Columns

• As IMF gives the green light, the President warns of tough road ahead

Despite the weird thousand nightmares that may have inveigled his Sunday night’s sleep — as conjectured by Sunday Punch last week — as he awaited the bailout loan verdict on Monday, the IMF Board’s positive response to bankrupt Lanka’s plea for help, crowned Ranil Wickremesinghe with spectacular success and left him bathed in a translucent glow as the man providence had chosen to pull out the chestnuts from the burning creditors’ fire for Lanka’s sake.

PRESIDENT: Brings the IMF fleece

His victory, in spite of all the odds, earned him the credit he deserved that not even the ranks of the opposition, spearheaded by the anti-Ranil battle-axe, Hirunika, could scare forebear to cheer.

The news came late on Monday night, past ten, to local media news desks. Early on Tuesday morning, Ranil Wickremesinghe tweeted his profuse thanks to the IMF Board.

His triumph was even more marked, for it came with a special concession. For the first time in its past 16 bailout history, the IMF granted the Lankan Government the option to convert its first tranche of USD 330 million into rupees and to use it to meet the requirements of the country. As State Minister of Finance Siyambalapitiya told Parliament on Wednesday, ‘we need to provide relief to poor and vulnerable groups initially.’

Indeed, the victory had not been gained without a single grapeshot fired. The people’s scars still daily bleed afresh and stand as a testament to the price the nation paid, and still pays, for the Lankan Government to win its spurs at the IMF. But whether it will be of lasting gain or whether it will turn out to be a mere Pyrrhic victory, still remains to be seen.

The grave hardships imposed upon the already burdened overstrained backs of the people have made the burning tear drop fall to drench the land with pain. The people’s resilience has been taxed to the limit, their protest marches to express their untold grievances have been quelled or dangerously kept at bay only with the threat of armed force; the constitution seems to have been kept in abeyance, its articles, stretched to fit the Government’s bespoke suit; the Government’s lawyer’s services, marshalled to enforce the draconian PTA and to hold activists indefinitely at Government’s will to legally suppress dissent.

And to crown it all, the very foundations of democracy, upon which its three supporting pillars shakily rest, have been subjected to the greatest stress and lie exposed to the gravest peril with its most basic right, the right to the franchise – the right around which all other rights revolve and exist — denied to the people on the spurious ground that the nation’s coffers are bare.

All these rights and sacrifices had been tied to the stake and had awaited the bonfire in the name of the president’s ‘first, the economy, second, the economy and third, the economy’ signature tune.

The patience that had wriggled out of its tethering leash, hearing the master’s voice doggedly sing solo and, that too, out of step with the orchestra and national mood, stood amassed to assault the parameter fence. The government had waged all its chips on one IMF turn of pitch; and toss and, luckily, fortune has smiled upon the brave. If not, all would have gone up in smoke in a blazing conflagration.

But now that the miracle had happened, the thrice-blessed nation’s lucky escape, the President in his victory speech did not forget to thank the people for their Herculean endurance in braving the worst of the violent tempest.

In the beguiling lull, the President told the House on Tuesday, ‘we understand the people’s hardships,’ and said: ‘Amidst numerous hardships, bearing all kinds of pressure, and undergoing suffering with equanimity, the people of this country remained calm and patient. Their commitment was a great strength in achieving the IMF Facility. Therefore, I firstly wish to extend my gratitude to my people of this country.’

PETER BREUER, IMF MISSION CHIEF: ‘Governance diagnostic on Lanka’

But mere thanks, and words of comfort alone, will hardly do, not even empathy, ostensibly shown towards untold pain and suffering, will suffice to ease the trauma of a people forced to the wall. Economic reforms in IMF’s name, forced down their throats with such an insensitive ‘like it or lump it’ high-handed attitude, necessary, perhaps, to meet rigid IMF terms, have left the national psyche deeply wounded.

