Sri Lanka: Still on the Rotten Bridge

 When Gotabaya Rajapaksa failed, the country paid the price. It will be no different if Ranil Wickremesinghe’s gains are reversed and he too fails.

by Tisaranee Gunasekara

“Homo Sapiens is prone to orgies of stupidity, brutality, and destruction.” ~ Martin Wolf (The crisis of democratic capitalism)

So back in the Chalk Circle, but this time play ends in Act 2. Grusha never gets across the rotten bridge. She is near the end when the Ironshirts, gathered on the other side, manage to inflame her with their insults. She turns around to give her own back. A battle of words ensues. The Corporal steps on to the bridge. Grusha stamps her foot. The soldiers join their leader. The rotten bridge breaks at both ends, plunging all on it into the abyss below. The play ends not in renewed life but in avoidable death.

Sri Lanka is still on the rotten bridge, precariously balanced between sensible economics and insensible politics. The freefall of the economy has been halted. But it can resume, and spiral into societal anarchy, if the political war of attrition between the President and the Opposition doesn’t end soon in a mutually-agreed ceasefire.

Sri Lanka has avoided collapse, for now. Hyperinflation has been reined in. A run on the banks has been averted. The rupee has stopped plummeting. Prices of essentials remain high, but the crippling shortages and killer queues are over. Tourism is booming, foreign remittances are increasing, and foreign reserves no longer look like Old Mother Hubbard’s cupboard. These gains are not opinions, but facts. And most of the credit for those small but meaningful advances belongs to Ranil Wickremesinghe.

Sri Lanka's President Ranil Wickremesinghe attends an interview with Reuters at Presidential Secretariat, amid the country's economic crisis, in Colombo, Sri Lanka August 18, 2022. [Photo: REUTERS/ Dinuka Liyanawatte]

On May 9th, SLPP thugs attacked Gota-go-gama protestors. Angry Lankans responded with mob violence. For two days, the country burned. On May 11th, tanks rolled down deserted streets, occupying urban centres and rural towns with no public opposition. People, having exhausted themselves with an orgy of arson, had retreated into sullen silence and resentful inaction. Gota-go-gama remained but its power of intervention was limited to issuing not quite realistic statements. Mahinda Rajapaksa had resigned. There was no prime minister, no government; only a weak president, a strong military, a wearied public, and a deadly political vacuum.

Opposition leaders declined the premiership, using virtue as an excuse. Ranil Wickremesinghe accepted. Some kind of political normalcy was restored. The alternative was not a pure government of the people, but a Gotabaya-military regime or just military rule.

Ranil Wickremesinghe is no Saviour. But he saved much. Those achievements, while real remain fragile, easily reversible. As with Grusha on the rotten bridge, utter disaster is still one misstep away.

The President has claimed economic health to be his priority. But economic health and political health are interdependent states. One cannot be sustained without the other. The political health of a nation cannot be achieved through tear gas, repressive laws, and baton charges, but through understanding and consensus. As Karu Jayasuriya pointed out, a political ceasefire is the need of the hour, first in parliament, then beyond.

The deftness and the patience the President displayed in inching the IMF deal to the finishing line is absent in his political dealings. His ham-fisted reaction to any protest is indicative of how his political attitudes continue to be shaped and coloured by his acrimony against those who burnt his books. The anger is understandable. But translated into political attitudes and policies, it could create a socio-political inferno which consumes the economic good he has achieved.

Not intelligent self-interest but blinding rage has become the determining factor in oppositional politics. So they align with the anti-direct tax crowd, forgetting that progressive taxation is a sine-qua-non of any progressive economic strategy. Had the IMF refused to sign a deal with Ranil Wickremesinghe, the opposition would have been singing the praises of this Bretton Woods twin.

Meanwhile, the bottommost one third of people struggle to live, dependent for survival on inadequate charity. Their suffering is glossed over by the government and ignored by the opposition. Their anger, if it explodes, will be a flood that takes everyone and everything in its path.

