Sri Lanka’s collective failure on the Geneva front
by Shamindra Ferdinando
Successive governments facilitated a high profile treacherous Geneva process by conveniently or incompetently refraining from exploiting former RAF pilot Michael Wolfgang Laurence Morris or Lord Naseby’s shocking disclosure in the House of Lords on Oct 12, 2017 to set the record straight as regards unsubstantiated war crimes.
The real issue is not defeat suffered by Sri Lanka at the UNHRC yesterday (23) but the failure on the part of successive governments to properly defend the armed forces.
Sri Lanka defeated the Liberation Tigers of Tamil Eelam (LTTE), which was widely considered to be invincible and the most ruthless terrorist organisation in the world, following a nearly three-year long combined security forces campaign. The war was brought to a successful conclusion on the banks of the Nanthikadal lagoon on May 19, 2009.
Sri Lanka’s collective failure to take advantage of Lord Naseby’s revelation as well as other related credible information in the public domain is nothing but betrayal of the war-winning armed forces. Lord Naseby provided the much needed ammunition to expose the Geneva lie two years after the Sirisena-Wickremesinghe government betrayed the armed forces at the UNHRC in Oct 2015.
On behalf of Sri Lanka, the then Permanent Representative in Geneva Ambassador Ravinatha Aryasinghe accepted the ‘Accountability Resolution 30/1’ on a specific directive from Premier Wickremesinghe-FM Mangala Samaraweera. Aryasinghe, who had earlier strongly opposed the US-led resolution at the informal discussions with the Core Group of Sri Lanka, is our Ambassador in Washington now.
A controversial US statement
The first indication that unsubstantiated war crimes accusations can be successfully countered was received at the first ever Colombo Defence Seminar conducted in late May-June 2011 during Lt. Gen. Jagath Jayasuriya’s tenure as the Commander of the Army (July 2009-July 2013). Jayasuriya succeeded war-winning Army Commander Gen. Sarath Fonseka in the wake of an unprecedented dispute between the Rajapaksas and Fonseka. The Sinha Regiment veteran ended up as the common candidate at the 2010 presidential election challenging Mahinda Rajapaksa his Commander in Chief only a few months before.
Thanks to Wikileaks, the US role in making Fonseka the common candidate as well as ensuring the one-time LTTE proxy, the Tamil National Alliance (TNA) extending support to him is in the public domain. The day the TNA declared its support to Fonseka, the unsubstantiated war crimes accusations should have been unceremoniously discarded. But, unfortunately, the war crimes accusations persisted even after the predominantly Tamil speaking northern and eastern electoral districts overwhelmingly voted for him.
At the first Defence Seminar, the then US Defence Advisor in Colombo Lt. Col. Lawrence questioned the very basis of allegations, including the execution of surrendered terrorists directed at the Army (58 Division/formerly Task Force I). The US official was responding to a query posed by retired Major General Ashok K. Mehta, formerly of the Indian Peace Keeping Force (IPKF) deployed here, to Major General Shavendra Silva, the first General Officer Commanding (GoC) of the celebrated 58 Division. Silva, the incumbent Army Chief was there in his capacity as Sri Lanka’s then No 02 at the UN. Smith’s voluntary and spontaneous revelation, made weeks after the UNSG’s Panel of Experts (PoE) aka the Darusman report accused Sri Lanka of killing as many as 40,000 (paragraph 137) embarrassed the US (Sri Lanka Defence Symposium: Now, US suspects credibility of LTTE surrender offer with strap line…dismisses KP, Nadesan as ‘mouthpieces’ with no real authority – The Island, June 3, 2011)
The US State Department had no option but to claim Lt. Colonel Smith hadn’t represented the US at the seminar. The political leadership and Army Headquarters never exploited the US official’s statement. In fact, Smith’s statement made six years before Lord Naseby’s disclosure based on the then British Defence Advisor Lt. Col. Anthony Gash’s wartime dispatches, should have been the basis for Sri L:anka’s defence. It would be pertinent to examine why the first Rajapaksa administration never bothered to examine the US official’s statement. In fact, the Army never really pursued the matter during the tenure of Army Commanders – Daya Ratnayaka (Aug 2013-Feb 2015), Chrishantha de Silva (Feb-2015-June 2017) and Mahesh Senanayake (June 2017-August 2019) as Commander of the Army. Lord Naseby made his disclosure during Mahesh Senanayake’s tenure as the Commander. But, the Army never examined/exploited Lt. Col. Smith’s statement and that of Lord Naseby as part of Sri Lanka’s overall defence in Geneva.
