Ranil Wickremesinghe

Sri Lanka: Wickremesinghe’s “Accidental” Presidency — From Agile to Fragile Democracy

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Editorial

“The challenge of modernity is to live without illusions and without becoming disillusioned.” – Antonio Gramsci

President Wickemesinghe’s accidental presidency was seen by many as a solution to the deadliest crises in the country and a way to bring about normalization. However, several of the key initiatives he had promised are still in limbo, and rhetoric has surpassed reality. As a result, people are being forced to compromise in order to survive daily, while those responsible for the economic turmoil remain at large. It’s no exaggeration to say that Sri Lanka’s sovereignty is at risk, as various actors disguised as protectors are plotting to interfere with the country’s internal affairs.

Sri Lanka has a long history of democratic governance, with its citizens enjoying the right to vote and elect their representatives. However, in recent years, the country’s democracy has been in decline, with the government under President Wickremesinghe accused of manipulating state institutions for political gain, postponing elections, and failing to build consensus with other political parties. As Plato says, “the price of apathy towards public affairs is to be ruled by evil men.”

One of the key indicators of a functioning democracy is the holding of free and fair elections, which allow citizens to choose their leaders without any interference or manipulation. However, Sri Lanka’s government has been accused of postponing local and provincial elections, which has led to a democratic deficit in the country. This has also contributed to a lack of accountability and transparency, as government officials are not being held accountable for their actions. In addition to using every possible trick to postpone elections, President Wickremesinghe has been accused of manipulating government institutions to promote his own political agenda. This is constantly eroding public trust in these institutions and undermined the rule of law. The lack of checks and balances has led to a concentration of power in the hands of a few individuals, which is a dangerous trend for any democracy.

Another critical issue is the failure of the government to initiate a national consensus among political parties. Without a shared vision and common goals, it becomes difficult to make progress on important issues, such as economic growth and social welfare. The lack of consensus has led to a situation where the government is unable to build consensus with other parties, which has further contributed to a democratic deficit. Moreover, the current government lacks a people’s mandate as it has been accused of obtaining the consent of a few politicians who were themselves accused of plundering the country. This has further weakened the democratic institutions in the country.

The current situation in Sri Lanka, where the government is facing accusations of undermining democracy, could have serious consequences for the country’s stability. Sri Lanka has a history of social unrest and armed struggle, which was triggered by similar issues that are being faced today. In 1971, an armed uprising led by the Janatha Vimukthi Peramuna (JVP) was launched against the government of Sri Lanka. The insurgency was fueled by economic and social grievances, as well as a lack of political representation for marginalized groups. The government’s response was brutal, with thousands of people being killed or imprisoned. The insurgency was eventually suppressed, but at a high cost to Sri Lanka’s social and political fabric. Similarly, in the late 1980s, Sri Lanka witnessed another period of armed struggle. The government’s failure to address the grievances of the Tamil minority led to the rise of the Liberation Tigers of Tamil Eelam (LTTE). The insurgency lasted for over two decades and resulted in the deaths of tens of thousands of people, as well as the displacement of many more. The LTTE was eventually defeated in 2009, but at a cost to Sri Lanka’s social and economic development.

These examples show how the failure of democratic institutions and the erosion of public trust can lead to social unrest and even armed conflict. If the current situation in Sri Lanka is not addressed, there is a risk of history repeating itself. The government must take urgent steps to restore trust in democratic institutions and engage with other political parties to build consensus on key issues. It is important to note that Sri Lanka’s history of social unrest and armed struggle has had a devastating impact on the country’s development. The conflict has left deep scars on Sri Lanka’s social fabric and economy, and it will take years to heal those wounds. Therefore, it is in the interest of all Sri Lankans to work towards a stable, peaceful, and democratic future, which can ensure that the country does not have to suffer through similar events in the future.

Sri Lanka’s democracy has been on a downward trajectory for some time now. The government’s failure to uphold democratic values and institutions has led to a decline in public trust and a democratic deficit. President Wickremesinghe’s days are numbered, and it is time for him to step down, if he is expecting an honourable existence, and allow for a democratic transition of power. Only then can Sri Lanka restore its democratic institutions and ensure that its citizens enjoy the rights and freedoms that are their birthright.

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Sri Lanka: Is Ranil solving the Economic Crisis?

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It is widely acknowledged that the current economic problems in Sri Lanka are complex and multi-faceted, and will likely require a range of solutions and approaches to address effectively.

Whether or not President Ranil Wickremesinghe, as an individual politician, can solve these problems without a mandate from the people is a matter of debate. Some might argue that political leadership is an important factor in driving economic reform and progress and that a leader with experience and a track record of success could bring valuable insights and solutions to the table. Others might argue that, without a mandate from the people, a leader may struggle to secure the support and resources needed to implement their ideas and drive meaningful change.

Ultimately, the effectiveness of any political leader in addressing the economic problems of Sri Lanka will depend on a range of factors, including their ability to work with other key stakeholders, secure the support of the public, and effectively implement their policies and initiatives.

In order to address the current economic problems in Sri Lanka, political leaders might consider the following steps:

Forming a united front: One of the key challenges in addressing economic problems is political polarization and division. Leaders from different political parties need to work together in a united front to develop a common vision and approach to tackling economic issues.

Addressing corruption: Corruption has been identified as a major contributor to economic problems in Sri Lanka. Political leaders need to take a strong stand against corruption and put in place measures to tackle this issue effectively.

Implementing structural reforms: The economy of Sri Lanka needs structural reforms to become more competitive and attractive to investors. Political leaders need to work with stakeholders to identify the reforms required and implement them effectively.

Encouraging private investment: Encouraging private investment is key to driving economic growth and creating jobs. Political leaders need to create a favorable business environment that encourages investment and fosters innovation.

Promoting financial stability: Political leaders need to work with the central bank and other financial institutions to promote financial stability and restore confidence in the financial system.

Fostering inclusive growth: Political leaders need to ensure that economic growth is inclusive and benefits all segments of society, particularly those who are marginalized and disadvantaged.

It is important to note that these are complex and challenging issues, and there are no easy solutions. However, with the right leadership and a collaborative approach, it is possible to make progress and address the economic problems facing Sri Lanka.

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What does Ranil Wickremasinghe have up his sleeve? 

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Whatever it is, equipped with his education, native intelligence and acquired political wisdom, he will be able to hold the country whole until it passes lawfully into the hands of the uncorrupt patriotic young generation that is waiting in the wings in patient silence (not into those of the ignorant noisy buffoons in the ‘aragalaya‘). 

A number of sacrilegious attacks have been made in recent times on the Sri Dalada (the Sacred Tooth Relic) in Kandy, astonishingly by some Buddhists. The two most recent instances are: Sepala Amerasinghe, an elderly YouTuber, committing repeated verbal sacrilege by calling the Tooth Relic a ‘labba’ (an impolite word implying a pendant male sexual organ) in his videos; the other instance may be described as a form of desecration of the Sri Dalada Maligawa in Kandy where the the Tooth Relic is housed: a kind of faith-healing veda mahattaya/native physician (a notorious charlatan and a crooked businessman according to social media accounts) by the name of Janaka C. Senadhipathi is building at Potuhera, Kurunegala, an unauthorized replica of the Sri Dalada Maligawa in Kandy, claiming that the sacred relic will be miraculously transported to his new shrine from the Kandy Sri Dalada Maligawa, which according to him, is polluted by the materialistic corruption of its present custodians). It is ironic that these acts take place (by design or coincidence) only a few days after president Ranil Wickremesinghe showed his desire to have a special exposition of the Dalada ahead of the next independence day due to be held in February. The president is obviously hoping to achieve something of tremendous importance for the nation that he seems to think is significant enough to be celebrated with a Dalada exhibition. What this epoch making development probably is not a mystery to adult Sri Lankans who have some idea about the dynamics of post-independence politics in Sri Lanka. It must be something to do with the final settlement of the so-called Tamil national problem or the implementation of 13A+.

This confronts the nation with a dilemma concerning Ranil Wickremesinghe as everybody’s  (225 in parliament’s and the general public’s) refuge/saviour: it is the general public perception that, at this moment, there is no political leader who can at least try to bring about some sort of economic stability to the country except Ranil Wickremasinghe. But will he be able to garner enough parliamentary support to implement 13A+? To compound the confusion, there is the problem of holding the lawfully scheduled local government elections, the likely result of which will not strengthen the mutually dependent parliament+president combine, nor benefit the nation economically or politically. The people will question: Why are you so particular about sticking to the electoral laws at this critical juncture where the flagrant violation of other existing vital laws such as the antiquities ordinances has introduced a previously non-existent religious and racial dimension to the country’s political divisions? But be that as it may. Let’s return to our present topic.

Since the arrival of the Tooth Relic in Sri Lanka in the 4th century CE (this is well recorded in the Mahavamsa and other chronicles), a tradition evolved according to which the ruler of the island acquired the legitimacy of his sovereignty by virtue of the possession of the sacred relic. The Dalada was held in a shrine within the palace complex. The shrine itself later came to be called ‘Maligawa’ or palace, the residence of the king, because of this connection between sovereignty and the sacred relic. Due to this reason, the Dalada was subject to changing hands between external invaders or internal rivals and the reigning monarchs in troublous times, as happened several times before the European advent in the island and after. The desacralization of the sacred relic and the attempted dilution of the sanctity of the Dalada Maligawa in Kandy could be premeditated. Though it is  well known that the Dalada has neither any connection with, nor bears any responsibility for, the current economic and political crises, it has become a target for attack concerning even natural disasters. Sepala Amerasinghe mentioned above, before calling the Dalada a ‘labba’ for which offence he has been arrested and remanded till January 17, blamed the recent floods in Kandy caused by heavy rain on the ‘kunu datha’ (rotten tooth) in one of his videos. This was an oblique reference to the traditionally held belief among Buddhists that the Dalada has rain making powers. Such beliefs (and relic worship itself for that matter) are not found in Theravada Buddhism, but are imports from the Mahayana tradition which are now part of the local Buddhist religious culture.

So there seems to be a deliberate attempt by certain inimical forces  to dilute or totally negate the symbolic power of the Sacred Tooth Relic for the majority Sinhalese Buddhist polity. It is the bounden duty of the government on behalf of all concerned citizens to investigate what sinister force is behind these incidents and take remedial action. But there are no blasphemy laws in Buddhism. When a TouTuber brought the ‘kunu data’ insult to their notice by phone, the Anu Nayake Theras of both Malwatte showed little concern about it. It was when several concerned lay Buddhists complained to them again about Sepala Amerasinghe repeatedly making sacrilegious statements that the Mahanayake Theras and the Diyawadana Nilame, the guardian of the Maligawa, wrote to the president about it.

