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Editorial

Dark world hidden wealth exposed

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Tuesday 5th October, 2021

The Pandora Papers investigation into about 12 million documents leaked from financial companies around the globe has shaken the world. A large number of global elites have been exposed for their questionable financial deals that helped ring-fence their wealth and evade taxes with the help of offshore companies. Among them are some of the world’s most influential people including political leaders, billionaires and others. Journalists numbering more than 600 from 117 countries have been analysing the data obtained by the International Consortium of Investigative Journalists (ICIJ) in Washington DC.

The Pandora Papers investigation has already made many big names squirm and they include former British Prime Minister Tony Blair and his wife, Russian President Vladimir Putin, and Jordan’s monarch King Abdullah II. Russia has vehemently denied Putin’s involvement, insisting that neither he nor any member of his inner circle has been named. As for Sri Lankans, former Deputy Minister Nirupama Rajapaksa and her husband are among those named in the Pandora Papers for running shell companies and acquiring properties overseas; they have reportedly refused to answer questions posed by the ICIJ, but their alleged involvement in the controversy is sure to become a huge political issue here, given their links to the ruling family. This revelation could not have come at a worse time for the government facing multiple crises and various allegations.

It is not possible to figure out the exact amount of funds stashed away in tax havens worldwide, and therefore we have to settle for ballpark figures. The ICIJ is of the view that the amount could range from USD 5.6 trillion to USD 32 trillion. The International Monetary Fund has said the losses that tax havens cause to many countries around the world could be as high as USD 600 billion a year. The existence of the offshore world aggravates global poverty and inequalities because it deprives the developing nations of some of their tax revenues. Besides tax dodgers and corrupt politicians who have amassed colossal amounts of ill-gotten wealth, criminals such as drug lords and terrorists have also benefited from tax havens, where they park their illegal funds. Strangely, none of the developed countries that promote transparency and fight against the scourge of black money, have taken any action against the tax havens. The practice of opening companies in tax havens is considered unethical rather than illegal!

Meanwhile, Sri Lanka has been warned of the possibility of a money-laundering haven coming up off its west coast. In April, US Ambassador to Sri Lanka and the Maldives, Alaina Teplitz, cautioned that Sri Lanka might face the unintended consequences of ‘nefarious actors’ who may try to misuse the Colombo Port City’s easy business rules as a permissive money laundering haven. Prejudiced as the US Ambassador may be, owing to America’s aversion to Chinese projects anywhere in the world, her warning should not be taken lightly, and extreme care should be exercised to prevent the Port City from becoming a tax haven like Monaco.

Worries that the Pandora Papers probe has caused to those who possess enormous amounts of hidden wealth in tax havens are far from over. Journalists continue to sift through the leaked documents, and many more startling revelations are expected in time to come. Many wealthy Sri Lankans, especially politicians, must be having sleepless nights, fearing the prospect of their shady deals, too, being exposed.

Prime Minister of Pakistan Imran Khan has rightly undertaken to probe all Pakistanis named in the Pandora Papers. Hundreds of Pakistanis have reportedly been exposed for having offshore accounts. Among them are some members of PM Khan’s Cabinet.

Pressure should be brought to bear on the government of Sri Lanka to emulate PM Khan and conduct investigations. Transparency International Sri Lanka has already called for an investigation. It is up to the Opposition to pressure the government, but the question is whether the hands of its top guns are clean enough to do so. Whatever the government’s or the Opposition’s response may be, the Sri Lankan public are now in a position to guess where the money stolen from them has ended up.



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Editorial

Of that ‘hug in the ring’

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Tuesday 26th October, 2021

There is an uneasy truce between the government and the warring teacher-principal trade unions. What looks like a hug in the ring, however, is deceptive; the two parties to the current dispute are actually in a clinch, which they are likely to break from to resume throwing killer hooks at each other, given half a chance.

The government started reopening schools last Thursday, as previously announced, but most of the protesting teachers and principals did not report for work on that day. Instead, they resumed work yesterday. They obviously sought to teach the government a lesson by keeping school attendance extremely low on Thursday and Friday. Whether their action had any impact on the government is doubtful, but students lost two more days of schooling, as a result. Both sides to the conflict would have the public believe that they are trying to safeguard the interests of students, but they are obviously driven by self-interest.

One only hopes that schools will remain open, and the protesting trade unions and the government politicians, most of whom should be sent back to school, will work out a compromise formula. Losses that students and the country have already suffered due to prolonged school closures caused by the pandemic are unprecedented, inestimable, and irrecoverable, and, therefore everything possible must be done to ensure that schools will not be closed owing to a teachers’ strike.

