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The permeance of global debt

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Lanka will subsist on a diet of perpetual debt

by Kumar David

The thesis of this essay, conveyed within my 1,700 word-mandate, is that the world economy has entered a phase of near universal debt. Lanka’s inexorable overload of domestic and foreign debt is part our own making part footnote of the global story. Everywhere, mighty USA and European Union included, the state is mired in debt that will not vanish so long as Finance Capital (FC) rules the world. The surpluses created by economic activity are amassed by a few institutions and individuals. Thomas Piketty drew attention to inequity of wealth and income. The market capitalisation of the world’s largest 2,000 companies is $100 trillion, but the value of all the property (land, houses, other fixed assets) of the poorer 50% of the world’s population is just $10 trillion. The heft of bank balance sheets, private-equity, mutual and hedge funds, pension & social welfare coffers, sovereign wealth funds and holdings of personal wealth, leave one dumb struck by their magnitude. FC rules the world.

Recently, post the 2009 recession, Central Banks including especially the Fed in the US expanded money supply not by billions but by trillions. Governments issued bonds, that is borrowed from FC’s (money-market) gigantic holdings to splurge on fiscal deficits or “sold” Treasury Bonds to Central Banks, which printed money (electronically) to “buy” on never-never terms. Debts to Central Banks will never be repaid, simply rolled over in perpetuity. Central Banks also ‘Quantitative-Eased’ hundreds of billions to banks and private funds to lubricate asset purchases (equities and property) which merely ballooned an asset price bubble and exacerbated wealth inequality. I don’t want to stud this piece with statistics which readers will find easily enough on the Internet and will limit myself to three numbers. The US national (government) debt of $26.5 trillion exceeded US GDP during 2020 and will not decline in the foreseeable future – in Japan it’s 230%. Second, global government debt is $60 trillion but global GDP in nominal (not PPP) terms is $75 trillion. The third point is that the total debt of non-financial corporations, globally, is about 95% of global GDP according to the IMF.

 

A nominal currency (not PPP) comparison

This essay is intended for my non-specialist readers and the data gives a broad idea of magnitudes and distributions. It is not easy to gauge indebtedness of financial institutions as reliable data is hard to come by. And it is meaningless to tot up household debt globally because $1,000 has a different meaning for say the denizens of the USA as against an Indian or an Indonesian. The idea I would like you to take away is not only that States and Corporations are deeply mired in debt, but more important things will get worse not better in the 2020s decade. This is commonplace in countries where productivity is low and which will never export enough to cover imports plus investment for capital projects plus surpluses to accommodate graft for the political classes. But I put basket cases to a side to deal with chronic diseases of the mighty. I cannot within the confines of this essay deal with the US, the EU and China, the big three whose capital shapes the world, and I have to limit this essay mainly to the US

Classical Keynesianism held that when demand and employment were low and economic activity in decline, the state should intervene and prime the pump with monetary and fiscal injections. ‘Monetary’ means to hold interest rates down and lend (print) to would-be investors; fiscal stimulus is big spending by governments to build infrastructure and create employment. Roosevelt’s New Deal helped but it was really WW2 (capitalism loves wars, armaments production and sales) that did the trick. In theory, economic revival should allow the government to recoup its outlay via higher taxes and duties. The “Keynesian multiplier” was said to be greater than one. It worked in the glorious boom from 1945-1970 when capitalism shone and socialist ideas were put away in a dog-box. But Keynes-Thought lost its shine after the oil-shocks of the 1970s and welfare capitalism slumped into Stagflation – economic growth was stuck in the mud; high inflation could not be reduced and high unemployment persisted. The world did not learn a lesson and turn against capitalism. On the contrary, there came neo-liberalism; Regan, Thatcher, Pinochet and JR slashing welfare, smashing trade unions, privatising and swinging political philosophy to the far right. Except Pinochet, mostly within the bounds of democracy unlike ultra-right populism today.