The politically motivated US decision to slap a travel ban on incumbent Army Commander in Feb 2020 should be examined against the backdrop of the criminal negligence on Sri Lanka’s part to counter lies propagated in spite of having powerful ammunition. Actually a Special Presidential Commission of Inquiry (PCoI) is necessary to ascertain the shocking lapses on the part of political and military leaderships that led to ‘Accountability Resolution 30/1’ in 2015 and the expansion of relentless and continuing Western campaign.
Yahapalanaya rejects Naseby disclosure
Treacherous politicians, some sections of the media and diplomatic community and the civil the society worked overtime to suppress Lord Naseby’s disclosure that threatened to undermine the devious Geneva project. The Geneva operation was meant to introduce a new Constitution that did away with Sri Lanka’s unitary status in the guise of addressing accountability issues. The Sirisena-Wickremesinghe administration spearheaded the despicable project. The then Joint Opposition (now SLPP) co-operated in that endeavor by being part of a parliamentary process to draft a new Constitution, spearheaded by Premier Wickremesinghe. President Sirisena remained an onlooker whereas his parliamentary group participated in the process. Wimal Weerawansa’s National Freedom Front (NFF) subsequently quit the process though his efforts to convince the JO to do so failed.
Lord Naseby’s disclosure threatened to weaken the yahapalana project. The Foreign Ministry under Ravi Karunanayake (RK received the appointment in the wake of Samaraweera’s removal as FM in May 2017) ridiculed Lord Naseby’s statement.
Did the Sri Lanka High Commission in London bring Lord Naseby’s statement to the Foreign Ministry’s attention? For want of a Foreign Ministry response to Lord Naseby’s very important statement, even a week after it was made, the writer, on Oct 20, 2017, sought an explanation from the Foreign Ministry. The Foreign Ministry response really disappointed a vast majority of people, who expected the government to use the House of Lords disclosure to counter lies that had been propagated by various interested parties. Instead of taking advantage of Lord Naseby’s statement, the Foreign Ministry spokesperson Mahishini Colonne declared: “The Government of Sri Lanka remains committed to the national processes, aimed at realizing the vision of a reconciled, stable, peaceful and prosperous nation. Engaging in arguments and debates in the international domain over the number of civilians who may have died at a particular time in the country will not help resolve any issues, in a meaningful manner, locally, except a feel good factor for a few individuals who may think that they have won a debate or scored points over someone or the other.”
The writer also raised Lord Naseby’s disclosure with the four-party Tamil National Alliance (TNA), one-time mouthpiece of the LTTE and the main Opposition in Parliament. The TNA refrained from responding to The Island queries submitted to TNA leader R. Sampanthan. In spite of over a dozen calls/sms to Raghu Balachandran of Sampanthan’s Office, The Island never received the TNA’s response. You may want to know when the set of questions regarding TNA’s response to Lord Naseby’s disclosure was submitted to that party. The Island submitted the following questions to TNA and Opposition Leader R. Sampanthan on Nov. 27, 2017 and repeatedly reminded the Opposition Leader’s Office of the delay on its part to respond: Have you (TNA) studied Lord Naseby’s statement made in the House of Lords on Oct. 12, 2017? What is TNA’s position on Naseby’s claims? Did TNA leaders discuss Naseby’s claim among themselves? Did TNA respond to MP Dinesh Gunawardena’s statements in Parliament on Naseby’s disclosure? And did TNA take up this issue with the UK High Commissioner James Dauris?
UK plays politics with Gash reports
The British HC too side-stepped the issue. When the writer raised the issue with Lord Naseby soon after his explosive Oct 12, 2017 disclosure, the Conservative Party member said that he received an assurance from the Minister of State for the Foreign and Commonwealth Office, Mark Field, that the issue at hand would be examined (FCO to study Naseby’s proposals – The Island, Oct 26, 2017). However, when the writer sought an explanation from the British HC in Colombo on the same matter, the mission dismissed Lord Naseby’s statement on the basis he was not speaking for the British government (Naseby’s call doesn’t reflect UK’s stand – HC, The Island Dec 6, 2017).
The UK never hesitated to praise Channel 4 News that propagated accusations that the Sri Lankan military massacred over 40,000 civilians. The then UK Prime Minister David Cameron went out of his way to praise the Channel 4 team accompanying him to Colombo for CHOGM 2013 when he addressed the media at the BMICH. Questions at this peculiar press conference were only fielded from a handpicked lot, especially from his retinue of embedded reporters from the UK brought with him. Is that another display of “British sense of justice and fair play”? But one plucky Lankan journalist Rajpal Abeynayake clearly shouted out “bloody hypocrites” as Cameron got up and left without taking any questions from independent journalists.
