Give And Take
Sri Lanka heads into the Sinhala and Tamil New Year at a time of difficulty and hardship unprecedented in our contemporary history. Covid 19 has cost us much, as it has cost nearly all countries in the planet. There have been claims that the worst is over and we continue to hope that this is correct. But that is not something that can be said with certainty. However a semblance of normalcy has returned although sections of the community, such as those dependent on tourism, continue to suffer hardship. Nobody can claim that the economy is in good shape with the rupee plunging to a historic low of Rs. 200 to the U.S. dollar. This must reflect both on the import bill and on external debt servicing and repayment. But tea prices remain good and the weather has been fair. While we can take comfort that we have not yet defaulted on our massive debt servicing and repayment obligations, the situation is far from rosy with our ability to raise new loans at interest rates that are not exorbitant declining by the day.
Although the ever-rising cost of living continues to impose hardship on both the poor and the middle class, this has been something that has been always with us for a very long time. Although incomes have grown, prices have grown much faster and we know too well that the value of money is now a fraction of what it was. This has particularly hurt savings and the prevailing low interest rates have dealt a kidney punch to large numbers of retired people dependent on interest income for their livelihood. While grumbling continues, people have learned to cope as best as they can. Despite all the negatives, the rulers continue to project a bold front. But there is no escaping the reality that the government has rapidly lost popularity since the last elections, both presidential and parliamentary.
No ban on New Year travel has been imposed although there are inherent risks, in the covid context, of large numbers of people going home to their villages from crowded urban centers they work in. This has been a long-held tradition and it would be a brave government that would interfere however much prudence dictates otherwise. While most people wear masks while moving around in public places, enforcing social distancing in crowded public transport will be next to impossible. Thus the powers that be have resorted to the easier way of leaving the choice to the good sense of the people rather than enforcing strict rules controlling movement. Although other countries have seen spikes of infection by being lenient on holiday travel, Sri Lanka will hopefully have better luck post avuruddhu.
We run on this page today a contribution from the Pathfinder Foundation of Mr. Milinda Moragoda, our High Commissioner-designate to New Delhi cautioning the government against taking too strong a stance on import substitution – a direction in which it is clearly moving. Given Moragoda’s political orientation, Pathfinder may be seen to be sticking its neck out by advocating a hemin hemin policy. Nobody would reasonably object to government imposing certain import bans to encourage local production as in the recent case of turmeric. There is no debate that we must grow crops that we can rather than import them. But governments must always strike the right balance between the interests of producers and consumers. When Prime Minister Dudley Senanayake pushed a massive food production drive during his 1965-70 government, he used to say at public meetings in agricultural areas that enormous foreign exchange expenditure was being incurred for the import of potatoes that some foreign experts had once-upon-a-time said cannot be economically grown here.
But Welimada farmers disproved them. Thereafter potatoes have been successfully grown even in Jaffna although we have not achieved self-sufficiency. “Why should we pay farmers in potato growing countries for their produce when we can pay that money to our own farmers?,” the prime minister used to ask. “But when we enforce a policy to ensure that our cultivators got the money flowing abroad, our opponents accuse the government of kicking the poor man’s ala hodda.” This was also true of chillies and onions where import substitution policies worked to benefit local farmers although at a cost to consumers. Jaffna farmers garlanding one-time Agriculture Minister Hector Kobbekaduwa with onions and chillies when he ran for president against J.R. Jayewardene was testimony to this policy. But it has not worked as successfully as it might have where local sugar production was concerned. Despite this country being endowed by conditions enabling sugar cane growing, we are nowhere near self-sufficiency although different governments have used tariff barriers to ensure better prices to domestic cane growers. Unfortunately we have a local sugar industry which makes more money out of its potable alcohol byproduct than from its sugar.
We have to be always conscious of the trade balance and cannot forget that Europe and the USA are the biggest markets for our garment industry. The ongoing restrictions on motor vehicle imports has no doubt saved us much foreign exchange but we cannot butter our bread on both sides by adopting one sided trade policies. That there must be give and take is a fact of life and it would be useful for the concerned authorities to take note of the Pathfinder perception that “openness to trade improves the tgrowth, employment and income trajectories of economies.”
Crime of booing
Tuesday 28th March, 2023
The efficiency of the police is truly amazing, the only problem being that it is selective. Our brave cops sprang into action and arrested a person after giving chase in Homagama over the weekend. His crime? He booed Minister Bandula Gunawardena while driving past a ceremony where the latter was laying the foundation stone for the construction of a Buddhist shrine.
What is the world coming to when those who have plundered public wealth, committed many crimes including murder and bankrupted the country are given police protection and citizens who express their displeasure at the government by booing are arrested? The Buddha forgave those who even tried to kill him, didn’t he? So, it defies comprehension why anyone should be arrested for jeering at a politician at a Buddhist religious event.
