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Region-wide war seen as looming over Europe

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The fear among sections of Western opinion is that a region-wide war is looming over Europe, basically on the lines of the two world wars of the 20th century. Two of the most immediate triggers to this belief are the seemingly non-interventionist military exercises being carried out by some 100,000 Russian troops on the Ukraine-Russia border and the reaction by the US to place 8,500 of its troops on high alert in the face of the development, besides getting together its Western allies in case Ukraine is invaded by Russia.

US President Joe Biden has been quoted as saying that ‘Russia would pay a heavy price’ in the event it invades Ukraine, in addition to warning of a ‘severe coordinated economic response’ on the part of the West in case of such a development. The results would be ‘disastrous’ for Russia and the Ukraine, the US President reportedly stated.

In a development of considerable significance, meanwhile, the US and Britain have bolstered Ukraine’s defense capabilities through the provision of some crucial military hardware. Britain, it is said, has already gone to the aid of Ukraine by sending to the country some of its military advisors and other key personnel.

Russian President Vladimir Putin, however, has dismissed the above Western reactions as ‘hysterical’. But he is on record as saying that Russians and Ukrainians comprise ‘one people, a single whole’. Thus, is he trying to acquire some legitimacy for the Russian military exercises on the Ukrainian border. That is, Ukraine is being seeing as part of Russia and taking back Ukraine should be perceived by the world as perfectly in order.

However, the stark reality is that Cold War type divisions are re-emerging in Europe. Russia made its intention clear to carve out Eastern Europe once again as its exclusive sphere of influence through its joint operations with Belarus a couple of months back against the backdrop of thousands of migrants from around the world flooding Belarus. It was believed at the time that Russia’s gameplan was to flood Western Europe in general and Germany in particular with migrants with a view to creating a refugee crisis in the traditionally Western sphere of influence.

As to whether there would be war or peace in Europe over Ukraine is seen to depend by some, entirely on Russian President Putin’s strategic thinking. What is he planning to do? This has emerged as the question of first importance in this connection. Whatever course of action the Russian leader may opt for, it is abundantly clear that he cannot afford to be seen as withdrawing tamely and faint-heartedly from the Ukraine border, now that he has sanctioned a heavy Russian military involvement in the region.

For Putin, ‘chickening out’ of Ukraine at this juncture is unthinkable. He will need to look over his shoulder constantly at those sections of the Russian public who see Ukraine as an inseparable part of Russia and are solidly behind the re-taking of Ukraine project. However, Putin is also obliged to consider the daunting consequences for particularly Russia from a military incursion into Ukraine.

At present except for Eastern Ukraine, which is within the Russian sphere of influence, the rest of Ukraine seems to be quite determined to fight a Russian invasion to the finish. This much is made clear by international media coverages of the Ukrainian crisis. In this effort, Ukrainians in general are bound to have considerable Western backing, militarily and otherwise, although it is difficult to say currently whether this would mean that Western military ‘boots’ would be on Ukrainian soil in the event of a Russian military incursion.

Considering that there will be no extensive Ukrainian backing for Russia in the event of an invasion, the latter would need to take their minds back to the 1979 USSR invasion of Afghanistan, which cost Russia very dearly. Is Russia opting for a military quagmire of like proportions? This question would need to figure prominently in Russian strategic calculations at this juncture.

However, the West has its share of problems as well. At present, it is not at all clear whether the US and Britain will be having West-wide, unanimous and ready backing for any military involvement in the Ukraine. Over the past few days, the US has been in consultation with the principal political and military formations of the West, such as NATO and the EU, but the US cannot rest assured that it would have their solid backing for a military riposte to a Russian invasion.

Germany, for one, has made no such unambiguous commitment and German backing is crucial to the success of a Western military response to Russia. Western countries would need to carefully factor in their economic links with Russia in particular prior to making any substantive military responses. For example, there is Germany’s high stakes gas pipeline project with Russia, ‘Nord Stream 2’, which needs to be taken into consideration. Would it compromise its energy needs for the sake of Ukraine’s sovereignty? This too is a poser to ponder on.

