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The ‘new normal’ budget



The run-up to the 2021 budget which Prime Minister Mahinda Rajapaksa, wearing his finance minister’s hat, presented to parliament last week was obviously “new normal” as the post-covid minted cliché goes. There was no dramatic build-up to it with people rushing to buy vehicles, electronics, appliances or whatever as was often the rumor-fuelled case in the past. As has been inevitable in every past budget in the medium, if not the long term, the price of arrack and cigarettes routinely thrashed with a price stick, will go up once more. But nobody knows by how much and smokers and imbibers continue to pay the old price for their bad habits. But they have the certain knowledge that Christmas will soon be over on the authority of the budget speech.

This 2021 budget was crafted, as Dr. Dushni Weerakoon, head of the Institute of Policy Studies, said in a post-budget commentary, “under an exceptional level of uncertainty.” Obviously the crisis measures now in force will remain with us for a long time and it will be unrealistic to assume that fiscal policy will revert to its “pre-crisis setting anytime soon.” This must influence both spending priorities and what Weerakoon called “the slow burn scenario for revenue generation.” It is common knowledge that revenue has already slumped, and not only because of covid and its consequences. Assurances of boosting the country’s growth rate and narrowing the budget deficit, which has for too long burdened the country’s fiscal policy as well as its macro economy, have been repeated. These are old stories that have been heard before and few will buy them.

A persistent criticism of the budget is that it did not say enough about how the government is going to deal with the covid crisis, and the consequences arising from it, by taking the people into its confidence. This, more than all else, is the greatest danger confronting not only Sri Lanka but also the whole world. Neighboring countries is South Asia, including India, Pakistan and Bangladesh, have been much more transparent than we with Pakistan even going as far as labeling her next year’s budget as a “covid budget.” Former Central Bank Governor Nivard Cabraal, now the deputy in the finance ministry, who will be the key speaker for the government in the budget debate, has already said at one of the regular remotely held post-budget seminars that the timing was not right for declaring a covid-19 austerity year. But belt-tightening all round will be inevitable. Protecting the very large numbers of daily wage earners and others deprived of their livelihoods by the present crisis must remain high priority. Money printing alone to tide over cannot be the solution. Budgetary provision would have been appropriate.

There was a lot of old wine in new bottles in the 2021 budget speech including self-serving (or should we say government politician serving) measures announced. One of these is the raising of the private sector retiring age to 60-years for both men and women. Currently women working for private employers can retire at 50-years of age and men at 55 and gain access to their EPF benefits. Now both genders will have to wait longer – as many as 10 years in the case of women and five where men are concerned. There is no need to labour the harsh reality that the EPF is the only social security net that private sector workers have for their retirement. Government servants have had their pension benefits from colonial times, a cushion that served them well over a long period and a major attraction of a government job.

This raising of the retirement age of private sector employees also has the undisclosed benefit for the government of slowing EPF payouts and enhancing available funds for government borrowing. We all know that the EPF is the major captive lender to the government and the billions or trillions in its books is always on call for government expenditure. Given the overload of foreign borrowing that has long burdened this country and made the possibility of repayment default an ever-growing risk, postponing the payout of a looked forward to EPF nest egg to private sector employees, confers a substantial benefit on big brother. The private sector generally did not enforce the minimum retirement age rule but allowed employees to formally retire and gain access to their EPF with the assurance of an employment contract to keep them in harness post-retirement.

Let us not forget previous efforts made to convert the EPF to a pension fund that was abandoned due to massive resistance. Even if these attempts succeeded, the new pensioners paid from a contributory scheme – both employer and employee make monthly contributions to the EPF – would not have received the same benefits as their government counterparts enjoying non-contributory pensions. These matters, no doubt, will be raised during the ongoing budget debate which has been abbreviated because of the covid issue. It has up to now been lacklustre with the press and public galleries closed when the prime minister made his budget speech, a necessary precaution in the present context. But it has elicited, as budget debates must do, matters of widespread public interest. One of these relates to Dr. Anil Jasinghe, the previous Director General of Health who was highly regarded for his leadership in handling of the covid emergency. Health Minister Pavithra Wanniarachchi told parliament on Thursday that Jasinghe, currently Secretary Environment, was now attending covid meetings at her ministry. That sounded apologetic to most people not appeased by the suggestion that ‘kicking him upstairs’ was just a promotion issue.

It is clear from the budget that policies of curtailing inessential imports and import substitution would continue and a conscious effort appears to have been made not to heap new burdens on ordinary people for revenue reasons. But the impact of the Goods and Services Tax that has been announced have not yet emerged. It is unlikely that this will not leave people altogether unscathed. And that too not only with regard to their booze and fags.