It is to be hoped that the President’s words of understanding will soon be translated into action; that the first tranche of USD 330 million will be converted, under the special concession granted, into rupees which will amount to approximately Rs 100 billion. A part of this sum should be used to meet the national requirement of easing the burden heaped upon the people. Disciplining the economy must take a breather while the masses are allowed time to regain their held breath. Else, the consequences that will follow acting on strict theory alone without taking account of the practical aspect involving human nature, will be too terrible to contemplate.

No economic theory can succeed without people willingly participating in the effort. Capitalism, with all its warts, had become an acceptable and profitable way of life long before Adam Smith wrote his ‘Wealth of Nations’. Unlike other political creeds which had to be theorised first and then enacted by dictatorial States — that overthrew dictatorial Czars – for people to forcibly follow to their ruin, capitalism evolved and developed since it best catered to man’s natural instinct to improve his station in life; and the freedom of enterprise went hand in hand with freedoms of Man enshrined in democracy.

Thus, in the coming weeks, the Government should extend some immediate economic relief to the people to lighten the burden, and to show that the benefits of this mother-of-all IMF loans are not only confined to those who warred for it but flow tangibly to those who suffered for it.

It is also the ideal opportunity for the Government to redeem its commitment to democracy and to good governance. Now with the convertible loan’s first tranche of over Rs 100 billion in the kitty, the Government has lost its last excuse not to hold elections.

Any attempt to further delay the scheduled local government elections for whatever reason or concocted excuse, will be deemed outrageous and deceitful.

The Government should not fear elections. The Government should fear only its denial. The President should not sour his IMF victory by going the extra mile to appear aloof and evade the constitutional demand to hold local polls. Its outcome will not affect his position as President or the position of his SLLP clan as MPs, though it will certainly erode their credibility. But hasn’t the President suffered the slur ever since he donned the purple last year? And haven’t the SLPP MPs thickly worn their shame on their sleeves ever since Gota’s fall?

Furthermore, no court will recognise a petition to outlaw MPs on the nonsensical basis of pradesha or municipal election results.

With that, along with the clamour for it, out of the way, the all-important Presidential election will fall due next year.

If the President thinks of testing the water before he plunges in, he can call for the decisive general election. Though general elections are not constitutionally due until mid-2025, the president has the constitutional discretion since March to call for one at any time. But this depends entirely on his political antenna. It is, however, unlike the delayed local polls, not one the people can demand as of legal right.

With the economic burden lessened, and the constitutionally due democratic right to exercise their free mandate given, there will be fewer causes to protest against, and fewer justifiable reasons for protests to break out on the streets to add to economic instability.

Whether anyone likes it or not, Sri Lanka is now fully committed to the IMF’s grand solution. And any future government will be beholden to uphold its covenants. Failure to honour its pledges, unless it’s upon mutually agreed exit terms, will imperil Lanka’s future dealings with the world.

Some of the IMF loan detractors say that Lanka has gone 16 times before to the same temple of prayer but no good has come of it. Maybe, but has the IMF course been allowed to run the full distance? Or has it been rejected out of hand when a new government assumed the reins of power? Like the Gotabaya Rajapaksa regime did in early 2020?

Seeing default looming on the horizon, it was the SJB, to its credit, that first urged the Gota regime to seek IMF help while the SLPP scorned and mocked the advice, opting instead for Cabraal’s home-grown panacea.

What makes this bailout loan special and different from all the rest, is that it is one won from the gutter of bankruptcy when the nation has slipped beneath its nadir of acceptability when it had been condemned as an international pariah, no foreign State would touch with a barge pole or lend a dime.

True, USD 3 billion will not on its own get Lanka out of the hellhole, but the economic pruning that preceded its grant and earned for Lanka the IMF seal of approval, made it possible for lost international confidence in Lanka’s reliability to repay debt, to blossom anew.

The President also pledged to draft laws against corruption in line with UN conventions. Sufficient laws already exist in the statute books, including the Money Laundering Act. It’s not the lack of anti-corruption laws but the lack of enforcement that has enabled mega political rogues to roam freely, without even a travel ban to keep them within the local jurisdiction.

