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!
22A is 19A Minus and does not help alleviate crisis
By Dr. Jayampathy Wickramaratne,
The long-awaited 22 nd Amendment to the Constitution Bill (22A) of the Gotabaya-Wickremesinghe government (or, should we say, the SLPP Government in which UNPer Ranil Wickremesinghe is Prime Minister?) was published in the Gazette on 29 June 2022. This means it could be placed on the Order Paper of Parliament seven days after that. Citizens and citizens’ organisations would be able to challenge the Bill in the Supreme Court within seven days of the Bill being so placed. As this is a constitutional amendment requiring a two-thirds majority in Parliament, the only question that can be raised before the Court is whether the People must approve it at a Referendum.
President Gotabaya Rajapaksa has just finished the first half of his term. The 20 th Amendment to the Constitution (20A) that he and the SLPP said was essential to develop the country by strengthening the Presidency is just 20 months old. What happened under his watch need not be recounted. The attack on the Aragalaya by SLPP goons, obviously with the blessings of highly placed leaders, led to the resignation of Premier Mahinda Rajapaksa. The President, with all his powers, could neither stop the attacks nor the violence that ensued all over the country. It was then that the beleaguered President offered to go back to the 19th Amendment to the Constitution and even hinted that he was amenable to the Parliament deciding to abolish the Presidential form of government, two of the main demands of the Aragalaya and also of the majority of the people. A survey conducted by the Centre for Policy Alternatives (CPA) in April 2022 revealed that 74% of the respondents wished for the complete abolition of the Executive Presidency compared to 50.3% in October-November 2021. The results of the “Mood of the Nation” poll conducted by Verité Research show that the Government’s approval rating for June 2022 is a mere 3%.
The SLPP and President Gotabaya then pulled a masterstroke by inviting the UNP’s lone MP, Ranil Wickremesinghe, to be Prime Minister. This was a setback to the Aragalaya, with many of its upper and middle-class supporters thinking that Wickremesinghe had a magic wand to cure the country of the economic ills caused by the Rajapaksas. Such hopes are receding fast, but the country is yet to see the Aragalaya picking up again, although that will be only a matter of time.
That the Government is making good use of the sense of hopelessness amongst the people is clear from the contents of 22A. It is nowhere near what was promised.
President’s powers regarding PM and Ministers and dissolution of
Under 19A, Ministers and Deputy Ministers were appointed by the President on the advice of the Prime Minister, a provision that significantly strengthened Parliament. The power that the President had to remove the Prime Minister at will was taken away. The unconstitutional removal of Premier Wickremasinghe by President Sirisena resulted in the infamous 52-day constitutional crisis, which ended in a massive defeat for the latter. 20A did away with many of the provisions of 19A, including the requirement that the President should appoint Ministers and Deputy Ministers on the advice of the Prime Ministers. The President’s power to remove the Prime Minister was restored.
22A seeks to bring back the requirement of the Prime Minister’s advice, but there is a catch. It would not apply during the present Parliament. Where the President is of the opinion that the Prime Minister has lost the confidence of Parliament, the Prime Minister can be removed but only during this Parliament. Under 19A, the removal of the Prime Minister was a matter solely for Parliament. The Cabinet of Ministers stands dissolved if Parliament passes a vote of no-confidence on the Government or the statement of government policy or the Budget is defeated — Article 48 (2). One recalls the occasion such a thing happened under 19A. Although Mahinda Rajapakse was appointed to replace Wickremesinghe who was unconstitutionally dismissed, Speaker Karu Jayasuriya recognised Rajapakse as Prime Minister as there was no court order to the contrary. Rajapakse was given the Prime Minister’s seat in Parliament and was referred to by the Speaker as “Hon. Prime Minister”. Immediately after a vote of no-confidence against the Government was passed, the Speaker referred to Rajapakse as “Hon. Member Mahinda Rajapaksa”. Rajapakse did know what hit him and was visibly upset.
The provisions of Article 48 (2) have been retained under 20A as Article 49 (2) with identical wording, and 22A does not seek to make any change thereto. When the Constitution is so clear as to how the Prime Minister can be dismissed along with the other Ministers by Parliament, why allow the President to dismiss a Prime Minister at all? That a new Prime Minister appointed to replace the one that has been removed by the President can be defeated on the floor of the House or that the removal can be challenged in the Supreme Court is no answer. Why open the doors to manipulation in the meanwhile? The country saw the horse-trading that followed the removal of Premier Wickremesinghe. Some MPs were one day with Sirisena and Rajapaksa and the next day with Wickremesinghe. The number of times a particular MP crossed sides defied counting. Empowering the President to remove the Prime Minister while Article 49 (2) is retained is arbitrary and violates the fundamental right to equality and equal protection guaranteed by Article 12 (1) of the Constitution. It also undermines Parliament and thus the sovereignty of the People guaranteed by Article 3. The writer submits that this would require approval at a Referendum.