The gurus of neo-liberalism like Heinrich Hayek, Robert Barro and Robert Lucas, theorised that the Keynesian-multiplier was less than one. Barro father of the now discredited ‘rational expectations theory’ said that if the state spent more, people will realise that higher taxes were on the way and would spend less, erasing the hoped for increase in demand. Nothing of the sort is happening today; reality has stood ‘rational expectations’ on its head. The US housing market is rising because of low interest rates (interest rates are negative in Japan). Consumer spending remains undamped without engendering inflation because the US consumer is tapping into a global, mainly Asian, dirt cheap by US prices, one-billion worker labour-market churning out goodies for pampered North American and European consumers. Inflation in the Eurozone is negative; Japan is in perpetual deflation. Fifteen dollars per hour! An Asian or south of the US-border worker will be lucky to take home $15 (LKR 2800) a day. What Barro and his ilk failed to take into account was much-integrated global goods, services and labour markets. US inflation stays stubbornly low because producers for the US market de facto pay minimal wages to their producers (workers). In any case governments and Central Banks can’t stimulate the economy in perpetuity, you can’t defy gravity forever.

Demand is slack in advanced countries because the one percent rich can only splurge that much on consumer goods and prefer to invest in assets, and secondly production companies are risk-averse in the face of Asian competition hence domestic investment in manufacturing remains weak. The pre-COVID picture was bleak since state revenue was slack in the rich world due to slow growth, and it was falling in the US thanks to Trump’s tax handouts to the rich. Post-COVID expenditure has risen even further due to large expenses on medical and subsistence grants and unemployment payments. Hence pressure for trillion-dollar stimulus packages. The end point is that substantial fiscal deficits have become a permanent feature. In the US for example the fiscal deficit for 2020 and 2021 taken together will be three to five trillion dollars. There is no way out except to borrow-print-hold interest rates low or negative, and live with debt for eternity. Eurozone stimulus will be hundreds of billions per years for many more years. This nexus of extra-loose monetary policy and unescapable fiscal deficit blurs the divide between monetary and fiscal policy; they merge. Government borrowing without constraint has got a new name, Modern Monetary Theory (MMT). Adherents of MMT dismiss concerns that excess borrowing will induce inflation or will bring countries to the brink of an abyss. They have no fear that if interest rates go up governments will have to default or that the financial system will die in convulsions.

I need to repeat the thesis that underpins my essay before moving on: The world economy has entered a period of universal debt – government, corporate and household. I now need to say a few words about high-finance in China; I am avoiding the term finance-capital (FC) when dealing with China because how financial interactions will unfold in the context of a state-led economy cannot be foreseen yet.

High-finance is moving into China on a not insignificant scale. I am on tenuous ground, but I make a ball-park guess that about 10% of global high-finance is networked with China – add 5% to 10% if Hong Kong is included. True, New York, London, Tokyo and Frankfurt dominate bank, investment-fund and equity-market capital. High-finance however is on the move; asset managers (BlackRock and Vanguard), giant investment banks (JP Morgan Chase) and others are setting up shop in China (HSBC is already there), and Ant Group’s Hong Kong stock market launch later this year will be the largest ever IPO, eclipsing Saudi oil giant Aramco’s recent listing. Let us imagine that global high-finance has a quarter of its roots in the PRC by 2030. Remember that China took over as manufacturing workshop of the world in 20 years from 1980 to 2000; finance is a great deal more fluid than industry.

High-finance will be affected if the reach of China’s financial sector becomes even half as big as its global manufacturing. Some of the influences that will underpin change in the decade of the 2020s are easy to discern. The stranglehold of the US dollar as world reserve currency and mechanism of payment will need to be broken. Within five years an alternative global payments system and a currency based on two or three of the following, gold, yuan, yen, Euro and US$, will need to be initiated. (The US is the only country that can run eternal deficits, print mountains of money and export its economic problems because the world remains hungry for dollars till the value of the dollar declines). Second, the world needs other payments mechanism to overcome the US stranglehold known as sanctions – Cuba, Iran, Hong Kong, China, Venezuela, Turkey and Russia are among affected countries. Third, Belt & Road expenditure will be facilitated by an alternative global currency and banking and payments mechanisms.

