1972 Constitution in Retrospect – II
By (Dr) Jayampathy Wickramaratne, President’s Counsel
In this the second part of a three-part article on the 50th anniversary of Sri Lanka becoming a republic, the writer submits that the 1972 Constitution paved the way for constitutionalising majoritarianism in multi-cultural Sri Lanka.
The unitary state
Although Tamil parties expressed their support for the Constituent Assembly process, they were to be disappointed by the substance of the new constitution.
Basic Resolution No. 2 proposed by the Government called for Sri Lanka to be a unitary state. The Federal Party (FP) proposed an amendment that ‘unitary’ be replaced by ‘federal’.
In a memorandum and the model constitution that it submitted to the Steering Committee of the Assembly, the FP proposed that the country be a federal republic consisting of five states made up as follows: (i) Southern and Western provinces, (ii) North Central and North Western provinces (iii) Central, Uva and Sabaragamuwa provinces (iv) Northern Province and the districts of Trincomalee and Batticaloa and (v) Ampara district. The city of Colombo and its suburbs were to be administered by the centre. A list of subjects and functions reserved for the centre, with all others going to the states, was included. Interestingly, law and order and Police were to be reserved subjects.
However, Assembly proceedings show that the Tamils were clearly for a compromise. Dharmalingam, who was a main speaker of the FP under Basic Resolution No. 2, stated that the existing constitution had failed as it was not designed for a multi-ethnic country. He pointed out that in ethnically heterogeneous countries where unitary constitutions had been in operation, concessions to the federal principle have been made to meet the demands and aspirations of the minorities. Where there has been a refusal to concede the federal principle, there have been movements for separation. The FP distanced itself from secessionists such as C. Sunderalingam and V. Navaratnam, referring to them by name, and stated that it was not asking for a division of the country but for a division of power.
Dharmalingam made it clear that the FP’s draft was only a basis for discussion. Stating that the party was only asking that the federal principle be accepted, he suggested that as an interim measure, the SLFP, LSSP and CP should implement what they had promised in the election manifesto, namely that they would abolish Kachcheris and replace them with elected bodies. He stated: “If this Government thinks that it does not have a mandate to establish a federal Constitution, it can at least implement the policies of its leader, S.W.R.D. Bandaranaike, by decentralising the administration, not in the manner it is being done now, but genuine decentralisation, by removing the Kachcheris and in their place establishing elected bodies to administer those regions.”
Sarath Muttetuwegama of the Communist Party, the first political party in the country to propose federalism, in 1944, followed Dharmalingam and stated that ‘federal’ had become a dirty word not because of the federal system of government but because of what the FP had advocated. He was clearly referring to the FP’s association with the UNP and the conservative policies it had followed, such as voting against nationalisations, the takeover of private schools and the Paddy Lands Bill. Seemingly oblivious to the offer that Dharmalingam had made, he asked why the FP had not used the phrase ‘regional autonomy.’ Speakers from the UF who followed Muttetuwegama made it clear that the UF was in no mood to consider the FP’s offer to settle for much less.
Consequently, Basic Resolution No.2 was passed, and the FP’s amendment was defeated in the Steering and Subjects Committee on 27 March 1971.
Dr Nihal Jayawickrama, who was the Secretary of the Ministry of Justice, under the UF Government, and played an important role in the constitutional reform process, has said that the first draft prepared under the direction of the Minister of Constitutional Affairs did not contain any reference to a ‘unitary state’. However, Minister Felix Dias Bandaranaike proposed in the Ministerial Sub-Committee that the country be declared a ‘unitary state’. The Minister of Constitutional Affairs did not consider this to be necessary and argued that while the proposed constitution would have a unitary structure, unitary constitutions could vary a great deal in form. Nevertheless, the proposed phrase found its way to the final draft. ‘In course of time, this impetuous, ill-considered, wholly unnecessary embellishment has reached the proportions of a battle cry of individuals and groups who seek to achieve a homogenous Sinhalese state on this island’ Dr Jayawickrama observed. ‘Reflections on the Making and Content of the 1972 Constitution: An Insider’s Perspective’ in Asanga Welikala (ed), The Sri Lankan Republic at 40: Reflections on Constitutional History, Theory and Practice vol 1 (Centre for Policy Alternatives 2012) 43.
It is significant that the FP continued to participate in the Constituent Assembly even after its amendment was rejected. Records show that its leader, S.J.V. Chelvanayakam, regularly attended the meetings of the Steering and Subjects Committee.
With the advantage of hindsight, it could be said that acceptance of the FP’s proposed compromise for a division of power would have proved to be a far-reaching confidence-building measure on which more could perhaps have been built later. Moreover, such an acceptance would have ensured the continued participation of the FP in the Constituent Assembly. Even had the FP, as the UNP eventually did, voted against the adoption of the new constitution, their participation in the entire constitution-making process would have resulted in greater acceptance of the 1972 Constitution by the Tamil people.
Although they discontinued participation at a later stage, Federal Party MPs nevertheless took oaths under the new Constitution. Tamil parties soon united under the banner of the Tamil United Front (TUF), which later became the Tamil United Liberation Front (TULF). At the famous Vaddukoddai conference of 1976, the TULF embraced separatism and adopted a resolution calling for a separate state called ‘Tamil Eelam’ in the Northern and Eastern provinces. At the 1977 elections, the TULF contested on a separatist platform and swept the Tamil areas.
