Tuesday, 06 June 2023 01:01 GMT

When The Bail-Out Becomes A Sell-Out

(MENAFN- Colombo Gazette)

By N Sathiya Moorthy

Like it or not, in the next big election in the country, or more of them, the IMF would be the key issue. The way the government has been dragging its feet on the relatively less important local government elections (LGE), and not all its arguments are wrong, the presidential elections next year may be the next big thing – and it would be fought between personality on the one side and ideology on the other.

Yes, President Ranil Wickremesinghe, the 'saviour' for the present will be pitted against the ideology that IMF has led the nation down the garden path after their kind of western capitalism had started it all under JRJ's care, way back in 1978. Worse still, after the way the IMF has promised a bail-out for Ukraine, which is caught in the midst of what has increasingly become a 'proxy war', with so much ease and by amending the rules precisely for the purpose, critics of this government in this country can happily dub Ranil's efforts as an outright 'sell-out', instead.

At the centre of it all would be the Sri Lankan national pride, which they would argue, the western-minded Wickremesinghe had pledged for those 12 pieces of IMF silver. Ask them, then, in retrospect as to what they would have done in his place, circa 2022, zilch would be the answer. But then, they would also have enough in their arsenal by then to not only target Wickremesinghe and his parliamentary under-writer in Mahinda Rajapaksa. Their arsenal could also deflect all specific questions aimed at embarrassing them on their plans for a bail-out when it was needed. Such is what the conditions that the IMF has laid down for Sri Lanka.

Such is also the free rein that the IMF has given Ukraine, where the current war has no end in sight. In typical western academic argument, Ukraine can spend its resources in war and the IMF, would feed the nation, as much as possible under the circumstances. The US is the single largest subscriber to the IMF scheme. If it has pumped in $ 112-b thus far into the Ukrainian war-effort, the US and the rest of the West are using the IMF to keep the warring nation strong.

So, what is the IMF message for the rest of the world that needs a bail-out owing to more serious structural issues and calamities like quakes and Covid? You fight America's war with a third nation as the US does not want body-bags, and the other warring nation is not an Afghanistan or Iraq to ensure that the number of dead American soldiers are fewer and far between.

Or, this is the kind of picture that the likes of JVP and FSP may portray at election time. The SJB, with the centre-right heart like Ranil-led parent UNP's, could be caught in between. Compared to Ranil & Co, the SJB may have cadres, may not be able to multiply its votes. Those for the IMF reforms would settle for Ranil, even in the company of the much-hated Rajapaksas. Those against have their choice cut out.

It would be the JVP, FSP or an alliance of both, which could shape up only closer to election-time, depending on how far and how fast the latter grows from forgotten perceptions from the Aragalaya days. There is otherwise the other danger of FSP's cadres moving over to parent JVP all over again, just as pro-IMF lobby within the SJB could find a better shelter under Ranil's umbrella, as the former's political criticisms could all end up becoming personal and placed in the past, which may not have any electoral relevance, now and later.

He who pays the piper...

According to news reports, Ukraine has reached an agreement with the IMF staff for funding worth $15.6 billion, the first for a nation at war. This comes after Kyiv's allies, especially the US, pressured the so-called last lender of the world to amend its rules in recent days, to facilitate the process. Already, almost without questions, the IMF had lent $ 2.8 b to Ukraine as 'emergency funding' by the middle of last year when it was making Sri Lanka, and also Pakistan to dance to its tunes.

Of course, there is meaning in the adage that he who pays the piper calls the tune. But in this case, the more the piper gets paid, fewer are the tunes to which he has to dance (or, make bodily movements that may or may not resemble a dance.

Another interesting part of the IMF package, as published, is that the second phase of the Ukraine aid would also go towards facilitating the nation's ascension to the European Union (EU), which is the only reason for which Russia went to war with the one-time Soviet era coparcener. More importantly, such an assumption – yes, it is only an assumption – implies that Ukraine would win the war against Russia and would have the freedom to join the EU, which would then be expected to take forward the IMF kind of a larger aid-package for post-war reconstruction, etc.

Whatever be the justification for such a belief on IMF's behalf, it is anybody's guess if the lender has worked out a fall-back option(s), if the war did not end in Ukraine's favour, or an agreed peace formula, now or later, includes a clause that Ukraine would not join the EU in the foreseeable future.

Street-opinion and more

Even without it, the IMF conditionality that might have facilitated some breather just now, even as taxes and tariffs have doubled or tripled, will only have critics a year from now. Their numbers would only grow, as nowhere in the Third World has the IMF package provided long-term relief as the poor have been seen becoming poorer and the rich, richer, over the middle and long terms.

In the changed scenario, distanced in time and spirit from the two JVP insurgencies of the early seventies and the late eighties, and also Tamil youth militancy of the mid-seventies that took a terrorist turn under the despotic Prabhakran later on, could find electoral expression in more moderate, centre-left ways. Or, that should be the nation's hopes. That the frustrations of a new class of the nation's poor – whose numbers may only be increasing – would not take to militancy, as many of them would be educated enough to have their faith in the 'barrel of the gun' than the ballot of democracy.

For a time, the street-opinion may also be swayed by the IMF becoming the nation's conscience-keeper in terms of controlling corruption and introducing governance reforms - but of the western kind, which may not fit into the Third World mind-set and methods. After a time, however, they all may get tired of banging it all up on the Rajapaksas in the name of corruption-control, and begin looking at their own present and future.

When bleakness in their perception is the answer that they get, then the idea that the IMF had humiliated the nation by making it the first one in the whole of Asia to be brought under its 'governance management scheme' or whatever it turns out to be. It would hurt possibly more than the beggar status of 2022, which would be a faraway memory, compared to their plight and poverty on hand. Does the IMF then expect those voters to elect Ranil to a full term in office on his merit, or even any other centre-right party or leader who is identified with the western capitalist ways, and 'free speech', which would then have no use?

That is when the current IMF bail-out would have come to be seen as a sell-out, contextualised by the Ukrainian experience at the other end. Sure enough, TV talk-shows in the local languages and the ubiquitous social media would have by then brought 'injustice to Sri Lanka' to every drawing home, with little enthusiasm than already for hauling up the Rajapaksas before the UNHRC for alleged war-crimes, if not the ICC, like Russia's Putin just now.

It's already visible and can be felt. Not only the Sinhala media and polity, but even those from the 'affected' Tamil community and their media have already ignored the ongoing UNHRC session, and also the US-UK condemnation of the nation's human rights record, along with their other western allies like Canada...

(The writer is a policy analyst & political commentator, based in Chennai, India. Email: sathiyam54@nsathiyamoorthy)


Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.