The SJB unveils its Economic Blueprint

By Uditha Devapriya

Given the scale of the crisis, it’s natural that political parties in Sri Lanka are focusing on the economy. Even if the March elections will theoretically not impact parliamentary numbers, there is bound to be a massive electoral backlash against the current government, which is led by an unelected President on the backing of a party headed by a much-reviled political dynasty. Against such a backdrop, the Opposition, especially the more left-wing and radical sections, is bound to bring about some pressure on the government to shift from its current economic policies. However, whether these tactics succeed will depend on the policies that these outfits parade as alternatives to the current setup.

The Samagi Jana Balavegaya (SJB) is Sri Lanka’s main Opposition party. Its leader, Sajith Premadasa, is the country’s Leader of the Opposition. As such what the party says and what its party MPs say in public, on the business of governance and on economic policy, is rather important. The SJB can be described as an offshoot of the United National Party (UNP), but this would be to overlook the many convulsions, not to mention ideological disagreements, within the party. These divisions have surfaced in recent months, particularly over issues like IMF reforms and financial austerity, with the party’s neoliberal right-wing flank arguing that there is no alternative to them, and its centrist and populist flanks – the latter hosting none less than the party leader – advocating a reassessment of such policies.

Weeks after the JVP-led National People’s Power (NPP) held an Economic Forum at the Galadari, the SJB unveiled what it calls an Economic Blueprint at the Hilton. Titled “Out of the Debt Trap and towards Sustainable, Inclusive Development”, the document, which was part of a wider Economic Summit that saw the participation of diplomats and policymakers, and academics, is self-explanatory: it focuses on the ways and means by which the SJB intends to salvage the economy from the present debt crisis. It focuses on 10 areas: these include not just economic policies like revenue collection, energy and utilities reform, and factor market reform, but also political issues like transparency and accountability. The Summit was basically a roadmap put together by the SJB’s Economic Policy Unit (EPU), led by its economic troika: Harsha de Silva, Eran Wickramaratne, Kabir Hashim.

The Summit began by laying the blame for the current crisis on two things: “leftism” and “popularism.” I am not sure whether they meant to say “populism.” It then went on to laud the economic reforms of the J. R. Jayewardene regime and the reforms proposed by Ranil Wickremesinghe at the 2004 election, implicitly bemoaning the latter’s defeat to populist forces. Speaking at a press conference days after the NPP unveiled its Summit, Kabir Hashim had argued that the JVP, in urging Mahinda Rajapaksa to reverse these policies, contributed to the present debt situation. At the Summit these points were reiterated, defiantly, with Harsha de Silva advocating an IMF-centric solution. Whatever election posturing that SJB MPs indulged in over the last few weeks, including Eran Wickramaratne’s proposal to up the taxable income from Rs 100,000 to Rs 250,000, were forgotten.

The event won praise from those who are broadly supportive of Ranil Wickremesinghe’s economic reforms, even if they do not like Ranil Wickremesinghe. Economic commentators and academics who had earlier castigated the SJB’s populist posturing applauded the EPU on the grounds that a mainstream party had finally given them the solutions they wanted to hear. They had reason to be jubilant. From beginning to end, the Economic Blueprint carries forward the yahapalanist rhetoric of a social market economy and advocates liberalisation, while criticising tax holidays and calling for the restructuring of State-Owned Enterprises and greater flexibility in factor markets. On all these issues the party’s EPU toes a neoliberal line: for instance, it notes that the country’s labour market is notoriously inefficient, in large part because “public sector recruitment is excessive.”

The audience at the Economic Summit, as I wrote above, consisted of those who support the President’s reforms though they oppose the President politically. These are the people who claim that the President has to go, but his policies have to remain, because, to bring up that oft-quoted neoliberal quip, “there is no alternative.” The Economic Blueprint does not, hence, dwell on manufacturing and industrialisation, but instead contents itself on linking Sri Lanka to what it calls Global Production Networks. To its credit, it also dwells on graphite and the importance of securing it as a crucial foreign exchange earner. Indeed, three years ago Harsha de Silva contended that, should the SJB be the party in power, he would “bring in a bill” to protect its supply. Yet such proposals are few and far between, and for the most are consigned to boxes, footnotes, and endnotes.

