Bankrupt

On the day their government announced fuel supplies would run out, thousands of Sri Lankans marched on the presidential residence and occupied it.

President Gotabaya Rajapaksa and Prime Minister Ranil Wickremasinghe both promised to vacate their posts on July 13. Until that happens, the mob promised not to leave the occupied presidential residence.

So much superficial comparisons have been drawn in social media between what is now happening in Sri Lanka and what happened here during the EDSA uprising in 1986. It is the differences between the two events, however, that are more substantial.

Gotabaya Rajapaksa was a popular (and populist) leader until fiscal problems began surfacing last year. He served as defense minister when his elder brother Mahinda was president, overseeing the brutal military campaign that finally ended the Tamil insurgency in 2009.

Prime Minister Wickremasinghe is a veteran statesman who had occupied the post six times over the past two decades. He returned to the post last May to help fix the fiscal and financial crisis engulfing the island nation. By then, however, it was too late.

Sri Lanka defaulted on its debt. It has basically nothing in terms of foreign reserves. The country has no money to purchase essential imports such as oil, food and medicines. It is on the verge of a humanitarian calamity.

Colombo has begged Moscow for oil. Negotiations are underway for an emergency loan from the IMF, although that could take months to happen. India promised some support, but that will likely be too little.

It is difficult to mobilize global support for the people of Sri Lanka. The crisis now being experienced is largely self-inflicted.

The road to this fiscal meltdown began when the Rajapaksa government began borrowing heavily to finance what were mainly vanity projects. Unable to pay back its debt to Beijing, for instance, Colombo was forced to lease it back to China. That port could now be used as a major trade and military outpost for the Asian superpower.

In order to buy popularity, Rajapaksa lowered taxes imposed on Sri Lankans. That quickly developed into an uncontrollable budget deficit that only further borrowing could finance.

Faced with thinning foreign exchange reserves, Rajapaksa banned chemical fertilizer imports, among other things. This brought about an agricultural crisis and massive food shortages. Food imports drained what was left of the country’s foreign exchange reserves.

Rajapaksa, a politician receiving very bad economic advice, took the wrong turn at every step of the way. Buying popularity by giving up revenues is always unsustainable.

Those in our midst who clamor for subsidies for everything and demand suspension of excise taxes must observe Sri Lanka most closely. When fiscal discipline is abandoned, the road to bankruptcy is opened.

Insecurity of tenure

When local executive power changes hands, it is often the career civil service of local governments that takes the hit.

When politicians of tyrannical bent take over, they often treat the local government as personal turf, purge the administrative ranks and install loyalists in otherwise career positions. Sure, incoming local executives put a premium on loyalty, but the quality of LGU administration is eroded in the process.

What happened in Parañaque City is illustrative of what is a larger malaise.

When Eric Olivarez took over, he demoted seven career officials and dismissed several other ranking officers. Those affected did not even get the courtesy of a written notice. The personnel changes were simply announced in a public gathering.

Among those replaced were the city accountant, the budget officer, the planning officer, the chief of the engineering office, the city’s official engineer and the chief of the City Disaster Risk Reduction Management Office. The head of the city’s budget office, for instance, has been in the service for 35 years and is not yet due for retirement. Not one of them was formally notified of the “reorganization” the new mayor set in motion.

In addition, the new mayor fired the city administrator, the public information officer and the city health officer. Also discharged were the chief of the city environment office and the chief of the business permit and licensing office. Most of those replaced were put on floating status. Many of them have served the city for three decades or more, starting their careers when the present mayor’s father, Dr. Pablo Olivarez Sr., was mayor.

An order covering the replacement was issued subsequently, days after the dismissals were announced. Some of the dismissed officials filed an appeal with the city’s human resources management office, to no avail. One affected officer filed a complaint with the Civil Service Commission (CSC), asking that the hasty reassignments be revoked.

For good measure, the new mayor invited the city’s barangay chairmen to dinner. They were surprised when, during the event, the mayor announced a vote would be held to replace the leadership of the Association of Barangay Chairmen (ABC). The ABC president sits as an ex officio member of the city council.

The wonder of all these is that Mayor Eric Olivarez is not even taking over from a rival. He is succeeding his own brother, Edwin, who hit his term limits and is now an elected congressman for the city. Parañaque has long been ruled by the Olivarez dynasty.

We should soon be hearing from the CSC about the replacement en masse of local government officers. While the local chief executive has the power to appoint senior officers of his administration, security of tenure of career civil servants must also be protected.