Features
Is the IMF a Member of the UN Family?
by Dr Sarala Fernando
The UN Secretary General seems to think so when he recently urged the Security Council and the Bretton Woods institutions to undertake reforms. Yet as the IMF programme unfolds in Sri Lanka one can see the divergence in the methods and objectives deployed by the IMF with its emphasis on domestic fiscal reforms and the UN which is advocating sustainable development, strengthening of health, education and protection of the environment and addressing global emergencies like climate change.
The mismatch is reflected in the growing chasm between the government and the public. The government had hoped that after Covid, Sinhala/Tamil New Year would be held in grand style this year, even providing funds to government institutions to organize events. Contrary to such expectations this year was marked with an absence of the usual cacophony of celebration. Instead of fireworks, the regular tv and radio counted down the auspicious times. The public was protesting the escalating cost of living as a result of new taxes, rupee depreciation causing food inflation, closing of enterprises and loss of jobs under the current IMF programme.
Reports galore on the increasing “misery” level with the deterioration marked among the most vulnerable under five-yearnold children, while women appear to be among the most affected whose plight, suicides, domestic violence, despair, are shown on live tv every night. Added to the woes it seems a sort of apathy has gripped the working people – that is those who have not been able to go abroad – seeming to prefer to voice their grievances and sink into depression rather than buckle down to work harder for more pay. Fortunately in Sri Lanka in time of any crisis, there is a huge network of humanitarian relief provided by the private sector, religious organizations, NGOs and concerned individuals which is making up for what the government cannot do.
People are asking now about the real cost/benefit of the IMF deal especially since it turned out that a substantial amount of the first tranche went back to the multilateral banks and bilateral lenders like India to meet outstanding debt repayments, as part of the IMF conditionality. In contrast, Bangladesh made the first positive move, offering to defer debt repayment on their $500 loan for another six months followed by India offering one year’s deffered repayment on their billion dollar loan.
The government argues that the IMF deal is a seal of approval opening the way for more assistance from multilateral banks and bilateral investors. But multilateral assistance has been slow to disburse in Sri Lanka such that when Covid hit, the World Bank just canceled their unutilized projects and redirected balances for the urgently required vaccines (in the haste, cancellation may have included expenditures already made by the government and not yet forwarded for reimbursement).Now the ADB has done the same, repurposed unutilized grants for emergency assistance of $350 million. For multilateral assistance to be well utilized there must be a strong domestic disbursement tracking system in place for timely reimbursement –has that been put into place and has the IMF provided necessary advice on that?
An early catastrophic consequence of the recourse to the IMF has been instead of strengthening human capital, there is an exodus of skilled workers and professionals for foreign employment leaving Sri Lanka’s flagship health and education system in dire straits, beset by strikes and shortages of equipment and essential drugs. Worse still, it is a blow to the national psyche where robust national health and education systems had given Sri Lanka its high social development standards, quoted as an example in early international indexes like the PQLI.
After the tsunami hit, our medical services responded immediately and prevented epidemics, hailed by WHO as exemplary. Now, young doctors well trained virtually free of charge in Sri Lanka, are leaving in droves attracted by study offers converted to work visas in overseas countries . Encouraged by the government release of foreign exchange for educational purposes, Sri Lanka’s students are facing a barrage of advertisements from foreign universities judging by the press advertisements and other inducements like work visas and permanent residence status upon graduation. There was even one advertisement recently by a foreign educational institution scouting for underage students with the added incentive of visas being provided for accompanying parents!!!
Has the IMF considered how focusing on revenue is disastrous for organizations like zoos which need not to boast about raising visitor revenue but rather on how they care for the animals in their charge? A similar situation exists for wild life parks and cultural triangle sites which are now encouraged to focus more on visitor revenue than on protecting the treasure in their charge. It is not only the family silver that is being put up for sale but even the wild animals are under threat.