Talking of footnotes and endnotes, the document makes absolutely no mention of the development paradigms pursued, and put into effect, by Ranasinghe Premadasa: what Dayan Jayatilleka describes as “growth with equity.” It was in Premadasa’s presidency that Sri Lanka embarked on a radical garment factories programme, implementing policies that Communist Vietnam was implementing at the same time. Today Vietnam has gone beyond being a manufacturer for Global Production Networks, and we have lagged. The document does not mention why this was so, but the facts speak for themselves: after Premadasa’s assassination, the government which succeeded him went on liberalising and foreignizing, reversing four years of development and promoting a policy of capitulation to global finance that every government since 1994 have been unreservedly pursuing.

If the SJB has not forgotten the Ranasinghe Premadasa factor, it is only because its leader happens to be Ranasinghe Premadasa’s son. At one point in the Summit the moderator, the ever-eloquent Kusum Wijetilleke, queried Sajith on what his party would do vis-à-vis IMF reforms. Sajith was blunt: he invoked his father, and correctly pointed out that negotiations are a two-way street. This is in stark contrast to those who tout IMF reforms as the only way forward and imply that the present administration, far from enforcing IMF dicta on SOEs and public sector recruitment, is not enforcing them enough. However, though Kusum’s question was posed to clear doubts about the SJB’s contradictory rhetoric on economic reforms, Sajith’s response only reinforced those contradictions: between his “negotiating better” approach and the EPU’s “IMF-centrism”, there is a palpable gap.

The reforms that the SJB’s Economic Blueprint advocates also raises important, thought-provoking questions about the practicality of the SJB’s programme. Against a backdrop of widespread discontent at the present regime’s policies,

how pragmatic would it be for the Opposition to blame the country’s problems on public sector recruitment, and how well received would policies aimed at making the labour market more “flexible” – doublespeak for making workers easier to fire and hire – be? Trade unionisation in this country is centred in the public sector, and unions are important ideological levers as far as the bureaucracy in Sri Lanka is concerned. No party here won power, or stayed in power, by alienating them. Besides, the SJB faces a strong opponent in the JVP-NPP. From a practical perspective, does it make sense to antagonise the latter’s most powerful urban constituency?

The SJB’s response to the JVP-NPP has been to conduct a McCarthyite campaign against their policies on social media. Prominent SJB activists, who were seen as progressive once upon a time, have wholeheartedly joined these efforts: one of them has gone as far as to imply that a vote for the JVP-NPP would be a vote for socialism and thereby a vote for the destruction of the economy. Such logic befuddles me, not least because it begs the question as to how exactly the economy has benefited from decades of divestment, privatisation, and untrammelled capitulation to global finance. The SJB probably knows that it cannot in all good faith answer these questions. Fear is a convenient ploy for a political party when there’s nothing else to resort to. The SLPP lavishly indulged in it against the UNP four years ago: that a section of the SJB is indulging in it speaks volumes about its values.

The tragedy in all this is that the SJB, as the country’s main Opposition, does have an answer to these issues: Ranasinghe Premadasa’s policies. Those policies, as Dayan Jayatilleka pointed out many years ago, need not be the preserve of the Premadasa family or parties associated with them. It can be enforced by anyone, by any outfit.

The Premadasa government was linked to some of the most respectable economic minds of the day, and many of them found a home at the Institute of Policy Studies: an organisation that, once upon a time, concerned itself with industrialisation-led development strategies. These economists and academics included Howard Nicholas, who has never even once been consulted by the SJB’s “Brains Trust.” This is not to say that the Premadasa administration was perfect, because it was not. Yet Jana Saviya, the 200 Garment Factories Programme, the peoplisation of the bus service, and the pragmatic, gradual privatisation of the plantations, all formed part of a wider strategy to combine growth with equity. It is this philosophy that the SJB must imbibe. But perhaps this is asking for too much.

The writer is an international relations analyst, researcher, and columnist who can be reached at udakdev1@gmail.com.