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Monday February 6th, 2023

Hope that the country will go towards an inclusive nationalism

Sri Lanka President Gotabaya Rajapaksa has discussed the island nation’s fuel crisis with the Russian President Vladimir Puti

ECONOMYNEXT – During the election campaign, the ruling party and its allies legitimized their call for a two-thirds majority in parliament on the basis that a change of constitution was needed to empower the future government. But there was limited information about what needed to be changed. The focus was on the 19th Amendment that shared power more equitably between the president and parliament, protected state institutions from political interference and banned dual citizens from contesting elections. There were also references to the need to do away with the 13th Amendment that devolved power to the provinces or at least abolish the devolved powers over police and land.

The government is now beginning to provide more information about its plans for a new constitution that would permanently alter the country’s political landscape. Minister of Justice Ali Sabry has said that the terms of Parliament and the President should be limited to five years, the number of terms of President be limited to two and appoint an expert committee to prepare a Constitution suitable to the country. Hopefully, this will be accompanied by the presentation of a process by which public opinion may be sought, as well as input from opposition political parties.

The history of constitutional change in Sri Lanka has been that a single political party obtaining a two-thirds majority has been a recipe for leaving all other parties out without taking their views into account. Thus, the 1972 constitution was drafted without taking into consideration the views put forward by the Tamil political parties. This led them to boycott the ratification process of the new constitution. The 1978 constitution too was drafted without input from the opposition parties and in the face of their opposition to its centrepiece, which was the executive presidency. The opposition parties described the presidency as the precursor to dictatorship.

Prioritised Community

President Gotabaya Rajapaksa and First Lady Ioma worshipping Monks

Events after the promulgation of the new constitutions in 1972 and 1978 have demonstrated that the absence of consensus in formulating the country’s supreme law can be extremely costly in terms of the conflicts they contribute towards. A similar danger exists on this occasion too. The election campaign that led to the election of President Gotabaya Rajapaksa in November 2019 was an extremely divisive one. This could be seen in the way that the electorate voted highlighting the ethnic and religious divides in the country. The threat posed by sections of the minority population to the sovereignty of the country and to the ethnic and religious majority in the aftermath of the 2019 Easter bombings led to a campaign that voting for President Rajapaksa was the last chance to save the country.

In his inaugural address after winning the presidency in November 2019, the President addressed this issue by saying that he had been voted into power by the ethnic and religious majority, but he committed himself to be the president of all. Much weight is being put today on this statesmanlike assertion. The general election campaign eight months later was less divisive due to the emergence of the Covid pandemic that took the primary place and affected all sections of the population in equal measure. The government’s decisive handling of the pandemic permitted the government to make significant inroads into the minority vote base. However, the theme of strong government being necessary to protect national sovereignty and the subordinate place of the ethnic and religious majority has continued to be a central one. President Rajapaksa’s policy statement to the new parliament at its inaugural sitting has reflected this reality.

The president was plainspoken in saying, “In accordance with the supreme Constitution of our country, I have pledged to protect the unitary status of the country and to protect and nurture the Buddha Sasana during my tenure. Accordingly, I have set up an advisory council comprising leading Buddhist monks to seek advice on governance. I have also established a Presidential Task Force to protect places of archaeological importance and to preserve our Buddhist heritage. While ensuring priority for Buddhism, it is now clear to the people that freedom of any citizen to practice the religion of his or her choice is better secured.”

A rebuttal to this statement of the president came the following day in parliament by former Chief Minister of the Northern Provincial Council and newly elected MP for Jaffna, C. V. Wigneswaran to who said, “My sole purpose in participating in this debate is to examine the effect the policy statement might have on the people of the North and East. There is no reference to the decades-old problems of the Tamil speaking denizens of the North and East. The North and East whilst being part of Sri Lanka are majority Tamil speaking. It would have been ideal if his Excellency would have had adopted a holistic attitude towards the island keeping in mind the necessity to view the problems of the periphery from the standpoint of subsidiarity.”

Inclusive Nationalism

Prime Minister Mahinda Rajapaksa getting a Hindu blessing alongside his Catholic wife Shiranthi

There is a concept of inclusive nationalism, in which everyone born within the boundaries of the country (regardless of race, religion, skin colour, language or culture) is accorded equal membership in the nation. The problem that the government will encounter is whether an inclusive Sri Lankan nationalism is possible when one ethnicity and religion is given priority. It will tend to alienate those who belong to other ethnicities and religions. The distinction between inclusive and exclusive nationalism is their attitude towards others. Exclusive nationalism centres upon the need to scapegoat others for the country’s social ills. This has happened time and time again in the past, most recently with the Muslims in the aftermath of the Easter bombings but also before.

In contrast, inclusive nationalism is consistent with the politics of compromise. Therefore, it is important that nationalism should be balanced by an emphasis on equality-based pluralism for citizens. Where people of different identities share a common space, the state needs to ensure there is equal rights, equal treatment and equal protection to all its citizens. This would mean, for instance, that a Tamil speaking citizen should be provided services in the Tamil language in any and all parts of the country. This would also be the case for Sinhala-speaking citizens in Tamil dominant areas of the North, East and hill country. Such a right would not be on account of Sri Lanka being a multi-ethnic, multi-religious and multi-lingual country, but rather by the need to provide equal treatment to all citizens.

