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Editorial

The ‘new normal’ budget

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The run-up to the 2021 budget which Prime Minister Mahinda Rajapaksa, wearing his finance minister’s hat, presented to parliament last week was obviously “new normal” as the post-covid minted cliché goes. There was no dramatic build-up to it with people rushing to buy vehicles, electronics, appliances or whatever as was often the rumor-fuelled case in the past. As has been inevitable in every past budget in the medium, if not the long term, the price of arrack and cigarettes routinely thrashed with a price stick, will go up once more. But nobody knows by how much and smokers and imbibers continue to pay the old price for their bad habits. But they have the certain knowledge that Christmas will soon be over on the authority of the budget speech.

This 2021 budget was crafted, as Dr. Dushni Weerakoon, head of the Institute of Policy Studies, said in a post-budget commentary, “under an exceptional level of uncertainty.” Obviously the crisis measures now in force will remain with us for a long time and it will be unrealistic to assume that fiscal policy will revert to its “pre-crisis setting anytime soon.” This must influence both spending priorities and what Weerakoon called “the slow burn scenario for revenue generation.” It is common knowledge that revenue has already slumped, and not only because of covid and its consequences. Assurances of boosting the country’s growth rate and narrowing the budget deficit, which has for too long burdened the country’s fiscal policy as well as its macro economy, have been repeated. These are old stories that have been heard before and few will buy them.

A persistent criticism of the budget is that it did not say enough about how the government is going to deal with the covid crisis, and the consequences arising from it, by taking the people into its confidence. This, more than all else, is the greatest danger confronting not only Sri Lanka but also the whole world. Neighboring countries is South Asia, including India, Pakistan and Bangladesh, have been much more transparent than we with Pakistan even going as far as labeling her next year’s budget as a “covid budget.” Former Central Bank Governor Nivard Cabraal, now the deputy in the finance ministry, who will be the key speaker for the government in the budget debate, has already said at one of the regular remotely held post-budget seminars that the timing was not right for declaring a covid-19 austerity year. But belt-tightening all round will be inevitable. Protecting the very large numbers of daily wage earners and others deprived of their livelihoods by the present crisis must remain high priority. Money printing alone to tide over cannot be the solution. Budgetary provision would have been appropriate.

There was a lot of old wine in new bottles in the 2021 budget speech including self-serving (or should we say government politician serving) measures announced. One of these is the raising of the private sector retiring age to 60-years for both men and women. Currently women working for private employers can retire at 50-years of age and men at 55 and gain access to their EPF benefits. Now both genders will have to wait longer – as many as 10 years in the case of women and five where men are concerned. There is no need to labour the harsh reality that the EPF is the only social security net that private sector workers have for their retirement. Government servants have had their pension benefits from colonial times, a cushion that served them well over a long period and a major attraction of a government job.

This raising of the retirement age of private sector employees also has the undisclosed benefit for the government of slowing EPF payouts and enhancing available funds for government borrowing. We all know that the EPF is the major captive lender to the government and the billions or trillions in its books is always on call for government expenditure. Given the overload of foreign borrowing that has long burdened this country and made the possibility of repayment default an ever-growing risk, postponing the payout of a looked forward to EPF nest egg to private sector employees, confers a substantial benefit on big brother. The private sector generally did not enforce the minimum retirement age rule but allowed employees to formally retire and gain access to their EPF with the assurance of an employment contract to keep them in harness post-retirement.

Let us not forget previous efforts made to convert the EPF to a pension fund that was abandoned due to massive resistance. Even if these attempts succeeded, the new pensioners paid from a contributory scheme – both employer and employee make monthly contributions to the EPF – would not have received the same benefits as their government counterparts enjoying non-contributory pensions. These matters, no doubt, will be raised during the ongoing budget debate which has been abbreviated because of the covid issue. It has up to now been lacklustre with the press and public galleries closed when the prime minister made his budget speech, a necessary precaution in the present context. But it has elicited, as budget debates must do, matters of widespread public interest. One of these relates to Dr. Anil Jasinghe, the previous Director General of Health who was highly regarded for his leadership in handling of the covid emergency. Health Minister Pavithra Wanniarachchi told parliament on Thursday that Jasinghe, currently Secretary Environment, was now attending covid meetings at her ministry. That sounded apologetic to most people not appeased by the suggestion that ‘kicking him upstairs’ was just a promotion issue.

It is clear from the budget that policies of curtailing inessential imports and import substitution would continue and a conscious effort appears to have been made not to heap new burdens on ordinary people for revenue reasons. But the impact of the Goods and Services Tax that has been announced have not yet emerged. It is unlikely that this will not leave people altogether unscathed. And that too not only with regard to their booze and fags.