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Mountain in labour?



Friday 4th December, 2020

The Presidential Commission of Inquiry probing the Easter Sunday attacks is reportedly in the process of winding up, following two extensions of its term; everyone is eagerly awaiting its findings, conclusions and recommendations. There will not be enough time for some of the key witnesses whose statements have already been recorded by the police to appear before the commission, according to media reports. The commission must be having a valid reason for this, but it would have been better if all of them had been cross-examined thoroughly and more information elicited from them.

Besides the PCoI probe, several other investigations got underway into the Easter Sunday carnage. Little has been heard about them. What has become of them?

His Eminence Malcolm Cardinal Ranjith, addressing the media yesterday, urged the government to ensure that all probes into the Easter Sunday carnage would be conducted properly and nothing swept under the carpet. He said the authorities concerned should have the courage to find out who had been behind the attacks. Reminding the government of its pledge to have the terrorist bombings probed thoroughly, the Cardinal said that unless its promise was fulfilled, they would have to think of an alternative. He can rest assured that all Sri Lankans who abhor terrorism are on his side.

The Cardinal’s call for identifying those behind the bombings is of crucial import. He has made this call on previous occasions as well. He is not alone in believing that the terror strikes were part of an international conspiracy. Maithripala Sirisena, who was the President and Defence Minister at the time of the carnage, did not mince his words when he said before the PCoI, the other day, that there had been a foreign hand behind the bombings. Among those who insist that there was an external involvement in the Easter Sunday attacks are former SDIG CID Ravi Seneviratne and SLMC Leader and former Minister Rauff Hakeem, MP.

Strangely, the focus of none of the investigations into the bombings has been on the alleged foreign hand. Investigators seem to be wary of looking at the Easter Sunday attacks from this particular angle.

No probe into the Easter Sunday carnage can be considered complete unless the alleged foreign involvement therein is investigated fully. The focus of the probes into the Easter Sunday terror has been on identifying those who failed to stop the attacks. The blame for the country’s failure to prevent them should be apportioned to all yahapalana leaders, the police and intelligence agencies. They did not heed repeated foreign intelligence warnings of imminent terror attacks. They are now blaming one another, but it was their collective failure that enabled the NTJ to strike with ease. One may argue that all of them should be prosecuted. But that will not help neutralise threats to the country if the real mastermind of the attacks is not identified.

We have seen various probes under successive governments, but not much came of most of them. Worse, some Presidents ‘swallowed’ the probe reports submitted to them. The public who bore the cost of those investigations has been left in the dark. Some of those investigations which dragged on for months were like the proverbial mountain which went into labour and delivered a mouse. As for the ongoing probes into the Easter Sunday attacks, it is hoped that we will not be left with a tiny rodent again.

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Recent judgments: Some queries



Thursday 3rd December 2020

Any judicial decision is always acceptable to only one party to a legal dispute; the winner hails it, claiming justice has been served, and the loser frowns on it and grumbles. That is the way the cookie crumbles. The judiciary, however, is not infallible, in any country, and concerns that the public expresses about its decisions should be heeded. In fact, judgments can be discussed and even criticised by the public but without causing affronts to the dignity of the judiciary and/or its members.

It is only natural that judgments in high-profile cases come under public scrutiny, and various views are expressed thereon. SJB MP Hesha Withanage, in Parliament, on Wednesday, raised a question about the judicial decisions that have attracted a lot of public attention of late. Referring to the recent judgments, given in favour of certain government politicians and their associates, he asked Minister of Justice Ali Sabry why other cases could not be similarly disposed for the benefit of the public so that the remand prisons would not be overcrowded. If all cases had been heard expeditiously, the unfortunate situation in the trouble-torn Mahara Prison, where hundreds of remandees are being held, would not have arisen, MP Withanage said. He was obviously viewing the issue from a political angle, and trying to embarrass the government, but his query may have struck a responsive chord with many people. He also provided the public, albeit unwittingly, with an opportunity to know the other side of the story.

Fielding Withanage’s query, Justice Minister Sabry said the anthropause caused by the prevailing pandemic had created a situation where court cases could not be heard, and, therefore, the Justice Ministry had requested the Judicial Services Commission to expedite the process of delivering judgments in the cases in which hearing had already been concluded. More than 70 judgments had been delivered recently, and the ones the Opposition was referring to were only a few among them, the Minister said, insisting that the government did not interfere with the judicial process.

