Features
Events leading to the signing of the Indo-Lanka Agreement
JR tells Rajiv “We can forgive but we cannot forget”
(Excerpted from volume ii of the Amunugama autobiography)
It was at this dismal stage that a new development in the long drawn out negotiations emerged. Due to his cricketing contacts Gamini became close to N Ram of the Kasturi family controlling `The Hindu’ newspaper which though originating in Madras had an all-India coverage with a strong presence in New Delhi. This was later seen when ‘The Hindu’ destabilized the Rajiv regime with their ‘scoop’ on the Bofors scandal.
The Kasturis were Brahmins who were on top of the South Indian social register. In their background correspondence Ram and Gamini had the concurrence of Rajiv Gandhi, if not of the Indian foreign policy establishment. It is said in JRJ’s biography by Wriggins and De Silva that at this stage the LTTE through back channels had indicated that they were in favour of an agreement if the Northern and Eastern provinces were joined. A new element of an Indian guarantee of an enforcement of an agreement between the two parties now entered the scene.
As Bernard Tillekeratne has written “Ram’s letter of 12th June 198 7….. outlined a set of proposals on the important precondition that India would be the mediator in all the discussions and even more importantly that it would underwrite the implementation of any agreement reached. This letter was one of the first positive developments that culminated in the Indo-Lanka Accord of 29th July 1987”.
Regarding the allocation of powers to the Provincial Councils JRJ cut the Gordian knot by suggesting that we adopt ‘in toto’ the provisions of the Indian constitution regarding the devolution of powers to the States. Thus, there would be three lists as in India – the powers of the Centre, the powers of the Provincial Councils and a concurrent list in which certain powers were exercised by both the centre and the periphery.
Earlier the discussion centered on devolution only to the North-Eastern Provincial Council. JRJ decided that all areas in the country should be brought under the second tier scheme. Once this formula was accepted the difficult task of ‘selling’ it to the Sinhala and LTTE protagonists were undertaken by the two parties. The Indian operation was undertaken by Dixit and his political secretary in Colombo. After his deputy met Prabhakaran and his advisors in the Vanni several times, though it was later disputed by the LTTE, Dixit informed New Delhi that he had succeeded in persuading the LTTE leaders to lay down their arms once the agreement was signed.
JRJ was for the immediate signing of the accord as he knew that opposition would build up not only from the SLFP and JVP but also from factions within his own Government. It became clear that Premadasa was against such an agreement and was being set up as a virulent opponent of India with Athulathmudali’s encouragement. Once I was asked to bring some documents to the Cabinet room while Cabinet sessions were in progress. As I climbed up the stairs I ran into Prime Minister Premadasa rushing down the steps in anger. However there was no one following him to cool him down as they usually do in those Cabinet dramas.
Gamani Jayasuriya who represented the Sinhala Buddhist lobby resigned in protest. During this time I associated with Gamani Jayasuriya as we were both members of the Governing Council of CNAPT (Ceylon National Association for the Prevention of Tubercolosis)in which my friend of University days, Fonseka, was secretary. Fonseka, who was a well-known astrologer, had predicted that Gamani would be the Prime Minister when this fracas was over. After resigning Gamani would visit Fonseka almost daily to check whether his prediction was coming true. In the event it did not happen and Gamani died suddenly, a very disappointed man. All this showed that the time was fraught with confusion and society was in turmoil which was to break out in a long period of terror.
Indo-Lanka Accord
I was one of the few participants who was present at President’s House when the Indo-Lanka accord was signed in the afternoon of July 29. I accompanied Gamini Dissanayake for the signing of the accord by Rajiv Gandhi and JRJ. Rajiv was accompanied by Foreign Minister Narasimha Rao and advisor Natwar Singh. On our side, Foreign Minister Hameed, Hurulle, Minister of Buddhist Affairs, Minister Devanayagam representing the Tamils and the Eastern Province and Gamini Dissanayake were present. The Prime Minister Premadasa, Athulathmudali and, surprisingly, Ronnie de Mel boycotted the meeting.
