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Budget offers fool’s paradise instead of facing up to Covid-19 realities

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by Rajan Philips

The Prime Minister’s budget speech last Tuesday and the President’s address to the nation the next day are both remarkable for their omissions to share with the people the government’s thinking and planning for dealing with the pandemic crisis that Sri Lanka is now going through along with the rest of the world. The budget speech tried to pretend a business as usual present scenario and routinely optimistic future prospects. It said little or nothing about Covid-19 and the government’s plans to deal with it. If anyone thought that the (Covid-19) matter was left to be addressed by the President himself in his talk the next day, that was not to be. The President covered every base (in baseball parlance) in his short political career but barely touched the topic of Covid-19. Why this reluctance to frankly talk about Covid-19?

There is no point in denying or trying to hide the formidable challenges posed by Covid-19 and the difficulties that the government of Sri Lanka and the country as a whole are having in dealing those challenges. No one is expecting the government to come up with a magical national response to the global pandemic. But it is reasonable to have expected that either the President or the Prime Minister would use their national pulpit to apprise the people of the gravity of the situation and the challenges of navigating through it. Nothing of the kind.

Our South Asian neighbours have been more transparent about the coronavirus in their budgets and economic statements. Pakistan and Bangladesh presented their current budgets in June 2020. Neither of them was shy about mentioning Covid-19. In fact, Pakistan called it the “corona budget.” Although criticized by the two opposition parties (PML-N and PPP), the Imran Khan government increased the allocation to the health sector to $156 M (130% increase from 2019), with 90% of it going to hospitals to deal with Covid-19 crisis.

In Bangladesh, the budget confirmed that sufficient funds have been allocated to meet the needs of all ministries to deal with the impact of Covid-19, while increasing the allocation to the health sector. From what was once ‘an economic basket case’, Bangladesh is now among the world’s fastest growing economies with a higher GDP than Pakistan despite having 60 million fewer people (161 M and 221 M). From a high growth rate of 8.2%, Bangladesh is now set to grow at still impressive 5.2% owing to Covid-19.

India finished its budget in February before the pandemic outbreak. But it has since consistently intervened with financial stimuli at both central and state levels. A week before Sri Lanka’s budget, India announced two stimulus packages totaling $60 billion topping up the $266 billion package from May, for a total 12% of GDP. India has also heavily invested in vaccine development for Covid-19 by the government’s biotechnology development. Both Pakistan and Bangladesh have also provided significant stimuli packages to soften Covid-19 fallouts.

 

Rewired Thinking

 

From what I have seen there is no mention in the budget of any Covid-19 related support, stimulus, or expenditure. The President in his speech referred to the allowance of Rs. 5,000 paid twice to 5.9 M families (total of Rs. 59,000 M, less than 0.5% GDP), and another $70 M for Corona-related expenditure. But nothing about future Covid-19 expenditures in either speech. Admittedly, Sri Lanka does not have too much money to spend on anything. That is all the reason why the government should use any and every opportunity to level with the people and tell them without holding back anything – where the government and the country are under Covid19, and what the government is planning to do about it. Are not budgets occasions meant for such purpose? And when else if not in a global pandemic situation?

The apparent thinking behind the budget has been revealed by Nivard Cabraal, the long-titled State Minister, in a post-budget seminar. As reported in Daily FT, the Minister has announced that the government “could have said it’s a COVID-19 year and looked at austerity measures, but it is not the right moment to do that;” instead, the government opted to be “bullish about growth and (by) tap(ping) into the rewiring of the global economy caused by COVID-19.” This is the only way, according to the Minister, for Sri Lanka to break out of long struggle with “persistently slow growth.” The report also carries the views expressed by Dr. Dushni Weerakoon (Executive Director, Institute of Policy Studies) at the same seminar, but unfortunately not at the same length offered to Cabraal. Dr. Weerakoon “warned (that) the Government could struggle to balance low interest rates with a high budget deficit as well as aim for high growth while fighting a pandemic.” More so, “if COVID-19 infections rise and the Government has to provide more public support in social spending.” This would make debt sustainability and deficit management problematic.

It is mystifying that Mr. Cabraal would suggest that a Covid-19 budget would have involved austerity measures. On the contrary, the debate over Covid-19 economic response is not about austerity measures but about the extent of stimulus measures that governments should be prepared to administer. It is also not quite explicable how the government would tap into the “rewiring of the global economy caused by COVID-19” – whatever Cabraal means by rewiring. The budget offers no specifics about this ‘rewiring’, or how any or all of the budget proposals would be linked to the supposedly rewired global demand opportunities. Looked at it another way, the very non-austere budget is wired to spend in all the wrong areas for all the wrong reasons, at a time when Covid-19 has removed all ambiguities as to whom and where government spending should be targeted.

