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Editorial

The galloping stock market

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The Colombo stock market has been galloping like nobody’s business these past several days with little or no rational explanation of why this is so in the context of a pandemic-hit business downturn. Among the reasons that have been proffered by brokers and analysts for this surge in confidence of market players, and they have increased substantially in recent months according to the CSE, is that interest rates are plunging. Investors who could earn as much as 12 or 13 percent or more on fixed deposits not so long ago, have to be now satisfied with marginal returns way below the prevailing rates of inflation. They are thus attracted to a stock market which is now performing better than most others in the region.

But the surge on the Colombo market is not supported by foreign or institutional buying which knowledgeable people say is necessary to sustain the current momentum. In fact there has been a steady outflow of foreign funds from Colombo in recent months and there has been no stemming of this flow. Although various authorities have more than hinted that institutions like the Employees Provident Fund and the Insurance Corporation will be back in the market in the short term, this does not appear to have come to pass.

Little wonder. There have been a plethora of allegations about pump and dump and market manipulation that institutional fund managers will be reluctant to open themselves to fresh accusations. This would mean a safe ‘do nothing’ philosophy unless they are ordered to enter the market. We do not know whether there is political or any other directions on what state-controlled entities should do with regard to stock market investment today. But we do know that this has happened in the past. It has been rightly urged that the EPF is only the guardian of the private sector retirement fund it manages, and not its owner. The fund belongs to its members who, together with their employers, make monthly contributions to it as a retirement saving. It must therefore refrain from speculative investments like stock trading is the conservative viewpoint.

The contra-argument has also been adduced. The EPF has long been a captive lender to the government. Government borrowing would naturally ease as the economy grows and there was official thinking within the Central Bank that it made sense to invest in private sector growth areas through the stock market as a long-term strategy. This was done to some degree that was admittedly small. Those who read the annual reports of listed companies, and even their quarterly financial reports listing their top twenty shareholders, will know that that the EPF has substantial stakes in many blue chip companies. There must be a lot of unrealized capital gains in the EPF portfolio where the pluses will outweigh the minuses although the fund cannot always back winners. If its members get an annual dividend ahead of inflation on their individual holdings in the fund, nobody can reasonably complain.

The benchmark All Share Price Index of the CSE has already topped its all time high and the upward momentum continued as this is being written on Friday. Where it will end, nobody can say. It is certainly a good thing for the country that many small investors are entering the stock market which is now retail driven. A completely new class of investors have today entered a field which not so long ago was the exclusive preserve of the rich. Massive turnovers in the billions are being recorded on the CSE every day and stockbrokers who had a lean time as the Easter bomb and the pandemic hit forcing market closure for a long period, would now be laughing all the way to the bank. While the market and its players can bask in the current sunshine, it is very necessary to attract foreign investors back to the CSE. This will undoubtedly be a formidable tasks but a bull run such as that which ongoing can be a factor that can prove persuasive.

 

Ranjan Ramanayake

 

The Chairman of the Elections Commission went on public record that Ranjan Ramanayake, the actor politician, who has now begun serving his term of four years rigorous imprisonment will not lose his parliamentary seat for six months. But the attorney general has said otherwise and the elections boss has subsequently stated that what he had expressed is a personal opinion. However that be, the Ramanayake issue remains very much alive in parliament where his Samagi Jana Balavegaya colleague, Harin Fernando sported a black shawl last week and said he will continue to wear it until Ranjan returns. Parliamentarian M.A. Sumanthiran, who defended Ramanayake in the Supreme Court also spoke up for the actor saying he was privileged to appear in court “for a clean, honest politician and I’m proud of that.”

The Speaker is yet to rule whether the convicted MP is entitled to attend parliament and promised to announce his decision in three weeks. Readers know that other prisoner-parliamentarians have previously attended sessions, but what will happen in this instance remains an open question in the short term. While most people believe that there is no appeal from a Supreme Court determination and a presidential pardon is the only way out, a contrary view relative to this matter has also been expressed in the context of the International Convention for Civil and Political Rights (ICCPR) to which Sri Lanka is a signatory.

