The Revival of Underperforming Enterprises and Underutilized Assets law or the virtual nationalization bill hatched in secrecy and then sprung on an unsuspecting business community is now in the statute book. Nothing can the opponents of this Act, especially the civic-conscious people of this country, do to undo it unless the government itself realizes the anti-democratic features latent in it and take corrective measures.
The fundamental flaw in the new law is that it is 'arbitrary'. No one knows the methodology in identifying an enterprise as under-performing or the criteria for it and it seems to be done purely on the 'whim and fancy' of the Finance Ministry or the Economic Development Ministry.
The arguments the government ministers presented in parliament in defence of the new law sound plausible on paper but it is the implementation of the law or the manner in which it is done that matters. The implementation of this law may tell a different story - a story of political victimization or robbing the opposition's Perera to pay the government's Silva. As often pointed out, legislation bad in law can be good in the hands of a good person and legislation good in law can be bad in the hands of a bad person. Thus it is the intention that we are concerned about.
Despite the government assurances, there is little embedded guarantee in the new law that it will not be used to achieve political ends -- to punish businessmen loyal to the opposition or to reward sycophants. The Act has virtually curtailed the democratic freedom businesses had enjoyed until this Wednesday to support the party of their choice. Any business entity that is seen propping up an opposition party or a campaign against a draconian government move now faces the threat of being taken over, though the President has given a verbal assurance that this act is a one-off legislation. A democracy recognises a private sector entity's right to support the policy of a party of its choice.
Thus the Act, we believe, smacks of a heavy dose of political vindictiveness and carries the venom to weaken opposition parties and may drag the country to a virtual one-party state. Under perfect democratic conditions, which offer a level playing field for all political parties, one-party rule could be an impetus to economic growth. But in warped democracies such as ours where media outlets run by the people's tax money are misused to carry government propaganda or sling mud at opponents and where public resources are misused for the election campaign of the ruling party, one-party rule could well mean dictatorship or abuse of power.
This country carries a long tradition of democracy and its people crave for the perfect democracy, the rule of law and, of course, a judiciary in which they can find refuge, especially when an all-powerful executive branch of the government misuses the trust the people have placed on it in keeping with the social contract. A vital feature of a vibrant democracy is a dynamic opposition whose primary objective is to check any undemocratic tendency that manifests in government actions. But sadly, the main opposition United National Party is not seen doing this noble duty to the full satisfaction of the people. As a result of this and many blunders the party made during the war, the UNP's support base has eroded to a historic minimum. The controversial legislation has only driven one more nail into the party's coffin as any future donations to the party from businesses are unlikely to come at the expense of donors earning the wrath of the all-powerful government and running the risk of their businesses being taken over under the new Act.
The country's third political force, the Janatha Vimukthi Peramuna, is also fast becoming a spent force with internal fighting expediting the inevitable.
Apart from facilitating a virtual one-party state, the new law virtually gives all the wrong signals to investors, both local and foreign and, therefore, does not augur well for the economic progress of the country.
Besides, one wonders whether the government has not learnt a lesson from the past when a previous government took over businesses and plantations only to run them at a colossal loss which warranted pumping of more and more money from the public purse with the budget deficit reaching unbridgeable proportions. Could not the government have taken heed of the comments by the chairman of the parliamentary Committee on Public Enterprises?
COPE chairman D.E.W. Gunasekera was recently quoted as lamenting in a newspaper interview that politicization was the main reason for a number of state enterprises ending up in the red. The accumulated loss, according to him amounted to more than 19 billion rupees while almost all the main state ventures from the CEB and CPC to SriLankan and Mihin Lanka, are running at huge losses.
As much as capitalism or laissez-faire liberal economy has failed in the West, state- run socialist empires have also collapsed; but the difference is that the free market economies recover faster.
We urge the government to take speedy moves to restore investor confidence and allay the justifiable fears persisting in the business community and among the general public regarding the fundamental right to property. We hope that secrecy in the law-making process would also end and the government would let the public debate or challenge bills prior to their enactment as per the provisions of the Constitution.
Once again a summit reminds us that there is regional cooperation in South Asia. Till the next summit, there is little talk on it. Even when leaders meet, what makes big news around the world is not South Asian regional cooperation but the meeting between the leaders of India and Pakistan, for hardly a summit decision will make a whimper at world stock and financial markets or will change the course of the world events unlike the European Union summits or the meetings of the G-8, the G-20 or even BRICS, the new group that brings together the emerging economic powers Brazil, Russia, India, China and South Africa.
The South Asian Association for Regional Cooperation whose leaders at last year's summit in Thimpu admitted that the grouping had been a failure, has made little progress in moving towards a successful regional economic bloc as the leaders who met in the Maldivian atoll of Addu would have realised.
One may point out that SAARC remains bogged down by the never-ending Indo-Pakistan rivalry and conflicts. But progress could be made if the leaders could take steps towards increasing people-to-people contacts and making South Asian Free Trade Area a workable agreement in keeping with each country's economic constriction rather than going for idealistic economic goals.
SAARC can also learn a lesson from the current crisis in the European Union which went headlong into regionalism in the past decade or so, giving membership to liberal European economies. While cooperation in areas ranging from agriculture to bio-technology is useful, SAARC will grow only through people power when there is an equitable distribution of wealth and resources regionally and in every member-state.