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Editorial

President’s gratuitous advice to Opposition

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Saturday 26th April, 2025

President Anura Kumara Dissanayake, who is leading the NPP’s local government (LG) polls campaign from the front, while urging his rivals to sink their political differences and help achieve national progress, would have the public believe that winning the upcoming mini polls will be a walk in the park for his party. He is being overconfident and overoptimistic.

The NPP’s huge victory in last year’s general election is still fresh, and therefore the government is thought to have a better chance of winning the LG polls, but nothing is so certain as the unexpected in politics. Whoever would have thought Maithripala Sirisena would beat Mahinda Rajapaksa in the 2015 presidential race?

The fact that President Dissanayake has had to address even what are generally considered village level meetings in support of the NPP candidates indicates that the government is aware that winning the LG elections will not be a cakewalk. He and his party are doing everything possible to consolidate their power by scoring another electoral win. The Opposition has lodged complaints with the Election Commission against the President and the NPP over alleged election law violations.

What we are witnessing on both sides of the political divide are standard election practices, including an exchange of allegations, and bellowing rhetoric. It is doubtful whether anyone will pay much heed to politicians’ claims, counterclaims and pledges. However, something that President Dissanayake has said about the Opposition is of interest.

President Dissanayake has given some unsolicited advice to the Opposition. He is reported to have said at a recent meeting in Puttalam that the Opposition will never be able to make a comeback unless it mends its ways, and the only way it can turn the tables on his government is to better the NPP. The subtext of his gratuitous advice is that the NPP is far too superior to the Opposition and attempting to outdo it is an exercise in futility. He is entitled to his view. After all, every President has had a very high opinion of his or her government since 1978.

However, there occur situations where the Opposition does not have to better the government in power to make a comeback. We have witnessed instances where massive protest votes propelled weak Opposition parties to power. The UNP’s mammoth victory in 1977 is a case in point. The same goes for the victory of the SLFP-led People’s Alliance (PA) in 1994. It was circumstances rather than anything else that led to the meteoric rise of Chandrika Kumaratunga in national politics and the PA’s victory.

In 2015, the UNP-led UNF won a parliamentary election not because it was any better than the UPFA; its victory was due to the people’s resentment at the Rajapaksa rule. Gotabaya Rajapaksa won the presidency in 2019 because the UNF government had become extremely unpopular, and President Sirisena had cooked his goose by neglecting national security and failing to prevent the Easter Sunday carnage (2019).

The NPP, which had only three seats in the previous Parliament, came to power with a steamroller majority, not because the people had any high regard for its leaders or their capabilities, but because they were extremely furious at the SLPP government, which had become a metaphor for corruption, abuse of power, etc., and, most of all, ruined the economy, causing untold hardships to them. The people found themselves in what may be called an any-port-in-a-storm situation, and the NPP tapped their anger effectively and infused them with hope by making as many promises as possible. The challenge before the NPP government is to live up to the people’s expectations.

If the NPP government makes the same mistakes as its immediate predecessor, the SLPP, and ruins the economy, the resentful public will take to the streets, demanding its resignation, and the vociferous leaders of the incumbent dispensation will have to head for the hills as fast as their legs can carry them. Therefore, instead of proffering unsolicited advice to the Opposition and indulging in self-righteous pontification, the NPP leaders had better tread cautiously, avoiding the mistakes of its predecessors.

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Editorial

Dalada Vandana

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Friday 25th April, 2025

Hundreds of thousands of Buddhist devotees have realised their dream of viewing the sacred tooth relic up close and paying homage to it during the past several days at the ongoing Dalada Vandana exhibition in Kandy. They have expressed their gratitude to the organisers of the holy event––and rightly so.

Government propagandists have sought to help the ruling NPP coalition gain political mileage from the relic exposition in the run-up to the local government elections. President Anura Kumara Dissanayake, who, during his Opposition days, used to condemn political leaders for visiting holy shrines, such as the Dalada Maligawa, with television crews in tow, opened Dalada Vandana, and received much publicity.

The government categorically stated that there would be no VIP queues for Dalada Vandana, and no devotee would be given preferential treatment, unlike in the past. But complaints abound that many influential people were granted privileged access to the Dalada Maligawa, while ordinary devotees were languishing in long queues for days.

The situation in Kandy has taken a turn that the government, municipal officials, health authorities and the police apparently did not bargain for. The Hill Capital is groaning, overwhelmed by the sheer number of visitors flocking there. Devotees are complaining of the lack of food, water and sanitary facilities in Kandy, which, according to media reports, is strewn with garbage, and has toilets overflowing in some areas. The government and Kandy municipal officials should have had plans ready to face such an eventuality. It is hoped that public health officials will go all out to prevent disease outbreaks.

