Economic crisis and paradigm shift in national ethos

By Vishvanath

Elaborate arrangements have been made for the SLPP’s national convention to be held on a grand scale in Colombo, today. A large number of party supporters and political leaders representing the constituents of the ruling coalition are expected to attend the event at the Sugathadasa stadium.

Party conventions are shows of strength, and the SLPP will make some important announcements pertaining to the elections to be held next year. Whether it has learnt from its mistakes and is willing to adapt its political strategy to the present-day needs, socioeconomic dynamics and the aspirations of the public, especially the youth, remains to be seen.

The SLPP won the last two elections by flogging national security issues and capitalizing on the anti-incumbency factor, which went against the Yahapalana government, but this time around, its old tricks will not work, for the people are fed up with conventional, patronage-based politics, which is one of the root cause of the present economic crisis.

Politics vs economics

It is rarely that a serious discussion on the national economy takes place in the Sri Lankan parliament even during annual budget debates. But Wednesday (13) was an exception. Both the government and the Opposition addressed a host of economic issues vigorously prior to the final vote on the Budget 2024, which was passed with a majority of 41 votes: Ayes 122, Noes 81, and one abstention.

Delivering a special statement in Parliament on the IMF Executive Board’s completion of the first review under the Extended Fund Facility arrangement for Sri Lanka, President Ranil Wickremesinghe, who is also the Minister of Finance, said on Wednesday that the IMF had endorsed Sri Lanka’s efforts to come out of bankruptcy. He declared that the IMF would release the second tranche of its loan soon.

President Wickremesinghe also sought to make political mileage out of the latest IMF decision. “I took over a bankrupt country last year. No leader came forward to take over that bankrupt country. Everyone was afraid to accept this challenge. None of the heroes who are now addressing the Parliament had the courage to come forward. I accepted that challenge.

“All I had was determination and dedication. Not a single MP representing my party was in the Parliament. But the majority of MPs supported me although they were also insulted and mocked. The people of the country also supported me. They faced various hardships for the country and supported this journey.”

Thus, President Wickremesinghe took the lion’s share of credit for the progress the country has made in its efforts to overcome bankruptcy. He thanked the SLPP and others for the successful implementation of the IMF programme and what had been achieved by way of economic recovery so far. But the crux of what he said was that the SLPP had failed to sort out the economy and the Opposition had shied away from the task of straightening up the tattered economy.

The SLPP may not be able to boast at today’s convention that it was instrumental in reviving the economy, having caused the current economic crisis and caused so much suffering to the public.

Shift in focus

There are positive signs of the focus of the nation shifting from politics to economics. Most Sri Lankans now have some rudimentary knowledge of the money supply, inflation, money printing, foreign reserves, debt restructuring, economic cost of corruption and waste, etc. Even the ordinary people are now attuned to fluctuations in oil prices in the world market and the pros and cons of IMF programmes.

Nobody likes crises and conflicts, which are destructive, but they are not totally devoid of positive aspects and outcomes; they are known to have the potential to bring about renewal and regeneration, as can be seen from the leitmotivs  in T. S. Eliot’s multi-layered poem, The Waste Land, which explores themes of destruction and renewal in the aftermath of World War I. Human history is replete with numerous such instances.

The American Civil War (1861-65) was a profound tragedy, but it bore some positive outcomes such as the abolition of slavery, an unprecedented stride towards equality and human rights, industrial growth, advancements in technology and infrastructure, etc. Overall, it laid the foundation for a unified and progressive America.

The French Revolution (1789-99), which plunged France into a prolonged period of chaos and violence, brought about transformative changes; it led to the abolition of the monarchy, the establishment of the foundation for modern democracy and principles of equality and economic progress.

The genesis of the Magna Carta (1215) was also in a conflict that resulted from oppressive rule, heavy taxation and the arbitrary exercise of power in England under King John’s rule. It led to the curtailment of the king’s absolute power and the enshrinement of individual rights.

The Arab Spring, which swept across some parts of the Middle East and North Africa between 2010 and 2012 resulted in some positive changes such as the fostering of a robust civil society, people’s awareness of human rights, and social change.

Similarly, last year’s Aragalaya in this country, which was similar to the Arab Spring in some respects, also brought about a paradigm shift in the national ethos. It upended the people’s thinking, perceptions of rights and freedoms, attitude towards the political authority. Having borne the brunt of the ill-effects of populist politics and politically-motivated relief programmes, the people have realized that the stability of political and social institutions depends on the strength of the national economy, whose wellbeing must therefore be prioritized over everything else.

IMF and elections

The people are reeling from the ongoing IMF program, which has laid down stringent conditions in exchange for assistance. They are crying out for relief, but they do not want to revisit what they experienced last year; President Wickremesinghe chose to call it economic hell.

The IMF programme is sure to be a main plank of every party’s election platform. The SJB has already started criticizing the IMF conditions and the resultant difficulties. Opposition and SJB Leader Sajith Premadasa told the parliament on Wednesday that a future SJB government would renegotiate the IMF conditions. President Wickremesinghe snidely remarked that those who sought to dictate terms to the IMF had the same cognitive ability as Montessori kids. The only way the country could free itself from the IMF conditions was to fulfil them and rebuild the economy, he said. This is going to be his line of argument during elections campaigns to be held next year.

It will be interesting to see what the JVP will say about the IMF programme, which it is not well-disposed towards, in the run-up to the next election. JVP leaders will find themselves in an ideological dilemma, for nobody wants the current IMF programme derailed, and the Marxists will not be able to endorse it or undertake to do away with it.

It will be a mistake for the politicians and political parties to use old slogans and pledges to muster popular support at future elections. Nobody will vote for a party that promises to do away with the IMF programme, slash or abolish taxes, increase salaries, reduce fuel prices drastically and distribute handouts, for the public now seems capable of realistically assessing the feasibility and the economic cost of such political pledges.