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On the Right Side of History

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by Dr Sarala Fernando

The visit to Sri Lanka by US Secretary of State Mike Pompeo has been amply analyzed in the press, commenting on its timing, agenda and impact on domestic public opinion. Mr Pompeo’s warm words of friendship “the US seeks to strengthen partnerships with democratic, peaceful, prosperous and fully sovereign Sri Lanka” reminded me of my first posting as a young diplomat to Washington D.C. in 1977. There, the State Department desk officer for Sri Lanka mentioned that they regarded Sri Lanka as an “unreliable” country, the only country against which Congressional sanctions had been imposed, stopping all US aid, namely the Hickenlooper Amendment and the Battle Act in the 1960’s, for nationalizing the foreign oil companies and trading with an “enemy” nation (China). These remarks by the desk officer showed scant respect for the sovereignty of small countries and unwarranted given the history of US-China relations, when by 1970-1971 President Nixon had taken the initiative to contact Beijing with which it had had no relations for 25 years and finally made that historic visit to Beijing to normalize relations in Feb 1972.

By way of contrast, elsewhere in the world, Sri Lanka has earned a solid reputation for its non-aligned foreign policy and a reliable all-weather friend, which has earned valuable reciprocation over the years . The best known examples include standing by Japan at the San Francisco Peace talks, standing with China even if it meant the loss of US aid, and support to Vietnam during the years of the US led war. I remember Vice President Binh, when I presented credentials in Vietnam in the late 1990’s , having warm words of friendship for Mrs Sirimavo Bandaranaike and Sri Lanka’s support during the difficult war time years. In the 1980’s as a young diplomat in Kenya, so many times I would meet friendship and warm smiles from people of different levels in society, as Mrs Bandaranaike was remembered as the world’s first woman prime minister, Chair of the Non Aligned movement, a considerable achievement in those days. When there was talk of an adversarial action on human rights during my tenure of office in Geneva (2004-2007), I remember the solidarity of the Asian Group, and how delegation upon delegation stood with Sri Lanka, recalling Sri Lanka’s support extended to them in times of their need. There was noticeable silence from our Big Neighbour due to the Tamil Nadu factor and also India’s moving towards accommodation on human rights with the West.

The Pompeo visit to South Asia in the dying days of the Trump Presidency, had as objective the consolidation of the US- India security partnership in the Indo- Pacific. News reports quoted the Pentagon that bilateral defence sales were at an all time high, with “India operating US sourced platforms such as P-8s, C-130Js, C-17s, AH-64s, CH-47s and M777 howitzers “and the bilateral strategic partnership advancing at a “historic” pace based on inter-operability and sharing of aerial intelligence. This visit was also to consolidate the Quad, a security pact between US, India, Japan and Australia openly proclaimed by the US as intending to counter Chinese “aggression” in the Indo Pacific region. By taking a leadership role in the Quad, India has signaled how far it has moved from the basic principles of Panchaseela and Non-alignment, which has been commented on in numerous articles.

In this context, it was understandable that ahead of the Pompeo visit to Sri Lanka, there had been considerable press attention and debate in the island on India-Sri Lanka relations and adverse public reaction to the military buildup in the region. There were also some domestic political maneuvers to shift India’s traditional support to Sri Lanka being conditional on the “full implementation of the 13th Amendment”. Some believe Foreign Secretary Colombage’s kow- tow to India describing the island’s new maritime security policy as putting “India first” was part of such manoeuvres which however failed to shift the Indian traditional position. But if it was intended to suggest something more, i.e. that Sri Lanka should function within India’s security umbrella, such a policy shift would have had short shrift in domestic public opinion due to many historical circumstances. To take just one example, during the “decade of confrontation” with India in the 1980’s, India had made clear its suspicions of Sri Lanka’s proximity to the US and alleged US interest in the Trincomalee oil tanks and VOA. Now it seems, India has made a 100 % turn, seeking instead to strengthen its bilateral security partnership with the US! So the question to be asked is why Sri Lanka should veer from side to side as the new “Cold War” looms in Asia, and what would that imply for the independence and credibility of our foreign policy?