The UK should really examine its role here, how it had intentionally contributed to terrorism much to the disappointment of the majority of Sri Lankans. Let me remind you of a statement made by one-time UK High Commissioner in Colombo David Tattham in 1996 soon after the armed forces brought the Jaffna peninsula under the government control. Tattham, during a visit to Jaffna, urged the Diaspora not to fund the LTTE. But the UK didn’t take any notice of Tattham’s appeal. The LTTE was allowed to operate there with impunity.
Relevance of Offord’s speech
Despite being up to all types of villainy around the world (for example what did the ICC say recently about the behviour of her troops in Afghanistan and how London shamelessly passed hasty legislation to save their skins), the British are now championing human rights here in its new capacity as leader of the Sri Lanka Core Group without even examining the post-war situation. Perhaps a statement delivered by Matthew Offord, the current Chairman of the All Party Parliamentary Group on Sri Lanka (Lord Naseby is the Honorary President and Founder) on March 18, 2021 in the House of Commons debate on UK’s commitment to reconciliation, accountability and human rights in Sri Lanka underscored the need for a fresh examination of the war, post-war and related matters.
The following is the text of elected member Offord’s speech: “I start by highlighting my chairmanship of the all-party parliamentary group on Sri Lanka. Sri Lanka’s relationship with the rest of the world has been strongly shaped since the end of the conflict by allegations that the Army committed war crimes and crimes against humanity during the final phase of the civil war.
“A UN panel of experts reported in April 2011 that there were credible allegations of those crimes by both Government and Tamil Tiger forces. It remains my opinion that both sides were at fault. However, I regret the Government of Sri Lanka’s decision to withdraw support for UNHRC resolution 30/1 and note that previous domestic initiatives have failed to deliver meaningful accountability. I therefore urge the Sri Lankan Government to engage in a process that has the confidence of all on the island.
“But it would be remiss to state that the current Sri Lankan Government has failed to act. The Office on Missing Persons and the Office for Reparations are to be retained and strengthened, so that communities may build trust. It will be good to see reform of the Prevention of Terrorism Act and progress on the release of political prisoners. We must act as a critical friend to the country. We need to help strengthen democratic institutions, and we must trust Sri Lanka to develop its own judicial and non-judicial mechanisms.
“Since the end of the conflict, reconciliation has occurred among Sinhala, Tamil and Muslim communities. People are able to live wherever they wish. They benefit from state resources, such as free education and health services. Private land that was occupied by the military has been returned, former conflict areas have been de-mined with assistance from the United Kingdom, and more than 12,000 ex-LTTE— Liberation Tigers of Tamil Eelam—cadres have been rehabilitated. There is greater connectivity throughout the island and globally, and all of this has transformed the business sector and the lives of everyone in the country.
“But we should remember that a fresh resolution and accountability are not a panacea for addressing underlying tensions. Questions about how to address the legacy of the Sri Lankan conflict must be answered: what kind of justice is attainable? How should the victims of violations be treated in the process? What might punishment look like, and how can justice play a constructive role in forging a lasting peace?
“Draft legislation for a truth and reconciliation commission had been prepared under the previous Sri Lankan Government, and that could be revisited. If it gains universal support in Sri Lanka, truth seeking among all stakeholders, including the diaspora in many of our communities and constituencies could make a lasting difference. When these issues have been resolved, a sustainable and acceptable peace will endure. Given the goodwill between our two countries, I ask the Minister: how can the UK help to facilitate a TRC mechanism that is unique to the needs of Sri Lanka?”
Offord took a sensible and impartial stand on the Sri Lanka issue at the poorly attended debate.
Unfortunately, Offord has either deliberately or inadvertently been silent on the need to examine Gash reports pertaining to the Vanni war. The elected House of Commons member owed the public an explanation. Why shouldn’t the Conservative party member ask his government to release the entire set of Gash reports to help ascertain the truth?
Recently, former Sri Lanka Chief Justice Sarath Nanda Silva told the writer that examination of wartime dispatches from Colombo-based defence advisors and defence attaches would help Geneva to establish the truth. Those who had been pushing Sri Lanka on the human rights front are silent on their own records and tend to depend on faceless accusers. The CJ, 41 was referring to PoE declaration that war crimes accuser wouldn’t be examined till 2031. If Offord is really keen on post-war Sri Lanka reconciliation he should push for a thorough inquiry. By depriving access to wartime British HC dispatches from Colombo, one cannot help with the reconciliation.
