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Editorial

Economics vs. Politics

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Thursday 15th August, 2024

All signs are that the upcoming presidential poll and the next general election, which is expected to follow in quick succession, will take their toll on the country’s economic recovery process. The main presidential candidates are ready to do things that are fraught with the danger of not only inhibiting economic recovery but also sending the economy back into a tailspin.

The government, controlled by President Ranil Wickremesinghe, who is also the Finance Minister, is playing Santa. It is throwing money around in a desperate bid to recover lost ground. It has promised a pay hike for the public sector workers while claiming that the IMF-prescribed revenue targets have to be met. The President himself has indicated that vehicle imports will resume soon. Predicting that the country’s foreign currency reserves will suffer a temporary setback as a result, he has claimed that they will improve with the passage of time. However, there is no guarantee that they will. Tensions between Israel and Iran are reaching a boiling point, and if war erupts in the Middle East, oil prices will shoot up and workers remittances will drop; the prices of imports are bound to increase exponentially in such an eventuality. We peddle no argument against the resumption of vehicle imports, but the government must tread cautiously without allowing its political goals to take precedence over the country’s economic recovery strategy.

Until the announcement of the presidential election, the government had been rejecting requests for a downward revision of painfully high personal taxes. It has now made an about-turn. President Wickremesinghe is reported to have told a group of university administrators that government is ‘looking at adjustments to the personal tax structure to provide some relief to the taxpayers’; he says he has received two proposals in this regard––one from the Treasury, which is under him, and the other from the IMF.

There is no gainsaying that people are reeling from direct and indirect taxes, and the news about possible tax revisions will certainly gladden their hearts, but the question is whether the factors that led to sharp tax increases have been tackled for tax cuts to be considered. The IMF has stressed the need for Sri Lanka to raise its state revenue to the region of 15% of GDP by 2025, and pointed out that the revenues in other middle-income countries average 26% of GDP. The SJB and the JVP/NPP have also promised to ease the tax burden on the public. Their argument that if the tax net is cast wide, and tax collection is streamlined with corruption being tackled, it will be possible to grant relief to the public, is not without some merit, but will that goal be attainable in the foreseeable future? It will be interesting to see the tax adjustment proposals by the Treasury and the IMF.

Curiously, all contestants in the presidential race have chosen to remain silent on the imputed rental income tax on the cards. What do they propose to do with it?

There is hardly anything that Sri Lankan politicians baulk at doing to further their political interests and win elections. Never do they hesitate to subjugate the country’s long-term economic interests to their short-term political goals. The current economic crisis is multifactorial, but it is mainly attributable to politically-motivated tax cuts and ill-conceived welfare measures under the Gotabaya Rajapaksa government. Having won the 2019 presidential election, the SLPP slashed taxes, causing a sharp drop in state revenue, and embarked on a relief programme aimed to win the 2020 general election. It resorted to excessive money printing, which led to an increase in inflation, and the depreciation of the rupee, aggravating the country’s forex woes.

Having ruined the economy, the SLPP had to upend its own economic strategy by way of crisis management at the behest of the IMF. But there are signs of the blunders that led to the current economic crisis being repeated.

Given what the government has undertaken to do at the expense of the economy to garner votes, and the attractive promises its rivals are making to woo the public, the upcoming presidential election can be considered a contest between economics and politics. One can only hope that the economy will survive the coming elections.



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Editorial

Justice, hypocrisy and politics

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Saturday 27th June, 2026

Governments of all political hues in Sri Lanka usually do not uphold the foundational legal principle of the presumption of innocence when their political rivals happen to be arrested. The JVP-NPP administration has failed to be different despite its election pledge to usher in a new political culture. Its politicians and propagandists ruthlessly vilify their political opponents who are taken into custody. They apparently consider their rivals held on remand guilty until proven innocent.

The inversion of the presumption of innocence could have disastrous consequences, as evident from a large number of summary executions and political assassinations during the past armed conflicts in this country. The SLFP, the UNP and the JVP have committed the sin of physically eliminating their political opponents.

The current SLPP leaders, while they were in the SLFP-led UPFA government from 2010 to 2015, turned a parliamentary select committee into a kangaroo court against a Chief Justice, and hounded her out of office. The UNP also launched witch-hunts against upright public officials and judges and treated suspects as convicts. The JVP-led NPP has prejudged the guilt of three suspects, including former Justice Minister Wijeyadasa Rajapakshe’s son, Rakitha, and SJB organiser for Horana Charith Abeysinghe, arrested on Thursday on suspicion of seeking a bribe from the wife of a drug dealer in custody.

