Connect with us


Basil’s Budget



Monday 15th November, 2021

Finance Minister Basil Rajapaksa has spoken, and the people are trying to figure out what he has said, one may say with apologies to Bill Clinton. Ordinary Sri Lankans, at whose expense governments raise revenue by way of indirect taxes, expect various benefits such as salary increases, tax cuts, subsidies, etc., when budgets are presented. So, Budget 2022 may have gladdened the hearts of only government teachers and principals. Rs. 30 bn has been allocated for the revision of their salaries. One can only hope that there will not be a spate of copycat strikes, as it were, by other state workers, demanding better salaries. The Sri Lanka Government Officers’ Trade Union Association has already threatened to launch a strike unless public workers are given a pay hike immediately.

What matters more than anything else at this juncture is how the government proposes to straighten up the battered economy, shore up dwindling foreign reserves, stabilise the rupee, service debt, improve the country’s creditworthiness, and overcome the balance of payment woes while raising funds to bridge the budget deficit.

Debt servicing is one of the biggest problems the country is beset with. Finance Minister Rajapaksa, presenting the Budget, on Friday, did not forget to take a swipe at the yahapalana government, which, he said, had raised debt to the tune of USD 6.9 billion during a 15-month period between April 2018 and July 2019 alone, and the debt the present government had to repay included that amount. Governments borrow heavily, leaving repayment to their successors. The Finance Minister, did not say that the yahapalana government had repaid the loans the previous Rajapaksa government had drawn, and the country’s debt burden could have been lessened significantly if borrowed dollars had not been spent on projects such as the Lotus Tower, the Mattala Airport, the Suriyawewa cricket stadium, the Hambantota port, etc.

Minister Rajapaksa said something sensible about debt repayment. “We cannot solve this problem only by obtaining international loans. Therefore, we must adopt a special programme to encourage exports to earn foreign exchange.” This, no doubt, is the way out. But will the government care to do so? Another way of overcoming the country’s forex woes is to attract foreign direct investment. But foreign investors are wary of parking their money here owing to corruption. Who wants to invest in a country where many palms have to be greased to get anything done? How does the government propose to eliminate corruption and improve the country’s ease-of-doing-business ranking to attract foreign investment?

The need for tax increases and surcharges would not have arisen if the government had not opted for tax cuts to win the last general election. That politically-motivated measure the SLPP adopted after winning the 2019 presidential election was one of the main reasons for the widening of the budget deficit, the other factors being lockdowns, pandemic relief and the cost of vaccination drive. Tax cuts caused a drastic drop in the state tax revenue from 12.6% in 2019 to 9.2% in 2020, according to analysts.

The government decision to curtail expenditure related to the state service and carry out public sector recruitment only to fill vacancies is welcome. Curiously, it was only last month that Leader of the House, Education Minister Dinesh Gunawardena said the government had decided to recruit more graduates to strengthen the public sector by increasing its workforce!

The budget proposal for reviewing the eligibility of Samurdhi beneficiaries is also welcome. Relief programmes in this country are characterised by poor targeting, which has benefited various racketeers, and led to an increase in the economic burden on the ordinary public, who pays indirect taxes. The Finance Minister ought to ensure that his directive is carried out.

Minister Rajapaksa said there were about 300 state-owned enterprises, and the government had invested over Rs. 670 billion therein and spent as much as Rs. 75 billion to maintain them, but most of them did not yield returns. What does the government propose to do with the loss-incurring ones? Is it planning to divest them or run them as Public Private Partnerships? Most of these state institutions in debt could be turned around if properly managed without political interference.

The Finance Minister has proposed that Rs. 8.5 billion, which Perpetual Treasuries Ltd., has earned through the bond scams, be transferred to the state coffers. Similarly, will probes be conducted into the sugar tax racket and other such frauds which have benefited the SLPP financiers, and action taken to confiscate the illegally raised funds?

Meanwhile, the Budget 2022 will not yield the intended results unless the government gets its act together on the health front. It may be recalled that the economy began to recover and the country recorded an economic growth of 8% during the first half of 2021 owing to the successful vaccine rollout. But thanks to the government’s refusal to impose travel restrictions in April to prevent an explosive spread of Covid-19, and resultant lockdowns, the economic growth rate is expected to drop to 5% or even 4% for the current year. The pandemic is spreading fast, and if the country happens to be locked down again, as feared by health experts, the economy will be in a far worse situation.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


O, Democracy!




Thursday 9th December, 2021

US President Joe Biden’s much-advertised ‘Summit for Democracy’ commences today with the participation of 110 nations. Sri Lanka is not among them. Some political commentators here have called the exclusion of Sri Lanka an indictment of the Rajapaksa government, which is undermining democracy.

