Economic Gloom, LG Polls & Coalitions Of Clowns


By Amer Ali

Dr. Ameer Ali

The prospect of any economic revival in 2023 is evaporating by the day if one understands the implications of what the Standard Chartered Bank has revealed lately. IMF’s 2.9 billion dollars, which hinges on successful debt restructuring, and further fundings from other multilateral aid agencies seems to be at least six months if not a year away. Accordingly, the economy is expected to contract by one more percent to 8 in 2023, although World Bank (WB) with even worse prediction expects positive growth in 2024. Behind this gloom is the threat of a global recession predicted by IMF and WB. At least to reduce the current economic pain somewhat and get the local economy moving, the Governor of Central Bank has appealed to India and China to reduce their debt, which is highly unlikely. Even if they were to be reduced, that would raise problems with private creditors. As a result of all this, Ranil Wickremesinghe’s (RW) 2013 budget would not be able to fulfil its promises.  

It is in such worrying scenario that the controversy over whether to hold or postpone Local Government Elections (LGE) scheduled to be held in March is dominating the political scene. Being an experienced politician, President RW knows very well that an election at present whether at presidential, general, provincial or local level would spell disaster to the political fortunes of RW as well as his SLPP backers. Although he remains non-committal in public, behind the scene however, he would certainly work to get the elections postponed. At least from a personal point of view it would be advantageous for RW to delay any election, because he needs time for the IMF strategy to work and deliver some progress so that he could then go before the people and claim credit for his economic wizardry. Based on that credit, his own party UNP would also be on a strong wicket to face an election at any level.  

Meanwhile and given the delay in IMF funds, debt restructuring and assistance from other sources there is also a political rationale for Mahinda Rajapaksa’s (MR) SLPP to delay the elections at least until RW’s taxing budget start biting the people. As time drags on and economic difficulties mount SLPP would then be able to shift the blame onto the incompetency of RW expecting voters to forget the original calamity caused by Rajapaksas. Sri Lankan voters have short memories, don’t they? 

In addition, and to the advantage of MR and Co., RW has embarked on a futile mission of resolving the Tamil national issue, which is a hot potato to any political party. RW started with an ambitious program to solve that problem for ever and before February this year, but he now realizes that it would be impossible and is reported to have postponed the whole discussion indefinitely. Had he continued with that agenda that would have given a golden opportunity to MR and his SLPP to bury him under the mud of Sinhala Buddhist ethnonationalism. 

To postpone the LGE therefore, the question of affordability was raised and an imaginary total of 10 billion rupees was quoted as the probable cost of holding LGE. That canard has now been shattered by the Election Commissioner who revealed that the actual cost would be only 5 billion and that money would be made readily available. Even then, the whole question of affordability is laughable in view of the far greater cost to tax payers of sustaining 225 parliamentarians, majority of whom are of substandard competency, with salaries, perks and security arrangements. This was why the aragalaya youth called for “No 225”.  

Finally, to add an international perspective, there is a view that IMF itself is in favour of LGE. Rather than pinpointing IMF it is safer to argue that because of the adverse international publicity of the Sri Lankan regime over its record of human rights violations, corruption and economic mismanagement there is a widespread feeling that the regime should receive a fresh mandate from the people. LGE is therefore unavoidable and as expected election fever has infected the country.    

What the nation witnessing now therefore is a comedy of coalitions among political clowns. The most startling one is that between RW’s UNP and MR’s SLPP. The former was routed by the latter in 2020 and the latter, and it was SLPP under its autocratic President GR, mishandled the economy and bankrupted the treasury. When GR was ousted (thanks to the aragalaya youth) RW became Rajapaksas’ guardian angel and now both have wedded in a marriage of convenience. It is like two lovers deciding to live or die together. Their party icons, elephant and lotus bud, would be used at convenience depending on the respective party’s popularity in different electorates.  

Against this unholy coalition is the Freedom People’s Alliance of 10 groups for the time being, many of whose members are disgruntled elements from SLPP. Of course, they claim to have allied to save the country, but from what or whom and how are left to one’s imagination. It appears that only SJB and NPP/JVP are left alone to fight individually. But politics is a strange animal and anything could happen between the two.

Comically, there are also coalitions mooted among minorities, and especially within the Muslim community. Unlike the grand coalition that wants to save the country, Muslim coalitions are always formed to save the leaders and their cronies. They would coalesce even with the devil if that devil would promise ministerial status and privileges.  The Tamils as usual would remain disunited and their largest political group TNA would pray for a close contest between the two major coalitions so that TNA could become the kingmaker.   

What is common among all these coalitions is the fact that apart from the IMF backed economic program to which RW could claim some credit none of the others have any alternative proposal for the economy to revive and peoples’ pain to reduce. Even SJB that criticizes the government has so far not come out with any alternative agenda  If it wants to renegotiate with IMF that would delay even further any chance of rebuilding the economy.  The only party that is constantly argues for a change in the SYSTEM seems to be NPP/JVP. 

The SYSTEM is exposing its bankruptcy by the day. It was only the other day that Justice Minister Wijeyadasa Rajapaksa revealed that more than $50 billion belonging to nationals are stacked away in foreign banks and safe havens. Most recently and according to information disclosed by the Ceylon Electricity Board and LECO under the Right to Information Act reveals a staggering amount of Rs.4,440 million as unpaid electricity bills from the rich and the powerful. The President with all the powers in his hands feels impotent to take remedial and decisive action to recoup these losses, because such action would mean interference with the system, which would jeopardize his own chance of getting re-elected. This had been the sad story of all Prime Ministers since 1947 and Presidents since 1978.

On a different note, the arrest of a free thinker, Sepal Amarasinghe for allegedly blaspheming the Dalada Tooth Relic, while allowing Buddhist monks who had been deliberately and insulting Islam and desecrating Hindu temples show how the system works in favour of one group and in disfavour of others. Should such a SYSTEM continue? This is the only question facing the nation at the moment. Conducting elections and replacing regimes with the same system is pointless. The aragalaya youth were on the money when they demanded system change and the country desperately needs them to continue with their mission. Even if the economy were to revive in 2024 as WB predicts it would be a wobbly revival without SYSTEM CHANGE. In this context, RW’s 25 years plan of reforms expected to be released on the Independence Day would be a catalogue of promises without structural choherence.    

*Dr. Amer Ali, Murdoch Business School, Murdoch University, W. Australia

The post Economic Gloom, LG Polls & Coalitions Of Clowns appeared first on Colombo Telegraph.

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