There is reason to believe that the police went above and beyond the call of duty to please Minister Gunawardena. Opinion may be divided on the protester’s action and the reaction of the police, but that is not what we intend to discuss, today. Suffice it to say that booing is symptomatic of bubbling public anger, which the government cannot contain with the help of the police. When a youth was arrested in April 2021 for sounding the car horn in protest against the police closing a road in Borella for a motorcade transporting a group of foreign dignitaries to pass, the media rightly questioned the wisdom of the government and warned that the situation was likely to take a turn for the worse. Police action did not deter the public from protesting. Subsequently, the then President Gotabaya Rajapaksa himself was booed while he was passing a long line of people near a milk food outlet. A few months later, the people took to the streets and ousted the President. That is how public anger wells up and fuels uprisings.
The police have reached peak performance during the past several months; their remarkable feats include using batons as magic wands to make unruly protesters in robes levitate over tall walls of the Education Ministry! While hunting down undergraduates, they have also arrested some underworld kingpins. When a restaurant owner was gunned down in Hanwella recently, not many expected his killer to be even identified, but the hired gun, known as Booru Moona was arrested in record time. The crime busters have also taken into custody some key figures in a drug cartel run by a criminal known as Harak Kata, who was arrested in Madagascar and extradited.
Curiously, the police lack this kind of high-octane performance where some crimes are concerned. The killers of a large number of persons including The Sunday Leader Editor Lasantha Wickrematunge and ruggerite Wasim Thajudeen are still at large, and their family members and friends have been seeking justice for more than a decade.
Worse, the police sometimes choose to turn a blind eye to serious offences committed under their nose. A few weeks ago, there was a public outcry over the presence of a large number of ‘unidentified’ armed men in uniform similar to that of the army near a university students’ protest in Colombo. Armed with assault rifles and clubs and iron rods, they were operating alongside the army and the police in full view of the media and the public. Both the army and the police have said those men are not their personnel. If so, who are they? It is a non-bailable criminal offence for anyone to carry firearms without permission and he or she must be arrested and produced in court. The police should have arrested those characters before cracking down on the protesting undergrads.
Will the police, who swing into action and arrest jeerers before one could say ‘boo’, so to speak, explain why they have not cared to identify the armed men who were seen with them near the Colombo University recently?
Tissue of lies and other issues
Monday 27th March, 2023
There is no bigger lie than the oft-repeated claim in some quarters that the 21st Amendment to the Constitution has helped strengthen democracy by ridding vital state institutions of dirty politics. Perhaps, the doormat at the entrance to the President’s Office receives better treatment than the supposedly independent Election Commission (EC), which suffers many indignities at the hands of some government politicians.
Prime Minister Dinesh Gunawardena was economical with the truth, which he also stretched and bent, in Parliament on Friday, when the Opposition questioned him on the postponement of the local government (LG) elections. The PM, who is also the Minister of Provincial Councils and Local Government, said he would meet the members of the EC for a discussion on poll-related issues soon. There is nothing to be discussed about elections! The government should either allocate funds for the LG polls or officially inform the public that it is scared of facing an electoral contest and therefore cannot hold the mini polls. Its refusal to release funds for elections on some flimsy grounds has only eroded public confidence in the electoral process, and given a turbo boost to anti-politics, which is manifestly on the rise and rapidly eating into the vitals of the state.
It is a pity that PM Gunawardena, who gained national prominence by standing up to a dictatorial UNP government under President J. R. Jayewardene, taking up the cudgels for the people’s franchise and winning the Maharagama by-election, in 1983, against tremendous odds, is now backing those who are all out to put off elections. President Jayewardene scrapped the 1982 general election for fear of losing his five-sixths majority in Parliament, and held a heavily-rigged referendum instead, undertaking to hold by-elections in the electorates where the UNP would lose. He had to hold 18 such by-elections, four of which were won by the Opposition despite large-scale rigging and violence unleashed by the UNP. Anil Moonesinghe, Richard Pathirana and Amarasiri Dodangoda won the Matugama, Akmeemana and Baddegama electorates, respectively. Forty years on, Gunawardena and the late Pathirana’s son, Ramesh, are backing Jayewardene’s nephew, President Ranil Wickremesinghe, who is putting off elections!
Unfortunately, it is Finance Ministry Secretary Mahinda Siriwardena who has had to take all the flak for not making funds available to the EC. He has become a soft target that everybody who lacks the courage to take on President Wickremesinghe turns on. Government Printer, Gangani Liyanage, is also in a similar predicament. Siriwardena allocated funds for the EC, albeit in dribs and drabs, before being asked by the Cabinet and the President in no uncertain terms to stop doing so. The government has pinioned him to the wall, and the Opposition worthies are punching him, and not those who deserve their blows. Let those heroes be urged to pluck up the courage to attack the President instead of turning on the public officials whom the government has put in the straitjacket of zero-based budgeting. These mandarins find themselves in an unenviable position; the government is preventing them from carrying out their duties and functions according to their conscience, and the Opposition is bashing them.
The SLPP MPs keep saying that they want the LG elections held. It is they who postponed the mini polls first, in 2022. However, if these politicians who are as crooked as a barrel of fish hooks are being truthful for once, then it will be seen that all members of Parliament, save the single UNP member and perhaps several others who have pledged their allegiance to President Wickremesinghe, are against the postponement of elections, and, worse, the President is refusing to allocate funds for the LG polls against the will of the vast majority of MPs! Parliament controls public finance, and therefore it must be allowed to decide whether to allocate funds for elections. Let a resolution be presented to Parliament to that effect and a vote taken thereon urgently.
