KMC Abrew
The pandemic has shown we need a “Government of the people, by the people, for the people, not just for the wealthy elite.” Abraham Lincoln
The above quote does not refer to the recent pandemic. There is no doubt that the Sars-2 Covid pandemic caused insurmountable problems to the economies worldwide. While certain developed economies in the Western world have recouped lost ground, certain lesser developed economies are still struggling to emerge from stagnation and economic downturn. The jury is still out as to the origin of the Sars-2 Covid virus. There is strong evidence that virulent pathogenic viruses, such as SARS-COV-1, influenza and MERS, arise naturally in the wild. The influenza virus continues to mutate infinitely; hence, the vaccine is based on the previous years’ mutants.
The zoonotic origin of the pandemic is historically strong. Alternatively, the COVID-19 virus may have naturally arisen in a Yunnan cave where virus samples were being collected, and it was probable that some of the researchers got contaminated and subsequently got infected with the virus. For years, scientists in Wuhan were researching coronaviruses, inserting genetic material into the virus to make them more infective to human beings. The motive for this seems unclear, whether it is to use it as a biological weapon or gain commercial advantage in developing a vaccine for the said virus. Whatever the origin of Covid 19, the consequences to the world economy were devastating, with profound loss of life. Economies dependent on the tourist industry were severely affected due to the disruption of air travel between continents.
The developing countries in Africa, Central and South America and Asia, largely depend on aid from developed countries in the West, various sister organisations within the United Nations and the World Bank. Then there are loan sharks who appear sympathetic to one’s cause and offer loans at a high commercial rate of around 8%. They, of course, have ulterior motives, such as offering repayment in 25 years or leasing various sites rich in mineral or geological assets, ports of strategic importance for 99 years, etc. Hefty commissions are offered to corrupt politicians to secure these deals.
While the political class and ministry secretaries continue to enjoy a luxurious lifestyle, travelling in gas guzzlers under the protection of so many security personnel, these developing countries are embroiled in debt spirals of billions or trillions of Dollars. A good example is Sri Lanka, once the second richest country in Asia, second only to Japan at the time of Independence. Now Sri Lanka is declared bankrupt with a debt spiral of over fifty-four billion US Dollars.
The elite political class misuses aid from international organisations, including disaster management funds. Following the devastating Tsunami affecting South East Asia in 2004, it is well known that the then leader of the country squandered the disaster management fund received by the Sri Lankan government. The Supreme Court heard the subsequent court case under the chairmanship of the then Chief Justice of the country. Although the judgement was delivered in favour of the political leader, the then Chief Justice admitted, years after retirement, that he made a mistake in delivering the judgement. India is the only country in the region that refused to accept aid following a natural disaster.
Failed Economy
In the context of a failed economy, I would focus on Sri Lanka. It is deeply distressing to see how successive generations of politicians, in the name of protecting and preserving Sinhala nation and Buddhism, ruined the economy of the country and initiated a commission culture which led to rampant corruption.
By and large, it is no exaggeration to state that the political leaders who ruled the country up until the beginning of the decade of the nineties were aristocrats and of wealthy families in Sri Lanka. Their intention of entering politics was not driven by monetary interest or enriching themselves or their families. They did not rule the country by the letter of the law. JR Jayawardana brought about an executive presidential system- a draconian system with all executive powers vested in a single man. But, interestingly, the country was named the “Democratic Socialist Republic of Sri Lanka”. With the introduction of the executive presidency, the last shred of democracy that the country enjoyed disappeared into oblivion. Successive politicians fought presidential elections with the promise to abolish the system. However, they all enjoyed the executive powers and tightened the system further, amending the constitution occasionally. The current president, who failed to win a single election outright in the 45 years of his parliamentary career and failed to win his electorate in the 2020 parliamentary election, became president by default and has gazetted two further pieces of draconian legislation, namely an Antiterrorism bill and Online security bill, simply to remain in power by hook or by crook.
At the time of Independence, the country remained predominantly rural with an agriculture-based economy. Agricultural production accounted for 30% of GDP. In certain respects, however, Sri Lanka then Ceylon stood out in marked contrast to the other least developed countries in the region. For instance, the education standard and literacy rate were considerably higher than in other countries of the region.
Similarly, public health standards were high, and the mortality rate was relatively low due to increased Government expenditure on health education and food subsidies. Today, the Ministry of Health has become a gold mine for corrupt ministers and ministry secretaries.
Is it not a shame that relevant politicians in charge of the ministry took a commission on ordering the COVID-19 vaccine? It is in Hanzard, following parliamentary debates, that the Oxford vaccine was available at $2.00 per dose if the order was placed promptly, but the Ministry of Health bought the vaccine at the rate of $18.00 per dose. The then president of the country went around the country stating we are getting vaccines from the WHO. WHO agreed to provide vaccines for 25% of the population above 60 years of age under the COVAC facility.
