by Tisaranee Gunasekara

"The leaves are falling early this year"
Louis XVI (During the French Revolution)
Let me begin with a necessary digression. Just one month before the US economy went into recession, 95% of American economists predicted that the US economy would not go into recession. That was not all. "Of 60 recessions in developed and developing economies during the 1990s, two third remained undetected by consensus forecasts as late as April of the year in which the recessions occurred." — (The Economist — 1.12.2001).

Efficiency and good management are the watchwords of Mr. Ranil Wickremesinghe’s UNP Inc. The Party after all has a businessman as the Chairman and a former top executive of the Maharaja Group as the General Secretary (both are political novices). The UNP began its nomination process by advertising in the newspapers for candidates, like any good private company.....and ended it with 13 rejected nominations (compared to the PA’s 7 and the JVP’s 2). Given the PA’s well-established and entirely deserving reputation for inefficiency, its seven rejections were hardly surprising. Not so the UNP’s 13 — including in some key places, like the Ratnapura Municipal Council (this is probably the highest number of rejections suffered by the UNP in any nomination process, since its inception).

I call it the Enron-isation of the UNP. Enron was the corporate high-flier that crashed down to an ignominious and destructive end. As the nominations debacle clearly demonstrate, the UNP’s conversion to technocracy and private sector managerial ethos have produced less and not more efficiency. The Party was both ineffective and lackadaisical during most of its seven year stint in the Opposition. And its performance has not improved markedly since its assumption of governmental power. The comedy of errors began with the appointment of ministers (a premier restaurateur recently told me that under the new dispensation, the busiest people are lawyers and surveyors — because of the ongoing war of demarcation of functions and possessions among the members of PM Wickremesinghe’s tangled web of ministers).

The nominations debacle which is only the latest episode of a long line of (often inexplicable) blunders — is symbolic of the gap between the pre-Wickremesinghe UNP and Wickremesinghite UNP in terms of political and governmental ability.

In the last several years, as the blunders and errors of the PA regime accumulated, many of us clung to the belief that some day under a UNP administration there will be a return to efficiency. The new administration’s maladroit conduct is making that belief seem like yet another vain hope. It is almost as if the regime has lost sight of its other obligations and challenges, promises and tasks apart from negotiations with the LTTE.

The acceleration of the peace process is not accompanied by any discernible movement on other fronts. The economy is not improving; the masses are as overburdened as ever because of the escalating cost of living; the power cuts are continuing; the quality of essential services remains unsatisfactory; many of the PA’s most controversial top appointees are still in place; and the Ratwatte ‘boys’ (wanted for questioning in connection with the Udatalawinna massacre) are still absconding. In fact the rapid pace on the ‘negotiations front’ only serves to highlight the lack of progress on almost all other fronts. The resultant imbalance is serving to heighten the general malaise.

The southern dimension

One of the dangers of the current ‘peace at any cost’ line is that peace is perceived as the panacea for all the country’s ills, political, economic, social. This justifies bending over backwards to satisfy the LTTE (allowing the Tigers to engage in forced conscription and extortion while cancelling the Army’s recruitment drive and reducing defense expenditure). It also means losing the ability to see the issue of peace/negotiations in all its complexity, particularly its impact on an already seething south. Sinhala chauvinism may have lost much of its potency electorally (facts suggest that historically its electoral value was somewhat overestimated — in 1956 S. W. R. D. Bandaranaike’s MEP managed to obtain only 43.7% of the total polled; the old left’s descent into Sinhala chauvinism with "Dudleyge badey masala vadai" line did not help it electorally). But extra electorally Sinhala chauvinism still retains the capacity to wreak considerable havoc, particularly against the backdrop of a generalized crisis.

In Sri Lanka the past is never the past; it is also the present and the future. Peace in the North - East can be the number one priority, but only so far as the south is stable. This is the lesson the Jayewardene regime learnt the hard way, in the post-Accord period. Given his past electoral performance, the new Leader of Opposition, Mahinda Rajapakse is unlikely to be a major problem to the UNP electorally. But in a non-electoral context his panache for "street politics" and his identification with the "radical" tradition of the SLFP (i.e. ethno-populism) can become a major headache to a regime which places a high premium on keeping both the LTTE and the IMF happy.

The issue of negotiations should therefore be handled with extreme caution, never forgetting for a moment the southern dimension. For example it is important to demonstrate that there is a direct link between negotiations and the immediate alleviation of the economic distress of the masses. That will go a long way in taking the wind out of the sails of the extremist forces waiting for another opportunity to set fire to the south.

