Challenges of the first 100 days


In the 48 hours after the presidential election, the present writer appeared on a live news telecast on Al Jazeera and said that only one man can ensure stability at this point in time and that is the newly appointed Prime Minister Ranil Wickremesinghe. He and the UNP he leads may not have the flair of the Rajapaksas, but he is a level headed politician who can prevent anarchy and hold the ship steady. Originally, the talk was that the UNP would get only 50% of the cabinet slots with the rest being shared among the others. It was certainly a surprise to see that the cabinet that was appointed was almost completely UNP with only Champika Ranawaka and Arjuna Ranatunga as outsiders. Dr Rajitha Senaratne is not a member of the UNP now but he was in the UNP earlier and after he left the Rajapaksa government, he told the present writer that he will be contesting the next election on the UNP ticket. The other non-UNP ministers are all minority party leaders like P.Digambaram and Rauff Hakeem who align with either the UPFA or the UNP as circumstances suit them.

It is thanks to this almost completely UNP cabinet that things have remained politically and economically stable up to this point. At least there is no chaos or a complete breakdown in the country. But hardly had it appeared that the UNP was in charge, former president Mahinda Rajapaksa relinquished control of the SLFP and handed over the chairmanship of the party to Maithripala Sirisena. The latter was elected to power on what was largely a UNP vote. One can see from the voting pattern that Sirisena got only a marginal number of SLFP votes. But now Sirisena finds himself as the chairman of the SLFP and the leader of the UPFA which has a large majority in parliament. This peculiar situation of the new Opposition Leader, Nimal Siripala de Silva, having a comfortable majority in parliament while the prime minister commands the minority can hardly be expected to last very long. But an SLFP without the Rajapaksas will be a radical departure from what we had got used to over the past nine years. It is the Rajapaksas who turned the SLFP into a party of doers. The SLFP without them will be the same old unsuccessful outfit that we had between 1994-2001 and 2004-2005.

If the present minority government holds, that will be only because everyone sees it as a temporary arrangement for 100 days until the executive presidential system is abolished and a new electoral system is introduced. But there could be snags on the way which the new government should watch out for. For example, according to the 100 day program of the new government, the process of abolishing the executive presidential system is to begin as early as January 21. There were various opinions about the abolition of the executive presidential system even among the political forces that supported Sirisena. Some wanted complete abolition while others like the JHU wanted to retain the presidency but with truncated powers. This however will be one of the easier points to handle as most of those who speak of abolishing the executive presidential system really want it abolished with a ceremonial head of state as in the pre-1978 era.

The restoration of the independent commissions for the police, judiciary, elections and so on, is the next priority. This too may be achieved without much of a problem because  all the political parties represented in the Public Petitions Committee of Parliament including the UNP, JVP and TNA had discussed the shortcomings of the independent commissions established earlier, and arrived at a consensus in 2008 that these commissions have to be reformed and made responsible to parliament and that bodies like the Public Petitions Committee should have the right to overrule any decision made by the independent commissions. But what has not been worked out adequately is the method of appointing the Constitutional Council which makes all the important appointments in the country. The old 17th Amendment had an incredibly complex method of making appointments to the Constitutional Council and it soon became unworkable with things reaching an impasse. The political parties will have to design a less complicated method of appointing the Constitutional Council - a process that may take time.

A recommendation that the present writer can make in that regard is that the Parliamentary Council that was introduced by the 18th Amendment should be retained and empowered to make all the important appointments. The Parliamentary Council is a very simple mechanism which is made up only of the PM and another MP appointed by him, the Opposition Leader and another MP appointed by him and the Speaker of Parliament. A small body like that has a much better chance of arriving at an agreement in making appointments to the various commissions and the judiciary and so on. Be that as it may, the real difficulties will emerge not in abolishing the executive presidential system or the introduction of the independent commissions, but in making changes to the electoral system. It need not be said that the abolishing of the presidential system of government and reintroducing a parliamentary system depends on changing the electoral system.

Biggest hurdle: electoral change

Virtually nobody says that a parliamentary system of government should be introduced while retaining the present proportional representation system. Indeed that would be impossible as governments would not be able to get a proper working majority in parliament under the proportional representation system. The discussion has been to introduce a hybrid first-past-the-post and proportional electoral system. There was a Parliamentary Select Committee appointed to look into this matter in the last parliament headed by Dinesh Gunawardena. The conclusion arrived at by that committee was that 140 MPs should be elected on the first past the post system from the electorates with 70 more being elected from the electoral districts on a proportional basis. The best losing candidates in the electorates of each district will get a chance to enter parliament on the proportional representation (PR) basis in the second round. The national list will have 15 seats. Even though this proposal was discussed extensively in the PSC, only the members of the then UPFA government signed the interim report. The UNP abstained from signing on the grounds that the views of the smaller political parties should be accommodated.