A few words about Lanka before I sign off. The merging of monetary and fiscal policy is already advanced. Prof Lakshman’s task is to stay on the phone borrowing from whoever will lend and burning the midnight oil ensuring that the printing presses keep rolling. We are familiar with Lanka’s Central Bank borrowing billions again and again from China, India, the IMF or money-markets to repay China, India, the IMF or money-markets, again and again! Debt keeps growing as interest compounds while capital indebtedness persists. The balance of payments will remain in the red if not forever, for the foreseeable future. I don’t know it can be reversed both because governments need to survive politically and there is no big-enough feasible economic strategy. I am certain China, India, Japan and the US will not let us sink on the balance of payments issue since none of them wants a chaotic and anarchic country in this geographic location. For this reason I do not see sudden collapse but slow irreversible decline.

This essay has turned into heavy reading; I feel sorry for myself. No one pays attention to well researched stuff that is not simple to skim and digest. Anything on the Sinhala-Tamil brawl or derogatory of persons, regimes or regime-opponents draws stampeding crowds. Oh well, what to do!



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Ethical wealth distribution: Theravada and Mahayana Buddhism

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The rules of income distribution as outlined in the Sigalovada Sutta, often referred to as the “householder’s discipline” or the “layperson’s code of conduct,” offer valuable guidance on ethical financial management and distribution of income in Buddhist thought. This sutta is part of the Digha Nikaya of the Pali Canon and addresses how a layperson should conduct their life in relation to family, friends, and community, including the responsible use of wealth.

The Sigalovada Sutta prescribes that wealth should be divided into four portions, each serving a different purpose. This fourfold division serves as a model for ethical financial management that promotes personal security, family care, social responsibility, and spiritual well-being.

*  One portion for daily needs: This refers to spending on one’s livelihood, ensuring basic needs are met without excess. It includes food, shelter, clothing, and other essential expenses.

*  Two portions for investment: These two portions should be used for increasing wealth, either through business, savings, or investments. The aim is to ensure long-term financial stability, reflecting the Buddhist value of planning for the future with mindfulness and foresight.

*  One portion for charity: The final portion should be allocated for charitable giving, supporting religious institutions (such as monks and temples), helping those in need, and contributing to social welfare. This aligns with the Buddhist emphasis on dana (generosity) and the moral responsibility to support others.

Validity and Relevance in Modern

Economic Context

The rules of income distribution in the Sigalovada Sutta remain valid for people who can manage a quarter of their income for daily needs. However, when 10% of people enjoy the lion share of 90% of the wealth while only 10% of the wealth is distributed among 90% of people in developing countries, the practicality of these rules is almost impossible.

Balance Between Consumption and Savings

The Sutta advocates for a balanced approach to spending, saving, and investing, which may aligns with modern financial principles in most advanced economies, where a significant portion of income is often invested in assets like home loans. This approach is consistent with the Sutta’s rule of reinvesting to accumulate wealth. The encouragement to save and invest reflects sound financial planning, helping individuals build long-term financial security and avoid excessive debt, a challenge prevalent in many low and lower and middle-income economies.

Investment for the Future

The recommendation to allocate two portions for investment highlights the importance of growing wealth in a sustainable and ethical way. In a capitalist society, this could translate into saving for retirement, investing in business ventures, or acquiring assets that can generate long-term benefits. Such a strategy encourages people to think beyond immediate consumption and fosters financial stability across generations.

However, the Sutta does not elaborate on the types of investments. While modern investments can generate wealth, some may conflict with Buddhist ethics (e.g., investments in harmful industries). The application of “right livelihood” (samma ajiva) would need to guide modern investment decisions, ensuring that they align with non-harmful, ethical industries.

Charity and Social Responsibility

The portion allocated to charity in the Sigalovada Sutta underscores the importance of generosity, social welfare, and communal support. In Buddhist ethics, dana is a key virtue that promotes not only the well-being of the recipient but also the spiritual growth of the giver. This approach to wealth distribution is particularly relevant today, where growing income inequality has raised concerns about social justice and equity.

Modern systems of philanthropy and corporate social responsibility (CSR) echo this principle of giving back to society. However, the Sutta frames charity not as an optional, occasional act, but as an integral and regular part of one’s financial life. This can serve as a moral critique of modern practices where charity is often viewed as secondary to personal wealth accumulation.

