Sri Lanka’s current leadership has been dangerously flirting with the prospect of a slide to chaos, fuelled primarily by the unmitigated escalation of the economic crisis. It is however to the credit of the people that, despite the multiple burdens piled on their hands in quick succession, they have been more than willing to stomach their share of the suffering in the hope that one day soon, things will indeed take a turn for the better. Unfortunately, however, that anticipated silver lining appears to be more elusive than ever, if the events of the past week are anything to go by.
Up until now the trump card of the administration, more notably that of the new Prime Minister, was the prospect of an expedited IMF bailout programme, supplemented with a helping hand from friendly countries. However, the only country that has so far come forward to the nation’s rescue has been neighbour India, and having been virtually milked dry to the tune of nearly $ 5 billion in short-term assistance, it is no longer willing to play sugar daddy. But it has not written off further assistance, which may be forthcoming (subject, however, to an unwritten caveat in the form of policy reform). With the regime displaying a distinct reluctance to go down that particular road, it appears that things are bound to come to a head sooner than later.
Of course that does not mean that friendly countries aided by humanitarian agencies will not step in to avert a humanitarian crisis. Already the US Government has announced food aid, along with the FAO and other UN agencies. But while all that will keep those most affected fed, it will not help the stalled economy move again. For that to happen, it is imperative that an IMF bailout is activated at the earliest, and it is towards that end that a technical delegation of the multilateral agency was in the country for over 10 days. At the end of the engagement locally, however, the anticipated result does not appear to have materialised, with the IMF remaining non-committal on urgent assistance, based on the routine, innocuous statement issued at the completion of the engagement.
At the core of the administration’s struggle to secure financing in any form appears to be the ever-widening trust deficit. When Sri Lankans overseas don’t trust their own Government enough to send remittances through the official banking system, will other entities, including those in the Middle East – where the majority of the Sri Lankan expatriate community have chosen to work – trust the Government enough to extend financial assistance? This is the challenge that the administration needs to overcome.
Three years down the line, it is quite clear that the administration never, at any point, had a plan or vision for the economy – or the country for that matter. It has always been a story of shifting goal posts each time a crisis dawned, and there have been many of that along the way, paving the way for this mother of all crises that we are now saddled with. The charade began no sooner the President was elected, when six months down the line the call was for a two-thirds majority in Parliament in order to deliver on the manifesto. Once that was given and the ‘Promised Land’ was nowhere to be seen, the 19th Amendment was made the scapegoat and the 20th was brought in as its replacement, giving the Executive powers that would make even its creator blush with envy. With that also under the belt, it was apparent that the promised splendour was not yet forthcoming. Then it was said that once the Port City Act was passed, the dollars would flow in and it would be the panacea for all ills. That too passed with a two-third majority and ended up a non-starter. Then it was time for the goal posts to be shifted again – this time to make the President’s younger sibling the Finance Minister.
One can vividly recall the picture that was painted by SLPP member after member in Parliament upon his appointment, of a land overflowing with milk and honey. But as reality would have it, what transpired was the exact opposite, so much so that he was compelled to resign in ignominy. Fast running out of options, then the call shifted to a change at the Central Bank and for the first time in the nation’s history, a serving MP in the morning became Central Bank Governor in the evening. The country is only too aware of how that played out as well. Finally, now it is the turn of the newly-appointed business magnate turned Investment Minister to pull a rabbit out of the hat.
The bottom line is that we have a country that has been driven to rock bottom – as described by the Prime Minister no less – and there is still no plan to put things right. Understandably, no country or agency appears to be willing to come to its rescue, despite the President sending emissary after emissary to various countries begging for help. The trust deficit seems far too wide to be bridged by the mere visit of an emissary, whose mission is to take whatever is put on the table.
The result of three years of unmitigated serial bungling and groping in the dark has, according to the Sri Lanka Freedom Party, resulted in the nation being plunged to a state of helplessness that even Velupillai Prabhakaran and his LTTE failed to achieve during 30 years of war. At no point in those 30 years did the nation grind to a halt due to lack of fuel or children having to stay away from school, or people having no food, or hospitals having to turn away patients for lack of medicine, or businesses both big and small having to put up shutters due to the non-availability of fuel and forex. Today, it is no secret that the biggest casualty of the bungling has been national security, the very platform on which this Government was elected on the back of the Easter attacks. Not only is there a palpable sense of lawlessness with rampant violence, robberies, and murders galore, worst of all is the anticipated sellout of the country’s energy sector to whoever is willing to throw some dollars.
