National consensus on debt and economy, need of the hour

By N Sathiya Moorthy

The way the politics of the upcoming presidential poll is panning out, it may not be long before some external player involved in Sri Lanka’s debt-restructuring and allies aspects of economic recovery will begin hinting at the need for a national consensus on such matters. It may be the IMF, it may be other players, but they will want guarantees that future governments will not seek a review of what the incumbent commits itself, that too with the future in mind.

The reasons are not far to seek. The ruling combine that has weathered the post-Aragalaya storm as far as the management of the economy, and the resultant parliamentary endorsement of the governmental decisions are concerned, threatens to break up over the presidential poll. Of course, before such decisions came to Parliament the Cabinet did discuss and decide on the future course. The SLPP under-writer of the Ranil Wickremesinghe presidency is well-represented in the Cabinet, and they cannot complain that they were not taken into confidence.

It is another matter, however, if those Cabinet ministers did take the Rajapaksas leadership of the party into confidence on every such decision, or if they obtained any specific direction in such matters from the higher-ups. In the prevailing circumstances, where many Cabinet ministers and other party leaders have pledged their support for the incumbent if there is a showdown over the presidential polls, how well the communication between the party and its governmental representatives is remains a moot question.

Alternative framework

The last time President Wickremesinghe called an all-party meeting to discuss the economy, the SJB Opposition boycotted it. The party claims to have economic experts among its MPs, which is not far from the truth. Others are mostly silent and party chief and presidential aspirant Sajith Premadasa is doing most of the talking – always attacking political rival Wickremesinghe and his policies. But the SJB is not laying out any alternative economic framework.

The less said about the JVP aspirant Anura Kumara Dissanayake (AKD) and his core team the better. They have stopped with saying that if elected to power they would re-negotiate the IMF conditionalities for debt with the international financing agency. No one asked, nor did they tell you, if the IMF mandate provides for such re-negotiation with every change of government.

Let’s acknowledge that both Wickremesinghe’s UNP and Premandasa’s SJB are cut from the same cloth as far as their policies based on market economy are concerned. Over the decades, the centre-left SLFP and its breakaway SLPP, have both accepted main aspects of the IMF’s action-plan. They might have gone back on past commitments either by their own government or that of the pre-split UNP, particularly in terms of jobs and salaries in the public sector, but meeting the theoretical construct of the IMF game-plan was never under contest.

Now for the JVP to declare that they would re-negotiate the debt-plan, including debt-restructuring with nations and governments, with the IMF is too sweeping a statement. They have to first know what the inherent limitations of such a framework are and how they intend meeting what essentially is an SOP of the IMF with not much elbow room for accommodating the domestic compulsions of individual nations and their governments.

Ideas, ideology

Yet, if now can the SLPP stick on to all policy-formulations of the Wickremesinghe presidency and hope to retain even a fraction of its traditional vote-bank that’s Sinhala-Buddhist nationalist and is identified with Mahinda Rajapaksa? Over the past three decades, from the CBK era from the mid-nineties, the SLFP counted more on its conduct of the LTTE war than its economic policies. True, the Rajapaksa presidency did double public sector jobs to 1.3 million from the previous UNP bench-marks, but that was not why the voters rooted for them.

Today, when private pollsters repeatedly claim that the Rajapaksas are down and out, and have not polled more than around five per cent popular-support, and they however seem to be confident, if not over-confident about their electoral future, where do they really stand on economic issues? Having backed the Ranil formula thus far, can they afford to hit the U-turn overnight if it came to that?

Indications are that the presidential poll especially will be fought this time on economic issue and not nationalist concerns which alone is the Rajapaksa strength from the past. Both the SJB and the JVP are going to engage Wickremesinghe only on economic issues. If they contest alone, the SLPP may feel left out, not knowing whether to defend the incumbent’s economic policies or find new ways to oppose it from now on.

If they support Wickremesinghe on mutually-acceptable terms, they would have to continue backing the former’s ideas if not ideology. The former is recent but the latter dates back to the days when S W R D Bandaranaike broke away from the parent UNP, to float the centre-left SLFP.

Either way, their core constituency comprised two elements. One was Sinhala-Buddhist nationalism, as demonstrated by the ‘Sinhala Only Act’ of the Bandaranaike regime in 1956. Then, there were even more disastrous initiatives on the economic front. However, the militant JVP, since inception in 1965, hijacked the economic agenda of the SLFP and other moderate centre-left outfits, starting with traditional communists.

Though they did hijack the nationalist plank too in the late eighties and retained it for the next two decades or so, they handed it over on a platter to President Mahinda, as the nation-wide local government elections of 2006 showed. Both were allies in the government but the JVP chose to contest alone in the local government polls only six months later – and lost miserably.

As the post-war parliamentary polls showed, the JVP vote-share had gone back to its traditional 3-5 per cent window from a high 11 per cent in the company of the pre-split SLFP under Rajapaksa. Now after close to 15 years, pollsters are telling you that the JVP has multiplied its support-base by three or at times four times – but they too are not sure. Obviously, the voters are not sure, as yet.

All of it only goes on to strengthen the argument that the economy needs stability, and that stability cannot come without a national consensus. Before asking creditor-nations to arrive at a consensus on debt-restructuring, there has to be national consensus and this and other aspects of economic revival – all of it need not be on the IMF diktats but once committed, no future government can wish it away, as used to do in the past.

Thereby hangs a tale!

(The writer is a Chennai-based policy analyst & political commentator. Email: sathiyam54@nsathiyamoorthy.com)