In this regard, there was certainly good news from the IMF. It wasn’t taking any chances by leaving it in the hands of Lankan politicians to tackle corruption. For the first time In Asia, ‘Sri Lanka will undergo a governance diagnostic exercise by the IMF’.

At the press briefing following IMF Board approval for the bailout loan , Peter Breuer, Senior IMF Mission Chief for Sri Lanka, declared on Tuesday; ‘We emphasise the importance of anti-corruption and governance reforms as a central pillar in the EFF supported programme. They are indispensable to ensure the hard-won gains of the reforms benefit the Sri Lankan people.”

He added: ‘The IMF is conducting an in-depth governance diagnostic exercise which will assess corruption and governance vulnerabilities in Sri Lanka.’

Will anyone have the gumption to claim this to be a blatant interference in the internal affairs of this sovereign nation, as the now outdated and discarded international doctrine once held? Or will they concede that such interference from an international body is essential to keep leaders in check and accountable?

Spelling out the sacrifices that will further have to be made, the President, in his victory speech, declared: ‘We are at a difficult period of time. However, we can reap the benefits of the commitments and toil in a short period. We have to make these sacrifices for the young people of our country, the future generation who are to inherit this nation tomorrow.’

But will the future generation inherit all the good their parents have assiduously built up for them when it visits the children in the form of sin and curse, should the proposed introduction of a property and inheritance tax be enforced in 2025?

President J.R. Jayewardene abolished the crippling Wealth Tax in 1987, shortly before he retired from the presidential office so that the inheritors could build upon the capital base their forefathers had bequeathed them, instead of the inheriting children left haunted and ruined by a terrifying wealth tax after their parent’s death.

It has been a long and hard road but there is certainly a long, long way and many miles to go before this nation can keep its promise.

Nehru dynastic heir Rahul G no sacred cow in Lok SabhaHeir to the Nehru political dynasty, great grandson of India’s first Prime Minister, Jawaharlal Nehru, leader of India’s opposition Congress party, 52-year-old Rahul Gandhi was disqualified from sitting in Parliament on Friday. This follows his conviction on Thursday by a Gujarati Court for criminally defaming Indian Prime Minister Modi by saying, ‘How come all thieves have the common surname, Modi?” He was sentenced to two years imprisonment. However, his sentence was suspended for 50 days to allow him time to appeal against the conviction and sentence. RAHUL GANDHI: Modi slur In the Indian Parliament, there was no question as to whether his disqualification from parliament should be held in abeyance pending the outcome of his appeal. The fact that he had been convicted for two years was enough to disqualify him. Until he disproved his guilt at a later stage, he was a convict. Take the Lankan case of Prasanna Ranatunga. SLPP Minister, Ranatunga, 56, was found guilty in June last year of extortion. He had demanded a bribe of 64 million rupees from a businessman in 2015 after using his powers as Chief Minister of the province to evict a group of people who had been in occupation in a 2 acre land for a long time. He was sentenced to 2 years rigorous imprisonment and fined 25 million rupees. The two-year prison sentence was suspended for five years. He has appealed. The Lankan Constitution disqualifies any person from sitting in Parliament if he or she is convicted of a criminal offence which carries a minimum of two years in prison. The ruling SLPP party, however, interpreted these provisions and held it not to apply to a person so convicted until the outcome of his appeal to a higher court. Under this unilateral take on the constitutional article, without any legal founding, he was allowed to not only sit in parliament as an MP but to continue sitting at the cabinet table as a minister of Gotabaya Rajapaksa’s government. After Ranil Wickremesinghe assumed office as President, Prasanna Ranatunga was reappointed to the cabinet as the Minister for Urban Development and Housing. That is the difference between India and Sri Lanka. Why India boasts a vibrant democracy where the rule of law is supreme and why Lanka is still thrashing in the sewers.