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Midweek Review

Developing economic crisis:Truth unravelled before COPE

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(From Left): Chief Financial Officer, Finance Ministry B.K.R. Balasooriya, Finance Secretary K.M. Mahinda Siriwardana, CBSL Governor Dr. Nandalal Weerasinghe and Deputy CBSL Governor T.M.J.Y.P. Fernando

By Shamindra Ferdinando

A COPE (Committee on Public Enterprises) meeting on May 25, chaired by Prof. Charitha Herath (SLPP National List), revealed the devastating truth about the utterly irresponsible public finance management that led to the ruination of the national economy.

A two-page press release in Sinhala issued by Janakantha Silva, Director Legislative Services and Acting Director of Communications, on the same day, disclosed how the incumbent dispensation caused the unprecedented meltdown.

But, the releasing of video footage of the entire meeting by the Parliament helped the public to clearly understand how the Finance Ministry, the Central Bank of Sri Lanka (CBSL), the Monetary Board, the then Presidential Secretary Dr. P.B. Jayasundera, the Cabinet of Ministers and the Parliament contributed to the debilitating economic-political and social crisis. The COPE meeting should attract Attorney General Sanjay Rajaratnam’s immediate attention. The Bar Association of Sri Lanka (BASL), too, cannot turn a blind eye to the shocking exposure of a seriously flawed public finance system and nothing but a negligent and incompetent Parliament.

During the proceedings, top Samagi Jana Balavegaya (SJB) member of the parliamentary watchdog committee, Dr. Harsha de Silva declared the appointment of ‘RW’ as the Finance Minister in addition to being the PM. When the former UNPer’s COPE colleagues raised eyebrows, Dr. de Silva quickly said: “Sorry. Mr. Ranil Wickremesinghe.’ A smiling Prof. Herath reminded that PM Wickremesinghe was Dr. de Silva’s former boss. The SJB’s economic guru de Silva functioned as State Minister for National Policies and Economic Affairs.

The then yahapalana premier held the Cabinet portfolios of those subjects. At the time the Treasury bond scams that had been blamed on Wickremesinghe and Company were perpetrated in Feb 2015 and March 2016, the CBSL functioned under the purview of Wickremesinghe’s ministry. So in actual fact Dr. Harsha de Silva, having been part of that yahapalana team that messed things up at the time in style, is in no position to take a ‘holier than thou stand’ now.

Similarly Champika Ranawaka, too, is under many a cloud. When he was the Power and Energy Minister, his bosom pal, then Chairman of the CEB, figured in the notorious Panama papers. So whose money had the then CEB Chairman Anura Wijepala banked in hidden accounts offshore?

Among those who had been at the meeting, summoned by the COPE, were Director General, Internal Audit, Finance Ministry Mrs. Deepika Colombage, Chief Financial Officer, Finance Ministry B.K.R. Balasooriya, Finance Secretary K.M. Mahinda Siriwardana, CBSL Governor Dr. Nandalal Weerasinghe, Deputy CBSL Governor T.M.J.Y.P. Fernando, Director General, Finance Ministry Hemal Kasthuriarachchi, Assistant Governor, CBSL Ananda Jayalath, Director, International Operations Department, CBSL Dr (Ms) D.S.T. Wanaguru, Monetary Board member Sanjiva Jayawardena, PC, Monetary Board member Dr. Ranee Jayamaha, Assistant Governor, K.M. A.N. Daulagala (Secretary to the Monetary Board), Assistant Governor, CBSL K.G.P. Sirikumara, Director, Economic Research, CBSL P.K.G. Harischandra, Director, Human Resources, CBSL A.M. Gunatilake, Director, Payment and Settlement Department, CBSL M.R. Wijewardena, Director, Legal and Compliance Department, CBSL Dr. (Mrs) A.A.I.N. Wickramasinghe , Director, Domestic Operations Department, CBSL Dr. R.A.A. Perera, Additional Director, Facilities Management Department, CBSL S.K.P. Vitharana, Additional Director, International Operations Department, CBSL S. Obeysekara, Chief Accountant, CBSL Mrs D.S.L. Sirimanne, Director, Department of Foreign Exchange Mrs. D.R. Karunaratne and Director, Department of non-bank financial institutions R.M.C.H.K. Jayasinghe.

Of them, only Governor Dr. Weerasinghe, Treasury Secretary Siriwardana and Monetary Board members Jayawardena and Jayamaha responded to the queries raised by the COPE. On behalf of the parliamentary watchdog, its Chairman Prof. Herath, Eran Wickremaratne (SJB), Rear Admiral (retd.) Sarath Weerasekera (SLPP), Rauff Hakeem (SLMC), Madura Vithana (SLPP), Jagath Pushpakumara (SLPP) and Premnath C. Dolawatta (SLPP) raised questions and also commented on the issues at hand. But, the day certainly belonged to SJB lawmakers, Patali Champika Ranawaka, who is also the leader of ’43 Brigade’ and Dr. Harsha de Silva.

At the onset of the proceedings, Prof. Herath, while underscoring the sensitive nature of the impending discussions, declared the 2018 and 2019 Auditor General’s reports on the CBSL were to be examined with the focus on the current status of the apex operation.

SJB MPs on the offensive

After Dr. Weerasinghe and Mahinda Siriwardana made their initial statements and responded to queries raised by Prof. Herath, lawmaker Ranawaka questioned the accountability on the part of the CBSL as well as the Monetary Board for the current crisis. The former minister Ranawaka emphasized that senior officials of both institutions couldn’t, under any circumstances, absolve themselves of the responsibility for bankrupting the country. The Colombo District MP didn’t mince his words when he declared that the top management officers of the CBSL were a handsomely remunerated lot whose culpability in the whole sorry state of affairs couldn’t be ignored.

