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Editorial

Forex woes and silver bullet

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Wednesday 23rd August, 2023

Justice Minister Dr. Wijeyadasa Rajapakshe has said, in an interview with Hiru TV, that Sri Lankan exporters have parked an eye-popping USD 100 billion overseas. His revelation has coincided with media reports that Sri Lanka is struggling to pay back a 200-million-dollar loan obtained from Bangladesh.

The abolition by the Yahapalana government of tough foreign exchange control laws in 2017 has stood unscrupulous exporters in good stead; they have been able to carry out their sordid operations without fear of being arraigned on criminal charges.

The Exchange Control Act of 1953, which had enough teeth to deal with forex racketeers strictly, was replaced with the Foreign Exchange Act of 2017, and criminal offences under the previous law were converted into civil ones for the benefit of some crooks facing legal action.

When the new Act took effect, criminal cases that had been filed previously lapsed, and legal action was not instituted against the offenders anew for obvious reasons; about 30 persons including the kith and kin of UNP and SLPP leaders benefited. The abolition of tough foreign exchange control laws must have made a significant contribution to the rapid depletion of the country’s forex reserves and the current economic crisis.

Racketeers continue to go places. On 14 August 2023, we published a front-page picture of some government politicians attending a meeting, where President Ranil Wickremesinghe discussed ways and means of developing the gem and jewellery industry and urged those engaged therein to help boost the country’s foreign earnings at least by USD 2 billion a year. Worryingly, among the government politicians present was MP Ali Sabry Raheem, who had been nabbed by the Customs, about three months back, with 3.5 kilos of gold and 91 smartphones and fined for smuggling. That the Customs gave MP Raheem kid-glove treatment and lowered the fine due to a government intervention is public knowledge. Legal action should have been taken against him for violating foreign exchange control laws; he should have been made to explain how payments had been made for the phones and gold he was carrying.

How can a government, which unashamedly shields the likes of Raheem and involves them in export promotion activities, be expected to hold racketeers at bay and improve the country’s forex inflow?

If at least 10 percent of the amount of unrepatriated export proceeds which, the Justice Minister himself says, are lying in offshore accounts, could be brought back, that would the proverbial silver bullet; the country’s foreign woes would vanish in next to no time, and there would be no need for bailout packages that always come with geopolitical strings attached.

Will the government care to launch an investigation, based on its Justice Minister’s statement, with a view to bringing back unremitted export proceeds? Most of all, it must restore the strong foreign exchange control laws introduced in 1953 and stop protecting racketeers if it is serious about shoring up the country’s foreign exchange reserves.



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Editorial

Power of millers

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Saturday 9th November, 2024

Large-scale rice millers, wholesalers and retailers continue to flout consumer protection laws with impunity. All varieties of rice are sold above the maximum retail prices, and some of them are in short supply. The Consumer Affairs Authority (CAA), true to form, trots out various lame excuses for its inability to prevent hoarding and the exploitation of the public.

Successive governments have failed to serve the interests of consumers vis-à-vis the rice Mafia, which always has the last laugh. In fact, they have baulked at taking on the big-time millers and wholesalers despite their braggadocio.

The JVP-led NPP, too, came to power, making a host of promises, the prominent among them being its pledge to make the IMF bend to its will and renegotiate the ongoing bailout programme. The IMF is far from tamed, and, worse, the government has had to touch its forelock before the millers’ Mafia.

President Anura Kumara Dissanayake himself has said a cartel of millers has created an artificial shortage of rice and jacked up prices. He has not only identified the problem properly but also threatened stringent action against the hoarders of rice, besides promising to ensure that the Paddy Marketing Board (PMD) will purchase more paddy and maintain buffer stocks to stabilise the prices of rice.

It is everyone’s fervent wish that President Dissanayake will be able to fulfil his promise to make rice, especially the varieties thereof consumed by the ordinary people, freely available at reasonable prices. However, the question is whether the state-owned warehouses have the capacity to hold enough paddy stocks to stabilise prices. One hopes that paddy will not be stored in airports again the way the Yahapalana government did.

What needs to be done urgently is to trace and confiscate the illegally hoarded rice. This however will be an uphill task, given the rice millers’ political connections and the fact that many politicians and their parties have benefited from the millers’ largesse.

Some CAA officials were recently seen on television visiting the warehouse complexes belonging to the members of the millers’ Mafia and asking questions. They should not be so naïve as to think the millers will tell them the truth, the whole truth and nothing but the truth about paddy stocks. They must find out where the illegally hoarded paddy is kept and take legal action.