It was widely criticized that Mr Pompeo used his stopover in Sri Lanka to go on the offensive against China, calling the Chinese Communist Party a “predator” – unusual diplomatic practice, embarrassing to the hosts during an official visit. In this background it was good to hear that President Rajapaksa in his meeting with Mr Pompeo was forthright and courteous in explaining Sri Lanka’s foreign policy of neutrality and friendship with all while correcting the allegation of “debt trap” often leveled against China . Foreign Minister Dinesh Gunawardene also underlined the three pillars of “neutrality, non-alignment and friendship with all” while highlighting the positive elements of the US-Sri Lanka relationship, the shared values and longstanding people to people contacts. Both President Rajapaksa and Foreign Minister Dinesh Gunawardena welcomed American economic cooperation, trade and investment however there was no mention of any signing of the pending MCC or SOFA agreements which some believe are essential elements of the US Indo-Pacific strategy.

As for the Quad, Sri Lanka’s support so far has been limited to hosting conferences on maritime security, and this too is receding, from the previous gala event under Prime Minister Ranil Wickremesinghe now down to a NGO conference last week by Pathfinder Foundation with funding from Japan, seeking to facilitate free and unimpeded navigation for all parties in the Indo-Pacific, without exception and exclusion (a far cry indeed from Mr Pompeo’s China-bashing). Unfortunately for this talk-fest by academics and retired diplomats, issues of maritime security were overshadowed by an environmental crisis when for the first time in Sri Lanka, a pod of some 120 short fin pilot whales beached in Kalutara. Environmental activists charged that acoustic threats from navy sonars during the Malabar naval drills by the Quad in the vicinity had disoriented the marine mammals. Indeed, in the US, pressure from law suits by environmental activists and judicial orders have already led to the US navy codifying a number of important operational safeguards for training exercises using sonars including underwater surveillance on safety for marine mammals, 25 mile exclusion zones around coastlines, biologically important areas, marine sanctuaries etc. An international campaign for a global ban on LFA sonars affecting marine mammal gathering areas is gaining momentum. Fortunately the Sri Lanka navy took a leading role in the Kalutara whale rescue operation and had not participated in the Quad drills, this time around.

While there is no support in Sri Lanka for US led militarization in the Indian Ocean, it should be noted that the American brand is strong in Sri Lanka encompassing both high tech and cultural assets ranging from music and film to food and clothing. America’s image abroad will benefit from the Biden Presidency which will return the US to its moral leadership in the global order including on issues such as climate change and human rights. However, our missions in New York and Geneva will have to stay alert for consequences in the aftermath of the Sri Lanka withdrawal from resolutions agreed under the previous US Democratic administration in 2015. The Foreign Ministry should be planning ahead with relevant Ministries and institutions to prepare for the upcoming HRC sessions and to place on record Sri Lanka’s implementation of assurances on human rights including upto date reporting under HRC mechanisms .

There is another worry and that has to do with analyzing the rationale for the military build-up in India. Beefing up the Indian air force seems a key strategy with the purchase of new Raffale jets, completing of mountain tunnels to enable quick reinforcements to the Northern border, adding to all the new hardware from the US and now consolidating aerial intelligence cooperation with the new BECA agreement, are these all elements of a larger plan not just for defence but perhaps preparations for an offensive? The underlying concern is that we are living in historic times, with major changes taking place on borders which would have been considered unthinkable a few years ago. There is Brexit and the breaking away from the European Union, more recently in Ngarno Karabakh territory has been conceded to Azerbaijan as a result of military force. While President Trump is still in office, Israel is moving forward on the Trump Peace Plan in the Middle East to extend its frontiers over the Golan Heights and occupied territories in the West Bank and Gaza while building of new settlements in East Jerusalem has begun. In South Asia, India has withdrawn the special constitutional status accorded since decades to Jammu, Kashmir and Ladakh, and now recently Pakistan has announced plans to make those parts of Kashmir administered by it into a separate Province which will be seen as a provocation by the Indian side. Is the stage being set for a historic military confrontation over Kashmir?

 

(Sarala Fernando, retired from the Foreign Ministry as Additional Secretary and her last Ambassadorial appointment was as Permanent Representative to the UN in Geneva. Her Ph.D was on India-Sri Lanka relations and she writes now on foreign policy, diplomacy and protection of heritage).



