By Kusum Wijetilleke

• Opportunity knocks for the Opposition

The Champion Pula is proving as elusive as the 21st Amendment – an oil tanker flying under Norwegian colours; lives and livelihoods dependent on the vital fuel on board the vessel. Meanwhile, the debate rages on regarding the privatisation of the Ceylon Petroleum Corporation (CPC) or liberalisation of the entire oil and gas industry or providing more petrol filling stations to the Lanka Indian Oil Company (LIOC) or approving, and appointing, private fuel importers with the requisite ‘capability’. As powerful CPC worker unions face up to a Government with no public mandate, the complexities of necessary reform become crystal clear. This is a single, albeit critical State-Owned Enterprise (SOE) with wide-ranging functions crucial to economic activity. If anyone ascribes privatisation, liberalisation, and deregulation as panaceas to the fuel crisis, they have missed the point. These projects are vitally necessary, yet we should also consider how and when salaries and wages across sectors will be revised upward to keep up with runaway inflation. Some companies, many export-related or those in the IT sector with foreign clients, began pegging their Sri Lankan worker salaries to the US Dollar. That is a very small sub sector of Sri Lanka’s some 8.2 million strong labour force; the much-derided State sector accounts for approximately 1.5 million. Complicated and nuanced, it is an essential debate. It is not, however, the definitive question surrounding Sri Lanka’s energy sector. That debate concerns the pricing of fuel, which many economists argue has for too long been over-subsidised across the board in a manner that has proved unsustainable. Sri Lanka will need to develop at pace in order to avoid a complete depression. Is that possible with petrol priced at Rs. 450-500 per litre with no significant sector-wide salary and wage adjustment on the horizon? Public Utilities Commission of Sri Lanka (PUCSL) Chairman Janaka Ratnayake released details of the requested tariff hikes, including stunning increases of 835% and 673% for the two lowest consumption categories while the two highest segments saw 81% and 36% increments. While the International Monetary Fund (IMF) has noted the urgent need to improve revenues by increasing taxes, the Government has simply not been as aggressive as it should have – once again betraying its lack of a mandate and political capital. For all its ideological rigidity, the IMF has also insisted on strengthening social safety nets to protect the most vulnerable in Sri Lanka. The IMF has noted that energy should be priced as per the market and there has been discussion about introducing a system of targeted transfers to subsidise the poorest. Sri Lanka’s non-existent information systems make targeted subsidies in the short-term extremely challenging. An example of how far behind the Sri Lankan State is in terms of its technological development is the recently-introduced and immediately-disbanded ‘voucher system’ for obtaining fuel. The optics alone are cause for concern; a major media briefing on important topics such as the decision to impose restrictions on the supply of fuel and the categorisation of ‘essential services’ was chaired by Sri Lanka Podujana Peramuna (SLPP) MP Mahindananda Aluthgamage. His record as the Minister of Agriculture will go down in history for all the wrong reasons; even if you leave the chemical fertiliser debacle at the President’s door, Aluthgamage must still answer for the fertiliser shipment that was rejected by Sri Lanka’s Standards Authority, causing a reported loss of $ 6.9 million. There were also promises related to compensation to farmers for the loss of harvests, but that too has not materialised. The constant appearance in the mainstream of SLPP members that failed spectacularly will not enhance credibility and will not appease lenders. All the President’s men It might also be time to admit and accept that constitutional reform will be little more than a facade, the process of passing the 21st (or 22nd) Amendment growing ever more farcical. The Minister in charge of this most delicate of processes, MP Dr. Wijeyadasa Rajapakshe stated that the President’s office would not be made a ceremonial position: “…the President was made a nominal position through the 19th Amendment, if we do that, Sri Lanka will become a failed State…” Rajapakshe is surely aware that Sri Lanka might as well already be characterised as such. The 21st Amendment was deemed necessary to temporarily dilute all significant powers from the office of the Presidency and transfer this to Parliament. This process was to lead to a reconstitution in the Chamber as well as a Government and Cabinet that has the necessary credibility to attract broad support from the electorate to pass painful reforms. Much like privatisation and the petroleum sector, the panacea to prevent abuses of power is unlikely to spring from the abolition of the Sri Lankan presidential system and replacing it with a version of the Westminster system, which was not itself a roaring success under Yahapalana. Sri Lanka has always veered between what is a traditional presidential-parliamentary system of government and a semi-presidential system, depending on the amendments in force at any given time. It was specifically revealing to listen to President