The myth of authoritarian stability

According to media reports, the police are to get 500 SUVs under an Indian credit line. The first 125 fuel-guzzlers have already been delivered.

SUVs for the police are not a priority by any sane economic standards. That economically irrational loan is symbolic of how political insensibility can undermine economic sanity.

The government’s zero-tolerance response to peaceful protests is turning non-issues into issues. The over-the-top reaction to March 7th IUSF protest is a case in point. If the government did nothing, the protest would have come and gone. But the government opted for a course of action which was the mirror-image of protestors’ heedless extremism. Police tear-gassed Colombo University students and staff who were not part of the protest and followed it up by tear-gassing students from nearby schools. A puny protest was met with massive violence. This is the path not to social peace but to endless disharmony.

Authoritarian stability is a myth. By pursuing that myth, the president, knowingly or unknowingly, is placing Sri Lanka on the slippery slope of unending unrest. This unrest will not be limited to the streets but will creep into the very heart of the state, as the attempt to use the legislature to cow the judiciary indicate. If pursued any further, this attempt to neutralise the courts will open another front, with the legislature engaged in a no-holds barred war with the judiciary on the orders of the executive. The necessary balance between the executive, the legislature and the judiciary, on which the health of the state rests, will be undermined to common peril.

The attempt by some state-sector trade unions to cripple the country through a continuous strike failed primarily due to the total absence of public support. The strike-leaders shelved their disruptive plans not because of government threats but because of public ire. If the government wants to avoid a repeat performance by state-sector unions, they should focus on propaganda; no hype would be needed; truth will suffice. Instead, according to media reports, the government in its PTA replacement has created a false equation between strikes and terrorism. Such dangerous dipping into tyranny are the inevitable fruits of pursuing the myth of authoritarian stability.  

As the World Bank reminded us recently, poverty in Sri Lanka doubled from 13% to 25% between 2021 and 2022 and will increase by 2% in 2023. This was Rajapaksa doing. And in that doing, the Rajapaksas had the uncritical backing of the likes of GL Peiris, Dulles Alahapperuma, and Wimal Weerawansa, not to mention the Viyath Maga cohort. Thanks to their collective economic insanity, people are eating less, both in terms of quality and quantity. The IMF seems to far more concerned about providing these poorest of the poor with a strong-enough lifeline than the government or the Opposition. The government, instead of focusing on an adequate poverty alleviation programme along the lines of Janasaviya (targeted and time-bound with consumption and investment components and add-ons like skills training), is picking political fights with all and sundry. The Opposition is more concerned with the taxes of the few than the hunger of the many.

The political war of attrition is not just consuming time, energy, and resources of both sides. It can also undermine President Wickremesinghe’s hard-won achievement, the IMF deal. Sri Lanka will not get the second tranche, if the targets of the first phase are not met adequately. Those targets can be best achieved not through repressive laws, riot police or club-wielding soldiers, but dialogue and consensus with stakeholders, starting with the Opposition. Economic moderation on the part of the Opposition in return for political moderation on the part of the government: that is a possible and necessary goal. Sri Lanka, still on the rotting bridge, need the unity of all moderates, a rational politico-economic understanding, to deprive political extremists of political oxygen.

Commenting on the uproar surrounding French president Emmanuel Macron’s plan to increase pension age by two years, The Economist warned “This could be a moment when social rebellion emerges.” If it does, the ultimate beneficiary, if there’s one, is likely to be Marine Le Pen rather than Jean-Luc Mélenchon.  

In Sri Lanka too the political war of attrition will deliver neither economic recovery nor greater democracy. The resultant turmoil will open the floodgates of either anarchy or tyranny or both.

