The reasons for the current crisis were analysed and discussed during the past few months, and the culprits were identified. Now, the entire country knows who they are. However, the more important factor is that the extreme turmoil that prevailed for months has been reconciled to some extent.
Yet, the troublesome big picture remains on the back burner and can surface again without warning.
The simple reason for this uncertainty is that either the politicians in the country or the majority of the general public realise that the situation cannot be completely resolved instantly with short-term remedies.
The role of the partially agreed International Monetary Fund (IMF) assistance seems to be hugely overplayed by both politicians and some scholars, perhaps giving over expectations to the masses. In the meantime, some factions completely condemn the IMF’s involvement, citing that the conditions imposed may lead to the slashing of existing welfare programmes.
However, the ground reality is that although the IMF and other foreign financial assistance are direly needed for the country, none of them is even close to the complete solution. Whatever foreign assistance coming Sri Lanka’s way is only a fraction of the actual requirements to reach a lasting solution.
Nevertheless, the IMF guidelines, such as fiscal transparency and public finance management, setting an anti-corruption legal framework, establishing political stability and consensus, and so on, are direly needed requirements for the country.
No sane person can oppose these key elements that have extremely negatively affected the country for the past few decades. The common public belief is that the country’s political hierarchy and bureaucrats are responsible for all the above mentioned negative occurrences.
Gruesome situation
Even in this gruesome situation, the politicians clearly display their opportunistic, self-centred, and deceitful behaviour shamelessly.
The whole international community, which came forward to support Sri Lanka, requests unity and political stability from the politicians. Yet, there is absolutely no unity or consensus among any of the political parties, even within. The sad situation is that even in this miserable circumstance, they demand a pound of flesh to agree on country-friendly common issues.
Many cliques appeared in parliament during the past three months. Although all of them publicly declare that they have formed these groups to solve ongoing public issues, the general public is aware of their hidden agenda. If an election is called sooner or later, these breakaway groups are certain to be hooked onto one of the main contenders.
None of these mushrooming gangs in parliament exist solely to maintain the power they wield as legislators. Whilst a few aim to make to make solo runs for the presidency, others fish in troubled waters to gain the best mileage out of the situation for the impending elections.
The intention of all these dubious politicians, no doubt, is to grab power. Even those who have no real public acceptance or voter base seem to be dreaming about grabbing power. None of these politicians has a genuine expectation of providing solutions to the crisis and helping people. Evidently, they all commenced vigorously working towards the next election instead of trying to provide relief to the masses.
In the current context, it is clear that no party will likely secure a majority to form a strong government if an election is called within a short period. Offering people a mandate to decide is democratic, reasonable, and rational. However, the pertinent question is whether the country can afford such an occurrence with the prevailing economic conditions and social discontent.
Working majority
Also, if an election is held urgently and a hung Parliament with a weak Government is formed, the situation will deteriorate further. A situation where no party has a working majority will likely mess up all important efforts that are already underway.
Can the country afford such events at this point in time? The country has already witnessed what transpired with a government with a two-thirds majority backed by an all-powerful executive president.
A hung Parliament will undoubtedly deepen political instability further. Certainly, in such a situation, the decision-making on important matters will slow down.
If the current Government continues for the next two and a half years, the citizenry certainly will witness relentless protests, strikes, demonstrations, and all types of anti-government actions organised by the Opposition. The general public will suffer even more.
In the midst of the current political turmoil, the Government is set to introduce new tax reforms this month. It is a public secret that the untimely, reckless, and ridiculous tax cuts of the previous Government are one of the key reasons for today’s dreadful economic situation.
Tax revenue is essential for a country to provide social welfare to its citizens. Nevertheless, at present, the general public is undergoing an unbearably rough patch with a skyrocketing cost of living with inflation rising to one of the highest in the world.
Therefore, the Government must make reforms to reduce indirect taxes (80 percent of the total taxes, according to sources) that directly affect the common citizens and collect maximum direct taxes from the wealthy. It is known that there are many entities that often opt to evade direct taxes by dishonest means.
Also, business entities most likely pass the tax component to the public by increasing prices. Hence, the Government must not only have a monitoring mechanism for balancing the taxes but also a viable and strong process to nail tax evaders.
Tax reforms
Other than the focus on increasing state revenue through tax reforms, the government’s attention to other areas such as exports, tourism, and small and medium-scale industries, and the restructuring of loss-making SOEs, is seemingly at a snail’s pace.
Time and again, Ministers or State Ministers make public announcements with pledges, but the country is yet to witness real action. The public is done with such pledges from politicians. The public’s trust in political parties and their members is at its lowest point.
However, the good news is that exports have been performing at peak levels for the past year through their own efforts.
The tourism industry is showing signs of some recovery in the coming season, provided the peace remains without disruptive disturbances by political parties and their followers. Whilst the SME sector suffers immensely for a number of reasons, nothing tangible takes place in the much-talked restructuring of loss-making state-owned enterprises.
To the whims and fancies of their masters, trade union spokespersons continue to make destructive public statements, confusing the entire nation, with figures that are mostly unsubstantiated and contradictory. Customarily, the government’s response is most often late, lethargic, and unconvincing, even on matters that can be verified and presented with correct data easily.
Irresponsible and politically biased media, some television stations, in particular, keep spreading negative information that can create chaos. They do it for two possible reasons.
Either to support their favoured political party or to lift their ratings. Even bureaucrats and professionals are divided on most of the common issues. Simply put, the entire society is divided and has no knowledge of the reality lying ahead.
Perhaps, the IMF is the only institution that will provide substantial financial assistance to Sri Lanka at this juncture. Very few other lending institutions, such as the Asian Development Bank and the World Bank, will also help with small contributions. Whatever the feasible emergency foreign assistance is due to receive, it will not be sufficient to get out of the current economic crisis.
The only remedy is to unite to combat the common enemy. Regrettably, neither politicians nor the majority of the general public seems ready as yet to create a common platform to create a stabilised economy.