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The colour evolution of the NPP

The colour evolution of the NPP

08 Dec 2024 | By Kusum Wijetilleke


A central theme of the National People’s Power’s (NPP) socioeconomic discourse, messaging, and political campaigning was the renegotiation of Sri Lanka’s International Monetary Fund (IMF) programme to ease the burden of the cost of living crisis. Several members of the NPP, including President Anura Kumara Dissanayake (AKD), have stated this many times over the last few years. 

The Sunday Morning carried an article in September by Imesh Ranasinghe, which reported on comments made by NPP Economic Council Head Prof. Anil Jayantha Fernando. Prof. Fernando was clear that the NPP Government could not work outside the IMF agreement, stating however that the “Government anticipated completing negotiations on the alternative programme with the IMF by December”.

In an article from the previous week, Dr. Sujeong Shim and Sachintha Pilapitiya reiterated the NPP’s calls for reconsidering the IMF programme, quoting presidential candidate AKD: “We are not opposed to economic targets… [but] we must consider the social impact of pursuing economic goals. We need to engage the IMF about social spending.” 

Several academics and economists, such as Yanis Varoufakis, Jayati Ghosh, Martin Guzman, and Brad Setser, have all noted that there are aspects of the Extended Fund Facility (EFF) that need renegotiation in order to better protect the poor and ensure inclusive growth. The aforementioned article highlighted comments by Prof. James Vreeland, which emphasised the importance of “the need to address the potential adverse effects of IMF programmes on the poor”.

The NPP’s manifesto was itself unambiguous on the need to “renegotiate with the IMF on the content of a more palatable and strengthened programme and how it is implemented for salvaging the poor and deprived people from that painful condition”. The infamous ‘alternative Debt Sustainability Analysis (DSA)’ has also not been released as yet.

 

Deal or no deal?


There is recent precedent from 2022: in Argentina, the Government of President Alberto Fernandez with Economy Minister Guzman were able to renegotiate certain terms with the IMF under extreme protest from Argentinian anti-IMF activists. 

The Argentinian Government sought to focus on economic growth and social spending, and was keen to reverse austerity measures; timelines were also amended and some fiscal flexibility negotiated as well. 

An Al Jazeera report from March 2022 notes that the “contentious deal with the IMF is a refinancing of a $ 45 billion loan that had been acquired by the previous administration of Mauricio Macri in 2018. Argentina was due to pay back $ 19 billion in 2022 and $ 20 billion in 2023. Under the new terms, Argentina has secured a much-needed grace period that postpones repayment of its debt until 2026.”

Ecuador’s President Guillermo Lasso, having been elected on a platform of renegotiating the country’s IMF programme, did just that in September 2021: a tax hike for the top income tax bracket in the country, some 3.5% of the country’s working population. Ecuador’s Minister of Finance was quoted by Reuters confirming his Government’s “intention to seek economic recovery and sustained growth, and to ensure fiscal equilibrium in the medium term”; President Lasso had inherited that programme from his predecessor President Lenin Moreno.  

Just these two cases show that a change in government can bring renegotiated programmes. Whether the renegotiated programme itself works or not is a different question. In Argentina, the Fernandez Government was unable to control inflation and was eventually voted out of office.  

Ecuador, on the other hand, earned significant success with its renegotiated programme, specifically in terms of social spending. Ecuador has also just signed a fresh IMF facility for “a new 48-month arrangement under the EFF… The programme aims to support Ecuador’s policies to stabilise the economy, safeguard dollarisation, and lay the foundations for sustainable and inclusive growth” (IMF).

The NPP’s abandoning of the ‘renegotiation’ platform has not received anywhere near the type of scrutiny and criticism from the media or commentariat that it deserves. There seems to be a wide consensus that the programme negotiated by the previous Government of Ranil Wickremesinghe should be followed by the present Government. 

This consensus exists in much of the business community and is part of the elite narrative that Sri Lanka can simply borrow its way out of this debt crisis and that economic growth, once it returns to strong enough levels, will lead to an easing of the pressures created by the country’s many economic structural weaknesses and imbalances.  

