N Sathiya Moorthy
27 August 2024
As if campaigning for incumbent Ranil Wickremesinghe in the presidential poll that is only weeks away, a senior Central Bank official recently claimed that the nation could face severe implications if it reverses the economic reforms initiated at the instance of the International Monetary Fund (IMF). This has come at a time when rival front-runners in Sajith Premadasa and Anura Kumara Dissanayake, not necessarily in that order, had long ago declared their intention to ‘renegotiate’ the package with the IMF, if voted to power. Neither of them has said what exactly they intended to re-negotiate and what has been IMF’s past behaviour in the matter if it had been approached with similar proposals for re-negotiating (only) the reforms side of the aptly-named ‘bail-out package’.
In comparison, Ranil should be congratulated for staying firm with his ‘reformist’ approach to economic policies, which he says he seemingly had nothing to do with as President in the past two years forgettable past forward since his UNP introduced it all in 1978 and he himself heralded as Prime Minister for at least four terms, including the longest five-year period, from 2015.
Against this, Sajith, as the leader of the breakaway SJB, is now talking about ‘capitalism with a human face’. As a slogan, it sounds fine, but will it be enough to convince the pauperised middle class and those that have been languishing below them all along, their collective condition worsened with the economic crisis? For his part, JVP’s Anura Kumara Dissanayake (AKD) has been more forthcoming. He has said that if elected President, he would abolish VAT on food items, medicines and school equipment.
It is a wonderful idea, yes, but removing VAT on these goods, especially food items that are consumed in large quantities, could leave a massive revenue-deficit that could become hard to fill up. Anyway, he has not said if he would negotiate such aspects with the IMF or carry out his promises unilaterally, as some past Presidents had done in their time. Ranil says this is what cost the economy dearly over a period – and he as President would not allow it to happen.
One thing is clear. If elected President, Sajith, Anura, or in the unlikely event of Namal Rajapaksa doing it, would sack Ranil’s finance team, including the Central Bank bosses wholesale. Whether it would be symbolic or symptomatic will then remain to be seen. That is to say, if they actually want to re-negotiate with the IMF on taxes and tariff, as they now want the voters to believe, or they would make all such moves and then let the IMF take the blame for ‘not yielding’ is a remote question just now.
Stronger integration
In the middle of all this, Ranil, addressing a BIMSTEC virtual summit as President, called for strengthening economic cooperation and regional integration with Japan and India, more especially the latter. He used the occasion to reiterate his gratitude to Prime Minister Narendra Modi and the people of India for supporting the nation during the economic crisis. He swore by the ‘Vision Statement’ released during his New Delhi visit last year, and said it will lead to stronger integration between Sri Lanka and India across various sectors.
Again, Ranil alone is forthright in the matter. It is not as if the other two do not acknowledge the truth of India’s assistance, even leaving out Namal Rajapaksa, who at the moment looks like ending up as an ‘also-ran’. But they have not taken bold to say-so in public. Their election strategy requires that they remain silent on the India front. But what Ranil is saying so very openly is that you cannot continue with economic recovery without the IMF and India – again, not necessarily in that order. Those that promise to shun both, openly or not-very-openly, are misleading the people of Sri Lanka, and their projects for economic recovery, if any, would crash even before commencing its hard journey.
It is true that India remains the only source for single-maximum contribution to the nation’s economic recovery or whatever has been attempted thus far. The crisis and the Indian role itself commenced their journey before Ranil’s time as President. Even as a political crisis and social protests were taking shape when the economy blew on the nation’s face two years back, New Delhi had begun its work.
It did not stop with surveying the possible damage and destruction to the nation’s economy. Instead, based possibly on such surveys, India had begun the recovery-work then and there. It was more than fire-fighting, more than the post-disaster relief and restoration operations as happened alongside the Asian tsunami of end-2004.
Those that are still ‘unforgiving’ over the IPKF era of the eighties forget that the Indian military that rushed all kinds of personnel and all types of aid during the tsunami went back once their mission was accomplished. Why, even the IPKF was here only because then President J R Jayawardena sought it, that too because he was facing a twin-militancy, of the JVP in the South and the West, and of the LTTE in the North and the East.
JRJ defied his Prime Minister, the LTTE-slain Ranasinghe Premadasa and possibly a large chunk of his ruling UNP parliamentarians during the time. But then, New Delhi was dealing with the government in Colombo, not individual leaders in their private capacity. And the IPKF pulled out, when Premadasa as successor President wanted them out.
Misleading constituents
It is the kind of argument that many in Colombo dish out when discussing or debating the perceived role of the south Indian state of Tamil Nadu in Sri Lanka’s ethnic issue, then and since. Yet, all such Sri Lankan discourses end with the one-liner, ‘After all, we are dealing with the government in New Delhi, not with politicians in south India.
