by R. M. B. Senanayake
The strikes in the health sector first by the nurses and then by the para-medics showed that the government is unprepared to deal with industrial strife in the public sector. The recent noises made by the JVP show that a showdown is in the offing.

Need to restore law and order

The UNF Government must realise that one of the reasons the people voted for it was because they were fed up with the anarchy that President CBK had brought about in society and the body politic. People particularly the middle class wants effective government. Who are those who constitute a threat to law and order? Firstly they are politicians themselves and their supporters who had got used to engaging in the worst crime and escaping because the police dare not touch them. Underworld big names like Baddeganne Sanjeewa were in cahoots with them. Have things changed? One hopes so although one begins to doubt it when the sons of ministers and their guards brandishing weapons and assaulting those who have the slightest brush with them.

A son of a previous minister was suspected of murder but the police never solved the crime. How many such crimes are still waiting to be solved? Journalists were murdered and even the murder of Kumar Ponnambalam is still to reach the courts. The UNF dispensation has failed to solve these murders but have also permitted the sons of their own ministers to act with impunity. Why should lawyers be allowed in police stations on behalf of these ruffians? Where is the equality before the law, which the Constitution lays down? The Minister of the Interior intervenes on behalf of another minister who defies the police. In a developed country both ministers would have been forced to resign one for defying the law, the other for undue interference in its due process. But it is not so in what was once called a five star democracy by another hypocrite.

So the public grin and bear while their leaders who are supposed to serve them lord it over them. Their sons provide a perfect role model for the youth of how to resolve differences and disputes. So now we find schoolboys also copying their example realising the value of resorting to force to settle scores. The people attack the bus drivers who run down their children accidentally. They might well argue that the police have given up their function as peace officers charged with the duty of maintaining law and order and therefore each one for himself and fists and muscle are the best enforcers. Effective government means that the monopoly of the use of force is with the government. The law must be enforced even against the rich and powerful no less than against the hoi polloi.

Face up to the challenges to authority

The challenge before the administration is to restore effective government. This means facing up to the challenges to lawful authority posed by powerful interest groups in society like the ruling party politicians, the underworld criminals, the casino operators, the hooch dealers, the drug dealers and above all the trade unionists, the corrupt businessmen and corrupt professional groups even among the lawyers, doctors and accountants who feather their nests under the cover of professional norms. Ours is not a free market democracy but at best crony capitalism in a fake democracy. Crony capitalism never produced economic growth, never mind the crap about the private sector being the engine of growth. This is not the type of private sector economists refer to.

The Trade Union threat to the government

The immediate threat to government’s authority is from the trade unionists which are dominated by anti-government leaders. They never voted for the UNP in any case. They oppose all that the present government stands for — the privatisation programme essential to reduce the debt burden, the deregulation efforts which are necessary to release the energies of the private sector to embark on entrepreneurial activity, the efforts to modernise education particularly university education which is critical for the development of the economy and the efforts to establish an endurable peace with a viable political settlement of the ethnic issue.

In an economy where there are many thousands unemployed, they oppose labour market reforms which are vital to create jobs and make the economy competitive vis a vis the rest of the world. In an environment of globalised economic activity we can survive only if we are competitive and all barriers to such competitive behaviour by business must be removed for our very survival. It is useless bemoaning the forces of globalisation. Our agriculture, our industry and our services like the port, the railways communications, and banking and finance must all become competitive. We cannot permit either monopoly or monopsony, the latter referring to monopoly on the part of suppliers of labour and other factors of production exercised by trade unions.

Those who are already in employment particularly in the public sector and the banks are the aristocracy of the employed class. They can hardly be called the working class since they all belong to the white-collar occupations. They work when they like and although they are supposed to serve the people they in fact lord it over them. No government has managed to break their power over the people. They decide when to strike and couldn’t care less if the public whom they are supposed to serve have to die without medical attention. What a pathetic display of governance by the Ministry of Health? The greatest service President J. R. Jayewardene did to the people was to break the power of the politically affiliated trade unions when they called the July 1980 strike. We have always had namby- pamby leaders who always gave in to the most unreasonable demands. But President JRJ stood firm and for once carried out a threat, which he warned the strikers about. Thousands who defied the government were sacked.

Other leaders in other democratic countries have done the same. Margaret Thatcher tamed the British miners union and its bragging leader Peter Scargill. They both established an era of peace in industrial relations, which led to prosperity. But the effects of such action have now worn off as new leaders have taken control of the same trade unions. In this New Year we are likely to see the trade unionists girding their loins for battle and it’s likely to be the mother of all battles. The government didn’t seem to need much persuasion to give in to the demands of the nurses who were led by a pro-government monk. But the government cannot afford to be selective in its pay negotiations as the subsequent strike by the paramedics showed. In the battles that loom ahead the government cannot afford to be partisan, favouring those trade unions which are affiliated to its party while resisting the demands of others.

Don’t appease trade unions

Resistance to trade union demands is always a strain on the government and the public are so fickle that they will not appreciate that the government is really acting in their interests. They may very well show sympathy to the strikers unless they suffer so enormously as in the case of the strike by health sector personnel. But appeasement or surrender will only sow the seeds of more trouble. Trade union leaders are quick to note any signs of government weakness and will be encouraged by such weakness. The uneasy cohabitation between the president and the prime minister will mean further strains as interested parties fish in troubled waters. The government cannot court unpopularity. Whenever one group of trade unionists make their demands and succeed others will look upon with envy and will be distressed by the success of their rivals.

Already the minister of health has made an unpardonable error in giving in to the nurses, a group who bring shame upon Florence Nightingale. Now that it is involved it will not extricate itself undamaged. If it continues to surrender it will create dreadful precedents and encourage other groups to strike too.

