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No second chance to save Sri Lanka: bank chief warns

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Central bank chief Nandalal Weerasinghe, charged with clawing Sri Lanka out of bankruptcy, says he had warned about economic calamity years before it hit Ishara S. KODIKARA

by Amal Jayasinghe

Sri Lanka’s Central Bank chief has disclosed for the first time how warnings of an impending calamity were ignored by the then president Gotabaya Rajapaksa.Nandalal Weerasinghe said he had predicted the impending economic catastrophe three years ago due to the so called Modern Monetary Theory and the “homegrown solution” of the previous administration of the Central Bank of Sri Lanka.

“I saw this crisis was coming,” he said adding that he had serious concerns about the monetary policy of the central bank at the time.

In a wide-ranging interview with AFP in Colombo, Weerasinghe said he was side-lined for warning of the dangers of the path the central bank was taking at the time and for his troubles, he was forced to take early retirement in September 2021.

“As the head of the Monetary Policy Committee at the time, as the senior deputy governor, I always raised concerns. And there were differences.

“But we as central bankers never came out with those internal disagreements with the management and also with the government in terms of policies.”

“In fact, I should say, not only me, the staff of the central bank, the professional staff, always raised this concern even after I left. … but those were not heard, not accepted, there was a kind of a different ideology coming from the Central Bank top as well as from outside, what we called a ‘home grown solution.’

“And as I remember, there was a six-month roadmap announced by the Central Bank. Completely unrealistic with false assumption, false expectations, and that ended up with reserves being ended up as almost nothing in April.

“Central bankers obviously knew what was going on. They expressed concern, but you know, the fear culture, and the rules and regulation is that although you can internally raise all issues and discuss, but no one can go out. And obviously, it’s difficult for a central banker to have the courage and go out and speak out outside the framework.”

He said it was “obvious” that if the government continued with its policies of “excessive monetary financing, suppressing interest rates, bad exchange rate policy, fixing at one rate for a long period, running down our reserves,” the country would head for disaster.

He said he privately voiced his concerns and noted that what happened between May and July last year was exactly as he had feared.As the country was gripped with an unprecedented shortage of foreign exchange, angry street protests over economic mismanagement, Rajapaksa turned to Weerasinghe to salvage the situation.

Pulled from comfortable retirement

“I never had an intention to come back to the central bank or public service…I thought I would have a good retirement life,” he said. He was spending time with his children in Brisbane, Australia and playing golf five days of the week when he got the invitation to return as the head of the Central Bank.

He said there would have been many others too who could have taken the job, but he decided to accept the challenge when he was invited but set his conditions demanding independence and a finance secretary (Mahinda Siriwardena) he could work with.

When Rajapaksa took over in November 2019, the country had over seven billion dollars in reserves, but when Weerasinghe took over the Central Bank the useable reserves were just 25 million. Days later, Sri Lanka defaulted on its $46 billion foreign debt.

Biggest challenge

Weerasinghe said the more difficult part of salvaging Sri Lanka economy will be the restructure of domestic debt while navigating a political minefield.

“This is the most challenging part of debt restructuring. It is very politically sensitive, socially sensitive and also there is some impact on domestic (bond) holders,” he told AFP.

He urged all members of parliament to exercise their duty to safeguard public finances by supporting the debt restructure efforts as the alternative would be catastrophic for the entire nation.He stressed that the country must vigorously pursue the reforms such as ensuring accountability, stability of policy and good governance without falling off the wagon again at the first sign of stability.

The country could get back to economic normality within two to four years if it stuck to the IMF program.The new government has doubled taxes and removed subsidies — both highly unpopular moves — to be in line with revenue targets set by the IMF.

He notes that Sri Lanka’s track record with the International Monetary Fund was “not good” because the island had gone to the Washington-based lender 16 times before, but failed to stick with agreed reforms.

“But this time, the 17th time with the IMF is different. It is not only a balance of payment crisis, but a debt crisis coming together at once,” he said. “If you are trying to go back to another (IMF) program, that will be most difficult, and I think that will be the end of the story.

“So basically, there’s no excuse this time, no second chance, you have to get it right this time.”

China onboard-

Last week, Weerasinghe unveiled Sri Lanka’s debt restructuring plan offering a 30 percent haircut to international sovereign bond holders, a nine year moratorium on repayments to bilateral lenders.More than half of Sri Lanka’s bilateral debt is owed to China. Weerasinghe rejects allegations that Beijing was holding up a debt restructure deal crucial to continuing with the $2.9 billion IMF bailout.

