A toxic cocktail of issues that are multiplying at a rate is pushing Sri Lanka and its 22 million inhabitants closer to the brink, while the elected Government appears to have clearly run out of options and resigned itself to simply sit by and watch the unfolding chaos. This tragic state of affairs was being compounded by some clueless ministers in the Government even as late as last week, still attempting to deny the existence of an economic crisis. All told, the unfolding economic tsunami has earned the wrath of a people who not so long ago endeared themselves to the very same Government through an unprecedented mandate.
Despite the increasingly-isolated bravado of a handful of ministers and even the Governor of the Central Bank, it is now clear that the haemorrhaging economy is slowly but surely slipping out of the control of the Government and into the hands of external entities. To make matters worse, rather than occupying itself with the task of getting things back on track, the powers that be seem to be more interested in window dressing and doing what it does best: hoodwinking a gullible public. But with people feeling the crunch deep down in their stomachs and some of them even collapsing and dying while standing in queues for fuel, the tide is turning and the voice of the people is beginning to drown out that of a Government struggling to make itself heard above the din.
The method of choice to alter the unfolding reality appears to be the dangerous route of bypassing Parliament, which in fact is the sole authority vested with the power to manage public finance. Sri Lanka being a sovereign state, power is vested exclusively in the people who through their franchise elect 225 members to represent them in Parliament. But unfortunately the Finance Minister who is a nominated National List MP and a dual citizen, appears to have failed to grasp the basic concept of accountability to the people. In fact, despite multiple reminders and calls to brief Parliament given the grave economic situation, such calls have largely been ignored, with the Minister failing to provide any update since his Budget Speech last December.
Now it appears that the Central Bank Governor, Monetary Board, and Treasury Secretary have taken a cue from their political boss and decided to follow the same route of giving Parliament a miss. Last week the Committee on Public Finance, which is the highest political body comprising elected MPs to oversee the all-important subject of public finance, was given the cold shoulder by these individuals who failed to show up after being summoned by its Chairman. This episode comes on the back of the All-Party Conference (APC) with questions being raised on its bona fides. This credibility issue has resulted in it being boycotted by the country’s main Opposition parties – the Samagi Jana Balawegaya (SJB), Janatha Vimukthi Peramuna (JVP), and Sri Lanka Muslim Congress (SLMC), among others, including Tamil parties, which allege that the APC is being used as a tool to bypass parliamentary accountability mechanisms. There is no legal basis for equalling all-party consensus to a parliamentary majority with regard to the resolution of any issue. Therein lies the futility of the all-party talk shop although it offers a platform for exchange of ideas.
But that too does not appear to be the case if the opening statement by the Central Bank Governor is anything to go by. The Governor, shedding all pretensions of being an independent entity as specified by law, valiantly attempted to pin the blame for the present crisis on the former Government. It took the former Prime Minister who was present at the meeting just two minutes to put the Governor in his place, with the President no less apologising to the former PM for the Governor’s comments. The thrust of that speech exposed the political intentions of the regime for using the APC as yet another arena for the blame game, rendering it a useless exercise.
If that was not bad enough, the motives of the APC were further brought into question by the refusal of the Finance Minister to provide a copy of the International Monetary Fund (IMF) Article IV consultation report to the APC despite the former PM’s repeated requests. Having first denied he had received a copy of the report, the Finance Minister then admitted that a draft had been received but refused to provide a copy. Interestingly, the very next day, the IMF published the full report on its website. If the Government is unwilling to provide the necessary data/tools for the Opposition parties to study the same and make their recommendations to the APC, then on what basis are they expected to submit their proposals? The former PM is smart enough to understand that today, government, like business, is essentially data driven. Gone are the days where one can look at someone’s face and come up with policy decisions, which appears to be what the regime expects.
Needless to say, it certainly seems to be how Cabinet decision-making takes place these days, with decisions being arrived at even before the relevant Cabinet papers have been presented. An allegation was made by Opposition lawmakers that the relevant approvals for the agreements with Indian entities had been obtained from Cabinet days before the papers were actually presented prior to the Finance Minister’s recent visit to India. This calls into question the calibre of Cabinet members who appear to routinely raise their hands to provide blanket approval to matters of which they clearly have no idea. It is these very same individuals who thereafter raise the loudest voices about national security. If Sri Lanka is to come anywhere close to raising its game with its peers, which it must in order to stay afloat, then it simply cannot afford the luxury of an inept cabinet, which in essence is the board of directors of Sri Lanka Inc.
