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.
Get down to brass tacks
Saturday 13th August, 2022
The government’s high-octane performance is really amazing although the Opposition has accused it of doing nothing by way of problem solving. It has already solved many problems since the appointment of the new President and the new Cabinet, and is in the process of tackling many others.
The UNP has overcome many problems, thanks to the current dispensation. It has come in from the cold, at last. It was in penury following its disastrous electoral loss in 2020, but is showing signs of recovery. Some of its seniors who were in hiding after defaulting on bank loans to the tune of billions of rupees have crawled out of the woodwork. Their problems, too, have been solved.
The SLPP also had numerous problems; it faced the prospect of being ousted. But the government has solved all of them. The Rajapaksa family is out of danger; it is calling the shots in the government, again. The SLPP MPs who fell out with their party bosses, and were sidelined, are back in the Cabinet.
Some ambitious Opposition politicians have realised their dream of becoming ministers. Having crossed over to the government, they no longer have any problems to contend with, and can now make up for lost time to their heart’s content. Many more ministerial posts are expected to be created when the 22nd Amendment Bill with provision for the appointment of a jumbo Cabinet is steamrollered through Parliament, and the problems that most MPs are facing will be solved in the event of a national government being formed. At this rate, all the problems of the UNP, the SLPP and others who are willing to switch their allegiance to the government will be solved once and for all.
But the problems that the people are beset with remain unsolved, nay they are worsening. There’s the rub. The foreign currency crunch continues, and precious little is being done to ensure a steady forex inflow, which is the be-all and end-all of economic recovery. The fuel crisis is far from resolved; rationing is no solution however efficient it may be. The economy is thirsting for oil. Extremely high petroleum prices have led to an increase in production costs and the prices of essential goods and services. Inflation is soaring. Bread now costs as much as cake did about two years ago. People continue to skip meals. Doctors are complaining of drug shortages in the state-run hospitals. The school system is not fully functional yet due to transport issues. The Ceylon Electricity Board has jacked up electricity prices unconscionably, and the Water Board is expected to follow suit soon. Tax increases are said to be in the pipeline. Businesses are closing down due to escalating production costs and for want of imported raw materials. Many people have lost their jobs. The situation is bound to take a turn for the worse when the adverse effects of the conditions for the IMF bailout packages kick in. The government does not seem keen to address these issues. The Opposition is all at sea.
The government and the Opposition have been busy talking instead of making a collective effort to pull the country out of the present economic mire. They are blowing hot and cold on the formation of an all-party government, which has come to mean different things to different people. The Opposition insists that the proposed joint administration should be an interim one, but the SLPP has some other plans; it wants to cling on to power by sharing ministerial posts with the Opposition. If President Ranil Wickremesinghe, the SLPP and the Opposition are serious about joining forces for the sake of the country, they ought to stop wasting any more time on endless talks, get down to brass tacks, set goals and formulate a definitive plan to reach them in the shortest possible time.
Aragalaya goes home
The goal of the Galle Face protest or the Aragalaya was to send the Rajapaksas home. On 09 May, Prime Minister Mahinda Rajapaksa went home. On 09 June, Basil Rajapaksa went home, and on 09 July President Gotabaya Rajapaksa agreed to go home. On 09 August, the Aragalaya went home, as cynics say! The incumbent government, which is a Rajapaksa regime in all but name, is cock-a-hoop, thinking that its strongarm tactics have helped bring public protests under control; it is now reverting to old ways.
The fact that the JVP, the Frontline Socialist Party (FSP), and their allies and sympathisers including former Army Commander Field Marshal Sarath Fonseka failed to bring large crowds to Colombo on 09 August for the ‘final battle’ has given the lie to their claim that they deserve the credit for the success of the 09 July uprising, which led to the ouster of President Rajapaksa. If it is true that they were instrumental in bringing so many people for the march on the President’s House, will they explain why they miserably failed on 09 August?
Similarly, the failure of the ‘final battle’ launched by the JVP, FSP and others has disproved the government’s claim that all those who took part in the previous protests are anarchists sympathetic to some ultra-radical political groups, and therefore the use of military force against them is justifiable. Now, it has become clear that most protesters who thronged the city on 09 July were resentful people, and some organised groups with hidden political agendas used public anger to compass their political ends. Hence the need to separate the irate public from troublemakers, and resolve the issues that make the ordinary public take to the streets.
The Galle Face protest movement started off as an agitation similar to the ‘Occupy Wall Street’ protest in the US, and was leaderless at the beginning; one may recall that the JVP, which had no control over the protest initially, warned that such an uprising would spell disaster for democracy. Thereafter, the JVP, the FSP, etc., gained control of the Aragalaya systematically. The UNP also had a considerable presence at the protest site, as former UNP MP Ashu Marasinghe has admitted. The protest gathered momentum with thousands of angry people, mostly youth, joining it, and some businesses and expatriate Sri Lankans providing assistance; most well-wishers of the protesters remained anonymous. There appeared signs of the Galle Face protest losing steam in early May, but the SLPP goons carried out a savage attack on it, giving it a new lease of life and triggering a wave of retaliatory violence, which was carried out in a systematic manner; organised arson attacks and other crimes were similar to the ones carried out in the late 1980s.
Perhaps, the Galle Face protest would not have snowballed into a mass uprising, much less led to the ouster of President Rajapaksa, but for the aggravation of the economic woes of the public. Oil and gas supplies came to a halt, and inflation continued to gallop, driving the people to protest.