The place of Buddhism
According to Dr Jayawickrama, Dr. de Silva’s original proposal called for the guarantee of freedom of thought, conscience and religion to every citizen. However, the Prime Minister requested that this proposal be added with a provision for the protection of institutions and traditional places of worship of Buddhists.
Basic Resolution No. 3 approved by the Constituent Assembly was for Buddhism to be given its ‘rightful place’: ‘In the Republic of Sri Lanka, Buddhism, the religion of the majority of the people, shall be given its rightful place, and accordingly, it shall be the duty of the State to protect and foster Buddhism, while assuring to all religions the rights granted by Basic Resolution 5 (iv).’
Basic Resolution 5 (iv) referred to read: “Every citizen shall have the right to freedom of thought, conscience and religion. This right shall include freedom to have and adopt a religion or belief of his choice, and freedom, either individually or in community with others and in public or private, to manifest his religion or belief in worship, observance, practice and teaching.”
But by the time the final draft was approved, the proposal had undergone a further change. Article 6 of the 1972 Constitution is as follows: ‘The Republic of Sri Lanka shall give to Buddhism the foremost place and accordingly it shall be the duty of the State to protect and foster Buddhism while assuring to all religions the rights granted by section 18 (1) (d).’ Section 18 (1) (d), in the chapter on fundamental rights, assures to all citizens the right to freedom of thought, conscience and religion.
To the question of whether constitutionally guaranteeing special status to Buddhism not available to other religions of the land might adversely affect the non-Buddhists, Dr de Silva retrospectively responded in the following manner: “The section in respect of Buddhism is subject to section 18 (1) (d) and I wish to say, I believe in a secular state. But you know when Constitutions are made by Constituent Assemblies they are not made by the Minister of Constitutional Affairs. I myself would have preferred (section 18(1) (d)). But there is nothing…And I repeat, NOTHING, in section 6 which in any manner infringes upon the rights of any religion in this country. (Safeguards for the Minorities in the 1972 Constitution (Young Socialist 1987) 10.)
Dr Jayawickrama has been more critical. ‘If Buddhism had survived in the hearts and minds of the people through nearly five centuries of foreign occupation, a constitutional edict was hardly necessary to protect it now’, he opined. (‘Colvin and Constitution-Making – A Postscript’ Sunday Island, 15 July 2007).
Basic Resolution No.11 stated that all laws shall be enacted in Sinhala and that there shall be a Tamil translation of every law so enacted.
Basic Resolution No.12 read as follows: “(1) The Official Language of Sri Lanka shall be Sinhala as provided by the Official Language Act No. 32 of 1956. (2) The use of the Tamil Language shall be in accordance with the Tamil Language (Special Provisions) Act No. 28 of 1958.”
Efforts by the FP to get the Government to improve upon Basic Resolutions Nos. 11 and 12 failed. On 28 June 1971, both resolutions were passed, amendments proposed by the FP having been defeated. S.J.V. Chelvanayakam informed the Constituent Assembly that they had met with both the Prime Minister and the Minister of Constitutional Affairs, and while the meetings had been cordial, the Government had refused to make any alteration to the Basic Resolutions. He stated that the FP would therefore not attend future meetings. “We have come to the painful conclusion that as our language rights are not satisfactorily provided in the proposed Constitution, no useful purpose will be served in our continuing in the deliberations of this Assembly. By taking this step, we mean no offence to anybody. We only want to safeguard the dignity of our people.” There was not even a dramatic walk out. ‘We do not wish to stage a demonstration by walking out’, he added.
That Dr Colvin R. de Silva, who prophetically stated in 1955, ‘one language, two countries; two languages, one country’, should go so far as to upgrade the then-existing language provisions to constitutional status has baffled many political observers. In fact, according to Dr Jayawickrama, the Prime Minister had stated that it would be unwise to re-open the language debate and that the better course would be to let the ordinary laws on the subject operate in the form in which they were. By this time, the Privy Council had reversed the decision of the Supreme Court in A.G. v Kodeswaranthat a public servant could not sue the Crown for breach of contract of employment and sent the case back for a determination on other issues, including the main issue as to whether the Official Language Act violated section 29 (2), as the District Court had held. Dr. de Silva did not wish the Supreme Court to re-visit the issue. ‘If the courts do declare this law invalid and unconstitutional, heavens alive, the chief work done from 1956 onwards will be undone. You will have to restore the egg from the omelette into which it was beaten and cooked.’ He had, however, resisted a proposal made by Minister Felix R. Dias Bandaranaike that Sinhala be declared the ‘one’ official language of Sri Lanka.
Apportioned Seats in Parliament and the “National List”
by Prof. Savitri Goonesekere
The recent appointment of well known entrepreneur and businessman Dhammika Perera to a seat in Parliament on the resignation of former minister Basil Rajapakse was challenged in several petitions in the Supreme Court. These petitions mainly alleged a violation of the fundamental right to equality, nondiscrimination, and non arbitrary decision making in the filling of a vacancy created in regard to a seat in Parliament occupied (not through election,) but APPORTIONMENT of seats, based on the votes cast at a General election. This concept of apportionment of 29 of the total number of seats in the electoral system of proportional representation was introduced into the Constitution’s provisions governing elections and the Peoples’ franchise, by the 14th Amendment to the Constitution in 1988.
