Sugar buddies caught with cash in a carpark as countdown begins for their bosses’ future
Rajan Philips-May 5, 2018, 12:00 pm
For starters today, I was planning this secular prayer: Let us first say thanks for small mercies – for keeping Ravi Karunanayake out of the cabinet in last Tuesday’s reshuffle. Two days later the thunderbolt struck –the President’s Chief of Staff and the Timber Corporation Chairman caught counting bribe cash in the carpark at Taj Samudra. How brazen has corruption become? We knew it had already climbed high. But thanks again for small mercies – to the Bribery Commission officials who arrested the two government thieves. The Bribery Commission is having better luck with real time culprits than it has been having with rogues of the past. I will spare the details of the arrests and the arrestees which are already virally known, and turn to their inauspicious effects on the new session of parliament that is scheduled to open on Tuesday, May 8.
Already, the presidential secretariat has exhibited its ineptitude in taking three trial and error gazette notifications to properly announce the May 8 opening. Now, President Sirisena will have to acknowledge and address the embarrassment of the mid-afternoon bribery scandal involving his Chief of Staff I.M.H. Mahanama and the Chairman of the Timber Corporation P. Dissanayake. The President has already exonerated himself by interdicting the culprits and claiming that the arrests of the two men prove that his administration is being effective in the fight against corruption. What it really proves is that things will work if the law enforcement officials are given the freedom to do their job without political interference.
President Sirisena or Prime Minister Wickremesinghe, or for that matter former President Mahinda Rajapaksa, cannot so easily exonerate themselves from their general record of protecting bribe takers and corruption beneficiaries, and allegations of their own implications in some of them. What will the President say, if anything, on the matter of bringing state criminals to book? Apart from state corruption, will there be answers to state murders of intrepid journalists and a young sports star? Will anything happen before the President’s elected term is over?
The people who thought there would be changes after 2015 are now fed up and are resigned to the old curse to let ‘there be a plague’ on not just two but, now, all three houses. The SLPP cannot absolve itself because it has a new abbreviation. Name change is not rebirth. Its contents are all old stock. The people are more concerned about their livelihood woes. There is no economic commentary going around that is positive or rosy, even without the unsolicited opinions of the former Central Bank Governor. With his past locked in a glass house, Nivad Cabraal, should stop throwing stones at the current regime. As for the economists with professional credibility, what they are figuring out in their heads the people are doubly feeling in their guts.
The economic woes
Sri Lanka’s economy like most national economies can keep growing at what Nimal Sanderatne calls its ‘autonomous growth’ rate, regardless of what governments might do to spur or stall growth. But when things go wrong, it is the government that gets the blame, and rightly so as is the case almost always in Sri Lanka. The current mainstays of Sri Lanka’s economy - are tourism, exports led garment and tea and sprinkling of manufacturing and agricultural products, agriculture with a high proportion of rice production, and remittances from Sri Lankan workers overseas (90% from the Middle East). Its chronic problem is the external balance of payments – trying to keep as much foreign reserves as possible to pay for essential imports, and often measured by the number of months of import capacity. Encompassing everything is the national debt which, as Mr. Cabraal has been crowing last week, has grown to historical highs. This is a pointless argument. Hardly any government has been able to reverse the debt trend, so every year the country invariably makes history with its national debt.
The debt and deficits are also functions of our structural inability to raise revenue levels or reduce non-discretionary expenditures (e.g. public sector salaries). After about 60 years when income tax was first introduced, only 7% of the labour force and companies reportedly pay income tax. And the yahapalanya government with the gusto of a drunken sailor increased public sector salaries in its first budget in 2015. Few public servants remember that now, because those are less than crumbs compared to what politicians and officials routinely make in bond auctions or car park cash transactions.
At the household level, the pinch comes from the shortage, or the rising cost, or both, of the imported essentials. Aggregate it nationally, shortages and cost of living have been perennial political predicaments. For the first 35 years after independence the contentious commodity was imported rice closely bundled with wheat flour and sugar. Over the second 35 years, rice has been replaced by fuel. Such was the significance of rice in 1970, that a figurative opposition promise, "we will bring rice even from the moon" became an election winning slogan. Rice eventually came and in substantial quantities, not from the moon but from the island’s paddy fields in the wet zone and in the dry zone.
No one is bold, or mad, enough now to promise to bring fuel from the moon, and there is no hope for producing petroleum locally. The government is in a bind to buy fuel globally at rising prices and enable its supply locally at cost that is affordable to ordinary people. It will be political suicide if the government were to simply let the market prices determine the cost of local fuel supply. Equally, it will be economic distortion to subsidize the supply cost of fuel, as it used to be done with rice. The financial impacts will be significant and the government will be flouting one of the key conditions of the IMF’s Extended Fund Facility to Sri Lanka. Commentators like Nimal Sanderatne have suggested a politically sensitive and economically responsible way out – that is to locally cushion the impact of rising global oil prices but cut funding elsewhere to make up the deficit, in the more discretionary areas of government spending, such as perks and pensions to parliamentarians and other government extravaganzas. It will be a remarkable shift if the government were to make such a course change from past practices.
While the present government is drawing much flak, but not unjustifiably, for its handling of the economy, things were not very different when the Rajapaksas were in power. In fact, it was often said that more than astrology it was former President Mahinda Rajapaksa’s fear that the economy would change for the worse that prompted him to call an early presidential election in January 2015. As blunders go, there are enough similarities between the two governments before and after January 2015. As far as the mainstays of the economy go, neither government did anything spectacular to boost tourism, exports or agriculture, apart from the 2016 restoration of EU concessions for Sri Lankan exports. According the annual World Bank overview, Sri Lanka continues to attract subpar volumes of the coveted FDI compared to peer economies. More importantly, the same report, suggests that the recent FDI inflow is "due mainly to the long-leasing of a port asset and a large land reclamation project", which are the leasing of the port operations and port lands in Hambantota, and the Port City development in Colombo. This is only another version of what the Rajapaksas did with Chinese loans for infrastructure development.
