A new beginning…..but
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It was a happy Aldoris, the choon- paan karaya, who came down the lane, with his signature tune louder than the usual volume. “Jayawewa, api denum (Jayawewa, we won),” he said joyfully, as he came to a halt at the gate where the trio had gathered.“Ithin ada kaema nikan denawada (So, are you giving free food today),” asked Kussi Amma Sera, playfully.
“Aiyo, kaema wala mila thama ekama gana (Aiyo, food prices still remain the same),” he replied.
“Mama nam chandey dammey Sajith-ta. Eth balaporoththu wemu aluth nayakaya janathwa udesa weda karai kiyala (I voted for Sajith but let’s hope the new leader will work for the people),” noted Serapina.
“Anura-ta godak abiyoga walata muna denna thiyanawa (Anura is facing many challenges),” said Mabel Rasthiyadu, adding: “Eyata godak weda karanna thiyenawa. Den ithin apita inney gamey kollek janathawata weda karanna. Issarawela hitapu deshapalana aya weda karey egollonge poudgalika thathvaya goda naga ganna-ne (He has a lot of work to be done. Finally we have a village boy who will work for the people and not for himself as our previous politicians have done).”
Kussi Amma Sera then walked into the kitchen and offered a ‘maalu paan’ and as I also picked up my mug of tea, the home phone rang. Who was calling on this sunny Thursday morning?
“Hello…..hello, what’s going to happen?” asked the caller, ‘Shifty” Silva, the always-inquisitive IT expert. “Well it’s not easy for the new leader,” I said.
“Even more challenging is for the National People’s Power (NPP) to get a parliamentary majority at the November poll,” he said. “That’s true. Trying to cobble together a working coalition would also be difficult as parties like the SJB or SLPP are anathema to the NPP,” I said.
“But the new leadership has made the right choices in retaining all or most of the Ministry Secretaries and urging public servants to work for the people and not for the political leaders,” he said.
In Kussi Amma Sera’s August 18, 2024 column, it was stated that, “One of the worst things that happens at an election is that ‘heads’ of state agencies and often ministries are swiftly changed by a new, winning presidential candidate (it won’t happen if the present incumbent continues). That is the political culture in the country and is unlikely to change unless, of course, there is a radical shift in policy by the winning candidate.” And indeed, it’s a refreshing and radical departure from earlier, accepted norms.
Ministry Secretaries including Treasury Secretary Mahinda Siriwardene and Foreign Secretary Aruni Wijewardana, have been retained which is a sign that the rulers are not vindictive towards the public service in replacing the incumbent officials, with the new Prime Minister clearly saying public servants should do their duty to the people and brook no nonsense from politicians.
Chambers of Commerce and other business- affiliated associations were quick (and falling over each other) to congratulate the new President, while the stock market cheered the win with hectic trading and rising turnover, contrary to expectations that the leftwing government would be an anti-market regime.
This was far from this perception as President Anura Kumara Dissanayake quickly met with Treasury Secretary Siriwardene and Central Bank Governor Dr. Nandalal Weerasinghe to discuss the economy and for a continuance of the IMF programme. The Central Bank Governor was also expected to continue in his post.
It was business as usual but clouds of uncertainty still remain in terms of the number of new laws that need to be enforced like the Economic Transformation Act in which the Board of Investment is to be replaced with a new institution and ambitious economic targets running to several years in the future, which Kussi Amma Sera criticised in an earlier column saying it is unfair to carve in stone these targets as any new administration would like to move forward with their own targets.
Rating agencies were conciliatory to the new administration. Moody’s Ratings said in a report that the political change is unlikely to derail reform trajectory.
It said: “While new President Anura Kumara Dissanayake’s election constitutes a major shift in Sri Lanka’s political landscape, it is believed the broad appetite for reforms will remain intact. We do not expect significant disruption to the country’s reform agenda or macroeconomic policies, which include the ongoing debt restructuring and structural adjustments under its programme with the IMF.”
However, it pointed out that some policies are likely to be reprioritised amid challenges in maintaining fiscal consolidation that could keep credit risks elevated for some time. Fiscal consolidation would contribute to a durable strengthening of Sri Lanka’s credit profile. “Since its default in 2022, fiscal authorities have implemented a number of reforms to restore fiscal sustainability, such as raising the value-added tax and corporate income tax rates and lowering the personal income tax free allowance. These reforms increased revenue to slightly more than 11 per cent of GDP in 2023 from 8.3 per cent in 2021. In turn, the government’s fiscal deficit narrowed to 8.3 per cent of GDP in 2023 from 11.7 per cent in 2021,” it said.
With the decision to hold parliamentary elections in November, Moody’s said it expects some period of political uncertainty until a new Parliament is formed.
Besides fiscal reforms, Sri Lanka has also made considerable progress in rebuilding its external position. Official foreign-exchange reserves rose to around US$6 billion as of the end of August – sufficient to cover around 3.5-4 months of imports – from well below $2 billion for most of 2022.
The Ceylon Chamber of Commerce said the new government should complete external debt restructuring based on the recent announcement of the commercial creditors, continue the IMF programme, relook at matters related to revenue collection such as RAMIS and Simplified VAT, and resolve the visa on arrival issue immediately, which was in fact restored on Friday.
In another development and in a strong message to the public sector, the Supreme Court ordered the Immigration Controller to be remanded for disobeying a court order to immediately restore the earlier e-visa scheme facilitated by Mobitel. This was based on a petition by the tourism industry and three MPs urging the court to cancel the costly and complex VFS-facilitated e-visa platform which has caused many problems for the tourist trade.
Kussi Amma Sera walked in with an unusual mug of coffee, saying in her little knowledge of English: “Sir… celebrate?” I nodded in acknowledgement hoping the visa process would be restored to its former glory and business will return to a semblance of normalcy notwithstanding the parliamentary poll in November.
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