Whenever pressure mounts on the government in power to get tough with the large-scale millers, they float various stories to deflect the blame for rice shortages. An attempt is now being made in some quarters to lay the blame for the current shortage of ‘nadu’ rice solely at the feet of some brewers, who are accused of using rice to manufacture beer. This allegation must be probed, but investigations must continue to find out the stocks of rice held by the millers’ Mafia, which must not be allowed to get away with its illegal practices by claiming that the people cannot buy rice at the maximum retail prices to eat because they ‘drink’ it in the form of beer.

The candidates who contested the September presidential race have submitted their campaign expense reports. They must be made to reveal whether they have received any funds from the wealthy rice millers, who have politicians eating out of the palms of their hands while exploiting consumers and farmers alike.

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Editorial

Trump’s comeback

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Friday 8th November, 2024

Donald Trump has done the impossible. He has made a triumphant return to the White House against all odds. Even his ardent loyalists may not have expected him to secure a non-consecutive term like Grover Cleveland, when he refused to concede defeat following Joe Biden’s victory in the 2020 presidential election, which, he claimed, had been stolen, and went on to instigate his backers to rebel. His opponents said he had cooked his goose.

Trump, impeached twice, incurred much public opprobrium after his defeat. It was widely thought that his felony conviction in May would seal his fate as a presidential candidate. But nothing could stop him—not even an assassin’s bullet. He has been elected to the White House as a convicted felon! His sentencing is scheduled for 26 Nov., but it is very likely to be delayed either indefinitely or for four years. Other criminal cases against him will be closed. Thus, if he had not been able to re-enter the White House, he would have had to go to prison!

World leaders are falling over themselves to congratulate President elect Trump. They are saying nice things about him fawningly. The irony of President Anura Kumara Dissanayake congratulating Trump may not have been lost on keen political observers. Trump supporters marched on the US Capitol in 2021, and the following year a mob led by Dissanayake’s party, the JVP, tried to capture the parliament of Sri Lanka, albeit in vain. Both instances of rioting amounted to attacks on democracy and the rule of law, but Dissanayake and Trump have been elevated to the highest positions in their countries!

Trump’s second term is very likely to upend many US policies. Speculation is rife that he will order the deportation of immigrants, introduce import restrictions through tariff hikes, and deep-six key climate-related regulations. He is also expected to give the US education and health systems a radical shake-up. Protectionist trade policies of Trump, and his actions to create more jobs for Americans in the US itself are bound to adversely impact other economies. This is something the Sri Lankan leaders should take cognisance of; they would do better to have contingency plans ready in case of what is feared coming to pass.

Trump’s promise in his victory speech that there will be no wars for four years under his presidency must have struck a responsive chord with all peace lovers across the globe. If there is anything genuine about Trump, it is his commitment to creating a world without wars. However, the Washington-based hawks that thrive on the arms industry powered by the blood and tears of hapless victims of armed conflicts will not take kindly to his anti-war crusade. Whether the 47th POTUS will be able to prevail over the merchants of death remains to be seen.

Resolving the escalating Middle East conflict will be one of the biggest challenges for Trump. He says he will adopt a different approach to conflict resolution. President Joe Biden has the blood of Palestinians on his hands; the Democrats are thought to have a soft corner for Palestinians, but the Biden administration has been extremely generous in providing military assistance to Israel, which is destroying Palestinian lives. The Democrats find themselves in a contradiction. So do the Republicans, who are openly supportive of Israel. Trump is a true friend of the Jewish state, but he will not support wars. So, the Trump win could prove disadvantageous to the Netanyahu government, whose belligerence knows no bounds.

If it is peace in the Middle East that Trump seeks, he will be left with no alternative but to have a come-to-Jesus talk with Netanyahu, who is determined to reduce the entire Gaza strip to rubble and has apparently bitten off more than he can chew by opening several fronts. He will also have to pressure outfits such as Hamas and Hezbollah to agree to a peaceful solution.

Trump makes no bones about his antipathy towards NATO, which he has called a huge drain on US resources. He is likely to push for a ceasefire in Ukraine, but where to draw a line of control is going to be a big problem because Russians have captured swathes of land in Ukraine. The Ukraine invasion has not gone the way Vladimir Putin expected, and there is no way Volodymyr Zelensky can defeat Russia in spite of being backed by NATO. So, chances are that Trump will succeed in having the two sides agree to a ceasefire, which is the need of the hour.

