2 October, 2022

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The President, IMF & System Change

By Ameer Ali

Dr. Ameer Ali

“I found the crown in the gutter, I picked it up with the sword and the people put it on my head”, said Napoleon. Ranil Wickremesinghe (RW) found the Presidency discredited and the seat vacated. He entered through a backdoor, occupied it and now expects the people to legitimize his occupation. Will he enable them with a chance to express their verdict?

To strengthen his claim, he has called in IMF to speed up assistance to repair the devastated economy, and he is stretching his hands to all opposition parties to join him in accepting all its recommendations, which are going to be distressful. Had that assistance been sought quite early, when the pandemic struck in 2020, the reparation cost would have been less harsh. Now it is going to be more painful. It is a case of damned if you do and damned if you don’t.

With or without IMF assistance, economic hardship endured by the people is set to continue at least for another year or two. RW is ultra-optimistic to restrict it to six months. Even then any growth is going to be spasmodic and at greatly reduced speed because, the system within which the economy operating is fundamentally faulty. Without a change of that system, economic revival, for a small and severely wrecked open economy is going to be extremely fragile, especially at a time when the entire liberal economic order is facing mounting challenges. IMF itself has forecast a contraction globally. The ongoing war in Europe, rising tensions in Taiwan Strait and Asia Pacific, and the resurgent pandemic would make this contraction increasingly possible.

RW is aware of this, but he is not willing to go beyond the economic arena and look at the socio-political structure of this multi-ethnic country that requires a fundamental overhaul for any economic model to work successfully. Instead, he is focusing on the neo-liberal export-oriented growth model with a renewable energy sector and use of nuclear energy, and hopes to push Sri Lanka to First World status by 2048, when the septuagenarian President would be about to become a centurion. His predecessor did not set any time limit for his vistas of prosperity and plenty, but RW has done. Yet, without systemic change RW’s target too will end in failure. This has been realized by the aragalaya generation and it is not going to retreat from fighting for it.

All economic models that were tried over the last seven decades could not lead the economy along a sustainable growth path, because the socio-political foundation on which those models were experimented was basically corrupt and ethno-centric and not truly nationalistic and democratic. It was this ethno-centricity in governance and social licensing of corruption that led to periodic political upheavals including a war and systematic loot of public wealth.

IMF, being one of the institutional guardians of neoliberal economic order within which Sri Lanka’s open economy operates, will therefore be not concerned about any systemic change, but will assist towards strengthening the open economy with its one size fit all remedies. Even in debt restructuring IMF would be more concerned about the interests of lenders than those of the borrower.  Yet, there is no choice and Sri Lankans have to swallow the bitter pill. Even the youngsters who are protesting and demanding systemic change are not rejecting IMF assistance totally.

Sadly, none of the political parties except JVP and NNP are willing to support systemic change. Strangely enough even TNA, which should know very well that the national question will have no hope of resolution under the existing system, is, in the name of pragmatic politics, willing to support RW’s so-called all-party governance. Ironically, a former minister of public security, who wanted to close down Muslim madrasas and restrict the importation of Islamic books, is now appealing to everyone to forget their ethnic and religious differences and unite behind the President to revive the economy. Does this mean that once the economy is revived, they could go back to their old differences? This man has no inkling towards wiping out the old system from which he and his colleagues obviously profited.

As pointed out in earlier columns the debate over systemic change is creating an inter-generational divide between the young and old. Aragalaya is not going to rest until that change happens. RW’s repression is bound to energize them.

A people centred secular constitution is the basic need for a sound democracy under which an economy would operate with added vibrancy. Once that democracy starts treating all Sri Lankans as equals with the same rights and obligations, the collective synergy of the people would become the driving force behind all productive enterprises. After all, what is more valuable to a country than its people? All the other economic variables including foreign investment would play a supportive role and together they would produce surpluses. Unless such surpluses are generated and exported there is no hope for sustained economic growth. That is why systemic change is an absolute necessity.

*Dr. Ameer Ali, Murdoch Business School, Murdoch University, Western Australia

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Latest comments

  • 11
    1

    I hear that SLPP is proposing NAMAL, Johnston, Lanza, Rohitha, Pavithra Pillayan, as ministers in new cabinet. What’s new ?? IMF will go bankrupt in no time.

    • 4
      9

      Do not worry about the IMF.
      It has bankrupted countries without ever hurting itself financially.