Moderation and Non-Attachment

The Sutta encourages wealth management without attachment, reminding individuals not to become slaves to material wealth. This aspect of the Sutta remains deeply relevant in today’s consumerist society, where the pursuit of wealth often becomes an end in itself, leading to stress, dissatisfaction, and ethical compromises.

In a world where economic success is often measured by material accumulation, the Buddhist approach to moderate consumption and wealth-sharing offers a counter-narrative. The focus on ethical and mindful use of wealth promotes well-being, both at an individual level and within the broader community.

Challenges and Limitations

While the principles of the Sigalovada Sutta provide a strong ethical foundation, there are some challenges in their direct application in a modern, globalized economy:

*  Changing Economic Systems: The economy during the Buddha’s time was much simpler, based on agrarian and barter systems. Today’s complex financial systems, with varied forms of income (salary, investments, passive income), may require a reinterpretation of the Sutta’s guidelines to fit different types of financial arrangements.

*  Wealth Disparity: The Sutta assumes a relatively equitable distribution of resources and wealth within society. In modern economies, however, there are vast differences in income levels, and what constitutes “enough” for daily needs, savings, and charity can vary significantly across socio-economic classes.

*  Capitalism and Profit Maximization: The Sutta’s approach contrasts with modern capitalism’s focus on profit maximization and economic growth at all costs. While the Sutta promotes ethical financial management and redistribution, capitalism often prioritizes individual wealth accumulation. This divergence presents a challenge for applying the Sutta’s principles in highly capitalistic societies where personal gain is incentivized.

Comparison of application of Singalovada

Stta between Theravada and Mahayana

The Sigalovada Sutta holds a significant place in both Theravada and Mahayana Buddhism as a guide for laypeople, particularly in the realm of ethical living and financial management. However, the application and interpretation of its principles, especially in relation to wealth distribution and social ethics, differ between the two traditions. These differences stem from the distinct philosophical and doctrinal foundations of Theravada and Mahayana Buddhism.

Theravada Buddhism’s Application of the Sigalovada Sutta

Theravada Buddhism emphasizes individual ethical conduct and personal enlightenment, applying the Sigalovada Sutta to personal and familial responsibilities. The focus is on personal responsibility and right livelihood (samma ajiva), where individuals are encouraged to earn a living without causing harm. Wealth is seen as a tool for fulfilling basic needs, supporting family, and practicing generosity (dana), particularly towards the Sangha and local community.

Theravada promotes moderation and non-attachment to wealth, in line with the Middle Path, avoiding excessive accumulation. The Sutta’s teachings guide individuals to manage wealth wisely while focusing on personal and community well-being, reinforcing mutual dependence between laypeople and monks for material and spiritual support.

Mahayana Buddhism’s Application of the Sigalovada Sutta

Mahayana Buddhism, through its Bodhisattva ideal, offers a broader interpretation of the Sigalovada Sutta, focusing on the societal implications of wealth distribution and ethical conduct. Wealth in Mahayana is viewed not just for personal well-being but as a tool for societal transformation, used to reduce suffering and promote collective welfare.

In this framework, charity takes on a universal dimension, with Mahayana practitioners encouraged to direct their resources toward large-scale social initiatives like education, healthcare, and poverty alleviation. The emphasis is on benefiting all beings, reflecting the Mahayana ethos of compassion and social responsibility.

Compared to Theravada’s stricter approach to wealth, Mahayana allows greater wealth accumulation, as long as it serves altruistic goals. This aligns with the Mahayana principle of upaya (skillful means), where the ethical use of wealth becomes a method to alleviate suffering and guide others toward enlightenment.

Comparison

The key differences in interpretation between Theravada and Mahayana Buddhism regarding charity, wealth, and ethical conduct can be summarized as follows:

Scope of Charity:

Theravada: Charity is more localized, focusing on immediate responsibilities like family, friends, and the Sangha (monastic community).

Mahayana: Charity is global in scope, aimed at benefiting all beings, reflecting the Mahayana vision of interconnectedness and collective enlightenment.

Ethical Conduct and Wealth:

Theravada: Emphasizes individual ethical conduct and personal spiritual growth, where wealth is a personal responsibility, contributing to individual merit and well-being.

