Colombo Telegraph

Conflicts Persist And The Economy Languishes: Why 2014 Will Be A Gloomy Year

By Kumar David

Prof Kumar David

If your want me to fib you could ask me to affirm that, at last, in 2014 the world and Lanka will turn the corner and happier days will return. If I did, come December, you will sue me for misleading you into an unfortunate financial or matrimonial embarkation. No sir, you had better look after your pocketbook and your urges; I want no part of it.

One ominous expectation and dismal prophecy is that Mahinda Rajapakse, if he calls presidential or parliamentary elections in 2014, is likely to win. The only contrary possibility is if a strong common opposition nominee surfaces on the “single-issue” ticket. There were two people who could have pulled this off, Reverend Sobitha and Chandrika. The former has declined; the latter has studiously avoided the spotlight and lost lustre and credibility . . . but . . .? If we get stuck with Rajapakse for a third term, it is bad news. The multitude of abuses for which this government, more than any other, is notorious, will not diminish. Add-in anxiety that the regime is complicit in anti-Muslim hate-crimes by association with its extremist flange, and the decoction turns lethal. Specific concerns aside, regular changes of government are indispensable for accountability. Indeed this is why term limits are built into all civilised polities – China’s Communist Party included.

There is risk that this country will go the Mugabe-Gaddafi-Suharto way. It took an uprising to oust the latter two, but 90-year old rogue Mugabe is likely to die in office before he is driven out. In these and similar cases, there were uprisings and repression was the tool by which dictators hung on to power. In Lanka, there is widespread flouting of election law and rigging, but it is also true that the regime has a strong base. The perpetual reward for war victory is permanency of tenure and carte-blanch to indulge in misconduct.

The opposition in Thailand is barmy! It wants premier and parliament removed and the country run by a self-appointed council, sans elections, for many years. The reason is candidly admitted: “We can’t win!” Lanka needs to see the back of Rajapakse, but it must be achieved by legitimate and constitutional means. (If the regime itself subverts democracy beyond redemption, then that’s a different ball-game and justifies a robust response). Till then, there’s hard work to do.

Leadership: A different perspective

In retrospect, the contribution of the Rajapake siblings and Sarath Fonseka to victory is exaggerated. I was among those who up to mid-2007 thought military defeat of the LTTE was improbable and that stalemate would drag on; I changed my prognosis only when the government abrogated the ceasefire agreement in January 2008. It should have been clear earlier that an army of 5000 to 10,000, with limited weaponry, was no match for a well organised force, by then swollen to 150, 000, with state of the art weaponry and uncontested control of air and sea. What this government also had was greater determination than previous ones. Then the LTTE dug its grave deeper by forfeiting the support of the international community (IC) and Delhi. Once it lost Delhi and the IC, and after it made the huge blunder of morphing from guerrilla fighters into a regular army, defeat was assured; the LTTE committed hara-kiri.

The point is not a one paragraph summary of the fortunes of war; some good studies are now available. My point is that the cards were stacked on the Rajapakse-Fonseka side and this collective was no Napoleonic military genius; its logistical and military role is overstated. These three were themselves beset by trepidation. Reckless artillery fire into civilian zones was due to exaggerated fear of dozens of Tiger cadres shielding there. This apprehension, not a grizzly thirst for Tamil blood – except Prabaharan’s – is the likely reason for shelling and bombing civilian “no-fire” zones. If civilian life had been valued, victory, though certain, would have been slower but by late 2008 it was foregone and needed no military mastermind to deliver.

Therefore, to comprehend the lure of the Rajapakses in its totality, a second aspect must be factored in. The war that was won was a race war, and the essence of race wars is that they flow from intolerance. Victory in such wars is sweet and brings with it a heady mood of vengeance and pungent well being. Since palpably, mankind’s consciousness is still in primitive adolescence, there are moral grounds, not just scientific ones, for choosing to be a Marxist.