The Samagi Jana Balawegaya (SJB), as the main Opposition party, which also promised a renegotiation of the IMF programme, albeit in different manner, must take up the critique of the NPP’s strategy with regard to the IMF, not as an ideological battle but as a means to an end – the end being to reduce the burden of reforms from low-income deciles and enable equitable growth. 

The NPP ought not to be allowed to simply ignore over two years of campaign messaging that revolved around a critique not just of Sri Lanka’s current programme but of the IMF itself, its manner of operation, and its very reason for existence. Some members of the NPP have referred to the IMF as a ‘neo-colonial’ institution or an instrument of Western imperialism.  

 

Pink – the colour of passion


The NPP has derived its ethos from the ‘pink tide’ and similar Left progressive movements across the world. 

When one considers the Janatha Vimukthi Peramuna (JVP) as being a foundational force behind the NPP, it is clear that the party has utilised a form of ‘pink Leftism’ which draws on Left-progressive socioeconomic reforms, a discourse that itself follows from orthodox Marxist principles without that overt emphasis, following similar movements across Latin America from Argentina, Bolivia, Brazil, and Venezuela. 

Pink Leftism emphasises an anti-neoliberal track of socioeconomic thought that generates and permeates a narrative surrounding inequities and imbalances of the status quo immediately recognisable to the vast majority of people in those societies. 

Rather than a focus on economic growth, pink Leftism is more concerned with income inequality and sees the widening gaps between the different income segments as central to the economic issues faced by a country. Many pink movements focus on economic redistribution utilising varying types of discourse with commonalities such as wealth redistribution through taxation, social welfare programmes, and state intervention in development and regulation, but with far less control and interference in the markets.  

In Brazil, a conditional cash transfer programme called ‘Bolsa Familia’ and land reforms in other parts of the continent have all been attributed to pink tide movements which are not only Left-progressive but also Left-populist. Many also have distinctive leadership, be it Hugo Chavez or Evo Morales (and AKD), who often have the support of the poorest and most marginalised in those societies.

An important distinction between elements within the movement is that while they seem radical compared to Centre-Right neoliberalism, the movements have not been radical in and of themselves. 

Even Chavez, the most radical within the Latin American pink movement, did not pursue anything like the Castro model; while nationalisation of industries took place, in many sectors, private businesses were allowed to operate as they did prior. Luiz Inácio Lula da Silva of Brazil is at the opposite wing within pink Leftism, being more social democratic or even Centrist with his policy prescriptions. 

 

U-turns and roundabouts


This column has covered various aspects of the AKD-NPP campaign discourse and messaging which emphasised eradicating corruption, recovering stolen assets, and implementing governance structures, all of which the NPP has earned the time and space to attend to. 

However, alongside the above, the NPP discourse also called for a renegotiation of the IMF agreement. It was the NPP that emphasised that the IMF programme was itself simply a means to perpetuate Sri Lanka’s long-standing status quo of debt and dependency. 

It was AKD who critiqued the IMF programme from an economic growth perspective; it was the NPP’s economic team that continued to insist on an alternate DSA that would be the foundation for the renegotiation. However there has hardly been any lip service to any of the items mentioned above.  

This ought not to be considered a moderation by the NPP nor should it be disguised as pragmatism; it is either capitulation or cowardice, or both. It is also deeply concerning in another sense. 

One argument against the previous Government was its lack of standing in negotiations with the IMF and bondholders on account of its defunct public mandate. The Wickremesinghe Government was unable to negotiate with the various parties involved from any position of strength, but this AKD Government is different; it has earned a sweeping mandate from the electorate. Why has it decided not to leverage that or at least bring this dynamic into its current discourse that has been significantly diluted?