The appointment of Mr. Perera to Parliament on an apportioned seat, in the midst of an unprecedented and grave political and economic crisis generated public controversy. Some considered his appointment a welcome effort to bring entrepreneurial experience into government at this time. Others viewed the appointment negatively and challenged its validity in these petitions in the Supreme Court. Mr. Basil Rajapaksa’s appointment had not been challenged in this manner. Field Marshal Sarath Fonseka had also held an apportioned seat, which had been challenged unsuccessfully in Centre for Policy Alternatives (CPA) v. Kabir Hashim in SC Appl. 54/2016. The possibility of bringing experts into Parliament through the apportioned seat process on the national list has been discussed even recently as a useful response to the current crisis.
The current petitions are of public concern, as they raised an important issue on the People’s right to franchise, and the meaning of Constitutional and legal regulations applicable to apportionment of seats in Parliament, on the basis of the Peoples’ exercise of their voting rights. The case was an opportunity to clarify the law and practice on this important topic relating to the franchise, as well as the eligibility of persons to occupy 29 apportioned seats in Parliament.
The petitions in the Dhammika Perera case were dismissed by the Supreme Court, at the preliminary procedural stage of granting leave to proceed with the litigation. No reasons were given for the decision, though the court heard arguments of Counsel in support of and in opposition to the petition. However the Court clarified that the refusal of leave to proceed was a split decision, with one dissent in a bench of three judges. Since no reasons were given, the approach of the majority and the dissenting judge to the legal issues raised by Counsel in regard to appointments to apportioned seats in Parliament, remains unknown to the public.
The decision of the court not to write a judgment and give reasons for refusing leave after hearing Counsel in the Dhammika Perera case at this preliminary procedural stage, follows the practice of the Court in exercising the discretion given in Article 126 (2) of the Constitution. The right to obtain relief for violation of a fundamental right is a right guaranteed by Article 17 and Articles 126 (2) and (4). The Supreme Court has been given a discretion by Article 126 (2) to decide whether it will grant leave to proceed with the application for relief and remedy for alleged violations of fundamental rights. This follows a tradition in Common law jurisdictions to ensure that courts are not overburdened in litigation, also reflecting a policy approach on avoiding unnecessary costs of litigation. Yet there is also jurisprudence in the Supreme Court indicating a different approach to the granting of leave to proceed.
In the Shirani Bandaranyake Appointment to the Supreme Court Case (1997 1 SLR 92 ) the Chief Justice decided that the case raised an important issue of “general and public importance” and referred the applications to a bench of seven judges. Justice Mark Fernando speaking for the court said that “having regard to the complexity and gravity of the questions involved, Counsel for both the petitioners and respondents were heard in support of and opposition to the petitions.” (p 93). Justice Fernando and Justice Perera wrote separate judgments, in a unanimous decision of the Court to refuse leave to proceed, creating important jurisprudence on this subject.
If this approach articulated by Justice Mark Fernando guides the Supreme Court, and is clarified in Rules of the Supreme Court, petitioners and the public will know the basis on which the Supreme Court refuses leave to proceed with a Fundamental Rights Application, relating to an important issue of public concern. The issue of apportionment of seats in Parliament is an issue of public concern to voters, just as appointments to high public office, as in the Shirani Bandaranayaka case also raised issues of public concern. Giving reasons can only enhance the stature of the court as an indispensable institution in the administration of justice in a Constitution that perceives the courts as exercising the “judicial power of the People” [Article 4 (c)]. This was also referred to in the judgment of the Supreme Court in the Dissolution of Parliament case (2018.) Citing an American case, Baker v Car (1962), His Lordship HNJ Perera CJ said “the court’s authority possessed of neither purse nor sword ultimately rests on sustained public confidence.”(Sampanthan v AG (2018) p 69).
The unresolved constitutional issue of appointments to Parliament on apportionment, and the National List.
Article 99A introduced by the 14th Amendment is very clear on the persons eligible to occupy apportioned seats after a general election. The meaning of this Article, in the context of the statute law also regulating elections i.e. the Parliamentary Election Act No. 1 of 1981 was the crux of the case argued by Counsel for the petitioners in the Dhammika Perera case. Geoffrey Alagaratnam PC former President of the Bar Association and other eminent lawyers who supported the petitions drew attention to the need to clarify the law on this important issue of public concern, because of a seeming conflict between the Constitutional provision (Article 99A) and Section 64 (5) of the Parliamentary Elections Act (1981).
Article 99A of the Constitution clearly states that persons allocated apportioned seats in Parliament based on the votes cast at a general election must be persons eligible to be MPs, whose name appears on a list submitted within the period of nominations, to the Commissioner of Elections. This list is now popularly known as the “National List,” from which a person may be nominated to hold a seat on the basis of apportionment and votes cast at the general elections. Article 99A also includes another category of persons who can hold such a seat. This is a person whose name is on an electoral list. Article 99A does not indicate that there is any other requirement of eligibility. It is therefore clear from Article 99A of the Constitution that both defeated candidates and persons on the National List are eligible to occupy apportioned seats.
The issue of defeated candidates occupying these seats is therefore an ethical rather than a legal or Constitutional issue. Consequently Mr. Ranil Wickremesinghe is lawfully occupying the seat apportioned to the UNP, though he was defeated at the General Elections (2019) and also publicly stated that candidates defeated at a General election should not occupy seats apportioned to the party. However Article 99A as argued by Counsel in the Dhammika Perera case does not permit persons who are NOT on the National list submitted at the time of nominations, to be allocated apportioned seats in Parliament. The procedure set out in Article 99A is for the Commissioner of Elections to request a Secretary of a party to nominate persons to fill an apportioned seat. The language of 99A does not enable persons outside these categories to be considered eligible to hold these apportioned seats.
