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Mandate of Ministry of Power – Some ambiguities, conflicts and barriers

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By Dr. Janaka Ratnasiri

The Gazette Notification Extraordinary No. 2187/27 of 09.08.2020 stipulates the mandates of ministries, both Cabinet and State, and the institutes coming under their purview. One common requirement of these mandates is that they should align with the President’s policy document “Vistas of Prosperity and Splendour (VPS)”. In assigning functions among ministries, one deviation from the past practice hitherto followed is the division of Ministry of Power and Energy into two separate ministries, Ministry of Power and Ministry of Energy. There is some sense in this decision (See also The Island of 14.08.2020). It is hoped this change is for the better and not for the worse, as usually happens.

MANDATE OF MINISTRY OF POWER AND STATE MINISTRY OF RENEWABLE ENERGY

The key mandate of the Power Ministry is given as:

Meeting the electricity needs of all urban and rural communities, based on the long-term generation expansion (LTGE) plan prepared by the Ceylon Electricity Board (CEB).

Supplying electricity to business enterprises in Sri Lanka enabling them to be competitive in the global market, and ensuring energy security.

Among the special priority areas identified for the Power Ministry are the following:

Expand the capacity of the Puttalam coal power plant, with additional investment.

Balance the generation mix from renewable energy plants, thermal power plants and natural gas power plants while minimizing the cost of generation and eliminating any uncertainties in generation.

Implement the long-term generation expansion plan.

Improve the efficiency of transmission and distribution systems.

Minimize the cost of electricity for manufacturing industries enabling their competitiveness in global markets.

Special priority areas identified for the State Ministry Renewable Energy, are the following:

Convert the Kelanitissa power plant to a natural gas turbine plant, and expand the Kerawalapitiya power plant.

Develop a smart network ensuring generation efficiency and optimizing its use.

Encourage the use of roof-top solar PV panels in households, commercial establishments and factories, enabling supply of electricity at low cost.

Encourage the private sector and entrepreneurs to establish renewable energy projects.

Add to the national grid the Broadlands Hydropower (HP) plant by 2020, Uma Oya HP plant by 2021, Moragolla HP plant by 2023, Thalapitigala and Seethawaka HP plants by 2024.

Add to the national grid the Mannar 100 MW wind power plant by 2021 and add 800 MW of wind and solar systems set up at Mannar, Pooneryn and Moneragala.

PROVISIONS IN “VISTAS OF PROSPERITY AND SPLENDOUR”

The VPS document has no separate section on Power Sector, but has only a section on Renewable Energy (RE), highlighting the President’s desire to give priority for renewable energy. The preamble to this section says “Renewable energy has now become a widely discussed subject and is needed as part of the overall energy mix of a country, which consists of Hydro, Thermal, Coal and alternative renewable energies. It will ensure that the country has access to low cost energy needed for rapid economic acceleration. By 2030, we expect the country’s renewable energy mix to be 40% of the total portfolio. We also anticipate that hydro and renewable energy together would account for 80% of the overall energy mix by 2030”.

The following targets on power sector development are also given in the VPS document.

According to the current plan, we will take actions to add 230MW of power to the national grid by installing the Broadland hydropower station by 2020, Uma Oya by 2021, Moragolla by 2023, Talapitigala and Seethawaka by 2024.

Immediate actions will be taken to convert the Kelanitissa plant to a natural gas turbine plant, where similar two plants will be implemented in Kerawalapitiya and Hambantota before 2023.

As part of the environmental-friendly policy, we will convert the fuel-powered plants located around the Colombo area to natural gas turbine plants within the next year.

With respect to transformation towards Renewable Energy, the VPS document says:

We will add 100 MW of wind energy in Mannar by 2021. Additionally, we expect to add 800 MW of solar energy to the national grid by executing a wind and solar power project with a public-private partnership in potential locations around the country including Mannar, Poonareyn and Monaragala.

Roof top solar systems will be encouraged so that households and small businesses wo

uld have access to low cost energy, which will be done in the course of the next five years.

We will remove all impediments and incentivize the private sector and entrepreneurs interested in setting up renewable energy projects i.e. solar and wind, and to this end, the government will provide assistance.

We will also introduce an efficient energy generation programme using industrial waste in each city.

We will introduce new policies and legislation to ensure the efficient use of energy in construction sector.

AMBIGUITY IN TARGETS GIVEN IN THE VPS DOCUMENT

The preamble to the section on Renewable Energy in the VPS document says “By 2030, we expect the country’s renewable energy mix to be 40% of the total portfolio. We also anticipate that hydro and renewable energy together would account for 80% of the overall energy mix by 2030”. There is much ambiguity in this statement. Firstly, it is not clear what is meant by “total portfolio”. Secondly, it is not clear whether the term “overall energy” means energy consumed in all sectors including power, transport, industries, commercial and households or whether it means energy consumed in the power sector only. On the face of it, overall energy would mean the former.

