15 October, 2018

Blog

Is Good Governance A Myth? Some Lessons From Greece

By Sumanasiri Liyanage

Sumanasiri Liyanage

Sumanasiri Liyanage

Events unfolded in Greece after Syriza coalition came to power in the Parliamentary election held on January 15 provides, in my view, interesting and useful lessons to small countries living under the domination of global finance capital. Syriza experience led us to contest some of the propositions advocated by the Sri Lankan so-called civil society. Many people belonging to Colombo civil society appear to think that every one, rich and poor, old and young, urban and rural wish to have good governance (yaha palanaya). Having mesmerized by the term and its anticipated popularity, new political coalition was formed to face the next Parliamentary election that is scheduled to be held in August 17, 2015. I have always been suspicious of these terms, especially they are being included in the lexicon of international financial institutions. I am aware that many civil society professionals love the term just because it is being widely used by the so-called international community and the international financial institutions. Recently, the European Union, European Central Bank and the IMF used a much improved phrase ‘better governance’. Had Hela Urumaya waited for a few more days they would have suggested this new phrase and called the new political formation, United National Front for Better Governance (UNFBG). Alternatively, their opponents would have renamed their coalition United Peoples Freedom Alliance for Better Governance (UPFABG). Since these days we are not much concerned about the content and substance, it is imperative to have long names.

Ranil ChampikaMy leanings towards Anarcho-Marxism invariably compels me to see a huge contradiction in the phrase good governance (or its improved European version “better governance”). Can governance be good? Can it be democratic? Well I will bracket these two related questions for a while as raising them may take us into a kind of philosophical muddle.

Greece economy was badly affected in the 2008 financial crisis. Around one million people lost their jobs. 30 per cent of business were forced to close down. Salaries have been reduced by 35 per cent while pensions was cut by 45 per cent. With that the gross domestic products decreased by 25 per cent and the country’s total debt has reached 180 percent of the GDP. This decline has also been reflected in human development indices. Child mortality rate increased by 42 per cent. The level of unemployment of young people is around 50 per cent. This abysmal situation arose as a direct corollary of economic prescription proposed by Troika that includes the European Union, European Central Bank and the IMF. They pumped money to Greece asking them to adopt more and more austerity measures affecting adversely the Greece economy and its people, especially lower classes. It was in this context and in the situation of the failure of two governments adopting policies prescribed by the Troika led Greece people to elect radical left coalition –Syriza- on anti-austerity platform at the Parliamentary election held on January 25, 2015.

Newly elected Syriza government began negotiation with Troika (now called Institutions) to get a reasonable deal to come out of the crisis and to implement its Thessaloniki program. However, European Union wanted badly to topple Syriza government as it saw Syriza like organizations are becoming increasingly popular in other debt-ridden European countries, especially in Spain. Hence, European Institutions declined to restructure Greece debt not because it created an economic problem for Europe but it would be a political problem for European banks and financial capital. So Troika imposed heavy conditionalities that forced Syriza government to adopt more austerity measures. Syriza asked Greece people at a referendum held on July 5 if they are ready accept those conditionalities imposed on them by the EU, ECB and the IMF. Greece people voted OXI (no). Syriza portrayed referendum as an attempt at preserving national pride and a choice for democracy against fear. This democratic action by the Syriza government further antagonized the European representatives of finance capital. They forced Greece finance minister, a well-known economist, Yanis Varufakis to resign to facilitate future negotiations.

As Guardian reported: “European leaders have confronted the Greek government with a draconian package of austerity measures entailing a surrender of fiscal sovereignty as the price of avoiding financial collapse and being ejected from the single currency bloc.” It was in this context that Angela Merkel asked Greece to have “better governance” as a prerequisite for a deal. Addressing the UN on development assistance to poor countries, she emphasized that “It is in their hands whether aid can be effective. Therefore, support to good governance is as important as aid itself.” Eran Wickramaratne announced at his election campaign that 58 German firms will come to Sri Lanka bringing much needed foreign investment. Hence they would ask for good governance since Germany does not that harsh to place higher standard of ‘better governance’ for poor countries or countries in the third world.

The question what is meant by good governance? Is it a society free of drugs and ethanol? A country free of corruptions? No, that is not what they mean by good governance and transparency. Let us turn back to Greece and the deal imposed on it by European Union. As mentioned earlier, German Chancellor Angela Merkel asked Greece to surrender its fiscal sovereignty meaning elected Greece government and its Finance Minister do not have right to decide on its budgetary polices. In constitutional democracies, power to take decisions over state revenue and expenditure is with the Parliament elected by the people. Germany under the name of good governance and transparency demands to hand over this right to European Union and its Eurocrats. Moreover, Germany demanded that “Up to €50bn (£35bn) worth of Greek assets will be transferred to a new fund, which will contribute to the re-capitalization of Greek banks. The fund will be based in Luxembourg. This is tantamount to liquidity asphyxiation.

