The Communist Party of Sri Lanka (CPSL) held its 21st National Congress recently. The Daily Mirror discussed the political, economic and social changes taking place domestically and globally with the CPSL General Secretary former Minister DEW Gunasekara. Following are excerpts of the interview done with Gunasekara.
Q : The world today is reaping the harvest of the collapse of the Cold War which was galvanized by ‘Perestroika’ of Mikhail Gorbachev. Where is the end of this or the next major jolt in global politics?
You are referring to the collapse of the Soviet Union and 26 years have elapsed since then. Much water has flowed under the bridges. Ideologist Francis Fukuyama identified this collapse as ‘End of History and the Last Man’ in his widely read book which had the same title. Incumbent Russian President Vladimir Putin identified it as a ‘catastrophe’. When the global financial crisis of 2007 /08 blasted the three main centres of capitalism, namely the US, EU and Japan, Fukuyama withdrew his characterization. Originally with the collapse of the Soviet Union he expected an eternal green light for capitalism.
It was at this stage that Pope Benedict requested economists to look for Karl Max’s ‘Das-Kapital’ to see what had happened. It took 10 long years for their economies to begin recovery. In fact, recovery 
began this year. So, imperialism failed to rope in Russia into its orbit. Instead, under Putin it took a different path as you see now.
Today, China and Russia have entered into a strategic partnership. In my view, the collapse of the Soviet Union was only a collapse of an economic model, not the collapse of an ideology. Imperialists expected a uni-polarity of the world order. Instead, we witness today a multi-polarity of world order. See the consequent change in the world economic balance of power.
The so called ‘War on Terror’ unleashed by the US in September 2001 has brought in death, destruction and chaos in the Middle East. China has become the second world power. The banner of economic globalization has been snatched away by China from the US. So the great October which created the Soviet Union has re-entered history through another door.
"The postponement of LG polls complicated the situation further. Subjective factors dominate do predominate objective factors. So, guess is no easy. The period from the nomination day to the polling date may cause further shifts in the political scene"
Q : But the market economy and modified capitalist policies have taken root in almost all the countries including China, Russia and Cuba and Latin America and Asia. Not a single country in Eastern Europe follows communism now. Your comments?
It is necessary to view these developments from a historical context and a dialectical perspective. There is no express way towards history. Science and technology have changed all spheres of human activity. Closed economies don’t fit into economic globalization. So, widening of the market becomes inevitable. But people now talk of a social market or socialist market. New models are emerging in the world. You referred to a ‘collapse of communism’.
Communism didn’t exist anywhere. They were called ‘communist regimes’ by the media. Even those countries didn’t identify themselves as communist regimes. They were early socialist models. New models are taking shape under the new historical conditions. This is how history moves on. See what is taking place in China, Vietnam, Laos Cuba and even in Cambodia. China has lifted 800 million out of poverty within a historically short period.
There is no such record in human history according to UN General Secretary, Antonio Guterres. By 2020, China shall fully eradicate poverty. On the contrary, there are 300 million living in poverty in the so called developed countries. Central and Eastern Europe are emerging as a new economic organization while Euro–Asia, led by Russia, has already come to stay. The new Silk Road initiative will bring in new economic models.
The illegitimate UNP –SLFP unity government formed in January 2015 became legitimized in August 2015, after the general election
The only gainers are the UNPers
If not for China, Sri Lanka by now would have been in the same plight as Greece
Q : Whether we like it or not the Non-Aligned Movement (NAM) is distancing fast from our political landscape. How and why is this?
NAM came into existence during Cold war conditions and after World War II. The newly independent countries were born out of the collapse of colonialism. They didn’t want to align themselves to the existing camps, capitalism or socialism. So it was a historical necessity. So, with the collapse of the Soviet Union, the significance of NAM was lost. Not only NAM, but even structures under US, namely World Bank, IMF, WTO are crumbling.
Already they have become toothless. The so called Brettonwoods System is no longer effective. New substitutes like Brix Bank, Euro-Asia Bank, African Bank etc. have emerged. G7 has been replaced by G20. The EU is in a state of disarray with Brexit. Similarly, so many new economic blocks have emerged. These are the realities reflecting the multi polarity of the new world order.
"See what is taking place in China, Vietnam, Laos Cuba and even in Cambodia. China has lifted 800 million out of poverty within a historically short period. There is no such record in human history according to UN General Secretary, Antonio Guterres. By 2020, China shall fully eradicate poverty"
Q : The domestic political scene has undergone major changes since the CPSL held its 20th Congress in July 2014. What are the most influential and important changes that had a big impact on the country and public life in particular?