The availability of free food and sanitary facilities, temporarily sheltered walkways, etc., for pilgrims in Kandy received wide publicity on the first day of Dalada Vandana, and it is only natural that so many people converged to the sacred city, expecting a comfortable stay there. Yesterday, the police and state officials had to urge devotees to stop travelling to Kandy, which is heavily congested and cannot take any more visitors, and those who are already there will have to spend about two days to enter the Dalada Maligawa.

The police have taken action to prevent buses, etc., carrying devotees from entering the Kandy city, we are told. That is the only way they can prevent the city from becoming even more congested and chaotic. But it has not been possible to stop people from reaching the city, and one can only hope that the police and the armed forces will succeed in carrying out crowd control effectively, and there will be no stampede in the city.

Hundreds of thousands of people have been waiting in several queues stretching for about 10 km each for the past three days or so to get a close glimpse of the sacred tooth relic and pay homage to it. Chances are that not all of them will be lucky enough to do so, and how people will react in the case of being turned away remains to be seen. Sri Lankans tend to turn aggressive at the drop of a hat, and this is something the police and the security forces will have to take cognisance of.

A mega event like a relic exposition that attracts huge crowds requires several months of planning. But the government wanted Dalada Vandana held fast for obvious reasons, and the Kandy has been plunged into chaos.

Meanwhile, there has been a proposal to hold Dalada Vandana annually. While this idea may resonate deeply with Buddhist devotees, the question remains whether the government, the custodians of the Sri Dalada Maligawa, the Kandy municipal authorities and the police are up to the gargantuan task—especially given their responsibility for organising the annual Dalada Perahera. Crucial factors such as costs and the need for extraordinary security arrangements must also be taken into consideration.

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Editorial

Good governance: Pie in the sky?

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Thursday 24th April, 2025

The NPP government is coming under increasing pressure to disclose the contents of the MoUs it signed with India during Indian Prime Minister Narendra Modi’s recent Sri Lanka visit. But it keeps them under wraps, trotting out various excuses and exuding hubris. Minister of Foreign Affairs Vijitha Herath as well as Cabinet Spokesman and Minister Dr. Nalinda Jayatissa has said anyone can invoke the Right to Information (RTI) laws and obtain information about the MoUs in question. Curiously, Dr. Jayatissa has reportedly said that some information about the MoUs cannot be revealed to the public without India’s consent! So, the question is whether he and Herath think Sri Lanka’s RTI Act will compel India to consent to reveal the contents of the controversial MoUs to the Sri Lankan public.

The NPP government never misses an opportunity to flaunt its popular mandate and brag that it has been elected by as many as 6.8 million people. But it does not respect their right to know the contents of the agreements/MoUs it has entered into with another country. Those people voted for the NPP in the hope that it would fulfil its pledge to usher in good governance.

Claiming that all its predecessors had only paid lip service to good governance, the NPP sought a mandate to make a difference. But there has been no radical break with the past under the current dispensation, as evident from the manner in which the NPP is conducting its first election campaign after being ensconced in power. It has adopted the same modus operandi as its predecessors in a bid to win the upcoming Local Government (LG) polls. State workers have been given pay hikes; government politicians are issuing threats to impose fund restrictions on the local councils to be won by parties other than the NPP; President Anura Kumara Dissanayake, who is also the leader of the JVP and the NPP, has promised to expand the Aswesuma social welfare scheme to include 400,000 more families; the government tried to distribute dry rations about two weeks ago to muster favour with the public, and it has pledged to recruit 35,000 more individuals into the state service, which is already bursting at the seams.

The JVP/NPP has made a mockery of its much-advertised commitment to good governance by refusing to ensure transparency regarding the aforementioned MoUs with India, especially the one on defence cooperation. The UN has defined good governance as the transparent, accountable, inclusive, and efficient management of public affairs and resources. Good governance cannot exist in a political environment devoid of transparency and accountability.

The JVP/NPP leaders vehemently protested when the previous government dragged its feet on presenting its agreement with the IMF to Parliament. Today, they are practising exactly the opposite of what it asked its predecessors to do. They insist that their MoUs with India do not contain anything detrimental to Sri Lanka’s interests. If so, they should have made the contents thereof readily accessible to the public of its own volition.

The JVP-led government has rightly undertaken to ensure that justice will be served to the victims of the Easter Sunday terror attacks expeditiously. It must go all out to fulfil that pledge. However, first of all, it ought to tender an unqualified apology to the public for its reign of terror, which destroyed thousands of lives and state assets worth billions of rupees in the late 1980s, when it campaigned against the Indo-Lanka Accord, claiming that it had been thrust on Sri Lanka. It sought to justify its mindless terror by claiming that violence was the only means it was left with in its efforts to defeat what it described as Indian expansionism, but today it has no qualms about signing MoUs/agreements with India on the sly. It is only fuelling speculation that it is doing its damnedest to prevent the ill-effects of its deals with India from becoming public in the run-up to the upcoming LG polls.

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