Pointing out that the government has officially accepted Sri Lanka’s bankrupt status, MP Ranawaka compared how the financial meltdown finally led to street violence, including death of a lawmaker whereas senior CBSL and Monetary Board members who oversaw the ruination of the national economy seemed not to have attracted public attention.

The former JHU heavyweight Ranawaka posed several pertinent questions to those who had been summoned before the COPE regarding the role and conduct of the Secretary to the Treasury, CBSL and the Finance Ministry. Dr. de Silva, too, raised contentious issues at hand relating to the crisis, particularly how the SLPP handled the economy during the March/April 2020 to March 2022 period when CBSL Governor Ajith Nivard Cabraal suddenly resigned after having floated the Rupee. The much delayed decision to float the Rupee caused a catastrophe as it then immediately nosedived against the dollar and other major currencies.

Their relentless probing questions exposed an ugly truth. The shocking exposure of the then Prime Minister Mahinda Rajapaksa who handled the finance portfolio, the then Presidential Secretary Dr. P.B. Jayasundera, himself a former top Central Banker and ex-Treasury Secretary, Governors of the Central Bank Prof. W.D. Lakshman and Ajith Nivard Cabraal, Monetary Board member and Treasury Secretary S.R. Attygalle, the entire Cabinet-of-Ministers chaired by President Gotabaya Rajapaksa and the Parliament to varying degrees has sent shock waves through the political establishment.

COPE proceedings revealed how those who had been responsible for public wellbeing, both at ministerial and official level, simply allowed the situation to deteriorate to such an extent today the government lacked the wherewithal to meet basic requirements. They were most probably waiting for India and China, in rivalry, come to their rescue. The Indian help came but it was too late as the situation had snowballed in next to no time. As to why China dragged its feet might be due more to Rajapaksa sibling and duel citizen Basil increasingly sailing the Lankan ship towards the West, forgetting the fact that we achieved so much in the past thanks to China, including its unquestioning support to us in our fight to defeat LTTE terrorists.

Lawmakers Ranawaka and Dr. Silva pressed the Finance Secretary Siriwardana, Governor Weerasinghe and Monetary Board members on (1) massive tax cut implemented soon after the last presidential election in Nov 2019, contrary to the advice given by the IMF (2) the IMF’s refusal to grant RFI (Rapid Financing instrument) to Sri Lanka in March/April 2020 and (3) printing money (4) colossal losses suffered by the CBSL due to its refusal to float the Rupee.

Officials’ answers flabbergasted COPE. The Finance Ministry, CBSL and the Monetary Board had been mercilessly dominated by the SLPP and did nothing to change the extremely dangerous path the country was taking. The SLPP was hell-bent on continuing with its reckless strategy at whatever consequences.

Conduct of Monetary Board

The Monetary Board consists of five persons – two ex-officio members, Governor, Secretary to the Finance Ministry, and three nominated members. At the time of the issue at hand Prof. W.D. Lakshman and S.R. Attygalle had served on the Monetary Board and the latter as the Secretary to the Finance Ministry as well. The Monetary Board’s appointed members were President’s Counsel Sanjiva Jayawardena, Dr. Ranee Jayamaha (retired Central Bank Deputy Governor) and successful businessman Samantha Kumarasinghe, who put Sri Lanka on the world cosmetic manufacturing map through his Nature’s Secret line of products, which earned the ire of some multinational leaders in the field because of its resounding overnight success.

Dr. de Silva flayed the government over the appointment of Samantha Kumarasinghe, claiming he didn’t know the basics in economics. But SJB economic pundit was apparently not aware that Kumarasinghe has a MBA from the prestigious Harvard Business School like the late A.S. Jayawardena, who, with his Harvard MBA, went on to serve successfully as the country’s Central Bank Governor and Treasury Secretary during some of the most testing times for this country, especially during the Asian financial crisis of 1996 and the terrorist bombing of the Central Bank in 2001.

According to a statement, dated July 15, 2020, issued by the CBSL, Sanjeeva Jayawardena has been appointed with effect from Feb 26, 2020 and Dr Ranee Jayamaha and Samantha Kumarasinghe with effect from June 29,.2020. President Gotabaya Rajapaksa appointed them under section 8(2)(c) of the Monetary Law Act with the approval of the Constitutional Council.

MP de Silva questioned the suitability of Kumarasinghe on the basis of an article he published in the Lankadeepa in which the SJB heavyweight claimed the Monetary Board member expressed views very much contrary to basic economy theories.

Let me reproduce a CBSL statement issued on July 15, 2020 on Kumaasinghe’s appointment. The Island believes it would be fair by the former Monetary Board member.

The text of the CBSL statement: “Samantha Kumarasinghe currently serves as Chairman and Managing Director of several companies in Sri Lanka, Bangladesh and Vietnam that operate in industrial sectors across cosmetics, textile chemicals, household cleaning products, organic food and biological fertilisers.

He currently serves as a member of the Presidential Task Force for Economic Revival and Poverty Eradication (2020), President of Lanka Industry Forum for Empowerment (LIFE) (2018 to date) and Chairman of Cosmetics Sector Advisory Committee at the Ministry of Industries (2016 to date). He has also served in the capacities of member of Presidential Industrialisation Commission (from 2018 to 2019), a board member of the Insurance Board of Sri Lanka (2012 to 2014), a committee member of the Implementation of the Integrated Curriculum, Subjects and Review of Academic Activities Process of the Ministry of Education (2013) and as Commissioner of the Presidential Taxation Commission (2009 to 2010).