Incidentally, Mahinda Rajapaksa seems to be lurking protectively behind Senadhipathi. The former’s erstwhile sidekick Mervin Silva visited Potuhera, and ordered the demolition of the front part of the building in question, declaring that there should be only one Dalada Maligawa, the one in Kandy and that the rest of structures in the place must remain. Mervin Silva was reported to have threatened with death social activist Nilantha Ranasinghe who had raised the issue in public and exposed Senadhipathi’s questionable activities with audio, video and print evidence. Mervin Silva told another YouTuber (named Chaturanga Bandara) that Mahinda Rajapaksa phoned him to thank him for what he did.)  Mahinda exploited the nationalist groundswell to sweep the 2019 presidential and 2020 parliamentary elections against the previous infamous yahapalanaya led by prime minister Ranil Wickremasinghe and president Maithripala Sirisena; but he totally betrayed that victory through the entrenched corruption he supported among his stooges and his own obsession with dynastic rule, which ultimately brought repeatedly rejected Ranil Wickremasinghe to the helm. Mahinda seems to have so morally weakened in parallel with his obvious physical degeneration as to make a futile attempt to salvage his lost popularity among the Buddhist voters by championing fake ‘Bosath’ Janaka Senadhipathi, with the help of thuggish Mervin. 

To return to the beginning, the media reported (December 24, 2022) that a request that president Ranil Wickremasinghe made for a special exposition of the Sacred Tooth Relic before February 2023 when Sri Lanka completes seventy-five years of independence did not get a positive response from either of the two Ven. Mahanayake Theras of the Siam Nikaya, Malwatte and Asgiriya, in Kandy, who are joint custodians of the Sri Dalada Maligawa. The president’s request was conveyed to the prelates in a letter from him personally delivered to them by prime minister Dinesh Gunawardane, who expressly called on them for the purpose. The Malwatte prelate, according to the news reports, suggested that the PM should approach the Asgiriya Mahanayake Thera about this as it is the latter’s turn at the moment to be in charge of the service at the Dalada Maligawa. When the premier visited the  Asgiriya Mahanayake Thera with the president’s proposal or appeal, the latter wonderingly asked him  if a Tooth Relic exposition at this juncture wasn’t a difficult task to perform.

With hindsight one would hazard a guess that the two Buddhist prelates of the Siam Nikaya, namely the Most Venerable Thibbatuwawe Sri Siddhartha Sumangala Thera of the Malwatte Chapter and the Most Venerable Warakagoda Sri Gnanarathana Thera of the Asgiriya Chapter, especially the former, might accommodate the presidential wish, if  Buddhist public opinion also favours it. There are two other nikayas, Ramanna and Amarapura, which signed an agreement to merge in August 2019; the expected merger was a step in the right direction, for the Maha Sangha unity is indispensable for the survival of the Buddhasasanaya as a religious cultural establishment. The living component of the Buddhasasanaya is the ‘sivvanak pirisa’ or the fourfold community of male and female bhikshus and male and female lay Buddhists. This is not a political entity, but a religious one, though it needs state protection (just as it enjoyed full royal patronage under Sinhala kings before the time of foreign invasions); in this, the Sinhala Buddhist community  is not different from other religious communities. (In Sri Lanka, 70% of the ethnically and religiously diverse total population comprise Buddhists.) No religion is more compatible with the best form of government evolved to date, democracy than Buddhism, though it is not your average religion. Bhikkhus and Bhikshunis may personally hold different political views, and even exercise their voting rights as they please, as citizens, but it is not proper for them to engage in partisan politics, because that would definitely cause divisions within the fourfold community of Buddhists. The clergy must leave active politics involving campaigning and electioneering entirely to the lay Buddhists. May the Mahanayakes have the wisdom to tell the president not to desecrate the Sri Dalada by dragging it into politics.

However, traditionally and historically, Buddhist monks have wielded great power over the Buddhist community including the rulers. Currently though, they are becoming increasingly powerless, mainly because of their meddling in politics, patronizing corrupt politicians, and also because of the Mahanayake Theras’ incomprehensible inaction and disunity. President Wickremesinghe’s seemingly cynical suggestion must be viewed in this context. Is he, through having a special Tooth Relic exposition held to coincide with the implementation of whatever solution he proposes to the Tamil ethnic problem, trying to make palatable to the Sinhala Buddhist majority something they would not normally look upon with favour. Is he bringing back an earlier unpopular deal that sent him and his party home at the hustings? But Ranil is too intelligent to repeat past errors.

I am tempted to say this because Ranil Wickremesinghe, unlike his predecessors Mahinda Rajapaksa and Maithripala Sirisena, does not usually make a show of unfelt religious piety for hoodwinking the masses. If he wants, he uses religion in a more street-smart way. Unlike the latter duo again, he is no religious hypocrite; he doesn’t even care to show if he is really a Buddhist (which of course is right, and befits a genuine Buddhist). The important thing, I think, is that he seems to know that ordinary Buddhist voters, true to their faith, do not worry too much about whether he is a Buddhist or a non-Buddhist. (Unfortunately, however, global scale media distortion against them demonizes Sinhalese Buddhists as racist chauvinists and religious fanatics simply because circumstances force them to raise their voice when their human rights are violated by others (such as unethical conversion of Buddhists, encroachment or vandalizing or desecration of Buddhist archaeological sites, deliberate distortion of historical and Buddhist doctrinal facts).

What is happening in Sri Lanka in this respect, hardly recognized or taken seriously by the global powers that be, is doubtlessly a crime against humanity carried out by an externally well funded medley of subversive organizations and individuals, that is getting more and more explicit and more and more overpowering in the Sri Lanka’s present economically and politically debilitated situation. It can be argued that the same forces that are behind this insidious barbarity are at least partly responsible for worsening the political and economic maelstrom that is currently engulfing Sri Lanka, despite the abundance of  rich natural resources and the  high quality of the human resources locally available, both of which its citizens can be justly proud of.

For president Wickremasinghe to want a special Dalada exposition he must be contemplating to consecrate, as it were, something momentous like a nationally important historic event concurrently with government celebrations that will mark the completion of seventy-five years of independence (whatever the last word is held to mean) from British colonial occupation. When it comes to true freedom from Britain, we believe that the 1948 independence was eclipsed by the promulgation of the republican constitution in 1972 under the United Front government of Mrs Sirima Bandaranaike. Yet, it looks like that Wickremasinghe wants to return to the Western fold by ignoring the 1972 change, which was not supported by the Illankei Tamil Arasu Kachchi (Lanka Tamil Kingdom/State Party/or misleadingly called the Federal Party in English) founded in 1949 by S.J.V. Chelvanayagam, an immigrant Tamil from Malaysia. (The clamour for a separate state for Tamils started soon after the grant of so-called independence, which was actually nothing more than dominion status. The 1972 declaration of Ceylon (as Sri Lanka was until then known among foreigners and English speaking locals) as a republic severed that last link with the  British empire.

 Sri Lankans are a democratic people. Ranil Wickremesinghe or any other political leader could easily accommodate the legitimate interests of the global and regional superpowers that the country’s geographical location makes it obligatory for it to satisfy, if he did it with the people’s full democratic approval, while at the same time preserving their national dignity, sovereignty and independence.     

When in 2019 Wickremesinghe and the UNP that he still leads got kicked out of parliament, he had spent forty-two years in that august body as elected member serving repeatedly in responsible senior positions over that long period as cabinet minister, opposition leader, and prime minister, and now as president at least by default. Ranil Wickremasinghe the politician has nothing more to win or lose in his life; he has nothing to look forward to, except perhaps a dignified obituary. But he suddenly finds ‘greatness thrust upon him’ by a strange turn of events in a context where  Sri Lankans of all religious and political persuasions are up against the wall economically and politically. The Sinhalese Buddhists, in addition to this adverse global predicament experienced, not only in Sri Lanka, but across most of the world outside, are simply facing a form of cultural genocide as argued above. It is expediently connived at by our corrupt traitorous self-seeking politicians and blithely indulged by an apparently unconcerned, blissfully ignorant Maha Sangha.

Ranil Wickremasinghe can still use his intellectual superiority and political acumen to rescue our nation.

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Sri Lanka: President’s Priorities in New Year

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After a tumultuous 2022, what lies ahead for Sri Lanka in 2023, Col R Hariharan postulates possible priorities for the President, outcomes and challenges for the Island Nation which seems to have weathered the political storm of the past year for now.

Learnings from 2022

Sri Lanka did not cover itself with glory in the year 2022. But the year is a remarkable one in Sri Lanka’ political history. The spontaneous Aragalaya protestors demonstrated that they cannot be taken for granted by their elected representatives. It did not matter if they were Rajapaksas – their heroes of yesterday. The protestors’ battle cry “GotaGoGama” saw the unseemly termination of the rule of the Terminator of Tamil separatists – President Gotabaya Rajapaksa. It has shown that getting elected to the high office of President is not enough; it lasts only so long as people accept it.

Events overtook the Machiavellian plans of Prime Minister Mahinda Rajapaksa. He was forced to quit home and office in the face of massive public protests. It showed enjoying parliamentary support is not enough to sustain power when people are determined to throw you out. The Hindu correspondent in Colombo Meera Srinivasan eloquently puts it: “When you hear ordinary citizens articulate their desire for a better future and country, the message resonates across borders and contexts. At one level, Sri Lankans were resisting leaders who they held responsible for their economic distress. At another, a mass uprising showed that no leader is invincible, and no might is bigger than people’s power.”

The transformation of seven-time Prime Minister and nominated member of parliament Ranil Wickremesinghe, brought in as “night watchman” PM, as President in a crisis, validates another clichéd aphorism: “fortune favours the brave.” But Wickremesinghe, a veteran of many political battles for survival, had the courage to step into the shaky chair. He quickly put together his jerry-built government to stave (save?) the country from plunging into chaos.

The President’s galaxy of ministers are mostly old faces with new labels, with a sprinkle of younger aspirants. It is still intact there, to usher in the new year, disproving the naysayers. This showed that President Wickremesinghe had a much better understanding of crisis management than the Rajapaksas. Despite the anachronism of his survival as President depends upon pro-Rajapaksa MPs, evidently most people feel his priorities are right.

