16 May, 2022

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Legitimate Criticism & Mindless Opposition

By Uditha Devapriya

Uditha Devapriya

It’s not really Basil Rajapaksa’s fault. When the country’s Finance Minister announced that the government had requested IMF for advice and expected a team to arrive in the country a week or so down the line, Colombo’s free market advocates thought debt restructuring was in the air. Some praised Rajapaksa, others praised the government, while everyone noted the necessity of going to and seeking (debt) forgiveness from the IMF. A few, though not very few, listed down what the regime ought to be doing: privatisation, austerity, public sector divestment. In other words, belt-tightening for the masses.

They were in for a severe disappointment: the government hadn’t asked for IMF assistance, merely advice. After Rajapaksa made his remarks, Ajith Nivard Cabraal clarified that he had been talking about “a routine Technical Assistance Program” for the Ministry of Finance’s “new Macro-Fiscal Unit.” I checked what Macro-Fiscal Units do: according to the IMF, they are “the government’s key unit for elaborating sustainable medium-term fiscal objectives and policy orientations, and for assessing fiscal risks.” So while Rajapaksa’s Ministry is still not going to the IMF, it’s not shirking the IMF either. In any case, reading between the lines, it’s clear that Rajapaksa and Cabraal weren’t contradicting each other.

I think the episode revealed the desperation of those who want the country to toe the IMF line. Advocates of debt restructuring, at least most of them, are so besotted with the idea that they’ll do anything. They’ll even mute their criticism of the government. This is why not a few among them publicly urged the SJB and UNP not to oppose the status quo, to support it for the greater good. Implied in these statements, of course, is the assumption that what we need now is not political transformation, but economic reform, and that so long as these reforms are implemented, those implementing them should be supported.

That the economy needs major restructuring is a no-brainer. But what does restructuring entail? Most of these prescriptions seem simple enough: stabilise prices, reduce wastage, eliminate corruption, and the like. The problem, however, has to do not so much with the solutions being recommended as with the manner of their implementation.

Price stabilisation, to give one example, is obviously necessary in a context where essentials are becoming luxuries. Yet what would happen if the government stopped printing money, or contacted the money supply? What would happen to interest rates, working capital loan payments, private sector investment, and the future of the middle-class?

People have a right to know about the consequences of these policy proposals. If the free market bandwagon are serious about implementing them and want the government to heed their call, they need to come out with what prescriptions like “austerity” would mean for the masses. They also need to insert the all too important caveat that these reforms will generate a significant backlash, and that even the most neoliberal government would have to scuttle them if they want to continue in power. In a word, the pro market crowd need to be clear about the political consequences of economic reform.

If the past should tells us anything about the future, it’s likely even the biggest neoliberal hawks in the UNP would, were they in power now, not go ahead with the policy proposals being advocated by the pro market crowd. The yahapalana regime is a case in point. While much hope was placed on the UNP’s ability to enforce market reforms, in the end it never really delivered. Advocates of market reforms point, very correctly, at the present regime’s tax cuts, which deprived the Treasury of much needed money when the pandemic came. Yet similar concessions were granted by the yahapalana government, despite the stridently pro-market rhetoric of its budgets, in particular the 2017 Budget.

Certain critics of the government point at Bangladesh. They note that despite the worst health crisis to hit the subcontinent since the Malaria Epidemic, Bangladesh managed to not just survive, but thrive, defying the most dismal predictions. The same cannot be said for Sri Lanka, partly because, as those who keep pointing to Bangladesh contend, of government action and inaction. But it’s important to note the differences, to understand that the issues being highlighted in this regard go deeper than one supposes. Other countries did thrive, Sri Lanka did not. Yet why that happened needs to be contextualised.

Sri Lanka suffers from the unenviable conundrum of shrinking tax revenues and expanding public services. To put it in layman’s terms, from whatever money the country earns, a great deal goes to the public sector, in particular services like hospitals. It goes into paying public sector workers, including PHIs, nurses, and teachers, the latter of whom were paid in full despite the months-long closure of schools. That teachers and doctors want higher salaries notwithstanding their security of tenure, then, can tell only one thing: they feel underpaid and want more. What austerity would mean to such groups, in light of hiking costs of living and declining standards of living, is anybody’s guess. Yours is as good as mine.

Sri Lanka’s public services aren’t exactly stellar or up to the mark, but they have earned just praise and commendation internationally. Literacy rates, poverty levels, and wealth and income gaps are better than they are elsewhere in the region. In countries like Bangladesh about a fifth of the population live below the poverty line; in Sri Lanka less than five percent do. Sri Lanka’s public education sector has bequeathed to the country a literacy rate of more than 90 percent. In Bangladesh the figure is a little more than 70.

