IMF for the Govt, elections for the Opposition
December 31, 2022, by M.S.M. Ayub, Daily Mirror: Sri Lankans are leaving one of the most tumultuous years in history behind today, December 31, 2022. The country saw two Presidents, three Prime Ministers, three Finance Ministers and two Central Bank Governors this year, not due to anyone having voluntarily retired according to the law but as a result of economy and politics facing unprecedented turbulences.
More importantly, this year, an executive President who had earned a name for himself before for his tough and highhanded actions fled the country in the face of an unprecedented unarmed public uprising involving hundreds of thousands of angry ordinary people.
They occupied the offices and official residences of the President and the Prime Minister within a matter of a day, July 9, without being incited by any political party. Also, we saw the second Prime Minister who had to resign owing to a political upheaval triggered by an economic breakdown after being hailed for victoriously ending a thirty-year-long civil war a decade ago. Dudley Senanayake was also forced to resign as Prime Minister 69 years ago in 1953 under similar circumstances.
The SLPP and the President’s party, the United National Party (UNP), are now planning to contest future elections in unison without reversing any of their policies
Interestingly, it was in 2022 that Sri Lanka, which is said to have once been called the granary of the East, declared it to be bankrupt by way of announcing its international debt default of about $ 51 billion on April 12. The then Prime Minister Ranil Wickremesinghe unequivocally and officially stressed in Parliament on July 5, “Sri Lanka is bankrupt and acute pain of its unprecedented economic crisis will linger until at least the end of next year.”
The year 2022 will go down in history as the year in which a leader of a political party which failed to secure a single seat in Parliament at the last general election was appointed by the same Parliament to the top most post in the country. The Presidency of Ranil Wickremesinghe was fathered by the worst economic crisis Sri Lanka saw since the Independence and mothered by the arch rival of his party, the Sri Lanka Podujana Peramuna (SLPP) which in fact brought the crisis situation to a head. It created a comic situation of his party and the SLPP which were thus far accusing each other for ruining the country economically and betraying it politically to foreign powers joining hands in ruling the country. An ironic setting emerged then where the President who encouraged the public unrest just two months ago as the Prime Minister unleashed a harsh clampdown on the same public uprising that catapulted him first to the position of Prime Minister and then to the position of President.
After all these, what is in store for the people of this country in the year that is to dawn tomorrow? Have the politicians of this country learnt lessons from this chaotic and riotous turn of events to guide the country in the right path? Have the people similarly learnt that it was their ignorance of politics and blinding themselves with a degenerated political culture that they have ruined their own future. Are they prepared to take their destiny in to their own hands abandoning their decades-long savior-seeking political mindset?
President Ranil Wickremesinghe is totally banking on the programme involving the International Monetary Fund (IMF) that was initiated by his predecessor Gotabaya Rajapaksa to resolve all economic and sociopolitical maladies. Sri Lanka and the IMF reached a staff-level agreement on September 1 under which the international lender had agreed to provide an Extended Fund Facility (EFF) of about $ 2.9 billion for a period of 48 months.
The agreement is subject to the approval by IMF management and the Executive Board which was earlier expected to be achieved at the end of this year and later was said to be granted in the first quarter of the year dawning tomorrow. It is also contingent on the implementation by the authorities of prior actions, which are described by the Opposition parties as IMF conditions.
Besides, it depends on receiving financial assurances from Sri Lanka’s official creditors. The thorniest issue the country has been facing in this process is China’s stand on restructuring loans Sri Lanka owed to that country. However, China seems to have slightly relaxed the hard line it maintained earlier in this regard. Yet, it is not clear even to the educated people in this country as to how the Government – in fact the President – and the IMF have planned the things.
Despite the President’s claims that Sri Lanka would have a primary surplus of more than 2 percent of GDP in 2015 and Sri Lanka would be a fully developed country by 2048, when the country celebrates its 100th anniversary of Independence, a road map is to that end is missing and hence the Opposition parties called his budget a concept paper.
If the lender’s Executive Board approves the agreement, Sri Lanka is to get only $ 750 million a year from the IMF. This amount is insignificant compared to the $ 3 billion received from India this year. On the other hand, even if the country fulfilled IMF conditions – pruning public expenditure, raising taxes and prices – it will grow only local funds to run the country. According to Foreign Minister Ali Sabry, the only exception is the move to “restructuring” public institutions by which the government expects to raise $ 3 billion.
Sri Lanka’s current economic meltdown is primarily a foreign exchange crisis. It is up to the country’s leaders to implement projects that would generate much-needed foreign currencies using the breathing space given by the IMF through a loan and an interval to repay foreign loans. The government has to implement such projects with the meddling of highly dishonest leaders and using similarly corrupt officialdom. On the other hand, the Opposition is entirely banking on early elections, local as well as national, to come to power, but without any viable plans for economic recovery. They rightly claim that the mandate given to the ruling party at the last Presidential and Parliamentary elections is no longer valid, as they have accepted that they ruined the economy.
President Gotabaya Rajapaksa requested any group to take over the country in April after “sacking” his Cabinet, and the SLPP’s move to appoint Wickremesinghe to the Presidency, claiming that he is the only person to save the country from the current mess is the proofs to this acceptance. The SLPP and the President’s party, the United National Party (UNP), are now planning to contest future elections in unison without reversing any of their policies. This is also a significant development in 2022: food for thought for the people.
However, the main opposition’s leaders, Samagi Jana Balawegaya (SJB), ironically claim that the President is attempting to implement their economic plan while lashing out at the government for increasing prices of essential items as well as electricity and water tariffs. SJB, too owes a road map to be presented to the people for the economy’s recovery before being elected to power.
This applies to the Janatha Vimukthi Peramuna (JVP) / Jathika Jana Balawegaya or the National People’s Power (NPP). Support expressed by mainly the Sinhalese and Muslims in the Sri Lankan diaspora, evident during the JVP leaders’ recent visits to Europe alone, would not resolve the foreign exchange crisis. Besides, the country has to depend on systems rather than the affiliations of a group of people to a political party.
Yet, despite the practicability of those plans, JVP seems to be the only party that has thought of tapping the local natural and human resources to develop the economy in the long run. Whether the JVP has a network of untainted professionals under its command to rein in the officialdom from top to bottom, which can sabotage anything that stands in the way to cohesion, is still being determined. Against this backdrop, the people who must have learnt an extremely bitter lesson from the current economic and political mess have to decide their future.
