Why is IMF here? Sri Lanka needs new governance model to avoid them in the future

 The state of bankruptcy Sri Lanka experienced can happen again if there is no change in the way the country is governed contrary to the thinking history never repeats itself

 The IMF may have their own agendas. But they are in the country because our politicians and officials failed to manage the economy leading it to bankruptcy. Some degree of economic and financial discipline is evident today, thanks to the presence of the IMF. Any proposed renegotiations should be on the basis of even greater discipline, and sustainable discipline, and not pandering to populism.

Sri Lanka needs a new political model to make the best use of the opportunity now before it to move forward without having to pay foreign loans, including International Sovereign Bonds, capital and interest, for the next four years, the savings accruing because of the successful negotiations ($ 12 billion indicated by the President) with the IMF. The IMF is more than just a lending agency. No country will need them if they manage their own affairs well. Failure to do so closes many doors to them on account of their mismanagement. IMF opens such closed doors and provides a country with opportunities to reach out to others, especially in the Western world, for investments, exports and even more bi lateral loans.

The current agreement with the IMF was concluded during the stewardship of President Wickremesinghe. He has to be given credit for it. No doubt the conditions imposed by the IMF were and are tough and negotiations would have been equally tough. Many may have forgotten that the starting point for the entry of the IMF to Sri Lanka and the commencement of negotiations, was the state of bankruptcy that the country experienced thanks to past governments of all hues. Though it may sound like a partisan political statement, it cannot be denied that no one else but Ranil Wickremesinghe stepped forward at the time to be at the helm of the country. 

Those who are promising re-negotiations of the IMF agreement now were not willing to be part of a multi partisan effort to negotiate with the IMF, although several invitations were extended by President Wickremesinghe. Whoever wishes to re-negotiate with the IMF could do so now from a different platform as the situation in the country is different to what it was two years ago. It is not bankrupt today. President Wickremesinghe’s effort and stewardship has provided that platform. 

Essentially, the next four years is crucial for the country. It has a window of opportunity to rise from the precipice it pushed itself onto. At a very fundamental level, it has to increase earnings, both in rupees and in foreign currency, manage expenditure within its income and increase investments that are productive and provide a good return to the country. Overarching all this is adherence to the law of the land and ensuring the law is enforced fairly and equitably to all citizens irrespective of their wealth, station in life, ethnicity, and religion. There cannot be some who are more equal than others.

The objective of this article is to encourage readers to think critically about political models that will serve the country best. The commencement of this thinking process has to be an answer to the question whether the models we have had up to now have served the country well or not. While the country has benefited from some of the development work undertaken by successive leaders and governments, one cannot deny that in an overall sense, the political models have failed the country when taking into account the fact that the country was declared bankrupt two years ago. 

Rather than carrying out extensive assessments and politically motivated fault-finding exercises, it is now opportune to examine different ways of governance, political and administrative, for a better future for the country and its future generations.

Sri Lanka’s strength and perhaps its weakness is its history. In terms of governance, it will serve as a source of strength if one were willing to learn from past mistakes. The opposite will be true, and history will be a source of weakness if one never learns from past mistakes. While some may argue that history cannot repeat itself, if one were to take Einstein’s words of wisdom that one cannot expect a different outcome by doing the same thing, the same way, history, and in this case the state of bankruptcy Sri Lanka experienced can happen again if there is no change in the way the country is governed contrary to the thinking history never repeats itself. 

Centralisation of political and economic power

Centralisation of political governance and bestowing all effective governance powers to the centre has not served the country as well as it could have. Besides the economic management that failed, it failed to address the ethnic tensions amongst people, and one could argue that the failure to address the causes of such tensions was essentially due to the centralisation of political and economic power.

Addressing this imbalance is easier said than done as history itself shows us. Compromise on the part of all concerned is needed to achieve a better balance, whether it is in governance, economic management or ethnic relations.

As Otto von Bismarck, a Prussian statesman and diplomat who oversaw the unification of Germany back in the early 1800s, said, “Politics is the art of the possible, the attainable — the art of the next best.” is perhaps the guide to address the imbalance.

The “politics is the art of the possible, the attainable — the art of the next best”, basically is the recognition of compromise as a key requirement to achieve a better balance in political and economic management and in ethnic relations. Compromise here does not mean compromise on values which are universal, but compromise associated with interpretations of history, whether they are cultural interpretations, religious interpretations or even governance interpretations. One cannot and should not compromise on equality and equity as all human beings are equal. No human being carries a label on its identity at the time of birth. They get affixed over time. The principle of equality at the time of birth must be carried through to the maximum extent possible throughout the life span of all humans.