The Agriculture Ministry has even entertained a proposal to export our wild monkeys for lab experiments and has been taken to court by a number of voluntary organizations, for this atrocious proposal. Now the Ministry of Agriculture is giving more firearms to farmers to kill monkeys, peacocks, wild boar etc claiming they are pests. What an example at this time of Wesak and Poson when the emphasis should be to highlight the Buddha’s message of compassion to the animals!
Having come out of two bloody youth insurrections, do we need to develop a gun culture in Sri Lanka or should we pursue UN sponsored programmes to collect and destroy small arms and light weapons? A domestic gun manufactory in Kadawatha has even started to advertise its wares in the local papers. Is there some connection between this new manufactory and the recent government initiative to promote gun distribution to farmers? Those concerned with national security would agree that the need of the hour after the end of the armed conflict is to reduce the numbers of small weapons in the hands of the public.
If culling is the only option, should not this be handed over to the military or police which is trained in the proper use of weapons? Compare our failed policies to the success of the wildlife campaigns in India under Prime Minister Modi with tiger numbers rising and parks well patrolled and conserved which has given the Indian Prime Minister excellent credentials internationally and a domestic political benefit as well, helping to draw the youth voters in India who are most interested today in nature and wild life protection.
The IMF with its focus on graphs and paper figures also needs to consider whether the value of tourism should be calculated in tourism arrival numbers and revenue forecasts or on goals of sustainability such as installation of renewable energy and recycling? Should unsolicited attractions like cable cars be entertained when unusually intense rains caused by climate change are causing the hillsides to collapse and what is required is more regulation to control construction in vulnerable areas? Forest conservators whose prime duty should be to protect the upper watershed from where all our major rivers derive, instead are being asked to sell off residual forests to raise revenue without a thought of the priority to increase forest cover to combat climate change as agreed under UN auspices.
As for bilateral assistance, sadly we hear from the press only about the controversial unsolicited projects, the return of the costly light rail system once abandoned due to protests from our transport specialists and a barge mounted nuclear power project apparently ignoring the perils of contamination from the worst maritime disaster experienced in Sri Lanka, Express Pearl. Following the IMF lead, the government focus is only on collection of compensation, yet what is needed is tightening of the regulations on carriage of hazardous materials as suggested by experts. Maritime zones around the country should be strictly protected and passing ships monitored for dropping plastic waste, excess oil etc in our waters as discussed under UN auspices.
Under the IMF raising revenue mantra, the government has lined up a list of failed SOE’s for sale or restructuring but has the IMF shared experience on how to do this with minimum social disruption? Why privatize strategic ventures like Sri Lanka Telecom which is a strong vibrant organization making profits and providing a good service? As a consequence its staff are demoralized and worrying about whether there is some deal already in the works for the new owner and whether that party will be interested in building the organization or just taking out its profits as quickly as possible.
Inevitably the discussions turn to queries of how geopolitics will play given the need to pay off the debt owed to India. It seems there are Indian companies lined up already to purchase these government assets, one such major player being the Adani group once brought to Sri Lanka as a “prestigious” investor subsequently smeared by legal challenges. The larger question that looms is the anxiety of the public over the growing Indian presence in our economy which if mishandled will become a major bilateral headache.
The government argument was that with the IMF nod of approval, it would open the path for new foreign investments, multilateral and bilateral. This approach has been contested by the public suggesting alternate domestic options ranging from moving to a knowledge economy including music and cinema exports, debt for nature swaps, bringing back “stolen” assets etc. In other words, their message to the government is that it should look inwards for domestic solutions instead of the old pattern of depending on foreign assistance and incurring more debt.
To restore its credibility, the government could begin by moving on the long overdue Ministry reorganization– finally let there be agreement on a fixed number of ministries with fixed locations which will facilitate public access. This reform has been stagnating since the time of Lakshman Jayakody who visited the Indian National Planning Commission for advice. A proposal worth considering is merging the Foreign Ministry with the Ministry of Trade, which has been accomplished in Australia for example quite successfully.
