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Fragile chances of recovery from current economic crisis



By Chandra Amerasekare

For most Sri Lankan expatriates concerned about the plight of their kith and kin struggling to survive in Sri Lanka, it was heartening to see the peaceful Aragalaya unfolding at the Galle Face Green against the corrupt and extremely inefficient government of Gotabaya Rajapaksa responsible for dragging the country into bankruptcy. A cross-section of the population lent their support to the demonstrators, for they had a common grievance and wanted either to force the government to change course or to make way for another government.

The protesters had neither political affiliations or a leader nor a planned course of action. They had no idea of the constitutional limitations to a change of government within the next two years. They were unarmed and peaceful. Economic difficulties and uncertainty about their future propelled them to the streets to voice their concern. It was easy for people looking for pleasure or free food or for opportunities to further their political agendas, to enter GotaGo Gama and become part of the crowd. Nobody knew from where the money flowed to finance the ad-hoc activities in GotaGoGama starting from spontaneous cultural shows to a free restaurant continuously supplying good food in the context of a national scarcity of food. However, the initial phase of the Aragalaya (before May 9th) though without a decisive plan or goal, won the hearts of Sri Lankans and was successful in achieving three significant changes in the country.

The first phase of the Aragalaya forced Mahinda Rajapaksha and his cabinet to resign. Secondly, Aragalaya awakened the voters to the reality and effectiveness of peoples’ sovereignty, to the fact that they have the power to elect the MPs but need to be careful in selecting their representatives and watch how they perform once elected. The other achievement was demonstrating the value of thinking as Sri Lankans, and not as Sinhalese, Tamils, or Muslims. No social reformer or social/political leader has been able to do this so effectively.

After May 9, the Aragalaya became ugly, destructive, and hate-driven. Rajapaksha supporters attacked the peaceful protesters and it was seen that the peaceful protesters were the victims and did not retaliate violently. But by this time other elements, some with political agendas backed by political parties and numerous leaders claiming ownership of the Aragalaya plus others with unholy personal agendas had infiltrated into the Aragalaya and they took over the task of retaliating against the SLPP for the May 9th attack. These elements went on a rampage of destruction creating a fear psychic and spreading hatred.

Burning private residences cannot be condoned in a decent society. Surprisingly, not a single expression of disapproval could be seen in Sri Lanka against the murder of a legislator and burning down houses of politicians that sheltered their innocent children and women. The reason for this may have been the fear psychic and fear of retaliation by violent elements of the Aragalaya. Sri Lankan culture is certainly not this. Even today one could see the accommodating, tolerant and hospitable nature of Sri Lankans in rural areas. The second stage of the Aragalaya destroyed that image of Sri Lanka and the image of the peaceful Aragalaya of the youth. These youths who were genuine protesters need to come forward and join democratic forces to change politics in Sri Lanka.

The demonised elements that took control of the Aragalaya had no respect for life and property, the rule of law, the forces and the police trying hard to maintain law and order, or even the constitution of the country. They pronounced that what they say is the constitution. There are indeed corrupt elements in the Police. But it is to the police that every Sri Lankan runs for help when in need of protection or to settle disputes. The tri forces always came to the rescue of civilians during war and natural disasters. The abusive manner in which some protesters reacted to them was not only appalling but extremely ungrateful. The violent demonstrators would have made Sri Lanka a stateless country had the police and the forces failed to hold them back after the nerve centres of administration were captured and plundered by them. Had that happened, it would have taken months to form a government for the various factions would have fought for leadership and power. Even after forming a government, it would have taken a long time to be recognised internationally as a legitimate state, and by that time a significant segment of the population would have succumbed to starvation and disease.

By no stretch of imagination can anyone say these Aragalaya members (second phase) had any concern for the struggling people. If they had, they would not have tried to dismantle the government that was trying to distribute the essential items to give relief to the people. The social and political unrest they created pushed back the assistance the country could have received in August to alleviate the people’s misery.

