New Cabinet and NPP Economic Policy Council

President Anura Kumara Dissanayake (AKD) has retained most of the critical portfolios, like Finance and Defence, under his purview within the new Cabinet. The power of the Executive is further heightened under such circumstances and perhaps it is a bit inconsistent with their pre-election pledge of diluting the powers of the Presidency. 

In an interview given to the BBC when the NPP Leader visited London last April, he mentioned the names of several individuals who could become Finance Minister upon emerging victorious. Some of the preferred choices he disclosed were: Sunil Handunneththi, Prof. Anil Jayantha, Dr. Harshana Suriyapperuma, and Prof. Seetha Bandara, all members of his party’s Economic Policy Council. Yet, contrary to his proclamation to the BBC, the President has retained the Finance Ministry under him while appointing Dr. Harshana as his Deputy. 

Who would hold the authority in terms of taking decisions at the Treasury under this arrangement is a matter of speculation. Secretary Mahinda Siriwardana taking charge of the fiscal policy would be the best thing that could happen for the economy. Siriwardana is a career Central Banker with a considerable amount of expertise in fiscal policy affairs. He had served as Director General of the Department of Fiscal Policy apart from having been an Alternate Executive Director to the IMF. 

There is no one in the so called NPP Economic Policy Council, which is dominated by accountants, who can match the credentials of the Secretary to the Treasury and it is hoped the former Central Banker would have the liberty to discharge his duties without having to experience undue influence from the Deputy Minister of Finance or his party’s bogus economic policy experts. In fact, the President needs to be applauded for not giving the Finance portfolio to any member of the NPP’s fake Economic Policy Council. Siriwardana also has a good rapport with the Monetary Authority Chief Nandalal Weerasinghe, and AKD needs to be commended for retaining the services of the two technocrats. 

One actually does not need to be either an economist or accountancy/finance professional to be politically in charge of the public purse. Late Arun Jaitley, who was India’s Finance Minister during Modi’s first premiership term, was a prominent corporate lawyer but he performed his tasks meticulously. George Osborne, who served as Britain’s Chancellor of the Exchequer under the premiership of David Cameron, is a graduate of History from Oxford. Readers might also recall that Late Mangala Samaraweera did an admirable job when he provided the political leadership to the Treasury despite being a Fashion Designer in contrast to his ill-famed predecessor, who happens to be a CIMA-qualified Management Accountant.

Already, the Government has turned its back on the flawed stances on economic policy matters associated with the NPP’s pre-election rhetoric such as preparing and negotiating an alternative Debt Sustainability Analysis and doing away with the cost-reflective pricing of utilities. The indications are the Government is keen on continuing with the IMF program and that would augur well for the economy. However, such a course of action could break the hearts of those businessmen as well as professionals like bankers who supported the NPP with the expectations of reductions in PAYE/personal/corporate income tax rates.

Meanwhile, it could only be in Sri Lanka where Head of State/Government holds a plethora of portfolios unlike in other countries. During the 1999 Presidential Election campaign, Ranil Wickremesinghe gave an undertaking that he would not have held any ministerial responsibilities had he won. But when he eventually became the Number One, he too held on to key portfolios. The former President would have been compelled to do so, as he might have entertained doubts about the capacity of the legislators who backed him. 

Possibly Sri Lankan leaders are either greedy to have vital ministries under their purview or they want those ministries to be led by bureaucrats without any involvement from politicians.