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Midweek Review

Over a decade after triumph over LTTE, Lanka still troubled by Western agenda



Prof. G.L. Peiris with colleague, Dinesh Gunawardena at the Foreign Ministry on the day he succeeded the latter (pic courtesy FM)

By Shamindra Ferdinando

A reference was made as regards the role played by Japanese Special Envoy Yasushi Akashi in the Norway-led peace process during Ranil Wickremesinghe’s premiership (2001-2003) when Japanese Ambassador in Colombo Akira Sugiyama paid a courtesy call on Foreign Minister Prof. G.L. Peiris on August 20.

Having won the Dec 2001 violence- marred parliamentary election, UNP leader Wickremesinghe swiftly signed the one-sided Ceasefire Agreement (CFA) with the Liberation Tigers of Tamil Eelam (LTTE) in Feb 2002, obviously prepared by the Norwegians. Even the country’s Commander-in-Chief the then President Chandrika Kumaratunga was unaware of any of the CFA terms till it was signed. The UNP leader was in such a hurry he didn’t even bother to properly consult the military before the finalisation of the CFA. Wickremesinghe and the late Velupillai Prabhakaran signed the CFA, separately.

Don’t forget the UNPer finalised the so-called peace initiative, launched by Norway, in consultation with the then President Chandrika Kumaratunga. The late Foreign Minister Lakshman Kadirgamar, too, had been involved in that initiative.

What really matters is why former Co-Chairs, having pathetically failed in their high profile project, are now pursuing an agenda targeting Sri Lanka at the Geneva-based United Nations Human Rights Council (UNHRC). What did Sri Lanka do wrong to end up at the UNHRC agenda? Didn’t the US declare UNHRC a cesspit of political bias in June 2018? The then US Ambassador there Nikki Haley declared: “For too long the Human Rights Council has been a protector of human rights abuses and a cesspool of political bias.” By whatever standards, the US is one of the worst serious human rights violators with a murderous record both in and outside the US.

Prof. Peiris, who had served as the Foreign Minister during President Mahinda Rajapaksa’s second term (2010-2015) received the foreign affairs portfolio again during the recent Cabinet reshuffle.

Prof. Peiris succeeded Rohitha Bogollagama, who switched allegiance to Kumaratunga in Nov 2004, having entered Parliament on the UNP ticket. Bogollagama, who successfully handled foreign affairs during Eelam War IV, failed to retain his seat at the 2010 general election from the Colombo District with some of the other UPFA candidates openly ganging up against him on election platforms. He contested Colombo as SLFP Organiser for Kotte, having first entered Parliament in 2000, 2001 (general election due to dissolution caused by a dozen PA MPs switching sides) and finally 2004 from Kurunegala on the UNP ticket. ‘The day Mangala issued a warning to P’karan’ in last Wednesday’s online edition of The Island dealt with how Bogollagama received the foreign affairs portfolio in Feb 2007 in the wake of the unceremonious removal of the late Samaraweera over differences with the Rajapaksas. They differed sharply on the conduct of the military strategy though that was certainly not the only contentious issue. Prof. Peiris was also in the same Cabinet.

Prof. Peiris back at FM

President Gotabaya Rajapaksa has now brought back the one time top law academic to the Foreign Ministry at the expense of Dinesh Gunawardena, who received the Education Portfolio amidst the simmering controversy over teachers’ salary issue. Switching of portfolios took place on Aug. 16 at the Presidential Secretariat. The President’s Media Division (PMD) refrained from releasing pictures of ministers taking oaths before the President. There hadn’t been a previous instance of the PMD not releasing pictures/video footage.

A Foreign Ministry statement quoted Prof. Peiris as having told Ambassador Sugiyama of what he called valuable contribution made by Akashi, now 90, in the peace negotiations and reference was also made to the Japanese role in the post-war reconciliation process and human rights issues. Foreign Secretary Admiral Prof. Jayanath Colombage was also associated with Foreign Minister Peiris at the meeting.

It is a supreme irony that the US that dropped the world’s first two atomic bombs on two highly populated cities of Hiroshima and Nagasaki to force Japan to surrender when it was already virtually on its knees unable to stop the carpet bombing by the US Air Force of the country is now an ally of Washington ready to support whatever the Americans would bid it to do.

Having finished off the LTTE in May 2009, Sri Lanka has been struggling to explain the conduct of its armed forces for having crushed ‘the most ruthless terrorist organisation’ (termed by the American Federal Bureau of Investigation) in conventional battles against the wishes of the self-appointed international community that has committed far worse crimes in an array of countries.

It would be pertinent to mention that during the Wickremesinghe premiership Prof. Peiris served as Sri Lanka’s top negotiator in the Norway-facilitated talks with the LTTE. Japan enjoyed a special status in the Oslo-led peace process that collapsed in April 2003 in the wake of the LTTE quitting the negotiating table. After the assassination of Foreign Minister Lakshman Kadirgamar in August 2005 and the abortive bid to assassinate the then Army Commander Gen. Sarath Fonseka in late April 2006, fighting erupted in the North and East in August. Had the LTTE succeeded in eliminating the then Defence Secretary Gotabaya Rajapaksa in Dec 2006, the war could have taken a different turn.

Sri Lanka brought the war to a successful conclusion in May 2009. But over a decade after the eradication of terrorism, Sri Lanka remains on politically motivated Geneva agenda with the issue coming up again later this month.

