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PBJ’s Arrogance

Jul 24, 2010 3:05:17 PM - thesundayleader.lk

P.B. Jayasundera and Mahinda Rajapaksa

The left leaning SLFP led governments of the past have more often than not taken an anti Western stance when in power, made famous by former Premier Sirima Bandaranaike’s reference to that bloc in her first tenure of office (1960-65) as being the “Rapacious West.”

Now, some 45 + years later, the present Government’s seemingly all powerful Treasury Secretary Dr. P.B. Jayasundera made an apparently similar outlandish statement at a function in Colombo last Friday.

He said that he had told three donor agencies, namely the World Bank (WB), Asian Development Bank (ADB) and the Japanese that if they are unable to fund rural development banks that they can go, in other words that they can close shop and  leave the country as the Government would then have no need of their services. Not the best of utterances or outburst, and certainly not diplomatic language, to make at a public function.

Quite a contrast with how late President J.R. Jayewardene vented out his frustration with the WB and the IMF in years gone by, when he, in his typically sophisticated way of putting his point across, quoted Dante’s Divine Comedy by saying, “Abandon hope all ye who enter herein,” in an apparent reference to the terms and conditions laid down by those donor agencies for Sri Lanka to obtain concessional aid.

All Jayasundera’ gung ho may be due to the fact that there is now Chinese money flowing into the country to take development forward, and lately Indian money, also joining in the bandwagon.  Those were not there during Jayewardene’s era. India was openly hostile towards him over the Tamil terrorist problem, and the only assistance forthcoming from China then was of a military nature, not development assistance by any long chalk.

The main funding agencies of the WB and the ADB are the West and Japan. It’s indeed funny that Jayasundera didn’t turn his guns at the IMF as well, whose alleged current fiscal directions, Jayasundera and the rest of the Government are following lapdog style, like, to increase tax revenue, they recently raised import taxes on vital food items such as wheat flour, thereby making the price of an ordinary loaf of bread to go up by between Rs.3-5, to get  IMF assistance, which earlier came in the form of US$ 325 million per tranche in a US$ 2.5 billion loan arrangement, provided Sri Lanka’s fiscal behaviour was correct.

However in recent times even the values of those tranches have been almost halved, now adding upto a little more than US$ 200 million per tranche, with a little over US$ one billion having been disbursed thus far, with the Government and Jayasundera appearing to be playing the IMF’s fiddle to get the remainder.

What is sauce for the goose is not sauce for the gander according to Jayasundera’s and the Government’s dictionary. They seemingly have a different yardstick to measure IMF conditions and another to measure the rest of the donor agencies such as the WB, ADB and Japan’s conditions. What is of concern is however the seeming lack of transparency, in particular of Chinese development loans. No one seems to know the interest charged on such loans nor of their tenures and an impotent opposition allegedly not raising such issues in parliament, and seeking Government’s clarification on such important financial matters. After all it’s the people of this country who will have to repay these loans. Not Jayasundera, nor the President, nor the Cabinet, nor the rest of the Government’s lawmakers. Power corrupts and absolute power corrupts absolutely. In contrast loans from institutions such as the ADB, WB, IMF and Japan are concessional, and their terms and conditions are transparent.

Another thing that Jayasundera has forgotten by making such seemingly rude utterances in public is that the backers of such donor institutions, the West in particular, are also Sri Lanka’s major export and tourism markets.

Words can be poisonous. It was Jayewardene’s foolish utterance when canvassing for the 1977 polls, where he drew a similitude to what happened in India which also went into the polls a few months earlier that year. He said that what happened to the “Cow and Calf” in India, would also happen to Mrs. Bandaranaike and her son Anura at the polls. The “Cow and Calf” is the symbol of the Indian Congress Party, but everyone knew, that Jayewardene’s inference was to the late Indira Gandhi, the then leader of the Congress party and her son Sanjay, who were defeated by Moraji Desai’s Janata Party at that election. Gandhi never forgave Jayewardene for that statement when she was returned to power in 1979, and the events that led to the 1983 riots and thereafter, is proof of the danger of not guarding one’s tongue.

A little more circumspection in public by Jayasundera and his ilk may do this country a world of good.

By Paneetha Ameresekere - Business Editor