17 November, 2017

The Ranil-Mangala Budget & Why The SLFP Must Reject It

By Dayan Jayatilleka – 

Dr. Dayan Jayatilleka

Mangala Samaraweera clearly reveals that the guiding philosophy of his Budget and indeed of the government’s economic policy is manifestly not that of President Sirisena but rather that of Prime Minister Wickremesinghe when he says “Mr. Speaker…In line with Vision 2025…”

Mr. Samaraweera’s budget is filled with lies, half-truths, dangerous ideas and outrageously treacherous policy suggestions. Its guiding philosophy, just as that of the Government’s Constitutional proto-draft contained in the Interim Report, is that of nihilism. The two are part of the same project of a de-nationalizing Counter-Reformation.

It is a strategic policy intended to cause a tectonic shift in Sri Lanka’s economy and Sri Lanka’s very being and destiny. Its very philosophy intends and denotes a shift from autonomy to irretrievable dependency. It is intended to shift ownership, power, preferences and resources from national to foreign, from medium and small capital to big capital mainly foreign, from the working people including the middle classes to big capital, and from the peasantry to the comprador capitalists.    

In other words, it is nothing less than an agenda to roll back all reforms and policies that built up a national capitalism and a national capitalist class (I mean Sri Lankan, not ‘nationalist’) from the early decades of the 20th century and accelerated through the post-independence decades. The Ranil-Mangala economic policy intends to destroy the very basis of such a national capitalism and a national capitalist class.

There is no coming back for this country from Mangala’s Budget if it goes through and is implemented– and fast track implementation is something Mangala is good at. The Ranil-Mangala policy has two main prongs. It targets the national economy and the Sri Lankan peasantry. For decades, dating from Independence but even before, in the days of the Ceylon National Congress in the expanding colonial legislature, under universal suffrage since 1931, the main thrust of Ceylonese economic policy has been the building of a strong Sri Lankan capitalist economy and protect the Sri Lankan peasantry. The Ranil-Mangala policy attempts to roll all that back.

Samaraweera opens his speech with a section entitled “Fast Tracking Liberalization”. He goes on to openly declare that “Mr. Speaker… Sri Lanka needs to liberalize and globalize.” While no sane economic voice today anywhere in the world is against globalization and for nativistic protectionism, no sane economic voice today anywhere in the world argues simplistically for a country to “liberalize and globalize”! “Fast-tracking” neoliberal globalization is precisely what Mangala Samaraweera is talking about.

Any literate politician knows that the problem is not about globalization as such, but about which model of globalization, and that another globalization which isn’t fast-tracked liberal globalization, is not merely possible but underway, with China and the East Asian (state-led) model in the vanguard.

The evidence is in on neoliberal globalization and its time has come and gone. While globalization remains valid and desirable, a certain model of globalization, i.e. neo-liberal globalization, is in crisis and has caused crisis. It is even blamed for the rise of extreme forms of nationalist, religious and cultural backlashes. However, it is precisely this outdated, widely discredited and dangerously de-stabilizing model that Ranil and Mangala seek to foist on us.    

Quite apart from the paradigmatic and conceptual fallacy, Mangala plainly lies: “Mr. Speaker, while we introduced an open economic policy regime in 1977, in the last decade we have lost momentum, with many of our laws remaining archaic and regressive.” Far from having lost momentum in the last decade, our economy was singled out in 2010 by the Singaporean Deputy Prime Minister (and Defense Minister) of that time as the fastest growing economy in Asia– the fastest growing economic zone in the world– with the solitary exception of China, which was growing faster.

Mangala lists the legislation which Ranil and he hope to gut, and it should be noted that almost all of them fall into the category of legislation passed by two SLFP-led, and more pointedly, Bandaranaike-led center-left coalition governments.

This is legislation that no UNP government chose or dared to touch, and in fact went on to build upon them because they had become part of Ceylon’s/Sri Lanka’s distinctive social democratic development model.

What Ranil and Mangala are trying to do is to scrap all the progressive legislation from 1956, and indeed post-Hartal 1953. This includes Philip Gunawardena’s Paddy Lands Act and Pieter Keuneman’s Rent Act.