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Features

Why record export earnings may not be good news

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By Gomi Senadhira

The press release by the Central Bank on the external sector performance ,in June 2022, perhaps was the first piece of good news we had received for a long time. According to the press release, “Earnings from merchandise exports, in June 2022, increased by 23.9 percent over the corresponding month, in 2021, recording US dollars 1,248 million, which is the highest ever monthly export earnings recorded. An increase in earnings of both industrial and agricultural exports contributed to this favourable outcome, …. Cumulative export earnings, from January to June 2022, also increased by 14.3 percent, over the same period in the last year, amounting to US dollars 6,514 million.” So, most of us would think we have enough dollars to cover our essential imports. But, apparently, that is not the case.

Earlier, the Central Bank Governor, Dr. Nandalal Weerasinghe, had said that exporters only converted about 20% of their export earnings into Sri Lankan Rupees and the rest was not brought back to Sri Lanka. That amounts to the US $800 million a month! The Governor had also said “… At least 40% of the total export earnings should be added to the formal financial system of the country. So exporters have a responsibility, at a very difficult time like this, to bring back their foreign exchange, through the banking system, and if that happens, then we can resolve the fuel crisis comfortably.”

(Diesel shipment that arrived in Colombo, on 16 July, still not paid for want of dollars – The Island July 30th) It appears as if the Governor is pleading with the exporters to bring back at least 40% of their export earnings. More notably, from Dr Weerasinghe’s statement, it is clear that the exporter had only converted 20% of their export earnings to rupees during the last five months. Did they convert their export earnings to rupees during the last year, or in the previous years? For how long has this been going on? When the Central Bank says “… exporters have a responsibility, at a very difficult time like this, to bring back their foreign exchange, through the banking system,” does that mean the foreign exchange earned, with the exports, is brought through the hawala network, or other similar arrangements?

Exporters deserve credit for the great service they provide and should be rewarded, appropriately. But not disproportionately. The export earnings are not earned by the exporters alone. These earnings are earned by all those who contribute to manufacturing the export products. All of them should be getting their fair share of the export proceeds. If not, there is something terribly wrong with the system. Is this normal in international trade?

During the last few years, some of the studies by Indian scholars, including Utsa Patnaik and Shashi Tharoor, have placed in the public domain some of the less known facts on the effects of the British colonial rule on India. They explain how the British seized India, “… one of the richest countries in the world – accounting for 27% of global GDP in 1700 – and, over 200 years of colonial rule, reduced it to one of the world’s poorest,” and how during the period British Raj siphoned out $45 trillion from India.

How was this done? Patnaik explains, “In the colonial era, most of India’s sizeable foreign exchange earnings went straight to London—severely hampering the country’s ability to import machinery and technology in order to embark on a modernisation path, similar to what Japan did in the 1870s. …, a third of India’s budgetary revenues was … set aside as ‘expenditure abroad’. The secretary of state (SoS) for India, based in London, invited foreign importers to deposit with him the payment (in gold and sterling) for their net imports from India, which disappeared into the SoS’s account in the Bank of England. Against these Indian earnings he issued bills… to an equivalent rupee value—which was paid out of the budget, from the part called ‘expenditure abroad’.” Patnaik underlines that this was “something you’d never find in any independent country,”

But it appears something very similar is happening in Sri Lanka, many years after the independence! If the exporters do not “bring back their foreign exchange ,through the banking system,” or only bring back 20% of it, then how do they pay for goods and services obtained locally? The local value addition for most of our exports is 70% to 80% or higher! The only major exception is cut and polished diamonds. Tea exporters buy tea with rupees. Some of the imported inputs, like fertiliser, or diesel, are sourced locally! The garment industry had moved up the value chain during the last 40 years and provide many value-added services, like designing, locally.

How do the exporters pay for all these goods and services, if they keep more than 60% of their export earnings outside the country? Do they get it through “hawala” or similar arrangements? During the British Raj, payments to local producers were done with the taxes collected by the Raj. In present-day Sri Lanka, how does one manage to raise a large amount of cash to operate such a system?

If a sizeable chunk of Sri Lanka’s foreign exchange earnings goes straight to banks in London, New York, Zurich, or elsewhere, severely hampering the country’s ability to import essential items, doesn’t that mean, Sri Lanka’s wealth is getting siphoned out through our exports? And there is not much of a difference between what happened during the colonial period and the post independent Sri Lanka!

So, June’s record export earnings also mean nearly US$ billion was siphoned off during the month! A new record for the month of June! And that means Patnaik was wrong when she said this was not “something you’d never find in any independent country”

That is not good news.

