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Placate or stand firm?

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This week opens with the Government staring down the barrel of a second possible train strike with powerful railway trade unions unless their salary demands are met by Thursday. The hefty increases, which the Finance Ministry has battled against on the basis that it would result in a salary hike for 24 grades of the public service and was therefore untenable as it would push up public expenditure and trigger inflation, are likely to test the mettle of the Government and put pressure on its public image.  

President Maithripala Sirisena has been the lone point of engagement with trade unions after he intervened to call off the first strike earlier this month. Contents of his discussions with union representatives have not been fully divulged to the public but shortly afterwards the Finance Ministry presented a Cabinet paper to appoint a Salaries Commission for the public sector, which was approved. The Commission has been tasked with analysing and evaluating the salary structures of the entire public service and present a report on the way forward in two months.

The task, already significantly hefty, was rejected by the railway unions that contend their demands are centered on salary increases that have already received Cabinet approval after being presented by the Transport Ministry and therefore a commission was not needed to peruse them before implementation. The unions also contend that legal provisions were included in the Cabinet paper to exclude railway services from the rest of the public sector and that any salary increase given to them does not need to extend to the other segments.

In any case a possible strike does not give sufficient time for the Salaries Commission to even be constituted much less have its proposals considered by the government. Whatever the contents of the Transport Ministry Cabinet paper the contention that railways should be given preferential treatment is an absurd one. The Ceylon Railways Department has provided significant services but it has also been marred by mismanagement, corruption and wastage in its long history. The quality of its services to the public are basic at best and while this is not only the fault of the department the idea that a chronically loss making entity deserves to be given higher pay and perks above other public services on tax payer funds is both unfair and unrealistic. 

However, the Government is also caught between a rock and a hard place. A railway strike is daunting at the best of times but a segment of buses have already pulled off the roads protesting spot fines. A railway strike on top of reduced busses would be a double whammy for the public and the Government would become the instant scapegoat facing heightened public censure for its role. 

The political backlash of such a situation could be grave as the Government heads to elections next year. But it also cannot afford to do nothing, literally, as any fiscal slippage could unleash macroeconomic instability that it can ill afford as it looks to finance growing external debt repayments over the next few years. All in all the Government may have little choice but to batten down the hatches and ready for the coming storm.

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