Under 19A, the President could have dissolved Parliament within the first four and a half years only if Parliament requested dissolution by a two-thirds majority. 20A changed this to provide that the President could dissolve Parliament during the first half of its term if Parliament so requested by a simple majority. 22A does not seek to change this.
Under 19A, the Speaker, Prime Minister and Leader of the Opposition were ex officio members of the Constitutional Council (CC), while the President would nominate one MP. Five persons were nominated jointly by the Prime Minister and the Leader of the Opposition, two of them being MPs. In making such nominations, they were required to consult the leaders of political parties and independent groups represented in Parliament to ensure that the CC reflects the pluralistic character of Sri Lankan society, including professional and social diversity. One MP was nominated by the MPs belonging to parties other than those to which the Prime Minister and the Leader of the Opposition belonged. The three persons from outside Parliament shall be persons of eminence and integrity who have distinguished themselves in public or professional life and who are not members of any political party. Parliament shall approve their nomination. In practice, such approval was a mere formality as they were nominated jointly and after a consultative process.
22A, while re-establishing the CC, seeks to make a crucial change. The five persons referred to are not appointed pursuant to the joint nomination of the Prime Minister and the Leader of the Opposition. One MP is nominated by the Government Parliamentary Group, and the other MP is nominated by the party to which the Leader of the Opposition belongs.The three persons from outside are nominated not jointly by the Prime Minister and the Leader of the Opposition but by the Speaker in consultation with them. The smaller parties are not consulted.
Several issues arise. If the Speaker is partisan (and there have been several such Speakers), the Government could ensure that all three CC members from outside are their own nominees. The Government, by virtue of its majority, would have no difficulty getting Parliamentary approval. The smaller parties would have no say in the nomination of these three persons. Thus, in the current Parliament, parties such as the TNA, NPP, EPDP, TNPF etc., who together account for twenty-five MPs, would not be consulted.
22A says that in nominating the two MPs and the three persons from outside Parliament, the Members of Parliament shall ensure that the CC reflects the pluralist character of Sri Lankan society. This would be most difficult as they would be nominated by separate processes. Under 19A, on the other hand, that was ensured as the nomination was jointly by the Prime Minister and the Leader of the Opposition after consulting the leaders of all parties in Parliament.
More time to challenge Bills
The 1978 Constitution originally provided for a Bill to be published in the Gazette seven days before it is placed on the Order Paper and for a challenge to the Bill to be made in the Supreme Court within one week from there. 19A extended the minimum period for publication to fourteen days. 20A reverted the period to seven days. 22A makes no change but seeks to increase the period for a challenge to fourteen days. This is salutary.
A damper on a consensus government
It is now clear that for Sri Lanka to obtain international assistance to tide over the present crisis, there must be an administration that enjoys cross-party support. This does not necessarily mean that all parties in Parliament must be represented in the Cabinet of Ministers or that party leaders should be in the Cabinet. One party might opt out of the Cabinet but still support the administration. Another party might decide it would be represented in the Cabinet by a few senior members but not by its leader.
If 22A becomes law in its present form, no opposition party or even MPs who have opted to be independent would be inclined to join the government because of the powers that the President would continue to have during the term of this Parliament.
22A proposes that the current President would retain the powers mentioned above during the term of the present Parliament and not during his entire term. This gives us an indication of the President’s current plan. Clearly, he has no intention of calling a general election during his term of office. If he had, 22A would have provided that the said powers would be retained for the complete duration of his period. It also shows that the SLPP knows it will be defeated if a general election is held ahead of time.
Airline Pilots and Professionalism
by Capt. Gihan A Fernando
RCyAF, SLAF, Air Ceylon, Air Lanka, Singapore Airlines, SriLankan Airlines, CAASL.
The story is told of two school friends, meeting after many years at a school function. One asks the other what sort of job he is doing. The answer was that after leaving school he had gone to Medical College and then qualified as a Surgeon. “How about you” he asked in turn. His friend had replied that he worked as an Airline Pilot.
Then the Surgeon says, “I had to go to Med School for five long years and another year of internship before I was even called a ‘Doctor’. You guys have it relatively easy as your training is only about 18 months and you get to be called an Airline Pilot.”