The value of Sri Lankan currency was good at the time of Independence, and $1.00 was equivalent to one rupee. The economy was based on agriculture. There was reliable education and health service. It is no secret that Sri Lanka was the second wealthiest nation in Asia, the first being Japan. The value of the rupee was equivalent to one US dollar. Ceylon had a strong currency.
In the early 1970s, about 5 rupees equalled 1 Sterling pound. Needless to say, today, $1.00 is equivalent to Rs 340, and £1.00 is equal to Rs.450. When Gotabaya Rajapaksa came to power, he cut taxes for no apparent economic reason but for his political stooges to earn money with a colossal loss of revenue to the treasury estimated to be 600 billion rupees.
At the same time, he appealed to expatriates to send dollars to the country, claiming dwindling reserves. The financial sector was rudimentary and fragmented at the time of Independence. The Monetary Law bill incorporating legislation for establishing the Central Bank of Sri Lanka was passed by parliament in November 1949. Central Bank of Ceylon became operational in August 1950.
Regarding the Monetary Law Act, the Ceylon Rupee was designated the standard unit of monetary value of Ceylon, and its par value was fixed at 2.88 grams of fine gold. That was how strong the currency of Ceylon was. The sharp decline in value demonstrates the economic incompetence of successive post-independent rulers.
Historically, there was no communal disharmony in Ceylon. Tamil and Sinhala political leaders fought jointly in the independence struggle and achieved Independence from Great Britain by 1948, a year after India had been granted Independence. It appears that short-sighted politicians created racial disharmony to gain /remain in power, aided and abetted by Buddhist monks. The seeds for the ongoing racial trust deficit and communal disharmony were sown when Bandaranayake passed legislation in parliament, making “Sinhala” the only official language of the country. Many political pundits now admit this was fallible.
Brain Drain
Due to the recent significant increase in taxes, electricity, gas, and fuel prices and the astronomical rise in the cost of food commodities, life has become intolerable, particularly for the middle class, which once enjoyed a decent lifestyle. Various television journalists have presented a mathematical analysis of the flight of middle-class wage earners. Raising interest rates fueled the fire of the flight of these people, such as teachers, university lecturers and even doctors. While struggling to make both ends meet, the once decent middle-class earners had no option but to withdraw certain facilities to their loved ones.
I had the fortune or misfortune to be in Sri Lanka a few weeks ago, and I was astonished to witness that the water tax rate was doubled by gazette notification. Doctors are leaving the country en masse. In the Teaching Hospital in Anuradhapura, the department of Paediatrics is closed due to the lack of specialists.
All grades of doctors are leaving the country for employment abroad. Not all doctors can leave due to medical registration issues, but whoever is in a position to secure employment is going.
I am personally aware of a young doctor couple who came for post-graduate training after local post-grad qualifications and returned to the country three years ago. I learned from reliable sources that they are back in the UK, looking for jobs and doing locum jobs. The country’s president celebrated 75 years of Independence a few months ago. However, people are queuing to leave the country, including teenagers with Ordinary Level qualifications, not realising there is little employment prospect for them except as unskilled labour.
Hospitals are without doctors, nurses, pharmacists, physiotherapists etc. Schools are without teachers, and universities are without lecturers.
The latest news is that the Sri Lankan Cabinet has approved a proposal to enact legal provisions to allow the awarding of medical degrees by foreign Universities in Sri Lanka. Current university students see this as the privatisation of higher education, while the Minister of Higher Education continues to prevaricate.
There was an attempt by the Rajapaksa Administration to abolish the University Grants Commission, which withstood the test of time and to bring a university admission system akin to UCAS in the UK under Kotelawala Defence Academy.
Not surprisingly, this was another opening to abuse and another source of illegal income to corrupt politicians. Jayawardana government allowed a private medical school in the eighties, which allowed students of wealthy parents with lower grades to enter and graduate as doctors. After years of protests, this private medical school was absorbed into a state University. Then came along Nevil Fernanado Medical Academy. After years of protests by successive undergraduates, this was amalgamated to Kotelawala Defence Academy. Will the Sri Lankan Government ever learn a lesson!!!
The recurring issues of economic mismanagement, political turbulence, and the brain drain demand a transformative response. Breaking this cycle requires a commitment to transparency, learning from past missteps, and prioritising the nation’s well-being over short-term gains. Sri Lanka’s resilience is evident, but unlocking its potential demands leadership focused on inclusive and sustainable development.
