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Editorial

The ‘new normal’ budget

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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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Editorial

Vital issues about victuals

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Wednesday 9th October, 2024

President Anura Kumara Dissanayake has met a group of food importers and discussed, inter alia, ways and means of making imported food items available to the public at affordable prices, according to media reports. He seems to think that discussions and moral suasion would help persuade the mudalali fraternity to refrain from profit maximisation for the sake of the public. If the government is really keen to serve the interests of the public, it should make a decisive intervention to tackle the problem of market cartelisation, which enables unscrupulous importers and wholesalers to jack up prices and exploit the public.

Egg prices have increased again after a temporary slump. Supporters of the new dispensation naively went so far as to attribute the egg price decrease to Dissanayake’s ascension to the presidency! What egg wholesalers with cold storage facilities did was to bring the egg prices down artificially so that they could buy eggs on the cheap and hoard them before increasing the selling prices. They have the best of both worlds while egg producers and consumers are gnashing their teeth.

Large-scale rice millers have offered to reduce the prices of rice. Never do they act out of altruism, and why have they become mindful of the maximum retail prices all of a sudden? It is not difficult to see through their game plan. They can afford to reduce prices temporarily but their small-scale counterparts cannot do so as they lack the wherewithal. If the prices of rice drop drastically, the small timers in the milling trade will go belly up; the rice market will be even less competitive in such an eventuality, and the Millers’ Mafia will be able to exploit the public to their heart’s content by increasing prices again.

Big-time millers leverage their wealth and political connections to deprive their smaller counterparts of funds for purchasing paddy by delaying bank loans, and fill their silos with paddy bought at lower prices. By the time the small-scale millers receive funds, there is hardly any paddy left for them to purchase and what is available is of inferior quality. This happens year in, year out.

Successive governments have done precious little to help the small-scale millers. The new government should ensure that funds are available for them to buy paddy when harvesting commences. The Paddy Marketing Board should be provided with funds and adequate storage facilities to compete with the Millers’ Mafia so that the farmer and the consumer will benefit. The JVP/NPP government is duty bound to do so because the JVP torched more than 240 agrarian service centres with paddy storage facilities in the late 1980s, according to Maithripala Sirisena, whom it helped become President in 2015.

The Millers’ Mafia employs another ruse to bring the prices of paddy down. It increases the prices of rice ahead of the harvesting season, compelling the government to import rice. When the state-owned warehouses are full with imported rice, the big-scale millers reduce prices, causing the imported rice stocks to rot as locally grown rice agrees with Sri Lankans’ palates more than the imported varieties. When the prices of rice fall, farmers have to sell their paddy at lower prices. After hoarding paddy, the crafty millers increase prices. Unsold imported rice stocks have to be disposed of as animal feed. The only way to end this despicable practice is to conduct raids and confiscate hoarded paddy. One can only hope that the JVP/NPP government will prove equal to the task of taking on the Millers’ Mafia.

Most people believed in the NPP’s pledges and rhetoric and voted for Dissanayake at last month’s presidential election. Having talked the talk—very eloquently at that––President Dissanayake now has to walk the walk. Unless the food importers and wholesalers stop exploiting the public, the government will have to get tough with them unlike the previous governments that chose to play ball with them for obvious reasons.

Wholesalers and importers of food and other essentials fleece the public with impunity thanks to their political links and slush funds, which help them have politicians eating out of their hands. Financiers’ interests take precedence over those of electors after elections.

There is a pressing need to ensure that politicians and their parties disclose the sources of funding so that the public will know who is in the pay of unscrupulous importers and traders. Let the SLPP, the UNP, the SJB, the NPP and other political parties be urged to reveal whether they have received any funds from such elements.

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Editorial

Easter carnage probes and AKD’s call

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Tuesday 8th October, 2024

President Anura Kumara Dissanayake, addressing a group of Easter Sunday terror victims, their family members, Catholic priests including His Eminence Cardinal Malcolm Ranjith, and others, at the Katuwapitiya Church, on Sunday, pledged to expedite investigations into the 2019 carnage and ensure that justice would be served fast. In saying so, he only repeated one of his election promises.