Consulting a respected Australian colleague, his comments were as follows: ” the Canberra amalgamation between foreign affairs and trade was so many decades ago that it now seems totally natural. At the time it involved a lot of pain and was divisive but time elapsed has more than demonstrated that it is a natural alliance and very sensible. Indeed much of the serious stuff and careers are now made on the trade side of the house. Our HC in Colombo would be able to obtain the various reviews etc but in short it’s been a huge success. We have two Cabinet ministers and two junior ministers to make the workload bearable.”
The Government can also do much more to cut down waste, requiring government ministries and agencies to give up rented buildings and declaring a moratorium on new building construction in favour of better usage of existing facilities. Seeing the shortage of beds for cancer patients in Anuradhapura main hospital and a building project which is stagnating, one wonders whether those emergency treatment centres opened for the Covid could not be repurposed to fill urgent health sector needs? Official reports suggest there are many unutilized building assets, empty small schools without teachers or students, unused small hospitals without doctors or proper equipment, which could be converted to support the morale of local communities.
As the IMF officers sit in far away offices and draw economic models on paper, they need to face the human predicament of those undertaking their reform programme and the need for conformity with UN expectations. The IMF is also learning and it is good therefore to note this time around that the visiting IMF team in Sri Lanka is meeting and facing questions from the public, the press, trade unions and opposition parties. Elsewhere in the world political leaders are pushing through unpopular measures and paying the price, like in France where as a result of pension reforms it seems President Macron is now unable to walk the streets without being accosted by protesters and heckled.
Little wonder that no elections are likely to be held in Sri Lanka in the near future and a mirage is being created by speculation over possible candidates for a quick Presidential poll. Fortunately for the IMF it has a charming Managing Director able to reach out to political leaders and with a friendly public image, a stark contrast to her stony faced officials!
(Sarala Fernando, retired from the Foreign Ministry as Additional Secretary and her last Ambassadorial appointment was as Permanent Representative to the UN and International Organizations in Geneva . Her Ph.D was on India-Sri Lanka relations and she writes now on foreign policy, public diplomacy and protection of heritage).
Features
Trump’s tariffs, AKD’s gazette and Sri Lanka’s diplomatic slumber
“We are rather respectable in Colombo. We go to bed fairly early, and we remain there till morning. “
According to Sri Lanka’s diplomatic folklore, the late S.W. R. D. Bandaranaike uttered these words while explaining the reasons for Sri Lanka’s abstention on the UN resolution condemning the Soviet invasion of Hungary. Apparently, SWRD’s foreign ministry officials were asleep at home when the diplomatic cable seeking instructions was received from New York. In those days, there were no cell phones, Internet, or even fax or telex machines. The diplomatic cables were sent through post offices. Decoding them was a slow and time-consuming process. Thus, the government could not provide appropriate instructions to our mission in New York in time, and the Sri Lankan delegation abstained on that sensitive UN vote.
Sri Lanka’s Absence from Section 301 Consultations
But then, how does one explain Sri Lanka’s absence from the crucial bilateral consultation held in Washington by the Office of the United States Trade Representative (USTR) during March-April on “Forced Labour” under the Section 301 of the US Trade Act of 1974? Didn’t our foreign and trade ministries send appropriate instructions to Washington in time? Even if the instructions from the foreign ministry were transmitted to our embassy in Washington by pigeon carriers, there was enough time for Sri Lanka to participate in those meetings.
In March, the USTR initiated these 301 investigations on 60 trading partners, and invited all of them for confidential consultations. Out of the 60, 46 participated in these consultations. Sri Lanka was not one of them. Other countries that didn’t participate in these consultations included China, Russia, and Venezuela! In addition to that, the Section 301 Committee conducted a public hearing with interested parties on April 28 and 29. Washington-based diplomats, representatives from few trade ministries as well as representatives from many foreign trade associations and chambers participated in these hearings. Sri Lanka was once again conspicuously absent.
