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Editorial

Lucky masterminds

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Tuesday 28th September, 2021

Several persons including a trader have been arrested and remanded over the Sathosa garlic racket. Media pressure seems to have jolted the police into action at long last. Since a judicial inquiry is now underway into the allegations against the suspects, the matter is best left to the learned judges concerned.

One, however, cannot help wondering why no action has been taken against all high-ranking officials of Sathosa responsible for the questionable garlic deal. The internal memos on the purchase of the stock of garlic weighing 56,000 kilos from the Ports Authority and selling it to a private trader will help trace them. Those who signed the memos at issue could be asked on whose orders they sold the entire stock to a third party at Rs. 135 a kilo instead of making garlic available to the pandemic-hit people at the same price. But for the Consumer Affairs Authority (CAA) intervention, Sathosa would have repurchased the same stock of garlic at Rs. 445 a kilo and sold it to the public above Rs. 500 a kilo, as media reports indicate.

CAA Executive Director Thushan Gunawardena, whose intervention put paid to the efforts of the Sathosa officials to repurchase the garlic stock fraudulently, is now facing a witch-hunt for having blown the whistle. Investigators are barking up the wrong tree. Trade Minister Bandula Gunawardena, under whose purview Sathosa comes, has seen red. Why he is so agitated defies comprehension; he ought to go all out to have the garlic racket probed thoroughly and the culprits arrested and prosecuted, instead of finding fault with the media if his hands are clean.

Masterminds behind criminal operations have all the luck in this country. They never pay for their crimes, and their minions become scapegoats.

Archbishop of Colombo Malcolm Cardinal Ranjith and other Catholic prelates have been fighting quite a battle for more than two years to have the mastermind behind the Easter Sunday attacks traced, but to no avail. The people who defeated the yahapalana government, expecting the new dispensation to bring the real culprits to justice, are really disappointed. Not even the Presidential Commission of Inquiry that probed the bombing could identify the terror mastermind. It dealt with the issue perfunctorily.

Everybody knows that the mastermind behind the Treasury bond scams has gone scot free. The then Central Bank Governor Arjuna Mahendran obviously carried out the illegal operation by abusing his position, but the person who ordered him to do so has not been found out yet. If Mahendran is brought back to stand trial, he will squeal on others. The present government has chosen not to go the whole hog to have him extradited, and the manner in which it is handling the matter smacks of a quid pro quo. While the SLPP grandees were calling for stern action against the Treasury bond racketeers, during their Opposition days, we argued in this space that Mahendran would be safe under an SLPP government because the scammers had links with all major political parties.

The state coffers suffered staggering losses amounting to billions of rupees owing to the sugar tax racket under the present government, which slashed the import duty on sugar so that one of its cronies would stand to gain. After being exposed, it claimed it had done so to bring the sugar prices down. But sugar remains expensive and the SLPP financier is grinning from ear to ear. The mastermind behind the racket has not been identified.

So, the person who masterminded the Sathosa garlic racket, too, will go unnamed, uninvestigated and unpunished, and the intrepid whistleblower will be made to regret having exposed the scam if ministerial barks and police action are anything to go by. How can anyone say this land does not belong to the corrupt?



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Editorial

Will exposés become fish wrappers?

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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!

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Editorial

Another sucker punch

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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.

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Editorial

Waltzing with virus

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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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