Advocata welcomes Economic Transformation Bill

Advocata welcomes Economic Transformation Bill; lists few key concerns

Independent policy think tank the Advocata Institute yesterday welcomed the  Economic Transformation Bill as ambitious and progressive but listed few key concerns. 

“The Advocata Institute welcomes the Government’s stated intention to move from an inward-oriented economy to a more open economy to boost international trade, foreign investment and productivity,” it said in a statement.  

The Sri Lankan Government has gazetted the Economic Transformation Bill to overhaul the country’s economic landscape. This ambitious Bill aims to create a more competitive, export-oriented, and digitally-driven economy while achieving net-zero emissions by 2050 – however, enshrining economic targets in law may prove to be problematic.

Some of the key reforms include the establishment of new institutions that are intended to address some important issues. The Bill proposes establishing an Economic Commission to streamline economic activity and trade, and splitting the role of the Board of Investments (BOI) between Zones SL, Invest Sri Lanka, and the Economic Commission.

 Additionally, the bill also sets up specialised bodies to focus on promoting foreign investment (Invest Sri Lanka), developing industrial zones (Zones SL) and international trade (Office for International Trade), boosting productivity (National Productivity Commission), and providing economic expertise (Sri Lanka Institute of Economics and International Trade).

The policy will address crucial areas like debt management, agricultural modernisation, import-export regulations, and economic governance.

The Economic Transformation Bill sets ambitious debt reduction targets, aiming to bring the public debt-to-GDP ratio below 95% by 2032 and significantly reduce annual Government borrowing needs. This strategy is complemented by a Public Financial Management Bill, which will be introduced alongside the Economic Transformation Act, to ensure responsible management of public finances and prevent future economic crises.

The Bill requires the Cabinet of Ministers to submit a report to Parliament every five years, outlining the policy framework and strategies to achieve the National Economic Transformation goals (Section 5). This may be revised from time to time and presented to Parliament. The first report is to be presented in 2025.

All policies, programs, regulations, circulars, and directives of the Government shall conform to such National Policy on Economic Transformation. The Government will also present a report each year on 31 March detailing progress made towards each target, and any corrective actions taken as and when needed (Section 7).

Limits for levels of debt and public expenditure are within the control of the Government and are widely used in other countries. Targets such as Exports/GDP, FDI/GDP while clearly signalling the Government’s intent, belong more to the realm of policy than law. The bill makes provisions that where these targets have not been met, the Government shall inform Parliament of the measures being taken to remedy the situation and indicate when they will be met. While the remedial measures reflect a commitment to meeting these targets, the practicality of it may be questionable as many factors influencing these targets often extend beyond direct Government control. 

Aththa Cartoon

Key aspects of concern

• The composition of the Board of the Economic Commission, which proposes a 10-member board with four ex officio members of the relevant line ministries while there will be six members appointed by the President. The chairperson of the Economic Commission Board will also be a Presidential appointment, while the Director General of the Economic Commission is a Ministerial appointment. The wide powers exercised by the President over these appointments leave room for questions of credibility and politicisation of appointments which needs to be carefully considered. Independent appointments of these key officials is mandatory for effective national policy formulation.

• Advocata is concerned that certain provisions of the Bill do not apply to the Colombo Port City Special Economic Zone, established under section 2 of the Colombo Port City Economic Commission Act, No. 11 of 2021. This exclusion could lead to unfair competition. 

• Another important point of concern is the incentives and exemptions offered to investors under this bill, which leaves room for ad-hoc short-term measures that can be changed from time to time under the prescription of the Minister. 

• Setting targets on debt and primary balance is commonly found in laws, while targets for GDP growth, exports, and unemployment are often addressed as policy targets. By codifying these targets into law, they gain a degree of enforceability that is not typical for policy goals. This raises questions about the mechanisms for enforcement and the consequences for failing to meet these targets. The decision to legislate specific economic targets in Sri Lanka’s Economic Transformation Act is unusual but comes with potential challenges in terms of enforcement and practicality⍐.

