By Kumar David –

Prof. Kumar David

Gota, UNP-candidate and post presidential-election foreign policy: Foreign connections key to Lanka’s future

‘Economic foreign policy’ (EFP), by which I mean how the next president and government design foreign investment, trade and external collaboration and respond to global economic circumstances will be key factors in determining growth, employment, inflation and welfare after the current election cycle. In my piece on 17 March I asserted that the 2019-20 Budget was of no importance as a policy tool and that its importance would lie in whether it succeeds as a populist instrument in winning votes for the UNP. One can generalise and say that with presidential elections due in November-December, a new parliament to follow in about seven months, and several provincial elections to take place who knows when, no economic policy initiatives whatsoever, initiated now will yield results before this cycle has run its course. Policies will not have a ghost of chance of yielding results, favourable or deleterious before a new or a re-elected administration stamps its seal. In saying this I have in mind economics in general, that is both domestic policy and EFP. In the globally networked economic system of today Sri Lanka is in a sense a slave-sate, not only in that global economics will determine much of what happens to us but also in that we need to design our EFP with a shrewd eye on what’s going on ‘out there’.

One cannot and should not attempt to deal with this scenario comprehensively this early in the cycle and in any case it is futile to say much about EFP before knowing which unsavoury character will be president and which of Ali Baba’s retinue will be seated in Kotte next year. Therefore as regards EFP I will say little but foreign policy in the broader sense of which global thugs diminutive Lanka will be compelled to bum is of concern. Let me say straight away that it is my firm view that no great or regional power (US, China, India, EU or Russia) is going to lose one wink of sleep about whether Gota or a UNP-nominee wins the presidency. We in Lanka have a greatly exaggerated view of our own importance, but frankly, all but India care not a fart whether it’s this one or the other. China is not much bothered about whether it’s a Rajapaksa or not, and the US similarly unconcerned about what happens in this diminutive island. Much bigger winds (desperate need for investment, loans so that we do not drown in debt, export markets), than the name of president or party, will decide the game for Sri Lanka. What difference did it make to China, eventually, that Mahinda was turfed-out? None. Only India, because of proximity, may find it useful to keep a tab on this troublesome speck in its littoral waters. 

To claim that the big boys care bugger-all about what goes on here is by no means the same as declaring that the converse is true. True, no great or regional power will interfere with our elections as it makes no difference to them – and China burnt its fingers badly in 2015 – but the relations that Lanka maintains with each of them during the 2020-25 period is of importance for us. In the last four years it was Chinese largesse and IMF mollycoddling that kept this country’s external finances afloat; it is foreign direct investment, manufacturing and the export-oriented sector that have been disappointing. Investment has focussed on hotels and tourism, luxury apartments and the Megapolis; even the Colombo and environs light-rail is not yet under construction.   

Trump’s second term?

I need to summarise in a paragraph what I said in my column last week. Matters of state and politics have fluctuated a great deal in the last several months in the US. Trump has gained considerably on the propaganda side after the Muller Report cleared him of collusion with Russia in the run up to the 2016 presidential elections and subsequently in office. The mainstream liberal media and the Democrats have suffered a humiliating setback made worse by their congenital inability to understand class politics. Trump plays to the insecurity of the white working class and bleak prospects facing poor whites and uses the outrage generated by huge and rising wealth and income inequality. Trump is a charlatan, but a successful one; his standing with his Base (a quarter to a third of the population) is secure because he capitalises on this anger by railing against the Washington “swamp” and the nose in the air “them”. 

In reaction to these trends a new Socialist-Liberal movement known as the Green New Deal is gaining ground among young Americans and within the Democratic Party. I predict a fundamental shift in US politics within say five years but I will not go so far now as to predict a Trump defeat in 2020. Fifty-fifty is the best one can intelligently conjecture so early in the day. I expect howls of “Traitor” from the morally righteous left, but for heaven’s sake dear reader have you not seen that ofttimes it is opportunistic rascals who win? Feedback I get makes we wonder whether some are so naïve as to confuse their wishes with hard reality! Hitler actually won in Germany in 1933 you know!

