Wednesday 13th April, 2022
Sri Lanka has had to suspend foreign debt payments for the first time. It is a sad day for every Sri Lankan. This measure has become unavoidable for two reasons. The country has to prevent a hard default; foreign debt payment due this year is reportedly about USD 4 billion including a USD 1 billion international sovereign bond maturing in July. It badly needs dollars for essential imports which are in short supply much to the consternation of the people, who have taken to the streets demanding relief and the ouster of the government. Political stability is essential for economic recovery, and vice versa. The country is thus in a catch-22 situation. It has come under a pall of political uncertainty, which has stood in the way of measures being adopted to save the economy. People’s economic hardships act as jet fuel for social unrest, which hinders economic recovery.
The need for debt restructuring cannot be overstated; but that task requires the consent of creditors, who will ask for a cast iron guarantee that their investments are safe and they will get returns thereon. It is doubtful whether the current political turmoil will help win their confidence.
It is hoped that when more forex is available for imports, and supplies are replenished, long queues will disappear—hopefully—making it possible for tension on the political front to be defused.
Newly appointed Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe has assured that the drastic measure at issue is only temporary, and the country will reach an agreement with the creditors concerned. One can only hope that the government pundits will allow the three men—the CB Governor, new Finance Minister Ali Sabry and new Finance Ministry Secretary Mahinda Siriwardana—and their teams of experts do what they deem necessary to tackle the economic crisis.
Needless to say, political upheavals drive away foreign investors and tourists and cost the country a great deal of much-needed foreign exchange. They also affect national productivity, which is a prerequisite for economic development. Neither the protesters nor the government politicians are willing to soften their stands. Both sides remain intransigent, making the country’s economic recovery an uphill task.
Protesters want the entire government to resign, and the latter is apparently playing a waiting game—maybe on the advice of its astrologers including Gnanakka—in the hope that protests will fizzle out with the passage of time, and its leaders will be able to crawl out of the woodwork and do more of what they have been doing.
The government does not seem to have realised the gravity of the situation. Both President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa said very little in so many words when they addressed the nation. The PM did not say anything new on Monday; he only repeated himself, and was seen to be making an effort to justify his decision to stay put amidst calls for his resignation.
Prime Minister Rajapaksa should have apologised to the nation, on Monday, for having wasted billions of dollars on Ozymandian projects like the Hambantota Harbour, the Suriyawewa cricket stadium, the Mattala Airport and the Lotus Tower. All Rajapaksa governments have been characterised by rampant corruption, which has led to an increase in national debt. The PM should also have explained to the public why the current administration had not sought IMF assistance at the first signs of trouble, the way his government had done in 2009 to avert an economic disaster.
The CBSL says it warned of the present crisis a long time ago but the government did not heed its warning. The yahapalana government ignored a warning by a foreign intelligence service of the Easter Sunday attacks, and more than 270 lives were lost, as a result. The present administration’s refusal to take on board the CBSL’s advice has turned the country into a hellhole, as it were, for 22 million people who have been left without essentials.
The government is struggling for survival, and let Parliament be urged to initiate action to abolish the 20th Amendment and reduce the executive powers of the President so that an interim arrangement could be worked out to facilitate the country’s economic recovery.
We wish our readers a happy New Year!
Govt. playing with fire
Thursday 26th May, 2022
The government seems determined to perpetuate people’s suffering. It claims that adequate fuel stocks are available in the country, but pumps at most filling stations have run dry, and long lines of vehicles are seen everywhere. When the fuel supply was restricted, recently, despite the unloading of two or three oil shipments in quick succession, it became obvious that the government was planning to jack up petroleum prices. What was feared came to pass; oil prices increased. But the fuel shortage remains.
What prevents the Ceylon Petroleum Corporation from maintaining an uninterrupted fuel supply if it has enough stocks? Is it starving the market again with a view to effecting another price hike? The only thing it does promptly is to close the filling stations where clashes occur; this measure only aggravates the suffering of the peaceful people. Why can’t the police prevent such incidents at petrol stations, where they have a significant presence?
More than 40 filling stations have been closed countrywide, owing to clashes, according to media reports. It is only natural that tempers flare when people languishing in queues for long hours have to return home without fuel. Most people spend more than 12 hours in queues to obtain petrol and diesel. How would Minister of Power and Energy Kanchana Wijesekera, who has filling stations closed at the drop of a hat, feel if he happened to queue up for fuel and return empty-handed after hours of waiting?