“…For example; the Rent Act, No. 7 of 1972 which limits the ownership of houses and the rent to be charged requires amendments; Paddy Lands Act, No. 1 of 1958 and the Agricultural Lands Act, No. 42 of 1973 will be amended to allow the farming of alternate crops; the Shop and Office Employees Act, No. 15 of 1954 will be amended…”

Mangala hopes to tamper with prices and property rights. In his pre-Budget media briefing at which he announced a few modest price reductions he said that “in an open economy there is no place for price controls”.

That not only shows his economic philosophy it also shows how little he knows about economics in general and the Open Economy in particular. He should sit at the feet of Ronnie de Mel and learn why the JRJ-Ronnie model retained price controls. It did not affect the Open Economy at all—which clocked 8% growth in its first years. It was a very conscious choice made by JRJ and Ronnie not to do away with price controls, and to make any change gradualistically rather than as a Big Bang which subjects prices of basics to the vagaries of the market, including the global market. The reason was that JRJ had learned at his cost, just what could happen if food stuffs were not subject to price control—he was a political victim of the Hartal of August 1953. He was determined not to make that mistake again. Mangala plainly does not know the economic history and the history of economic policy-making in Sri Lanka.

This fallacy was echoed and extended in his budget:

“Mr. Speaker…In line with Vision 2025, we need to undertake bold reforms in factor markets in order to eliminate price distortions and restore property rights in accordance with market principles aiming at promoting faster and sustainable growth. Capital market reforms to capture its full potential are imperative for ensuring high growth over the medium-term and beyond. Without proper ownership of land and property, no country could achieve faster growth ensuring prosperity for all. In this context the country’s land and property ownership issues need a careful and urgent appraisal. Country’s labour demand against the constraints on labour supply requires a closer examination of all areas of the labour market including labour laws, to pave the way forward to harness the productive resources of the economy.”

There are four clear targets here. Firstly, prices, which we already discussed. Secondly, the various measures that made ownership more egalitarian, more national, and shifted it towards both the national middle classes and the poor. This is true of the peasantry/agriculture and lands and the urban poor and middle classes i.e. housing policies. Thirdly, labor laws, which Ranil and Mangala wish to alter, so that wages are no longer protected and the playing field is heavily tilted in favor of capital, especially big foreign capital. Though intrinsically desirable, his chatter about flexible hours for women workers is a disguise for commencing total deregulation of labour which in turn will drive down wages. 

Fourthly, the capital market. The East Asian crisis of 1997 which Mahathir Mohamed’s unorthodox policies saved Malaysia from, clearly proved that opening up the capital markets means extreme vulnerability to market manipulation and “hot money flows”, which can suck out a country’s capital, de-capitalize a country, leaving it an empty shell. Ranil Wickremesinghe tried to introduce capital market liberalization in 2001-2003 but mercifully he was turfed out. Now Mangala and he are back at it!

The Ranil-Samaraweera model hopes to de-industrialize Sri Lanka and shift it to trading and commerce, rather than industrial and agricultural production as well as industrial production based upon agriculture (the Chinese lift-off strategy under Deng Hsiao Peng).

“Mr. Speaker …The dormant spirit of competitiveness must be reawakened to make Sri Lanka the trading and the commercial hub it deserves to be. The country needs to shift away from being more protectionist and inward-oriented. Sri Lanka’s border measures need to see a complete revamp through well-targeted and time-bound trade reforms promoting growth. Our over dependence on non-tradable drivers challenges growth in the coming decade.”

“We have tried many strategies including protecting local industries through tariffs. We have legislations that do not allow foreign investments in certain sectors. Perhaps, most of all, our complex labour laws and bureaucracy have unwittingly obstructed foreign enterprises from entering into the country, thereby, preventing the much needed competition for the local industries. Trade reforms are integral to national competitiveness. Let me say this, competition breed’s success. It tests our limits and forces innovation. As such, let me assure our local private sector, our Government’s policy of entering into Free Trade Agreements (FTA) and the removals of para tariffs should not be viewed as a threat to our local industries.  The para-tariffs applicable on the tariff lines which do not at present carry any Customs duties will be abolished within the next 3 years, in keeping with our policy of liberalizing and globalizing.”

Even the Blue-Green economy is the equivalent of the central bank bond scam. An island must build up its shipping and push outward into the sea-lanes. Instead the Ranil-Mangala vision is merely to convert it into a port of call, and a place where ship building is not local (we built our own fast attack craft) but foreign owned.  Note also that there is no mention that the “independent port regulator” will be totally national/local—it could very well have foreign involvement with grave national security and strategic consequences.

