The modern UNP was the more urban, business-friendly party and the SLFP was the more rural, socialist-friendly party. Now, insomuch as we have parties at all, the UNP has turned.
In this interim government, Ranil Wickremsinghe is leading the most business-unfriendly incarnation of the UNP I’ve ever seen. Not only are their policies mixed at best, he and Finance Minister Ravi Karunayake are outright hostile to the private sector.
To a degree, even dumb government policies are OK as long as they’re predictable. Investment is essentially planning and that requires a predictable environment. This interim government has been nuts.
With things like the Port City or Lotus Tower nobody knows what’s happening and no one knows what’s going to happen next. The government spokesman Rajitha Senaratne is deeply unreliable and different people in the government contradict each other on the daily. Even with things that weren’t Rajapaksa pet-projects, it’s unclear which direction policy will take.
More substantively, this government has imposed taxes retro-actively, which makes everything unpredictable. Should you invest in a sector, or will it be taxed to the ground next year? Who knows. Should you pay dividends, or will the government take that money away? Have you pissed off Ranil recently? Did you go to Royal College?
In this environment it’s hard to plan investments, and you can see the results in the flatlined stock market. It’s a good time to buy, but people are honestly just waiting.
Then let’s start with appointments. The biggest appointment – Ravi Karunayake as Finance Minister – is not someone with a stellar reputation. He’s never been convicted, but he has been indicted – for violating the Exchange Control Act in connection to jailed financier Raj Rajaratnam. He was also involved in the unsuccessful privatization of Sathosa, but all the records got burnt in a fire. So… that’s your Finance Minister.
Prime Minister Ranil Wickremesinghe also appointed Arjunan Mahendran to the Central Bank. Mahendran has a son-in-law who was a known wheeler-dealer in the stock market, but it was assumed that Mahendran was above that. However, as soon as he was in office, the son-in-law’s company made millions on a bond issue where no one else seemed to have the same information. Strange.
In response to criticism, Ranil appointed a committee of UNP loyalists with no particular expertise to investigate and gave a speech saying, essentially, that the past government was much worse and that he’d come after the private sector. Ravi has also gone to a primary dealers meeting (which doesn’t come under the Finance Ministry) and berated the people there for complaining.
Even in the face of all this blow-up over one appointment, this government is trying to make more. Now they’re trying to use their minority stakes in private banks to change the directors there, replacing them with government appointees. Given the performance of government appointees at the top, this is hardly reassuring news. They could say that the prior appointees were bad, but I honestly don’t trust this particular government either, and they should maybe wait till after an election.
Meanwhile people like Harsha De Silva who were quite voluble and clear in criticizing the past government have nothing to say. It’s not an especially inspiring performance by the UNP.
Business and the economy are supposed to be the UNP’s strength but, quite honestly, they’re sucking at it. Are things better than under the Rajapaksas? I would say yes. Things were quite predictable there but there was always an undercurrent of rot – people could take land, money, etc on a whim. The country was also accumulating unsustainable debts and spending billions of dollars on vanity project. This government has stopped that so props to them. We are also able to complain and have some hope of a difference. All good, no doubt.
Good governance, however, is not the same as ‘not bad governance’. Good governance would be transparency and responsiveness in appointments. Good governance also involves getting elected, which the UNP still hasn’t done.
In the specific case of now, I’d say that good governance means governing with humility and carrying out Maithripala Sirisena’s 100 Day plan. It does not involve bungling around with the private sector and blaming then and the media when things go wrong. If you have a mandate and a plan you can take on business, but I frankly don’t think that the UNP has a mandate for anything besides what Sirisena has said or promised.
As it is I don’t think they should take the urban business vote for granted as they have in the past. They have yet to earn mine.