Be honest with people, this once

The Minister of Finance has repeatedly told the public that the government would pay debts of the nation, owed to foreigners, and also maintain standards of living, both at the same time. Nobody can do that. Nobody can make an omelette without breaking an egg. In that degree it is a lie, no not even a clever lie. He has advisors who know that like the back of their hand. To withhold that truth is both bad politics and worse economics.

In the most primitive terms, here is the arithmetic: Your income (GDP) has fallen from 100 to 80. Your interest and principal payments overseas (debt obligations, overseas) remain at 20. Then the income that the nation can spend (disposable income) is 60. There is no way that you can spend 100 or even 80. Schematically, that is where we are. It is probable that temporary loans from IMF, IBRD, ADB and a few others may ameliorate the situation, somewhat. But we, the people of Sri Lanka, must repay the money we borrowed.

A supremely important question is what section of our people will go without most. It is fair that all of us go without some of our standard of living. It is most unfair that those that can least afford to do without, must actually go without the most, relative to their income. To obviate that which otherwise would be fatal to any programme, it is necessary to spread what the minister and IMF call a social safety net. It follows that those in high income levels must pay proportionately more of their now lower, yet high incomes, to protect the lower incomes of those that previously received the lowest incomes, and now have hit rock bottom. Nothing is just that, it is not fair. How you do that is not easy to work out. But now there are many examples to learn from. His advisors are conversant with them, having worked in similar situations in other countries. Go to them. Come back and tell us the truth. It will hurt us. Yet if you hold back the truth, you will hurt yourself fatally, as Gotabhaya Rajapaksa learnt on July 13th.

USVATTE-ARATCHI