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The People vs. the Clan



The ongoing protests have now continued for several days with neither side relenting. In a non-violent war between the Regime and the People, the rulers have been yielding ground inch by grudging inch but there has been no concession from either side that can end the stalemate. The demand has now boiled down to the single proposition that the Rajapaksas must go lock, stock and barrel and stolen loot returned. It’s certainly been a fast breaking drama, commanding not only domestic but international attention with many startling developments by the day. Sadly none of these included receiving power, fuel, gas, milk powder or any other essential the people have had to do without. Cost of living? Forget it; it’s zooming like in a banana republic and the time is not far off when a wheelbarrow will be needed to carry cash to market.

First the cabinet excluding the prime minister resigned. But two first family siblings and Namal baby not there any longer. Then there were three or four ministerial re-appointments including Foreign Minister GL Peiris and Ministers Dinesh Gunawardene, Leader of the House and Chief Government Whip Johnston Fernando. They were essential for maintaining foreign relations and the conduct of parliamentary business. In what some might consider a major concession, former Justice Minister Ali Sabry was appointed Finance Minister in place of dual citizen Basil Rajapaksa who clings on to his U.S. citizenship. This self-same Basil, once touted to be a miracle man with seven brains, was brought into parliament via the controversial 20th Amendment which undid its predecessor and once again concentrated virtually all power in the president. Many of those howling against Basil and now claiming independence in parliament voted for that amendment. Perhaps his replacement was a concession of sorts to the wolves baying for his blood who were once on the government side of the legislature but now saying they’re independent.

Former Central Bank Ajith Nivard Cabraal has gone and been replaced by Nandalal Weerasinghe, retired Senior Deputy Governor recalled from Australia here he was visiting his daughters. Weerasinghe was denied the governor’s position some time ago, before Cabraal’s move from the National List State Ministry of Finance back to the Central Bank. The solid resistance to going to the IMF has now been abandoned and preliminary talks have begun. There’s going to be no quick fix but contacts have been established. A council of respected economists including former Governor Indrajith Coomaraswamy and two senior former IMF officials of Lankan descent have been enlisted to assist negotiations with their former employer. These developments, together with some rainfall in the hydro-electricity generating catchments are some rays of hope in an otherwise desperate scenario.

Thankfully there has been no violence and the regime, thus far, has refrained from attempting to forcefully eject protesters from their Galle Face battleground. The government seems to be hoping that sheer fatigue will let out pent-up steam and ease the protest momentum. Despite heavy rain and scorching heat protesters have remained entrenched with numbers replenished with new people joining the core from many parts of the country. Many celebrated the New Year on the green and there were television images of the symbolic pot of milk being boiled to overflowing at Galle Face. This is in addition to independent protests outside Colombo. There is a predominance of young people among the demonstrators, educated and middle class. The various commentators writing for this issue of our newspaper make the point of the unprecedented middle class presence, something unusual in this country where blue collars, with exceptions, dominate peeditha panthiya protests and demonstrations. But what we are seeing today is People vs Rajapaksas not underpinned by salary and similar economic demands other than those for bare essentials.

The Mirihana protests outside the president’s private home, where it all began, saw the mysterious appearance of an armed motorcycle squad sent away by police in the glare of television coverage of a protest outside parliament. There was also burning of law enforcement vehicles but why no arrests were made by police present in numbers has not yet been forthcoming. Allegations of an Avant Garde hand, rightly or wrongly, attempting to incite violence have been freely made. While police have released an artist’s sketch of a man wanted for torching a police bus there has been no explanation why the act itself was perpetrated in the presence of the police with none arrested. No military/STF presence except for VIP home security has been evident suggesting that there are no plans to unleash the dogs of war on unarmed protesters.

As regular columnist Rajan Philips says on this page impeaching the president is a long shot; too long we would add. The numbers do not even appear sufficient to get a simple majority needed for the no confidence motion against the government for which signatures are now being collected. Signatures for an impeachment motion against the president too, which needs a two thirds majority, are also being canvassed. There are fence sitters on both sides of the legislature and, as the JVP’s Vijitha Herath has said in an interview in this issue, there are purchasable elements in the body politic available to change sides not only for filthy lucre but also for political office. The number of ministers who have held office in UNP governments and then under the Rajapaksa dispensation cannot be counted on the fingers of both hands.

How events will pan out eventually remains to be seen. The old fox JRJ once said a particular election must be won hondin ho narakin – by good or bad. The Rajapaksas are confronted by a similar dilemma; they have to retain power hondin ho narakin.

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Political compulsions vs rationality



Saturday 28th May, 2022

Reports that the public sector workers will be given a pay hike from the budget to be presented in a few weeks have stirred up a lot of controversy. One cannot bring oneself to be critical of a pay hike for workers, but the question is whether the government which is even without funds to pay the public workers their salaries will be able to grant them a pay hike. Is it planning to print more money? The government seems to have got cold feet due to adverse criticism of the alleged offer of a pay hike to the state sector, if a claim attributed to it is anything to go by; it has said the reports of the salary increase at issue are not true. One could only hope that it is telling the truth, for once, and will act sensibly without ruining the economy further.