Then the Pilot tells the doctor the essential difference is that “you get to bury your mistakes while my mistakes will bury me!”
This is just one aspect of an airline pilots’ working life.
Another aspect is the ability to evaluate and manage the potential risks involved, from departure to destination by maintaining a situational awareness in relation to other traffic in the vicinity. If the risk is too great then the pilot does not pursue the initial plan of action. Instead he/ she will draw on his/ her knowledge and experience to follow an alternate means of compliance.
To help pilots to achieve this, in modern aircraft there are two Light Emitting Diode (LED) displays in front of each of them known as the Primary Flight Display (PFD) and Navigational Display (ND). In the ND there is traffic in the vicinity displayed from the Traffic Collision Avoidance System. (TCAS). (See picture)
As can be seen, the pilot has all the conflicting and other traffic in the vicinity displayed on his ND to help build mental picture. Also, perhaps to a greater degree, listening out through his headphones, or speaker, the chatter between the other aircraft in the vicinity and the control tower, helps them to form that mental picture. In an ideal world he/ she will not do anything to compromise safety. The Litmus test is to ask the question whether one would take the same course of action if one’s family was on board that flight.
This bring me to the recent report of a SriLankan Airbus 330 aircraft that declined to climb when given clearance to climb by Ankara Air Traffic Control (ATC), as they were aware of another aircraft at higher level. The crew would have had the display of all the traffic in the vicinity on their ND’s (the instruments are duplicated). Therefore, there was no real conflict of traffic and good communication prevailed to ensure that it was a non-event. This is a common occurrence of the day-to-day life of an airline pilot.
It probably warranted a confidential ‘Incident Report’ which is essentially a confidential feedback to the management and can be passed on to the ATC in Ankara, Turkey, through proper channels to fine-tune their operations. The cardinal rule in report writing is that it should contain only facts in the third person and the crew should never pat themselves on their backs! By accident or design this non-event had been leaked to the media and hyped. Was it to create a distraction from our day-to-day problems? As one airline pilot put it, it was no big deal. How did the confidential document such as this leak out to the public domain? In contrast if a surgeon saves a patient’s life, using his knowledge, experience and skill, he does not go bragging in public and it doesn’t even make the news!
After two significant crashes in the early seventies in Florida Everglades and Portland, Oregon, USA, in the pre-glass cockpit era, it became evident that resource management, communications and knowledge on human factors were deficient among airline crews and needed to be formally instructed in these ‘soft skills’. Workshops were soon designed and conducted to discuss all aspects of an Airline pilots’ working life. It became mandatory to be held every two years for all airline pilots the world over. By the pilots for the pilots. The surgeons soon copied the methods used like the use of checklists and called it ORM (Operating Room Management). The Captain or the Surgeon sets the ‘tone’ in his team.
The writer was a Crew Resource Management (CRM) facilitator for almost 10 years in a successful far eastern carrier. At the end of the three to five day programme, he wrapped up with a quote from Capt. Robert N Buck “My heroes are the unknown, unheralded airline pilots who fly without incident or accident, making decisions, stopping potential disasters before they happened, flying all night to see though scratchy, tired eyes; fighting bad weather in all seasons from ice to thunderstorms; away from home and family for at least half of every month.”
Almost every time I got a hesitant applause from the wide cross section of Aviators in the class room. This was a normal day-to-day experience in an Airline pilot’s working life and it boils down to professionalism.
Apportioned Seats in Parliament and the “National List”
by Prof. Savitri Goonesekere
The recent appointment of well known entrepreneur and businessman Dhammika Perera to a seat in Parliament on the resignation of former minister Basil Rajapakse was challenged in several petitions in the Supreme Court. These petitions mainly alleged a violation of the fundamental right to equality, nondiscrimination, and non arbitrary decision making in the filling of a vacancy created in regard to a seat in Parliament occupied (not through election,) but APPORTIONMENT of seats, based on the votes cast at a General election. This concept of apportionment of 29 of the total number of seats in the electoral system of proportional representation was introduced into the Constitution’s provisions governing elections and the Peoples’ franchise, by the 14th Amendment to the Constitution in 1988.