With the chaos in the administrative machinery, the authority of the government is limited to paper. The ministers may think their departments are ticking when officials pretend to work in their presence, but the public know otherwise. The government must understand that the trade unions want to smash the government. The job of the government is to ensure that they do not succeed. If the government is unsuccessful in this it will continue in office but it will not be in power. The government already feels itself checkmated by the president. This of course is not a bad thing if the president confined herself to acting as a check on bad governance by individual ministers or when the government as a whole departed from the norms of good governance. But that would be too much to expect from a politically partisan president.

The government must realise that no pay claim in the public sector, whether by nurses, doctors, or railwaymen can be taken in isolation. If one group wins its claims a series of other catch-up claims are inevitable. This will knock the daylights out of the government’s budget. In spite of the rhetoric of the minister of finance, the government is finding it hard to maintain recurrent expenditure as budgeted. One can predict for certain that there will be over-runs in the recurrent budget.

No Pay Strategy for the Public sector

The problem is that the government has no pay strategy for the public sector. How much of an increase in pay can the government accept without worsening the budget deficit to rein which the government has agreed with the IMF? If the government fails to curb the wage demands in the public sector it will not be able to keep to the conditions agreed with the IMF. We can call the IMF names but there is no other body to give us foreign exchange when we run into Balance of Payments difficulties. The alternative is to starve as the Argentineans are now realising. Strict wage discipline is a sine qua non to control inflation and maintain the exchange rate. This is likely to come under severe pressure this year.

Fixed salary contracts

Will the government fail in its obligations agreed with the IMF as its predecessor did? What would that mean for the economy - higher inflation and depreciation of the rupee.

The problem with the public sector salary structure is that it is not based on the market. The Treasury and the Ministry of Public Administration don’t look to the market when they fix the salary scale for a job or occupation. They decide that one job or occupation must have a higher salary scale than another because this other group requires more education or training. Most training is in-house and provided by the government itself. This is no sound basis to fix salary scales. Salaries should be determined by supply and demand. There is a definite over-supply of persons for white-collar jobs and this is seen in the large number of applicants for such jobs.

In fact it is not necessary to fix salary scales at all before advertising such jobs. The line department should instead be given a range of pay within which to recruit. Salary scales, which are career based, should be drawn up later if at all to retain personnel who have been trained in-house and whose experience is useful. Such salary scales should be fixed only after taking into consideration the demand throughout the public sector for a particular occupation where comparable. But fixed renewable contracts should be adopted for all new public employees recruited to the public sector. This will enable the government to terminate employees whose work is unsatisfactory without going through the tortuous disciplinary procedures which stultify the enforcement of discipline in the public service.

Interdiction with return of job after a time when the charges are either dropped or not proved is the order of the day. If dismissed they can go to the courts. So it is no wonder that public employees shirk work, steal, cheat and plunder public funds. The leftists should tell the country what is happening in Communist China. China has decided to put all public employees on specific contracts for limited periods. Lifetime employment is a thing of the past and the government has taken a necessary step to recognise this change, which has come about in the modern economy due to globalisation. Strikes, threats and political pressure to insist on an ‘acquired right’ to full employment will not help to preserve it. The trade unions by resisting much needed labour reforms are not helping their cause. Instead they will only bring the whole house down for all and bury themselves as well.

They should learn from the trade unions of Germany & Japan, countries destroyed by the world war but which rose from the ashes because their workers came to an agreement with the employers and the government not to strike until the economy was re-built. Today these workers enjoy higher living standards than the British workers who resorted to the luxury of strikes throughout the post-war years — the so-called British disease, until Margaret Thatcher took them on. If the British economy is still growing and growing without inflation it is because of the foundation she laid down by reform of the labour laws and curing the British disease.

If trade unions are to determine public sector pay the hopes of the government to improve the public sector are doomed. There are very few cases for an increase in public sector pay and that is where the government is unable to retain the services of experienced persons or persons with some unusual skills. The best test is to advertise and see if there are applicants or not. If there are no applicants then there is a case for higher pay unless such personnel are not available at all in the country or are unwilling to move from the private sector to such jobs. But the government and not the trade unions should determine when and how adjustments should be made to public sector pay scales. If the government fails to maintain wage discipline in the public sector, its pledge to the IMF to bring down the budget deficits will become a mere piece of paper. If we fail to achieve macro-economic stabilisation we are doomed as a nation. But such stabilisation cannot be achieved by giving into the trade union demands for wage increases.

Keep the guard up

The government should keep track of all trade union unrest in the different departments so that it will not be caught unawares when a strike breaks out. The government must insist on strike notice and those who do not provide such notice should be liable to punishment for violation of the law. The government should establish an Arbitration Service to go into pay claims such as anomalies in salary scales. Trade unions don’t like to be bound by arbitration awards and hence they could be non-binding. But such awards could be most enlightening to ministers and officials when they do go on strike after failing at arbitration. As it is ministers are clueless when sudden strikes take place and then they make fools of themselves by providing ad hoc adjustments, which create further salary anomalies and rival claims from other groups.

Ban strikes in essential services

Finally it is time the government took a firm stand on strikes in essential services - essential not for the middle classes but for the large mass of the poor. Hospitals are certainly an essential service for the poor and strikes in hospitals should be declared illegal and those who resort to strike should be dismissed as the President of the USA did to the thousands of air traffic controllers some years ago.

Tony Blair recently said that he had lost his love for popularity for its own sake. Prime Minister Ranil Wickremasinghe said the same thing about the ethnic issue. So the prime minister must instruct his mediocre ministers to act on principle and not give in to expediency. If the ministers continue to give in to every trade union demand every trade unionist will know that the government can be pushed around and then the road to anarchy will open which SWRD traversed in the late 1950s until his demise.
(Send your comments by E-Mail to rmbs@sltnet.lk