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Friday, April 19, 2024

Economic crimes in Sri Lanka: How come Gota is still at large? – Ranga Jayasuriya

Maithripala is found guilty of the Easter Sunday attack. But the Rajapaksas who ruined the nation are protected by a hundred commandos 

Consider the irony! As it should, Maithripala Sirisena, the former president, was indicted and found guilty of failing to prevent the Easter Sunday attack that killed 250 churchgoers and patrons at tourist hotels. He was ordered to pay Rs. 100 million in compensation to the victims of the attack. Other senior state and military officials, including the then defence secretary, Inspector General of Police, and chief of State intelligence, were similarly found guilty of remission of their duties and were ordered to pay compensation.

As it transpired in the presidential commission of inquiry, Sirisena had instructed the Director of State Intelligence, Nilantha Jayawardene, to go soft on the rising Islamist extremism, considering the delicate balance in his electoral alliance, which had a number of Muslim political parties. He, however, contested that he was not privy to the foreign intelligence warnings on the forthcoming attacks – probably because his security officials took his initial instructions as the default position of the state reaction to Islamist fundamentalism.

Gotabaya Rajapaksa’s ban on chemical fertilizer, against saner advice from local experts, is bordered on insanity. It decimated the local agricultural sector, plunging farmers, which account for every one in four of the local workforces into poverty. 

Consider another analogy. Gotabaya Rajapaksa and a bunch of close-knitted acolytes who handed the economic policy effectively ran this country to the ground within less than two years. Gotabaya is still a free man and is protected by 100 commandos at his private residence. He is unrepentant of his colossal destruction. Some of his acolytes are bragging about their time in his administration. His Governor of Central Bank, Ajith Nivard Cabraal, has published a book.

What makes Gotabaya Rajapaksa’s complicity in turning a nation of 22 million into paupers, robbing our present and future, a lesser crime than Maithripala Sirisena’s omission of duties?

Worse still, Gotabaya’s were deliberate, well-thought-out decisions taken without consideration of their serious negative consequences on the national economy. Their fallout was predicted. Nor was it some unexpected exogenous effect that crashed the economy. The Rajapaksas blamed the Covid, but the economies that were worst hit by Covid, bounced back by double digits when the pandemic subsided. And Covid did not route the local agricultural sector, Gotabaya’s folly of compulsory carbonic fertilizer did.

Loss of Rs. 800 billion

Consider a few instances of Gotabaya Rajapaksa’s destructive economic policies. His package of extensive tax concessions, introduced at the behest of the wheeler-dealer business class that bankrolled his campaign, cost Rs. 800 billion in government revenue, leading to a severe crisis in public finances. That led to a sovereign downgrade by the rating agencies, culminating in a sovereign default.

Second, the full course of economic repercussions did not happen overnight. There was time to pull back and rectify. Instead, the government refused to go to the IMF, and it serviced debt until the last US$ 500 million in foreign reserves was spent. It maintained an unsustainable rupee peg to the US dollar and then floated the rupee out of the blue, which lost 70% of its value to the dollar in two weeks. An IMF extended facility, as advocated by the economists, would have provided room for a managed floating of the rupee and defended its value. Instead, Gota and his economic con-doctors crashed it to the ground, triggering hyper-inflation and wiping out the lifetime savings of the public in a matter of weeks.

Ban on chemical fertilizer

Third, Gotabaya Rajapaksa’s ban on chemical fertilizer, against saner advice from local experts, is bordered on insanity. It decimated the local agricultural sector, plunging farmers, which account for every one in four of the local workforces into poverty.

Fourth, consider some of the other egoistic blunders. Some folks recently protested the wasteful expenditure of a total budget of Rs. 200 million (US$ 500,000) for the Independence Day celebrations. Gotabaya forfeited a US$ 480 million Millennium Challenge Grant and suspended the Japanese-funded US$ 1.5 billion light railway project. The country now owes Japanese contractors US$ millions in project management costs of the abandoned project.

Aren’t these economic crimes? These are, indeed, wilful and deliberate actions guided by short-sighted political calculations at the nation’s expense. These are crimes punishable in the court of law elsewhere in the world.

In Thailand, former prime minister Yingluck Shinawatra, the younger sister of Thaksin, was found guilty of criminal negligence for a rice subsidy that cost US$ 8 billion to the government and was sentenced to five years in jail in absentia.

In Brazil, Dilma Rousseff, Lula’s successor, was impeached for cooking books to downplay the government debt.

Rs. 800 million renovation of MARA residence 

In Sri Lanka, instead of being held accountable for their actions, the Rajapaksas rule the roost from behind the curtain, even after the dynasty is dethroned in a popular uprising. Mahinda Rajapaksa recently moved to an official residence that was renovated at the expense of Rs. 800 million. That is enough money to build a technical college for the nation’s children.

Some claim Gota inherited the economic rot. That may be partially true. But that is not an excuse to push it down the precipice.

Then who bequeathed him the rot? Successive governments are guilty of failing to undertake necessary economic reforms. Still, a closer look would reveal that no one else so grotesquely exploited the relatively good times than MR. He ballooned the government sector workforce from 750,000 when he was elected president, to 1.5 million and bragged about it. All that is for a few hundred thousand extra votes.

Rs. 400 billion loss of MARA’s action: Air Lanka

In one egoistic outburst, he nationalized the Sri Lankan airline after its then Emirates management refused to offload a group of fee-paying passengers to accommodate Rajapaksa’s entourage. He then handed it to a brother of a sidekick to run it, and he ran it to the ground. Another pet project, the Budget airline Mihin Lanka, was shut down after incurring consecutive losses running into billions of rupees. Mahinda Rajapaksa, a village lawyer, as his predecessor and nemesis Chandrika Kumaratunga aptly described, was not somebody intellectually competent enough to make the nation’s economic decisions. Still, his advisers, many of who were chosen on the merit of loyalty, were in no mood to appraise him of the folly of his decisions. Sri Lankan airlines has incurred nearly Rs. 400 billion of losses since its take-over in 2009.

Similarly, much of the Chinese loans were squandered on equally irrational and whimsical premises. Economists should study the actual economic returns of US$12 billion of Chinese loan-funded projects, the economic logic of which was guided by the whims and rent-seeking intentions of the Rajapaksas.

Even after Sri Lankans deposed an incompetent rent-seeking regime that ruined the nation, they continued to suffer for the actions of a few ruling elites. And economic criminals are at large and protected by the state. The public cannot hold them accountable, which would come from vigilante justice. It is the duty of the current government, and more importantly, the judiciary, to keep them responsible.

But President Ranil Wickremesinghe says his priority is to fix the nation destroyed by his predecessors, who still wield power from behind. Holding accountable those responsible for past economic crimes could come later, he says. No. Both could go in parallel. That could invoke a degree of confidence in the public, legitimate investors, and bond-holders who would be forced to take a haircut. That would also address his government’s deficit in legitimate and moral leadership.

And the stubborn truth is no matter what Wickremesinghe does, the Rajapaksas and their acolytes are guilty in the eyes of the people of this country. Anyone who defends them, wilfully or not, is blighted by their association. No such person is likely to command the moral right or political legitimacy to guide the country through drastic economic and social reforms that the country needs to come out of the current crisis.

Follow @RangaJayasuriya on Twitter

Courtesy of Daily Mirror.

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