Undermining a nation

With the heartening national outpouring, opportunity abounds to remake our potential - Pic by Ruwan Walpola 

Saturday, 30 April 2022

The previous Government had an opportunity to “clean the swamp”, to address corruption, and to revive competitiveness. Instead, they devolved into bickering political and economic agony aunts, dithering, paralysed, and yet for all that…they had some real development projects on the horizon, from Japan on Light Rail to discussions underway with the US, EU and more. 

The new Government, ever eager to strip any credence from their predecessors, scrapped that development pipeline essentially, and oblivious to any real national growth drive, led with their ruinous tax cuts.

When these had been announced during the 2019 election, the incumbent Government assumed it must be a campaign gambit, as it failed every test of sanity otherwise (a warm up for “organic fertiliser” perhaps).

Sri Lanka collected less revenue than virtually every other country, and has a staggeringly high cost of running an inefficient Government. So removing levies, and taking the value-added tax from 15% to 8%, in the aftermath of already having been to the IMF seemed beyond eccentric.

Mangala Samaraweera’s prophetic words of these proposals leading to bankruptcy and having Lanka join the ranks of Venezuela and Greece, are chillingly accurate. And one wonders, why the simple math couldn’t be grasped, particularly when the fantasised local investor surge never materialised.

The idea of unexpected, unintended and unpredictable events, outlier events, called “Black Swan” events by some, describes the subsequent nature of the entire pandemic management boondoggle and debacle. 

Populist leaders often paint in broad brush strokes, and the disciplined execution required for crisis management often eludes them. And then to populism add divisive nationalism and you have a true Molotov cocktail. 

COVID Cuckoo Land

And then cometh the “sham-demic.” Let us remind ourselves how readily we were duped. C-19 was already circulating we now know in 2019. Ergo, “locking it in” was an utter, unqualified farce, being airborne. We may not have known this initially, but we knew it early enough.

Somehow, mysteriously a “non-diagnostic” test, the PCR (its own paperwork testifies to it being there to “amplify” viral fragments not to identify live infectiousness) was ready to go. 

Curiously, it was ready for manufacture, and one of the creators of the test, was one of the authors of the since discredited paper, that in 48 hours was given “peer review” by a journal he was on the editorial board of (real banana republic antics, except these took place in Germany) to “validate” this. And all this happened back in January before any full-fledged genome mapping was available.

Already by February, courtesy of seroprevalence studies and the floating case study of the Diamond Princess Cruise Ship we knew there was cross-immunity from other coronaviruses and their kin, hence the very low lethality for anyone below 65, and frankly even above 65 who didn’t have multiple compounding illnesses (comorbidities).

That for a pathogen that was age stratified (virtually no risk to children, the young and healthy) and had for those not immuno-compromised or very frail, close to a 99% recovery rate, we blew up the world, and set in place a chain event of collateral damage, the horrifying extent of which is only now becoming evident, defies rational explanation. Indeed, rationality was in scarce supply. There are alas human forces stronger than logic.

Here in Lanka, with no curve to flatten, and no mortality surges that threatened excess mortality, we imposed the most restrictive varietal of lockdown, an outright 24/7 curfew initially, a $ 1 billion body blow in terms of economic impact. 

 

Our biggest foe is a perpetuation of yesterday’s follies in facing tomorrow’s opportunities. We cannot afford to dupe ourselves further. Acts of “intensive” commitment and enterprise must pool, through strengthened and carefully reformed institutions into the “extensive” good of national renaissance and outright transformation. We proceed, haltingly if we must, but definitely, anchored in Lanka’s cultural riches and its people’s greatest aspirations. If “serendipity” is truly “sagacity in the face of opportunity” we have only one direction to go

 

And we continued…while the Maldives had soaring tourism in the midst of this, we refused to challenge ourselves to come out of our bunker and see how we might avail of our proximity. 

And other neighbouring nations materially added to their foreign reserves while we depleted ours by close to 80% over the same period. 

And Sweden continued to demonstrate that “lockdowns” and “masking” were largely irrelevant to public health outcomes (in terms of excess deaths amidst an open economy it outperformed Germany and Austria easily). Japan demonstrated the same on the “lockdown” front, despite its masking mania (which long pre-dated COVID, though it had never done much to stem annual respiratory viruses there). 

