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The price we pay for a bailout

28 Mar 2022

What’s the price we have to pay for the money that we are getting to stave off imminent collapse of the system? There appear to be complaints in some parts that everything we are getting as assistance to stave off the current circumstances come at a price. People feign surprise. But should they? When we are in a situation as bad as this, the family jewels would be sold off. What else is there to do when the possibility of loans at high interest is staved off due to the negative credit ratings? What are the family jewels we may have to sell? This article does not dwell on who we have to sell those family heirlooms to. That’s only incidental. But there will not be emergency assistance without substantially compromising our assets, and that’s a foregone conclusion.  There is a video doing the rounds portraying some poor landowners in Badulla saying their land is about to be taken over for distribution to a multi-national company for cultivation of lucrative cash crops. These people say they would never consent to the takeover of their lands. However, either they would be given the correct price, or the lands would be taken over by stealth. There is not much point in protesting that the “family jewels” are being parted with in this fashion. The fact is that there is hardly any alternative anyway. What is left to be done? The question that has to be asked is to what extent the moves to divest to foreign powers, etc., would compromise security and hurt the real owners of these assets — the people of this country. Lands being parcelled off and valuable assets being sold or leased would hand over control of parts of this nation to foreign interests, in effect. However, the alternative is that there is total economic collapse with the people having to put up with energy and food shortages. The social repercussions of such a situation would be incalculable. If the social fabric is torn apart, the entire edifice would collapse, and the country would lapse into anarchy. What would be the extent of the repercussions in the north of the country for instance? Would there be demands that substantial control of the Northern Province be ceded to Tamil political parties in a power-sharing arrangement that the leaders of this country would be forced to accept? When it comes to a choice between penury and no money for essentials such as fuel and ceding control over parts of the country to certain parties in a loose political arrangement, the Government would be tempted to take the latter choice. What of the war we have fought and the sentiments of the majority community that, in one voice almost, has been in favour of central government control over land in the Northern Province? Will we be forced to abandon notions of central government writ in the face of the calamity we are facing on the economic front? If we as a country are given the choice, it is possible that the leadership chooses so-called territorial integrity over everything else, because that would be what the community would be clamouring for. However, does that mean that people would be willing to go without fuel and other essentials for long periods of time? It is a safe bet that the “community” would not be willing to bite the bullet in this fashion. In which case, does it mean that the leadership would “cede territory” and do whatever has to be done in order to secure assistance from certain parties at a given time? The other scenario is that the countries coming to our rescue – whichever they are – would be satisfied with certain concessions of assets, etc,. That would happen anyway as there is no such thing as a free lunch. But if there are various other demands of a strategic and political sort, it would be a different story, and the Government would have to make a choice between availing itself of immediate assistance and acquiescing to various demands. On the latter, the Government could find itself between a rock and a hard place. If the leadership decides that there is only one way to go, which is to ensure that the central government would always retain control over the Northern Province, there may be a problem with receiving immediate offers of foreign assistance in tangible form.  As it is, people are standing in queues and awaiting simple essentials such as fuel at the pump. So can the country go on if there is a total breakdown of supply due to the dollar crisis? That’s not feasible, which means the Government would have to go looking for alternatives. Already, there is a decision, it seems, to go to the International Monetary Fund (IMF) for a bailout, but it takes time for such funding to materialise. What option does the Government have under these circumstances?    Your guess is as good as mine, but there could be the option of alternate sources that would not make strategic or political demands but would only ask for stakes in certain “projects”. Whichever way it is cut, it is indeed a very tricky situation — and the Government cannot afford to let things slide.  There are various problems with regard to how the Government hopes to handle the volatility of the issue on the ground. There cannot be too much instability due to fuel scarcities, etc., which is why the armed forces have been deployed.  But even the formidable presence of the armed forces cannot stave off a situation of conflict and social unrest, if there is no supply of fuel and gas for long periods or food security is threatened. The separate countries and entities that offer the Government their assistance would very probably be working according to a plan.  Each nation, for instance, would go to considerable lengths to make sure that their own strategic and other interests in the country are looked after, which means that there must be scrupulously mapped out plans.  In no event can the Government risk any social unrest due to fuel shortages, etc., and so that would be of paramount consideration in how the regime plans future eventualities. But the political costs of ceding control over territory etc. would have to be factored in. There would absolutely be no way in which the Government can let the situation deteriorate beyond its control. It is this writer’s guess that the countries that offer assistance, etc., are acutely aware of the need of the regime to facilitate supplies on time. To this end, each country must have figured out ways and means of making supplies available fast, so that the Sri Lankan regime would not have to run the risk of total systemic collapse and the attendant repercussions. The next few weeks would be crucial with regard to how the situation would be addressed eventually. It could be that the last word has not been written yet about exactly who is going to come to our assistance in terms of making immediate supplies available when it comes to the crunch. There are many variables and surprising developments that may occur for the simple reasons that some expectations may be upended. What if the Government is compelled to take the difficult route and acquiesce to various demands for sale of national assets and political demands, to boot? If the Government is seen to cave in, it would result in various forms of civil unrest, despite the perceived difficulties this would pose for the people already suffering due to the scarcity of essentials. But people, even if they choose to, would not be able to say we don’t care what happens politically if we get our supplies; there would be other forces that ensure that. So there are bound to be several twists in the tail before this saga of the 2022 economic calamity finally ends. (The writer is a former Editor-in-Chief of three national English language publications and a practicing Attorney-at-Law. He is an Editors’ Guild award-winning columnist, and contributing writer and columnist for the Nikkei Asian Review and South China Morning Post, while his editorials have been published in The Australian) ………………………………………………………………… The views and opinions expressed in this column are those of the author, and do not necessarily reflect those of this publication.  

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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!


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