Daily FT Thursday, 6 June 2024

பிந்திய செய்தி:

பிரதமர் மோடியின் பதவியேற்பு விழா ஜூன் 9-க்கு தள்ளிவைப்பு?

 புதுடெல்லி: டெல்லியில் ஜூன் 9-ம் தேதி மாலை நரேந்திர மோடி மூன்றாவது முறையாக பிரதமராக பதவியேற்க உள்ளார் எனத் தகவல் வெளியாகியுள்ளது. ஜூன் 8-ல் பிரதமர் மோடி பதவியேற்பார் என சொல்லப்பட்டு வந்த நிலையில், பல்வேறு காரணங்களால் இவ்விழா ஒருநாள் தள்ளிவைக்கப்படுவதாக தெரிகிறது.

இந்து தமிழ் வியாழன், ஜூன் 06 2024

குறிப்பு:பல்வேறு காரணங்களில் ஒரு காரணம் கூட வெளியிடப்படவில்லை ENB.

Narendra Modi Fell to Earth After Making It All About Himself

The Indian leader used his singular personality to lift his party to new heights. Then the opposition found a way to use his cult of personality against him

People in a crowd holding cardboard cutouts of Mr. Modi at a campaign rally in Chandrapur, India, in April.Credit...Atul Loke for The New York Times

When everything became about Prime Minister Narendra Modi of India, his party and its century-old Hindu-nationalist network were propelled to unimagined heights.

On the back of his singular charisma and political skill, a onetime-fringe religious ideology was pulled to the center of Indian life. Landslide election victories remade India’s politics, once dominated by diverse coalitions representing a nation that had shaped its independence on secular principles.

But there were always risks in wrapping a party’s fortunes so completely in the image of one man, in inundating a country of many religions, castes and cultures with that leader’s name, face and voice. Voters could start to think that everything was about him, not them. They could even revolt.

On Tuesday, Mr. Modi and his Bharatiya Janata Party, or B.J.P., fell back to earth. After having promised their biggest election romp yet, they lost more than 60 seats. Mr. Modi will remain in office for a third term, but only with the help of a contentious coalition of parties, some of which are opposed to his core beliefs and want power of their own.

With the result, India’s strained democracy appeared to roar back to life, its beaten-down political opposition reinvigorated. And after a decade in which Mr. Modi’s success in entrenching Hindu supremacy had often felt like the new common sense, India is seeing its leader and itself in a new light, and trying to understand this unexpected turn.

Most fundamentally, the opposition, newly coalesced for what it called a do-or-die moment as Mr. Modi increasingly tilted the playing field, found a way to use the cult of personality around him to its advantage.

Opposition leaders focused on bread-and-butter issues, often at granular levels in particular constituencies. They hammered Mr. Modi over persistent unemployment and stark inequality. But the B.J.P., with Mr. Modi from on high its only spokesman, was often left with just one answer: Trust in “Modi’s guarantee.”

“The ‘Modi’s guarantee’ slogan turned out to be our undoing,” said Ajay Singh Gaur, a B.J.P. worker who had campaigned in the party stronghold of Uttar Pradesh, the northern state where Mr. Modi suffered his biggest blow on Tuesday, losing nearly half of the B.J.P. seats.“

The opposition made that sound like this was not about him having delivered, or trying to deliver,” Mr. Gaur said, “but about him being an arrogant politician.”

Mr. Modi gave his adversaries a lot to work with, even declaring that he may not be “biological” and that he had been sent by God.

He has still emerged better so far than other Indian leaders who deeply centralized power. He remains in control of levers of power that could help him and his party restore their dominance. Indira Gandhi, who had also glorified herself and went so far as to suspend India’s democracy after declaring a national emergency, was voted out at the peak of her powers before returning three years later.

