The 'disappearance' of an Opposition, and a system in crisis

likely to offset about 90 per cent of the trade deficit. Increased tourist earnings and other service earnings are likely to result in a balance of payments surplus. Consequently there is not much concern about the trade deficit.

The other reason for a lack of concern has been the large scale foreign borrowing. There is scant concern that the country's foreign debt is about 65 percent of GDP and that its servicing absorbs about 25 percent of the country's export earnings.

Dr. P.B. Jayasundera, the former Secretary to the Treasury, called this concern "debt mania of some intellectuals, retired bankers, and politicians." He said that debt is part of the economy and what matters was the proper management of debt to the GDP ratio. In fact what matters, is the purposes for which debt is used; what the debt finances between tradable and non-tradable goods and the rate of return to those activities.

The Road Map of the Central Bank for 2015 envisages policies that would increase imports owing to the improvement in the balance of payments rather than utilise the balance of payments surplus to redeem foreign debts. Since the Central Bank has to repay US$ 500 million this year to the IMF and there are other repayments due this year and in 2016, it is important to reduce the trade deficit to generate a higher balance of payments surplus to improve the country's foreign indebtedness.

Trade prospects in 2015

The deterioration in the trade balance since October foreshadows serious setbacks to exports in the coming months leading to a large trade deficit once again in 2015 unless remedial measures are taken as the country is vulnerable to external shocks. Exports may not fare well this year owing to the decline in oil prices of the country's export markets for tea. Although there was an expectation of higher growth in Western countries this is not certain. The lower prices for tea and lower demand for manufactures may increase the trade gap unless imports could be contained. On the other hand, the precipitous fall in oil price could reduce import expenditure this year provided prudent pricing policies for petroleum products are adopted.

Managing the trade balance

Export growth in the short to medium-term would depend on further strengthening of outward looking economic policies, prudent public expenditure management that does not lead to excessive imports and maintaining overall aggregate demand. In the longer run the diversification of exports and export markets and ensuring an investment climate to generate exportable products is needed.

The week following the presidential election has witnessed further extraordinary developments. It saw a wholesale capitulation from the SLFP membership to the new President, reducing the UPFA to a minority in Parliament. The second spate of crossovers combined with the handing over of the party leadership by Mahinda Rajapaksa to President Sirisena has created an unprecedented situation. We now find the leader of the main opposition SLFP and the leader of the ruling UNP both in government. How will this affect the multi-party system and the working of democracy?

SLFP's internal crisis

The attempt to wrest the party leadership started with a group within the SLFP Central Committee declaring that they had elected Sirisena as leader by a majority vote amongst themselves. There was a simultaneous meeting of the SLFP Central Committee held at the party headquarters where the leadership of Mahinda Rajapaksa was reportedly endorsed by a majority of 42 out of 55 members present. It's not clear what transpired during the course of the week, but by Friday Rajapaksa had handed over the party leadership to President Sirisena. SLFP frontliners Nimal Siripala de Silva, Susil Premajayantha and Anura Priyadarshana Yapa who had doggedly maintained that the attempted changes were not in keeping with the SLFP constitution, had to eat their words.

This situation raises questions that have wider implications not just for the SLFP but for voters in general and for the health of the democratic process. Some may argue that nothing has changed in the SLFP since its elected members are still sitting in parliament and they still have a 'true-blue' SLFP leader. But consider this: Just after the election, the SLFP still held an elected majority in parliament and had a party leader who, as presidential candidate, attracted nearly 50% of the people's vote in a national election. Within a matter of days, after the election a chunk of the SLFP parliamentary group defected to back a leader whose support base, it could be credibly argued, comes mostly from the UNP and other (non-SLFP) coalition parties. How fair is this by those who voted for these SLFP MPs in 2010, and the 5.7 million who voted for Mahinda Rajapaksa at the recent presidential election?

Were voters betrayed?

The SLFP MPs' capitulation and Rajapaksa's surrender of the party leadership are seen as betrayals by some UPFA coalition partners including those in the Left Alliance, consisting of the Lanka Sama Samaaja Party, Communist Party and the Democratic Left Front. They say they were not consulted on these moves.

According to LSSP leader Tissa Vitarana's analysis of the SLFP vote, 90% or more voted for Rajapaksa and around 10% for Sirisena. Sirisena came in on the bulk of the UNP vote with the support of other sections such as the TNA, SLMC, upcountry Tamil parties' votes and about 10% of the SLFP vote. In parliament, people had voted for a majority of 138 SLFP members, but they betrayed that and took positions in a Sirisena-led regime, Vitarana said. These developments are "very unfortunate, and undemocratic" the veteran socialist leader told the Sunday Times. "The SLFP should have stuck together and retained Rajapaksa as chairman."

Flawed system

Questions also arise over the manner in which Prime Minister Ranil Wickremesinghe was sworn in, and the way the Cabinet was 'dissolved.' Did former prime minister D.M. Jayaratne resign, or was he sacked to make way for the new appointment? Some reports say he was 'removed' by a presidential order. Jayaratne could not be reached to verify this point. If the prime minister had to be sacked, would it not follow that the other Cabinet ministers too would have had to be sacked? Nimal Siripala de Silva has said that all Cabinet members 'automatically' lost their positions with the swearing in of a new prime minister. Conflicting legal opinions and interpretations have been expressed through the media on the complex subject of the constitutionality of these developments. The new Government should officially explain the position and establish the constitutionality (and thereby legitimacy) of events that took place, instead of leaving it to individual MPs to make ad hoc statements. People have a right to know.

Some of the peculiarities of this election may be attributed to the unusual situation where both the frontrunners were drawn from the same party. The tussle over SLFP leadership is unlikely to have arisen in the form it did, had it not been possible for Sirisena to cross sides and retain his party membership. The fault is not Sirisena's, but lies in the SYSTEM that allows an MP to cross sides without losing his or her party membership or seat in parliament. This has led to distortions. Rectifying this situation should be a priority of the new Government, which says it is committed to good governance and democratic values. Or else what appeared at first to be a vote for democracy could turn out to be a caricature of it.

Who will act as an opposition?

With all the crossing-over that has taken place before and after this election, the opposition seems to have virtually 'disappeared.' The TNA, SLMC, JHU, ACMC, CWC, NUW are all with the Government. The JVP has taken a position of supporting the 100-day programme but not accepting portfolios. The support of all parties for salutary reforms in the 100-day plan such as the repeal of the 18th Amendment, setting up independent commissions and the enactment of the Right to Information Act is commendable. But what happens after the 100-days? A decision to sit in the opposition benches hardly makes the SLFP an opposition, if most of its members are with the Government. And it's difficult to see how the SLFP can regroup to fight back at the general election when its leader sits in government. Will there be no opposition to challenge the Government in Parliament?

The composition of almost all the provincial councils too has changed on account of crossovers. If the composition of elected bodies like parliament and PCs can be radically altered by crossover and affidavit, one may ask, then what's the point in voting?