Monday 27th September, 2021
Chain snatchers swallow the necklaces they are making off with when they fail to outrun their pursuers, who however beat them black and blue before handing them over to the police for recovering the valuables with the help of laxatives. The incumbent government is apparently in a similar predicament. When it struck a shady deal with a US energy firm, the other day, behind the back of its coalition allies and the public, it may have thought the hurriedly inked pact would be a fait accompli, and its opponents would be left with no alternative but to stop protesting. But it thought wrong; it is drawing heavy fire, and pressure is mounting on it to scrap the questionable deal.
In February, the government had to withdraw from an agreement on the Colombo Port East Container Terminal (ECT), which was to be run as a joint venture with an Indian company and Japan. The SLPP leaders do not seem to learn from their mistakes.
Why there is so much resistance to the shady deal with a US company is understandable. The government scuttled a bidding process and selected the American venture, New Fortress Inc., which will acquire a 40% ownership stake in the West Coast Power Ltd., the owner of the 310 MW Yugadanavi power plant. The US venture will also build an offshore LNG receiving, storage and regasification terminal off the coast of Colombo, and initially supply the equivalent of 1.2 million gallons of LNG to Sri Lanka.
Even those who are supportive of Public-Private Partnerships (PPPs) are critical of the New Fortress deal due to the absence of transparency and questionable exclusivity. The Professionals’ National Front has condemned the deal, which it says is a threat to the country’s energy security. It has also demanded to know whether the government consulted the Attorney General on the agreement, which, it says, does not come under the Sri Lankan law.
Millions of Sri Lankans who were dependent on Laugfs for cooking gas have been left high and dry. Laugfs starved the market and obtained a price hike, claiming that it was incurring losses, but its gas is still not available. The government is helpless. Given this situation created by a local company, what guarantee is there that something far worse will not happen due to the New Fortress deal? All US companies do as Washington says; their compliance anent the US ban on the Chinese tech giant, Huawei, is case in point.
The SLPP leaders vehemently opposed the yahapalana government’s deal with China to lease the Hambantota Port in 2017. They even staged protests and called the deal a threat to Sri Lanka’s sovereignty. Today, they are struggling to justify the New Fortress deal while wrapping themselves in the flag. The then President Maithripala Sirisena defended the Hambantota port deal, which he said had to be struck because his administration could not pay back the loan the Rajapaksas had obtained for the project; he is now in the incumbent government as the leader the SLFP, which is opposed to the New Fortress deal.
The New York Times
published an article titled, How China Got Sri Lanka to Cough Up a Port, criticizing the Hambantota port deal. It will be interesting to see how the US media describes the New Fortress-the Rajapaksa government deal. Will any American newspaper publish an article titled, ‘How the US Got Sri Lanka to Cough Up a Power Plant’?
When the yahaplana government tried to implement a free trade agreement it had signed with Singapore arbitrarily, Sri Lankan professionals and Opposition politicians (who are currently in the SLPP) launched a successful protest campaign. They called for the formulation of a national policy on agreements between Sri Lanka and other countries and/or foreign companies. It is the absence of such a policy that has enabled government politicians to do as they like in handling state assets.
Sri Lanka cannot exist in isolation and has to work with other countries and foreign ventures, but such deals must be transparent, legal and beneficial to its interests.
Among those who are campaigning against the New Fortress deal are some SLPP constituents. They would have the public believe that they have taken a principled stand on what they call a clandestine pact. What will they do if the SLPP leaders do not heed their protests? They must tell the public what action they are planning to take in such an eventuality. Will they pull out of the government? Or, will they fall in line and stop protesting. Let them be urged to fish or cut bait.
Will exposés become fish wrappers?
Journalists the world over are familiar with an expression worn thin over decades and more: ‘yesterday’s news is only fit to wrap the fish in!’ That’s exactly what’s happened to the Pandora Papers that made big news a few days ago in this country and many others globally who’s leaders/citizen had been fingered. A week later, with three weeks yet to go for the Commission to Investigate Allegations of Bribery and Corruption to respond to President Gotabaya Rajapaksa’s one month’s deadline for a report, the whole business is nearly forgotten. Hardly a bleat is heard. Readers would remember that the Panama Papers where a massive data base of some 11.5 million files from Mossac Fonseca, the world’s fourth biggest offshore law firm made global waves; and a number of Lankans and companies incorporated here were named. But this is now less than a dim memory. That was over five years ago and, as far as we know nothing much has happened since, anywhere, about that exposé, also by the International Consortium of Investigative Journalists. Will that material, and this, eventually become fish wrappers?
