{"id":229528,"date":"2022-10-16T00:01:45","date_gmt":"2022-10-15T18:31:45","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=229528"},"modified":"2022-10-30T00:12:46","modified_gmt":"2022-10-29T18:42:46","slug":"ranilnomics-learning-nothing-forgetting-everything","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/ranilnomics-learning-nothing-forgetting-everything\/","title":{"rendered":"Ranilnomics: Learning Nothing, Forgetting Everything\u00a0"},"content":{"rendered":"<p><span style=\"color: #ff6600;\"><b>By <a style=\"color: #ff6600;\" href=\"https:\/\/www.colombotelegraph.com\/?s=Rajan+Philips\">Rajan Philips<\/a> &#8211;<\/b><\/span><\/p>\n<div id=\"attachment_208116\" style=\"width: 160px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.colombotelegraph.com\/index.php\/modi-rajapaksas-bonding-bothering\/rajan-philips-3\/\" rel=\"attachment wp-att-208116\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-208116\" class=\"size-thumbnail wp-image-208116\" src=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2020\/02\/Rajan-Philips-150x150.jpg\" alt=\"\" width=\"150\" height=\"150\" srcset=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2020\/02\/Rajan-Philips-150x150.jpg 150w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2020\/02\/Rajan-Philips-45x45.jpg 45w\" sizes=\"auto, (max-width: 150px) 100vw, 150px\" \/><\/a><p id=\"caption-attachment-208116\" class=\"wp-caption-text\">Rajan Philips<\/p><\/div>\n<p>The Sri Lankan political class has a \u2018measurement problem\u2019 with the economic crisis in the country. Political leaders and organizations, specifically the current parliament, seem to be lacking in competence to come to terms with the magnitude of the current economic problem. This failure manifests itself in the same-old-same-old ways in which parliament is conducting itself, and the SLPP government has learnt nothing and forgotten everything from the exit experience of the Rajapaksas. Add to this the President\u2019s facile optimism that although the crisis is grave, the country has in him the man who is capable of overcoming it. The assumption, or even the fact, that Ranil Wickremesinghe is the only one in parliament who has a measure of the problem does not by itself reduce the magnitude of the problem or renders its solution any easier. <span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>The inability to grasp the magnitude of the problem invariably leads to superficial responses, both internally and externally. The optimism on the external front involves the assumption that all the external support mechanisms to overcome the economic crisis will eventually and somehow fall into place. It is only a matter of time. So, give some time and slack to the President. If only the realities were so simple. Cabinet ministers and a good majority of MPs seem to be taking it for granted that the IMF agreement, China\u2019s concessions, the overall restructuring of debt payments, and the reopening of channels for new FDI inflows \u2013 all these will somehow start happening.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p><span style=\"color: #ff6600;\"><b>Dire Predictions<\/b><\/span><\/p>\n<p>This level of optimism is contrary to the global reality which in every sense involves a highly divided, dog-eat-dog world in which it is already a struggle for Sri Lanka to get the attention and priority it desperately needs. That desperation is not sinking into the heads of cabinet ministers and MPs who are waiting to become ministers. Again, the assumption, or even the fact, that in President Wickremesinghe Sri Lanka has a leader who can reach out and get help from any country in the world does not necessarily mean that help is on the way, in double quick time, and in amounts help is needed at any given time.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>Add to this the dire predictions about a global economic downturn for 2023, and the specific warning in the IMF\u2019s biannual World Economic Outlook released on Tuesday this week, that \u201cthe worst is yet to come, and for many people 2023 will feel like a recession.\u201d Sri Lanka\u2019s situation, by any measurement, is worse than a recession. Releasing the Outlook report, the IMF\u2019s director of research, Pierre-Olivier Gourinchas offered this admonition about low-income countries: \u201cToo many low-income countries are in or close to debt distress. Progress towards orderly debt restructurings through the Group of Twenty\u2019s Common Framework for the most affected is urgently needed to avert a wave of sovereign debt crisis. Time may be soon running out.\u201d<\/p>\n<p>Sri Lanka is well past the point of aversion. Its debt restructuring talks are virtually stalled over the impasse involving the debt owed to China. This week Washington is hosting the annual meetings of the IMF and the World Bank attended by finance officials and central bankers from around the world. How is Sri Lanka going to be prioritized in this climate? State Minister of Finance Shehan Semasinghe is providing ministerial representation for Sri Lanka at the Washington meetings. This is the pathetic level at which Sri Lanka\u2019s economic literacy is being exhibited at world gatherings of finance ministers and experts. Not to be outdone at home, the full Cabinet of Ministers reportedly decided to have Sri Lanka formally downgraded from middle-income status to low-income status. It was left to the much learned Minister Bandula Gunawardana to make the announcement on behalf of the cabinet, only to have it shot down almost immediately by the President\u2019s Media Division. Perhaps one might feel sorry for the President in all this, but then again all of this including the cabinet is his own making.