By Ameer Ali –
From a “free Sovereign and Independent Republic” in 1972 followed by a “Democratic Socialist Republic” in 1978, Sri Lanka, after nearly fifty years of tumultuous political and economic experiments has been transformed into a republic of chaos. The descent towards this chaotic republic in all its political, economic and social manifestations was accelerated during the two years of Gotabaya Rajapaksa Presidency.
Politically, the parliament, with too many of its current members with low level education and rowdy character, and who otherwise would have found it difficult to find a decent job in the open market, has lost its past prestige and excellent debating caliber, and for all intents and purposes been reduced to an assembly rubber stamping the wishes of an all-powerful executive president. It was the former Prime Minister Ranil Wickremesinghe who once noted that several of his colleagues wouldn’t even know the difference between James Bond and commercial bonds. That decline and indiscipline is also reflected in the cabinet of ministers where the principle of collective responsibility has been thrown out of the window and each minister seems to be a law unto him or herself. Perhaps it was this chaotic parliamentary politics that must have added one more reason for provoking the President to prorogue the parliament before he left for Singapore. There is talk of changes in the cabinet in the new year, but if GR is going to choose from the existing stock of parliamentarians there cannot be much improvement.
More than the chaotic politics it is its corollary in the economic arena that stands out preeminently. Latest figures published by the Department of Census and Statistics show an increase of 4.4% in GDP over the first nine months of 2021. At the same time, after four quarters of expansion the economy has contracted by 1.5%. How does one resolve this contradiction? First of all, these macro statistics are meaningless, firstly because there are questions about methodology of computation, secondly, because they are unidimensional averages and thirdly, because they do not actually reflect the raw situation at ground level where the market and households interact.
While economic problems at macrolevel themselves are alarming especially with rapidly depleting foreign reserves and mounting foreign debt, it is at the microlevel that retail outlets and households are facing the real crunch. Import restrictions and lack of foreign exchange for wholesalers result in empty shelves at retail outlets with chronic shortages in merchandise stock. This situation has been made worse by artificial market rigidities caused by mafia operators uncontrolled by the government. In combination, they have caused unpredictable weekly if not daily increase in retail prices, loss of employment opportunities in the private sector, fall in household income, wide spread poverty and conditions of near-starvation creeping into households. Starvation in the past was an exceptional phenomenon in Sri Lanka, which is now threatening to become normality.
The President, the government and their cronies conveniently and hypocritically, blame the pandemic for all these difficulties. But they made it worse by their misguided economic policies based on empty idealism and populist politics. While the president concentrated all his attention in consolidating his authoritarian hold on power ably assisted by the military, his government took the easy way out by resorting to borrow and spend in search of a mirage of “prosperity with splendour”. Shamefully, the president’s handpicked Central Bank chiefs, the economic theoretician Lakshman and his successor and accountant Cabraal, provided an aura of theoretical substance to an otherwise uncoordinated and contradictory set of policies. These chiefs advertised the strategy as an alternative way towards development, without elaborating its details, and hoped to achieve that development simply by printing money to provide liquidity. To minimize the inflationary effect of this excess money printing, they quite cunningly excluded food prices from calculation. It was in short, a short-sighted strategy with little awareness of how it was going be received by international observers.
While President Gotabaya Rajapaksa’s wreckage of democracy with its attendant values of freedom, justice and human rights sounded alarm bells at UN level, his government’s economic mismanagement and resulting chaos made international financial markets lose confidence on the economy and, unsurprisingly, credit agencies began downgrading the country’s credit risk, which warned foreign investors of Sri Lanka’s rising riskiness. (Just recently, Fitch has downgraded the rating by one notch to CC). Although the Central Bank kept on fuming against the agencies, the warning certainly was heeded by investors. As a result, between 2019 and 2021 when every country in Asia enjoyed inflows of FDI and increased their foreign reserves only Sri Lanka missed out and consequently suffered a decrease in reserves. The country is now on the verge of bankruptcy.
A panic-stricken Finance Minister flew out to India begging for financial assistance while his budget was still being debated in the parliament. This never happened before. It is now understood the Prime Minister with a few Muslim parliamentarians is also scheduling visits to Arab countries, seeking loans or currency swaps to manage the chaos. In spite of all this negatives, it is inconceivable that this regime is still unwilling to approach the cheapest option available: the IMF for a bail lout. One obvious reason is that they do not want to accept the conditions that would be attached to its assistance, because that would tie up government’s hands from dishing out economic privileges and concessions to its coalition factions and mafia moguls. Chaos is therefore set to continue and people would suffer in consequence.