Kumarasinghe studied at Royal College, Colombo. He is a chemistry graduate of the University of Peradeniya and an alumnus of the Harvard Business School, USA. He started his entrepreneurial career in 1993 with just 12 employees and was adjudged ‘Entrepreneur of the Year’ in 2008. He was awarded a Presidential National Honours Award in 2019 for his valuable contribution to the country.”

Dr. Jayamaha strongly defended her conduct as a member of the Monetary Board and that of President’s Counsel Jayawardena. Commenting on calamitous decisions to fix the Rupee at 203 and refusal to engage the IMF, Dr. Jayamahaha alleged that Governor Lakshman, Finance Secretary Attygalle and nominated member Kumarasinghe pursued an agenda of their own. Dr. Jayamaha alleged that the Governor’s group always had the majority and therefore, they couldn’t have opposed. Dr. de Silva rejected Dr. Jayamaha’s stand.

The lawmaker insisted that all members of the Monetary Board were equally responsible for the current predicament. The MP suggested that Dr. Jayamaha and President’s Counsel Jayawardena should have gone public to deter the Governor and his colleagues.

SJ hits back

Sanjeeva Jayawardena quite clearly explained how he and Dr. Jayamaha took a common stand on touchy matters. Apropos Sri Lanka’s RFI request and related issues, Jayawardena revealed, beginning early 2020, they on nine different occasions, recommended/suggested engagement with the IMF. Jayawardena also explained their efforts to establish what he called an external debt monitoring mechanism. The President’s Counsel explained how Governor Cabraal acted, contrary too decision taken in respect of floating the Rupee at a proper forum. Jayawardena and Jayamaha have also warned against excessive money printing. Dr. de Silva asked for the minutes of the relevant meetings. The lawmaker reiterated that members of the Monetary Board bear equal responsibility for the current crisis.

One of the most controversial issues was the massive tax cut to the tune of Rs 600 bn implemented by the current dispensation. Treasury Secretary Mahinda Siriwardana asserted that the decision on the tax cut should have been reversed in the wake of the Covid-19 eruption. Dr. de Silva pushed Siriwardana on the issue at hand. The former UNPer asked Finance Secretary Mahinda Siriwardana to reveal the person who decided to implement the tax cut regardless of specific IMF advice at a time the lending agency called for debt restructuring in the wake of Colombo seeking RFI? The lawmaker also wanted the Finance Secretary to confirm whether the Finance Ministry conducted a survey before the controversial decision was made? Lawmaker de Silva asked who dropped the IMF recommendations to the dustbin. Finance Secretary side-stepped the issue in spite of lawmaker Ranawaka attacked the CBSL and the Finance Ministry on the same issue. The Finance Secretary struggled to cope up with the situation whereas Dr. Weerasinghe revealed how the tax cut was ordered. According to Dr. Weerasinghe, there hadn’t been any consultations at any level before they were informed of the disputed decision.

Earlier, Dr. Weerasinghe, in response to probing questions, acknowledged the circumstances Dr. PB Jayasundera decided not to engage the IMF regardless of the precarious economic outlook. Lawmaker Ranawaka repeatedly said that the crisis that had engulfed the country is far worse than the Treasury bond scams, 2019 Easter Sunday massacre or alleged war crimes.

Appearing before the COPE, as well as the Committee on Public Finance (COPF), headed by Anura Priyadarshana Yapa (SLPP) Dr. Weerasinghe last week acknowledged how the Finance Ministry misled the Parliament over the years. There hadn’t been a previous instance of a CBSL Chief going public with the truth. Dr. Weerasinghe told COPE how the Parliament allocated unavailable funds to various ministries on the basis of false estimates. That had been the norm as politicians and officials cooperated in a despicable way to deceive the public.

Dr. Weerasinghe also blamed such irresponsible practices for the current crisis. Perhaps, Dr. Weerasinghe should be especially commended for reminding the COPE of the responsibility of the Parliament in ensuring suitable appointments are made. The CBSL Chief dared to be forthright in his appearances before parliamentary watchdog committees thereby set up new standards in Sri Lanka’s utterly corrupt public services. However, the CBSL Chief, too, cannot exonerate himself of the responsibility for overall irresponsible conduct of the institution, as pointed out by Dr. de Silva in respect of the Monetary Board.



Midweek Review

AKD in dilemma over anti-terror laws he used to condemn

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President Dissanayake

President Dissanayake’s government promptly utilized the PTA – the first since the presidential election – to deal with those who had been suspected of allegedly planning to mount an attack on Israelis in the Arugam Bay area. The government couldn’t have ignored the alleged threat, especially against the backdrop of the warning issued by the US Embassy here, of what it called a serious risk. In line with the statement, dated Oct. 23, the Embassy imposed travel restrictions on mission personnel as well, while strongly urging US passport holders to avoid the area.

By Shamindra Ferdinando

The Prevention of Terrorism Act (PTA/No 48 of 1979)) that had been introduced in 1979 as a temporary measure by President JRJ in response to emerging threats from separatist terrorists and made into a permanent law in 1982 (No 10 of 1982) attracted considerable public attention over the past few weeks in the wake of the police making arrests under this draconian law.

The issue at hand should be freshly examined against the backdrop of the Janatha Vimukthi Peremauna (JVP), the dominant partner in the newly elected National People’s Power (NPP), having been at the receiving end of that piece of controversial legislation in the ’80s, particularly during their second violent uprising (1987-1990 period).