In balancing the imperatives of collective nationalism with equality-based pluralism for citizens, the government needs to develop champions from within its ranks to bridge the gap in understanding and trust. There will be a need to promote values of a pluralistic, multi-ethnic and multi-religious society in which equal opportunities and equal protection are ensured through a framework of equal rights and equitable practices. This will need to be accompanied by trust-building between communities by setting up platforms for this to take place through enhancing and expanding the space for positive interaction and the dispelling of divisive and demonizing narratives of the other.

Whatever reservations that those from the minority communities might have had regarding the president’s policy statement, it was accepted by the parliament, including those representatives from the minority communities, without division. One of the sentences of the policy statement to parliament by President Rajapaksa was that “Our ardent desire is to build a prosperous nation with a productive citizen, contented family and a righteous society.” This is a sentiment that will resonate throughout the country and all sections of the people and needs to be actualised. (Colombo, August 25, 2020)

 

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Sri Lanka to address SME tax problems at first opportunity: State Minister

ECONOMYNEXT – Problems faced by Sri Lanka’s small and medium enterprises from recent tax changes will be addressed at the first opportunity, State Minister for Finance Ranjith Siyambalapitiya said.

Business chambers had raised questions about hikes in Value Added Tax, Corporate Income Tax and the Social Security Contribution Levy (SSCL) that’s been imposed.

It should be explored on how to amend the Inland Revenue Act, Siyamabalapitiya said, adding that the future months should be considered as a period where the country is being stabilized.

Both the VAT and SSCL are effectively paid by customers, but the SSCL is a cascading tax that makes running businesses difficult.

In Sri Lanka SMEs make up a large part of the economy, accounting for 80 per cent of all businesses according to according to the island’s National Human Resources and Employment Policy.

(Colombo/ Feb 05/2023)

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Sri Lanka revenues Rs158.7bn in Jan 2023 up 51-pct

ECONOMYNEXT – Sri Lanka’s government revenues were 158.7 billion rupees in January 2023 but expenditure and debt service remained high, Cabinet spokesman Minister Bandula Gunawardana said.

In January 2022 total revenues were Rs104.5 billion according to central bank data.

Sri Lanka’s tax revenues have risen sharply amid an inflationary blow off which had boosted nominal GDP while President Ranil Wickremesinghe has also raised taxes.

Departing from a previous strategy advocated by the IMF expanding the state and not cutting expenses, called revenue based fiscal consolidation, he is attempting to do classical fiscal consolidation with spending restraint.

President Ranil Wickremesinghe has presented a note to cabinet requesting state expenditure to be controlled, Gunawardana told reporters.

State Salaries cost 87.4 billion rupees.

Pensions and income supplements (Samurdhi program) were29.5 billion rupees.

Other expenses were 10.8 billion rupees.

Capital spending was   21 billion rupees.

Debt service was 377.6 billion rupees for January which has to be done with borrowings from Treasury bills, bonds and a central bank provisional advance of 100 billion rupees, Gunawardana said.

Interest costs were not separately given. (Colombo/Feb05/2023)

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Sri Lanka’s Ceylon Tea prices down for second week

ECONOMYNEXT – Sri Lanka’s Ceylon Tea prices fell for the second week at an auction on January 31, with teas from all elevations seeing a decline, data showed.

“In retrospect, the decline in prices would be a price correction owing to the overall product quality and less interest from some key importers due to the arrival of cargo at destinations ahead of schedule,” Forbes and Walker tea brokers said.

The weekly sale average fell from 1475.79 rupees to 1465.40 rupees from a week ago, according to data from Ceylon Tea Brokers.

The tea prices are down for two weeks in a row.

High Growns

The High Grown sale average was down by 20.90 rupees to 1380.23 rupees, Ceylon Tea Brokers said.

High grown BOP and BOPF was down about 100 rupees.

“Ex-Estate offerings which totalled 0.75 M/Kg saw a slight decline in quality over the previous week” Forbes and Walker said.

OP/OPA’s in general were steady to marginally down.

Low Growns

In Low Grown Teas, FBOP 1 was down by 100 rupees and FBOP was down by 50 rupees while PEK was up by 150 rupees.

The Low Growns sale average was down by 8.55 rupees to 1547.93 rupees.

A few select Best BOP1s along with Below Best varieties maintained.

OP1                     Select Best OP1’s were steady, whilst improved/clean Below Best varieties maintained.   Others and poorer sorts were easier.

PEKOE                 Well- made PEK/PEK1s in general were steady, whilst others and poorer sorts were down.

Leafy and Semi Leafy catalogues met with fair demand,” Forbes and Walker brokers said.

“However, the Small Leaf and Premium catalogues continued to decline.

“Shippers to Iran were very selective, whilst shippers to Türkiye and Russia were fairly active.”

This week  2.2 million Kilograms of Low Growns were sold.

Medium Growns

Medium Grown BOP and BOPF fell by around 100 rupees

The Medium Growns sale average was down by 33.40 rupees to 1199.4 rupees.

“Medium CTC teas in the higher price bracket witnessed a similar trend, whilst teas at the lower end were somewhat maintained subject to quality,” Forbes and Walker brokers said.

“Improved activity from the local trade and perhaps South Africa helped to stabilize prices to some extent.”

OP/OPA grades were steady while PEKOE/PEKOE1 were firm, while some gained 50-100 rupees at times.

Well-made FBOP/FBOPF1’s were down by 50-100 rupees per kg and more at times.

(Colombo/Feb 5/2023)

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