Whether the world, or at least the US, will be a better place during Trump’s second term, one may not know, but his presidency surely won’t be worse than Biden’s. One can only keep one’s fingers crossed.

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Editorial

Euphoria, realpolitik and reality

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Thursday 7th November, 2024

The NPP’s victory in the September presidential election has catapulted the JVP to the limelight. An otherwise camera-shy JVP General Secretary, Tilvin Silva, faced an interview on the state-owned ITN on Tuesday night. What he came out with was usual campaign rhetoric, but there were some takeaways.

Silva said the JVP-led NPP had succeeded in exposing its opponents’ propaganda lies. The SLPP, the UNP, the SJB, etc., had predicted a collapse of the economy and Sri Lanka’s international isolation in the event of an NPP win in the presidential contest, but the economy was doing well; the IMF programme was on track, and some powerful nations had assured President Anura Kumara Dissanayake’ interim government of assistance, he said. China was so pleased with the JVP-NPP government’s commitment to good governance that it had decided to donate school uniform fabric to all students, he claimed.

China has no doubt helped this country in numerous ways. But wasn’t the JVP among the political parties that faulted China of having granted loans for the Rajapaksas’ mega infrastructural projects riddled with corruption?

Silva also said the US, impressed by the JVP-NPP government’s anti-corruption campaign, had offered to help attract American investors. Whoever would have thought, a few years ago, that the JVP would ever consider it an achievement to be in the good books of the US? And, why has the US done a volte-face on its better-dead-than-red policy to help the NPP led by the Marxist JVP?

The JVP, or any other party for that matter, would do well to be wary of the envoys of powerful nations bearing gifts. The big powers have neither aversion to corruption nor any love for democracy and good governance. They back foreign governments which, in their estimation, can be used to further their geo-strategic interests regardless of whether the latter are corrupt. The US had no qualms about defending Marcos of the Philippines, Shah of Iran, Papa Doc and Baby Doc of Haiti and countless other corrupt dictators across the globe to promote its own interests.

Moreover, the Americans have re-elected Donald Trump as their 47th President despite multiple court cases—both civil and criminal—against him, and his felony conviction with sentencing due soon.

The JVP/NPP should be cautious instead of being euphoric when the US showers praise on its government and offers help. It is popularly said that gift horses should not be looked in the mouth, but they must be looked in the belly. If the Trojans had been wise enough to do so during their legendary war with the Greeks, Troy would have been safe. It will be prudent for the JVP/NPP leaders to figure out what the US expects in return for its support. Altruism is no driver of foreign relations in the modern world.

President Gotabaya Rajapaksa refused to sign a Status of Forces Agreement which, if inked, would have allowed US troops to be stationed in Sri Lanka. During the 2022 uprising here, the US cranked up pressure on Gotabaya not to use force against the protesters who were all out to oust him. However, it looked the other way, when his successor, Ranil Wickremesinghe, had the Galle Face protest or Aragalaya crushed. In March 2024, the then Speaker Mahinda Yapa Abeywardena revealed in Parliament that some foreign powers had pressured him to take over the executive presidency and form a government in violation of the Constitution after the resignation of President Rajapaksa. Former Bangladeshi Prime Minister Sheikh Hasina has reportedly alleged that Washington played a role in her ouster because she refused to cede control of St. Martin’s island to the US.

Perhaps, it was India that helped further the NPP’s political interests more than any other country. A lot of legitimacy accrued to the JVP/NPP from Dissanayake’s India visit, so much so that the JVP denied ever having conducted a lecture on Indian expansionism as part of its initiation programme in the late 1980s. Diplomacy is never devoid of realpolitik, and the true nature of India’s relations with the JVP/NPP will be known only when the latter reveals its position on key issues concerning the 13th Amendment, the plunder by Indian fishers of Sri Lanka’s fishing resources, and Adani Group’s proposed power projects here.

Silva said in the aforesaid interview that during the Gotabaya Rajapaksa government, the then Minister Nimal Siripala de Silva had been compelled to resign from the Cabinet following a complaint by a Japanese envoy that he had sought kickbacks from a Japanese company engaged in a BIA expansion project, but President Ranil Wickremesinghe had reappointed him. This is a very serious allegation, which has not been probed properly though it has been repeated umpteen times. Will the JVP-NPP order a fresh probe into it?

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