The UNHRC in March this year adopted a new resolution on Sri Lanka. The Resolution 46/1, adopted on March 23, 2021, paved the way for a powerful new accountability process to collect, analyze, and preserve evidence of international crimes committed in Sri Lanka for use in future prosecutions.The so-called Core Group comprising the United Kingdom, Canada, Germany, Malawi, Montenegro, and North Macedonia that submitted the resolution received the backing of an overwhelming majority of the 47-member UNHRC. Altogether 22 Human Rights Council members voted for the resolution at the behest of the powerful US/UK, while 11 voted against, and 14 abstained. In spite of the longstanding close relationship between Japan and Sri Lanka, the former abstained. Japan had no alternative but to conveniently abstain as it couldn’t decide on its own on the politically sensitive matter. Japan followed the US vis-a-vis Sri Lanka at the UNHRC though the solitary Super Power quit the organisation. South Korea went a step further by voting for the resolution as Seoul couldn’t ignore US dictate.

Sri Lanka should realise the Comprehensive Partnership the two countries entered into in Oct 2015 (PM Shinzo Abe and Ranil Wickremesinghe signed the agreement in Tokyo) less than a week after the yahapalana administration betrayed the military in Geneva on Oct 1, 2015 didn’t matter as Quad member Japan is politically, economically and security-wise bonded with the US. Remember, how Abe reflected on U.S. President Barack Obama’s visit in 2016 to Hiroshima. The Japanese leader asserted: “The two enemies that fought immensely 71 years ago are now bonded by the heart.”

The ongoing confrontation between China and Quad comprising the US, Japan, India and Australia has brought Sri Lanka under further pressure due to the US-led alliance taking an extremely hostile stand as regards China-Sri Lanka relationship.

Prof. Peiris and Basil Rajapaksa, who received the Finance Portfolio a couple of weeks before the mini-Cabinet reshuffle met Colombo-based envoys representing major powers. Sri Lanka, now embroiled in a severe balance of payments crisis, needs the backing of the international community and the understanding of international lending agencies, particularly the IMF. The current crisis should be examined, sensibly, against the backdrop of the economic turmoil caused by the raging Covid-19 epidemic as it caused the total collapse of the vibrant tourism industry and nose dived remittances from our expatriate workers, both of which raked in billions of dollars annually to the country. However, the SLPP government and the Opposition shouldn’t forget the country could have faced the global pandemic much better if not for the ruination of the economy caused by unbridled waste, corruption, irregularities and negligence since independence by all counts. Those who represent the SLPP and the SJB in the current parliament cannot absolve themselves of the responsibility for the present state of the national economy. Energy Minister and attorney-at-law Udaya Gammanpila should be commended for publicly warning the government of dire consequences unless remedial measures were taken. The warning was given on June 13 in the wake of SLPP demanding Gammanpila’s resignation over the sharp increase in fuel prices announced on June 11. In spite of SLPP’s vow to bring down the price of fuel once Basil Rajapaksa received the finance portfolio the ruling party quietly suppressed the issue.

Thalpahewa clarifies

Foreign Ministry faces a daunting task in countering external challenges. Before dealing with current challenges let me mention career diplomat Chanaka Thalpahewa’s response to ‘India’s Vietnam moment, US pullout and Afghan dilemma with strapline UNP’s call to terminate diplomatic relations with Taliban questionable’ carried in August 25, 2021 online edition. Thalpahewa, who recently returned to the Foreign Ministry having served UN Habitat as head of the agency for Sri Lanka and the Maldives emphasized the pivotal importance of keeping in mind the origins of terrorism here. “There cannot be an ambiguity as regards the origins of Tamil terrorism here,” the author of Ashgate publication ‘Peaceful Intervention in Intra-State Conflicts: Norwegian Involvement in the Sri Lanka Peace Process’ Thalpahewa said. Having headed the Sri Lankan mission in London at the time of President Sirisena’s visit in early 2015 pointed out the declaration made by retired Vice Admiral G.M. Hiranandani regarding the Indian role in terrorism in Sri Lanka. VA Hiranandani authored a trilogy on the official history of the Indian Navy namely: Transition to Triumph (covering the period 1965 to 1975), Transition to Eminence (1976 to 1990), and Transition to Guardianship that covered the last decade of the twentieth century. The book that dealt with the 1976 to 1990 period confirmed the establishment of terrorist training camps in South India in 1981, two years before the first major LTTE attack on the Army in the Jaffna peninsula. The outspoken Foreign Service officer agreed with the writer’s assertion that India created an environment conducive for direct intervention here. Thalpahewa’s well researched book is a must read for those interested in knowing the truth as Sri Lanka is yet to set the record straight.

Today nuclear power India is part of the overall US strategy and like Japan is ready to counter the growing Chinese influence in the region. Here too it is an irony that the West that more or less treated India like a leper not too long ago and even attempted to break it up by lighting separatist fires across the great ancient country, from the 70’s now has become a lap dog of the US instead of holding her head high as the world’s second largest economic power before long, while Washington is self-relegating herself as a has been due to her profligacy and sheer arrogance.