However that be, there are many matter that arise that deserve attention not only from governments but also from the wider public. All of us are aware of the numbered bank accounts that have made Swiss banks both rich and famous. Such accounts, with multi-digit numbers known only to the client and selected bankers, add another layer to banking secrecy. But they are not completely anonymous. That’s because the name of the client is still recorded by the bank and is subject to what’s called “limited warranted disclosure.” Such hiding holes are widely sought by the wealthy to stash away both legitimate and ill-gotten wealth from the prying eyes of governments, law enforcement agencies, taxpeople and sometimes even spouses. Lesser known is the fact that such facilities are no longer the exclusive preserve of the Swiss. They are now available in over a dozen countries in Europe, Africa and Asia. Apart from numbered bank accounts, there are many tax havens in several parts of the world widely used for both money laundering and tax avoidance. They are useful not only to those anxious to exploit their possibilities but also to the service-providing countries to enrich national coffers.
Since the Pandora Papers hit the headlines, Pakistan’s Prime Minister Imran Khan has made several noteworthy speeches into the expose` which linked hundreds of Pakistanis, including members of his cabinet to wealth secretly moved through offshore companies. Khan has promised action if wrongdoing is established just as much as our own president has done. Ownership of offshore holding companies is not illegal in most countries including, we believe, Sri Lanka. But they are frequently used to avoid tax liability or to maintain secrecy about large and shady financial transactions. Even before the smelly stuff hit the fan with the publication of the Pandora Papers, Khan addressing the UN International Financial Accountability, Transparency and Integrity Panel called upon countries he termed tax havens to “adopt decisive actions” and return wealth looted from developing countries. Saying that the figures were staggering, he estimated that perhaps a trillion dollars were siphoned off in this manner and much of that were bribes received by corrupt white collar criminals. Demanding that the bleeding of poor and developing countries must stop, he urged that stolen assets of developing countries including proceeds of corruption, bribery and other crimes must be returned immediately.
Where Sri Lanka is concerned, the liberalization of the economy in 1978, not 1977 as commonly stated, resulted not only in devaluation of the currency and the stupendous increase in the money supply, but also the commencing of massive and expensive infrastructure and other development projects of which the Accelerated Mahaweli Development was perhaps the largest. This resulted in the award of gigantic contracts on a scale previously not known in this country. Such contracts also meant commissions, and what these were and who collected them was largely unknown. Since then we have had many other very large projects. While the country knows what the taxpayer paid for these as revealed in the figures presented to parliament and budgeted for, what kind of commissions were paid and to whom, is information largely outside the public domain. While decision-making politicians and perhaps bureaucrats are widely suspected to have been beneficiaries of such loot, companies, some well known and others less so, have been identified as agents of various contractors. Whether such funds were duly accounted for and the taxes thereon paid remains unknown.
Whistles have been blown here but we have unfortunately not been able to obtain the cooperation, for example of the Government of the United Arab Emirates about loot allegedly stashed in Dubai. Nobody can expect companies providing haven to ill-gotten gains to cooperate with bloodhounds on their trail. Imran Khan’s appeal to tax haven providers can only fall on deaf years as has happened before and will continue to happen in the future. Third world countries claiming to pursue criminals who had bled their economies will only do so if the quarry belongs to an opposing camp. Governments will only chase opponents and when they change, investigations already undertaken, not without influence of ruling powers, will be abandoned as we have too often seen. As the late Sunil Perera of the Gypsies so memorably sang, Lankawa ehema thamai, I don’t know why!
Another sucker punch
Saturday 16th October, 2021
Hardly a day passes without huge increases in commodity prices being reported. Prices are rising so rapidly without any discernible increase in economic activity that one wonders whether the country is being tipped into stagflation. The government is behaving like an inebriated lifeguard who watches a drowning man flailing, instead of throwing a lifeline. Powerful businesses are having a field day, jacking up as they do prices according to their whims and fancies. Businessmen determine the prices of their products and services, and announce them at press conferences, making one wonder whether there are any consumer protection laws in this country. There is no one the hapless consumer can turn to. What is this world coming to when a government looks on while the people are being fleeced so savagely?
Consumers have been suffering heavy blows, one after another, during the past so many weeks, and the latest one has come from the local dairy product manufacturers including a state-owned company; they have jacked up the prices of the locally produced milk powder by Rs. 225 and Rs. 200 a kilo. The new prices are Rs. 1,170 and Rs. 1,165 a kilo, according to media reports. These price hikes have left one puzzled.
Three main reasons the milk powder importers have given for increasing the prices of their products are the increases in milk food prices in the international market, the depreciation of the rupee against the US dollar, and the escalation of freight rates. True, there have been some cost increases, but the question is whether they are so high as to warrant such massive increases in the prices of imported milk powder here. The milk powder importers obviously emulated the rice millers who have become a law unto themselves; they, too, created a scarcity and won their demand for unprecedented price hikes. Now, imported milk powder sells at Rs. 1,195 a kilo. People expected the local dairy companies, which heavily market their ‘Sri Lankan-ness’, to act reasonably, only to be disappointed.