Minister Sabry then got on his hobbyhorse; he lashed out at the previous regime for having manipulated the legal process and set up of the Financial Crime Investigation Division, etc., for that purpose. The less said about the Police Department, the better in that it is a mere appendage of the government in power. The same is true of the Attorney General’s Department, but incumbent AG Dappula De Livera deserves praise for trying to make a difference and standing up to the powers that be in carrying out his duties and functions. Unfortunately, he has not received enough support from the legal fraternity, the media, civil society organisations and the Opposition.

It is doubtful whether the discerning public will buy into Minister Sabry’s claim that the present government does not interfere with the legal process. Under the current dispensation, the police have shown their selective efficiency by concluding probes against Opposition politicians double-quick. They have also reopened some old cases where the political enemies of the current adminstration are involved. But they invariably baulk at executing arrest warrants when the suspects happen to be government politicians and those in the good books of the ruling party.

The judiciary is the only branch of government which people repose their trust in, and, therefore, extreme care must be taken to prevent an erosion of public faith therein lest democracy should be further weakened. Hence the need for the Justice Minister to support his claim that more than 70 judgments have been delivered in court cases during the recent past; he ought to release a list of those judicial decisions. That is the least the Justice Ministry can do to clear doubts in the minds of some people about the court cases the Opposition has referred to and defeat attempts being made in some quarters to cast aspersions on the judiciary.

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A crime of utmost savagery



Wednesday 2nd December, 2020

The recent assassination of Iran’s top nuclear scientist, Prof. Mohsen Fakhrizadeh, has shocked the civilised world and been rightly condemned as a dastardly act of terrorism. His killers left no clues as to their identities. Iran has blamed the US (which it calls ‘Global Arrogance’) and Israel. Its indignation is understandable.

Those who had Prof. Fakhrizadeh assassinated may have sought to demoralise Iran and scuttle its nuclear programme, but they seem to have only strengthened Tehran’s resolve to achieve its goal. The proliferation of nuclear weapons, no doubt, is an unnervingly frightening proposition, but the question is whether those who are all out to prevent Iran from achieving its nuclear ambitions have cared to set an example by suspending the production of their nukes.

Most of the nuclear capable countries are run by bloodthirsty hawks who have engineered many wars and caused hundreds of thousands of civilians to be killed elsewhere. The world cannot be any more dangerous even if other states acquire nuclear capability. Nukes in the hands of any nation are dangerous. Those who already have huge stockpiles of nuclear weapons, which are capable of blowing the planet several times over, will be without any moral right to try to prevent others from producing nukes so long as they do not decommission theirs and act responsibly without abusing their military might to dominate and exploit the world.

The non-proliferation of nuclear weapons is the goal the world must strive to achieve, but assassinating nuclear scientists is certainly not the way to set about it. Given the present global order, where might is right, for all practical purposes, it is only natural that the countries whose sovereignty and independence are threatened by meddlesome nuclear powers are trying to arm themselves with nukes. Iran is not alone in doing so. One may recall what Charles de Gaulle famously said: “No country without an atomic bomb could properly consider itself independent.”

Gone are the days when the US had the run of the world, so to speak. Now, it has formidable opponents. Try as it may, it cannot frighten China into submission either economically or militarily or otherwise, and Russia is also emerging powerful. The US and China are evenly matched in most respects so much so that the former has had to look for new allies or lackey states to retain its dominance of the international order. Worse, it has had to talk to the Taliban in a bid to wriggle out of the Afghan imbroglio. About a decade or so ago, who would have thought the US would ever negotiate with terrorists?

The world is changing fast, and so are geo-political dynamics and realities. The world history is replete with instances of mighty empires crumbling. The sun finally set on the British empire. Uncle Sam will show a clean pair of heels, given half a chance in Afghanistan, and has failed to humble the ‘Little Rocket Man’, who cocks a snook at Washington, at every turn, from his hermit kingdom. Those who are riding piggyback on the US or other powerful countries and resorting to aggression against their enemies had better be mindful of this reality, and act responsibly.

Iran should be dealt with diplomatically and must not be driven into a corner. Washington should not have withdrawn from the so-called Iran nuclear deal and opted for hostile action. President Donald Trump, who made that mistake, is on his way out, and how his successor, Joe Biden, widely considered a sensible leader, will handle the Iran issue is not clear.

One can only hope that Iran, which has not chosen its enemies wisely, will remain unprovoked in spite of its unbearable loss, desist from retaliation, which may be exactly what its enemies are waiting for, and deny the perpetrators of the dastardly crime of assassinating its much-revered scientist the pleasure of having a casus belli.



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