We continued to cower and had lunatics with misapplied medical degrees tell us there would be no long-term economic consequences to vastly over-reacting to something whose impact was no worse than a median influenza strain. 

This was especially so given that virtually every COVID death certificate came encumbered with numerous compounding illnesses, meaning COVID was either almost always just part of the ensemble, or just incidental, a bystander once the immune system had been weakened sufficiently by the primary culprits.

We ignored early treatment from generic and highly efficacious therapeutics for which data is overwhelming and clung to quarantine centres for too long, and then held out myopic hope of a “vaccine” that was non-sterilising and does not stop spread or re-infection and is potentially implicated in a dizzying number of adverse effects. 

As a commentator observed, “This is the only vaccine that people take three times, then wear masks, close businesses, stay home, and still get the disease, only to turn around and blame the unvaccinated for their troubles.”

And then we kept turning the economy “on” and “off” and imposing debilitating and unnecessary costs that rendered businesses less and less competitive, all in the vain attempt to contain the uncontainable – an airborne virus that caused many less deaths than car accidents in the country.

And for doing this, for locking everyone up, and bleeding more cash, and responding by mad rupee printing, adding to a building inflationary tsunami, we were briefly being acknowledged for the same reality avoidance of “zero COVID” as Australia and New Zealand. 

Both had far more reserves. And both are facing their own terrible economic headwinds now. And both have capitulated in the face of the overwhelming need to let natural immunity develop and for C-19 to finally, finally, be allowed to become endemic. 

Study after study has since shown that natural immunity for robust, long-term protection, vastly outperforms these “vaccines” whose safety trials are incomplete, that were only ever “tested” by their manufacturers, and which need multiple boosters as their efficacy wanes. And these boosters are increasingly irrelevant as they were calibrated for the Wuhanese virus, which no longer exists. 

But we want to keep jabbing and wasting more money and time, and not learn from Israel’s bitter experience (three to four boosters in and as many surges).

Back to the “funny money” economics of it all

After increasingly crazed reality avoidance via “organic fertiliser” which wrecked farming and brought calamity to industries like tea and rubber, the stockpiling of these manic antics coalesced, and cash just dried up for essential goods like food and fuel. 

Fall-out: petrol lines that snaked around entire neighbourhoods and 13 hour+ power cuts.

Essential medicines were unavailable, staples like rice became unaffordable. 

In further madcap folly, after unsustainably holding the rupee at 201 to the US Dollar since roughly April 2019, an overnight float/depreciation was inflicted, which literally wiped out the remnants of the economy. The rupee is now hovering past 340 to the US dollar, after a virtual “overnight” 30% collapse initially.

So, now with protestors camped out in front of Presidential and Prime Ministerial homes, and the main artery of Colombo (Galle Face Green), and across the country, these protests are in their 20th day, and have brought out people of all ages and religions, and women for the first time in the history of the nation for such overt expressions of dismay and for taking a stand against inequity in a public and organised way.

The fertiliser “mistake” has been reluctantly and peevishly accepted, with hollow apologies that seem shorn of empathy. The acting Finance Minister Ali Sabry has had to declare the value-added tax has to increase again to shore up finances. And the repeal of the 20th Amendment, which will be a Constitutional tonic, dethroning much of the magisterial arrogance of the “Executive” Presidency, seems imminent.

Emergency scampering for funds is underway to the IMF, World Bank, China, India, Indonesia even. 

Foreign debt will now be repaid under the aegis of the IMF as per the Government, which constitutes a form of default, unprecedented for the island nation since achieving independence in 1948. The stock exchange is currently the world’s worst performer, trailing even Russia.

And then there’s leadership

The current Government is today front and centre for being criticised. The family dynasty has seemed to some akin to a mafia. Certainly, it is unprecedented to have had the President, Prime Minister and Finance Minister from the same family – the latter clearly and woefully ill qualified for the role. It begins to seem like a cabal, rather than a coalition of talent or capability.

But some of the grandees from other parties, who certainly cut a statesmanlike figure by comparison, had their innings, and never pursued the corruption allegations levied against the earlier Rajapaksa Government. Cost of the Government was not improved. Structural reforms didn’t take place. Squabbling between the two coalition parties neutered execution effectiveness. 