Otherwise, Aragalaya protests would have probably continued. It also showed that people are ready to give the leader time and space to get his act together. President Wickremesinghe’s actions show that he is still wary of muted Aragalaya protestors watching from the wings. Though the threat of Aragalaya has taken a backseat from the political mainstream, hopefully it will force the political class to prioritise people’s needs first.

It is the historical Aragalaya movement that propelled President Wickremesinghe to power. It showed the failure of the traditional tools of state instruments of power including security personnel to quell the protests, Though the movement has seemingly dissipated now, its subterranean presence can be seen now in protests by students and staff in universities, among monks and civil society organisations. So, it is not enough to find berths for youth representatives in advisory bodies of the government. Good governance, rule of law and impartial judiciary will satisfy most of them.

Corruption and cronyism seem to be endemic in every action of the government. For long people have put up with it. The Aragalaya movement has sown the seeds of distrust of the political class in the minds of the people. If Sri Lanka has to survive as a stable democracy, politicians must regain the trust of the people. In this context, Winston Churchill’s words in the House of Commons come to mind. “At the bottom of all the tributes paid to democracy is the little man, walking into the little booth, with a little pencil, making a little cross on a little bit of paper. No amount of rhetoric or voluminous discussion can possibly diminish the overwhelming importance of that point.”

As Sir Martin Gilbert, leading historian, and Churchill’s official biographer, says: “Parliamentary democracy is an easy concept to grasp but a difficult one to sustain. Throughout the Twentieth Century, and into our present Twenty First Century, the institutions and ideals of parliamentary democracy have been under continual threat. The power of totalitarian regimes to dominate their own people is – and remains – attractive to those who wish to control the life of a nation without checks and balances.” These words hold true to Sri Lanka’s present situation as China with its increasing global clout might appear as an attractive alternative. A dissatisfied population may be easily swayed to ignore that it is a one-party “democracy” of 21st century Communism of the Chinese kind.

Agenda for 2023

Sri Lanka is stepping into 2023 with the economy limping on crutches with the tourism industry and export trade taking a beating. The promised IMF recovery package is yet to materialize. Peoples’ woes of continuing price rise, shortage of essential food stuff and energy resources are making life difficult. The scars of Covid pandemic are still there and the flare up of a new variant spreading fast in China, European countries and the US portends ill of a revival of the pandemic in the new year. There is no end in sight to the early end to the Ukraine war. This has queered the strategic stability of Sri Lanka’s environment. Its fall out is being felt in Sri Lanka’s relations with major powers competing for dominating the Indo-Pacific.

The President’s agenda for 2023 will have to be planned in this environment. The year 2023 is going to be a year of long weekends with nine of them falling on Fridays and Mondays. In other words, it will be a year of less than nine months of work. So whatever Sri Lanka plans to achieve will have to factor time as an invaluable resource. In management terms, this would mean investing in short-term projects that yield quick results to stoke the feeling of achievement to raise the morale of the people. Indian experience has shown extensive computerisation of government systems can achieve this. The first item on the President’s agenda for 2023 seems to be to resolve “the Tamil issue” by February 4, 2023, before the nation celebrates 75th anniversary of Sri Lanka’s independence in March.

Ethnic reconciliation had been featured as an important item on the agenda of all presidents, except for Gotabaya Rajapaksa. The veteran hero of the separatist war, on becoming president made it clear that Sri Lanka was for the majority – Sinhala Buddhists. Of course, despite all the fanfare with which the ethnic issue has been featured in the agenda of successive presidents no discernible results have been achieved. Of course, the only exception is the 13th amendment that created provincial councils. Even that was sent to the halfway house, when the Rajapaksas prioritised pleasing the Sinhala Buddhist constituency, over reconciliation of minorities.

President Wickremesinghe is a past master in using ethnic reconciliation as an effective political tool to garner public support. He had spearheaded the UNP protests the 2000 draft constitution bill moved by President Chandrika Kumaratunga. The UNP MPs set fire to the draft of the bill in the parliament. The draft 2000 constitution contained power sharing proposals that could have ended the ethnic confrontation. It never saw the light of the day and Sri Lanka missed an opportunity to bring the ethnic issue to a closure. It was a costly political expediency that cost the nation dearly, as 100,000 people lost their lives in the Eelam wars that followed.

The Yahapalana government of President Maithripala Sirisena with PM Wickremesinghe went to the extent of preparing a draft constitution fielded by the constituent assembly. But it never saw the light of the day perhaps because both the President and PM had their own political agenda. Considering this background, President Wickremesinghe’s deadline for resolving the Tamil issue by February 4, 2023, seems unrealistic. However, the President appeared to be making the right moves – all party conferences, palaver with the leaders of Tamil, Muslim, and likeminded leaders of other political parties. He has opened offices in Vavuniya and Mannar to keep his ear to the grind wheel.

But the President must reckon with the elephant in the room – the Sinhala Buddhist rural masses. They need to be convinced that the Tamil issue is the priority when the whole country is locked in the struggle for survival. Can President Wickremesinghe convince them to resolve the four decade long ethnic issue eating into the vitals of Sri Lanka? Only time will tell.

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Sri Lanka: Beckoning the devilish anarchy

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Since the ending of the internal civil war, I have been vehemently vocal on the need for directing Sri Lanka towards a profound reform program. Following the Black July of 1983, Sri Lanka remained in a bizarre state of persistent bloodshed for a long time, until the end of the internal civil war in 2009. The people of the country were compelled to live in an atmosphere overwhelmed by the fear of death during this long period.

The insurrections launched by the Sinhala and Tamil youth had resulted in the death of a large number of young people. The entire society was rendered more or less dead spiritually, by the brutality unleashed on the society by the Sinhala and Tamil rebels as well as the security forces that suppressed the riots. Though the security forces had succeeded in defeating the Sinhala-Tamil insurrections, both the victorious security forces and the State suffered serious damage from those insurrections.

Many things were destroyed in this ugly socio-political environment, and the things that escaped from being destroyed completely had become distorted and corrupt. This particular socio-political environment had caused to corrupt and distort the politicians of the country and the state including the government officials and the entire institutional system of the state. This situation had plunged the entire state into a dilapidated level.

My role

Introducing necessary reforms without delay, for rectification of the decline and the distortion occurred in the socio-political system and the state had become an essential condition for the very survival of the state and the social system. I used the 25th and 30th anniversary of the Ravaya held in 2012 and 2016 respectively, which were participated by the leaders of major political parties of the country, to point out to them the urgent need for having reforms introduced to overcome this situation.

But when it appeared that the political leaders of the country do not have a genuine interest or commitment in making necessary reforms, I reached the conclusion that, in the absence of essential reforms, the country will inevitably plunge into a great destruction, and consequently there will be a great collapse in the state and the social system, and eventually the country will be pushed into a state of economic bankruptcy and political anarchy.

In order to explain the situation, I wrote and published two books in Sinhala titled “Lankawa Galawaganima” (Rescuing Sri Lanka) and “Jathiye Kedavachakaya” (The Tragedy of the Nation). The number of scholarly articles authored and published by me in this respect could be hundreds. Besides these, I founded an organisation called the “Punaruda Vyaparaya” (Revival Movement) to enlighten the public about the great collapse destined to occur, and nearly 300 public discussions were held raising the public awareness on the impending downfall. I wish to assert that I have always appeared in favour of a profound transformational reform program implemented within a comprehensive framework centred on wide public participation.

I can be considered as one who was able to foresee and predict in advance with a considerable degree of certainty that Sri Lanka will soon fall into this abyss unless appropriate remedial measures were taken to arrest the trend. I was able to make such a prediction because I had focused my keen attention on this question long before it was going to happen. In fact, I had a deep intellectual involvement and emotional relationship with the crisis in Sri Lanka. It was due to the knowledge and discipline I had acquired through perceiving and evaluating the crisis well in advance that I was able to analyse it and make suggestions as to how it should be overcome as soon as Sri Lanka fell into the abyss.

At the time when the country has fallen into a state of bankruptcy and a massive public unrest had emerged in the form of the Aragalaya launched by the youth against president Gotabaya, I appealed to the protesters to take the Aragalaya into a constitutional framework without allowing it to be thrown into an anarchic state; and, at the same time I ventured to meet president Gotabaya and point out to him the importance of directing the country towards adopting a reform program that would make a profound change in the system which is corrupt, and handed over to him a list of reforms required to be introduced together with a methodology that could be adopted in implementing the proposed reforms.

What ought to be done?

I am not a political follower or a protagonist of Gotabaya. During the presidential election, my stance was that Gotabaya was not a suitable person to be appointed the president of the country because he remained indicted with serious allegations. Despite my stance regarding Gotabaya, in the face of the country falling into a state of bankruptcy, I ventured to meet him with my reforms proposals, not with the intention of gaining undue advantage, but with the view to persuading him to direct the country to a reform program without delay, and thereby reduce the possible destruction to the country. Not only did he express his agreement with my proposal, but also he had enlightened Ranil Wickremesinghe about it when the latter was appointed the Prime Minister.

The Prime Minister also spoke to me about the proposal. It is interesting to mention that I had held two rounds of talks previously with Ranil Wickremesinghe about a reform program even before the country went bankrupt. Late Mangala Samaraweera also participated in those discussions. Three of us knew that the country was heading towards a big crisis. We had a rough idea about the need for intervention at an appropriate time and about the reforms to be introduced.

When Prime Minister Ranil Wickremesinghe assumed the presidency, I felt that the opportunity had arisen to lead the country to a reform program. For that purpose I decided to extend my voluntary support to President Ranil Wickremesinghe without expecting any payment or personal benefit. After all, it is an essential condition to create a common consensus among the parties representing the legislature for launching a profound program of reforms. To achieve that purpose, we (the People’s Movement for Reforms) met the leaders of major political parties and discussed this issue with them.

The list of political leaders whom we met and discussed is as follows: Sajith Premadasa, the leader of the Samagi Jana Balavegaya (SJB), Maithripala Sirisena, leader of the Sri Lanka Freedom Party (SLFP), Anura Kumara Dissanayake, leader of the Janatha Vimukthi Peramuna (JVP), Rauff Hakeem, the leader of the Sri Lanka Muslim Congress (SLMC), Basil Rajapaksa, National Organiser, Sri Lanka Podujana Peramuna (SLPP), M.A. Sumanthiran, media spokesperson of the Tamil National Alliance (TNA), Mano Ganesan, leader of the Tamil Progressive Alliance (TPA), Douglas Devananda, leader of the Elam People’s Democratic Party (EPDP) and Champika Ranawaka, leader of the 43rd Brigade.