SJB MP Harsha de Silva, who led off the budget debate for the Opposition could not have hoped for an easier target to attack. As he summed it up the budget would neither kick-start the economy, nor provide relief to the people burdened by economic hardships. Quite rightly, he questioned the allocation of Rs. 330 billion for highways, as if building roads would help suffering businesses and starving people. The allocation, rather mis-allocation, for highways is also an instance of inappropriate assumptions for economic growth in the current pandemic situation.

Funnily enough, the space allocated for mentioning Archaeological and Cultural Heritage Presidential Task Force in the budget speech is sandwiched between Tourism and Foreign Employment. The assumptions of prospects for the future of tourism are not at all funny, however. The $10 billion industry is in serious trouble and cannot be salvaged in any significant way by promoting domestic tourism. The same goes for foreign employment, the cash-cow sector that used to have 1.5 million Sri Lankans employed abroad, mostly Middle East, and bring in $7 billion annually is now in dire straits. There is no discussion of the prospects, let alone projections, for the future of this sector and its broader socio-economic ramifications within Sri Lankan society. If it is the government’s wired thinking that 1.5 million Sri Lankans can be fitted into global rewiring, there is no indication of that thought process in the budget.

Under “Investment in Public Health,” the budget speaks somewhat unclearly “to the new reality would make it unavoidable to be engaged in the day to day activities of the people with the Corona pandemic.” It reports the global total of 55 million Covid-19 cases and 1.35 million deaths, but shies away from being transparent about the situation in Sri Lanka. And somehow an insurance fund will materialize to help Covid-19 victims with contributions from businesses who are also victims of Covid-19. Glaringly missing are any allocations for purposefully expanding the Public Health Services and related infrastructure to deal with the Covid-19 situation. Also missing are the government’s assessment of the current situation and its projections for the future. These gaps are obviously the result of professional disengagement at the political level with the realities of Covid-19.

As if to highlight the level of professional engagement in the government’s Covid-19 response, Health Minister Pavithradevi Wanniarachchi, who is patently out of her depth in coping with Covid-19 response, said in parliament last Wednesday that former Health Services Director General (DGHS) Dr. Anil Jasinghe continues to attend COVID-19 meetings, even though he is now the Secretary to the Ministry of the Environment. Public Health was dealt a big blow when Dr. Jasinghe was kicked upstairs from Health to Environment, and now the Ministry of the Environment is minus its Secretary whenever Dr. Jasinghe is on Covid-19 calls. Why not move Dr. Jasinghe back to Health?

 

 



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BRICS emerging as strong rival to G7

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It was in the fitness of things for Indian Prime Minister Narendra Modi to hold a special telephonic conversation with Russian President Vladimir Putin recently for the purpose of enlightening the latter on the need for a peaceful, diplomatic end to the Russian-initiated blood-letting in Ukraine. Hopefully, wise counsel and humanity would prevail and the world would soon witness the initial steps at least to a complete withdrawal of invading Russian troops from Ukraine.

The urgency for an early end to the Russian invasion of Ukraine which revoltingly testifies afresh to the barbaric cruelty man could inflict on his fellows, is underscored, among other things, by the declaration which came at the end of the 14th BRICS Summit, which was held virtually in Beijing recently. Among other things, the declaration said: ‘BRICS reaffirms commitment to ensuring the promotion and protection of democracy, human rights and fundamental freedoms for all with the aim to build a brighter shared future for the international community based on mutually beneficial cooperation.’

It is anybody’s guess as to what meanings President Putin read into pledges of the above kind, but it does not require exceptional brilliance to perceive that the barbaric actions being carried out by his regime against Ukrainian civilians make a shocking mockery of these enlightened pronouncements. It is plain to see that the Russian President is being brazenly cynical by affixing his signature to the declaration. The credibility of BRICS is at risk on account of such perplexing contradictory conduct on the part of its members. BRICS is obliged to rectify these glaring irregularities sooner rather than later.

At this juncture the important clarification must be made that it is the conduct of the Putin regime, and the Putin regime only, that is being subjected to censure here. Such strictures are in no way intended to project in a negative light, the Russian people, who are heirs to a rich, humanistic civilization that produced the likes of Dostoevsky and Tolstoy, among a host of other eminent spirits, who have done humanity proud and over the decades guided humans in the direction of purposeful living. May their priceless heritage live long, is this columnist’s wish.