Sri Lanka has been caught up in the battle between the US-led Quad and China for superiority and certainly a victim of circumstances due to its strategic positioning. The bone of contention is the increasing Chinese presence in Sri Lanka with Colombo International Container Terminals Ltd., (CICT), joint venture between China Merchants Port Holdings Company Limited and the Sri Lanka Ports Authority (SLPA), 99-year lease on the Hambantota port and the Colombo Port City being strategic investments.

Challenges faced by GR administration

Having succeeded Dinesh Gunawardena on Aug 16, Prof. Peiris received top envoys of India (skipped UK sponsored Geneva vote on Sri Lanka accountability resolution), China (voted against), US, EU, Russia (voted against), Japan (skipped), Pakistan (voted against), South Korea (voted for), Kuwait, Germany (voted for), the Netherlands (voted for), Australia, Turkey, Qatar, Norway, Vatican, Libya, UN and Italy (voted for). Unfortunately, Sri Lanka never managed to set the record straight as regards the accountability issue. Successive governments since the successful conclusion of the war in May 2009 squandered opportunities to vigorously present our case. The SLPP, too, has so far failed pathetically.

In the absence of a cohesive effort on Sri Lanka’s part, India stepped up pressure on Sri Lanka at the UNHRC with a strong reference to 13th Amendment to the Constitution forced down our throat during the Indian Army deployment in Sri Lanka’s Northern and Eastern province following the infamous ‘parippu drop’.

The UN and so-called Sri Lanka Core Group, in consultation with the Tamil National Alliance (TNA), one-time the LTTE’s sidekick worked overtime to harass Sri Lanka at Geneva. Successive governments, including the SLPP conveniently failed so far at least to officially inform the unbreakable relationship between the LTTE and the TNA until the very end. The TNA, having backed war-winning Army Commander Gen. Sarath Fonseka at the 2010 presidential election continues a despicable accountability agenda at the UNHRC. Of the five Sri Lanka Co-Group, three, namely the UK, Germany and Canada are major powers. The UK and Germany voted for the anti-Sri Lanka resolution whereas Canada backed it. Core Group bared its intentions when it raised the arrest of 2019 Easter Sunday carnage suspect Attorney-at-Law Hejaaz Hizbullah and retired Director, CID Shani Abeysekera at the UNHRC. The Foreign Ministry must examine the whole picture without being distracted by various events.

The UK is home to an influential segment of the Tamil Diaspora as well as former members of the LTTE, including Adele Balasingham, a high profile terrorist who may have been even aware of the May 1991 assassination of former Indian Prime Minister Rajiv Gandhi. Having repeatedly refused to help establish the truth by making available wartime UK diplomatic dispatches fromthe UK HC in Colombo, the UK continues to fool Sri Lanka by maintaining proscription of the LTTE in terms of the UK Terrorism Act No. 7 of 2000. The British action is meant to deceive Sri Lanka. The British ban is nothing but propaganda. Actually, the UK never restricted LTTE activity and throughout the war stood by Prabhakaran’s conventional fighting cadre. Sri Lanka Core Group members, the UK and France (voted for anti-Sri Lanka resolution) with the backing of the UN and the US made a last ditch bid in April 2009 to throw a lifeline to the LTTE. Had they succeeded, the current inoculation drive against the raging Covid-19 epidemic would have to be carried out in consultation with the LTTE. Hope, the people haven’t forgotten how the LTTE and Western powers exploited the post-tsunami situation to set up P-TOMS (Post-Tsunami Operational Management Structure) to share power with the LTTE.

Among the dignitaries, Prof. Peiris recently met included UN Resident Coordinator Hanaa Singer who has been absolutely pursuing a hostile agenda here. Having taken over the mission in Sept 2018, Singer quite clearly played politics here. She revealed her hand clearly on a number of occasions. Singer intervened on behalf of those demanding their right to bury Covid-19 victims. She went to the extent of writing to Premier Mahinda Rajapaksa over the cremation of COVID-19 victims’ bodies. Sri Lanka never properly challenged the UN mechanism used to collect information and the use of unverified data to move the 2015 accountability resolution. This Viceroy type behaviour of the UN big wigs here has been going on for far too long.

It was only the late Foreign Minister Lakshman Kadirgamar, who had the guts to tell the UN where to get off when an arrogant Norwegian who was posted here as the Resident Representative at around the beginning of the present millennium unilaterally decided to convert the UN compound in Colombo into a Tamil refugee camp soon after some serious military debacles in the North. It was obviously a premeditated attempt to create a problem situation here without there being any violence against Tamils anywhere in the South!

Those in power should be particularly ashamed for failing to challenge the confidentiality clause inserted by the UN that prevents the examination of UN (judicial or otherwise) data till 2031. We must be the only country prevented from seeing who our accusers are. All those countries voted for the resolution and abstained at the March 2021 session are involved in the plot against Sri Lanka though some did so reluctantly at the behest of the US.

In the wake of Gotabaya Rajapaksa’s triumph at the 2019 presidential election, Switzerland Embassy in Colombo with the support of political elements here staged an abduction of embassy employee Garnier Bannister Francis (formerly Siriyalatha Perera). Their project failed when President Rajapaksa thwarted the Swiss bid to evacuate Francis along with her family. The Swiss also provided political asylum to Inspector Nishantha de Silva of the CID and his family just before the trumped up abduction drama. Perhaps Prof. Peiris should take up these matters with the Swiss Ambassador when the latter pays a courtesy call on him.