The US economy, though slowing in Q4-2018 and Q1-2019, is keeping up record levels of employment, reasonable growth and low inflation, enabling Trump to crow: “This has been an incredible week for America. The economy is roaring, the ISIS caliphate is defeated 100 percent, and after three years of lies, smears and slander the Russia hoax is finally dead. The collusion delusion is over”. But serious economic forecasters see a bleak future trumping Trump by the end of the year. Companies say the country is at the bounds of non-inflationary growth, labour shortages are beginning to bite, profit margins are falling and consumer demand is slackening. If monetary policy is not tightened continued growth will become inflationary. Credit is not growing fast enough to self-sustain growth; this means the economy will remain dependent on asset price inflation or fall into recession. The Fed is hostage to the stock market and to Trump. Market selloff and presidential berating forced it to stop interest rate hikes and end “quantitative tightening”. A downturn in the in next 12 to 18 months is what sober economists see as Trump’s Achilles’ heel.

Trump and Sri Lanka

Several months ago I speculated in this column that a stark danger to a Gota candidacy was the possibility that the US may defer his attempt to surrender citizenship. It is an obvious gambit to spoke his presidential wheel and I am surprised that my hunch attracted no comment in the media at the time. Now in a lightning move, murdered (allegedly by personnel in Gota’s line of military command) editor Lasath Wickrematunge’s daughter, and the International Truth and Justice Project on behalf of Tamil torture survivor Roy Samathanam have filed civil cases in the US and physically served summons on Gota while he was at Trader Joes (a shop) in Pasadena, California. Will the courts let him abandon US citizenship while legal action is pending? Drug peddlers are not allowed to cut and run, but I am not knowledgeable of the procedural differences between civil and criminal cases; let us wait and see. In the remainder of this piece I will leave aside renunciation of US citizenship and focus on other political concerns.

What is of interest in Sri Lanka is that if Trump wins a second term in November 2020 it will be less than a year after we elect a new president and within months of a general election. How may it relate to our domestic concerns? What will count for as much as economics or policy, is personal dynamics. Trump is notoriously narcissistic and bonds with likeminded vagrants. He has formed special relationships with Brazil’s new alt-right president Jair Bolsanaro described as the ‘Trump of the Tropics, Israel’s corrupt Prime Minister Benyamin Netanyahu, Philippine go-for-the-kill Durante, erstwhile rocket-boy Kim Un-John and of course there is that enigmatic relationship with Putin. So don’t discount the importance of this personality quirk of Donald Trump.

If Trump and Gota both win I see a grovelling Gota worming his way into Trump’s list of buddies. There are squadrons of avid Gota-doting Sinhalese in the US; they have connections to promote their man. The 2016 US presidential elections saw a Sinhala-Tamil divide; Tamils smashed thousands of coconuts haro-haraing the gods to smile on Hilary Clinton, while the Sinhalese despised the woman for alleged pro-Tamil diplomatic bias. This is still simmering and will come into the open if Gota wins. In the Tamil mind Gota is indelibly scarred by war and atrocities against civilians. But he is a war hero of near Mahinda status in the Sinhalese mind. If he is willing to cringe, I have little doubt that Trump’s advisors will persuade their President to grant Gota an audience. US foreign policy will switch as mercurially as it did in the cases of Pakistan, Syria and Afghanistan, if Trumpian idiosyncrasy wills it.

How will Trump-Lanka relations evolve if Ranil, Sajith or Karu turn out to be president? It will be a business-as-usual relationship; but normal business in the twenty-first century for Lank is a matter of balancing between India, China, the EU and America, in about that order of importance. Of the three UNP runners, in relation to policy it would not be unfair to say that Sajith is the least skilled in projecting a Sri Lanka image and the least experienced buttering up foreign leaders and prospective investors. I am not contesting that he is a popular candidate among young people and Sinhala-Buddhist voters. 

The legal actions against Gota in the US, even if his presidential bid is successful, will create knock-on complications. Renunciation of dual nationality, even if successful is a separate matter from the civil cases. The latter will drag on for months or years and we could have the spectacle of a president embroiled in endless American law suits. The UNP will exploit this in the election campaigns and against a putative President Gotabaya afterwards.