POLITICS-SRI LANKA: Uncertainty Hurting an Already Faltering Economy

By Feizal Samath Reprint | | Print |

Feizal Samath

COLOMBO, Jul 16 2001 (IPS) - Sri Lanka is once again heading into a political quagmire as the government and opposition forces battle for the hearts and minds of voters ahead of a snap referendum called by President Chandrika Kumaratunga.

As the country gets ready for the Aug 21 referendum, called to ascertain whether the people want a new constitution, political analysts and economists say Sri Lanka is going downhill and facing months of uncertainty.

Meanwhile, the Norwegian-backed peace process has been placed on the backburner for the second time in eight months with the government’s pre-occupations elsewhere.

“This so-called peace process is taking us nowhere,” a resident in the war-torn northern city of Jaffna told this correspondent. More than 65,000 people have died in the conflict since 1983 when Tamil rebels began demanding a separate state for their minority community.

Last week, Kumaratunga – with her ruling People’s Alliance (PA) coalition in tatters – did the unthinkable. She suspended parliament for two months till September and called for a referendum in a bid to scuttle an opposition move to oust the government.

She made her move on July 10, ahead of a demand by opposition parties in parliament to House Speaker Anura Bandaranaike to debate a no- confidence motion against the government.

The no-faith vote which the opposition, with its 115 members against the PA’s 110 members, says it is confident of winning, has been stalled due to delaying tactics by Kumaratunga.

This is only the second time in history that parliament has been prorogued and a referendum called. In 1991, then President Ranasinghe Premadasa suspended parliament to similarly buy time against an impeachment vote against him. In 1982 President Junius Jayawardene held a referendum to extend parliament by another six years without calling national polls.

“The voice of the people has been silenced,” said a corporate leader, who declined to be identified, as the joint business community in one voice called on the government and opposition parties to form a government of national unity, at least for three years.

Sri Lanka’s main Chamber of Commerce said in a separate statement that the current situation “certainly a deterrent to new local and foreign investment”.

“The stock market is at a standstill, to say the least, and there is reduced level of foreign investment. Last year foreign investment was lower than in previous years and amounted to 700 million rupees (8.2 million U.S. dollars),” the statement said.

The Central Bank earlier noted that economic growth in the first quarter of the year had sharply fallen to 1.3 percent from 6.6 percent in the same period last year.

Economists said growth had been dampened by a recession in the United States, Sri Lanka’s main market for garment exports, while remittances from Sri Lankan workers in the Middle East had also fallen due to exchange fluctuations.

“The economy will certainly be affected in the next few months as political management takes precedence over economic management,” the head of an economic think-tank said.

The Central Bank’s economic growth forecast for the full year is 4-4.5 percent, down from 6 percent last year but private economists believe it could be much lower given the current gloomy environment.

Dr Pakiasothy Saravanamuttu, director of the Centre for Pokicy Alternatives (CPA), says the referendum is an attempt to shift the battleground to an area in which the government believes it could attract wider support – the new constitution – and thereby relegate the no- faith vote to the dustbin of history.

“Whatever way the actions of the president are viewed, there is no escaping the conclusion that they are undemocratic and designed for the sole purpose of keeping the PA in government, irrespective of the political consequences and the financial cost,” he wrote in a political commentary in the ‘Sunday Leader’ newspaper on July 15.

The question to be posed at next month’s referendum – ‘Are you in agreement with the proposal that the country needs a new constitution which is nationally important and an essential requirement?’ – has also stumped the opposition.

While the government was egging ahead with a ‘yes’ vote at the referendum, the opposition is also left with no option other than asking people to vote ‘yes’, as the need for a new constitution is not disputed by anyone.

Rajitha Senaratne, parliamentarian of the main opposition United National Party (UNP), said the joint opposition would urge the people to vote ‘yes’ at the referendum and “send President Kumaratunga packing home on August 21”.

“The opposition will use its air time on radio and television to call for Kumaratunga’s ouster through the referendum by the immediate abolition of the executive presidency,” he said.

Analysts said people would be confused if both the government and the opposition sought a ‘yes’ vote.

Kumaratunga came to power in 1994, leading her PA coalition on the promise of scrapping the executive presidency which has come under severe criticism due to its limitless powers and control over parliament. Seven years on, she is still to fulfil her promise and is now serving a second six-year term as president since 1999.

Other flaws in the constitution should be rectifed to address the need to decentralise power to the provinces from the centre – satisfying minority Tamil demands for regional autonomy, analysts say.

A draft constitution proposed by Kumaratunga’s government in August last year, which contained proposals to devolve power to the regions, was scrapped as it failed mobilise enough support in parliament.

Government politicians have said that if the people endorse the need for a new constitution, the PA will present an entirely new bill incorporating four independent commissions to handle the police, judiciary, the public service and elections – which have been among the main demands of the opposition.

Opposition parties are planning to take to the streets in a major protest rally is to be held in Colombo on July 19 with separate protest marchers converging in the city from all parts of the island.

The opposition is also collecting signatures from members of parliament to present an impeachment motion against Kumaratunga for debate when the legislature reconvenes in September.

If the opposition succeeds in ousting the government, credit must be given to a role played unknowingly by a small town called Mawanella in the central hill region.

Last May, mobs attacked shops, homes and mosques of minority Muslims in the town, turning the Sri Lanka Muslim Congress (SLMC) and its leader Rauf Hakeem, a key PA ally, against the government.

Hakeem was sacked from the government last month, a day before he was apparently planning to quit over the state’s inability to arrest the culprits of the violence.

The SLMC leader’s repeated demand for an inquiry into the Mawanella clashes triggered disputes with other cabinet colleagues, with Kumaratunga finally yielding to pressure to throw the former out of the cabinet.

Hakeem then crossed over to the opposition and his seven-strong group was enough to reduce the government to a minority in parliament, triggering the current crisis.