It was clear that both Rajiv and JRJ looked on Gamini as the coming man in Sri Lanka. In JRJ’s eyes his search for a loyal follower for future UNP leadership was focused now without a doubt on Gamini. When all the signing was done Rajiv went up to a mike set up in the spacious garden and said a few words of conciliation. All eyes were on JRJ when he ambled up to the mike cool as he could be under the circumstances, and gave a mini lecture on Indo-Sri Lanka relations. He ended up by looking Rajiv straight in the eye and, distilling in words the agony that India had imposed on him by their derailing of his efforts to remake Sri Lanka, said to India; “We can forgive but we cannot forget”. He then led Rajiv on foot to his office in President’s square for a no holds barred Press Conference presided over by the two leaders.
This Press Conference was a historic one. The whole of Colombo was shut down and there was an eerie silence in the administrative square which housed the President’s office. The area was guarded by a strong police contingent. Only a few hours before, the armed services had evicted a large contingent of protesters led by Bhikkhus and the SLFP, who had staged a sit in near the Fort Railway station. Mrs. Bandaranaike herself had been present and had been bundled out by the Police adding to the violence that was unleashed by UNP goons against the protesters who were non-violent.
We could hear the police sirens from the battle grounds in the Pettah. Later we heard that about a dozen protesters were killed. There were reports that gangs of protesters were approaching Colombo city from the suburbs. JR appeared to be unfazed before the media but I knew that he was worried by the rising violence which was passing from SLFP control to the violent hotheads of the JVP. JRJ dominated the press conference with his short introduction and the taking of questions from the global media.
When asked by the press as to the delay in reaching an agreement he blamed himself He said, “It was a lack of courage on my part, a lack of intelligence on my part, a lack of foresight on my part”. It was a bravura performance rarely seen in modern politics. Rajiv looked on stunned by JRJ’s candour. The press then asked him ‘who else’ hoping to cast the net wide. JRJ replied with a smile ‘the media’ drawing a laugh from Rajiv and the hard-bitten journalists who had come to cover the historic event.
Looking back this conference was the biggest event dominated by JRJ during the last days of his regime. He spoke bravely when the country was in flames and his own fate was in the balance. From now on he was put on the defensive by the JVP, supported by the SUP, which unleashed a violence in the South which could not be contained by him and was to spill over to the Premadasa era till the JVP leaders were physically eliminated in 1989. Sri Lanka entered an era of uncertainty and social disruption which blighted the legacy of President Jayewardene which held spectacular promise in its first years. The monolithic UNP which held sway earlier was fragmented and it took all the leader’s skills to even keep it together and pass the baton on to Premadasa. But on that day the future was uncertain and posters threatening to ‘Kill the old man’ began to appear all over the country. An attempt was made on Rajiv’s life by a JVP indoctrinated naval rating and two Indian destroyers steamed into Colombo harbour to show that India will not stand idly by. It was a time of a national tragedy and all eyes were on the implementation of the Accord. The violence unleashed by the JVP compelled JRJ to ask Rajiv for the induction of the Indian Peace Keeping Force [IPKF] which was the first time after independence that a foreign military force was stationed in strength in the country with their own command structure and tasks which were identified by their own leaders.
The President could not deal with the military situation in his own country as he could not do battle in both the North and South of the country at the same time. It must be mentioned here that our military top brass concurred with this decision though they were unhappy to be ‘confined to barracks in the North’. This was particularly so because the Jawans’ who were flown in from South Indian bases were of poor quality.
On a visit to Katunayake I saw them emplane for the North from there. Sonic were dragging well fed goats with them, obviously for a tasty ‘mutton curry’ in their camp. Others were crowding the duty free shop buying everything available on their payday. Though they were under orders to confine themselves to the Northern and Eastern theatre, their intelligence had not indicated that Trincomalee district was multi-ethnic. Due to the activity of the IPKF and the LTTE and the enforced inactivity of the Sri Lankan army, the Sinhalese and Muslims of the East started to stream south for safety, adding more pressure on JRJ who could not depend on Premadasa or Lalith to support him. Only Gamini Dissanayake stood by him and I shuttled between ‘Braemar’ at id Dixit’s residence to seek information on the plans of the IPKF, since the chain of command was broken. To make matters worse, Dixit himself was not kept informed by the Indian Military in Trincomalee and he was getting alarmed and even threatening quit if he was being undercut by Delhi.