In today’s world, 99% of wars have been fought purely for the sake of energy security. The wars in the Middle East and now in Ukraine epitomise this contention. It is in such a backdrop that the Government, in its desperation, has decided to open out the energy sector to anybody who is willing to import and sell fuel in this country at their cost. At the very least, one can only hope that the administration will have in place the necessary safeguards to prevent this all-important sector falling into the wrong hands, where the solution might well be worse than the crisis itself. Therefore, there is every likelihood that the manner in which the administration aims to balance the fulfilment of its energy needs without compromising on security, especially in the context of Sri Lanka’s strategic location – which could potentially give rise to geopolitical concerns – will turn out to be a case study on the subject.
Be that as it may, Sri Lanka is fast running out of options, and if the Petroleum Minister, who recently visited the Middle East in search of oil, is unable to find a supplier, then there is a likelihood of even the limited services currently being carried out coming to a halt. Of course even during the war, especially in the north and east where regular fuel supplies were non-existent, people adapted to the situation and carried on regardless. We now see that same shift in mindset taking place in the rest of the country, with people adapting to alternate modes of transport, even to the extent of making it a fashion statement. However, the danger of it all is the conditioning of minds to accept the status quo and the attendant hardship as political inevitability, which once again is a victory for the regime.
As of last week, for the first time in the country’s history, Sri Lanka gained one more feather in its cap of ignominy upon being classified as a country caught up in hyperinflation – when inflation rises above 50%. According to official data released last week, CCPI-based headline inflation increased to a staggering 54.6% in June from 39.1% in May, while food inflation increased to a record-breaking 80.1% in June compared to 57.4% in May. With no mitigatory measures in place and money printing still continuing, people are fast approaching breaking point.
Even at this late hour, the politicians responsible for this mess must realise that they need to take a back seat and allow an independent governance mechanism to take over the driving seat. If Sri Lanka is to turn the corner, it must ensure the rule of law, transparency, and accountability in governance. The American Ambassador in the news these days spelled it out in black and white when she stated: “Oversight and transparency are critical components of our assistance programmes. US aid is only awarded to partners that adhere to globally-recognised monitoring and evaluation standards. This ensures that funding is accounted for and assistance reaches those who need it most.” While the US may not be the country’s biggest lender or investor, it certainly sets the benchmark in the standards that are to be expected, which others take cognisance of by default. If the Americans are happy with the set-up, others will be too, even though they rarely see eye-to-eye. To expect even the most minimal standards of accountability from this particular administration is to ask for the impossible, simply going by its track record so far.
However, it has one last opportunity to show the world that the winds of change are blowing across the Diyawanna, when Parliament sits this week and the 22nd Amendment to the Constitution is presented. To the uninitiated, it is yet another attempt at deception where the core demand for change in the presidency and the setting up of independent commissions as prescribed in the 19th Amendment have been craftily sidestepped, and a diluted substitute has been forwarded in its place. The Justice Minister, who has earned a reputation for saying different things at different times, appears to have outdone himself in this instance by going against his own Private Member’s Bill, which envisaged tighter reforms.
For instance, the apex Constitutional Council proposed by the new Amendment envisages seven out of 10 seats to the governing party if the president and PM happen to be from the same party, which, needless to say, defeats the very concept of an ‘independent’ administration. Being the apex council that presides over the other nine, it also sets the tone for how things are likely to play out in the others. More significantly, the proposed changes to the President’s powers – which are at the core of the ‘People’s Struggle’ – will come into effect only with the election of the next Parliament, which effectively means the incumbent, who is the actual eye of the storm, will continue regardless. If this is not deception and undermining of the people’s struggle, then what is?
It is therefore the duty of all right-thinking politicians to push for a better deal during the Committee Stage of the 22nd Amendment Bill in Parliament. The politicians who are responsible for the suffering of the people must, even at this last stage, refrain from yielding to their petty party agendas and instead grab the opportunity to put this country on the right track once and for all. If not, the donor community will not waste a minute in seeing through the deceit, and will look elsewhere to put their money.