The writer is sure Offord understands the British lost credibility by offering sanctuary to LTTE activist Adele Balasingham, wife of Anton Balasingham, British citizen of Sri Lankan origin. Did the British ever inquire into the possibility of Adele’s direct involvement with women suicide cadres? The possibility of Adele knowing the woman suicide bomber who targeted former Indian PM and Congress I leader Rajiv Gandhi can never be ruled out. If New Delhi is really interested in finding the truth it should be the first party to pick up this line of thinking.
How Sri Lanka helped enemy strategy
Sri Lanka facilitated Western strategy against the country by allowing anti-Sri Lanka propagandists a free hand. One-time Deputy Minister and retired Rear Admiral Sarath Weerasekera addressing a media briefing organized by civil society organization ‘Eliya’ backing Gotabaya Rajapaksa’s candidature at the 2019 presidential poll said that Lord Naseby’s disclosure could be the basis for Sri Lanka’s defence at the Geneva body. The Navy veteran was flanked by the then The Island political columnist C.A. Chandraprema (our present Permanent Representative in Geneva) and Ven. Medagoda Abhayatissa. Weerasekera, now the Public Security Minister, faulted the yahapalana government for not exploiting Lord Naseby’s revelation to Sri Lanka’s advantage (Lord Naseby’s call to revise Vanni death toll: Parliament faulted for not taking up vital issue – The Island Nov 8, 2017).
The SLPP government certainly owed the public an explanation how it used/failed to use Lord Naseby’s disclosure along with other credible information such as Lt. Col. Smith’s stand at the 2011 Colombo Defence seminar, Wikileaks revelations and still confidential UN report that dealt with the Vanni conflict and placed the total number of dead at 7,721 to build up a strong case.
The writer during separate media briefings during the Yahapalana administration raised the accountability issue and was told by Field Marshal Sarath Fonseka, Mahinda Samarasinghe and Dayasiri Jayasekera the cabinet had never discussed Sri Lanka’s response to alleged war crimes allegations. Fonseka’s colleagues in Nov 2017 (Dayasiri Jayasekera in his capacity as the Cabinet spokesperson) and Aug 2018 (Mahinda Samarasinghe in his capacity as the SLFP spokesperson) revealed a pathetic situation. They acknowledged that the Cabinet of ministers had not discussed Sri Lanka’s defence nor examined the Geneva Resolution. Jayasekera reacted angrily when the writer queried about the lapse on the part of the government. Jayasekera declared that a statement made by Lord Naseby in the House of Lords would be used by the government appropriately at the right time, though the Cabinet was yet to discuss it.
Jayasekera said that they wouldn’t take up issues pursued by The Island the way the newspaper wanted. It had not been taken up by the Cabinet on the basis it wasn’t considered a grave matter, the Minister said. The Minister initially asserted that Lord Naseby’s statement wasn’t directly relevant to the Geneva issue (Cabinet spokesman provoked by query on govt response to Naseby move – The Island Nov 16, 2017).
When the writer asked the then Deputy Minister of National Policies and Economic Affairs Dr. Harsha de Silva whether Lord Naseby’s disclosure could be used at the Universal Periodic Review (UPR) of the country’s human rights record at Geneva, the then UNPer said that the matter was not directly relevant to the UPR. He was responding to a query by The Island in his capacity as the leader of the country’s delegation to the UPR (The issue never discussed at cabinet: House of Lords statement not directly relevant to UPR-Dr. De Silva – The Island, Nov 14, 2017)
In spite of the change of government in Nov 2019, the country is yet to take tangible measures to expose the Geneva lie. The handling of the 46th Geneva session proved again Sri Lanka’s failure. Those responsible should keep in mind Geneva lie cannot be exposed by propaganda alone.
Growing foreign dependency and India’s USD 4 bn lifeline
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.
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
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.
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.
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.
Cabinet gives green light to develop Sigiriya as a sustainable tourism destination
Cabinet approves incorporation of the Sri Lanka Institute of Agriculture
Vesak week from 2nd to 8th May 2023
‘Dates have the highest sugar content to fight Coronavirus’
Sunday Island 27 December – Headlines
U.S. Congress to probe assets fleecing by US citizens of Sri Lankan origin
Features5 days ago
Happy Birthday dearest Mrs. Peries !
News4 days ago
Mano says LG and PC elections equally important
News6 days ago
Decorated gunship pilot blacklisted for appearing on political stage
Midweek Review7 days ago
Growing foreign dependency and India’s USD 4 bn lifeline
News6 days ago
No more selling of Hajj visas, assures Minister
Breaking News7 days ago
Property tax to be replaced with Wealth Tax, Gift Tax and Estate Tax – President
Editorial7 days ago
Celebration of debt
Sports6 days ago
Sri Lanka’s flawed ODI strategies