Moreover, President Biden has not been absolutely unambiguous on what he has meant by Russia being called on to pay ‘a heavy price’. Does he have in mind military repercussions by the West or collective economic sanctions? Besides, some of the President’s recent statements have led observers to believe that the US would not mind some minor military incursions into Ukraine by Russia. This has the West guessing but it could lead Russia into believing that it could get away with some violations of International Law in the Ukraine.

Accordingly, although war clouds may seem to be gathering over the Ukraine, there is no certainty as to whether we would be having a full-blown war on the lines of the First World War, for example. However, the existence of two antagonistic alliances, though loosely formed, tempts the observer into inferring that a region-wide war in Europe is within the realms of the possible. Nevertheless, the sides are in the process of talking somewhat and the hope of the sane is that Jaw-jaw-jaw will prove more potent than war-war-war.



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Visa Debacle: Fixing what ain’t broken

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by Dr Sirimewan Dharmaratne,
former Senior Analyst, HMRC, UK

There is a famous saying ‘If it ain’t broke, don’t fix it. Sri Lanka seems to be the exception to this rule. This is no more laid bare than the current debacle with tourist visas. Most countries that want tourist dollars have visa free entry or a minimal fee. A visa is a means for controlling access and a fee act as a further deterrent. It is a form of a user fee that is designed to restrict entry. Therefore, if you want tourists to come to your country and spend money, simple economics says not to charge an entry fee.

Reciprocal Requirements

The justification seems to be centred around the fact that Lankans pay much higher fees to this company when they travel compared to what visitors pay to come to Sri Lanka. This justification alone typifies why Sri Lanka is where it is now. The underlying issues here is not what Sri Lankans have to pay when they travel abroad but what tourists have to pay when they come to Sri Lanka. This is what those who are actually making a living from the tourism is concerned about. Most developed countries have stringent visa requirements for citizens of less developed countries for obvious reasons. But those countries do not have reciprocal requirements. This is not because they don’t have pride, but because they need the money that tourism brings in. It makes good business sense.

They make more money by allowing well-off tourists to come freely and spend rather than by selling visas.

Elated by the recent surge in tourist arrivals, in the eyes of the government, Sri Lanka is now a ‘cannot do without’ destination. Therefore, the first response is to increase the price of everything, starting with a visa fee and let others have a piece of the pie as well. Having this overassessment about the value of the country has led to various forms of rip-offs, some of which have been widely circulated in social media. Further, one has only to check hotel rates and other accommodation to realise how the rates have gone up astronomically. Increase of visa fee appears to be following the same misguided thinking. The truth, however, is that Sri Lanka is considered a ‘cheap’ destination for an ‘exotic’ holiday. It does not particularly standout in any aspect, such as beaches, nature, wildlife or food compared to other similar destinations. As Sri Lankans, we all have a visceral value of the country, but in the eyes of tourists, it is one of the many destinations that they can spend their money on and not a place to be visited at any cost.

Demand for Travel

Access costs determined the demand for a destination. When there are competing destinations in terms of characteristics, a savvy, erudite traveller will naturally select a destination that has lower access cost. While there is some flexibility in certain access costs, such as airfares, visa costs are regarded as a waste that does not add anything to the value of a trip. Most Western tourists look at it in disdain because they believe, rightly or wrongly, developing nations should be facilitating their patronage and not restrict it. Therefore, the issue is not what Sri Lankans have to pay when they travel overseas, but what tourists have to pay when they come to Sri Lanka compared to other South Asian destinations.

Sri Lanka had a somewhat high US$50 visa, which most visitors acquiesced. According to SLTDA’s own departure survey, most visitors stay 21 days or less with most frequent length-of-stay being 14 or 21 days. Therefore, it is likely that in excess of 95% of the visitors would have obtained this visa. This option that was mysteriously excluded, appears to have been reinstated. However, what in fact is the correct fee is sketchy.

If the proposed service fees are added, then the actual cost to the visitor could be as high as $75, which is a 50% increase. This is where knowledge of some basic economics would have been helpful. If you raise the price of goods or service without a discernible increase in quality, the demand will go down.