In parliament last week Sumanthiran drew attention to the fact that Sri Lanka has failed to enact legislation for contempt of court although some work in that regard had been done. Expressing the view that the term imposed on Ramanayake was unprecedented and exceptionally severe, he drew attention to a serious lacuna in the law which has resulted “in an unprecedented injustice to an honest Member of Parliament.” Ramanayake has consistently refused to apologize for the offence over which he was charged; his parliamentary colleague, Lakshman Kiriella, also last week referred to the conduct of two former chief justices, although under the protection of parliamentary privilege. Such reference had obvious implications in the context of what Ramanayake said.



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Editorial

The Grim Reaper in overdrive

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Tuesday 20th April, 2021

April is the cruellest month, one may say with apologies to T. S. Eliot, on seeing the increase in fatal road accidents during the festive season in this country. During the last five days alone, 52 lives have been lost in road mishaps, and about 670 persons have suffered injuries, according to the police. In fact, the number of deaths due to road accidents averages eight a day, and road fatalities receive media attention only when there happens to be an uptick therein. Not even coronavirus carries off that many—for now, at least.

With an average of 38,000 crashes that cause about 3,000 deaths and 8,000 serious injuries annually, Sri Lanka has the worst road fatality rate among its immediate neighbours in South Asia, a World Bank study has revealed, as we pointed out in a recent comment.

Why this unfortunate situation has come about is known to the authorities tasked with ensuring road safety. The traffic police have identified 25 causes of road accidents, prominent among them being reckless driving, negligence, indiscipline, drivers’ lack of knowledge of road rules and regulations, fatigue, human error, driving under the influence of liquor and drugs, pedestrians’ disregard for road rules and safety measures, poor conditions of vehicles and road infrastructural defects. Other causative factors, identified by independent experts, are an exponential increase in the number of vehicles, irregularities in the process of issuing driving/riding licences and lapses on the part of the traffic police themselves.

Given the sheer number of causes of road mishaps, a multi-pronged strategy and a long-term, holistic approach are needed to tackle them. But it may be possible to contain the problem to a considerable extent if steps are taken urgently to deal with reckless driving, indiscipline, driving under the influence of liquor and drugs, and road infrastructural defects. Last month’s tragic bus accident in Passara shook the country, it killed 14 passengers. The driver of the ill-fated vehicle was responsible for the mishap, but it could have been prevented if the Road Development Authority had cared to remove a boulder that had rolled onto the road, blocking part of it, or at least put up speed breakers and warning signs near the bottleneck. Such issues can be sorted out immediately.

Police deserve praise for taking tough action against drunk drivers. Drunk driving is easy to detect. In most cases, there is no need for even breathalyzer tests. But the problem with narcotic addiction among drivers is that there are no outward signs of impairment. Medical experts inform us that drugs such as cannabis, methylamphetamine and ‘ecstasy’ greatly impair drivers’ ability to control speed and judge distance and hinder coordination. The need for facilities to conduct roadside drug testing to detect narcotic addicts behind the wheel has gone unheeded although many drivers, especially truckers and busmen are hooked on drugs. Bus owners’ associations have been calling for action against drug addicts in the garb of bus crews, but in vain.

Meanwhile, random checks in urban areas to nab drunk drivers have stood suburban liquor bars in good stead because most people patronise these watering holes due to lack of police presence around them. This is something the traffic police should pay attention to. If they step up checks in suburban areas as well, they may be able to net many more drunk drivers, who pose a danger to all road users.

Road accidents are as much of a scourge as the current pandemic; they kill about 1.39 million people around the world annually, according to the World Health Organisation. One is at a loss to understand why there has been no sustained global effort similar to the campaign against COVID-19, to obviate the causes of killer road accidents; this is doubly so for this country where road fatalities outnumber the pandemic-related deaths. It is unfortunate that road traffic deaths get reduced to mere statistics and then forgotten.

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Editorial

It’s sovereignty, stupid!

