When the President delivered his ‘policy statement’ in Parliament on Wednesday (8) to inaugurate the Fourth Session of the Ninth Parliament – his second in six months – the thrust of it was that most of the issues that caused the economic crisis had either been resolved or were in the process of being resolved – the caveat for the latter being ‘what has been achieved should not be reversed due to disruption’ for whatever reason.
Be that as it may, just two days later, Japanese industrial and corporate giant Mitsubishi Corporation, which has had a presence in Sri Lanka for 60 long years, through thick and thin – including 30 years of war – announced that it was shutting down its office here. Needless to say the Japanese giant would have accorded this decision the due diligence it merited.
No doubt the announcement came as a shock and reality check to the establishment that was seemingly ensconced in its own ‘positive’ rhetoric that things were on the mend. Besides, what is cause for concern is that it is the big boys like Mitsubishi Corp. that provide direction and comfort not only for other entities vis-à-vis investment and trade but also the Japanese Government, which by and large is corporate compliant as it is these mega corporations that keep Japan ticking.
Unfortunately the message that appears to be emanating from Colombo these days to the rest of the world is not one that is necessarily desirable. Three key reasons alluded to by the Japanese giant in justifying its decision offer a snapshot of the tough road that lies ahead and the extraordinary effort that will be required to turn things around at least in the next decade. Mitsubishi in Colombo had highlighted Sri Lanka’s default of external debt, adverse international ratings, and, more importantly, the country’s ‘economic outlook’ as key reasons for its pullout.
Therefore, in the larger interest of the nation, it is important to consider as to what it is that the Japanese see by way of a ‘negative outlook,’ which appears to have eluded both the politicians as well as the people of this country. At first glance, it seems that the bleary outlook has more to do with a deficit of trust and hope in the country’s leadership than anything else. And by no means should it come as a surprise because corruption, which is anathema to the Japanese, still remains the buzzword in Government.
Japanese politicians, including prime ministers, are known to resign at the first hint of trouble involving any member of their staff no matter how insignificant, paving the way for others to take their place. It therefore follows that whenever such things occur, it is the people who decide who should replace them. That is why elections are a regular occurrence in Japan and never a second option.
It is a well-known fact that Sri Lanka’s historically close relationship with Japan has been soured in recent times due to a toxic combination of alleged corruption and arbitrary decision-making, which has resulted in mega projects that took years to put together being cancelled overnight. These include the Japanese-funded Light Rail Transit project that was offered to Sri Lanka at optimum concessionary terms as well as the manner in which the Japanese-funded Katunayake Airport expansion project has been handled.
Unfortunately, despite the change in administration, little has been done to rectify the damage caused. Japan, by the way, is Sri Lanka’s second biggest bilateral creditor and at the best of times gifted the present Parliament building, national television broadcaster Rupavahini, and the fully-fledged specialised Sri Jayewardenepura Hospital, among many other such gifts.
Therefore, it is regrettable that a close and dear friend has been treated shabbily by a leadership that clearly didn’t know whether it was coming or going, but surely the present leader who has been around for yonks should know better. In the matter of the Katunayake Airport expansion project, the Japanese, who had accused a sitting cabinet Minister of soliciting a bribe, were left red-faced when a committee appointed by the current administration ‘cleared’ the Minister of any wrongdoing. While the committee had its say and the administration thought it had won the day by reinstating the Minister on the strength of that report, it now appears it is the Japanese who are having the last word.
At a time when the country needs all the help it can get, especially from its old friends, puerile diplomacy by the very same ‘hawks’ of the last administration are not doing any favours for anyone by their hawkish outlook. To add fuel to the fire, there appears to be no inclination on the part of the current administration to hold to account those responsible for the economic collapse, much to the dismay and discomfort of corruption-averse nations like Japan. In fact the President in his policy statement sought to play down the issue and bide for time, probably in the hope of leaving that onerous task to someone else when he claimed that what is more pressing at this juncture is economic recovery as opposed to prosecution of culprits.
Unfortunately, the very entities that the administration is approaching for help don’t seem to share that sentiment. In fact the IMF, UNHRC, and even nations like Japan have been clear in pushing for those responsible for ‘economic crimes’ to be brought before the law, but the administration clearly appears to be having other ideas. And therein lies the rub.
The IMF, a past master in the game of economic diplomacy and economic compulsion, has so far kept shifting the goalposts on the eligibility criteria for the bailout package, probably in the hope that those in power will get the hint, but that seemingly does not appear to be the case. Therefore, the stalemate is likely to continue while everyone else in the South Asian region that has approached the IMF for assistance is already in receipt of the funds. It is also noteworthy that while what is being sought from the IMF amounts to a total package of $ 2.9 billion spread over a period of 48 months, Sri Lanka’s debt exposure for 2023 other than bilateral and multilateral credit currently under suspension amounts to $ 3.2 billion. These are obligations that stem from swap facilities, interest payments, foreign currency loans, securities, and deposits that have to be paid back irrespective of the debt repayment suspension.
Given these circumstances that have been compounded by a tattered human rights record, the next best thing the administration can do to regain its democratic credentials is to hold whatever the due elections on time. Politicians never usually miss an opportunity to boast about the ‘democracy’ that we enjoy, citing the holding of elections as the primary basis for that boast. The reality, however, is that elections for the most part are an inconvenience that are dispensed with at the slightest excuse.
The fact that the apex court has given the green light for the conducting of the Local Government Polls in its determination of an application last week is reflective of the law of the land where the Election Commission is the ultimate authority in the conducting of a poll. However, the determination of another application seeking the postponement of the poll has been set for the 23rd of this month. The basis for the application is the cost involved. Interestingly enough, the postal votes would already have been cast by then and also much of the expenditure which the action attempted to prevent would also have already been incurred by then.
All tolled, the likes of Mitsubishi appear vindicated in their assessment considering the Government’s nominees for the key parliamentary oversight committee on public finance, which should send shivers down the spine of most right-thinking people yearning for change and a professional approach to the nation’s critical issues – all of which are essentially rooted in public finance.