Teachers and principals have warned that they will intensify their trade union action unless their demands are granted. The government has undertaken to solve their salary issues through Budget 2022, to be presented to Parliament next month. The rectification of teachers’ and principals’ salary anomalies is likely to make other categories of state employees resentful. The public sector salary structures are very complex; they are in fact a minefield. A decision is said to have been taken to make teaching a closed service, as a way out, but it is too early to say whether the proposed solution will be acceptable to others.

General Secretary of the Ceylon Teachers Union Joseph Stalin has said teachers will confine themselves to teaching, and will not take part in school cleaning campaigns and other such activities. Teachers and principals carry out various tasks besides teaching for the benefit of their students without expecting or receiving anything in return, and their voluntary work should be appreciated. But, sadly, teaching is exactly what a considerable number of teachers do not do properly. Complaints abound that many teachers and principals neglect their duties; almost all students are dependent on supplementary education to prepare themselves for competitive examinations. The proliferation of private tuition centres throughout the country is an indictment of government teachers. This is something the teachers’ unions which are all out to win their demands ought to take cognisance of. They should ensure that each member of theirs earns his or her keep without being a burden on the taxpaying public.

Meanwhile, the government is sure to print more money to meet the protesting teachers’ and principals’ demands, causing inflation to rise further. An increase in the public sector salary bill, or other state expenses, generally leads to tax hikes. This will be a double whammy for the general public already struggling to make ends meet. But the government will have to fulfil its pledge to teachers if schools are not to be closed again.

No reasonable person will grudge teachers—or any other category of workers, for that matter—better pay, but the latter will have to work harder and help straighten up the education sector which is in decline. The least that the protesting trade unions can do is to make teachers carry out their duties and functions properly to obviate their students’ dependence on shadow education to pass competitive examinations.

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Editorial

When haste leads to trouble

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Monday 25th October, 2021

Farmers’ protests against the prevailing fertiliser shortage are gathering momentum, but Agriculture Minister Mahindananda Aluthgamage insists that there are enough stocks of fertiliser in the country. He says the protests are politically motivated. It is doubtful whether anyone will buy into his claim. There would have been no such protests if fertiliser had been freely available. The possibility of agrochemical companies having a hand in protests cannot be ruled out, but what actually fuels the street demonstrations is the anger of farmers who have suffered crop losses due to the fertiliser shortage.

The incumbent administration implements its policies exactly the way the country’s war on terror had been fought prior to 2006; governments launched much-publicised offensives against the LTTE only to call them off owing to heavy losses the military suffered. The SLPP government has launched several blitzkriegs, as it were, to achieve some policy objectives, during the past several months, but without much success or, in some cases, with disastrous consequences.

The overuse of agrochemicals has been a ‘grave’ problem. What is given free of charge is often overused or wasted, and the previous Rajapaksa administration’s wisdom of giving a fertiliser subsidy stands questioned. Most farmers used to apply agrochemicals liberally even to loosen soil before harvesting manioc. The practice of spraying insecticides on vegetables ready to be harvested has been prevalent among most cultivators. President Gotabaya Rajapaksa has rightly pointed out that water in streams and wells adjacent to paddy fields cannot be used for drinking due to agrochemical runoff or leaching. The unregulated use of agrochemicals has also led to ecological disasters; it has killed insects and birds that prey on pests such as rats, and mosquito larvae. The owl and the dragonfly are among the worst affected species, according to environmentalists. Soil cannot recover due to the repeated application of overdoses of weedicides, pesticides and chemical fertilisers. These issues must be tackled, but systematically. It was a mistake for the government to ban all agrochemicals overnight. It should have taken steps to reduce the use of agrochemicals while introducing organic fertilisers and educating the farming community on the advantages of the proposed changeover. That way, it could have won over farmers because they want to keep production costs low and lead a healthy life. The fertiliser blitz, as it were, has backfired with farmers taking to the streets, and wily politicians cashing in on their frustration to gain political mileage.

Traders at the Manning market are complaining of a decrease in vegetable supplies, and they blame it on the agrochemical ban. If this claim is true, then it can be argued that the market situation presages serious problems for both the public and the government. Shortfalls in supplies will send vegetable prices through the roof, making it even more difficult for the people to make ends meet.

The country is in this mess because the government, in its wisdom, telescoped its organic fertiliser programme, which should have been phased over a couple of years. Even some Agriculture Ministry higher-ups have admitted that the sudden fertiliser ban was based on wrong advice, according to newspaper reports. Former President Maithripala Sirisena has gone on record as saying that he and the SLFP urged the powers that be to tread cautiously instead of banning agrochemicals overnight. Their advice went unheeded, he has claimed. Their SLPP counterparts are raking them over the coals for having said so. Sirisena and his party may be flayed for many things, but they have got it right on this score, and the government worthies had better stop bashing the SLFP and make a course correction.