May it be for eggs, bread, fuel or visas, this is one of the basic economic principles that actually work. On the other hand, there is evidence that while the visa fee is US$50, only US$40 is paid to the government with the remaining US$10 is paid to the company as a ‘service’ fee. If this is the case, then it is absolute madness. While the visitors don’t care how the money is divided, it is imbecilic to hand over US$10 from each visitor for a service that was done for free just a month ago. The thinking and reasoning behind this defeat any form of rationality and can only be attributed to a perfidious, self-serving motive.

Uniqueness and elasticity

How much the visits would go down depends on the amount of increase and availability of substitutes. These two together show how elastic the demand would be.

This is where Sri Lanka has no particular advantage compared to other countries in the region. There are plenty of close substitute destinations if tourists want to visit South East Asia, which offer visa free arrival or a minimal visa fee. Apart from that, for European tourists, a whole new market has opened up in Eastern Europe, Andalucía, Türkiye and in the former Soviet republics, where holidays are ridiculously cheap. Majority of these countries do not have visa requirements for Western European tourists, which is their target market.

Sri Lanka also does not have any ‘must see’ places, such as Machu Picchu, Great Wall or Angkor Wat. There is no compelling reason for a visitor to specifically select Sri Lanka that would justify the additional access cost. What is on offer is fairly prosaic, and comparable to many other countries that offer similar experiences.

The bottom line is despite the euphoria surrounding the new found tourism goldmine, Sri Lanka is easily substitutable and therefore the demand is likely to be very elastic. If this nonsensical visa fee continues to exist, then a significant reduction in visitation can be expected, especially those with families. The loss will not be to the tourists but to Sri Lanka.

Logic of Outsourcing

With Sri Lanka being a popular outsourcing destination, it is hard to comprehend that there is no firm that could perform this task. In fact, a local entity seems to have manage well up to 16 April, and through the peak of arrivals during the winter months. Why their service no longer suffices is a mystery. Further, according to reports, Sri Lankan IT professionals could have done and were doing the work for a fraction of the cost. What is the compelling reason to change the status quo? There have been no reports of major infringements or capacity issues. So why fix something that was not broken?

Length of Contract

This is another aspect of this arrangement that does not make any sense. Why get into a 16-year contract when the world of IT and AI is fast changing? There are already unmanned immigration counters in many airports. Most documents and applications are now machine processed. It is predicted that most back-office work will become redundant in the near future. This company need not make huge investment on infrastructure to take this additional work on for Sri Lanka. Such a large company should be able to easily absorb this work without significant additional investment. Therefore, there is no reason to ask or agree to a contract for the next 16 years! This is an egregious decision on the part of the government, or is there some other in-win agreement that does not benefit the country?

Money Trail

Another dubious aspect of this contract is how the visa revenue is transferred to Sri Lanka. Apparently, when visas were processed locally, the daily take was sent to the Treasury at the end of each day. With the new arrangement, it is understood that the daily revenue is sent to a Dubai account of the company and transferred to Sri Lanka two days later, sans service charges. Based on an average of 5,000 daily visitors and a US$50 visa fee, this means maintaining an account with a minimum daily balance of US$250,000 in an overseas bank using Sri Lankan visa fees, but that does not belong to Sri Lanka. This guaranteed money could be used for various reasons, apart from the interest that could accrue on a daily basis, such as for overnight lending. The bottom line is that other than the undeserved service fee, the company is placed to generate more income from the financial arrangement and contract that Sri Lanka has seemingly sleepwalked into.

Security

The justification that it is a global company which processes visas in many countries is irrelevant. In any country, by law, one has to first look for local contractors before looking overseas. There is no evidence this procedure has been followed. But the more compelling issue is national security. Although, it is now said that foreign nationals would not man visa counters, they will have access to vast amounts of information and data that could be used for the benefit of a foreign nation. Although visa issuance may be done by Sri Lankans, back-office staff could be selectively biased in forwarding applications. This could create problems for the Sri Lankan governments from friendly nations if they see a pattern of bias. These concerns have been already raised by countries that are crucial for Sri Lankan foreign relations.