The incumbent Sri Lankan government may be hauled over the coals for attacks on democracy, but one should not make the mistake of recognising the US as the global standard-bearer of democracy.

Among Biden’s invitees are Jair Bolsonaro of Brazil and Rodrigo Duterte of the Philippines. The Human Rights Watch has this to say about Brazil under Bolsonaro: “President Jair Bolsonaro is threatening democratic rule in Brazil … He is pursuing campaigns to intimidate the Supreme Court, signalling that he may attempt to cancel the 2022 election or otherwise deny Brazilians the right to elect their leaders, and violating critics’ freedom of expression.” But Biden has had no qualms about inviting Bolsonaro to the summit and enlisting his help to ‘set forth an affirmative agenda for democratic renewal and tackle the greatest threats faced by democracies’! The less said about Duterte, the better. So much for Washington’s concern for democracy.

Prominent among the invitees to Biden’s Summit for Democracy is Indian Prime Minister Narendra Modi, whom the US refused an entry visa, for years, over the 2002 Gujarat riots, in which more than a thousand Muslims were massacred. The Obama administration reversed the US decision, and now the White House rolls out the red carpet for Modi, who lectures other nations on minority rights and the virtues of ethnic reconciliation, etc.

What about the report card of the host of the Summit for Democracy? The US, which has undertaken to promote global democracy, has failed to lead by example. The Freedom House World Report (2021) reveals that over the past 10 years the United States’ aggregate ‘Freedom in the World Score’ has plummeted by 11 points; the US is among the 25 countries that have suffered the largest declines during this period. Its current score is 83. Shouldn’t the US inspect the beam in its eyes, first?

The Biden administration says the goal of the Summit for Democracy is to rally the nations the world over against the forces of authoritarianism. But it is obvious that the US is trying to shore up its crumbling international image and counter China’s increasing global dominance. Biden’s summit has little to do with democracy; it is aimed at furthering Washington’s geo-strategic interests, as evident from the invitation extended to Pakistan. The US has no way of dealing with the Taliban without Pakistan’s help.

If the US is so averse to authoritarianism, as it claims to be, will it explain why it has backed evil dictators such as Pinochet of Chile, Marcos of the Philippines, Mohammad Reza Pahlavi  or Shah of Iran, Batista of Cuba, Somoza of Nicaragua, Seko of Zaire, Suharto of Indonesia, Rhee of South Korea, and Saddam Hussein of Iraq? Pinochet’s Caravan of Death, which hunted down Opposition activists in the remote parts of Chile did not cause any concern to the US.

The US has taken upon itself the task of ridding the world of authoritarianism and terrorism but it strove to save LTTE leader Prabhakaran, during the closing stages of the Eelam War IV, in 2009.

If Sri Lanka had signed the SOFA (Status of Forces Agreement) with the US and allowed the stationing of American forces here, perhaps it would have been invited to the Summit for Democracy in spite of the various allegations the Opposition and civil society groups are levelling against the incumbent government.

Continue Reading


Expensive jokes



Wednesday 8th December, 2021

What the government has been doing in Parliament during the past few days is like smashing up pots in a desolate house, as a local saying goes. The SJB is boycotting the budget debate in protest against an alleged incident where one of its MPs, Manusha Nanayakkara, was roughed up by a government member on Friday. Denying the allegation, the SLPP has accused MP Nanayakkara of threatening the Speaker. Thus, the government and the Opposition have been trading accusations liberally much to the neglect of their legislative duties.

It serves no purpose to have a budget debate without the participation of the main Opposition party therein; the position of the government on its own Appropriation Bill is already known, and none of its members can be expected to criticise it. Therefore, it is the duty of the Opposition to analyse the budget, highlight its flaws and suggest improvements or changes thereto.

Yesterday, the government MPs were heard making sardonic comments at the expense of former Prime Minister Ranil Wickremesinghe, MP, and Opposition Leader Sajith Premadasa, who was absent. Their utterances had nothing to do with the budget. They seem to have taken the SJB’s protest very lightly if their wry sense of humour is anything to go by. They may have been amused by their own jokes, which however went down like lead balloons where the public is concerned. Those who cared to watch yesterday’s parliamentary proceedings were left nonplussed. The public may not have minded the government MPs’ jokes in the House, but for the fact that they are very expensive; parliamentary sittings cost about five million rupees each. Public funds are being wasted in this manner while many people are skipping meals, and vital sectors are experiencing fund cuts.

One may not buy into the government’s claim that MP Nanayakkara flew across the House, as it were, to threaten the Speaker. But both the Opposition and the government must ensure that none of its members sprint towards the Chair, in a huff, or otherwise. There are ways and means of registering an MP’s protest against the Speaker’s rulings in a civilised manner. There have been instances where some MPs almost harmed the Speaker. In October 2018, a group of Opposition MPs who are now in the SLPP government, almost gheraoed the then Speaker Karu Jayasuriya in protest against his rulings.

