3 December, 2022

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2023 Budget: Wickremesinghe Economics & Post-Rajapaksa Politics 

By Rajan Philips

Rajan Philips

The 2023 Budget presented by President Wickremesinghe on November 14 is notable for a number of unique ‘firsts.’ Ranil Wickremesinghe is the fifth President to sequester the finance portfolio instead of assigning it as an exclusive portfolio to a cabinet minister, but he is the first to prepare and author most or the entirety of the budget speech. The budget is shot through and through with Wickremesinghe economics, or Ranilonomics as it is now commonly called. Mr. Wickremesinghe is not an economist by training, so he has no disciplinary fetters to constrain him freely bandying his economic philosophy. A philosophy, if not moss, which he has auto-gathered over his upbringing years at his erudite home and long years labouring as a cabinet minister and parliamentarian among lackluster colleagues. 

Optimisms and Omissions

The President’s idiosyncratic and ideologically pragmatic fingerprints are everywhere in the budget. The budget is also strikingly optimistic both in regard to economic expectations and in its assumptions about Sri Lanka’s factor endowments. And there are significant omissions of details on the pressing issues of the day – timelines for, and even the likelihood of, securing IMF assistance and debt restructuring; stock and price status of food supplies and backup plans to deal with current and future scarcities; and the state of affairs in the petroleum sector which is becoming a costly circus under a runaway cabinet minister. 

A not so curious omission is the deafening silence on the utilization of Port City in the new economic order that the President is assiduously promoting. It is no longer curious because after nearly two decades of political gestation, environmental fudging and  oceanic landfilling, the vaunted Port City is virtually dead on arrival. Then there is this in the budget to feed one’s curiosity – the President’s proposal “to establish an Institution to undertake and facilitate research on the history of Sri Lanka. Accordingly, I propose to allocate Rs. 50 million for this purpose.” Go, figure. 

At the same time, President Wickremesinghe’s budget is a politically clever piece of work in the most trying circumstances. It straddles, rather than balance, the restructuring demands of the IMF and the livelihood requisites of Sri Lanka’s growing poor. It even placates the army by downsizing through retirement. The President made a point in repeatedly emphasizing that it was time for governments in Sri Lanka to move away from making ‘popular’ decisions to making ‘right’ decisions. To make a different point, it is time political leaders moved away from blaming the people for their so called popular decisions. The President deftly sidestepped the issue to say whether the decision of the Gota-regime to do away with taxes was meant to be popular among the people who are now being called upon to pay the price for it with interest. Or was the decision on organic fertilizer meant to be politically unpopular and economically right? 

Welfare economists are familiar with the false dichotomy between equity and efficiency in economics. Equity with efficiency is amply possible, and efficiency without equity is socially unsustainable. Ranilonomics appears to be expressing the same falsehood in popular terminology. The budget is also clever in totally avoiding any mention of the Rajapaksas and their contributions to Sri Lanka’s debt and economic distress. Instead, the President picks on SWRD Bandaranaike using a quote from Singapore’s Lee Quan Yew that has been a longstanding table talk topic among Colombo middle classes. He even adds a measure of self-deprecation by alluding to the shortcomings, if not failures, of the 1977 economic changes under JR Jayewardene and calling for a new direction defined by the so called Social Market Economy. 

Politics of Passage

There is a political reason for avoiding any blaming of the Rajapaksas in the budget speech. The reason is the uncertainty of the budget securing a majority vote in parliament. And here is another significant ‘first’ for Ranil Wickremesinghe’s first budget, for never before has a budget been presented by the leader of a political party that has only a single listed MP in parliament. This is another quirkiness of post-Rajapaksa politics, and President Wickremesinghe’s reluctance to canvass a majority in parliament for the budget without including the support of MPs who are loyal to the Rajapaksa family. 

Conflicting reports have emerged connecting the return on Sunday (November 20) of Basil Rajapaksa to the passage of Wickremesinghe’s budget in parliament. Initial reports indicated that Mr. Rajapaksa on his return will twist MP’s arms to get a two-thirds majority for the budget in parliament. Other commentaries have since been aired that Basil Rajapaksa’s SLPP can barely muster a quorum in parliament, let alone secure a two-thirds majority for the Wickremesinghe budget. According to SLPP loyalists, more than canvassing for the budget, Mr. Rajapaksa will focus on revamping his party to face the local government elections, which are due before March 2023, but the President and the Prime Minister are in no hurry to see them go ahead. 