The world that a newborn enters is conditioned by history, or historical interpretations, culture, religion and several social factors. The newborn grows in such environments. They are barriers that stand in the way of any free thinker, and it is not easy for one to break free from such barriers. This may be why Bismarck coined the phrase “politics is the art of the possible”, as pursuing pure ideology itself acts as a barrier towards achieving better outcomes and “next best” would be an attainable outcome if one finds compromise between competing pursuits.

In the context of this line of thought, the following is suggested for readers to contemplate as a way forward to avoid the pitfalls experienced by the country.

a) A decentralised political governance model – Strengthen the role of provincial councils by granting national cabinet status to chief ministers of provinces. While national policy on key areas such as economic management, finance, health, education, foreign affairs, and defence will be formulated at national cabinet level with the participation of the chief ministers of provinces, the implementation of policies except in defence and foreign affairs would be assigned to provincial councils.

b) Establishment of a National Planning Council (NPC) with provincial planning subcommittees, that will develop and monitor a 10-to-15-year National Strategic Plan. The NPC should be nonpolitical and comprise of representative from the private sector, universities, research organisations, unions, and key government agencies. This Strategic Plan will become the basis for governing the country irrespective which party wins government at a general election. The plan should be approved by the National Parliament. This plan should be reviewed periodically. Of course, assessments based on regular monitoring, including new ideas and new ways of doing things based on advancing technology, has to be taken into consideration by an incumbent government and revisions of the plan approved by the National Planning Council. The NPC should be responsible for setting economic parameters such as an agreed debt to GDP ratio, a cap on expenditure based on income, export earnings and investment targets

c) Head of State – The President of the country will be the head of State and will have specifically defined executive powers. The Prime Minister will be the head of the cabinet and head of the government. A President will be elected by the people for a term of 5 years and serve only a maximum of two terms. Presidential aspirants should be independents and not contest via party tickets. The Prime Minister will be the candidate who will command majority support in the Parliament.

d) Limiting the national parliament to 100 members and the national cabinet to 15 members plus the chief ministers of provinces. Limit deputy ministers to one for each cabinet minister. As the task of implementing national policies will be devolved to Provincial councils, its political and administrative structures will have to be suitably strengthened. 

Ideally, the members of the National Parliament should be drawn from the local government and provincial council system with some, say 50 members selected by the people on a first past the post system. Provision should be made for the Head of State to appoint cabinet ministers from outside the Parliament but reporting to the Parliament.

e) Strengthen the role of local government – This sector is the one that is closest to the people, and it must be made more meaningful for the people and the country. Ideally local governments should be free of party politics as divisions on this basis becomes very corrosive to the society. If members are elected as independents based on the confidence people have for them, a council will be able to function as a people’s council in a more effective manner.

f) The Police department to be re framed as (a) a National Criminal Defence Task Force and (b) a Provincial based Community Peacekeeping Task force. The exact responsibilities of each Task Force will have to be worked out, but in the main, the responsibility for law enforcement related to all criminal matters throughout the island will be assigned to the National Criminal Defence Task Force and all community peacekeeping enforcement will be assigned to the Provincial Community Peacekeeping Task Forces. 

Conclusion

The thrust of these few suggestions is to advocate

a. Limiting the role national parliament members to policy discussions arising from the National Strategic Plan, approvals and monitoring, 

b. Strengthening the role of non-government entities in the national planning process and 

c. Devolution of political and administrative governance to provinces based on the approved National Strategic Plan. The central government will have some specific responsibilities as stated while other subjects will be devolved to provincial chief ministers who will have cabinet status.

d. Strengthening the role of local government

Discussions should take place on a new governance model if the country is to be free of debt and on a trajectory to grow as a fair and equitable, financially stable and self-sustaining country. The current debate on these critical matters is limited to politically motivated fault-finding discourses from political platforms with hardly any specific solutions to address the underlying governance failures. If no worthwhile specific solution emerges from those who are only criticising the present trajectory, the voters should not be blamed if they chose to stay with the current trajectory and opt to stay with the President whose plans are known and who has given the country a breathing space of at least four years to build on the existing plans while addressing any weaknesses in these plans and addressing any inequities, and chart a new path for the country. Discussing and debating publicly available specific, accountable alternate plans identifying achievable solutions to the ills that affect the country and who is best placed to drive the destiny of the country based on such plans should be the criteria to determine who is best placed to be the next President of the country.