One of the main reasons why the economy is in a tailspin is excessive money printing, which is the only thing the Rajapaksa government has done efficiently. Some leaders of the present dispensation and their officials went so far as to argue that money printing did not cause an increase in inflation! No wonder the economy deteriorated under the watch of these pundits. The current crisis has come about mainly due to economic mismanagement during the past few years. No less a person than IMF Managing Director Kristalina Georgieva has said the crisis here is owing to mismanagement, and therefore the most important thing to be done is to put the country back on a sound microeconomic footing. Massive tax cuts and duty waivers have caused a steep decline in state revenue. Therefore, besides the worst-ever foreign currency crunch the country is experiencing, there is a huge rupee crisis.

Colossal amounts of money already printed have caused soaring inflation and currency devaluation. Prices increase almost daily, and essentials are prohibitively expensive for most people, who are protesting. It is high time the government stopped printing money haphazardly for politically-motivated programmes, and heeded expert advice. The Central Bank (CB) is struggling to tame the runaway inflation by absorbing excess liquidity; it has increased interest rates by an unprecedented 700 basis points. Such measures are bound to make the economy contract, and adversely impact the private sector with about six million workers, in the short run, however essential they may be to contain inflation and ensure the country’s long-term economic wellbeing. What the CB is performing is a balancing act.

The business community has already warned of job losses in the private sector, and asked for a debt moratorium to prevent the collapse of many small and medium enterprises (SMEs). Yesterday, we quoted Chairperson of the Sri Lanka United National Businesses Alliance, Tania Abeysundara, as having said that around 4.5 million Sri Lankans employed in SMEs might lose their jobs in the coming months unless the government stepped in and assisted the businesses in trouble. This is a frightening proposition.Most workers deserve better pay. But pay hikes must not be politically determined, especially amidst an economic crisis, if further trouble is to be averted. The yahapalana government made the mistake of promising a huge salary increase to the public sector workers before the 2015 presidential election, and implementing its pledge to win the parliamentary polls a few months later, thereby causing an unnecessary stress on the economy. The incumbent administration has already increased the salaries of some categories of public sector employees including teachers and given a special allowance to all state sector workers besides distributing cash by way of relief for political reasons. A general election may have to be held sooner than expected. Let the government be urged to ensure that political compulsions do not overtake rationality in preparing the budget to be presented. The least it can do to help resolve the economic crisis is to leave the task of managing the economy to experts and give them a free hand. Everything it touches turns into a mess.

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Running, hunting and flying trapeze



Friday 27th May, 2022

What was widely expected of the SLPP and the Opposition, by way of their contribution to resolving the current economic crisis, was the formation of a national unity government. Religious dignitaries and civil organisations campaigned hard to bring the warring parties together, and political leaders had the public believe that they were making a serious effort to form a multi-party Cabinet, but the mountain that laboured has brought forth a mouse—a deformed one at that.

Some of the newly-appointed ministers are at daggers drawn. They have turned hostile towards even President Gotabaya Rajapaksa. Ministers Harin Fernando and Manusha Nanayakkara continue to inveigh against the President. Fernando has, at a recent media briefing, repeated some of the allegations he levelled against the President and other members of the Rajapaksa family while he was in the Opposition. He and Nanayakkara are obviously trying to remain in the good books of the irate public by criticising the President and the SLPP while being members of the Rajapaksa government. But the problem with running with the hare and hunting with the hounds is that there comes a time when the person doing so does not know whether he/she is running or hunting.

It is hoped that the ongoing uneasy political cohabitation between the SLPP and a section of the Opposition does not exemplify a local saying about connubiality –– ‘even the shadow of a doomed marriage is crooked’. There should be a healthy relationship between the President and the Cabinet if the government is to be prevented from becoming a two-headed donkey that tries to pull in two different directions simultaneously. A toxic relationship between the President and the Cabinet or some members thereof takes its toll on the performance of a government, as has been our experience. We have witnessed such scenarios twice during the past two decades, or so.

President Chandrika Bandaranaike Kumaratunga and the UNF ministers including Prime Minister Ranil Wickremesinghe fought bitterly from 2001 to 2004. President Kumaratunga had to stomach many indignities at the hands of the UNF ministers. Their enmity stood the LTTE in good stead. President Kumaratunga finally sacked the UNF administration. There was a similar situation from 2015 to 2019; President Maithripala Sirisena and the UNF Cabinet including PM Wickremesinghe hardly did anything other than fighting so much so that the former sought to dislodge the UNP-led government and hold a general election only to be left with egg on his face courtesy of a landmark Supreme Court ruling against his rash executive action. Their clashes rendered the yahapalana government dysfunctional and led to national security being severely compromised; a group of terrorists struck with ease on 21 April 2019, destroying more than 270 lives in churches and hotels, as a result.

