Policy Challenges in the post-conflict situation
by R.M.B Senanayake
We ended the war in May 2009 but were immediately caught up in the global financial crisis and the subsequent economic recession. The global financial crisis was fairly well handled or it could have led to a serious foreign exchange crisis. The Central Bank managed the crisis reasonably well in the short term immediate aftermath but there are still challenges ahead. Fortunately foreign investor confidence in the country has not eroded much with direct foreign investment still coming in although lesser volume and migrant remittances are increasing.
But exports have still to recover fully from the economic recession; what we need is not mere recovery but a spurt in earnings. The prospect for this is indeed bleak with the suspension of the GSP Plus by the European Union which will come into operation from August. Our commodity exports face the problem of production limitations. Both tea and rubber production depend on the weather with tea requiring rain while rain slows tapping rubber. Overall, prospects for export growth are bleak. While our foreign remittances grow, such growth is inadequate to meet the balance of trade deficit which is likely to grow this year as the economy recovers and produces 5% growth as predicted by the IMF.
There is also the rise in oil prices which are now over $80 a barrel. Different analysts give different predictions for the future course of oil prices for this year. But they are unlikely to be below $75. In the second half of 2008 oil prices dropped to around $45. So we will face a massive increase in the oil bills which will worsen the current account of the balance of payments. We have of course run current account deficits in the BOP almost every year since 1977 and previously funded such deficits by foreign and bilateral aid often obtained at very concessionary terms. So our debt repayment burden is still not too heavy.
But the present regime has embarked on short term foreign borrowing and foreign bilateral borrowing from China and India. India seems to be more interested in developing the North and East and the time may not be too far when the Tamil people look to her as the savior unless we launch a process of reconciliation. Our politicians are ignorant of the true feelings of the Tamils. The deployment of the Army in the North and the East may give the impression of an army of occupation and the benefits of the so-called ‘uthuru wasanthaya’ are not likely to flow to the whole country unless normal economic relations are encouraged between the north and the south and this is possible only after normalization of relations between the government and the Tamil people.
The Tamil people will have to be wooed by the government and the recent election results show that the Tamils can be more flexible when it comes to voting for the ruling party.
Gaining legitimacy with the West
The West seems to have assumed that with the end of the war there would be a return to democratic norms. Minister G.L Pieris has made some noises about it but seeing is believing for words must be matched with deeds. Democracy, unlike other forms of governance, has inherent checks and balances to mitigate the inclination to resort to violence to resolve political differences. If the Opposition is constrained in Parliament and if the JVP is harassed through legal and extra-legal measures they may have second thoughts about democracy. They may not win elections but they could pose a threat to peace and democracy.
Suppressing dissent is no way to run a democracy and the appointment of Mr. Mervyn Silva has not created confidence in the media. It is a slap in the face of media freedom and democracy. Similarly, governing the country under Emergency Regulations and continuing to use the Prevention of Terrorism Act to harass opponents and critics is not democracy.
Let us not follow the post conflict African countries like Rwanda or Sierrra Leone. It is still dangerous for journalists to work in most of these countries. In February 2009, four Sierra Leonean female journalists were subjected to an extraordinary attack – abducted, stripped naked and forced to march through the streets of the eastern city of Kenema – for reporting on an anti-Female Genital Mutilation (FGM) campaign on the international day of zero tolerance for female circumcision.
Such impunity undermines the tenets of democracy of which freedom of speech and other basic human rights are intrinsic. Blatant violation of the rights of others who challenge the ruling regime is not democracy. The lack of freedom in those countries was also complicated by widespread corruption, joblessness and insecurity.
There is also the question of funding a standing army of several tens of thousands required originally to fight the war but now making no economic contribution. Can we bear the cost when the government finances are in such a parlous condition? The government is running huge and increasing fiscal deficits and there seems to be no way to cut them down. Can the Defense expenditure be reduced? Security personnel will say no but they have a vested interest.
Security comes not from arms and soldiers but from winning the hearts and minds of the Tamil people. Other countries have appointed Reconciliation Commissions but we have ignored this subject. We seem to have a naïve view of how a defeated people will feel and think. Openness and free expression of the innermost feelings is a sine qua non for reconciliation. Can anyone say the people are free to express their inner feelings?
One can’t expect the Government to agree to war crimes investigation by the UN. But the government must at least show that it respects human rights and democratic freedoms for its ordinary citizens without branding the dissentients as conspirators against the state.
Do we want to follow where critical media are ruthlessly closed down, journalists arbitrarily arrested and thrown in jail or forced to flee the country. The appointment of Deputy Minister Mervyn Silva is a bad start.
Cutting government expenditure
But there is one area where the government can reduce expenditure and even generate extra income from reforming and running the State Corporations at a profit. Eliminating the massive losses caused by corruption, mismanagement and politicking is essential. Employing the unemployed in government jobs or in the public sector when there is no productive work for them to do is a foolish solution to the unemployment problem. But this seems to be the only solution within the purview of the government.
The educated unemployed have always been a destabilizing factor and giving them jobs in the government is not likely to satisfy them. They want not only income but the perks and social status which they think they deserve as graduates. These youth can only serve as fodder for instability in the future as in the past.
The challenge facing us is indeed how to balance the competing demands to translate peace into concrete development that benefits ordinary people on the streets.
With the politicizing of the bureaucracy and the state machinery the government administration generally lacks the necessary capacity or the will to effectively perform core functions of statehood. The Police are not the police of the State but the police of the ruling party politicians. It may well become the same with the courts unless the independence of the judiciary is safeguarded. The health and Educational services are in a crisis with standards falling in education and diseases and death increasing.
Many in the public service are unwilling or simply unable to provide basic public services such as governing legitimately, ensuring physical security, fostering sustainable and equitable economic growth as well as other essential public goods such as clean water, affordable health care, schools, roads and decent jobs.
The government must understand the need for a modern bureaucracy. A servile sycophantic bureaucracy is not equipped to carry out development. Bureaucracy is not an institution which existed in our traditional ruling regimes. It is a recent innovation by the British. The Indian political parties wisely refrained from messing with the public service. But SWRD undermined the public service and the Left political parties saw in the situation an opportunity to establish their own regime through a bloodless revolution by capturing power from within.
It is the height of folly to entrust the governance of a country to a set of politicians who lack modern knowledge and experience in public administration to run the day to day operations of the state machinery. The democratic ethos requires a clear separation of politics and governance and the rule that the politicians should confine themselves to policy and leave the administration to the permanent officials.
Without such a separation there can neither be good administration nor development. The 17th Amendment was an attempt to restore the situation but it will never be agreed to by power hungry politicians who want to arrogate to themselves all power. The 2/3rd majority could lead to another self serving Constitution for the powers that be.
The Communists consolidated their power through a one party state and stifled all dissent. But the last say is with economics. The Warsaw bread riots led to the fall of the communist regime. So the government must not allow high inflation to pauperize the urban people beyond a point.
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