The (UNP) government has little to show for its economic strategies over the last three years, which were centred on the promise of a million jobs based on a knowledge-based social market economy, Western Region Megapolis, free trade with anyone who wanted to talk trade with Sri Lanka, and opening industrial clusters throughout the country. What the government has been shown in return is the wrath of the people in the neglected agricultural sector, and mostly rice producers, who were left literally high and through two full paddy seasons of extreme drought. Prime Minister Wickremesinghe acknowledged that the neglect of the country’s agricultural population was a major factor in the UNP’s crushing defeat in the February local government elections. It will be interesting to see if the President’s Policy Statement to parliament on Tuesday will signal anything new that we haven’t seen so far. Or, will it be the same old, same old? The debate that will follow could be expected to offer clues about the positions the main political parties will be taking on the economy, the upcoming elections and constitutional changes.
The countdown
The new sessions will also be the start of the countdown for the final phases of the political careers of not only President Sirisena and Prime Minister Wickremesinghe, but also former President Mahinda Rajapaksa. They are the three crucial political figures and rivals of today. They are also at the tail end of their political careers. All three of them have choices to make. Two of them, Sirisena and Wickremesinghe, may want to contest the next presidential election, which in theory one of them could win, but in reality both of them may lose. All three of them, on the other hand, have another common choice before them – and that is to put an end to all future presidential elections by supporting the JVP’s proposed 20th Amendment to abolish the executive presidential system in its current form. They will still have one more kick at the can – to contest the next parliamentary election as the prime ministerial candidates for their respective parties.
No matter how and where it will end, the JVP’s 20th Amendment proposal has become a cat among the pigeons in the main political parties. To date, the UNP and the SLFP including President Sirisena and Prime Minister Wickremesinghe have not said anything about the JVP’s proposal. The newly minted UNP Secretary Akila Viraj Kariyawasam has let it be known that Ranil Wickremesinghe will contest the next presidential election as the UNP candidate and will win. The SLFP’s group of 16 were once the chief promoters of a second Sirisena candidacy for President, but it is not clear where they stand now given their self-selected no man’s land between the Sirisena and Rajapaksa loyalists. However, the SLFP Secretary Duminda Dissanayake has, like his UNP counterpart, announced that President Sirisena will be contesting for a second term as the SLFP candidate.
But both the UNP and the SLFP leaders will have a time explaining to their 2015 allies and the general public why they are going back on their earlier promises to abolish the executive presidency, and presenting themselves as two opposing presidential candidates. Already about 40 civil society organizations have expressed support to the JVP’s proposal. The greater onus to explain will be on Maithripala Sirisena who vowed to be only a one-term President. They may have quietly ignored their promises and filed nominations as candidates, but the JVP’s proposal has set a political trap in their tracks. They will have a great deal of explaining to do if they choose not to support the JVP’s 20th Amendment.
The TNA also has indicated support for the 20th Amendment provided its concerns on the ethnic problem are addressed in the amendment package. That will leave Ranil Wickremesinghe in a particularly awkward spot insofar as the Tamil votes are concerned. If the TNA supports the JVP amendment and the UNP opposes it and defeats the amendment, Mr. Wickremesinghewill have a hard time canvassing the Tamil vote. He may even suffer a second Tamil boycott, but a totally voluntary one unlike in 2005.
The Rajapaksas and the SLPP have their own set of calculations in coming to terms with the JVP’s proposal. The No Confidence Motion against the Prime Minister has already exposed the lines of division in the Rajapaksa camp. Those who were gung ho about the NCM are the promoters of Gotabhaya Rajapaksa for presidency. Basil Rajapaksa didn’t think much of the NCM idea; he was more for forcing the dissolution of parliament to be followed by a general election. Mahinda Rajapaksa would lead the SLPP to victory and become Prime Minister. There could even be an outside chance of a different 20th Amendment to rescind 19A and restore 18A. Then Mahinda Rajapaksa could be President again. Even Mohan Peiris and Nivard Cabraal could return and together with Gotabhaya Rajapaksa, again helping his brother as the quintessential doer functionary, they could restore the old Tuesday-Tea triumvirate meeting to mull over state business.
But Basil Rajapakasa is too sharp a person to miss out on reality through day dreaming:it is best for the SLPP to focus on early dissolution and a parliamentary election. The defeat of the NCM also took the air out of the Gotabhaya balloon. Then came, the JVP’s proposal and the SLPP leadership decided to test the political winds by letting MP and former Minister) Bandula Gunawardaneannounce that the SLPP would support JVP’s amendment if it included the provision for immediate dissolution of parliament. That would solve two problems for the family and the SLPP. ‘Abolishing’ the executive presidency would mean that the family doesn’t have to split over choosing a presidential candidate. And with dissolution and new parliamentary election, Mahinda Rajapaksa could return to power as Prime Minister and Head of Government.
There are layers and layers of political pushes and pulls, including admonitions from the Sangha, not to mention personal agendas and priorities, which Sirisena, Rajapaksa and Wickremesinghe will have to deal with while deciding what to do about the JVP’s 20th Amendment. One certainty that we can assure the three rivals is that if they decide to support the 20th amendment and facilitate its successful passage, in parliament and in a national referendum, they will leave behind a very positive political legacy that they, their allies and progenies can for ever be proud of. Conversely, they should convince themselves that they are indeed proud of opposing the 20th Amendment before opting to oppose it.