The popular idea that a party in Parliament, particularly at this time of a national crisis, can bring to Parliament professionals and others with special expertise, does not conform to the eligibility criterion set out in Article 99A. Therefore, persons who occupied these apportioned seats, whether Basil Rajapaksa or Sarath Fonseka also did not satisfy the Constitutional provision on eligibility to fill an apportioned seat. Article 99A seems to have been ignored in discussions on appointments to Parliament on the national list.
It is also clear that this Article 99A in the Constitution casts a duty and responsibility upon the Commissioner of Elections and the Secretary of a Political Party who nominates a person to an apportioned seat to abide by Article 99A. The Commissioner is a public servant, and he can be sued in a fundamental rights violation case relevant to wrongful allocation of an apportioned seat. The Secretary of a Political party is a Non-State actor but becomes liable for a wrong decision since our courts connect him to the inaction of the State or government agency in ensuring conformity to the Constitution. (Faiz v. AG (1995 1 SL 372).
The PROVISIONS in the Parliamentary Elections Act 1 of 1981 on VACANCIES to one of the 29 APPORTIONED seats in Parliament
The Parliamentary Elections Act (1981) Section 64 was amended consequent to the 14th Amendment in 1988. This provision in the principal enactment of 1981 dealt with filling of vacancies in seats in Parliament. When the 14th Amendment provided in Article 99A for a National list, and apportionment of seats, a new provision Section 64 (5) was introduced into the principal legislation, the Parliamentary Elections Act, to cover the procedure for filling vacancies to these apportioned seats. Section 64 (5) enacted by an amendment of 1988, i.e. the same year as the 14th Amendment, uses the words “Notwithstanding anything in the previous provisions” (ie on vacancies in regard to ordinary seats in the principle enactment of 1981), and sets out a PROCEDURE for filling vacancies in the special APPORTIONED seats created by Article 99A of the 14th Amendment. This 1988 provision Section 64 (5) added to the Parliamentary Elections Act indicates that in the case of persons occupying these apportioned seats, a vacancy is filled by “the Secretary General of Parliament informing the Commissioner of Elections who then requires the Secretary of the Party or leader of the relevant independent group apportioned a seat to nominate a member of such party ” to fill the vacancy. It is this language on PROCEDURE in filling vacancies to apportioned seats, that is now being used to argue that the Secretary of a party or leader of an independent group has complete discretion to appoint a person of his/ her choice to fill a vacancy.
Our Constitution has a controversial Article 16 (1) that has been consistently criticized, which does not permit judicial review of legislation once it is enacted by Parliament. Even in jurisdictions like India, South Africa and Canada, that permit judicial review of legislation for non-conformity with the Constitution, there is a legal concept of “Presumption of Constitutionality of legislation” and “reading down” legislation in order to follow a “purposive” interpretation that seeks to harmonize the basic law of the land, a country’s Constitution and legislation enacted by Parliament.
In Sri Lanka in the in the cases AG v Sampath SC Appeal 17/2013 and SC Ref 3/2008 the Supreme Court refused to follow a provision in the amended Penal Code of 1995 that provided for minimum sentences on the ground that the legislation could not be interpreted as restricting the judicial discretion of the Courts. Both these judgments held that the power of interpretation of law is embedded in the judicial power recognized in Art 4 (c) of the Constitution. This could not be restricted by ordinary law (in this case the amended Penal Code) since the Constitution is the Supreme Law. While this decision may be critiqued as in conflict with the restricted power of post enactment judicial review of legislation in our Constitution, the decisions indicate that there is a rationale for interpretations that seek to give predominance to the Constitution as the basic law of the land.
As Mr. Alagaratnam PC and other Counsel for the petitioners argued in the Dhammika Perera case, interpreting section 64 (5) of the Elections Act as giving an absolute discretion to the Secretary of a Party or the leader of an independent group apportioned a seat, to fill a vacancy in that seat, means that he/she can ignore completely the criterion on eligibility for apportioned seats, so clearly set out in the 14th Amendment, when it introduced a concept of apportioning 29 seats. This is surely a situation where an interpretation must be adopted that recognizes rather than undermines the significance of basic Constitutional provisions on eligibility to occupy a seat in the legislature.
In CPA vs Kabir Hashim, Sripavan CJ delivered a short judgment, when refusing leave to proceed in a petition challenging the nomination of Sarath Fonseka to a vacancy in an apportioned seat. His Lordship held that the issue of filling vacancies was not considered in Article 99A of the Constitution (on apportioned seats). This was regulated by the procedures detailed in Section 64 (5) of the Parliamentary Elections Act which, His Lordship said, gave a discretion to the secretary of the party or the leader of an independent group to nominate the person to fill a vacancy in an apportioned seat. His Lordship did not, with respect, address the substantive requirements for eligibility to occupy an apportioned seat, that were set out in Article 99A, when the 14th Amendment to the Constitution created this new category of seats in our Parliament. His Lordship’s opinion also takes a different approach to ordinary law vis- a-vis the Constitution as the “supreme law of the land,” in the cases referred to earlier.