“The way China is dealing with this process is different because they are a new kind of creditor in the global sense. We expect some delays because China is a new player. So China will take its time, but China is fully on board, and agreed to support Sri Lanka and help Sri Lanka to come out of this crisis.”

China has not joined a “common platform” initiated by Japan and which involves India and the Paris Club of creditors. However, Colombo insists it will have bilateral talks with Beijing but in the end all creditors will be offered comparable terms with no one getting a better deal than what is offered to others.



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UN’s challenge of selective accountability without international equity

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Volker Türk

Despite the prevalence of double standards in international practice, it remains in Sri Lanka’s national interest to support the principles and implementation of international law. The existence of international law, however weak, offers some level of protection that smaller countries have when faced with the predatory behaviour of more powerful states. For this reason, the Sri Lankan government must do all it can to uphold its prior commitments to the UN Human Rights Council and implement the promises it has made to the fullest extent possible.

The visit of UN High Commissioner for Human Rights, Volker Türk, later this month may possibly be overshadowed by the eruption of hostilities in the Middle East following Israel’s attack on Iran. The High Commissioner’s visit to Sri Lanka relates to the series of resolutions passed by the UN Human Rights Council over the past sixteen years since the end of the war. It will highlight the contradiction in the rules-based international order when geopolitical interests override legal commitments. These resolutions highlight the importance of protecting human rights during times of conflict and ensuring accountability for war crimes. They are part of the enduring legacy of international human rights and humanitarian law, as exemplified by the Geneva Conventions and the global post-war consensus that atrocity crimes should not go unpunished.

The High Commissioner’s visit is likely to provoke criticism that the United Nations is pursuing Sri Lanka’s adherence to international norms with greater zeal than it shows toward violations by more powerful countries. There appears to be acquiescence, indeed even tacit approval, by influential states in response to Israel’s military actions in both Iran and Gaza on the grounds of existential threats to Israel. Similar military actions were taken in 2003 by the US and the UK governments, among other international powers, to destroy weapons of mass destruction alleged to be in Iraq. One of the central arguments made by critics of the UN’s engagement in Sri Lanka is that double standards are at play. These critics contend that the United Nations disproportionately targets weaker countries, thereby reinforcing an international system that turns a blind eye to powerful countries and, in doing so, undermines the credibility and coherence of global human rights standards.

The arrival of the High Commissioner is also likely to reignite internal debate in Sri Lanka about the purpose and legitimacy of UN involvement in the country. The question is whether international standards effectively contribute to national transformation, or do they risk being reduced to symbolic gestures that satisfy external scrutiny without generating substantive change. There will be those who regard international engagement as a necessary corrective to domestic failings, and others who see it as an infringement on national sovereignty. The question of accountability for war crimes committed during the three-decade-long civil war remains a deeply divisive and sensitive issue. Sri Lanka, with its own complex and painful history, has the opportunity to lead by example by reckoning with the past unlike many other countries who justify their atrocities under the veil of national security.

International Breakdown

The modern international system emerged in the wake of two catastrophic world wars and the recognised failure of early twentieth-century diplomacy to prevent mass violence. At its core was a collective pledge to establish a rules-based international order that could maintain peace through law, institutional cooperation, and multilateral governance. The development of international human rights and humanitarian law was most pronounced in the aftermath of the mass atrocities and immense human suffering of World War II. The powerful nations of the time resolved to lead a new global order in which such horrors would never be repeated.

This vision of a rules-based international order as a safeguard against a return to the law of the jungle, where power alone determined justice was institutionalised through the United Nations, the Geneva Conventions, and the establishment of international courts such as the International Court of Justice and the International Criminal Court. However, this international system has come under increasing strain in recent decades. Recent events show that it no longer functions as originally envisioned. In practice, the consistent application of international law, regardless of the status or power of a state, is frequently compromised. The selective enforcement of legal norms, particularly by powerful countries, has eroded the legitimacy of the system and calls into question the universalism at the heart of international law.

At present, at least three major international conflicts taking place in Ukraine, Gaza, and now the confrontation between Israel and Iran, illustrate a sustained breakdown in the enforcement of international legal norms. These conflicts involve powerful states that openly defy legal obligations, with the international community, especially its more influential members, often remaining conspicuously silent. Only a handful of countries, such as South Africa, have chosen to raise issues of international law violations in these conflicts. The broader silence or selective rationalisation by powerful countries has only reinforced the perception that international law is subject to political convenience, and that its authority can be subordinated to geopolitical calculation. Earlier examples would include the ruination of prosperous countries such as Iraq, Libya and Syria.

