Dissolution of parliament or impeachment to bring Sirisena to heel?

January 23, 2016, 5:52 pm 

Prime Minister Ranil Wickremesinghe was attending the World Economic Forum in the Swiss ski resort of Davos while back in Colombo the stock market was setting records in the wrong direction and the promised addition of Rs. 2,500 to the basic salaries of government servants in January failed to materialize. What conceivable advantage would Sri Lanka have by attending an event such as the World Economic Forum? One very prominent pro-UNP website described the meeting in Davos that Wickremesinghe addressed on the sidelines of the World Economic Forum as an ‘investor’s conference’ and said that there was so much investor interest in Sri Lanka that there weren’t enough seats at the conference venue. Despite such starry-eyed effusions, the prospect of any investor from Davos or anywhere else coming to Sri Lanka is pretty slim. No significant Japanese investment came to Sri Lanka even after Wickremesinghe addressed the Japanese parliamentarians and Japan is a country that has always had a prominent presence in Sri Lanka unlike Europe. Europe is known in Sri Lanka not as an aid giver or investor but as the main international backers of separatism in this country.

In any event, what the world’s economic glitterati heard in Davos about the future prospects of the world economy in 2016 and beyond, would not put them in any mood to invest anywhere let alone a country like Sri Lanka. Even George Soros who was in Sri Lanka earlier this month to advise this country on its future course of action went to Davos and sounded a dire warning about the state of the World economy and predicted that the global financial system was on the cusp of a major meltdown like in 2008-2009 which will if anything be worse than the previous instance. As Soros explained, what set off the 2008-2009 world recession was the non-performing mortgage crisis in the USA. This time it is the gradual conversion of the Chinese economy from being export driven to being driven by its own internal market.

Soros had told Bloomberg TV that it has been 80 years since the world last faced a deflationary environment, and the world doesn’t know how to handle it. In other words, Soros was predicting that the melt down that was coming was going to be much worse than the 2008-2009 episode. Back in 2008, the economic crisis was described as the worst since the great depression of the 1930s. During the 2008 financial meltdown, the Sri Lankan public hardly even knew that the world was going through its worst economic downturn since the 1930s. Those were the years in which the war reached its peak and the people of Sri Lanka were glued to their TV screens and the war drowned out all other news.

An even more important factor was that back then, we had competent managers running the economy and they were able to take whatever steps that could be taken to cushion the impact of the global downturn. This time if a world economic crisis hits us, we are going to feel the consequences perhaps with even greater acuteness than most other countries in Asia. We now have to brace ourselves for a crisis of unprecedented proportions when we are least equipped to handle it. We have a dysfunctional government which has no conception whatsoever of economic management.

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