Sounding Poor

By Tony Perera –JUNE 23, 2021

We live in a nation where actual political choice, which lies between the SJB and SLPP, have at least from a media image perspective pivoted themselves to the lower ranks along our socio-economic spectrum. The two major parties in rhetoric pander to the poor.

This takes the form of large public gatherings, rhetoric lacking economic feasibility, and a lack of discourse on public policy. There is such a lack of differentiation in the rhetoric that people have started calling the SJB, SLPP Lite. I, and I assume the people willing to read my pieces, am not a champion of poor people’s rights over that of the majority.

My take is that pro-poor policies like changing the curriculum towards the vernacular, the take‐over of private estates under land reform, and the vast spread nationalization of major industries is actually bad for the broader society. The impact though perceived as being favourable to the poorest may only be slightly beneficial or in most instances actively against their own long-term interests.

Context

This piece is being written partly in response to the very well written piece in Economy Next titled ‘Classist, (an) aristocratic cabal in Sri Lanka conspiring to prevent Premadasa presidency: MP’[ by Imesh Ranasinghe. This is the sort of rhetoric that helped bring about the first Premadasa presidency and I am concerned given Sri Lanka’s cultural biases it will lead to a second Premadasa presidency.

Historically I come from a mix of people but there is a notable few that I would consider in the elite. On both sides of my family, there were members of the Senate and also other notable subsequent descendants. As people tended to marry within wealthy circles it is very likely that a large proportion of my ancestry including all my grandparents spoke English and had land.

Wealth is not a strong predictor of policy acumen. A lot of my relatives are idiots. My grandparents land holdings of which I have none should not disqualify me from the capacity to impact public policy.

Here I feel I must also tell female readers that I currently am more towards the poorer end of the spectrum and have done things that I deeply regret.

The Pro-Poor policy

SWRD Bandaranaike’s children famously were not educated in the vernacular for their tertiary education. Changing the medium of instruction in most major schools to the vernacular in effect reduced the cost of education (and thereby subsidy to the poor) on the treasury. The students in vernacular education are less gainfully employable by their peers in private institutions.

Large tracts of estate land now lie with no clear ownership and have not been tended to properly. The banking sector is in effect the real owner of most major plantation companies who are now so riddled with debt that they can barely make operational payments.

Large nationalized industries like the CEB, CPC, and SriLankan Airlines are marred by corruption and do not offer low-cost services to the general public.

Historic wealth (land) not a predictor of current wealth

As land has become less important as a factor of production in the modern economy and credit creation has become more meritocratic there is far less of a feudal structure in Sri Lanka. After all many of the estate companies listed on the stock exchange run at a loss.

Think of the concurrent downfall of the Kotelawala empire and the rise of Dhammika Perera. Though there are some families that have notably remained wealthy throughout our independent history they do not make up the current majority of political spending.

The land reform policies of Sirimavo Bandaranaike combined with the subsequent state-sponsored unrest caused by JR Jayewardene caused a huge outflow of talented minds. People who have the capacity to make something out of nothing for many decades now have chosen to emigrate.

Our country is now in such a position of poverty that even marriage proposals advertised in the paper now tend to weigh more heavily on foreign employment opportunities than on the gift of land.

Political Spending

Historically landed people were able to influence electoral outcomes as land was the major asset class and they were able to outspend their opponents. Money is a necessary but not sufficient factor for electoral victory. The SJB outspent both the SLPP and UNP in the last two elections and did surprisingly poorly.

The SJB is backed mainly by the Apparel sector whose major players owe their fortunes to UNP policy in the 1980s that transferred huge amounts of wealth and opportunity to a very small group of people. The notable names within this mix are notably from historically poor and uneducated backgrounds. People of the time would have thought of those people as being Indian (in a derogatory minority sense) and being the sorts that would have to marry within their own very small and highly interrelated communities. This however has not impeded their meteoric rise to power.

The SLPP is backed mainly by the construction and protectionist industries. They owe their wealth to state contracts and large choice and cost taxes they put on the general public through protectionism. The people from this group even in spite of considerable wealth position themselves with the masses. Many go so far as to conflate being Sinhalese to being Sri Lankan. They remain an active threat to an indivisible and pluralistic Sri Lanka.

Aristocratic spending on elections

Assuming the aristocratic cabal in the Economy Next piece refers to Ranil Wickremesinghe supporters one must question whether the UNP will be the major spender in the next general election. Though the sale of the leader’s residence might help it is not like the UNP is going to be able to outspend either the SLPP or the SJB.

Large corporations rely heavily on credit to function. The SLPP will be in a handsome position to allocate credit through the large state-owned banking system to their supporters who will, in turn, spend lavishly on the election. Our own money will be used against us electorally.

The SJB will lean on the vast export wealth whose interests it seeks to protect if elected to power. They will benefit in the long run through a lower than the optimal rate of taxation on export sector profits again in effect robbing from the treasury.

Foreign control of policy

A large portion of the political goodwill of the Yahapalanaya government was wasted on inquiries into the armed forces. Though from a moral perspective there can be no doubt that there should be an inquiry it would be politically prudent to begin from the establishment of the Executive Presidency. It is a political reality that you will have to put Sinhalese victims before Tamil ones.

Read More