The smaller political parties like the SLMC and the JVP vehemently opposed the hybrid electoral scheme and it is to be expected that they will do whatever they can to ensure that the new electoral system never sees the light of day. The reason why the JVP came running and joined the National Executive Council to oversee the implementation of the 100 day program is obviously to protect their interests and to try and scuttle the proposed electoral reforms. Ironically, the smaller parties like the JVP, SLMC and Rishard Baithiudeen’s ACMC supported the common candidate project but now they are in danger of being seriously undermined by the very promises that they themselves made! But the UNP and all the political forces associated with President Sirisena will be unable to go to the people again without abolishing the executive presidential system, and introducing a parliamentary system of government which in turn cannot be done without changing the electoral system.

As far as the system proposed by the Dinesh Gunawardene committee was concerned, the UNP did not have any basic disagreement except for saying that the views of the smaller parties have to be accommodated. If the UNP and the UPFA now try to keep the smaller parties happy, the most fundamental promise of the 100 day program will remain unfulfilled. In this scenario the UNP and the UPFA have no option but to ram through the change in the electoral system despite protests by the smaller parties. Basically the hybrid system will strengthen both the SLFP and the UNP and it is in their interest to see that the hybrid system is introduced. Just to take the UNP as an example, under the present electoral system they don’t have a single MP in the Nuwara Eliya district.

What has happened is that small Tamil parties that form alliances with the UNP at election time contest on the UNP list and the Tamil people in the district cast all three preference votes for Tamil candidates. The same thing happens in the UPFA list as well and the result is that in both the UPFA and UNP lists in the Nuwara Eliya district the three top candidates are all Tamil. The same thing has been happening to the UNP in the Kandy district where three Muslim candidates including Rauff Hakeem contested in 2010 and the Muslims cast all three preference votes for Muslim candidates. The Kandyan Sinhalese have always been strong support base for the UNP but as of now the only Kandyan Sinhala UNP MP elected from the UNP is Lakshman Kiriella. Under the hybrid electoral system, each electorate will have an MP and the UNP will be able to serve their base among the Kandyan Sinhalese without having to cede what is rightfully theirs to organized minority parties.

Besides, under PR, the minority parties were busy promoting ethnic disharmony. It was in the interest of the minority parties to see to it that members of their community saw members of other ethnic communities as enemies. Besides, you found minority community leaders moving from district to district trying ‘harvest’ the ethnic vote in those districts. A good example is that of Mano Ganesan moving from the Colombo district to the Kandy district and of Rauff Hakeem moving from the Ampara district to the Kandy district. Such things lead to the ‘hollowing out’ of the two main political parties, i.e. one sees ‘UNP’ or ‘UPFA’ parliamentarians on paper but they are actually members of minority parties. For example, in the Vanni district the UPFA has two MPs, but they are actually members of the ACMC. The SLMC and the ACMC were spreading their tentacles all over the country by contesting even districts that had small concentrations of Muslims with the intention of getting at least Provincial Councilors and local government members elected.

This was clearly not a situation that could have continued. One of the biggest faults of the Rajapaksa government was that though they had a two thirds majority in parliament, they did not reform the electoral system. They introduced the proposed reforms only at the local government level and stopped at that. They did not introduce reforms at the provincial and parliamentary level. Since there is now once again an opportunity to get the electoral system changed, the necessary reforms should be rammed through by the SLFP and the UNP regardless of the representations of the smaller parties. The advantage in having the hybrid electoral system is that it would promote ethnic harmony by compelling the electoral organizers to maintain cordial relations with all communities within his electorate. Furthermore the political parties would be able to appoint members of the minority community to organize Sinhala majority electorates as in the days of old when M.H.Mohamed represented Borella and A.C.S.Hameed represented Harispattuwa.

Conversely, minority community organizers appointed to electorates with sizable minority communities will have to woo members of other communities living within their electorates so as to make every vote count. The ethnic exclusivism that we see among minority community politicians today will disappear at least in areas outside the north and east. Even under a hybrid electoral system, the minority parties may not disappear. They can always continue to exist by forming no-contest pacts with the UNP or the SLFP. But even when a no-contest pact is entered into, the candidate they put forward in a particular electorate has to get votes from all communities living within the electorate. So the minority parties if they want to survive outside the north and east, will have to change their entire outlook.  A member of the SLMC for example will not be able to simply walk into an electorate and get elected by preaching ethnic exclusivism. He will have to put down roots in the electorate and build relations with all communities if he is to have any hopes of getting elected.

The biggest challenge that the new government will have is to resist the minority party and small party filibustering over electoral changes that they are bound to encounter at the level of the National Executive Council. Discussions on the proposed electoral reforms are supposed to start before the end of this month and conclude by March 2 and the legislation should have been passed by March 17 according to the schedule. The UNP and SLFP should ensure that these deadlines are adhered to. Both the SLFP and the UNP have been short changed and betrayed by the minority parties on numerous occasions and they should make use of this opportunity to put an end to the preaching of ethnic and religious disharmony for political advantage.