When Ranil Wickremesinghe became the President, fuel and LP gas supplies resumed all of a sudden, and an effort to form an all-party government got underway, infusing the public with some hope. People have chosen to act with restraint, as a result. This, we believe, is the reason why the 09 August protest flopped. But, worryingly, the promised political change as well as economic relief remains a will-o’-the-wisp, and if the government fails to maintain a continuous fuel supply, bring down the cost of living, and form an interim, all-party government, pressure is bound to build up in the polity again and find expression in mass uprisings despite the ongoing hunt for the self-proclaimed protest leaders. Rulers are always left without any defence when a tsunami of public anger makes landfall.
The government has made the mistake of causing an affront to the intelligence of the people who are calling for a radical political change and tangible economic relief. Instead of trying to live up to their expectations, it is planning to appoint a jumbo Cabinet and lure Opposition MPs into joining it so as to retain its hold on power until the expiration of the current parliamentary term.
One of the main criticisms that Ranil Wickremesinghe, Maithripala Sirisena and their Yahapalana allies levelled against the Rajapaksa government ahead of the 2015 presidential election was that it maintained a massive Cabinet at the expense of the public to engineer crossovers. They introduced the 19th Amendment, limiting the number of Cabinet members to 30 and that of other ministers to 40, but made a mockery of their bona fides by craftily inserting a section to remove that limit in case of the formation of a national government. Dissident SLPP MP Gevindu Kumaratunga has told Parliament that the original 22nd Amendment Bill unveiled by the government initially did not contain any provision for expanding the Cabinet, but it has been smuggled into the Bill submitted on Wednesday! Thus, the government has unwittingly shown its hand. The people will be burdened with a jumbo Cabinet, again!
The Rajapaksa-Wickremesinghe administration is apparently labouring under the delusion that it could cling on to power with the help of crossovers, and coercion will help overcome anti-government protests. Unfortunately, it has, in its wisdom, chosen to test the people’s patience again and is playing with fire, instead of making a serious effort to defuse tensions in the polity by eliminating the causes of public discontent, and making life less miserable for the ordinary public.
Gallup polls and G-strings
Thursday 11th August 2022
The results of an opinion survey, released recently, indicate that JVP leader Anura Kumara Dissanayake is leading where the public approval ratings of the candidates who vied for the presidency in Parliament last month are concerned. Dissanayake leads the survey on trust in leaders to do the right thing to resolve the economic crisis, with 48.5%, followed by Ranil Wickremesinghe (36.6%), Opposition leader Sajith Premadasa (29.1%) and Dullas Alahapperuma (23.7%).
The outcome of the aforesaid opinion poll is likely to make the JVP believe that it stands a better chance of shoring up its image and improving its electoral performance if it remains independent of the grand alliance thought to be in the making, and acts as the Opposition. If all other parties represented in Parliament join forces with the SLPP to form a unity government officially, then the post of the Opposition Leader will have to go to the JVP; that is the basis on which TNA leader R. Sampanthan became the Opposition Leader in 2015.
However, it is not advisable for anyone to go solely by opinion/polls survey results in making vital decisions, for public opinion could be as elusive as the weather; forecasts thereof could go wrong, and some politicians who disregard this fact have found themselves up the creek without a paddle. What befell Keith James Locke, a New Zealand Green Party member, may serve as an example. In the run-up to the 2005 election, he was so confident of victory in his electorate because of Gallup polls predictions favourable to him that he undertook to run across Epsom, in the buff, if his rival won. Unfortunately for him, the pollsters’ predictions went wrong, and he lost! Under pressure from the media and his political rivals, he carried out his promise; he made a dash across the Auckland suburb, wearing a G-string with bodypainting depicting a full suit!
Even in the US, where pollsters employ advanced methods to gather data and analyse them, the Gallup polls results went wrong as regards the outcome of the 2016 presidential election. Polls forecasters confidently placed Hillary Clinton’s chance of winning at between 70% to 99%! But Donald Trump came from behind to beat her. It may be argued that Clinton won the popular vote, but the fact remains that Trump secured the presidency. Pollsters also failed to predict the outcome of the British general election in 2015.
One may recall that in Sri Lanka, too, something similar happened at the 2015 presidential election. All secret opinion surveys commissioned by the Mahinda Rajapaksa government ahead of that election predicted a landslide win for the sitting President, but his main rival, Maithripala Sirisena proved to be a dark horse. Rajapaksa did not know what hit him. Even Sirisena may not have expected to pull off such an upset victory.
Sri Lankan pollsters may be familiar with the idea of ‘shy Trumpers’, which came into being during the 2016 US presidential election; many Americans did not want to identify themselves as the supporters of Trump, during surveys, due to his undesirable behaviour but approved his policies and voted for him. Likewise, there may not be a dearth of ‘shy Rajapaksers’ in the Sri Lanka polity, and the beleaguered Family may be planning a comeback a la Bongbong Marcos of the Philippines. This may be the reason why they enabled two non-SLPP members, Wickremesinghe (UNP) and Dinesh Gunawardena (MEP) to secure the presidency and the premiership respectively and function as placeholders, while enjoying life, until the time is opportune for the Family members to crawl out of the woodwork.
President Wickremesinghe has likened his unenviable task to that of Grusha, who carries a baby across a collapsing rope bridge, in The Caucasian Chalk Circle. That, we believe, is an understatement of his daunting mission; he is carrying a much heavier burden—a full-grown, former ruggerite, who is the son of not just a former Governor but an ex-President, no less!
As for surveys and statistical analysis of public opinion, it behoves politicians to tread cautiously. Prudence demands that they keep an ear to the ground, and factor in all political developments and trends in making crucial decisions, instead of being carried away by survey results.
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