Editorial

The traditional Sinhala and Tamil New Year dawned this week with certain uncertainties. President Gotabaya Rajapaksa was certain he was not going to desert his post but uncertain about any plan to maintain a stable government. The multitudes protesting on the streets were certain they would stay put as well until the President ‘went home’, but uncertain what would happen thereafter.

Such is the paradox the country is up against. The unfolding drama between the two and as to who will blink first is being watched by the whole world especially the foreign funders. Many are those who expect a ‘regime change’, but others dismiss it as improbable.

The President has dug in his heels refusing to bow to the demands of the growing mass agitation for his ouster, which though it might achieve the objective of the popular outcry, could also trigger a dangerous and arguably worse, political and constitutional crisis with no specific Government or Opposition alternative so far in sight.

On the other hand, the President seems paralysed by recent events. The protesters are blocking him from coming to his office. He doesn’t even stay at his private residence anymore. While he can always operate from elsewhere, he seems somewhat incapacitated. He has two fronts to combat — political and economic, in the face of an implosion within the ruling coalition ranks, the country declaring it is virtually bankrupt for the first time in its history in the midst of an unprecedented popular uprising demanding his resignation.

The Government for all intents and purposes has lost its majority in Parliament. That, however, doesn’t mean the Opposition has a majority either, given the fence-sitting by so-called ‘Independent’ groups neither here nor there, only adding to the political instability. They want an interim government with themselves in it, a case of changing pillows for a headache.

The People’s Movement has no ready answer either for a post-Gotabaya Rajapaksa era should the President throw in the towel. For how long therefore does this standoff continue?

The greater priority would seem to be to stabilise the deteriorating economy. The Central Bank took some hard decisions by going for the default option i.e. to stop settling ISBs (International Sovereign Bonds) and basically to say, Sri Lanka is bankrupt. It is now official. The country does not have the money to repay the foreign loans it must settle right now.

This was inevitable. The Treasury cannot refinance the maturing foreign loans. Local banks are not even honouring credit card payments for USD 100 for essential internet services. It is not unusual though for a country to go into an orderly default as long as it means ‘restructuring’ the loans — a debt relief process. So, Sri Lanka is now in the ‘restructuring’ business.

The newly appointed and re-appointed Finance Minister left last night for Washington DC to talk to the World Bank and the International Monetary Fund (IMF) carrying with him arguably the most difficult brief he has received, far more difficult probably than all the bad briefs he had in defending his client, Mr. Gotabaya Rajapaksa.

The restructuring business has already got underway with a freeze on recruitments to the public sector, a float of the rupee to the dollar etc. The prescriptions to come in return for any bailout from the IMF and emergency relief packages for food and fuel to put local industry and agriculture back on their feet are going to be immensely painful unless there is a ‘safety net’ provided for the increasing poor.

Fortunately, there is some all-party consensus that the IMF is the last chance saloon for Sri Lanka, but the ‘haircuts’ as the IMF prescriptions are called, are something the Government will have to brace itself for with the trade unions in the months ahead. It will be a mountain to climb for an already unpopular Government. But that is for a later date.

The Central Bank had, inter alia, asked overseas Sri Lankans to chip in with their dollars. India did the same a few years back, but then the sitting Government in New Delhi was at the height of its popularity within and outside India. The Rajapaksa Government on the other hand is facing a severe trust deficiency, not least where money matters are concerned. Overseas Sri Lankans are already giving excuses saying they will not subscribe until “the rogues in Sri Lanka” are out of the scene. And not all overseas Sri Lankans are flushed with money. One third of them are housemaids or menial workers in West Asia, South Korea etc. It is their remittances on which Sri Lanka has partly survived all these years anyway.

Not that the better-off Sri Lankans abroad rush to remit money to Sri Lanka to save the nation. A glorious example is the Diaspora that keeps calling for accountability on human rights issues in the North, but has ‘deep pockets and short hands’ when it comes to investing in the North.

The general demand to recover the ‘billions’ plundered by politicians and their ‘partners in crime’ in recent years to finance part of the shortfall of dollars is a distant dream under whatever Government, present or future. As long as the perpetrators can hide in Dubai or Singapore or buy their citizenship in other countries, none of this will happen.

The half-hearted attempt by the previous Government in appointing a Presidential Task Force that co-opted the help of the UN and the World Bank’s StAR (Stolen Assets Recovery Initiative) went nowhere. Those entrusted with the job went to Addis Ababa, Lausanne and St. Petersburg for conventions and all that happened were the press releases of their speeches. The investigating arm was itself corrupt, sending half-baked reports for the Attorney General to file indictments that failed the scrutiny of a court of law. There was no political will as time went by to pursue vigorously what they had promised to those who voted them into office.

It is not that such action cannot be taken. The many findings of the Auditor General and Presidential Commissions of Inquiry provide for ample evidence of corruption. This newspaper has published enough rackets and just last week reported the colossal loss to the country’s depleted dollars in the purchase of sugar under this dispensation. Is the President wearing tinted glasses is the question. Reports are swirling around about the national airline carrying ‘printed material’ to Uganda, a country just declared as one engaged in money laundering.

All this may not be the immediate priority, however much it remains on the wish list of the suffering masses. Will the President show any inclination to take action on this front? Probably not. The ship of state has hit an economic iceberg and is sinking. The captain of the ship is dazed by the events unfolding around him yet wants to remain at the wheel. He must douse the fires aboard and address the burning issues before the ship sinks with him, and his people.