Minister Wijesekera talks nineteen to the dozen in an accusing tone that suggests that he thinks the people have bankrupted the country and got their comeuppance. Let him be reminded that he is part of a failed government, whose leaders have ruined the country by mismanaging its economy and helping themselves to public funds; he is also responsible for the current mess. He should be considerate towards the people, and take action to ensure that fuel is distributed efficiently, instead of lecturing to them. He and his bosses ought to realise that they are playing with fire. They know what it is like when public anger spills over on to the streets, don’t they?
Fathers of crisis
Parliament is not without some good men and women who take their legislative duties and functions seriously and do their utmost to safeguard the interests of the hapless public. The Chairman and some members of the COPE (Committee on Public Enterprises) are among them. They have exposed various rackets in the public sector and censured errant state officials. They deserve public plaudits.
COPE Chairman Prof. Charitha Herath has called for a PSC (Parliamentary Select Committee) to find out who is responsible for ruining the economy and bankrupting the country. There is no need for an investigation to identify those who have reduced the country to penury.
The present economic crisis is not of recent origin, but it is the current regime that worsened it. The blame for the current mess should be apportioned to President Gotabaya Rajapaksa, former Prime Minister Mahinda Rajapaksa, who held the finance portfolio, and former Finance Minister Basil Rajapaksa. They did not heed expert advice, and ran the country like a petti kade in Medamulana. It has now been revealed that the Central Bank economists warned of an economic crisis well in advance, and called for action to avert it, but the government chose to ignore their warning.
A PSC probe, if conducted impartially, will help officially establish who is responsible for the economic meltdown. It must also be found out how US dollars disappeared from the country so fast, and whether there is any truth in the allegation that large amounts of foreign currency were smuggled out systematically during the past two years or so.
People have no faith in PSC probes thanks to the one into the Treasury bond scams, under the yahapalana government. The ruling party members of the PSC that investigated the bond racket behaved like a bunch of ruffians, insulting and intimidating the Central Bank (CB) officials, who testified against the then CB Governor Arjuna Mahendran. They stooped so low as to spoil the final COPE report with a slew of footnotes, and the Central Bank officials were prevented from countering their flawed arguments.
If a PSC is to be set up to investigate the economic crisis, the right persons will have to be appointed as its members, the majority of whom should come from the Opposition, if it is not to end up being another Treasury bond probe committee.
Failures as pillars
Wednesday 25th May, 2022
Failures are the pillars of the incumbent government. Most of the newly-reappointed ministers have earned notoriety for incompetence and dishonesty. With them as Cabinet members, does the country need any enemies? The resignation of Prime Minister Mahinda Rajapaksa was expected to pave the way for the formation of a multi-party, interim government. But nothing of the sort has happened, and failed politicians are going places, again. Worse, the most important Cabinet post remains vacant; the Finance Minister has not yet been appointed although the economy is in a tailspin—so much for the government’s sense of priority and urgency! The Cabinet is like a third-rate ‘mega’ soap opera that drags on without the title character.
When one says the members of the new Cabinet are incompetent, one does not mean that there are other MPs—in the government or the Opposition—who are equal to the task of steering the country out of the present crisis under their own steam. The holier-than-thou members on both sides of the aisle have failed, albeit to varying degrees, and contributed to the current mess. The less said about the government MPs, the better, and the only thing the Opposition worthies are adept at is backseat driving; they claim to know the way, but cannot drive when they are provided with an opportunity. If so, why are these politicians being urged to sink their differences and form a national unity government?
The best contribution the members of Parliament could make to crisis management is to behave. That way they could help restore political and social order, which is a prerequisite for economic recovery. As long as they are at one another’s jugular, political stability will elude this country, making it impossible to put the economy back on an even keel. The International Monetary Fund, upon which the country is dependent for a bailout package, has expressed serious concern about socio-political upheavals here.
If the political parties co-operate in Parliament for the sake of the people, who are undergoing immense suffering, there will be political stability in the country at large. On 09 May, and the following day, we saw what they were really capable of. Supporters of both the government and the Opposition were involved in the spate of violence that rocked the country. Hence the need for their leaders to cooperate in Parliament, without fanning flames of violence. It is imperative that the government refrain from engineering crossovers from the Opposition, and make a serious effort to secure the support of its political opponents.
It’s fuel pricing formula, stupid!
