By Kumar David –

Prof. Kumar David

Thus, we may all “Chortle in our joy” on the 13 or 20 of July if everything goes as promised. The first step in the Sri Lankan Colour Revolution seems to have inched forward like a golden dream but I will remain on guard till both Gotabaya (GR) and Wickremesinghe (RW) have been seen off. The worst tricks are not beyond the former, the latter is untrustworthy and hungry for the presidency. If all goes well after 20 July new phases open but there are still no guarantees. The Arab Spring was followed by the Cairo Winter because an intransigent Muslim Brotherhood attempted to impose Islam on the whole nation.

Image by Randy Chriz Perera

There are four stages into which the social-political-economic catastrophe can be factored. An Emergency Room (ER) period followed by a very short-term VST phase of about a month, thereafter a short-term (ST) phase up to elections and thereafter a medium five to ten-year (MT) recovery period. In any case ST and MT are about whistling in the dark if we get through ER and VST. I have emphasised many times in my column that unless the fuel crisis is resolved quickly there will be havoc. The country is already in virtual lockdown and violence will erupt first at petrol stations and then everywhere as strikes, boycotts and mass opposition grows. Other media commentators, probably due limited technical savvy did not get the point for a long time but are now waking up; fuel is the lifeblood of a modern economy – transport, production, jobs, education, exports, electricity – without it life and the economy grind to a halt.

What RW and his imbeciles ignored was that without fuel social and economic life is paralysed, a virtual lockdown. He was and is angling to hang on for another year or more, that was his game all along. The anger in the petrol queues has reached boiling point, civilians and the military clash, police officers are alleged to fill up their tanks and sell on the side, hundreds of thousands of 3-wheeler chaps are in black-market business. If 200,000 metric tons (MT) of fuel do not arrive within a week there will be civil commotion. People already ask “What’s the point of our revolution? Nothing has changed”.

Assuming that we get past ER (that is up to about now, and fuel arrives before rioting breaks out), the next say month leading to formation of some form of all-party government and the finalisation of the IMF protocol is the VST or very short-term phase. The statement made by the visiting IMF team was significant and unprecedented. It remarked that overcoming corruption was basic. Everybody knows what that means; GR must go! It is not that he is the most corrupt of the Clan, that dishonour goes to BR, MR and Namal R, it is that his presence as head of state sets markers which make it impossible to root out the extreme dishonesty that has made Lankas’s body septic. It is being said that when Gota goes the IMF and other lenders will feel reassured about corruption and short-term foreign funding may be made available; good if this expectation comes true.

Ranil (RW) being pushed out should be a matter of little relevance. He has served his purpose in conducting the initial rounds of negotiations with the IMF visiting teams (thank you) and is now dispensable. He was never the font and source of state-power, Gota was. GR was needed by and therefore supported by the government parliamentary group members to retain their perks and privileges. Public support for this most hated of all Sri Lankan regimes (President, parliamentary group and PM) stands at about 15% according to polling agencies. The back scratching of the two principal actors, their body language and public perception was that this was not a Gota-led Ranil administered game, it had evolved into a Gotabaya-Wickremesinghe regime. The people were right therefore in advancing their ‘Gota Go!’ demand to the next stage of a ‘Gota and Ranil both Go!’ Ranil is a low life-form and clings to a Prime Ministership, that he has done nothing to earn, in the hope that he may be able to wangle his way to the presidency. He must be forced out as soon as possible. I hope at least 113 MPs have already written to the Speaker stating that they have no confidence in him and that he is no longer PM, meaning he has suffered a de fact vote of no-confidence.

It is unsafe to allow Ranil to be President even for a day; it must be prevented even if rules have to be bent. He could have resigned and ended the uncertainty but that he did not is ominous. It must be deemed that President and PM perished simultaneously in an earthquake and now Parliament in consultation with party leaders must make simultaneous appointments. Such a turn was unforeseen in the constitution and the response has to be equally bold and unconventional. This is what the people demand unanimously and the courts will have no choice but to go along.