But the State Minister of Solar Power, Wind and Hydro Power Generation Projects Development was heard over the TV recently saying that his Ministry’s target is to generate electricity up to 80% of the total electricity generation from renewable energy sources by 2030, in compliance with the VPS document. Obviously, the author of this document has erred when he said that 80% target is in respect of overall energy, if the State Minister’s word is taken as correct.

In an article published by the author in The Island of 19, 20, and 21 of February, 2020, he described, in detail a scheme to meet 80% of the total energy consumption from renewable energy sources by 2030 considering all sectors, including power, industries, transport, commercial and households. The scheme included operating wind power and solar power units as stand-alone systems generating direct current for electrolyzing water and producing hydrogen. There are several options available to use hydrogen to meet the energy needs in power, industries and transport sectors. Another option given in the article is to convert biomass into a liquid fuel for use in transport and households.

Energy generation and consumption data in different sectors in Sri Lanka is given in the Energy Balance Statement (EBS) prepared annually by the Sri Lanka Sustainable Energy Authority (SLSEA). The latest EBS is available only in respect of 2017. Table 1 gives data taken from the EBS and it shows that Sri Lanka has already achieved 45% of renewable energy share in the total energy mix in 2017. Hence, to give a target of 40% to be achieved in 2030 has no meaning.

Table 1 Overall Energy consumption given in 2017 EBSFuelQuantityUnitEnergy Content

(PJ)Share %Petroleum oil 5,375kt232.0 43.9Coal 2,156kt 56.9 10.7Sub-Total (Fossil Fuels) 54.6Major hydro 3,075GWh 30.9 5.8Biomass11,810kt192.9 36.5Other Renewables 1,650GWh 16.2 3.1Sub-Total (Renewables) 45.4Total528.9100.0 ELECTRICITY DEMAND BY 2030

The CEB prepares biennially a long-term generation expansion (LTGE) plan outlining the least cost options of generation plants that need to be added to the system annually for the next 20 years. The latest plan is in respect of the period 2020 – 2039 which is still in the draft form yet to be approved by the Public Utilities Commission, Sri Lanka (PUCSL) and scrutinized by the public. The Plan includes a Base Case that will meet the needs of average demand as well as other cases to meet the needs of high and low demand. Table 2 gives the capacity of different types of generating units that need to be added during 2020 – 2030 as given under Base Case.

Table 2. Capacity additions proposed in LTGE Plan 2020-39Type of plantCapacity to be added during 2020-2030

MWMajor hydropower plants627Solar PV plants900Wind power plants675Biomass plants55Mini-hydro plants165Diesel plants665Gas turbine plants70Combine cycle gas turbine plants1,500New Coal power plants 1,200

The LTGE Plan has also worked out the average generation from each plant type annually and the values obtained for 2030 are given in Table 3, extracted from the data given in Annex 8.4 of LTGE Plan. It is to be noted that it is not possible to forecast exact values for generation from each category in the future because it depends on many extraneous factors such as rainfall, cloud cover, wind regime, fuel prices and demand which are not known accurately in advance. Annex 8.4 gives both average values as well as high and low extreme values anticipated considering the uncertainties. Table 3 gives only the average values anticipated.

It is seen that according to CEB’s LTGE Plan for 2020-39, generation from renewable sources could reach only 35% by 2030, which is far below the 80% target given in President’s VPS Policy Document, assuming what is intended by “total energy” appearing in this document is total electricity generation. In order to align with the President’s policy, CEB will therefore have to come out with a revised plan for capacity additions reducing the thermal plant capacity and correspondingly increasing the RE systems enabling to raise the RE share in total electricity generation from 35% to 80% by 2030.

Table 3. Forecasted average generation in 2030 Plant categoryCapacity MWGeneration GWhMajor hydropower plants1,607 4,364Other renewable energy plants2,700 6,738Sub-total – RE sources4,30711,102Reciprocating plants 136 413Existing coal power plant 810 4,781Existing combined cycle plants 594 1,825New gas turbine plant 70 113NG combined cycle plants 1,500 5,783New coal power plants1,200 7,721Sub-total – Thermal4,31020,636Total31,738Share of RE generation35.0%

OPTIONS FOR MEETING THE PRESIDENT’S TARGET

The obvious choice for meeting the President’s target is to shift from coal power to solar and wind power. In an article written by the author appearing in the Island of July 31st and August 1st, 2020, he showed that by shifting from coal power to solar and wind power, CEB can save over 100 billion rupees annually. This is based on the price of LKR/kWh 10 offered in an on-going wind power project and bids received for solar power projects as divulged by CEB Chairman (Island of 24.07.2020). This is much less than the average cost of generation incurred by CEB which is LKR/kWh 23. In addition to the expenditure saved, adopting solar and wind power gives a bonus of providing pollution free generation.