The Opposition has faulted Finance Minister Basil Rajapaksa for being absent in the House during the budget debate. Former PM Wickremesinghe yesterday reminded the government that the Finance Minister was duty-bound to be present in the House, and President Chandrika Kumaratunga and President Mahinda Rajapaksa had done so as Finance Ministers. Those who are au fait with parliamentary affairs and traditions will agree with the former Prime Minister. Some government MPs have sought to justify the Finance Minister’s absence, but their line of reasoning sounds absurd. They are trying to defend the indefensible.

The opponents of the executive presidency want it scrapped and powers of Parliament fully restored. But what is the use of enhancing the powers of a Parliament whose members do not carry out their legislative duties and functions to the satisfaction of the public?

Chief Opposition Whip Lakshman Kiriella told Parliament, the other day, that the MPs should be able to gain admission to the Law College and universities by virtue of their legislative experience. Going by the behaviour of some of them, it looks as if they had to be sent back to kindergarten.

Meanwhile, the protesting SJB MPs have chosen to make their speeches on the budget via social media platforms. If the budget debate can be conducted without the presence of the Finance Minister and most MPs, with the Opposition using the Internet to comment thereon, the question is why Parliament should not opt for virtual sessions so that its costs can be kept low, and debates held without interruptions or fisticuffs.

Continue Reading


New laws alone won’t do



Tuesday 7th December, 2021

The government is keen to amend the election laws to provide for restrictions on campaign expenditure, and President Gotabaya Rajapaksa has given the Legal Draftsman necessary instructions in this regard, Media Minister Dallas Alahapperuma has reportedly said. It is hoped that the new laws to be made will also make it mandatory for candidates and political parties to disclose sources of their campaign finance, and the amounts of funds they receive by way of donations.

Laws to regulate campaign finance are long overdue, and the government initiative is therefore welcome. However, one should not be so naïve as to expect all problems related to campaign expenditure, etc., to disappear with the introduction of a few more laws. It is one thing to make laws; it is another to enforce them properly. We already have enough and more laws to prevent election malpractices, but the problem is that they are not applied correctly and fairly.

Politicians are adept at circumnavigating laws and compassing their political ends. When the 19th Amendment was introduced, it was widely expected to enable key state institutions to emerge independent and strong. But the Constitutional Council tasked with depoliticising those outfits became a mere rubber stamp for the Prime Minister, who manipulated it to further the interests of his government. This is the fate that befalls all laws in this country.

The problem with the election laws is not that they lack teeth; instead, it is that the authorities concerned lack the courage to enforce them strictly. The results of several elections, and the 1982 referendum should have been cancelled, given widespread rigging and violence that marred them. What was witnessed before and during the presidential and parliamentary elections in the late 1980s was the very antithesis of democracy; polling agents were chased away and ballot boxes stuffed openly while the police looked on. The North-Western provincial council polls (1999) were also affected by large-scale violence and rigging, but the results were not declared null and void.

Minister Alahapperuma has said the laws to be made will help usher in a new political culture. One should not be faulted for being sceptical about the possibility of such a radical change happening in Sri Lankan politics simply because of a few more additions to the country’s huge body of laws. If the government is genuinely desirous of changing the existing, rotten political culture, it ought to follow Alahapperuma’s example anent electioneering.

The media has been watching Minister Alahapperuma’s election campaigns with interest over the years. He has had the courage to spurn the conventional campaign methods; he does not use posters, banners, bunting, etc. When he chose to swim against the tide and take the high road, not many expected him to succeed in dirty Sri Lankan politics, but he has received a very positive response from the electorate. He has thus been able to keep the cost of electioneering very low. If he can conduct decent polls campaigns under the existing election laws, and get elected, why can’t others? There are several other politicians who also conduct clean election campaigns, and the onus is on the public to appreciate their courage to be different and reward them with votes. Sending the right men and women to Parliament is half the battle in draining the swamp.

It is heartening that the government has realised the need to regulate campaign finance at last and reportedly taken steps to introduce new laws for that purpose. If the SLPP had cared to set an example to others by keeping its campaign expenditure low, it would not have had to go out of its way to scrap duty on sugar imports in a questionable manner, some moons ago, to please one of its main financiers, thereby causing a huge loss to the State coffers. This scam has damaged its image irreparably.

Now that the government has evinced a keen interest in regulating campaign finance, will the ruling SLPP disclose, suo motu, the amounts of funds it received for the 2019 presidential election and the 2020 parliamentary polls, the sources thereof and actual expenditure.

Continue Reading