In Bangladesh, the initial response to the pandemic was to go about business as usual. In Sri Lanka, on the other hand, health professionals had to constantly urge and engage with the government to enforce lockdowns and restrictions. When things got out of hand, the regime eventually complied. In Bangladesh garment factories, the backbone of the economy, were kept open despite much criticism. In Sri Lanka they were kept open as well, attracting similar criticism, but this happened on an arguably much smaller scale.

The point I am making here is the same point I make to people comparing Sri Lanka to Lebanon: context matters. We can lament the state of our economy and identify problems to be resolved, but without contextualising them and putting them in a proper historical and social perspective, no prescription, however well it may have worked for other countries, will work for us. Scaling down public services, for instance, will make no sense if it generates a huge backlash and imposes even more austerity on the poor.

There’s a fine line to be drawn between legitimate criticism of the government, which is what political commentators and intellectuals in general should engage in, and mindless acceptance of each and every policy prescription thrown in the way. The outcry over money printing is a case in point. The urban and suburban middle-classes almost universally decry it, but no one mentions what will happen if the State stops printing money or contracts the money supply. This is largely because the public – and by that I include supporters of the government – are so beholden to orthodox theory, whether from the Left or the Right, that they think whatever has worked elsewhere will work here.

What’s dangerous about this is that those supporting such policy proposals avow that it doesn’t matter who’s implementing them; so long as they are being implemented, their assumption runs, the country should and will benefit. Here, too, we see that tendency to dichotomise politics and economics, to think that economic reforms are what count and that their political consequences are, at most, a secondary concern. Reality, however, has a way of working around, and against, such assumptions, a point which does not as yet seem to have dawned on Colombo’s pro market and civil society circuits.

Sri Lanka desperately needs a critique of the powers that be which goes beyond obsession with market imposed austerity on the one hand and obsession with parading yourself as the superior of everyone else on the other. But these two broad trends seem to be dictating the direction of the Opposition, be it the UNP, the SJB, or the JVP-NPP. The regime would like nothing better than a disorganised Opposition, an Opposition incapable of winning hearts and minds. Yet that is what we are seeing here, now, and for all intents and purposes, it may be what we’ll see for quite some time. This is deeply distressing.

*The writer can be reached at udakdev1@ gmail.com

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Latest comments

  • 15
    0

    ” To put it in layman’s terms, from whatever money the country earns, a great deal goes to the public sector, in particular services like hospitals. It goes into paying public sector workers, including PHIs, nurses, and teachers, the latter of whom were paid in full despite the months-long closure of schools. “

    The author has left out the highly bloated defense budget, which keeps growing each year under the Goat.

    If anything, more money should be channeled to education and health, at the legitimate cost of the military, which as many se it today, exist to keep the Rajapaksas from jail.

    Ws this an unintentional slip, Uditha?

    • 10
      0

      Easton,
      You beat me to it. The camel in the tent is the military. It is there to keep the restive able- bodied masses in full employment. They cost a lot of money. Perhaps Uditha is too patriotic to mention that fact.
      Apart from that, what country of our size has a million able-bodied males driving Tuesday instead of working in factories? To compensate, we have to import skilled labour even from China.

      • 1
        0

        Correction: a million driving tuk- tuks

  • 12
    0

    Uditha,

    Are you confused or am I confused?

    What is your point? ……….What is your bloody point?

    Either before, or after, can you give a synopsis of the points you are attempting/trying to make?
    1.
    2.
    3.


    “Mindless Opposition”

    Opposition is, people standing in queues for days and praising the Rajapakses’ ancestors/parents in words of endearment ……….. oppositions don’t come any better than that!

    • 6
      0

      Dear Uditha
      The real question one should be posing ,is what’s being done to reverseve the current economic chaos.
      IMF would impose their own terms which will not be palatable to Cabaral or Basil and are not in any state to negotiate for better terms
      Personally my take would be reduce public service expenditure for a starter
      Privatise the SOE s which are losing in millions aday by shear bad and inept management. All of them are top heavy by any norm
      RN

      • 1
        0

        RN,
        .
        People should raise the question current bunch of stupid men in power would ever come to sense and see it forward.
        :
        They have proved not being able to settle even thrivial issues such ” gas cylinder blast issu” or ” price control on the rice”… so how can they ever be able to find solutions for the economic problems soon. And Basil R as a total idiot would do it, just add what he had been doing in the past regarding – weapon purchase using black money. Man would have been good to be a PIMP leader but no means a minister of finance.

