None of the election manifestos/policy papers declared in the run-up to Sept. 21 presidential election have taken into consideration the daunting political, economic and social challenges faced by bankrupt Sri Lanka. They never made at least an attempt to discuss a debt repayment plan. Having received time till 2028 to resume debt repayment, serious contestants should have taken the public into confidence and announced their specific plans on how to deal with debt repayment. Instead, President Ranil Wickremesinghe and SJB leader Sajith Premadasa sought to outdo each other by making promises, ranging from unprecedented salary hikes for public servants to lifting of ban on importation of vehicles. With the economy in a precarious state, such promises seemed beyond the Treasury’s capacity. This is the same government, headed by President Wickremesinghe, that bluntly refused to consider a salary increase of Rs 10.000 asked by public servants about six months earlier, citing dire economic situation confronting the country!

By Shamindra Ferdinando

On behalf of the Pathfinder Foundation, its Chairman Bernard Goonetilleke recently handed over what the think-tank called policy documents titled (i) ‘Economic Crisis in Sri Lanka: Policy Challenges for the New Government,’ and (ii) ‘Bridging Borders: Enhancing Connectivity between India and Sri Lanka,’ to presidential candidates Ranil Wickremesinghe (independent), Sajith Premadasa (SJB), Anura Kumara Dissanayake (JJB) Namal Rajapaksa (SLPP) and Dilith Jayaweera (CP).

Dr. Nihal Abeysinghe received the Pathfinder documents on behalf of JVP and JJB leader Dissanayake.

Having served the Foreign Service for nearly 40 years, Goonetilleke received the appointment as Chairman, Pathfinder Foundation, founded by Milinda Moragoda, in May 2010, two years after his retirement.

Goonetilleke served as Sri Lanka’s Ambassador in Washington during the 2005-2008 period as the combined forces were battling the separatist LTTE (Liberation Tigers of Tamil Eelam). The war was brought to a successful end in May 2009. Before being posted to Washington, Goonetilleke also served as Foreign Secretary (2003-2004) during the Norway-led peace initiative that led to Eelam War IV.

Meticulously prepared Pathfinder documents, however, underscored the pivotal importance of future foreign and economic policies as bankrupt Sri Lanka holds the presidential election with much trepidation, later this week, because of the unknowns in the form of foreign agendas, especially from the West.

The Foundation methodically addressed the entire range of issues confronting bankrupt Sri Lanka now trapped in the US-led efforts to contain China. India being part of the strategic ‘Quad’ (The Quadrilateral Security Dialogue) alliance is quite clearly worried about Chinese intentions here. Having examined Pathfinder documents, the writer is of the opinion that the organization that described itself as an independent, non-partisan research and advocacy think-tank, in fact, however, appears to be blindly and absolutely backing the International Monetary Fund programme promoted as a panacea for the country’s ills. It also throws its weight behind the ongoing Indo-Lanka initiatives at all levels. In other words it is not a case about finding a winning path, but merely backing a trail trodden by so many from the third world as dictated by the twin sisters in Washington, with hardly any success from South America to Africa and Asia.

It would be pertinent to mention that Milinda Moragoda, the Pathfinder founder and former Sri Lanka’s High Commissioner to New Delhi, who has apparently tied his wagon to Indian interests, recently presented a copy of the foundation’s Study Group Report on ‘India-Sri Lanka Physical Connectivity’ to Indian National Security Advisor Ajit Kumar Doval. This happened during the latter’s recent controversial visit to Colombo. The report provides a comprehensive blueprint for physical connectivity between the two countries in road, rail, electricity and petroleum sectors.

It is not difficult to understand that the second policy document ‘Bridging Borders: Enhancing Connectivity between India and Sri Lanka’ also dealt with the issues addressed by the Pathfinder Study Group Report on ‘India-Sri Lanka Physical Connectivity.’ In fact, the thought-provoking reports are the same.