Fortunately, according to recent media reports, the new administration is unlikely to commit itself to all the devastating conditionalities contained in the agreement signed by the PA regime with the IMF last year.

It is important to remember that some of the economic problems faced by Sri Lanka today (particularly the decline in export demand and foreign investment) are conjunctural and not structural ones. They are the inevitable outcome of the current US/global recession and consequently will become less acute once those crises peter out. It is therefore the height of foolhardiness to implement politically costly and systemically destabilizing structural changes in response to problems which are a function of the current global economic condition. Imposing more economic hardships on masses during hard economic times can only lead to trouble.

As US Treasury Secretary Harry Morgenthau said at the inaugural conference of the IMF and the World Bank: "All of us have seen the global economic tragedy of our time..... We saw currency disorder develop and spread from land to land, destroying the basis for international trade and international investment, even international faith. In their wake, we saw unemployment and wretchedness — idle tools, wasted wealth. We saw their victims fall pray, in places, to demagogues and dictators. We saw bewilderment and bitterness become the bread of fascism......"

Argentina and Enron exemplify the dangers inherent in the economic extremism the IMF tries to impose on countries like ours. Argentina was a globaliser par excellence — in the 1990s it "abolished trade barriers, opened its capital markets to international money and sold everything from banks to ports to foreign investors." (2.2.2002) (Economist). Enron epitomized post-socialist (neo-liberal) capitalism. Its bosses were ideologically committed to and campaigned aggressively for complete deregulation (its creator and CEO Ken Lay had "abiding faith in free markets") while its policy was totally stock market oriented. This combination eventually enabled Enron to overstate its profit by US$ 600 million in year 2000 and to ban its blue and white collar workers from selling their company shares in time (their life savings and pension funds were invested in these shares) while top executives bailed out, selling their stocks at huge profits (Ken Lay made US $ 37,683,887).

Since economic neo-liberalism entails the removal of political, economic and social safety nets of the state, primeval chaos and ruin for the small and middle level people are dangers inherent in the model, as the Argentinean tragedy and the Enron debacle demonstrate. As Theodore Roosevelt said: "more and more it is evident that the state and if necessary nation has got to possess the right of supervision and control as regards the great corporations." — (Theodore Rex — Edmund Morris).

"Square Deal"

Governing a country is like an act of juggling. The golden path is one that avoids extremism of all sorts, and balances contending claims and interests — a "square deal" in the words of Theodore Roosevelt. Everyone must have something to lose because that is the only way to avoid mindsets and acts of desperation. Every group should be made politico-economic-social stakeholders of the system so that they all have an interest in preventing the replacement of order by disorder. This necessitates a holistic approach to policy making, an approach which takes into account the myriad consequences of political, economic and social strategies, specially in a country as polarized and as fragmented as Sri Lanka.

Commenting on a recent IHT/Pew survey which found that a majority of non-Americans see US policies as a principle cause for the September 11th attack, Ivo Daladier of the Brookings Institute said: "we (Americans) are not very good at putting ourselves in the shoes of others" (International Herald Tribune — 20.12.2001). That is the crux of the problem in the technocratic approach to policy formulation favoured by both the PA and the new UNP. Technocrats by definition have only a narrow, partial perspective, a perspective limited to and by the confines of their chosen field — since technocracy is "government by technicians who are guided solely by the imperative of their technology" (Encyclopedia Britannica).

The rationale is that politicians and traditional bureaucrats are incapable of reforming the economy and the polity because of their susceptibility to popular pressure and their innate conservatism. Therefore that task should be handed over to technocrats since only technocrats have the necessary will to carry out unpopular reforms, particularly in electoral democracies. But as the above mentioned record of economists in economic forecasting shows, this is not a very wise thing to do — because the limitations inherent in the technocratic approach precludes the foreseeing of political and economic upheavals. Such myopia can make a regime cavort heedlessly where angels fear to tread — as the PA did and the Wickremesinghe administration is doing on the negotiations front and may yet do on the economic front.

Let me conclude with another necessary digression — the fable of the Gardner and the Lord of the Manor. Once upon a time there was a farmer whose carefully cultivated vegetable garden was being destroyed by a bunch of voracious hares. In desperation, the farmer asked the Lord of the Manor to help him save his vegetable garden. The obliging Lord turned up with a party of friends to hunt the hares. And.....

"The hounds and riders in a single trice
Had wrought more havoc in his paradise
Than all the hares in the vicinity
Could have achieved throughout infinity."
— (42 Fables of La Fontaine - Edward Marsh).