Gotabaya Rajapaksa’s defiant statement during the first days of June, noting his distaste for a separation of powers: “You can’t have a mixed system,” he said. “I experienced this and now know… My personal opinion is that if you have a presidency he must have full powers. Otherwise abolish the Executive Presidency and go for full Westminster-style Parliament.” This is at once informative of the Gotabaya mindset while providing some direction for constitutional reform. What those with authoritarian tendencies seek primarily is a concentration of power. What is ironic is that the Gotabaya project utilised Parliament to consolidate power under the presidency. The Pohottuwa, Rajapaksa family, and/or Gotabaya Rajapaksa himself were able to subvert the parliamentary Chamber to relinquish all power to the Executive. Constitutional reform alone does not protect against such an outcome. There will also need to be campaign finance reforms, guardrails against entrenched family involvement within and across branches of government and a system of checks and balances informed by international standards. This is not a task that should be undertaken while rogue MPs sit in the Chamber, unwilling to accept that the severity of economic policy outcomes has rendered their mandate illegitimate. The elephant in the room The debate is crucial, the Oppositional parties must align on Sri Lanka’s system of government. The Janatha Vimukthi Peramuna (JVP), whilst aiming to occupy a progressive space on the political spectrum, has been staunchly against the existence of the Office of the President. A President directly elected by the voters within a system that guarantees the separation of powers with independent responsibilities and functions, would be the most suitable structure to introduce basic governance and oversight, and it is also the most progressive way forward. A presidency that is not ceremonial, perhaps with the inclusion of a Defence portfolio, but with no direct power over the Legislature, would certainly be a moderate position to occupy, given the gap in this specific issue throughout Sri Lanka’s political spectrum. In order to mobilise a varied yet broad and diverse coalition of electoral support, the political Opposition must not alienate the moderate nationalist base in order to appease the liberal base. If the presidency becomes an insurmountable political issue, there will have to be a referendum, once political stability is regained, settling the matter through a democratic process. It will soon be two months since the events of 9 May and the resignation of Prime Minister Mahinda Rajapaksa. Ranil Wickremesinghe was appointed to the position on 12 May; since then, how far has Sri Lanka moved toward genuine reform? Deep reforms of governance structures are prerequisites to an IMF facility and debt restructuring. Sri Lanka must correct its governance deficit. Wickremesinghe’s inability to convince the international community to offer even short-term assistance to stabilise the situation should not have surprised serious observers. What was surprising – the sheer number of people that believed Wickremesinghe had any chance of genuine reform with a significantly anti-reform parliamentary majority and a deeply-unpopular President in tow. There also seems to be a fresh campaign to discredit the protest movement – the Aragalaya plus GGG (‘GotaGoGama’) and other protest sites. On the one hand, authorities are arresting popular social media figures and activists. On the other hand, pro-Rajapaksa social media teams have launched a campaign to reinforce a narrative that the Aragalaya is trying to sabotage the IMF and that protests are interfering with negotiations in Sri Lanka. Dr. Shanta Devarajan, a former Senior Economist at the World Bank Group, was asked directly by Newsfirst whether protests affect the IMF negotiations. The answer was a resounding “no… in fact, it’s the opposite… because the normal pattern we’ve seen in other countries, Egypt, Turkey and so on, is that when there is an IMF programme, then there are protests in the streets against the IMF programme. This is a case where the protests started before an IMF programme… the people out there protesting in the street… see the clear relationships between their adverse economic circumstances, the shortages… and economic policies pursued by this Government. We can draw a clear line between the tax cuts of November 2019, the decision to keep making debt service payments out of reserves when Sri Lanka lost access to capital markets, the decision to finance the fiscal deficit by printing money, these are the reasons why we have these shortages now… so there’s a very clear relationship between the decisions taken by the Government and the outcomes.” The environment is ripe for fresh agitation that is coordinated, concerted, and consolidated. There is still time for the National People’s Power (NPP)-JVP to cast aside sectarian tendencies and launch a coordinated struggle with the Samagi Jana Balawegaya (SJB). It is noteworthy that Sajith Premadasa is criticised for not forging alliances with Oppositional parties, while Anura Kumara Dissanayake is hardly ever accused of the same. The Tamil National Alliance (TNA) must also demonstrate a wider perspective of Sri Lankan politics, beyond the communal issue. This process of Oppositional collaboration should