      • 9
        0

        Could you list the countries IMF bankrupted, with no fault of their’s.

        • 0
          3

          Oh, there is a qualifier:”with no fault of theirs”
          I should have known that to some it is always the fault of the victims of imperialism.

          • 0
            0

            This is how 24/7 you perseverate with stereotype non factual comments. Now that you don’t have one, why don’t you try providing the list of countries bankrupted by IMF ??? You still have a day for comments to close, so lets try without qualifier.

      • 3
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        IMF does not invite countries, it is countries that go to IMF with the begging bowl. So why accuse IMF just don’t go.

    • 4
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      A single man representing his own party is thrown into a pool filled with various reptiles, some highly poisonous and others less poisonous. This single man must be prevented from harming people and the surrounding environment from the pool. At the same time, possible damage from poisonous reptiles should also be avoided. So the situation is completely hopeless. However, miracles can work.
      :
      That is my definition of the composition of Parliament today. The situation would have been worse if the JVP had become the president, I don’t care much about diplomacy because JVP doesn’t talk about each other. They will speak straight. It will be better than corruption, but if it is practical – that is a big question.

      Perhaps, IMF and WB are terrible, what are the other options. ?

      7 years ago, Greece had collapsed, and they had no choice but to rely on everything the Merkel-led EU told them – the EU’s austerity plan for the Greeks was even tougher 7 years earlier. Although their tourism business has increased, the economy has not yet recovered. That’s how civilized Greece coped, so it’s unlikely that Sri Lanka, dominated by uncivilized Sri Lankans, would cope.

    • 5
      1

      IMF or any loan from others will work only the country is in peace and the Problems of the Tamils, Muslims and Up country Tamils with the two third majority in parliament immediately. Verbal or written promises and agreement won’t solve the problem. Every one should feel this country is ours. Can the President Ranil will can make these changes in the constitution within three months? The investors need the practical assuarance that their money is safe and secure for many decades. This is not a time to play back door games.

  • 7
    3

    ……….Strangely enough even TNA, which should know very well that the National Question will have no hope of resolution under the EXISTING SYSTEM,is,in the name of pragmatic politics,willing to support so-called–all-party governance……..
    laments Dr.Ameer Ali.

    The TNA is a bundle of contradictions. They support the Aragalaya which calls for a Systemic Change.
    Now the TNA has begun to go towards pragmatic politics……..
    They have outdone grass-hoppers.
    At the end of the day they will cry and say Ranil let them down……………………..

    • 2
      0

      The best option would be to throw away all or part of the state funds that Mahinda Rajapaksa clearly gulped down during his tenure and use them as foreign exchange reserves. Asking central working communities to remit their traditional remittances increasing annual foreign exchange resources.
      But the easiest thing is to take 1/4 ( 5 billions of USD) of the money stolen from Mahinda Rajapaksa. It would be better to give the citizen a better access to the normal way of buying regular fuel needs without making us another debtor.

    • 5
      0

      “It was this ethno-centricity in governance and social licensing of corruption that led to periodic political upheavals including a war and systematic loot of public wealth.”
      In one sentence, Dr.Ali uncovers the root of all our problems. What would the country look like if Sinhala Only was not imposed in 24 hours? About as different as if “Organic” wasn’t imposed in 24 hours, I think. If lopsided colonisation and standardisation had been avoided by leaders with vision, we wouldn’t have had a war. How many potential leaders and intellectuals would be still alive to lead the country? We wouldn’t have to suffer the likes of Seetha Arambepola, the Admiral Professori or Channa Jayasumana. Only people with real ability would lead, not a bunch of idiots with a particular ethnic label, all in thrall of an unelected bunch of hypocrites in robes.
      But can ethno-centric governance be rooted out? I believe it is too ingrained into the masses and will take generations. It would be best to write some ethnic balance into a new constitution, such as making the Premiership/Presidency rotate between ethnicities, or having vice-presidents. By ethnic balance, I don’t mean 75% for the majority. More like 60-40. The minorities already have a major part of the economy. Why not political power too?

