Roots of the crisis

All the candidates who contested the Presidential Election sought a mandate from the public to rule the country which was not in a healthy state, but had reached a level of bankruptcy in almost every aspect. However, none of them, the candidates of traditional and mainstream political parties and the alternative candidates who contested the Presidential Election, offered a practical vision to save the country from this unfortunate situation – Pic by Shehan Gunasekara

The candidates who had genuinely contested the Presidential Election had elaborate and attractive election manifestos. But none of them had a pragmatic program to address the basic question of how to overcome the extensive crisis Sri Lanka is facing. The severe debt crisis was not the only problem that Sri Lanka has to solve. Yet, Rohan Pallewatte was the only candidate who had presented a practical idea for ​​easing of the burden of foreign debt.

All the candidates who contested the Presidential Election sought a mandate from the public to rule the country which was not in a healthy state, but had reached a level of bankruptcy in almost every aspect. However, none of them, the candidates of traditional and mainstream political parties and the alternative candidates who contested the Presidential Election, offered a practical vision to save the country from this unfortunate situation.

The country’s crisis

The status of the crisis Sri Lanka is facing as a country can be summed up as follows:

The social system is in a sticky situation where the unity and integrity, the hallmark of a sound social system are disintegrated and afflicted with hostile attitudes which may, at any moment, lead to conflicting situations due to racial or religious reasons.

The State is in a pathetic state of degeneration and chaos in which the checks and balances of its three main arms, the Legislature, the Executive and the Judiciary, had collapsed and the efficiency of public institutional system disintegrated.

The Constitution, the fundamental law of the country which determines how the State and its institutional system should function and the interconnection between citizens must be maintained is in a state of chaos. It has lost its proper order and consistency due to continued abuse by unscrupulous amendments made from time to time.

The institutional system of law enforcement and establishment of justice is in a rotten mess of corruption in which it has lost its active strength.

The number of state employees is around 1.5 million and the labour productivity of them is very low. The salary bill and the pension bill of state employees’ has become an unbearable burden to the government.

The foreign debt level remains extremely high, and the annual expenditure for repayment of loan instalments and interest component has risen to $ 4,000 million which is slightly higher than the annual income of the government.

Almost all sectors of economy are in a pathetic state of imminent collapse. Rural agriculture and commercial agriculture are prominent among them. 

Although Sri Lanka is considered to be an upper-middle-income country, not only the rural masses but also the middle class urban people are caught in a debt trap. 

How to overcome the wider crisis that Sri Lanka is facing can be considered the biggest challenge encountered by the new President. Compared to other countries in Asia, Sri Lanka was in a shining state by the time it gained independence in 1948. Most importantly, Sri Lanka had a foreign exchange surplus of Rs. 1,200 million when the British left Sri Lanka

The trajectory of the crisis

How to overcome the wider crisis that Sri Lanka is facing can be considered the biggest challenge encountered by the new President. Compared to other countries in Asia, Sri Lanka was in a shining state by the time it gained independence in 1948.

At the time of independence, in terms of per capita income, Sri Lanka remained second only to Japan. The gap between the two countries was not big. As per education and health indicators, Sri Lanka enjoyed either the first or second place. Sri Lanka had a conspicuous position in the sphere of infrastructure facilities among the Asian countries. By the standards of that time, Sri Lanka had a well-developed and improved road network. There was a good rail service. At the time of independence, Sri Lanka had a network of railway lines of about 1,000 km. By 1900, the revenue earned by railway was as high as 30% of the total government revenue.

By the time Sri Lanka gained independence, Colombo harbour had become the number one harbour in Asia. The number of ships arrived at Colombo harbour had reached 4,400 per year; and today, 70 years after independence, the number of ships reaching the Colombo harbour remains the same. 

Although Sri Lanka did not have an industrial sector producing goods for export, it had a strong export trade based on tea, rubber, coconut and spices. Tea produced in Sri Lanka, popularly known as Ceylon Tea, was considered the best tea in the world. It was the surplus revenue generated by tea industry that enabled Sri Lanka to maintain a costly welfare policy.