Uphold Consistency

The Sri Lankan situation illustrates the importance of preserving an international legal system with mechanisms for credible and impartial accountability. Sri Lanka, so far, has been unable to address the issues of accountability for serious war-time human rights violations through internal mechanisms. However, the broader lesson from Sri Lanka’s experience is that international norms ought not to be applied selectively. If global institutions aspire to uphold justice by holding smaller or less powerful countries accountable, they must apply the same standards to powerful states, including Israel, Russia, and the United States. Failing to do so risks creating the perception that the international legal system is an instrument of coercion and selective punishment rather than a foundation for equitable global justice.

Despite the prevalence of double standards in international practice, it remains in Sri Lanka’s national interest to support the principles and implementation of international law. The existence of international law, however weak, offers some level of protection that smaller countries have when faced with the predatory behaviour of more powerful states. For this reason, the Sri Lankan government must do all it can to uphold its prior commitments to the UN Human Rights Council and implement the promises it has made to the fullest extent possible. In multilateral forums, including the UN, Sri Lanka must reassert these commitments as strategic assets that help to defend its sovereignty and legitimacy. At the same time, Sri Lanka needs to take up the challenge of using these international platforms to highlight the problem of selective enforcement. Sri Lanka can contribute to the broader call for a more principled and consistent application of international law by demonstrating its seriousness in protecting vulnerable populations and position itself as a responsible and principled actor in the international community.

Engaging with the past in accordance with international standards is also essential for Sri Lanka’s internal reconciliation and social cohesion. The principles of transitional justice—truth, accountability, reparations, and institutional reform—are not only universally applicable but also critical to the long-term development of any post-conflict society. These principles apply across all contexts and periods. If Sri Lanka is to evolve into a united, stable, and prosperous country, it must undertake this process, regardless of what other countries do or fail to do. Only by acknowledging and addressing its own past can Sri Lanka build a future in which its multi-ethnic and multi-religious character becomes a source of strength rather than weakness.

 

by Jehan Perera

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A model for reconciliation

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Volker Türk

Conciliation between parties to a conflict involves two basic processes. The common factor to both is identifying the perpetrators associated with the conflict and holding them accountable for their actions, because of the belief that atonement for the violations committed help the aggrieved survivors to ease their pain without which reconciliation is not possible. One process involves Voluntary Admission of the TRUTH to the point of admitting guilt on the part of the perpetrators for the violations committed and Forgiveness on the part of the victims. Another process is to establish the TRUTH through mechanisms set up to investigate the scope and extent of the violations committed and identification of the perpetrators responsible, so that they could be punished to the extent of the law, thus assuaging the pain of the aggrieved. This is Retributive Justice.

The features common to both processes are that violations committed are in the PAST, which, in the case of Sri Lanka span, over a period of 16 to 30 years. Under such circumstances, ONLY Voluntary Admission would identify the perpetrators, while in the case of Retributive Justice, the credibility of the investigations to establish the TRUTH, based on which perpetrators are identified, would vary from questionable to inadmissible after the lapse of 16 to 30 years.

The first process cited above, namely Voluntary Admission followed by Forgiveness, was adopted by the Truth and Reconciliation Commission of South Africa. This attempt failed to meet expectations because one of the parties, who was to participate and make Reconciliation meaningful, refused to participate in the exercise. Furthermore, others see such processes as too idealistic because outcomes of the Reconciliation process require the full participation and genuine commitment of the parties to the conflict. Consequently, most countries opt for the second process, which is Reconciliation through Retributive Justice despite the fact that it is dependent on the credibility of the evidence gathered over decades and, therefore, has the potential to be flawed.

ALTERNATIVE APPROACHES

TO RECONCILIATION

If admission of Guilt and Forgiveness is realistically not an option, or the limitations of mechanisms to establish credible evidence is also not a dependable option, the only alternative most countries adopt is for time to heal the grievances between parties to the conflict in a manner that best suits their respective social and civilisational values Since such an alternative leaves grievances that initiated the conflict to resolve itself on its own accord, the inevitable outcome is for societies to stay divided and frustrated thus making them fertile grounds for conflicts to recur.