That is not all! “The Eurogroup document said experts from the troika of creditors – the International Monetary Fund, European Commission and European Central Bank– would be on the ground in Athens to monitor the proposed bailout programme. The trio would also have a say in all relevant Greek draft legislation before it is presented to parliament. Furthermore, the Greeks will have to amend all legislation already passed by the Syriza government this year that had not been agreed with the creditors” (Guardian)

Other condionalities include increasing VAT up to 23 per cent, privatization of state assets, further reducing pensions, and labor market reforms.

The new agreement is a harder version of the same prescriptions imposed on Greece by the European Institutions and the IMF. So there is no assurance that it would work this time. Many economists have in fact already warned that this good governance and transparency package is dangerous and it would satisfy only the needs of the European, especially, German banks. The Nobel prize-winning economist Paul Krugman has said the EU’s demands of Greece are madness and accused Germany of killing the European project. Referring to German demands over Greece, he added: “Who will ever trust Germany’s good intentions after this?”

The events that had unfolded in Europe have thus redefined what is meant by “yahapalanaya”. What is really hidden under this phrase has been brought to surface in Brussels. Can people of an independent country agree to this project? This is the project that seeks domination of small nations by global finance capital. In spite of the day time robbery at the Central bank of Sri Lanka, many “yahapalana’ experts know the hidden meaning behind it. However, that is not for voters’ consumption during the election campaign. Yanis Varufakis has summarized this in the following word: They hated “Burkean view of the sovereignty of parliament – in our case it was very clear that our parliament was being treated like rubbish.” As a commentator of New York Times puts it “In the name of preserving the “European project” and European “solidarity,” the ultimatum put to Greece required something close to the surrender of the nation’s sovereignty. For all of Greece’s past sins, and for all of the gamesmanship and harsh talk of the governing Syriza party, this outcome arguably had elements of punishment as well as fiscal responsibility.”

*The writer is the Coordinator of the Marx School, Colombo – e-mail: sumane_l@yahoo.com

Print Friendly, PDF & Email

Latest comments

  • 0
    0

    [Edited out] We are sorry, the comment language is English – CT

    • 3
      0

      Thanks, good one Sumane! Yes, Economic Rights and Social Justice will be the new fault line of struggle in Sri Lanka where the culture of the Global elite one percent screwing the global 99 percent is alive an well..

      With Arjuna Mahendran who is accused of CORRUPTION and insider trading who is unqualified to hold the post of Central Bank Governor since he only has a basic degree in Economics, Sri Lanka is on a slippery slope to a debt crisis and like Greece may lose economic sovereignty.

      The CB is issues debt, government bonds at a rate and following the same policies of he corrupt clown Nivard Cabraal.

      Meanwhile Milinda Moragoda’s neocon think tank rather than calling for an investigation of insider trading at the Central bank is asking for civil society groups to calculate the cost of the few hand outs to HONEST working people in Sri Lanka at election time. Moral of Pathfinder Foundation story is stop the pay rises to the poor and ignore the bick ticket corruption at the Central Bank.

      If Ranil Wickramaginhe wins the election Civil Society groups will need to push for ECONOMIC RIGHTS and and investigation of Mahendran, his son-in-law and perpetrual treasuries to be held ACCOUNTABLE, as well as Nivard Cabraal who was Namal Jarapassa’s side kick.

  • 0
    0

    Third World Countries Have To fight Hard To Ensure GOOD Governance. The politicians come begging for votes but when they secure power they forget their promises and become masters and the voters their servants. These guys start making money for themselves using various avenues through the power vested on them.
    We have seen this enough and the public must fight hard against this menace by ensuring good governance is delivered by these guys.

  • 1
    2

    Perhaps Mr Sumanasiri you would like to live in a Sri Lanka ruled by a royal family, with the father as the king, the eldest son as the prince in waiting, and the rest of the family as the courtiers…..

    Perhaps you like a feudal system…

    Perhaps you like drug dealers, underworld figures, crooks and rapists to be the parliamentarians….

  • 2
    0

    Germany not only conquered Europe through EU but also became the richest there with the creation of the Euro.

    Greece has suffered the most by converting to Euro.

    Germany with 4 Trillion annual GDP wouldn’t write off the 60 Billion to give the Greek people a fresh start.

    That is the sort of Yahapalana mateship the Euro heavies have for their fellow Europeans.