When IMF discussions were pushed back due to the social unrest, bilateral donors ready to open their aid windows to help Sri Lanka hesitated, and that prolonged the agony of the people. Added to this, the deceit of a few who took advantage of the scarcities to find new avenues of income by hoarding oil and gas disillusioned many including those who stretched a helping hand.

Now that a beginning has been made to stabilise the country socially and politically, there is law and order and there is a skeleton of a government. All political parties have a responsibility to work together to rescue the country. If this happens and an all-party government is formed, it will give a more democratic face to the government and make social and political stability sustainable until the country can afford an election as early as possible. Most importantly this will give a signal to the international community, both multilateral and bilateral donors that there is no power struggle and the country is serious about recovering the economy.

Political parties and society need to recognise the political and economic realities prevailing at this moment. Then only the country can move forward. We need to realise that everything has to happen according to the constitution to avoid anarchy and complete breakdown. There is no constitutional provision to dissolve parliament for the next two years. Any government formed within the present parliament needs to have a working majority in parliament. It is the SLPP that has a majority. The current President has the support of 134 members. The present economic situation demands immediate action and the prospects of making it better are dim and uncertain for at least another six months. Further struggles will push recovery beyond the horizon. Sri Lanka cannot come out of this situation without foreign assistance. To get foreign assistance a precondition is political and social stability and the willingness of the country to work to revive the economy.

Given these preconditions and the country’s inability to stand on its own feet at this moment, the best course of action is to go along with the present government whether we like it or not, and work together to retrieve a bleeding economy and save the lives of people without further delay. The opposition parties owe it to the people who elected them to help the government in this effort to recover and maintain social and political stability to facilitate the recovery. If they do that they will be able to share the credit for helping the people to emerge from the current disaster. Personal ambitions are high. If opposition parties keep looking for prospects of grabbing power at the expense of making people suffer, leaders stick to their guns and refuse to join the government laying down impossible conditions, they can end up as losers in the next election. People certainly will not consider them as politicians who love the country and the people.

In this effort to rebuild the economy, Government needs to give due place to youths who initiated the peaceful Aragalaya and others who have ingenuity and leadership. The maiden speech made by a young Sri Lankan woman in the Victorian parliament revealing her carrier prior to entering parliament as a voluntary social worker to uplift the lives of many and how she learnt from experienced people in her life, gives an idea about how youth could become leaders. The Government should look for youths like that and give them space in the legislature and other decision-making centers.

System change

The general opinion now in Sri Lanka is that there should be a system change to usher in an era of corruption-free government and people-friendly development. What is this system change? In simple language, a system means the way a human being does something to fulfill a need or get something done. In a parliamentary democracy what systems are used in governance? The constitution provides the framework for all the systems of governance and for protecting the individual and society. It is the fountain of all laws, lays down the individual rights and freedoms, the limitations to the exercise of such freedoms and rights, and the sub-systems necessary to govern the country. As such we have the following systems in governance:

· The legislature to make laws in keeping with the constitution and decide on policies and control government expenditure and revenue as well as borrowings.

· The executive, including the presidency and the Cabinet, answerable to parliament for implementing policy.

· The judiciary, responsible for implementing the laws according to the constitution.

· The Public service and the Judicial service responsible for implementing government policy, and managing the administration.

One needs to first identify the defects and loopholes in the existing systems that allow corruption, inefficiency, waste, and indifference to people’s welfare, to bring about the changes necessary to remove them. For example, consider the constitution that provides the framework for all the other systems. Any government with a two-thirds majority could change the constitution to further its political agenda to the detriment of the welfare of the people. Such changes have increased the powers of the president excessively and compromised the independence of the Public, Judicial, and Police services Commissions and the Elections Commission. The result was the politicisation of these Commissions and the public service leading to inefficiency and corruption due to political patronage replacing meritocracy in recruitment, promotion and postings in these services.

