Why I Don’t Support The Aragalaya

By Leonard Jayawardena –JUNE 25, 2022

Leonard Jayawardena

The Aragalaya, the “Struggle,” is the still ongoing popular protest movement in the country that began months ago in reaction to the current economic crisis, which has manifested itself in fuel shortages, food shortages and rampant inflation, and for which the protesters blame the Government led by President Gotabaya Rajapaksa (GR).

Its most visible, symbolic and localised manifestation is the protest site at Galle Face, which was set up on April 9th and named “Gotagogama” in reflection of its main demand that GR, who was elected to office in 2019 for a period of five years, should resign.

Later, the protest spread to in front of the Temple Trees, which was first christened “Mainagogama” in reflection of their demand for the resignation of Prime Minister Mahinda Rajapakse (I still haven’t figured out how MR came by the sobriquet “Mynah”), which later changed to “Nodealgama” following the latter’s resignation on the assumption that the newly appointed PM, Ranil Wickremesinghe (RW), had a deal with the Rajapaksas to protect them.

A number of articles has appeared in the Colombo Telegraph about the Aragalaya and they were generally supportive of and sympathetic to them, as were all the comments, as far as I read them, that appeared below them. In this article I am presenting a dissenting view at the risk of stepping on a lot of toes.

My reasons for the dissent are;

a) the incoherent positions and objectives of the Aragalaya protagonists and their largely impractical demands. Further, the slogans and claims of the Aragalaya are largely a misrepresentation and distortion of the causes of the present crisis;

b) the way the Aragalaya has turned out has resulted in a subversion of the rule of law, which in turn damages our democratic system;

c) to my knowledge, aragalayas of this sort anywhere in the world have not resulted in economic prosperity and corruption-free governments and politics for any nation (the Arab Spring being the most notable recent example) and have even turned very ugly (as the Arab Spring did in some cases and as we got a taste ourselves in the May 9th incident and its aftermath); and

d) a course correction in the form of seeking the IMF’s assistance has been done and progress is being made. We should give it space to work out and not hinder the recovery process of the economy by supporting a resistance movement that keeps the nation in a state of social and political instability.

I will begin with a disclaimer: I have never voted for the Rajapaksas unlike those 6.9 million voters, many of whom now wish they had not.

Causes of the present economic crisis

Multiple compounding factors have led to the present economic crisis. The roots of the crisis are

1) The expenditure of Sri Lankan governments since Independence in 1948 has exceeded their revenue, so that, whereas we had a budget surplus at the time of Independence, we now have an unsustainable deficit. Largely contributing to this have been our world record state sector (1 state employee per 12 citizens), which eats up about half of the government revenue, and government spending on health, free education and welfare. The result is heavy government domestic borrowing and money printing, the latter of which causes inflation. The present government has contributed its fair share to the woes in this department.

2) Our economy is import-oriented, rather than export-oriented, so that we are perennially short of foreign currency. This and massive economically unviable infrastructure projects have led to the present unsustainable external foreign debt levels. We have had to take more loans to repay old loans.

The crisis was accelerated by;

1) Tax cuts by the GR administration, which depleted state revenue and had snowballing effects. However, this was in GR’s manifesto and, the 6.9m voters, many of whom are now ever ready to declare that they should be beaten for voting this goverment in, were aware of this or should have been.

2) The Corona pandemic, which crippled the country’s economy for months, wiped out parts of it and resulted in a double whammy to the tourism sector (an important source of foreign exchange), which was just raising its head above water after the Easter Sunday attacks of 2019. Remittances from foreign workers, too, took a hit as a result of loss of jobs.

Against the above backdrop credit ratings agencies downgraded Sri Lanka, which effectively locked it out of international capital markets. In turn, Sri Lanka’s debt management programme, which depended on accessing those markets, derailed and foreign exchange reserves plummeted alarmingly in a short time because reserves were utilized to service debts. We are now officially a debt defaulter nation.

The lack of dollars have resulted in shortages of fuel, gas, electricity cuts, etc. The Government is now short of not only dollars but also rupees! At the time of writing there are plans afoot to print new money to the tune of Rs. 3 trillion just to be able to pay government employees’ salaries.

A sudden shift to organic farming resulted in reduced harvests, food shortages and much pain to conventional farmers. A transition to 100% organic agriculture too, was, in GR’s manifesto, and, though framed as the fulfillment of an election pledge, the move was almost certainly triggered by the scarcity of dollars.

GR’s administration also reduced interest rates to boost business in keeping with another election promise, a move now reversed by the newly appointed Governor of the Central Bank, Nandalal Weerasinghe. The reduction caused economic hardship to large numbers of people who depended on interest income from their deposits for survival.

It is now accepted that the failure to seek the assistance of the International Monetory Fund in a timely manner brought matters to this pass. GR’s administration and the Central Bank resisted calls by experts and opposition leaders for months to seek help from the IMF despite rising risks. But after oil prices soared in the wake of Russia’s invasion of Ukraine in late February, the Government eventually drew up a plan to approach the IMF in April. On 7 June Gota reportedly admitted that it was a mistake not to have sought the help of the IMF six months or one year ago and, in a recent interview with the BBC, the new Governor of the Central Bank expressed the view that the present crisis could have been averted if the Government had gone to the IMF sooner.

The economic crisis in Sri Lanka should also be viewed within a larger, global perspective. The World Bank has warned that about a dozen developing economies could follow Sri Lanka into default in the coming months, e.g., Pakistan, the Maldives and Senegal. Some see Sri Lanka as the proverbial canary in the coal mine.

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