    Now the Greek inhabitants have to mortgage every bit of their public assets to Bundesbank to get a loan to pay the short term debt. .

    And start borrowing again.

    Our Yahapalan Boss Ranil and his offside Galleon are on their way already to mortgage out inhabitants assets to the English and the Yanks.

    China gave us loans on mates rates to build our Infrastructure.

    Ranil stooped everything.

    Now Galleon is workoing 24/7 to mortgage these valuable public assets and borrow y from English , Canadian and US Investment Banks and Pension Funds,

    There by creating exactly the same situation as Greece is faced with now.

    When we can’t pay the loans our Yahapalanaya will be all on American and British terms.

    China on the other hand, would write off , if the crunch comes where we couldn’t pay.

    But our Intelligentsia can’t see that , Or they don’t like Chinese.

  • 1
    1

    Mr Sumanasekera writes:

    “China gave us loans on mates rates to build our Infrastructure.”

    “China on the other hand, would write off , if the crunch comes where we couldn’t pay.”

    Yes, they indeed would. But Sri Lanka would have to give its testicles on a platter in return! We’d be a vassal state of China ever after!

    • 2
      0

      @Nari-bana

      Thank you for acknowledging China’s contributions. Can you cite equal contributions made to us in ANY sphere that our new Best Friends have done for us in the past ?

      By the way, I don’t expect you to include things like nurturing the LTTE as a contribution.

      The answer is pretty much nothing. Canada, the US, Norway, Sweden, the UK and other Enlightened Western States did little except pour funds into the LTTE, try EVERY mechanism available to make sure Sri Lankan soldiers and leaders were brought up before courts as War Criminals

      I assume that typical of the Colombo-Educated, you were brought up to believe that being a vassal of the West is a good thing ?

      • 1
        1

        Where would you send your children for education? China? Would you or your children would settle down in China? Or, would you like them to be in Canada or Australia instead? Would you ask your children to learn Chinese instead of English?

        Don’t talk bullshit. There were people who campaigned for Sinhala Only in the 50s and 60s while secretly getting their children to study English intensely. They are the ones who sent their children to England while turning the local education to swabhasha only.

        There are people who revile against “thuppahi” culture while secretly practicing ball room dancing.

        There are people who denounce those who speak in English while delighting in the fact that their grandchildren living in Australia cannot utter a word of Sinhalese, or, even if they do, rejoice in the fact that they speak Sinhalese with an English accent.

        What hypocrisy!!!

      • 0
        0

        Oh Boy…

        Your responses are like those ass burning Rocket Chillies from India.

        I don’t think our West Worshippers can handle it..

        Perhaps you should change the name to Kochchimiiris….

  • 0
    1

    Dear Mr Liyanage ,

    You conveniently forgot that Greece cooked their books to get in to Euro .Just like in Sri Lanka, politicians borrowed money to bribe their voters. Greek politician gave pension when the workers reach 50. Personal taxation was very low and productivity was low . It was very popular . All other European countries pensionable age is 65. They were in lot of debt when they joined the Euro but did not disclose it to the EU . Just like us they borrowed and borrowed and rewarded their own, just like our politician . No tax was collected. Collected tax was wasted . This is not socialism/Marxism or capitalism . This is corruption . Any country continue in this path will ultimately become bankrupt . Look at Zimbabwe . Do not blame others when the problem is home grown.

  • 0
    1

    Greece Debt Crisis in Sri Lanka? Never will such an impressive catastrophe occur in Sri Lanka! Why? Sri Lanka’s debt crisis is/will be cushioned by Lankan maids to the ME.

    Whether it is the West or China that takes over (courtesy of Ranil or Rajapaksa respectively), every time we get a new package from Germany or the West, or China, Elite and Non-Elite who manage to clinch the Elite status and country assets like the way Elites do, will take a large chunk of the monies, and set up shop in the US and other glossy Western lands. And more maids will go to the ME and pay their taxes to the Sri Lankan government to pay for Elite excesses. Too late for the Greeks to follow our structure (not that their Elite was ever as bad as ours) – the ME maid sector is overrun by Lankan maids.

    In the end, the only challenge to our sovereignty is the shame of our women going to the ME. Knock you heads on your hands people, and say : “Aparada අපරාධ!”

  • 0
    0

    [Edited out]

  • 0
    0

    Good governance is a beautiful and nice words to hear. But what is the meaning of “good governance” as Sri Lanka is concerned.

  • 0
    0

    Greece has to wake up and implement competitive economic policies and work hard to be part of a thriving European set up. What Greece has been doing is overspending on borrowed money. How long can a country go on? The EU leaders have stepped up rightly so to bring reality.

