ISSN: 1391 - 0531
Sunday September 23, 2007
Vol. 42 - No 17
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No war for next generation but what of economy?

Defence Secretary Gotabhaya Rajapaksa early this week made a 'Call to Arms', so to say, making it patently clear that the Government was not going to make the mistake of leaving the job of defeating the LTTE militarily, half-done.

He was speaking with the President of the Republic and the Commander-in-Chief of the Armed Forces by his shoulder.

He was contradicted the last time he made a similar statement not long ago by the Foreign Minister of his own Government. Either the Foreign Minister was asked to do so, or was living in another planet - both of which are possible.

This time, there were no such rebuttals. We can, therefore, safely take it that this statement is indeed Government policy now. The statement had different reactions. It warmed the cockles of the hard-line elements who believe that what he says is the stark reality of how to deal with this endless insurgency. Some who support his approach, like the leader of the JVP, think he's right but that such a statement must come from the President. And the US Ambassador thinks a military solution is not the answer in Sri Lanka (though Iraq is a different story).

In the meantime, in Parliament this week, there were other statements being made -- about the war on the Cost of Living. When a JVP MP raised the issue of better wages for plantation workers, the Deputy Minister of Finance offering an apology why these higher wages cannot be met, said that Rs. 50 billion had been paid for arms procurements alone in the war effort so far this year.

Teachers, health sector workers, railway employees, CEB employees, and several other sectors are clamouring for salary anomalies to be met, so that they can keep pace with the soaring Cost of Living. Bread, dhal, sugar, milk, transport, gas, electricity, etc are basic requirements of any family. There is no doubt that wage increases, especially of the low wage earning class, are more than justified and should be given. Thousands upon thousands and their families are clearly feeling the economic pinch, and it is starting to hurt real bad.

The State has got itself in a serious bind and is virtually broke, unable to pay. If it prints money and pays, it will only fuel inflation as a natural consequence. The economy is so run-down, that the capitalist 'trickle down' theory has nothing to trickle down. Spending is scarce, and savings impossible, hitting the poor the hardest.

That is probably why the Government is looking for foreign commercial borrowings as an escape route, but while this is a temporary measure to ease public finances and the balance of payments, it is only accumulating the problem for the next generation. War expenditure is, by its very nature, inflationary and does not create goods or services that people can consume. Since much of the purchases are from overseas, they again fuel inflation and depreciate the rupee. Other social evils -- bribery, corruption and crime are galloping.

In this backdrop, the Leader of the Opposition made a pertinent point this week about the expenditure of public finance outside Parliament's control. He cited cases where this is happening.

The attitude of the Government to recent COPE reports, to the Auditor General's report on wastage and corruption in the Government sector is inexcusable.

Worse still is its approach to continuing wastage by way of the import of luxury cars for Ministers, tamashas, entertainment, large contingents on foreign trips undertaken by the President, and the frequency of such visits and the utterly useless travels by Ministers and their families that yield zero results other than a press release back home.

The Defence Secretary has a valid point in not seeing the North-East insurgency passed down to the next generation. But is he or the Government for that matter, willing to pass down an economy in shambles to them? War expenditure too should be scrutinised. Every effort must be made to reduce wastage of funds -- in every quarter -- and the Government's leadership must set that example, which is not evident now.

While there is justification for wage increases to be in the form of a temporary inflation allowance for only wage earners below a certain threshold, the carnival indulged in by Government leaders in the midst of hell for its citizenry, is the best recipe for further turmoil in the country in the midst of a costly insurgency.

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