Sri Lanka needs to tackle contentious issues. The country whoever is at the helm cannot turn a blind eye to contentious trumped up issues. The continuing failure on the part of the government to address the core issue raised by Lord Naseby pertaining to the veracity of the main allegation that 40,000 Tamils perished on the Vanni east front is quite baffling. Thanks to Lord Naseby’s revelation in Oct 2017 regardless of the continuing humiliation at Geneva, the world knows how the UK suppressed authentic diplomatic cables that cleared Sri Lanka of war crimes. Lord Naseby fought a near three-year legal battle to secure a section of the cables. The UK’s efforts to suppress such information are understandable as whoever in power, voters of Sri Lankan Tamil origin there cannot be antagonized. But Sri Lanka’s failure to present her case properly is much worse. The UPFA/SLPP failure on the human rights front is perhaps far worse than the UNP’s betrayal of armed forces at the UNHRC in 2015.

Sri Lanka’s disgraceful letdown should be examined against the US Defence Advisor Lt. Col. Lawrence Smith’s bombshell revelation in June 2011 that Sri Lanka military didn’t perpetrate war crimes. Perhaps, the Foreign Ministry should revisit the accountability issue again against the backdrop of the NATO pullout from Afghanistan last month that reminded us of Indian withdrawal from Sri Lanka in 1990.

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Midweek Review

Growing foreign dependency and India’s USD 4 bn lifeline



Baglay on an inspection tour of the State Printing Corporation

By Shamindra Ferdinando

The Japanese embassy and UNICEF (United Nations Children’s Fund, previously known as United Nations International Children’s Emergency Fund), on 16 March, 2023, issued a joint statement that dealt with the impact the developing political-economic-social crisis is having on the poor in Sri Lanka.

The statement focused on the suffering of the children and measures taken by UNICEF, in consultation with the Governments of Japan and Sri Lanka, to provide relief to the needy.

However, what really captured public attention was the declaration made by the Japanese Ambassador, in Colombo, Mizukoshi Hideak, that with the latest contribution, amounting to USD 1.8 mn, the total Japanese financial assistance, provided through UNICEF alone, exceeded USD 3.8 mn, since the beginning of last year. That is definitely a significant package provided through a single UN agency, particularly against the backdrop of the unceremonious cancellation of the Japan- funded Light Rail Transit (LRT) project, in late Sept., 2020, by the Gotabaya Rajapaksa Government.

The directive, in this regard, was issued on 21 Sept., 2020, by Dr. P. B. Jayasundera, in his capacity as Secretary to the President, to the then Transport Secretary, Monti Ranatunga. That move ruined Sri Lanka’s relations with Japan.

Whoever advised the then President Gotabaya Rajapaksa to terminate the project, without consulting Japan, as head of the Cabinet-of-Ministers, he couldn’t absolve himself of the responsibility for the ruination of vital relationship with Tokyo. Had it not been the case, Japan, most probably, would have delivered a substantial assistance to Sri Lanka, at the onset of the ongoing unprecedented crisis.

Sri Lanka made a failed bid to secure as much as USD 3.5 bn loan from Japan, during the tenure of Sanjiv Gunasekara as Sri Lanka’s Ambassador in Tokyo. Gunasekara, a close associate of President Gotabaya Rajapaksa, resigned in the wake of the 09 May, 2022, violence, that gave a turbo boost to the campaign against his government.

Unlike Japan, India provided direct aid in various forms to Sri Lanka, struggling to cope up with what became an insurmountable crisis to overcome on our own. India has repeatedly declared that the continuing assistance is in line with Premier Narendra Modi’s much touted ‘Neighbourhood First’ policy. Sri Lanka received concessional credit facility, amounting to USD 1 bn, in March last year. In addition to that, by the second week of March this year, Sri Lanka received other lines of credit, worth over USD 3 bn. Therefore, the total Indian assistance is worth over USD 4 bn, a staggering amount as Sri Lanka’s debt before the Japanese and Indian interventions stood at over USD 53 bn. Indian intervention cannot be compared, under any circumstances, with assistance provided by any other country.

The Indian assistance is of immense importance as the International Monetary Fund (IMF), after much deliberation, promised USD 2.9 bn over a period of four years. The delay on the part of China to provide an assurance as regards debt-restructuring support, hindered the finalization of the tripartite agreement involving Sri Lanka, creditors and IMF. Finally, China gave that assurance, in writing, early this month.

Indrajit Coomaraswamy

The situation was so precarious, Sri Lanka couldn’t have even provided the free text books that have been given, annually, to the student population ,from the time of the JRJ regime. Those who had been at the helm of political power, over the past three decades, to varying degrees, ruined the economy, and, by 2021/2022, Sri Lanka was unable to provide even the basic requirements, like cooking gas, kerosene, petrol, etc., as even remittances from our expatriate workers, which in the past amounted to about seven billion dollars per year, dropped drastically due to the illegal underground banking system, hawala/undiyal, hijacking much of it from the normal banks. The government didn’t have the means to provide school text books for the 2023 academic year. In consultation with India, of the USD 1 bn concessional credit facility, over USD 10 mn was utilized by the State Printing Corporation, and private importers, to procure printing paper and other material from India. India met 45% (four mn students) of the total requirement. Indian High Commissioner Gopal Baglay visited the SPC, on 09 March, 2023, to dispatch a consignment of textbooks to schools. Education Minister Dr. Susil Premjayantha joined Baglay. The Indian High Commission statement, issued two days later,, was aptly titled ‘India’s support for text books investment in Sri Lanka’s future.’

