Legacy of ministers
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The compound outside was being vigorously swept as Kussi Amma Sera happily tested her new set of garden implements.
The sound of the ekel broom swishing the leaves off the rain-swept ground was music to the ears. Gathering the leaves with a new rake, KAS said, “Mahattaya, hari santhosai, aluth baduth eka wedakaranna, apey aluth amathi wagey”.
She was referring to the long-awaited Cabinet reshuffle on Monday which literally was just that: Shuffling of the two main positions in the Cabinet – finance and foreign affairs. Predictably, the ministers promised the sun, the moon and the rain in their new re-assigned portfolios.
Ravi Karunanayake, a powerful and wealthy politician, till the last minute held on steadfast to the post of Finance Minister against growing calls for his ouster. Eventually when it happened, the former finance minister and Mangala Samaraweera swapped portfolios. That was not all, Karunanayake – whose ability seemed to have been more recognised by the UK Banker magazine which named him as Asia’s Best Finance Minister than the political hierarchy at home – has requested several divisions in the Finance Ministry to come under his wing.
While it is clear that some of these departments – National Lotteries Board, Mahapola Trust Fund, Securities and Exchange Commission, SriLankan Airlines, EPF, ETF and National Insurance Trust Fund, etc – are cash rich while others are powerful political tools, the request is unprecedented.
This is the first known incidence when subjects that don’t technically belong to the ministry in question are being re-assigned or requests to do so have been made. In a less rambunctious political arena several decades back, such a request would have been outrageous and shocked not only the public but also politicians.
However, in today’s game of self-centred politics, this is not unexpected. Furthermore, to ‘keep the peace’, the government would have (by today — Sunday) gazetted these subjects as requested or is most likely to do so.
In life nothing is permanent, particularly the position of ministers who come and go, sometimes even before they can settle down. For the record, Karunanayake’s two-year stint as Finance Minister is not the shortest. M.M. Mustapha’s nine-day stint (November 22 to December 5, 1959) was the shortest, while Ronnie de Mel’s 11-year term of office in 1977-1988 is the longest on record.
However, the former finance minister is among a group of ministers who believe that their legacy stretches beyond their tenure. The same issue of assigned subjects arose when Kabir Hashim was appointed Minister of Public Enterprise Development and Sri Lanka Insurance (SLI) was brought under his purview from the Finance Ministry. What followed was not only absurd but hilarious as Karunanayake’s appointees, at his behest, refused to quit their positions at the SLI. His nominee still continues there.
Oh, for the days when ministers resign or step down with grace just like the extraordinary Wijayananda Dahanayake, a former prime minister, who left Temple Trees carrying just two suitcases in the 1960s, Gamani Jayasuriya, who quit in opposition to the Indo-Lanka Accord in 1987 and even current Prime Minister Ranil Wickremesinghe who departed from Temple Trees without a fuss, in the aftermath of theUNP defeat at the 2004 poll.
Fast forward today and what is the legacy that ministers leave behind? Greed, corruption, power-hunger, appointing cronies, nincompoops, relatives and so on rather than being remembered for meritorious conduct, clean governance and a job well done.
While ministers here hold onto their positions with utter disregard for public opinion, accountability or ethics, in the western world, ministers are expected to have high moral standards.
In April 2014, the Prime Minister of the New South Wales (State) of Australia, Barry O’Farrell resigned over receiving a bottle of wine as a gift that he failed to declare in 2011 and which was perceived as a potential issue of corruption by a corruption commission!
Karunanayake’s performance as Finance Minister has been filled with controversies while his deeds and bold pronouncements have not been matched by economic statistics. According to the Central Bank’s key indicators, the economy grew by 4.8 per cent in 2016, 4.4 per cent in 2015 and 5 per cent in 2014 and is estimated to grow by 5 per cent in 2017. Gross official reserves fell to US$6 billion in 2016 from $7.3 billion in 2015 and $8 billion in 2014. As at April 2017, these reserves had fallen to $5 billion, a far cry from the $8 billion in 2014, though opponents of the then Mahinda Rajapaksa government would argue that it was foreign borrowings rather than earned cash (exports) that propped up the reserves.
Faced with burgeoning foreign currency debt bills, the present government is also forced to borrow internationally in addition to propping up the rupee without allowing a free-fall.
Total outstanding external debt has risen to $46.58 billion in 2016 from $42.9 billion in 2014. The trade deficit rose to $9 billion in 2016 from $8 billion in 2014. Foreign investment as per Board of Investment figures fell to $801 million in 2016 from $967 million in 2015 and $1.5 billion in 2014.
It would be unfair to pin all the economic woes on Karunanayake (he must have been doing some things right to be selected as Asia’s Best Finance Minister), as many issues were connected to government policy particularly increasing public sector wages without a substantial rise in revenue and not effecting crucial public sector reforms, particularly pruning expenditure.
The enormity of the economic crisis is now on the shoulders of Samaraweera and with the government facing local and provincial elections this year and its popularity tested by strikes, protests and demonstrations, introducing unfriendly, economic reforms would be political suicide.
The chaos was this week described by critic and economist W.A. Wijewardene as: “An incapacitated government through its own in-fights, lack of consensus, internal communication and clear-cut direction makes it a lame duck government.”
The government is pinning its hopes on more foreign investment to create jobs and economic growth, but ad hoc policy-making and unpredictable taxation won’t help. While Samaraweera’s next two years are likely to be dominated by borrowings to pay off debt, restoring the image of the Treasury and its senior staff (without utilizing a set of private consultants like the former finance minister) should be the first step towards balancing the economy.
Otherwise, Samaraweera like Kussi Amma Sera’s “home people don’t know what to do” would have to go around raising cash to pay bills and keep the economy afloat; unless the heavens open up with foreign investment and a spurt in exports. Not the best legacy to leave behind, for a minister who assumed office on Thursday, thankfully without much fanfare.