is Amunugama as good as he looks?
Power, it has been said somewhere, is the best aphrodisiac. Sarath
Amunugama may not need one, but power definitely has worked its
charm on the Minister who last week delivered the Budget speech
with the élan of a man who has at last reached his full potential.
But behind the impeccable enunciation, was a message that Amunugama
and the government wanted writ large.
wanted to state out loud that the economy now belongs to the people.
So everything was suffused with symbolism -- including the kiribath
which replaced tea and cakes at the party for Members of Parliament.
to judge a budget by its trappings is like trying to judge a bride
by her train. Yet, this much can be said: last week's budget worked
to a philosophy. Which was that if a budget doesn't benefit the
people, it should at least appear to benefit the people.
this is not to write-off the budget, it is to say that its substance
appeared to be rather thin and underachieving contrasted with its
hubris. Amunugama will turn around and say that no budget can achieve
anything substantial given the lean global economic environment,
and doubtless his point will have to be considered. But how much
in fact does the fine dress that's wrapped around this budget represent
the reality that obtains in the country's actual rupees and cents
such as Snodgrass and Abeyratne have done some rigorous probing
into Sri Lanka's development story since independence, and Snodgrass
particularly comes around to a very interesting conclusion -- that
we are sure Sarath Amunugama would have heard of by now.
verdict -- incidentally to be published soon in a Harvard Review
of the War and Economy in Sri Lanka -- is that Sri Lanka's economy
was torpedoed significantly on two separate occasions.
points out that there was 70 per cent external trade at the time
the British washed their hands off the affairs of this island. But
this percentage went down to almost 30 in the 1970s after the Sirimavo
Bandaranaike led United Front government placed the economy on a
platform of self sufficiency.
the time J. R. Jayewardene reversed the trend, he says, it was too
late. But however, the country (according to him, I stress) made
modest gains and was on a upwards trajectory until the Tamil Tigers
decided to rebel against the state. These two developments combined
put the brakes on the economy which has been struggling to work
to its full potential since, despite the fact that some impressive
gains have been made in certain spheres of public endeavour.
inward looking development paradigm which is ostensibly for people's
welfare ended up impoverishing the very people that it was supposed
to serve, and this fact, leave alone the conclusions of Snodgrass,
was borne out by the scale of defeat that the Bandaranaike government
suffered in 1977. The phase that followed was of liberalisation
and laissez-faire which no doubt shored up the economic indexes
and got the country back on an even-keel, but then, due to the events
beginning '83 or otherwise, vast sections of the rural and urban
poor have not benefited at all from the effects of this 'reform.'
ideological project of Amunugama and his JVP backed think-tank is
to keep the economy running on the same track but to reverse some
of it's trends which have been helping only the Colombo bourgeoisie
and its attendant entrepreneurial and landed classes. Hence the
'home-grown' slogan and the claim that the budget was not written
in the offices of the IMF and the World Bank.
one thing even Amunugma and his comrades have taken care not to
do is to panic the so-called captains of business. The tack on the
other hand has been to empower the working classes or at least to
provide them with the illusion that this government is at pains
to empower them.
though even every Cassandra in Colpetty might agree that redress
is good, there have been two inconvenient questions. A) Is the redress
enough to put money in people's pockets so that the economy will
be spurred into activity and growth? B) Was it affordable, even
this little redress granted, or was it a cosmetic exercise at best,
or a disastrous inflationary gambit based upon the monetary rascality
of printing money?
view of that, though that might sound heavy, has to be seen holistically.
Even for cosmetic purposes, a people oriented budget philosophy
is probably a good one. At the least it will soften the social friction
inasmuch as people will feel there is a government that seems to
care, though it is probably one that cannot deliver. At best it
will actually put money in people's pockets in the most difficult
of economic circumstances, and get the economy moving again, while
the IMF and World Bank mandarins will shake their heads in disbelief
and perhaps try to put a spanner in the works probably out of spite!
second scenario though it may sound absurdly upbeat, even naïve,
is not entirely impossible, because time and again the World Bank
recipes have proved to be recipes for disaster, whereas this conventional
wisdom of the World Bank and its neo-liberal brahmins has worked
often, as economist John Kenneth Galbraith says, when stood on its
assuming that Amunugama and his players have their hearts in the
right place concerning a people's budget, it may also well be that
they have not just their hearts in the right place but their heads
too. But the problem with these so-called left of centre governments
(…non-UNP somehow seems the better way of putting it) is that
they were never able to strike the mean. It's hardly a way of articulating
it, but one can say that the Sirimavo Bandaranaike government of
the 70s went way over the top in its experiment for self sufficiency
and self reliance, all administered with a bitter dose of price
the dapper Sarath Amunugama does not either in style or substance
share in that kind of isolationism, but the UPFA government will
have to strike a fine balance of people-economics and simple neo-liberalism.
Any government will entirely ignore the IMF and World Bank at its
peril, and would also ignore the donor community and the so called
investor club at its peril.
hoping that its ostensibly people friendly economic policies will
actually empower people and spur some sort of growth, the government
needs to keep sending the correct signals, find new markets for
textiles, keep the tourism boom going and generally keep at least
some of the charming neo-Liberal compradors purring.
if that was not enough, all this has to be done while keeping that
war reasonably down so that it won't erupt again in an all consuming
fury. It's a tall order that can hopefully only be sustained by
men of fine fettle who can draw on more than just Peradeniya charm
and chic post-Paris intellectual bravado.