Pitfalls of probationary Govt.

By Victor Ivan

It appears that the JVP thinks that it can fool the PA while the PA thinks that it can fool the JVP.

There is no logic in some of the JVP's political stands. When the Wayamba Provincial elections became an open robbery of votes and even the UNP refrained from becoming a party to that Provincial Council, the JVP, for some reason, gave some legitimacy to that fraudulent council with its members taking oath. 

In many Provincial Councils, including the Western and the Southern, where the JVP support from outside was necessary for the PA to run the administration, the JVP was unable to get any of its programmes implemented. The JVP's performance in these councils show that it is the PA which has a say.

As the political crisis continued, JVP leaders declared on a number of occasions that neither their party nor the UNP had a mandate from the people to form a government. That declaration gave legitimacy to election malpractices that took place at the parliamentary election of 2000 and gave rise to a theory that the JVP had a duty to defend the PA government purportedly elected by the people.

In that sense the JVP's plan for a probationary government is not only a tactical move but may also be a manifestation of an invisible agreement that the JVP has with the PA.

Whatever may be the reason for the JVP to strike a deal with the PA, there is still a fundamental question: Will this move help extend the life of the PA government by one year?

With the JVP's help, the government is assured of 119 votes in parliament while the Opposition has 105. But this equation can be troubled by a dissension within the PA. A change of loyalty on the part of just eight government members could tilt the equilibrium in favour of the opposition. If this happens it will not only put the PA in crisis but also the JVP. 

In the JVP's programme for a probationary government there are positive aspects like the five independent commissions as well as some negative aspects that might aggravate the present crisis. According to the probationary programme, the government should not enter into peace talks during the next 12 months. This shows that the JVP does not like the idea of peace talks, and if the government agreed to this position, it could create further disaster or invite more attacks from the LTTE, plunging the economy into an abyss.

The condition that the programme of privatisation must be stopped during the probationary period also spells economic doom. The government had to come to an agreement with the International Monetary Fund for an urgent loan as a solution to the balance of payment crisis. In terms of that agreement 225 million dollars were approved. Of that amount, 131 million dollars was released in April. Another tranche (Rs. 24.16 million) was released on August 30, and further releases are expected in November and February.

The country has been able to pay for its imports without a serious balance of payment crisis thanks to the IMF assistance. 

The condition on the privatisation programme and a freeze on price increases of essential goods go contrary to the terms of the agreement the government entered into with the IMF. If the privatisation programme is suspended, then the release of the IMF loan will be delayed or stopped. This will create a major balance of payments crisis. 

Although some of the proposals included in the probationary programme might be attractive to some people, many of them are impracticable. For instance, the freeze on price increases. It might be possible in a controlled economy. An attempt to control prices will hasten the collapse of the economic sector as it works against market forces.

The condition that all farmer loans be written off, too, lacks practicality. It is not only farmers who are indebted to banks. There are others such as fishermen who are also going through a similar hardship as farmers. There are also middle-level entrepreneurs who have obtained bank loans and invested in the tourism sector, which is a dire strait today due to the LTTE attack on the airport. Shouldn't they also be granted relief? 

It is only a policy of granting relief that will prop up the economy as a whole will suit the present crisis.

The strategy of the JVP appears to be causing a crisis in the UNP over its failure to capitalise on the political crisis and capture power. 

The JVP seems to think that it will be able to face an election triumphantly, and get better results if the UNP can be sent into a crisis at this moment. But given the crisis in the PA, the JVP's success is limited.

The writer is the Editor of Ravaya