At that time, the country had an efficient bureaucracy and an independent Judiciary. The Governor at that time was as powerful as the President today; yet the Judiciary did not hesitate to make decisions against the Governor in an event he had committed offences. Corruption was not a regular feature of state rule when the British left Sri Lanka. Most importantly, Sri Lanka had a foreign exchange surplus of Rs. 1,200 million when the British left Sri Lanka.

Our politicians who came to power after independence failed to understand the importance of building the modern Sri Lankan nation by abolishing the recognition accorded to caste distinctions, strengthening and promoting harmonious racial and religious relations and introducing reforms to suit the newly emerged conditions of independence

Turning the country upside down

It was not the white people who ruled the country during the colonial era, but our selfish leaders who took control of the country that turned upside down the good performance of the country that prevailed up to independence. 

It was not the white but our own patriotic rulers who came to power after independence that jeopardised the performance level of the country and made Sri Lanka that remained a heaven compared to other Asian countries, a hell. 

Our politicians who came to power after independence failed to understand the importance of building the modern Sri Lankan nation by abolishing the recognition accorded to caste distinctions, strengthening and promoting harmonious racial and religious relations and introducing reforms to suit the newly emerged conditions of independence. 

During the British rule, the administrative positions were held by foreigners. Their salaries were based on terms and conditions applicable to expatriate employees, which remained relatively higher in comparison to the average income level of the country. However, the salaries were not changed when these vacancies were filled by local employees after independence. 

The subsidies and relief measures brought to the fore following the independence was mainly aimed at elections. The cost of rice ration given to the poor and the rich without any difference outweighed the combined cost of education and health.

The damage done by nationalisation to commercial plantations was immense. The tea estates owned by foreign companies were acquired without having required management skills to maintain them. Failure to safeguard and maintain the quality of tea has drastically undermined the global reputation enjoyed by Ceylon tea. 

The Language Policy, which gave prominence to the Sinhala language, not only stopped at pushing disgruntled Tamils into an extreme end, but also deprived the capacity of Sri Lanka becoming a bilingual society. 

The inability of our leaders to manage the issues of racial and religious passions and emotions can be considered the most important factor that caused the wretchedness of the country. Not only did our leaders ignore the need to build a modern nation, they also pursued a policy of aggravating racial and religious passions to achieve political ends and to win votes. As a result, Sri Lanka was turned into a land soaked in blood for a very long period of 30 years.

The destruction caused to lives and property during the prolonged period of incivility was immense. Most of those who were lucky enough to save their lives when a large number of people were killed in violent clashes, have become more or less dead spiritually. Not only the society, but everything including politics, religion and the arts that came under the onslaught of this uncivilised stream became distorted. 

It was in the backdrop of this prolonged uncivilised period that the looting of public property has become a regular feature of State rule, and corruption becomes a massive and large-scale phenomenon. The wider crisis the country is facing now can be considered a direct outcome of the failure to make a complete reorganisation of the country following the ending of the violent conflicts.

Rampant corruption can be considered another major factor that has caused Sri Lanka to become such a miserable country. The top layer of the power pyramid is more corrupt than its bottom. That is why corruption has become an unmanageable menace in Sri Lanka

National integration

Ethnic, caste and religious differences standing against national unity can be considered the main factor that caused the violent conflicts among Sinhala, Tamil and Muslim communities. 

Although it has been possible to suppress the violent conflicts that have arisen on the basis of race, caste, creed and religion, Sri Lanka has not been able to build the Sri Lankan nation to ensure that the conflicts would not recur again. The country’s stability cannot be achieved without fulfilling this basic condition. 

India has been able to fulfil this condition in one way, Singapore in a different way, and Malaysia in a way unique to them. Yet, Sri Lanka has not even reached the stage in which to seriously consider the need to fulfil this condition.

A sound economic performance can be achieved only if a peaceful environment prevails in a country where there is no room for conflicts and damage to property. People who live in fear and with a sense of insecurity will not proceed to invest their wealth in business. The foreign investors also will be attracted only to countries having a peaceful environment and political stability. Foreign investors perceive Sri Lanka as a risky country. 