LTTE and JVP Reaction
According to the Indo-Lanka agreement the LTTE was to hand over their weapons to the Sri Lankan armed forces under Indian supervision. What actually happened was a farce which was enacted by the LTTE in violation of the agreement. The LTTE hid its heavy weapons and only offered a token pistol to the army. The other Tamil parties were ready to comply but had the legitimate fear that once they disarmed, they would be massacred by the LTTE. Government made plans for reconstruction of the North and East. The Indian High Commission under Dixit went on overdrive to please Rajiv but the media and the opposition in the South began a virulent campaign against the Indians. For the first time the hitherto monolithic UNP began to crack, largely because the PM and his coterie of MPs showed their displeasure in no uncertain terms.
Premadasa made his famous Angoda Temple speech criticizing the Accord and by implication the President. SLBC brought the tapes of the speech to me and asked for instructions regarding broadcasting it that night with the news. At this point news of my dilemma had reached Premadasa through his henchmen in SLBC.I got a call from Wijayadasa the PM’s Secretary, telling me that his boss was very disturbed by the delay and that I should not be guided by Gamini Dissanayake’s advice on this matter. It was a hot potato and I took the tapes and the DG of SLBC Anura Goonesekere to ‘Braemar’ for the President’s instructions. JRJ was worried and did not have his usual ‘sang froid’. He asked me what we should do and I suggested that we should use an edited version leaving out the venomous attacks. He agreed and we broadcast a watered down version that night.
That seemed to have satisfied the PM who had been informed by his henchmen that we would censor his speech ‘in toto’. Perhaps he was spoiling for a fight on this issue. JRJ on the other hand was very keen to retain the PM’s support at this crucial juncture. He was aware that the SLFP had dangled a carrot before Premadasa saying that the SLFP would back him and Mrs. B would not enter the fray if he sabotaged the Accord. It was a time of moves and countermoves and the Government which was designed to last forever and a day was on the edge of crumbling. Two Southern MPs who had ridden on JRJ’s coattails did not vote for the 13th amendment designed to give effect to the Accord. Another MP from the south who was considered to be a tough guy from Tangalle was murdered by the JVP on his way back from Colombo to his electorate.
The JVP under Rohana Wijeweera who was in hiding with his top leaders as his party was proscribed, launched a murderous attack on all those who supported the Accord, including the leaders of the left-particularly the LSSP, CP and the NLSSP who though advocates of revolution were ill prepared for political violence on this massive scale. While the LTTE had murdered left leaders of the North, the JVP followed suit by murdering leftists in the South. The CP which was active in the grassroots in the South and was a rival to the JVP was decimated.
An early indication of the ruthlessness of the JVP was the horrific murder of the popular student leader of the Colombo campus named Daya Pathirana who opposed their taking control of the student movement which was a power base for their politics. Another innovation of the JVP was the mass induction of young monks, particularly from the universities, as a cover for their political work and military operations. As De Silva and Wriggins have written, many of these monks made bloodcurdling threats which even embarrassed JVP members. As the encounters became even more violent some of these monks gave up robes and emerged as front line leaders of the party. Others, as I have described earlier, jumped ship by migrating to Europe where their supporters had infiltrated the new temples built by JVP oriented migrants in the hig cities.
Interlude
While the JVP and its allies stepped up their protests, the North saw a period of peace which was acclaimed by the international community. A relief and rehabilitation package was negotiated with international donors and inter district movement, particularly visits of Buddhists to Nagadipa, was encouraged. University administrators held their annual conference in Jaffna and we were able to arrange special railway trips from Colombo to Jaffna. Local and foreign journalists were encouraged to report from the North and business slowly resumed, particularly in respect of agricultural produce which was in high demand in the South. The situation was slowly returning to normal when several unfortunate events, some by design, upset the fragile peace. The first was the internecine conflict between the Tamil militants.
Many non LTTE groups became close to the IPKF and on occasion became their informers and proxies. At this stage the LTTE launched murderous attacks on the other Tamil parties partly because they had not given up their claim to be the ‘sole representative’ of the Tamil people and partly because the truce with the Sinhala forces enabled them to turn their attention to the rivals closer home who were being disarmed by the IPKF. The upshot was that ‘the short stay’ of the IPKF promised by Rajiv became a farce and they got bogged down in a disastrous war which finally led to the assassination of Rajiv himself. The LTTE was refusing to play by the Indian playbook and the country was slipping further and further into a cycle of violence over which nobody had control. This was a nightmare period for JRJ, who assailed in the North and South, had to confront dissatisfaction within his party ranks, led by the PM no less. Soon it became life threatening to the party leaders when an assassination attempt was launched by a JVP cadre who was a senior member in the party, inside Parliament itself The mistrust in the party had grown to such an extent that the PM was initially suspected of being one of the conspirators.