The government and the Opposition should be ashamed of their failure to provide for the children’s need.

Perhaps, a Parliamentary Select Committee (PSC) should be appointed to examine the circumstances leading to Sri Lanka’s bankruptcy status. Decades of utterly irresponsible management of the economy, coupled with an explosive mixture of causes – waste, corruption and irregularities – caused the current crisis.

Political parties, represented in Parliament, are responsible for the continuing crisis, to varying degrees.

Controversy over ISBs

The Island discussed some of the issues at hand in last week’s midweek piece, headlined ‘All praise for Lanka’s saviours!

What Dr. Coomaraswamy didn’t say was that as the CB Governor, he was also directly responsible for the Yahapalana government borrowing a record USD 12.5 bn from the international bond market, at high interest rates, from private lenders, primarily in the West. So what did that government achieve with such huge borrowings? All that the Yahapalana regime achieved, with all that money, we cannot see, except to lay the foundation for the current debt crisis?

Our comment on the basis of recent claims that the Governor of the Central Bank, Dr. Coomaraswamy (2016-2019), only told one side of the truth, attracted responses from several parties, including the Central Bank.

Consequently, the writer discussed the borrowing of USD 12.5 bn, and related matters, and was told the following: First, it is important to point out that the Governor, Central Bank, has no authority to approve or undertake any borrowing on behalf of the government. The borrowing limit, in any given year, is set by Parliament. Therefore, the government cannot borrow beyond the limit set by Parliament. In addition, all external borrowing has to be approved by the Finance Minister, and the Cabinet of Ministers. The Governor and the CBSL only have an advisory role. On ISBs, they have marketing and issuance as additional responsibilities once the Cabinet approved the transaction.

It is also important to recognize that ISBs are only one channel for external commercial borrowings. Others include short-term SWAPs, foreign term loans/syndicated loans and external flows into government rupee securities. The article dealt with only one instrument, having ignored the switching that was undertaken during 2015-19 to increase the maturity and reduce the cost of foreign borrowing.

As regards the USD 10 bn increase in ISBs outstanding during 2015-19, USD 5 bn of this increase can be attributed to switching away from shorter term (one year or less) and more expensive SWAPs and highly volatile foreign portfolio investment (hot money) in Government rupee securities to longer term (5 and 10 years) and less costly ISBs. SWAPs were reduced from approximately USD 2.5 bn to USD 500 mn.

Volatile and foreign investment in government rupee securities was reduced from USD 3.5 bn to USD 600 mn. In addition, during the course of 2019, a second ISB of USD 2 bn was issued to create a stronger buffer of external reserves to address the inevitable increase in uncertainty going into elections due shortly thereafter. (The money required for 2019 had been raised through an ISB, issued in March 2019.)

So about USD 7 bn of the USD 10 bn increase in the stock of ISBs outstanding, during 2015-19 may be attributed to increasing the stability and reducing the cost of the ISBs outstanding by switching instruments and raising the buffer provided by external reserves prior to a period of uncertainty, associated with elections.

The remaining increase of USD 3 bn may be partly attributed to the fact that borrowing incurred earlier had not resulted in a sufficient increase and/or saving of foreign exchange. Hence money had to be borrowed to repay debt incurred earlier. In fact, Verite Research found that 89 percent of external debt, repaid during 2015-19, could be accounted for by liabilities incurred prior to 2015.

The adverse debt dynamics were recognized and the Medium Term Debt Management Strategy was published in April 2019 to chart the way to sustainability. In addition, the Active Liability Management Act (2018) was introduced to expand the tools available to the CBSL for managing external debt sustainably. The CBSL, as the economic adviser to the Government, also advocated that there should be a primary surplus in the budget and that non-debt creating inflows (such as exports, remittances, tourism proceeds, FDI, inflows into the CSE and government securities) should be increased to enhance the capacity to service debt while supporting the level of imports necessary to achieve the growth potential of the economy.

They also pointed out that only one of the ISBs, issued during 2015-19, has been settled to date. This amounted to USD 500mn. They expressed the view that it is not possible to sustain the argument that servicing ISBs, incurred during 2015-19 ,led to the standstill in debt repayments in April 2023.

Treasury bond scams and tax cuts

The US embassy released this picture of
Ambassador Chung at an event in
Colombo where the second shipment of
36,000 metric tons of Triple Super
Phosphate (TSP) was handed over to Sri
Lanka. It brings the total of USAID-supported
TSP and urea fertiliser to more than
45,000MT, over the last year.

Sweeping tax concessions to the rich and reduction of VAT, that had been introduced by President Gotabaya Rajapaksa’s government to encourage business in 2019/2020, escalated the financial crisis, leading to the declaration of the state of bankruptcy, two years later. No one in the Gotabaya Rajapaksa’s cabinet dared to challenge such far reaching tax concessions and VAT reduction.