Abandoning this central plank of the party’s offering throughout the last two years must be seen as having significant implications for the principle of democratic accountability. A mandate is provided by the people to a party and its leaders to implement the platform on which they campaigned and contested, and forms part of the foundation for the legitimacy of the government. A government that campaigns on a platform of good governance is bound by this once in government; whatever else it achieves, its central pledge cannot be discarded.  

Yet this is precisely what happened to then Prime Minister Wickremesinghe’s ‘Yahapalana’ Government with the Central Bank bond scam only a few months on from the inauguration of that administration. 

This is basically a Lockean analysis – the state’s legitimacy is granted by the consent of the governed – from John Locke’s 1689 ‘Essay Concerning Human Understanding’: “The legislative and executive power used by government to protect property is nothing except the natural power of each man resigned into the hands of the community… and it is justified merely because it is a better way of protecting natural right than the self-help to which each man is naturally entitled.” 

 

Countering the counter-elites


Pink movements such as the NPP succeed at winning elections in no small measure by appealing to populist instincts in their electorates, but this ought not to be considered in the pejorative, though it often is in Sri Lanka’s Centrist political commentary and analyses. 

In political science, this might be interpreted as the median voter electoral strategy developed by American economist Anthony Downs, which recognises that a political party will appeal to the median voter with their platform but might shift away from that median once in power. This shift can be to suit the dynamics or preferences of the constituencies of the economic and social elites.  

One example might be the 1997 New Labour adventure in the heyday of Third Way Centrism and its poster child in Europe – Tony Blair, whose platform called for support for the working classes, investments in public services, and reducing inequality. 

Despite New Labour’s perceived successes in the period that followed, there is little argument that the Blairites were keenly focused on the interests of private sector elites; the administration began a process of deregulation across industries, including in the banking sector. 

Much scholarship has noted that New Labour’s ‘light touch’ regulation and the Financial Services and Markets Act of 2000 were significant contributors to the UK financial sector’s over-leveraging, self-regulation, and increased risk appetites that ultimately led to mass bailouts of the sector.  

Elite capture and interest group influence is covered in political science through ‘elite theory’ and the work of writers like William Domhoff, which considers how and from where power flows in a large organised society such as the nation state. In this context, the elite are represented by the political class, but the real power wielded in the state occurs through the influence of organisations, think tanks, lobbies, large corporates, and industrialists; sociopolitical outcomes are largely determined by these groups.  

Elite theory posits that elites are unified and their power concentrated through institutional and sometimes even personal power, and become dangerous when the interests of such groups contradict the collective needs of wider society. 

Domhoff’s 1967 book ‘Who Rules America?’ looks at how large profit-making institutions such as banks and conglomerates impact power structures. The existence of a conglomerate, operating across sectors and thus wielding significant power over labour, regulation, prices, and so forth, is often detrimental to more inclusive policy-making processes.  

Another important work that encompasses both the NPP’s shift or moderation and elite theory is the work of John Dryzek et al. in ‘Theories of the Democratic State’ (2009) which discusses how a counter-elite movement such as the NPP might be co-opted by the existing set of elites through integration with counter-elites. 

Dominant elites thus sustain some control over the policy-making apparatus usually under the pretence of reform. This represents the manner in which opposition groups to elite consensus are managed so that they do not disrupt the interests of the elites.  

Consider the make-up of the President’s economic advisory council, some of the specialists that have joined the Government for specific projects, the appointment of extremely wealthy industrialists or their representatives to powerful State positions, etc. 

Combine this with the reversal and moderation of its campaign platform and it cannot be unreasonable to consider whether the counter-elite movement of the NPP has in fact been co-opted and is now serving the interests of the few against the many. Time will tell, but the signs are ominous. 

 

(The writer has 15 years of experience in the financial and corporate sectors after completing a Degree in Accounting and Finance at the University of Kent [UK] and also holds a Master’s in International Relations from the University of Colombo. He is a media presenter, resource person, political commentator, and foreign affairs analyst. He is also a member of the Working Committee of the Samagi Jana Balawegaya [SJB]. He can be contacted via email: kusumw@gmail.com and X: @kusumw)



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