Big money in politics

National Co-ordinator of Centre for Monitoring Election Violence (CMEV) Manjula Gajanayake

Justice Minister Ali Sabry

MP Dr. Harsha de Silva

Former MP Sunil Handunnetti

Strategic Communications Consultant and Freelance Broadcast Journalist Nadim Majeed

By Centre for Progressive Network 

Today, big money dominates politics in Sri Lanka to a degree never seen before. Whatever issue brings you to politics – whether it’s job security, education or health standards, social protection, climate change or simply livelihood – there is a reason why our country hasn’t been able to make progress: corruption. Money sneaks through every part of our political system, corrupting democracy and taking power away from the people. 

Big companies and the wealthy spend millions to grease the hands of legislators in order to push policies most favourable to them. But before all of that – before the legislative process even starts – the wealthy and rich businessmen try to buy off politicians during elections. The lack of campaign finance regulations allows the wealthy to pour unlimited amounts into campaigns, thus drowning out the voices of ordinary Sri Lankans. It’s no surprise that most people believe the wealthy have much more influence than the rest of us.

Take for example, the recent tax cuts implemented by the Rajapaksa Government. While giving massive tax breaks to their wealthy friends and businessmen, the Government has reduced Government revenue by over Rs. 500 billion. Especially at a critical time like this, when the country is in economic peril. The sugar scam by itself has resulted in a loss of Rs. 20 billion. This vital revenue could have been allocated to reduce the budget deficit, combat COVID-19, provide relief to people and businesses or even to improve the standards of health and education in Sri Lanka. In contrast, what we witness is an uncomfortably high debt load at a hefty 101% of GDP, against an emerging market economy average of 65% of GDP. Who will bear the brunt of this? The ordinary Sri Lankan.

Big businesses in Sri Lanka have significantly benefited from Government policies such as the import ban, which put hundreds of SMEs and workers out of business, while making record profits for big businesses. For example; Hayleys conglomerate generated Rs. 242 billion in revenue last year and a Rs. 14 billion net profit, the highest in the company’s 143 years of existence. LOLC made Rs. 53 billion after profit, the highest ever recorded by any Sri Lankan company. Hemas has reported a Rs. 3.3 billion profit.  

Moreover, the import ban, fertiliser ban and other policies have led to shortages in essential food items and commodities including milk powder, LPG gas, fuel, rice, sugar, kerosene and many more. While the wealthy and big businesses accumulate records, recent months have seen a wave of strikes and protests by key sections of the working class, including among state sector, plantations, garments, railway and port workers.

If we take a look at the proposed budget for the year 2022, education and healthcare has been allocated a meagre amount of Rs. 170 billion and Rs. 235 billion respectively, while highways and defence has been allocated Rs. 280 billion and Rs. 421 billion respectively. This is further militarisation of a country that already has one of the highest military personnel per capita, for a country that is not at war. Highways continue to be allocated massive sums, thus benefiting the monopolies in the construction sector that continue to grease the hands of corrupt politicians. These budget increases could have gone to education and healthcare, in which we lack human capital to move to the next stage of development, as well as to combat a pandemic. A study conducted by IPS in 2020 revealed that only 30% of students in the smallest schools were reached via online/TV compared to over 80% in the largest schools. There is a huge disparity in our school system, which could have better utilised this money in bridging the gap between urban and rural schools, as well as providing more technology-driven education to rural children. The Ministry of Women’s and Children Affairs has witnessed a decrease of 25%. Over 52% of our population is women, yet the allocation is abysmal.

Sri Lanka is currently heading for one of the biggest economic challenges in its history in 2022, with the Central Bank printing money like there is no tomorrow under Modern Monetary Theory, ordinary people strangled by import substitution, inflation, shortages among others. Government’s response to these policy failures has been to offload this crisis onto the working class and poor through increased taxes, subsidy cuts and skyrocketing increases in the cost of essentials. We believe the root of the problem stems from the lack of campaign finance regulations that has led to a deterioration of democracy in Sri Lanka. It has turned Asia’s oldest democracy into an oligarchy, in which a handful of wealthy donors dominate politics and business in Sri Lanka, while the concerns of the majority are neglected.

It was refreshing to hear Justice Minister Ali Sabry, SJB MP Dr. Harsha de Silva, and former JVP MP Sunil Hadunnetti highlight the need to come together across parties to push for this regulation to be passed in Parliament.

Welcoming remarks by MP Ali Sabry where we would expect to see a new draft of this constitution in 2022 that will be discussed in Parliament but also require the input of the public.

Following the call for submission of proposals recommending electoral reforms in July this year, he further noted that discussions have been convened recently with MPs across parties and civil society stakeholders to finalise and bring forward an electoral system that works for everyone, prior to any upcoming election.

National Co-ordinator of Centre for Monitoring Election Violence (CMEV) Manjula Gajanayake highlighted election campaign expenses from the 2019 Presidential and 2020 Parliamentary elections, and reiterated the commitment civil society organisations have towards ensuring campaign finance regulations are enacted in Sri Lanka.

Big money in politics: Problems

• The rise of wealthy and rich businessmen spending unlimited amounts of funds to influence elections.
• The lack of restrictions on outside spending from corporations and special interest groups.
• The rise of political advertising and lack of transparency on who is funding them.
• The negative impact on ordinary Sri Lanka, especially youth, women, low-income people and other minority groups.

Solutions

• Adopt Campaign Finance regulations aimed at promoting fair political competition and curbing the influence of money;
• Making it mandatory to disclose all political spending
• Closing fundraising loopholes for candidates
• Rules contribution and spending
• Enforcement
• Sanctions 
• Secure the independence of the Election Commission and strengthen their ability to effectively enforce the law

Money sneaks through every part of our political system, corrupting democracy and taking power away from the people 

Pix by Upul Abayasekara