News/Comment

28th October 2001

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The Sunday Times economic analysis

People have to pay for political gundus

By the Economist
Suddenly the government has found the money for expenditures it said it could not incur. Although government revenues are well below the expected amount, it is able to indulge in higher expenditures. In the first seven months of this year government revenue amounted to Rs. 137 billion, whereas expenditure reached Rs. 213 billion. 

This year's revenue is likely to be much less than budgeted owing to the low rate of growth and business turnover.

How will the government find the money for additional expenditures? Well that may not be a concern of a government whose sole preoccupation is to remain in power. Perhaps some of the burdens will be passed on to the next government. 

Perhaps the money is being scraped out of other expenditures. "Spend now and pay later", appears to be a guiding principle of public finance these days. A clear example of the government indulging in expenditures it said it could not incur was the salary increase for public servants. This was resisted several times. Public servants went on strike. Yet the government did not give in. The IMF apparently had a condition that public servants salaries should not be increased to give the facility of US $ 253 million. It obtained US$ 130 million up front. Now that the government has violated this clause of the agreement, it may not get the rest of the facility. 

In any case so many of the required conditions for the rest of the instalments or tranches have not been fulfilled and there is no likelihood of these being complied with either. 

Therefore there is probably no chance of obtaining the rest of this facility. 

What happens to the balance of payments too may not be the concern of the government. It may however affect our ability to obtain balance of payments support next year, when we may continue to face balance of payments difficulties. 

A cardinal principle of parliamentary government is the control of public expenditure by the people through parliament. Every rupee spent by the government should be accounted for and be in accordance with the allocations in the budget. 

This fundamental principle has been violated in recent times, particularly just before elections. Parliamentary vigilance in ensuring detailed accountability of public expenditures appears to be very lax. The second principle of parliamentary democracy that has been violated is that once a government calls for an election it has no right to either make policy changes or indulge in new expenditures. This is a principle that has been continuously violated by successive governments. 

The recent expenditures giving benefits to government servants, subsidies and other benefits is a clear violation of this principle. It is a means of using people's money to obtain people's votes. Ultimately the people themselves have to pay. 

However, this is not clear at the moment of giving such benefits. There is an illusion that some segments of the population are receiving benefits. 

Ultimately these additional expenditures have to be paid by either taxes or through inflation. In either case the cost is borne by the people. 

As Milton Friedman has said "There is no such thing as a Free Lunch". Someone has to pay for it. That someone is the people.


Anthrax: Don't panic

By Faraza Farook
Although the Anthrax threat has reached alarming proportions in the United States, with at least three deaths being reported and the White House, State Department and Supreme Court being affected, there was no reason for alarm here, medical officials said.

This assurance came in the wake of tests conducted by the Medical Research Institute on suspected samples for Anthrax spores being proved negative. 

"There is no culture positivity so far in the samples tested and all packages suspected to contain Anthrax have been tested," Dr. S.D. Atukorale co-ordinator of the Task Force on Anthrax said.

Meanwhile the Public Health Department of the Colombo Municipal Council (CMC) has set up an Anthrax Prevention Unit to entertain any queries on the issue and also to attend to suspected mail.

Chief Medical Officer Dr. Pradeep Kariyawasam said the Department would purchase required accessories including gloves, masks, overalls and anti-biotics.

Both Dr. Atukorala and Dr. Kariyawasam said people were panicking unnecessarily and warned that a panic stricken person was likely to spill the contents of the package on his or her dress resulting in the spread of the infection to others.

Dr. Kariyawasam said anyone who received a suspicious mail could contact him on 691922 and should remain calm. 

During the past two weeks suspicious envelopes have been received at the US, Australian, French, Indian, British, Saudi Arabian, Norwegian and UN missions here. On Friday the French and Saudi Embassies were shut down for the day after more suspicious envelopes were received. 


Weddings and polls on collision course

With elections day falling in the festive month of December, many events including wedding Course plans have gone awry because of fears of polls violence.