Bridging the trust deficit
03 Jul 2022
Bridging the trust deficit
03 Jul 2022
Sri Lanka’s current leadership has been dangerously flirting with the prospect of a slide to chaos, fuelled primarily by the unmitigated escalation of the economic crisis. It is however to the credit of the people that, despite the multiple burdens piled on their hands in quick succession, they have been more than willing to stomach their share of the suffering in the hope that one day soon, things will indeed take a turn for the better. Unfortunately, however, that anticipated silver lining appears to be more elusive than ever, if the events of the past week are anything to go by.
Up until now the trump card of the administration, more notably that of the new Prime Minister, was the prospect of an expedited IMF bailout programme, supplemented with a helping hand from friendly countries. However, the only country that has so far come forward to the nation’s rescue has been neighbour India, and having been virtually milked dry to the tune of nearly $ 5 billion in short-term assistance, it is no longer willing to play sugar daddy. But it has not written off further assistance, which may be forthcoming (subject, however, to an unwritten caveat in the form of policy reform). With the regime displaying a distinct reluctance to go down that particular road, it appears that things are bound to come to a head sooner than later.
Of course that does not mean that friendly countries aided by humanitarian agencies will not step in to avert a humanitarian crisis. Already the US Government has announced food aid, along with the FAO and other UN agencies. But while all that will keep those most affected fed, it will not help the stalled economy move again. For that to happen, it is imperative that an IMF bailout is activated at the earliest, and it is towards that end that a technical delegation of the multilateral agency was in the country for over 10 days. At the end of the engagement locally, however, the anticipated result does not appear to have materialised, with the IMF remaining non-committal on urgent assistance, based on the routine, innocuous statement issued at the completion of the engagement.
At the core of the administration’s struggle to secure financing in any form appears to be the ever-widening trust deficit. When Sri Lankans overseas don’t trust their own Government enough to send remittances through the official banking system, will other entities, including those in the Middle East – where the majority of the Sri Lankan expatriate community have chosen to work – trust the Government enough to extend financial assistance? This is the challenge that the administration needs to overcome.
Three years down the line, it is quite clear that the administration never, at any point, had a plan or vision for the economy – or the country for that matter. It has always been a story of shifting goal posts each time a crisis dawned, and there have been many of that along the way, paving the way for this mother of all crises that we are now saddled with. The charade began no sooner the President was elected, when six months down the line the call was for a two-thirds majority in Parliament in order to deliver on the manifesto. Once that was given and the ‘Promised Land’ was nowhere to be seen, the 19th Amendment was made the scapegoat and the 20th was brought in as its replacement, giving the Executive powers that would make even its creator blush with envy. With that also under the belt, it was apparent that the promised splendour was not yet forthcoming. Then it was said that once the Port City Act was passed, the dollars would flow in and it would be the panacea for all ills. That too passed with a two-third majority and ended up a non-starter. Then it was time for the goal posts to be shifted again – this time to make the President’s younger sibling the Finance Minister.
One can vividly recall the picture that was painted by SLPP member after member in Parliament upon his appointment, of a land overflowing with milk and honey. But as reality would have it, what transpired was the exact opposite, so much so that he was compelled to resign in ignominy. Fast running out of options, then the call shifted to a change at the Central Bank and for the first time in the nation’s history, a serving MP in the morning became Central Bank Governor in the evening. The country is only too aware of how that played out as well. Finally, now it is the turn of the newly-appointed business magnate turned Investment Minister to pull a rabbit out of the hat.
The bottom line is that we have a country that has been driven to rock bottom – as described by the Prime Minister no less – and there is still no plan to put things right. Understandably, no country or agency appears to be willing to come to its rescue, despite the President sending emissary after emissary to various countries begging for help. The trust deficit seems far too wide to be bridged by the mere visit of an emissary, whose mission is to take whatever is put on the table.
The result of three years of unmitigated serial bungling and groping in the dark has, according to the Sri Lanka Freedom Party, resulted in the nation being plunged to a state of helplessness that even Velupillai Prabhakaran and his LTTE failed to achieve during 30 years of war. At no point in those 30 years did the nation grind to a halt due to lack of fuel or children having to stay away from school, or people having no food, or hospitals having to turn away patients for lack of medicine, or businesses both big and small having to put up shutters due to the non-availability of fuel and forex. Today, it is no secret that the biggest casualty of the bungling has been national security, the very platform on which this Government was elected on the back of the Easter attacks. Not only is there a palpable sense of lawlessness with rampant violence, robberies, and murders galore, worst of all is the anticipated sellout of the country’s energy sector to whoever is willing to throw some dollars.
