By Ameer Ali –

Dr. Ameer Ali

On the 11 of September a Counter-Terrorism Bill (CTB) was introduced to the cabinet by two ministers and was approved with the blessing of the President, which replaced the Prevention of Terrorism Act (PTA) introduced first as temporary law in 1979, made permanent in 1982 and came under international criticism for its abuses. However, with the end of the civil war and defeat of LTTE terrorism was successfully wiped out and a re-emergence of that evil from the same quarters is highly unlikely. It will be suicidal for any lunatic from the minority communities to even dream of engaging in terrorism. The government knows that and so are the security forces. Then, why now the CTB? Is there any sinister motive to behind this piece of legislation? There is enough room to smell a rat.

CTB is coming into effect at a time when the economy is in tatters. The south bound rupee, whether caused by external factors or internal mismanagement is going to bring intolerable hardship to ordinary folks. The flow of remittances that so far helped to sustain a number of households is also flattening to make matters worse. There is a limit for the Central Bank (CB) to intervene in the money market to strengthen the currency. Prolonged intervention is certain to deplete foreign reserves which will bankrupt the economy. In this era of globalization of finance and financialisation of economies central banks are losing control over money supply, partly because money itself has become an undefinable and slippery exchange medium and partly because the conventional tools of monetary control have lost their teeth. No wonder Jack Ramus, an expert in globalization of finance calls CBs  ‘institutional anachronism’. This is why there is consensus among Sri Lankan economists that the government has to attack the root cause of the problem rather than meddling with money market.  They want the authorities to reduce budget and current account deficits, the former by raising tax revenue and the latter by reducing expenditure. In addition, it is vital for the government to stop borrowing to meet its expenses. I would even go further and urge the government to go beyond macroeconomic variables and attack issues like corruption and ethnic discord in order to strengthen the nation’s production base and increase productivity.

However, to solve the immediate problem of falling rupee the Prime Minister is harping on turning Sri Lanka into an export economy by encouraging foreign investment. The idea is good but it takes a long time and cannot be achieved within the remaining period of Yahapalana regime. A more sensible solution is coming from the Minister of Finance who has announced cut in the import of selected items. His selection starts with motor vehicles for politicians and others, and include luxury items such as air-conditioners, refrigerators, televisions, perfumery and mobile phones. Whether some of these items are strictly luxuries or semi-essentials is debatable. However, by targeting the politicians in particular and choosing luxuries to start with the minister is protecting himself politically from being accused of favouring the rich and powerful.  Yet, the cut is not enough to resuscitate the rupee and have to go deeper and wider.  As the rupee continues to depreciate, the minister will have no choice but to announce the most unpopular but neoliberally sanitised bitter palliative AUSTERITY before imposing quantitative restrictions on import of consumer items such as flour, kerosene, sugar, and so on. Some of them have already been taxed and more have to be done to satisfy the economy’s CEO, the IMF.  This is when the economic problem will become political and CTB is therefore a precautionary measure to face the adverse consequences arising from unbearable austerity. 

Austerity measures, imposed on the instruction of IMF, had produced bread riots and violent protests wherever they were implemented. Egypt, Tunisia and Greece are some glaring examples in recent times. When cost of living becomes unbearable there is no choice but for people, mostly the urbanites, to come to the streets. Draconian measures will then become necessary to bring matters under control. Is there a likelihood that happening in Sri Lanka? 

Already there is political turmoil and popular disenchantment against a government that has failed to live up to its 2015 promises to its voters. At the same time, the opposition led by the Rajapakse clan is getting increasingly frustrated and restive at repeated attempts to dislodge MS-RW coalition. Even the janabala tamashas fizzled out without demonstrable gains. Therefore, any spontaneous uprising by the people against austerity measures will be manna from heaven to Rajapakses to gain maximum political advantage out of it. However, it can be counterproductive. During street protests, as Sri Lanka has witnessed in the past repeatedly, there will always be the danger of a few maniacs to take the law into their hands and spark violence. Presently, and especially at a time when ethnic tensions are still smouldering an incendiary device thrown at a retail establishment belonging to a minority businessman may turn the protest into an ethnic riot. Even security personnel appear to have participated in certain such instances. Such an outcome will then set the scene for the government to intervene, call it terrorism and take counter-terrorism measures.  One should remember that there is no universally accepted definition of terrorism. It is such an elastic concept and elusive phenomenon that a government can dub any anti-government violence as terrorism and resort to draconian measures in the name of counter-terrorism. 

It is in this scenario one finds the sinister motive behind CTB’s timing and passage. If a terror situation can be manufactured, the unpopular government can use that scenario to postpone general elections. Yahapalana regime knows very well that going to polls at the end of its current term will be suicidal.  If it can find some excuse to extend its term of office Rajapakse clan can be left to hibernate in political wilderness little longer hoping their stamina and vitality is sapped weaken the political threat. One of Mangala Samaraweera’s recent statements that his government will turn the economy into a robust growth producer by 2025 should be understood in the context of this emerging scenario. Thus, CTB is a precautionary and timely measure taken by the government to ensure its continuation in office beyond 2019 and in the face of a tottering economy.