Columns

This May Day is indeed a red-letter day.

The protests against the ruling family will reach a crescendo. Protestors from all over the country are expected to converge at Galle Face opposites the Presidential Secretariat to join the people’s protest and demand that the Rajapaksas resign and go.

Uncertain

At mid-week there is no certainty as to how this people’s movement will end. The political stalemate between the people and the government is continuing with no sign of a solution in sight. However justified the protests and strikes are, they are aggravating the difficulties.

Protests

The protests are gaining wider support country-wide and stronger by the day. The Galle Face protest is expected to reach mammoth proportions today. Yet, will it achieve its objective?

Parliament

The political responses by parliamentarians are confusing, inadequate and uncertain. The Opposition claims it has a majority of votes in Parliament to move a no confidence motion against the government led by Prime Minister Mahinda Rajapaksa, who claims he has a majority of votes in parliament.

Last Wednesday, the Prime Minister made a strong speech that he will not resign nor can he be removed from office as he commands a majority in Parliament. He vowed to solve the economic shortages and price escalation speedily.

Parliament

Meanwhile the Opposition is divided though opposed to the Rajapaksa regime. The claim of having a majority in Parliament to move a no confidence motion appears inaccurate as revealed at the PM’s Meeting with Parliamentarians and Provincial Councilors on last Wednesday.

There does not appear to be a Parliamentary means of resolving the political crisis. In fact, there is no indication of how the political stalemate will end.

Imperative

The resolution of this political crisis is imperative for an economic recovery. The longer the political stalemate drags on, the more unbearable the economic woes of the people. Mass malnutrition, starvation, deprivation of essentials, loss of livelihoods, and a further deterioration of the economy is inevitable. The economy will deteriorate even further.

Vistas of adversity

Decreased export output owing to an unavailability of imported raw materials, power cuts, unavailability of diesel and transport difficulties of workers is reducing export earnings. Tea exports are decreasing and the trade deficit is widening. The external finances would diminish further with the reduction of export earnings and increasing import costs.

Increasingly difficult

The resolution of the severe economic problems is becoming increasingly difficult as needs and shortages are increasing, while foreign assistance is running out. The crisis has reached proportions when the Government is seeking humanitarian aid to obtain essential pharmaceuticals and food. Once the further Indian credit line is exhausted essential needs of food and fuel could dry up.

Immediate need

The economic crisis requires an immediate solution–a short-term resolution of the problem–followed by medium-term and long-term structural reforms. Today’s column focusses on the immediate need for assistance to resolve the severe shortage of essentials.

Rapid relief

In spite of the optimism zoomed by Finance Minister Ali Sabry from Washington, indications are that there is much sympathy and understanding of the country’s plight, but little prospect of financial assistance from the International Monetary Fund(IMF).

There was much expectation that the country could get assistance from the IMF’s Rapid Finance Instrument (RFI) and then, in a few months an Extended Credit Facility (ECF) followed by a longer-term Structural Adjustment Facility (SAF).

Unlikely

It now appears that we may not get the RFI as debt sustainability is a pre-condition for it. “Get your house in order first” is the strong message. In the words of the IMF; ensure debt sustainability to enter into an agreement, to obtain a RFI.

Silver linings

The silver lining in this bleak picture of dark clouds is the promise of international assistance. India, which has already provided material assistance of about US$ two billion and has agreed to provide fuel for another US$ 500 million, is supporting the country’s efforts to obtain assistance from multilateral organisations, especially the IMF, and is considering further aid.

World Bank

The World Bank is providing US$ 400 million of medical supplies. This is invaluable in the current situation of shortages of medicines in hospitals that is threatening lives. The Asian Development Bank (ADB) too has indicated assistance for essential pharmaceuticals. It is these aid that can save the country from the dire scarcities of essential needs.

China

The request from China to reschedule their debt has been turned down on a matter of principle and in turn has promised a fresh loan. Perhaps there would be further assistance forthcoming to meet the current scarcities of finance to purchase food, fuel and raw materials for industry.

Lifelines

It is these humanitarian and concessionary aid that can keep the country’s economy afloat. Sooner rather than later hard and painful decisions would have to be taken to stabilise the economy and be on the road to economic recovery. Will the country’s politics allow it?

Summing up

There does not appear to be an end to the protests, strikes and disruptions. Parliament is yet to find a means of changing the regime that is quite confident it could weather the storm and not be defeated by a majority vote. The Prime Minister is confident that he could relieve the people’s difficulties and regain their confidence. The President is adamant that he will not resign. Protestors wow to fight till the Rajapaksa regime is ousted.

There is no early solution to the people’s grave threats to livelihoods. There is certainly no signs of either a political or constitutional resolution. It is difficult to address the economic crisis without political stability. How and when will this multiple crisis end?