Neville de Silva assesses the coalition in-fighting that could jeopardise Sri Lanka’s political and economic stability
Scenes of violenceerupted in the Sri Lankan parliament building as politicians debated the issue of corruption in January.
The discussion descended into a brawl in the centre of the chamber, backed by a cacophony of partisan shouting from the sidelines and a display of anti-government slogans written on large sheets of paper held aloft by protesting MPs.Some politicians were knocked to the floor;others were left bleeding and had their clothes ripped.
These corruption allegations relate to the Central Bank and a sale of bonds in 2015 soon after President Maithripala Sirisena took office. Hehas recently said he will leave the presidency after meting out appropriate punishments to corrupt politicians.
A commission which investigated the bond sale has drafted a report which appears to implicateimportant politicians, the governor of the Central Bank and high profile persons in the business community.The alleged insider trading supposedly cost the country almost 12 billion rupees. Suspicions of an attempted cover-up by the main party in the ruling National Unity Government (NUG) had damaged itspublic image.
Ironically, the NUG came to office in 2015 promising to end widespread bribery and corruption.Now the commissionis recommendinglegal action against the former finance minister Ravi Karunanayake, former Central Bank governor Arjuna Mahendran, businessman Arjun Aloysius, who is the main beneficiary of the bond auction,and various officials of the Central Bank.
Prime Minister Ranil Wickremesinghe hit back by claiming the previous Rajapaksa government was corrupt.In response, the commission said that Treasury bond sales between 2008 and 2015 should also be investigated.This has opened the doors for the government to launch an inquiry into deals struck during the Rajapaksa years.
Sri Lanka’s economy has been growing as a result of the peace dividend following President Rajapaksa’s triumphant crushing of the minority Tamil separatist insurgency by the Liberation Tigers of Tamil Eelam (LTTE).Itis believed to have grown by around four percent last year, but that is nevertheless a decline from the 5 per cent GDP growth achieved in 2014. The drop was partly due to harsh weather that devastated agriculture, a sector that generates 7 per cent of total GDP in the country. Some rural regions have experienced the worst drought in 40 years, forcing people to abandon their farming livelihoods in the countrysideto seek work in cities.
‘In Sri Lanka, poverty, unemployment, lack of livelihood options and recurring climate shocks impact the food security of many families, resulting in migration to find secure livelihoods,’ the International Organisation for Migration (IOM) said last year.
The government set out its economic direction for the country in September 2017 under its Vision 2025: A Country Enriched policy framework. At its core, the policy aims to position Sri Lanka as a competitive, knowledge-based economic hub at the centre of the Indian Ocean.
In order to achieve this ambitious goal, there must be political stability but that is in short supply. Last month an angry president walked out of a cabinet meeting after blaming the United National Party (UNP) for continued criticism from within the coalition,though he was eventually coaxed back to continue with the discussions.
Although the Sri Lanka Freedom Party (SLFP) and the UNP are politically joined at the hip, the union was a marriage of convenience forged to defeat Rajapaksa, who was aiming to extend his presidency to a third successive term.Ideologically, and in both economic and foreign policy, the two parties are far apart, and any cohabitation between the two traditional rivals was bound to cause rifts. Yetdivorce is not an option, asSirisena and Wickremesinghe need each other to govern.
Last month the Supreme Court ruled that Sirisena’s term of office will be five years rather than six, and is therefore due to end in January 2019. That is only a small blessing; the president and the prime minister will still have to live together and desist from their mutual sniping– at least until the next elections.