Editorial

President Gotabaya Rajapaksa’s Address to the Nation on Wednesday night, hot on the heels of a mass protest rally displaying public anger and angst over the current economic catastrophe playing out, seems to have been primarily to announce to his citizens that he had eventually decided, and had no other choice but to seek the help of international lending agencies to bail the country out of its plight.

Going before the World Bank and the International Monetary Fund (IMF) have been regular occurrences over the years, but this Government strained so much to make the call this time. It seemed the President ran out of options and was having one last throw of the dice with a promise to turn around the economy.

When the President says he is not to be blamed for the current situation, it is partly true. He has to pay for the sins of the recent past, the massive foreign debts accumulated over the years through a string of unsolicited mega projects that brought no dividends in return. Today, the country is forced to pay back these huge loans taken ten years ago by the Rajapaksa the First Government. What is crazy is that the public – all those hundreds of thousands venting their frustrations against the President and his Government on the roads throughout the country — don’t even know who borrowed what, from whom, and for what. Those seem state secrets.

And so, the President is in a way, correct in saying that this was a problem he inherited, but then the very players who took part in committing those sins of the past remain well entrenched in his Government continuing to give him, Rajapaksa the Second, the same ‘dead ropes’ for which he therefore cannot exculpate himself of responsibility. He even says he has full confidence in them, still.

Like the case involving the fertiliser ban for which debacle he just cannot blame any previous Government, the President ignored independent expert advice when the economy began stuttering, then choking and eventually collapsing. No doubt the COVID pandemic and the global economic recession started to bite into the debt repayments, but the Government vacillated, dithering, delaying and waiting for miracles to happen on the advice of the Governor of the Central Bank.

It was he who once said that Sri Lanka can easily do without GSP Plus benefits when the country was under the cosh by the European Union at the UN Human Rights Commission. Foreign investors then shifted to Bangladesh. By the time the former Government won back the concessions, it was too late; the investors were well established in Bangladesh whose foreign reserves shot up to USD 65 bn and now gives cocky Sri Lanka loans. This time, he was to say Sri Lanka can do without going to the IMF when the writing was on the wall, and the country was with its back to the wall.

It is known that the Governor and the Finance Minister were at odds about going to the IMF. The indecisiveness and the delay in the decision-making has cost the country and both must be held culpable jointly and severally for bringing the country to virtual bankruptcy.

The IMF panacea is not going to be easy either for the Government to follow or the people to swallow. Clearly not wanting to be the unpopular doctor prescribing bitter medicines and recommending welfare cutbacks, the IMF is demanding the Government set the stage first for it to enter it. The rupee float and its attendant devaluation by a whopping 30 percent resulting in severe inflation experienced last week is an IMF prescription. This is what the IMF means by ‘stabilising’ the patient now needing treatment at the intensive care unit. The Government will need a ‘haircut’ on its expenditure, and pruning of its money printing binge. Further price hikes are on the cards as loss-making state enterprises come under the IMF pump triggering further political instability in the making as corresponding public agitation continues.

President Rajapaksa’s job may or may not be on the line, but is it the IMF that is the ‘last chance saloon’ for that inevitable haircut?

Foreign deals: People in the dark

Finance Minister Basil Rajapaksa returned from India with a billion dollars in the bag, and more tantalisingly promised, but what aspects of national security, sovereignty and territorial integrity were bartered for it is anybody’s guess.

Up to now, no official statement has come from the Government of Sri Lanka about the deals that were struck, except some superficial accounts from the respective embassies in Colombo and New Delhi. These deals included renewable energy projects in eastern Sampur and in northern Mannar. Some security related projects are being tossed about. Whether these projects are good, bad or indifferent to the national and economic interest of Sri Lanka is in the realm of the unknown to its citizens.

The Indian side has already said that the Northern Province of Sri Lanka is “a region of focus” for it. Is this comparable to Russia’s ‘region of focus’ shown towards Ukraine, one may ask.

This goes to the much larger question – whether individual Ministers, or even the Government of the day ought to be permitted to sign pacts in total secrecy binding with shackles the long-term interests of the country for short-term benefits.

Various ministers announce energy contracts with foreign suppliers. Even the Leader of the Opposition this week told his followers that three West Asian suppliers will provide fuel to a Government of his on a deferred payment basis. Who are these suppliers? In this world of kommis kaakkas or commission agents and brokers who are nameless and faceless, everything happens below the public radar. One-time Finance Secretary R. Paskaralingam is named in the Pandora Papers as having amassed monies in offshore accounts. There are those who are living in Australia having got kickbacks on Airbus deals. There are so many who have plundered the fat off this land with secret deals unbeknownst to the public.

They, in cahoots with politicians, have brought about ruin to this country by such sweetheart deals with foreign Governments, companies and funds, for which the ordinary people are paying a heavy price today.