By Jehan Perera –
The economy is beginning to give indications of macro stability which President Ranil Wickremesinghe has made his primary objective. The most visible of these is the appreciation of the rupee against the dollar and other international currencies which signals a shift from the previous trend of depreciation. Over the past year the cost of the dollar rose by as much as 80 percent in the official exchange rate and even more on the black market. The current appreciation of the rupee is attributed to the rise in foreign exchange earnings including the upswing in tourism. But it is still contingent upon import controls and also non-repayment of foreign debt due to the declaration of bankruptcy.
The confirmation by government authorities that the much delayed IMF loan facility of USD 2.9 billion will be finally coming through would be a confidence booster. This is in addition to the forthcoming USD 400 million currency swap with the World Bank. These are all indicators of a positive outlook for the economy. It suggests that the government’s economic strategy to regain macro stability is working to the country’s benefit. However, the government needs to bear in mind that the recovery of the macro economy needs to benefit the population at large and not be monopolized by the high income segment within it. There is a need to initiate a sustainable system of economic recovery based on indigenous inputs and outputs. The plan is yet to be revealed.
A good society and economic plan to attain it would be one that protects the least in it. This weekend I attended a funeral. The person who had died looked more than 80 years old. But the real age was 63. The cause of death was cancer. The tragedy was that when the cancer was first detected there was no chemotherapy drugs in the government cancer hospital which primarily serves those who are economically less resourced. According to the dead person’s family, the patient was strong and could have coped with the chemotherapy at the outset of the disease. When the chemotherapy drugs became available several months later the patient had been weakened by the cancer which had also spread. The patient’s weakened body could no longer cope with the strong medicine. The family has to bear the loss.
The reluctance of the government to conduct local government elections at this time becomes clear. It is aware that there are countless stories like the one recounted above. The government would rather go to the polls after showing the people more substantial signs of economic recovery which will benefit them. Most of the voters are poorer rather than richer, and are likely to want to vote against a government that has an economic policy in which the costs are borne by the poorer rather than the richer. The government has therefore preferred to offer the people free rice for Rs 10 billion rather than spend that amount on financing the local government elections. There is a need to get away from the culture of dependence on government patronage to empower people to earn their own living. The date fixed by the Election Commission, March 9, was too soon and so the government ensured that the elections would be postponed.
Last week the Supreme Court issued an interim order in which the Finance Secretary and the Attorney General were directed not to withhold the funds allocated for election purposes under the 2023 budget. This court ruling would provide the government with a face saving way in which to back off from its stance that the local government elections would not be held at this time or anytime soon. The Finance Ministry has immediately issued a statement that the government would release the necessary financial allocations to enable the elections to be held. The course is now clear for the government to heed the decision of the Election Commission with regard to the new date for elections. The Elections Commission has stated that it would consult with a number of stakeholders before fixing the new date.
In making this landmark judgement, the Supreme Court has had the benefit of a similar decision being taken by the Supreme Court of Pakistan where a similar issue has to be addressed. In Pakistan the government claimed that the provincial elections could not be held due to the lack of financial resources. The Supreme Court in Pakistan set a deadline of 90 days from the date of dissolution of the provincial assemblies for the elections to take place. There was the concern in Pakistan, as there is in Sri Lanka, that permitting a government to postpone elections citing lack of funds will set a dangerous precedent. As developing countries like Pakistan and Sri Lanka constantly face a shortage of financial resources, this justification could be used at any time to postpone an election that the government feels it might lose.
It is interesting that in both countries the elections to be held are not parliamentary elections but elections at the sub-national level. Although permitted to slip out of public consciousness, provincial elections have been postponed in Sri Lanka for more than four years. In both countries there is the concern that a heavy electoral loss by the government would lead to a demand for early parliamentary elections even if they are not legally due. Unlike the local government elections which are legally due to be held at the present time, the parliamentary elections are not due for more than two years. This would account for President Ranil Wickremesinghe being quick to assert that the government cannot be changed by an unfavorable verdict at a local government election, but only by a parliamentary election.
Due to the economic hardships that the people have been facing over the past year, there is the likelihood of the government facing a severe election defeat at the present time. Although the legal position is that parliamentary elections are only due in another two and a half years, a government defeat at the local government elections is likely to lead to a demand from the opposition political parties for it to step down and this could lead to protests on the streets. This concern has prompted the president to say that “It is important to note that any changes to the government must be made through the proper channels, such as a parliamentary election. The streets are not an option for the parliament, and any attempt to subvert the established process would be a violation of Sri Lanka’s constitution and the rule of law.”
The president’s statement that only parliamentary elections can change the government is an early warning that he will not call for early parliamentary elections even if the ruling party performs poorly at the local government elections. There are examples from the past when governments that have lost local government elections badly have not collapsed but have continued in power until the next parliamentary election falls legally due. In February 2018, the government lost the local government elections badly. However, the government continued in power for the full duration of the parliamentary term and elections were held only in August 2020. At those elections the government experienced a severe drubbing as was expected. On this occasion too, the government led by President Ranil Wickremesinghe appears determined to stay on in power till the very end of their respective terms.