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Monday 19th April, 2021

Sri Lanka’s sovereignty has taken centre stage thanks to the Colombo Port City Economic Commission (CPCEC) Bill. The Opposition and its allies are all out to scuttle it, claiming that it will severely undermine the country’s sovereignty, which the government vows to protect at any cost. The UNP has joined others in challenging the Bill in the Supreme Court. This, it has done while seeking to justify its decision to appoint its leader Ranil Wickremesinghe to Parliament via the National List; he unsuccessfully contested the last general election from the Colombo District.

If the government, the Opposition and their supporters are so concerned about the country’s sovereignty, they must respect the franchise of the people in whom sovereignty resides. Sovereignty and franchise are inseparable. How could the aforesaid politicians reconcile their much-advertised campaign for protecting sovereignty with their endorsement of the practice of appointing as National List MPs unsuccessful candidates and others of their choice in violation of people’s franchise.

The situation took a turn for the worse, under the yahapalana government, which not only appointed a bunch of defeated candidates to Parliament as National List MPs but also made some of them Cabinet ministers! Almost all political parties with parliamentary representation have undermined people’s franchise in this manner. Even the JVP, which never misses an opportunity to take the moral high ground, failed to be different. The lame excuse that political leaders trot out for this blatant violation of franchise is that the law provides for such appointments. If this despicable practice is to be considered acceptable simply because certain bad laws can be interpreted to justify it, then the Executive President should not be faulted for exercising all dictatorial powers the Constitution has vested in him.

Moreover, it has now been revealed that the J. R. Jayewardene government smuggled some sections into the election law to enable the appointment of outsiders to Parliament as National List MPs. The Provincial Council Elections Act was amended in a similar manner in 2017 to postpone the PC polls indefinitely. Questionable practices and actions based on such rotten laws cannot be considered legitimate by any stretch of the imagination.

The National List mechanism, which was devised purportedly to bring in eminent persons as MPs, has in effect empowered political party leaders to violate the people’s franchise with impunity. Therefore, the legal provisions that allow defeated candidates and outsiders to enter Parliament via the National List must be abolished; they are antithetical to democracy and have a corrosive effect on people’s franchise and sovereignty. Strangely, not even those who undertook to usher in good governance, in 2015, cared to get rid of these bad laws.

It is being argued in some quarters that when the seats of appointed MPs fall vacant, only the National List nominees or those whose names appear on district nomination lists should be appointed to Parliament in keeping with Articles 99 and 101 of the Constitution. But we believe that only the National List nominees whose names are made public before parliamentary elections must be brought in as appointed MPs; the appointment of unsuccessful candidates as MPs is an assault on democracy.

Technically, people who vote for a particular political party/independent group also endorse its National List nominees, who arguably attract votes. In 2015, the JVP had, as one of its National List nominees, former Auditor General Sarath Mayadunne. A lot of people must have voted for the JVP to have him in Parliament to fight against corruption effectively. But no sooner had he been sworn in than he resigned, paving the way for the appointment of a defeated JVP candidate. What the JVP did was tantamount to taking the voting public for a ride. Other political parties, too, have done likewise unashamedly.

At present, the National List can be abused to appoint any party member to Parliament, and anyone can obtain the membership of a political party by paying as little as Rs. 10. One may argue that all it takes to render people’s franchise irrelevant is Rs. 10! What moral right do the politicians who unflinchingly make use of bad laws to defy the will of the people have to fight for democracy, sovereignty and franchise?

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Editorial

The finger on the spot

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A television interviewer last week asked Fisheries Minister Douglas Devananda what is to be done when a robber enters your home? Is he not to be chased off? The program in which the minister appeared was dealing with the long festering problem of a South Indian fisheries fleet brazenly crossing the International Maritime Boundary (IBM) and entering Sri Lanka waters. These illegal fishermen are not just poaching in our waters. They engage in bottom trawling, using large vessels with powerful engines, destroying the marine environment and seriously eroding the replenishment capacity of this country’s fish stock, a process affecting the livelihood of our fishermen in the short, medium and long term.

