Daily Mirror (Sri Lanka)

Economic opportunit­y cost of...

- BY JAYAMPATHY MOLLIGODA (Jayampathi Molligoda is a Fellow Member of the Institute of Chartered Accountant­s of Sri Lanka and holds a FMIC Masters of Business Administra­tion from the Post Graduate Institute of Management, University of Sri Jayawardha­napura.

Asolution can be found to the current crisis if all parties concerned will adhere to the generally acceptable dispute resolution mechanism.

However, it is easier said than done, because this crisis situation has gone beyond redemption. In my view, it’s a futile exercise to determine the constituti­onality or otherwise of the executive actions & powers and the parliament­ary supremacy and its powers simply because there is no valid constituti­on to talk about.

The constituti­on has many inconsiste­ncies and it’s bad in law. Now that at least one aspect is being challenged before Supreme Court, we should not interfere with the judiciary procedure- instead we await the outcome, however there is nothing to prevent discussing the legal, socio/political and economic aspects of the current crisis situation. It goes without saying that political stability is a necessary pre-requisite in attaining economic welfare of the people.

Two ideologies: two government­s?

In my view, this is a clash between two distinctly separate ideologies recognized and preached by the two main political forces in this country thus trying to practice their own idealistic governance model.

The proponents of the neoliberal economic model coupled with western backed Westminste­r style parliament­ary system of governance advocating nearfedera­l style of constituti­on are in the process of bringing more and more constituti­onal and economic reforms and those who oppose such moves are reliant on more socialisto­riented market-based economic developmen­t model coupled with a strong presidenti­al system of governance with little devolution of power to the periphery. I do not intend discussing this aspect in detail, however if we are to find a stopgap solution to the current impasse, it has to be acceptable and fair by both parties—in other words there shouldn’t be a situation where one party will lose and other will win. Instead, we will work towards maintainin­g the same status quo, till we go for a parliament­ary election.

Ideally, we could have both the presidenti­al and parliament­ary elections on the same day, for which we need to wait till January 9, next year, and the incumbent president must make his proclamati­on indicating his intention to contest the next presidenti­al election.

Economic opportunit­y cost of the national government

We preach that Sri Lanka is a Democratic Socialist Republic as per the 1978 constituti­on and practice social- market economy. Some experts say our country is faced with a huge ‘debt trap’ and the external account performanc­e is fast deteriorat­ing. Despite continuous borrowings, our foreign reserves are declining and debt servicing is ever increasing.

The trade deficit was US$ 9,619 million, however managed to finance through worker remittance­s and foreign exchange from tourism. According to the World Bank developmen­t reports, 45 percent of our population is below US $ 5 a day which is one of the generally accepted internatio­nal criterion. As can be seen from the Household Income and Expenditur­e Survey (HIES) undertaken by Department of Census and Statistics, over 51 percent of the national income is enjoyed by the 20 percent of the higher income earning category (rich) of the people whereas, only 5 percent of the income is accrued to the 20 percent of the population(poor) in the lower income category. As per HIES (2016), the average monthly household income in the poorest 20 percent was Rs.14, 843 and richest 20 percent was Rs. 158,072.

The external debt as a percentage of GDP in 1977 was only 21 percent and now it’s 60 percent. FDIS are less than US$ 1,000 per annum. According to recent World Bank review, the economy is estimated to have grown by 3.6 percent in the first half of 2018, following a 16-year low growth of 3.3 percent in 2017. Agricultur­e and related industry sectors are expected to have recovered in the first half of 2018.

The real issue here is we have very low national savings, resulting a gap between investment­s and savings. We need to either create a conducive business environmen­t to attract foreign investment­s or borrow money in order to make investment­s on infrastruc­ture developmen­t projects including improvemen­ts in health and education.

These statistics are not sufficient to explain the real downturn. The bottom line is that the successive government­s (not only under the national government) have failed in bringing social justice and much needed economic welfare to the people. Most of the top business leaders and financial analysts are of the view that the quality of life of not only poor, even the middle class is drasticall­y reducing. The income inequality and social unrest are fast spreading across the regions, sub-districts and cities.

As for the failure of the national government, for it to work for the benefit of the people, there should be a common work programme. The failure in the present situation is due to the fact that the UNF had one programme dominated strongly by the Prime Minister Ranil Wickremesi­nghe (RW) and the UPFA had its own programme dominated only rather weakly by President Maithripal­a Sirisena (MS) who was not in Parliament. If there was a common programme agreed upon, this present crisis might not have taken place.

Parliament­ary sessions back to normal?

According to media reports, the parliament­ary sessions were held peacefully on Monday the 19th November in accordance with d standing orders. It was decided to appoint the business committee. The leader of the house, Minister Dinesh Gunawarden­a said ruling party should have the majority representa­tion in the committee, which is not something unusual and it’s normal.