President Dissanayake should have addressed the specifics of some issues the Church had raised about the 2019 terror attacks, one being the fate that has befallen the reports of two vital probe committees appointed by President Ranil Wickremesinghe. Spokesman for the Colombo Archdiocese Rev. Fr. Cyril Gamini Fernando, speaking at a discussion on the Easter Sunday terror attacks, recently, demanded to know what had become of the report of a committee President Wickremesinghe appointed to investigate some allegations that Channel 4 (UK) had levelled against Sri Lanka’s military intelligence in respect of the Easter bombings. The Church leaders should have requested President Dissanayake to make that report public.

What characterises the presidential probes in this country is lack of transparency on the part of the Presidents who order them. Committees and commissions are appointed to investigate issues of national importance, but not all their reports are released to the public, who have a right to know their findings. Sri Lankan Presidents have a remarkable ability to swallow committee reports whole!

Leader of Pivithuru Hela Urumaya Udaya Gammanpila, addressing the media yesterday called upon President Dissanayake to release the report of the committee appointed by President Wickremesinghe to investigate the Channel 4 allegation that Sri Lanka’s military intelligence was involved in the Easter Sunday attacks. Gammanpila also asked President Dissanayake to make public the report of the committee appointed by President Wickremesinghe to probe four specific issues concerning actions and responses of Sri Lanka’s military and intelligence officials in relation to the Easter Sunday bombings with special emphasis on the conduct of the head of the State Intelligence Service and the Chief of National Intelligence. That committee was headed by retired judge A. N. J de Alwis.

Gammanpila argued that on Sunday President Dissanayake would have been able to field questions from the victims of terror confidently at the Katuwapitiya Church and provided specific answers thereto if he had perused the aforesaid two reports, copies of which were available with Saman Ekanayake, who served as the Secretary to President Wickremesinghe, and the Attorney General. Whether President Dissanayake has read those reports, we do not know, but if he has not, it is high time he studied them and took action to make them accessible to the public.

There is no need to probe the Easter Sunday attacks all over again, and therefore it is hoped that no attempt will be made to reinvent the wheel. The Presidential Commission of Inquiry (COI) which investigated the 2019 carnage, has presented a corpus of information in its final report although it examined the alleged foreign involvement in the terror bombings perfunctorily. The COI findings could serve as the basis for a future investigation. If a new probe committee/commission seeks to begin from the beginning, investigations are likely to drag on until the cows come home. More than half a decade has already elapsed since the 2019 terror attacks.

The Catholic Church has said the mastermind behind the Easter Sunday carnage is the person who called himself ‘Abu Hind’ and his true identity is known to current Secretary to the Ministry of Public Security Ravi Seneviratne, and the members of the COI. Arresting the suspected terror mastermind will be half the battle in ascertaining who was actually behind the Easter Sunday carnage.

The Ministry of Public Security is now under Minister Vijitha Herath, who can ask Seneviratne, whom he handpicked as his ministry secretary, to reveal the true identity of Abu Hind, and President Dissanayake should make public the reports submitted by the Imam and Alwis committees.

Meanwhile, it is hoped that the NPP/JVP government, which has undertaken to have the Easter Sunday carnage probed thoroughly and serving justice expeditiously will not baulk at going the whole hog in view of the fact that Mohamed Yusuf Ibrahim, father of two National Thowheed Jamath bombers, Mohamed Ibrahim Ilham Ahmed and Mohamed Ibrahim Insaf Ahmed, was a JVP National List nominee in the 2015 general election.

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Editorial

Clash of mandates

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Monday 7th October, 2024

The process of submitting nominations for the 14 Nov., general election is currently underway. It is popularly thought that a person who wins the presidency stands a much better chance of steering his or her party to victory at a subsequent general election. But anything is possible in politics, where upset wins are not uncommon. What if a party other than President Dissanayake’s NPP wins the upcoming parliamentary polls?

Dissanayake has been one of the bitterest critics of the executive presidency, which his party, the JVP, has condemned as a wellspring of evil. But he chose to do what his predecessors had done, after being sworn in as the President; he exercised the much-despised executive powers of the President to dissolve Parliament prematurely in a bid to secure control thereof and consolidate his position.