(The writer is a specialist on trade and development issues and can be contacted at senadhiragomi@gmail.com)

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Improving trend needs to be sustained on multiple fronts

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by Jehan Perera

The government appears to have secured political stability in the short term.  So far President Ranil Wickremesinghe’s efforts to restore stability appear to be working. Political stability is necessary for decisions to be made and kept.  It is a necessary element for international support to come in.  One of the IMF’s conditions to provide the country with the multi-billion-dollar loan it seeks is political stability that would ensure that commitments that are made will be kept.  The protest movement has not mobilised public demonstrations on the very large scale of the past after the appearance of Ranil Wickremesinghe in leadership positions, initially as prime minister and subsequently as president. This would be seen as an achievement by the government.  The present governmental line that protests should be within the law is difficult, and also frightening, to challenge when a state of emergency is in force.

The government has shown its ability to wield the emergency law with deterrent effect. Under the state of emergency that President Wickremesinghe declared on July 18, the period that a person may be detained before being brought before a magistrate has been increased from 24 to 72 hours. The authorities have been granted additional powers of search and arrest, and the military has been empowered to detain people for up to a day without disclosing their detention. The state of emergency also gives the president and the police broad powers to ban public gatherings, allows the police or military to order anyone to leave any public place or face arrest, and makes it an offense to cause “disaffection” or to spread “rumours.” However, in a sign that Sri Lanka’s system of checks and balances is still working, the Colombo Chief Magistrate’s Court has rejected a request by the police to ban a public protest planned by political parties and multiple organisations on September 9.

Human Rights watch has pointed out that “these provisions are vague, overly broad, and disproportionate in violation of the rights to freedom of expression, peaceful assembly, association, and movement.”  The midnight strike on the protestors who had camped for over three months at the main protest site at Galle Face would make any reasonable person think twice before getting into physical confrontation with the government.  The social media coverage of events that night showed men in black uniform and wearing masks, attacking the unarmed protestors.  As these men did not wear identification badges, there is a question whether they were part of the official security forces or drawn from other groups that work with them.  This response brought discredit to the perpetrators and disturbed both Sri Lankan people and the international community that have the welfare of Sri Lanka at heart.

The government has also used the full power of the draconian law to ensure that the leadership of the protest movement is neutralised. Several of them have been arrested, some of them given bail, others remanded, which would send a chilling message to the others.  The government has also shown its willingness to offer high positions to those who are prepared to join it.  This has led to a situation where two trade union leaders active in the protest movement have been treated very differently.  One has been offered a high post while the other has been put into prison, although he has now been given bail.  In a signal that he is sensitive to public pressure and human rights concerns, President Wickremesinghe had spoken to leader of the Ceylon Teachers Union, Joseph Stalin, after he was remanded and reportedly said he admires the members of the protest movement who talk of a system change.

ECONOMIC STABILISATION

Apart from the appearance of political stability there is also the appearance of economic stabilisation.  The shortages of cooking gas, petrol and diesel, and the 13-hour power cuts were among the main catalysts of the protest movement.  It was during the period of long power cuts, when staying at home became unbearable, that neigbourhood groups began to converge in urban centres to hold candlelight protests.  However, at this time the supply of gas, petrol and diesel has improved significantly and the kilomere-long lines in front of fuel stations are much less common.  Credit has gone to the QR code system put in place that gives to each vehicle a weekly quota.

The challenge for the government is to ensure that the economic situation continues to be stable without experiencing the acute shortages of key items that causes distress to the general population.  The QR code system can only work if there is petrol and diesel to be distributed.  The current imports of cooking gas, petrol and diesel appear to have been made possible by a World Bank loan which was re-purposed to the purchase of essential items.  However, these funds will dry up soon.  The question is what will happen after that.  There is apprehension that the country will fall once again into a situation of severe shortage.  The government needs to take the people into its confidence regarding the future.  The government also needs to be trusted if it is to be believed.

The World Bank has given an indication that they are still to be convinced regarding the provision of further assistance to Sri Lanka.  Earlier this month, the World Bank issued a statement “expressing deep concern about the dire economic situation and its impact on the people of Sri Lanka yesterday said it does not plan to offer new financing to Sri Lanka until an adequate macroeconomic policy framework is in place.  Issuing a statement, the World Bank Group said it is repurposing resources under existing loans in its portfolio to help alleviate severe shortages of essential items such as medicines, cooking gas, fertiliser, meals for school children and cash transfers for poor and vulnerable households.  To date, the World Bank has disbursed about US$160 million of these funds to meet urgent needs.”  This is extremely concerning as the World Bank is closely connected to the IMF on which Sri Lanka is pinning its hopes for a big loan.