If one considers the Legislature, more than sixty percent of the members do not play a role in legislative or overseeing functions. Most MPs attend parliament to meet the minimum requirement of attendance and give their vote to support the party when a vote is taken. They earn a special fee for attendance when voters have sent them there for that purpose. There are no minimum educational or legal requirements in the election law for a candidate to contest parliamentary elections. The same law has no provisions to prevent MPs from crossing over seeking greener pastures. The conduct of most MPs during parliamentary sessions exceeds the limits of decency. The debate is mostly motivated to damage the image of opponents for electoral gain. Accusations are made against opponents based on social media without presenting evidence. The code of conduct for MPs is toothless to prevent such actions.

There is no provision in the existing structure of the overseeing committees in parliament for outside social groups and interest groups to contribute to policy making or overseeing policy implementation. The cost of maintaining an MP and a Minister is a huge burden to the taxpayer. Extravagant remunerations and perks, expenditures on office facilities, transport as well as escorts given to Ministers and MPs are unsustainable in a debt-dependent poor country.

Similarly, the existing defects of the other systems mentioned above are known to the public. Constitutional changes and new laws, regulations, changes in procedures and record keeping, as well as improving the use of modern day technology in administration are required for a system change.

In conclusion, the most important factor necessary for a system change is the commitment of the people to understand the current realities and change their perspective and attitude. They must adhere to basic values and adopt a lifestyle that is within their means. More importantly, they must exercise their vote intelligently to appoint the most suitable candidate to parliament and subsidiary political assemblies. The entire society has the responsibility to create a social environment where ethics such as honesty, fairness, tolerance, respecting diversity, respecting women and elders are the norms.

The writer is a retired SLAS officer who has worked in the Ministries of planning and Finance for over two and a half decades. She can be contacted at

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Need for best relations with China



(This letter was sent in before the announcement of the government decision to allow the Chinese survey vessel to dock at Hambantota – Ed.)

I once met Pieter Keuneman sometime after he had lost the Colombo Central at the general election of 1977. We met at the SSC swimming pool, where he had retreated since his favourite haunt at the Otters was under repair. Without the cares of ministerial office and constituency worries he was in a jovial mood, and in the course of a chat in reference to a derogatory remark by one of our leaders about the prime minister of a neighbouring country, he said, “You know, Ananda, we can talk loosely about people in our country, but in international relations care is needed in commenting on other leaders”.

Pieter, the scion of an illustrious Dutch burgher family, the son of Supreme Court judge A. E Keuneman, after winning several prizes at Royal College, went to Cambridge in 1935. There he became a part of the Communist circle, which included the famous spies Anthony Blunt, later keeper of the Queen’s paintings Kim Philby, and Guy Burgess. Eric Hobsbawm, the renowned historian commenting on this circle, wrote of the very handsome Pieter Keuneman from Ceylon who was greatly envied, since he won the affections of the prettiest girl in the university, the Austrian Hedi Stadlen, whom he later married. Representing the Communist Party in parliament from 1947 to 1977, soft-spoken in the manner of an English academic, Pieter belonged to a galaxy of leaders, whose likes we sorely need now.

I was thinking of Pieter’s comments considering the current imbroglio that we have created with China. Our relations with China in the modern era began in 1953, when in the world recession we were unable to sell rubber, and short of foreign exchange to purchase rice for the nation. The Durdley Senanayake government turned to China, with which we had no diplomatic ties. He sent R G Senanayake, the trade minister, to Peking, where he signed the Rice for Rubber Pact, much to the chagrin of the United States, which withdrew economic aid from Ceylon for trading with a Communist nation at the height of the Cold War.

Diplomatic relations with China were established in 1956 by S W R D Bandaranaike, and relations have prospered under different Sri Lankan leaders and governments, without a hint of discord. In fact, in addition to the vast amount of aid given, China has been a source of strength to Sri Lanka during many crises. In 1974, when the rice ration was on the verge of breaking due to lack of supplies, it was China, to which we turned, and who assisted us when they themselves were short of stocks. In the battle against the LTTE, when armaments from other countries dried up, it was China that supported us with arms, armoured vehicles, trucks, ships and aircraft.

