Sri Lanka – From A Failed To Pseudo Mafia State?

By Vipula Wanigasekera –

Long queues of Tuk Tuks across Sri Lanka waiting for fuel may not necessarily be reflecting the real demand. Reason being the emergence of a black market where gasoline can be sold 3 times the real price so that the Tuk Tuks are not required to be on the road for hire.

That’s a mafia styled emerging black market at a time fuel prices have once again increased with no shipment in the vicinity. It is not a surprise then why not many Mercs, Audis, Jaguars and Beamers are seen in petrol queues, not to mention that some super luxury vehicles have a privilege to fill tanks from the refinery itself.

‘The Guardian’ 22 June reported Sri Lanka’s PM as saying country’s economy has ‘completely collapsed’. Sri Lanka is therefore a failed state which is generally defined as a political body that has disintegrated into a point where basic conditions and responsibilities cannot be fulfilled meaningfully.

Declining living standards of population is a clear indication of a failed state with the a) political and bureaucratic decisions being detrimental to development, b) erosion of legitimate authority to make collective decisions, c) inability to provide basic public services, d) non recognition to interact with international community in a crisis situation, e) visible level of corruption f) unequal justice and lack of control over subordinates’ actions.

The autocratic style of Governance in Sri Lanka, though not called a mafia with white collars appearing in the fore front, had been in the making especially since early 200. The severance of the joint venture with Emirates is costing SriLankan Airlines an average of Rs 28 billion a year and these losses are inconceivable and are still accumulating. The good part of the country could have been provided with solar power with that capital lost over a decade.

Issuance of liquor bar licenses in a country that has one of the highest consumption of liquor, law makers running businesses with conflict of interest, permits issued for various activities like sand mining, privileges given to have the loans written off as bad debts by state banks etc have been open secrets.

Sri Lanka has defaulted on its debt for the first time in its history as the country struggles with its worst financial crisis since independence. Hamilton Reserve among the other bond holders, has filed suit in the Federal Court of New York Southern District citing possible reasons for Sri Lanka’s inability to pay the debts.

The IMF team has just left Sri Lanka issuing a statement that drastic restructuring may be required in the recovery plan which may not be in line with the political culture in Sri Lanka. Meanwhile thousands of casual daily jobs will evaporate and so will small time businesses in the near future.

Sri Lanka will have to depend on the big brother – India and other friendly countries for basic needs such as fuel, food and medicines. The credit lines so offered will have their own strings attached to them.

Shortages of goods have triggered rapid price escalations. The hardships of masses are conspicuous with long fuel queues (some collapsing with cardiac arrests in the long wait for days). A large number of farmers are languishing without fertilizer and some of them are in the constituency of the ruling family where paddy fields have gone dry.

Sri Lanka is caught up in multitude of issues to be called a failed state. The frequent changes in cabinet seats with the hope that someone will wave a magic wand, has not worked with the macro picture being bleak. The new PM, thought to be a ‘Messiah’ is yet to prove himself. He has so far been ‘describing’ the magnitude of the issues while the Japanese Government has mentioned that they cannot ‘trust’ Sri Lanka Government which is understanding.

It would have been desirable had the entire Government resigned and allowed people to elect a new Government. The grievance that an election costs nearly Rs 3b does not hold water. The loss of revenue to the Government after the blatant duty reduction of tax on the importation of Sugar alone is calculated as over RS 16 billion. Sri Lanka could have staged 5 elections with this kind of money.

The unsustainable debts, failing to go to IMF on time, forcibly holding the dollar, massive unfocused tax cuts after elections, arbitrary ban on fertilizer imports, excessive money printing, mismanagement as revealed in COPE and COPA parliamentary meetings, have resulted in the present predicament of the country bringing it to a failed state.

What is then a pseudo mafia state and is Sri Lanka heading towards that?, a question worth discussing. A mafia state is a system where the Government is tied with organized crime to a degree when politicians, government officials, the police, and/or military become a part of the criminal enterprise.

Having been coined by Alexander Litvinenko and the states that were been called Mafia states include Bulgaria, Guinea-Bissau, Montenegro, Myanmar and Venezuela.

The study by Anthea McCarthy-Jones elaborates how corrupt practices evolve into the almost complete criminalization of a state. This study traces Venezuela’s political trajectory and critical junctures laying the foundations for the mafia state.

In a mafia state, cash-rich individuals and criminal organizations take over valuable assets and will also engage in hostile buying of potentially up market properties and companies at low prices, not to mention the alleged wealth that is lying outside Sri Lanka and how politicians became staggeringly wealthy during their tenures.

Thousands of people who are laid off are then tempted to break the law. Unemployed experts in finance, accounting ICT etc tend to make themselves available to criminal cartels.

It may be harsh to apply this definition to Sri Lanka which has relative peace at present while Australians having their cricket tour. But the time may also be the calm before storm.

The credibility of the present Government is repeatedly questioned. In the past, killings and disappearances including Easter Sunday attack remain unresolved and most of them are portrayed in the protest area – Galle Face. Then the reported threats emanating from various quarters for journalists and social activists.

After 2019 elections, cancellation of Japanese light rail project, concerns on the tax reductions, agreements for the supply of Gas with improper procedures, paying for an empty shipment of fertilizer from China, all perhaps being tip of an ice berg, have attributed to a mafia style governance.

Adding more salt to the wound, release of prisoners on special pardons, convicts holding positions, involvement of nonmilitary personnel in security matters and open intimidations like ‘killing a crow and leaving a feature’ could well be interpreted as signs of a mafia state together with sprouting black markets starting from fuel dungeons.

The economic mutilation done by autocratic if not insane decisions, are not reversible for years. It is with utter dismay that the public is watching COPE and COPA proceedings in parliament and whatever that is revealed, the public knows that none of them will end up in a court of law. One law maker in the ruling party openly accused that former President’s secretary who was one time convicted and exonerated, was given a free hand to control both the treasury and the central bank!.

Though pseudo mafia governance in Sri Lanka has been in existence incognito for some time, life of people moved on with the economy holding at some resolute level prior to the pandemic.

The post Covid conditions began to expose corruption and mismanagement when the treasury ran out of money to pay the bills after losing a massive tax collection – over Rs 500b a year, in favour of businesses specially the ones which supported election campaigns.

Allowing an import oriented economy for decades, Sri Lanka’s foreign currency reserves have dwindled with the loss of foreign exchange from expatriates, exports, and tourism.

The investments on infrastructure taken from loans that are reported to be paving way for underhand deals for individuals, had not generated revenue like the iconic tower standing right in the middle of the capital, probably the biggest white elephant in Asia.

The mayhem of black May triggered by supporters of the state with the blessing of politicians and aftermath is history. And yet a question leaves among public why most of the perpetrators are still free while the whole drama is on tapes of CCTVs. The aftermath of houses belonging to politicians gutting down by fire is also to be noted, be it level of frustration or an organized way of vandalizing when opportunity arises.

Pseudo Mafia state therefore takes a form of pareto principle with a minority calling the shots whether they are connected to the Government or otherwise while the public has to go thorough enormous hardships and suffering.

It is said that unless some economic miracle happens, the volcano is about to erupt in Sri Lanka when helpless population across the country unleashes the unendurable agony caused by the deprived access to food, medicines, education and transport.

*Writer is a former Diplomat, Head of Tourism Authority and Senior Lecturer for Edith Cowan University , Perth

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