We look forward to the printing and publishing of the Hansard, and it can be assumed the official parliament­ary document will carry the correct position mentioning Mahinda Rajapaksa (MR) as the Prime Minister and Ranil Wickremasi­nghe as a Member of Parliament from Colombo district.

Since the western diplomats and foreign NGOS and proponents of RW/UNP have been refusing to accept President’s authority and only accept what the Parliament says, someone can politely give them copies of the parliament­ary proceeding­s contained in the Hansard which is the official parliament­ary publicatio­n of the parliament­ary sessions held on 19th.

Has the national government ceased?

Whether we like it or not, what we are witnessing now (till the Supreme Court judgement due on December 7) is a government of UPFA, and the previous national government formed on September 2, 2015 has ceased to operate with ‘pre-26/10/18’ Cabinet of ministers’ has discontinu­ed to function w.e.f. 26/10/2018. This is because the UPFA Secretary General on 26th October, by a letter addressed to the Speaker has withdrawn its support from the national government. However, the President has opted not to reconstitu­te the cabinet which was above 30. It goes without saying that functionin­g of a cabinet exceeding 30 is unconstitu­tional. Instead, he has opted to remove the Prime Minister, RW in terms of the powers vested under 42(4).

In my view, the president should have the courtesy to request the leaders of the former government to form a new cabinet and allow the leader of that party to present the budget of the UPF government which has already been prepared, thus enabling him to have his UNF government.

The proponents of the UPFA have argued that the national government formed under Article 46(4) has ceased to exist soon after the MS’S UPFA has withdrawn its support to RW’S UPF. Unfortunat­ely, in terms of the ruling given by the Speaker on the September 2, 2015 on the formation of the national government, the proponents of RW could still argue that this position is not correct and the national government has not collapsed even without one of the constituen­t parties. What about that Muslim Member of Parliament contested separately? Is there a provision available to form another national government?

19A should have made provisions in case a breakdown occurred

The 19A is initiated the hybrid government­s. It is important to highlight that the 19A doesn’t have a provision to justify the continuati­on of the existing cabinet in the event one party withdraws support to the NG they formed, and consequent­ly the compositio­n of the next government.

They only talked about the formation of a national government and there is no provision at all to accommodat­e a scenario ‘what if it doesn’t work?’ It was a big experiment which should have made provisions in case there was a breakdown due to any reason whatsoever. This is a serious lapse on the part of 19A, which has really created chaotic situation leading to a scenario called ‘Reduction to Absurdity’.

This situation has prompted the incumbent president to invoke the powers vested in terms of the constituti­onal provisions. People’s sovereignt­y is exercised by the power of the executive president and this includes franchise as well (Article 3 and 4). The president has opted to act under Article 42(4) to issue two gazette notificati­ons thus appointing MR as his PM. However, it should be admitted that his appointmen­t of PM must be substantia­ted at a future parliament­ary session, if they are to proceed with a stable government.

The proponents of RW argue that in terms of Article 46 (2), which deals with the tenure of the office of the Prime Minister, he cannot be removed and PM shall continue unless he himself resigns or ceases to be a member of parliament, which in my view, is correct if we take the relevant clauses in isolation. Then what would happen to the incumbent PM after defeating at a no-confidence motion in Parliament? Does it mean that he cannot be removed just because Article 46 specifical­ly gives only two situations for PM losing his position? It is also true that the Article 48 as per the Sinhala version of the constituti­on was referring to a situation arising from the ‘removal of the prime minister’. Therefore, one cannot say that there is no provision to remove the incumbent prime minister after 19A. It is not the parliament that appoints the prime minister. It is the president’s discretion.

President’s power has reduced under 19A; the Article 42(4) still in force

The Parliament does not have a role (as the initial step) in deciding who the Prime Minister is. It is the President’s opinion what matters here as the initial step. If the President feels that RW is most likely to command the confidence in parliament, he can appoint RW as PM. Don’t forget that RW became his Prime Minister- three and half years back.

If the feelings change to such an extent that he is unable to have RW as his PM- three and half years later, then he should be able to look elsewhere for a new Prime Minister. That’s how he removed RW under Article 42(4) and appointed MR as his new PM. It is true that in order to establish that MR commands the majority in parliament, the new PM has to face a vote of noconfiden­ce. This is the letter and spirit of Article 42(4). Quote; “…who, in the President’s opinion, is most likely to command the confidence in parliament” – not the majority in parliament.

The president is the appointing authority as well as the person who is authorised to remove the prime minister so appointed as per the Interpreta­tion ordinance. Therefore, there is no need to specifical­ly mention in the said article about the removal. This is subject to scrutiny by the judiciary; however no one has yet challenged the legality of the president’s act.

Contradict­ory clauses in 19A and move to dissolve Parliament

Since there is no clear- cut provision in the constituti­on to continue the government prevailed at the time of withdrawal of UPFA from the national government, the President has opted to use his unfettered power vested under 33(2) C of the 19A, which was introduced along with Article 70(1) restrictin­g President’s power to dissolve within 4 1/2 years. I recalled Supreme Court determinat­ion in 2002 when a similar 19A was presented as a bill on a fundamenta­l rights infringeme­nt case, it was determined that the duration of the president’s power to dissolve, which was originally only after the expiry of one year, should get extended only up to three years without reference to people at a referendum.

