COPE and the “people’s budget”
View(s):The good news this week was that the Parliamentary Committee on Public Enterprises (COPE) got an opposition MP as its new chairman.
JVP MP Sunil Handunneththi was elected chair of the committee, the first time in many years that an opposition member is heading the committee that examines the affairs of the state sector.The previous chairman D.E.W. Gunasekera, who was part of the UPFA-led government in the pre-2015 era, clashed with UNP members on the committee when he released a report pertaining to the tainted Central Bank bond deal. The report was released just before parliamentary elections last August slamming the bond deal which also dealt with the role of Central Bank Governor Arjuna Mahendran and his son-in-law Arjun Aloysius, whose company was the largest beneficiary in that transaction.
UNP members distanced themselves from that report saying the committee had not completed its work and any report therefore was premature.
Mr. Handunneththi’s entry as chairman along with other committee members would hopefully lead to a more in-depth analysis and scrutiny of loss-making state organisations and political involvement in any cover-ups. His impending ascent to this seat was briefly mentioned at a pre-budget discussion organized by the Sunday Times Business Club two weeks ago where Deputy Minister Eran Wickramaratne said it was hoped the JVP MP, who is the party’s main spokesman on economic issues, would be appointed as COPE chairman.
The JVP is increasingly becoming a powerful voice on behalf of the public on the state of the economy, corruption and governance. When MP Vijitha Herath addressed a Sunday Times Business Club meeting a few months ago on the Government’s 100-day programme, he was asked whether the JVP was anti-private sector or pro-private sector. His response was that the private sector was important to the economy but it should be also transparent and accountable.Last week, during a post-budget panel discussion a representative from the National Chamber of Commerce endorsed many of the views raised by Wasantha Samarasinghe, the JVP spokesman on trade unions.
Unsurprising, however the new leadership of the JVP under Anura Kumara Dissanayake with a new vibrancy was unable to garner more votes at the August parliamentary poll because the group’s bloody past (1971 insurgency and 1988-1990 attempt to oust an elected government) is still fresh in the minds of many people.The not-so-good news is that the 2016 budget, despite all the ‘daily’ niceties by Finance Minister Ravi Karunanayake and the Colombo-based business community, has more downs than ups, with the proposals become clearer as the week progressed.At one meeting, Mr. Karunanayake was quoted as saying that “the government is determined to deliver what the people want and not what the government wants”. Nice words but in reality, far from the truth.
While sections of big business see a lot benefits, short and long term, small businesses – which account for a large percentage of the country’s economic activity – have been badly affected by the rise in Nation Building Tax (NBT) and Port and Airport (PAL) while VAT has been reduced.
In a recent newspaper article, well-known sociologist Prof. Siripala Hettige, raising some interesting points, asked “How serious are we about the economy?”His argument is that while the authorities spent a great deal of time on democracy and good governance, there is a need to deal with other serious issues to with the same enthusiasm and drive.
“… many people expected the new government to focus attention on economic development. In order to do so, it was necessary for the leaders to get a thorough economic analysis of the domestic economy done in order to identify the possibilities and challenges and formulate a rational plan of action. Yet, except for some disjointed comments and pronouncements by several leaders, we have not seen anything like a well formulated action plan to get the economy out of the present mess,” he wrote.He raises some fundamental issues. For instance, for lower sections of the people who may not know where the next meal would come from, good governance is of secondary importance as against ‘pressing economic and social issues such as cost of living and poor public transport’.
“These issues cannot be resolved without creating productive employment. So, the soundness of the economy is the most critical factor in creating social and political stability which in turn is a prerequisite for economic development,” he says.Prof. Hettige, also chairman of the National Police Commission, says that very soon the people will not tolerate the serious economic issues coupled with growing conflicts within the government.“In a country where people have been living with corruption and abuse of power for many years, continuing hair splitting on one case leading to serious loss of confidence in the regime can have serious political repercussions,” he says.In a way this is true. Governance, transparency and corruption are not serious issues among rural folk. Rather it’s the cost of fertiliser, essential goods, schooling for their children, subsidies, etc that they worry about.
Furthermore raising the personal tax threshold to Rs. 2.4 million from Rs. 750,000 per annum, which means that anyone earning Rs. 200,000 per month (a princely amount) and below is exempt for tax, is not of any benefit to this larger segment of the population.Many of the serious issues in the economy have been masked by the so-called ‘good signals’ in the budget and rhetoric of going after ‘Rajapaksa’s millions’.
SLFP ministers are also openly criticicing Ravi’s budget. While on the one hand it’s laudable to permit independent thinking in the government unlike under the previous regime when MPs would have been sacked for such openness, criticism is happening in a fragile environment where coalition partners –UNP and SLFP – are set to campaign against each other at forthcoming local government polls.The Government needs to tackle economic issues with the same spirit and enthusiasm of going after the corrupt or providing ‘hand outs’ to big business.