How the economic crisis offered a “historic opportunity”

By N Sathiya Moorthy

First, the Ranil team had claimed that the outgoing president would be a “national candidate” in the presidential elections scheduled for mid-October. Since then, President Ranil Wickremesinghe himself has said that the elections will decide the success or failure of the country.

According to him, if the people are satisfied with his government’s policies and economic recovery programs, they can support him, that is to say his candidacy for the presidential elections. Or, they will face the consequences of living in a country whose economy has collapsed, where they will struggle to obtain essential goods like medicines and fertilizers, and will experience long queues for fuel and gasoline.

Indeed, was Ranil cursing the nation with another economic crisis, similar to the one that toppled the otherwise popularly elected president Gotabaya Raapaksa and catapulted him to power? Or, did he boldly embrace his type of economic reforms as the only path to the nation’s recovery, even though it would take time, and both of his recognized candidates had one or more alternative models to to propose ?

It is true that beggars do not choose and that Sri Lanka, at the height of the economic crisis, had no choice but to accept the IMF’s condition. Does this automatically mean that his rivals will not follow the reformist past, especially when none of them said so?

On the contrary, Anura Kumara Dissanayake of the JVP even declared early on that if elected president, he would talk to the IMF, but renegotiate the terms and conditions, now accepted by the outgoing president. SJB’s Sajith Premadasa has vehemently criticized every reformist move by his former UNP boss. He also did not propose an alternative model.

But Sajith, between the two, is more expected to have a better working model to offer than Anura. That doesn’t mean neither has any, though – which is what Ranil is now implying.

Get defensive

The answer to the question of whether both, or at least one of them, had a functioning post-reform economic model would have been known if only Sajith and Anura had conducted the promised economic debate before a national audience . Of course, there wouldn’t have been an instant winner and loser in this debate as if it were an annual school day, but the outcome would still have been known during the presidential vote.

In the fray, what most observers missed was that Ranil and his current team were still out of the picture. This places Ranil and his business model above the other two. He did, however, say that he was prepared to debate the current draft in Parliament – ​​but, at least on this point, he had the “incumbent president’s advantage” against the common prevalence of the “incumbent president’s disadvantage”.

Nothing came of it, as Sajith and Anura, or Anura or Sajith alphabetically, debated how to debate – without actually getting into the debate. Certainly the nation was not watching, at least not yet, but those watching, especially journalists and other opinion makers, of whom there are many in the urban middle class and in academia, might have been convinced that both are important. zeros in the department.

Now, even if they have a valid economic program that can “save” the nation from the dominant “IMF model” – just as Ranil says that the “IMF model” alone can “save the nation” – the other two should do additional efforts. efforts to interest opinion makers in them and their model(s) of economic recovery and also convince them that it would work. So, even without their knowledge, the outgoing president has already put his adversaries on the defensive.

Sustainable goals

Amid all this, the United Nations Development Program (UNDP) says the country’s economic crisis offers a “historic opportunity to optimize the use of resources to achieve the ‘Sustainable Development Goals’ (SDGs). This is of course a loaded statement, where the general emphasis is on “development goals” while the UNDP’s is on “sustainable goals”.

If not now, but if it happens a second or third time, whether by UNDP or other international agencies, incumbent President Ranil’s electoral competitors may well start accusing them of launching a campaign not recognized in his favor. Whether intentional or not, they may not be far from reality. Better yet, say UN agencies, with the possible exception of the IMF which is in the thick of things, they are postponing their assessments and announcements until after the presidential election – or even the legislative election, which might not precede the other, as some had predicted. , earlier.

In comparison, the IMF’s statement that it was open to discussing alternatives to the current system, after the vote, should be relatively even-handed, so to speak. This does not prevent the Ranil team from asserting, now or later, that the IMF was capable of being “influenced” by the results of the elections, and not by logical and lasting arguments, as the IMF could have done. current government.

But if the Ranil regime had an alternative model to offer, it did not take the nation into confidence, so that the voter was convinced that one existed, but the government in power was powerless in this matter, mainly in due to inherited charges. Even for Ranil’s candidacy, it would have been better if his leaders had presented their responses to the IMF’s proposals before Parliament – especially after opposition parties stayed away from a consultative meeting called by the outgoing president.

If memory serves me correctly, only ITAK parliamentarian MA Sumanthiran among the invited political leaders attended this discussion from the non-governmental side. The footage of the discussions looked funny, as it showed that the entire government, starting with President Ranil as Finance Minister, other ministerial colleagues and senior officials were sitting there, to convince the only man sitting there. on the other side of the aisle, as if the future of the nation, indeed the world as a whole, depended on a simple nod from this person.

Sharp

But it doesn’t end there. Despite government delays in promised restructuring of the economy, the IMF has released an additional tranche of $33 million as part of the promised $2.9 billion bailout package. The delays include a crucial restructuring of foreign debt, including that of China. In announcing the decision, the IMF said the Sri Lankan economy was “starting to recover” but was “still vulnerable and the path to debt sustainability remained uncertain”.

It is now becoming clear that China, the nation’s chief creditor, has not given up on restructuring, as was once claimed. Or, at least, to the levels Sri Lanka needed to receive the full IMF bailout, paving the way for a greater inflow of foreign investment at levels that would create jobs, increase government revenue , family income and GDP. , All at the same time.

This leaves the question open. If no restructuring is possible so far, none will be undertaken before the presidential election. Theoretically, it would then be up to the successor government to respect new deadlines which would automatically become necessary and required. It can be a continuation of the current one or a new one – it’s up to the voter to decide.

However, the same demands will continue until after the legislative elections, at least for purely political reasons. This amounts to admitting that Ranil returns as president. If there is a new president, he will also need more time to familiarize himself with the IMF’s commitments to his predecessor. If he is a JVP president, he will need even more time to familiarize himself with the political administration, which he is not accustomed to after decades of the party posing as an opposition group minor.

No one, however, should be surprised if Ranil’s rivals start complaining here and now that by releasing the delayed tranche just now, the IMF is favoring the incumbent president in national elections, helping him out. of a difficult situation which, after all, was looming. . And that the outgoing president was not the “national candidate” but that of the IMF and those behind it – something that the Ranil team tried to refute through their inventions, but it is no longer possible!

(The author is a Chennai-based political analyst and political commentator. Email: (email protected))

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