That prompted the law makers to bring in Article 33 (2) C giving power to the president to dissolve the Parliament in a situation like this, despite having the Article 70(1) which is a restrictiv­e clause, thus preventing Supreme Court to determine calling for a referendum when they heard 19A this time in 2015. In short the Supreme Court has not requested them to go for a referendum to pass Article 70(1) as there is adequate power vested in the President under Article 33(2) C to dissolve the Parliament.

It is relevant to mention here that there are serious inconsiste­ncies in the 19A in regard to the constituti­on of the Election Commission and some clauses in the Sinhala version differ from the Tamil and English versions etc. When perusing the constituti­on (vide Article 103), it is evident that the total number of members to the election commission has been reduced from five to three (03). As can be seen from the Article 104 (1), the quorum shall also be three numbers (03). What is more concerning is that the Article 104 (2) says that in the absence of the Chairman from any meeting of the Commission, a member elected by the members present from amongst themselves shall preside at such meeting. How can we have a commission consist of two (02) when the quorum is three (03)? These clauses are contradict­ing with each other. In view of the above, it is clear that the election commission is not properly constitute­d. In the circumstan­ces, I would suggest the government in consultati­on with the other parties will consider amending the 19A and rectify anomalies.

Conclusion

Question whether neo-liberalism is a good thing or not can be answered by people differentl­y. One could respond, yes, it’s good. Alternativ­ely, he may ask. ‘What do you mean by good?’ and ‘Good for whom?’ Keynes once defined economics as the “science of thinking in terms of models joined to the art of choosing models which are relevant.” Ordinary people now question that the real problem is with the ‘art’ part.

One can therefore argue that the economic developmen­t cannot be achieved by means of technocrat­ic economic policies; politics must play a central role.

The neo-liberal economic model coupled with western backed Westminste­r style parliament­ary system of governance advocating federal style of constituti­on thus bringing more and more constituti­onal and economic reforms could dilute the ‘letter and spirit’ of the Article 1 and 2 of the constituti­on.

The Article 1 &2 state that Sri Lanka is a free, sovereign, independen­t and democratic socialist republic, which is a unitary State. Aren’t we playing only lip service to the Article 1 and 2? What is your choice?

The Supreme Court shall have the sole and exclusive jurisdicti­on to hear and determine the pending cases, however, it must be emphasized that it is prudent to have a caretaker government under president MS, having a stake both by MR and RW and go for a parliament­ary election. Ideally, we could have both the Presidenti­al and parliament­ary elections on the same day. This could be presented as a temporary solution under a dispute resolution mechanism and cannot be construed as the end goal.

We as civil society members strongly believe that People of this country deserve a better system of governance so that our children can have a better & brighter future.

IDEALLY, WE COULD HAVE BOTH THE PRESIDENTI­AL AND PARLIAMENT­ARY ELECTIONS ON THE SAME DAY, FOR WHICH WE NEED TO WAIT TILL JANUARY 9, NEXT YEAR

IN MY VIEW, THE PRESIDENT SHOULD HAVE THE COURTESY TO REQUEST THE LEADERS OF THE FORMER GOVERNMENT TO FORM A NEW CABINET AND ALLOW THE LEADER OF THAT PARTY TO PRESENT THE BUDGET OF THE UPF GOVERNMENT WHICH HAS ALREADY BEEN PREPARED

ACCORDING TO RECENT WORLD BANK REVIEW, THE ECONOMY IS ESTIMATED TO HAVE GROWN BY 3.6 PERCENT IN THE FIRST HALF OF 2018

THE SUPREME COURT SHALL HAVE THE SOLE AND EXCLUSIVE JURISDICTI­ON TO HEAR AND DETERMINE THE PENDING CASES

ACCORDING TO A RECENT WORLD BANK REVIEW, THE ECONOMY IS ESTIMATED TO HAVE GROWN BY 3.6 PERCENT IN THE FIRST HALF OF 2018

THE PROPONENTS OF RW ARGUE THAT IN TERMS OF ARTICLE 46 (2), WHICH DEALS WITH THE TENURE OF THE OFFICE OF THE PRIME MINISTER, HE CANNOT BE REMOVED AND PM SHALL CONTINUE UNLESS HE HIMSELF RESIGNS OR CEASES TO BE A MEMBER OF PARLIAMENT, WHICH IN MY VIEW, IS CORRECT IF WE TAKE THE RELEVANT CLAUSES IN ISOLATION

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 ??  ?? President Maithripal­a Sirisena MP Ranil Wickremesi­nghe Prime Minister Mahinda Rajapaksa
President Maithripal­a Sirisena MP Ranil Wickremesi­nghe Prime Minister Mahinda Rajapaksa
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