After the impressive vote in parliament to pass the 21st Amendment, the President could have tried to piggyback his budget on the same coalescence, and get a two-thirds majority for a second time while isolating the Rajapaksas yet again. But that would have required a broader consultation with multiple parties in parliament and involved, by his reckoning, potential exclusion of ‘right policies’ and inclusion of ‘popular policies.’ Ideally, the President could have facilitated a ‘consociational budget’ by nominating/appointing an outside technical expert as Finance Minister to build parliamentary consensus on details while providing overarching leadership as President. Such an exercise would have won broad political support at home and significant credibility abroad.

As has been his wont, the President wants to make his own budget and manufacture his own majority in parliament. No matter what and how much cut to size they are, the Rajapaksa cohorts will be voting for the budget. The President is also trying to fish for maximum votes among the Tamil, Muslim and Upcountry Tamil MPs by his timely casting of the reconciliation net. For the rest, he will count on the country’s political mood that will not easily approve of the budget being defeated in parliament by opposition MPs. To prevent an unseemly split in its ranks, the SJB may give a free vote to its MPs which would allow those who want to vote for the budget to go ahead. Opposition MPs in general who do not like the budget may opt to abstain rather than vote against, and allow the budget’s passage. The JVP can stand in its lonely eminence and vote on principle against the budget without affecting the outcome of the vote. 

Come to think of it, the President would seem to have been able to stabilize himself politically far more than he and his government have been able to stabilize the economy. He will keep his detractors guessing on the timing of the local government elections, and more so about dissolving parliament and calling for a general election. He might also be testing the political wind going by the inspired rumours that a presidential election (not due before November 16, 2023) might be held before the next parliamentary election (which could be as late as August or September 2025). But November 2023 is an eternity in politics and anything can happen between now and then, including a second Wickremesinghe budget.     

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Latest comments

  • 8
    0

    Forget Economics.
    What attracts me is, “to establish an Institution to undertake and facilitate research on the history of Sri Lanka”.
    Why rob Gnanasara Thero of his pet project. Is Gota o.k. with that.
    Ranil is thankless!

    • 5
      0

      Nathan
      “to establish an Institution to undertake and facilitate research on the history of Sri Lanka”.
      You reckon this is a ploy to placate powerful monks disgruntled about their electricity bills?

      • 2
        0

        OC,
        What a wonderful guess?? Spot on!!!?
        Nevertheless they would need MORE light for this research too!!!??
        Bigger subsidy for power cost!!

        • 3
          0

          Mahila Man

          “You reckon this is a ploy to placate powerful monks disgruntled about their electricity bills?”

          Actually, Dullas Alahapperuma “requested the President to hand over the Ministry of Finance to someone who has the time and the knowledge on the subject,…..”

          Did Dullas Alahapperuma mean Gnasara, Gnana Akka, Wimal Sangili Karuppan, his twin brother Seeman (former Tamil film director), ….. …… ?

          • 3
            0

            Mahila Man

            I recommend one more person, it is Deepti Desperate Silva.
            Hope nimal approve it

  • 7
    1

    Reaseach ??? You mean a need for identity for a nation that deems itself great ?

    “Whence camest thou? and whither wilt thou go”? And she said, “I flee from the face of my mistress Sarai”
    With friends like China and relations like India we don’t need economists in the IMF.
    Our future lies in our past….. just give us the money or we can research another.

  • 6
    2

    Gas and truth and ideology.

    For 74 years we had uninterrupted supply of gas. Gas supply was interrupted during Gota’s tenure. Ideology was discarded (people who had) and people’s noses were dragged in truth and forced to face it.

    Ranil has somewhat restored the supply of gas ……. now gas supply intact, is there no need for truth: should we believe all the lies Ranil peddles because he gives us gas? …….. to hell with ideology

    I prefer truth to gas ……. then I don’t live in Lanka …….. gas is easy to get ………

  • 4
    0

    RP, Agree budget is a clever piece. No blaming of the robbers that led to bankrupcy

  • 5
    3

    “a number of unique ‘firsts.’ Ranil Wickremesinghe is the fifth President to sequester the finance portfolio instead of assigning it as an exclusive portfolio to a cabinet minister, but he is the first to prepare and author most or the entirety of the budget speech.”
    Actually just one ‘unique’ is identified, and that too in a rather insignificant category.
    *
    “Wickremesinghe is not an economist by training, so he has no disciplinary fetters to constrain him freely bandying his economic philosophy.”
    How many of our finance ministers were economists by training?
    As far as I know, MDH Jayawardane had a degree in Economics, but did not take it up as his career.
    *
    “There is a political reason for avoiding any blaming of the Rajapaksas in the budget speech.”
    The man has done just about enough to anger, but not infuriate, the family. Is the wish of the author to see him perform political hara-kiri?
    *
    All recent political weather forecasts have gone with breeze. Are we scheming an artificial shower to make earlier gloomy forecasts about RW come true?
    *
    RW’s budget is the best tightrope walk that he could manage between the IMF and demands of electoral politics.
    I distrust the IMF, and distrust RW too. But is there a trustworthy leadership on offer?