As a result, when the USTR published the proposed forced labour tariffs on June 2nd, Sri Lanka ended up with a 12.5% duty. Pakistani and Indonesian diplomats participated in these consultations and took appropriate follow-up measures, and managed to enter the 10% duty category. As even a threat of a modest tariff hike could disrupt supply chains and reduce competitiveness, particularly in an industry such as garments, I discussed this issue on 15 June and underscored the importance of Sri Lanka’s participation at the next hearing, which was scheduled to be held from July 7th .
Awakening from Diplomatic Slumber and AKD’s Gazette
Fortunately, Sri Lanka finally awoke from weeks of diplomatic slumber, and Ambassador Mahinda Samarasinghe participated in the public hearing on 9 July, and promised, “…. · We have agreed to the text in our negotiations with the USTR on forced labour, …. The gazette as we speak is being printed and I’m getting the gazette tomorrow morning, and the gazette will be shared with USTR as I get it“.
As promised, President Anura Kumara Dissanayake issued a gazette on 10 July banning the imports of goods produced by forced labour. These new regulations are very similar to what Pakistan and Indonesia enacted in April, after their consultations with USTR in March. Why couldn’t we do it in April? Why did we wait till the very last minute?
Challenges ahead
“War is too important to be left to generals alone,” is a famous saying attributed to former French Premier Georges Clemenceau. Similarly, monitoring our main markets is too important to be left to diplomats alone. The United States is the largest single-country market for Sri Lanka. Therefore, Sri Lankan trade chambers and associations should become more proactive in these markets and participate in these events. For example, the chairman of the Pakistani apparel exporters association participated in the April hearings. Similarly, representatives from the Indian Agricultural and Processed Food Products Export Development Authority, the Federation of Indian Chambers of Commerce and Industry, the Confederation of Indian Industry, and Reliance Industries also participated in July hearings. At an event where each speaker is given only five minutes (strictly enforced), having a number of speakers from a country is an advantage. The presence of industry representatives in these kinds of events also help them understand the market dynamics and the future challenges. This is important, particularly because there will be many more challenges with Trump’s tariffs.
With the gazette issued on 10 July, Sri Lanka has imposed a prohibition on the importation of goods produced with forced labour. Now, the challenge will be to effectively enforce the prohibition. And what are the goods produced with forced labour? The USTR list only focuses on aluminum, cotton, electronics, lithium-ion batteries, rice, and tobacco. However, according to the U.S. Department of Labour, the list is much longer. Hence, this list may change continuously during the next two years and tariffs may fluctuate once again.
So, this is definitely not the time to slumber.
(The writer, a retired public servant, can be reached at senadhiragomi@gmail.com)
by Gomi Senadhira ✍️
Features
Tales of Mystery and Suspense 10 Casino for Sale
After the overwhelming grotesquerie of J K Rowling’s latest Cormoran Strike novel (written, I should have noted, as the others were, under the pseudonym Robert Galbraith), I thought I should return to the world of fun, and also a much shorter description since this thriller moves quickly without the layers of detail that Rowling engages in.
I then move to the second comic thriller by Caryl Brahms and S J Simon. This, their second story to feature Vladimir Stroganoff and Adam Quill, was Casino for Sale, as lunatic a romp as the first, though without the emphasis on the ballet that characterized A Bullet in the Ballet.
This one begins with the impresario Stroganoff buying a casino cheap from Baron Sam de Rabinovich, only to find that it was a rundown place, not the grand casino of La Bazouche, a resort on the Frenc+h Riviera, as he had initially thought. The grand one belonged to Lord Buttonhooke, and Stroganoff could not compete, until he thought of bringing the Ballet Stroganoff to the casino – which of course leads to Buttonhooke deciding to have ballet performances in his Casino too.
Stroganoff invites Quill to visit him, which Quill decides to do since he has left Scotland Yard, having come into a legacy. No one believes this, and he has to face questions as to what he did to have been sacked, with sympathy for having been found out.
