One would have thought that the President, who is also the Minister of Finance, made a slip when he divulged almost a ‘state secret’ during his meeting with national newspaper editors and electonic media heads this week that had the Government not raised electricity prices, the economy would have collapsed. One must, therefore, assume that [...]


May Day Signals


One would have thought that the President, who is also the Minister of Finance, made a slip when he divulged almost a ‘state secret’ during his meeting with national newspaper editors and electonic media heads this week that had the Government not raised electricity prices, the economy would have collapsed.

One must, therefore, assume that it was something the President wanted the people to know – that the country’s economy is in rather dire straits. Notwithstanding the rosy picture of the economy frequently portrayed through the Annual Reports of the Central Bank (apparently hidden from Parliamentary scrutiny for some time now), the President has another view. It has been an open secret for a while that the Ministry of Finance (the Treasury) and the Central Bank have not met eye-to-eye on the state of the economy and if one had to believe one of them, alas, unlike in the past, it would be the position of the Treasury that might be safer to accept.

The revised electricity tariffs that are now in place are aimed at reducing the Ceylon Electricity Board’s mounting debt that has a knock-on effect on the Ceylon Petroleum Corporation and the rest of the economy. The Government has found no way out of this quagmire and under increasing pressure from the Washington lending twins, the International Monetary Fund and the World Bank (so that they qualify for more loans) the bitter pill had to be administered to the inevitable guinea pig – the consumer.

The resultant unpopular measure has even seen a public feud erupt within the Cabinet with the incumbent Minister of Power and Energy saying “Not I, Sir” and placing the entire blame on her predecessor who in turn, is vehemently denying paternity saying that it was something he resisted and that was fathered by the Treasury.

This is what our respected Economic Analyst has been repeatedly saying; that our economy is fundamentally flawed; that our Balance of Payments is lopsided and not in our favour; that our priorities are lopsided; and that we are getting into a debt trap.

Into this scenario comes the fact that the Government is preparing to profile persons who get involved in mass anti-Government protests. This is serious business, and the news is filtering out on the eve of May Day, when the workers of the world must unite. Henceforth, legitimate trade union activists can be lumped with anti-national elements (or those who are perceived to be anti-national) and be on the Government’s national security database.

With the economy shaky to say the least, and ordinary citizens asked to dip deep into their pockets to pay more and more for their monthly bills, mass protests are likely on the horizon. The Government seems equal to the task. Already, special anti-demonstration police squads are being trained and equipment to break up street protests has been ordered.

For a country that has been elevated to ‘middle income’ status in the World Economic Index, the picture however, is not a pretty one – and the President seems to have acknowledged it even if in passing.

Take the case of the farmers, for instance. While this Government is relying very heavily on the vast vote base of the farming community – workers who are the least recognised by trade unions, fertiliser that was issued at a massive subsidy (at Rs. 350 a 50 kg bag when the market price is Rs. 1,200 for the same bag) is now subject to a budgetary ‘jilmart’ (trickery) and the farmer will soon be asked to pay Rs. 500 a bag.

The additional Rs. 150, the Government says is an insurance scheme to cushion against future droughts or floods. This subsidy was a terrific bonanza to the farmer and the ruling party was assured of the farmer’s vote for it, but someone has to pick the subsidy tab at the end of the day. Even where the private sector is concerned, a ton of fertilizer is Rs. 75,000 and sold at Rs. 24,000 — so one can see the huge subsidy the Government incurs. How long more can the Government continue with this subsidy if the economy is in dire straits?

And what of the farmer’s pension scheme pioneered by former Minister of Agriculture Gamani Jayasuriya and launched by former President J.R. Jayewardene in March 1987 at Medirigiriya in Polonnaruwa. There are 2.7 million farmers in Sri Lanka which is 33 % of the total work force (or 1/3rd of the working population) contributing 11.2% to the GDP. But there are no May Day rallies for them – just a token representation at the bigger rallies dominated by the urban workers. Neither does the Pension Scheme work for them. The Farmers Pension Fund was reduced to zero by August last year and the 86,500 farmer-pensioners now qualified to be beneficiaries were last paid their pension in December 2011. The Fund is short of Rs. 319.5 million. The Auditor General has even shown how directors of the Fund have played out monies from the poor farmers’ pensions, if that is any indicator of the true state of this country’s public service mores.

We have regularly urged the Government to pay greater attention to another set of workers – those outside this country toiling in cultural and social deserts remitting as much as US$ 6 billion to this country’s coffers. What electricity bills would be without this money is unimaginable.

Still, the Government has done very little, if nothing at all, to send more women staffers to the country’s diplomatic missions in those inhospitable countries, especially in West Asia where nearly half a million Sri Lankan women work. Unscrupulous job agents backed by equally unscrupulous politicians continue to have a field day. When will they listen to these voices of despair from the wilderness? There are no May Day rallies for them.

The unemployment rate, the Central Bank says, has dropped from 4.2% to 4% over the last year. Even if one is to take these statistics with a pinch of salt, unemployment of those in the age group up to the age of 29 years is 30% — and 7.5% of them are A/L qualified. There are no May Day rallies for the unemployed.

And so, as they prepare to mark International Labour Day on Wednesday (May 1) with a public holiday to boot, spare a thought for the farmers, migrant-workers and the unemployed youth who are largely forgotten at these celebrations; and the Government’s preparations to meet the challenges of potential agitation by the hard-pressed working class in an economy now admittedly in trouble.

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