However, the invaluable civilization which the Russian people have inherited makes it obligatory on their part to bring constant pressure on the Putin regime to end its barbarism against the Ukrainian civilians who are not at all party to the big power politics of Eastern Europe. They need to point out to their rulers that in this day and age there are civilized, diplomatic and cost-effective means of resolving a state’s perceived differences with its neighbours. The spilling of civilian blood, on the scale witnessed in Ukraine, is a phenomenon of the hoary past.

The BRICS grouping, which encompasses some of the world’s predominant economic and political powers, if not for the irregular conduct of the Putin regime, could be said to have struck on a policy framework that is farsighted and proactive on the issue of global equity.

There is the following extract from a report on its recent summit declaration that needs to be focused on. It reads: BRICS notes the need to ensure “Meaningful participation of developing and least developed countries, especially in Africa, in global decision-making processes and structures and make it better attuned to contemporary realities.”

The above are worthy goals that need to be pursued vigorously by global actors that have taken upon themselves the challenge of easing the lot of the world’s powerless countries. The urgency of resuming the North-South Dialogue, among other questions of importance to the South, has time and again been mentioned in this column. This is on account of the fact that the most underdeveloped regions of the South have been today orphaned in the world system.

Given that the Non-aligned Movement and like organizations, that have espoused the resolution of Southern problems over the decades, are today seemingly ineffective and lacking in political and economic clout, indications that the BRICS grouping is in an effort to fill this breach is heartening news for the powerless of the world. Indeed, the crying need is for the poor and powerless to be brought into international decision-making processes that affect their wellbeing and it is hoped that BRICS’s efforts in this regard would bear fruit.

What could help in increasing the confidence of the underdeveloped countries in BRICS, is the latter’s rising economic and political power. While in terms of economic strength, the US remains foremost in the world with a GDP of $ 20.89 trillion, China is not very far behind with a GDP of $ 14.72 trillion. The relevant readings for some other key BRICS countries are as follows: India – $ 2.66 trillion, Russia – $ 1.48 trillion and Brazil $ 1.44 trillion. Of note is also the fact that except for South Africa, the rest of the BRICS are among the first 15 predominant economies, assessed in GDP terms. In a global situation where economics drives politics, these figures speak volumes for the growing power of the BRICS countries.

In other words, the BRICS are very much abreast of the G7 countries in terms of a number of power indices. The fact that many of the BRICS possess a nuclear capability indicates that in military terms too they are almost on par with the G7.

However, what is crucial is that the BRICS, besides helping in modifying the world economic order to serve the best interests of the powerless as well, contribute towards changing the power balances within the vital organs of the UN system, such as the UN Security Council, to render them more widely representative of changing global power realities.

Thus, India and Brazil, for example, need to be in the UNSC because they are major economic powers in their own right. Since they are of a democratic orientation, besides pushing for a further democratization of the UN’s vital organs, they would be in a position to consistently work towards the wellbeing of the underprivileged in their respective regions, which have tremendous development potential.

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Queen of Hearts

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She has certainly won the hearts of many with the charity work she is engaged in, on a regular basis, helping the poor, and the needy.

Pushpika de Silva was crowned Mrs. Sri Lanka for Mrs. World 2021 and she immediately went into action, with her very own charity project – ‘Lend a Helping Hand.’

When launching this project, she said: “Lend a Helping Hand is dear to me. With the very meaning of the title, I am extending my helping hand to my fellow brothers and sisters in need; in a time where our very existence has become a huge question and people battling for daily survival.”

Since ‘Lend a Helping Hand’ became a reality, last year, Pushpika has embarked on many major charity projects, including building a home for a family, and renovating homes of the poor, as well.

The month of June (2022) saw Pushpika very much in action with ‘Lend a Helping Hand.’

She made International Father’s Day a very special occasion by distributing food items to 100 poor families.

“Many are going without a proper meal, so I was very keen, in my own way, to see that these people had something to keep the hunger pangs away.”

A few days later, the Queen of Hearts made sure that 50 more people enjoyed a delicious and nutritious meal.

“In these trying times, we need to help those who are in dire straits and, I believe, if each one of us could satisfy the hunger, and thirst, of at least one person, per day, that would be a blessing from above.”

Pushpika is also concerned about the mothers, with kids, she sees on the roads, begging.

“How helpless is a mother, carrying a small child, to come to the street and ask for something.

“I see this often and I made a special effort to help some of them out, with food and other necessities.”

What makes Pushpika extra special is her love for animals, as well, and she never forgets the street dogs that are having a tough time, these days, scavenging for food.

