19 October 2021 12:08 am Views - 1938
At a ceremony to mark the 72nd anniversary of the Sri Lankan Army last week, he pledged to introduce both within the next year. In the meantime, the country is stuck neck-deep in the worst ever economic crisis in recent memory. It is worsening with every day that passes. The crippling shortage of fertilizer as a result of one of his trademark follies of banning chemical fertilizer has brought farming to a grinding halt in some areas and left farmers despondent at the dawn of the new farming season. The shortage of milk powder, gas and other imported essential items as a result of the country having almost run out of foreign reserves smacks of a making-of a miniature Venezuela.
There is no more inopportune moment in recent times than now to tamper with the state structure and its mechanism. The country would have better served if the President tries to address the existential economic challenges. That is what smart and commonsensical political leaders would have done. But, here in Sri Lanka, things unfold as if the script of the Last King of Scotland.
The President has himself acknowledged that those who voted him to power feel he has let them down. They ought to be. Those of the social-economic background of 6.9 million voters who voted Gotabaya Rajapaksa to the presidency have faced the brunt of the fall out of the demagogic policies of their President. They were lured to vote for him through a mixture of nationalistic and sometimes ultra-nationalist rhetoric, anti-minority dog-whistling, fear psychosis over concocted foreign conspiracies, and of course, manifest failure of his predecessor.
Now those grandeur promises have melted into an ugly spectacle of skeletons that had so long been sugar-coated with everyday rhetoric. The reality bites, and it pains.
Sudden plan to ban fertiliser and agrochemicals led the farming community to the edge of poverty
Before proceeding to analyze the tragedy that Sri Lanka is today consider the potential that Gotabaya Rajapaksa had when he was elected President. As this writer wrote then, he had the best of both worlds, a populist following at home (that would have made it easier for him to make much needed domestic and foreign policy choices) and a general sense of goodwill from the international community, including from the Western democracies, who, despite their reservations, were willing to give him a chance. The latter was by and large because, Gotabaya Rajapaksa inherited a political system, with somewhat strong independent institutions, empowered under the 19th amendment, and an overall climate of rule of law, which was in part the inheritance from the predecessor, Yahapalanaya.
President Gotabaya Rajapaksa has dismantled each of these advantages. He scrapped the 19A and effectively turned state institutions into a rubber stamp of his whims and fancies, He picked an unwanted battle at the UN Human Rights Council by withdrawing Sri Lanka’s co-sponsoring of a previous resolution, the decision eventually resulted in the Council mandating an evidence-gathering mechanism of war crimes. He snubbed the Americans by rejecting the half-a-billion-dollar grant from Millennium Challenge Cooperation, as if Sri Lanka is the superpower in the power relationship.
He pardoned several convicted killers, and the attorney general living in the new reality also dropped charges against a number of high-ranking officials implicated in gross human rights abuses and corruption.
None of these developments made Sri Lanka better respected in the democratic nations in the international community. Authoritarianism and heightened power centralization could still have paid off. It could have been given short shrift by the international community – as has historically been the case with Lee Kuan Yew’s Singapore or Mahathir’s Malaysia. But a key ingredient, a flourishing economy, had been missing in the Sri Lankan context. The economy has proven to be the weakest link of the Gotabaya Rajapaksa administration. His government’s economic policies have resulted in a phenomenal disaster.
An ill-thought-out overnight ban on chemical fertilizer had far-reaching economic consequences for farming communities, who have always lived on the fence of the poverty line. Many hundreds of thousands would fall back into poverty
Consider the plight of agriculture, which is bound to produce a record low harvest both in cash crops and near subsistence farming, and the government-inflicted miseries on a vast swath of farmers and other workers in agriculture who account for a fourth of Sri Lanka’s workforce. An ill-thought-out overnight ban on chemical fertilizer had far-reaching economic consequences for farming communities, who have always lived on the fence of the poverty line. Many hundreds of thousands would fall back into poverty.
Much of the economic woes have to do with excessive foreign debt and debt serving costs, which had been growing over the past decade. The incumbent President and the government are not solely responsible for that, but the President weakened the government’s fiscal situation by another ill-thought-out decision to grant extensive income tax concessions. The result was, partly due to that and also due to the contraction of the economy during the past year, the government’s revenue dropped by 26%. Correspondingly, the loan repayment cost as a share of government revenue shot to 72% last year from 47% in 2019. Effectively Sri Lanka now wins the cup as the country with the highest debt serving component as a share of the government revenue.
Sri Lankan economy lives in borrowed times. According to Fitch ratings, the country has to meet US$ 29 billion in debt repayment between now and 2026. With foreign reserves as low as US$ 3.5 billion, including US$ 800 million special drawing rights, how these debt repayment commitments are met is a billion-dollar question. The only common-sense option left is to go to the IMF to negotiate a debt restructuring plan. However, strings that would come attached with such a plan would preclude many wasteful populist policies. Therefore, the Gotabaya Rajapaksa regime has opted to kick the can down the lane, rather than solving the problem. It is piling up new loans, as a temporary fix to repay old ones. As a result, general government debt to GDP rose from 86.8% in 2019 to 101% in 2020! It is expected to increase to 108% by 2022.
Fixing these intricate problems is far more difficult than tampering with the constitution.
Both the constitution and the electoral system require reforms, which have to be reached through comprehensive all-party consultations and also with the participation of civil society and other stakeholders. But existential economic realities mean that such reforms can wait. Rushing them would produce another farcical and partisan exercise like the 20th amendment.
The fixation to fiddle with the constitution amidst a raging economic crisis can only be explained in the egoistic fantasies that have already done so much damage to the country. That seems to be the new normal of Sri Lanka as of now.
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