      • 1
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        OC
        “If lopsided colonisation and standardisation had been avoided by leaders with vision, we wouldn’t have had a war.”
        Not so simple. The failure was in not providing all regions of the country with decent schools with science and a fair standard of English (not necessarily to read Shakespeare).
        Colonosation had mischievous intentions all along, but then what was the response of Tamil leaders? What did they do to encourage the Northern landless to settle in the East? (Of course ‘low caste’ cheap labour was something that they will not part with. It was only after the ban on import of onions and potatoes the people sought land outside the peninsula. Want of work in the plantations during the drought in the country drove Hill Country Tamils to the North. How well were they received? Gandhiam led by SA David & Dr Rajasundaram supported by Dr Shanthi Rajasundaram was the only organization that showed a strong sense of commitment..

      • 0
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        “Not ingrained in the masses”, but rooted and enmeshed in the DNA of those who who are vote in.

  • 5
    6

    “He entered through a backdoor, occupied it and now expects the people to legitimize his occupation.”
    Would it have been any less true of the other bidders who missed their chance.
    He won the vote fair and square, and that cannot be contested if one accepts the legitimacy of the electorate.
    We heard plenty positive things about the election when there was hope that Dullas wold win hands down.
    There is a clear lack of intellectual honesty in some of these academic verdicts.

    • 4
      3

      SJ

      “Would it have been any less true of the other bidders who missed their chance.”
      No, but there were different options available outside prliament for a fair selection of a temporary administration sugggested by many in this forum until we get a people mandate.

      • 0
        1

        The game, like cricket, has rather stupid rules..
        And it is played by the rules.
        Had Aragalaya had its way as you understand it, what you suggest may have been possible (no guarantees though).
        *
        I discuss possibilities not fantasies.

  • 2
    1

    The President, IMF & System Change

    The president has to answer globally variations are used to depict situations as being polarized and to force witnesses

    Due to arrival of ship from China approval to visit. And Russia
    The country has to answer china you are either with us, or against Because India is protesting
    Due to IMF – The country has to answer US you are either with us, or against us. If with Russian
    Existing conflict to either become allies or lose favor. This how they gauge the President Stand

  • 2
    0

    * Gota was taking advice from Mahinda, on appointing Ranil as Prime Minister.
    * Ranil and Rajapaksas (particularly Mahinda) have a shady arrangement.
    * The Presidency he holds now is a result of that arrangement.
    .
    With such an understanding between him and Mahinda, Ranil should have insisted on Gota seeking IMF help for that understanding to continue.

  • 3
    0

    The economic models that were tried over the last several decades could not lead the country along a sustainable economic path, because the socio-political foundation on which those models were experimented was basically corrupt and ethno-centric and not truly nationalistic and democratic. It was this ethno-centricity in governance and social licensing of corruption that led to periodic political upheavals including a war and systematic loot of public wealth.
    .
    Very many have been stressing this truth at every opportunity they have had.

  • 1
    1

    Systemic change recognizes interdependencies and makes the necessary changes in those other parts and their interrelationships.

    It prevents isolated treatment. of one or two elements only, for instance resolving economic crisis alone ignoring all other interdependencies such as good governance practices etc

  • 2
    6

    “Strangely enough even TNA, which should know very well that the national question will have no hope of resolution under the existing system, “

    What is this so called ‘NATIONAL QUESTION’ that has no hope of resolution under the existing system?

    • 0
      0

      “What is this so called ‘NATIONAL QUESTION’ that has no hope of resolution under the existing system?”
      EAGLE EYED INTROSPECTION THAT IS NOT TAKING US NOWHERE, STALLING PROGRESS OF THE COUNTRY AND COMMUNITY AT LARGE!
      DOGMA of the last century and continuing without indication of abatement!!!

  • 3
    1

    “to go beyond the economic arena and look at the socio-political structure of this multi-ethnic country that requires a fundamental overhaul for any economic model to work successfully.”
    It’s not only the politicians but also the Buddhist clergy should be willing to get both Political and Economic changes made together as soon as possible.
    I do hope Ranil W will listen to Dr A A

  • 4
    1

    Dr Ameer Ali,

    You had concluded your excellent article with the following remarks “That is why systemic change is an absolute necessity” Well said!

    But in the body of your article you had set that ‘A people centered secular constitution is the basic need for a sound democracy under which an economy would operate with added vibrancy”. another excellent medicine, but as a single solution for all the ills.

    I fear that it go against your enthusiasm for a systemic change.