The Risk Index has given Sri Lanka 6 points. The previous index was also 6. In this index, it is only Afghanistan and Pakistan that stand above Sri Lanka, the current index of both countries stands at 7.Even the previous index remained at 7. Both Sri Lanka and Myanmar stand par in the Risk Index. India, Philippines and Thailand share the same position (3.3).

Countries with high Risk Index levels fail to attract foreign investors. The Foreign Direct Investment (FDI) inflow to Sri Lanka stood at $ 9.7 billion in 2016. The FDI for six selected countries in the region, including Sri Lanka for 2016 , in $ billions is as follows: Sri Lanka 9.7 , South Korea 185.0, Hong Kong 1698.0, Taiwan 75.0, Thailand 188.7, Malaysia 121.6 and Singapore1096.3. Foreign Direct Investments are essential for economic growth. It is through the lowering of the risk index and building the modern nation that Sri Lanka can be turned into a country which attracts foreign direct investments and foreign investors. 

Rampant corruption

Rampant corruption can be considered another major factor that has caused Sri Lanka to become such a miserable country. The top layer of the power pyramid is more corrupt than its bottom. That is why corruption has become an unmanageable menace in Sri Lanka. Denmark is the least corrupt country according to the international ratings on corruption. 

New Zealand enjoys the second position while third position is shared by Finland, Singapore and Switzerland. Sri Lanka is placed 89th position in the international rankings. Hong Kong which was more corrupt than Sri Lanka at one stage of time has presently been ranked 14th in the international ratings. 

It was after 1977 that amassing wealth by undue means became a regular feature of state governance. It can be considered an occurrence due to allowing the MPs to exploit public property by President Jayewardene rather than an outcome of the open economy. It is important to note that the countries like Denmark, New Zealand, Finland, Singapore and Switzerland which can be considered as non-corrupt or least corrupt countries have open economic systems.

Whatever the shortcomings of those who held ruling power until 1970, they did not misuse their authority to amass wealth by undue means. They did not allow their MPs to do business with the government. It was President Jayewardene who turned this good tradition upside down, which prevailed up to then.

President Jayewardene seems to have thought that the MPs of the governing party will continue to extend their support to him in safeguarding the government in difficult situations if they were allowed to earn wealth by undue means using their power. Consequently, the MPs of the ruling party inclined towards doing business with the government. Later, this ugly system was pursued by other presidents also, who came to power after JR Jayewardene, adding new features to the system. Accordingly, a large number of MPs have become racketeers doing business with the government contrary to the law. Some have become planters through acquisition of state lands. Some others have become contractors who do business with the government. Some of them are licensed liquor dealers while several others are license holders of rubble and sand business. 

The system which had made it compulsory to limit election expenses and submit accounts of expenses incurred was abolished in 1977. Since then, the electoral process has become a costly game. Of this, a Presidential Election is the most expensive game. Therefore, the candidates contesting the Presidential Election have to spend huge amounts of money; and they are compelled to seek the support of the lenders of black money. Consequently the presidents elected with the patronage of black moneylenders are in turn compelled to patronise the black moneylenders who supported them. This situation has led to corrupt the entire institutional system thereby making the corruption uncontrollable. 

It was possible to obtain fake passports from the issuing agency. It was also possible to obtain fake National Identity Cards from the Department for Registration of Persons for money. A former head of the Department for Registration of Persons was arrested by the CID for allegedly issuing National Identity Cards to the LTTE. Almost all tax collecting institutions in the country are in an extremely corrupt state.  According to a statement made by the Registrar General to News First, Sirasa TV, about 40 to 50% of registered land deeds can be considered fake documents. It is well known that some of the documents presented by parents to testify their address in the tough competition of getting a good school for their children are forged. 

How can Sri Lanka be made a developed country without overcoming the corruption and the state of degeneration that has overwhelmed the entire institutional system of the country?

The inability of our leaders to manage the issues of racial and religious passions and emotions can be considered the most important factor that caused the wretchedness of the country It was in the backdrop of this prolonged uncivilised period that the looting of public property has become a regular feature of State rule, and corruption becomes a massive and large-scale phenomenon A sound economic performance can be achieved only if a peaceful environment prevails in a country where there is no room for conflict and damage to  property