Sri Lanka - Stop selling the family silver, no, gold!

(MENAFN- Colombo Gazette)

By N Sathiya Moorthy

TNA parliamentarian M A Sumanthiran deserves all praise and thanks for his initiative to help the nation address the economic crises, so should SJB's former minister, economist Harsha de Silva. While the latter has reiterated his appeal to the government for talking the Opposition into confidence on the forex crisis, the former has thoughtfully convened what tantamount to an all-party meeting – two, thus far — on the economic crisis, urging the government to commence re-negotiating repayment schedules and terms with the nation's creditors.

Both are jobs that the government of President Gotabaya Rajapaksa should have initiated, and both are legacy issues that cannot be wished away by the leadership or disowned by the Opposition. Both are national problems, going beyond the ethnic issue, which alone is now acknowledged as one – though nothing has been done to resolve it in the decade-plus after the conclusion of the ethnic war. Today, neither can be allowed to drift either, as they are as critical as the ethnic issue, or even more, to decide the fate and future of the nation and its population.

Time used to be when many people in the country would very casually refer to their nation as a 'Somalia in the making'. That included poor and less literate who did not know if Somalia was an eatable or a drinkable. SJB Leader of the Opposition Sajith Premadasa sort of kicked up a row not very long ago when he made a similar comparison. While offensive it was about another member-nation of the UN system, it did not stir much criticism within the country. That was because Premadasa was seemingly reflecting prevailing sentiment of a large section of the population, as such a sentiment had returned with a vengeance and loudly so, after the current forex and economic crises hit the nation as none before it.

Maintaining confidentiality

The two rounds of Sumanthiran-initiated talks are conspicuous by the kind of confidentiality attending on them. As organiser, the TNA leader clarified that it was an open meeting with the doors closed only to ensure that the discussions did not go off-tangent and kept the focus on the agreed subjects. And so it seemed to have remained. The national media either did not get a 'leak' or a 'scoop', or were so unimpressed by the anticipated outcome, they did not bother reporting the proceedings, even 'post facto'. What they reported was what Sumanthiran was officially authorised to put out in a signed a statement.

It is significant that the leaders of the three economic committees of Parliament, elected on ruling SLPP combine's ticket, were present. It is however anybody's guess why the UNP and the JVP that were represented in the first round were absent from the second. If their worry was that it would help the main SJB to steal the show, the choice of Sumanthiran as the organiser and his own conduct should have nullified it.

After all, the TNA was busy talking still about the ethnic issue and human rights violations from the previous decades, both inside Parliament and outside, when the nation was grabbling with the forex and economic crisis. They did not talk even about the farm sector crisis, caused by the 'organic fertiliser' norm which rather became a scam after the Chinese supplier demanded and obtained $ 6.4 m in scarce forex reserves for supplying 'sub-standard' stuff.

At least to that limited extent, the choice of Sumanthiran as the initiator of the all-party talks should have cooled the governing leadership's inherent concerns and political fears. If anything, it's the SJB leadership and the rest from a non-Tamil background who should have been worried if the TNA and/or its parliamentarian were trying to hijack what essentially was their agenda – and should remain so.

After all, for a very, very long time, no SLT politician has been in government to know, understand and think like a political administrator. Though there may still be time for the likes of Sumanthiran to think and act like ones, right now they have handled it all with grace and maturity which may have been absent if a southern Sinhala party or leadership had taken the initiative, instead.

It is still unknown if the TNA leader had invited the government political leadership to send a representative or two to participate in the talks and partake of the common understanding that was evolving. For, it was also the only prudent way to approach the problem. Commence rescheduling talks with creditors here and now lest the nations should hit a stone-wall on the forex payment and reserves front all over again, sooner than the government is ready anticipate. It is not even a ship-to-mouth kind of existence, still government ministers are already talking about improvements in tourism and overseas jobs sectors, post-pandemic, for them to calculate steeply increased flow in the coming months.

Forex woes and more

SJB's Harsha, who also attended the all-party talks with party boss Sajith Premadasa, is even more specific. In his recent statement, the economist-parliamentarian, who had done a stint as state minister under the so-called 'Government of National Unity' (GNU) earlier, focussed almost entirely on the forex situation. Harsha too has only urged the government to discuss it all with the Opposition, though he did not seem to concede that they all had to share the blame for the economic/forex mess in which the nation found itself now.

Rather, it's a legacy issue to which every party and the leader had to take the blame. The Tamil parties as also the JVP cannot escape the blame for wantonly letting their militant leaderships of the forgettable past for destroying the nation's economy and economic edifice, as if that would solve the problems that they were supposedly highlighting. Far from that.

Harsha has also asked the government and the nation not to trust the relatively rosy picture being painted by Central Bank Governor Ajit Nivard Cabraal, and cautioned against over-estimation. Instead, he has reminded the nation and the government about the 2,000-odd containers of essentials, including food and medicine, that are stuck in the Colombo Port as around $ 20-m needs to be found to pay up. He has also recalled the yoyo nature of the forex situation in recent weeks, indicating how even the $ 1.5 b in Chinese currency-swap has vanished almost without trace, owing to tight repayment schedules, that would still continue to haunt the government and the government and the nation for a long time to come.

MP Harsha claimed that the government seemed intent on selling more of the gold in its reserves to tie up the forex crisis, as much as it could. What he did not say, nay, ask, was this:“What do you intend doing when all the gold stocks evaporate thus?” It is very much a required caution in Third World South Asian cultural circumstances. When neighbouring India came to pledging a part of its gold reserves to meet forex commitments, the nation's people were so upset about 'selling the family silver' to meet daily expenses that they readily agreed to ushering in reforms based on market economy.

There are those in India who today complain that much of the nation's current economic woes outside of the pandemic owed to that sentimental fault-line that tripped them all when the pledging of the nation's gold stocks became a news in itself. Sri Lanka's added woes is that even selling all the gold stocks may not be enough to pay up all creditors, both overseas and domestic, or at least the former.

It's time the government came out with a White Paper on the economic and forex situation and take Parliament and nation into confidence before charting out the future course. After all, it is the future of the nation that is at stake, not just of a leader or a party!

(The writer is Distinguished Fellow and Head-Chennai Initiative, Observer Research Foundation, the multi-disciplinary Indian public-policy think-tank, headquartered in New Delhi. email: )

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