But Mr. Modi’s B.J.P., the world’s largest political party, finds itself in a tough spot after years of centralization and reliance on a government machinery put to the service of one man, analysts say. The huge advantage the party has built in numbers and resources is undercut by a lack of internal consultation and delegation of authority.

That was a key reason for its failure in Uttar Pradesh, India’s most populous state, with 240 million people, and surrounding states. Local B.J.P. leaders were disenchanted by a top-down approach toward choosing candidates, as well as what they called a misguided belief that Mr. Modi’s popularity could allow the party to sidestep potent local issues and caste factors.

With Mr. Modi sucking up all the oxygen at the top, other senior leaders of the party have been left to fight for relevance and a voice. His relentless self-promotion has also alienated the leaders of the Rashtriya Swayamsevak Sangh, or R.S.S., the B.J.P.’s right-wing fountainhead.

A banner for Mr. Modi in Varanasi, India, last month.Credit...Atul Loke for The New York Times

During election seasons, the R.S.S. activates its vast grass-roots network in support of B.J.P. candidates. While Mr. Modi, a former foot soldier in the organization, has advanced many of its goals, his consolidation of power goes against its regimented nature and its focus on ideology over individual personalities.

One R.S.S. insider, speaking on the condition of anonymity to discuss internal thinking, said that Mr. Modi’s exalting of himself had created such resentment inside the group that some of its leaders welcomed any sort of reality check for him, short of his ouster.

Sudheendra Kulkarni, a political analyst who served as an aide to the first B.J.P. prime minister in the 1990s, said Mr. Modi had pushed through unpopular legislation — in particular farm laws that prompted a yearlong protest that choked New Delhi — without consulting with party officials in the affected states. They were left to cope with the ramifications.

“The B.J.P. was never a one-leader party,” Mr. Kulkarni said. “All that changed with Narendra Modi in 2014. He sought to promote a new authoritarian idea of one nation, one leader.”

Hypothesizing that Mr. Modi’s popularity had peaked, the opposition saw an opening to go after a decisive section of votes in the Indian political formula.

For decades before his rise in 2014, neither the B.J.P. nor the Indian National Congress, the country’s two largest parties, could muster majorities on its own. Mr. Modi expanded his party’s backing by consolidating right-wing Hindu voters and drawing in new supporters with his personal story of a humble caste and economic background and a promise to change lives through robust development.

A decade later, in this year’s election, the opposition found traction in painting a very different picture of Mr. Modi — as an autocratic friend of billionaires. Since Mr. Modi had achieved everything he had set out to do, the opposition argued, his pursuit of a resounding majority could only mean that he would seek radical change to the Constitution.

That claim stirred anxiety among India’s Dalits and other underprivileged groups, who see the Constitution as their only protection in a deeply unequal society, guaranteeing them a share of government jobs and seats in higher education as well as elected bodies. The opposition was able to push the message harder when some in Mr. Modi’s right-wing support base, long seen as having an upper-caste bias, called for revoking the quotas.

Caste identity was a major driving factor for voters in many states, particularly in Uttar Pradesh, with its 80 parliamentary seats. The decline of a Dalit party in the state meant that about 20 percent of the votes were potentially up for grabs.

In Ayodhya, the constituency where Mr. Modi inaugurated a grand Ram temple earlier this year in an effort to consolidate his Hindu support base, the opposition put up a Dalit candidate. He handily defeated the B.J.P.’s two-term incumbent.In other cases, voters showed their anger over the B.J.P.’s perceived sense of impunity. In Kheri, a constituency where the son of a B.J.P. minister rammed his S.U.V. into a crowd of protesting farmers, killing several, the minister also lost.

Mr. Modi’s election campaign took its most divisive turn in Banswara, in the desert state of Rajasthan, where he called India’s 200 million Muslims “infiltrators” and raised fears that the opposition would give them India’s wealth, including Hindu women’s necklaces.

Banswara’s B.J.P. incumbent was routed in the election. While the loss was most likely attributable to local issues, the national discussion noted that Mr. Modi’s comments had not helped.

