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Monday February 6th, 2023

Who’s afraid of election campaign finance regulations?

UNREGULATED CAMPAIGN FINANCES AND MEDIA BIASES THREATEN ELECTION INTEGRITY

Sri Lanka’s 8th presidential election held on November 16, 2019, saw a record turnout of 83.72% of the nearly 16 million total registered voters. Barring a few incidents, the election—known online by its hashtag #PresPoll2019—was considered free, fair and (mostly) peaceful by both local and international election observers. The European Union’s Election Observation Mission (EU-EOM) noted in its preliminary report on November 18 that the election was “largely free of violence and technically well-managed”.

The Asian Network for Free Elections (ANFREL), a regional alliance of international election observation organisations, in its initial assessment said the success of election was marked by the acceptance of its outcome by all contesting parties, “in a welcome demonstration of democratic maturity, yielding a swift transfer of power”. This was the first key national-level election conducted by the independent Election Commission (EC) since it succeeded the former Department of Elections in November 2015. The EC’s greater powers evidently ensured this election’s integrity in physical terms. However, much more needs to be done on how election campaigns are implemented, monitored and regulated.

NO LEVEL PLAYING FIELD

While commending the EC for conducting the election in a credible and professional manner, the EU observes pointed out that there was ‘no level playing field for all candidates’. They attributed it to three factors: unregulated campaign spending; abuse of state resources; and media bias. Mass media biases as well as social media manipulation are not entirely new in Sri Lanka and not limited to election times either. But these were more pronounced during #PresPoll2019 and, if trends continue unchecked, they can undermine voters’ ability to make informed choices.

The EC has been trying to persuade all media to abide by election rules. On September 21 2019, the EC gazetted election media guidelines that asked all print, broadcast and web media outlets to “provide accurate, balanced and impartial information in broadcasting or televising or publishing their news bulletins and any other programme relating to political matters”. The EC’s media guidelines covered all news and current affairs reporting as well as political commentary (including editorials and political cartoons). But they were mandatory only on the state media whose managers and journalists risked legal action for violations.

MICRO-TARGETING VOTERS NEEDS GREATER SCRUTINY, TRANSPARENCY AND POSSIBLE REGULATION

The private media—which has a more significant audience share—was expected to adhere to them too, but many outlets chose to ignore and supported their chosen candidate instead. Announcing the election outcome the day after, EC chair Mahinda Deshapriya highlighted the Commission’s lack of legal powers to regulate the private media. “Private TV and radio use airwaves that are public property to distribute their content, so [they too] have an obligation to act with greater responsibility,” he argued. In frustration he added: “If we can’t get more legal powers to ensure both state and private media abide by election media rules, we might as well ask the media owners to select winning candidates in the future—and save billions of public funds spent on conducting elections!”

BIG SPENDERS

According to EU-EOM, the two highest-profile candidates Sajith Premadasa (of New Democratic Front, NDF) and Gotabaya Rajapaksa (of Sri Lanka Podujana Peramuna, SLPP) both made “extensive use” of traditional media, with a substantial presence in paid advertising in television and the print media. Their campaigns also used “cross-platform electioneering tactics online, with official promotion pages adjoining third-party sites that frequently served to discredit the rival. The volume of hostile commentary was higher on SLPP-leaning sites.” (Full text: http://bit.ly/EOMSL19) Two local sources gave an indication of how much money was spent by the leading candidates. The Centre for Monitoring Election Violence (CMEV) estimated that a total of Rs3,108 million was spent by five presidential candidates between October 14 and November 10. Of this, SLPP’s share was Rs1,518 or 49% of the total estimate, while NDF spent an estimated Rs1,422 million, or 46%. According to CMEV’s data, both campaigns spent significantly (SLPP 61% and NDF 50.5%) on print and broadcast media advertising compared to other activities like public rallies and promotional materials.

Data is not available on how much each campaign spent on targeted advertising on key global tech platforms like Facebook, YouTube, Instagram or Google. Meanwhile, a study by Verite Research thinktank found that many Lankan television, radio and newspaper companies had charged premium rates (between 150% to 300% of standard prices) for carrying election advertising (see details at: http://bit. ly/2QHZ6ue).

Assuming these data collations are reasonably accurate, they bring up several concerns. The high cost of mass media buying rules out paid advertising for most election campaigns. Given the lack of regulations on campaign financing, the richest campaigns have a distinct advantage over all others.

