I drew attention last week to the worries caused by what seemed arguments that elections should be postponed. I have noted that Indrajith Coomaraswamy who set the ball rolling as it were has made it clear that he does not advocate the constitution being violated, while Nimal Sanderatne did say ‘how the mandatory constitutional requirement could be postponed is difficult to foresee.’ But given the use that might be made of their statements, I would have much preferred it if both these eminent gentlemen had been less ambiguous about the possibility of not having elections.
And I regret too their baldly stated conviction that things are now better, since though that is true, it would have been less misleading had they pointed out that, while things are better than they were last year, they are certainly not as good as they should be. It would seem they made their optimistic pronouncements before the IMF team had made its inspection and reached a decision, and certainly before the IMF report on corruption was published. But it seems myopic of these two experts to have failed to register what everyone knew, and it only remains to be seen whether they will issue a corrective statement as to their assertion that we are on the right path with incorporation of what the IMF has said.
The IMF report is a long one, but a few samples of what it recommends will make clear that we have a long way to go to get out of the woods, and that tightening the belts of those who are not well off is not enough, though this seems to be what Messrs Coomaraswamy and Sanderatne find satisfying. Knowing Indrajith’s decency I cannot believe he is satisfied, but he simply will not rock the boat, and while he himself aims to do the right thing he simply will not insist that political authorities set themselves high standards.
IMF’s recommendations and challenges
Three areas the IMF points out which require action are:
i) the Asset Declaration and Conflict of Interest Systems; (ii) more effective investigation and prosecution of corruption; and (iii) enhancing mechanisms for recovering stolen assets, including such mechanisms as non-conviction-based confiscation.
Is it too much to ask that Indrajith and Sanderatne weigh in on these issues? Indrajith knows full well, having taken over from Arjuna Mahendran as Governor of the Central Bank, that the 2015 bond scam not only ‘generated extensive profits for private parties while simultaneously saddling the state with costly debts’ as the IMF report has it, but also meant that the excessive interest rate Mahendran had permitted to his son-in-law raised interest rates across the board for the country. While under the much-excoriated Cabraal interest had generally been around 10% for loans taken on the bond market, after Mahendran had scammed the country, the rate became more in the region of 12% and that lasted.
It would have been good had Indrajith pointed this out during his tenure, for it must have made his life difficult. He has explained why he turned so much to foreign private agencies for loans during his period, those who have made it clear to the government that they will not take too great a haircut, which led to Domestic Debt holders also taking a beating.
But I also have another major point of contention with the distinguished economists who have spoken of the economy or rather of economic recovery being derailed time and again by elections. They do have a point, though I am sorry they did not also look at the fact that this happens now more frequently, unlike in the days before JR’s perverse constitution which, with its several amendments, permits elections at the drop of a hat. Staggering Presidential and Parliamentary Elections, and allowing either of them at will (contrary to the Presidential term initially being fixed), caused mayhem, which was added to when Provincial Councils were introduced, and those too staggered from the inception.
Impact of postponed elections
I will look further at that, but today I will draw attention to the single greatest disruption the economy suffered through political gamesmanship, which was caused by the postponement of elections back in 1982, the most perverse though not the first of JR’s perversions of democracy. Not only did that drive dissent underground, and cause violent disruption, but it also led to hubris on the part of a Government that thought it had rolled up the electoral map and proceeded thereafter to engage in bullying of other pillars of democracy.
It was claimed recently that ‘if Sri Lanka had been able to sustain the socio-economic reforms initiated by the late President in 1977, the nation would be a developed country today. President Wickremesinghe emphasized that challenges such as riots, terrorism and the failure to fully grasp the philosophy, hindered the complete success of these reforms. He also noted that neighbouring countries like India, China and Vietnam, which transitioned from closed and socialist economic practices, had studied Jayewardene’s approach and prospered by adapting their policies to the changing times.’ The Government failed in this blithe assertion to note how riots had been engendered, and how they had contributed to the burgeoning of terrorism and the collapse of the economic development that had begun, including increasing tourism.
But there is another fundamental flaw in the blithe generalization, when he talks of ‘the failure to fully grasp the philosophy’. The Government does not mention whose failure it was and seems to understand the basic difference between the economic free for all which was how Jayewardene and his dominant advisers interpreted the introduction of free market policies and the mixed economy developed by the countries which he notes have done much better than us. And one can only describe as nepotistic effrontery his idea that those countries studied Jayewardene’s approach – unless he means that they studied it and worked out where he had gone wrong.
The fact is that the countries that transited successfully from closed and socialist economic practices did not abandon the maxi-min principles of social democracy, the philosophy enunciated by John Rawls that distinguishes liberalism from the neo-liberalism that is now touted as an economic panacea though it has so obviously failed in so many places. Cutting down on state monopolies that are wasteful did not mean cutting down on basic services which the state must provide, with a commitment to enhancing opportunities for the worst off.
Professor Rajiva Wijesinha