Sixth week of the GR Presidency
Posted on December 28th, 2019

by C.A.Chandraprema Courtesy The Island

*  No whinging and complaining
*  No daily rants about the previous government
*  Business of governing back on track

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We are now past the fifth week of the Gotabhaya Rajapaksa presidency which officially began on November 18, but have not yet completed six weeks. The six weeks will be completed only on January 2. That we are now rid of the raving lunacy of the yahapalana regime seems almost too good to be true. But it is true, the yahapalanites are no longer in charge! We no longer have to switch on the TV and watch a demented yahapalana leader screaming into the camera that the ‘Raaajapaksas’ will be be jailed, that they will be made to wear jumpers, that they will be made to hang on to windows of the Medamulana walauuwa, that they should be reborn as earthworms so that they can be cut in two with a mammoty and more to that effect.  

 It was not just we Sri Lankans who realized that Sri Lanka had been taken over by madmen in January 2015. The whole world was aware of it. When Sri Lanka was under siege in the UN Human Rights Council in 2012, 2013 and 2014, there were a significant number of countries that supported us outright and voted in our favour. Yet another group while sympathizing with us, and even speaking in our favour in the Council refrained form voting due to pressure from the Obama administration which they could not resist because they were dependent on the USA for security or foreign aid or trade. Both groups of countries were our friends. In 2015, when the yahapalana government embarked on the self destructive course of co-sponsoring resolutions against itself, not one of these friendly countries joined Sri Lanka but chose to watch silently from the sidelines while Sri Lanka proceeded to shoot herself in her own rear end.

 Normally, one would expect countries that were friendly with Sri Lanka to support any decision that the elected government of Sri Lanka takes, and if Sri Lanka’s elected government decides to try its own armed forces for war crimes at the behest of foreign powers, then Sri Lanka’s friends would be expected to shrug their shoulders and say “well if that’s what you want, who are we to think that we know better?” and help Sri Lanka do whatever she wants. That however was not how our international friends saw things. They could see that Sri Lanka’s new government was treading a path that would not do Sri Lanka any good and indeed would even jeopardize the interests of the entire bloc of non-aligned nations. Hence, not a single friendly country joined in the co-sponsored resolutions that Sri Lanka passed against herself in the UNHRC. Sri Lanka was surrounded only by the traditional enemies of Sri Lanka when she co-sponsored resolutions against herself in the Council after 2015. No votes were taken because Sri Lanka was also a party to the resolutions. Our international friends were acutely aware that lunatics had taken over the reigns of power in Sir Lanka and they wanted no part in what Sri Lanka was doing to herself.

 Government by madmen 

In February 2018, on the day that campaigning closed for the local government elections held that year, no less a personality than the Auditor General of Sri Lanka called a press conference and announced publicly that he does not know how much Sri Lanka owes to foreign creditors. He said that foreign loans had been taken by the previous (Rajapaksa) government in a haphazard manner with foreign debt being taken on by certain state owned institutions as well in addition to the debt taken directly by the government and therefore, nobody had kept track of how much the country owed to outside parties. This was an extremely dangerous statement for a responsible state official like the Auditor General to make. This is the kind of statement that would make existing investors panic and withdraw their investments from the bond and stock markets and discourage any new investors from coming in. 

After listening to the Auditor General’s revelations, foreign investors in Sri Lanka should have been girding their loins to flee. But the Central Bank of Sri Lanka issued an immediate correction and said that even though the Auditor General says he does not know how much Sri Lanka owes foreign creditors, THEY knew exactly how much Sri Lanka owed and to whom and that Sri Lanka had never defaulted on a payment and that that there was no need to panic. It was not only the Auditor General who said that he did not know how much Sri Lanka owes, the President and Prime Minister of that government and many ministers were also in the habit of making public statements  to the fact that Sri Lanka was in the midst of a huge debt crisis created by the previous government.  

Statements like these would have destroyed the economy of any other country. The collapse in Greece was brought about as a result of the Greek government admitting that they had fudged the budget deficit figures and that their deficit was actually much larger than depicted officially. But in Sri Lanka despite important functionaries of the government ranging from the President, Prime Minister and Auditor General falling over one another to say how much in debt the country was, we did not suffer a similar fate.