How the loss of as much as Rs 600 bn in revenue, as alleged by the Opposition ,due to tax concessions and reduction of VAT, contributed to the current crisis, should be examined, also taking into consideration (1) Treasury bond scams perpetrated in Feb, 2015 and March 2016 at a time the CBSL has been under the then Prime Minister Ranil Wickremesinghe, in his capacity as Minister of Policy Planning and Economic Affairs (2) Enactment of new Foreign Exchange Act in 2017 in the wake of Treasury bond scams. Critics say the repealing of time-tested exchange control law that has been in place for decades paved the way for exporters to ‘park’ export proceeds overseas. Of the 225 MPs, 94 voted for the new law whereas 18 voted against. In spite of Justice Minister, Dr. Wijeyadasa Rajapakse, PC, taking up this issue, both in and outside Parliament, remedial measures hasn’t been taken, to date. The Finance Ministry owed an explanation as to how it intended to compel the exporters to bring back export proceeds (3) Continuing public-private sector partnership in corrupt practices, particularly mis-invoicing (under invoicing and over invoicing of imports/exports) (4) Pivithuru Hela Urumaya leader Udaya Gammanpila, MP, has moved the Supreme Court against the Central Bank Bill. The Attorney-at-Law alleged that the new law violated Article 3 and 4 of the Constitution hence needing the approval of the people at a referendum. In addition to Gammanpila, Dr. Gunadasa Amarasekera and Jathika Nidahas Peramuna leader Wimal Weerawansa, too, moved the Supreme Court in terms of the Article 121 against the Bill titled ‘Central Bank of Sri Lanka.’ Former JVP MP Wasantha Samarasinghe, on behalf of the Jathika Jana Balavegaya (JJB), too, moved the Supreme Court in this regard.

A warning from Hanke

The country is in a bind. In spite of the execution of the agreement with the IMF later this month, the situation remains dicey. The absence of economic recovery plan continues to cause further instability.

Therefore, the government and the Opposition should seek a consensus on a national action plan, even if Local Government polls cannot be conducted in late April, regardless of the Supreme Court intervention.

Steve Hanke, Professor of Applied Economics, at Johns Hopkins University, in the USA, recently issued a dire warning to Sri Lanka. Appearing on CNBC’s ‘Squawk Box Asia,’ Prof. Hanke declared Sri Lanka needs institutional reforms in order to achieve long-term debt sustainability.

Referring to Sri Lanka and what was described as emerging markets (Argentina and Montenegro), where he played a key role in establishing new currency regime, former economic advisor to US President Ronald Reagan warned “Unless you change the institutions and the rules of the game, governing these countries, they’re always going to remain in the same … situation that they’ve been in for a long time.”

Prof. Hanke added: “In fact, most of the personalities, involved in Sri Lanka ,at the high level, are exactly the same as they’ve been for years. So nothing has changed.”

In other words, those who have ruined Sri Lanka are spearheading the economic recovery process. The American is spot on. Sri Lanka is in a pathetic situation. Those who had systematically brought Sri Lanka to its knees, by pursuing ill-fated policies, emerged as its saviours. That is the bitter truth. The role of the executive, legislature, and judiciary, needs to be examined. Those who have moved the Supreme Court against the Bill, titled ‘Central Bank of Sri Lanka,’ have quite conveniently forgotten how the Yahapalana government, and Central Bank, twice perpetrated Treasury bond scams. What would have Prof. Hanke said if CNBC raised Treasury bonds scams during ‘Squawk Box Asia.’

If not for Deepa Seneviratne, the then head of Public Debt Department, Governor Arjuna Mahendran’s role couldn’t have been proved. Former Auditor General Gamini Wijesinghe said so at an event organized by the Colombo Municipal Council years ago.

Sri Lanka cannot forget Prof. Hanke’s remark in the CNBC programme. “You have to remember that we have a country that since 1965 has had 16 IMF programmes and they’ve all failed. You get temporary relief in anticipation of a bailout. But in the long run … none of these IMF programmes work.”

It would be pertinent to briefly examine how interested parties brazenly protected perpetrators of the Treasury bond scams.

Having named Mahendran as the Governor, regardless of the opposition from President Maithripala Sirisena, those planning to commit the first daylight robbery of the Central Bank moved Deepa Seneviratne to the Public Debt Department as its head, in spite of her not having had any previous experience in the particular division. It seems they had obviously felt comfortable in having a lady officer there they thought they could manipulate her to suit their need. But Seneviratne turned tables on the bond thieves by putting up a note to register her strong opposition to Mahendran’s move. She should have been rewarded for her fearless stand with at least a national honour if not an international one, even from bodies like the UN, the Transparency International, Amnesty International, etc. But it seems that even these international busy bodies have their own political angles.

It would be of pivotal importance to keep in mind that President Sirisena appointed a Commission of Inquiry (CoI) in January 2017, about 10 months after the second robbery, and two years after the first.

The Commission comprised Justice K.T. Chitrasiri, the late Justice P S Jayawardena and retired Deputy Auditor General V. Kandasamy. Sumathipala Udugamsuriya functioned as its Secretary. CoI issued a devastating report that implicated Perpetual Treasuries Limited (PTL) in the Treasury bond scams.