The collective incompetence of such a board is reflected in the economic hardship being faced by the people where a 50 kg bag of cement now costs the same as a 1 kg pack of milk powder. The national staple of a cup of milk tea sold in corner shops has risen from Rs. 30 a cup just six months ago to Rs. 100 last week, while the real value of incomes has plummeted thanks to skyrocketing inflation. The rupee devaluation to 300 to the dollar last week has resulted in another mega fuel price hike announced by Indian Oil Company in Sri Lanka, pushing local petrol prices to a dizzy Rs. 303 per litre. More worryingly the rapid rupee devaluation will result in the twin evils of Sri Lanka’s already-unsustainable external debt burden almost doubling overnight in rupee terms while also hitting hard on per capita income in dollar terms. Therefore, it is likely that Sri Lanka will soon be relegated to ‘poor’ status from ‘middle income,’ which segment it has maintained for the last two decades.
So who is to be blamed for what has come to pass? Up until about a month ago it was an all-powerful trio that called the shots on anything and everything to do with the country’s economy. But having finally come to terms with the gravity of the situation, the answer was the appointment of an ‘Economic Advisory Committee’. Then, having realised that the appointed advisors consisted of the very same people who created the mess, another advisory committee was announced, this time to advise the advisors consisting of business bigwigs. Last week after what seemed like much deliberation, these advisors to the advisors came up with five proposals, all of which envisaged the appointment of another five separate sets of advisors! The entire process has now been reduced to a joke and the butt-end of corporate humour.
Given the status quo, there is little hope that anything substantive will materialise from this advisory mechanism, which at the most will only delay the inevitable. There also arises the question of whether anything these multiple sets of advisors come up with will actually be implemented, with the Government already deciding to seek IMF and World Bank assistance. If the Bretton Woods duo accedes to the request, then the Government has no choice but to dance to their tune, which renders the advisors redundant and a waste of time and resources. For how much longer can the country afford to blunder on with the people being thrown from the frying pan into the fire?From the frying pan into the fire
26 Mar 2022
From the frying pan into the fire
26 Mar 2022
A toxic cocktail of issues that are multiplying at a rate is pushing Sri Lanka and its 22 million inhabitants closer to the brink, while the elected Government appears to have clearly run out of options and resigned itself to simply sit by and watch the unfolding chaos. This tragic state of affairs was being compounded by some clueless ministers in the Government even as late as last week, still attempting to deny the existence of an economic crisis. All told, the unfolding economic tsunami has earned the wrath of a people who not so long ago endeared themselves to the very same Government through an unprecedented mandate.
Despite the increasingly-isolated bravado of a handful of ministers and even the Governor of the Central Bank, it is now clear that the haemorrhaging economy is slowly but surely slipping out of the control of the Government and into the hands of external entities. To make matters worse, rather than occupying itself with the task of getting things back on track, the powers that be seem to be more interested in window dressing and doing what it does best: hoodwinking a gullible public. But with people feeling the crunch deep down in their stomachs and some of them even collapsing and dying while standing in queues for fuel, the tide is turning and the voice of the people is beginning to drown out that of a Government struggling to make itself heard above the din.
The method of choice to alter the unfolding reality appears to be the dangerous route of bypassing Parliament, which in fact is the sole authority vested with the power to manage public finance. Sri Lanka being a sovereign state, power is vested exclusively in the people who through their franchise elect 225 members to represent them in Parliament. But unfortunately the Finance Minister who is a nominated National List MP and a dual citizen, appears to have failed to grasp the basic concept of accountability to the people. In fact, despite multiple reminders and calls to brief Parliament given the grave economic situation, such calls have largely been ignored, with the Minister failing to provide any update since his Budget Speech last December.
Now it appears that the Central Bank Governor, Monetary Board, and Treasury Secretary have taken a cue from their political boss and decided to follow the same route of giving Parliament a miss. Last week the Committee on Public Finance, which is the highest political body comprising elected MPs to oversee the all-important subject of public finance, was given the cold shoulder by these individuals who failed to show up after being summoned by its Chairman. This episode comes on the back of the All-Party Conference (APC) with questions being raised on its bona fides. This credibility issue has resulted in it being boycotted by the country’s main Opposition parties – the Samagi Jana Balawegaya (SJB), Janatha Vimukthi Peramuna (JVP), and Sri Lanka Muslim Congress (SLMC), among others, including Tamil parties, which allege that the APC is being used as a tool to bypass parliamentary accountability mechanisms. There is no legal basis for equalling all-party consensus to a parliamentary majority with regard to the resolution of any issue. Therein lies the futility of the all-party talk shop although it offers a platform for exchange of ideas.