The JVP constantly demanded the repealing of the PTA at a time the party never dreamt of an opportunity to win a national election under any circumstances. In fact, the abolition of the PTA had been one of the JVP’s main demands throughout the war/insurgency and thereafter. However, now that the JVP-led NPP having had convincingly won the presidential (Sept. 21) and general (Nov. 14) elections and is in the process of consolidating its power, the powers that be have no option but to revisit its previous highly critical stand on the controversial Act.

Can President Anura Kumara Dissanayake, who is also the Commander-in-Chief of the armed forces, in addition to being the Defence Minister, as well as head of the National Security Council (NSC), do without the PTA.

Can the PTA be abolished and whatever existing/future security threats be dealt with other relevant laws, or replaced with a new law acceptable to all political parties represented in Parliament. But, that does not mean that concerns of those outside Parliament should be discarded without proper examination.

President Dissanayake’s government promptly utilized the PTA – the first since the presidential election – to deal with those who had been suspected of allegedly planning to mount an attack on Israelis in the Arugam Bay area. The government couldn’t have ignored the alleged threat, especially against the backdrop of the warning issued by the US Embassy here, of what it called a serious risk. In line with the statement, dated Oct. 23, the Embassy imposed travel restrictions on mission personnel as well, while strongly urging US passport holders to avoid the area.

The government had no option but to invoke the PTA again to deal with those who sought to humiliate the administration over the Mahaveer Naal events conducted in the Northern and Eastern provinces in memory of LTTE leader Velupillai Prabhakaran’s birthday.

Responding to the Mahaveer Naal events, Public Security and Parliamentary Affairs Minister Ananda Wijepala, first time entrant to Parliamen, accused Opposition activists of exploiting the situation to undermine the government. Wijepala, who had served as Anura Kumara Dissanayake’s private secretary when he served as a lawmaker, alleged that the involvement of the New Democratic Front (NDF) in the conspiracy, while shortly, thereafter, law enforcement authorities arrested the administrative secretary of the SLPP, Renuka Perera, for allegedly disseminating false information with regard to Mahaveer Naal.

It would be pertinent to mention that not all those who were apprehended for disseminating such false information been taken in under the PTA.

The issue is whether the government needs a draconian law, like the PTA, to deal with persons circulating videos of LTTE events during the conflict and after.

Apprehending people for circulating videos of such events seemed ridiculous when the Illankai Thamil Arasu Kadchi (ITAK), having recognized the LTTE as the sole representative of the Tamil-speaking people, received an audience with no less a person than President Dissanayake. The meeting between President Dissanayake and the ITAK delegation took place at the Presidential Secretariat amidst the continuing furore over people being arrested for circulating Mahaveer Naal content. Some of the ITAK members recently had paid tribute to the LTTE publicly while the government struggled to deal with bad press over Mahaveer Naal events.

The writer is of the view that commemoration of LTTE cadres should be permitted, regardless of their status. In fact, such events underscored the futility of the LTTE macabre cause. Mahaveer Naal automatically reminds the country of the atrocities that had been perpetrated by the LTTE over the years until their very end on the Vanni east front.

Let me remind those shedding crocodile tears for terrorists of the cold blooded killing of academic Rajani Thiranagama in Jaffna in late Sept 1989 during the deployment of the IPKF. Dr. Thiranagama was shot dead on Sept. 21 while cycling home from the Jaffna University, where she was Head of the Anatomy Department.

Yahapalana

bid to repeal PTA

While in the Opposition, Ranil Wickremesinghe relentlessly campaigned against the PTA. Wickremesinghe had an opportunity to explore the possibility of doing away with the PTA after he facilitated Maithripala Sirisena’s victory at the 2015 presidential election. Wickremesinghe’s broken promise due to delaying of the required action, should be discussed, taking into consideration Western governments’ unbending interest in abolition of the PTA. They felt that in the aftermath of the LTTE’s eradication, Sri Lanka didn’t require such a law.

Since the successful conclusion of the war in May 2009, the Western governments had been putting pressure on war-winning President Mahinda Rajapaksa to abolish the PTA. The JVP, too, backed the Western call to do away with emergency regulations and the PTA. However, President Rajapaksa resisted relentless Western pressures but the Yahapalana government initiated a high profile project to do away with the PTA over a year after the 2015 January presidential election.

Instead of doing away with the PTA as demanded by various interested parties, Wickremesinghe sought to replace the existing law with what he called the Counter Terrorism Act (CTA).

The committee that had been tasked with drafting the policy and legal framework of the proposed law was headed by Sagala Ratnayake, Minister of Law and Order and Southern Development. Obviously Wickremesinghe couldn’t have done away with the PTA without taking adequate provisions to counter terrorism. Wickremesinghe subjected the whole process to the scrutiny of Western governments. Among those invited for discussions on the CTA and an Amendment to the Code of Criminal Procedure Act on Dec. 16, 2016, were Justice Minister Wijeyadasa Rajapakse, Minister Sagala Ratnayake, British High Commissioner James Dauris, French Ambassador Jean-Marin Schus, EU Ambassador Tung-Lai Margue and several other foreign envoys.

However, the Yahapalana government couldn’t go ahead with the project. Wickremesinghe couldn’t muster the required support for his move as the Yahapalana parliamentary group gradually fell apart. By late 2017, the relationship in the coalition between the UNP and Maithripala Sirisena’s SLFP had deteriorated to such an extent, agreement on such a significant piece of proposed legislation seemed very much unlikely. Their decision to go it alone at Local Government elections in early February 2018 sealed the fate of the Yahapalana alliance, and the much touted bid to introduce CTA in place of the PTA, fizzled out.

