11th August 1996

Of opportunities and subsidies

By Rajpal Abeynayake

The people are not entitled to anything except opportunity. That is the credo of the champions of the anti-welfarist tendency that is now sweeping enlightened Western liberal-democracies. Hard on the heels are ourselves, we who learnt our welfare from the Buddha and probably the same Western liberal democracies.

George Orwell, who wrote Down and Out in Paris, disguised himself as a waif and did the soup kitchen circuit in the Paris of his time. (Orwell could teach our ice cream, parlour novelists a thing or two. He did not believe in writing about hunger and destitution after a gourmet splurge and an orgy for dessert.)

So, Orwell donned a trampís garb, and presented himself at the soup kitchens, or wherever the down and out in Paris would congregate. Fact is, there were no soup kitchens in Paris. Orwell describes a life that will surely elude the imagination of any armchair novelist. In the nights, he found that a trampís life was worse than a dogís life. On an average destituteís day, a tramp couldnít move an inch, or turn over on his side while he slept. When you were sleeping next to another five filthy unwashed fellow down and outs, there simply wasnít the room for it...

But, as our Sorbonne educated President would know, far reaching reforms by the French left installed a welfare safety net that could protect any down and out in Paris from the indignities that Orwell underwent in his self exile in the poor quarter of Paris.

But recently, French President Jacques Chirac declared that the time has come to reconsider such sponsorship. His announcement was heralded by fierce strikes and work stoppages, the likes of which France has not seen in a long time.

In Sri Lanka, these rumblings might have sounded unpleasant for our Sorbonne educated President who is faced with the prospect of making drastic, probably unprecedented cuts in welfare and subsidies in order to salvage an economy that is heartily sick.

But, welfarism in a developed economy as that of France, does not necessarily equate to the welfarism that is practised here. Previous governments, including the presidentís motherís government of 1970, were elected purely on the strength of a welfarist plank. Welfarism has educated the youth, who nevertheless, probably because of the ideas that they inculcated via such education, have rebelled on more than one occasion against the establishment.

Slashing welfare is usually the work of ultra rightwing governments, but now, Sri Lanka is witness to the spectacle of a government identified as left of centre having to contemplate slashing welfare to keep the economy afloat.

The problem now is that the state is running out of largesse to sell in order to raise the funds that are necessary for the economyís upkeep.

We all know that there is no economy to speak of in third world countries such as ours without the dubious support of the IMF and the World Bank. Obviously, the recommended therapy for keeping the economy alive, courtesy these agencies, is to slash welfare in style.

But slashing welfare, say for instance the diesel subsidy, will have the cumulative effect of removing the vital safety net. Once this safety net is gone, it will be quite horrendous to contemplate the repercussions to the social fabric.

Which is of course not to say that the maintenance of costly welfare is good for the state. If welfarism is a strain on major economies such as those of USA and France, one could imagine the repercussions of welfare on a shoestring economy such as ours.

So, G. L. Peiris, the governmentís economic contortionist, is faced with a grim paradox. It was a remarkable balancing act, the last one he did with the budget.

But, this time around, the economic problems, for which the PA has largely nobody to blame but themselves, are of epic proportions.

But, politically, the government is not a write off.

Anura Bandaranaike, the Presidentís political brother has been talking in terms of forming a national government and exiling the President, his beloved sister, to the job of ambassador to the UN if she so wishes! One has to admire the brass that goes into the making of such a statement.

Here is an executive President, who has all powers short of making Anura a woman, according to J. R. Jayewardeneís definition. But Anura has already made plans for shunting her off to the UN...

Except in the event of assassination or physical incapacity, there doesnít seem to be the slightest doubt that this President will complete her term. That was what Presidencies were meant for, under the scheme of things that Jayewardene had in contemplation. If one counts the number of times the idea of national government has been mooted in the last few years, it will be easy to understand why we Sri Lankans always like to talk about the coming non-event. The national government theory is like a reflex attack of conscience. Each time the nation goes through a major crisis, the theory of the national government raises its head. The duty of the opposition, of course is to oppose, and not to form national governments.

You do not have to know Erskine May chapter and verse to be able to say that...?

But, to come back to where we started, if people are entitled only to opportunity, then, if the state cannot provide opportunity, can it not be argued that the state has to provide a poor alternative called a subsidy?

Opportunity cannot be created in an economy not conducive to entreprenuership or in an economy which the wealthy would rather hedge their bets than risk investment.

If the state cannot create opportunity it has to take away the free lunch, but can the state create opportunity without taking away the subsidy?

It is this chicken and egg conundrum which would at this juncture probably decide the fate of our nation. There arenít any laid back solutions to the kind of economic problems we are talking about. J. R. Jayewardene said he needed the Executive Presidency to make the economy get better. Chandrika Kumaratunga needs the Executive Presidency because the economy isnít getting better. Subtle difference?

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