Several proposals for building large scale solar power plants and wind power plants have been granted Cabinet approval in 2016 and 2017, but there have been no follow up measures taken to pursue them by the CEB. This is despite their economic and environmental advantages. With the announcement of President’s policy on promoting renewable energy, it is hoped that the officials in the Power Ministry and CEB will change their mindset and implement the proposed RE projects without delay. In order to get the private sector involved in this exercise, the present limitation of 10 MW for the development of RE projects by the private sector has to be removed.

The officials of the Power Ministry as well as of the CEB need to be reminded of the statement “We will remove all impediments and incentivize the private sector and entrepreneurs interested in setting up renewable energy projects i.e. solar and wind, and to this end, the government will provide assistance” appearing in the VPS policy document under Renewable Energy section. It is essential that they change their lackadaisical attitude towards renewable energy, if the President’s targets are to be achieved.

The mandate of the State Ministry of Renewable Energy includes building of large scale solar and wind power plants as priority areas. However, their implementation will be possible only with the concurrence of CEB, which was lacking in the past RE projects. There were also media reports of India offering a large solar park under the International Solar Alliance initiated by the Indian Prime Minister together with the French President at the Climate Change Summit Conference held in 2015. Sri Lanka should accept this offer and accelerate building up its solar power capacity.

Another option available is to increase the large hydropower capacity. The general thinking on this is that there are no more suitable sites available to build large hydropower plants in Sri Lanka. However, it is possible to build a large hydro power plant by building a new reservoir on Kotmale Oya below St. Clair’s waterfall and linking it to the existing shaft of the Upper Kotmale Power Plant. This will enable it to operate during the day increasing its plant factor rather than operate only as a peaking plant as done now. Water spilling over the Upper Kotmale Reservoir as well as water flowing down Devon’s water fall can be collected in this new reservoir.

This proposal was made by the Central Engineering Consulting Bureau (CECB) during the planning stage of Upper Kotmale project but not accepted by the Japanese Contractors. It has the potential to add about 160 MW of capacity, generating additional 520 GWh of RE annually. This is a better option than diverting water from Pundalu Oya to the shaft of the Upper Kotmale Project as proposed by CEB in its 2020-39 Plan.

The CEB’s LTGE Plan has given low priority for biomass power plants, adding only 5 MW capacity annually. This can be easily enhanced by setting up dedicated energy plantations and mixed plantations which will generate more renewable energy. It will also provide more opportunities for income generation to rural people and providing fodder to maintain a livestock industry. The colossal sum of money spent annually on importing fuel for thermal power plants presently could be retained in the country by developing biomass power plants.

It has been estimated that 1 ha of dedicated plantation of a crop such as gliricidia will yield 10 t of biomass annually. Assuming combustion of 1 t of biomass with 33% efficiency will generate 1.5 MWh of electricity, 1 ha of plantations has the capacity to generate energy equivalent to 15 MWh. Hence, to replace 1 MW of thermal power plant, about 500 ha energy plantations are required. This could be on new land or on home gardens and abandoned cropland including fallowed paddy land.

In 2019, the Cabinet declared 2022 as the year of Biomass Energy with the objective of promoting energy generation from biomass. Already, SLSEA is pursuing a project funded partly by UNDP and FAO for “Promoting Sustainable Biomass Energy Production and Modern Bio-Energy Technologies” with the specific objective of removing obstacles to the realization of sustainable biomass plantation, increase of market share of biomass energy generation and adoption of biomass- based energy technologies in Sri Lanka. Currently, a survey is planned to identify land available and suitable for energy plantations. Findings of this study will help developing more biomass power capacity at commercial scale by 2030.

CONFLICT BETWEEN THE POWER MINISTRY MANDATE AND VPS POLICY DOCUMENT

The Power Ministry mandate has the following provisions pertaining to the LTGE Plan and Puttalam Coal power plant.

Meeting the electricity needs of all urban and rural communities based on the long-term generation expansion (LTGE) plan prepared by the Ceylon Electricity Board (CEB).

Expand the capacity of the Puttalam coal power plant with additional investment.

Implement the long-term generation expansion plan.

As mentioned previously, CEB’s current plan envisages building 1,200 MW of coal power plants by 2030. Though it is consistent with the above mandate of the Power Ministry, its implementation will result in achieving only 35% share for RE plants out of total generation by 2030. This is in violation of the VPS targets. Hence, either the State Ministry should pursue more RE projects disregarding what was specified in the CEB’s LTGE Plan or the CEB revise its Plan to align with the President’s VPS document.