The Sirisena-Wickremesinghe alliance had been in turmoil since Wickremesinghe’s nominee for the post of Governor Central Bank, Singaporean Arjuna Mahendran, perpetrated the massive Treasury bond scams in Feb. 2015 and March 2016. The humiliating defeat suffered by both the UNP and the SLFP at the Local Government polls effectively ended their partnership while the CTA was put on the back burner. The government had been in such a desperate situation, the top leadership simply could not deal with the CTA and the matter was quickly forgotten.

Having neglected national security to their heart’s content, the UNP leadership relaunched the CTA project in the wake of the 2019 Easter Sunday carnage. The UNP saw an opportunity to pressure political parties represented in Parliament, as well as other interested parties, over the proposed CTA. However, Wickremesinghe’s move hadn’t received much anticipated support as those who opposed the PTA alleged that the new law never really changed the powers granted to law enforcement authorities.

In spite of the Easter Sunday attacks, the opposition to the PTA, and the proposed CTA, remained unyielding. Political parties, civil society and Western governments haven’t been able to reach consensus on anti-terrorism law legislation though all post-war administrations discussed the issues at hand at length.

President Gotabaya Rajapaksa, too, made an effort to amend the PTA. In late January 2022, President Rajapaksa’s Cabinet approved a spate of amendments to the PTA. But, the proposed amendments failed to secure the backing of those concerned about anti-terrorism law. The introduction of amendments meant that President Rajapaksa had absolutely no interest in at least examining Wickremesinghe’s brainchild CTA.

The civil society, legal scholars and other interested parties simply rejected the amendments on the basis the government failed to address their long standing concerns. The Rajapaksa administration in Dec. 2019 withdrew Wickremesinghe’s proposed Counter terrorism Bill to pave the way for a new initiative that was launched in June 2021. Obviously, it hadn’t been a priority for the Rajapaksa administration though under Foreign Minister Prof. G. L. Peiris’s leadership a Cabinet subcommittee deliberated a report prepared by Defence Secretary Gen. Kamal Gunaratne. That bid, too, failed and during Wickremesinghe’s presidency (July 2022-Sept 2024) nothing really happened with regard to the PTA.

New challenges

The European Union has linked the repeal of the PTA with its continuing relationship with Sri Lanka. The EU, in Oct. 2021 during Gotabaya Rajapaksa’s presidencyk told Sri Lanka that the country must amend the PTA that gave law enforcement authorities sweeping powers to arrest and hold suspects, without trial, if it wanted to retain the lucrative GSP-plus trade status with the 27-member economic bloc.

President Dissanayake now faced the daunting task of addressing the concerns of the EU and various other members of the Western world with regard to anti-terrorism laws here.

Dissanayake’s administration cannot ignore the renewed calls for the abolition of the PTA or the introduction of suitable amendments. However, the government cannot weaken Sri Lanka’s defences against terrorism though the LTTE rump is unlikely to pose a conventional military threat. But, the 2019 Easter Sunday carnage proved responsibility on the part of the government to ensure the armed forces, the police and intelligence services had legal safeguards when dealing with terrorism.

*One of the major shortcomings in the amendments proposed by President Gotabaya Rajapaksa, according to civil society groups, is the failure on the part of the amended Bill to address problems with the admissibility of statements and confessions under the PTA. They have repeatedly pointed out provisions of the PTA waived the application of the Evidence Ordinance and there were no safeguards to be followed in recording confessions and statements from suspects.

*Another issue of concern is that the period of 72 hours after arrest and before production before a magistrate had not been amended. They have declared this is a loophole in the PTA that facilitated the torture of those arrested under the PTA while in custody.

*They are also concerned about the absence of sufficient judicial oversight during investigations conducted in terms of the PTA.

*As the definition of the acts which came within the offence of terrorism is of a broad and vague nature, those in authority tend to abuse the PTA. The amendments that had been approved by Gotabaya Rajapaksa’s Cabinet in January 2022 hadn’t addressed concerns expressed by interested parties.

The above were some of the concerns raised by those demanding abolition of the PTA/suitable amendments to the law. Anti-terrorism laws in force in all countries regardless of their status always attract public criticism and can be described as a source of intense debate. Critics say that anti-terrorim laws violate even the basic freedoms enjoyed by the people.

Neighbouring India employs a spate of laws meant to deal with terrorism. Amendments have been introduced over the years and like here these laws have been abused though stakeholders accept the need for tough anti-terrorism laws to meet security challenges. India has gone to the extent of neutralizing those living overseas in case New Delhi felt they posed a threat. The ongoing controversy involving India and Canada over the alleged hit ordered by New Delhi in Vancouver is a case in point.

Sri Lanka, under any circumstances, cannot afford to do away with the PTA altogether. However, the government, in consultation with political parties represented in Parliament, should take tangible measures to ensure law enforcement didn’t deliberately abuse PTA for political or private purposes. There is no point in denying the fact that the PTA had been grossly abused over the years by all governments. Perpetrators hadn’t been properly dealt with thereby creating an environment for such abuses. However, the PTA had provided invaluable support for law enforcement operations as successive governments battled Northern and Southern terrorists.

During the war against the LTTE, the PTA had been a critical part of the government arsenal. Interrogation of suspects had been part of the overall security strategy meant to thwart attacks as law enforcement authorities battled LTTE terrorists assigned for covert operations in the South and especially suicide bombings.

Terrorist infiltration couldn’t have been averted without continuous operations, based on available information. The government had no option but to discourage people from the Northern and Eastern provinces from taking up residence in Colombo and its suburbs, as well as other predominantly Sinhala areas, as part of the overall measures to neutralize the threats on soft targets.