Prognosis

This change does not pass any logic that could justify such a monumental change. It appears to have been done in an ad hoc manner without doing a proper economic analysis or any other analysis relating to viability, security or economic development. There will definitely be a drop in visitations as there won’t be free entry for citizens of any country, even those who enjoyed that benefit earlier. What is most likely to suffer is family visits, because a potential increase in access cost of $300 to an average family of four would be a significant shock.

If the process is more convoluted, which requires submitting further documentation other than just passport information, it will be a further deterrent. All this will have a negative impact on the visitation rates that are now envisaged by those who are actually keeping Sri Lanka tourism going. There will be a corresponding impact on the local economy.

Currently Sri Lanka only enjoys a measly 15% repeat visitors, most of whom may even not be bone fide tourists. This is compared to nearly 40% repeat visitors in a destination like Barbados, which has no visa requirement for European or North American tourists. How a country, which has absolutely nothing over Sri Lanka has achieved this feat needs to be understood. It is definitely not by making visitors unwelcomed at the port of entry. Sri Lanka needs to rethink where they are going with tourism in the future and not kill the proverbial ‘goose that lays the golden eggs.’

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AKD’s fixation on assets vs. liabilities:

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An Open Letter to Dr R. H. S.Samaratunga former Secretary, Ministry of Finance

Dear Dr. Samaratunga,

I am addressing this letter to you because you were the Secretary to the Ministry of Finance when the item ‘non-financial assets’ was added in 2015 to the ‘Statement of Financial Position’ in the Finance Ministry’s annual reports. Up to that time, only financial assets had been accounted for in the Statement of Financial Position.

In normal circumstances, a change as esoteric as that would have gone completely unnoticed by the general public. However in February 2018, the then Auditor General Gamini Wjesinghe stated at a press conference held to introduce his report on ‘Public Debt Management’ that while the Finance Ministry records a total national debt of Rs. 8.8 trillion as at the end of 2016, the assets base is indicated as just Rs. 1.1 trillion. From that point onwards, the JVP started using these figures in political campaigns to bolster their claims of massive corruption on the part of successive governments.

Speaking in Los Angeles this year, Anura Kumara Dissanayake (AKD) stated that various governments had taken project loans amounting to Rs. eight trillion but that there were assets worth only two trillion. (He was obviously using the figures in the Finance Ministry’s 2022 Statement of Financial Position.) On this basis AKD stated that over 75% of the project funds had been stolen and that all the projects had been built with just 25% of the funds borrowed. He repeatedly mentioned this apparent disparity between liabilities and assets even during his recent interview on Derana TV. This has become a fundamental part of the JVPs political campaign in the presidential election.

When the finance ministry first started including non-financial assets in the Statement of Financial Position in 2015 under your watch, the total value of non-financial assets was given as Rs. 21.2 billion. By the time Auditor General Gamini Wijesinghe spoke about this matter in 2018, the value of non-financial assets in the Statement of Financial Position had gone up to just over Rs. one trillion. In the latest available (2022) Statement of Financial Position, the total value of non-financial assets is given as just over Rs. two trillion.

The note on ‘government borrowings’ in the finance ministry’s Statement of Financial Position also seems to have become more detailed during the period after 2015. Even though the 2015 Statement of Financial Position (or those that preceded it) did not indicate ‘foreign project loans’ separately in the breakdown of government borrowings, in the Statement of Financial Position, we begin to see foreign borrowings for projects featuring in the breakdown of government borrowings from 2017 onwards. Thus in the latest available (2022) Statement of Financial Position we see over Rs. 7.6 trillion (which can be rounded off to 8 trillion as AKD has obviously done) listed as foreign loans for projects in the note on government borrowings.

The Rs. two trillion worth of non-financial assets mentioned in the 2022 Statement of Financial Position are not just the assets built with foreign project loans but ALL the non-financial assets of the Republic of Sri Lanka. If the value of any assets built with foreign loans has been included at all under the rubric of non-financial assets in the 2022 Statement of Financial Position, it will be only a miniscule proportion of the total amount mentioned. When AKD realises this, he may start claiming that 99% of the foreign project funds had been stolen and that the all projects had been built with just 1% of the amount borrowed!