This theory, though spot-on, is not going to influence the Sinhala electorate or the 2014 outcome, except in the “single-issue” scenario. For readers who may not have met the term, “single-issue” option, it is when a candidate seeks to abolish the executive presidency, enact a parliamentary constitution, then step down and call fresh elections. The smart option for Rajapakse is presidential elections first, and then a parliamentary poll; the winner’s party will romp through the latter. To do this in 2014 or early 2015 he will have to short-circuit his current term by about a year – he is also carrying some leftover baggage from his truncated first term. The Constitution was a mess on term-specifications even prior to the loathsome Eighteenth Amendment enacted by the SLFP, SLMC, Dead Left, UNP traitors, and other bits of slime and gunk.

The prospect of putting up with the Rajapakses and this lot for a total of 18 years is daunting, but there are other distressing matters also. The first can be collected under the rubric ‘bad governance’ (abuse of political power, subjugation of the judiciary, breakdown of law and order, kickbacks, intimidation of opponents, and consorting with drug pedlars). There is no reason to expect, and no evidence to show, that a further term for president or governing alliance will change this. Second, conflict with the Northern Provincial Council will exacerbate as Colombo flouts law and Constitution to obstruct the NPC and grind it down. The third is that relations with the IC will deteriorate further.

Neither Rajapakse nor Prabaharan are great leaders; this can be asserted confidently in Mandela month. A great leader, among other qualities, has the moral authority to say “No” to his base when needed. Mandela did it on three memorable occasions; when he threw the ANC into panic but went ahead and commenced talks with de Klerk in the late 1980s, when he restrained black rage and checked a nation on the edge of civil war after the assassination of Chris Hani in 1993, and third, his presidential preference for reconciliation over justifiable vengeance. Gandhi too defied his disciples when he needed to; he had the moral authority. Lenin defied the party majority in April 1917 in the so-called April Thesis, and powerful party factions in accepting the Brest-Litovsk Peace Treaty in 1918, and in 1921 when he launched the New Economic Policy.

It is not news that Rajapakse funks his Sinhala-Buddhist extremist following and will not dare confront that which he has no moral authority to manage or control. However, what is not so well known is that Prabaharan too was apprehensive of his cadres. He would say to visitors that if he dared settle for less than Eelam, his Praetorian Guard and military commanders would finish him off. He was enslaved by the spilt blood of martyrs. The vision of great leaders can never be enslaved.

The economy

The economic picture is not as gloomy as the political landscape, but there is nothing much to cheer about. According to the ADB and visiting economics experts the Lankan economy is in a state of suspended animation, it is not collapsing but not doing well either. The future looks like more of the past. GDP at nominal exchange rates is $65 billion ($175 billion at PPP) and per capita it is $3200 at nominal rates. This is not bad and has us knocking on the middle-income club door. Growth in 2014 will be about 6.5%, and with population growth down to 1%, upward income mobility is likely.

Unfortunately, this picture is misleading because of structural flaws. I will mention a few statistics that are often quoted. Sovereign debt is stuck in the region of 80% and refuses to drop. The 2014 current account will probably look like this: Imports $24 billion, Exports $12 billion. And don’t believe last month’s budget, the shape of public finances at the end of 2014 will look rather like this: Revenue $9 billion, Expenditure $14 billion – that is a sizable budget deficit. The biggest foreign currency earner, remittances from women sent into domestic servitude in the Middle East is $6 billion or over 50% of the trade account (import-export) shortfall. Shame Sri Lanka!

A fundamental structural defect stands atop these numbers. It is that, speaking in strategic terms, there is no coherent economic policy direction. Neither does the government go the whole hog with the capitalist free market and throw the economy wide open to foreign and local investors, dismantle customs controls, and remove poverty alleviation programmes and worker-wage protection from the statute book, nor does it go the other way. The other way, in the post-Stalinist world where rigid central planning is discredited, is a managed and directed (dirigisme) development policy. South Korea in its boom years and China since Deng are examples of the dirigisme approach. Rajapakse-economics follows neither approach systematically; it lives hand to mouth, fed by infrastructure loans and grants, largely from China.

It is this lacuna in economic strategy that is titillating the government into flirting with the prospect of turning Colombo into a casino infested brothel, and into over reliance on tourism. Tourism should be encouraged, but to rely on it as a cornerstone of economic growth is foolish, given its volatility. For a while, a succubus promising the fiancialisation of Lanka into the Wonder of Asia visited our leaders each night, but this liquidity too has now evaporated.

Back to Home page