The “vanity projects”, the big ticket, big loans (from China) undertakings, like the deep sea port, was to catapult Lanka to becoming a Singapore. 

This ignored all the “nation-building” needed, the governance, the rule of law, the meritocratic Government, the quality strictures, all that led the world to dub it “Singapore Inc.” This was more “Goodfellas” or “Sopranos” at least optically.  Many of these projects were not realised for a multitude of reasons, and the debt just kept soaring (doubling between 2010 and 2020).

The lack of adequate investigation in the aftermath of the tragically heart-breaking Easter bombings, which today leaves deep suspicion and further erodes any trust in the Government, again is part and parcel of an increasingly defunct legal and social contract between those who govern and the governed.

On another front, one of the problems throughout has been chronic indecision. The President first proclaimed at the outset of the COVID mania that Lanka had never been shut down in 30 years of civil war and wasn’t going to be now. It was an admirable and sane sentiment. 

And it lasted about 72 hours, when we did a literal “overnight” curfew (the most restrictive in the world at the time) and diplomats were sent scampering to send tens of thousands of tourists home with no notice, and expatriates who had to remain, had no way to arrange for food, nor any immediate way to get home (due to border closings). It was bungled and catastrophically executed. Going forward, reversals of “lockdown” decisions then abounded, no one could plan, or staff, or stock, and businesses haemorrhaged. No one seemed to be in charge, and often contradictory statements were lobbed at various stakeholders, who were increasingly confounded. 

In fact, the about face on key decisions, and not knowing if agreements would be sustained, or who actually was taking calls (if anyone was), gave not only local leaders, but investors, other countries, a great sense of confusion and incoherence…not what you want as you seek to navigate and emerge from both a global crisis, and a mushrooming local one.

Imagine the incoherence of pinning hopes on tourism and not realising that providers can’t import what they need to serve those tourists, or in fact are finding it virtually impossible to locally source bread, or milk, or even local meats. 

Such businesses can’t survive (other than the large hotels who are endowed accordingly) with 13-hour rolling black-outs particularly when there is no diesel for generators. 

And long-suffering tourists and expats, besotted by the graciousness, beauty and warmth of this gorgeous land, found their resolve to stay here whittled down. Some, while here, even joined the protests! 

I alluded to the fertiliser fiasco, but its real ramifications have come increasingly to the fore. A third of the labour force and 8% of gross domestic product was disrupted. The paddy harvest failed leading to having to import rice and provide extremely expensive aid to utterly devastated farmers. And of course, the grand dame, tea, was unable to provide the export largesse that would normally be forthcoming.

Facing a reformation

Everyone watched it happen. I was in a discussion out of India, which invited a multitude of Lankan commentators. And one of them, a younger leader associated with the protests, asked the others, “Why did you elect them? And where have you been over the last two years?”

Potent and poignant questions. The old joke is, “How do you go bankrupt? Answer: Slowly, then suddenly.”  Well, the “sudden” shock is so visceral it’s understood. The trick is to be “shocked” before you need to be. The level of rationalisations and “magical thinking” encountered, particularly when we set up discussions with some global stakeholders and eminent local leaders, was mystifying. All of the fears we tabled, have unfortunately, come home to roost. 

So, we must strengthen our national capability to “connect dots” and look at consequences and conduct cost/benefit assessments.  Of course, the entire world failed catastrophically in this regard in terms of the ledger with say “lockdowns.” Norway is the latest country to speak of the unacceptable impact of these and has stated, “It can never be allowed to happen again.” But it happened right under their noses! And the Zen like calm does not augur well for our ability to snap out of a collective trance.

Here in Lanka the way forward has to be prosaic. Repeal the 20th Amendment, replace it with the 21st, and give back to Parliament its core powers. Have Parliament assume oversight of finances. Then, once the President has less power and no real purse, an interim Government can come in, and hopefully independent commissioners, answerable to Parliament, drawing from private sector expertise, can have clear, unromantic accountability for steadying the country in terms of finances, constitutional reforms, legal accountability, locating misappropriated assets, ensuring at least the fuel/electricity/food/medicine quadrinity is taken care of. 

