Groundviews

Economic Justice and Democratic Survival

Featured image courtesy IndiaTimes

Social order starts breaking down if people are under profound stress. Then the default position is tribe – us/them, a hostility towards the unfamiliar or the unknown.

Barack Obama[i]

In ‘The Obama Doctrine’, his long piece on the Obama Presidency, Jeffery Goldberg writes that Mr. Obama, reflecting on his failures in the Middle East, privately laments, “if only everyone could be like the Scandinavians, this could all be easy.”[ii]

Indeed, but a main part of being Scandinavian is getting economic growth-social justice equation right.

A New Beginning’ was the title of the speech President Obama gave at the University of Cairo in June 2009. The speech clearly indicated his determination to ‘reset’ the button on America’s relations with the Muslim world soured to an unprecedented degree by the criminal disasters of the Bush years. To drive in the point home, Mr. Obama avoided visiting Israel during this first visit to the Middle Eastern region.

When the Arab Spring arrived and the US not just allowed but also supported the peaceful ouster of two loyal tyrants, it looked as if Mr. Obama’s hope for a new beginning would be realised. But it didn’t take long for spring to regress, via a numbing winter and a discontented autumn, into a burning summer. The inability of the new governments to provide economic relief to the masses and the unwillingness of the Western world (America included) to sufficiently grasp the historic link between economic injustice and extremism played and continue to play an important role in the snuffing of democratic hope in the Middle East.

Tribal identities and atavistic emotions are what many people revert to when they fail economically. This retrogression happens even in places unfamiliar with tribalism, such as the United States. Donald Trump’s worrying success depends to a great degree on his acknowledgement of the inadequacies of the American economic recovery (presided over by President Obama). Mr. Trump talks to the whites who had fallen by the wayside and the whites who fear a similar fate for themselves or their children, attributing this plight to an influx of immigrants, ‘The Other’ who take away from ‘real Americans’ their jobs and their place in the sun. The fact that Mr. Trump employs low-waged immigrant labour in his own businesses does not matter to those white Americans whose minds are deranged by economic pain, political fear and primeval hate. Atavism is blind and inane, be it in Islamic Middle East, white-Christian America or Sinhala-Buddhist Sri Lanka.

 Humane Development and Political Stability

From Scandinavian successes to Middle Eastern failures, economics is a common factor. And that factor will play a pivotal role in deciding Sri Lanka’s own trajectory – ahead to an inclusive, saner future or back to the Rajapaksa past.

The Rajapaksas went down to an unexpected defeat due to many factors. Rice and curry economics was one of them, perhaps even the decisive one, the most important reason which compelled a segment of the Rajapaksa support-base to change its political allegiance and vote for Maithripala Sirisena.

The Sirisena-Wickremesinghe administration can ignore the primacy of rice-and-curry economics only at its own peril.

The Prime Minister promised that the substantial hike in the Value Added Tax will not cause changes in the prices of some consumer essentials or hit the poorest. That promise was broken, just days later. On Saturday, the price of wheat flour was increased by a whopping Rs. 7.50, making inevitable across-the-board increases in food items which form a part of the staple diet of the people who occupy the bottom rungs of the income ladder.

So the new tax measures will cause an increase in the overall cost-of-living (including education and health costs) and a concomitant decline in living standards. And as is ever the case everywhere, this blow will fall with disproportionate hardness on those occupying the lower rungs of the income ladder. Indirect taxes are regressive in nature; they inevitably erode the purchasing power and the consumption levels of lower and middle classes. The resultant drop in demand can have ripple effects, contracting the economy, reducing growth levels, decreasing employment and income-generation and worsening absolute and relative poverty.

For those who voted in the Sirisena-Wickremesinghe administration hoping for a real and continuous improvement in their own economic conditions, this would be a bitter pill indeed. They will be disappointment and discontented; if these sentiments turn into political disillusionment, it can undermine the democratic gains of the post-Rajapaksa period. This threat can come both from a government resorting to repression to maintain stability and a racist-populist opposition advocating a return to the Rajapaksa past.

The planned reintroduction of capital gains tax is aimed at revenue generation and ensuring a less unfair distribution of the costs of economic austerity. That and the proposed increase in income tax are an indication that the government is trying to ensure that those who occupy the upper and upper-middle rungs of the income ladder too will have to bear some of the costs of the coming austerity. Another positive development is the introduction of a bill increasing the minimum wage in the private sector to Rs. 10,000. These measures are necessary but not sufficient to contain popular discontent. If the economic situation is dire – and it is dire – and if people are being asked to tighten their belts, then the politicians must lead by example. That is absolutely essential to contain the political fallout of economic austerity.

In Sri Lanka, the political class has become a privileged-scree. Its members are exempt from taxes and enjoy a variety of rights and privileges which are denied to ordinary citizens. The politicians and not the poor are the real welfare kings and queens of the country. The oppressive increase in the VAT can never be justified in the public eye, if there is no reduction in the costly privileges enjoyed by the parasitic political class.

