By Malinda Seneviratne –
Dr Harsha De Silva, Economic Affairs State Minister, has always been in awe of Ranil Wickremesinghe, the leader of his party and the Prime Minister of Sri Lanka. He’s not alone in this. There are many who believed that Wickremesinghe was the only senior politician with his head screwed on right.
[Well, ‘right-wing’ could be the subtext there, but then again he’s not been shy about his ideological preferences. We could add that the ‘left’ or what’s left of it is pretty ‘right’ too, in the wing-sense of the term.]
Let’s leave aside parentheses. Let’s focus on the economy, of which Wickremesinghe was made out to be an expert. A good manager, we were told. A brilliant mind, we were told. Uncorrupt and would not tolerate corruption, we were told. We were told a lot of things. ‘Thanikara molayak’ we were told: a brain, nothing else. Let’s not go into the incorruptibility claim; let’s pass over all that with a single word, ‘bonds!’
Well, the approver, that’s Harsha, made an interesting plea just the other day. He wants the country’s upper middle class ‘to act with some social consciousness to help the government offset the impact of the depreciation of the Sri Lankan currency.’ He wants the ‘high income people’ to demonstrate some ‘social consciousness’ and offers some tips: postpone by just a couple of months that new luxury car or that trip to Alaska. These, he believes, could help cut the demand at the margin.
I don’t know where the middle class is located; I don’t know what kind of lines separate it from the lower class and the upper class. I don’t know, therefore, what lines frame the ‘upper middle class’. I don’t know if Alaska is a great tourist destination. A 7-day tour costs something like US$ 3,000 per person. Assuming a family of 4, i.e. of the punchi-pawla-raththaran si
In any case, I am perplexed that someone like Harsha, who swears by capitalism, should talk of ‘social responsibility’. Why on earth should anyone think of ‘society’? It’s all about self-interest, isn’t it? Sure, we have CSR projects, but that’s brand-building and a palliative for a non-existent disease, corporate guilt. The upper classes are not into belt-tightening; they pass tax burdens on to the consumer, even as they lament such mechanisms.
Let’s concede however that it’s actually in the interest of the rich to be socially conscious, to tighten best and embrace ‘austerity measures’ that force them to go to Anawilundawa instead of Alaska and take tuk-tuks for a change. Let’s say that it’s just a minor part of a major plan that Harsha and other economists in the UNP have hatched to save the falling rupee.
The boss has laid it out. Wickremesinghe, speaking at a school in Nattandiya has said, correctly, that Sri Lanka needs to handle the devaluation crisis with utmost care. He says that Sri Lanka cannot increase interest rates as other countries have done because it would affect investments. Didn’t know that we had lots and lots of investors, but then again let’s just concede that we need to insure against investor-flight.
What’s interesting is that the PM has stated that action will be taken to arrest the crisis in one month’s time, vowing that the government will not allow the economy to crash. What the ‘action’ is he has not detailed, but he’s given us a hint in the following observation:
‘The situation is expected to be more stable [by] then,’ that’s one month from now. If there’s stability then there’s no need of any ‘action’ one would think. It’s all volatile and that’s not his fault, of course. However, the conviction he’s expressed regarding ability to prevent a crash sounds dubious when he also says ‘we do not know what will happen in the future with the trade wars which the USA had got into with Canada and China’.
Now all these are random statements made in forums not necessarily discussing the nuts and bolts of managing an economy, but they do indicate anxiety and confusion. The more disturbing matter is that this UNP-led government is clueless about the global economy.
Dr W.A. Wijewardena, former Deputy Governor of the Central Bank has written extensively on how incompetent the government has been. Clueless, really. For example, taxing savings, any AL student would tell you, is a disincentive to save. Perhaps Harsha could detail the logic of that particular decision.
That’s ‘local’. The understanding of the global, i.e. larger destructive processes which countries like Sri Lanka are ill-equipped to face, is as or more disturbing. Wickremesinghe didn’t seem to know that China exists or rather had discounted China’s pivotal position in the global economy until ‘Brexit’ his him between his eyes. Up until then he was badmouthing China. It took ‘Brexit’ to make him realize that the West won’t and indeed cannot help Sri Lanka. He said ‘We will look East’. Clearly, he must have been looking in some other direction.
Sorry, but we can’t say kohomada tikiri mole to that. Even if one believes that model to prosperity peddled by the IMF, World Bank, the USAID and their preferred ‘economic experts,’ this kind of ignorance is unpardonable.
I don’t know about the upper middle class, but I doubt that even the upper class (do they go to the moon on vacation and are they planning to buy rockets, I wonder?) must doubt the UNP’s claims to having a handle on things economic. The lower classes, i.e. the middle-middle and lower according to the Harsha Classification, do not have any doubts and if you have doubts, ask a cross section. Ask them what they think of Ranil or the UNP or this Yahapalana Government when it comes to sorting out economic problems. You would probably get a earful. On second thoughts, maybe you will not. Just two words, be it in English or Sinhala. No prizes for the correct guess.