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In Times of Corona Scenarios for Sri Lanka

Introduction

One Text Initiative (OTI) is an inter-political party dialogue facilitator that promotes consensus-based policy making. Scenario building is at the core of OTI’s approach to understand policy challenges and identify areas for inter-party consensus building. As the outbreak of Covid-19 pandemic and the government response to it are shaping Sri Lanka’s political economy and the cultural landscape in unprecedented manner, OTI carried out a consultative scenario building process to predict future scenarios. The scenarios were identified through a consultative process with all major political parties through their representatives at OTI forum as well as independent experts. OTI envisages to periodically evaluate and updating the scenarios with background Information, situation assessment & conflict mapping, future scenario planning & strategic forecasting, generating models, methods and tools for of strategic interventions, and generating alternative scenarios.

What are OTI Scenarios?

The OTI approach to scenarios regards them as possible stories about the way the world might turn out tomorrow. Because there are numerous possibilities about the how a situation may evolve in the future, none of the scenarios are specific forecasts of the future. As what may actually happen is an outcome of interplay among myriad factors and actors, the scenarios provide a plausible description of what to expect. Such a description is generally based on extended analysis of current and historic trends and events. In the following scenarios, Covid-19 is considered as a catalyst for the future trajectory of the newly established government of President Gotabhaya Rajapaksa. As such, four possible scenarios have been predicted for the five year term of the government, with a focus on the immediate possibilities. These scenarios broadly cover potential developments in Sri Lanka’s economic, political and socio-cultural spheres since the outbreak of Covid-19 pandemic.     

OTI Scenario Building Methodology

OTI conducts a broad based brainstorming and consultative process with OTI partners representing all major political parties. OTI uses its proprietary OTI Scenario-Building Toolkit that was developed in 2010, and has been successfully applied since then to project political and social outcomes. This process includes, collecting inputs from on wide-ranging developments, trajectories, and issues were collected using a brainstorming process involving political party representatives and experts. These inputs are categorized as drivers, actors and factors for later binary, and pair-wise ranking approaches of OTI. Four scenarios have been identified and OTI foresees that the present-day dynamics of the Sri Lankan socio-political environment may lead to any of the identified scenarios in the next five years.

The scenarios are categorized into clusters of outcomes to achieve maximum consistency. However, for obvious reasons, some overlap between scenarios is unavoidable. Once the scenarios are identified and vetted for coherence, they are agreed upon by participating representatives and experts.

Each scenario has been rated in terms of their probability of becoming a reality in a scale of four, from Low, Moderately Likely, Likely, and Very Likely.  Further, the level of government credibility under each scenario has also been categorized into : Very Low, Low, Moderate, High.

Scenario I – Phoenix

Probability:  LowCredibilityModerate                                 

Legitimacy – concentrated around the President: The outbreak of the virus shifts the political power towards the President, who manages the crisis winning the confidence of the majority population. Strong and popular leadership is appreciated as he keeps things under control. Covid-19 helps the unite people and the rise of a new nationalism.

Economy – low oil prices, sufficient foreign aid, and reduced imports: Low oil prices, and Chinese financial assistance keep the government finances afloat in the short and medium run. Although, the global slowdown affects the West worst, negative interests in the developed economies drive investment to the emerging economies, including Sri Lanka. Exports drops are compensated by low import costs due to low oil prices. Short term lockdowns disrupts some established networks and allow new and more efficient production and distribution systems to emerge. Temporary economic measure of reduced luxury imports and domestic production revival sets the country on a Mahatir’s Malaysia model, however, opening a new chapter of military backed state capitalism at the core and a small number of elite business magnates enjoying ‘insider’ status.

Politics – President gets a political advantage and the relevance of the Parliament and Parliamentary election decreases: the trust in the able-handed management of the President supported by a strong military and the favorable media networks will render the elections relatively unimportant to the masses. With the help of the Buddhist order that supports the view of the President, Parliamentary elections will not be held, or postponed as much as possible without reconvening the present Parliament. Election will be held and the ruling party obtains a clear majority, with potential to achieve 2/3 majority with a significant number of cross-overs. The political stability continues and the government remains popular with good chances of continuity. Prime Minister’s role will be overshadowed by that of the President.       