Our 20th Congress in July, 2014 identified the trends emerging in the domestic political scene. To recall, it was before that Congress that I spoke to former President Mahinda Rajapaksa of the growing trends. In fact it was on the basis of a scientific analysis of past election results. I prevailed upon him not to go for an early Presidential Election. Even the incumbent President who was then the General Secretary of the SLFP was present with other leaders of the UPFA when I discussed these matters on July 1st, 2014. It is in this background that these developments need to be viewed.
Firstly, the first ever UNP–SLFP Unity Government in Sri Lanka was formed after the presidential polls in 2015. In an unprecedented scenario, UNP Leader Ranil Wickremesinghe became Prime Minister despite the fact that the UPFA–SLFP led Opposition had a two thirds majority in Parliament for Mahinda Rajapaksa.
Secondly, former President Mahinda Rajapaksa hurriedly renounced the leadership of the SLFP and handed the party over to the former General Secretary of the SLFP, Maihtripala Sirisena, who emerged as the victor at the Presidential elections.
Thirdly, the 18th Amendment to the Constitution, brought in by two thirds majority in Parliament, was replaced by the 19th Amendment by the same Parliament with a five sixths majority by the same legislature. As a consequence, Parliamentt can’t be dissolved till 2020.
Fourthly, No party has a working majority in Parliament and therefore there is no other way out except by forming an uneasy coalition to rule the country.
Fifthly, the illegitimate UNP-SLFP Unity Government of 2015 became legitimized in August 2015, after the General Elections.
Sixthly, the SLFP led UPFA is divided right from the middle with one wing with the Government and the other with the Opposition (JO). In the eyes of the voters, all these developments are confusing and perplexing.
****The SLFP still doesn’t have a strategy to meet with the new developments. The only gainers are the UNPers. The original sin is in its inability to interpret the result of the Presidential elections.
New economic strategy is the only way out of this debt trap
Today, China and Russia have entered into a strategic partnership. In my view, the collapse of the Soviet Union was only a collapse of an economic model, not the collapse of an ideology
The banner of economic globalization has been snatched away by China from the US. So the great October which created the Soviet Union has re-entered history from another door
Q : Could you confidently say that the left movement in Sri Lanka is still a force to be reckoned with in domestic politics?
Ideologically, it is still a force, but organizationally it may not be. The collapse of the Soviet brought in confusion in the sphere of ideology. It is the new liberalism which made the trade union movement weaker, the base of the left movement. Yet, had there been unity or at least united action, the left would have been stronger.
Both JR and Premadasa failed to destroy the left ideologically. The international factor too was in their favour with the collapse of the Soviet Union. Under the new emerging international developments, the left has the potential to re-emerge provided there is unity and well thought out strategy. This was the consensual position that we took during the 21st Congress held in October, 2017.
"I am no soothsayer or astrologer to predict. I can only observe some emerging trends in the confused and complicated political situation. The LG polls being a grassroots election, there will be local factors in operation. The new electoral system may generate new interests and heat. The split in the SLFP will be a determining factor this time"
Q : The people, social and religious organizations, trade unions, school and university students and their parents, Bhikkus (Monks) and many others take to the street to protest and resort to trade union action even regarding extreme, trivial or personal issues at the drop of a hat and disrupt public life. This they do by using the new found freedom to the extreme. As a seasoned politician, do you think this is a healthy trend?
There is nothing to be worried about peoples’ protests for they are democratic expressions. They are mostly sporadic or instant and not properly led. In my view, this is a reflection of the impending crisis – political, social and economic.
Taking a broader view, existing political culture is also a determining factor. Loss of confidence in politicians opens the way for anarchy. To that extent there are unhealthy developments. Opportunists have entered the trade union movement with privileges and patronage being offered. Thus, those who are irrational are being taken. In the good old days when the left movement played a key role in politics and trade union movement, the trade union leaders never called health workers, doctors and nurses in particular to strike.
Leaders of health workers like Piyadasa Adipola strictly adhered to the methodology of negotiations without causing painsto patients. So, I agree that there is an unhealthy trend being set by way of strikes. Only 10% of the workers are organized in trade unions. Under well-organized trade union movements, there won’t be irrational decisions or irresponsible work stoppages. When the left movement is weakened, such negative tendencies emerge. This is against what neo-liberalism has brought about – so, the new culture.
" However, I must confess that the discipline of public finance suffered adversely under the Executive Presidency despite constitutional provision. It turned worse when the Executive became the Finance Minister"
Q : The Central Bank bond scam has shaken the political fabric of the country as never before. Being the former Chairman of the Parliamentary Oversight Committee COPE, that probed the swindle to some extent, do you think the Presidential Commission of Inquiry is the best thing to happen?