The challenge to the government would be to avoid the fate of the government that lost the February 2018 elections. The present situation is one in which President Wickremesinghe wields a maximum of power unlike in 2018 when he was only prime minister. As the parliamentary term has now passed the halfway mark at two and a half years, the president has become empowered to dissolve parliament at his will. The ruling party members of parliament are likely to be subservient to the president as they would not wish him to dissolve parliament and subject them to an election at this time which they are likely to lose. Therefore, the president has the opportunity to impose his authority on the two areas he has set his mind—the recovery of the Sri Lankan economy (being mindful of those neglected like the cancer patient) and the resolution of the country’s ethnic conflict and obtain the support of the parliamentary majority.
Plato / March 7, 2023
Jehan,are you serious when you say that the President has the opportunity to impose HIS AUTHORITY [Executive President eh? ] for a] The recovery of the Economy b] The Resolution of the Ethnic conflict ?
Two birds with one stone eh?
Raj1957 / March 8, 2023
Ranil is not called Ranil Rajapakse for nothing—-he is there to protect the murderers & criminals who are the Rajapakses. We have not forgotten Ranils in involvement in the Batalanda torture camp & many other crimes—-after all he is the nephew of that racist scoundrel JR Jayawardena. The Tigers were the best medicine for the Sinhala politicians.
SJ / March 8, 2023
“We have not forgotten Ranils in involvement in the Batalanda torture camp & many other crimes”
“Involvement” demands credible evidence.
RW was an important suspect, but his being party to the torture was not supported by evidence. That he was aware of the events in Batalanda is fair suspicion.
Woolly statements suggesting other crimes as well do not help to know the truth.
It will help sane discussion if criticism of RW will be for what he actually did or is actually doping,
MSarrij / March 8, 2023
It seems that the status quo without parliamentary elections will continue until the current “tenure” of the current “parliament” expires. The future for the people is bleak under the current decrepit leadership.
What is needed is a new educated young team which the country has in abundance to take over the political leadership. This requires a new constitution with term and age limits for elected office and equal representation of both sexes in the parliament.
The new constitution should be ready when the “lifetime” of the current parliament ends and hopefully a much better future for all.
Simon / March 8, 2023
Ranil W is very conscious and mindful of his own failure as a PM, a Minister, and a Politician counting nearly four decades. He had his own “Desire” to be the President of the country before he say “Good Bye” to his career and life. If not overburdened with that “THURST” he would not have “Planned” to enter the Parliament, having lost at the general elections, through that “National List” and “Conspire” to be the “Appointed” PM with the “Blessings” of a duly elected “President” by the people. He didn’t stop at that, yet again “Sacrificed” the little bit of “Honor” in him and ascended to the seat of President with the support of his own rival party, perhaps “Promising” to be a “Slave” to that “134” MPs. That is his “Legacy” that would be recorded in the political history of Sri Lanka and that would also be “Remembered” by the world at large.
Now what is left for him is by hook or crook to gain at least a little bit of “Recognition” as a President who “Resurrected” S/L from a huge collapse (to which he too contributed in no small measure) of the economy and degeneration of the social/civil life of the people.
Simon / March 8, 2023
Part II: Now what can he (Raanil W) do to gain at least a little “Bit” of recognition.? He knows the economy has collapsed and is a “Bankcruupt” country. According to his thinking, “Financial” injection is the only remedy. That is why his greatest attempt was to secure as much as money by way of “Loans” and “Loans” from wherever possible.
Does he have any carefully planned economic plans to “Invest” those “Loans” to secure a “Net Return” to repay the loaned money and to get the benefits to spread out to the people? He has not planned any such plans. The net result would be to divert those “Loans” towards “Consumption” as has been done during the last few decades during which time we have a huge “DEBT BURDON” collected to our “BANKRUPTCY” account.
He will use these “LOANS” to provide daily consumer items because he is mindful of the mentality of our people and that is the age-old slogan: “Bath Dun Piya”; “Handen Hari Hal”; “Rs. 3.50 Bread”; “Eta Ata” etc. He wants to Establish this “FIRST”.
Once that “FIRST” is established, he will hold “Elections”. That is no doubt a good “PLAN” because our people will easily “FORGET” once their “BELLY IS FULL”. He will say: “BADATA BATH” (Rice to the Belly) and “HITHATA DUKA NEHE” (No suffering to the mind)
SJ / March 9, 2023
Forget about Ranil.
Does anyone vying for his seat have any different feasible idea?
All of them cannot see beyond the IMF barrier.
Simon / March 9, 2023
SJ: I don’t think IMF or any other lending institutions are a bad idea. What went wrong was and is the political leadership and the parties who rule the country have no proper plans and evaluated projects to make the best use of such make-shift arrangements for the country. Even the people don’t know exactly why and for what purposes such funds would be used provided their day-to-day consumption needs are met. The political “Vultures” make the opportunity to amass their share of the funds and thrive in the “GAME”.