The appointment of Mr. Perera to Parliament on an apportioned seat, in the midst of an unprecedented and grave political and economic crisis generated public controversy. Some considered his appointment a welcome effort to bring entrepreneurial experience into government at this time. Others viewed the appointment negatively and challenged its validity in these petitions in the Supreme Court. Mr. Basil Rajapaksa’s appointment had not been challenged in this manner. Field Marshal Sarath Fonseka had also held an apportioned seat, which had been challenged unsuccessfully in Centre for Policy Alternatives (CPA) v. Kabir Hashim in SC Appl. 54/2016. The possibility of bringing experts into Parliament through the apportioned seat process on the national list has been discussed even recently as a useful response to the current crisis.
The current petitions are of public concern, as they raised an important issue on the People’s right to franchise, and the meaning of Constitutional and legal regulations applicable to apportionment of seats in Parliament, on the basis of the Peoples’ exercise of their voting rights. The case was an opportunity to clarify the law and practice on this important topic relating to the franchise, as well as the eligibility of persons to occupy 29 apportioned seats in Parliament.
The petitions in the Dhammika Perera case were dismissed by the Supreme Court, at the preliminary procedural stage of granting leave to proceed with the litigation. No reasons were given for the decision, though the court heard arguments of Counsel in support of and in opposition to the petition. However the Court clarified that the refusal of leave to proceed was a split decision, with one dissent in a bench of three judges. Since no reasons were given, the approach of the majority and the dissenting judge to the legal issues raised by Counsel in regard to appointments to apportioned seats in Parliament, remains unknown to the public.
The decision of the court not to write a judgment and give reasons for refusing leave after hearing Counsel in the Dhammika Perera case at this preliminary procedural stage, follows the practice of the Court in exercising the discretion given in Article 126 (2) of the Constitution. The right to obtain relief for violation of a fundamental right is a right guaranteed by Article 17 and Articles 126 (2) and (4). The Supreme Court has been given a discretion by Article 126 (2) to decide whether it will grant leave to proceed with the application for relief and remedy for alleged violations of fundamental rights. This follows a tradition in Common law jurisdictions to ensure that courts are not overburdened in litigation, also reflecting a policy approach on avoiding unnecessary costs of litigation. Yet there is also jurisprudence in the Supreme Court indicating a different approach to the granting of leave to proceed.
In the Shirani Bandaranyake Appointment to the Supreme Court Case (1997 1 SLR 92 ) the Chief Justice decided that the case raised an important issue of “general and public importance” and referred the applications to a bench of seven judges. Justice Mark Fernando speaking for the court said that “having regard to the complexity and gravity of the questions involved, Counsel for both the petitioners and respondents were heard in support of and opposition to the petitions.” (p 93). Justice Fernando and Justice Perera wrote separate judgments, in a unanimous decision of the Court to refuse leave to proceed, creating important jurisprudence on this subject.
If this approach articulated by Justice Mark Fernando guides the Supreme Court, and is clarified in Rules of the Supreme Court, petitioners and the public will know the basis on which the Supreme Court refuses leave to proceed with a Fundamental Rights Application, relating to an important issue of public concern. The issue of apportionment of seats in Parliament is an issue of public concern to voters, just as appointments to high public office, as in the Shirani Bandaranayaka case also raised issues of public concern. Giving reasons can only enhance the stature of the court as an indispensable institution in the administration of justice in a Constitution that perceives the courts as exercising the “judicial power of the People” [Article 4 (c)]. This was also referred to in the judgment of the Supreme Court in the Dissolution of Parliament case (2018.) Citing an American case, Baker v Car (1962), His Lordship HNJ Perera CJ said “the court’s authority possessed of neither purse nor sword ultimately rests on sustained public confidence.”(Sampanthan v AG (2018) p 69).
The unresolved constitutional issue of appointments to Parliament on apportionment, and the National List.
Article 99A introduced by the 14th Amendment is very clear on the persons eligible to occupy apportioned seats after a general election. The meaning of this Article, in the context of the statute law also regulating elections i.e. the Parliamentary Election Act No. 1 of 1981 was the crux of the case argued by Counsel for the petitioners in the Dhammika Perera case. Geoffrey Alagaratnam PC former President of the Bar Association and other eminent lawyers who supported the petitions drew attention to the need to clarify the law on this important issue of public concern, because of a seeming conflict between the Constitutional provision (Article 99A) and Section 64 (5) of the Parliamentary Elections Act (1981).
Article 99A of the Constitution clearly states that persons allocated apportioned seats in Parliament based on the votes cast at a general election must be persons eligible to be MPs, whose name appears on a list submitted within the period of nominations, to the Commissioner of Elections. This list is now popularly known as the “National List,” from which a person may be nominated to hold a seat on the basis of apportionment and votes cast at the general elections. Article 99A also includes another category of persons who can hold such a seat. This is a person whose name is on an electoral list. Article 99A does not indicate that there is any other requirement of eligibility. It is therefore clear from Article 99A of the Constitution that both defeated candidates and persons on the National List are eligible to occupy apportioned seats.