There is no gainsaying that the law must apply to everyone equally, and all allegations of transgressions must be probed. So, nobody should protest against the arrest of the aforementioned trio unless their legitimate rights are violated while in custody. If they are found guilty after a fair trial, stringent punishment must be meted out to them. This task is best left to learned judges. The government must not seek to gain political mileage out of their arrests. What one gathers from various statements the JVP/NPP politicians, including ministers, have been making about Rajapakshe and Abeysinghe is that the government is labouring under the misconception that they should be considered guilty simply because they have been arrested.

The SJB has suspended Abeysinghe’s party membership and launched a disciplinary inquiry. Such action is welcome. However, Abeysinghe should be given an opportunity to tell his side of the story and defend himself. The principle of natural justice must be upheld. That is how such matters are handled in the civilised world.

JVP/NPP politicians and propagandists continue to blame the SJB for having individuals with underworld links within its ranks. It should put its own house in order before telling other political parties how to deal with their members facing allegations.

Former Energy Minister Kumara Jayakody has been indicted for corruption before the Colombo High Court. The JVP/NPP unashamedly defended him to the hilt when the Opposition moved a motion of no confidence against him in Parliament. He stepped down when it became too embarrassing for the government to keep him in the Cabinet. What action has the JVP/NPP taken against him over charges of corruption? Has it at least held a disciplinary inquiry against him? Why hasn’t it suspended his party membership?

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Editorial

Falling oil prices and fallen heroes

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Friday 26th June, 2026

The whole world is enjoying the benefits of the US-Iran peace deal. Vessel traffic has more than doubled via the Hormuz Strait over the past 36 hours or so, bringing oil prices down steeply, according to media reports. Predictions that oil prices would not return to the pre-conflict levels in the foreseeable future have gone wrong.

World oil prices have come down almost to the pre-Iran war levels, with the global benchmark Brent crude dropping below USD 72.48 a barrel, described as the price it was at the day before the launch of the US-Israel attacks on Iran on 28 Feb., and settling at USD 72.63 per barrel. The US benchmark West Texas Intermediate (WTI) fell below USD 70 per barrel. These are very positive signs. Oil price decreases have stood all economies in good stead.

Some countries, such as the US, Australia and Pakistan, have opted for partial pass-throughs causing pump prices to drop, much to the relief of consumers who were reeling from the inflated fuel costs for more than three months. They have managed to cool inflation to some extent. But Sri Lankans are not that lucky. At the time of going to press, the JVP-NPP government had not decided to lower fuel prices; it was only trotting out various excuses for the so-called lag phase while pressure was mounting on it to reduce fuel prices at least partially. Sri Lanka’s fuel pricing has shown a rockets-and-feathers pattern under successive governments.

The JVP-NPP government did not scruple to opt for an immediate asymmetric cost pass-through when world oil prices increased. It allegedly resorted to price gouging by revaluing oil inventories, procured at lower costs, at prevailing market prices. When the Iran war erupted in late February, the government declared that the country’s fuel stocks were sufficient for several months, but it increased fuel prices immediately afterwards in keeping with global oil price hikes. Thus, it gets the best of both worlds by making fuel prices cost-reflective only when world oil prices rise. It is continuing the policies of the SLPP-UNP government, which it condemned for exploiting the public.

During their opposition days, the JVP/NPP leaders claimed that a government that increased local fuel prices whenever world oil prices rose was not worth its salt; it was a simple task that even a Pettah trader was equal to, they argued. They are now doing exactly what they flayed the previous governments for.

The Opposition has accused the government of keeping fuel prices unconscionably high to recover the staggering losses caused by the coal procurement scam, which has made the diesel-fired power plants operate overtime to compensate for a generation loss at Norochcholai. The Ceylon Petroleum Corporation has admitted that it had to buy some diesel shipments at prices as high as USD 286 per barrel to prevent supply disruptions. What has driven the demand for diesel high is the country’s overdependence on diesel-fired power plants to avoid power cuts.

