This Is My Nation - The Nation

It is the economy that matters


The country’s major opposition party, the United National Party (UNP) also appears to have realised that it is after all the economy that matters. They should know: many believe the short-lived United National Front (UNF) regime collapsed in 2004 partly because its economic benefits were designed to give only long term yields and there was no short term redress for the masses.

When a then little known man named Bill Clinton launched his campaign against the incumbent President of the United States, George Bush (Snr.), his campaign strategist James Carville hung a sign in Clinton’s office in Little Rock, Arkansas to constantly remind his candidate what the campaign was all about. That sign simply said, “It’s the economy, you stupid!”

That Clinton trounced Bush at the election that followed notwithstanding the latter’s success in the Gulf War, is now history. But, if there are any strategists left in President Mahinda Rajapakse’s team of advisors at this point in time, they might as well take serious note of Carville’s advice.

In fact, after a long and self imposed slumber, the country’s major opposition party, the United National Party (UNP) also appears to have realised that it is after all the economy that matters. They should know: many believe the short-lived United National Front (UNF) regime collapsed in 2004 partly because its economic benefits were designed to give only long term yields and there was no short term redress for the masses.

Traditionally since independence, UNP governments have been better managers of the economy than Sri Lanka Freedom Party (SLFP) led coalitions. Thus, while the government of Sirima Bandaranaike in the early seventies is best remembered for the economic hardships it imposed on the country, the J.R. Jayewardene regime that followed is credited with liberalising the economy and paving the way for sustainable reform.

Chandrika Kumaratunge who followed seventeen years of UNP rule was ideologically more of a socialist than a capitalist. But realising that offering to discard the popular open economic policies would be political suicide, she ran with the slogan ‘An open economy with a human face’, a reference to tackling the corruption that had set in with liberalisation.

The Kumaratunge era failed to do much either in the economic sphere or in terms of the other major issue it was confronted with-the North East crisis of terrorism. But its failures now seem to pale into insignificance, considering the downward spiral the economy is experiencing right now.

A glance at the week’s headlines paint a dismal picture. The price of milk food increased, gas prices also rising, the government imposing a series of stealth taxes amidst much controversy in Parliament, and the Leader of the Opposition threatening to cancel the banking license of a global bank if it proceeds to offer succour to the government by way of a five hundred million dollar bond issue.

Inflation is rampant and interest rates are soaring. In a climate of uncertainty, investors are hesitant to pump their dollars into the country, especially when the noises the government makes vis-a-vis the ethnic conflict are designed to provoke rather than placate.

Problems
The problems President Mahinda Rajapakse is faced with appear to be two-pronged: on the one hand, being elected on a populist platform where he attempted to offer everything to everyone, his government lacks a cohesive policy and vision with regard to the economy. On the other hand, Rajapakse has to appease his many political partners which create a picture of immense wastage especially when the cabinet itself numbers over a hundred.

Then there is more than a whiff of scandal. The recent hullabaloo over the Benz vehicle imported by a monk turned Member of Parliament erupted into one big controversy. Purchases for the war including those of the MiG aircraft are equally contentious and the report of the Committee on Public Enterprise (COPE) headed by government parliamentarian Wijedasa Rajapakse stinks to high heaven.

The resultant picture is that of a banana republic like state where the powerful have everything, and the poor, nothing. To add to the President’s woes, the Janatha Vimukthi Peramuna (JVP), his ally during the election which won him many a proletariat vote, has now taken up cudgels against him. This week saw the JVP casting the first stone against Rajapakse, voting against the government in Parliament in the five controversial finance bills.

Most of these critics would be silenced if the government is able to find some tangible solutions to the rising, or rocketing, cost of living. But this is precisely what the powers that be seem unable to do. In this respect, there is no spectacle worse than Minister Bandula Gunawardena, who seemed to have the answers to all the country’s economic woes while he was in the UNP, only to develop some spectacular amnesia since he crossed over to the government ranks!

Economic strategy
If there is indeed an economic strategy in the Rajapakse regime, it does not seem to be working. What seems to be there instead are excuses for wasting colossal amounts of money, the Weerawila airport and Mihin Air being two classic examples.
No one would deny that the country would benefit with a second national carrier or another international airport, but the pertinent question is, for a cash-strapped government, should these money guzzling enterprises be priorities? What justification would they provide to be top of the list choices, except for reasons of personal aggrandisement?

What is certain now is that the government’s popularity is waning, and the masses’ economic woes are contributing significantly to this predicament. President Mahinda Rajapakse may well believe that come what may in Parliament, he would continue to be the Executive President. But that is the very reason why he should act quickly and decisively to stem the economic rot because, in the final analysis, the buck stops with him also for the very same reason: he is the Executive President, not to mention the fact that he is the finance minister as well!

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