The VPS document has the following statement:

As part of the environmental-friendly policy, we will convert the fuel-powered plants located around the Colombo area to natural gas turbine plants within the next year.

It is gratifying to note that the new Government has decided to adopt an environment-friendly policy. However, it should apply not only to Kelanitissa Complex, but also to Puttalam Power Plant as well where the pollution is much severe than at Kelanitissa, particularly arising out of million tonnes of ash accumulated over the years containing many toxic heavy metals including mercury and arsenic.

Hence, in keeping with this policy, the proposal to add another 300 MW coal power plant to Puttalam Complex should be scrapped and instead the government should build a NG operated power plant of similar capacity which will be cheaper and easier to operate and maintain. Further, it will not emit any polluting gases such as Sulphur Dioxide or any particulates or any ash at all. Even the emission of other gases such as Carbon Dioxide contributing to global warming and Oxides of Nitrogen will be very much less.

Also, the LTGE Plan is highly flawed. It is supposed to determine which power technology will be the cheapest in 20 years hence based on current prices. With the cost of generation depending on plant capital cost and fuel prices both of which could vary widely within a span of 20 years, it is futile to make forecasts now as to which technology is the cheapest in 20 years hence and to adopt it. The technology should be selected after calling for bids for different technologies and selecting the most economic plant that meets detailed performance specifications as well as specifications on emission limits. This should be done at the time of building the plant and not based on flawed forecasts. Hence, stipulating a mandate to follow a flawed plan does not make sense.

BARRIERS AGAINST THE STATE MINISTRY AND VPS MANDATE

The State Ministry mandate has the following requirement:

Convert the Kelanitissa power plant to a natural gas turbine plant, and expand the Kerawalapitiya power plant.

The VPS document has the following requirements:

Immediate actions will be taken to convert the Kelanitissa plant to a natural gas turbine plant, where similar two plants will be implemented in Kerawalapitiya and Hambantota before 2023.

As part of the environmental-friendly policy, we will convert the fuel-powered plants located around the Colombo area to natural gas turbine plants within the next year.

Conversion to natural gas operation is possible with gas turbine power plants, both open cycle gas turbines (OCGT) and combined cycle gas turbines (CCGT). The latter comprises of two generating units, a gas turbine and a steam turbine which operates with hot exhaust gas released by the gas turbine without consuming additional fuel. Hence, a CCGT plant has a high efficiency exceeding 50%.

At Kelanitissa Complex, there are two OCGT plants with capacities 80 MW and 115 MW commissioned in 1981/82 and 1997, respectively, and two CCGT plants with capacities 165 MW and 163 MW commissioned in 2001/03 and 2003, respectively. All these power plants currently operate with auto diesel, except that the CEB owned 165 MW plant operates partly with diesel and partly with naphtha produced as a surplus in the refinery. All these plants can be converted to operate with NG after modifying their fuel injection systems, if it is found economical to do so considering their age. However, the non-availability of NG is a barrier to convert them within the specified time targets given in the mandates.

In order to convert these gas turbine plants to operate on NG, first NG will have to be imported in the form of liquefied natural gas (LNG) for which special unloading jetties on land or floating units need to be built which takes several years. Though negotiations were held with India and Japan for several years after signing memoranda of understanding with them for building a terminal and importing LNG, no progress has been made public on this project. It was also reported in the media that CEB is seeking assistance from the Asian Development Bank (ADB) to establish a terminal for importing LNG.

Originally, the Ministry of Petroleum had the mandate for importing LNG, but because of the ministry’s inaction, the CEB obtained Cabinet approval for them to import LNG directly. However, under the new government, all matters relating to petroleum including NG comes under the purview of the Ministry of Energy. It is to be seen how the two ministries will coordinate to supply NG for operating not only these existing gas turbine power plants but also the proposed new gas turbine power plants. Importing of LNG needs to follow international protocols and has to be handled by competent operators after having in place the necessary regulatory framework on safety aspects and issuing licenses for operators.

CONCLUSION

The mandate given to the Ministry of Power recommends the establishment of coal power plants in keeping with the long-term generation expansion plan of CEB. On the other hand, the mandates given to the State Ministry for Renewable Energy recommends conversion of existing thermal power plants to operate on natural gas in keeping with the environment-friendly policy of the government. Therefore, to be consistent in applying this policy, the proposed 300 MW coal power plant to be built at Puttalam should also be converted into a gas power plant.