The longest serving Indian National Security Advisor Doval’s latest visit to Colombo caused intense controversy due to the former head of internal and counterintelligence agency meeting three of the contestants – Wickremesinghe, Premadasa and Dissanayake – as well as Tamil politicians representing the North East, upcountry and Colombo. Their decision to leave out SLPP candidate Namal Rajapaksa is understandable. India obviously considers that the SLPP has no chance at all at the presidential election, with its vote base divided between President Wickremesinghe and former President Mahinda Rajapaksa’s eldest son, Namal.

Doval is on his third term having received the appointment in 2014 after Narendra Modi’s victory at the general election. Whatever the official explanation regarding Doval’s latest visit to Colombo, no one can justify meeting presidential candidates and scores of other lawmakers. From New Delhi’s point of view, India, under any circumstances, cannot allow Colombo to deviate from the post-Aragalaya path.

At the behest of the IMF, in May this year, President Wickremesinghe presented the Economic Transformation Bill, the Public Debt Management Bill and the Public Financial Management Bill. President Wickremesinghe repeatedly declared that these Bills were meant to stabilise the economy and prevent another debt default crisis. Out of that lot, the Economic Transformation Bill can be categorized as the most important and politically sensitive. Enacted in July, the new law brought all political parties backing Wickremesinghe, Premadasa and Dissanayake in line with the IMF formula or strategy or whatever you desire to call it.

Interestingly, the group of dissident SLPP MPs, backing Dilith Jayaweera, never raised objections to it at the time. They could have demanded a vote on the Economic Transformation Bill or at least publicly questioned the circumstances the controversial Bill was passed.

Post-war presidential polls

Sri Lanka conducted three presidential polls since the eradication of the LTTE, widely considered combined forces brought the LTTE to its knees, following a relentless campaign conducted over a period of two years and 10 months.

Those who couldn’t stomach the LTTE’s annihilation, resented President Mahinda Rajapaksa. They wanted to see the back of the war-winning President, who defied the West’s last minute effort to rescue Tiger Leader Velupillai Prabhakaran and his core group as they were cornered into a sliver of land between the Nanthikadal lagoon and the Mullaitivu beach surrounded by a Tamil civilian human shield they were holding for their protection. Political parties represented in Parliament collaborated with the US in a treacherous attempt to defeat Mahinda Rajapaksa. In spite of the JVP, SLMC, CWC joining the UNP in a despicable US backed project, their so-called common candidate, retired General Sarath Fonseka, ended up with egg on his face.

Contesting under the ‘Swan’ symbol, hitherto an unheard of sign at local elections, and the registered political party New Democratic Front (NDF), Fonseka polled 4,173,185 (40.15%) whereas Rajapaksa secured 6,015,934 (57.88%).

Appearing on the live Sirasa political programme ‘Satana’ last week the Sinha Regiment veteran Fonseka, an independent candidate contesting Sept. 21 presidential poll, repeated the preposterous accusation that he was robbed of victory at the 2010 presidential election.

In the wake of Fonseka’s defeat, the late Somawansa Amarasinghe, the then JVP leader, alleged that computer ‘jilmaat’ (jugglery) had been resorted to defeat Fonseka.

Thanks to secrets revealed by WikiLeaks the world knows the US intervention at the 2010 presidential election. Interestingly, Maithripala Sirisena and Sajith Premadasa contested the 2015 and 2019 presidential elections, also under ‘Swan’ symbol, though the JVP quit the alliance ahead of the 2019 poll. Contesting under the JJB symbol for the first time Anura Kumara Dissanayake emerged third at the 2019 election with 418,553 votes (3.16%) but in post-Aragalaya scenario, the JVPer is one of the top contenders.

Having recognized the JJB’s potential to secure power at the next presidential election, the first national poll after Aragalaya, New Delhi extended an invitation to Dissanayake for a five-day tour that enabled him to visit New Delhi, Ahmedabad, and Thiruvananthapuram. The visit assumed greater significance as Dissanayake was granted the opportunity to meet External Affairs Minister Dr. S. Jaishankar and Doval.

Colombo based longstanding correspondent of The Hindu Meera Srinivasan quoted JJB MP Vijitha Herath as having said: “In our meeting with Mr. Doval, we discussed regional security and bilateral issues concerning India and Sri Lanka.”