It is with respect difficult to consider the decision in CPA v. Kabir Hashim as a judicial precedent that binds the Supreme Court, and prevents the matter being considered again in light of the specific language in Article 99A of the Constitution on eligibility to occupy an apportioned seat in Parliament. The Supreme Court has not followed a strict approach to the concept of “stare decisis” or binding precedent in a context where the structure of our courts has changed through both statutes and post independence Constitutions. The capacity of a superior court to contribute to development of the law without being fettered by previous decisions is reflected in important decisions of judges like Basnayaka CJ in Bandahamy v. Senanayake (1960) 62 NLR 313 and Wanasundere J in Walker Sons v Gunathilleke (1978- 19801 SLR 231.
It is in the public interest that the meaning of Article 99A and the policy on apportioning 29 seats in Parliament is clarified and addressed in any further amendments to the Constitution. Giving a complete discretion to a non-State official like a Party Secretary to choose persons entitled to fill vacancies in apportioned seats based on electoral votes, undermines voting rights. There is also the public interest in having persons qualified to occupy these apportioned seats being nominated initially, or in filling vacancies that are created later. More specific criterion of eligibility to take apportioned seats will also address the public interest in bringing a diverse range of experience to the legislature of the country through the National list. Such an amendment should also clearly make defeated candidates not eligible to occupy such seats.
The Dhammika Perera case raises once again an issue of public concern in regard to filling vacancies in the 29 apportioned seats in Parliament, either through the national or electoral list. Clarifying the law can be done without delay through the contemplated current Constitutional reforms. If this is not done, it seems important for the Chief Justice to appoint at least a Divisional Bench to provide a clear interpretation of Article 99A of the Constitution or point to the important need for clarity on this matter through a Constitutional amendment.
Litigation in the courts and ground realities indicate that there are many important unresolved issues that require constitutional reform. Even within the current Presidential system, the cumbersome procedure for impeachment of a President and also judges of the Supreme Court, and appointments on the National List, clearly require significant review and reform. And yet, ad hoc constitutional reform efforts like the 19th Amendment, 20th Amendment and the proposed 21st Amendment, seem to ignore public concern for reforms in these important areas. There should be public advocacy to ensure that all these areas are addressed immediately in the current constitutional reform process.
When will the Gang of Four be held accountable for their irresponsible decisions?
by Sanjeewa Jayaweera
Most living in Sri Lanka feel like they have got into the boxing ring with Muhammad Ali. The ferocious punches thrown regularly are taking their toll, with most either on their knees or on the canvas. The final punch that will knock us out seems inevitable, but the question is when?
The pounding started initially with queues to buy milk powder for children, which then got extended to buying cooking gas, then to long power cuts, and now to queues extending several kilometres to buy petrol, diesel, and kerosene. Along the journey of suffering, we have also been penalized with hyperinflation. The saying “it never rains but it pours” seems so accurate.
The country is facing a humanitarian catastrophe of a magnitude not previously experienced. Most foreign commentators say, “Sri Lanka is facing the worst economic crisis since 1948.” In a release, the World Food Programme (WFP), the world’s largest humanitarian organization, stated, “An estimated 4.9 million people – 22 per cent of the population – are currently food-insecure and require humanitarian assistance. Reduced domestic agricultural production, scarcity of foreign exchange reserves and depreciation of the local currency have caused food shortages and a spike in the cost of living, which is limiting people’s access to healthy and affordable meals. The economic crisis will push families into hunger and poverty – some for the first time – adding to the half a million people who the World Bank estimates have fallen below the poverty line because of the pandemic.”
The latest WFP assessment reveals that 86 per cent of families are buying cheaper, less nutritious food, eating less and, in some cases, skipping meals altogether. Before the economic crisis and the pandemic, malnutrition rates across Sri Lanka were already high. Before the COVID-19 pandemic, Sri Lankan women and children suffered from far higher rates of malnutrition than most other middle-income countries: 17 per cent of children aged under five were too short because of stunting, and 15 per cent were too thin for their height (wasted). The current economic crisis will likely aggravate this further.”
The peaceful uprising, predominantly by the youth referred to as the “Aragalaya”, and the violence that erupted on May 9 resulted in the resignation of the Prime Minister and the cabinet. Thankfully, quite a few unsavoury characters are no longer in the cabinet and have remained mainly underground, although a few are making occasional media appearances to test the waters. A few less savoury but still abject failures of the Mahinda Rajapaksa regime have managed to get back into the cabinet. It is a paradox that a person who led his party to political oblivion and lost his seat is now the Prime Minister. So much for the will of the people!
However, my article is about the architects of our economic Armageddon. In a previous article, I identified them as Nivard Cabraal , P B Jayasundera , S.R. Attygalle and W D Lakshman and referred to them as the Gang of Four (G4). I have consistently advocated for the G4 to be charged and prosecuted for their actions that I would call criminal.
I am glad that recently a Fundamental Rights (FR) petition has been filed in the Supreme Court (SC) seeking appropriate action against those responsible for the prevailing economic crisis in the country, including the G4. One must hope that the SC will commence hearing the case on a priority basis and arrive at a verdict as soon as possible because most people I talk to say, “These fellows should be taken to Galle Face and be mercilessly whipped!” Although I don’t subscribe such drastic action, I understand their anger.