The purpose of discussing with all of them was to explain the need for having a profound reforms program and the importance of creating a common consensus for adopting a framework which is acceptable to all of them, and would not allow anyone to act arbitrarily in implementing the reforms program. The need for having a profound reform program was accepted by all the leaders. It must be said that the time spent by some leaders for these discussions ranged from two to three hours.

It was evident from some of the statements published in social media that the discussion held with Basil Rajapaksa, the National Organiser of the Sri Lanka Podujana Peramuna (SLPP), has caused great anger in some people. It is not difficult to understand that it was a special situation that has been created and maintained purposefully and systematically rather than being a natural or spontaneous reaction. Many of those who have commented had demonstrated amply, the negative characteristics such as poverty of their knowledge, sometimes their stupidity, political bigotry and their lumpen heritage. The failure of a country is not only an indicator of the failure of politicians and officials alone, but it should also be considered as an indicator of the failure of academics and the professionals of the country as well.

The black market economy of the country is larger than the formal economy. The size of the lumpen social group in the country is also unusually large. It can be said that the lumpen-style debase rowdy language has become the accepted linguistic usage of the revolution and the revolutionary academia. Due to political bigotry or bias, some are inclined to think that the crisis in the country is a matter to be solved by a government elected of their choice and not through the reforms implemented by the incumbent government. Also, they seem to think that whatever may be the reforms to be introduced, they should be implemented in the absence of those representing the Pohottuwa party.

Could the country survive without solving this crisis until the next government comes to power? What will happen to the country if no one gets enough power to form a government in the next election? Since the ruling power rests on the Pohottuwa party, a reform program cannot be implemented without the support of that party. If the Pohottuwa should not be involved in the reform program on the basis that it is corrupt and has committed serious mistakes, then, the same accusation can be levelled more or less against every party that has ruled the country and represented the parliament. Sri Lanka has received a golden opportunity for introducing profound reforms. If this opportunity is not utilised properly, there is no doubt that the nation will be compelled to pay a big compensation for missing it.

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Sri Lanka in 2023: Saffron, Kurahan, Red or Green?

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“Winds don’t blow as ships desire.” ~ Arabic proverb

Before Gotabaya Rajapaksa, there was SWRD Bandaranaike. Before Organic Only, there was Sinhala Only. And the related transformation of Vidyodaya and Vidyalankara from monastic colleges to secular universities. Like Sinhala Only, this was an election promise; like Sinhala Only, this was implemented with no forethought or planning.

The first signs of the coming malaise were evident by 1962 prompting the government to appoint a three-member Universities Commission, headed by DCR Gunwardane. In its report, made public in 1963, the Commission called the 1958 bill an ‘ill-considered and irresponsible’ piece of legislation pushed through by ‘political Bhikkus’ who “dictated policies, dominated public affairs, and incited actions which people in their normal senses would have considered even possible.” These political monks were also “responsible in large measure for inflaming the racial and religious passions that erupted in such sickening fashion in the early part of 1958,” the Report pointed out. The commissioners, all of them Buddhist civil servants, concluded that as “the higher education of Bhikku and higher education of the laity cannot be brought under one organisation, the two pirivena universities should cease to exist at the earliest possible moment.” The fusion, if continued, “would have a disastrous effect on the entire Sangha,” the Report warned.  (All quotes are from Prof. HL Seneviratne’s The Work of Kings).

The warning was ignored and the Report consigned to oblivion even though the Commission was appointed in response to widespread societal concerns about the effect of the two universities on ‘mahanakama’ (monkness) and the ‘Buddhist way of life’. Sixty years later, those fears have been fully realised. A new definition of ‘monkness’ and of ‘Buddhist way of life’ is now entrenched. The horrendous tales emerging from the Buddhist and Pali University are not anomalies but symbolic of these transformed notions of monkness and Buddhist way of life. Monks (with a few honourable exceptions) have become key engines of violence, intolerance, and ignorance in society.

In Buddhism Betrayed, SJ Tambaiah tried to understand and explain how a teaching based on compassion and loving kindness towards all beings became a religion of violent hatred. The monks of today are the rightful adherents not of what the Buddha taught but of this ‘betrayed Buddhism’, a creed devoid of all moral-ethical underpinnings and reduced to a body of mostly meaningless rituals.

During the initial idealistic phase of the Aragalaya, a young protestor in Kandy was pictured holding a hand-drawn poster depicting a rogues’ gallery of top pro-Rajapaksa monks, with a telling caption: Become Ordained at least now. In the same week, when a political monk tried to join a protest in Battaramulla, he was respectfully told to leave. In those early days, the Aragalaya was not only non-party; it was also secular. That promise would soon turn out to be a mirage. Saffron robes and cassocks became a common sight, with some even acting as the public face of the movement.

Political Bhikkus are a key component of the Lankan malaise. Yet, like politicians, they see themselves as The Solution. Walavahangunawave Dhammarathana thero, the chief incumbent of the Mihintale temple, is the latest monk to succumb to this delusion publicly. In June 2020, he was praising Gotabaya Rajapaksa for his ‘wise leadership’ and thanking him for ‘saving the country from Covid-19 and promoting indigenous production’. In August 2022, he was calling Ranil Wickremesinghe a leader with ‘foresight’. Now he is on the warpath against all politicians. He has given the authorities a month to relieve the poor of their economic miseries. If the government fails to do so by next poya day, he wants people to get out onto the streets and throw out, well basically everyone.

Whether this is another flash in the pan or the prelude to a serious upheaval remains to be seen. Equally unknown is the story behind this sudden emergence, as sudden as that of Galagoda-atte Gnanasara. Is this new saffron-robed rebel chief his own man or an unwitting pawn? Either way, this latest attempt to fuse religion and politics even more tightly, to uphold the myth of Saviour-monk, again, doesn’t augur well for 2023.

Last week, Iran publicly executed a second unarmed protestor, Majidreza Rahnavard. It is instructive to remember that the mullahs were once liberators, courageous resisters to the Shah’s authoritarianism. Religion and politics is a deadly combination. Bad for politics, worse for religion, worst for the people who fail to maintain an unbridgeable wall between salvation in this world and next.

A Worrying Vacuum

The latest results of the Institute of Health Policy’s opinion tracker survey paint a picture that is fascinating and disturbing in near equal measure. If the question is Who is the most popular of them all, the answer seems to be none (at least according to the data made public).  If the question is Who is the least unpopular of them all, then the answer is Ranil Wickremesinghe. His net unpopularity rating is the lowest at 45%. Sajith Premadasa is the most unpopular political leader with a net unpopularity rating of 57%. Gotabaya Rajapaksa has a net unpopularity rating of 51% and Anura Kumara Dissanayake a net unpopularity rating of 55%.

If that is the fascinating part, the worrying part is the remarkable decline of Gotabaya Rajapaksa’s unpopularity. He is now less unpopular than either Sajith Premadasa or Anura Kumara Dissanayake and within touching distance of Ranil Wickremesinghe.

Recently a group of Lankan boat people were rescued by a Japanese vessel in Vietnamese waters and handed over to Vietnamese authorities. The Lankans were headed to Canada, but didn’t mind being sent anywhere so long as it wasn’t Sri Lanka. That wasn’t the country the Rajapaksas inherited in 2019; that was country they were compelled to relinquish in 2022. Not that they consider themselves blameworthy in anyway. “If people were patient a little more, the economic crisis would have been resolved,” Basil Rajapaksa said in a recent TV interview.

“The Aragalaya is over, what is the difference?” Basil Rajapaksa asks in the same interview, opting not to see, for example, that there are no fuel or gas queues, because Aragalaya got rid of President Rajapaksa, PM Rajapaksa, and Finance Minister Rajapaksa. His answer to the SLPP being a family party is to tell us to look at North Korea, Kim Il-sung succeeded by his son and grandson. When questioned about the preponderance of Rajapaksas in the SLPP, he answers, “If that is what the people of this country hopes for…” When asked if he’s willing to give up US citizenship or angling for another constitutional change, he turns coy saying he is willing to act “according to need”.

The Rajapaksas still create their own facts, live in their parallel universe, believe themselves to be inerrant, and are committed to familial power and dynastic succession. And at least one of them has become way less unpopular, which turns a Rajapaksa comeback from a mere theoretical possibility into a very real one.

Commenting on Jair Bolsonaro, Yascha Mounk says, “Brazil is yet another indication that the threat from authoritarian populists is here to stay” (The Atlantic –4.11.2022). He calls this the new normal, something democracies must learn to manage. A truth applicable to Sri Lanka as well. The Brazilian case is instructive in another sense. Jair Bolsonaro was a deeply unpopular incumbent. Lula, the challenger, was probably Brazil’s most popular politician. Yet the presidential election went into a second round. Lula’s eventual margin of victory was disturbingly narrow. Populism’s obituary is ever premature. It’s more a vampire that rises from the dead when democracy undermines its own credibility and democrats are too busy with their childish squabbles to see the looming shadow.

As Basil Rajapaksa makes clear in his interview, the Family, like President Wickremesinghe, is playing a waiting game. If Mr. Wickremesinghe fails to maintain living standards at least at the current low levels, if there are huge hikes in the prices of essential goods or services or long power cuts, if the necessary privatisation of state enterprises is not handled carefully (as Mangala Samaraweera did with Telecom), the SLPP will move into the oppositional space. Given current economic trends, that day may not be far ahead.

Three examples suffice. Economic contraction worsened in third quarter. 193billion rupees worth of gold was pawned in the first 10 months of 2022, mostly by middle class people, mainly for educational and agricultural purposes, according to a study by Prof Wasantha Atukorale of the University of Peradeniya. 6.3million people are food insecure.

The breakup of the UNP in early 2020 was a key causative factor of the current disaster. Had the UNP faced the election as a single party, the Rajapaksas would not have gained a near two-thirds majority. Without that massive majority, and the validation conferred by it, the Rajapaksas may have steered clear of some of the more extreme measures, such as Organic Only and the 20th Amendment.

