Editorial

In some quarters, the visit of the Managing Director of the International Monetary Fund (IMF), Ms Kristalina Georgieva, to Sri Lanka is being hailed as ‘historic’, welcomed not only by the Government but also the mainstream Opposition.

All economic indicators point to an economy on the road to recovery, under IMF watch. However much the incumbents in office seem to convince themselves that they inherited a completely bankrupt economy, the turnaround came during a period when the political leadership was taken over by someone who has become their nemesis today and whom they are straining to neutralise.

Little is spoken of the diplomatic breakthroughs secured then – that Sri Lanka’s longstanding non-aligned foreign policy was adroitly handled to salvage the country from suicidal financial management.

The IMF Chief paid a handsome compliment to the Government saying; “I think for the first time there is a government that is trusted by the people.” All governments are trusted by the people in their early years in office. She went on to outline the achievements, like 5 per cent growth and bringing inflation down from 70 per cent, attributing these to the incumbents when they were achieved much earlier.

Likewise, the Government reaffirmed its commitment to continue close cooperation with the IMF and other international lending agencies, “aimed at sustaining macroeconomic stability, strengthening governance, promoting inclusive growth and enhancing resilience against future shocks”. Major foreign debt repayments begin in 2028 following the grace period negotiated with creditors. The fifth tranche from the IMF Extended Fund Facility (EFF) is expected next month. But there are rumblings of coal tenders going bad and gas supplies in danger. There cannot be a replay of 2022 of shortages in essential services.

Ms Georgieva uploaded a post at the end of her three-day visit: “Sri Lanka has come a long way. The government’s reform program is delivering for the country and her people. I stressed the importance of staying the course…” She wants the Sri Lankan economy to grow to 7-8 p.c. Unfortunately, her office declined an open media/public discussion with her during her stay.

The Government is keeping faithful to the IMF script. The restructuring of the state-owned power sector is in progress, and the consumers are asked to pocket out higher tariffs so that the deadweight at the board (CEB) can be provided a golden handshake. Such an exercise would have been met with stiff resistance by the ruling party if in opposition, but in office, they realise the need to enforce tough measures. On the other hand, Rs. 25 billion is being infused to keep the national airline in the air.

Many are the detractors of IMF policies, with examples worldwide where the people have suffered due to their ‘bitter pills’, and governments have fallen in the process. It seems the IMF has learnt from these lessons and is more sensitive when prescribing economic medicines for comatose economies. And the fears that the ruling party, given its revolutionary past, would be flying blind have been allayed. It is now flying with operational instructions from the IMF and under constant check through a Governance Diagnostic Assessment, the IMF tool designed to analyse the country’s ‘institutional weaknesses, corruption vulnerabilities and macro-critical governance gaps’.

The IMF’s own credibility will benefit greatly from Sri Lanka’s ‘success story’ at a time when reform of the global financial architecture is at the top of the agenda in many multilateral settings.

For a country that just celebrated its 78th year of independence from foreign rule, praising the arrival of the IMF chief is misplaced flattery. As we said earlier this month, independence and sovereignty are no longer a binary in Sri Lanka, with the latter compromised by international lending agencies like the IMF overseeing the economy now in the grips of the Gordian knot of private foreign creditors.

What’s happened has happened, and the ultimate goal of the Government, as it has said, is to ensure the country does not have to go to the IMF for the 18th time – and correspondingly, welcome another IMF chief.

AI sovereignty

In Colombo, the Foreign Ministry gushingly described the invitation in bilateral terms beyond the multilateral subject of the meeting. “Rooted in proximity, strengthened by trust, and guided by practical cooperation, the India-Sri Lanka partnership continues to evolve with purpose,” it said.

The geopolitics of the Delhi meeting were clear. India, soon to host the BRICS summit of the middle powers of the developing world, was claiming its place as a front-runner in the AI ecosystem currently helmed by the USA and China but also leveraging on behalf of the global South. ‘AI should serve as a medium of inclusion and empowerment, especially in the Global South,’ PM Narendra Modi said. On the sidelines, India and the USA signed the Pax Silica – a US-led strategic initiative bringing together trusted states to build a common supply chain for electronics and critical minerals to avoid ‘weaponised dependency’ on China through its dominance in these sectors.

Mass displacement in the labour market is widely foreseen by the advent of AI, but the yaysayers see AI technology creating new opportunities. The naysayers see tech oligarchs – leaders of the techpolar world – taking control of nation-states from governments whose policies cannot keep pace with advancing technology, and yet, the oligarchs themselves gradually losing control of the systems they create.

AI brings advances in health, agriculture, education and government systems. But like the explosion of the mobile phone now within the reach of the poorest of the poor worldwide, the vast benefits of AI are being weighed with the dangers: countries are considering measures such as banning social media from children; AI-powered Lethal Autonomous Weapons Systems (LAWS), the ‘killer robots’ with a mind of their own, risk putting decisions over human life and death in battle into algorithms free from human control and accountability.

Meanwhile, PM Modi, in his keynote address, presented India’s M.A.N.A.V. Vision for AI – the ‘N’ standing for ‘National Sovereignty’; data belongs to its rightful owner. In other words, data belongs to countries that generate it.

One would hope these ground rules apply to Sri Lanka’s controversial ‘Unique Digital Identity’ (UDI) – the development, implementation and maintenance of a national identity system which is a collaboration with India within the ‘resurgent Indo-Lanka relationship’ and ‘guided practical cooperation’ referred to in Colombo’s foreign ministry statement. According to the Modi Doctrine, the collection of biometric data of Sri Lankan citizens under the UDI project should belong to Sri Lanka, its rightful sovereign owner.