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One thing that has forever confused me is that GOSL has banned color-photocopiers on the grounds that people are going to counterfit money. Then they go and print 65 billion Rupees ($650 million). I’m beginning to think they’re just defending their monopoly. Honestly, if we subsidized counterfitting we’d have less inflation than with the government manning the presses. What’s remarkable is that 2 years you looked at Sri Lanka and things were looking up. Peace process was moving, economy was growing, and me in Canada was looking forward to coming back.

Now we got Queen Banaranaike teaming up with the people that killed her husband for no higher purpose but power. I can’t discern any other GOSL policy. Aaaaah, wtf. We kick out the British just to get colonized by the Bandaranaikes. Queen B is fully willing to team up with a party she hates just for power. That’s the only policy that matters to the Queen. In fact, the JVP is the only part of the government with any coherent policy at all. End the peace process, cut off from the global economy, and invest more power in the State. Shit, at least it’s something. The Queen’s got a Parliament full of Eunuchs just reacting to events. Oh shit, Tsunami? Let’s form a commission. Whatzat that, your lights are out? No room in the schools? Here, have some crack.

Uh, but this is in reference to a LBO ‘Fuss-Budget’ article with facts and stuff. In short, the Queen and the JVP have completely borked the economy. By economy I don’t mean figures on a graph, I mean that I had no electricity for hours today, Trishaw drivers are paying more for gas, and inflation is driving the cost of living through the roof. I’ll quote extensively from Fuss-Budget cause the LBO archives are a black-hole. Full column is well worth reading.

Chapter 6 (Fiscal Policy and Government Finance) of the annual report: the fiscal policy thrust was placed on continuing the fiscal consolidation process, increasing public investment, strengthening debt management, developing debt markets, restructuring public enterprises, providing relief to the general public, while enhancing transparency and accountability in conducting fiscal operations.

Would you or I have been able to walk on the street wearing clothes, after saying something like this?

What fiscal consolidation? The current account deficit went up from a planned Rs 26 bn to Rs 78 bn, and up even from the Rs 58 bn achieved in 2003. The budget deficit supposedly went from 8 percent to 8.2 percent of GDP. It looks small only because there was so much inflation (to see how inflation compensates for fiscal profligacy read The Thrift Column – Friends and Enemies

The UNP started the rot, soon after President took over the ministries, but it was ‘Rata Perata’ that delivered the coup de grâce. Basically two years of progress had been squandered.

If that was not enough, Central Bank printed massive amounts of money to finance the budget. The table in page 108 says in black and white that the Central Bank printed Rs 65 bn (sixty deleted five billion rupees!) to finance the deficit. Fiscal consolidation forsooth!

Increasing public investment? This is an unfunny joke. Donor funded projects, particularly Asian Development Bank ones, were held-up for the lack of counterparty funds. Public investment fell from 5 percent of GDP in 2003 to 4.8 percent in 2004.

…developing debt markets? This really takes the cake. There is unprecedented financial repression in the economy. Interest rates are negative by a shocking margin. The yield curve is a mute testimony to how rates are manipulated by the Central Bank going against all market fundamentals by printing money (Print Job) and keeping rates negative (Grand Larceny)

Secondary market trading in longer term government securities has now come to a standstill. When a single trade takes place, the yield curve jumps like a jack-in-the-box in Zimbabwe. There are two short terms curves now. A manipulated primary auction rate, and a slightly higher curve developing around outright sales by Central Bank.

…restructuring public enterprises? What restructuring? SEMA had been thwarted at every turn by the JVP (We can give the SEMA full credit for trying though). CEB made an Rs 15.1 bn loss, up from just 3.7 bn in 2003. Petroleum is another mess, but fortunately the price formula had saved it to some degree.

…providing relief to the general public? Is driving up inflation to 18 percent robbing the income of 19 million people, subsidizing energy, which is mostly used by the rich, and stealing from the EPF and ETF, providing relief to the general public?

…enhancing transparency and accountability in conducting fiscal operations? Who is accountable for robbing the EPF? Nobody. Who is accountable for printing money driving up inflation and making people poor? Nobody.

Or to sum it up…

We live in a dream world, strutting around pretending to be pro-poor-pro-growth and so on, but in actual fact we are a nation of Marxist empty-headed money printers.

Inflation is not pro-poor. Refusing to restructure public goods (like Electricity) that cost the public Rs 15.1 bn in losses is not pro-poor. Growth of 4.4% while slicing the same damn slice of pie thinner is not pro-poor. Completely stalling the peace process is not pro-poor. Kicking poor people of their tsunami-affected land is not pro-poor. The only people with a pulse in the government are the JVP, and they’re moving Sri Lanka rata perata towards Burma and North Korea.

Queen B saw that Britney had Bit-Bit and Paris had Liberace and she went and got a rabid pit-bull off the street. Now that damn dog is pissing on the furniture and scaring guests. It likes playing with the CEB and when somebody tried to take that drool-soaked toy away the thing threw a fit. Every night it’s barking its ass off at the Tiger sleeping in the yard, but can’t nobody do nothing. The Queen needs the dog, and the only policy left is God Save the Queen.