One cannot but appreciate President Rajapaksa’s initiative to promote organic agriculture like his renewable energy programme. But it should be carried out gradually in a sustainable manner. If only the President and his advisors heeded the oxymoronic adage, festina lente— ‘make haste slowly’.

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Editorial

Prohibiting cattle slaughter

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The prohibition of cattle slaughter which has been bruited around for many moons was announced last week with our stablemate, The Island reporting on its front page that the government had approved a ban on cattle slaughter. This subject also made news some weeks ago but was laid by, possibly out of concern of hurting Muslim sentiments. Muslims generally are beef eaters and for as long as living memory serves, and probably much longer, they have controlled the beef and mutton stalls in Municipal and other markets. Most butchers belong to that community and previous efforts to ban cattle slaughter has been strongly resisted by Muslims.

Although Sri Lanka is a Buddhist country and Buddhism frowns on the taking of life, most Buddhists are carnivorous. True many Buddhists do not eat beef but are quite happy to eat mutton (actually goat meat in this country), chicken and fish. Many of them accept in their minds and hearts that consuming fish, flesh and fowl run against the tenets of their religion, but they lack the will power to give up their carnivorous ways of pandering to their senses. Not eating beef, of course, has cultural roots. Cattle serve man as draft animals and help us to till our fields and cows give us milk. So how can we as claimed Buddhists eat beef? In India, the vast majority of the Hindu population is vegetarian and the cow is a sacred animal. Many non-vegetarians here say that had they lived in India, it would have been easy to convert to vegetarianism.

The report we quoted in our opening paragraph, though stating that government had approved prohibiting cattle slaughter, did not say that beef eating was being prohibited. It has already been announced that import of beef will be permitted. Last week’s announcement merely said that the Legal Draftsman has completed amendments to certain Acts and Ordinances including the Cattle Slaughter Ordinance No. 9 of 1893, Act No. 29 of 1958 concerning animals, Sections 252 and 255 of the Municipal Councils Ordinance and Ordinance No. 15 of the Urban Council Act of 1987. It added that the Attorney General had certified that these Bills did not clash with the Constitution.

Given the government’s current foreign exchange-strapped situation, how much money will be available for beef imports? That is anybody’s guess. Will it be possible to procure from abroad quantities of beef now consumed by ordinary people at prices they can afford? We have our doubts. Beef and other exotic meat and fish are already imported to the country. The finest Australian beef, lamb, salmon and what have you are on the menus of top-end restaurants in posh hotels and elsewhere – of course at a very high price. They can also be purchased at gourmet food shop and delicatessens although only the very rich patronize such establishments. We are struggling to revive our tourism industry on which very heavy investments have been made and non-availability of epicurean cuisine in the menus of existing classy hotels and restaurants will obviously hinder that not only short term but also in the medium and longer terms. We live in a largely non-vegetarian world and even in India, home to a very large population of vegetarian Hindus where cows are held as holy, cattle slaughter is not prohibited.

Animals as much as humans have a right to life and that is unarguable. Buddhists exhort ‘may all beings be well and happy’ but too many Buddhist live lives which makes that impossible. Goats, pigs, fish, chicken etc. have as much right to life as humans or cattle whose slaughter is to be prohibited. The moral argument against killing cannot be enforced in a lopsided way where some are more free than others although that’s the prevailing order. Hundreds of thousands of our people depend on fisheries for their livelihoods. Is it practical to enforce a ban on fisheries? President Premadasa, influenced by a Buddhist monk he held in the highest regard, imposed a prohibition on state participation in the inland fisheries industry. Large investment made thereon was jettisoned but with years passing, the restrictions were relaxed and the state is once again active in this field. There is little doubt that most dairy cows, once their milk providing days are over, end up with the butcher. So also chickens when they do not lay enough eggs to be economically viable. Also, broiler chickens are widely farmed for their meat. There is no escaping the reality that enforcing a ban on cattle slaughter will be fraught with immense practical difficulties. We will have to wait and see whether these will be overcome and the intention implemented.

Ironically, it was only at the end of last year when it was reported that Asia’s largest meat processing plant was opened in the Katunayake Export Processing Zone by no less than Minister Namal Rajapaksa with other political VIPs in attendance. Social media seized on this in the context of government’s expressed intention on prohibiting cattle slaughter. That report was not accurate. While a large meat processing facility had in fact been opened and is now running in the Katunayake EPZ, it is certainly not Asia’s (nor South Asia’s) largest. It is an export targeting value adding project which, while using some imported beef (though not much), was working mainly with local chicken meat and also has plans for a fish processing factory . The promoter is taking advantage of fiscal incentives for value addition to develop an export segment of his meat processing business. All this amply demonstrates the prevailing hypocrisy in Sri Lanka’s methods of governance. Examples are too numerous to mention so do take your pick.

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