Gota-Ranil are finished and a caretaker government to plan an election comes next after a 30-day period when the Speaker functions as temporary president (unless Ranil’s’ shenanigans bear fruit). But there will still be skirmishes. Resurgence of Aragalaya, trade union agitation, joint opposition marches and mobilisation, rejection of the treacherous 22A Constitutional Amendment, student revolts and confrontation with the security establishment are potential flash points. Right now (mid-July) is the starting period of new turmoil since the interim government has no clue how to address the fuel shortage.

The opposition, or joint opposition of the pre-election phase will have little more to offer the pending IMF protocol which will impose significant belt tightening, fiscal dripline and a tough debt restructuring regimen. The opposition can demure but has no option but swallow some of it. A continuing deficit-budget is madness, printing money will drive inflation to hyperinflation, declining production will reduce exports. A dual currency system is on its way since imports can no longer be financed by diving ever deeper into the hell-hole of dollar debts. These realities will confront any government (all-party, multi-party, or mad hatter’s tea-party) which has the misfortune to take office from now till the election. Having given thought to all possibilities I am of view that the JVP should participate in this all-party government with the SJB, TNA, SLFP, the 9-party gang and a rump of pro-SLPP MPs, to run the show till elections.

This brings us to the prospects facing the next elected government. I concede that this line of thought makes two assumptions. It assumes that the turmoil I spoke of two paras ago does not end in social instability, chaos and anarchy. If that were to occur all bets are off the table. The second assumption is that a deal can be struck between actors in government and opposition to pass a resolution by simple majority calling for dissolution of parliament and fresh elections. If parliament is to be dissolved within 2 ½ years of August 2020, this is the only way it can be done legitimately. Both assumptions are fraught. If the first is falsified it’s a bloody mess, if the second assumption is falsified the next president march on till mid-2025. If both these dangers are averted then we have to consider the five-year programme of the next elected government. You have your draft programme and I have mine. Sajith, Anura Kumara and the SLPP each have their own. I wish to put down mine.

I believe that medium- and long-term economic strategies for Sri Lanka should be double track: (a) a strong state-led interventionist strategy, and (b) market forces to guide effective and efficient decision making in investment ant production and to encourage entrepreneurship. Sound contradictory? No! Let me explain with the leading example we are familiar with, best summarised in the most interesting book that I have read this year: “The Other Side of Globalisation” by SR (a.k.a. Sriyan) de Silva published by the Employers’ Federation of Ceylon.

The portion of the book that I am making use of is a discussion of the much-publicised East Asian Economic Miracle. The countries in this group are Singapore, Hong Kong, Taiwan, South Korea, Malaysia and Thailand. Japan the leading ‘goose’ flew away much ahead. The point is that East Asia did NOT follow the then-IMF neoliberal prescription (the IMF is better now). These countries did not exclude the state from economic policy, quite the contrary the state played a key role in picking winners and losers and in choosing emergent sectors and industries. The state did not leave it to market forces to set the menu initially; only gradually was a freer role opened to the market. The approach was a grand success. An opposite example is the ghastly failure of Yeltsin’s Russia where powerful Western business interests, the US Government and Treasury and neo-con and neo-liberal intellectuals made all the crucial decisions ending in the corrupt, oligarchic power structure that runs Russia today.

I take pause to distinguish between neo-conservative (neo-con) and neo-liberal. Neo-con is a political ideology of global American leadership, it seeks to remould the world in an American image, believes in the primacy of American military power and is aggressively anti-communist (Soviet Block) and now devoted to containing China. Although East Asia rejected the then-IMF neo-liberal economic strategy it did line up with an American-led political ideology. The purpose of this digression is to strengthen my case for a strong state-led economic growth strategy side by side with market rationality. This dichotomous approach is indeed possible; it worked splendidly in East Asia, loyalty to American political leadership notwithstanding.