A Budget amidst the Winds of Change

The Fourth Budget of the UPFA Government and President Rajapaksa which was presented on Thursday confounded the skeptics and brought confidence to the doubtful of the Government’s commitment to its policy of development while proceeding with its determination to defeat terrorism and restore democracy to the entire country.

No doubt there will be criticism on several aspects of the budget depending on one’s political belief or ideology, or what one believes should be the best economic policy. Such criticism is part of democracy, and can only help to fine tune the Budget at the Committee Stage of debate and in its ultimate implementation. But, as we can already see it, there will be criticism that is based on the narrow aims of political parties in their constant jockeying for power.

There are already signs that such criticism will not carry much weight with the public, who are able to assess the limited aims of politicians, and can also see in the budget proposals a genuine attempt to come to terms with the problems faced by the people in the immediate context, and be ready for the problems that we will have to face in the not too distant future if the world economy continues it spiralling movement downwards.

It is a movement that Sri Lanka and smaller countries such as ours can have little control over, with the causes for the crisis in the financial sector, which have moved to the economic sector, being largely caused by the profligate spending and credit driven economies of the west, particularly the United States of America.

The budget proposals make further headway in the Government’s principle aim of building a largely Sri Lankan economy that can have the least pressures from external developments, while being aware that we can never be insulated from the economic forces of globalisation. Towards that end the proposals presented by President Rajapaksa seek to further strengthen the rural economy, especially to make Sri Lanka self-sufficient in food and all that we can produce for ourselves, hopefully with an exportable surplus. Clear action has also been taken to encourage local manufacture from the restrictions through taxation of imported goods, both food and other consumer items. A good example was the increased cess duty on imported fruits and vegetables, which was an important turn away from the dangerous turn we took in 1977, when the UNP’s steamroller-majority Government of JR Jayewardene sought to please those who were hankering after imported apples, grapes and cheese, and made that great invitation to the Robber Barons to come over here.

In his preamble to the Budget proposals the President, who is also Finance Minister, laid out very clearly the exact situation that prevailed at the time he assumed office in November 2005. He reminded the House that at the time the North and East of the country was controlled by terrorists, with certain areas being clearly declared and designated as LTTE controlled areas, and the government of the day turned a blind eye to the illegal banking and Court operations that were going on there, as well as to the use of children as child soldiers and the training and use of women as suicide killers. As he stated it: “Terrorism was permitted to operate on a wide scale not only allowing damage to human lives and property, but also to our economy and the democratic image of the country.

Inhuman acts

There was no stable policy towards defeating terrorism. Innocent civilians in the North and East were subject to inhuman acts of terror and harassment for over 25 years. The LTTE carried out brutal terrorist attacks on the Central Bank, the Oil Refinery, the Katunayake Airport and our own World Trade Centre in Colombo, and also attacked globally acclaimed places of worship such as the Sri Maha Bodhi and the Temple of the Sacred Tooth Relic. He reminded the House that virtually all our Tamil leaders, who were widely respected in our society, were brutally murdered, and that the LTTE had killed more Tamil leaders than Sinhala leaders, and virtually eliminated the democratic representatives of the Tamil people. Not only had the LTTE murdered those leaders who were dedicated to peace and development in Sri Lanka, but also assassinated a Prime Minister of India who was a close friend of this country.

The Economy

Moving from the bloody sweep of terror to the reality of the economic regime that prevailed at the time he took office, President Rajapaksa made the most scathing indictment of the whole thrust of economic policy that was in play. He said the neo-liberal globalisation process that was followed by our country for over 30 years, paid economic dividends only to a very small segment of our society. “We were fast realising that this process was unsuccessful. More than half of the GDP was Colombo based. Agricultural development was forgotten. Paddy fields were neglected. They were filled and used for commercial activities. Rubber and tea cultivation was destroyed by permitting such land to be blocked out and sold. The need to develop irrigation, highways, electricity, water supplies and rural development was also forgotten. In short, rural villages were so neglected and made so distant from Colombo as though they were no longer a part of Sri Lanka.

He said the country had suffered a severe mental setback, realising that the Government was not only unable to fulfill its obligation to combat terrorism and bring about peace, but it was also not willing to even construct a rural road. “Pushing aside the professionals and intellectuals of our country, and using foreign consultants instead, had become a habit. The public sector was pruned to a destructive level. Picketing campaigns by unemployed graduates became a common sight. Workers engaged in industrial action due to the closure of large factories such as those at Embilipitiya and Thulhiriya. State institutions such as the Food Department, CWE, Paddy Marketing Board, CTB, State Engineering Corporation and the Government Factory were being wound up. Alternate institutions were being set in place at the Sri Lanka Customs, Inland Revenue Department, Department of Railways and the People’s Bank. Tax Amnesties that were introduced made a detrimental impact on the tax system. Large scale frauds took place. Banks such as Pramukha Bank crashed. State revenue was low. Debt burden of the country increased, having raised debt without building up corresponding national assets.

It showed the pressing necessity for change in Sri Lanka, both in combating terrorism and the direction of the economic policies, if the country was to make any progress. It was a challenge that called for change in our own country, as Barack Obama saw as necessary in the United States of America.