The primary reason for the failure of the options hitherto pursued is that it limits the process of Reconciliation ONLY to violations associated with the Conflict. It does not factor in the grievances that initiated the conflict. This aspect is completely overlooked in the processes that involve admission of guilt followed by forgiveness or in Retributive Justice. Consequently, accountability based on Retributive Justice, advocated by the UNHRC and recommended by some in Sri Lanka, remains far from what is needed for meaningful Reconciliation.

It is, therefore, imperative that Sri Lanka presents a viable alternative that is NOT rooted in PAST actions but in the PRESENT because it is in the PRESENT that the livelihoods of those affected by the conflict have to be restored and their sense of hopelessness healed. Furthermore, Reconciliation, based on the PRESENT is recognized as the principal pillar in meditation as being the most rewarding to contribute to overall human wellbeing.

THE ALTERNATIVE

The approaches pursued by Sri Lanka were to appoint Presidential Commissions of Inquiry, Presidential Truth and Reconciliation Commissions, Task Forces to investigate and gather evidence with Foreign participation and the ongoing Evidence Gathering Mechanisms of the UNHRC, to name a few. In the midst of these attempts, Sri Lanka also set up the “Office for Reparations” (OR) under Act, No. 34 of 2018 and the Office on Missing Persons (OMP).

The stated Objective of OR was the recognition given by the Act to “a comprehensive reparations scheme anchored in the rights of all Sri Lankans to an effective remedy will contribute to the promotion of reconciliation for the wellbeing and security of all Lankans, including future generations”. Whether these Offices were set up with the conscious intention of focusing on the PRESENT while continuing to engage with Retributive Justice mechanisms that focus on the PAST, is not known.

The title of the 2018 Act states:

“AN ACT TO PROVIDE FOR THE ESTABLISHMENT OF THE OFFICE FOR

REPARATIONS; TO IDENTIFY AGGRIEVED PERSONS ELIGIBLE FOR

REPARATIONS, AND TO PROVIDE FOR THE PROVISION OF INDIVIDUAL

AND COLLECTIVE REPARATIONS TO SUCH PERSONS…”;

Its Vision is: “To create Reconciliation among Nationalities and ensure Human Rights through Economic and Social Prosperity”.

Its Objectives are:

1. To formulate and recommend to the Cabinet of Ministers, policies on reparations to grant individual and collective reparations to aggrieved persons.

2. To facilitate and implement such policies on reparations as approved by the Cabinet of Ministers, by the office for Reparations, including specialised policies on public education, memorialisation and on children, youths, women and victims of sexual violence and persons with disabilities.

3. To establish links to ensure the compatibility of the office for reparations with other mechanisms aimed at reconciliation.

4. To monitor and evaluate the progress of delivery of reparations to eligible aggrieved persons

GRANTS TO FAMILIES OF MISSING PERSONS

“The (OR) makes monetary grants to victims of conflict as a form of reparations. The focus of the OR is to assist aggrieved persons (victims) in ways that will provide meaningful assistance that is sustainable. Hence, the grant is not intended to serve as compensation but is given as a form of monetary relief. Families of missing persons are included in Livelihood development programmes, with particular focus on women who are heads of households”.

“Families of missing persons are among those to whom monetary grants are made by the OR on receipt of confirmation from the Office on Missing Persons (OMP) that the person is in fact missing. In terms of section 11(a) of the OR Act No. 34 of 2018, the OR is empowered to “receive recommendations with regard to reparations to be made to aggrieved persons, from the Office on Missing Persons.”

“Since the year 2022, the OR has received recommendations from the OMP to make payments to claimants in respect of a family member who they confirm are missing, after the conduct of an inquiry by the OMP into complaints made to the OMP by the family member (a claimant). The sum granted is Rs. 200,000/= per missing person, and is the same as the sum granted to applicants who make direct requests to the OR for monetary relief on the basis of the death of a family member”.

The three-step procedure followed by the OR on receiving the recommendation from the OMP is as follows-

STEP 1- OBTAINING INFORMATION FROM FAMILY:

“The letter received from the OMP confirms that the person named therein is reported missing, based on documents produced to the OMP, and recommends that a payment be made to the complainant named therein.

The information in the letter is sometimes inadequate to affirm the identity of the missing person and ascertain whether any previous grants have already been made to the family of that person on a direct application made to the OR. Hence the OR proceeds to obtain necessary information from the OMP and/or the complainant regarding – (1) the identity of the claimant and the missing person (Name, address, NIC number if available), to check from the OR information system whether a payment has been made previously and (2) the Bank Account to which the grant money should be remitted.