The minister responded with a question of his own. What do you do when the robber is armed?, he countered. Devananda put his finger on the spot; perhaps not literally in that the Indian fishing fleet routinely crossing the IBM is not armed to its teeth though its quite probable that there are a gun or two in individual trawlers or boats. What he was in effect saying is that the poachers are backed by the might of India and there is very little that we can do about it. What the minister said evoked painful memories of Operation Vadamarachchi of May and June 1987 when the Sri Lankan forces were on the verge of defeating the Tamil Tigers waging war on the Lankan state.

What did India do? Alleging that the people living in the war-wracked area were starving, several Hercules transport planes escorted by Mirage jet fighters intruded into this country’s sovereign airspace for a claimed “humanitarian operation” – the infamous parippu drop as we came to know it. The signal was unmistakably clear. Either halt the military operation or face the consequences. That would be an Indian invasion of this country. Then President J.R. Jayewardene, fighting an insurrection in the South and a civil war in the North was in a tight bind from which there was no escape. The rest is history. The Indo – Lanka Agreement between Jayewardene and Prime Minister Rajiv Gandhi of India was signed and the so-called Indian Peace Keeping Force (IPKF) followed. But there was no disarming of the LTTE as promised. Thanks to what India did then, the civil war raged till 2009 when the Tigers were eventually defeated.

This country’s predicament over the rape of our marine resources, grievously affecting the livelihoods of our fishermen eking out a precarious livelihood, and also endangering the very existence of the fisheries industry in the North of this country, is very similar to the parippu drop of not so long ago.

During the decades of the war, the imperatives of fighting the separatist-terrorists required long periods where our fishermen were banned from venturing out to deep sea. They were confined to a coastal fishery and this left expanses of our territorial waters wide open to Indian fishermen to exploit. Those years and what happened then deeply ingrained in the Indians the conviction that they could fish as they like, wherever they would, regardless of the International Maritime Boundary and the Law of the Sea. There were rich picking to be had and the opportunity was seized.

After the war ended and normalcy – or at least some semblance of it – was restored, there was no keeping the Indian fishermen, often manning trawlers owned by Tamil Nadu politicians and their patrons, to their side of the IBM. For several long years efforts at resolving this problem have been made. There have been some placatory noises from the Indians but little attempt, leave alone a serious effort, to tackle this issue. Contacts have been made at the highest levels of government and all they have produced are platitudes about adopting a “humanitarian approach” to the problem. The humanitarianism is all about allowing Indian fishermen to enhance their livelihood, never mind the super profits made by capitalist politically-backed trawler-owners hiring those fishermen to crew their vessels. Nary a word about our own fishermen, long left to fend for themselves as best as they can while the Indians rob what is rightfully theirs.

No end to this situation is in sight. There are occasional reports of poachers and their vessels taken to custody by the Sri Lanka Navy. More often than not, after a little fuss, bother and diplomatic niceties, the fishermen and (emphasis ours) their craft are returned so that they can poach another day. Earlier this year there was was an incident when an Indian fishing vessel poaching in Lankan waters reacted aggressively to a naval craft attempting to arrest it. This resulted in the sinking of the trawler and the death of one of its crewmen. Predictably there was a blaze of publicity and protest in the Tamil Nadu press about the Sri Lanka Navy killing Indian fishermen. Such incidents are clear indications of the sensitivity of the problem at hand. We have to live with the reality that we cannot wield the big stick to protect what is ours. But the government is under pressure from fishermen North and South to do something about it. Devananda has talked about issuing passes for a limited number of Indian fishing vessels, excluding big trawlers, to enter our waters.

But as one northern politician said in a television program, 500 will come if 50 passes are issued. Indian fishery interests are saying “why exclude the trawlers?” In any case do we have the capacity (or the political will) to effectively police our waters, protect the interests of our fishermen and the sustainability of our marine resources against a monster predator from across the Palk Strait? D we always have to bow down to Big Brother?

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