A few weeks back, the Committee on Public Finance (COPF) called the G4 for a hearing to ascertain the reasons for the economic collapse. Unfortunately, I have not been able to view the entire proceedings of the hearing as only a 15-minute video is available on YouTube. In that clip, Nandalal Weerasinghe, the incumbent Governor of the Central Bank of Sri Lanka, in an apparent snide remark aimed at Attygalle, said, “Responsible Government officials should refrain from engaging in politics and that the difference between a politician and an official should be properly recognized.”
It must be recalled that Attygalle was appointed as the Treasury Secretary in haste by the Mahinda Rajapaksa(MR) administration during the short-lived constitutional crisis in 2018. Some will also remember how MR immediately appointed Kapila Chandrasena as the CEO of SriLankan Airlines but had to quickly rescind the appointment due to public backlash. It was only subsequently revealed that Chandrasena’s wife had been paid US $ 2 million by Airbus as a bribe.
The belief is that many of the appointments made by MR appear to have been based on friendship and loyalty as opposed to competence. Therefore, it might be difficult for Attygalle to convince too many that he is not politically aligned with the Rajapaksas.
When questioned about the tax cuts that resulted in a significant loss of revenue to the government, Attygalle said that due to the commencement of the covid pandemic, it was not possible to pass judgment on whether the experiment of reducing taxes was correct. However, it does not need an Einstein to predict that a country grappling with a chronic budget deficit and a balance of payments crisis would get into severe economic difficulties due to such irresponsible decisions.
I highlighted my concern over several of the tax proposals in an article written by me called “Sri Lanka’s Tax Conundrum” published in the Sunday Island of January 12, 2020. Although I am no economist, my two and half decades of working in Sri Lanka, mainly as a Chief Financial Officer in several hotels, manufacturing and retail businesses, have given me sufficient knowledge and exposure to raise concerns.
The tax cuts entailed the reduction of Value Added Tax (VAT) to 8% from 15%, reduction of corporate tax for manufacturing companies to 18% from 28%, abolishing the 2.5% Nation Building Tax, the increase in the taxable supply threshold for VAT from Rs. 12 million to Rs. 300 million, the increase in single-person tax-free allowance to Rs. 3 million from Rs. 1.2 million together with significant widening of tax slabs and reduction of rates resulting in the highest rate coming down to 18% from 24%.
All these changes were done with no projection of how much tax revenue will be lost. Neither was there any comment about how the government intended to bridge the revenue deficit. It was all so reckless and irresponsible.
The international credit rating agency, Fitch Ratings, reacted immediately and, in a release, stated that tax concessions granted are “credit negative” and revised the outlook on Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Negative from Stable.
These agencies are independent and skilled in their assessments. However, our Treasury Secretary (Attygalle) and the Central Bank Governor (Lakshman) released statements sharply rebuking the Fitch statement. In fact, in a TV chat show, he accused the international credit agencies of being politically biased and being part of an international conspiracy against GOSL! Furthermore, every subsequent downgrade of our credit ratings drew a sharp rebuke from Attygalle, Lakshman and Cabraal, questioning the motives of such downgrades.
For those of us who had engaged credit rating agencies on behalf of the companies we worked for, such criticisms were not valid and were downright stupid. Given the critical role that international rating agencies play, commonsense dictated that even if there is disagreement, there was a need for a far more diplomatic engagement and consensus building than releasing strongly worded rebukes and questioning their motives. The arrogance and the stupidity of the G4 are stunning.
In addition, in their infinite wisdom, the GOSL also decided that the PAYE tax at source previously collected from employers and Withholding Tax (WHT) from interest income paid by banks and financial institutions to individuals should be abolished. To say that this was a stupid and irresponsible decision is being polite.
In my article of January 12, 2020, I published a table from the Department of Inland Revenue Performance Report for 2018 setting out statistics of low compliance by businesses and individuals when filing their tax returns from 2013-14. I stated, “In such a scenario, expecting individuals to be compliant with their tax returns and payment of quarterly tax is being optimistic.”
I believe the architect of the above changes was none other than PBJ. When he was the Treasury Secretary during the period 2010 – 15, at many private sector forums, he said, “I have told the IRD to stop worrying about collecting PAYE taxes as the collection is so small.” However, he also stated, “If government servants are exempt from income tax, why should the private sector employees pay tax?” The end result was that many of us had our income tax files closed by the IRD, which was way back in 2011!
The decision to print money under both Lakshman and Cabraal led a former deputy governor of the CBSL to state that “Lakshman has turned the CBSL to a printing press.” It is believed that the G4 and others in charge of economic policy were disciples of the highly controversial Modern Monetary Theory (MMT). Many independent economists raised concerns and predicted that such action would lead to hyperinflation. Abraal arrogantly refuted these concerns.
The Island of April 27, 2021 quotes Cabraal as follows “State Minister of Money and Capital Markets Ajith Nivard Cabraal said yesterday that there was no relationship between money printing by the Central Bank of Sri Lanka and the depreciation of the local rupee in the foreign currency market. Minister Cabraal commented while responding to questions during an interview on Swarnawahini television. When asked whether the value of the Sri Lanka rupee showed a negative correlation to a surge in money printing by the Central Bank as the Opposition claimed, the state minister replied, “Generally, people say it may be because they don’t know. The issue is when those that claim to be in the know of these matters also say the same thing.”