The poverty of alternatives

The world’s first recorded labour strike was in ancient Egypt during the reign of Ramesses III when necropolis workers, tomb-builders and artisans, downed their tools and protested demanding their pay. Since that day in 1170BCE, strikes have often been the only recourse available to the powerless with no other means of making their voices heard.

In Sri Lanka, even that weapon is denied to millions of casual workers providing vitally necessary (even risky) labour in the industrial sector. Like the 2 million Manpower workers who labour in the FTZ garment factories. They are right-less and unprotected since they are not registered under the Labour Commissioner. According to media reports, about one quarter of their salaries go to agents and they are not entitled to bonuses or other facilities. Most of these Manpower workers are women and many suffer sexual harassment in workplace with no recourse to relief or justice (https://theleader.lk/news/16114-2023-03-17-08-20-48). And yet, about the suffering of these millions of Lankan workers, the injustices visited on them, the Opposition is silent.

Of the grade 3 students in government schools, only 34% are literate and 7% are numerate, according to a research by the Education Ministry covering the entire island, done between December 2021 and January 2022. This disastrous inability cannot be blamed on the pandemic alone since only 26% of students lacked online facilities. The fault also lies in the quality of the education and of the educators. If this trend continues, we will have a population that cannot read, write, or do a basic sum, and therefore unemployable except as soldiers, monks or Manpower workers. This too seems not to be a priority for the Opposition.

The SJB and the JVP who agree on very little are agreed on reducing taxes for highest income earners from the current 36% to 24%. This is their economic progressivism. In what sense is Ranil Wickremesinghe more neo-liberal than these opposition leaders who want to tread the same path as Gotabaya Rajapaksa and give tax breaks to those in the topmost bracket?

If the SJB sounds clueless on economic issues, it is because the party is trying to run with the hare and hunt with the hound on contentious issues. The JVP’s cluelessness seems genuine, its ignorance of economic basics as total as Gotabaya Rajapaksa’s. The best evidence is a recent statement by Sunil Handunnetti, who will be the finance minister if the JVP/NPP forms a government. Questioned about the recent appreciation of the rupee against the dollar, his response was: “Do you think if the rupee becomes stronger than America, America will let us be? Eh? If so America will bomb us. That rupee is becoming stronger than the American dollar.” His NPP counterpart, an economics lecturer in a university, did not dare to correct him, proving once again that the NPP is a mere cover for the JVP.

Utopia is not an alternative to reality. It is a form of escapism and must be understood as such. There are no painless paths out of this crisis. The Opposition should be focused on minimising the burden on the poorest one-third of the population, the 3.4million people identified by the World Food Programme as suffering from hunger. Instead, opposition parties are vying with each other to curry favour with disgruntled doctors and relatively high earning state sector workers. They criticise President Wickremesinghe, but are yet to provide a rational alternative to the path he is charting.

The JVP might be too like the frog-in-the-well to know it, but the SJB and some SLPP break-offs would know that we are not in a position to impose conditions on anyone, starting with the IMF. They would also know that the IMF today is not quite the IMF of yesteryear and that most of the conditions in the agreement with us are helpful, necessary or both. There is no austerity for the poor in the agreement, only some belt-tightening for the rich and the middle class.

If direct taxes are lowered, indirect taxes will have to be increased, hurting the poor more. If the rich and the middle class do not share the burden of recovery, the poor will have to shoulder an even greater load. If we keep on pumping money into loss-making state enterprises like Sri Lankans, there will be less money for education and health. Those are the real choices any future government will have to make. All the rest, like making good the income-expenditure gap through less corruption or bringing back the stolen money, is rhetoric. Both are worthy and necessary goals. But neither can be realised fast enough to make a difference in the here and now, given how endemic corruption has become and how much legal and paper work will be involved in getting stolen money back.

When Gotabaya Rajapaksa failed, the country paid the price. It will be no different if Ranil Wickremesinghe’s gains are reversed and he too fails. When the healthy difference between opposing political parties descends into an endless war, there can be no winners; only losers.