This could be best done by expediting the building of the 300 MW gas power plant at Kerawalapitiya for which the Cabinet approval has already been granted after a procurement process which got dragged for nearly 4 years. This plant, which could be built much faster than the coal power plant, will be able to meet any power deficit anticipated in a few years’ time. It appears that the Ministry is holding back this project for reasons best known to them and the new Minister should use his good office to expedite the project without listening to officials who were responsible for delaying it. The most practicable way of achieving these targets is to appoint a new set of young honest officers not allergic to renewable energy and gas power to take decisions on these matters.

 



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Prospects for NPP/JVP at the next election

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by Kumar David

Several months ago I brought to my reader’s attention a straw-poll that I had conducted among my friends on the left of the political spectrum, university colleagues and liberal intellectuals on two matters; (i) their own voting intentions, (ii) what they perceived were the electoral prospects of the NPP/JVP. The replies were consistent. Most said that they would vote for the NPP/JVP or that they were mulling over it. Almost all declared that would not seriously consider Sajith or Ranil led outfits and that anything linked to the Rajapaksa-Porotuwa garbage heap was out of the question. Regarding whether the NPP/JVP could win an election most people in my straw-poll had reservations. While they were themselves satisfied that the JVP would never again repeat the madness of 1971 and 1989-91 they reckoned that the electorate at large was still anxious (minissu thaama bayai). I am grateful to all who wrote to me (actually everyone I contacted replied) for their frankness and careful evaluation of ground realities.

The National Peoples Power (NPP), an alliance of about 28 political parties, trade unions and grass-roots organisations conducted a public seminar on January 24, 2023, which was jam packed, not enough seating room. The keynote speaker was Anura Kumara Dissanayake (Anura hereafter) who was very clever in how he handled the seminar by declaring right at the start “People are concerned about our economic policies; they want to know how we will handle the economy”. Now indeed this is true, but it also let him off the hook about the insurrectionary folly of 1971 and 1989-91 and allowed him to skirt the concerns of the ethnic and religious minorities. I will touch on all three issues, economy, minorities and political adventurism in this short article while giving priority to the economic discussion in the light of the enormous success of the January 24 Seminar/Symposium/Consultation.

Yes, there is considerable interest in the JVP’s economic programme since it has never been explicitly spelt out in the past except as simple anti-imperialist and anti-neoliberal slogans. Anura, as expected focussed on the great hardships the people were suffering because of the ongoing economic crisis, the unbearable increase in prices and the breakdown in public services – hospitals for example are short of medicines, dressings for wounds and beds.

I will begin by picking up six crucial economic issues that arose from the January 24 seminar without stating whether the questions were or were not adequately addressed by the panellists on the stage. It is the right answer to the questions that matters most not whether the panellists got it right or are still working towards adequate solutions. What’s the rush, the elections aren’t tomorrow?

Will an NPP/JVP government be friendly to private-sector businesses?

How will Small and Medium Enterprise (SME) be encouraged and financed?

What is the attitude of the NPP/JVP to loss making state enterprises?

How will foreign investment be encouraged?

What is the is the right approach to Free Trade Agreements with other countries?

How will digitisation of production and of enterprises be encouraged?

I will now proceed to comment on these seven economic issues without indicating whether my comments are the same or different from what the panel members said. There is lots of time more to the next election; we are in the midst of a discussion in progress. Let’s go step by step. Yes, the NPP/JVP should aim to consolidate a mixed economy and therefore the role of the private sector must the recognised. As will become clear when I answer questions lower down what has to be consolidated is a dirigisme economy where the state directs fundamental policy, emphasis being on the word fundamental. In Singapore, South Korea and above all in China (Deng Xiaoping onwards) the private sector prospered although the directive role of the state in the broad sense was retained.

Making resources available for SMEs has to be undertaken as a matter of policy. Certain banks must be identified for that purpose, policy instruments create and funding provisions made via the Treasury. Support for SMEs has to be a state responsibility.

In my view policy towards loss-making state enterprises needs to be well defined. White elephants like Sri Lankan Airlines should be sold off. Loss making state enterprises have to be divided between those who make a loss because they carry a huge consumer subsidy (electricity for example) and others which are fattening an excessive work-force (some portions of the petroleum industry). In respect of the former the NPP/JVP has to decide to what extent and for how long a subsidy is a political necessity, and in respect of the latter a ruthless but time diversified closure policy adopted. Time has to be given for people to learn new skills to find alternative employment avenues. Digitisation is a specialist topic and I was pleased with the response of the relevant member (I am unable to recall his name) of the Seminar Panel who spoke briefly on digitisation and showed an expert grasp of his subject.