Apart from that those lending institutions are also not concerned because they are also “Infested” with “Vultures”( such as Agents of services and materials) to grab the “Fair Share” of the “Loot”. That is how the Auditor General recently reported that out of “`19” million loans, only the “assets” created were only “9” million. No one knows what happened to the balance of “`10” million.
This “GAME” continues. The “STRUGGLE” to stay in “Power” and “GRAB” power too will continue.
chiv / March 10, 2023
Simon, that is exactly the quote (” IMF barrier” ) Pissu Vasu made in parliament calling Ranil, “Psychotic” . (or is it Schizophrenic ??? ). Typical joke I heard during my childhood, one patient standing at the entrance of Psych Hospital addressing others as patients. Obviously that makes our Parliament a “Mad House” and our people ????? Vasu is also demanding pressing charges against Ranil.
Nathan / March 10, 2023
Has Vasu been relevant in SL politics, ever.
He is struggling to grab attention.
And, you get caught in it!
Ad / March 9, 2023
RW is not an expert in economics. He is batting to spend the time with his tales of the unexpected. The Govt. are clueless as to how to implement a program so that it can be welcomed by society. They only know rowdyism and arrogance disregarding the suffering of the masses. Doesn’t know what kind of a infrastructure change is required to improve economy, but only syphon the treasury with perks and privileges’. It should be borne in mind of the donor agencies to ensure that these funds are correctly utilized to improve income generation rather than road building and other fancies of the RW and his colleagues.
Chandrametha / March 9, 2023
World is a dangerous place not because people who do evil, because of people who look on and do nothing , said Albert Einstein. Right to protest is a constitutional right of the people, enshrined in the constitution. Yet president chose means Oppression by tear gas and water cannons. London Mayor sold Water cannons purchased by previous Mayor as they have never been used. Author is upbeat about $400 million loan from world bank which I believe insufficient to pay for monthly fuel import. Similarly IMF loan is not huge either compared to loans, Rajpakses taken from China at commercial interest rate of 8 percent.
It is naive to think of economic recovery within the next 2 and half years as RW has not installed any constructive and tangible recovery plan. All he had done is raising taxes and negotiated with IMF. RW had tried all within his grasp to avoid holding local govt. elections. He dare not defy Supreme Court decision.. Author argues that next parliamentary election not due for 2 and half years. But Presidential election is due November 2024. Has RW got the confidence to face the country. Does author think that president elect will not dissolve the parliament which will be his prerogative.
Simon / March 9, 2023
“Supreme Court Shows Democratic Route to Government”.
Yesterday, in the Parliament the SLPP (Pohottuwa) MP – Harischandra Dolawatte- a “Lawyer” challenged this decision of the SC and requested the Speaker to appoint a “Committee” to look into how that decision has “Violated” the “Prevoleges” of the “House”. He further stated that the handling of Financial Matters is a matter for the Parliament only and the SC cannot interfere with that power. For certain the present “Speaker” who acts like the “Boot-Licker” of the “Regime” would appoint that “Committee”. Still, it is not done but could be in the offing.
The question here is: Shouldn’t IMF and other “World Lending” bodies take note of these developments in the Legislature and the widespread condemnation of the present Regime before giving any “Bail Out” programs to be managed by a “Rouge” regime? If the highest Law Enforcement Institution is brought to a “Mockery” by the Legislators, what more sanity would prevail in the country? What would happen to all these “Bail Out” programs under such a Regime? Will not such a Regime put this country from the Frying pan to the Fire?
Buddhist1 / March 10, 2023
With amusement, I watched the parliamentary privileges speech of “Dodawana Dolawatta”. It made me wonder if Dodawana Dolawatta too passed his law exam like the Raja’s Baby where someone else wrote his Law exam while he was in a private air-conditioned room.
Dodawana Dolawatte voted for the Budget and in it, there was an allocation made for the Local Government Elections. Now the court wanted that money released. How can he now claim that its a violation of his privileges? The court’s order was to allow what this Dodawana Dolawatte voted for.
Thug Ranil and the crooks of SLPP say that the opposition is not working with them by supporting their actions to improve the economy. This again is a joke. When “Pinata Seat Ranil” was voted by the crooks to be the President, the opposition requested him to first form the Constitutional Council, Which would then select the Ministers for the Cabinet. He did not do it as a thank-you to the SLPP crooks who elected him. In such a situation how can Ranil-Rajpakse and the band of crooks expect any support from the opposition? Even after that, after creating a Jumbo Cabinet and another bandwagon of State Ministers, still, Ranil-Rajapaksa and the band of thieves are commenting that the opposition is not working with them.
eeakdavi / March 10, 2023
Thanks Jehan for a well written and balanced piece as always from you.
I do not agree 100% with you (you too only call it a possibility) about one point.
Ranil’s strategy of hoping for some economic improvement before risking an election is unlikely to pay off. When what? Agitation by those left behind and still hungry will force an early General Election on us anyway.
In that case there will be a hung parliament (my guess) with the NPP holding the largest number of seats (maybe); a plurality that is. It is stupid to attempt second guess beyond that. All we can say now is that the Programme and Credibility of the NPP is very important in the coming two years.