Assassination Attempt
While the UNP parliamentary group was meeting as customary in a committee room in parliament an employee opened a door to the room and lobbed a hand grenade into it. Without doubt the target was JRJ whom the JVP had built up as a hate figure. Luckily for the 81 year old President the grenade hit his desk and rolled away from him and exploded further away killing the MP for Morawaka, Abeywickreme. Lalith Athulathmudali was seriously injured and had to be rushed for emergency surgery. the Prime Minister was also injured but not seriously. According to the President he had been saved because the PM had pushed him under the table so that the shrapnel did not hit him. Within a short time after the attack I got a telephone call to say that the President wanted me to come immediately to the Army OPS Combine office in Flower road.
When I went there JRJ had just arrived with blood splattered all over his tunic. He was in shock and asked us what we should do? I had read much about the Kennedy assassination and told him that we had to immediately do two things. One was to ensure that there was no further attacks due from a wide ranging conspiracy and secondly to inform the country that he was safe and that the conspiracy had failed. He agreed and I sent for a Rupavahini camera crew and alerted the channels about an imminent announcement by the President.
JRJ wanted a few minutes to compose himself and faced the cameras in a live broadcast with the blood on his tunic seen clearly. He identified the attack as an assault on democracy and went out of his way to assure the public that the PM, though slightly injured, was safe. That took the sting out of the speculation that the PM had engineered this attack. It was a miracle that the President had survived but it added to his woes as a leader and encouraged some ministers, especially Ronnie de Mel and Nissanka Wijeratne to think of jumping ship. JRJ by shrewdly bringing in the PM as a victim ensured that the party would not be weakened further. The Thirteenth Amendment
Action now shifted to the 13th amendment which was to give legal effect to the provisions of the Indo-Lanka agreement. Challenges to it were launched by different opposing parties including the alliance of major opponents called the Mavbima Surakeeme Viyaparaya [MSV] which was led by Maduluwawe Sobhita. It was a powerful organization and with the JVP raising the ante with violence, the judgement of the full bench of the Supreme Court on the Constitutional amendment bill became absolutely crucial.
JRJ was confident of his two third majority in Parliament. But if it came to a need for approval in a referendum, the bill was as good as dead. Everybody was on tenterhooks while awaiting the verdict. Premadasa also realized at this juncture that he had gone too far. This was a period when, for the first time, JRJ and Premadasa were really estranged. With all the hostility to Premadasa in the party JRJ had stood by him and had given him his due. He remembered the time when he and Dudley had paid a salary to the up-and-coming Premadasa with their personal funds. Even at this stage he was loath to discipline the PM but he sent a clear message that he was annoyed by removing Sirisena Cooray from the Executive Committee of the party, together with Ronnie de Mel who had resigned from the Cabinet by then.
Premadasa then pulled back stating that he was willing to abide by the decision of the Supreme Court regarding the 13th amendment. This was because he had been assured by Raja Wanasundera who was a senior judge sitting on this very bench, that a referendum will become necessary. Raja was a close friend of M Fernando who acted as Premadasa’s emissary on this issue. But this tactic backfired because Justice Parinda Ranasinghe provided a majority to the verdict of the Bench of judges which held that a referendum was not necessary and that the amendment could be passed with a two third majority in Parliament. JR cracked the whip, and the Bill was passed in the midst of unprecedented security, when the MPs had to be bussed with an armed escort to Parliament and back to the heavily guarded hotel in Colombo which was booked for them. The PM true to his word moved the Bill in Parliament. But Colombo was like a war zone and the Government appeared to be tottering. This was a nightmare for JRJ, with his party officials being killed en masse and even some of his MPS like De Silva of Habaraduwa and Tikiri Banda of Galagedera being killed in a brutal fashion.