The day he arrives in La Bazouche there is a murder, of a vitriolic critic called Citrolo, in Stroganoff’s office. He had been going to write a damning review of the opening night of the ballet and Stroganoff, when he realizes Citrolo cannot be swayed, drugs him and dictates the review himself to the papers. He leaves Citrolo sleeping and finds him shot the next morning, whereupon he decides to muddy the waters and leave a suicide note and lots of other murder weapons. So much overkill, as it were, of course ensures that he is arrested.
But the excitable French detective who makes the arrest follows up his suggestion that Buttonhooke was also involved, and so the two casino owners find themselves in cells next door to each other, with the detective Gustave quite happy to provide creature comforts for a fee.
Quill decides he must investigate, and finds Gustave most cooperative, since he has a laid back attitude to work. So it is Quill that finds a notebook which makes it clear Citrolo is an accomplished blackmailer, and that there are lots of possible murderers, including Stroganoff’s croupier, who was crooked, Rabinovich, who was now working for Buttonhooke, a confidence trickster called Kurt Kukumber, whose prospectus for a dud gold mine was found in the office and Prince Alexis Artishok who was engaged in a deal to buy diamonds from the ballerina Dyra Dyrakova.
Stroganoff had been trying to get Dyrakova to dance for him, but having done so previously she had refused. But then to Stroganoff’s chagrin she agreed to dance for Buttonhooke. The clearly crooked Artishok had told Buttonhooke’s mistress Sadie Souse, who was not very bright, that Dyrakova possessed diamonds she was willing to sell cheap, and Sadie was determined to have them.
Quill meanwhile finds out that there was a secret passage to Stroganoff’s office, the obvious solution to what had begun as a locked room mystery, and that this was known by almost everyone apart from Stroganoff himself. And then Rabinovich is murdered, just after Gustave had released his two original suspects, leading him to blame Quill for having insisted on that and thus allowing them to kill again.
Soon afterwards Dyrakova arrives, and the town is full of posters announcing that she will appear in the casinos, elaborate posters for either one, since Stroganoff is determined that she will dance for him, and if she does not come willingly, he has devised a scheme to make her do so unwillingly. So, though Buttonhooke has her taken off to his yacht immediately she arrives at the station, Quill along with Arenskaya gets her into a launch and to Stroganoff’s casino, where she performs to tumultuous applause, not knowing for whom she is dancing.
When Quill asked her about the diamonds, she said she had sold them long ago, and that gave Quill the solution to the mystery. Rabinovich had known about this, and Artishok had killed him to prevent Sadie learning it from him, he had killed Citrolo who had recognized him for an accomplished card sharper, not a Russian prince at all. But before he is arrested, he gets away in a boat, and the police launch that pursues him is on the point of catching him up when it runs out of petrol.
Again, lots of excitement, and entertaining references – Gustave grows marrows – and if not quite as brilliant as its predecessor, Casino was certainly a delightful read.
Features
The challenge of being positive about SAARC
It was a few years back that a former President of Sri Lanka took it on himself to pronounce SAARC ‘dead’. Since then there have been other sections of Sri Lankan opinion that have joined the critics of SAARC and taken the solemn stance that SAARC has indeed died what may be called a natural death.
Their fatalism is understandable. SAARC has failed to meet at heads of government or state level for the past several years to take the SAARC process notably forward. Regional cooperation has more or less been only an appealing idea. No substantive concrete projects have taken off to make the idea a hard reality. ‘Inner paralysis’ seems to be SAARC’s lot. Hence the fatalism in these circles.
However, being one of the worst cash-strapped regions of the world and a teemingly populated one with people virtually left to their devices, what choices do the ‘SAARC Eight’ have other than to try their best to band together and continue with their cooperation efforts, however small they may be?
There is no escaping the mounting debt trap for many of these countries and bankrupt Sri Lanka is a glaring example, but ‘throwing in the towel’ and abandoning themselves entirely to the diktats of the strongest economies and their agencies will prove a ‘living death’ for many countries in the SAARC fold.