The economic program

The economic program for the 100 days consists mainly of increasing the salaries of public servants and reducing the prices of 10 essential items by removing indirect taxes and also reducing the price of fuel once again by reducing the taxes. Increasing income levels is important for the economic wellbeing of any country. Most Western countries have minimum wage laws to prevent incomes from going below a certain level. The prosperity of a country is also measured by the income levels and lifestyle of the people. Today, almost everybody has a mobile phone, a TV, refrigerator and even items like washing machines and vehicles like trishaws and motorcycles are commonplace. All those are signs of increasing incomes and improving lifestyles. In countries like Japan, even private sector wages are negotiated on an annual basis – all in the name of maintaining minimum lifestyles. So nobody can say that increasing salaries is a bad thing.

But there are pitfalls that the new government will have to watch out for. The immediate salary increase that has to be given is Rs. 5,000 for state sector employees. The previous government had also provided for a salary increase for public servants from January this year so the new government will be able to freewheel on the provision made by the previous government in giving the first increase of Rs. 5,000. But they will have to do this with unforeseen reductions in the income of the government due to the simultaneous pledge to reduce the taxes on 10 essential items and on fuel as well. Taking cuts in government revenues while increasing salaries at the same time will put an enormous strain on government resources and the new government will have to exercise care in where they pull money out of because that could lead to an undesirable chain reaction. For example, if they pull money out of domestically funded development projects that will not only put people out of work, it will also give people the impression of a slowdown. The irony is that the UNP which always wanted a small government service is now saddled with paying a huge salary increase to a bloated state service.

The new government should be mindful of the fact that the Rajapaksa government maintained a situation of the utmost economic confidence. Last week, word spread among the construction industry that two Chinese funded projects the Kaduwela-Kerawalapitiya highway and the Northern Highway had been temporarily halted for an evaluation of the project and that already has members of the construction sector muttering with discontent. Apart from the local contractors, the donors for the project are also furious as evidenced by the biting editorial published by the Hong Kong based South China Morning Post Under the title "Sirisena must not bite the hand that feeds". The editorial went on to say, "China was turned to by Rajapaksa for infrastructure deals and loans that Sirisena alleges are unfavourable and will enrich the former leader and his family. The new government will investigate the claims, but deals that have been signed have to be honoured." The Chinese probably are hurt to the quick by allegations made by the opposition that projects funded by them were mired in corruption. The Chinese have very strict anti-corruption measures in place with the death penalty being handed down for those caught with their hands in the till. To be accused of brazen corruption despite such measures obviously undermines confidence in Chinese projects throughout the developing world!

The stock market showed slight declines and by Friday was showing signs of people preferring to sell rather than buy. In this kind of economy, the market operates on perception. The reason why there has been no panic is entirely because of the UNP’s preponderance within the government. If not for the UNP’s economically reassuring presence, the country would be in a state of panic by now. This why it is important not to pull funding out of the wrong places to fund the increase in salaries and to compensate for the loss of revenue from taxes on fuel and other essential items.

The new government should be also mindful of the fact that while they have pledged to increase the salaries of state sector employees by Rs. 10,000 (Rs. 5,000 immediately and another 5,000 later), the minimum wage of a private sector employee still remains at Rs. 10,000. And it was brought up to that level only in the last budget. There are far more employees in the private sector than in the state sector. By giving state sector employees and increment bigger than the minimum wage of a private sector employee the government is in effect turning state sector employees into an elite, with bigger salaries, more job security and pensions none of which the private sector employees have. This will have the effect of increasing pressure on politicians to provide their supporters with government sector jobs – every politician’s nightmare.

In a way, Ravi Karunanayake has got one of the most sought after jobs in any government – the finance ministry. But he also faces the biggest challenges and he holds the future of the entire UNP in his hands. The Rajapaksa government kept the interest rates low, the exchange rate was held steady, inflation was managed, and income taxes were kept at the lowest rates in history. These fundamentals will have to be maintained just as they are at least within this crucial 100 day period if the largely UNP government is not to suffer serious consequences. Whatever may be said about the UPFA’s economic management team led by the likes of P.B.Jayasundara and Ajith Nivaard Cabraal, they had immense skill and they steered the country through the war and the worst world recession ever seen since 1930 - in 2008-2009. This writer once told the international rating agencies at a consultation that if this country did not collapse in 2008-2009 with a war raging in Sri Lanka and the entire world reeling under the worst recession since 1930, then this economy is not going to fall now. Now, the UNP will have to take the baton from the UPFA. The only party that has even a chance of ensuring economic stability is the UNP. The UPFA has no chance of doing that without the Rajapaksas and their team.

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