    • 5
      0

      Would you request all the politicians to declare their wealth and assets and return all that was not legitimately acquired?

    • 5
      0

      Nimal, it’s like modern art, only UD will know the significance of his writing. Remember his mentor is none other than DJ. Made for each other, isn’t it.

  • 7
    0

    “…….The yahapalana regime is a case in point. While much hope was placed on the UNP’s ability to enforce market reforms, in the end it never really delivered…..”

    Which planet do you live in Uditha?

    Yahapalanaya was a culmination of not only UNP fellas, but many others including extreme leftists!! They all wanted a good government sans rogues. Mostly good hearted common people, the masses who hated bloody Rajapaksha thieves and who wanted a clean regime, a clean administration, with low powered President, more powered given to the parliament..!! All that was achieved, dont you know?? 19th A? MPs did their best amidst so many betrayals by Gamarala and Ranil Ponnaya pulling the leg! Didnt they establish the promised independent commissions, Elections, Police, Judiciary etc? Not a single citizen, let alone journalists lifted in white vans? Didnt they improved the books and increased $$$ reserves?? Comparatively they achieved heaps against previous 9 years of Rajapaksha heist, don’t you see that?? Unfortunately the punnakku eating fellows gave the votes back to gang leaders again as Gamarala and ponnaya started fighting…..

    • 4
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      Let me correct it please, Yahapalanaya was not a regime.
      It came into be through the rise of all various parties and fronts in 2015.We still have that much respect on its architecht late Rev. Sobitha thero.
      However, the fact that grand coalitions cant move forward – in a developing country, where majority would respect corruption and crime more than the other way around, it ended up being rejected. Decent Ranil and other poltiicians were smeared with all unexpected allegations.
      :
      All what the bitch s sons achieved after returning to power is GETTING exonerated from their CRIME investigations. Basil should long be jailed but he is made minister of finance. Aluthgamage should long be in jailed, but he has become the number joker of Gotabaya s totally unsuccessful govt.
      :
      There is a saying – yakage widiyata wimanya goda naegiya yuthuyi… the palace should be built according to the wishes of the devils. Srilankens that are highly corrupted chose Medamulana ballige puthas again dreaming a better future, but it backfired again. Good riddance to bad rubbish !

  • 6
    6

    Jit, you using abusive words on people will not solve anything. They also can use such words on you.

    The fact is that more than 2/3 people watched the Yahapalanaya government and voted against it. Ranil lost all the seats and the old UNP was left without a single seat.

    The guy is back in parliament ! This is one reason why people hate Ranil.A manipulator without principles.

    All don’t have a pathological hatred of the Rajapakses.( such an attitude only benefits a guy like Ranil because he will then have a ready made voter base because they hate the Rajapakses -esp the CT readers!)

    After the Bond scam people realized that Ranil is also a rogue but perhaps more devious. If you examine the statistics you will see that the country did not develop any faster during the Yahapalanaya . It borrowed very much more.He stopped the Port City project and ended up paying a penalty. Ranil wanted to reduce the powers of the president only because he realized that he has no hope of becoming one. Previously Ranil resisted dismantling the presidency.

    By the way have you counted the number of foreign trips ranil has made during his four terms as PM? You will faint !

    • 7
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      1 of 3…..Deepthi, you have got your facts absolutely crossed why yahapalanaya collapsed. Elections are like surfing. We all know most people are poor in political maturity, so they love to go for big waves. The party that can create the highest and biggest wave will be able to take them for a ride on those waves – finally to be dropped at the bottom when the wave recedes – shattered!
      Here are main reasons why yahapalanaya lost the elections and they are no fault of Yahapalanaya concept at all!
      1) Easter attack – a massive number of Catholics, arguably about 6% of total voters which is quite detrimental, voted against UNP (now they all know who actually planned and executed the attack)
      2) Fabricated lies by the Rajapaksha gang about the compromised state of national security – related to the above
      3) Muslim terrorism phobia – again, related to above 1) and other Muslim ethnicity related fabricated stories like Safi drama – vanda sathkam, vanda koththu etc.,
      4) Highly efficient pro- Rajapaksha propaganda machine, including most popular TV and radio channels plus a strong social media network