We can arrive at an understanding of what is expected by the inclusion of ‘non-financial assets’ in the financial statements of the Ministry of Finance by perusing the IMF’s Government Finance Statistics Manual of 2014. According to the IMF manual, the non-financial assets of a nation state are made up of ‘produced assets’ which include all fixed assets, inventories and valuables, and ‘non-produced assets’ such as land and natural resources. Thus in order to have a proper valuation of the non-financial assets of a nation state, all the land, buildings, streets, highways, lighting systems, bridges, communication networks, canals, and heritage assets, such as Sigiriya, and the Ruwanweliseya, which are assets that ‘a government intends to preserve indefinitely because they have unique historic, cultural, educational, artistic, or architectural significance’ will have to be included under non-financial assets.

King Sri Wickrema Rajasingha’s throne in the museum, all Dutch coins and the paintings at President’s house will have to be included under ‘valuables’ and under natural resources will have to be included items such as the value of the electromagnetic spectrum, the natural resources in the sea within Sri Lanka’s exclusive economic zone, the value of the graphite, phosphate, gem and mineral sands deposits in Sri Lanka etc. Any sensible person will see that the task of having a proper valuation of the non-financial assets of a nation state to be included in the Statement of Financial Position is a task like trying to empty the Beira Lake with a tea cup.

Furthermore, the IMF’s Government Finance Statistics Manual of 2014 stipulates that non-financial assets should be valued at current market prices. If anyone is wondering how heritage assets like the Dalada Maligawa or the Munneswaram Kovil are to be valued at current market prices, the IMF manual has an answer – “When there are no observable prices because the items in question have not been purchased or sold on the market in the recent past, an attempt has to be made to estimate what the prices would be were the assets to be acquired on the market on the date to which the balance sheet relates.”

For officials of the Finance Ministry or qualified valuers to spend time on such an exercise is nothing short of insanity. Furthermore, Sri Lanka is a country where many government entities have not presented their annual reports to Parliament for years. To expect such a country to have the current market prices of the sum total of non-financial assets of the nation stated accurately in the annual Statement of Financial Position is something that is not going to happen in this century or the next.

The compilers of the IMF’s Government Finance Statistics Manual of 2014 knew that what they were trying to promote was a tall order. They observed that “It is recognized that the implementation of the fully integrated GFS (government finance statistics) framework presented in this Manual will take some time”. And further that – “A more difficult step is likely to be the collection of a complete set of information about the stock positions of non-financial assets held at a given time and their valuation at current market prices”. Such admissions can qualify as the understatements of the 21st century.

The head of the National Accounts Division of the OECD observed in 2017 that the measurement of non-financial assets is one of the most problematic areas in national accounts and that only a few countries like Australia and France have a fairly complete set of balance sheets, although their statistics also contain information gaps. Accurately accounting for non-financial assets in the statement of Financial Position is not a tall order only for Sri Lanka but for almost all countries in the world. Nobody living today, in any country will be able to use the item ‘non-financial assets’ in the balance sheets of nation states in any meaningful way in macroeconomic analysis during their lifetimes.

Our Ministry of Finance would have known that this was a ‘mission impossible’ when the item non-financial assets was included in the Statement of Financial Position. Then, why did they embark on an exercise akin to trying to empty the Beira Lake with a tea cup? Did the IMF or some other important international body insist that non-financial assets be included in the financial statements? Or did the pressure come from a local entity like the Auditor General’s Dept.? Either way, why did the finance ministry succumb to such pressure and take on a task that can never be fulfilled and waste time, money and resources in reporting useless data that cannot, and will never be used in any kind of macroeconomic analysis?

The amounts mentioned as the value of ‘non-financial assets’ in Sri Lanka’s Statement of Financial Position are unusable on account of being incomplete. Note 17 in the 2022 Statement of Financial Position has given the breakdown of non-financial assets as follows – buildings, machinery, land, biological assets, intangible assets, work in progress, and leases. The amount stated as the total value of the buildings of the Republic in 2022 is just over Rs. 375 billion. When that is translated into US Dollars at the 2022 exchange rate, the total value of the buildings of the Republic becomes 1.15 billion USD – roughly the amount that the government got as an upfront payment for the lease of the Hambantota Harbour in 2017.