Meanwhile, private bus operators, who secure fare hikes whenever diesel prices increase significantly, have argued that the operational and regulatory framework involving them and the National Transport Commission does not require them to lower bus fares when diesel prices decrease. If so, the government ought to introduce new laws and regulations to ensure that bus fares reflect diesel price decreases to prevent asymmetric pricing, for fuel is a major cost input in the transport sector.

If the JVP/NPP leaders were in the Opposition today, they would take to the streets demanding fuel price reductions. While out of power, they promised to champion the cause of the poor and resist injustice with might and main, just like Robin Hood and his Merry Men, but once in power, they are accused of behaving like Prince John and Sheriff of Nottingham; they are increasing taxes and enforcing compliance ruthlessly, besides jacking up tariffs. Such a hero-to-villain transformation usually carries significant political costs. No wonder the government is reluctant to face the Provincial Council elections.

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Editorial

Indelible ink and tainted records

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Thursday 25th June, 2026

The government has decided to scrap the long-held legal requirement to mark voters’ fingers with indelible ink at polling stations. It is in overdrive to introduce necessary legal amendments, we are told. The reasons given for its decision is that the practice of using indelible ink causes “operational inefficiencies” and “significant additional costs”. The Election Commission has claimed that the scrapping of the indelible ink requirement is its brainchild.

The JVP-NPP government is busy amending election laws and working on a new electoral system while doing everything in its power to postpone the Provincial Council (PC) elections further. If only the election monitors had continued to pressure the government to hold the PC polls rather than focusing on relatively inconsequential matters.

The use of indelible ink is not a silver bullet capable of preventing electoral malpractices, and therefore one can argue that its discontinuation may not render the electoral system any more vulnerable to practices, such as multiple voting. But whether it is prudent to do away with such safeguards against election malpractices, relying solely on the voter identification requirement is a moot point, given the fact that none of the main political parties are respecters of people’s franchise.

The UNP resorted to election malpractices and unleashed barbaric violence to retain its hold on power in the 1980s, when it used a heavily rigged referendum to make a general election disappear. The SJB, an offshoot of the UNP, is widely viewed as sharing the latter’s political DNA. The SLFP and its allies also rigged elections. In 1999, they chased away polling agents and stuffed ballot boxes in full view of the police to win the North Western PC polls. Some of the SLFP organisers responsible for violating election laws in that despicable manner are currently in the SLPP. The TNA fully endorsed the election boycott ordered by the LTTE in 2005 and even announced it. The JVP employed brutal methods such as shooting, beheading and quartering as part of its campaign to sabotage elections in the late 1980s. What guarantee is there that such political parties are any different from the proverbial cat that calmly held a lamp on a dining table only to revert to its old ways at the sight of a mouse?

As for the legal requirement of national identity cards (NICs) and other proofs of identity for voting, one may recall that the JVP seized the NICs of thousands of people during its reign of terror in the late 1980s. Some of the current JVP leaders have declared that they will not let go of power. They stand accused of working towards a one-party rule.

The Cabinet of Ministers is reported to have decided to remove provisions related to the use of indelible ink from election laws, while retaining voter identification requirements. Accordingly, the Presidential Elections Act, the Parliamentary Elections Act, the Provincial Council Elections Act, the Local Authorities Elections Ordinance, etc., are to be amended. One can only hope that the government will not turn amending election laws into a mega political project and use it as a pretext to postpone elections it is reluctant to face.

Most of all, a watchful eye needs to be kept on the amendments to be introduced, for there is no guarantee that the amendment Bills will not be stuffed with sections without judicial sanction to further the interests of the government. It has been revealed that when the Parliamentary Election Act of 1981 was amended in 1988, the words, “any member” (of a political party) were surreptitiously inserted thereinto after ratification to provide for the appointment of persons of party leaders choice to fill National List vacancies. In 2017, during the UNP-led Yahapalana government, several sections were incorporated into the Provincial Council Elections amendment Bill arbitrarily at the committee stage to provide for postponing the PC polls indefinitely. Controversy surrounds the manner in which the Online Safety Bill was “passed” in 2024. It was declared ratified amidst a noisy protest in the House.

Indelible ink is used by the countries in this part of the world as an antidote to multiple voting. Other democracies, especially in the West, have no need for it as they have reliable voter identification systems, which are however not totally foolproof. It is not prudent to presume that the franchise and the electoral process are invulnerable in this country, given the tainted records of the political parties that remain unremorseful. Hence, it is imperative that all safeguards against election malpractices be retained and strengthened.

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