A painted ship in a painted ocean

“Day after day, day after day, We stuck, nor breath nor motion. As idle as a painted ship Upon a painted ocean.” 

- ‘Rime of the Ancient Mariner’, Samuel Taylor Coleridge -

In a volatile global economy, our economy is contracting. We are in default. We are broke. Our economy is as idle as a ‘painted ship in a painted ocean’.

In ‘The Rime of the Ancient Mariner,’ Victorian poet Samuel Taylor Coleridge narrates the misfortunes of a sailing vessel. Dead winds keep the ship motionless. 

Spending days in this terrible immobility, dull and depressed sailors gave the place their own name – a period of no energy, utter helplessness, low spirits. They called it the doldrums.

Most people in this tortured land of ours are now in the doldrums. The harsh truth seems to escape current clique lording over the land.  

The ship by chance manages to break free of the ice and sails followed by a giant albatross. Then quite inexplicably the Mariner kills the bird with his crossbow brining a curse upon the vessel. 

After much muddling and confusion, other shipmates vilify the Mariner and hang the bird carcass around the Mariner’s neck.

It is a tantalising story. Something must happen for nothing to happen. Then again as the Government Printer has demonstrated over the printing of ballot papers in these strange times, something and nothing can happen simultaneously. 

President Ranil Wickremesinghe thinks that we are well on the road to recovery. In his second ‘Address to Parliament’ (some call it the second ‘throne speech) he told us:

“Now there is stability in the economy. People are comfortable. We have been able to safely guide Mother Sri Lanka a long way across a challenging course. It was not an easy journey. However, it is not yet over.” 

To my simple mind, people are not comfortable. To claim that people with no medicine, no fertiliser, no children’s shoes, and not enough food are comfortable is holy BS. I am talking about ordinary people. 

But then, he could also be right. To him ordinary people are those who read the Sunday Times and express their ‘weltanschauung’ in English. He points out to a young lass who tells the venerable English broadsheet “I have not given up on my Sri Lanka.” To me living in proximity of the Passport office I see thousands daily with a totally deferent idea. 

The rulers are comfortable. People are not. Since April 2022 we don’t meet our debt obligations. Negotiations with the IMF is only for a respite. It is only after reaching an accord with the IMF, that we can chart our path to recovery. We still do not know when or at what cost.  

Some people go through life believing in an image of themselves that is far from real. It is as if they are trapped in a narrow passage of mirrors. By breaking that passage you are only doing them some good. You can set them free and make them see how horrendously mistaken they are. 

President Wickremesinghe told us, “The moment the schoolchildren sang the National Anthem and Jayamangala Gatha during the last Independence Day celebration, I was convinced of the need to secure their future.” 

How times change? Now we are reduced to peddle simple sugary talk. Alice in Wonderland had seen plenty of cats without a grin. Alice was truly amazed to encounter a grin without a cat! 

A politician who spent a lifetime in the quest for power must invariably arrive at being either self-centred or simply egoistical. When in charge of an institutional set up, they believe that the institution cannot succeed without them.  

This deep-seated desire to keep it going may at times compel such driven leaders to stretch the limits of their power to bizarre levels. More simply these leaders inhabit a make-believe world.  

To prove they aren’t usurpers they drive hard to portray perfection, betraying a terrible incapacity to acknowledging their failures. When confronted by failure, they convince themselves and others that these problems are neither their fault nor their responsibility.

Their own distortions convince them that they are doing nothing wrong, or they rationalise that their perversions as justified to achieve a greater good. Surrounded by cronies they lose their capacity to think logically about important issues.

If the idea was to explain policy, why on earth should it involve pomp and ceremony? Why tea and canopies in times of hunger and distress? 

The Policy Statement could have been presented to Parliament avoiding ceremony. Why address Parliament in a new session? Well, that’s all about hubris. Getting to the top of the mountain isn’t good enough. You must show that you are the master of the mountain. 

We are a long way from the path of recovery. I don’t expect the economy to recover under the Ranil Wickremesinghe Presidency. The well-read, well-informed politician seems to have missed the key global indictors as amplified in the Global Risk Report 2023 of the World Economic Forum:  

“Economic warfare is becoming the norm, with increasing clashes between global powers and state intervention in markets over the next two years. 

“Economic policies will be used defensively, to build self-sufficiency and sovereignty from rival powers, but also will increasingly be deployed offensively to constrain the rise of others. Intensive geoeconomic weaponization will highlight security vulnerabilities posed by trade, financial and technological interdependence between globally integrated economies, risking an escalating cycle of distrust and decoupling. As geopolitics trumps economics, a longer-term rise in inefficient production and rising prices becomes more likely. Geographic hotspots that are critical to the effective functioning of the global financial and economic system, in particular the Asia-Pacific, also pose a growing concern.”

Harsha, Eran and Kabir are right about what needs to be done. Although I have not quite forgotten their ‘footnotes’ to explain the ‘hocus pocus’ of the bond scam they seem honestly intent on grappling with issues identified as immediate. One hopes that they will be good at persuading ordinary people to make extraordinary sacrifices in these aberrated unimaginable times. 

The SJB trio have squarely recognised a fundamental that the well-meaning people of the National People’s Front insist on sweeping under the carpet.