“The Sri Lanka Ports Authority Act, No. 51 of 1979 and the Merchants Shipping Act, No. 52 of 1971 will be amended to cater to the demands of the modern day logistics and marine industry. This will also ensure healthy competition, an independent Ports regulator will be introduced. Restrictions on the foreign ownership on the shipping and the freight forwarding agencies will be lifted. This will enable major international shipping lines and logistics operators to base their operations in Sri Lanka.”

“As I already mentioned, we will remove restrictions that limit the land ownership rights of listed companies with foreign ownership together with the restrictions on foreigners’ ability to purchase condominiums below the 4th floor.”   

The Ranil-Mangala Budget is one of a completely, totally Open Economy; a wide-open economy, unregulated and unprotected. It is not the Open Economy strategy (JRJ-Ronnie-Premadasa) that is at fault but this crazy cowboy version of it; this is an Open Economy on crack or worse, Fentanyl. What this will achieve is the wrecking of a Sri Lankan industrial capitalist class and the development of a manufacturing base, which are the twin factors at the heart of the Malaysian, South Korean and East Asian miracle as a whole.

The Mangala Budget and the underlying Ranil-Mangala strategy completely change the goal and aim, the very project and path, of Sri Lanka’s bipartisan economic policy since Independence, from one of (national) development to (mere) growth. Overall what is intended is a shift to foreign ownership which will crowd out all the national social classes. It must be resisted tooth and nail. The SLFP must rebel against it.

Print Friendly, PDF & Email

Latest comments

  • 16
    5

    This writer seems to be dishing out his usual diatribes every other day to Colombo Telegraph.
    I note that the number of those comments received for his diatribes had decreased over recent months/years. Presumably many regular readers had stopped reading his diatribes.

    I have been seriously thinking about this chap and why he writes so much and so often, inciting hate about other communities and politicians, he does not seem to like. My conclusion is that he suffers from ‘Piles’.

    Piles, also known as haemorrhoids, are swellings containing enlarged blood vessels found inside or around the bottom (the rectum and anus). The exact cause of haemorrhoids is unclear, but they are associated with increased pressure in the blood vessels in and around the anus. This pressure can cause the blood vessels in the back passage to become swollen and inflamed.

    Those affected have a tendency to be an irritant to others and go on complaining on various trivial matters.

    There are various treatment options for severe haemorrhoids as this person suffers from. One of these options is banding, a non-surgical procedure where a very tight elastic band is put around the base of the haemorrhoid to cut off its blood supply.

    I trust this helps this writer and take this advice to recover.

    • 5
      0

      The best place DJ to be is in Mulleriya.

      He has no whatsoever sympathy about the nation. He knows the situation better than anyone else, but his rotten mind set seems to have no space to see it right.
      I wonder what this man would do, if he would be invited for a new position by My3 just forgiving him for his usual rabble rousing activities ?

      Surely the bugger would eat the heaps of shit all at once as a greedy and sick dog would do.
      Enough is enough this man is a sick person. Please CT readers dont allow the bugger to spread his kind of abusive posts.

      • 2
        0

        Sirimal – “The best place DJ to be is in Mulleriya”. Well said, Sirimal.

  • 12
    2

    this guy went against all principles he stood for right along to get positions from Mahinda .He is a spent force

    • 8
      1

      arjuna,

      “all principles” DJ is completely devoid of principles so there are issues for him to rub shoulders with MR and Co!

    • 9
      0

      arjuna – He is a spent force like a used condom!

    • 2
      0

      But the saddest reality is media prostitutes for their selfish gains are after him.

      Can you imagine ?

      The main problem I see today is, media does not reveal where they have to – let alone today.
      Sirasa is no better to Hiru and Dherana.

      Even than Satana Program is just an another redherring.

      I think so long MEDIA would not take it serious, punnakku eaters would even grow in the course of time.

  • 13
    2

    well who cares if SLFP rejects it. The people of the country accepting it whole heartedly.

    • 7
      2

      MaRa MaRa ChaTu MaRa and cronies, under obligation to Maaa must reject it.

  • 13
    2

    Dayan,

    Cut the verbiage. Get to the crux. What precisely is wrong with the budget? How does it compare with previous budgets? Given prevailing constraints, what is objectionable? Are you up to it? Do you have a grasp of macro finance? Or is it just party-politics BS that you are capable of?