The JJB forgetting all their revolutionary zeal also secured US recognition and over the past two years developed its relations with the Western camp and became globetrotting savvy politicians as the party was groomed as a likely alternative to incumbent President Wickremesinghe. The challenge faced by Wickremesinghe should be examined against the backdrop of him having to depend entirely on the SLPP’s support. With the UNP reduced to just one lawmaker in Parliament, Wickremesinghe has no alternative but to reach a consensus with the SLPP – a highly contentious move that caused irreparable damage to that party. At the end, a divided SLPP ended up backing two candidates President Wickremesinghe and Namal Rajapaksa.

Premier Dinesh Gunawardena, who had been with the Rajapaksas for many decades, broke ranks with his erstwhile buddies to pitch camp with his school buddy and UNP leader Wickremesinghe who suffered two major setbacks in the run-up to the presidential poll. Despite desperate efforts to convince the SJB parliamentary group to switch allegiance to him at Premadasa’s expense, the President did not succeed. Firstly the Supreme Court unseated three SJBers, namely Harin Fernando, Manusha Nanayakkara and Diana Gamage who held Cabinet and non-Cabinet portfolios, respectively, in separate cases.

The other devastating setback was his failure to secure the SLPP’s support, thereby preventing a split in the party voter base. Had Wickremesinghe managed to secure the backing of an undivided SLPP along with the majority of SJB parliamentary group, the ground situation could have been much more favourable to the incumbent President.

Turning a blind eye to external interventions

The EU and the Commonwealth are among international poll observation missions already deployed here. However, they are unlikely to pay attention to foreign interventions. In fact, international missions have never discussed the issue in the past. Local polls monitoring missions, too, are unlikely to comment on foreign interventions for obvious reason of them being dependent on foreign funding. So not a hum from them in the past despite worldwide shock revelations, especially by WikiLeaks, nor can the country expect any in the future.

In fact, foreign interventions have made election manifestos/policy statements of leading candidates irrelevant. The recent Doval visit as well as the US stand during Aragalaya and post-Aragalaya showed the growing dangers facing the country. Trapped in developing economic-political and social crises, the Wickremesingthe-SLPP government continuously struggled to overcome daunting foreign policy challenges.

In the face of relentless Indian and US pressure, Sri Lanka had no option but to impose a one-year ban on the entry of foreign research vessels to Sri Lankan waters. The ban came into effect on January 1, this year. It would be a major issue that would test whoever wins the Sept. 21 contest as China would be determined to have that ban lifted whereas India and the US wanted restrictions imposed on foreign research vessels extended. That order is meant to bar Chinese vessels.

External interventions here have reached a dangerous level with foreign powers seeking control over political parties. One-time Indian Foreign Secretary Shivshankar Menon, in ‘Choices: Inside the Making of Indian Foreign Policy’, launched in 2016, discussed how China funded earlier election-winning apparatus for defeated President Mahinda Rajapaksa. In the same year, the then US Secretary of State John Kerry crowed in public about how they funded ‘regime-change’ operations in Nicaragua, Myanmar and Sri Lanka to the tune of USD 585 mn. This declaration was made in the wake of Mahinda Rajapaksa’s defeat at the 2015 presidential poll. That US statement proved beyond doubt that the US got involved in the 2015 presidential election, too.

None of the contesting political parties here would dare to complain to foreign election observation missions about external interventions. Election monitors issue statements about setting up so-called party offices, an utterly useless exercise that wouldn’t have any impact whatsoever on the electorate whereas external powers brazenly intervene here, both overtly and covertly.

The Parliament, too, remained conveniently silent over external interventions though some lawmakers addressed the issue. Current State Finance Minister Shehan Semasinghe raised the US funding made available to those who had been opposed to Mahinda Rajapaksa at the 2015 presidential election.

In spite of a high profile US statement Sri Lanka never took any notice. The Election Commission never even acknowledged the issue at hand.