Correcting that seminal error might be a way to prevent a Rajapaksa comeback either as kingmakers or kings. The main differences between the UNP and the SJB are not political or ideological, but personal, a sense of pique, thwarted ambitions. If leaders on both sides can rise above their personal animosities and petty concerns (not an easy thing to do, as history demonstrates again and again), an understanding is possible. A reconstituted UNP can then build the same working relationship with the JVP that enabled the defeat of Mahinda Rajapaksa in 2015 and the progressive reforms that stemmed from it, such as the 19th Amendment, the restoration of judicial independence, and the right to information act.

Healing the UNP-SJB breach might be the only way Sri Lanka can emerge from the economic morass with not-too-high a cost. If the breach continues, it could hasten a descent into social violence, a return of the Rajapaksas, or possibly, and sequentially, both.

The Extremist Gene  

“People began to feel that the Ceylon University catered more to the elite society, absorbing western ideas and ignoring all that was indigenous,” wrote Ms. NGD Sirimanne (Ratnapala) in her MA thesis, The Evolution of Higher Education in Sri Lanka. “The emergence of Mahajana Eksath Peramuna in 1956 was the result of this grievous Cultural Consciousness. Thus began the need to establish a University ‘much like ourselves’.”

A key impulse behind the changes of 1956 was the desire to level down instead of raise up. Those who stood in the way of that drive towards the lowest common denominator were condemned as traitors, reactionaries or both. Tribalism, racial, religious, and social, was made coterminous with patriotism. Insularity was enthroned as a moral good, forgetting the positives we received from across the seas, starting with the teachings of the Buddha.

Sixty years on, we have universities ‘much like ourselves’ where no difference is tolerated, ignorance is no bar to advancement, and violence is the first and preferred way of settling a dispute. The relationship between society and university is a two-way street, microcosm and macrocosm interacting with and on each other in an endless spiral. We are a less civilized and more barbaric country than we were before these changes were introduced.

During a ceremony to honour outgoing US Speaker Nancy Pelosi, Republican congressman and former speaker John Boehner said they often disagreed with each other but were never disagreeable to each other. “You can disagree without being disagreeable,” he emphasised. If democracy is to survive, political and civil society must practice the art of disagreeing forcefully without resorting to force.

This is perhaps the tolerance we lost, when we turned universities into spaces of exclusion, racial, religious, and social. If this tolerance survived in our universities, ragging would not have become torture and last week’s mob attack on the house and person of a former vice chancellor of Peradeniya would not have happened (even if the former VC’s son was inebriated and verbally abusive, as student leaders claim, as in mitigation).

Ranil Wickremesinghe’s repression of unarmed demonstrates and the JVP’s inability to unequivocally condemn Peradeniya mob violence are but two sides of the same intolerant coin. Janaka Thissakuttiarachahi of the SLPP and Nalin Bandara of the SJB were being equally uncivilised when they hurled sexist remarks at female parliamentarians. Hirunika Premachandra’s recent remarks on Ranil Wickremesinghe demonstrate yet again how far we have moved away from common decency. Politeness is not a class virtue, it’s a human virtue.

“We are a disaster.” This is a phrase Latin Americans use to refer to their contemporary condition, according to Ariel Dorfman in Other Septembers. If Sri Lanka’s economic disaster is not to turn it into a societal one, if this country is not to become an ungovernable, unliveable wasteland in 2023, restraint on the part of everyone would be necessary. Political, economic, social, and religious leaders should take the lead, but waiting for them to do so is no longer an affordable luxury. There is very little to choose between statal and anti-statal violence, if you are an ordinary citizen caught between those contending forces. We have lost much, but we could lose way more. 2023 may be the year we made the turn around, economically or socially, or the year we plummeted a depth too horrendous to contemplate, yet all too easy to imagine.

Correction

In my November column I said that the parliament would stand dissolved if the budget is defeated. I was wrong. It is the cabinet of ministers that would stand dissolved as per Article 48(2) of the Constitution. I apologise to the readers for this error. My thanks to Gamini Viyangoda for kindly bringing it to my notice.

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Sri Lanka:  Correct The Price Distortion for A Sustainable Development – Part 1

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A riot in Sri Lanka dethroned the democratically elected prime minister and the president in May and June 2022, respectively. Ranil Wickremesinghe, who did not contest the presidential election and could not get the support of at least one per cent of the constituents during the general election, was elected as the president by the parliament. However, he did not have a single MP in the parliament from his party to vote for him. He doesn’t have members of parliament from his party to appoint to the cabinet of ministers. As such, his political opponents who are entirely against his liberal policies have been appointed to the cabinet, and he is yet to find MPs to fill all portfolios. Under these circumstances, since the beginning of 2022, Sri Lanka has been in Socio-political and economic turbulence. The country is bankrupt, people are suffering, and the economy is in reverse gear. 

Historically, Sri Lanka is accustomed to a welfare-oriented economic culture. During the colonial period, universal free health and vernacular education were available. In addition, universal and generous food subsidies with rationing started during World War II. Probably this would have been done to keep Sri Lankans contented, considering the strategic importance of Sri Lanka for the war. However, since independence, providing welfare and subsidies for the whole gamut of life of Sri Lankan has become a perpetual feature of the annual budgets. At the inception, the cost of subsidies and welfare was met from the surpluses generated from the plantation sector and the export of natural resources as raw materials to advanced countries. Even after depleting those resources, welfare programs and subsidies continued at the development budget’s cost but within the domestic economy’s capacity.

After introducing the open economic policy, the inflow of foreign grants and concessionary credits increased considerably. The government entered a comfortable zone enabling it to continue with the welfare budget and various subsidies without any attempt to increase the government revenue and foreign exchange earnings. Even after exhausting the concessionary foreign credit and grants, the government remained in the comfortable zone with high-cost local and foreign borrowings without enhancing the revenue. In addition to that, money printing was also done. The ability to brow and provide welfare and subsidies became a success indicator for all successive governments. The citizens are also accustomed to thinking on the same line. The political leaders, administrators, and economists, who managed the economy, did not seriously consider how to do debt servicing without being insolvent on a future date but continued with ceaseless borrowings. By living with a plethora of subsidies, individuals became accustomed to enjoying artificial prosperity and living beyond their means. Maintaining the rupee at an artificially high value in the recent past did not allow people to feel the actual cost of imported goods. Hence consumer preference was also for imported goods creating a high demand for foreign exchange, which was in short supply for debt servicing and essential imports. Over-dependency on foreign grants, domestic and external borrowings at a high cost, and lack of attempt to improve the government revenue and export earnings are the leading causes of the economic crisis/ bankruptcy in 2022.

 For this article, the word “Subsidies” covers a wide range of wasteful public expenditures that don’t contribute to the national economy, distort the market prices/demand, and lead to mal allocation of resources. It covers (a) cash and material grants without rendering goods or services, (b) price subsidies for various goods and services, (c) subsidising the losses of state-owned enterprises, (d) overstaffing in the public sector institutions, (e) losses due to corruptions, mismanagements, and wrong decisions (f) and all kinds of unproductive public expenditure and wastages.

There are different types of subsidies and welfare programs, such as direct cash and material grants, price subsidies for consumer goods and inputs, cross-subsidies between sectors and subsectors of the economy, cross-subsidies between institutions and different products of the same institution, tax holidays, different tax rates for industry types, subsidising the losses of SOEs, overstaffing in government institutions, etc. All these expenditures become an income for some people without contributing to the economy. Subsidies for inputs and consumer prices prevent reflecting the actual economic cost of local products and distort the consumer’s price in the market. Consequently, the demand also doesn’t reflect the people’s real needs and purchasing power. The ultimate result is the mal allocation of resources, low productivity, high cost of production, low income, and inefficiency of the economy at the macro level. The impact of a few subsidies and resultant market-price distortion are discussed below.

Agriculture products

Rice, the staple food of Sri Lanka, was sold at a highly subsidised price on a ration for everybody, regardless of family income, from 1945 to 1978, with some modifications to the scheme from time to time. Consequently, two different prices, subsidised and open market prices, existed for many years. From the 1960s to the 1980s, the government purchased paddy at a relatively higher guaranteed price, encouraging farmers and sold it at a subsidised price to relieve poverty. Further, irrigation water, the most important and valuable input of paddy farming, is still free to the farmer, though it is a hefty cost to the nation. In addition, low-cost finances were also provided through the cooperative banking system. The fertiliser was also supplied at a nominal price, virtually free from 2006 to 2020. Research findings and extension services are also provided free for everybody. Due to the guaranteed price and availability of low-cost/free inputs, farmers do not pay the actual cost of inputs.  Though the government has spent a lot of public resources to increase paddy output, farmers remained poor. But the market price of rice is unaffordable for many people and high compared to imported rice. If all subsidies are removed, the actual cost of production of a kilo of rice could be doubled. In addition to subsidies, tariff protection and the guaranteed price are also available for rice production. The farmers could not reap the optimal Productivity and income of these support packages due to inappropriate technology and farming practices.

Tariff protection and guaranteed prices are available from time to time for certain other field crops, such as lentils, big onions, potatoes, dried chillies, maise, turmeric, milk, sugar, and poultry products, but it is inconsistent. Farmer’s reaction to intermittent ad-hoc tariff protection distorts the market (demand and supply) and gets them into a further disaster. High prices in a season encourage farmers to produce more in the next season, dropping prices below the cost of production.  Hence, often, it brings more fortune to traders/stockists than farmers. If everything works well, farmers may occasionally benefit from crops like potatoes and onions, but at a very high hidden cost to the macroeconomy, consumers, and the environment. Under these circumstances, much research is needed to produce those crops competitively. Otherwise, those land and resources may be used for other high-value crops and economic activities, which have the capacity to generate more income, employment, and foreign exchange. Having different climatic zones and two rainy seasons and two dry seasons, anything can be cultivated in Sri Lanka. But tariff protections, subsidies, and incentives should not encourage the misuse of valuable resources. Perhaps, instead of using those resources for import substitutions, cultivating export-oriented crops may bring more benefits to the economy. However, rice is not a product that can respond immediately to the demand and price. Also, there is no surplus rice production in the world market.  As rice is the staple food, reaching near self-sufficiency, even at a comparatively higher cost, is justified to ensure food security. However, producing a surplus is detrimental to paddy cultivation’s sustainability as the production cost is higher than in other rice-producing countries. Also, subsidising the cultivation of paddy fields in the low country wet zone is justifiable to ensure those will remain as lowlands for water retention.