All nations and much of humanity has been integrated in to a single ‘global economy’.  We have transitioned from a world of regional and bilateral trade into a new international order where production processes and wealth creation is organically linked to a global process. No single nation-state can remain insulated from the global economy. We cannot prevent or even attempt to dilute the penetration of political, social, and cultural superstructure of global capitalism. 

If Comrade AKD doesn’t like it, he can lump it. 

To return to the point of departure of this essay, the Ancient Mariner presides over a painted ship in a painted ocean. 

For four decades he engaged in politics, preached economics, promised reforms and held out hope and prosperity. The people rejected him decisively. So much so that he failed to retain his seat in parliament. 

For the least popular politician in the land to say that he will not be hesitated to take unpopular decisions is both comic and tragic. 

The single navigator of the economy 

As Prime Minister of the ‘Yahapalanaya’ government he was the one single navigator of the economy. 

His economic profligacy during the 2015-2019 period is worse than the decades under the Rajapaksa fiefdom. Here are some glaring examples. 

As Prime Minister of the Yahapalanaya government he was in sole charge of economic policy. His economic profligacy during the 2015-2019 period is worse than the decades under the Rajapaksa fiefdom. Here are some glaring examples.

Under his stewardship the ‘Yahapalanaya’ regime borrowed a massive $ 11.5 billion through International Sovereign Bonds during the period 6 March 2015 and 28 June 2019 (see table 6 in the Quarterly Debt Bulletin of the Ministry of Finance). With this massive borrowing what did his government achieve in terms of growth, employment generation and poverty reduction? 

At least the Rajapaksas built an empty sea port at Hambantota, an empty airport at Mattala, a forsaken cricket stadium in Sooeriyawewa, an empty convention hall in Hambantota, and a concrete contraption called Nelum Kuluna. 

What has the Economic Maestro got to show for the $ 11.5 billion his administration borrowed? 

In a press release dated 28 May 2015 the Department of Public Debt of the Central Bank explained or rather gloated over the new regime’s rush to jump on the slippery slope to insolvency. The Governor at the time was Arjun Mahendran. And he knew his business.   

“The final order books stood at US$ 2 billion, an oversubscription ratio of 3.08 times, from 173 accounts. Distribution was very well diversified, with Asia taking 23 per cent, Europe 27 per cent and the US at 50 per cent. Global Fund Managers were the largest investors in the transaction, representing 79 per cent, with Banks, Pension Funds/Insurance and Private Banks taking 9 per cent, 7 per cent and 5 per cent respectively. 

“With this transaction, this Issue represents the first Sovereign Bond Issue for Sri Lanka in the international capital markets in 2015, post the change in government. This Issue also succeeded in achieving a ten-year cost of funds which is inside the current Sri Lanka US$ secondary levels and at tighter spread vs the US Treasury compared to the last ten-year Sri Lanka US$ in 2012. This achievement is all the more impressive, given the recent volatility in US Treasury yields and anticipated Fed rate hike later this year.” 

Quite oblivious to his own performance in his second peroration to parliament he pontificates:  

“An international organisation with experience in solving financial crises made the following statement about our country.

“Sri Lanka has a reputation for ‘kicking the can down the road’ – this leads to problems avoided rather than solved in the long term.”

Who kicked the can in 2015? Whose behaviour is he talking about? 

During the Rajapaksa presidency between 2010 and 2014 the country spent an average of $ 662 million per year on imports of ‘personal vehicles’. The Yahapalanaya campaign condemned the Rajapaksa profligacy. 

The clever competent Prime Minister Ranil Wickremesinghe promised to do better than Mahinda Rajapaksa. 

He was not ready to do business as usual. He did better. He did business better than the usual. 

On borrowed funds the exchange rate was steady. It was fun time for the upper middle class. Encouraging times for the middle class. Borrowing time for the lower middle class.  

In the period 2015-2019 a total of $ 1,064 million was spent on the import of ‘personal vehicles’. RW recorded an increase of 61% over MR’s profligacy (see Table 75 in the Statistical Appendix of the Central Bank Annual Report 2014, and Table 78 in the Statistical Appendix of the Central Bank Annual Report 2021). 

An overvalued Rupee deadened the value judgement of the class that shopped in glitzy malls and drove Maserati’s Porches and Mercedes Maybachs. The wretched of the earth did not grumble. They went on living. They were content because even Mahanayake’s were choosy about which brand of vehicle offered them ‘niravanic comfort’! 

C.J.P. Siriwardena the then Assistant Governor of the Central Bank explains Sri Lanka’s 2007 entry into international capital markets. (Chapter 16 – 60th Anniversary of the Central Bank Commemorative Volume (www.cbsl.gov.lk). His concluding remarks are prescient and nearly oracular.  

“Sri Lanka is determined to continue with marking its presence in the international capital market, which has enabled the country to raise funds at competitive rates to finance infrastructure projects and restructure some of the debt accumulated by financing development projects.

“It has also provided an added incentive for the authorities to be more prudent and implement policies with a long term perspective as the country is now subject to further attention of market forces, which while blessing “good behavior” punish severely any “wrong-doing”. Now we are being punished severely for our wrongdoing!