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p><span style=\"color: #ff6600;\"><b>Karmic Quirks<\/b><\/span><\/p>\n<p>For his part, the President addressed parliament again on 6 October. When I read the Sunday Island\u2019s editorial last week on the President\u2019s statement to parliament and its banner-coverage by the Daily News, I could not help chuckling how the wheels of political karma have turned over the last fifty years. That is a long time in politics by any measure, but here we have the Lake House papers that were nationalized by an SLFP-led government in 1973 to rebuke the Wijewardenas and the Wickremesinghes, now feting<span class=\"Apple-converted-space\">\u00a0 <\/span>the grandson of DR Wijewardena and the son of Esmond Wickremesinghe, who is also Sri Lanka\u2019s most fortuitous, but not quite fortunate, Head of State and Head of Government.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>There was another karmic quirk that occurred recently, figuring Tiran Alles, who was the alleged mastermind behind the equally alleged arrangement between the LTTE and Mahinda Rajapaksa in the 2005 presidential election that led to the infamous fatwa that stopped Tamils in the North and East from voting and precipitated the defeat of Ranil Wickremesinghe by the narrowest of margins. That was then, and now Tiran Alles as Minister of Public Security is said to have misled President Wickremesinghe into signing the abominably extraordinary gazette on High Security Zones. The gazette has been withdrawn and the President\u2019s supporters have blamed the Minister and the over-zealous Defense Secretary for the gazette misadventure. But that does not wholly absolve the President, for he should have known better without asking for the Attorney General\u2019s opinion and he should be held responsible for appointing and\/or retaining the current crop of Ministers and Ministry Secretaries.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>All these nuggets would have been great for polemic grinding in ordinary times. But we are not in ordinary times, but extraordinary times. Politics itself is extraordinarily different, and the underlying living experiences of the people are extraordinarily difficult. But the government and the SLPP Ministers and MPs in parliament are not at all sensitized to the people\u2019s difficulties and the country\u2019s challenges. They have abdicated their responsibilities to the President in return for the President protecting their interests.<span class=\"Apple-converted-space\">\u00a0 \u00a0 \u00a0<\/span><\/p>\n<p>In his statement to parliament, the President confessed to being repetitive and said, \u201cI would like to draw your attention to some of the challenges we face today in reviving the collapsed economy\u201d \u2026 and insisted that \u201cwe have got to consider it over and over again since it would enable us to comprehend the real picture of the situation we are in today.\u201d However, the President did not present in any great detail &#8211; what he called \u201cthe real picture\u201d of the country\u2019s economy. And to the point of this article, the President\u2019s address was full of words but there were no numbers \u2013 either about the severity of Sri Lanka\u2019s debt problems, or about the timelines for their restructuring and repayments. Instead, he papered over the economic crimes of the Rajapaksas, and berated unnamed \u201cgroups\u201d for apparently wanting to destroy the economy in order to capture political power.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p><span style=\"color: #ff6600;\"><b>The return of Solheim<\/b><\/span><\/p>\n<p>Obviously, the President was having in mind the JVP whom he could not publicly scold after being with the JVP in the yahapalanaya government. His target group of course<span class=\"Apple-converted-space\">\u00a0 <\/span>is the Frontline Socialist Party, which too the President chose not to name, perhaps out of deference to the JVP. Once again, the President reminded the country that he \u201cembarked on this journey taking a huge risk \u2026 at a time when no other political party or leader of the opposition would accept this risk\u201d \u2026 and requested all parliamentarians \u201cto join a common program to build the country through the National Assembly of Parliament, \u201cJana Sabhava\u201d which is to be established soon, and Parliamentary Sectoral Committees.\u201d<\/p>\n<p>The President has got himself into a habit of calling, at one moment, all MPs to join him, and then flying off the handle quite immediately and threating to call a referendum unless parliament acts soon enough according to his timetable, which nobody knows. His latest referendum threat is over how many locally elected the Local Government elections. Few weeks earlier it was all about parliament coming to a consensus about enacting new election laws after sitting on them for nearly ten years. Now out of the blues comes the extraordinary announcement that the President has appointed former Norwegian Minister Erik Solheim as his \u201cInternational Climate Adviser.