Grim vistas of poverty and shortages loom for Lanka

DOLLAR CRISIS COMPELS PROMISED LAND OF THE CHOSEN SEED TO PRACTISE AUSTERITY ON GRAND SCALE

If the motley cheer squad of Government MPs and supporters had waited eagerly for Basil Rajapaksa to weave a rosy tale of economic boom for Lanka in his maiden address to Parliament as Finance Minister on Wednesday, they were in for a nasty shock.

Instead of kindling hope that the promised vision of prosperity and splendour is around the corner, the Finance Minister could only but paint grim vistas of poverty and shortages as he outlined the perilous financial state the nation faced.

Coming as it did from the horse’s mouth, this was bad news: the final official confirmation that things had come to such a pretty pass that the truth could no longer be concealed nor compromised: the candid admission that the time for spinning the yarn that all was hunky dory was long past. The thread had run out and the spool lay bare.

Finance Minister Basil Rajapaksa made no bones when he declared the economy was in dire straits, with the present severe foreign exchange shortage coupled with a total of Rs. 1.6 trillion in lost revenues due to the COVID pandemic serving to further compounding the crisis.

Indeed, it was a despairing picture he depicted as he gave a detailed account of the nation’s depleted finances. At least, he was frank enough not to lay the blame at COVID’s door but to say that while the pandemic had certainly aggravated the crisis, the astounding losses suffered and why Mother Lanka’s cupboard lay bare was mainly due to wastage, corruption and unnecessary expenditure over the years. The larder was empty because wasters, rogues and spendthrifts had wasted, robbed and squandered the nation’s wealth for years.

He told the House: “We know that our expenditure has always been higher than our revenues. But this year, the loss of revenue so far has risen to nearly Rs. 1.6 trillion more than estimated. Our income comes from three main sources: the Customs, Excise and Inland Revenue. They have all shown minimal returns.”

So how does the nation climb out of this gaping loss pit to suck the nectar dripping from the honeycomb above? So what’s the solution, the hope of ever transcending this financial sinkhole?

The Finance Minister sees some hope in getting dollars from the country’s resilient exports and plans to build on it. As for loans, even with gasping breath, it seems the Government jealously guards the semblance of sovereignty it thinks it still holds. He said the Government would take loans from the World Bank, the Asian Development Bank or other lending institutions, but not from donors which attach conditions that impact the country’s sovereignty.

He also presented the controversial Tax Exemption Bill, officially called by its non- descript title Finance Bill, which would allow those with undeclared money here and abroad to invest it here, no questions asked, without fear of prosecution even though it maybe the fruits of massive corruption. Whether allowing scoundrels to use Lanka as their whitewashing laundromat to turn black money white and profit from their corruption, which, the Minister himself said, was one of the prime reasons that have been the ruin of Lanka, is a wise move remains in doubt.

He warned the House of hard times ahead. He said: “We are trying to limit the loans, and imports will be limited to essential needs and only for projects that have a return.”

True to his word, within 24 hours, the Central Bank’s Monetary Board imposed import restrictions on 623 consumer goods. Importers will henceforth have to place a 100 percent cash deposit upfront against the import of any goods on the prescribed list when they open ‘ Letters of Credit,’ or has it now been renamed ‘Letters of Cash’?

Some of the goods prescribed are mobile phones, fans, TVs, refrigerators, washing machines, ovens, digital cameras, shirts, tracksuits, swimwear, nightdresses, underwear, socks, rubber tyres, furniture, air conditioners, apples, grapes, oranges, cosmetics, toiletries, perfumes, makeup preparations, beer, wines, cereals, starches, chocolates, cheese and butter.

There is no certainty, however, that even if the 100 percent cash upfront requirement is made, whether the banks will have the dollars to import the goods.

On Wednesday, Basil Rajapaksa also confessed to the House the Government’s impotency to overcome the crisis alone, saying, “We don’t expect to overcome a crisis of this magnitude on our own but hope the Opposition will cooperate to solve it.”

The Opposition must, of course, cooperate in the national interest. But the Government’s call for help must be genuine. If it’s merely to use the Opposition as a reusable rubber stamp for its unilateral ad hoc decisions in a tacky public relations exercise for its own benefit, then it will be nothing more than a cruel sham.

The Government has all the powers it needs and more. The justification has been, these powers are necessary to solve the problems. It has a near two- thirds majority in Parliament with the balance five seats easily obtainable to make the magic twothird replete, and is aptly empowered to steamroll the opposition and enact any laws it wishes. The 20th Amendment passed last year renders the President even more powerful. A state of emergency, with its wide range of powers, is in force.

But has this surfeit of power, this stockpile, this hoarding, this accumulation, this concentration of power in a single receptacle, brought even an iota of benefit to the masses? Perhaps, it is time to start distributing it for the common welfare of all.