The G4 also pursued a policy of keeping interest rates well below the inflation rate. This was purported to encourage borrowing. This ludicrous policy resulted in depositors being able to negotiate higher rates for their US Dollar deposits than for their LKR deposits! One of the first actions of the new Governor was to increase the treasury bill interest rates significantly. It is a tried and tested formula to raise interest rates to curtail demand and reduce inflation. Currently, the world over, nearly all central banks have resorted to this policy. It seems that G4 are the only exception.
The decision to peg the Lankan Rupee to the US Dollar at 200 for a considerable period against the advice of many independent economists and bankers has had a debilitating impact on our economy. Undoubtedly, this has resulted in a burgeoning black/ grey market where the rate differential was significant. In addition, this has led to a substantial decrease in the receipt of remittances by Sri Lankans working overseas and also by exporters who may be keeping the funds overseas in anticipation of a devaluation. We all are fully aware of the pain now endured by a lack of dollars in the country.
Having held on to the US Dollar to LKR 200 for too long, the Monetary Board under the chairmanship of Cabraal recklessly let go of the peg resulting in a steep depreciation of the LKR by nearly 80% over just two months. This was despite the IMF’s explicit warning that any peg relaxing needs to be done carefully and systematically. A couple of members of the former monetary board have stated that Cabraal unilaterally decided to abandon the peg. This is being disputed by him, claiming that it was a collective decision. Whether it was collective or unilateral, Cabraal needs to bear complete responsibility for this reckless decision that has upended the lives of millions of our people. Lastly, I must say that my personal opinion is that the members of the Monetary Board who objected to the policy decisions of Cabraal should have resigned and made their reasons public at the time. To claim that to have resigned would have been cowardly is unacceptable.
Cabraal has recently released several public statements in which he has attempted to exonerate himself. He has stated that even now, the exchange rate is being pegged, and money is still being printed. Yes, no doubt. However, the damage done in the last two years is so immense that it is impossible to stop the rot immediately. As the saying goes, it is like riding a tiger and not being able to get off. That is the country’s predicament.
I believe the COPF meeting ended with another scheduled follow-up meeting. There has been no news of any further deliberations involving the G4. I doubt whether anything of value emanates from these deliberations. In the last couple of months, the Committee of Public Enterprises (COPE) reviews, Chaired by Professor Charita Herath, have made headlines over how poorly the state-owned enterprises are being administered and managed. However, for me, they are just theatrics as most such disclosures have been included in the Auditor General’s reports of such enterprises and have been in the public domain for quite some time. It is just that no one bothered to read such reports.
Undoubtedly, the G4 need to be charged and prosecuted for bringing this country and its people to its knees. Our lifestyle has been taken back several decades. As stated in the WFP report, millions of our people will starve and be malnourished. The youth of our country, referred to as the future, do not see any future, and most are in a mad scramble to leave the country.
The President, PM and the Cabinet are equally responsible for this dastardly state of affairs. Still, for me, the G4 bears the greater responsibility in that, as so-called experts, they failed, and their failure is due to sheer arrogance and their reckless decision to experiment with the lives of millions of people.
For me, the comment made by MP M A Sumanthiran when addressing the G4 at the COPF meeting is relevant in meting out punishment to those responsible for the current situation in our country. He said, “The former minister of finance Mangala Samaraweera, who was a fashion designer and not an economist, predicted in October 2019 that the tax proposals of Gotabaya Rajapaksa as set out in his manifesto would result in an express train to bankruptcy, default and a Greek-style financial crisis.” He rebuked the G4, saying that their so-called expertise in economic management could not foresee what a fashion designer was able to!
That is precisely my conclusion too. This is a man-made disaster, and it is a travesty of justice that those responsible are still not behind bars whilst the people of this country are on their knees.
NAKED, BUT NOT ASHAMED IN WASHINGTON
by ECB Wijeyesinghe
When the sun comes over the mountains, Washington DC in August can be as hot as – well, as Colombo in April.
For one thing, it is a good change from the misery of a London summer when it sizzles and drizzles alternately. In the capital of the US the moods of the weather, like the people, are more predictable. But that is of little help when you arrive in your hotel. hot and tired, in a heavy all-purpose tweed suit, drenched with perspiration, and without the means of getting into a change of clothing. For the fact of the matter is that my suitcase was missing when I reached Washington.
It had been over carried by the domestic airline which brought me from New York, and it was now probably resting placidly in some West coast airport waiting to be claimed by an owner who was not there. Though I surrendered myself to the thought that everything happens for the best in this best of all possible worlds, I could neither eat nor sleep. The lunch hour passed. It was time for the siesta, but I have still to meet the man who can have a siesta on an empty stomach.
The cup of tea brought nostalgic memories of home and the humidity etched the picture sharper in my mind. The dinner hour approached on leaden feet. I am glad there was no gong. It would have sounded like a death-knell. And so to bed. I, without anything on. I wished I could sleep and thereby end the heartache and the thousand natural shocks caused by a missing suitcase.
Hamlet must have been a happy man compared with Wijeyesinghe in Washington. My bedroom in the hotel was not air-conditioned. There was only a blower which pumped in hot air from outside It was one of those wheezy contraptions that the Lionel Wendt Theatre uses occasionally to keep VIP’s cool and to prevent them from leaving the hall after the first Act of a play. Finally, I had an idea. I thought that, as the witching hour of midnight was approaching, I might play my last card. I prayed:
De profundis ad to clamavi Domine,
Domine, exaudi orationem meam.