have begun yesterday. The dynamic between the Opposition parties is still governed by their respective number of seats in the Chamber and by that measure, the SJB is still the most significant player despite the defections. There is even time for members of the United National Party (UNP) and Sri Lanka Freedom Party (SLFP) to salvage reputations and careers. The vindication The SJB that had seemed so weakened in the aftermath of the Wickremesinghe appointment and accused of being overly idealistic and tactically naïve, afraid to accept a poisoned chalice, now seem vindicated with each passing week. The Leader of the Opposition seemed to have calculated that the likeliest scenario would have been gridlock; orchestrated by the powerful Executive and a compliant parliamentary majority. A stifled SJB and an ineffective prime ministerial venture by Sajith Premadasa would most certainly have paid into the SJB’s chances to secure an outright majority at a future General Election. Prime Minister Wickremesinghe must now perhaps have wished that he too had placed some conditions on accepting the post. Another dynamic that deserves consideration: in such a scenario where the SJB had accepted the invitation in May to form a national government, which parties would then constitute the Opposition? Would the lack of a serious Opposition have been a positive for reforms that are being closely observed by international lenders? The Ranil Wickremesinghe Government can boast of no significant political or constitutional reforms, no fresh popular mandate, no widely accepted fiscal plan, no clear roadmap to debt sustainability and no enhancing of safety nets for the poor. The list of achievements includes an almost symbolic return to the pre-2019 tax structure which does little to shift the burden from the poor to the wealthy and the corporates. Wickremesinghe, along with President Rajapaksa and the Government, are losing further credibility as shortages increase and hardships intensify. The Opposition, though also criticised by some sections, might just be winning hearts and minds despite the unwillingness of much of the political and media establishment to accept that the Leader Premadasa and senior members of the SJB have been proven right time and again. In November 2021, when the US Dollar was pegged at Rs. 203, Premadasa warned of “economic Armageddon” and was derided. Dr. Harsha de Silva urged the Government to approach the IMF in November 2020. In July 2021, Eran Wickramaratne warned of fiscal instability if the Government continued to address solvency issues with liquidity management tools. In that very same month Kabir Hashim compared Sri Lanka’s monetary policy to the failed methods of 15th century Scottish Economist John Law. The SJB’s statements and decisions have thus far been largely vindicated. This guarantees the party and Premadasa very little unless they are able to seize the moment, sometime in the very near future. The temperature is starting to increase and the levels will be back near the 9 May peak; it will only take the smallest of sparks to create a second wave of violent backlash. The economy has contracted 1.6% for Q1 of 2022 as per the Department of Census and Statistics. Given the inaccuracies of previous releases and recent revelations by the Auditor General regarding incomplete records of loans obtained, even these figures could be called into question. An official vehicle carrying Sarath Weerasekera, the SLPP MP who secured the highest number of votes in the Colombo District in 2020 as a first time candidate, was surrounded by a group of angry citizens near a shopping area. The MP, who was in the front seat, no doubt got the very direct message being relayed, with his jeep swiftly leaving the scene. This MP, who recently requested minorities to not “test the patience” of the Sinhala Buddhist majority, being subject to angry chants by the very same majority, fresh out of patience, is a welcome irony. Yet in the context of his electoral performance, the rebuke is striking. Weerasekera won almost 330,000 votes in 2020, simply because of President Gotabaya Rajapaksa’s explicit endorsement. MPs Wimal Weerawansa and Udaya Gammanpila managed a shade over 400,000 between them. Former UK Prime Minister Harold Wilson quipped that a “week is a long time in politics”. In Sri Lanka, this might be doubly true. An economic collapse will always lead to a fluid political dynamic; things can change very quickly, but coming into the seventh month of 2022, the Opposition SJB must sense an opportunity. In the next few weeks, there is every chance for the party to finish what it started in the final days of April, when it led its largest-ever crowd all the way to the Presidential Secretariat and shook the establishment to its core, opening up the space for the Aragalaya at GGG as we know it today. The SJB has received little credit in the political commentary, perhaps deservingly so given the state of the country, but that narrative could be about to change. (The writer has over a decade of experience in the banking sector after completing a degree in accounting and finance. He has completed a Masters in International Relations and is currently reading for a PhD at the University of Colombo. He is also a freelance writer and researcher, and can be reached on email: kusumw@gmail.com and Twitter: @kusumw)