As discussed above, Sri Lanka has spent a colossal amount to subsidise paddy farming and to increase the area under cultivation for over seven decades.  For the government, researchers, and the public, agriculture means paddy farming, but not very wide other varieties of grains, lentils, vegetables, fruits, and animal products. Prices of those nutritious foods are relatively high and unaffordable to ordinary people.  As a result, though we are a middle-income country, our malnutrition level is much higher than other developing countries in the region. Even with a plethora of subsidies, agriculture has become a survival strategy for the rural poor and reinforced the subsistent farming system. Sri Lanka needs more research on technological innovations in seed production, livestock breeding, farming practices, tools and equipment, post-harvest technology, etc., appropriate for smallholder farming to improve productivity and make it profitable.

Transport and petroleum

During the last three decades, government policy on energy was inconsistent and kept changing with party politics.  Unlike other countries, Sri Lanka kept fuel prices low, even at times of high prices in the world market. From 2007 to 2014, while fuel price in the world market was very high, Sri Lanka kept the kerosene and diesel prices relatively low by keeping the petrol price high. Very often, fuel prices in Sri Lanka are kept low compared to other countries in the region. In 2016, the Gasoline price in Sri Lanka was US$0.88 per litter. During the same period, gasoline prices in India, China, and the United Kingdom were US$ 0.97, US$ 0.96, and US$ 1.46. respectively. Though CPC is highly indebted to banks, the fuel is being supplied to CEB, Railway Department, the Armed forces, and Sri Lankan Air Line on credit and subsidised price. The CPC meets the financing cost of these credit supplies. On many occasions, the government used to tax the CPC exceeding its cost of production, compelling it to borrow to fill the gap. The CEB, Sri Lankan, and Railway are not concerned very much about their cost of production as a significant part of it is met by the CPC. Consumers also opt to use more diesel and kerosene to increase profitability, disregarding the actual economic cost to the nation.

However, in 2022, petroleum price distortion has been corrected to a considerable extent. In June 2022, the diesel price in Sri Lanka stood at US$ 1.28, while India, China, and Pakistan stood at US$ 1.18, 1.03, and 1.35, respectively. Kerosine price also increased to reflect the actual cost. Gasoline price has also increased to US$ 1.53, which is relatively higher than the above-said countries. Further, the cross-subsidization has been removed, reflecting the actual cost of production of each product. This price correction should continue without distorting it again for cheap political gains. However, losses sustained due to mismanagement, inefficiency and corruption shall be eliminated to reduce the cost of production.

Due to the subsidised/ distorted fuel price and the low priority for public transport, ownership of private vehicles has increased rapidly. The annual per capita petroleum consumption in Sri Lanka in 2021 stood at 350.5 Lt, while India, Bangladesh, Pakistan, and Nepal stood at 194.5, 41.6, 158.6, and 91.6Lt. respectively. The number of road motor vehicles per 1,000 inhabitants of Sri Lanka, excluding two-wheelers, was 157 in 2019. The same for Pakistan, Nepal, India, and Bangladesh was 111 in 2019, 110 in 1918, 45 in 2016, and 27 in2021, respectively.

The policies and strategies in the transport sector, including subsidised fuel, encouraged the use of private vehicles. Today Sri Lankans are reluctant to walk even a 200-meter distance; instead opt for a car, three-wheeler, or motorbike. Since 2022, Sri Lanka has had no foreign exchange to import fuel to satisfy the demand, but still harping on to maintain the previous lifestyle.

Electricity

The government policy was to achieve a hundred per cent coverage of households with electricity connections. According to the World Bank Collection of Development Indicators, 100% of the country’s population had access to electricity in 2020. This achievement is due to the political commitment of all governments to ensure 100% electricity coverage of households. For several decades, subnational-level development programs such as the Decentralised Budget have emphasised rural electrification. It was used by all political parties as bait to lure votes in all elections. Rural electrification has several negative economic aspects, such as high capital outlay due to scattered housing, low demand, low purchasing power, lack of commercial demand, high transmission loss, etc. Though rural electrification has no significant contribution to economic growth, it has improved the living standard of rural communities by uplifting the status of health, education, welfare, and use of household electrical equipment. So, the quality of human capital has improved tremendously, which would lay the foundation for future economic advancement if appropriately used.

The government and CPC highly subsidise the CEB to generate and distribute electricity. Further, the capital cost of rural electricity is 100% funded by the government. But CEB is running at a massive loss. It is reported that from 2006 to 2017, the cumulative net loss of energy sector institutions was 363.9 billion. According to the CEB Annual Report 2019, 37% of the electricity sale was for highly subsidised domestic and religious uses, but revenue was only 31.6%. The Average selling price was Rs. 16.63 per kWh, while the average cost of production was Rs 23.29. Cross-subsidising between consumer categories couldn’t fill this considerable revenue gap without passing the burden to the taxpayers. According to the same report, the total number of employees was 26,114; perhaps about 50% could be overstaffed. Overstaff also amounts to a considerable subsidy or payment of unemployment benefits by a commercial entity, which the Treasury should have done through a welfare program.

According to a consultative document of PUCSL, the average cost of production of one unit of electricity is forecasted as Rs.32.87 for 2022. The cost increase of Rs.9.58 in 3 years from 2018 to 2022 is unrealistic. The average selling price for 2022 has yet to be made available. According to the “Electricity Tariff Revision -2022”, the subsidy element to domestic use and religious places has been removed to a considerable extent. However, compared to the forecasted average unit cost of production (Rs.32.87), the tariff is extremely low for the domestic user category, 0 to 60kWh per month (Rs. 8.00 for the first 30 units and Rs.10.00 per unit for the following 30 units). The religious places are subsidised up to 120 units a month (Rs.8.00 for the First 30 units, Rs. 15 for the second 60 units, and Rs.20.00 for the following 30 units). Exceeding the consumption of 180 units a month, Rs.65.00 per unit is charged, much higher than the forecasted average unit cost of production.

The tariff for industries (Rs. 20.00 per unit), general-purpose users (Rs. 25.00 per unit below 180 kWh and Rs 32.00 for 181 and above), agriculture, and street lighting (Rs.20.00), are also below the cost of production. However, all these categories have a monthly service charge which is increasing parallel to the increasing usage. Also, there is an optional time of use; the low tariff for the daytime and off-peak hours and a slightly higher tariff than the cost of production for peak hours (agriculture and industries Rs.35 and general-purpose Rs.34). However, the peak time tariff and monthly service charges are grossly insufficient to meet the cost of the subsidy.

 The second category of domestic users (consumption above 06kWh), up to 90 units per month, is entitled to a subsidised tariff of Rs 16 .00 per unit. Compared to the tariff of the low quantity user category, this group pays a two times higher tariff for the first 60 units. There is no subsidy element beyond 90 units a month (Rs50.00 for 91-180 units and Rs.75.50 above 180 units). Most households consume more than 90 units monthly, resulting in an automatically annulled subsidy. Therefore, this is punitive and much higher than the forecasted average cost of production of Rs. 32.87.  According to the revised tariff, the entire cost of the subsidies to the low-quantity domestic user category, production-oriented sectors, street lighting, etc., has been passed on to the high-quantity user domestic customer category and religious institutions, which is highly unfair. Further, the tariff applicable to electric vehicle charging is Rs.81.00 per unit in the daytime. This discourages the use of electric vehicles and contradicts the overall policy of reducing the use of fossil fuels.

Increasing the total revenue is very doubtful if the high-quantity domestic user category becomes unaffordable for the revised tariff. If the above-said forecasted cost of production is correct, the loss may be increased further. The Optional Time Use (daytime, peak, and off-peak) is reasonable to discourage the overuse of power during peak hours. However, the monthly service charge is not a strategic tool but an attempt to collect additional money from those who can afford to pay.  The tariff structure has become complicated and irrational because of several tariff blocks, user categories and loading with various charges. Instead of having many user categories, such as low-income, middle-income, rich, small industries, large-scale industries, tourism, agriculture, government institutions, streetlights, etc., tariff Blocks may be rationalised with a small number of user categories. It must structure to discourage excessive non-productive consumption, allow reasonable domestic use without punitive tariffs, encourage consumption for production-oriented activities and make the poor affordable for the minimum requirements. In doing so, the underlying principle shall be ‘operating the business above the breakeven point’. Under any circumstances, subsidising the inefficiency, corruption, and negative impacts of individual or group hypocrisy and wilful sabotage is not acceptable.

Energy prices and consumption are not guided by economic forces but by the interest of politicians and pressure groups. Social and political concerns have overshadowed economic considerations. If all subsidies are removed, the optimal combination of the energy source is used, corruption is minimised, and the electricity is sold at a cost-reflective price, the CEB can become profitable. Then it will save the vast amount spent to subsidise the loss. Ultimately, the energy sector price distortions have encouraged the outflow of foreign exchange earnings for importing motor vehicles and fuel and for constructing costly highways. Also, the distorted price in the energy and transport sectors distorts the prices of many other products. It is worthwhile to do an in-depth study to understand whether the huge loss incurred by the CEB justifies the social benefits achieved through subsidised electricity and to identify a cheaper solution to achieve the same results.

To be continued

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Budgets 2023: The Acid Test in Bankrupt Sri Lanka

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President and Finance Minister Ranil Wickremesinghe is to present his maiden full budget for 2023 in Parliament this afternoon. A lone MP in Parliament representing the United National Party, he accepted the premiership in May 2022 when the incumbent Prime Minister Mahinda Rajapaksa resigned from the post after a popular struggle against his administration. He informed the Parliament and the nation that he accepted the position, when the others were reluctant, to rescue the country’s dying economy tapping onto his experiences as premier on five previous occasions.

Then, after two months in early July when President Gotabaya Rajapaksa fled the country and tendered resignation from overseas, Ranil was sworn in as Acting President in terms of the provisions of the Constitutions. Soon after that, his position was ratified in Parliament with 134 votes in his favour. He very quickly took over the mantle of the Government, appointed a PM from the ruling Sri Lanka Podujana Party or SLPP, formed a skeletal Cabinet from leading figures in SLPP, and invited the Opposition to join hands with him to rescue the economy as a government of emergency. When the response to this last request was in the negative, he filled the vacancies in the Cabinet with other members of SLPP, introduced an interim budget for the last three months of 2022, got an amendment to the Constitution passed in Parliament, proposed a wide tax hike, and continued with the work already begun to seek a bailout package from IMF. 