The present-day rulers used to rake Finance Minister Mangala Samaraweera over the coals whenever fuel prices were increased under the yahapalana government. The then Opposition Leader Mahinda Rajapaksa even cycled to Parliament when petrol and diesel prices slightly increased. Today, fuel prices have gone into the stratosphere.
The SLPP grandees who made a song and dance about Mangala’s fuel pricing formula tell us that they have adopted the same method to determine fuel prices. They should apologise to Mangala posthumously.
The government says the public will gain from the fuel pricing formula in case of the appreciation of the rupee. It is going to be a long wait!
The Cabinet will revise fuel prices on a monthly basis, according to media reports. One shudders to think what will happen in case of monthly price revisions. Fuel prices will continue to soar, and driving/riding might be a luxury only the super rich can enjoy. The ‘babies’ of the ruling family might be able to turn Colombo into an F1 street circuit without any resistance from the public.
Government boost for GotaGoHome – Phase II
Tuesday 24th May, 2022
The first phase of the campaign for ousting President Gotabaya Rajapaksa is over. It has only caused the resignation of Prime Minister Mahinda Rajapaksa, and the appointment of UNP leader Ranil Wickremesinghe as his successor. The President continues to hold office. All the problems that drove the public to stage street protests remain unsolved; in fact, they have worsened, but there has been a let-up in the protest campaign. One sees only unorganised, sporadic protests in some parts of the country.
The Galle Face protest, which started off as an apolitical struggle to dislodge the government and engineer a systemic change, has lost steam, but the forces that propelled it remain active. It was obvious from the very beginning that the core of the Galle Face aragalaya was political, and the fact that the JVP, and the Frontline Socialist Party have been behind the protest is now public knowledge. If ex-UNP MP Prof. Ashu Marasinghe’s admission, in a brief interview with this newspaper, that he had been involved in the Galle Face protest from the beginning is anything to go by, then the UNP, too, has had a hand in it. Does this explain why those who went all out to see the back of PM Rajapaksa float like bees and sting like butterflies, as it were, when they take on PM Wickremesinghe, who has been the main beneficiary of the aragalaya?
On 09 May, an SLPP goon attack on a group of anti-government protesters triggered an explosive release of the pressure build-up in the polity. The spate of violence that ensued ran its course, leaving little pressure for the anti-government forces to tap. The protest campaign against the President is now without much political traction, as a result; it needs a turbo boost, which will come only from another massive pressure build-up, for its Phase II to get underway. Pressure of such a magnitude could result from power cuts, the scarcity of essentials, etc.
All essential commodities are in short supply, but their shortage is not as severe as that of fossil fuels. Rains have lessened the country’s dependence on thermal power generation, albeit temporarily, and power outages are not as bad as they used to be. Cooking gas is also being made available, and it will lower the demand for kerosene. The food shortage is still not so severe as to trigger mass protests.
Pressure needed for the launch of the GotaGoHome protest – Phase II will result from the non-availability of diesel and petrol. The number of vehicles waiting in queues for petrol and diesel is increasing although the Ceylon Petroleum Corporation, and Minister of Power and Energy Kanchana Wijesekera insist that there are enough fuel stocks. Filling stations remain closed, most of the time, and not even the ones required to function round the clock are open at night, and, therefore, motorists and motorcyclists have to wait in queues overnight, undergoing tremendous suffering. People struggling to obtain fuel are so resentful that their tempers flare at the drop of a hat and fights break out frequently. The government has, in its wisdom, chosen to close the petrol stations where incidents of violence occur. Thus, it further aggravates the fuel problem and makes the people even more incensed. Public anger can be tapped to fuel the Phase II of the protest campaign against the President. The day may not be far off when people take to the streets in their millions, calling for the resignation of the President, again.
Strangely, no one in the government seems to care to sort out the fuel problem although enough diesel and petrol stocks are said to be available. Hoarding is not the only reason for this situation. Hoarders are having a field day because the fuel distribution network is extremely inefficient. If all filling stations are made to remain open round the clock, at least for a few days, with their supplies being replenished regularly, there will be no need for the people to wait for long hours. If man power is a problem, the Civil Defence Force personnel could be deployed to help dispense fuel.
If the people can be convinced that there is a system in place, and they do not have to spend sleepless nights in their vehicles to obtain fuel, they will not riot, and there will be no panic buying. Is it that a section of the government is advancing a hidden agenda by aggravating the fuel problem?
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