By Jehan Perera –

Jehan Perera

Minister of Agriculture KD Lalkantha, one of the most senior members of the government, has made a statement regarding former president Ranil Wickremesinghe which has been a subject of speculation. Minister Lalkantha said that the former president has the best understanding of the present international economic order and the economic challenges facing the country. He had asserted that the former president has a distinct worldview, rooted in neoliberalism, which continues to shape his approach. He is quoted as having said, “This shift towards neoliberalism is what we are witnessing now. Ranil was the first politician in Sri Lanka to openly embrace neoliberalism,” he remarked. “He is the knowledgeable figure in this area.”

The appreciation of the former president and his understanding of what needed to be done to take the country out of the economic morass it had fallen into in 2022 can be interpreted as the government’s justification for keeping to the IMF agreement. Prior to the elections that brought it into power, the NPP position was that the IMF agreement was unbalanced and too hard in its impact on the poorer sections of the population and therefore needed to be renegotiated. There were concerns that an NPP victory at those elections would lead to a possible break with the IMF and to renewed economic instability. This did not occur, and now it appears that the government is thinking further ahead on the lines of the former president.

Speaking at the same event, Minister Lal Kantha also lamented the inefficiency and overstaffing in the public sector according to news reports. He also referred to the government’s efforts to curb corruption and inefficiency and praised the current political leadership’s commitment to tackling these issues but noted that reforms in the public sector are still ongoing. There are reports of resistance to the government’s efforts to reform the system and to appoint persons from outside the government bureaucracy to high level positions. “The government has stopped corruption, from the President to the MPs. However, the public sector must be reformed, and we will change that system slowly but steadily,” the minister concluded. The government, with broad consultation, should devise a comprehensive process and roadmap to address the inefficient public sector. No country will rise beyond its public service.

Government Confidence

The ability to appreciate the strengths and talents of a defeated opponent is a sign of one’s own strength, rather than an admission of weakness or an indirect appeal for help. In this light, Minister Lalkantha’s commendation of the former president could be seen as a sign of confidence of the NPP government in the success of the path it is treading. After winning the elections, the NPP government has moved swiftly to have a good working relationship with the IMF and other international creditors. Indeed, the government delegation that has gone to Washington DC for discussions on the fourth review of the Extended Fund Facility programme are expected to also meet with the US government representatives for discussions on the Trump tariff issue’s impact on Sri Lanka.

It is also noteworthy that the government has implicitly engaged in a renegotiation of the IMF agreement by not engaging in the large-scale privatization of state assets as agreed by the previous government. State-owned enterprises such as Sri Lankan Airlines and various other loss making state corporations are entities into which successive governments have pumped in huge amounts of money. These have not been run profitably due to the total mismanagement and large scale corruption that has taken place as alluded by Minister Lalkantha who has pointed to the need for privatization. However, the privatization of asset-rich state enterprises (taking into account their land, equipment and other infrastructure) would have been a gold mine to corrupt politicians who dominated governments in the past. There is reason to believe that a similar fate will not befall state owned businesses that engage in public-private partnerships under the present government. This is a government that has taken action to stop corruption, as affirmed by Minister Lalkantha, and which is seen in the absence of any whiff of scandal at present at the higher political level of government.

Another area in which the government has implicitly renegotiated the IMF agreement is in terms of its greater focus on the poorer sections of the population. This is taking place through greater allocations of resources, indeed a threefold increase, to those living below the poverty level in terms of direct assistance via the Aswesuma programme. The implicit renegotiation is also taking place through the greater allocation of resources to the health and education sectors. This is in contrast to the policies of the previous government. Under the previous government plans were afoot to scale back on resource allocation to the public health and public education systems and to provide more opportunities to the private sector to take over from the run-down public systems.

Longer Term 

It seems that the government will be going into the forthcoming local government elections on a good wicket. The traditional New Year season which just ended saw unprecedented levels of street level shopping that exceeded the best of previous years. The government’s exposition of the Sacred Tooth Relic of the Buddha has also been greatly appreciated by the general population even though the opposition politicians have complained that this exposition has been for election purposes. The long lines of people who stood for hours to get a viewing, and expressed their gratitude for the opportunity with tears of joy, was a demonstration of the close connection with the culture of the people.

In addition, the government is delivering on its promises with regard to corruption, crime and punishment. Several prominent personalities are already in the net. The independent bribery and corruption commission has been reactivated. There is political will and rule of law backing it, unlike in the past, and legal prosecutions are taking place. The controversial Easter bombing of 2019 which successive governments failed to investigate in a credible manner is now being investigated with political will and rule of law in place. This has given rise to prominent personalities behaving in a most peculiar manner which indicates that the searchlight of truth is beginning to uncover the morass of evil that led to the massacre of innocents. The same commitment to truth seeking needs to be demonstrated with regard to those who went missing in the north and east during the years of war.

At the last elections that brought it to power, the government won in all parts of the country. This was an unprecedented victory, given the ethnic polarization that has been prominent from the dawn of independence. This phenomenon is likely to be repeated at the local government elections to be held in a fortnight. Nonetheless, the plural ethnic, religious and political composition of the country needs to be better represented in the government and in their choices, such as with regard to the missing persons of the north and east. The holding of the long delayed provincial council elections is important in this regard. It can bring in the missing element of pluralism and power-sharing into the system of government that is essential for national success in the longer term.