    When you go for an isolated piecemeal solution like removing GOTA while the entire corrupt set up remains intact, the struggle losses her momentum, disillusioned and splinter for aragalaya to start all over again

  • 2
    6

    China’s Scientific Research and Space Survey Ship “Yuan Wang 5” which is scheduled to dock in Magampura Port is the trending news. India has raised unfounded concerns over China’s space survey ship and apparently has requested the Sri Lankan Government to block its entry to Sri Lanka.
    What is the big deal about China’s space survey ship and is India innocent?
    China’s “Yuan Wang fleet” has a space tracking and telemetry system that can track spacecraft, rockets, Intercontinental Ballistic Missiles, submarine to shore missiles and satellites. So far, “Yuan Wang 5” has completed 55 such tasks. In addition to China, France and the US also have space survey ships. But, Russia’s prestigious “Yuri Gagarin” space survey ship is the world’s largest (courtesy: global security).
    Does India have any right to block China’s space survey ship docking in Magampura Port or raise “spy” concerns? Based on India’s own track record, the answer is “no”.

    • 2
      6

      India, which built naval bases all around China, is playing the “victim”. This is the list.
      1. Indian Naval Service (INS) Kohassa naval base and INS Baaz naval + air base in Andaman and Nicobar Islands.
      2. India has military access to Reunion Island, a region of France located near Mozambique Channel.
      3. A military base on Agalega Island of Mauritius.
      4. A military base in Assumption Island of Seychelles.
      5. India has plans to build a naval base in Maldives.
      6. A military base in Port Duqm in Oman.
      7. India has military access to Chabahar Port in Iran.
      8. India has offered a 1 billion credit line to Mongolia probably with an ulterior motive.
      9. Under ACSA, India has military access to any port in Japan.
      10. India has military access to Cam Ranh port in Vietnam.
      11. India has military access to Changi naval base in Singapore.
      12. India has military access to Sabang port in Indonesia.
      In addition, in 2020, India signed a defense and security agreement with the United States to access US satellite data for targeting missiles and foreign military assets. Therefore, India’s “spy” concerns over China’s space survey ship is a joke. There is nothing wrong with China’s “Yuan Wang 5” docking in Magampura port.

      • 0
        8

        I think it is in India’s best interest not to wake up the “sleeping dragon”. Because China has developed a system that can easily jam the US invented GPS system. I wonder whether Russia uses it in Ukraine.
        India may have had plans to add Trincomalee harbour in Sri Lanka to the list of its overseas naval bases. Foreign agents who funded insurrectionists seemed to have thought the forcible removal of Gotabhaya was the easiest way to destabilize Sri Lanka. However, Gotabhaya’s decision to appoint Ranil as the Acting President before leaving the country has obviously hindered such plans. India’s unsolicited massive credit lines could have complete control of Sri Lanka. Ranil’s appointment as the President was a big disappointment for India.
        Sri Lanka may accept another bailout from the IMF, if ONLY it is the last resort. All those who have concerns about IMF’s bailout conditions, have an opportunity to see a preview these days. Besides, there is a prerequisite for IMF’s bailout. Therefore, Sri Lanka’s first choice for seeking assistance should be China, not the IMF.

        • 1
          1

          Bag of superlative, imaginary, thinking and expectation devoid of reality

      • 1
        1

        Champa,
        Fully agree with you, suggest they use Colombo Port and KKS too and have a Chinese Air force base in Anuradhapura as the Command Station for PLA Air command for South Asia.
        Colombo port handles 60-65% of transhipment of Indian Import/Export cargo and this would enable the Chinese to have a handle and understanding, on the goings-on in the sub-continent!?
        The next important thing is have the PLA headquarters SA Command in Kandy – perhaps Peradeniya??!!
        They could take over the Campus premises to ‘billet’ personnel under its command, New Chinese PLA Military Command Centre, with Chinese South Asia Commander resident in Kings/Queens Cottage or Pavilion as the case may be in Kandy!!??
        SL would be abolishing the Presidency and there is no need for residence for HoS in Central Province?
        The Peradeniya Campus could be done away with, as they have failed produce graduates of any commendable learning, because the 6.9 million literate are uneducated and knowledgeable to comprehend the need and manner to elect even their sovereign representatives to Parliament and President’s house??
        Pathetic, the sooner that is done would be the better for Sri Lanka
        YOU CERTAINLY IMPEL PEOPLE WHO CAN’T THINK TO THINK INDEED!!!

    • 1
      0

      Very Good question, raised and answered!! None to compare??!!!

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