There had been several preconditions imposed by IMF for such a bailout like increasing tax revenue, reforming state-owned enterprises, Central Bank refraining itself from funding the budget, tightening monetary policy, making the Central Bank independent, working towards the generation of a surplus of 2.3% in the primary account of the budget by 2025, and restructuring the unsustainable foreign debt. His Central Bank Governor and the Treasury Secretary had been working hard on meeting these goals and attained a certain level of progress except the foreign debt restructuring issue. Ranil very confidently told the Parliament last week that Sri Lanka could hope to finalise the IMF bailout by the end of 2022 with India and China participating actively in the debt restructuring program. 

This is the background to the presentation of the Budget for 2023. 

However, Sri Lanka’s economy is still not out of the woods as admitted by the Central Bank Governor recently. The major macroeconomic issues are looming over the country. On the foreign exchange side, the usable foreign reserves have now fallen to a virtually zero level. The country cannot move back to a safe import program of essential items and raw materials. The shock treatment introduced by way of banning a significant volume of imports is still continuing, killing the economy’s ability to make a quick turnaround. The official consumer price inflation is high at around 70% with the increase in food items going at above 85%. But when the overall inflation, with prices of investment goods and export goods inclusive, as measured by Stephen Hanke’s inflation dashboard, it is above 115% per annum. 

The high food inflation has threatened the food security of both low income and middle-income consumers. The food security is defined as the affordability and availability of a nutritionally balanced diet and the increases in prices have reduced the affordability side. Compounding the food insecurity issue, there is a shortage as well as cost increases of essential medicines crippling the country’s healthcare system. This is a major humanitarian crisis, and it should be resolved as quickly as possible to prevent street riots by angry crowds. The real economic growth is in the negative region with an estimated economic shrinkage of the GDP by about 9% in 2022 followed by a further shrinkage of 4.5% in 2023. 

The Central Bank expects a meagre economic recovery of about 1.5% in 2024 with a forecast of similar growth rates in the next 3-to-4-year time period. The Central Bank is working on an estimated nominal GDP of Rs. 24 trillion in 2022, up from Rs. 17 trillion in 2021. But when this is converted to dollar purchasing power by using the current exchange rate of Rs. 370 per dollar, its value falls to $ 65 billion in 2022 down from $ 85 billion in the previous year. What this means is that the economy will recede to the level which it had in 2011 with a per capita income of $ 3,000. 

To kickstart the economy growing from this depth and make Sri Lanka a developed country by 2048 as envisaged by Ranil is really a challenge. As a result, with slowing economic growth, Sri Lanka will have to remain a lower middle-income country for some time. In fact, the Cabinet of Ministers recently decided that even being a lower middle-income country is too much for Sri Lanka because it cannot have access to cheap funding from friendly countries and multilateral financial institutions like Asian Development Bank, International Development Association, and the UN System. It decided to request the World Bank to consider Sri Lanka as a low-income poor country for the purpose of securing such highly concessional and cheap loans. This does not mean that Sri Lanka will be downgraded to a low-income country in practice. If accepted, it will be regarded as low-income country for extending cheap loans. 

Apart from this, there are several other critical issues looming over the Budget 2023. The foreign debt restructuring program has hit a snarl at this late stage. What is being proposed to restructure is only the borrowing from commercial sources and from friendly countries by the central government which has been estimated to be at $ 33 billion by the Ministry of Finance. This is only a fraction of the total foreign debt of the country which stands at about $ 80 billion. 

Even if the commercial and friendly country loans are successfully restructured, Sri Lanka has a major foreign debt repayment issue due to the lack of foreign exchange to repay other types of foreign debt obtained from international lending institutions like ADB or World Bank, borrowing by state-owned enterprises like CPC, CEB, Water Board, and SriLankan Airlines, borrowing by the Central Bank and the financial institutions, and the borrowing by the private sector. 

In the next 12-month period, the debt repayment obligations of the country as estimated by the Central Bank will amount to $ 5 billion. When the Central Bank’s obligation to pay the outstanding amount due to Asian Clearing Union at $ 1.9 billion is also included, this goes up significantly to $ 6.9 billion. Sri Lanka does not have foreign exchange to meet these obligations.

Apart from this, China which holds about 52% of the total bilateral loans by the central government has become a holdout lender in the country’s debt restructuring exercise. Sri Lanka should meet in London, known as the London Club, to negotiate its commercial loans and in Paris, known as Paris Club, to do the same for bilateral loans. China is a member of neither club. And its policy has been not to follow the normal debt restructuring that involves foregoing a part of the principal or interest or both – known as offering a haircut – but giving a new loan to the borrower to repay the old debt and restart it as new one in the books of the borrower, known as refinancing. If Sri Lanka’s other creditors find that arrangement unacceptable, the negotiations will come to a halt and so would the IMF bailout and its associated other benefits. That was why IMF, World Bank and other creditors have repeatedly warned the Sri Lanka Government that it should immediately get China on board in the restructuring exercise. I have in this column mentioned earlier that it will be a test of Ranil’s diplomatic skills to get China on board as expected. 

Then, there are two other critical issues relating to debt and foreign exchange issues which will hamper his budget 2023. One is that the Treasury is not only empty but also overdrawn as far as the liquid funds are concerned. In terms of the Constitution, the Government operates through a cash flow account known as the Consolidated Fund. All the receipt of the Government through taxation, non-tax revenue, grants, and loan proceeds are credited to this account as resources. Then, expenses as approved by Parliament are debited to this account. Since these receipts and expenses are tallied in the budget, the Consolidated Fund should balance itself except for small surpluses or deficits that may occur due to the non-synchronisation of the flows. But over the time, they should be naturally eliminated. 

But what is being experienced by the Sri Lanka Government is that the deficit in the Fund is rising month after month forcing the Treasury to finance it through temporary overdraft facilities obtained from the two state banks and a provisional advance from the Central Bank equal to 10% of the estimated revenue for the year. As such, the deficit which had been around Rs. 100 billion a few years back has now ballooned to nearly Rs. 1 trillion. With the Government revenue falling short of the estimates and the expenditure overdoing, the overdrawn state of the Fund is rising. The biggest challenge of the Budget 2023 is to eliminate this overdrawn position and make a new start with regard to budgeting of the country. That requires Ranil to use the current revenue to reduce the two overdraft balances from the two state banks that amounted to Rs. 840 billion at end-2021. With the expected meagre income level in 2023, this is an impossible task. 

The other critical issue is the negative net foreign reserve position of the Central Bank. The Bank always had a net positive position with regard to its foreign reserves but from May 2021, they fell into the negative region first by small amounts but then in leaps and bounds in every passing month. Since action was not taken to correct it at that time, it began to grow from around a shortfall of about $ 25 million at the beginning to $ 4,500 million as at end of September 2022. Since the Bank has reported its gross foreign reserves at about $ 1,700 million, the total foreign exchange liabilities of the Bank can be estimated at $ 6,200 million. 

This does not mean that the Central Bank’s overall position depicts a state of bankruptcy since it has a positive balance of domestic assets, in the form of loans given to Government and to commercial banks. But regarding its foreign involvements, it is a state of bankruptcy. Unless the Budget 2023 takes action to correct it immediately, the problem will be compounded in the period to come with no available facilities for correction. The Central Bank of the Philippines underwent such a trouble in 1993 and eventually was liquidated paving the way for the establishment of a new central bank with support from IMF, Government of Japan, and the US Treasury. This state of affairs within the Central Bank will not be viewed kindly by outside creditors. 

Then, there is this domestic debt restructuring issue which is also peeping over the Budget of 2023. Previously, Sri Lanka’s domestic debt was not unsustainable and therefore, the issue did not arise. However, a debt unsustainability is a situation where a country can repay its debt and pay interest only by resorting to extraordinary measures and it is not left with an option except defaulting it. As long as the Government can borrow money from the market to service its domestic debt, its debt is sustainable. However, if it is unable to borrow from the market the entirety of its fund requirements and it must borrow from the Central Bank and the banking sector to finance it, its debt is unsustainable. 

The Central Bank’s new management is trying its best to avoid this possibility by increasing interest rates and eliminating the new lending to the Government. But with increases in interest rates from 12% to 30% plus, the current success rate is not encouraging. If the foreign creditors ask for a domestic debt restructuring as well, it will be a death blow to the country’s financial system. 

The Budget 2023 should address all these issues. With that only RW can show that his magic wand will be working. 

A version of this article originally published in Daily FT

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Global South is facing double jeopardy – Sri Lankan Prez at COP27

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President Ranil Wickremesinghe addressing the COP 27 Climate Change Conference in Sharm El-Sheikh, Egypt said that unbridled industrialization of the developed countries is the root cause of climate change, leaving the poor to suffer the consequences. He said that the problems facing poor countries are augmented due to the absence of adequate funding.

As a result, these countries are facing double jeopardy – struggling to develop economically while fighting to protect the living standards of their populations.

Therefore, President Wickremesinghe said that the developed countries must deliver on their pledge in Glasgow – by doubling their funding to compensate the developing countries for loss and damage.

Accordingly, he said that as proposed by the Climate Vulnerable Forum, commissioning a Special Report on this aspect to strengthen international awareness for future responses would be appropriate.

President Wickremesinghe thus proposed that before COP 28 in Dubai, like-minded nations should meet at Ministerial Level to discuss the way forward on all aspects of climate finance.

He also noted that this should be followed with a meeting of the Heads of Government of these countries on the margins of COP 28 to display a collective frame of mind to stave off the calamity.

Following is the full speech delivered by President Ranil Wickremesinghe at the Cop 27 Climate Change Summit;

“The salubrious environs of the green city of Sharm El-Sheikh will undoubtedly inspire our discussions at COP 27 to a successful conclusion. I sincerely thank the Government of Egypt for your warm welcome and hospitality.

Sri Lanka is replete with biodiversity and has consistently addressed the challenges of climate change. Let me record the action of Sri Lanka in this regard:

Sri Lanka

• Commenced the process of reducing carbon emissions by 14.5% by 2030

• Initiated Marine Spatial Planning

• Recently established a Climate Office

• Spearheaded the UN declaration of the 1st March, as World Sea Grass Day

Sri Lanka is

• Employing the National Policy for Conservation and Sustainable Utilization of Mangrove Ecosystems

• Implementing the Commonwealth Pilot project for Climate and Ocean Risk Vulnerability

• Led the Commonwealth Blue Charter Action Group on Mangrove Ecosystems and Livelihoods

Sri Lanka

• Will not increase further energy capacity via coal power

• Will phase out fossil fuel subsidies

• Will aim for 70% of renewable energy for electricity generation by 2030

• Will join the recent Global Methane pledge made in Washington

Yet, for climate action to be successful, wide-ranging measures to complement the UNFCC and Paris Agreement must be pursued.

