The President, IMF and system change

President Ranil Wickremesinghe 

“I found the crown in the gutter, I picked it up with the sword and the people put it on my head,” said Napoleon. Ranil Wickremesinghe (RW) found the Presidency discredited and the seat vacated. He entered through a backdoor, occupied it and now expects the people to legitimise his occupation. Will he enable them with a chance to express their verdict? 

To strengthen his claim, he has called in IMF to speed up assistance to repair the devastated economy, and he is stretching his hands to all opposition parties to join him in accepting all its recommendations, which are going to be distressful. Had that assistance been sought quite early, when the pandemic struck in 2020, the reparation cost would have been less harsh. Now it is going to be more painful. It is a case of damned if you do and damned if you don’t. 

With or without IMF assistance, economic hardship endured by the people is set to continue at least for another year or two. RW is ultra-optimistic to restrict it to six months. Even then any growth is going to be spasmodic and at greatly reduced speed because, the system within which the economy operating is fundamentally faulty. Without a change of that system, economic revival, for a small and severely wrecked open economy is going to be extremely fragile, especially at a time when the entire liberal economic order is facing mounting challenges. IMF itself has forecast a contraction globally. The ongoing war in Europe, rising tensions in Taiwan Strait and Asia Pacific, and the resurgent pandemic would make this contraction increasingly possible. 

RW is aware of this, but he is not willing to go beyond the economic arena and look at the socio-political structure of this multi-ethnic country that requires a fundamental overhaul for any economic model to work successfully. Instead, he is focusing on the neo-liberal export-oriented growth model with a renewable energy sector and use of nuclear energy, and hopes to push Sri Lanka to First World status by 2048, when the septuagenarian President would be about to become a centurion. His predecessor did not set any time limit for his vistas of prosperity and plenty, but RW has done. Yet, without systemic change RW’s target too will end in failure. This has been realised by the aragalaya generation and it is not going to retreat from fighting for it. 

All economic models that were tried over the last seven decades could not lead the economy along a sustainable growth path, because the socio-political foundation on which those models were experimented was basically corrupt and ethno-centric and not truly nationalistic and democratic. It was this ethno-centricity in governance and social licensing of corruption that led to periodic political upheavals including a war and systematic loot of public wealth. 

IMF, being one of the institutional guardians of neoliberal economic order within which Sri Lanka’s open economy operates, will therefore be not concerned about any systemic change, but will assist towards strengthening the open economy with its one size fit all remedies. Even in debt restructuring IMF would be more concerned about the interests of lenders than those of the borrower. Yet, there is no choice and Sri Lankans have to swallow the bitter pill. Even the youngsters who are protesting and demanding systemic change are not rejecting IMF assistance totally. 

Sadly, none of the political parties except JVP and NNP are willing to support systemic change. Strangely enough even TNA, which should know very well that the national question will have no hope of resolution under the existing system, is, in the name of pragmatic politics, willing to support RW’s so-called all-party governance. Ironically, a former minister of public security, who wanted to close down Muslim madrasas and restrict the importation of Islamic books, is now appealing to everyone to forget their ethnic and religious differences and unite behind the President to revive the economy. Does this mean that once the economy is revived, they could go back to their old differences? This man has no inkling towards wiping out the old system from which he and his colleagues obviously profited. 

As pointed out in earlier columns the debate over systemic change is creating an inter-generational divide between the young and old. Aragalaya is not going to rest until that change happens. RW’s repression is bound to energise them.

A people centred secular constitution is the basic need for a sound democracy under which an economy would operate with added vibrancy. Once that democracy starts treating all Sri Lankans as equals with the same rights and obligations, the collective synergy of the people would become the driving force behind all productive enterprises. After all, what is more valuable to a country than its people? All the other economic variables including foreign investment would play a supportive role and together they would produce surpluses. Unless such surpluses are generated and exported there is no hope for sustained economic growth. That is why systemic change is an absolute necessity.   

(The writer is attached to Murdoch Business School, Murdoch University, Western Australia.)