In his own constituency of Varanasi, in Uttar Pradesh, Mr. Modi’s winning margin of nearly half a million votes in 2019 shrank to about 150,000 — a disappointing showing after he had dispatched some of the B.J.P.’s most senior leaders to camp out there to help him achieve an even bigger victory.

Jai Prakash, a tea and samosa seller in Varanasi, said some of the prime minister’s work, particularly his improvement of roads, was popular. But Mr. Modi was losing the plot, Mr. Prakash said, by turning to issues disconnected from people’s day-to-day lives.

“Prices are skyrocketing; so is unemployment,” Mr. Prakash said. “He has done some good. But people cannot worship him endlessly.”⍐

• Mujib Mashal is the South Asia bureau chief for The Times, helping to lead coverage of India and the diverse region around it, including Bangladesh, Sri Lanka, Nepal and Bhutan.
• Suhasini Raj is a reporter based in New Delhi who has covered India for The Times since 2014. 
• Hari Kumar covers India, based out of New Delhi. He has been a journalist for more than two decades.

New York Times June 5, 2024 

Reuters: India election results 2024

India election results 2024

Results of the six-week-long election to the lower house of India’s Parliament started pouring in Tuesday morning

Published June 4, 2024 

Last updated 18:40 BST Reuters

Results of the Indian general elections were out on Tuesday with the National Democratic Alliance (NDA), led by the Bharatiya Janata Party (BJP), winning a majority, even if their seat tally reduced significantly compared to the 2019 elections.

Counting of over 640 million votes that were cast in the 2024 Indian general elections began early on Tuesday. The polling to elect 543 members of the Lok Sabha, lower house of the Indian parliament, concluded on June 1.

The ruling BJP along with its allies was competing for a third term under Prime Minister Narendra Modi’s leadership. The Indian National Congress (INC), which has the second largest national footprint after the BJP, helped stitch a new coalition called the Indian National Developmental Inclusive Alliance (INDIA) last year, hoping to wrest power from Modi through a united opposition.

Elections were held in seven phases in constituencies spread across 36 states and federal territories.

The BJP seized power from the Congress and its allies with a decisive victory in 2014, marking the first time in three decades that a single party achieved a majority of its own. Its strength increased in the subsequent 2019 election. However, the party did not end up with enough seats this year to form a majority by itself.

Its previous victories had come from the more populous northern and western parts of India. It lost some of that turf to the Congress-led alliance this year.

India's political landscape has significantly evolved over time. Until three decades ago, the Congress was the dominant force. However, the BJP began gaining substantial electoral strength and emerged as the leading party. Its wins in the 2014 and 2019 elections relegated Congress to historically low levels of influence, winning less than 10% of the seats each time. This year, however, the Congress almost doubled its tally.

A

All major exit polls had predicted a historic victory for the BJP, anticipating its best performance to date.⍐

Note

Some allies of BJP and INC have changed between 2019 and 2024.

Sources

Election Commission of India; Trivedi Centre for Political Data; DataMeet; Natural Earth

Edited by

Simon Scarr, Anand Katakam and Raju Gopalakrishnan

Modi’s party may need junior partners to form a government.

 

A worker carrying a sign showing Prime Minister Narendra Modi of India outside his party headquarters in New Delhi on Tuesday 04-06-2024.Credit...Dinesh Joshi/Associated Press

பின்னிணைப்பு

Prime Minister Narendra Modi’s ruling party will likely need help from junior partners to form a government under the rules of India’s parliamentary system, early election results indicated on Tuesday.

In a 2019 election that handed Mr. Modi a second consecutive term, his Bharatiya Janata Party won 303 of the 543 seats in Parliament. That was well over the 272 seats it needed to rule on its own.

This time, exit polls released over the weekend suggested that the B.J.P. would once again easily win more than 272 seats. But as of early Tuesday afternoon, official voting results indicated that it would win about 240 seats instead.