Many functions scheduled for poll day, December 5 have either been postponed, advanced or cancelled, hoteliers told The Sunday Times.

While most business enterprises were wary of making early bookings, people who had booked hotels in advance for weddings and other functions were in a fix trying to book another date.

"Conferences running into three to five days have definitely been postponed," Trans Asia's Banquet Manager Rohan Pathirana said.

Hilton banquet manager Thushara Ariyawansa said most companies were looking at dates after the polls. "There will be definitely less functions towards the end of November and people aren't deciding on the dates until the last moment," he said.

While three weddings scheduled during this period at the Oberoi have been postponed or advanced none have been cancelled, Assistant Manager Banquet Sales Dhammika Bandaranaike said.

Holiday Inn banquet manager B.S.R. Premaratne said while they were expecting last minute changes, of the three weddings scheduled on election day so far two had been postponed.

Similarly, events scheduled for December 5, 6 and 7 at the Mt. Lavinia hotel have been postponed.

However, some hotels were going ahead as scheduled. "No cancellations or postponements so far," said Hilton's Marketing Communications Director Yasmin Cader. She said there were no changes in the already organised programmes and the hotel was going ahead even with the childrens' Christmas carnival on December 9.


Mervyn's manape act

Clinically Yours - By Dr. Who
There have been many adjectives used to describe Mervyn Silva in the past week ranging from the technical to the vulgar, but make no mistake, the man is no political idiot. 

After first storming a newspaper office and threatening reporters and then on the very next day assaulting a fellow MP at the Sri Maha Bodhi in Anuradhapura, there have even been suggestions that the former Member of Parliament is mentally ill. However, having Silva's head examined would probably yield nothing more than the stigmata of many years of five course Parliamentary lunches given at subsidized prices. 

Every Parliament has its mavericks; in the days gone by, it was Wijayananda Dahanayake. In the J. R. Jayewardene era it was the long-haired and loquacious We. Ja. Moo Lokubandara while the Premadasa era had A. J. Ranasinghe of slipper-soup fame. Some of them, Dahanayake and Lokubandara for example, later mellowed and rose to greater heights in the political ladder. Mervyn Silva is also a maverick of sorts but he is a smart one. And the media it appears is playing into his hands by doing exactly what the man wants them to do. 

Consider the man's plight. He is originally a SLFPer but then finds himself in the opposition after changing sides to become a UNPer. Then he quickly compensates for all that by falling at the feet of President Chandrika Kumaratunge and crossing over to the Peoples' Alliance during that debate on the now abandoned draft Constitution. 

He is rewarded with a deputy ministerial job but having switched his electoral base from the rustic Hambantota district to the more realistic Colombo Central he has to fight with the likes of A. H. M. Fowzie for the precious 'manape'. 

So, he stage manages these episodes and suddenly everybody knows who he is and what he looks like, thanks to the outrage that erupts in the media. 

It is true that people cast aspersions about his sanity, but to do that, you still have to know who the man is. 

And that is the key to that 'manape'. Now, don't be fooled by reports that Silva was remanded (and released, of course) and assurances from the stand-in SLFP general secretary that disciplinary action will be taken against him. 

Instead, just remind yourself that the notorious D. M. Dassanayake of Anamaduwa fame took oaths as a deputy minister while there was a warrant out for his arrest. Of course, gung-ho politicians who think that they are God's gift to the nation have their way of doing things. But when such acts occur too close to an election and in quick succession, we need to think again. 

In our opinion then, Mervyn Silva is neither mad nor is he as much a moron as he pretends to be. What is more likely is that he is a man with one eye on the 'manape' and the other on a ministerial portfolio. 

And we are all helping his cause by discussing his disgusting act of aggression at the offices of the 'Divaina'. So, if one ventures a prediction as an outcome of all this, it is that Mervyn Silva will now win enough 'manaapa' to win a seat in the next Parliament, courtesy of all the publicity that we all afford him so eagerly. 

And then, Mervyn the manipulator-and not Mervyn the moron- will have the last laugh. 



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