The second Pathfinder policy document that had been presented to presidential contestants blatantly promoted the overall Indian project here. That document comprehensively dealt with five key aspects namely (i) maritime (ii) air (iii) energy and power (iv) trade, economic and financial and (v) land connectivity meant to transform Indo-Lanka relationship to a new level. Pathfinder foundation discussed the developing situation against the backdrop of President Wickremesinghe’s meeting with Indian leader Narendra Modi in New Delhi on July 21, 2023.

Let me stress that ‘Bridging Borders: Enhancing Connectivity between India and Sri Lanka’ is not a secret document but one that can be accessed at (https://pathfinderfoundation.org/images/publications/policy%20papers%20and%20reports/2024/indo%20-%20lanka%20connectivity%20-%20breif%20report.pdf). It gives the reader a clear understanding of what is happening on the ground and status of discussions regarding these projects.

Security factors, concerns

Even ordinary people have expressed serious fears of an outbreak of violence over the coming weekend. The SLPP backing President Ranil Wickremesinghe as well as the SJB have accused the JJB of premeditated violence. The JJB has categorically denied these accusations whereas Kumar Gunaratnam, the General Secretary of the Frontline Socialist Party aka Peratugaami Pakshaya and former military wing member of the JVP has publicly defended their decision to take up arms in 1987, after they were driven underground by the JRJ regime.

The armed forces and police pathetically failed to prevent overthrowing of a democratically elected President with an overwhelming majority in July 2020. Their failure should be discussed taking into consideration extremely serious accusations directed at the military top brass by no less a person than ousted President Gotabaya Rajapaksa. The armed forces pathetically failed on May 09/10, 2022 and July 09, 2022, as organized gangs systematically torched properties of SLPP parliamentarians and sometimes those of their close supporters and relatives in many parts of the country with meticulous intelligence, including in the Colombo district.

It would be the responsibility of the armed forces and police to swiftly and decisively tackle any unforeseen post-election situation/development. There cannot be another countrywide security crisis again. The armed forces and police top brass should be directly held responsible for maintaining law and order as the possibility of interested parties resorting to violence cannot be ruled out.

It would be a grave mistake on the part of the National Security Council (NSC), chaired by President Wickremesinghe, who is also the Commander-in-Chief of the armed forces and the Minister in charge of Defence, not to have a specific plan to deal with any eventuality. One might say that such a plan is inevitable and concerns raised by the writer irrelevant. Then, the country needs a clear explanation as to why such a contingency plan hadn’t been implemented especially after mobs caused countrywide destruction on May 09/10, 2020.

The Gotabaya Rajapaksa government mishandled the Rambukkana incident where one person died when police opened fire to prevent a mob from setting fire to a bowser carrying petrol on April 19. 2022. The police arrested the senior officer in charge of the area SSP K.B. Keerthiratne along with three other police personnel for doing their job. That government move sent the wrong signal and the total collapse of the law and order situation in the second week of May, 2022 and again in July, 2022 cannot be discussed without examining the Rambukkana incident.

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

These are confusing times for Sri Lankan voters. The imminent election is seen as existential. Myriad of pledges are made by various politicians to win votes. Each pledge is bettered by another. None of these however is costed and no explanations is given how they will be funded. It is likely that none or most of these pledges could be financed without massive tax increases, significant cuts to public services or without massive borrowing. This is why it is hard to understand how such diametrically opposite policies could be implemented within the pledges that are made. Voters of course are not concerned or particular about the ‘devil in the detail’. They are mesmerised by the good life rhetoric that is metered out. Ideally, there should be an ‘independent’ candidate, not running for the presidency, to unbiasedly evaluate all these fairy stories to educate the public. In the absence of such an avenue, hopefully this will at least go some way in fulfilling that need.

Increasing public sector pay

In any country, public sector pay is financed by the taxpayer. Unlike the private sector, where pay is based on profits or productivity, there is no such link in the public sector. The only way public sector pay can be increased is through the growth in the economy that will yield more tax revenue. The role of the public sector is to provide efficient public services to facilitate growth of the economy. More productive and profitable private sector means more growth, which relates to more tax revenue without increasing tax rates. When this happens, it is justifiable to reward the public sector though higher pay.