President Sirisena went to the extent of dissolving Parliament, in June 2015, to prevent the Committee on Public Enterprises (COPE) tabling its report on the first bond scam. SLFP leader Sirisena owes an explanation. Justice Chitrasiri’s CoI didn’t inquire into that aspect. Sri Lanka’s response to waste, corruption, irregularities and mismanagement is baffling. Let me end this piece reminding how the Bar Association of Sri Lanka (BASL) secured a substantial sponsorship from Perpetual Treasuries Limited (PTL) deeply mired in a bond scam, in 2016, for the Law Asia Conference during the tenure of its then President Geoffrey Alagaratnam, PC. The BASL never explained why it obtained PTL sponsorship even after the exposure of Treasury bond scams. That partnership also escaped the CoI. The rest is history.

Knowing what is now happening to the US economy with a string of bank failures and unprecedented bailouts, especially due to hoodoo economics it introduced in recent decades, like repeated quantitative easing (blindly printing trillions of dollars leading many to say the dollar is now only good as toilet paper) that has been practiced to ensure its world hegemony, the whole world might be hit with bank failures and even by a depression worse than the one that befell with the stock market crash of 1929. Already the contagion has spread to Europe with some leading banks there also requiring help.

Washington’s debt now stands at USD 31 trillion and climbing, but our own debt burden is still under USD 55 billion. So if we can get our exporters, who have stashed export earnings abroad, to bring them back, the picture here will not be as scary as it is made out to be. Even Minister Wijeyadasa Rajapakse has said that our export proceeds that have been parked overseas is in the region of USD 55 billion.

Soonwe will start receiving the IMF bailout, but our economic whiz kids have not done anything to plug the massive foreign exchange leak that has been freely draining foreign currency from the country, since the nineties, by way of private foreign exchange dealers who have been allowed to sell foreign exchange to any Tom, Dick and Harry, including drug dealers, to take their sales proceeds out of the country!

We would also like to ask the relevant authorities what they have done to recover monies stashed abroad by Lankans illegally that were exposed in great detail by the likes of Panama Papers and Pandora Papers.

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Midweek Review

A Miscellany of Thought



N. A. de S. Amaratunga (2022)

A Review by G. H. Peiris

I cannot claim to have the scholarly competence to place under critical scrutiny all items in this collection of writings authored by Professor N. A. de S. Amaratunga, and published in The Island from time to time since the early years of the present century. Accordingly, this ‘review’ is no more than an attempt to convey to a wide readership my gratitude for what I have learnt from Professor Amaratunga’s insights on a series of metaphysical and secular issues that have figured prominently during the recent past in the arena of debate and discussion among our intellectual elite, my appreciation of his rational perceptions and his subtle banter in responding to bizarre elements in our public affairs.

As a brief introduction to the author I should state that Professor Amaratunga’s career record is featured by several decades of distinguished and dedicated service to the University of Peradeniya in teaching, research and clinical work. Acquiring advanced skills in the field of ‘Maxillofacial Surgery’, he has provided physical and psychological relief of life-long impact to thousands of patients. He is also credited to have trained several of his junior colleagues in the Faculty of Dental Science, had has served as its Dean. The offer he received from the Peradeniya University of the Prestigious Award of the ‘Degree of Doctor of Science’ is testimony to his eminence in Sri Lanka’s community of scholars and professionals.

What probably enhances Professor Amaratunga’s status among the intellectual elite of Sri Lanka is the fact that his talents, interests, and concerns have not been confined to professional expertise. He has authored several creative writings in Sinhala which the cognoscenti place at par with the best works of that genre. More relevant than all else to the present ‘commentary’ is his capacity for elucidating the essence of certain complex metaphysical issues – especially those of Buddhist philosophy ‒ with the same clarity of thought seen in his contributions to media forums on current affairs.

In his ‘Introduction’ to the volume Professor Amaratunga makes a categorical statement regarding the paradigmatic guidelines of his ‘thoughts’. They are rendered below in abridged form as follows:

(a) The distinctive elements of our island civilisation are derived from Theravada Buddhism and the Sinhala language.

(b) The leadership of Sri Lanka’s mainstream politics since the termination of British rule in the mid-20th century has continued to be impaired by a cultural duality – on one side of the divide, the ‘alienated’ whose behavioural values and norms bear the imprint of subservience to values prescribed by the ‘West’, and, on the other side, those who treasure our civilisational heritage and understand the needs and aspirations of the majority of our people.

(c) His standpoint is that of an ardent ‘nationalist’, in the sense that he is unequivocally committed to safeguarding and promoting Sri Lanka’s national interests.

On literature, Professor Amaratunga adds that he is inclined towards the need for ‘social relevance’ of the fine arts, and believes that the paradigm of ars gratia artis (‘art for art’s sake’) is inappropriate for Sri Lanka, especially in creative writing.

The ‘miscellany’ of this volume is structured to constitute four ‘Sections’ – titled as: 1. ‘Literature and Culture’; 2. ‘Religion’; 3. ‘Economy’; and 4. ‘Health’. The first two of these ‘Sections’, consist respectively of 25 and 19 essays of unequal length. In these ‘Sections’ the reader could pick out from different points of the temporal sequence in which they are arranged items that constitute a mutually cohesive group from the viewpoint of content. For example, in the first ‘Section’, there are six such items, each serving as a contribution to an ongoing media debate, but when considered as a group would be seen as an invaluable enrichment of understanding on a significant feature of the educational system of the country – such as, say, the impact of the nation-wide ‘Fifth-standard Scholarship Examination’ or ‘The general decline of standards in higher education’. Likewise, in the total of 18 articles in ‘Section’ 2, thirteen items could be considered as a mutually cohesive group of thoughts that illuminates certain vitally significant aspect of Buddha Dhamma and Buddhism as practiced in Sri Lanka.