It is the Indian Centre’s problem.’ The fact still remains for most Sri Lankan politicians, common people and even strategic-thinkers, ‘south India’ refers only to Tamil Nadu. They all go on pilgrimage in Tirupati, to Sai Baba earlier and Sri Sri Ravishankar in Bangalore and a host of astrologers in Kerala — but still want to believe all of them are ‘Tamil land’, if only to continue misleading their innocent constituents.
For their part, the Tamils have mastered the art of ‘shifting the goal-post’ and make the rest of the world aware that it is the Colombo government that has been doing it all along. Their views on India, too, keep changing all the time. Just two years back, all those political leaders wrote to Prime Minister Modi, seeking New Delhi’s assistance for the ‘full implementation’ of the India-facilitated 13-A, again from the eighties.
Even without New Delhi’s visible nudging, all three main candidates in the present presidential election have promised full or fuller implementation of 13-A, multiple Tamil parties and their leaders, divided on egos, have moved onto demanding ‘federalism with re-merger’ of the North and the East. This has been in the Tamil DNA, beginning with the revered SJV’s Batticaloa declaration that ‘this is only the first step’ (to what?), just three days after affixing his signature to the famous/infamous BC Pact with Prime Minister S W R D Bandaranaike in the mid-fifties. The rest of it followed, but this one alone has not been adequately documented by Tamil historians for the rest of the world.
The fact also remains that India got involved when and only when Tamil refugees in their tens of thousands waded through the risky seas in junk boats to reach to the safety and security that they could not get in native Sri Lanka of generations, in the aftermath of the shocking ‘Pogrom-83’ that wrenched hearts and stomachs together. Those refugees and their children and grandchildren are still camping in the very same ‘south India’ of the Colombo elite – and no one in successive governments has initiated steps to give them a sense of security and safety for them to return home to their motherland.
Hopes, not clues
Now, even as Sri Lanka is limping back to ‘Ranil’s new normal’ as Sajith aptly named it, and the pauperised middle-class has got no hopeful words as yet from any or all the candidates in the fray, India continues to pump in public sector and private sector investments in a big way, so as to create jobs and generate family incomes and governmental revenues. New Delhi has hopes, yet no clues, if the risk is worth taking, but it is all a part of the nation’s ‘Neighbourhood First’ policy.
The Indian approach, now and earlier, is centred on keeping individual Sri Lankans, too, happy and content. It is unlike the developmental assistance from the Chinese adversary, which has been playing a mind-game with all of India’s South Asian neighbours, as has become Beijing’s practice. What has remained are ‘white-elephant projects’ that exclusively employed Chinese labour and did not create jobs and incomes for the locals, and yet indebted Sri Lanka, no end.
Yet, it is Indian investments like those of the private sector Adani Group that have been at the centre of litigation in the Supreme Court, in the name of environmental protection and compromising ‘Sri Lankan sovereignty’ and the like. There may be differences over pricing, etc, and they can be and should be discussed, not necessarily litigated, citing extraneous causes. As coincidence would have it, the court has set a post-poll October case for hearing the multiple petitions, including one from the Tamil-speaking Catholic Bishop of Mannar, as it is where the Adani wind-farm is set to come up.
Loss of sovereignty
Incidentally, these worthies, for instance, found no problem when the government of Mahinda Rajapaksa invited China to native Hambantota with a huge debt-linked development project, where no Sri Lankan, including his own constituents and loyalists, got employment. There was no talk of environmental-damage when the Hambantota seas were dredged or the huge boulders blocking the sea-mouth bombed to smithereens.
Nor was there any such damage in the creation of the Colombo Port City reclamation by China for putting up a massive Chinese ‘financial hub’ – all of it, now under an Act of Parliament. In between, none of them talked about the loss of Sri Lankan sovereignty and territorial integrity when the laughable ‘Government of National Unity’ (2015-19), palmed off the Hambantota property on a 99-year lease to the Chinese creditors.
They have not said anything since, either, when Beijing was seen as playing around with Colombo on the crucial debt-restructuring, which was yet another pre-condition for the IMF bail-out package, which added up to $ 3.9-b. Against this, New Delhi had put up $ 4 b upfront in the early weeks and months of the economic crisis two years back, with Indian officials not tired of saying it was all ‘for the people of Sri Lanka’ (and not for any ruler or regime at a particular time).
Did you say, ‘Something is rotten, somewhere – and it is not in Sri Lanka?’
(The writer is a Chennai-based Policy Analyst & Political Commentator. Email: sathiyam54@nsathiyamoorthy.com)
