Could A ‘National Government’ Resolve The Crisis?

By Laksiri Fernando –MAY 20, 2022

Dr. Laksiri Fernando

Sri Lanka has been heading from crisis to crisis during the last two years, the acuteness of the calamity peaking during the last three weeks. Whatever his past weaknesses or present biases, Ranil Wickremesinghe’s acceptance of the Prime Minister position is clearly commendable given his experience, background, and creditability among sections of the international community. Although ‘one-man’ representative of the UNP in Parliament at present, he has a vast experience as a Prime Minister, a leader of the opposition, and in politics. He was also the Prime Minister of the last government.

This is what people expect him to put into practice without getting into ‘conflictual political controversies’ under the present circumstances.

Interim or National?

There is a controversy as to ‘what kind of a government’ is desirable under the present circumstances. While more political sections of Parliament call for an ‘interim government,’ the intendant position of many advocates is for a ‘national government’ going beyond the interim tasks. Thus a ‘national council’ is proposed, consisting of all political parties in Parliament to take place.

Whether the second objective could be achieved is still not clear, particularly given the divisive and conflictual nature of political parties and groups in Parliament. Violent incidents, instigated by the former PM Mahinda Rajapaksa, is one example of the confusing status of parliamentary politics. While the advocates of a ‘national government’ give priority to economic conditions of the country, among other matters, the promoters of an ‘interim government’ focus more on political matters believing that political correctness might resolve even the economic problems.

Roots of Crisis

Sri Lankan crisis should not be taken in isolation. Covid 19 should be taken as a worldwide warning, the lessons of which have not properly been drawn by almost all countries and international organizations. Power struggles are also looming as the Russian invasion of Ukraine signifies. Instead of cooperation, competition, conflicts, violence, and armed struggles are exacerbating the situation within countries and internationally.

As the Bloomberg newspaper has warned (18 May), ‘Sri Lanka Default Hints at Trouble Ahead for Developing Nations.’[i] Among other countries, Pakistan, Egypt, Tunisia, Ethiopia, Ghana, and Peru are particularly mentioned. Sri Lanka has decided to default over $12 billion foreign bonds this year. This will affect the country negatively in the long run. If the country had a proper scheme and plan to overcome the difficulties, say early last year, this situation could have been ameliorated.

Of course, there are national roots of the situation. Mismanagement of public funds, failure to balance income/expenditure (budget), and most importantly foreign exchange (balance of payments) are some of the root causes. Excessive power within governments had given impetus for the Ministers to take arbitrary decisions disregarding both economic and political consequences. At the heart of these decision making has been a close family rule.

Sri Lanka has also been promoting a development path based on ‘infrastructure development’ unproportionate to the actual development of industries, production, and exports. It is to promote ‘this path’ that sovereign bonds were sold in foreign markets and loans were taken to build ports, airports, and highways. Even the Treasury or the Central Bank did not have proper financial records of the country’s debt obligations. Politics seem to dominate economics.

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