Always breakdown

The gas explosions continue unabated with the promise investigation/inquiry report not out as this is being written. The Chinese ship carrying suspect organic fertilizer has ultimately left Sri Lanka’s territorial waters but the country is facing a massive arbitration claims in Singapore. All this is adding to the massive cost and misery created by the ill-thought and hurriedly implemented ban on the import of chemical fertilizers. Farmers have been promised compensation for crop losses resulting from the non-availability of accustomed fertilizers. But who is going to pay this compensation? Certainly not the decision makers who created the mess. As always the taxpayers, meaning all the people of this country, will have to pick up the tab.

Readers may remember a popular television program titled “Always Breakdown” that was beamed by a private station some years ago. That, sadly, remains the state of the nation to this day. Although the blackout of a week ago was not protracted after the problem was thankfully put right within hours of the outage, the threat of much longer travail remains alive and kicking. The CEB engineers and other segments within and outside the power sector have in no way given up their agitation against the deal between the government and New Fortress Energy (NFE) of the U.S. planning to enter the country’s power sector. It’s legality is now under challenge in the Supreme Court with, ironically, three cabinet ministers among the petitioners.

The unions have already tasted blood. The divestment of the Colombo Port’s East Container Terminal was abandoned after direct trade union action. India’s Adani was compensated with the right to develop the West Terminal. But this too is resented and what the future holds is anybody’s guess. Whether the Sri Lanka Ports Authority which is supposed to complete the partly built East Terminal has the wherewithal to do so is questionable. Debt funding, given the load already carried, seems unthinkable. The teachers have got their demands after months of agitation while enjoying full salaries for no work. How the government is going to meet that obligation, running into billions, has still not been revealed. By printing more money?

Other unions too are on the streets with varied demands that do not seem unreasonable in the context of inflation running at historical highs. A 10,000-rupee demand by government employees is already on the table. The health sector wants a Covid allowance of Rs. 7,500 a month. Government expenditure continues to be hugely ahead of ever-falling revenue and how the gap is going to be bridged remains in the realm of the unknown. Our debt repayment ability deteriorates by the day along with creditworthiness. State sector employees, compelled to remain at home for months for Covid-related reasons, did not suffer pay cuts. This was quite in contrast to most others in the private sector who continue to see monthly deductions on their pay slips. But anybody receiving a salary, whether it’s full, half or whatever fraction, is much better placed than the self-employed and the daily paid suffering immense privation.

Government employees demanding more seem to care less about anything outside their own selfish objectives. Some union bosses have gone public loudly declaiming a recent statement by a political panjandrum that the state sector is bloated. This is self-evident and very well known to the whole country and no denials, however strident, can alter the reality. We’ve had countless investigations into this problem and all kinds of recommendations have been made over the years. But there has never been any serious political will to tackle the ever-growing menace. Quite the contrary, much less than downsizing the public sector the reverse has been the order of the day. Jobs for the boys (and girls) has been the policy of successive administrations whatever their political complexions to get votes and win elections. Dr. N.M. Perera, the late LSSP leader, as finance minister decades ago, tried to cry halt to the non-contributory pensions payments of public servants. He was realistic enough not to interfere with existing benefits but propose a change where new entrants were concerned but was doomed to failure. None of his successors ever made even a feeble attempt to address this problem alongside unsustainable public sector numbers that has now grown to unmanageable proportions.

Finance Minister Basil Rajapaksa recently went on record saying there will be no new recruitment into the government service. The Treasury has announced that those who run state-owned enterprises will be held accountable for their proper management and functioning. But does anybody remember what happened to the arrangement between Emirates and SriLankan Airlines to turnaround the national carrier that has bled billions out of the national economy and continues to do so to this day? The rightful refusal of the airline’s foreign CEO to deny a demand to offload paying passengers to accommodate a presidential retinue on board a flight resulted in his sacking and the whole partnership arrangement was summarily ended. And this at a time when the company had been profitable after decades of losses. The debt-funded vanity white elephants costing the people hugely are legion. New problems keep sprouting by the day like mushrooms after the rain. The few cosmetic changes that are being made will not make any difference to the big picture. How long will we be able to blunder along in this inexorable march towards a failed state?