To survive the economic crisis, the government needs popular consent. Popular consent would be hard to come by if it looks as if the political class is enjoying the good life while ordinary citizenry, be they poor, middling or rich, suffer deprivation either absolute or relative. If the government fails to compel the political class to share the burden of austerity, the economic crisis will turn into a political crisis sooner rather than later.

Joe Stiglitz said, “The greatest challenge is not in the institutions themselves but in mindsets”[iii]. The freeing of man from the divine paved the way for his political liberation, the second without the first would have been impossible. There must be a similar paradigmatic shift in economic thinking, freeing man both from the tyranny of the invisible market forces and the all too visible state. The market and the state must exist for citizens and not the other way round. The wellbeing of democracies depends on democratic leaders’ capacity to face this challenge.

The Road to Good Governance

From time immemorial, humans have imaged their heavens, the ones in the sky and the ones on earth. Thomas More, dreamer and politician, saint and persecutor of religious dissenters, called his own version of the ideal state Utopia, a name he coined from the Greek, meaning no place. Perhaps he meant it as a signal or even warning. After all, utopias are not finished products but works in progress. They can be lodestars, but never reachable destinations.

Good governance was an effective electoral slogan. Contrary to the utterances of some ministers, the replacement of the Rajapaksa regime with the Sirisena-Wickremesinghe administration did not bring about good governance. That change merely enabled the long and never ending walk towards the utopia called good governance.  Good governance is not and cannot be an achieved reality; at the very best it can be a set of guidelines to act within and a series of goals to work towards.

The uncouth conduct of the Minister of Higher Education is only the latest indication that getting rid of the Rajapaksas was far easier than getting rid of the execrable practices which became the norm under their rule. The best guarantee that the necessary journey towards good governance doesn’t end on the opposite shore is not action by this or that political leader but an optimum combination of fair laws, strong institutions and a citizenry willing to stand up for their rights.

The institutional baby steps towards good governance are evident in the response to the controversial hit-and-run accident in Rajagiriya. Whether Minister Champika Ranawaka was responsible for the accident or not remains to be uncovered. But had this accident happened when Mr. Ranawaka was a powerful minister in the Rajapaksa administration, he wouldn’t have suffered any inconvenience, even if he had been manifestly, undeniably guilty. Most of the media would have been mute and all eye witnesses silenced. There would have been no outcry and no investigation. Today there is an investigation and the courts have ordered the police to record a statement from Minister Ranawaka and to arrest him if necessary. Perhaps the investigation will not uncover the truth, but the fact of its existence is a step forward. The commendable stance taken by the court is a sign that the rule of law is re-emerging, after the long Rajapaksa winter.

Given the problems confronting Sri Lanka, two security guards ordering a couple out of the Independence Square might not seem like a big deal. It wasn’t and it was. That incident indicated that the tendency towards selective moral policing is alive and well in the post-Rajapaksa Sri Lanka and if left unchecked can turn into a scourge for ordinary citizens. The rapid response to this incident via social media and the satisfactory resolution of the matter are symbolic of the very real difference between the old and the new. The Rajapaksas could impose any arbitrary rule they liked, with near impunity; the absence of democratic space prevented ordinary citizens from raising their voices. Today that space exists to a considerable extent. Even when protests are met with state violence, the public can take their grievances to the Police Commission, re-rendered independent by the 19th Amendment. Such institutional safeguards are far more material in protecting the post-Rajapaksa democratic space than grandiose promises or lofty declarations by politicians who seem to think their governance is, by definition, good governance.

Some institutional progress and the emergence of a less indifferent and more involved citizenry – these are the real achievements of the post-Rajapaksa era. Economics will play a major role in deciding whether these achievements can be protected and enhanced or whether they will be obliterated in the interests of hanging onto or regaining power.

As Tony Judt pointed out, in France a segment of the working class and the poor, disproportionately affected by economic austerity, became the vehicle of growth for the right wing National Front of Le Pens (father and daughter). These people were “looking for someone to blame and someone to follow” and found a home in the neo Fascist right, “whose programme consists of one long scream of resentment”[iv]. It is easy to imagine the lay and ordained extremists in Sri Lanka presenting themselves as the saviours of economically threatened Sinhala-Buddhists. Since Lankan left traditionally contained within itself some germs of national-socialism, it would be easy for the racist right to don the multiple cloaks of progressivism, anti-imperialism and anti-capitalism and blame ugly Americans, encroaching Indians, rich Tamils, richer Muslims or conspiring Christians for the economic plight of poor Sinhala-Buddhists.

Economic injustice and the resultant increase in poverty (both absolute and relative) breed extremism of every variety. This is an old universal lesson which we can ignore only at our own peril.


[i] http://www.theatlantic.com/magazine/archive/2016/04/the-obama-doctrine/471525/

[ii] Ibid

[iii] Globalisation and its Discontents

[iv] Reappraisal