Features
Role of identity in the making and breaking of West Asian peace
The West Asian peace effort continues waveringly amid uncertainties. The world could be considered as having ‘some breathing space’ currently in this tangled situation on account of a dip in oil prices but whether such relief would be of a long term nature is left to be seen.
Meanwhile, some vital ‘details’ in the peace process are continuing to hobble it. One such factor is the nuclear issue. While US President Donald Trump is on record that Iran’s purported nuclear programme from now on will be monitored by the International Atomic Energy Agency (IAEA), this assertion is being denied by the Iranian authorities who indicate that Iran will be coming under no such regime. That is, Iran will be answerable to no one with regard to its legitimate right to defend itself.
Accordingly, an early closure to the nuclear question could not be expected and the furthering of peace in the region hinges on the principal sides being of one mind on the issue. Moreover, toll-free shipping through the Strait of Hormuz is proving to be a bone of contention between the warring sides.
However, perhaps going largely unnoticed in the Middle East region are identity questions of considerable magnitude that have stood in the way of the region making some headway towards a peace settlement and which would continue to undermine such a process going forward. Identity, or a group’s self conception, is by far the most intractable of the factors in the conflict and the main sides would do well to manage it effectively before long.
US Vice President J.D. Vance, as pointed out in this column last week, fired one of the first salvos in this regard in the current peace effort. He reportedly said: ‘Regional peace and stability includes stopping the funding of “terrorist organizations” .’ He probably had in mind the Hezbollah organization which is funded and armed by Iran but, needless to say, the latter would reject this statement out of hand because it does not see the Hezbollah as terroristic in orientation.
Accordingly, the tangled issue of ‘who is a terrorist?’ would recur to hamper the West Asian peace bid. An important corollary to this matter is that Middle Eastern militants would be branding US administrations as terroristic considering the humanly costly military interventions undertaken by the latter over the decades in the world’s war zones.
It is difficult to see the main sides taking up the issue of terror and arriving at a common understanding on the problem over the next couple of months in their peace deliberations but the unresolved question could be expected to be the proverbial ‘elephant in the room’ that could even wear the sides down. Accordingly, ‘quick fixes’ to the Middle East imbroglio would need to be ruled out.
However, paring down terror to its essentials, it needs to be found that in contemporary times it is identity and issues growing out of it that keep the question alive and render it intractable. In fact the problem should be seen as igniting and sustaining a multiplicity of conflicts world wide.
So pervasive are identity questions that they are seen by some as having played a role in leading to the recent resignation of Keir Starmer as UK Prime Minister. Among other things, the latter is seen as having been incapable of managing migration related issues besides falling short in strengthening domestic social cohesion.
Identity issues came to a head in the UK in the form of the recent anti-immigrant riots in Northern Ireland. Clearly, some immigrants continue to be seen as aliens and parasitic in nature in some parts of the UK by jingoistic elements. Thus is ignited anti-foreigner violence.
That said, some of the most laudable measures for the promotion of peaceful race relations are found in the UK today. The latter’s race relations legislation could be seen as constituting a model for the rest of the world and needs to be studied and adopted by particularly the global South where identity conflicts are rampant.
Unfortunately, racial amity is not being considered a priority by the Trump administration. Under the latter immigrants are being seen by supremacist whites as the archetypal ‘Other’ who should be violently shunned. Accordingly, social cohesion in the US too is being steadily undermined and stepped-up race hate in the country shouldn’t come as a surprise.
In the West Asian region, archetypal ‘Othering’ could prove particularly pernicious and destructive. It could lead to the unraveling of the current peace talks between the adversaries and needs to be addressed by them if the negotiations are to prove productive.
For far too long the West and Israel have been viewed as archetypal enemies by Iran and its supporters. On the other hand, Palestinian militants have been habitually seen by the Far Right in the US and by hard line Israelis as sworn enemies who are best eliminated. These seemingly unresolvable divides in the Middle East could bring down the present negotiatory process.
Even if the present round of mediated negotiations between the US and Iran lead to a substantive cessation of hostilities in West Asia, the divisive mindsets of the prime antagonists, that is, the US and its ally Israel on the one side and Iran and its supportive militant groups on the other, would need to be changed for the better if enduring peace is to be given a chance. That is, mindsets would need to be transformed on both sides of the divide from mutual hostility to mutual amicability. No doubt, a long-gestation process.
