A 50-day review: Discontent in private sector and ‘Colombians’

Friday, 27 February 2015 00:30 - - {{hitsCtrl.values.hits}}

UNP Leader Ranil Wickremesinghe waves at supporters as he arrives at the College House, Colombo 7 polling booth on 8 January in this file photo to cast his vote at the Presidential Election. The movers and shakers of the private sector are largely Colombians and the UNP’s out-of-character behaviour is putting them off and it will not be surprising if the usual UNP majorities in Colombo decline significantly at the forthcoming general election By a Special Correspondent It is 27 February; the new Government has clocked 50 days of power and it is opportune to review its performance during this period. If one is to go by the rumblings and the ramblings in Colombo, there is increasing disillusionment with the UNP-dominated new Government. The previous Government, try as they did, was unsuccessful in converting the “Colombians” from their deeply-entrenched UNP loyalties. This was amply evidenced by the results in the presidential election and at various elections in the past. The heart of Colombo remained indefatigably UNP. However, the UNP which the Colombians voted for in January 2015, and many times before, and the values, ideologies and fair play which typified the UNP, have changed dramatically and the UNP is near unrecognisable, especially in the eyes of the private sector. The movers and shakers of the private sector are largely Colombians and the UNP’s out-of-character behaviour is putting them off and it will not be surprising if the usual UNP majorities in Colombo decline significantly at the forthcoming general election. Unlawful, inequitable and unreasonable When President Sirisena was elected in January 2015, it was the expectation of the Colombians that the President and his new Government, will, come what may, always act in accordance with the law. The ‘Maithri’ Government also promised that its actions will be in keeping with a spirit of fair play and equity.

However, as it has so transpired, the instances of the Government attempting to steamroller organisations, and individuals, into silent submission by the deployment of unlawful, inequitable and unreasonable means, are many. Although I will not try to list these out, the Prime Minister will know what is being referred to. Allowing a “wrong,” however unpalatable it may have been in the first instance, to be righted by another “wrong” is not “yahapalanaya”. The introduction of “retrospective” taxation and that too on an unequitable basis and in blatant, and knowing, violation of Investment Treaties given under the Constitution of Sri Lanka is not “yahapalanaya”. Discriminatory targeting of corporates The discriminatory targeting of a section of society, simply because they exceeded an arbitrarily established profit threshold is not “yahapalanaya”. The targeting, and hounding, of organisations and individuals simply because they are perceived to have been friends of the previous Government is not “yahapalanaya”. Certainly, and by all means, if there is evidence of illegal and unethical dealings, the Government must bring the offenders to book. However, it is certainly not “yahapalanaya” to go after them on a whim and a fancy. The majority of the big corporates in Sri Lanka have, over the many years, always worked with the government of the day and they have done so within a legal and ethical framework. There remains little doubt that this Government, too, will want big business to be supportive of their policies within a framework of good governance. If this happens and if they are successful in their endeavours, meritoriously, will the next government brand them as organisations who were lackeys of the previous government simply because they worked with the government of the day?

