An interesting news titbit caught our attention recently. It stated, quoting the All-Ceylon Bakery Owners’ Association, that seasonal cake sales had dropped by 75% last month compared to the year before. Then again, another news item last week pointed to a probable cause for that – it stated that people’s salaries and wages had significantly dropped in actual value during the course of last year. 

The extent of the drop was startling as a Rs. 100,000 salary/income in January 2023 was actually worth only Rs. 63,711 by December – a calculation attributed to Numbers.lk. The report added that an approximate amount of Rs. 56,000 or 56% was required to offset the impact of inflation. Interestingly enough, the official inflation rate has been less than 5% for the better part of the year, highlighting the disparity between reality and official data.

Besides this stark contradiction, what is of serious concern is the impact of rapidly-diminishing disposable incomes on the macro economy. It is estimated that the private and informal sector workforce is five times that of the public sector, currently estimated to be around 1.4 million. These workers, unlike their public sector counterparts, have not had the benefit of a pay hike since pre-pandemic times and continue to draw the same salaries while those drawing Rs. 100,001 are now subject to income tax as well as 18% VAT when spending that already-taxed income.

Therefore, it is no surprise that rapidly-shrinking disposable incomes appear to be having a profound impact on the entire economic value chain. For instance, a 75% drop in cake sales means that it is not only the bakeries that have to bear the brunt of the impact but also the entire supply chain such as wheat suppliers, egg producers, energy companies, and suppliers of numerous other raw materials that go into producing a cake, not to mention the packaging and logistics sectors. It is this same fate that has befallen all other goods and services owing to the lack of consumer spending power.

When suppliers and producers feel the pinch of reducing demand leading to a drop in production, they are confronted with the challenge of making ends meet, including the ability to pay increased Government taxes such as VAT, thereby not only defeating the Government’s revenue objectives but also triggering other complications such as closure of businesses, relocation of factories to regional countries, rising parate executions by banks, and loss of employment, all of which will further haemorrhage an already-critical situation.

Therefore, it is incumbent upon the administration to tread cautiously with regard to its economic policy objectives, notwithstanding external compulsions to do this and that in the name of economic reform, or, for that matter, in consideration of electoral prospects, with the election buzz already in the air. 

In a backdrop of political pressure, notably from the ruling party, contrary to public posturing on the urgency for a poll, the current interim leadership must not lose sight of its mandate – which by its own admission is to stabilise the economy. Now, having seemingly achieved that – no doubt, expendable political capital – it is imperative that the nation’s revival prospects are not compromised by petty considerations as in the past, for the simple reason that this country and its people can no longer afford such vanity. If the economy is now claimed to be stable, the prerequisite for the next logical step in order to consolidate and grow out of the current limitations is a fresh administration with a fresh mandate. 

Mercifully enough, the current leadership appears to be alive to that prerequisite and has already hinted at a poll of some sort in the near future with speculation rife of a General Election preceding the statutorily-required Presidential Poll by end October. But circumstances are such that whatever the poll is conducted first, its result will necessarily pre-empt the conducting of the other one soon after, in deference to the will of the people.

The clearest indicator of an election close at hand is the spectre of political pole vaulters. Already a significant few who have been aligned with the ruling party have chosen to decamp and hitch their fortunes to the main Opposition SJB. However, having managed to retain its integrity thus far, the party must be cautious in who it chooses to welcome into its fold, given that it will only take one charlatan to destroy years of hard work.

Besides, there is the possibility of there being no clear winner, with stiff competition among Opposition parties. The erstwhile JVP comrades now rebranded as the NPP seem to be fighting hard for a share of the pie and if the current electoral mood prevails over the course of the next few months, a neck and neck battle is on the cards as far as the SJB and NPP are concerned, which raises the question, what of the ruling SLPP and the obliterated UNP that has received life support from the interim presidency?

While the Gotabaya Rajapaksa debacle and the pursuant economic crisis have dealt a near-fatal blow to the SLPP’s electoral fortunes, notwithstanding the prospects of individuals lining up to stake a claim for the party’s presidential nomination, a statement by the party’s founding patriarch, Mahinda Rajapaksa last week that he will not be in the fray will likely have grave consequences for the party that has essentially been created and nurtured around his legacy. Besides, the recent Supreme Court ruling on those responsible for the economic crisis will likely impede his endorsement of the ultimate candidate.

Given the harsh reality of the ongoing economic crisis, where one-third of the population constitutes those already in poverty and those on the brink of it – double the poverty level from two years ago – it can be assumed that voter awareness may have doubled as well. Having been forced to endure hunger and deprivation for no fault of theirs, this section of the population will essentially play a decisive role in determining the next leadership and ultimately the fate of this nation, for better or worse.

Therefore, it is incumbent upon parties, irrespective of their party agendas, to first focus on educating voters on executing their civic duty rationally rather than emotionally. Besides, it is equally important to educate voters on voting methodology given the intricacies of the preferential voting system and its potential to be the final arbiter of who secures the presidency in the event no candidate is able to garner the statutorily required 50% plus one. Parties that are complacent, taking comfort in their own surveys, might be in for a surprise if the second preference vote count is triggered, leading to the second best in the first count ultimately walking off the winner.

This is why, just as much as it is important to apprise voters of their policies and plans, the same effort must go into educating voters on voting wisely while not adding to the spoiled votes count. Voter education in this country obviously takes time as evidenced by 75 years of falling for promissory politics, from Sirimavo Bandaranaike’s promise of rice from the moon in the ’70s that led to near starvation, J.R. Jayewardene’s promise of a ‘dharmishta’ society that ended with a bloodbath in the ’80s, Chandrika Kumaratunga’s promise of bread at Rs. 3.50 in the ’90s, Mahinda Rajapaksa’s promise of abolishing the presidency in the ’00s, Maithripala Sirisena’s promise of ‘Yahapalanaya’ in the last decade that led to him being convicted twice by the Supreme Court, and Gotabaya Rajapaksa’s promise of  prosperity that ended up in bankruptcy.

The economic crisis has taught voters the unique lesson that the destiny of this land is now in their hands and 2024 will decide whose year it will be – an awakened electorate or ‘promising’ politicians.