Mahayana: Focuses on collective well-being, with the Bodhisattva ideal promoting the use of wealth for broader social and spiritual welfare.

Wealth Accumulation:

Theravada: Advocates for moderation in wealth accumulation, consistent with the Middle Path, viewing wealth with caution to avoid attachment that may hinder spiritual progress.

Mahayana: Permits greater wealth accumulation if directed toward altruistic goals, using wealth as a tool for social transformation in alignment with the Bodhisattva’s mission.

Common Ground:

Ethical Conduct: Both traditions stress earning wealth ethically through right livelihood, avoiding harm.

Generosity: Charity (dana) is central to both, emphasizing generosity as a way to reduce attachment and contribute to well-being.

Non-Attachment: Both stress non-attachment to wealth, though the degree and application of this differ between the two traditions. Wealth is seen as a means to support ethical living rather than an end goal.

(The writer, a senior Chartered Accountant and professional banker, is Professor at SLIIT University, Malabe. He is also the author of the “Doing Social Research and Publishing Results”, a Springer publication (Singapore), and “Samaja Gaveshakaya (in Sinhala). The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of the institution he works for. He can be contacted at saliya.a@slit.lk and www.researcher.com)

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Schools can help ease religion-based distancing 

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A representational image. (Picture courtesy of UNICEF)

by Susantha Hewa

In her article titled “Old Wines in New Democracies: Education in the making” published in The Island of October 1, 2024, Prof. Sivamohan Sumathy, referring to a move which is proposed in the NPP’s election campaign manifesto, commends giving schoolchildren a broader understanding of religions in general, when she welcomes “a holistic civic education where one learns about religions rather than one’s “own” and learns about diversity”. Surely, it will be a decisive first step in the direction of inspiring religious amity.

The proposed scheme will certainly go a long way in building bridges between different religious communities in the country, although it would be upsetting to those who wish to continue the tradition of exposing the children only to the religion of their parents for the fear that learning about other religions would diminish their religious zeal. In a society where people can be parochial enough to fear the extinction of the institution of religion even more than they may fear the very extinction of the human race, the idea of teaching children a religion other than his own may scare many people complacent about the culture of, lets’ say, “one religion, never mind whatever it is”. However, today, even with thousands of missiles whizzing across the sky killing thousands of peace-loving and innocent people, pushing the world to the brink of obliteration, anyone of those single-religion advocates may yet ask, “Bro, I am really worried. What about our religions? Will they be still there in their pristine purity once we are all reduced to ashes”? Tragic, isn’t it? There is little doubt that all those world leaders who are breathing fire and promising sweet vengeance with each provocation have too much of their “own” religious blood coursing through their veins. If only they had an opportunity to transcend the “my religion, my truth, the only truth” mentality in their impressionable years! Let wiser counsels prevail, and, the sooner the better.

The acquisition of the first language is somewhat similar to the acquisition of the (first) religion. Infants acquire both before they are sufficiently cognitively developed to “learn” them in the sense in which learning is generally understood in education. Yet, this “single language – single religion” tradition has apparently done little to make society peaceful. Let’s take language. Being exposed to only one language (monolingualism) in early childhood is not the best way to promote social cohesion. In fact, in the modern world, it is a deprivation and an invitation to introversion. According to research, bilingualism and multilingualism bring many linguistic and non-linguistic benefits to children who will grow up to be more confident, empathetic, more skilled in making friends from different cultural backgrounds, securing better employment, better in learning new languages, etc. For example, according to research, “bilingual preschoolers seem to have somewhat better skills than monolinguals in understanding others’ perspectives, thoughts, desires, and interests” (Bialystok & Senman, 2004; Goetz, 2003; Kovács, 2009). Fortunately, parents and society are informed of the benefits for children who naturally acquire two or more languages rather than one.