There is also a social dimension to this chaos. This is a post-independence legacy inherited and made worse by the current regime. While pundits and policy advisers are discussing and debating about solving recurring trade and budget deficits, few seem to be willing to talk about the growing social awareness deficit in the country. Social awareness is the ability to understand and feel the people and social groups around you and the ability to interact with them in the most efficient and proper manner. In a multi-ethnic, multi-religious and multi-cultural Sri Lanka social awareness is an asset to be preserved and developed that helps enriching other areas like the economy. That awareness, which was in abundance once upon a time and played a positive role even during the colonial era has been deliberately allowed to run into deficit by post-independence politics. The present inter-communal disharmony is the creation of a divisive and intolerant majoritarian political ideology which, under the present regime has received tremendous impetus. The latest gimmick of appointing a task force to investigate measures to translate the so called one-country-one-law mantra into workable reality, placed it under the chairmanship of an ethno-religious cleric is certainly not going to enhance social awareness.
On multiple fronts therefore, Sri Lanka has become a republic of chaos, and a basket case of economic mismanagement. Political change, although a necessity, is itself not sufficient unless the new regime has a credible economic program to implement. IMF has to be a partner in the new experiment. Even the leftists like JVP and NPP have to swallow this bitter pill. There is also a need for an accommodative national philosophy which would unite all communities and enhance the nation’s social awareness. It is a tall order to ask but has to be accomplished in the interest of future generations. Will the current exercise in constitution making pave the way for a new era?
*Dr. Ameer Ali, School of Business & Governance, Murdoch University, Western Australia
chiv / December 19, 2021
Yes indeed we are now a Republic of Chaos which exactly our SB and Patriots wanted.
leelagemalli / December 20, 2021
Please watch the powerful youth reject muruththettuwa Cheewaradariya.
GATAM / December 19, 2021
The three tribes will never agree to one constitution.
Only way out of chaotic Sri Lanka is to create three mono ethnic nations within the island with relocation of people.
Until then it will be more and more chaos, riots, violence, terrorism, extremism, etc.
SJ / December 21, 2021
Waiting for your map.
davidthegood / December 19, 2021
IMF option is the cheapest, most reliable, best for continuity and discipline of this corrupt nation, will not promote expansion of the dark kingdom buying up state properties cheating ownership, and stable enough in the long run to give support. Better late than never and prefer not to be slaves of the unpredictable and unreliable lands of the rising sun. Swiss Basel is unbelievable.
SJ / December 21, 2021
Kindly tell me where the IMF has really solved any economic crisis.
Please read “Confessions of an Economic Hit Man” by John Perkins (2005)
Mallaiyuran / December 21, 2021
” Kindly tell me where the IMF has really solved any economic crisis. ” The Modaya cabinet is discussing going to the IMF, at this 11th hour. But you show that you are in a time deeper hole, Mariana Trench, than the well frogs’ cabinet members.
You select and read only Satanic Verses. (I don’t mean Rushdie’s- I just borrowed the phrase). Otherwise, would you have written your-own name as “SAVAM”? Savam in Tamil means a derogatory, old-fashioned word for corpse. Further it is frequently used by Jaffna schools’ Saddampies to downgrade their students’ abilities and curse them with low words. There are a million books in the Western world, in a thousand languages, excellently debating and analyzing modern economics, politics, science, culture, history, technology…… It is sad that the school you attended couldn’t guide you how to hunt for roses in the garden of wildflower libraries. You are putting your fishing basket under your nose as a pillow and finding comfort from the annoyance of wildflowers’ fragrances. Is that a kind of Asthmatic sickness that you cannot tolerate flower smell? The light shed through books for everyone else is guiding you into a hellish hole of dark. Sorry man about the curses that have fallen upon you.
Ajith / December 19, 2021
“There is also a need for an accommodative national philosophy which would unite all communities and enhance the nation’s social awareness. It is a tall order to ask but has to be accomplished in the interest of future generations. Will the current exercise in constitution making pave the way for a new era?”
In order to create a permanent fear among Sinhalese, Sinhalese political leadership and Fundamentalist Buddhist leadership branded Tamils and Muslims as a threat to Sinhalese existence rather than a co partners since both Tamils and Muslims are majority in the world. In order to create that environment they decided to use violence and policies to eliminate Tamils and Muslims from this island. Unfortunately, these approaches started to bite the Sinhalese economy day by day and now the Sinhalese find that they may loose their hand in this island. Only way forward is to realise that they were cheated by their own Sinhalese leadership and we have to share the interest of other communities.