“These animals, too, need food, and are voiceless, so we need to think of them, as well. Let’s have mercy on them, too. Let’s love them, as well.”

The former beauty queen served a delicious meal for the poor animals, just recently, and will continue with all her charity projects, on a regular basis, she said.

Through her charity project, ‘Lend a Helping Hand,” she believes she can make a change, though small.

And, she says, she plans to be even more active, with her charity work, during these troubled times.

We wish Pushpika de Silva all the very best, and look forward to seeing more of her great deeds, through her ‘Lend a Helping Hand’ campaign.

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Hope and political change:No more Appachis to the rescue

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KUPPI on the current economic and political crisis: intervention 1

by Harshana Rambukwella

In Buddhist literature, there is the Parable of the Burning House where the children of a wealthy man, trapped inside a burning house, refuse to leave it, fearful of leaving its comfort – because the flames are yet to reach them. Ultimately, they do leave because the father promises them wonderful gifts and are saved from the fire. Sri Lankans have long awaited such father figures – in fact, our political culture is built on the belief that such ‘fathers’ will rescue us. But this time around no fathers are coming. As Sri Lankans stare into an uncertain future, and a multitude of daily sufferings, and indignities continue to pile upon us, there is possibly one political and emotional currency that we all need – hope. Hope is a slippery term. One can hope ‘in-vain’ or place one’s faith in some unachievable goal and be lulled into a sense of complacency. But, at the same time, hope can be critically empowering – when insurmountable obstacles threaten to engulf you, it is the one thing that can carry you forward. We have innumerable examples of such ‘hope’ from history – both religious and secular. When Moses led the Israelites to the promised land, ‘hope’ of a new beginning sustained them, as did faith in God. When Queen Viharamahadevi set off on a perilous voyage, she carried hope, within her, along with the hope of an entire people. When Martin Luther King Jr made his iconic ‘I have a dream’ speech, hope of an America where Black people could live in dignity, struck a resonant chord and this historical sense of hope also provided inspiration for the anti-Apartheid struggle in South Africa.

This particular moment, in Sri Lanka, feels a moment of ‘hopelessness’. In March and April, this year, before the cowardly attack on the Gota Go Gama site, in Galle Face, there was a palpable sense of hope in the aragalaya movement as it spread across the country. While people were struggling with many privations, the aragalaya channeled this collective frustration into a form of political and social action, we have rarely seen in this country. There were moments when the aragalaya managed to transcend many divisions – ethnic, religious and class – that had long defined Sri Lanka. It was also largely a youth led movement which probably added to the ‘hope’ that characterized the aragalaya. However, following the May 09th attack something of this ‘hope’ was lost. People began to resign themselves to the fact that the literally and metaphorically ‘old’ politics, and the corrupt culture it represents had returned. A Prime Minister with no electoral base, and a President in hiding, cobbled together a shaky and illegitimate alliance to stay in power. The fuel lines became longer, the gas queues grew, food prices soared and Sri Lanka began to run out of medicines. But, despite sporadic protests and the untiring commitment of a few committed activists, it appeared that the aragalaya was fizzling out and hope was stagnant and dying, like vehicles virtually abandoned on kilometers-long fuel queues.

However, we now have a moment where ‘hope’ is being rekindled. A national movement is gathering pace. As the prospect of the next shipment of fuel appears to recede into the ever-distant future, people’s anger and frustration are once again being channeled towards political change. This is a do-or-die moment for all Sri Lankans. Regardless of our political beliefs, our ideological orientation, our religion or class, the need for political change has never been clearer. Whether you believe that an IMF bailout will save us, or whether you believe that we need a fundamental change in our economic system, and a socially and economically more just society, neither of these scenarios will come to pass without an immediate political change. The political class that now clings to power, in this country, is like a cancer – poisoning and corrupting the entire body politic, even as it destroys itself. The Prime Minister who was supposed to be the messiah channeling international goodwill and finances to the country has failed miserably and we have a President who seems to be in love with the idea of ‘playing president’. The Sri Lankan people have a single existential choice to make in this moment – to rise as one to expel this rotten political order. In Sri Lanka, we are now in that burning house that the Buddha spoke of and we all seem to be waiting for that father to appear and save us. But now we need to change the plot of this parable. No father will come for us. Our fathers (or appachis) have led us to this sorry state. They have lied, deceived and abandoned us. It is now up to us to rediscover the ‘hope’ that will deliver us from the misery of this economic and political crisis. If we do not act now the house will burn down and we will be consumed in its flames.

Initiated by the Kuppi Collective, a group of academics and activists attached to the university system and other educational institutes and actions.

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