It cannot be stressed enough that those mediating in this long-running conflict, themselves need to approach peace-making with unbiased minds. It needs to be realized, for example, that Israel too has been ‘hurting’ badly in this conflict over the decades to the degree to which the Palestinian side has been victimized cruelly, dispossessed and divested of dignity.
Any negotiated peaceful settlement should seek to address this persistent mindset malaise as well and turn enmity into amicability. An equitable solution that addresses the lingering grievances of both sides could lay the basis for this process of ‘Turning Spears into Ploughshares.’
‘Land and Bread’ have been at the heart of the Middle East conflict over the decades or even centuries. An equitable solution should provide these assets in equal measure for both sides. There is no getting away from the ‘Two State Solution’.
Features
Central bankers live on Short End Street; Economic planners live on Long End Street
Long End Street is not a summation of Short End Streets. Eighteen short-term crises and no long-term growth in sight!
For quite some time, there has been no agency of government dealing with long-term economic and social policy questions. Nor have universities been of any help. There has been a National Planning Department in the Ministry of Finance but we have not seen any worthwhile reports from them. M. D. H. Jayawardena, in 1956, presented in Parliament the Six-Year Programme of Investment. Soloman Bandaranaike established a National Planning Council and a Planning Department, with Princy Siriwardena as its Director. They wrote the Ten-Year Plan, better known for its readability than its depth of analysis or policy content. Ten years or so later Dudley Senanayake established a Ministry of Planning and Employment with Gamani Corea (later of high international repute) as its Permanent Secretary. The Ministry was responsible for some useful analytical work and the development of a bureaucracy responsible for plan implementation. The latter was the work of a brilliant member of the Ceylon Civil Service, Godfrey Gunatilleke, who also worked in the Ministry. The major pre-occupation of the Ministry turned out to be the annual government budget and the management of direly scarce foreign exchange, all short term considerations. They set up a bureaucratic mechanism to evaluate capital expenditure in the government budget. The Ministry won plaudits for its Foreign Exchange Budget, some analytical wok on the economy, including population projections as well as education, in both schools and universities. As the 1970s wore on, planning earned a bad press and the new government of 1971 disbanded most of that and created a Department of National Planning in the Ministry of Finance, which survives to date.
A part of the purpose of this narrative has been to bring out that, all along, government has had no outfit of economists and sociologists whose job was to study long term changes in our society and the economy and in the rest of the world and propose solutions for consideration by governments. (A brilliant exception was the work on education, that was directed by Jinapala Alles, who had graduated in chemistry and was a fast learner and was at great ease with numbers. He was also an effortless leader of a small team of self-selected competent and enthusiastic public servants.) The government depended on the Central Bank for advice on long term development of the economy. Princy Siriwardena was seconded for service in the Planning Secretariat; similarly, Gamani Corea was from the Bank. Later, he was replaced with H.A.de S. Gunasekera, likely the most brilliant economics teacher in the University of Ceylon. He taught monetary economics, essentially short term. (His favourite economist Keynes famously wrote, “In the long run we are all dead”.)
When the Ministry of Planning and Employment was established in 1965, government plundered the Central Bank to staff it: Gamani Corea, R. M. Seneviratne, N. Ramachandran, Nihal Kappagoda and G. Usvatte-aratchi. Later, W. M. Tillekeratne and A. S. Jayawardena both long term employees of the Central Bank, were appointed as the chief economist of government. Jayawardena still later became the Governor of the Bank. Several other employees of the Bank, including J. B. Kelegama, P. B. Karandawela, P. B. Jayasundera worked at high levels in successive governments and that practice continued when Mahinda Siriwardena became the Secretary to the Ministry of Finance when Anura Dissanayake became the Minister of Finance. It is mysterious that the government saw no need for specialist advisers who would identify long term economic and social problems and solutions therefor, look out for markets and technology and warn of impending pitfalls, in contrast to our mighty neighbour which had a Planning Commission that handled long term problems and a Central Bank which had learnt to handle masterly, monetary problems.
