THESE are Email Exchanges amongst Personnel in the Rajeewa Jayaweera Circle — mostly hostile to the messy politics of the Yahapaalana Era, 2015-19 …. with highlighting emphasis being the imprint of The Editor, Thuppahi
A = Prithi Perera to the Jayaweera Circle, 21 November 2019
Thank you Rajeewa for the most useful tabulation. Much pains taking and time would have gone into it.
The following are my observations;
- Nearly 60%-70% of the Sinhala Majority Votes in the South were with GR and 80% -90% of the Tamil/Muslim Minority Votes in the North East of SL were with Sajith. This shows an obvious polarization of society in Sri Lanka, between the south and the north/east, between the Sinhala majority in the South and the Tamil/Muslim minorities in the North/East. The 30 year war where the wounds seem not to have healed as yet and the 21 April 2019 Easter Bombings have also given added strength to the anti Tamil/Islam lobbies. This can be adduced to be the reasons for the further accentuation of the extremist lobbies supporting the Rajapaksa dynastic politics. They seem to be successfully fanning these extremist elements during given periods, particularly when issues in economy and governance appear to go against them if and when they are in power, or when elections are in sight, if they are out of power. Anyone studying these patterns will find them to be more factual than fiction. Unfortunately, we also have some of the clergy making remarks that seem to encourage extremism, like in the case of Gnanasara Thera who has openly said that the BBS movement will be disbanded after the upcoming Parliamentary Elections in 2020 once victory is assured for the Rajapaksa’s.
- Ironically, though, Wattala and Negombo in the Sinhala Catholic belt were won by Sajith, despite the ill effects of the Easter Bombings which affected two churches along the Catholic belt.
- It will also seem unlikely that the SLPP will achieve a 2/3 majority at the Parliamentary Elections due in April 2020, given that GR achieved just 52.5% in November 2019. To date, CBK holds the highest percentage victory of 62% in 1998, followed by 58% victory achieved by MR in 2010, after the war victory. He had a winning majority of 1.8 Million votes over General Fonseka in 2010, which was converted into a loss by nearly 0.5 Million votes in 2015, a reversal of nearly 2.3 Million between 2010 and 2015. As such, everything may not necessarily be hunky dory for the Rajapaksa’s, unless they deliver on their many promises made during the 2019 elections.
- It must also be borne in mind that as per a Central Bank Report, the government will have to begin reimbursing nearly 3 Billion US $ per annum as capital during the next 3 years commencing 2020 in respect of loans taken in the past, particularly those taken in the prior years in 2012-2014 where the moratarium period is now over and if they are to keep to the promises of providing free fertilizer for farming and salary increases for 1.6 million state employees, as also, for the Estate labor, the bills to be borne by the government will run into billions, if they are to keep up with the elections promises. This is at a time where our Debt to GDP stands at 82.9 % and additional borrowings could be throttling. As such, one cannot attribute the economic morass only to the Yahapalana regime and or RW, RK and Mangala, but, to cumulative mismanagement, borrowings at high costs for construction of unproductive assets and robbing by successive governments. Once again, the billions spent on the elections will also need to be put back and those who spent on the elections will have to be adequately compensated, thereby robbing through excessive commissions will continue to happen in the future too. Today, the High Court of Appeal confirmed the immunity of President GR to his 5 cases of corruption now pending in the courts.
- One area where there will be an immediate revival will be the stock exchange where all wheeling and dealings take place and the black monies get whitened and the pumping and dumping will begin. The monies being made there by the few will then be invested into real estate and construction and for that, the Capital Gains Tax may need to get revised again. And once the boon levels off and may even crash, there will likely be an excess supply of apartments, resulting in unsustainability. This is what happened prior to 2015.
However, let’s hope for the best and that there will be more restraint and transparency and accountability in governance and that there will be no strikes by bus owners, doctors, railway employees and university students, estate labor and farmers that could have crippling effects on the economy. We can be hopeful in that the first mentioned four have been clearly Rajapaksa supporters!!!
B = Gus Mathews in Response, 22 November 2019
Prithi, Thank you for your analysis on Rajeewa’s breakdown analysis. Please click on the link below for a qualitative analysis of the results as espoused by a FT journalist: http://www.ft.lk/columns/Victory-over-the-oppressed/4-689834
The debt to GDP ratio that you quote for Sri Lanka is not necessarily onerous as the borrowing is not the cynosure of the economy. It is growth that is the all-important factor. As long as you have growth in the economy the debt plays second fiddle. The USA had a GDP to debt ratio of 105 percent in 2017. Japan had a mind-numbing 236 percent.
Governments borrow to stimulate economic growth and growth increases economic activity. The debt incurred prior to the advent of the ‘yahapalanaya’ administration was serviceable as the economic growth was approximately seven percent.
However, the growth dropped to below three percent during RW’s tenure and the sovereign bond debt payments that were due in August 2019 would have defaulted thus incurring non-favourable ratings from ‘Moodys’. RW then had to engineer a debt to equity swap with the Chinese bank on Hambantota to enable RW to pay the sovereign bond debt by reducing the overall outflow.
There is also a plethora of misinformation regarding the debt owed to Chinese banks. This was politics playing to the unsophisticated by the UNP coterie to show the previous government in bad light. Please click on the link below for an economic assessment on Chinese debts by the well-respected economic analysts ‘Verite Research’