The lack of capacity is the biggest obstacle to the implementation of Climate Action plans. Therefore, capacity building is vital in this regard.

To overcome this obstacle, we propose to establish an International Climate Change University in Sri Lanka, with an ancillary institution in Maldives, which would be the first of its type.

This seat of learning can be a trans-disciplinary global centre for green and blue studies – for scientists, environmentalists, researchers, policymakers, development practitioners, and of course, students the world over, to interchange knowledge transcending national and disciplinary boundaries.

The envisaged Climate Change University will offer both short-term courses and postgraduate academic awards to build capabilities for mitigating and adapting to climate change.

The University will also expedite the skills of the new generations to deliver the political, economic, social, cultural and digital transformations required to prevent a 1.5-degree world.

It will be the vehicle to enlighten domestic climate change challenges and prospects.

The collaboration of multilateral institutions and organizations such as the Commonwealth, World Bank and the ADB amongst others, will be sought for the establishment of this institution of higher learning – making it a multi-stakeholder partnership transcending – national boundaries.

I hope Sri Lanka’s proposal will receive extensive support and endorsement from the international community.

Since the prescriptions for addressing climate change have to be dispensed in the global domain, we will meet again next year, charged with high hopes.

However, the chequered implementation of previous decisions, including those of COP 26 is extremely disheartening.

Regrettably, the ground reality is that the fossil fuel-based industrialized countries of G7 and G20 who have been the main promoters of green hydrogen are now backtracking to use of fossil fuel.

In the last year, Carbon Dioxide emissions increased by 2bn metric tonnes – from 34.3bn to 36.3bn metric tonnes.

Such double standards are unacceptable. Developed nations should be given leadership to overcome climate challenges rather than abdicating their responsibilities.

It is no secret that climate financing has missed the target.

It is ironic that the 100 bn dollars pledged annually, have not been available in the coffers to finance climate challenges – as many developed nations deem it fit to renege on their climate financing contributions.

These countries who are also on both sides of the Ukraine war seem to have no qualms about spending for a war which will finally exceed $350bn. A conflict waged purportedly for the security interests of the combatants.

The only security at stake is food insecurity, acerbated to levels not experienced before the war. Many living both in the developed and developing world are outside the scope of three meals a day.

It is estimated that between 30 to 40 million people are being driven into hunger, especially in Africa. This war has also resulted in the upward spiralling cost of living, and shortages of oil and gas supplies, and it has brought the fight against hunger to our homes.

Expectedly, it has led to the curtailing of much-required climate finance pledged by these very same countries.

The issue we have is not finding the party responsible for the war, but the party that will end the war.

Why do we need this funding? It is a known fact that the practice of colonialism transferred the rich resources of Asia and Africa to Europe and was used to industrialize their countries. We became poor from this plunder.

The unbridled industrialization of the developed economy is also the root cause of climate change, the consequences of which, we the poor countries are forced to suffer. Our problems are augmented due to the absence of adequate funding.

Therefore, those in the South are facing double jeopardy – struggling to develop economically while fighting to protect the living standards of our populations.

It is therefore imperative that the developed countries deliver on their pledge in Glasgow – by doubling their funding. Adding insult to injury, damages caused by extreme weather conditions are increasing, and their impacts are exceedingly costly.

Developing countries which are the worst affected by the rise in emissions from the industrialized world, need to be compensated for loss and damage.

While the issue of loss and damage is now included in our formal agenda, we have to ensure that the emitters contribute financially to those affected. As proposed by the Climate Vulnerable Forum, commissioning a Special Report on this aspect to strengthen international awareness for future responses would be appropriate.

Considering the failure of the developed world in bringing about the much-discussed relief, it is proposed that before we get to Dubai for COP 28, like-minded nations should meet at Ministerial Level to discuss the way forward on all aspects of climate finance.

This should be followed with a meeting of the Heads of Government of these countries on the margins of COP 28 to display a collective frame of mind to stave off the calamity.

In conclusion, let me recall the UN Secretary-General’s recent words, “The choice is between collective action or collective suicide”.

The vacuum created due to inaction now requires the global display of sustained political will through dynamic action and constructive cooperation on the part of like-minded countries to prevent this catastrophe.

Let us traverse this path urgently.”

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What constitutes a crisis worthy of global attention? When a regional bank in the United States falls victim to the inversion

Sri Lanka: Wickremesinghe’s Machiavellian skills

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During the month, the government’s preliminary talks with the International Monetary Fund (IMF) on structuring its economic recovery continued. However, debt restructuring continues to be delayed with China due to its preoccupation with the 20th NPC meetings of the Chinese Communist Party (CCP). Even negotiations with India and Japan are moving at a slow pace. Perhaps, this is due to their lingering doubts about the Wickremesinghe government’s ability to see through the structural reforms.

In this context, President Wickremesinghe must be heartened by the show of solidarity for his actions by the US and some of the EU members, despite the use of high-handed methods to suppress public protests. Internally, the passing of the 22nd Constitutional Amendment (originally introduced as 21A) to improve executive president’s accountability, the use of the Prevention of Terrorism Act (PTA) to curb Aragalaya activism and the launching of the Rise Together (Ekwa Nagitimu) campaign at the grass roots to recoup the image of the Rajapaksas were key highlights of happenings in October 2022.

The events leading up to these important internal developments showed existing differences, not only within the ruling Sri Lanka Podujana Peramuna (SLPP) and its cohorts, but also within the opposition parties as well. Of course, during the month political leaders continued to ride their time-tested political hobby horses – new constitution, electoral reforms, call for general election and the not be missed late entrant “investigation and follow up into the Easter Sunday terrorist attacks.” The government used the familiar gambit of appointing parliamentary select committees and presidential commissions to tackle the opposition moves. So, everybody continued to be busy doing something.

Strategizing economic recovery

However, President Wickremesinghe appears to be leveraging lack of unity within political parties to adopt transactional strategies to push through actions to achieve targets set in the 2022 interim budget for increase in government revenue and debt reduction. The actions taken so far, include reducing government spending, tackling public corruption, energy reforms to open retail distribution of fuel to private firms, privatise wasteful state-owned enterprises and promote foreign investment avenues. Normally, these issues are considered politically explosive. Despite paying lip service, political parties in power have seldom considered seriously implementing such measures. Given this dismal record of political parties, Wickremesinghe government’s actions do not seem to have animated the media. The Aragalaya movement has by and large eroded public credibility in political parties.

Inspite of the lack of credibility in the government, some progress seems to have been made in improving the business climate as indicated by the LMD-NielsenIQ Business Confidence Index (BCI) for October. Reporting on the state of business, Sri Lanka’s online business magazine LMD said the BCI provided “a semblance of relief; it has climbed a heartening 13 basis points to 89” during October from September’s 76. However, it quoted NielsenIQ Director-Consumer Insights Theirca Miyanadeniya’s assertion “concern over the socio-political status of the country is waning as business and people are in a race to survive against a backdrop of extreme hardships.”

With the major economies expecting a period of global recession in the coming months, it is essential that Wickremasinghe government survives to see the country through the period of economic privation in the coming months. Under such circumstances, the passing of the 22nd Amendment to the constitution 174 votes in favour and one against, may be considered as an indication of grudging acceptance of President Wickremesinghe’s leadership by over two-thirds members of parliament. The amendment was passed despite some pro-Basil Rajapaksa members of the ruling SLPP objecting to the clause on not allowing dual citizens to become members of parliament. This indicated two things: the decline of Basil Rajapaksa’s influence within SLPP and the Rajapaksas continued support to President Wickremesinghe.

The 22A is a compromise between the Yahapalana government’s 19A to curb the sweeping powers of executive presidency and Gotabaya’s 20A to restore the powers of the executive presidency. The bill was much debated by parliament members and the public and its present form represents a compromise solution reflecting some of the key elements from both the earlier amendments on the subject. For instance, it has retained the 20A clause on the powers of the president to dissolve parliament after two and half years, as against four and a half years stipulated in the19A.

On the other hand, 22A has reintroduced 19A’s clause prohibiting dual citizens from contesting elections which was allowed by the 20A. The 22A reduces some of the powers of the president enjoyed earlier under 20A, regarding appointments to high officers of the state including the Chief Justice, judges of supreme court and appeals court, chairmen of the election commission, human rights commission, and police commission and the IGP. The constitutional council created now has the power to make these appointments. The president and prime minister enjoy some influence in picking members of the constitutional council, which will have three members from civil society.

Conclusion

The writing on the wall is clear: Sri Lanka must achieve targets presented in the 2022 interim budget for increase in government revenue and debt reduction to overcome the worst ever financial crisis it is facing now. Otherwise, Sri Lanka’s debt will be unsustainable; international financial bodies like IMF and World Bank do not assist the economic recovery of such countries. Obviously, lack of understanding among the political parties in tackling long pending critical issues, has stood in the way of evolving a coherent national political and economic narrative to restore Sri Lanka’s credibility both at home and abroad. It will not be pragmatic to expect the political parties to give up their pettifogging and bury their hatchets to see through the crises. They are accustomed to using the economic crunch and hardship faced by the people to improve their poll prospects.

As a seasoned politician, President Wickremesinghe is using his Machiavellian skills to use factionalism existing within almost all the parties, to push through legislation to restore the economy. So far, political parties by and large are grudgingly accepting his rule for want of a better alternative. How long he survives this perilous journey will determine the future course of events in Sri Lanka. One advantage he only seems to enjoy is the moral, political, and even economic support of most of the major Indo-Pacific powers including India and China. But much would depend upon how President Xi Jinping will handle China’s economic downturn, that could have its fall out on Sri Lanka.

Tailpiece: Contact with BJP?

A columnist writing in the Colombo weekly Sunday Times said a group of former LTTE cadres identifying themselves after rehabilitation as the ‘Democratic Cadres Party’ were in New Delhi in India recently. They took part in “an event organised by a group that maintains close ties” with India’s ruling BJP. They are said to have had discussions with various influential political actors and policymakers in New Delhi. Their requests to Indian authorities included lifting of the ban on LTTE proscribed in India since 1991 and full implementation of 13th Amendment. The article said their allegations that Hindu shrines were being acquired by the Archaeological Dept and WildLife Dept under questionable circumstances seemed to have struck a chord with the audiences, “given the BJP’s aggressive campaigns based on Hindutva ideologies.”

[Written on October 30, 2022.]

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