It was China and Pakistan that stood by our armed services in this dire crisis. More recently, amidst the furore, created by Western nations about human rights violations, China was at the forefront of nations that defended us. A few weeks ago, it was reported that the UK was ready with documents to present to the UN Security Council to press for war crimes trials against the Sri Lankan military, but the presence of China and Russia with veto powers prevented it from going ahead with its plan.

It is in this context that we have to view the present troubles that have engulfed us.President Ranil Wickremesinghe, in the short period he has been in office, has won the sympathy of people by the speed with which he has brought some degree of normalcy, to what was a fast-disintegrating political environment. On the economic front, his quiet negotiations and decisions are arousing hopes.

A shadow has been cast over these achievements by the refusal to let in the Chinese ship to Hambantota, a decision made on the spur of the moment after first agreeing to allow it entry. The manner in which it was done is a humiliation for China, one administered by a friend. We must remember that these things matter greatly in Asia.

These are matters that can be rectified among friends, if action is taken immediately, recognising that a mistake has been made. The President should send a high-level representative to assure the Chinese leadership that these are aberrations that a small country suffers due to the threats of big powers, to smoothen ruffled feelings, and normalize relations between two old friends. The American-Indian effort to disrupt a 70-year old friendship, will only lead to its further strengthening in the immediate future


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A change of economic policies for Sri Lanka



Millions of Sri Lankans are anxiously waiting to see what actions will be taken to make life bearable again.If we follow the example of successful countries we see them exploit their opportunities, and use the wealth created, not to import cars and go on luxury trips abroad, but to re-invest the money proceeds in further projects to bring in even more money. They proceed in this way until their citizens have good standard of living. Probably, the best example of that compounding of wealth is Singapore.

Singapore exploited its geographic advantages. It provided cruise ships with bunkering services and repair, later they provided airlines with refueling and expanded that to one night free stop- overs for passengers to buy luxury goods at their glamorous, tax-free shopping malls. The Japanese were making wonderful new gadgets: cameras, music players, portable radio cassette players, binoculars, all available in the malls and sold tax free!! Lee Kuan Yu forbade the ladies to wear denim jeans, and to wear dresses with hem lines coming down two inches below the knee! He even instructed the ladies to smile! No man could have long hair for fear of arrest. Littering was prohibited, so was chewing gum and smoking butts on the roads and pavements. The place was kept clean!

They used the proceeds arising from all this commercial activity to build housing blocks, develop new roads and other beneficial projects. (Individuals were not allowed to walk away with the profits, just to fritter them away.) Sentosa Island had installed a communications dish antenna connecting it with New York and the financial markets. This was an example of intelligent seizing of opportunities. I account for this intelligent development as due to the high educational and knowledge of Singapore’s progressive management. The result is a firm currency, holding its value.

Something similar has happened to Russia. Russia is rich. It is under progressive intelligent management. Stalin had developed the railway network across the full eleven time zones. But many areas remained to be connected. Putin found the finances to develop coal mines, develop oil and gas deposits and build railway bridges and tunnels for better access to markets and their demand for Russian products. Even as you read this, trains of 70 plus trucks, each with 70 tons of coal are grinding their way to China, day and night. Gas is flowing through an extensive network of pipelines, both east to China and west to friendly countries in Southern Europe. Mr. Putin and his men have succeeded in getting Russia fully functional. And the more Russians there are to spend money, so the more demand for goods and services: shops, etc., providing multiplying employment in Russia.

Mr. Putin wants to build a road and rail link south through Iran to India. A design plan is in the works. It is being discussed with Iran and India. Putin is displaying initiative for the benefit of Russia and its citizens. Putin cares for the citizens of Russia and is creating both wealth and jobs too. Architects are designing attractive living spaces and buildings which provide a better environment for Russians and contractors are building it. Education of Russian citizens is playing a big part in Mr. Putin’s thinking, too. Russia needs a talented workforce.