 The reason for this was because everybody in the world, including friendly countries and investors knew that Sri Lanka had been taken over by madmen after January 9, 2015 and their statements need not be taken at face value. When prominent members of the government kept trying to accuse the previous government of taking on debt that could not be repaid, the Rajapaksa led Joint Opposition was forced to react and to point out that it was not the previous government that was responsible for the debt crisis and to bring to the attention of the public the quantum of foreign loans taken by the yahapalana government. Such matters have never been discussed publicly to such an extent under any previous government that this writer can remember. Truly there are guardian deities watching over this country. We were ruled by raving madmen for five years and the country is still here. The four guardian deities of Sri Lanka. Sri Vishnu, Kataragama, Sumana Saman and Vibhishana, have to be among the best there is in the world as far as guardian deities go.

After the yahapalanites captured the Presidency in January 2015, they had to face the inconvenient reality that they had lied and conspired their way into power leaving the public reeling with shock and disbelief after the result of the Presidential election was announced and they had to do something fast, to consolidate their hold on power or risk defeat at the Parliamentary elections that were to follow. So they set about bribing the voter by increasing public sector monthly salaries by Rs. 10,000 and reducing the taxes on many essential foodstuffs. Thus at one and the same time, government revenue decreased and expenditure increased resulting in the government having to make up the shortfall through borrowings.

  The salary hike alone increased public expenditure by about USD 1.1 billion a year without any concommittant increase in government revenue. When the salary increase went into the hands of the public with many families receiving an increase of Rs. 20,000 a month where both parents were state employees, this led to a spending and importing frenzy leading to balance of payments problems. Then inevitably, under the tutelage of the IMF, they started collecting taxes to raise revenue to meet the increased government expenditure.

At last a govt. of doers not whingers

 Within about a year, the economic chickens had come home to roost and taxes were increased all round. Ultimately, the public was actually made to pay for the privilege of having the lunatics whom they had elected to power, running the country! The total government debt which was Rs. 7.39 trillion at the time the yahapalana government came into power in January 2015, had skyrocketed to Rs. 12.64 trillion by the end of July 2019 – an increase of 71%. This due to no other reason than the expenditure incurred by the yahapalanites to get themselves elected to power at the Parliamentary election of 2015. This is the worst crisis in public finances ever experienced in this country. This country has never experienced such recklessness and irresponsibility in the management of public finances at any point in the past.

 The UNP government of 1977 when Ronnie de Mel was the Finance Minister had been very careful with public finances. Even Chandrika Kumaratunga, despite her ‘fish woman’ style of governance, was never as reckless as the yahapalana government when it came to public finances. In comparison to the yahapalanites even CBK was a paragon of probity and circumspection. No government in its right senses would mess with public fiances because finally it is those wielding power who will have to deal with the consequences sooner rather than later and every government wants to extend its stay in power for as long as is possible – this was the factor that brought self discipline into the system. That commonsense however did not apply to the yahapalana government.

 That is how government debt increased by over 71% in less than five years during which no investment was made on any major projects. All that happened during the past five years is the completion of some of the projects that had been started by the previous Mahinda Rajapaksa government. Public finances today are in the worst state ever. Yet we have not heard any whinging or complaining by anybody in the new government saying that the country is in debt and that the government is helpless.  Compare this with the persistent whinging by Maithripala Sirisena, Ranil Wickremasinghe and virtually everyone else in the previous government to the effect that the Rajapaksa government had taken on debt which could not be repaid. Despite this whinging for public consumption, what the yahapalanites had actually inherited from the previous Rajapaksa government was one of the strongest economies in Asia.

 The growth rate was second only to that of China, the stock market was at its peak, the Rupee had been holding steady for years, interest rates were the in the single digits, development projects that had been dreamed of by many governments but could never be implemented were being built and the country was poised for an economic take off. The change of government that took place in 2015 was undoubtedly the most destructive in Sri Lanka’s post independence history. It was like the sack of Rome by the Vandals. While sacking Rome, and in the midst of the burning and pillaging, the Vandals were loudly complaining that the Romans had been doing things the wrong way and that they had come to put things right for the people of Rome! From the time the yahapalana government came into power, they kept claiming that the economy was in a bad shape when they took over and that it was their job to put things right. This was obviously not true but they kept repeating it in the Goebbelsian hope that if it is repeated often enough, it will come to be accepted as the truth.