\u201d<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>It is not quite out of the blues when you hear from Mr. Solheim himself, how this appointment came about. According to his email exchange with the Daily Mirror, \u201cMy old friend Ranil Wickremesinghe invited me to visit Sri Lanka and asked me to be his International Climate Adviser. I am looking forward to working closely with the President and his great team on how to assist Sri Lanka to find a green pathway out of the economic crisis. Renewable energy, electric mobility, tree planting, green agriculture and ecotourism all offer huge opportunities for jobs and prosperity while taking good care of Mother Earth at the same time.\u201d Is this another turn of the wheel of karma?<\/p>\n<p>Not surprisingly, Mr. Solheim has called \u201cthe proposal for a university on climate science in Sri Lanka a brilliant idea,\u201d and noted that \u201cSri Lanka has a very rich intellectual tradition and can establish a hub for climate science &#8211; working closely with other Indian Ocean nations and the rest of the world.\u201d What can you say, except ask, what are friends for? Even when your country is struggling to feed its children. Why did not the President think of appointing Mr. Solheim as his international adviser to prevent malnutrition among Sri Lanka\u2019s children? That would have been a little less indefensible.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p><span style=\"color: #ff6600;\"><b>Ranilnomics<\/b><\/span><\/p>\n<p>Through all these distractions, Mr. Wickremesinghe\u2019s ultimate reason for being President is his assumed ability to lead Sri Lanka\u2019s economic recovery. In his many statements since \u201cembarking on this journey taking a huge risk,\u201d first as crisis Prime Minister and now as redeemer President, Ranil Wickremesinghe has been outlining his approach to overcoming Sri Lanka\u2019s economic problems. Dr. W.A Wijewardena, a former Deputy Governor of the Central Bank and a frequent writer of expert articles on practical economics, has described Mr. Wickremesinghe\u2019s approach in summary as \u201c<span style=\"color: #ff6600;\"><a style=\"color: #ff6600;\" href=\"https:\/\/www.colombotelegraph.com\/?s=Ranilnomics\">Ranilnomics<\/a><\/span>.\u201d<\/p>\n<p>Ranilnomics is the Wickremesinghe version of \u201csocial market economy policy\u201d that was first tried in postwar Germany. As described by Dr. Wijewardena, it was \u201can attempt at finding a middle path between pure capitalism and extreme socialism.\u201d Mr. Wickremesinghe has been elaborating on this for some time \u2013 first as half-powerful Prime Minister in the yahapalana government and now as all-powerful president in a post-Rajapaksa government. Given Mr. Wickremesinghe\u2019s somewhat long association with \u2018social market economy\u2019 (SME) that predated the current economic crisis, the SME approach is not an automatic toolbox with all or most of the tools that might be appropriate for use in the current situation.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>In fact, there is no such ready made toolbox, but there are enough economists in Sri Lanka who would be able to provide consistent advice to the government. The President has occasionally referred to experts offering voluntary advice and support to him and to the government. If so, why is it that their involvement is not made public or channeled through formal institutional arrangements? Ever since public protests broke out against the Rajapaksa regime, expectations were raised that outside experts would be brought into parliament and cabinet through the National List avenue. The JVP and some of the opposition parties were prepared to sacrifice their MPs to create openings for outside experts to enter parliament and then the cabinet. Of course, that would be anathema to SLPP MPs.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>But why has not the President done anything to bring in outside experts as MPs and make them ministers? Instead, there is Shehan Semasinghe, State Minister of Finance, doing the honours for Sri Lanka at the IMF and the World Bank in Washington. There is Bandula Gunawardene always talking out of turn in Colombo, and the whole cabinet seriously deciding to formally downgrade Sri Lanka from middle-income status to low income status.<span class=\"Apple-converted-space\">\u00a0<\/span><\/p>\n<p>In all the reporting of helpful interventions in Sri Lanka by other countries and international agencies, there seems to be an emerging focus on helping vulnerable sections meeting their basic needs and helping children avoid malnutrition. In other words, there might be financial and material support to prevent severe food shortages and malnutrition, but no easy way out for the government to get an IMF agreement on track and to reach agreement on a debt restructuring package. That would be just rewards for a government that in spite of having a new President has learnt nothing and forgotten everything from the exit passage of the Rajapaksa family. Unfortunately, the people will have to suffer collateral damages but they will have their turn, hopefully sooner than later,<span class=\"Apple-converted-space\">\u00a0 <\/span>to vote the present rascals out and elect a new parliament that will have credibility both within and outside the country. <span class=\"Apple-converted-space\">\u00a0 \u00a0 \u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p> [&hellip;]<\/p>\n","protected":false},"author":153,"featured_media":228681,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,2186,46,8,2375],"tags":[],"class_list":["post-229528","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-colombotelegraph","category-featured-news","category-constitutional-reforms","category-editorial","category-stories"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - 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