Ranil: A SWOT Appraisal

By Kumar David –JUNE 19, 2022

Prof. Kumar David

“Men make their own history, but they do not make it just as they please; they do not make it under circumstances chosen by themselves, but under circumstances directly encountered, given and transmitted from the past. The tradition of dead generations weighs like a nightmare on the brains of the living”. Likewise Prime Minister RW is not a slave to the past, nor is he a free agent. What he can do is restrained by economic and political inheritances. By far the weightiest are economic conditions, the most important of these stretch back 70 years. But there is also a different genre of follies – abuse of power, mismanagement and plunder – pertaining mainly to the Mahinda and Gotabaya presidencies. The predicament now is that we as a nation are consuming more than we produce and have for decades survived on borrowed money and foreign debt. I say this not as moral sentiment but plain unadorned fact. To rescue the nation from this wretched economic inheritance is above the capacity and beyond the remit of RW’s Interim Administration (IA) – a weakness, a “W”. Nevertheless there are things that can be done within the parameters of a ‘merely’ interim administration. (SWOT = Strengths, Weaknesses, Opportunities, Threats)

Unexpectedly, consumption has been slashed by steep inflation embodying increases in fuel and food prices. Future consumption too has been hacked by the loss in value, if measured in dollar terms, of private savings in funds, trusts, equities and banks, the future value of fixed pension payments, and probably by a decline in property and fixed asset values when measured in dollars. VAT has been increased and taxes on the affluent will rise for sure. LKR has fallen to less than 40% in value measured in gold in the last three years. Some losses will be recouped by the salaried classes (workers) by trade union action, and mass agitation will force future governments to provide a degree of relief; but real wages have fallen (this is one item in “labour market restructuring”, the other item easy-firing, won’t be so easy to do). The non-salaried classes (rural folk, urban and semi-urban petty bourgeoisie) are up the gum tree. The four day working week amounts to a big cut in government jobs since recruitment will soon fall. Overall, consumption has been lowered for a long time to come. Hence one of the IMF’s pound-of-flesh demands has come to pass without help from RW.

RW in a perverse sense is a lucky bugger; the crisis has played into his hands by getting some “economic restructuring” done; public consumption has been slashed and RW spared the opprobrium of having to do it. This can perhaps be counted as an “S” or strength. To what extent it will translate to a smaller deficit in the primary fiscal-deficit (revenue minus expenditure, leaving aside debt servicing) cannot yet be figured out but there will be a degree of relaxation in the deficit. Will RW be able to sell this scenario to the public? That will depend on the answers to other questions I discuss anon.

There is the second crisis in the economic domain; deficits in the trade account and in balance of payments. So much has been written on the nitty-gritty details that no explication is needed here. The bottom line is that to survive we have to import less, export more and to export more we have to make more. And we have to make things more efficiently (high-browed economists call it total factor productivity, but such terms are not for yokels like you and me). This is a huge challenge beyond the remit of RW’s IA. Whatever medium-term programme, good or bad, he attempts will be challenged, fairly or unfairly, as having no electoral mandate.

Gota (GR) had a mandate which he buggered in incredible style, the devil himself couldn’t have done worse, but this is no argument for RW to govern long-term without a mandate. If 21A is pushed through without excessive emasculation, if RW and his IA, despite 1/3 of his Cabinet being dunces and another 1/3 crooks, gets some relief from shortages, and given that Sajith and his SJB have their tails tucked deep between their legs, a liberal-democratic alliance led by RW (Sajith has lost his shine) has a moderate chance at an election in the absence of anything else. The Left has to await its time and Rajapaksa-side MPs will hightail it to Timbuctoo before they are hanged from post-election lampposts. This has to be counted as an “O” for opportunity, but not as a Strength since uncertainties are large and many.

The biggest “O” or opportunity that RW has is if he can sweet-talk the IMF, World Bank (can he get that fossilised old fool GL to shut up), India and even China to be ever more generous. It seems this is happening, but slowly. We are told that the IMF wanted RW appointed because he could sweet-talk this side and that. Of the twin challenges, shortages and prices, it is not possible for RW do much about prices for the reasons stated in my second paragraph, but if he can kiss feet, lick bums and ease shortage of fuel, medicines and parripu, even at a price, for say three months, the economy may get past imminent shipwreck. Overcoming gridlock on shortages, especially fuel (petrol, diesel and cooking-gas) is RW’s best short-term bet, but petrol queues are still long and sullen

The threat “T” to a liberal-democratic option is political. SJB leaders are immature in judgment and Sajith, Ranjith Madum’b, Eran, Harsha and Fonny cannot think out of personalised (RW vs. Sajith) sectarian boxes. They are unable to reason around a bigger liberal-democratic agenda; their minds need to ripen beyond personalities since the pettiness of these leaders is a threat to their class. (Champika has fled to seclusion and self-immolation). As a leftist I should be happy you may say. Well yes and no; it exposes how effete that class is, but I don’t want its bungling to land us all in chaos. An analogy: I am an opponent of neo-imperialist USA-hooked NATO and abhor brutal Orthodox Christian non-Marxist Putin, but I don’t want their mutual bungling to precipitate hunger, prolong dependence on environmentally dirty energy and aggravate fears of nuclear conflict. Macron is right, we have live with these flesh-eaters for now.

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