Shifting responsibility for economic collapse onto the people

By Jehan Perera

Slowly but surely the ruling party is beginning to reassert itself.  An indication is the removal of Prof G L Peiris from the chairmanship of the ruling party.  In the aftermath of the economic collapse last year he has been one of the few members from the SLPP to have adopted a reformist role.  He was also one of the few members of the SLPP to vote for a reformist party member, Dullas Alahapperuma, to become the president of the country at the parliamentary election for the president.  However, the majority of members in the SLPP thought otherwise and voted for the opposition candidate Ranil Wickremesinghe who was dependent on the votes of unrepentant members of the ruling party for his victory.  It was clear that Dullas Alahapperuma would have had a bigger base of reformist support from within the ruling party to leverage for a change in the system that had led to the collapse of the economy.

 The battle cry of the protest movement that swept away former president Gotabaya Rajapaksa and his government from the seats of power in the middle of last year was for a system change. This was a political and moral position that was concretised in the slogans that demanded that the incumbent president Gotabaya Rajapaksa and the 225 MPs go home.  “Go home Gota” was a slogan that was understood the length and breadth of the country even if many people did not know what was being meant by “system change.”  It was an implied call for fresh elections that would give rise to a new government with new members with a people’s mandate. Also at the top of the list of the slogans of that time was the inspiring and hopeful bid to get corruption outlawed in view of the damage it had done, and continues to do, to the Sri Lankan economy which shrank by 9 percent last year, and is expected to shrink by a further 4 percent this year.

 Unfortunately, none of the constructive demands of the protest movement for elections and for accountability have come to pass.  There have neither been local elections to give any idea of the present mandate of the people nor has there been the slightest practice of accountability or restraint in the practice of corruption.  The issue of corruption has come into the open again on the issue of the nitric acid carrying container ship, the X-Press Pearl, which caught fire in Sri Lankan seas causing immense destruction to the environment and livelihood of the fishing community.  As reported in the media Justice Minister Wijeyadasa Rajapakshe has already made a shocking revelation that he had got hold of details regarding the transfer of US $ 250 million to the foreign account of a Sri Lankan as a bribe to obstruct the legal process related to X-Press Pearl disaster, and directed the police to initiate investigations into it. However, he has failed to name the Sri Lankan involved and will await further details from the probe.

ACCOUNTABILITY ABSENT

 The continuing tragedy of the present time, which is articulated by the now suppressed protest movement, is that there is no accountability for those in positions of power. Nor is there transparency. Instead, there is the dark cloud of unknowing.  Recently there has been the case of the Rs 5 million that went missing from the Central Bank. There is no transparency at all as to how the money went missing for two weeks and then was found.  There is no readily available explanation as to how the money went missing and later found, where and by whom. It should be noted that the tale of the missing money from the Central Bank has come in a context in which the Central Bank has been printing billions of rupees. By way of contrast, the concept of accountability is in existence and practised in Sri Lanka, though not in the government.   At private banks those who are dispensing cash as bank tellers have to pay through salary cuts for whatever mistake they make in their work.

 The imposing of discipline on those lower in the rungs is also to be seen in the manner in which the government is dealing with the economic crisis.  The government’s agreement with the IMF has been at the cost of high taxes and job cuts imposed on the masses of people.  The costs of this economic restructuring is falling heavily if not disproportionately on those who are middle class and below. Fixed income earners are particularly affected as they bear a double burden in being taxed at higher levels at a time when the cost of living has soared.

 The government’s clarion call for the restructuring and sale of state-owned enterprises is being projected as evidence of the statesmanship and vision of the political leaders.  The public service is vastly overstaffed and government managed businesses are making gigantic losses.  But it is unfair and immoral to place the blame on the workers who were employed there in large numbers to satisfy the patronage-needs of political leaders.  The political debate has been turned on its head.  It is not about holding those political leaders accountable for the economic crimes of mismanagement they have perpetrated, but on the workers they hired, that there are too many of them and they are overpaid in relation to the work they do.

 Another missing dimension in the current debate about restructuring the economy and getting it out of the rut is the absence of any effort to ensure accountability for past economic mismanagement and corruption, indeed for the looting that took place in the economy.  The government has not held those political leaders accountable. Instead, it has shown solicitude for sufferings and pain of mind suffered when their houses were attacked and burned during the height of the protests.  Such solicitude can be appreciated, but it needs to be consistent across the board.  The different treatment given to politicians as compared to ordinary citizens would rankle within those large numbers of citizens who lost their properties too, during the war, terrorism and riots of the past, but only received meager compensation if at all from successive governments.

REALISABLE DREAM

 The government’s unwillingness, perhaps inability, to deal with the issues of corruption goes back to its roots.  The government, and president, continue to be beholden to the majority in parliament for their continuation.  The tragedy is that this governmental approach will doom Sri Lanka to the shallows, where it has been languishing for at least four decades. The government has been unprepared to form a coalition with the opposition members in parliament to ensure accountability and reform in fact and not only in words and are, therefore, hostage to the ruling party and its leadership. Some government members have started to talk about forming a national government. If this is to be done, it should be based on clear objectives, including pursuing corruption cases, and should be an effort at genuine power sharing. The desire to stay on in power must not take precedence over dealing with corruption.

 The economic mismanagement, looting and Ponzi schemes whereby successive governments borrow to repay old loans needs to change if Sri Lanka is to take off into the rapid economic growth its people yearn for.  It is not the people who should be blamed but the leaders who are dishonest and corrupt, and who continue to be so. The leading think-tank Verite Research has highlighted that while the government has fulfilled 25 percent of the IMF’s conditions that can be tracked, it has failed to fulfil its commitments to accountability and transparency.  It noted that timely progress on the IMF programme has two benefits. First, there are the material benefits that can result from many of the actions. Second, it can improve confidence in Sri Lanka’s governance, which then helps negotiations to restructure the burden of past debt and speed up the path to future economic recovery.

In the 1970s, Sri Lanka was a third world leader in every aspect that counted, ensuring social welfare to its people, non-alignment in foreign policy, and was one of the first countries in the developing South Asian region to liberalise its economy.  This is a tradition that Sri Lanka can regain soon if it has proper leadership. It must not be forgotten that when Sri Lanka regained its independence after 450 years of colonial rule and the exploitation that came with that rule, it was one of the economic leaders in the whole of Asia with the potential to become the “Switzerland of the East.”  Our hope is that the natural resources that the country has been endowed with, and the natural capacities of its people which are demonstrated in the success they notch up in other countries to which they emigrate, will enable a speedy catch up for all the lost years.  But there needs to be honesty, transparency and morality and the desire to take everyone, north and south, rich and poor, on this journey.