Real war ahead

Thursday 6th August, 2020

Hurly-burly is done and everyone is now agog. Thankfully, there has been a bloodless election. We can only hope that the post election period will be without any untoward incidents. The Election Commission (EC) has, in its wisdom, delayed the process of counting although it insists that all counting centres are safe. Dusk may be falling today when the final result is out. One can guess the winner, but it ain’t over until the fat lady sings.

The country has been without a Parliament for more than five months, and nobody has made an issue of it save those who strove to have the previous Parliament reconvened instead of pressing for an early general election. People learned to live without the local government institutions for more than two years thanks to the previous government, which specialised in postponing elections. Hardly anyone is interested in provincial council elections, which have been postponed indefinitely. Not even the TNA, which has an enormous appetite for devolution, is keen to have the PC polls.

There has been a severe erosion of public trust in Parliament, and the task before the incoming dispensation as well as the Opposition will be to live up to people’s expectations and restore their faith in the national legislature. UNP leader and former Prime Minister Ranil Wickremesinghe got it right when he said, albeit in jest, that people wanted all 225 MP dumped into the Diyawanna lake.

A democratically elected stable government is a prerequisite for restoring investor confidence, reviving the economy and improving the country’s credit ratings. But political stability alone will not help get the battered economy back on an even keel. Much more needs to be done. Stringent measures are called for to achieve economic revival. All three political parties—the SLPP, the SJB and the UNP—have promised the moon to the public, and it is doubtful whether the next government will be able to fulfil people’s expectations.

The world of work has suffered a body blow, and COVID-19 is bound to cause many more job losses and a drastic drop in productivity across the globe due to lockdowns and other such drastic measures. The pandemic is believed to have left about half a million people unemployed in this country. Developing countries are without the wherewithal to cushion the blow.

The next government to be formed shortly will have its work cut out to find foreign exchange, which alone can help solve the balance of payment crisis and ease import restrictions. There is a pressing need for a mega stimulus package to revive the economy. We will be lucky if there is no negative economic growth. Import restrictions, however necessary they may be as a short-term remedy, will prove counterproductive, economically and politically, in the long run. Sri Lanka’s trading partners have already frowned on the blanket ban on imports. There is also the problem of debt repayment, for which dollars will have to be earned or borrowed in a hurry. Aid comes with strings attached. Successive governments have committed the country to disastrous bi-lateral agreements, out of desperation for the much-needed forex, and whether the next administration will be able to make a difference remains to be seen.

How will the next government raise funds to pay state employees and pensioners within the next few months? It will find itself in an unenviable position.

The incumbent government introduced some relief measures such as tax cuts with a view to winning the general election, which it could not afford to lose. The next dispensation will not hesitate to recoup the losses, and the signs are that there will be tax and tariff increases in the near future.

The interval in hell, as it were, we have been enjoying all these months will be over soon.