From a left propaganda point of view to speak of the tremendous hardship that the sudden economic crisis and the post-Covid and post global-recession period, had created is straightforward. Anura drew attention to the great hardships of the masses, the need to provide additional resources and made a fairly straightforward moral argument. The practical point is how to get this done without cutting other contending demands and how to persuade China to restructure rather than defer (postpone) debt repayment. Though I am a member of the NPP and have been an electoral candidate on the NPP National List slate what I say in this article is not NPP policy, rather is an open-ended contribution towards the ongoing discussion and it is intended to help formulate NPP policy. There is a long way to go before the next election and the lot more water will have to flow under the bridge before the NPP finalises its positions.

It is in this spirit that I make the comment that the NPP needs to openly declare that its model can, broadly, be described as social-democracy. Obviously, it is absurd to focus on prescriptive details but alternatives such as a USSR type state directed economy or the outdated Cuba-Venezuela-Angola-Ne Win Burma models are out of the question. Pakistan with the tacit approval of the Imran Khan opposition, Bangladesh, Malaysia, Indonesia and Mongolia de facto, in the context of post-Covid, global recession threatened world, have explicitly or all but explicitly endorsed social democracy. The NPP must have the gumption and the courage to explicitly state that it stands for social-democracy. It must tell the JVP that the old model of in the Wijeweera days is all dead and useless.

“Pepe” Mujico (Jose Mujia) the 40th president of Uruguay from 2010 to 2015 is described as the world’s humblest head of state. He donated 90% of his $12,000 monthly salary to charities. He was an outspoken critic of capitalism. A former guerrilla with the Tupamaros, he was tortured and imprisoned for 14 years by the military Uruguayan dictatorship (1973-85). Military dictatorships are the foulest and most abominable of regimes in the world. In Argentina for example the military dictatorship (1976-83) threw its opponents, alive into the sea out helicopters and that included pregnant women. Have no doubt that a military dictatorship in Sri Lanka will do the same. Have we not had enough experience of what unfettered military power can do? Sixty thousand young men and women perished when military power ran unchecked in 1989-91. But this comment is by the way, what I wish to say is something else; it’s about social-democracy. Pepe’s most famous quip is that if Uruguay was a big European country it would have become famous as the home of modern social-democracy. The point then is that in this complex and uncertain period the correct model to explicitly assert is social-democracy. The NPP must openly and explicitly declare itself a social-democratic entity.

I promised to comment briefly on minority concerns and the insurrectionary history of the JVP before I sign off. I would like to see the NPP explicitly reject the Wijeweera-Somawana storylines. That is reject Wijeweera’s fifth lecture and his general antipathy to plantation Tamils. Likewise, I would like to see the NPP dissociate itself from the Somawansa – Sarath Silva intervention that dissolved N-E provincial unity. More broadly I would like to see the NPP declare itself in favour of devolution to minority communities and to provinces. Obviously specific details remain to be clarified and that should be the topic of many fruitful discussions in NPP forums.

On the matter of apologising for the insurrectionary excesses and anarchist folly of 1971 my friend Prof Eich persuaded me that this is an unrealistic expectation and I should drop the matter. I agreed and remained silent for about two years. But as the NPP/JVP influence spreads more broadly into the Sinhala petty-bourgeois and rural classes the topic is raising its head again – (minissu bayai). An election winning strategy cannot plaster over that. The pathological madness that, as in the Cultural Revolution, the past has to be utterly destroyed in order to build the world anew may have influenced some in the extremist ranks of the JVP some decades ago. I have indeed run into many admirers of the Cultural Revolution in “those” times. However now the NPP must be uncompromising; there is no room for sympathy for any of this in its commitment to social-democracy.

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75 Years: How a halcyon start became a horrible sorrow – A tale of two compacts and two economies

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by Rajan Philips

Sri Lanka, then Ceylon, became independent in the best of times. Almost all contemporary accounts said so. A model colony was becoming independent unexpectedly soon with no struggle or sweat. No other emerging polity apparently had it so good. The economy was on a roll by the measures of foreign reserves and local consumption levels. As a small island it was easy to be overcome by modernization. Road and rail networks crisscrossed the island, telecommunications and postal services were bringing people closer. Public education was free and public health was looked after, the two anchoring a robust welfare system that was unique among comparator colonies. The population was under seven million and even though the vast majority of the people were relatively deprived, there was optimism that there was opportunity for everyone.

Universal franchise had been introduced 17 years earlier, in 1931, and the people had had a head start in experiencing electoral democracy – uniquely among non-western polities and well ahead of quite a few western ones. Independence arrived on the back of a new constitution, which was a simple text crafted by unassuming legal drafting and not the exalted product of a ponderous constituent assembly. Yet Sri Lanka’s first constitution, unlike its successors, was a compact document that possessed too many virtues and too few faults. Most importantly, it underwrote the communal compact that was the necessary and sufficient prerequisite for the colonial rulers to handover power to their local successors.

