Sunday Times 2
When Visions of Prosperity turn into reality
‘Visions of Prosperity and Splendour’ is what Gotabaya Rajapaksa called his election manifesto in his bid for the Sri Lankan presidency. As stated clearly it is his vision for his paradisiacal dream and is far from being achieved. It is quite apparent that he is going through the initial exercises.
The daily barrage of his many visions in the Lankan media, particularly in the state media, may have made some of his devoted supporters to believe that some of these visions have already become real. It is a well-known maxim in advertising and propaganda that constant repetition of a statement — true or false — comes to be believed by non-discriminating masses as being true.
The believers can be pardoned because some visions envisaged in the manifesto are stupendous in magnitude and pace of development of most development projects of the past in Lanka.
These include: 70 percent of electricity consumption to be generated from renewable sources of energy by 2030; Sri Lanka to become a key maritime hub with development of Colombo, Galle, Trincomalee, Kankesanthurai and Oluvil harbours. Making Colombo into a transit harbour, with new bunkering facilities at Ratmalana, Veyangoda, Peliyagoda; Five new Export Processing Zones to be established in the next two years.
These also include: A Pharma Zone to be set up with 25 investors (not named) pumping US$ 300 million — 50 percent of the of pharmaceuticals required to be produced locally saving Rs 60 billion annually; an Investment Zone of 400 acres in the Hambantota Industrial Zone for manufacturing medicine targeting the global market; completion of 100,000 Km of road construction by 2024, renovation to 5,000 irrigation tanks using modern and ancient technologies immediately.
Ministers have promised their contributions off their own bat. Energy Minister Udaya Gammanpila has pledged that extraction of oil and gas will begin before he contests the next parliamentary election. A political wag says Gammanpila is being too modest, having found oil in the seas off Lanka days after his appointment as Minister of Energy. An oil slick has been found off the East coast of Sri Lanka near a burning oil tanker containing about 2 million barrels of oil!
Minister Bandula Gunawardene promises to establish university campuses in towns where he addressed election rallies —ten (or more?)
A retired professor says Gunawardena must be under the delusion that establishing a university campus is as simple as establishing ‘tutories’ in shacks which the minister should be very familiar with.
All Sri Lankans will hope President Rajapaksa’s Visions of Prosperity and Splendour come true but wishes, hopes, a two-thirds majority and even a new constitution will not be enough. He needs finance which he sorely lacks.
Opposition leader Sajith Premadasa told parliament while speaking on Vote on Account debate that the World Bank had predicted a negative growth rate for Lanka by the end of the year (-3.2 percent) while the Asian Development Bank (ADB) had predicted a negative growth (- 6.1 percent.)
Another opposition member, former minister and ex-banker Eran Wickremaratne speaking in Parliament warned the Government to be prepared for the worst budget deficit in 35 years.
He said: Expenditure increases during a health crisis but that is not what happened. Capital expenditure came down during his period. The crisis occurred due to the collapse in government revenue…. The previous government kept the budget deficit at 5.3 percent of the GDP. This, however, began to deteriorate by the end of 2019 because of the Government’s irresponsible statements in the run up to the election on taxes and while the fiscal position has deteriorated, the situation has got progressively worse in 2020.
Wickremaratne pointed out: Government revenue had declined by 28 percent compared to 2019. Recurrent expenditure increased by 10 per cent and the budget deficit increased by 41 percent. Government debt had increased by Rs 1,020 billion to over 14,000 billion from January to June in 2020.
His gloomy picture continued: Despite reduction and exemption in some taxes, there had been no benefit felt by the people and the prices of essentials have increased.
These were statistics coming out of government departments, he claimed.
On External debt he said: By the middle of 2019, the Government reserves had been US$ 8.59 billion. In June 2020 they were US$ 6.7 billion. Therefore there were major debt repayments.
The country’s debt was about 87 percent of the GDP of which 57 percent was foreign debt.
This damning criticism we expected would be rebutted by the usual defence: This was because of the debt legacy you left us which would have been responded to with the query of the original debtor. But Prime Minister Rajapaksa, who also holds the portfolio of finance, has not responded as yet.
Rajapaksa is playing politics instead of economics. He has come out with a political ace: Banning slaughter of cattle. This has the Sinhala-Buddhist lobby which enabled their party to a two-thirds majority cheering wildly.
While playing politics can be indulged in joyfully, not so with economics where comes the critical point: the collapse of the economy followed by devastating political consequences.
President Rajapaksa needs a massive influx of financial assistance in grants, loans or direct foreign investments to make his visions come true. Armchair foreign policy analysts may wax eloquently about morality and national sovereignty but all that cannot take Sri Lanka to paradise. The hope lies in the two power blocs wanting entry in Lanka’s ports and airports. The quadrilateral alliance of the United States, India, Japan and Australia can help but with the Covid 19 pandemic having their economies in a top spin it is unlikely to play the role of Good Samaritans helping Third World countries in distress.
China can and may help and it holds the whip hand on debt repayment.
Meanwhile, the Rajapaksa cheering squads can be happy thinking that the Visions of Prosperity and Splendour are indeed real.
(Gamini Weerakoon is a former editor of The Sunday Island, The Island and Consulting Editor of the Sunday Leader.)