How come the prices of locally produced milk powder have risen so sharply? The domestic milk powder manufacturers have claimed their costs have also gone up. Their argument is not convincing. The onus is on the Consumer Affairs Authority (CAA) to reveal to the public whether the increases in the prices of local milk powder are actually due to increases in production costs, or whether the domestic dairy product manufactures have sought to make the most of the situation; consumers feel that they are being exploited. An explanation is called for.
The general consensus is that the CAA has become so politicised and impotent that it only provides a rubber stamp for unscrupulous big businesses with political connections. Will it try to prove its critics wrong by taking up the cudgels for the public?
Is there a government? This is the question one asks oneself on seeing how helpless the public has become vis-à-vis powerful businesses who exploit them with impunity.
The Presidential Commission of Inquiry that probed the Easter Sunday bombings (2019), in its report, says one of the reasons for the serious security lapses which led to the carnage was that the then government was dysfunctional. True, the yahapalana government became a metaphor for dysfunctionality and ineptitude. The present dispensation, whose leaders promised a strong government to protect the interests of the public, does not look any different in spite of having a two-thirds majority in Parliament; confusion is reigning at the upper echelons of government. Ministers are running around like headless chickens, and the public is at the mercy of profiteers who enjoy unbridled freedom to do as they please.
Let the ruling politicians be told that they are digging their own political grave.
Waltzing with virus
Friday 15th October, 2021
There was a mixed reaction to the demarcation by the government of an area adjacent to the Presidential Secretariat for public protests, in 2020. Some people welcomed it, claiming that it would help keep protesters off the busy city roads, but others suspected an ulterior motive; they said the government was planning to ban public demonstrations outside the designated area. Whether the government was contemplating such a move is anybody’s guess, but today the so-called ‘Agitation Site’ allocated for protests is perhaps the only place where there are no demonstrations. Hardly a day passes without mass protests being reported from different parts of the country. These agitations could not have come at a worse time.
Thousands of farmers took to the streets yesterday in Minneriya, calling upon the government to make fertiliser available freely. The protesters obviously ran the risk of contracting Covid-19. Burning Agriculture Minister Mahindananda Aluthgamage in effigy, they bitterly complained that they had suffered crop failures due to a fertiliser shortage. The government looks unconcerned about farmers’ woes, and its propagandists are all out to brand the protesters as a bunch of hirelings of the Opposition and agrochemical companies. But so many farmers would not have protested in all parts of the country so aggressively without any genuine grievances although their demonstrations cannot be considered devoid of politics. In a country where not even places of worship are above partisan politics, it is not fair to expect farmers and their associations to be apolitical.
What really matters is not farmers’ political affiliations but the causes of their resentment and why the government has chosen to ignore the grievances of the farming community.
The government ought to meet farmers’ representatives without further delay, look into their grievances and do everything possible to solve their problems. Measures such as unleashing the ruling party propaganda hounds on protesters, and bellowing rhetoric will not do. It is also plain political suicide for the government to antagonise the farmers, who can make or break governments. Most of the protesting farmers of Minneriya must be the supporters of the present dispensation; the people of Polonnaruwa have voted overwhelmingly for the SLPP at the last two elections.
The fertiliser issue is a very complex one, which has to be tackled separately with the participation of all stakeholders; it cannot be solved overnight. But the government has to do something urgently to prevent mass protests which can worsen the national health emergency. What the country has gained with the help of an expensive, 41-day lockdown will be lost in a few days if super-spreader events such as protests continue at the current rate. Fear is being expressed in health circles that Covid-19 fatalities are likely to soar come December owing to the irresponsible behaviour of the public and the government’s lackadaisical attitude towards pandemic control; it seems to have pinned all its hopes on its vaccination drive, which cannot be considered the proverbial silver bullet.
Where is the Minister of Agriculture? We see only his effigies these days. He said no rice would be imported because there were enough rice stocks in the country; he embarked on a quixotic mission to tame the rice millers only to return bruised and much the worse for wear. Rice is now being imported, and someone will laugh all the way to the bank. The Agriculture Minister also insists there are enough stocks of fertiliser in the country. If so, are the farmers who are protesting against a fertiliser shortage out of their senses? He had better talk to the irate farmers and sort out their problems without provoking them further.
It behoves the government to direct the Agriculture Minister and his officials to meet the representatives of farmers’ organisations and make a serious effort to bring the situation under control. If he is not equal to the task, then either the Prime Minister or the President ought to intervene to solve the farmers’ problems that are driving thousands of people to stage street protests like the one we witnessed yesterday in Minneriya.
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