The Finance Ministry may be making valiant efforts to account for all the non-financial assets of the Republic the way a madman would frantically try to empty the Beira Lake with a tea cup, but they are not likely to get anywhere with regard to this matter in this birth or the next. The item ‘non-financial assets’ in the Statement of Financial Position will perpetually be a work in progress serving no useful purpose. Nearly a decade after this item was introduced to the financial statements of the Finance Ministry, only the JVP has found a use – albeit a political one – for this data on non-financial assets produced in the Finance Ministry’s Statement of Financial Position.

When a Statement of Financial Position with a glaringly understated accounting of non-financial assets goes to the Auditor General’s Department which will be full of those from accounting and book-keeping backgrounds, questions will be raised about the lack of assets when compared to liabilities. The Auditor General’s 2018 report on Public Debt Management has stated the obvious in saying that the reason for the lack of non-financial assets in the Finance Ministry’s Statement of Financial Position is due to the failure to correctly identify and account for the assets that should be included under that item.

So long as the Ministry of Finance continues to have non-financial assets as an item in their Statement of Financial Position, the Auditor General’s Department will have no option but to continue to find fault with the Ministry of Finance for failing to ‘identify and account for’ the assets that should be included in the Statement of Financial Position. The people of this country will be able to live with that just as they have learnt to live with the fact that most government owned entities fail to present their annual reports to Parliament on time. What will be more difficult to live with will be how the figures for non-financial assets mentioned in the Finance Ministry’s Statement of Financial Position is understood by some politicians.

Today, AKD states that project loans taken amount to Rs. 8 trillion while the assets built with those loans amount to only Rs. 2 trillion. As I said earlier, when he realizes that the Rs. two trillion in non-financial assets mentioned in the 2022 Statement of Financial Position refers to all the assets of the Republic and not just the assets built with foreign loans, he may start saying that 99% of all foreign project loans had been stolen and that the projects had been built with just 1% of the borrowed funds.

If the result of the presidential election goes the wrong way, some very unpleasant things could happen in a quest to recover the money deemed to have been ‘stolen’ from foreign borrowings for projects. Since the starting point of all this was the inclusion of the item ‘non-financial assets’ in the Finance Ministry’s Statement of Financial Position in 2015, when you, Dr. Samaratunga, held the position of Secretary to the Ministry of Finance, you should come forward and explain matters to the public.

There are thousands of economists, accountants, civil servants, business executives, financial analysts, academics and the like in this country. Yet the only group of people in Sri Lanka who have found some use for the figures on non-financial assets reported in the Finance Ministry’s Statement of Financial Position is the JVP which has a history of doing very unpleasant things on the basis of their understanding of the world. Hence I earnestly request you to explain this issue of non-financial assets reported in the Finance Ministry’s Statement of Financial Position to the public as it is now no longer just an item included in the financial statements of the Finance Ministry but quite literally a matter of life and death for many people.

Yours sincerely
C. A. Chandraprema

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Western Discontents, India’s Long Election and Sri Lankan Anniversaries

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by Rajan Philips

The attempted assassination of Slovakian Prime Minister Robert Fico has sent shivers down western spines. In a rare moment of unity, both Joe Biden and Vladimir Putin condemned the shooting. The identity of the arrested shooter has not been made public, but he is believed to be a 71 year old poet and writer violently protesting the Fico government’s attacks on media freedom including the replacement of Slovakia’s independent public broadcaster, RTVS, with a pro-government and ‘patriotic’ mouthpiece. The small country of five million that was born out of the 1993 dissolution of Czechoslovakia, in that famous “velvet divorce,” is now feared to be on the brink of more internal divisions and instability. And it has put Europe itself on edge.