It was also necessary to place all this on record, so clearly even when presenting the Fourth Budget of the Mahinda Rajapaksa administration, especially with the charges being made that there has been no progress, made in the country since the people defeated the UNP in April 2004, and went ahead shortly after one year to elect Rajapaksa as the President, with a new vision for the country, and the key issues facing it, namely terrorism and development through rural empowerment. Both these challenges are now being met in large measure, and the latest Budget proposals indicate that the country will continue to move in the direction of triumph both in the elimination of terror and the establishing of a strong national economy.

The Plumber

The sheer lack of political direction and absence of coherent policy in facing up to the challenges before the country was seen in the week before the Budget was presented, when the UNP presented what it described as an Alternate Budget. It was a total misnomer as all it had was “proposals” rather demands on the expenditure side of budgeting with no indication of the revenue side.

It could not escape comparison with the hasty and half-baked proposals that were being presented by the John McCain - Sarah Palin campaign to meet the serious challenges faced by the American people on the economy, with the great crashes of Wall Street that have so harshly impacted on Main Street, USA. If Joe the Plumber, seen as the economic guru to John McCain in his pursuit of Thatcher-Reaganomics, as the American people were feeling the pains of the failure of those policies, it appeared that the UNP’s Alternate Budget was also a poor bit of economic plumbing that had been very hastily done.

It showed the lack of both engineering and plumbing skills in delivering the goods that the people needed - mainly the defeat of terrorism and the determined push towards economic progress. There was a very clear touch of Ravi the Plumber from Kotte in the very concept of these demands and their presentation, under the misleading title of an Alternate Budget.

The political plumber from the Kotte may have much muscle on his body to turn the toughest wrench, but these proposals are proof of a grave lack of muscle in the brain to present something that is even worthy of cursory study.

Agent of Change

The resounding victory of Barack Obama and the Democratic Party in the US election, fooling many a “pundit” who failed to see the demand for change among the people, and also the planning and organisational skills of Barack Obama, who is admittedly short on experience but has proved he can make up for it in intellect. In January he will become the occupant of the White House, built by the labour of black slaves, too. By any measure the victory of Obama is one which can and must give hope for all who believe in democracy anywhere.

As for the impact of this victory of Sri Lanka, not much can be seen just now, but his campaign has shown he is a man of great wisdom and pragmatism, which if allowed to have full reign in his administration cannot be too harmful or dangerous to Sri Lanka. Yet, being aware that the United States is not likely to undergo sea changes in foreign policy, with President Obama having to look at the best interests of the United States first; there is every sign that his will not be knee-jerk reactions of a politician who only believes in the use of might and muscle, but will make much more use of brain and persuasion in the conduct of affairs with other nations, and the building of better and more lasting relations, which could help make the world a somewhat safer place for all human beings.

The leap for us

Most Sri Lankans are overjoyed at Obama’s victory, often for the colour of his skin from which some affinity is drawn, and for the fact that he has come so far as a member of a minority that obtained its voting and other rights barely 40 years ago. This tempts one to ask the question as to when we, who have had universal franchise from 1931, and have a history that can be traced back to over 2000 years with a common heritage, will take the mental and political leap required to elect a national leader from say, the Tamil people in our midst.

I will end this by quoting from the final paragraphs of the endorsement of Barack Obama for the US Presidency made by the Editors of the “New Yorker” of October 13, ‘08, Writing under the heading “The Choice”. A more compelling endorsement is not easy to find.

“The exhaustingly, sometimes infuriatingly long campaign of 2008 (and 2007) has had at least one virtue: it has demonstrated that Obama’s intelligence and steady temperament are not just figments of the writer’s craft. He has made mistakes, to be sure...... But, on the whole, his campaign has been marked by patience, planning, discipline, organisation, technological proficiency, and strategic astuteness. Obama has often looked two or three moves ahead, relatively impervious to the permanent hysteria of the hourly news cycle and the cable-news shouters. And when crisis has struck, as it did when the divisive antics of his ex-pastor threatened to bring down his campaign, he has proved equal to the moment, rescuing himself with a speech that not only drew the poison but also demonstrated a profound respect for the electorate.

Although his opponents have tried to attack him as a man of “mere” words, Obama has returned eloquence to its essential place in American politics. The choice between experience and eloquence is a false one something that Lincoln, out of office after a single term in Congress, proved in his own campaign of political and national renewal. Obama’s “mere” speeches on everything from the economy and foreign affairs to race have been at the centre of his campaign and its success; if he wins, his eloquence will be central to his ability to govern.

“We cannot expect one man to heal every wound, to solve every major crisis of policy. So much of the Presidency, as they say, is a matter of waking up in the morning and trying to drink from a fire hydrant. In the quiet of the Oval Office, the noise of immediate demands can be deafening. And yet Obama has precisely the temperament to shut out the noise if necessary and concentrate on the essential. The election of Obama-a man of mixed ethnicity, at once comfortable in the world and utterly representative of twenty-first-century America-would, at a stroke, reverse our country’s image abroad and refresh its spirit at home. His ascendance to the Presidency would be a symbolic culmination of the civil- and voting-rights acts of the nineteen-sixties and the century-long struggles for equality that preceded them. It could not help but say something encouraging, even exhilarating, about the country, about its dedication to tolerance and inclusiveness, about its fidelity, after all, to the values it proclaims in its textbooks. At a moment of economic calamity, international perplexity, political failure, and battered morale, America needs both uplift and realism, both change and steadiness. It needs a leader temperamentally, intellectually, and emotionally attuned to the complexities of our troubled globe. That leader’s name is Barack Obama.”