“Communal Compact” (AJ Wilson) is the idea that the (Soulbury) Constitution and the granting of independence were the result of a political agreement among the country’s constitutive “communal groups.” Put another way, the British had to either assume or believe that there was such an agreement among the Sinhalese, the Tamils and the Muslims before deciding on the timing and the terms of their departure. Before long, however, the communal compact came under stress and eventually broke.

After 75 years, the controversy is over a different and somewhat narrower compact – the ‘devolution compact.’ Equally, the seemingly salubrious economy that greeted independence in 1948, has now become a deflated and damaged economy requiring intensive treatment in 2023. Hence, the tale of two compacts and two economies. But how did we get here?

Broken Economy

The answers go back to the circumstances in which Sri Lanka became independent. There was more to them than the rosy pictures painted by contemporary accounts. There were already economic fissures and sociopolitical fault lines. These fissures and fault lines defined the political questions of the day and the political alignments that arose out of them. How they unfolded is the story of Sri Lanka after independence. It is an overtold story, but there are always new takes on them as new generations come along to live through the same old problems.

For all its consumption complacency, the economy in 1948 was the “classical colonial export economy”. Plantation exports paid for consumption imports and left a not too small Sterling surplus as bonus. However, the situation was structurally unsustainable. A fast growing population and a politically demanding consumption culture could not be supported indefinitely by the export earnings from tea, rubber and coconut alone. Within a decade, foreign reserves fell from one year worth of imports to four months of them. There has been no looking back since, albeit the wrong way.

The decades following saw severely imposed import restrictions that did not, however, serve the textbook purpose of stemming consumption and accumulating aggregate savings for productive investments. Import scarcities also had to pay a heavy political price. Unemployment became the new scourge along with the chronic mismatch between the outputs of free education and the labour needs of the economy.

Free education expanded the imparting of academic learning and not the technical mass education needed for the development of industries. Industrial development itself was circumscribed by the small national market of the island, its total lack of non-agricultural raw material resources, and indiscriminate import restrictions. State led industrialization proved to be too capital intensive and addressed neither the unemployment problem nor the needs of consumers.

The open economy alternative did unleash the potential for private industrial development and shifted the economic base from its sole reliance on plantation exports. But skyrocketing consumption levels, privatization of education that serves no social or economic purpose, criminal neglect of and corruption in the vital energy and transport sectors, and economically inappropriate and graft generating infrastructure investments have brought the national economy to its current parlous state.

In the assessment of Sri Lanka’s current President, there is no economy left to be reformed! He is promising, among many other promises, a new take off for a better landing at the hundredth anniversary of independence, which neither he nor his followers and critics will be around to witness.

One beam of light that needs to be added to this rather bleak recounting is the story of domestic agriculture, which has been an impressive one in terms of overall growth, if not quite so in terms efficiency of input allocations and certainly not in terms of the distribution of its outputs. Whether comparatively advantaged or not, agriculture is the bulwark of livelihood for the majority of Sri Lankan households; and inclusive of the plantations, it also provides the main domestic base for local industries. Any government can ignore agriculture only at its peril, and the punishment for anyone choosing to monkey with it will be the swiftest and the severest. The organic fertilizer fiasco just proved that, and rightly so.

In 1966, concluding his monograph, Ceylon: An Export Economy in Transition, Donald Snodgrass saw only one certainty “from the historical perspective of 120 years of modern Ceylonese economic development;” and that was, “the search for an economic system that will provide a politically acceptable and economically viable replacement for the classical export economy will continue.” The economy now is far more diverse than what was there in 1948. But the point about the elusiveness of the search for a “politically acceptable and economically viable replacement,” is spot on, 75 years on.

Broken Politics

Of the two, political acceptability and economic viability, it is the political part that has been playing the weightier role in Sri Lanka’s political economy. Politics itself has been swayed by non-economic pressures and compulsions than it has been informed by economic imperatives. The current debate over devolution would suggest that nothing might change even now. Economic doldrums, notwithstanding.

Political divisions along party lines were in their embryonic stage at the time of independence in 1948. The newest political party, the United National Party, had just been formed by DS. Senanayake to contest the 1947 parliamentary elections on a rightwing platform. GG Ponnambalam had formalized his Tamil Congress a few years earlier. And the country’s oldest political party, the Lanka Sama Samaja Party, that had just been freed of its proscription was already in two parts marking the second of its many splits. Rounding off the Left was the Communist Party that had come into being as the first splinter of the LSSP.