    • 7
      1

      2 of 3…Here are few other important reasons as well:
      5. Sirisena and Ranil conflict. Why Ranil agreed to Sirisena’s candidacy against Karu J. as desired by Ven Sobhitha is well known. Ranil didn’t want a person with integrity as the President because then he would not be able to launch his game plans. Ranil knew Karu’s integrity and honesty was light years ahead of himself and Sirisena. Also, Ranil has a huge inferiority complex so didnt want to work under his own former deputy so he’d rather work under a total outsider, even a low ranker like Sirisena.
      6. The Bond scam was not invented by Ranil/Mahendran. It was started by another world class rogue, Nivad Cabral in 2010 with the blessing of Rajapaksha gang and UNP raised that in the Parliament as well as filed a case at the SC in 2015. Cabral bought high credit risk ‘B’ grade Greek bonds worth Rs.10.2 billion between 2009 – 2015. He illegally paid USD 6.5 million US hedging fund lobbyist Imaad Zuberi who is in jail now, for his brokering services…… cntd….

    • 7
      1

      3 of 3…..All these money is absolutely lost today as Greek bonds are not worth the paper they are printed on! And no one knows how much he manipulated in other CB bonds in those 10 years and together, it could easily surpass by miles as to what Mahendran did.
      7. Yahapalanaya did NOT borrow more – that is a blatant lie! Prove it with stats if you can! They actually paid off more loans of the previous robber barons and restructured some on white elephants like Mattala.
      8. You are worried about Ranil’s foreign trips? Count how many Mahinda did between 2005 – 2015 (plus his kith and kins) and how many he accompanied (Hint 340 battalion for the 2007 UN convention alone!!) and add up ALL his trips plus the number of ALL people went with him plus their total cost in USD – You will easily pass the stage of fainting and go into a lifetime coma!!
      Ranil or UNP has no readymade voter base anymore. People do not trust Sajith either. Both will be history, come next elections. The bulk of former UNP voters will either turn to 43 or NPP.

  • 4
    0

    Sinhalese have managed this island for nearly 75 years which is very long and I don’t think they can survive any more. This island is now become a holiday resort for many Sinhalese leaders. Sri Lanka couldn’t find any leaders to govern this island in this island and now dependent on USA citizens. The most powerful President and Finance Minister of this island do not belong to this country. On behalf of this country, they make deals with various personal partners in China, India, Bangladesh, Pakistan, USA, Burma, and more for a commission. Nobody knows how much loan we are getting and how much we are spending for public because these are secret deals and we have to pay back them or sell our resources to them. If IMF come you have to have records but for these there will be no records or accounts. At the end, this island will be left with archeological evidence of Lord Buddha statues and bones of the people.

  • 6
    0

    Omg Uditha! Who’s talking about how we scramble around to do things these days? Anyone who takes over will also have to scramble around. It’s what made us scramble in the first place that should be chased away and prosecuted so it will NEVER shame the Motherland again.
    *
    Bring on JVP-NPP with some Sajith so they can do 1\2 IMF together with austerity with 1\2 paycuts.
    *
    Here’s a contextualization : Life in Bangladesh is cheap.

  • 6
    4

    Jit Thank you for toning down your language.

    However, you make a sweeping statement, typical of many on this forum-“We all know that most people are poor in political maturity..”

    Cannot the same thing be said about you? What makes your opinion more mature? Is it because you say it in English ?

    What is politics ? Voting for Ranil and his type of UNP ?

    The people experience the effect of our politics every minute of their lives. In the kitchen, on the street, in the bus, at the work place. You must be experiencing it in a air conditioned room talking in English.

    I am also envious of your self confidence. You have given a list of the reasons why they voted against Ranil /UNP. Wow such confidence in your own analytical skills !

    One point is clear. Ranil is a devious rogue, however according to your analysis in the amount robbed less that of the Rajapakse/Cabrall combine !

    • 4
      0

      Deepthi,

      “……….you make a sweeping statement, typical of many on this forum…..”

      Yes we do. Just like you do too – that one would be fainted if they checked the costs of Ranil’s overseas trips???

      But there is no need to be envious about our self confidence or political maturity. Try hard and I sincerely hope one day you will get there.

      I’d rather not respond to the rest of your comments.

      I rest my case with you so there’s no need to respond.

    • 2
      1

      DS,
      What was the amount robbed in the bond scam by Ranil? Honest and detailed answer please.

  • 6
    5

    Old Codger have you also swallowed Ranil’s red herring and joined his Old Boys club ?

    Can you give me a honest and detailed answer about the amount of money the Rajapakses have robbed? I did not see any indictment during your Yahapalanaya with a honest and detained amount !

    What you will suggest is that Mahendran only continued what Cabrall did before him.