Given that they grow up in a multilingual setting, children easily acquire several languages without their parents feeling unduly upset about it. Today parents are too sophisticated to insist that the child should strictly survive on a diet of the parental language so as to be an unadulterated specimen of the ‘ethnicity’, which is falsely identified with the respective language; for example, imagining a Sinhala ‘ethnicity’ joined at the hip with Sinhala language.  However, this sophistication ends where religion begins, so to speak. Not many parents would allow their children to get exposed to a religion other than their inherited one. The reason is obvious – the faith factor, which has no role in language acquisition, but embedded in religion.

Many of us who were destined to start as monolinguals later upgrade ourselves to be bilinguals or multilinguals thanks to the enabling quality of language. With every language a child acquires, she becomes stronger and more competent in social and cognitive skills in addition to being linguistically more versatile. However, the crucial difference between language-acquisition and religion-acquisition in early childhood is that the former hardly gets in the way of the child acquiring a second or third language, whereas the latter inevitably resists another religion being acquired due to the invariable buildup of faith in the first religion which is inherent in the process. The glue that binds the members of any religious community is their unconditional trust in the infallibility of their creed. One may argue that even in language acquisition in early childhood, the child surely develops ‘faith’ in the versatility of the language he begins to use. True enough, but this ‘faith’ never acts as a resistance to the acquisition of the next language in the queue.

Why letting schoolers learn religions other than their ‘inevitable’ religion can give a significant fillip to religious harmony is that this “learning” process, unlike the acquisition process in early childhood, will be the natural learning procedure where cognition takes the centre stage of the entire process, which would not demand faith as the final product. The students as mature learners will use their cognitive faculties to question, understand, reason, reject, analyse, accept, etc. to know rather than believe. Such a holistic approach to the teaching of religion will surely but slowly result in the younger generation learning to take a more sober and balanced approach to the whole idea of religion. Hence, the sooner they implement it, the greater the benefits for all.

It would be a fantasy if anyone thinks of persuading parents to let their children be exposed to several religions. Being the products of the same conditioning process, we would be stricken with a terrible sense of guilt and sin if we were to evade our sacred ‘parental obligation’ to mould our children in “our” religion to the exclusion of all the others. Hence the importance of teaching “religions” as a subject in the school curriculum, which will be a better-late-than-never kind of option. Such a project will bring more benefits to the students if “morality studies” can be made a part of the curriculum placing it in a wide framework in which morals are discussed outside the precincts of religion, examining them in their essential web of links covering all aspects of experiential life.

The historian Yuval Noah Harari says, “History isn’t the study of the past; it is the study of change” (Nexus, 2024). This idea questions the somewhat patronizing attitude that history is just learning about the past and is of no ‘practical value’, unlike STEM subjects (science, technology, engineering and mathematics) that take all the prizes. However, the study of history is much more than learning the dates and events, as Harari points out. It’s time that religion, which has been the responsibility of the family and the tradition, was understood as much more than rituals, narratives of the saints and their uniqueness, codified morals, etc. The inclusion of religions as yet another subject in the school curriculum, where students are allowed to study them without the accustomed inhibitions will be quite timely and relevant in a world in which belligerence is preferred to religious values in solving the most crucial problems.

Perhaps, adult education in this regard, too, may not be irrelevant in the present context, where parents are fixated about the mantra of single-religion. They may be persuaded to look at religion in a broader human context to usher in a better world. Possibly, media can help?

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New start in international relations can be highlighted in Geneva

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by Jehan Perera

Diplomatic missions that took a keen interest in the outcome of the presidential election have lost no time in reaching out to President Anura Kumara Dissanayake after his victory.  Prior to the election it appeared that former president Ranil Wickemesinghe was the favourite of the Western bloc of countries.  They made frequent public statements commending the president for his handling of the economy which were supplemented by similar supportive statements by the IMF.  The Wickremesinghe government also made a special effort to be identified with Western-led initiatives including the promise of participating in naval operations in the Red Sea despite having an ill-equipped ship.

One of the concerns of the Western bloc of countries and India in particular was the foreign policy orientation of the NPP and its presidential candidate.  The surmise was that with the NPP’s core constituent the JVP, being a Marxist-Leninist party as stated on its website, that the NPP would be tilted towards countries with a similar ideology.  In the aftermath of President Anura Kumara Dissanayake’s victory, the international media gave credence to the view that the government would tilt towards China and Russia, which have been long term allies of Sri Lanka, especially during the period of war and when it came to human rights issues in the context of that war.