    • 3
      3

      “How many of our finance ministers were economists by training?”

      No wonder why a non-economist was appointed being a Finance Minister during the most difficult time, the day weeping widow became the Prime Minister.

  • 5
    1

    How did Ranil’s “committee” exonerate Nimal Siripala De Silva from the Japanese ambassador’s complaint and reinstate him as a minister?

    Ranil and his committees and his Buddhism and his books! :)))

    • 2
      0

      Nimal,
      “Ranil and his committees and his Buddhism and his books! :)))”
      Buddhist morality is quite different from western morality. That’s why even a monk may eat animal flesh as long as it wasn’t killed specifically for him. The Vinaya Pitakaya forbids monks from having sex with disembodied heads in cemeteries. Don’t ask me why.

      • 5
        6

        Codger, so much excusing Ranil and such hatred of Buddhism/Sinhalese !

        Every religion has so much nonsense, Mary Magdalene , walking on water…. Hinduism ,Islam, just look at some of the things they are saying .

        Indians cremate their dead. why did they have cemeteries ?

        By the way ,your Ranil was defended by Lanza of Kudu fame in parliament. Since you said that ranil is cleverly manipulating PM Dinesh Gunawardena , Lanza too is a clever manipulation of Ranil ?

        This cleverness reminds me of a Gay marrying a Lesbian in order to show off as a properly married couple ! Who is fooling whom ?

        • 0
          0

          DS,
          “Indians cremate their dead. why did they have cemeteries ?”
          Why don’t you go read the Vinaya Pitakaya? I have.

  • 2
    1

    nimal fernando: Your question: “How did Nimal Siripala……….”

    The answer: President Ranil W appointed one “Kusala” at the request of the “Accused” Nimal Siripala and she functioned as the “Chairperson” of the Committee.

    The next question is: How did Nimal Siripala was acquitted? The answer: The “Committee” found that there was no complaint.

    If there is NO complaint, what is there to inquire about? So isn’t acquittal the obvious?

    To say that there was “NO COMPLAINT”, the PEOPLE paid the fees due to the Committee.

    • 0
      0

      Nimal Siripala Silva is not a young politician.
      He has been involved in politics for the past 50 years.
      How did he or someone like him get involved in an allegation of corruption? Has he been accused of this before? I am not going to purge anyone, if I did, he should be punished equally. If they did that, they should be ashamed like senior people. But our so-called judiciary does not seem to be good for this nation. They may be fair with their convicts in small cases on the poor. When it comes to politicians they have proven – they are biased. Although it is known to the whole world, it is believed that we should not “criticize the court”.

  • 5
    6

    Old thosai, which version of the Vinaya Pitakaya did you read ? All this religious crap , from mouth to mouth among illiterate generations for about 500 years and then put to writing by a semi-literate person !
    The writer interpreting freely according to his era. The original was in one language and the writing is another.
    Now you hold something like this as a truth !

    Like ranil’s Buddhism your religious reading is nonsense. Ranil knows the meaning of “wanting” ( thanha) Greed and fraud ?
    Both of you are too crass, full of deceit and fraudulent to be talking of religion.

    • 1
      0

      Silly Deepthi
      I criticize all religions, not only Buddhism. But I admire the way that Buddhist writings go into so much specific disciplinary detail. But of course, the clergy in this country is anything but Buddhist, as we can see by the number of fake Arahats, including the one arrested with Thilini Piumali the swindler.
      What sort of Buddhist are you, that you don’t even know your own religious writings? There are Buddhist texts that laymen are not encouraged to read, just as Christians weren’t allowed to read the Bible in the past.
      “The writer interpreting freely according to his era. The original was in one language and the writing is another.”
      So you know what the original means? How much more idiotic can you get? Do you even know what the Vinaya Pitakaya is?

    • 1
      0

      DS
      I am interested.
      Please give the version that you have read for everyone’s enlightenment.

    • 2
      0

      DS and the like dimwits@
      .
      Thanhawa is the major part of Rajapkshe political mechanisms. mahinda RAJAPAKSHE is the one who indulged with that than anything else. Thanks to PADADA Rajapakseism, Deepti Silvas became the majority.
      .
      This nation was as a result destroyed. Today the dogs of Rajapakshe are dumb. Can any one of you give us one example, just one example that Mahinda Rajapaksa has ever donated anything to the poor (who are the majority of this nation)? Never….but you can give many examples of how they looted the state…that Rohita…the youngest of the bastards never sweated for his funds but today lives off his father’s loot.
      .

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