Where appropriate, the OR requests an affidavit from the claimant to state that no member of the family has previously received any payment on account of the death of that family member. A template of the Affidavit is provided by the OR”.

STEP 2 –

Processing the claim on receiving information.

STEP 3 –

Remittance of grant money to claimant.

CONCLUSION

With the conclusion of the Armed Conflict in Sri Lanka in May 2009, the approach to Reconciliation recommended Internationally, by the UNHRC, and by some Sri Lankans, was to address accountability for violations committed during and after the conflict through mechanisms of Retributive Justice that involve investigations, evidence gathering followed by prosecution. Over the years, Sri Lanka has laboured under these pressures without any meaningful outcomes as far as Reconciliation is concerned. This has been the experience with other countries as well.

The primary reason for this being the inability to gather credible evidence associated with violations committed over the PAST 16 to 30 years for Reconciliation to be meaningful. Furthermore, since the process is time consuming, the impression created is that no Government is serious about Reconciliation. This has left the survivors of all communities frustrated and disappointed in respect of their emotional and physical aspects of living in the PRESENT.

In the meantime, Sri Lanka set up the Office for Reparations (OR) and Office on Missing Persons (OMP) in 2018. Over the last seven years, these Offices have been working in the shadows, focusing on the physical needs and priorities of the survivors with a focus on the PRESENT and not on the PAST. This enables visible and tangible benefits to the survivors which is far more meaningful to their daily physical living with feedbacks to their emotional wellbeing, as well, than attempting to uncover the TRUTH of what took place decades ago. However, the need to expand the mandate of the OR to cover the development of Policies that address the causes that initiated the conflict is imperative.

Hence, the present Government should make the expanded Objectives of the OR the theme of their model for Reconciliation because the relevance of the PRESENT has its roots in meditation that promotes living in the PRESENT as being the most rewarding for human wellbeing. This model should first be discussed with a representative group of communities in Sri Lanka followed by first presenting it to the UN High Commissioner for Human Rights Volker Türk, during his visit to Sri Lanka, and then to the UN Human Rights Council in Geneva as a Resolution for acceptance.

by Neville Ladduwahetty

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Unique mashup cover…

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Mayuka Aparnatha may not be seen and heard in all parts of the country, performing live on stage, but he is certainly a star on social media, and has done modelling, as well – both ramp and photographic.

His preference, at the moment, he says, is to work on cover songs, adding that he does his covers with a touch of his own.

His latest song is titled ‘Asai Mannam’ and it has just been released. It is his fourth cover and also marks his first-ever mashup.

According to Mayuka, ‘Asai Mannam’ is a unique Sinhalese interpretation of the South Indian hit ‘Asa Kooda’ by Sai Abhyankkar and Sai Smriti.

“I consider this cover special because it’s a mashup with the song ‘Ma Diha’ by Dilu Beats. To my knowledge, this is the first-ever Sinhala cover of ‘Asa Kooda.’”

Mayuka’s musical journey began when he was very young.

Mayuka in action in the ‘Asai Mannam’ video

“Coming from a musical family, where my grandparents were involved in stage and drama, I naturally gravitated toward singing. I took part in inter-school competitions, as a child, and was fortunate to win a few. It has always been my dream to become a singer.”

Mayuka says he received formal training at KK Music, adding that he began making his music by starting with cover songs on YouTube.

Prior to ‘Asai Mannam,’ he has released three other covers, which are also available on his YouTube channel – MAYUKA.

Of course, one would say that the turning point in his musical career was when he participated in The Voice Sri Lanka, aired on Sirasa TV, and competed under Coach Raini’s team. He progressed until the battle rounds.

“Being a part of that show was a dream come true and something I can proudly tick off my bucket list.”

Mayuka went on to say that creating this official cover and music video of ‘Asai Mannam’ has been a rewarding experience.

“Music has always helped me through emotional and mental challenges, and I sincerely hope my songs can do the same for others, whether by healing, comforting, or simply bringing joy.”

Says Mayuka: “I’m deeply grateful to everyone who has supported me so far. I hope those who resonate with my style will continue to listen, and I look forward to sharing more music with you in the future.

“I’m also incredibly grateful to be featured in The Island newspaper. Thank you so much for the support.”

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