In today’s world, 99% of wars have been fought purely for the sake of energy security. The wars in the Middle East and now in Ukraine epitomise this contention. It is in such a backdrop that the Government, in its desperation, has decided to open out the energy sector to anybody who is willing to import and sell fuel in this country at their cost. At the very least, one can only hope that the administration will have in place the necessary safeguards to prevent this all-important sector falling into the wrong hands, where the solution might well be worse than the crisis itself. Therefore, there is every likelihood that the manner in which the administration aims to balance the fulfilment of its energy needs without compromising on security, especially in the context of Sri Lanka’s strategic location – which could potentially give rise to geopolitical concerns – will turn out to be a case study on the subject.
Be that as it may, Sri Lanka is fast running out of options, and if the Petroleum Minister, who recently visited the Middle East in search of oil, is unable to find a supplier, then there is a likelihood of even the limited services currently being carried out coming to a halt. Of course even during the war, especially in the north and east where regular fuel supplies were non-existent, people adapted to the situation and carried on regardless. We now see that same shift in mindset taking place in the rest of the country, with people adapting to alternate modes of transport, even to the extent of making it a fashion statement. However, the danger of it all is the conditioning of minds to accept the status quo and the attendant hardship as political inevitability, which once again is a victory for the regime.
As of last week, for the first time in the country’s history, Sri Lanka gained one more feather in its cap of ignominy upon being classified as a country caught up in hyperinflation – when inflation rises above 50%. According to official data released last week, CCPI-based headline inflation increased to a staggering 54.6% in June from 39.1% in May, while food inflation increased to a record-breaking 80.1% in June compared to 57.4% in May. With no mitigatory measures in place and money printing still continuing, people are fast approaching breaking point.
Even at this late hour, the politicians responsible for this mess must realise that they need to take a back seat and allow an independent governance mechanism to take over the driving seat. If Sri Lanka is to turn the corner, it must ensure the rule of law, transparency, and accountability in governance. The American Ambassador in the news these days spelled it out in black and white when she stated: “Oversight and transparency are critical components of our assistance programmes. US aid is only awarded to partners that adhere to globally-recognised monitoring and evaluation standards. This ensures that funding is accounted for and assistance reaches those who need it most.” While the US may not be the country’s biggest lender or investor, it certainly sets the benchmark in the standards that are to be expected, which others take cognisance of by default. If the Americans are happy with the set-up, others will be too, even though they rarely see eye-to-eye. To expect even the most minimal standards of accountability from this particular administration is to ask for the impossible, simply going by its track record so far.
However, it has one last opportunity to show the world that the winds of change are blowing across the Diyawanna, when Parliament sits this week and the 22nd Amendment to the Constitution is presented. To the uninitiated, it is yet another attempt at deception where the core demand for change in the presidency and the setting up of independent commissions as prescribed in the 19th Amendment have been craftily sidestepped, and a diluted substitute has been forwarded in its place. The Justice Minister, who has earned a reputation for saying different things at different times, appears to have outdone himself in this instance by going against his own Private Member’s Bill, which envisaged tighter reforms.
For instance, the apex Constitutional Council proposed by the new Amendment envisages seven out of 10 seats to the governing party if the president and PM happen to be from the same party, which, needless to say, defeats the very concept of an ‘independent’ administration. Being the apex council that presides over the other nine, it also sets the tone for how things are likely to play out in the others. More significantly, the proposed changes to the President’s powers – which are at the core of the ‘People’s Struggle’ – will come into effect only with the election of the next Parliament, which effectively means the incumbent, who is the actual eye of the storm, will continue regardless. If this is not deception and undermining of the people’s struggle, then what is?
It is therefore the duty of all right-thinking politicians to push for a better deal during the Committee Stage of the 22nd Amendment Bill in Parliament. The politicians who are responsible for the suffering of the people must, even at this last stage, refrain from yielding to their petty party agendas and instead grab the opportunity to put this country on the right track once and for all. If not, the donor community will not waste a minute in seeing through the deceit, and will look elsewhere to put their money.
Kapruka
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Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Automobile, Mother and Baby Products, Clothing, and Fashion. Additionally, Kapruka offers unique online services like Money Remittance, Astrology, Medicine Delivery, and access to over 700 Top Brands. Also If you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.Send love straight to their heart this Valentine's with our thoughtful gifts!