There were forebodings at the time of the divorce about the trajectory that Slovakia would take unlike its severed twin, the Czech Republic, that was a model addition to the West. Then US Secretary of State Madeline Albright, a Czech American, called it “the black hole” of Europe. Now there is more of them and even within the old countries of Western Europe. Robert Fico has been Prime Minister twice before, between 2006 and 2010 and again from 2012 to 2018. After his defeat in 2018, he was pronounced politically dead, but he resurrected himself veering wildly from moderate left to extreme right, like so many other political leaders in Eastern Europe. The 59 year old Fico is a noted protégé of the Hungarian Prime Minister, Viktor Orban, who is notorious for his ideological contortions and right wing authoritarianism.

The Old Europe

The old Europe of consociational politics and electoral alternations between centre-left and centre-right political parties has virtually disappeared and the continent is now stuck in confrontations between the forces of extreme right and their new enemies, liberal elites. The old left has disappeared with the old Europe. In the continent, where Hegel first saw newspapers replacing morning Mass (now both have been replaced by the cell phone), freedom of expression and independent media are coming under threats from populist right wing governments.

Like Fico in Slovakia, Italy’s Prime Minister Giorgia Meloni is on course to allowing the sale of state-owned news agency AGI to a sitting lawmaker who already owns three conservative dailies and who belongs to the League Party that is a coalition partner of the Prime Minister’s Brothers of Italy party. Government supporters use the country’s draconian defamation laws to judicially harass and even jail prominent government critics. Philosophy Professor Donatella Di Cesare of Sapienza University in Rome has become the latest victim of defamation charges based on a complaint against her by Francesco Lollobrigida, brother-in-law of the Prime Minister and her Minister of Agriculture.

There are exceptions, as in Spain, where the Socialist Party is weathering opposition storm in Madrid and even won the largest share of the seats in the recent Catalonia regional election that saw, for the first time in over 10 years, the pro-independence parties collectively winning fewer seats than the other parties. In Britain, the Labour is all but assured of a rampaging return to power both at Westminster and in Holyrood, Edinburgh. But a catastrophic collapse of the Conservative Party may well trigger the rise of the extreme English right as a potent force in keeping up with its European Joneses, so to speak. Hopefully, what Tom Nairn called the ‘English enigma,’ to describe England’s historical indifference to nationalism, would not be fatally imperilled.

America is another story where seething social discontents are tearing apart the country’s, and the world’s oldest, democratic institutions. Adding insult to injury, Michael Johnson, the Republican Speaker of the House of Representatives, the third in the line of succession after the President and the Vice President, led a posse of Republicans and showed up last week in a Manhattan court room 200 km away from the capital, to show support to Donald Trump who is on trial in a criminal case involving his alleged hush-money payment to cover up his sexual dalliance with a porn star. The criminality is not about sex or even the payment, but about violating the election law and undermining election integrity by conspiring and suppressing negative information about himself from the public during the 2016 presidential election.

Of all the multiple indictments that Trump is facing, the porn star sex scandal is the least politically significant, but the only one that has been able to proceed to trial. All the other and far more serious indictments are mired in legal wrangling and judicial delays. The most heinous of them, Trump’s instigation of an insurrection in Washington on January 6, 2021, to overturn Biden’s election, is being held up at the Supreme Court until the Conservative Justices make up their mind about what one of them said would be “a ruling for the ages!” Hardcore Republicans believe that Trump is being unfairly subjected to politicized prosecution that they would expect to see only in third world countries. The Republicans who should know better, like Speaker Johnson, have jettisoned all political scruples and are supporting Trump to avoid falling foul of his rabid followers.

New India

In most third world countries, no political party would have someone like Trump as its presidential candidate. And against a candidate like Trump, an incumbent like Biden would not have to even campaign. But in America the race between them is close, thanks to the electoral college system that stymies the popular vote. Biden’s domestic record is exemplary – in restoring presidential stability after four years of Trump’s havoc; revamping the economy to becoming the only stable economy in the western world; and in implementing the largest slew of progressive and social welfare measures in 60 years – after Lyndon Johnson’s Great Society. Yet he is in a close race because of the social divisions that are frozen along party lines.