There is a compelling argument that the last Parliament had to be dissolved as the NPP, which had only three members in it, needed to secure legislative power in a general election to carry out President Dissanayake’s policies. But the question is whether a mandate given to a President takes precedence over that of a political party which controls Parliament. There is another argument in favour of the premature dissolution of the last Parliament; the SLPP government, which was full of undesirables, lost legitimacy to remain in power when President Gotabaya Rajapaksa (GR) and Prime Minister Mahinda Rajapaksa resigned due to mass protests. One cannot but agree that the SLPP government was full of misfits, but ironically the majority of the people who, unable to make proper judgements, made the mistake of electing those undesirables in the 2020 general election, voted for Dissanayake overwhelmingly at the recently concluded presidential election!

True, the SLPP government mismanaged the economy and inflicted unbearable suffering on the public, who were left with no alternative but to rise against that regime. But if mass protests can delegitimise popularly elected administrations, future governments, including the one President Dissanayake is planning to form, will also lose legitimacy in case of continuous mass protests against them.

Interestingly, Dissanayake, who successfully harnessed the forces that ousted President GR to realise his presidential dream, said in the run-up the 21 Sept. presidential election that President GR was a victim of what Ranil Wickremesinghe’s reckless borrowing from external sources to the tune of USD 13.5% billion during the Yahapalana government (2015-2019). The biggest beneficiary of the 2022 uprising, which the JVP infiltrated and manipulated, was Wickremesinghe, the ‘reckless borrower’; he became the President! Thus, Dissanayake and the JVP/NPP are doubly at fault.

If the political parties/alliances that form governments after obtaining popular mandates can be dislodged on the basis of the outcomes of presidential elections or according to the whims and fancies of the Executive Presidents, then what are general elections there for? In 2015, following the election of President Maithripala Sirisena, the UPFA ceded control of Parliament to the UNP, allowing President Sirisena to appoint Wickremesinghe as Prime Minister. The UNP did likewise in 2019, after GR secured the presidency. In 2004, the then President Chandrika Kumaratunga sacked the UNP-led UNF government, which had obtained a popular mandate about two years after the 1999 presidential election.

In 2018, President Sirisena made an abortive bid to sack Prime Minister Wickremesinghe and then dissolve Parliament. Last month, the SLPP government stepped down, following the election of President Dissanayake, allowing him to appoint a three-member Cabinet before dissolving Parliament. The Presidents who have either dissolved Parliament or wrested control thereof, immediately after being sworn in, came to power promising to abolish the executive presidency or to curtail the presidential powers that help undermine the legislature. Their actions have facilitated the emergence of an unhealthy political culture devoid of co-operation and coexistence between the Executive and the Legislature, unlike in mature democracies.

There is a constitutional provision preventing the President from dissolving Parliament before the expiration of two and a half years of the term of Parliament. In other words, if the President and the Prime Minister happen to be elected from different parties, they will have to co-operate for at least two and a half years to prevent the country from descending into chaos. If so, why shouldn’t they be made to do likewise after the expiration of the first two and a half years of the term of Parliament? The opponents of the executive presidency maintain that the President should be stripped of the power to dissolve Parliament prematurely. This argument has some merits.

The fact that the President has to have control over Parliament to ensure smooth governance points to a serious flaw in the Constitution. The Prime Minister becomes more powerful than the Executive President to all intents and purposes when they happen to represent two different political parties, and they tend to clash. This constitutional anomaly can lead to political instability mainly due to Sri Lankan political leaders’ insatiable quest of self-aggrandisement and unwillingness to cooperate for the sake of the country.

Some political commentators are of the view that both the presidential election and the parliamentary polls should be held simultaneously. But the possibility of two different parties securing the presidency and control of Parliament cannot be ruled out. The way out is for the political leaders to learn to respect the mandates they receive at presidential and parliamentary elections separately and act in the interest of the country.

It is up to the public to elect, as their MPs, only the individuals who have the national interest at heart, at the upcoming general election. Otherwise, political instability is likely to set in, taking its toll on the economic recovery process in case of a party other than the NPP gaining control of the legislature or the next Parliament becoming hung by any chance.

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