However, in the aftermath of his victory, President Dissanayake has given precedence to India, both in terms of economic activities and security interests.  The first foreign ambassador to meet him was the Indian ambassador.  The first foreign minister to visit Sri Lanka has also been from India at which economic development projects with India was given prominence.  President Dissanayake has assured the Indian government that India’s national security will be a priority concern for Sri Lanka.  At the same time there have been messages of goodwill from around the world, including countries that are important to Sri Lanka as they provide both markets and economic assistance to it, including the US, Japan, EU, China and Russia.

NEW LEADERSHIP

The government will soon be facing its first major foreign policy challenge. This week the UN Human Rights Council (UNHRC) will be deciding on the level of its scrutiny of Sri Lanka, particularly focusing on accountability for human rights violations and the handling of the country’s economic and political crisis. Since 2009, the year the war ended on the battlefields of the north, the international community led by the Western bloc of countries has been pressing Sri Lanka at the UNHRC to investigate and deal with the past.  There is the question as to what happened in the final stages of the war and to ensure accountability, among other matters, which include finding of missing persons, return of land and de-militarising the north and east.

In Resolution 51/1 of October 2022, the UNHRC decided, among other matters, to extend and reinforce the capacity of the Office of the High Commissioner for Human Rights (OHCHR) to collect and preserve evidence of gross human rights violations. This aims to advance accountability and support judicial proceedings in countries that have laws that permit prosecution of war crimes in their jurisdictions.  Both the governments headed by presidents Gotabaya Rajapaksa and Ranil Wickremesinghe strongly opposed this resolution.  But the legal arguments they made and the evidence they produced to show improvement of the human rights situation on the ground have not changed the approach of the UN system.

This time around, however, the situation can be different and the Sri Lankan government may respond differently.  For the first time since the UNHRC resolutions on Sri Lanka made their appearance starting in 2009, Sri Lanka has a government in which none of its members can be accused of having participated in the excesses committed during the course of the war.  The members of the present government were not in positions of power where they could have made decisions regarding the deployment and use of force by the security forces.  The only time they held cabinet posts was in the period 2004-2005 when the Norwegian-facilitated ceasefire agreement was in operation and armed hostilities between the parties had temporarily ceased. During that time the president served as the Minister of Agriculture, Livestock, Lands, and Irrigation.

SUCCESS STORY

UNHRC Resolution 51/1 of 2022 was for a two-year period, which comes to an end this month.  The indications are that the Western-bloc of countries will not let it lapse at a time when most of its recommendations have yet to be implemented by the Sri Lankan government.  A draft resolution that has been circulated calls for a one-year extension- “Decides to extend the mandate and all requested work of the Office of the High Commissioner for Human Rights in Human Rights Council resolution 51/1 and requests the Office of the High Commissioner for Human Rights to present an oral update at its 58th session, and a comprehensive report on progress on human rights, reconciliation, and accountability in Sri Lanka at its 60th session to be discussed in an interactive dialogue.”

Instead of continuing on the confrontational path taken by the two previous governments, an option for the new government would be to take the position that it needs time to study the provisions in the resolution, ascertain the present state of implementation and what it can implement in the next year.  As in the case of the IMF agreement the Dissanayake government can take the position that it will propose amendments to the resolution at the next or subsequent sessions of the UNHRC.  The ideal would be a resolution both Sri Lanka and the UNHRC can agree to.  There is significant goodwill towards Sri Lanka within the UN system which has been heightened by the peaceful transition of power that has taken place in the aftermath of the presidential election.

The ability of the new government to take forward the national reconciliation process that was commenced but not taken forward by previous governments will also add to the credibility of the new government. The positive work done by civil society in Sri Lanka was given special recognition at the ongoing 57th session of the UNHRC at a side event on Combating Intolerance, Hate Crimes and Islamophobia which was hosted by the United States Delegation to the UN Human Rights Council.  Under its new leadership, Sri Lanka has the potential to be the good news story in a world that is increasingly troubled by the breakdown of international norms that need to be reversed, and Sri Lanka can do its part.

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