The suggested massive increases in public sector pay will have to be financed by the current tax intake. There is room to collect more tax through going after tax evaders. While increasing the tax base is always a good idea, using that money to bribe the public servants with unsustainable pay offers is irresponsible and grievously short-sighted. Increases tax revenue should be spent of improving public goods and infrastructure to augment the efficacy of the wider economy, without wasting peoples’ hard-earned money to buy votes.

Increasing incomes

This is another myth that is being flaunted shamelessly. Some are committed to doubling personal income within an unrealistic time period and some guaranteeing a minimum income for all households. Permanent increase in personal or household income can only be achieved through long-term sustained economic growth and not through temporary ploys like transfer payments from tax revenue. This will only add to increase in inflation and hinder economic growth. There will be more demand on consumption without a corresponding increase in production. Production and growth will be stymied by excessive tax, which is wasted on appeasing low-income individuals. The more tax that is imposed, the more would be the overall loss to the economy.

Jobs and employment

A job is meaningful only if that job adds as much or more to the economy than the pay. While this is generally practiced in the private sector, public sector has become a sink hole to suck in all excess individuals that are unemployable. These individuals rarely add anything close to their wage rate to the economy. This is of course no fault of their own. They are victims of a corrupt political system that perpetuates by making unrealistic and unsustainable promises on providing employment. What is needed is to re-train and re-tool redundant public sector workers and make them able to find productive employment in the private sector or become entrepreneurs and not offer them dead-end jobs that cost to the taxpayer.

Subsidies and agricultural credit

To woo in the vast population of those that are engaged in some form of agriculture, plethora of promises, which neither help agriculture or the wider economy, are given. Subsidies promote inefficient and uncompetitive agriculture and do more harm to the environment. Cheap credit on the other hand misallocates resources and promotes more inefficiencies. Farmers have not made significant strides during the past 50 years despite billions in state support and still are heavily dependent on the state for survival. This is primarily because election promises forever keep this group needy and dependent so when the election time comes new set of promises can be given.

Cheap credit

Cheap credit is another great vote puller. Various interest rates are offered and without understanding of how an economy works. These wasteful and inefficient practices are possible only because Sri Lanka has enormous money pits called state banks. These banks are used at the whims of the politicians to do all sorts of misdeeds such as loans on heavily discounted rates, cancel bad debts, finance projects or enterprises without any requirement or guarantee to paying back. Some politicians are so cavalier with public money, they even go as far as to offer unsecured loans. And who is the guarantor? The state. But there is nothing called ‘the state’ that makes money. The state means the taxpayer. Yes, it is the taxpayer who keeps replenishing this bottomless pit. With the door of the treasury open just to walk in and take any amount at any time, the government ‘banker’ always makes a profit.

Protecting state enterprises

This is another bone thrown at the voters to show great compassion for the nation and patriotism. State enterprises are ours. We are not selling them to anyone, especially to foreigners. These are our national treasures. These lies are perpetuated, mostly by who are employed in these dens of thieves. Promising to protect these white elephants nevertheless wins was number of votes because of the sheer number of individuals employed in these obsolete entities and their dependents. This is sold to the gullible public as something to be defended at all costs. Sri Lanka is probably the only country in the world where the state is involved in selling salt, fish, timber, gas, fuel, electricity, medicine, telecommunication, water, gems, food, sugar, building materials, paddy, vegetables, etc. Every one of them is a loss-making entity and a huge burden on the taxpayer. However, to do the right thing and say that all this will be handed over to the private sector be run efficiently, as done in most countries, would be political hara-kiri.