But that too does not appear to be the case if the opening statement by the Central Bank Governor is anything to go by. The Governor, shedding all pretensions of being an independent entity as specified by law, valiantly attempted to pin the blame for the present crisis on the former Government. It took the former Prime Minister who was present at the meeting just two minutes to put the Governor in his place, with the President no less apologising to the former PM for the Governor’s comments. The thrust of that speech exposed the political intentions of the regime for using the APC as yet another arena for the blame game, rendering it a useless exercise.
If that was not bad enough, the motives of the APC were further brought into question by the refusal of the Finance Minister to provide a copy of the International Monetary Fund (IMF) Article IV consultation report to the APC despite the former PM’s repeated requests. Having first denied he had received a copy of the report, the Finance Minister then admitted that a draft had been received but refused to provide a copy. Interestingly, the very next day, the IMF published the full report on its website. If the Government is unwilling to provide the necessary data/tools for the Opposition parties to study the same and make their recommendations to the APC, then on what basis are they expected to submit their proposals? The former PM is smart enough to understand that today, government, like business, is essentially data driven. Gone are the days where one can look at someone’s face and come up with policy decisions, which appears to be what the regime expects.
Needless to say, it certainly seems to be how Cabinet decision-making takes place these days, with decisions being arrived at even before the relevant Cabinet papers have been presented. An allegation was made by Opposition lawmakers that the relevant approvals for the agreements with Indian entities had been obtained from Cabinet days before the papers were actually presented prior to the Finance Minister’s recent visit to India. This calls into question the calibre of Cabinet members who appear to routinely raise their hands to provide blanket approval to matters of which they clearly have no idea. It is these very same individuals who thereafter raise the loudest voices about national security. If Sri Lanka is to come anywhere close to raising its game with its peers, which it must in order to stay afloat, then it simply cannot afford the luxury of an inept cabinet, which in essence is the board of directors of Sri Lanka Inc.
The collective incompetence of such a board is reflected in the economic hardship being faced by the people where a 50 kg bag of cement now costs the same as a 1 kg pack of milk powder. The national staple of a cup of milk tea sold in corner shops has risen from Rs. 30 a cup just six months ago to Rs. 100 last week, while the real value of incomes has plummeted thanks to skyrocketing inflation. The rupee devaluation to 300 to the dollar last week has resulted in another mega fuel price hike announced by Indian Oil Company in Sri Lanka, pushing local petrol prices to a dizzy Rs. 303 per litre. More worryingly the rapid rupee devaluation will result in the twin evils of Sri Lanka’s already-unsustainable external debt burden almost doubling overnight in rupee terms while also hitting hard on per capita income in dollar terms. Therefore, it is likely that Sri Lanka will soon be relegated to ‘poor’ status from ‘middle income,’ which segment it has maintained for the last two decades.
So who is to be blamed for what has come to pass? Up until about a month ago it was an all-powerful trio that called the shots on anything and everything to do with the country’s economy. But having finally come to terms with the gravity of the situation, the answer was the appointment of an ‘Economic Advisory Committee’. Then, having realised that the appointed advisors consisted of the very same people who created the mess, another advisory committee was announced, this time to advise the advisors consisting of business bigwigs. Last week after what seemed like much deliberation, these advisors to the advisors came up with five proposals, all of which envisaged the appointment of another five separate sets of advisors! The entire process has now been reduced to a joke and the butt-end of corporate humour.
Given the status quo, there is little hope that anything substantive will materialise from this advisory mechanism, which at the most will only delay the inevitable. There also arises the question of whether anything these multiple sets of advisors come up with will actually be implemented, with the Government already deciding to seek IMF and World Bank assistance. If the Bretton Woods duo accedes to the request, then the Government has no choice but to dance to their tune, which renders the advisors redundant and a waste of time and resources. For how much longer can the country afford to blunder on with the people being thrown from the frying pan into the fire?Kapruka
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!
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!