    • 2
      0

      His cause is just the grudge on RW.

      DJ s thoughts are pathological. I have neither heard nor read DJ writing about real burning issues since the state is left following lootings of Rajapakshes.

      I realyl dont know why he has been making every effort to fool the festated nation ?
      Can anybody please help this guy sensing about the situation ?
      That can help the nation for sure.

      God help srilankens !

  • 9
    1

    Dayan finds a plot to introduce federalism in every GoSL initiatives. He then writes garbled nonsense.
    In the budget speech, he could not connect anything with TNA, LTTE or federalism. So he goes on to write this Mother Of All Nonsense.
    Dayan was in the thick of a failed Tamil liberation movement. He would have tried to bring up his crazy ideas. Got kicked out?

  • 7
    1

    This is a veritable DJ tour-de-force; bollocks to the left, bollocks to the right, volley and thunder from the Economic Guru of our times. Did I hear the frogs in the well croak in delight?

    Those who have followed DJ will recognise the spiel. Somehow, I get the impression that DJ will not rest until he has the Great Liberator back on the throne ( together with country-screwing supporters let loose to fill their boots). What rewards will DJ reap? – your guess is good as mine, but his hopes are high.

    The sad truth with the left in Sri lankan politics is that they have no compunction in using the common man and peasantry to achieve power. After that, every one can queue for their daily bread and whatever else is needed to keep body and soul together. Let us all be beggars together.

    DJ looks forward to the day when he can go about his well-stocked library humming
    the working class can kiss my arse, my lefty pals have power at last!

    • 5
      0

      Spring Koha

      This public racist when questioned once said he changed because everything around him had already changed. So he was only keeping up with Johnsons.

      He is not ashamed of not having any principles.

      • 2
        0

        Native Vedda,

        Paras do not have principles.

        The principal goal of the Paras is to lie and steal.

        Ask your elders.

  • 7
    1

    This man is living in the previous century. I cannot understand a person goes down to this level to attack UNP and the prime minister because he is not given any recognition by them. Very sad!

    • 4
      0

      He is unique to his thoughts. That is why he remains unemployed for such a long time.

      May be possible, he may have been controlled by Rajapakshe Sorcery tricks.

      You are dead right, this man is a wound.

      Let s wish him a sooner recovery !

  • 7
    1

    DJ the smart patriot has been in the past blowing his own tumphet how great he is and he stood up to the West as a diplomat under MaRa.

    Now he crows that he is multi talented- economist, political scientist, scociologist, constitutional expert and many other but not a psychiatrist to counsel himself.

    Yet he wants MaRa regime to come back so that he can become a full minister like Mangala.

    He got many dreams. Dream on DJ for MaRa Bros & Sons Co to return to power.

    Poor DJ has run out of Cuban magic tricks and now hoping for Chinese – US miracles.

  • 5
    0

    The “dimwit” usually comments on anything. It has not.
    Do you read something here Dayan?

  • 6
    0

    What a crap! If Dayan thinks that this budget has to be opposed then he himself, his boss Mahinda Rajapakse, JO and JVP should have the guts to present draft alternate budgets to the voters so that they can compare and see and then decide if this Yahapalana budget is bad or not. If this is not done, then Dayan has to stop his crap and accept that this is the best budget anyone can do. I am 100% sure Dayan will not take up this challenge!

  • 3
    0

    CT you could have better used this space without this Used Car Salesmen’s garbage. Loyal readers of CT don’t waste your time.

  • 6
    0

    Machan Koha, Wow how about that? Dayan Mario Silva Jayatilleke the failed political scientist has now become an economist!

    So what’s next?With the GMOA in the slippery slope of hopelessness,Dayan may next get to work with scalpel in hand.Why not he may argue.After all, I am a Doctor ain’t I?Sanja please watch out!

  • 0
    1

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 0
    1

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 0
    1

    This comment was removed by a moderator because it didn’t abide by our Comment policy.For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2/

  • 3
    0

    The entire world is going private and I believe that Cuba the only remaining socialist country too will join sooner than later after Fidel Castro’s memory fades away. What would have been DJ’s comments if MR presented this very same budget.There is no way out for us must dart full thrust towards open economy. Revolutionary Russia and China and all European countries are in why not us. The rot that SWRD started should be buried 100 feet deep.

Leave A Comment

Comments should not exceed 300 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically shut off on articles after 10 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.

leave a comment