We need the essential national stability for donors to come forth, and a functioning society as a backdrop for ramping up the tourism which can be a forex deliverance if we aim for and can meet the service and quality expectations of “higher spend” tourists who currently flock to Southeast Asia. 

We need a scorecard for national development as I’ve said, anchored in a real vision, “To make Sri Lanka a first world country in a decade.” It is a vertiginous vision given today’s reality, but as I’ve said, it is akin to grand visions like putting a man safely on the moon in a decade, or Japan wishing to become synonymous with quality, or Singapore being committed to being a services and then IT hub. 

Sri Lanka must decide what it wants the next decade to be about in the story of its own national evolution. And it must commit, by channelling the energies and synergies of protest towards progress. 

Welcoming freedom and development

 And for whatever reason, reflection takes me back to the Hungarian Revolution of 1956. It was a Revolution to an extent “betrayed” by the central intelligence arm of an evident world power, which fomented loud assertions of support as long as the insurgents were content to keep dying for the greater good (the Kurds in 1991 in Iraq remember similar incendiary banalities).

The remarkable commentator Hannah Arendt romanticised this revolution, which proved itself to be darker and murkier than she projected in the 50s.  

And it was only to find its fulfilment perhaps 30 years later in 1989 in a peaceful, bloodless “velvet” revolution, where Budapest supported the East German revolt by letting them transit Hungarian soil without hindrance. It was another bit of leverage in toppling the Berlin Wall at that time.  

And so the “lost treasure of revolution” that Arendt perhaps prematurely celebrated in the 50s was ultimately vindicated. 

She describes this “lost treasure” as the ability to more or less “spontaneously” without too much central planning “recover” freedom, describing it as a spirit of “unforced liberty.” 

 She detects it in the summer of 1776 in Philadelphia, the summer of 1789 in Paris (though clearly more fleetingly, showing it needs vigilance and stewardship) and the autumn of 1956 in Budapest (more controversially initially though ultimately fulfilled).

 She says, it appears only “under the most varied circumstances, appears abruptly, unexpectedly, and disappears again under different mysterious conditions…” She likens it to a “will of the wisp.”  

For this most practical of thinkers, this ethereal concept is a balm. She soured on the Hungarian 1956 revolution as whiffs of retrograde nationalism emerged, and as the grandeur of the enterprise became polluted with heavy handed anti-Semitism as well.

But what we might take from this is that while the “lost treasure of freedom” may be more elusive, and can be delayed or stymied, it continues to await our discernment, and our commitment to kindle an impetus for real development. 

Good, like evil, Arendt explained, manifests “intensively” (through private acts of depravity or private acts of grace) or “extensively” (translated through institutions and bureaucracies, focused for example on degenerate aims or potentially, life affirming breakthroughs).

Sri Lanka needs to summon the wisdom and will for the “extensive” good of building up human capital, reforming our financial markets, upholding the independence of the judiciary, making our Government both more competent and far less expensive. 

If we can uphold the values of universal education and the legal and social rights of women as a bulwark of that, if we can create a level playing field for intelligent enterprise and sane incentives for investment, if we can both commit to cultivating and being open to welcoming talent from wherever that can help build a modern society, and if we can continue to transition towards “services” and “high value addition,” we can not only locate but meaningfully leverage that human cultural treasure Hannah Arendt alluded to so enticingly as a precondition for freedom flourishing.  

Our biggest foe is a perpetuation of yesterday’s follies in facing tomorrow’s opportunities. We cannot afford to dupe ourselves further. Acts of “intensive” commitment and enterprise must pool, through strengthened and carefully reformed institutions into the “extensive” good of national renaissance and outright transformation. We proceed, haltingly if we must, but definitely, anchored in Lanka’s cultural riches and its people’s greatest aspirations. If “serendipity” is truly “sagacity in the face of opportunity” we have only one direction to go.

With the heartening national outpouring, opportunity abounds to remake our potential. Time to locate and mobilise the sagacity to light up serendipity…and the courage and the vision…for everyone’s sake.

(The writer is the founder and CEO of EPL Global and founder of Sensei Lanka, a global consultant with over 30 years strategic leadership experience and now, since March 2020, a globally recognised COVID researcher and commentator.)