Winning that much support — 44 percent of the seats in Parliament’s lower house — is an impressive feat in India or any other country. And the new math should not prevent Mr. Modi from securing a third consecutive term as prime minister.

But the dip in the B.J.P.’s electoral support, far short of Mr. Modi’s goal and his last electoral performance, will likely have political ramifications.

At a minimum, the B.J.P. will have to depend more on the junior members of its existing multiparty alliance. Two of the most prominent parties do not share Mr. Modi’s Hindu-first agenda.

And if the governing alliance does not win a majority, the B.J.P. will be able to form a government only by adding new partners.

It may not come to that. As of Tuesday afternoon the alliance was on track to scrape by with a narrow parliamentary majority — far short of its target of 400 seats, but enough to stay in power with its existing members⍐.

June 4, 2024, 4:54 a.m. ETJune 4, 2024

June 4, 2024

Hari Kumar, Mujib Mashal and Mike Ives New York Times

No breakthrough, no breakdown at Shangri-La

US-Chinese defense chiefs meet for first time in 18 months while Filipino leader keeps
rhetorical heat on China at Singapore talk shop

MANILA – Rising tensions between China and US allies in Asia set the tone for this year’s Shangri-La Dialogue in Singapore, a defense talk shop that brought together defense officials and policy experts from across the Indo-Pacific and beyond.

In his highly anticipated keynote speech, Philippine President Ferdinand Marcos Jr pulled no punches by slamming Beijing’s aggressive actions in the South China Sea.

In a barely veiled criticism of the Asian superpower, the Filipino leader highlighted its “illegal, coercive, aggressive and deceptive actions [which] continue to violate our sovereignty, sovereign rights and jurisdiction” in the hotly disputed waters.

More broadly, Marcos Jr warned of the “permanent fact” of China’s aim to achieve “determining influence over the security situation and the economic evolution of this region.”

Faced with criticism at home and overseas for his hard pivot back to Western allies after six years of his predecessor Rodrigo Duterte’s pro-China foreign policy, Marcos Jr underscored the “stabilizing presence of the United States [as] crucial to regional peace.”

Nevertheless, the Filipino leader made it clear that, similar to other Southeast Asian states, he is not fully aligning with one superpower against another since “[i]t’s never a choice” and “[b]oth countries are important” for regional peace and prosperity.

Recognizing the dire consequences of an untrammeled New Cold War, the two superpowers also initiated vital conversations on the sidelines of the mega-event.

During his meeting with China’s newly-installed defense minister, Dong Jun, US Defense Secretary Lloyd Austin held what the US characterized as “firm but professional” conversations on a wide range of issues including disagreements over Beijing’s nuclear, space, and cyber development policies, actions in the South China Sea and the Taiwan Straits, and alleged “lethal aid” to Russia in the Ukraine conflict.

This marked the first meeting of its kind between US and Chinese defense chiefs in 18 months, raising hopes of restoring guardrails in their bilateral military relations. The two chiefs agreed to reopen hotlines in a move that will help keep tensions from spiraling into confrontation in Asia.

This year’s Shangri-La Dialogue couldn’t have been more timely. It came hot on the heels of China’s massive drills around Taiwan shortly after the self-ruling island nation inaugurated its new president, Lai Ching-te.

Although the new Taiwanese leader has emphasized his commitment to maintaining a stable status quo, Beijing has stepped up its intimidation tactics by expanding its missile deployment close to and expanding aerial patrols across from the Taiwan Strait in demonstrating its growing ability to conduct a complex, multidirectional invasion of the self-governing island China sees as a renegade province.

“If China stops its provocation and intimidation, then peace and stability can be maintained,” Taiwan’s Defense Minister Wellington Koo told reporters following China’s latest drills, painting the Asian superpower as the main cause of trouble in the region.