The LTTE targeted public transport in a bid to mount pressure on the government as it was retreating on the battlefield.

In spite of allegations of its misuse and abuse, the PTA had been quite useful in combating Southern and Northern terrorism. That is the undeniable truth. Whatever its shortcomings, the PTA cannot be done away with unless the government introduces a new anti-terrorism law that meets security requirements, in a challenging environment.

Though the West impose pressure on countries like Sri Lanka to undo such laws, they themselves have introduced even much harsher laws like the Homeland Security Act 2002 passed by the USA, primarily in reaction to the 9/11 attacks there, in the previous year, by Muslim terrorists, that claimed few thousand lives and somewhat similar draconian laws were introduced in England after the bomb attacks in London soon afterwards. But there is hardly a whimper from our Foreign Ministry that generally plays deaf and dumb like our diplomats about such unfair demands from us by the West.

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Midweek Review

Hour of the Ethical Minority

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By Lynn Ockersz

The theorists waxing eloquent,

In the raucous House by the Lake,

Are seeing their brute majority,

As bodying forth the majority will,

Or the ‘sovereignty of the people’,

And there is some merit in this,

But this is also the hour,

Of the unbending ethical minority,

Who wouldn’t be steamrolled,

Into bartering their consciences,

On being Whipped into saying ‘Yes’.

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Midweek Review

US funding for Colombo port project involving Adani group and JKH in the balance

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US International Development Finance Corporation (DFC) CEO Scott Nathan and US Ambassador to Sri Lanka Julie Chung at West Container Terminal site in early Nov. 2023. The visit took place in the wake of the US announcement of a $553 mn loan to Colombo West International Terminal Private Limited (CWIT). Adani group partly owns CWIT (pic courtesy US embassy)

Gautam Adani

In response to US indictment, Adani has declared that his conglomerate is committed to “world-class regulatory compliance.” The international media quoted one of the world’s richest as having said: “This is not the first time we have faced such challenges. What I can tell you is that every attack makes us stronger. And every obstacle becomes a stepping stone for a more resilient Adani Group.”

Adani said so at an awards ceremony in Jaipur.

By Shamindra Ferdinando

Dr. Ganeshan Wignarajah, in his capacity as an advisor to the Sri Lankan President, and member of the Geopolitical Cartographer board, as mentioned in the latest Indo-Pacific Defence Forum, dealt with the ongoing economic-political-social crisis here.

Dr. Wignarajah, who had served as the Executive Director of the Lakshman Kadirgamar Institute (LKI) during the Yahapalana administration, quite confidently asserted (i) economic mismanagement (ii) Chinese loans and (iii) Covid-19 and other external shocks caused the unprecedented crisis.

The quarterly, published by the Commander of the U.S. Indo-Pacific Command, is meant to promote their overall political-military and social strategy in the Indo-Pacific region.

The Sri Lankan-born academic, in his article titled ‘Partners for Progress: Sri Lanka works with India, U.S. to bolster economy, stability,’ examined the developing situation here against the backdrop of, what he called, Chinese debt trap diplomacy. China has strongly refuted such accusations over the years. We haven’t forgotten the verbal battle between Yahapalana Finance Minister Ravi Karunanayake and the then Chinese Ambassador Yi Xianliang over the former’s disparaging remarks on interest rates on loans provided by China. This was in late 2016, several months after the second mega Treasury bonds scam, perpetrated by the Premier Ranil Wickremesinghe-led government.

Dr. Wignarajah conveniently refrained from making reference to over USD 10,000 million in new International Sovereign Bonds that had been taken between 2015 and 2019, following the change of government. Former President Mahinda Rajapaksa is on record as having declared procurement of USD 10,000 million, by the Yahapalana leaders, broke the back of the Sri Lankan economy. Instead, the academic cleverly hid the Yahapalana borrowings. Dr. Wignarajah declared (in verbatim): “Sri Lanka’s default demonstrates the risk of imprudent foreign borrowing, with relying on sovereign bonds with high interest rates to finance development projects or high-interest, low return Chinese loans.’’

As the article had been formulated before the presidential election that was held on Sept. 21, 2024, the professorial fellow in economics and trade at Gateway House, Mumbai, missed an opportunity to examine post-national poll developments.

The unexpected emergence of the National People’s Power (NPP), as the dominant political power, at the expense of the Sri Lanka Podujana Peramuna (SLPP) and the United National Party (UNP), according to some, may change the dynamics of Sri Lanka’s relations with the US-led grouping that includes India. However, others assert that bankrupt Sri Lanka has no other option but to continue with the IMF agenda and an agreement on economic partnership, signed in July 2023, by Premier Narendra Modi and the then President Ranil Wickremesinghe.

Wickremesinghe, who suffered a humiliating defeat in the presidential poll on September 21, and then at the parliamentary elections on Nov. 14, 2024, emphasized the responsibility on the part of his successor Anura Kumara Dissanayake to fully implement, what he called, the ‘Vision document’ with India.

The Press Trust of India (PTI) quoted Wickremesinghe as having said so on the sidelines of an event he attended at the Sri Sathya Sai Vidya Vihar school recently.

The SLPP-led Parliament that elected Wickremesinghe as the President in July 2022 to complete the remainder of President Gotabaya Rajapaksa’s five-year term, owed the country an explanation whether the former received the approval of the Cabinet to finalize the so-called ‘vision document.’ The latest Indo-Lanka agreement dealt with strengthening maritime, air and energy ties, as well as land connectivity between the two countries. There hadn’t been a proper discourse, at any level, regarding the ‘Vision document,’ though various interested parties promoted the controversial ‘Vision document’ in the run-up to the presidential election.