The result is that the currency, the Ruble is strong and does not devalue. It keeps its value.Belarus, Russia’s neighbour, can also be praised for outstanding development. The population in the big towns is cossetted with amenities and facilities which provides a luxurious way of life for townspeople especially those with industrial jobs. However, it must be admitted, the standard of life for the minority 30% population living in the countryside has yet to catch up. The administration is strict and everyone is law abiding. For example, you can leave your hand phone at your seat while you visit the toilet conveniences and it will remain undisturbed until you return.

Belarus, being a mostly agricultural country has a big tractor manufacturing plant, it has a fertiliser mining and producing plant, it has a commercial vehicle plant, DK MAZ which produces industrial trucks such as fire extinguishing trucks and also produces the most comfortable, bright, low step buses and so on, and of course, Belarus makes its own industrial vehicle tyres. The towns are prosperous and clean and Minsk, the capital is a beautifully laid out city. Town apartment blocks are multi-storied living spaces, but are so well designed and fitted as to provide pleasant living spaces for its people. These reduce urban sprawl across the wooded countryside.

What are Sri Lanka’s strengths? It is a small island thus making communications short and sweet. Its location in the Indian Ocean is a plus, its scenic beauty is a plus allowing a thriving tourist trade for people from colder climates, and its soil and climate allows almost anything to be grown. Therefore its agriculture is a great strength. Its long coastline can provide fish if the fisherised. It has deposits of graphite and phosphates which can be exploited to produce profits for further investment in development projects. It has its illiminite sands which are an extremely valuable asset but need to be controlled and exploitation expanded. It has a whole gem mining industry which need to be managed in way beneficial to the government. It has several government owned businesses which need to be overhauled and modernized to convert losses to profits. The rupee in 1948 was equal to the English pound, now it is around 450 rupees to the Pound. That gives a good description of Sri Lankan past governance.

Profits from projects need to be ploughed back into further projects to bring about a higher standard of living for all its inhabitants. Then the Lankan reputation of being a paradise island with happy people will be restored.

Priyantha Hettige

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Sapugaskanda: A huge challenge for RW



It will be interesting to see if anything fruitful will come of the so-called “investigation” announced by the Minister-in-charge, about what seemed like an outrageous overtime payment to the petroleum refinery workers.While waiting for the outcome of that investigation, I thought of highlighting again the real and central issue that cuts across all loss-making government undertakings in Sri Lanka, such as the CPC, CEB, SriLankan Airlines, etc. that have been mercilessly sucking off tax-payer’s money into them like “blackholes”.

These organisations have been typically sustaining a mutual understanding with corrupt or inept politicians. “Sahana milata sewaya” (service at a concessionary price) was the catchphrase used by them to cover up all their numerous irregularities, wanton wastage, gravy trains, jobs for the boys and massive corruption, mostly with direct and indirect blessings of the politicians.

Here, I’d like to bring out just one example to help readers to get an idea of the enormity of this crisis built up over the past few decades. You’ll only have to look at what seemed like gross over-staffing levels of the CPC’s Sapugaskanda refinery, compared to international standards as shown below:

* Sapugaskanda Refinery – 50,000 Barrels Per Day (BPD); 1,100 employees Superior Refinery, Wisconsin, USA – 40,000 BPD; 180 employees

* Louisiana Refinery (including a fairly complex petrochemicals section), USA – 180,000 BPD; 600 employees

* Hovensa Refinery (now closed) – US Virgin Islands; 500,000 BPD; 2,100 employees.

These are hard facts available on the Internet for anyone to see, but I’m open to being corrected. I doubt if any sensible private investor would even dream of allowing such a level of gross over-staffing in their businesses.

As everyone knows, this is the position in all government business undertakings, as well as in most other government agencies in Sri Lanka. One can say that Sri Lankans have been willingly maintaining a crop of GOWUs (Govt Owned Welfare Undertakings), primarily for the benefit of the “hard-working” employees of these organisations, but at an unconscionably enormous cost to the rest. Obviously, this “party” couldn’t have gone forever!

Will Ranil be up to this challenge? I doubt very much.

UPULl P Auckland

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