Envy of the Rajapaksas

 The yahapalanites came into power harbouring a visceral jealousy for what the Rajapaksa government had achieved. They claimed that all the infrastructure projects built by the Rajapaksa government were white elephants. They claimed that the economy was not doing as well as the Rajapaksas claimed and that the figures had been cooked. One of the first things that the yahapalanites did after capturing power was to redo the figures to show that the country had not been growing as fast as claimed by the Rajapaksa government. A time when we experienced a kind of insanity similar to that of yahapalana rule was when Chandrika Kumaratunga came into power in 1994. Where the CBK government of 1994 to 2001 was closest to the yahapalana government was in the relentless persecution of the opposition. However, the similarities end there.  

Even the persecution of the opposition by the CBK government never reached the levels of the yahapalana government. The insanity in that government was largely caused by the behavior CBK herself and her closest henchmen. CBK however never claimed that the previous UNP government had been cooking the books to make things look good. At one TV appearance she in fact acknowledged that considerable development had taken place under the 1977 UNP government. The yahapalanites however came into power with the sole intention of claiming that the Rajapaksa government had done nothing that was worthwhile. SLFP types always held the view that the UNP was better than them in running the economy and especially in achieving high growth. The UNP types for their part always thought they were better than the SLFP at running the economy. That in fact had been the actual historical experience until the Rajapaksas took over the SLFP.

 After 2005, for the first time in history, the SLFP started running the economy better than the UNP. This was obviously something that the UNP types simply could not stomach. Even the terms used to describe the SLFP ‘baiyyas’ as against the UNP ‘toyiyas’ shows a certain snooty attitude of mind. For the first time in history the Rajapaksa led SLFP outdid the UNP in economic development by a margin that could never be closed. This is obviously the reason why the UNP expended so much powder and shot trying to denigrate the Rajapaksa led SLFP’s achievements between 2006 and 2014. But the flatfooted, incompetent, ignorant and arrogant way the yahapalana government went about running the country has now ended up destroying for good the economic credentials of the UNP.

 After 2015, for the first time in history, the economy went into a tailspin after a UNP government took office. The growth rate plummeted, the stock market crashed. Now the historic roles have been reversed. The UNP have become ‘baiyyas’ the mere sight of whom sends the economy into reverse gear, and the SLPP which has emerged out of the old SLFP have become the new ‘toiyyas’ the doers, who can put the economy right. The UNP might as well now stop speaking in English and use only the vernacular. They might as well drop the traditional UNP attaire of jacket and tie and wear a traditional ‘amude’ (loin cloth) instead. The UNP is now not a party of economic managers, but a party of tree climbers at best. What they are fit for, is to shin up trees wearing amudes, to pluck coconuts.  

Today, less than six weeks into a new government, the difference is palpable. The English speaking tree climbers have been defeated and the economic managers are back. All complaining and whinging has stopped. Even though the new government has inherited the biggest debt crisis that this country has ever faced, no one has still spoken about it or complained. When Dr Nandalal Weerasinghe of the Central Bank was asked at a press conference last Friday, as to how much foreign debt will have to be paid back in the year 2020, he said it was about 4.8 billion USD. Without any doubt this country is in dire straits due to the debt crisis created by the yahapalana government.  

But the only sign that the new government has given of a crisis are the austerity measures that have been adopted by everyone from the President downwards. Despite the debt crisis, drastic tax cuts have been made in order to get the economy going again. There was no unavoidable global reason for the lack of economic growth during the yahapalana government. The economy was doing badly only due to their baneful presence as leaders of the country. During the past five years, countries like India and Bangladesh were growing at unprecedented rates while Sri Lanka stagnated. The international conditions were propitious for growth. World crude oil prices were less than half of what it had been before 2015 and yet the yahapalana government failed to make any headway.  

As of now, the new government is engaged in an effort to jump start the economy. If this government can’t do it, no one else can do it. Last month’s election result showed that the people wanted the insanity of the past five years to come to an end. The voters did ensure that it came to an end, and how!

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