On behalf of India, Pathfinder Foundation requested the leading candidates at the presidential election, namely Ranil Wickremesinghe, Sajith Premadasa and Anura Kumara Dissanayake, to go ahead with the ‘vision document.’

It would be pertinent to mention that Dr. Wignarajah has ceased to be an advisor to the Sri Lankan President in the wake of Wickremesinghe’s defeat. The advisor had been also involved with Pathfinder Foundation as a senior visiting fellow at the Foundation.

He has had the audacity to even deal in cavalier fashion with India’s intervention in 2022 to save Sri Lanka with reference to the Adani Group’s investments here as well as longstanding US projects, such as the Millennium Challenge Corporation that was rejected by President Gotabaya Rajapaksa’s government.

Essentially, the expert addressed the issues at hand from the point of view of the US-India response to the Sri Lanka crisis.

New developments

The killing of Canada-based Sikh separatist leader Hardeep Singh Nijjar outside his Vancouver temple in June 2023 has caused an unprecedented diplomatic row between New Delhi and Ottawa. The killing that Canada had blamed on India without whatsoever hesitation led to tit-for-tat expulsion of diplomatic staff. Among those who had been expelled were the top most Indian and Canadian intelligence officials based in the respective capitals.

But what really upset New Delhi was the US and the UK throwing their collective weight behind Canadian accusations, thereby undermining the Modi government’s international standing. Perhaps, the harm that had been caused to the relations between Canada and India can never be restored.

International news agencies in Oct, 2024 quoted the spokesperson of the UK’s Foreign Commonwealth and Development Office (FCDO) as having said: “We are in contact with our Canadian partners about the serious developments outlined in the independent investigations in Canada. The UK has full confidence in Canada’s judicial system. Respect for sovereignty and the rule of law is essential.”

“The Government of India’s cooperation with Canada’s legal process is the right next step,” the official added.

On top of the simmering diplomatic row with Ottawa, the US has filed charges against an Indian government employee over his alleged involvement in a failed plot to kill an American citizen of Indian origin. The Federal Bureau of Investigation has identified a New York-based targeted person as a prominent advocate for Sikh separatism.

The US Attorney’s Office for New York declared in Oct, 2024 that it filed “murder-for-hire and money laundering charges” against Vikash Yadav.

Another suspect in the case, Nikhil Gupta, was extradited to the US earlier, in 2024, to face charges, while Yadav remains at large. There hadn’t been such high profile previous cases involving Indian government agents conducting clandestine operations in the West.

Canadian and US investigations have placed India in an utterly embarrassing position. In spite of strong Indian denials, both Canada and the US have maintained that India is under investigation.

The possibility of Canada and the US trying to establish a connection between those who had been involved in operations in their respective territories cannot be ruled out.

The state of crisis of Indian foreign relations with the West has to be discussed, taking into consideration the shocking Canadian declaration that no less than Home Minister Amit Shah, widely believed to be the second most powerful person in the country, sanctioned the Vancouver hit.

Regardless of Indian denial, Canada has refused to change its stand with regards to Shah’s direct involvement in targeting those India considered as a threat. There seems to be no way forward for India on the matter, especially in the West as both Canada and the US pursued investigations.

How could the Canadian and US common stand in respect of clandestine operations undertaken by India undermine India’s once robust relations with the West? Can the West jeopardize their relations with India, at a time they are in conflict with China and Russia?

The Modi’s government obviously has ended up with egg on its face and is struggling to cope up with extremely harmful media coverage. Shah is the chief aide to Premier Modi.

Against the backdrop of Canadian accusations directed at Shah, the US is also likely to probe the possibility of the powerful Home Minister having a hand in the New York operation. Whatever the outcome of Canadian and US investigations, New Delhi will have to address the collective responsibility on the part of the Indian Cabinet in authorizing clandestine operations overseas.

The Adani factor

Dr. Ganeshan Wignarajah

When Wickremesinghe recently demanded that his successor President Dissanayake goes ahead with the ‘Vision document’ with India, he was probably turning a blind eye to the US indictment of Gautam Adani over high profile accusations regarding the USD 265 mn alleged bribery scam to benefit Indian government officials.

Perhaps, the US move against Adani, one of the closest associates of Modi, may destabilize Indo-US relations. Adani and seven others had been charged over, what the US called, the corrupt solar project. They have been accused of securities fraud, conspiracy to commit securities fraud, and wire fraud.

Dr. Wignarajah, in his piece to the US military magazine, praised the Adani projects here to the high heavens. Obviously, as the US indictment hadn’t been announced at the time the academic submitted his piece to the Indo-Pacific command, he couldn’t be faulted for the omission. However, the new Sri Lanka government shouldn’t try to side-step the issue by engaging in delaying tactics.

Unexpected bribery accusations that had been directed at the Indian conglomerate placed a major US funded project here under an extremely difficult situation, particularly because the US was to provide funding to the tune of over half a billion USD. The West Container Terminal at the Colombo port involved Sri Lankan blue chip John Keells and the Adani Group. Other participants are Special Economic Zone Limited and Sri Lanka Ports Authority in the USD 700 mn project.

The NPP government never expected the US to move legal action against the Adani group and may find it difficult to explain Sri Lanka’s continuing partnership with the Indian conglomerate. Unless of course, proper reassessment was made in respect of the Port project as well as other investments, particularly investment of U.S. 1.4 bn for wind power plants.