Having muttered this invocation which of course means : “Out of the depths have I cried to Thee, 0 Lord. Lord, hear my prayer.” I turned over on my side and tried to snatch some sleep. The clock struck twelve and almost immediately afterwards there was a loud knock on my bedroom door. For a moment I did not answer. I hesitated, because opening the door to investigate meant getting out of bed. And, I had nothing on.
So in the most stentorian voice that I could muster, I shouted, more in fear than in anger, “Who the devil is that?” “Porter sorr.” Said an equally stentorian voice from the other side of the door. “What do you want?” I said trying to cover my nakedness with a sheet that was not there. “Your suitcase is here,” said an unmistakable Negro voice. I asked him to come in and leave the bag somewhere, anywhere, and quit before he became aware of my predicament.
More than once I thanked him most profoundly, with an air of finality, for the service he had rendered at that time of the night; but the man did not budge. I had hoped that like Old Man River he would just roll along after leaving the suitcase in the room. But he soon revealed his intentions as he approached the foot of my bed.
“Tip, sorr.” He said in a slightly aggressive tone.
Here was a problem that could not be solved by being too puritanical. The night was dark and so was I. The porter was a male and so was I. There was nothing to hide. So, taking one consideration with another I leaped out of bed, rushed to my coat and with the alacrity of a conjuror removed fifty cents from my purse. Using the coat as a sort of shield I approached the porter and placed the coin in his outstretched palm.
With a sigh of relief I muttered another brief prayer of thanks as the door closed behind the porter. Before I got into my sarong and inspected my belongings, I switched the light on and had a good look at myself in the mirror. I thought I had acquired a couple of wrinkles which I had not noticed earlier. The next morning, clothed and in my right mind, I thought my first duty as a loyal citizen of Lanka was to pay my respects to our Ambassador, who happened to be Mr R.S.S.Gunawardene. (He was knighted later.)
R.S.S. is a genial man, full of savoir faire, and according to people who know something about these things, he is said to ooze with sex appeal. One or two ladies of my acquaintance have confirmed this. The Ambassador promptly invited me to lunch and over a simple rice and curry meal, which included a hot sambol a mellun and papadam, he held forth for two hours.
R.S.S. is a delightful talker, full of strange stories about people, especially politicians. Having been a schoolmate of S.W. R. D.Bandaranaike, Herbert Hulugalle, Arthur Ranasinha, R.S.de Saram, E.B.Wikramanayake and other celebrities, he talked incessantly about their strengths and their weaknesses, especially their weaknesses, which of course were much more interesting than their virtues.
At the end of this entertaining luncheon dialogue, I tried to recall my contribution to the conversation and found that I could write what I had said on a picture postcard. My other distinguished Ceylonese host was Mr. William Tennekoon, the bashful banker. He was quite a contrast to the ebullient R.S.S. In his own quiet way he could be pungent in his assessment of men and matters, and his charming wife sometimes broke into a smile of reproof whenever she thought he was exceeding the bounds of discretion.
During the first few days I spent in Washington DC. I was introduced to an American couple who had spent many happy days in Ceylon. The husband had served in the Navy during the War and he had no doubt that Trincomalee had the finest harbour East of Suez. After the second cocktail, he told me that he had no doubt that the Ceylonese were the most lovable people in the East. After the third cocktail, he confessed that the women of Ceylon were the most beautiful in the world, a statement which brought a faint blush of jealousy to the cheeks of his good-looking wife who was sipping a sherry, and thought that the time had come to sit to dinner.
Nobody knows what confessions he would have made after the fourth cocktail. His name I believe, was MacMillan, and of Scottish extraction. Even his wife called him Mac. He had a big fund of yarns, mostly about Scotsmen. One of his best he said, was also the favourite of President Taft, whose ancestors came from England.
A Scotsman, he told me, went out one bitterly cold day on the golf links, did the whole 18 holes, tramped back and at the end of it all gave his caddy a miserable tip of three pence.
The caddy looked hard at the man and said:
“Do you know I can tell your fortune by these three pennies?”
The man shook his head, as if he entertained a doubt, and the caddy stared at the first penny.
“This first penny,” he said, “tells me that you are a Scotsman. Right?”
“The second tells me that you are a bachelor.”
“And the third tells me that your father was a bachelor too.”
With that Mac gulped down his final liqueur, roaring with laughter, and brought the curtain down on a most enjoyable evening.
(From The Good At Their Best first published in 1979)
Cardinal appeals to Pope to solicit aid for Sri Lanka
Apportioned Seats in Parliament and the “National List”
Ceylinco Life now offers cash rewards to Family Savari winners
‘Dates have the highest sugar content to fight Coronavirus’
U.S. Congress to probe assets fleecing by US citizens of Sri Lankan origin
Sunday Island 27 December – Headlines
News7 days ago
Economic crisis: Govt. MPs slam Cabinet, Finance Ministry
Features19 hours ago
When will the Gang of Four be held accountable for their irresponsible decisions?
News2 days ago
Fuel crisis: Key CPC facility opened for VIPs, friends as public transport shrinks
News3 days ago
HRCSL: No prisoners were used in 09 May attacks on protesters
News5 days ago
Sajith says ‘super’ PM has failed, SJB ready to take over govt.
News7 days ago
LIOC seeks to expand operations
Opinion7 days ago
News2 days ago
Resignation of Prez, PM prerequisite for resolution of current crisis – Direction Sri Lanka