Biden’s Achilles heel is outside America. In Gaza and now potentially in Ukraine. Senator Bernie Sanders, a veteran of the 1968 antiwar protests and a progressive Democratic presidential contender in 2016 and 2020, has warned that Gaza could be Biden’s Vietnam, not because the two are comparable but because of their comparable political implications in an election year. As in 1968, when Nixon won the election promising peace in Vietnam.

In stopping arms shipment to Israel, Biden has gone farther than any President after Reagan. But that is not enough to stop pro-Palestinian student protesters in over 130 US campuses. Not enough either to mitigate US’s total isolation from the rest of the world on the Palestinian question. In The recent UN General Assembly vote to give Palestinians full membership status, received overwhelming support from 143 countries. The US was one of nine including Israel voting against the resolution.

Unlike western incumbent leaders, Prime Minister Modi has no problem about returning to power for a third term in India. The elections are now well past the halfway mark and the remaining contests are mostly in the northern states along with West Bengal and Maharashtra. Modi’s and the BJP’s problem is whether the BJP alliance will retain or exceed the 2019 tally of 353 seats (BJP alone got 303 seats). Modi started the election campaign with the call to get 400+ seats. The rhetoric has since been pegged back following indications of lower voter turnout compared to 2019. And the rhetoric has been switched to attack the Muslims to energize the subaltern Hindu vote in the Hindi belt areas that gave the BJP most of its seats in the last election.

What Modi has in common with many populist leaders in the west is in demonizing the elites and the secular and liberal traditions in politics. He targets the Congress elites of the past with studied vengeance. He is also aggressive in suppressing dissent and organizing media attacks, government investigations and defamation suits against those who oppose him. He has publicly boasted that the new India will reach out and kill its enemies even in their homes.

The statement is widely believed to be a reference to Modi government’s alleged attempts to silence Sikh activists involved in the Khalistan movement abroad. Notably so in the US and in Canada, where Indian emigrants with alleged connections to the Indian government are facing criminal indictments over murder and attempted murder charges. Prime Minister Modi could have won a third term without any of this, and India would still be a growing economic power by virtue of its population size and natural endowments. What role would the election results have in influencing the Modi government to rethink its ways is the question now. We have less than a month to find out.

Sri Lankan Anniversaries

Sri Lanka has a few months to go before its tryst with elections. Meanwhile, the month of May has two anniversaries that are three days apart. One marks the birth of the Republic of Sri Lanka and the adoption of the First Republican Constitution. Hence the First Republic, in Gaullist chronology. That was on May 22nd in 1972. The First Republic and its Constitution are widely believed to have been the principal cause of Tamil political alienation and the birth of Tamil separatism in Sri Lanka.

The state’s response over the next 10 to 15 years and the violent Tamil rejoinder led to many killings, a whole pogrom and a long drawn out war that pitted the Sri Lankan army against the LTTE. The war ended with the defeat of the LTTE on May 19, 2009. That is the second anniversary, and it marks an event that occurred 37 years after the First Republic was born and 31 years after it had been superseded by the Second Republic with its own Constitution in 1978.

There is no official or public commemoration of the May 22 anniversary that falls on Wednesday next week. The end of the war anniversary, on the other hand, is variously and even controversially commemorated on two different dates within Sri Lanka, and in the Tamil diaspora universe even involving foreign governments. The end of the war anniversaries have become the continuation of the war by peaceful means. One would hope that they remain peaceful forever and are not influenced or infected by the raw shenanigans such as allegedly involving the current Indian government and Khalistan Sikhs.

On the other hand, even though the anniversary of the First Republic and its Constitution is now unhonoured and unsung, the political changes and consequences that flowed from them have significant implications even today, 52 years later. One of those implications has been the never-ending preoccupation with constitutional politics. The 1972 Constitution carried in its womb the seeds of its own undoing and was totally repudiated and wholly replaced by a new constitution in 1978.

The 1978 Constitution introduced the executive presidential system that undermined the parliamentary system that was in force and put Sri Lanka on an uncharted constitutional path. Forty six years and 21 amendments later, the Sri Lankan Constitution is still a massive political bone of contention. How much of an issue would, or should, it be in the upcoming presidential election?

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