Yes, it was my COPE investigation which first shook the political fabric. The Parliament was dissolved on the very day I was preparing to present my interim report. In fact, this was the first instance when the COPE was directed by the legislature to undertake an investigation of this nature. COPE is normally required to follow the procedure of examining Audited reports. In this instance, before the Auditor General could lay his hands on, the COPE had to undertake the preliminary investigations itself. Of couse, I had the expert advice and assistance of the then acting Auditor General to undertake such an assignment. I was the first to demand a commission from the President. I insisted on having two Supreme Court Judges for reasons of credibility, integrity and confidence. I am happy that it so happened. It would have been better if the Commission also had judicial powers.
Q : The legislature has failed to take appropriate punitive measures regarding state ventures and officials who have allegations against them made by the COPE on financial mismanagement and other corruptions. Your comments?
The COPE came into existence in 1979. It was considered necessary to have a separate oversight committee for public enterprises with the expansion of the public sector in Sri Lanka’s economy. However, I must confess that the discipline of public finance suffered adversely under the Executive Presidency despite constitutional provision. It turned worse when the Executive became the Finance Minister.
I took over as COPE Chairman in 2010. During the 31 preceding years of COPE’s existence, since 1979, only 600 examinations had been completed. During my short period of five years, I completed 700 investigations compared to 600 in 31 years. COPE was required to present reports to Parliament. It doesn’t have powers for implementation or punitive measures on errant public enterprises. It is the responsibility of the Executive to carry out recommendations and follow up action of the reports.
However, I put pressure on the cabinet, ministers and secretaries to follow up action. Some cases were referred to CID and the Bribery Commission, for further inquiries. I got chairmen and boards removed. Each COPE report was debated in Parliament for two days. Since the Parliament was the only institution responsible and accountable to the public with regard to public finance, it is left to Parliament to explore ways and means of ensuring financial discipline. I was insisting on change in standing orders for more powers.
"Science and technology have changed all spheres of human activity. Closed economies don’t fit into economic globalization. So, widening of the market becomes inevitable. But people now talk of a social market or socialist market. New models are emerging in the world"
Q : There is no doubt that the Local Government Polls expected in January will be a fiercely fought among the UNP, SLFP or the UPFA, JVP and the SLPP. As a veteran politician could you guess which party will come first under the prevailing political climate?
I am no soothsayer or astrologer to predict. I can only observe some emerging trends in the confused and complicated political situation. The LG polls being a grassroots election, there will be local factors in operation. The new electoral system may generate new interests and heat. The split in the SLFP will be a determining factor this time. The new alignment of political forces is dependent upon several variable factors.
I observe that only the UNP as undivided. All other political forces are in a state of disarray. The new political alignments may vary from district to district and possibly from one social body to other. The postponement of LG polls complicated the situation further. Subjective factors dominate do predominate objective factors. So, guess is no easy. The period from the nomination day to the polling date may cause further shifts in the political scene. It is too early to comment whether the prevailing anti-government trend will shrink or expand.
Q : The Government is in the process of introducing far reaching tax reforms in a bid to accelerate economic progress. As a senior politician who has campaigned to overhaul our tax system in and out of Parliament for years, what are the merits and demerits of the new tax system you have identified?
Despite being a Minister, I have been in the forefront in the struggle to cause an increase in Government revenue. Government revenue as percentage of the GDP was 24%, in 1977. It dropped to 10% by 2015. In all my speeches at Budget debates from 2005 to 2015, I have been warning repeatedly of an impending debt trap. Today, a lot of research has been done globally with regard to this problem of debt. Disparity of income levels is one of the global challenges caused by taxation policies driven by neo-liberal economic strategies.
The gap between Direct Tax (15%) and Indirect Tax (85%) had been on the increase since 1978 budget and 40 years of neo liberal taxation policy has brought the present impasse. Finance Minister Mangala Samaraweera has proposed a new approach to tax reforms. We watch and see how he disposes
Q : How could Sri Lanka get rid of the huge debt trap that runs to nearly 3 trillion rupees and how?
Debt is today a world phenomenon under neo liberalism. It has become a subject matter of global debate even at the recent G 20 summit. In Sri Lanka, this is a legacy carried forward by every administration since 1977.
I attribute this to the drop of Government revenue. There are other factors as well such as fluctuations of exchange rates and interest rates. Debt has turned into a trap with the fall in revenue caused by tax relief, tax exemption, low tax rates etc. The shortfall of revenue is met by loans and borrowings paving the way for tax dodgers to invest in Bonds. So this is a vicious circle. In the final analysis, gainers are finance capital investors as evidenced by the Bond scam. New economic strategy is the only way out of this debt trap. If not for China, Sri Lanka by now would have been in the same plight as Greece.