Meanwhile, Ministers and high-ranking state officials must not be at loggerheads. The need for a healthy relationship between the Cabinet and the bureaucracy for the country to face challenges, overcome crises and achieve progress cannot be overemphasised. When Basil Rajapaksa was the Finance Minister, it was reported that the then Central Bank (CB) Governor Ajith Nivard Cabraal had not been able to meet him for months to discuss vital issues concerning the economy.

The Finance Minister and the CB Governor are like two aerialists who perform flying trapeze; they must have absolute faith in each other, and be adept at synchronised movements if disaster is to be averted. In the case of Sri Lanka’s economic circus, there is no safety net. A government must not expect the CB Governor to perform monetary pole dancing. One may recall that a CB chief who chose to display his skills on the pole in a bid to entertain his political masters, during the yahapalana government, had to flee the country, in the buff, as it were.

CB officials have recently revealed before the COPE (Committee on Public Enterprises) that they warned of an economic meltdown about two years ago, but their efforts to convince the government of the need to take urgent action to straighten up the economy were in vain. One could only hope that a similar situation will not happen again, and the political authority will listen to expert advice and do what needs to be done urgently to save the economy, and grant relief to the public calling out for help.

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Govt. playing with fire



Thursday 26th May, 2022

The government seems determined to perpetuate people’s suffering. It claims that adequate fuel stocks are available in the country, but pumps at most filling stations have run dry, and long lines of vehicles are seen everywhere. When the fuel supply was restricted, recently, despite the unloading of two or three oil shipments in quick succession, it became obvious that the government was planning to jack up petroleum prices. What was feared came to pass; oil prices increased. But the fuel shortage remains.

What prevents the Ceylon Petroleum Corporation from maintaining an uninterrupted fuel supply if it has enough stocks? Is it starving the market again with a view to effecting another price hike? The only thing it does promptly is to close the filling stations where clashes occur; this measure only aggravates the suffering of the peaceful people. Why can’t the police prevent such incidents at petrol stations, where they have a significant presence?

More than 40 filling stations have been closed countrywide, owing to clashes, according to media reports. It is only natural that tempers flare when people languishing in queues for long hours have to return home without fuel. Most people spend more than 12 hours in queues to obtain petrol and diesel. How would Minister of Power and Energy Kanchana Wijesekera, who has filling stations closed at the drop of a hat, feel if he happened to queue up for fuel and return empty-handed after hours of waiting?

Minister Wijesekera talks nineteen to the dozen in an accusing tone that suggests that he thinks the people have bankrupted the country and got their comeuppance. Let him be reminded that he is part of a failed government, whose leaders have ruined the country by mismanaging its economy and helping themselves to public funds; he is also responsible for the current mess. He should be considerate towards the people, and take action to ensure that fuel is distributed efficiently, instead of lecturing to them. He and his bosses ought to realise that they are playing with fire. They know what it is like when public anger spills over on to the streets, don’t they?

Fathers of crisis

Parliament is not without some good men and women who take their legislative duties and functions seriously and do their utmost to safeguard the interests of the hapless public. The Chairman and some members of the COPE (Committee on Public Enterprises) are among them. They have exposed various rackets in the public sector and censured errant state officials. They deserve public plaudits.

COPE Chairman Prof. Charitha Herath has called for a PSC (Parliamentary Select Committee) to find out who is responsible for ruining the economy and bankrupting the country. There is no need for an investigation to identify those who have reduced the country to penury.

The present economic crisis is not of recent origin, but it is the current regime that worsened it. The blame for the current mess should be apportioned to President Gotabaya Rajapaksa, former Prime Minister Mahinda Rajapaksa, who held the finance portfolio, and former Finance Minister Basil Rajapaksa. They did not heed expert advice, and ran the country like a petti kade in Medamulana. It has now been revealed that the Central Bank economists warned of an economic crisis well in advance, and called for action to avert it, but the government chose to ignore their warning.

A PSC probe, if conducted impartially, will help officially establish who is responsible for the economic meltdown. It must also be found out how US dollars disappeared from the country so fast, and whether there is any truth in the allegation that large amounts of foreign currency were smuggled out systematically during the past two years or so.

People have no faith in PSC probes thanks to the one into the Treasury bond scams, under the yahapalana government. The ruling party members of the PSC that investigated the bond racket behaved like a bunch of ruffians, insulting and intimidating the Central Bank (CB) officials, who testified against the then CB Governor Arjuna Mahendran. They stooped so low as to spoil the final COPE report with a slew of footnotes, and the Central Bank officials were prevented from countering their flawed arguments.

If a PSC is to be set up to investigate the economic crisis, the right persons will have to be appointed as its members, the majority of whom should come from the Opposition, if it is not to end up being another Treasury bond probe committee.

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