Friday (15) marked the United Nations’ ‘International Day of Democracy,’ with this year’s theme being ‘Empowering the next generation’. The theme, no doubt, would have made the current political dispensation in this country rather uncomfortable, given the fact that democracy and all that it entails have been relegated to the backburner in the name of economic recovery, while the ‘next generation’ is looking elsewhere for both democratic as well as economic emancipation.
Democracy is not only about holding elections; it is also about policymakers putting the interests of the nation ahead of personal and party interests, and, in the event it is not so, for the people to be able to speak up and put things right. It is for this reason that fundamental democratic rights are the foundation of the nation’s Constitution and checks and balances for democratic governance an integral part of it.
When those holding office decide that these safeguards can be set aside, as in the case of the Speaker ruling that a mere proposal approved in Parliament cannot be reviewed in a court of law, then it becomes problematic for the basic functioning of a democracy. We have a Parliament that has long lost its mandate, a President who was overwhelmingly rejected by the people, no sign of elections anywhere on the horizon, shrinking civic space, lack of accountability, and a growing culture of impunity, be it a mass murder to influence voters or responsibility for bankruptcy – all of this just about sums up the state of democracy in this country.
Given this state of affairs, all eyes will be on the International Monetary Fund’s (IMF) maiden governance audit and its resultant appetite to lobby for a genuine reform agenda. It is indeed a sad indictment on this nation that it has to now depend on an external aid agency to not only bail it out of bankruptcy but also drive reform that would hopefully bring about transparency and accountability in governance. Therefore, the IMF post review must specify where action is needed following its governance audit on corruption and good governance, and, given the general disinterest in meaningful reform in that respect, ensure implementation through direct tie-up to future disbursements.
On the subject of democracy, the Domestic Debt Optimisation (DDO) programme currently underway is anything but democratic as far as the average citizen is concerned, given that the bill for gross economic mismanagement and recovery has been placed exclusively at the doorstep of the working class while the wealthy have, for the most part, been exempted from the exercise.
What is hilarious is that while the Government continues to argue that the impact of the DDO on the superannuation funds will be minimal, it is unwilling to split this ‘minimal impact’ three ways across the banks and bond holders, thereby easing pressure on the ETF and EPF. The excuse citied is the ‘risk’ to the banking sector. In other words, this ‘minimal impact’ split three ways would still be big enough to crash the banking sector, but when imposed solely on the superannuation funds will have negligible impact!
Be that as it may, what is cause for concern is that no meaningful political reforms have yet been formulated to mitigate the risk of future bankruptcy owing to the very same causes that caused the current crisis. This is why reform targeting accountability is of critical importance, not just to fulfil the demands of the people, but, more importantly, to prevent a recurrence owing to corruption and governance failures in the future.
In the current economic environment, where over 70% of State revenue is reportedly being gobbled up just to pay the interest component of the country’s debt stock, the tax-paying public has every right to demand as to what they get in return for the massive burden they endure. In a situation where the health sector is crumbling, the education sector is stagnant, and even critical infrastructure like the railways and roads are in a deplorable state, it is about time that the powers that be consider as to what exactly the people are getting in return for their taxes.
Talking of priorities, at a time when the President has decided to visit Cuba to offer Sri Lanka’s expertise in coconut cultivation among other notable items on the agenda and also attend the rather obscure G77 meeting in Washington to call for compensation for labour migration from the South to the North, the much-anticipated IMF delegation is in Colombo to carry out the first review of its $ 2.9 billion bailout package.
Being the Minister of Finance, the main driver of the economic reform programme, and, given the exceptional circumstances, it certainly would have been prudent for the President to have liaised directly with the visiting delegation than preferring to delegate that task to an Acting Minister who represents a political party, the Sri Lanka Podujana Peramuna (SLPP), which at least in theory is opposed to the economic policy of the President. In fact, former Governor of the Central Bank Nivard Cabraal, who many consider as an architect of the country’s bankruptcy and a livewire of the SLPP, went on record last week criticising IMF engagement, which he claims will drag the country further into the abyss.
Notwithstanding the merits of the accusations from various quarters or the politics involved in the recovery effort, one thing that is clear is that Sri Lanka as a nation is now at the mercy of foreign entities who are at liberty to dictate terms to a regime that has no recovery plan of its own other than to play second fiddle to the IMF.
It is not without merit that there is a growing school of thought that the Government of Sri Lanka has been relegated to the role of a school class monitor, with economic policy being decided in the boardrooms of the IMF in Washington. With the end of the first semester, the report card of the class is now up for review and the country has to await what the principal has to say.
The problem is that while the West is quite adept at demanding transparency and accountability, the IMF review process itself is shrouded in secrecy, with only the final verdict being made known to the public. At the end of the day, the people of this nation have every right to know what the entity has demanded of the Government, its commitments to the Government, and the modalities of its review process. Having gone through 16 such programmes in the past and none having ever been completed, it is about time that better transparency is enforced by both parties.
The IMF review currently in progress is like none other as it is the first time that the multilateral agency is implementing a ‘governance audit’ on a country in addition to the economic performance review. It will be recalled that the IMF along with the UNHRC called upon the Government as part of the bailout package to identify and punish those responsible for what they described as ‘economic crimes’ that paved the way for Sri Lanka being declared as bankrupt.
Not much appears to have been done in this regard over the course of the past year other than enacting a watered-down anti-corruption law which lacks retrospective effect. Even this law was implemented coinciding with the visit of the IMF delegation, indicating the action is more through compulsion. While the IMF delegation is likely to note this distinct hesitance to fix the accountability deficit highlighted by the country’s citizens themselves during the people’s revolution last year, it will be interesting to note its observations on the matter.