The forgoing observations do not detract from the intrinsic value of the short contributions referred to. Indeed, in my amateur assessment, in Section 1, the items titled ‘Quality of University Education’, ‘Purpose of the Novel and its Appraisal’, and the twin items titled ‘Darwinian Evolution vs. Intelligent Design’; and in Section 2, ‘Truth in Buddhism and Realism in Literature’, and ‘Mind, Matter and Nirvana in Mahayana and Theravada Buddhism’, are examples of the author’s extraordinary depth of understanding and his skill of disseminating that knowledge in a lucid form.

It is in the 3rd Section of the volume titled ‘Politics’ that the real ‘miscellany’ of Thought is found, consisting of 78 items, and accounting for well over half the total page-length of the volume. Since they have been presented in a chronological order ‒ with the first item published in 2001, and the last in 2021‒ the list of items, at first glance, looks like a total mess which, indeed, is how our politics look. But a closer scrutiny show that all items in this list could be placed in one or another of 6 ‘Sub-Sections’ titled as ‘Ethnic Relations’, ‘Foreign Affairs’, ‘Electoral Politics’, ‘Development Plans and Projects’, and ‘Constitutional Issues’, with the chronology of the list providing the vicissitudinous background of each contribution which Professor Amaratunga has made, and each discussion or debate in which he has participated.

Once again I should emphasise that foregoing observation does not imply that the ‘Thoughts’ in this section, read individually, are either uninteresting or irrelevant to our present concerns. On the contrary they offer ideal readings both as reminders of the volatile scenarios we have passed though during the past two decades as well as the unshakable faith our politicians appear to have on the widespread dementia among the voter-population and on their own ability to hoodwink the electorate. Professor Amaratunga’s thoughts could re-kindle fading memories, especially on repeated failures to fulfil campaign pledges, the large-scale losses due to financial malpractices, the allegations of ‘war-crimes’ and of ‘violation of human rights’ in the counter-attack by the major powers of the North Atlantic alliance in retaliation to Sri Lanka’s close relations with the People’s Republic of China, the ingredients of success in the US-sponsored ‘regime change’ effort culminating in the establishment in 2015 of a puppet government in Colombo, the betrayal of our national interests by our own self-seeking representatives at the protracted Geneva inquisitions, the constitutional fiasco of August 2018, the euphoric Gotabhaya victory about a year thereafter, and then, the stunning exposure by the pandemic of the fundamental weakness of our dependent economy.

In the 4th Section of the volume titled ‘Health’, most of the items are devoted to diverse experiences witnessed globally and in Sri Lanka during the Covid-19 pandemic, but in an unconventional manner in the sense that they emphasise significant aspects that have not received adequate attention in the analytical writings on the pandemic. In my view the most significant issue highlighted in this section is the need for Sri Lanka to adopt development strategies towards self-reliance, especially in the availability of medicinal drugs and on food-security. Implicit in several items of this section is a forewarning of the risks entailed in the pursuit of development policies that enhance Sri Lanka’s macroeconomic dependence on the major global and regional powers.

Many items in this miscellany of thoughts contain a prominent element of dissent and disagreement with other participants in the media debates and discussion for which The Island has served as a major forum. But that dissent has all along been featured by a laudable sense of “civilised intelligence”. As a professional whose skills have an intense demand, his interests and concerns have not remained confined to his professional expertise – a feature often seen among other ‘specialists’ including those of the university community.

This volume is, first of all, a demonstration of intense and well-informed concern on a wide range of issues of vital importance to Sri Lanka. Had that quality been more widespread it is unlikely that those earning six-figure incomes would threaten collective action to bring the economy to a standstill to express their dissatisfaction on a relatively marginal erosion of monthly emoluments at a time of unprecedented national crisis, attempting to conceal their avarice with a façade of safeguarding democracy, or eliminating public corruption, or on grounds of their capacity to earn higher incomes outside Sri Lanka.

Yet another exemplary feature I discern in this ‘Miscellany of Thoughts’ is that its contents are not angry knee-jerk reactions when provoked by thoughts different to his own. Professor Amaratunga’s dissent is entirely free of the crude clashes often seen in the so-called social media. Nor are his thoughts based on a hurried consumption of internet ‘short-eats’. In his thoughts that extend beyond brief corrective interjections of ‘common sense’, what we see is an extraordinary depth of knowledge acquired through serious reading and a thorough understanding of the issues on which he had focused.

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Midweek Review

Loneliness of the Bottom Half



By Lynn Ockersz

There you crouch by your hearth,

Seeing your fires sputtering out;

Your hopes of a bubbly pot of rice,

Ending in inflationary smoke spirals,

Leaving you with the painful thought,

That your dignity as mother and wife,

Is gravely harmed and beyond repair,

For, a turn of events not of your making,

Has reduced you and yours to penury,

So much for that Trickle-down Theory,

That Pundits say will end your misery,

But they tell you not to stop dreaming,

Because soon you will be bailed out,

Of your State of longsuffering;

Thanks to Princely tips from ancient Italy.

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