Muffle the media: Economic battles ahead

by FS

(August 02, Colombo, Sri Lanka Guardian) Every once in a while a government gets agitated over too much media attention on a particular sequence of events or a major development and attempts to ‘muffle’ the media. It was not however muffling the media that happened during the three years of intense battles between government troops and Tamil militants. It was muzzling the press and calling everyone else critical of the war, unpatriotic. While there may be some valid reasons to restrict information during war-time, a complete blackout on the news and harassment of journalists, publishers and TV barons is not in line with governance, accountability and the Right to Information (RiT).

The use of the word muffle is deliberate as it means to either put one hands over the ears to muffle the sound or make sounds quieter or less distinct. That’s – clearly and to a large extent - what the government is doing as it battles a fresh enemy – the economy vis-a-vis rising debt and lower revenues. It’s not the tough restrictive news flow during the war but some element of that era.

Take the latest directive to officials of the Ministry of Finance and Planning and the Central Bank. They have been barred from giving telephone interviews but are allowed to be interviewed by journalists but with a rider: permission for such interviews must be authorized by the head of the department or institution.

The economic battle is as hard as the battle for territory, for saving lives, for independence with the only exception being there is no loss of life except rising debts and burdens on the people. An example of the crisis the government faces the shortage of cash to meet current expenditure, development needs and demands from the people came on Wednesday when President Mahinda Rajapaksa and officials like Treasury Secretary Dr. P.B. Jayasundera did an about-turn of the promised wage hike of Rs 2,500 for public servants from January 2009. The promise was made ahead of the presidential and parliamentary polls but now Rajapaksa and Co. are saying no promises were made and, anyway, such a wage hike ‘may’ come only in 2011 – announced through the next budget presentation in November.

The coffers are empty. Two weeks back the Central Bank said it was floating a $1 billion bond to raise money to overcome financing constraints. Taxes are quietly rising even though the tax on cars and other vehicles came down. One car dealer put it succinctly: “The authorities sharply raised the taxes two years back which saw a fall in new car purchases, then reduced it recently to the old rate. That hasn’t changed anything.”

Last month, a 20 % bonus on interest income for commercial bank deposits held by the elderly was withdrawn six months after it was launched. Reason: the government has run out of funds. The scheme was introduced as a sequel to requests from desperate depositors that the regime of low interest rates, which fell to 9% and less from 14-16% a few years back. This was after depositors, dependant on interest income for this sustenance, shifted deposits to licensed commercial banks from un-registered and even registered finance companies after the collapse of many of the latter institutions.

Central Bank officials say that such schemes are not sustainable and aimed at meeting a particular requirement. In this case, lower interest income to barely survive, a situation officials say has eased to a large extent as the rate of inflation has slowed down: meaning the cost of goods has dropped.

Inflation – a term misunderstood by not only consumers but also by economists - has slowed down but that’s not the whole story. For example if a commodity was priced at say Rs 300 per kg, 2-3 years back, that would have increased by 15 % (inflation rate then) or Rs 45 to Rs 345. Now at current single digit inflation of 5%, the market price would be around Rs 360. For a depositor who earned an interest income of say Rs 15,000 per month (hardly enough to make ends meet, nevertheless…) in that year when interest rates were high, now finds his income down to just Rs 8,000. But, remember he or she is still paying Rs 360 for that commodity. So where is the argument that lower rate of inflation helps the consumer?

The government has an economic battle on its hands however much it puts a bold or straight face with chief spokespersons for the government dismissing issues like they never existed. Veteran trade unionist Leslie Devendra coined a nice word for the kind of rubbish that was being spouted by politicians on the EU GSP issue. He called it the ‘Chandiya’ foreign policy.

Recent events concerning the media are disturbing. The government is launching a Media Development Authority to bring ‘professionalism’ to the profession. A laughable not laudable initiative! The place to invoke professionalism should be in the state media (no offence to colleagues who are just following orders much against their will) which is one-sided to the extent that even a kindergarten kid can see through the façade. The private media may have its agendas but at least there is an attempt to be impartial and give the perennial ‘all sides of the story’.

Thus attempts to stifle information or muffle the voice of officials who speak the truth in the public interest, in the national interest and finally as patriotic citizens, will not work. It’s just counterproductive and an unpopular measure.