    On the new lending planned UK govt’s contribution alone is $10bn. Similarly large amts by other countries too. How do they explain to their tax payers of the reason to continue supporting Greece’s failures?

    • 0
      0

      This is the name of the game. Loans are given in the name of the country ,loans are spent by a few politicians and bankers/economists , the money tunnelled back into the foreign banking system and the cycle continues. The poor in the name of whom this money is borrowed are asked to pay for it. That is why the ordinary greeks are refusing to repay the loan. Lenders also have a price to pay they cannot get away scott free,

  • 0
    0

    Sumane seems to be suffering from serious intellectual dishonesty disorder or lack of analytical skills. The gist of this piece is that Yahapalanaya is not a term defined as such Sumane tries to define it for the UNP and its allies by using analogy from Greece Crisis. He also uses “Germany” which was mentioned by Eran in the context of obtaining FDI to role German played in Greece issue. To this “Professor” at Sanana Campus it is all connected. And for that, he borrows legendary Karl Marx’s name and somewhere in between Paul Krugman’s name too. What a load of bunkum! Don’t these Rajapaksa cronies have a spine to talk some sense?

  • 1
    0

    This is a welcome article on the implementation of the beggar-thy-neighbour strategy through the good governance mantra.

    Good-for-nothing pundits like Shelton Wanasinghe, Lloyd Fernando, KHJ Wijayadasa and W.A. Wijewardena have been peddling this good governance for some time now. It’s time to reign in these peddlers from their hawking streets.

  • 1
    0

    This is what I read in Hindu paper published in India;

    “To sum up, good governance is today a major discursive tool enabling the global transition of democracies to a form of government that some academics have labelled “soft authoritarianism”. A more accurate description would be “authoritarianism with a democratic face”.

    Good governance entails the substitution of politics – which is what democracy is all about — with management. It seeks to insulate policy-making from the chaotic pressures of democracy.

    So what kind of a government does good governance mandate? Given that there is only one model of development possible in the good governance framework – market-led development – a government that upholds good governance will have to cease being a guarantor of the citizens’ socio-economic rights. It would instead function as a facilitator and enabler of the market, which would deliver these goods and services to those who can afford them.

    As for those who can’t afford them, if they behave well, they might get the carrot of cash/credit, which is essential to function as a market citizen. If they misbehave, the stick of repression is an ever-present threat. Democracy without politics, and citizenship without rights — these are the twin pillars of good governance as it’s advocated today. The beauty of it is that everyone seems to love it.”

  • 0
    0

    When you appoint corrupt men who do not have the capacity to run an economy then they take orders from the IMF and WB. The development programme of Ranil and MR was the plan regaining Sri Lanka sponsored by the IMF and WB the great proponents of the economic hit man. Today the country is broke and both men are fighting an election confirming the proverbial saying” Nero was fiddling whilst Rome was burning”. None of these guys deserve any thing other than incarceration.They are incapable of anything other than taking orders from the USA, India whilst pretending they know every thing when they know nothing. Any questioning and a white van will arrive. These men are selling the sovereignty of the country and that is why they should be charged for treachery.

  • 1
    0

    Sumanasiri,

    The term governance, in its current context and usage, first seems to have appeared in a 1989 World Bank report. This report can be accessed from the World Bank site at http://documents.worldbank.org/curated/en/1989/11/439705/crisis-sustainable-growth-sub-saharan-africa-long-term-perspective-study

    However, there seems to be some disagreement as to when the term was first used. Göran Hydén, a professor of political science, claims to have first used it. Nevertheless, it is important to keep in mind that Hydén used it when he was tasked to prepare a background paper for the 1989 report!

    The World Bank tried to cover up the failure of its Structural Adjustment Programme by blaming it on poor governance. You can see this claim on page 60 of this report.

    Ram Agarwala, an Indian economist, prepared the first draft of this report. The powers that be at the World Bank were unhappy with this draft. Agarwala claimed that “[t]hey came down on … [him] like a ton of bricks” and believed that his days as the “blue-eyed wonder were over”. The best part is that he claimed governance to be “an alibi for the failure of adjustment”.

    I wonder what the good-for-nothing peddlers of good governance have to say about all this. Let me mention some names of these peddlers again:

    W.A [Edited out] Wijewardena
    Bradman [Edited out] Weerakoon
    Lloyd [Edited out] Fernando
    Godfrey [Edited out]Gunatilleke
    Shelton [Edited out] Wanasinghe

Leave A Comment

Comments should not exceed 300 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically shut off on articles after 10 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.