Meanwhile, China has also upped the ante in the South China Sea against the Philippines, a US mutual defense treaty ally. Chinese maritime forces have clashed with Filipino patrol and resupply vessels close to the Second Thomas Shoal and Scarborough Shoal on at least five occasions in recent months, leading to the injury of several Filipino servicemen and major damage to multiple Philippine vessels.

ENB Poster-820-South China Sea

During his question and answer with media at the Shangri-La Dialogue, Marcos Jr made it clear that the death of a Filipino coast guard or naval servicemen would cross a “red line.” “If a Filipino citizen was killed by a willful act, that is very close to what we define as an act of war. We would have crossed the Rubicon. Is that a red line? Almost certainly.”

On multiple occasions, the Biden administration has signaled its “ironclad support” for the Philippines and, accordingly, said that the 1951 US-Philippine Mutual Defense Treaty would apply in the event of an armed attack on Philippine public vessels and troops in the South China Sea, raising the prospect of great power conflict over the disputed land features. 

A deep source of concern is the dearth of institutionalized dialogue between the two superpowers just as risks of armed confrontation have increased in recent months. Following then-US House Speaker Nancy Pelosi’s visit to Taiwan in 2022, China suspended various communications channels with the US as a form of diplomatic retaliation.

Chinese paramount leader Xi Jinping and US President Joe Biden met on two occasions in November 2022 and also on the sidelines of the Asia-Pacific Economic Cooperation Summit (APEC) in San Francisco last year, where they agreed to re-establish guardrails in bilateral relations.

In particular, the Pentagon has pushed for setting up a communications channel between the US Indo-Pacific Command (INDOPACOM) chief in Hawaii and his Chinese counterpart overseeing operations in the Western Pacific including over Taiwan, Japan and the South China Sea.

Last month, the US and Chinese defense chiefs held talks over the phone to set the tone for their in-person meeting in Singapore for the Shangri-La Dialogue.

“The [US Secretary] expressed concern about recent provocative [People’s Liberation Army] activity around the Taiwan Strait and he reiterated that [China] should not use Taiwan’s political transition – part of a normal, routine democratic process – as a pretext for coercive measures,” US Air Force Major General Patrick Ryder Ryder said in a statement following the 75-minute meeting between Austin and Dong.

After meeting Austin in Singapore, Dong said the “stabilization” of military-to-military relations “does not come by easily and shall be cherished dearly,” Chinese Defense Ministry spokesperson Wu Qian, told reporters after the meeting, adding that Dong stressed that neither side should “contain or smear” the other side, but rather build mutual trust.

Dong also said that when it comes to areas surrounding China, especially the South China Sea, commercial ships and aircraft “can always operate safely,” but that “there is a huge difference between freedom and willfulness, between navigation and trespassing.”

“It is important to respect others’ security concerns, and security should be mutually respected. No one can pursue one’s security at the expense of another country’s security,” Dong said, according to the ministry spokesperson.

For the Philippines, Marcos Jr’s keynote speech, the first-ever by a Filipino leader, marked a major diplomatic victory. It provided Manila a major platform to rally international support as well as increase pressure on Southeast Asian neighbors to address rising tensions in the South China Sea.

Singapore served as a perfect venue for Marcos Jr to highlight ASEAN’s shortcomings in exercising agency and leadership in shaping regional affairs as well as underscore his country’s defensive approach to ongoing disputes. 

He underscored the inviolability of the Philippines’ sovereign rights and “strategic agency” while highlighting China’s aggressive actions, including its recently passed law against “trespassing” in Beijing-claimed waters across the South China Sea basin.

“We have defined our territory and maritime zones in a manner befitting a responsible and law-abiding member of the international community,” the Filipino leader emphasized, pushing back against China’s narrative that the Philippines is the source of trouble.

“As President, I have sworn to this solemn commitment from the very first day that I took office [to defend our sovereign rights]. I do not intend to yield. Filipinos do not yield,” he added, warning China that its current course of action spells a lose-lose situation for the whole region.⍐

By RICHARD JAVAD HEYDARIAN   JUNE 1, 2024 Asia Times