POLITICAL STABILITY

The issue of political stability is highlighted by the government as being necessary to obtain international assistance and also as a justification for quelling the protest movement through emergency laws.  There is explicit blame being apportioned to the protest movement for creating instability in the polity that is deterring the influx of foreign assistance and investments.  However, the fuller picture needs to be seen.  The IMF as much as the World Bank, and indeed other potential sources of donor support, want their resources to be used for the intended purpose and not be squandered or siphoned away corrupt practices and in sustaining loss-making state institutions.

The hoped-for IMF-supported programme to provide assistance to Sri Lanka is being developed to restore macroeconomic stability and debt sustainability, while protecting the poor and vulnerable, safeguarding financial stability, and stepping up structural reforms to address corruption vulnerabilities and unlock the country’s growth potential. IMF mission team to Sri Lanka last month specifically mentioned the need to reduce corruption stating that “Other challenges that need addressing include containing rising levels of inflation, addressing the severe balance of payments pressures, reducing corruption vulnerabilities and embarking on growth-enhancing reforms.”

Both the international funding agencies and the protest movement are on the same page when it comes to opposing corrupt practices.  The main slogans of the protest movement during their heyday was the ouster of the then president, prime minister and cabinet of ministers, and indeed the entire parliament, on account of the corruption that they believed was responsible for having denuded the country of its foreign exchange reserves. This was not simply the replacement of one set of corrupt leaders by another. There are disturbing signs that some of those accused of corruption are once again on the ascendant.

The underlying demand of the protest movement was and continues to be the very “systems change” that the president has said he admires in his reported discussion with remanded trade union leader Joseph Stalin. Civil disobedience to obtain a government that is transparent and law abiding, that does not steal the wealth of the country, is a noble goal, no less sacred than the civil disobedience struggles engaged in by Mahatma Gandhi in India and Martin Luther King in the United States.  The ingredients for a rebound of the protest movement continue to be in place and hopefully the evidence of a systems change will become more convincing.

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Brenda Mendis… ‘Gindara Kellek’

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I first got to know Brenda Mendis when she was very much a part of the group Aquarius, before joining Mirage..

With Aquarius, her dynamism bloomed, on stage, when she partnered two other female vocalists – from the Philippines.

And…yes, they certainly did rock the scene; the three girls were the talk-of the-town and they were featured at some of the best venues in the city.

She was also, at one time, associated with the band 2Forty2.

Brenda now operates with an outfit called C Plus Band, and with whatever free time, that comes her way, the talented artiste is now working on originals.

The latest is the song ‘Gindara Kellek’ and this is what Brenda has to say:

“I have known this guy Chathurangana de Silva for a very time and he has been involved in composing certain songs for the C Plus Band.

“We then got down to discussing about putting together a song which could be classified as a fast genre in music, and Chathurangana, along with Sampath Fernandopulle, came up with the suggestion for the lyrics, and they did so, based upon a proper observation of my lifestyle and the personality portrayal of myself, and that’s how “Gindara Kellek’ came into the scene.”

Brenda went on to say that the composing was done during a tight schedule.

“As I am the female vocalist, on a full time basis, with the C Plus Band, it took us more time than what is usual spent at a recording session, because of our public performances.”

‘Gindara Kellek’ is not Brenda’s maiden effort. She has been involved in quite a few other originals, including ‘Tharu Peedena Seethale,’ ‘Obai Mage Thaththe,’ ‘Mage Raththaran,’ ‘Kaprinna (Chooty),’ ‘You Never Know,’ ‘Mea Nilwan Nimnaye, and ‘Sitha Igilee Gihin.’ And, they are all uniquely different to each other, she says.

With the country going through a tough period, Brenda, spends her free time working out and reading.

“I would take this opportunity, through your very popular music page, to thank all those who helped me throughout my journey in this wonderful field of music.

“I shall continue to keep music lovers happy, with my music, and I would also thank my followers for supporting me and for being with me throughout my career in showbiz.”

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