Raj-UK / December 19, 2021
As a new year begins, I can only see gloom & doom in the years ahead as there seems to be no economic recovery plan. Blame everything on the pandemic but in life, we come across unexpected obstacles which we overcome & move on. So what is this govt. doing? The influx of tourists with their $ & Euros is too much to expect in the short term, nor, remittances from ex pat labour. Can we depend on ‘organic’ tea, fruit, spice & coconut exports? Can the struggling garment industry compete with Bangladesh, Vietnam & other countries, now that we have lost the GST concession? How did Bangladesh, a poverty stricken country, behind SL in garment exports in the 80s, is now ahead of us? Apart from cheap labour what can we export to fill our forex reserves?
Even a small time entrepreneur with common sense will conduct a feasibility study & the return on the investment before embarking on a new venture. Premadasa’s ‘gam udava’ folly probably inspired the monumental white elephant investments of the current regime, for which, we are paying the price now. Would anyone compile a list of those responsible for the current economic chaos to shame them from continuing the destruction of the country?
Sinhala_Man / December 20, 2021
Yes, it looks pretty grim, Raj-UK.
Am in Maharagama now owing to my granddaughters being in town. They’re in Pitakotte but my daughter is sleeping in the next room.
Saw Gota on TV in Diyatalawa – more soldiers passing out. I can’t see him giving up in a hurry.
Simon / December 20, 2021
Sinhala_Man: “I can’t see him giving up in a hurry”. As I see, “HE” is not allowed and if wanted will be prevented by his closest “Associates” who have taken him a “Hostage”.
Please let your daughter sleep but let her see it when awake. Have a nice day.
leelagemalli / December 20, 2021
Did u guys watch this?.
Youth are sending out the message.
[edited out] award is being designed to Gota these days. We everyone attacked polonnaruwa donkey but Gota senses are similar to that of a deaf and blind/ but the bugger seems to be talking about discipline before soldiers????
Simon / December 20, 2021
Dear LM: YES! I watched it. I didn’t stop at that. My Kadamandiya members were facilitated to watch it on my widescreen TV. Babun Appu Maama said: “Thuk Nodikin. Munwage Wasaloya Sivru Dagena Natana Nadagan. Munta Kanna Dena Unta Gahanna Ona Boowallen”. The rest of the comments that followed cannot be written here. Cheers!
a14455 / December 19, 2021
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Buddhist1 / December 20, 2021
Sri Lanka is a Dictatorship Democracy by the rogues, for the rogues and of the rogues.
Pon Lanka / December 20, 2021
As long as Rajapaksas are in power Sri lanka will be ruined and go from bad to worse. They bother only their family welfare, crap the nation’s wealth quicker by controlling main ministries in their hands, and keep advisers of over 75years such as Secretaries, Foreign minister, Central bank chief, and most Governors, etc and thereby run the Gov’t similar to a Retirement Home Whilst highly qualified youths are disgusted and running abroad.
Lasantha Pethiyagoda / December 20, 2021
While endorsing the last ditch alternative to avert bankruptcy as asking for an IMF loan, the opposition’s urging towards that option is not necessarily in good faith. The IMF is not an entity that seeks to eliminate poverty or help nations overcome inherent poverty, but a business entity that seeks to control and manipulate weak countries. The opposition would like the IMF’s drastic conditions to make the people hate the present regime and make it all the more unpopular, so that it can use the leverage to take power again. What is needed is for the people to abandon the two-party parasitic game of sharing the bounty and allow a third party to engage in a wholly different method of administration.
Plato / December 20, 2021
The 1972 Constitution[ Architect Dr.Colvin R.De. Silva ] enshrined Buddhism and gave Constitutional status ONLY to Sinhala.
JRs 1978 Constitution was worse. It created the Executive Presidency ; THE CAUSE FOR ALL THE WOES IN THE COUNTRY..
Whats in store with Gotas third Constitution?
Will it pave the way for a new era worse than the previous two?
Mallaiyuran / December 21, 2021
You didn’t mention that how did we fare with the virtue of Souldbury constitution.
Naman / December 21, 2021
What is the REMEDY for a chaotic country?
—Adopt meritocracy in all aspects of life.
—Cease ethnic suppression
—Allow only the educated civilised people to enter the Parliament
—DO NOT allow Priests to dabble in politics
—Have a Defence Force that protects the law abiding citizens [the people of the country] & NOT serve /carry out crooked activities for the RULERS.
—Have an Independent Audit commission to check on Bribery/commissions on trade agreements etc
—THE NEW CONSTITUTION should be drafted according to the will of the people ||||& APPROVED by them