Accessing social media platforms is cheaper but reaching out to one-third of the population who are online is not sufficient by itself. Also, the surge of sponsored or boosted content on social media closer to the election date added to the already high cacophony there.

DISINFORMATION OVERLOAD

While somewhat levelling the field for less well-endowed campaigns, social media presented a new layer of challenges for the election authority and voters. After the election was announced, politically motivated disinformation and racially charged hate speech increased in volume and intensity. However, such negative content flowed also through many mainstream media outlets notwithstanding their editors and publishers claiming to adhere to media ethics. As EU-EOM noted: “A peaceful and calm campaign on the ground contrasted with divisive rhetoric,hate speech and disinformation in traditional and social media.

Only a few of the 35 registered candidates were visible throughout the campaign period.” Elsewhere in their report, EU-EOM said, “The SLPP conducted a highly organised grassroots campaign and a sophisticated political messaging strategy online, including the use of mobile phone applications. While these applications were used primarily to promote the SLPP candidate, they also obtained voters’ personal information, essential for automated micro-targeted canvassing.”

The EU observers noted how the Premadasa campaign also used social media heavily, but with “markedly less investment in micro-targeting”.

Micro-targeting individual voters on social media (enabled by their behavioural profile already with the tech platforms) is an aspect of campaigning that needs greater scrutiny, transparency and possible regulation. Facebook—with 6.5 million users in Sri Lanka by October 2019 —was singled out by EU observers as the prime contributor to the crafting of political narratives in the public space and to setting the electoral agenda.

Ahead of the election, Facebook had claimed in op-eds in English newspapers that they were “absolutely committed to maintaining the integrity of the elections in Sri Lanka.” Yet election observers found that the company did not walk their talk. “The EC had only an informal understanding with Facebook on the removal of hate speech and disinformation. Citizen observers also reported harmful content online to the EC and Facebook. However, Facebook’s reluctance to take action, coupled to high levels of anonymous, sponsored content, enabled a mushrooming of hateful commentary and trumped-up stories that capitalised on long-standing ethnic, religious and sectarian tensions,” EU EOM said.

Disinformation and hate speech on Facebook continued even during the 48-hour cooling period before the election day, “when Facebook removed only a small proportion of such paid content. This was detrimental to the election and at odds with international standards.”

ADVOCATING STATUTORY REGULATION OF MEDIA IS HAZARDOUS IN IMMATURE DEMOCRACIES LIKE OURS

Since EC did not have a written agreement with Facebook, it was left entirely to the company’s discretion on whether—and how fast—it acted on any specific content flagged by the Commission or election monitoring bodies.

The number of removed Facebook posts or pages was not made public. Adding to these concerns is the fact that Facebook did not consider the EC’s media guidelines applicable to it. (Social media is mentioned twice among the 34 clauses of these guidelines, admittedly not in very precise or clear terms.)

URGENT ACTION NEEDED

So what is to be done? Advocating statutory regulation of media is hazardous in immature democracies like ours. Yet #PresPoll2019 has highlighted the need to empower the EC vis-à-vis all mainstream media, at least during election times, to guard against media biases. Regulating campaign finances could be a more effective way forward. EC has been calling for campaign finance regulations for a long time, pointing out that such scrutiny was mandatory in the past, until the Parliamentary Elections Act No. 1 of 1981 repealed that requirement.

The current law enables EC only to monitor if a candidate is exploiting state resources. There are no upper limits or accounting requirements for private funding received by campaigns. An Election Campaign Finance Bill requiring candidates to reveal sources of funds and expenditure has been with the Legal Draftsman’s department for some months. Once campaign finance regulations are in place, EC chair Deshapriya says, the private media’s bias in favour of a chosen candidate can be checked.

“If a candidate is given extra airtime on the news or in other programming, we can calculate that as if that airtime is paid for, and add it to the particular candidate’s campaign costs. If the cumulative total exceeds what is allowed by law, the candidate risks being disqualified.” Will the current Parliament pass the campaign finance regulation law before its term ends in early 2020?

Media companies whose advertising revenue goes up massively during election times are unlikely to advocate campaign transparency or spending limits. Voters and civil society have to raise their voice—and fast.

Science writer Nalaka Gunawardene is on Twitter @NalakaG and blogs at http://nalakagunawardene.com

(Colombo/Feb08/2020)

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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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