Responding To The Politics Of The Budget

By Ahilan Kadirgamar -October 30, 2012

Ahilan Kadirgamar

Budgets are deeply political because they are about the distribution of resources. If we take the budget of a family, it is hierarchical and gendered; decision making on expenditure is often monopolised by the head of the family, where male and monetised work are valued over others, particularly domestic work. The same goes for the national budget, not only in terms of the priorities of resource allocation, but also the value given to certain sectors, the limited number of actors determining the budget and particular constituencies making recommendations. Budgets also intervene in deeply political moments shaped by historical social relations whether it be natural disasters, global economic crisis or national political manoeuvres.

Immediate Concerns

There are at least three immediate political economic concerns that will shape the reception of the 2013 Budget. First, if we take the drought that has affected our farmers this year, the impact of such a natural disaster is necessarily shaped by agrarian relations; whether it be the history of land reforms and the size of farming plots, their dependence on wage labour and their access to longer-term credit and subsidies to wade through difficult times. The same can be said of the politics of the global economic crisis. An economic crisis does not erupt out of a vacuum; it is a product of the capitalist system which exploits one section of society to the benefit of another, and in the process also creates the conditions for its own crisis. Furthermore, the impact of the global economic downturn depends on the extent to which the Sri Lankan economy has been integrated into the global economy through financial and trade liberalisation. Next, the controversial DiviNeguma Bill and the immense centralisation of resources and powers under the Minister of Economic Development is bound to shape rural economic life including the distribution of subsidies and local finances such as microfinance loans. The Divi Neguma Bill will both undermine devolution by absorbing subjects and powers belonging to the Provincial Councils and reinforce political patronage down to the local level.

While these concerns are shaping the imminent reception of the Budget, the Government is likely to heed the recommendations of those economically powerful actors and members of the mainstream economic establishment. Serious engagement with the Government on the Budget has been limited to the major financiers of the Colombo Stock Exchange, the Chambers of Commerce and the business community, and the international financial institutions. The IMF and the World Bank in particular have considerable leverage to shape the Budget. The IMF has strict budgetary conditions for its Standby Agreement of 2009 and the World Bank’s loans promote infrastructure development through its heavy investment and pushes for privatisation of education through its funding. The media is also selective in legitimising the views of professional economists, as budgets are viewed as technical policy plans rather than political documents requiring engagement by the citizenry. This situation is not unique to Sri Lanka. A national budget is claimed to be the realm of expert economists and business leaders, even though it is a reflection of the balance of political and economic forces or class relations in any society.

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