Pitambar Pant, Montek Singh Ahluwalia, Manmohan Singh, I. G. Patel and Raghu Ram Rajan were most distinguished economics policymakers and central bankers. Japan benefited greatly from the work of MITI. So did Korea from its counterpart. This is not to argue that had there been an outfit of that sort, Sri Lanka would now be rich but to warn that the Central Bank is neither equipped nor fit to fight those battles. If you scan the Central Bank Act of 2023, you will find stabilisation the most frequently recurring theme. Clause 6 reads ‘The primary object (objective?) of the Central Bank shall be to achieve and maintain domestic price stability.’ The most generous reading that the Bank may have anything to do with economic development is in Clause 6 (4) ‘In pursuing the primary object (objective?), the Central Bank shall take into account, inter alia, the stabilisation of output towards its potential level.’ Lawyers may have a field day with that and economists may beg for its meaning.
Amarananda Jayawardena was the last Governor of the Central Bank who had understood that the central bank was equipped to handle short term problems and that not always valiantly, and that it had neither the tools nor the resources to plan and engineer long term development. As Governor, he did not speak for the government on long term economic and social problems, although prior to assuming duties as Governor of the Bank, he had been the chief economist of the government. Jayawardena knew all too well the nature of the tools and the resources he had and how far he could confidently aim and shoot. It was simply silly to produce a Five-year Road Map (no matter how colourful the accompanying graphics), when a central bank mainly used transactions in the short-term financial assets market to move interest rates and the demand for money. The Bank of England, for most of the 20th century, used Commercial Paper with two ‘good names’ at its Discount Window. Short-term and long-term rates of interest, normally, behave in a predictable relationship, although occasionally, and in volatile times, that relationship may become inverted. (I am not well read on recent Fed and the Riks Bank market operations.)
The economists at the Central Bank are experts in monetary policy and are rarely knowledgeable about economic growth. An exception was S. B. D. de Silva and he found writing a half page note to the Centra Bank Bulletin (monthly) stultifying. He left the Bank quite young and continued studying economics until the very end of his life. As undergraduates they may have read on economic growth and development but as professionals in the central bank, it is unlikely that they kept working on problems in that area. They may also have learned, some time, that there has been no central bank credited with spearheading economic development in any country. Therefore, to pretend that they can advise the government on economic planning, is a hobby which they would be wise to desist from.
We did a splendid job of saving our new born children and their mothers as indicated in low infant mortality and maternal mortality rates. We scored an even more resounding victory in educating all our children. If we have any claim to any civilizing missions in the 20th century, these two stand out. Beside them, we have been mostly failures. The economy has advanced only laggardly. It has miserably failed to exploit excellent opportunities to sell in burgeoning markets, output employing a healthy and educated labour force. Japan, South Korea, China, Vietnam, south India, Ethiopia, Rwanda and several other countries, all (except Japan) late comers to the game compared to Sri Lanka, succeeded in doing just that. It is wrong to blame governments alone for poor economic growth, as many do. Most economic activity in this country is run by the private sector and leaders there have made poor use of opportunities.
When ministers of government and its employers collect bribes, private sector persons pay bribes. The markedly rapid economic growth in Andhra Pradesh, Telangana, Karnataka, Tamil Nadu and Keralam and poor growth in Madhya Pradesh, Uttar Pradesh, Bihar and many others in the north east are under the same central government dispensation, sharply pointing to differences in the quality of business leadership in the two groups. ‘Big business’ here run betting shops, supermarkets, hospitals, import and market household equipment, banks and insurance companies and, most ambitiously maintain construction companies. (In the widely watched IPL cricket matches 2026, Sri Lanka advertised regularly a Betting Centre!) Tourism in this country is the business of small-scale enterprises with low productivity. The ubiquitous kade with a stock-in-trade of less than one hundred thousand rupees, borrowed from a relative or a friend, is a sign of rampant unemployment and not of budding entrepreneurship. When you go to consult a doctor in a private hospital in Colombo and wait endless hours, count the number of men and women employees idling, supervised by a proportionately large number of idling supervisors. Where are the large-scale manufacturing and service companies, selling the world over, where economies of scale abound in the 21st century? So far as I recall, there has been no Initial Public Offering (IPO) of shares in the Colombo Stock Market during the last 7 years. Nor have multinational companies established here any large factories or offices.