Challenges – Risk of a constitutional crisis, upholding democracy, managing discontent. The Parliament will not be reconvened and the Parliament approval for government expenditure will not be obtained, thereby violating the constitution. Degeneration of Sri Lanka’s democracy may be an outcome, as the constitutional deadline of three (03) months without a sitting Parliament may expire. Increasing authoritarian tendencies may lead to ethnic and economic discontent to emerge. Respecting human rights, minority rights, and economic rights of the marginalized will be areas that the government’s attention may be lacking. Increasing power and demands by religiously motivated majoritarian actors, including aggressive Buddhist monks will pause an increasing challenge to the maintenance of a civil administration. 

Scenario II – Hero’s Wasteland

Probability: Moderate          Credibility: VeryLow

Legitimacy:Government loses legitimacy and the opposition is weak. Relatively unpopular regime resorts to ‘big-brother’ politics. Internal splits in the government affect its image and integrity. Increased militarization harms government’s international image.

Economy – Impact of the world economic recession due to the Covid-19 pandemic will exacerbate country’s existing foreign debt crisis and already stagnated export earnings into further crisis level. Prolonged and persistent lockdown will shrink the economy, reduce export earnings, reserves. The ensuing socio-economic contraction will stall development and reduce opportunities, leading to stagnation, increased inequality and desperation within the society. Tourism, apparel and other exports are affected by global recession. Oil price fall’s advantage evaporates with increased government expenditures for doll-outs and increasing regimental apparatus.   

Politics – Initially, people will prefer a populist strong government that would ultimately lead to an authoritarian rule as constitutional checks and balances in decision making processes are ignored. Parliamentary election will be delayed owing to the impending crisis, and the institutions for upholding the constitution, i.e. elections commission/ judiciary will be unable to change the course during the centralized crisis response. General Election is postponed and the President resorts to running the country with the Governors and the military. Government does not attempt to obtain Parliamentary approval for expenditure, but continues to ignore the constitution.  ‘Law of necessity’ becomes the motto of the government to harness public support in the crisis situation to justify extra-constitutional conduct. Once Parliamentary elections are held with delay, the chances of the ruling party to obtain a large majority reduces, leading to a new level of the crisis between the Parliament and Presidential powers/ outfit. Democratic institutions falter, economy lags, social unrest rises creating a tailor-made setting for a strong-man leader to emerge. This becomes a tailor-made situation for either popular and populist democracy oriented national leader to emerge or an a populist leader who can take the government-lead ethno-religious nationalist tendencies to a next level coupled with promises to put the economy back on winning track.  

Challenges – Internal struggles with SLPP (President included), come out as increasingly authoritarian outlook of the President-centered administration continues.  Prime Minister Mahinda Rajapaksa and Basil Rajapaksa form a new internal block. Increasing distress of the people as the economy does not pick up gets suppressed, leading to covert resistance. Further militarization of administration and public sphere to contain dissent. Ethnic polarization rises to an unprecedented level and violence against Muslim communities become a new norm, thereby the ‘Muslims’ become the main ‘other’ in the Buddhist-Sinhala consciousness. The minority parties, specially the Tamil minorities, will be able to retain their political power in the polarized situation. As President’s hegemonic powers are challenged in various ways, he will resort to wielding his own power increasingly. Human rights and economic rights become very hard to uphold, as the regime resort to undermine the rights-based approach and activists.

Scenario III – TISL (This is Sri Lanka) / Status Quo

Probability: Very likely         Credibility: Low

Legitimacy: The President suffers a loss of image as the Covid-19 outbreak puts the government on the back foot. Prime Minister’s image deteriorates in competition with that of the President. Government’s legitimacy is challenged weakened as it ignores the constitution. and later, by opposition on economic and democracy fronts.     

Economy – ‘Sri Lanka has seen and survived many crises before Covid-19, Tsunami, the Armed conflict in the North, and April 21. The country has come through them quite well, but could never have been able to sustain the momentum to convert opportunities into a national drive,  enabling a real turn around in the way things happen. Covid-19 crisis will also be overcome despite significant damage to day-to-day life and economy. People will come together during crisis, but, will soon go apart after it. Economic woes will hurt the people and specially those at the bottom of the pyramid, as main sectors that are likely to hit are manned by the least fortunate of all. The apparel industry, tea industry, tourism, migrant workers to Middle-East are likely to get the worst impact as demand for all four sectors will reduce in the global recession and oil price crash. Government’s ability to look after them becomes increasingly minimal as its fiscal position becomes weak. As has been already seen, ad-hoc pragmatism will dominate the fiscal management, characterized by sudden money printing, unpredictable tax changes and import controls etc. This will lead to inflation and reduced trust among the business and investor communities.  

