What is meant by ‘Yaha Palanaya’? Some Lessons from Greece
(Courtesy of The Island)
By Sumanasiri Liyanage
Many people belonging to Colombo civil society appear to think that every one—rich and poor, old and young, urban and rural—wishes to have good governance (yahapalanaya). Mesmerized by the term and its anticipated popularity, new political coalition was formed to face the next Parliamentary election that is scheduled to be held in August 17, 2015. I have always been suspicious of these terms, especially when they are included in the lexicon of international financial institutions. I am aware that many civil society professionals love the term just because it is being widely used by the so-called international community and the international financial institutions. Recently, the European Union, European Central Bank and the IMF used a much improved phrase ‘better governance’. Had Hela Urumaya waited for a few more days they would have suggested this new phrase and called the new political formation, United National Front for Better Governance (UNFBG)! Alternatively, their opponents would have renamed their coalition United Peoples Freedom Alliance for Better Governance (UPFABG). Since these days we are not much concerned about the content and substance, it is imperative to have long names.
My leanings towards Anarcho-Marxism invariably compel me to see a huge contradiction in the phrase good governance (or its improved European version ‘better governance’). Can governance be good? Can it be democratic? Well, I will bracket these two related questions for a while as harping on them is likely to lead us to a kind of philosophical muddle.
The Greek economy was badly affected in the 2008 financial crisis. Around one million people lost their jobs. About 30 per cent of business closed down. Salaries have been reduced by 35 per cent while pensions cut by 45 per cent. With that the gross domestic products decreased by 25 per cent and the country’s total debt has reached 180 percent of the GDP. This decline has also been reflected in human development indices. The child mortality rate has increased by 42 per cent. The level of unemployment of young people is around 50 per cent. This abysmal situation arose as a direct corollary of economic prescription proposed by Troika, the European Union, European Central Bank and the IMF. They pumped money into Greece asking it to adopt more and more austerity measures affecting adversely the Greece economy and its people, especially lower classes. It was in this context and in the situation of the failure of two governments adopting policies prescribed by the Troika led Greece people to elect radical left coalition –Syriza—on anti-austerity platform at the Parliamentary election held on January 25, 2015.
Newly elected Syriza government began negotiation with Troika (now called Institutions) to strike a reasonable deal to come out of the crisis and to implement its Thessaloniki programme. However, the European Union wanted to topple Syriza government as it saw Syriza-like organizations becoming increasingly popular in other debt-ridden European countries, especially in Spain. Hence, European Institutions declined to restructure Greece debt not because it created an economic problem for Europe but it would be a political problem for European banks and financial capital. So, the Troika imposed heavy conditionalities that forced Syriza government to adopt more austerity measures. Syriza asked the Greeks at a referendum held on July 5 if they were ready TO accept those conditionalities imposed on them by the EU, the ECB and the IMF. They overwhelmingly said: OXI (no). Syriza portrayed referendum as an attempt at preserving national pride and a choice for democracy against fear. This democratic action by the Syriza government further antagonised the European representatives of finance capital. They forced Greek finance minister, a well-known economist, YanisVarufakis to resign to facilitate future negotiations.
The Guardian reported: “European leaders have confronted the Greek government with a draconian package of austerity measures entailing a surrender of fiscal sovereignty as the price of avoiding financial collapse and being ejected from the single currency bloc.” It was in this context that Angela Merkel asked Greece to have “better governance” as a prerequisite for a deal. Addressing the UN on development assistance to poor countries, she emphasised: “It is in their hands whether aid can be effective. Therefore, support to good governance is as important as aid itself.”
Eran Wickramaratne announced at his election campaign that 58 German firms would come to Sri Lanka bringing much needed foreign investment. Hence, they would ask for good governance.
The question is: what is meant by good governance? Is it a society free of drugs and ethanol? A country free of corruptions? No, that is not what they mean by good governance and transparency. Let us turn back to Greece and the deal imposed on it by European Union. As mentioned earlier, the German Chancellor asked Greece to surrender its fiscal sovereignty meaning elected Greece government and its Finance Minister do not have right to decide on its budgetary polices. In constitutional democracies, power to take decisions over state revenue and expenditure is with the Parliament elected by the people. Germany under the name of good governance and transparency demands to hand over this right to European Union and its Eurocrats.
Moreover, Germany demanded that “Up to Euro 50bn (£35bn) worth of Greek assets will be transferred to a new fund, which will contribute to the re-capitalization of Greek banks. The fund will be based in Luxembourg. This is tantamount to liquidity asphyxiation.
That is not all! “The Eurogroup document said experts from the troika of creditors – the International Monetary Fund, European Commission and European Central Bank– would be on the ground in Athens to monitor the proposed bailout programme. The trio would also have a say in all relevant Greek draft legislation before it is presented to parliament. Furthermore, the Greeks will have to amend all legislation already passed by the Syriza government this year that had not been agreed with the creditors” (The Guardian)
Other condionalities include increasing VAT up to 23 per cent, privatization of state assets, further reducing pensions, and labour market reforms.
The new agreement is a harder version of the same prescriptions imposed on Greece by the European Institutions and the IMF. So, there is no assurance that it would work this time. Many economists have, in fact, already warned that this good governance and transparency package is dangerous and it would satisfy only the needs of the European, especially, German banks. Nobel prize-winning economist Paul Krugman has said the EU’s demands of Greece are madness and accused Germany of killing the European project. Referring to German demands over Greece, he added: “Who will ever trust Germany’s good intentions after this?”
The events that have unfolded in Europe have thus redefined what “yahapalanaya” means. What is really hidden under this phrase has been brought to surface in Brussels. Can people of an independent country agree to this project? This is the project that seeks domination of small nations by global finance capital. In spite of the day time robbery at the Central bank of Sri Lanka, many “yahapalana’ experts know the hidden meaning behind it. However, that is not for voters’ consumption during the election campaign.
The writer is the Dean, Faculty of Management and Finance, SANASA Campus.
e-mail: sumane_l@yahoo.com
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