What is driving this irrational behaviour? The Colombians know for sure that it is not the style of the majority of the individuals in the current UNP-dominated Cabinet of Ministers to act with scant disregard for lawful and accepted practices. So what is driving this irrational behaviour? One cause is certainly the obsession of the new Government to deliver on its 100-day program. A 100-day program is a tall order for any administration and it becomes taller when the administration is new. The primary objective of the new Government was, and has to be, to make changes to the Constitution in removing, or limiting, the unfettered powers which are currently resident in the Executive President; the reversion of the majority of the executive powers to a Parliament duly elected by the people and the re-establishment of the institutions which safeguard the rights of the people. This was the principal push behind the citizens’ vote, and certainly the Colombian votes, in electing Maithripala Sirisena as the President. They are aware that the changes to the Constitution are work in progress and will be formally presented to the Parliament shortly. That is well and good. In addition to the aforesaid principal objective, there was the need to give relief to the ordinary citizen. Although this was done, its strategic thrust, sustainability and proposed funding are very questionable and portray an amateurism which inevitably arise when decisions are driven by undue haste. The President, whilst recently reviewing the progress of the 100-day program, stated that the needs of the people must be achieved within a democratic framework. It is fully agreed that some circumstances require action which may be uncomfortable to some. However uncomfortable that may be, it is essential that such actions are equitable and not flawed in concept. Robbing Peter to pay Paul is not democratic! Getting Paul to pay Peter through mechanisms which are fair and reasonable is fine. Delivering on 100-day pledges The establishment of an effective “holding” organisation with the capability to direct, manage and oversee the workings of the Government and the other State institutions, during the 100-day period, and the establishment of mechanisms to investigate and ascertain the facts in bringing to book those responsible for large-scale corruption and other misdeeds has to be an important objective of the new Government. However, it may indeed be the reality that it is impossible to achieve this goal within the set timeframe if actions have to follow a legal framework and it is best that the new Government resigns itself to this fact and apprises the public of the progress made, the challenges faced and the new timelines. If the Government had prioritised on the few specific objectives as described above, the 100-day program would have been delivered effectively and the current regime would have been in a position by the end of the said period to showcase a sustainable organisation and articulate a set of operating principles to the voters in seeking re-election at the general polls. Unfortunately, this appears nigh impossible, right now, because the Government has set itself tasks beyond the capacity of a 100-day program. Bitten off more than it can chew The greed for votes has driven many sensible politicians to take irrational actions. The ill-thought objectives, workloads and the unrealistic timelines for the achievement of the objectives have led to mass-scale bungling and a resultant loss of credibility. The administration has attempted to bite more than it can chew. We have clever, committed and sensible individuals at the helm of Government and they do not deserve to be in this situation because of the lack of leadership, coordination and the madness of a few. Contradictions and changes Just take the Port City as an example. Two different Cabinet Ministers and the Prime Minister gave contradicting versions of its status within a space of 10 days. Further, these versions were different to what the President is quoted as saying in India. The Minister of Finance addressing a Ceylon Chamber of Commerce gathering on the 30 January spelt out the categories of organisations that would be subject to Super Gains Tax (SGT) and the basis of the SGT calculation. One week later, his statement that BOI companies were not included was contradicted by the Deputy Minister of Policy Planning and Economic Development. In the first week of February, the Minister of Finance, the Ministry officials and private sector representatives agreed on a basis for the charge of SGT. A few days later the agreed base was changed. As of date of writing, more radical changes are being contemplated and/or have been made. This includes a move to levy a SGT on BOI Companies which are governed by Investment Treaties under the Constitution of Sri Lanka, a move which is akin to committing Foreign Direct Investment hara-kiri. This vacillation evidences the lack of pre-thought in formulating, and presenting, an Interim Budget in a hurry. Time limitations and growing impatience As was stated earlier, the 100-day program does not allow adequate time to achieve all that was promised. Even at this juncture, it is not that difficult to identify the “must do” actions and the new Government is advised to focus on them, these being the actions which were at the heart of the President’s election, and achieve them. The Reverend Sobitha Thera has already warned them of the dangers, and the consequences, of unfulfilled promises. Rajiva Wijesinha, in an interview with the Daily FT, speaks of the growing impatience among the many who voted for the NDF. Arrogance towards private sector The private sector is increasingly frustrated by the lack of professionalism displayed in many aspects of the Interim Budget and the cold shoulder shown to them by those in power. The very persons who when in the Opposition criticised the previous regime of not listening to the stakeholders prior to formulating policies are now making the same mistake. The arrogant, “take it or leave it” attitude displayed towards the private sector by those in power, appears to reinforce the belief that it is right for the Government to force the private sector to subscribe to a flawed funding of the Interim Budget. Whilst this may be true if one is solely looking to win the general election, it will be extremely foolhardy on the part of Government to cold shoulder the private sector, a sector which is the key to the sustainable economic development of the country. It is also key to employment generation and the flow of incomes into the households. Losing the Colombians The large numbers which gathered in Nugegoda to express their support to the former President is surely a sign that there are many ordinary citizens out there who are not enamoured by the basket of “goodies” made available under the Interim Budget. Whilst acknowledging that there has been significant progress on the fronts of “freedom of expression” and foreign relations, if the Government is not prudent, and far-thinking, in its other actions which have been the subject of this review, it will neither have the masses nor the “loyal” Colombians nor the private sector/industrialists behind them. Amidst all the described confusion, the President has been the silver lining in an otherwise dark cloud. His actions have, in the main, been consistent with what he preached. He has lived up to the picture that was painted. It is now hoped that he will intervene quickly in redressing the situation before the discontentment takes deeper root. There is still time to correct course. If you don’t you will lose the Colombians.