The New Brooms

Any election usually brings more than a new government. For example, there will be a new order, new faces and, of course, new dreams. In the immediate aftermath of an election, the opposition is temporarily subdued. Optimism is at its zenith. It is the best of times. Naturally, however, two months after a General Election, this is not the feeling we get. Not that we feel the opposite. Just that ‘optimism’ is not the best term to describe our feelings. Our fingers are still crossed. We do have hopes, but they come with strings attached to uncertainties. We are being told it is a new political culture. We have been asked to adapt ourselves. Easier said than done.

Adapting does not appear easy, as we are not used to the new order. Like the rest of the democratic world, we have long been used to the two-party system, which has worked reasonably well so far. Mutual balance was good and nobody complained. Since independence, we have been voting either to extend a term of a government or to topple it. We never voted to bring two parties to power simultaneously. Just once, we voted to bring a parliament that opposed the president. It was an unsuccessful experiment. That parliament lasted only two years before it was dissolved by the then president for apparently inconsequential reasons.

The two-party system is not just political. In most democratic countries two parties dominate more for economic reasons. Take the UK for example. Since the 1920s, the two largest political parties have been the Conservative Party and the Labour Party. Before the Labour Party rose in British politics, it was the Liberal Party with the Conservatives. Conservative Party policies are centre-right. It was the political party that introduced ‘Thatcherism’ – the economic, social policy and political style of its former leader Margaret Thatcher, who led the party from 1975 to 1990. The Labour Party, on the other hand, is a centre-left political party that grew out of the trade union movement and socialist political parties of the nineteenth century. Now the party contains a diversity of ideological trends from strongly socialist, to more moderately social democratic. The two parties represent two opposing groups, each sensitive to a particular set of policies. A fusion between the two is unimaginable. It simply will not work.

A possible counter argument: Such differences in economic policies do not exist between the two dominant parties here. Since 1994, the SLFP has adopted and efficaciously practiced open economic policies. If it is perceived less market friendly, that is for other reasons. Even if we buy this argument, voters normally expect a change of economic policy with a regime change. If the same policies were to continue, why change in the first place?

This is not the only reason that makes the current government different from any previous ones. Typically, a government loses power for economic reasons. Something goes seriously wrong with the policies it follows and people look for a change. This time, the economy was not the key reason to bring in new faces. Except for few, who always anticipate more subsidies, the rest were not seriously worried about the economic policies of the Rajapaksa regime. It was a fair balance of neo-liberal and populist policies. The neo-liberal part was important for amassing wealth. The populist part redistributes that wealth to the masses and keeps them happy. Normally, such a balance is not feasible, but the favourable conditions created by the post-conflict recovery attempts created the ideal ground for practicing the same. Now the biggest challenge the SirisenaWickremesinghe administration faces is finding a better system to keep everyone happy. It won’t be easy.

The business community might naturally expect a repetition of previous UNP government performances – it is the single dominant player in the so called ‘National Unity Government’ (Guess calling it a ‘coalition’ is misleading). UNP policies were hardly the same from Senanayake to Wickremasinghe, but there were some common denominators. The UNP has always been the party of the capitalists; some of its past leaders wanted it to be the conservative party of our own. It is also the party that liberalized the Sri Lankan economy – a first in South Asia; India followed only 15 years later. The UNP’s market friendly policies were apparent under all its leaders starting from Jayawardena, and reaching a climax under the short lived 2001-2004 Wickremasinghe administration. I would not be surprised if anyone wishes a quantum leap from the UNP than a continuation.

How far the UNP could match those expectations is anyone’s guess. First, the UNP is not on its own. Even if we ignore the President, who does not appear to have his own economic agenda, the cabinet is not monolithic. The opposition members of the cabinet will be facing the government in an election in another five years. What incentives do they have in pushing a UNP agenda? How committed are they? Will they risk supporting critical decisions? Only time will answer these questions.

Even if it were a monolithic UNP government, it is highly doubtful it can pursue the same neo liberal policies of the previous Wickremasinghe administration. Its economic stance was the second crucial point UNP lost power so quickly and was pushed to the opposition for more than ten years. Particularly its policy to maintain a ‘small government’ by restricting new recruitments to the public sector worked badly against the UNP. While the UNP was worried about a government workforce of just 350,000, the two Rajapaksa governments that followed effortlessly increased that to 1,500,000, surely enjoying the benefits. I do not think the UNP would be that naïve again. They have already learnt the lessons. They know moving away from populist policies will not work. So the ‘neo liberalism’ this time will only be limited to the level populist policies will allow. More public sector jobs; more ‘free lunches’; more controls; more favouritism – not exactly what the business community has in their minds.

What would then be the best case scenario? the political climate remains calm. International assistance is offered and accepted. No need to tighten seat belts. Foreign investors are invited and offered right conditions. More factories; more BPO centres and more tourists. More lucrative jobs are created in the private sector so that few expect government jobs. A complete socio economic revolution. A new world order. This is just the theoretically best possibility. We just have to start from that point and apply the practical conditions to see the actual outcome. At this point, all we can do is to hope that it would be least different from the best case.