Blame Game: Who failed the country, who will rescue it?

Listen to any political talk show or a press conference, and you will stumble upon one of the following popular refrains - or all.  

 First is the grievance that the politicians, who have ruled the roost since the independence, have failed the country. It is even richer when this comes from those like Chandrika Bandaranaike Kumaratunga, two-time president, whose family ruled for 25 years - who now says that Sri Lanka at 75 is a ‘failed state’ and that the politicians have looted the country.
 The second argument is that whatever the crippling imperfections that had failed the country, fixing them require a new mandate obtained in an election - and therefore, the current administration has no right to address any of them.  

Third is the call for a new set of political leaders to take over as if they have a magic wand to fix the country. However, since such virtuosos are unlikely to emerge from elections, certain arrangements, like the obnoxious call to set up a people’s council, must be explored. 

All the above do not just cater to the popular sentiment; they exploit the popular anger and the sense of disgruntlement. On the surface, they might even appear convincing to a constituency that once thought Gotabaya Rajapaksa had a miracle cure for the country’s ills. However, look closer, this diagnosis is not just misleading but also self-serving. It offers no solutions - except the pie-in-the-sky promises bound to fall wayside. Dangerously, it distorts the mandatory remedies.

Is Sri Lanka a ‘failed state’?
Take the first argument: Is Sri Lanka a failed state - or have its politicians failed the country? Defaulting on its debt does not turn a country into a failed state, but, yes, a bankrupt one. 
A failed state represents a near-complete breakdown of the political, economic, social and security structures of the State to the extent that the government no longer has control over its territory and its key apparatus. Economic and fiscal difficulties alone do not make a failed state, but the State’s inability to hold political and security control (its monopoly of violence) over its territory is. That is not the case with Sri Lanka. (This could probably have happened if the excesses of Aragayala - when some fringe types tried to lay siege to Parliament - were not averted)

Second, since independence, politicians have failed to deliver on par with their better-accomplished peers in East Asia and South East Asia. But, again, in the recent history of political economy, the Asian Tiger economies were an exception, not the norm. According to an IMF report, out of 103 middle-income states in the 1960s, only 13 became high-income countries by 2006. According to some estimates, that number has risen to 23 by 2020, mainly due to the addition of former Warsaw bloc countries who joined the EU and were showered with massive economic assistance. 

Sri Lanka was a low-income country then, and is now a lower middle-income country, downgraded from upper middle-income status after one year. True, successive political leaders failed to capitalize on the relatively higher economic and, more importantly, social indicators left behind by the Colonial British.

The question is, why did they fail? Were the independent leaders just nincompoops in their own right who landed in power thanks to dynastic politics? Sri Lankan politician leadership, be it Sir John Kotalawela, SWRD Bandaranaike, Dudley Senanayake, or Felix Dias Bandaranaike, do not appear intellectually inferior to their contemporaries in South East and East Asia. Nor are the current lot fools compared to those who rule high-growth economies like Vietnam or China. 

What failed them and the country was the system or the State’s structure. Unlike the pro-growth authoritarian states, Sri Lanka adopted the British inheritance of Westminster parliamentary democracy. But as the system became overly parochial and populist, the safeguards for economic sanity and political cohesion were undone by the premature mobilization of grassroots. The political system became one of doll out driven and ethnic bidding, and much less performance-driven as was the case in better-performing emerging economies.

It is a system defined by the people, who vote for their leaders and not one imposed on the public at gunpoint.  Politicians were not the catalyst but the passengers in that system. Immersed in such a political culture, Sri Lankan voters would never have voted Lee Kuan Yew to power. Populist charlatans gradually populated that political system until Gotabaya Rajapaksa brought it crumbling down. 

Inertia, not corruption, the root of economic stagnation 
Another oft-cited charge is about corruption that brought the country to its knees. This, again, is a simple but misleading argument. Sri Lanka has a corruption problem, and so are most countries. But Sri Lanka has a much-inflated sense of corruption perception - Alleging someone with corruption without consequences for wrongful and malicious allegations has been a time-tested means to delegitimize the system and its stakeholders.

What held back Sri Lanka was much less corruption but incompetency, red tape and the overall lack of initiative of the political and bureaucratic classes. A political system defined by dole-outs and constrained by trade unionists to economic monopolies has no inclination to reform. Sri Lanka failed because it refused to reform.

Non-event of new mandate: Lankans don’t vote for reforms
The second argument is the requirement of a new mandate to fix the pressing problems. That is baloney. Sri Lankans do not have a history of voting for economic reforms. On the other hand, good economic policies are politically inconvenient. Any government would unlikely win a mandate to restructure the loss-making and underperforming SOEs, introduce a common-sense tax code, or remove local monopolies that have cannibalized a captive market.  

Read between the lines; stalwarts of the Samagi Jana Balawegaya are already preaching policies which run against the reforms agreed upon under the IMF bailout. That may be good for politics, but not as fixes for the economy. Old habits die hard.

Sour grapes and clowns
Third is the peripheral actors and disgruntled elements who think this is their moment or are simply bitter. The former includes the JVPs and, more interestingly, the Peratugamis, who offer no solutions but pretend as if they ever come to power, the reserves would be flooded with remittance dollars by Sri Lankans abroad. Then there is another bunch, the university dons who may yet to publish in an international journal but know better than anyone how to revamp the economy, and medical doctors who give fixes for the preservation of SOEs - after an ill-fated advocacy that led to a ban on chemical fertilizer. They hold a simple grudge against the new Tax code. This half-baked advocacy by a so-called intelligentsia and chattering classes is an ingrained part of the social and political structures that had evolved to be insular and far less inspiring. 

Sri Lanka is failed by a political culture that values handout over economic growth and the persistent lack of initiative by the political class, who were constrained by their constituency. That constituency is one of underachievement and insularity which has historically opposed any serious attempt to reform it. The only real reform in Sri Lankan history was JR Jaywardene’s free-market economy, which again was only possible due to the mass humiliation of bread queues and kerosene-stanched garments of Sirimavo Bandaranaike’s failed socialist policies of the previous seven years. 

The new government is offered a similar opening after Gotabaya Rajapaksa’s disastrous economic exercise. No election mandate offers such a persuasive opportunity for reforms. It should not squander this opportunity and forge ahead with a sense of urgency for a full scope of economic reforms- to catch up from where we stopped in 1978. 
 It seems to have a conviction to reform but is lacking in urgency. If it fails in this monumental duty, Sri Lanka could well end up being a failed state, one way or the other.

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