Minister Kanchana Wijesekera informed Parliament, on Thursday (23), that President Wickremesinghe had asked for a division by name on the government’s agreement with the IMF so that the public would know who was supportive of the IMF programme and who was not. The same modus operandi could be adopted, if a vote is taken anent the LG polls, so that the public will know who actually wants the elections put off. This is the most democratic way of deciding whether to hold the LG polls or postpone them.
North Korea is reported to have recently tested a secret weapon capable of causing tsunamis. The Rajapaksa-Wickremesinghe regime, which often warns that Sri Lanka might end up being a country like the hermit kingdom unless its economic programme is followed, has resorted to an ill-advised course of action that is fraught with the danger of triggering a tsunami of public anger. Its members have apparently forgotten the firenado, as it were, which hit them in May 2022.
More heavy lifting to be done
As President Ranil Wickremesinghe tirelessly stressed, the signing off on the Extended Fund Facility (EFF) with the International Monetary Fund marks a new beginning. “Forget the past and the old games,” he has said seeking the cooperation of both the opposition and the media for a great leap forward. He has made the point that the IMF arrangement of USD 2.9 billion opens the doors for further credit adding up to USD 7 billion from elsewhere. When he met editors and other media heads on Thursday he said we have to continue negotiations with bilateral and multi-lateral lenders as well as private creditors which he admitted would be the most difficult.
The bad news when this was being written on Friday was that unless there is a dramatic change of heart on the part of the executive, the likelihood of the scheduled local government elections in the foreseeable future appears more than remote. There are, of course, a clutch of cases before the courts at present and which way the determinations will go is not clear right now; also in which direction the dice will roll once the courts rule. But it is patently clear that both the president and the government want these elections as much as they want a hole in the head.
There is no need to labour the reason why the incumbent establishment does not want local elections at the present moment. This, notwithstanding SLPP General Secretary Sagara Kariyawasam’s mealy-mouthed protestations that his party does not wish these elections put off. The electorate is very well aware that these elections cannot mean a change of government. Wickremesinghe is safely ensconced on his presidential throne until Gotabaya Rajapaksa’s term runs out in November 2024. Wickremesinghe is constitutionally empowered to dissolve parliament whenever he wishes from now until then. That’s the whip-hand he holds over his SLPP backers who made him president. It will safely ensure that they will not rock the boat during his tenure.
Just as much as the president and his government do not want any election in the short term, the opposition parties are literally panting that these be held soonest for reasons that are all too obvious. The last time the country elected local bodies was in February 2018 and the Rajapaksa party was the comfortable winner. The credit for this within the SLPP was widely apportioned to Basil Rajapaksa, its national organizer. That election victory heralded the coming of Gotabaya Rajapaksa in November 2019 and the Mahinda Rajapaksa government the following August. This is why the opposition, principally Sajith Premadasa’s SJB and the JVP-led National People’s Power (NPP), is striving might and main to have this election one way or another. The present signal is that they will not succeed in this endeavour. But as in cricket, there is no certainty in the outcome.
Though the president requested that the old games must not be played any longer, his supporters don’t practice what he preaches. There was a vulgar display of firecracker lighting, in true Sri Lankan style, greeting the announcement that the IMF deal was through. Everybody and his brother well know that this polluting lighting of strings of firecrackers greeting election results, politicians arriving at meetings and other similar events are funded by the politicians themselves. Some ghouls even lit crackers when President Premadasa was assassinated. We don’t know whether last week’s cracker lighting was a command performance or of old habits persisting. Whatever it was, it was unseemly.
The mere fact the IMF deal is through does not mean that the country is going to emerge from the economic morass in which it is mired. A great deal of heavy lifting remains to be done. The initial benefits cannot be more than a trickle. Possibly the June negotiations down the road may be an opportunity to offer some tax relief to professionals loudly protesting that the new rates are totally unrealistic. We run a letter from a retired Commissioner General of Inland Revenue in this issue who says that in his view, the problem is not with the rate of taxation which is between six and 36% but with the exemption threshold.
He rightly says that given today’s hyper-inflation. high cost of electricity, water and essential food, the Rs. 1.2 million exemption threshold is far too low. He believes that if this is raised to at least Rs. 1.8 million a year, it may be possible to win the unions over and reduce the tax burden on high income professionals. He has said this should not impact on the IMF agreements and the time has come for a compromise between the government and protesters. Clearly the now retired writer will not have access to actual numbers. But given his long service in the tax department, he would have an instinct for these matters.
It is also pertinent to say here that it is time the government makes a statement about the safety of the country’s banking sector. There are many worries on this score particularly after what happened recently in the U.S. and in Switzerland. It is well known that our state banks have been captive lenders to insolvent state-owned enterprises with such loans underwritten by the government. The fact that the IMF deal was successfully concluded, no doubt, is a reassuring factor about the stability of our commercial banking system. Nevertheless, a statement from the government will reassure constituents.
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