Price control

There is a controlled price for everything starting from the humble ubiquitous egg. There is controlled or standard price for even cup of tea more specifically for plain tea and milk tea. This extends to bread and associated bakery products, rice packets, hoppers and string hoppers, poultry, coconuts, sugar, rice, milk all other imaginable food and non-food items. Then there are numerous associations and organisations that are dedicated to announcing these prices when there are changes in prices of inputs. They will come and say, because the price of flour has gone up by this much. we will have to increase the price of a fish bun by 5 cents! Because of the recent increase in price of sugar, the new price of a plain tea goes up by 2 cents! Then there is army of well-dressed government servants, who are going around to retail establishments ensuring that an egg is sold at 52 cents and not at 55! It is a blessing that most of these is not seen in other countries or Sri Lanka would be the laughing stock of the world. But inside the country this is a very serious matter. People expect the government to control the price of everything because politicians have given the impression that they can intervene and control the free-market process. They dare not say let the market decide prices. In the political arena the right for people to have all these at controlled prices is vigorously defended giving people the warped idea that politicians are tutelary guardians of the public from all forces of the world.

What an honest politician should say

NO increase in public sector pay until the country shows real sustained growth and tax revenue goes up by taxing real profits and not by increasing tax rates. In fact, public sector should be given the challenge to reduce costs and increase efficiency through their own initiatives. If this can be achieved, part of the saved expenditure could be used as reward pay.

NO increase in personal or household incomes by distributing tax revenue among those who are economically inactive but reward work and entrepreneurship by tax credits and income supplements. No one’s income can be guaranteed. Income is a reward for your own labour and ingenuity. While the society has the obligation to care of sick and disabled, the government should promote enterprise and work and not guarantee income for anyone.

NO new employment in the public sector unless there is a clear benefit to the taxpayer. First reallocate resources where it is needed. Each department should be given a target of reducing expenditure say by 10% year on year, by implementing efficiency measures. Excess workforce should be given training opportunities to take on private sector employment or tool them to start businesses.

NO freebies for agriculture though subsidised inputs, cheap or cancellation of credit or buying outputs at artificially inflated prices using taxpayer money. If you look at the real cost of producing a kilogram of rice for example, taking into account of all the subsidies and benefits given, it may be cheaper to pay farmers not to cultivate and import rice! Estimating the real cost should also include the pay and benefits of the army of public servants who are solely dedicated maintaining an inefficient agriculture sector.

NO cheap credit, handouts or unsecured loans though state banks. Decommission state banks and stop the government being a lender. This money never gets paid. Also, this will eliminate the irresponsible and self-serving practice of cancelling loans for political gain. This is taxpayer money, which should be protected by the government and put to productive use. State banks and other development banks have become open safes for politicians and their cronies to raid the taxpayer with impunity.

NO protection for state enterprises. These have caused monumental damage to the economy. The government should not run businesses and these institutions have become free-running entities, deciding their own salaries and spending without little or no accountability. It is certain that that whatever they do could be done 10 times cheaper through properly regulated private establishments. What benefits do the taxpayer get from fisheries and timber corporations or paddy marketing board?

NO price controls. Liberalise the consumer goods market. Price controls do not work and both the consumer and producer lose. Without price controls there will be price fluctuations during certain natural events such as floods and diseases, but this will only be temporary as the producers will soon get back to normal production. Initial higher prices and shortages will soon disappear and the market will revert back to normal. This can be never be managed or alleviated though price control. This will only create unnecessary misery on consumers and producers.

Political arena has become a ground for spreading unrealistic, unchecked and irresponsible information among the public about how good their lives are going to be after the elections. The truth is whatever promised is largely unachievable, at least within the time frames suggested. Uplifting incomes, living standards and general well-being of a nation is a gradual process that will take lot of commitment from the politicians as well as the public. The start of this process is where politicians be honest with voters and the voters understanding that there are no shortcuts. However, with the amount of lies, deceptions, misinformation and false hopes that are unashamedly meted out at all political platforms and the elation of the public to hear such mendacities, it looks like this election will also be another lost opportunity.

By Lynn Ockersz

Parvati of Wanni District,

Eking out a sad existence,

On neighbours’ kindliness,

And shrinking state help,

Is now eagerly sought out,

By glib-tongued Sires,

Scrambling for the top,

To figure in their cheer squads,

At Rupees three thousand per day,

Which, for her, is no bad price,

But at the end of the raucous day,

She would need to trek back,

To her solitary run-down hut,

And continue her night vigil,

For a never-returning son,

Whose Disappearance decades back,

No ‘Truth-telling’ has explained.