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Two events of great political significance took place last week. The first was the passing of the Bill to increase the number of items on which Value Added Tax (VAT) was imposed and to increase the percentage on which VAT was already effective from 15 percent to 18 percent.

Many Government Parliamentarians did express their displeasure at this proposal which would hurt the already overburdened people and make their lives even more difficult. However, when it came to voting all of them rallied round the Government and saw the legislation through. 

The second was, the Sri Lanka Podujana Peramuna’s (SLPP) Annual Convention which took place at the Sugathadasa Stadium on Friday. The SLPP delegates once again elected Mahinda Rajapaksa as their Leader, while former President Gotabaya Rajapaksa was a conspicuous absentee.

The highly unpopular VAT Bill was rushed through Parliament in time for the International Monetary Fund’s (IMF) Board meeting on December 12, where Sri Lanka’s second tranche of the extended IMF facility was discussed. While many of the conditions laid down by the IMF had been complied with by the Government, it had fallen short of the revenue targets. The imposition of the VAT was intended to make good this failure by increasing Government revenue.

The IMF at its Board Meeting eventually agreed to release the second tranche of its 2.9-billion-US dollar facility. From the Government’s point of view, the IMF decision was welcome as it was hoped it would open the doors for further aid from multi-laterals such as the World Bank and the Asian Development Bank.

However, the increase in VAT will make the burden on the citizenry even heavier and could have adverse political repercussions for both the United National Party (UNP) and the SLPP.

With two elections, Presidential and Parliamentary, due in 2024, it will be a formidable task for the UNP and the SLPP, together or separately, to win back the confidence of the people at the hustings. With the UNP faring badly at the 2020 Parliamentary elections, it will be faced with the dilemma of whether to stand alone or in coalition with the SLPP at the forthcoming elections.

If it decides to stand alone, the UNP will only have Ranil Wickremesinghe’s Presidency to place before the people in its task of wooing the voter. In his 2024 Budget Speech, the President described the situation in the country at the time he took over as follows: “At the time, I took over a patient who was dying. A country that resembled a living hell. A derailed economy that had been brought to its knees.”

“We fought over meagre litres of petrol. Conflicts emerged over obtaining a gas cylinder. We remained in darkness for ten to fifteen hours a day. Our supermarkets began to sell firewood. Businesses collapsed. The tourism industry crumbled. Jobs were lost. Essential goods became scarce. There were queues everywhere. All public transport failed. Schools were closed. We could not conduct examinations. There was a food crisis due to the lack of fertiliser. The situation reached a point where we felt as if we were left not with a country but we were in a State akin to hell.”

These statements made by the President are a damning indictment of the Gotabaya Presidency and SLPP governance and are difficult to challenge. President Ranil Wickremesinghe’s claims to have done better than his predecessor, is based on the fact that he has, according to some economists, stabilised the economy which was reduced to bankruptcy since 2019 by economic blunders committed by the then Government.

At the micro-level
however, President Ranil Wickremesinghe has not been able to improve peoples’ lives, with the cost of living reaching staggering heights and likely to further soar with the increased rates of VAT. The Public Health system has taken a beating and corruption continues unabated.

That is probably why SLPP stalwart and former Minister S.B. Dissanayake claimed at a media briefing last week, that the UNP will not be able to muster more than one percent of the votes at an election.

On the other hand, the SLPP would be hard put to claim a share of the credit for the ‘stabilisation” of the economy because every point it makes in favour of President Ranil Wickremesinghe will amount to an indictment of the Gotabaya Rajapaksa Presidency.

That is probably why Friday’s SLPP Convention completely ignored Gotabaya Rajapaksa who was conspicuous by his absence. The speakers at the convention made no reference to the former President who was marketed as the ‘Wada Karana Wiruwa’ at the last Presidential and Parliamentary elections.

Even SLPP Secretary Sagara Kariyawasam who hailed Mahinda Rajapaksa as a national hero for giving leadership to the victory over the Liberation Tigers of Tamil Eelam (LTTE) chose to completely ignore Gotabaya Rajapaksa’s role in the LTTE’s defeat. This was in marked contrast to the campaign at the last Presidential election where his role in defeating the LTTE was touted as his main suitability for the Presidency.

None of the convention’s speakers made reference to the Supreme Court judgement which found the SLPP Leaders responsible for the economic crisis, nor did they offer any apologies for driving the country to bankruptcy.

One factor which emerged from the SLPP convention is that it still relied on Mahinda Rajapaksa’s name to promote its fortunes at the next elections. In fact, the former President showed signs of his old self in his speech when he said the SLPP would be a formidable party once again at the next elections.

However, it remains to be seen whether the SLPP will be able to make any impact with the voters after its disastrous performance in governing the country since 2019.

(javidyusuf@gmail.com)