By Sunil J. Wimalawansa –
Prof Sunil J. Wimalawansa
Part 6: Sri Lanka—Changing Pillows to Cure Headaches: Lack of Accountability, Ability, and Credibility
Most of the current crises originate from the fiscal/foreign exchange shortage. During the past two years, the currency was pegged to USD and artificially maintained the exchange rate by the former central bank governor, pumping (wasting) vital foreign exchange reserves. Besides, in addition to pilferage, the country is importing more than exporting in dollar terms, and the overly-blown government continues to spend 300% more than it is necessary.
Conflicts of interest and the failure to handle the IMF
The inexperienced and clueless finance minister and the short-sighted governor’s next solution was to monetise (printing) Sri Lankan currencies like madmen, which devalued the Sri Lankan Rupee by half against the USD ignited the inflation. However, they had no effective strategic plan and failed to remedy the foreign currency deficit.
During this period, exports continued to decline, yet the ruling party imported luxury items, including cars, for themselves and the elite. In addition, some ministers and administrators made insane amounts of USD profit by converting the COVID pandemic into an unscrupulous business. This major scandal must be investigated and brought to justice, from PCR and RAT, COVID testing kits, the military-run hotel quarantine and other quarantine scams.
Corruption and lack of experience in handling international affairs
The recent negotiation by the former tarnished (and the current incapable and conflicted) finance minister, who had no relevant education or experience in economics, was a flop. With conflicts of interest, he, the cabinet, and the former central bank governor miserably failed to develop a tangible solution to the economic calamity led to over ten billion losses of the foreign reserves.
The newly appointed minister does not have better economic qualifications or understanding of the intricacies of global politics related to handling loans and debt-restructuring and handling and implementing IMF conditions. Besides, with a negative credit rating and ongoing corruption in the country that cannot hide from the international community, obtaining the eight billion (or more) USD the country seeks from the IMF will not be easier.
Poor leadership, pilferage, and criminal activities
These were conducted in conjunction (or using) the health department and the military. In these deals, they were, apparently profiting between 10% to 90%, in foreign currencies, especially concerning the importation of vaccines. Besides, to use these ineffective vaccines (against new variants) used, the military and police coerced vaccination to make more profit and, as per unconfirmed claims, to finish expired vaccines. These were unethical and violated the constitution and the Nuremberg Code of ethics. None of these violations was investigated.
The lack of foreign exchange due to irresponsible and senseless actions by the government prevented the importation of fuel, cooking gas, essential food and medicine, and prolonged electricity cuts due to the energy crisis. Isn’t it clear who is responsible for this mess? Unfortunately, these situations will worsen before it improves during the next few months. The lack of leadership, direction, progressive policies, and weak political opposition worsened the situation. Consequent lack of food, medicine and energy security affects the entire country.
Absence of accountability and undemocratic actions
As discussed in the previous parts of this series of articles, the root causes for the deepened national debt in Sri Lanka are evident. Continuing begging and browsing are the worst options under these circumstances. The current “consumption” economy must be converted to a “production” economy, and most subsidies (freebees) should be phased out over time.
These actions will reduce the trade gap and budget deficits. It would lead to a new scenario where Sri Lanka never needs to get back to loan traps. However, the magnitude of the fiscal deficit in Sri Lanka has not yet been fully declared. In the past few years, internationally recognised political-corrupt countries like Uganda, Nigeria, and Ukraine, so as Sri Lanka, lacked the transparency and accountability of their executives and legislators.
Significant reduction of tax income while increasing government expenditure, especially those meaningless, non-priority projects done for personal gain, have worsened the financial disaster and phenomenally increased the debt carried by the public. Once the interim cabinet is appointed (in conjunction with the resignation of the president and prime minister), it must increase the tax base at least back to what it was in 2019. It is necessary to introduce a mandatory statute to declare politicians’ “total” income and assets, government servants in senior administrative positions, and all professionals and businesspeople. Failure or false declaration should be considered a legally punishable white-collar crime with jail sentences.
Due resignation of the chief executive and the next presidential election
As per the current constitution, to avoid chaos in the current scenario, it would be advisable to synchronise electing an interim president with the president’s resignation. Under normal circumstances, abolition of the executive presidency needs a two-thirds majority approval of the parliament and then the Supreme Court. Alternatively, this could be accomplished through a nationwide referendum with the presidential or general election to get the people’s approval to (A) abolish the executive presidency, (B) eliminate provincial and other councils, and (C) introduction of the new constitution to replace the current spoiled one, without incurring additional cost.
Suppose the president and/or the prime minister refuse to resign; united opposition should bring a no-confidence motion at the earliest possible to start the ball rolling. If the president refuses to resign/step down, any MP can formally request his removal based on specific reasons provided in the constitution, such as mental instability. Nevertheless, this is a cumbersome process that could take four months needing the Supreme Court and medical evaluations, etc. Currently, there is no such luxury of time.
Failure to accomplish those mentioned above could lead to further turmoil. If so, instead of resigning, the Prime Minister becomes the president with the automatic dissolution of the cabinet. In this worst-case scenario, the country’s situation will be like jumping from the pan to fire—the same crooked politicians will remain in power. Meanwhile, with the revocation of the 20th amendment using a two-third majority, the parliament can depend on either the 17th or 19th amendments for its functioning till the new constitution. The country does not need yet another gimmick, the 21st amendment, which may only benefit the opposition (as per the title of this series of articles).
Summary
Over the past two decades, parliamentarians have focused on looking after themselves rather than the country. For some, it was an open goldmine to loot: they placed the country last on their priority list. Instead of preventing corruption, loopholes in the current constitution provided them with incentives to pilfer funds and profess to act like kings. At the same time, they forget that they are “servants” to the public.
Besides, current policies, including enacting the 20th amendment, strengthened their power and protection from prosecution and opened more avenues for wrongdoings without facing the consequences. In contrast, legislatures failed to make policies that address and encompass the rich diversity, talents, resources, and the culture and harmony of the society. No executive should ever apply shameful brutality against the unarmed public employing the police and the military, who are paid by the populace. Such childish and arrogant behaviour guarantee failure not only of the president but also all parliamentarians.
The next article will discuss lack of security, abuse of power, regaining credibility, and solvency.
Related articles:
Changing Pillows To Cure Headaches: What Led To The Current Economic Crisis In Sri Lanka?
Changing Pillows To Cure Headaches Will Not Solve The Financial Crisis
Abuse Of Power – Changes Needed To Reverse The Situation
Debt Trap, Lack Of Accountability & Blunders
Government Brutalities Against Protesters