The gains may be meagre but giving-up on SAARC cooperation in full would prove self-defeating for the organization and South Asia. Right now, the collective intention ought to be to salvage what the region could from the tenuous cooperative efforts. Moreover, such initiatives could go some distance to generate a degree of goodwill among the Eight and help in sustaining a dialogue process.
Given this backdrop it proved ‘a stich in time’ for the Regional Centre for Strategic Studies (RCSS), Colombo, to recently host the SAARC Secretary General Ambassador Md. Golam Sarwar to a round table discussion on the unifying potential of SAARC and its future possibilities, besides other related issue areas.
Held on June 24th and moderated by RCSS Executive Director and former ambassador Ravinatha Aryasinha, the forum brought together a vibrant, wide ranging audience comprising academicians, diplomats, senior public servants, civil society activists and many others. Following the presentation by Ambassador Golam Sarwar titled, ‘Reigniting SAARC: Achievements, Challenges and the Way Ahead’, a lively Q&A followed.
The above forum could be described as an act of lighting the proverbial ‘candle’ rather than ‘cursing the darkness.’ It surely is a ‘darkness’ that could be seen as daunting considering that the region’s pivotal powers, India and Pakistan, are failing to act in a spirit of accord but are engaged in bitter finger-pointing on a number of questions of vital importance to SAARC.
On the other hand, what is the rest of the region doing to bring the above sides together? It is disappointing that to date the rest of SAARC has failed to launch a major diplomatic drive to bring peace between the feuding regional heavyweights. It needs to act without delay and establish its earnestness and this effort would need to prove SAARC’s staying power in the unfolding months and even years.
In assessing SAARC’s seeming failure local opinion in particular has failed to factor in what could be described as weak leadership. Since Sheikh Mujibur Rahman of Bangladesh, the founding father of SAARC, the region has failed to produce a visionary leader who could advance the SAARC cause with charisma and drive.
Among other reasons, weak leadership accounts considerably for the faltering and stuttering status, as it were, of SAARC. Badly needed are leaders who could go the extra mile, think less of narrow national interests and work diligently towards the collective well being of the region but SAARC’s millions of ordinary people have been made to wait in vain for leaders of such stature. Instead, they have been burdened with politicians who seem to be relishing the apparently moribund state of SAARC.
Looking back, it could be said that it was the dynamic leadership factor that led to the launching of the Non-Aligned Movement and for its sustenance for a few decades. True, it could be seen in some quarters that NAM is no more, but as in the case of SAARC, the former too has been unfortunate to be burdened over the years with politicians who lack the vision and drive to unflaggingly advance the fortunes of the South. NAM and SAARC lack the dynamism and vision of leaders of the stature of Jawaharlal Nehru, for example, to give them the required guidance and intellectual depth.
The reasons are complex for there not being among us currently political leaders with the vision and the steadfast commitment to advance the legitimate interests of the South. However, it could be stated with conviction that the majority of Southern leaders have too easily caved in to the demands of the global North and its financial agencies.
These leaders have failed to see, for instance, that the largely market economy oriented Northern governments would not view with favour a centrist economic model that attaches priority to the interests of the dis-empowered publics of the South. This realization ought to have dawned on the current government in Sri Lanka, for instance, some while ago but it has no choice but to abide by IMF dictates since economic survival at present is unthinkable without the latter’s succour.
Accordingly for SAARC this should be the time for some soul-searching. Priority needs to be attached to ending the feuding between India and Pakistan since at present the material fortunes of the region hinge largely on these regional giants giving peaceful relations among them a try. This is no easy challenge to meet but some daring, visionary diplomacy needs to take hold among the rest of SAARC.
There is some sense in SAARC bringing the peoples of the region together through programs that address their best collective interests. A meeting of minds among SAARC nations could enable SAARC and its agencies to build a region-wide people’s movement for progressive political and economic change that could in turn lead to the region’s political leaders sensitizing themselves more to the neglected needs of their publics.
However, the time is ‘now’ for the initiation of these progressive changes and the voice of SAARC well wishers would need to drown out those of their critics.
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