    Who was Cabrall’s Perpetual Treasury ? You might say Cabrall had his sister working with Aloysius, so that was the conduit for Cabrall/MR ? Where was the indictment during your genius Ranil’s yahapalanaya against Cabrall , his sister and Aloysius ?

    Mahendran/Ranil/Aloysius took it to another level. When you look at everything Ranil did to bring Mahendran, protect him, give him another term and eventually assist his escape, do you think anyone can say RW is honest?

    Do you think Aloysius and Mahendran bought all the Bonds without informing other brokers and obtaining all the money from government banks( in 24 hours) to buy them , because they love the country ! Ranil is so devious that in order to fool people like you he called it the auction method. Father- in -law selling to son- in-law , without informing other brokers, at a special interest rate, is a auction !

    • 4
      3

      D.S,
      So, as I fully expected, you can’t answer the question. Like many others who talked much about it and contributed to the eventual Rajapaksa return. For your information, when many some of the accused were discharged, the court put the loss to the state at 360 m .
      This is from the 3% difference in interest rate on 10 billion. I do hope that isn’t too complicated for you. In your opinion, is a loss of 360 million more important than a loss of 15 Billion at Srilankan ?
      Would you also explain how the state can “lose” money by borrowing it?
      “Can you give me a honest and detailed answer about the amount of money the Rajapakses have robbed?”
      Even the Rajapakas don’t know. These were not legally documented public transactions. The bond affair was. As I have said before, there was insider dealing, and bribery. But making fast money from bonds is not a crime, as the Singaporeans have made clear.
      If the bond affair was so heinous, most stock market punters would be in jail too.
      I am not one who falls for media drama, no matter what axe is being ground. I said the same about the explodig LPG drama too, if you didn’t notice. You too ought to carefully analyse whatever red herrings you come across.

  • 2
    5

    Old codger with defenders like you Ranil/Mahendran/Aloysius would be stoned to death in Saudi Arabia. Open and Shut case.

    Ranil brings his lifelong bosom glib talking friend Mahendran as governor. Mahendran’s son in law Aloysius is a wheeler dealing amoral Bond dealer.

    Before Mahendran is even appointed Aloysius resigns from Chairmanship of Perpetual which is his vehicle for dealing in bonds.

    So although not clear to you, these three rascals knew there was a conflict of interest and were preparing to fool the world.

    That particular sale of bonds , the other dealers were not informed. Aloysius cornered the market buying most of the shares.

    You say the government borrowed money. True at an interest rate. That interest rate is vital for the dealer to sell his Bonds in the secondary market.

    If the Governor decides to sell a 100 rupee Bond at 50 rupees, who will benefit? If the Governor instead of nominating 10% interest nominates 9% ,who will benefit ? All these decisions were made by Mahendran when his son in law was the main buyer.

    Please read the commission report on Mahendrans behaviour that day.

    • 3
      3

      DS,
      Ah, finally you admit that the loss, if any, was 3%. Or 300 million.
      Everything else you bring in is peripheral, and doesn’t influence the outcome. You also don’t seem to know that these were 30 year bonds.What do you think the actual value of 10 billion rupees will be in 2045? A couple of used cars?
      Was this ” loss” something to make a media circus out of and be sold to the financially illiterate to bring down the government.? Especially when there were far greater real losses at places like SL Airlines for example? People who believed and spread this story are responsible for the predicament we are in now.

      • 4
        1

        People who believed and spread this “bondscam” story have no right to complain about the Rajapaksas.
        I have never denied there was insider trading or conflict of interest. Those are moral issues which wouldn’t have affected the outcome. What does it matter whether one dealer or a hundred took up the bonds? 10 billion is 10 billion.

  • 3
    5

    Later a question arose, who wanted to collect money by the sale of these particular Bonds.

    Suddenly a undated, unreferenced letter appeared via Ravi Karunanayake. Remember?

    Why did Ranil dodge being cross examined by the prosecuting Counsel and instead was given a good time by the then AG who was later appointed CJ by the Ranil government ?

    In his evidence this so called honest Ranil said that he met young Aloysius at a private party later ( after the Bond scam was blown) and that he assured the PM that he was no longer doing Bonds but was developing a new type of arrack(Mendis special) . That is Ranil ,your model leader !

    I too feel frustrated that these criminal Rajapakses are not meeting justice. In the inferior Sri Lankan minds Rajapkses , Wickramsinghes and such like are beyond the reach of the law.

    But don’t ever say that it is only the Rajapkses who are bad and should be punished. By saying that we are continuing a bullshit system that has gone on for 2000 years. The same hangman must do the job on all these rascals.

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