Is the air we breathe deathly to enterprise?
by Usvatte-aratchi
Features
A Requiem for Keir Starmer rule
By the time Sir Keir Rodney Starmer resigned, polls showed that he had become the least popular Labour Prime Minister in living memory. His fall was all the more striking because his political beginnings had once suggested a very different trajectory. As a teenager in the Labour Party Young Socialists, and later as editor of the Marxist journal Socialist Alternatives, he had stood firmly on the radical left. As a human rights lawyer he opposed the illegal invasion of Iraq, earning a reputation for principle and moral clarity.
It was this early radicalism that his supporters later weaponised, presenting him as a unifying leftwing figure in the aftermath of the coup against the Labour Party leader Jeremy Corbyn. The right-wing of Labour, having spent years undermining Corbyn (including through a coordinated campaign that framed him, falsely, as anti-Semitic) found in Starmer a vessel through which they could reclaim the party while reassuring the membership that continuity with the Corbyn surge remained intact.
In his resignation speech, Starmer claimed to have inherited a politically, morally and financially bankrupt Labour Party. Yet the record shows that Corbyn had revived the party’s grassroots, drawing tens of thousands of new members back to a party embodying the tradition of Keir Hardie. The oligarchy closed ranks against this leftist heavyweight, using Starmer and the Labour right wing as their weapon. Starmer’s “Changed Labour” was not a renewal but a repudiation, embracing the very Thatcherite revisionism that had hollowed Labour out in the first place.
A Britain battered by decades of neoliberal restructuring formed the backdrop to Starmer’s rise. The cumulative effects of Maggie “milk-snatcher” Thatcher’s programme, deepened by Blair, Cameron, May, and Johnson, combined with the convulsions of Brexit to produce a profound economic, social, and political crisis. The Conservative Party imploded under the weight of its own contradictions. Starmer, offering managerial calm, an a Corbyn-lite manifesto, rode the wave of Tory collapse to a landslide victory.
But once in office, he revealed himself as a Blairite in sombre tones: a Thatcherite in Labour clothing. Within weeks he slashed winter fuel payments for pensioners, inaugurating a harsh antiworkingclass agenda. He embraced the Israeli government even as it carried out genocide in Gaza. The former human rights lawyer now used antiterror legislation to suppress dissent, particularly protests against the genocide. His immigration rhetoric, invoking an “island of strangers,” echoed the poisonous cadences of Enoch Powell.
Throughout his premiership he remained pofaced, showing little emotion even when forced into humiliating Uturns by public outrage. He displayed no visible sorrow at the mass killing of children in Gaza. Only at the prospect of losing office did he appear moved. He was, in the words of Saki, a man with “the soul of a meringue,” a mediocrity whose obedience to the oligarchic class and to Zionist backers embodied what Hannah Arendt called the banality of evil. His legacy – and that of the Tories who preceded him – is a nation distrustful of politicians of whatever hue, open to the pseudo-anti-elite, deception of the billionaire-backed racist far-right
His resignation leaves Britain at a crossroads – will it follow the fascistic path of Nigel Farage’s Reform Party, or will it go down the green-red road of Zach Polanski and Corbyn? Even replacing Starmer with the newly-elected Andy Burnham will only provide more-of-the-same Tory policies – Burnham went on record saying his first foreign visit as Prime Minister would be to Israel. These are the same policies that created a visceral hatred of Starmer and opened the gates for Reform’s surge.
When news of his resignation broke, a friend told this writer that the one who had engineered the exit of Jeremy Corbyn had been unable to complete two years in office. He added, ‘Rajakam kalath kalakam palade”-– even if you reign, your deeds will bear consequences.
And, so ends the Starmer era, not with the dignity of a statesman, but with the hollow thud of a project built on betrayal, opportunism, and the abandonment of the very principles he once claimed to uphold.
by Vinod Moonesinghe
-
News7 days agoCreditor receives USD 2.5 mn as Lankan public bears loss from theft of Treasury funds
-
News6 days agoCreditor not yet paid
-
News6 days agoConsumers bearing 22% tax burden despite 18% VAT claim: Dr. Harsha de Silva
-
Features5 days agoNanda Pethiyagoda Wanasundara as three generations of family saw her
-
Features4 days agoSri Lanka developing independent hydrographic capabilities
-
Opinion7 days agoSriLankan Airbus struck by lightning
-
Editorial5 days agoFuel crisis: Beyond price debate
-
Latest News4 days agoSooryavanshi thumps fastest List A fifty as India A win tri-series