Politics – Keeping the people together around a new nationalist umbrella will be difficult. The policy gap between the President and Prime Minister will start widening gradually, leading to two centers of power. That will harm policy consistency and governance will increasingly become a competition between the President and the Prime Minster. Parliamentary election will be not be held during June and thereby lose legal and constitutional legitimacy. Once the election is held, the new Government formed by Mahinda Rajapaksa, will easily surpass 113 Parliamentary seats but will fall short of any hopes of 2/3rd majority. In this situation, further reforms to the Constitution is unlikely, and the debates over 19th Amendment and electoral reforms will remain without progress.  The new PM will have to experience quite a lot of blocking from the President. Shirking exports and faltering economic management will increase distress in the short run leading to increased power of the opposition parties. Everyday issues will soon obscure the long term issues leaving chances of real solutions behind. The opposition may gain a strong foothold as time goes on.      

Challenges –  The ultra-nationalist elements that supported the President during his election campaign will have to be kept under check as they try to invent new ‘enemies’. Increasing power of chauvinist elements in society will gain momentum. As Presidential appointments will be mostly from the military, the government will have to do extra hard work to maintain its civil outlook. A president backed by the Military and a Prime Minister trying to work around that block will be quite a devastating scenario that need to be averted. This will bring about a typical three block fight, among President, Prime Minister and the opposition, with strong resemblance to 2015 – 2019 era.

Scenario IV – ‘Us vs Them’

Probability: ModeratelyLikely        Credibility: Moderate 

Legitimacy – The government falters at controlling the Covid-19 outbreak and the Muslims will be blamed for that, for willfully spreading the virus and for ‘enjoying’ an unfair share of the economic pie. The President becomes a crusader for the Sinhala race as the international image of the government reduces. 

Economy – As the economic activities slow down and life becomes difficult, despite the end of the ‘lock-down’ period, and as businesses take time to recover, the burden of the economy will be felt by the most vulnerable, and the relatively poor. Exports dwindle and jobs are lost. The government has gotten used to an increasingly state-run or interventionist economic system with its centralized supply chain management during Covid-19 outbreak and prefers to continue it to a considerable period, in a bid to keep prices low, specially for the poor. As government finances are unlikely to be easy in the short run, a strong man leadership emerges, with increasing ethno-religious polarization. State control of businesses and supply chains are justified on two arguments – first, government (military) does it cheaper and better, and second, that it is actually from Muslim control that businesses are rescued.

Politics – The strong-man leadership model will again look attractive in the short run. Secular institutions of democracy may be undermined in long process. The election will be postponed and the government will continue without Parliamentary approval for public finance. However, such extra-constitutional conduct of the government will be justified by majoritarian religious outfits, including highly respected Buddhist monks, as Christian leaders remain silent on those issues. The 19th Amendment to the Constitution and the Reconciliation process become irrelevant issues within the Sinhala polity. Nevertheless, discontent over the financial and development disparities between different economic classes will emerge and will be overshadowed by ethno-religious tensions. Chauvinist elements will receive patronage from rulers; supporting a one-man rule. Economic management will soon be overtaken by a privileged few, as military-backed groups will run factories that go bankrupt in the recession. In the post-Covid situation, there will be a surge of nationalist self-sufficiency rhetoric, anti-western attitudes and anti-Muslim sentiments, that will shape the politics.    

Challenges – Ethno-religious elements will harm national unity leading to increased polarization on ethno-religious fault lines. In a situation where country’s civil image is harmed, no other country, including India, may be not in position to help Sri Lanka due to their own economic ills as they are also in the process of recovering from the world economic recession other than China. This would be a great opportunity for China to get Sri Lanka into its firms control as a proxy state in Chinese international axis. Opposition politics can take and extremely scattered form, sometimes with elements equally chauvinist and partisan.