The US recently disclosed that though they promised over half a billion USD for the Colombo port project, the funding hadn’t been made available so far. Would denial of US funding undermine the implementation of the Port project. Construction began in Nov. 2022, five months after Parliament elected Wickremesinghe as the President.

The US stepped in during Ranil Wickremesinghe tenure as the President after previous plans for the East Container Terminal, involving Japan and India, had to be shelved due to protests. Sri Lanka had no other option but to offer the Colombo West Terminal project to appease New Delhi, furious about unilateral cancellation. The country paid a huge price for such cancellations, having announced mega projects without proper evaluation and consensus with stakeholders. There can be no better example than the idiotic cancellation of the Japanese-funded Colombo light rail project soon after the 2020 general election.

Japan reacted angrily to the unilateral announcement of the cancellation of USD 1.4 bn project funded by Japan through a soft loan.

What would be the fate of the West Container Terminal project in case Adani and JKH had to fund it in the absence of US financial backing? How could the US and India intend to maintain close links as desired by both powers against China in the backdrop of continuing bad press over attacks on Sikhs living overseas and the Adani fiasco.

The Congress-led Indian Opposition disrupted both Lower and Upper Houses of Parliament demanding a joint committee to investigate Adani’s companies in the agriculture, renewable energy, coal and infrastructure sectors. Unless India addresses accusations against Adani in a transparent manner, they can have long term repercussions, both domestically and internationally.

In the wake of the US indictment, Kenya cancelled multimillion-dollar deals with the Adani Group for airport modernization and energy projects. The mega company will also face scrutiny in Sri Lanka and Bangladesh.

The damage to US-India ties would be much more with legal action against Adani compelling India to play it safe. While the government remained silent on the issue at hand, Amit Malviya, the governing Bharatiya Janata Party’s IT head, declared in a post on the social media platform X that the US charges were “allegations and the defendants are presumed innocent unless and until proven guilty.” Critics asserted that this was nothing but a show of support by the Modi government for the Adani Group.

It would be interesting to see how the much weakened Opposition in Sri Lanka Parliament takes up the Adani issue. Parliament meets this week, though the issue is not on the agenda, an Opposition member may take the opportunity to comment on the politically sensitive matter.

Adani is the major Indian investor here. According to available data, Adani’s projects account for nearly 70% of overall Indian investments during the 2005-2019 period.

A story from the past

Undue Indian government intervention on behalf of Adani group was disclosed amidst unprecedented political turmoil here with President Gotabaya Rajapaksa under tremendous pressure in June 2022 with the country unable to finance basic needs with covert groups even having blocked worker remittances through official channels.

The revelation was made by then head of the Ceylon Electricity Board (CEB) M.C.C. Ferdinando during an open hearing of the Committee of Public Enterprises (COPE) that President Gotabaya Rajapaksa told him that Indian Prime Minister Narendra Modi had insisted that a 500-megawatt wind power project be directly given to the Adani group.

Embattled President Rajapaksa denied the disclosure. Within two days after the shocking declaration in Parliament, Ferdinando claimed that he lied after being overwhelmed by emotion. Of course no one took Ferdinando’s denial seriously for obvious reasons.

“On November 24, 2021, the President summoned me after a meeting and said, India’s Prime Minister Modi is pressuring him to hand over the project to the Adani group,” Ferdinando said, according to a video clip of his testimony made available by Parliament. According to the CEB head, he had received instructions from President Rajapaksa in this regard in Nov. 2021, just weeks after Adani visited Colombo.

Ferdinando was responding to questions posed by the then head of COPE Prof. Charitha Herath and another member about the circumstances the Adani group had chosen to construct a 500 MW wind power plant on the northern coast.

Ferdinando told the committee that he informed the President that the matter didn’t concern the CEB, but the Board of Investments. “The President insisted that I look into it. I then sent a letter mentioning that the President has instructed me and the Finance Secretary should do the needful. I pointed out that this is a government-to-government deal,” Ferdinando said.

During the heated hearings, Prof. Herath asked whether the wind power deal would be considered “unsolicited”. “Yes, this is a government-to-government deal, but the negotiations should take place according to the least cost policy mentioned in the act,” said Ferdinando.

On the following day, President Rajapaksa contradicted the CEB Chief. “Re a statement made by the #lka CEB Chairman at a COPE committee hearing regarding the award of a Wind Power Project in Mannar, I categorically deny authorization to award this project to any specific person or entity,” he tweeted.

“I have withdrawn that statement,” Ferdinando said. The media quoted the CEB Chief as having said that he only realized that he mistakenly made such a comment, when the Minister inquired from him about the matter on Saturday (June 11) morning.

Thereafter, Ferdinando issued a statement to Prof. Hearth on Saturday in which he tendered an apology, saying that due to “unexpected pressures and emotions”, he was compelled to name the Indian Prime Minister.

The public hearing took place on a Friday, a day after Parliament passed an amendment to the 1989 Electricity Act that removed competitive bidding. The main opposition, Samagi Jana Balawegaya (SJB), alleged that the primary reason for bringing forward the amendment was to accommodate the “unsolicited” Adani deal. The SJB demanded that projects beyond 10 MW capacity should go through a competitive bidding process.

The amendments to the Sri Lanka Electricity Act were passed with 120 votes in favour of the amendments with 36 voting against in the 225-member Parliament amid strong resistance from power sector trade unions in the state-run Ceylon Electricity Board (CEB). Thirteen MPs abstained in the voting.

The story should be examined taking into consideration Adani’s pow vows with President Gotabaya Rajapaksa and Premier Mahinda Rajapaksa in late Oct. 2021 in Colombo.

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