Many candidates ran as independents in 1947 and an unhealthily large contingent of them were returned as MPs. The UNP did not win an overall majority (50 of its 92 candidates lost in the elections) but was able to form the new government with the help of independents and Appointed MPs. The efforts of non-UNP MPs, through their historic gathering at Yamuna, the Havelock Road house of highly respected lawyer politician, Herbert Sri Nissanka, to present an alternative bid for power ended in failure, marking the first of many such failures to come. (To be continued).

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Sri Lanka at 100

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by Ram Manikkalingam

Sri Lanka’s future is hanging in the balance as we turn 75.

On its 75th birthday Sri Lanka is divided. There is a stand-off between the people and the political institutions. The people reject Parliament and the President. And Parliament and the President fear the people. This standoff cannot last indefinitely. It will lead to authoritarianism, anarchy or reform. The decisions made, not only by politicians who control our political institutions, but also by the people who want them changed, will determine where we end up.

If there is one person, who has a decisive role in where our country will be in 25 years, it is President Wickremesinghe. While parliament and the people can no doubt make a difference, their decisions must come through political persuasion and mobilization. But President Wickremesinghe can act on his own.

He was picked by the Rajapaksas to protect their interests. But he is not of the Rajapaksas. He protects the Rajapaksas indirectly, by protecting the system that they, and other politicians have benefited from. This system is a combination of rentier capitalism and majoritarian democracy. Businessmen make their money from permits, contracts and quotas provided by politicians. In turn, these businessmen fund the politicians, who run campaigns that favour the majority. Breaking out of this is not what the leading politicians of Sri Lanka want. When the Aragalaya peaked, and the Rajapaksas found themselves rejected, they looked for the next best leader. Someone who would maintain the system the Rajapaksas required for their survival. So Ranil Wickremesinghe was chosen. But he also has a choice.

He can hang onto the Rajapaksas and let the Rajapaksas hang onto him. Or he can begin a serious process of reform that by its very definition will require ditching the Rajapaksas and their ilk.

If he chooses the former option, he will preside over the rapid erosion of the economy and the gradual deterioration of democracy. Because the Rajapaksas very much represent the faction against both political and economic reform. This would prevent him from making the kind of economic reforms required to restructure our debt with the creditors, attract investors, promote equality, and improve public services. As anti reformists, the Rajapaksas would prevent Wickremesinghe from making critical changes required to move the country forward. Instead, they will act as a reactionary force, hostile to any democratic impulse and economic changes that reduce their corrupt grip on power.

This alliance between Wickremesinghe and the Rajapaksas would, in terms of policy, transform itself into an alliance between Sinhala extremism and neo-liberalism. This would precipitate political opposition, not just from political parties, but also from newly mobilized political groupings, including the youth, the students, the middle class, the trade unions and civil society. This opposition, in turn, can lead to state repression, as the government uses its control over the security forces to crack down on the newly revitalized Aragalaya, leading to authoritarianism or anarchy.

Ordinary people, spooked by threats and suffering under the burden of a rapidly deteriorating economic situation, would not even have the wherewithal to protest. They would be struggling to make ends meet, feed, clothe and educate their children, while taking care of the elderly and their struggling kin. The result would be a dispirited country, submitting, once again, to the authoritarianism of a narrow political elite, that unites in the face of popular mobilization.

Instead, the crackdown may also lead to greater mobilization, spiraling out of control despite the armed forces using excessive force. And in an echo of last year, gets rid of the President and this time the parliament, as well. In the absence of a sensible political programme, this systemic change brings neither reform nor revolution. Instead, Sri Lanka becomes saddled with a series of unstable governments that lack the capacity to advance democracy or the economy. Sri Lanka becomes a country where governments come and go, not because of fundamental political changes, but because an influential faction in or out of government is dissatisfied with a particular policy or leader.

This leaves Sri Lanka with a narrow path to political and economic reform that must be picked within the next couple of months.

At the end of February, President Wickremesinghe would have the power to dissolve parliament. He may fear doing so, because the new parliament will be dominated by political parties that are his rivals. He will then have to negotiate reforms with a prime minister who may have more popular support than he does. But does he really have the power to enact reforms, today? Even his positive efforts to release military occupied land and PTA prisoners, and implement the 13th Amendment are being met with hostility by his own faction in parliament. Moreover, any effort to balance the budget, strengthen welfare measures for the poor and vulnerable, raise taxes, restructure loss making State Owned Enterprises – would require a government that has the support of the people, not one that fears them. It is not too late for President Wickremasinghe to lead such a government that includes all political parties.

Sri Lanka has a narrow window to begin a process to deepen democracy and enact economic reforms that would bring us dignity and equality when we celebrate our centenary.

(Ram Manikkalingam is Director of the Dialogue Advisory Group. He was an adviser to then President Kumaratunga and was a Visiting Professor at the University of Amsterdam)

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