The issue of defeated candidates occupying these seats is therefore an ethical rather than a legal or Constitutional issue. Consequently Mr. Ranil Wickremesinghe is lawfully occupying the seat apportioned to the UNP, though he was defeated at the General Elections (2019) and also publicly stated that candidates defeated at a General election should not occupy seats apportioned to the party. However Article 99A as argued by Counsel in the Dhammika Perera case does not permit persons who are NOT on the National list submitted at the time of nominations, to be allocated apportioned seats in Parliament. The procedure set out in Article 99A is for the Commissioner of Elections to request a Secretary of a party to nominate persons to fill an apportioned seat. The language of 99A does not enable persons outside these categories to be considered eligible to hold these apportioned seats.
The popular idea that a party in Parliament, particularly at this time of a national crisis, can bring to Parliament professionals and others with special expertise, does not conform to the eligibility criterion set out in Article 99A. Therefore, persons who occupied these apportioned seats, whether Basil Rajapaksa or Sarath Fonseka also did not satisfy the Constitutional provision on eligibility to fill an apportioned seat. Article 99A seems to have been ignored in discussions on appointments to Parliament on the national list.
It is also clear that this Article 99A in the Constitution casts a duty and responsibility upon the Commissioner of Elections and the Secretary of a Political Party who nominates a person to an apportioned seat to abide by Article 99A. The Commissioner is a public servant, and he can be sued in a fundamental rights violation case relevant to wrongful allocation of an apportioned seat. The Secretary of a Political party is a Non-State actor but becomes liable for a wrong decision since our courts connect him to the inaction of the State or government agency in ensuring conformity to the Constitution. (Faiz v. AG (1995 1 SL 372).
The PROVISIONS in the Parliamentary Elections Act 1 of 1981 on VACANCIES to one of the 29 APPORTIONED seats in Parliament
The Parliamentary Elections Act (1981) Section 64 was amended consequent to the 14th Amendment in 1988. This provision in the principal enactment of 1981 dealt with filling of vacancies in seats in Parliament. When the 14th Amendment provided in Article 99A for a National list, and apportionment of seats, a new provision Section 64 (5) was introduced into the principal legislation, the Parliamentary Elections Act, to cover the procedure for filling vacancies to these apportioned seats. Section 64 (5) enacted by an amendment of 1988, i.e. the same year as the 14th Amendment, uses the words “Notwithstanding anything in the previous provisions” (ie on vacancies in regard to ordinary seats in the principle enactment of 1981), and sets out a PROCEDURE for filling vacancies in the special APPORTIONED seats created by Article 99A of the 14th Amendment. This 1988 provision Section 64 (5) added to the Parliamentary Elections Act indicates that in the case of persons occupying these apportioned seats, a vacancy is filled by “the Secretary General of Parliament informing the Commissioner of Elections who then requires the Secretary of the Party or leader of the relevant independent group apportioned a seat to nominate a member of such party ” to fill the vacancy. It is this language on PROCEDURE in filling vacancies to apportioned seats, that is now being used to argue that the Secretary of a party or leader of an independent group has complete discretion to appoint a person of his/ her choice to fill a vacancy.
Our Constitution has a controversial Article 16 (1) that has been consistently criticized, which does not permit judicial review of legislation once it is enacted by Parliament. Even in jurisdictions like India, South Africa and Canada, that permit judicial review of legislation for non-conformity with the Constitution, there is a legal concept of “Presumption of Constitutionality of legislation” and “reading down” legislation in order to follow a “purposive” interpretation that seeks to harmonize the basic law of the land, a country’s Constitution and legislation enacted by Parliament.
In Sri Lanka in the in the cases AG v Sampath SC Appeal 17/2013 and SC Ref 3/2008 the Supreme Court refused to follow a provision in the amended Penal Code of 1995 that provided for minimum sentences on the ground that the legislation could not be interpreted as restricting the judicial discretion of the Courts. Both these judgments held that the power of interpretation of law is embedded in the judicial power recognized in Art 4 (c) of the Constitution. This could not be restricted by ordinary law (in this case the amended Penal Code) since the Constitution is the Supreme Law. While this decision may be critiqued as in conflict with the restricted power of post enactment judicial review of legislation in our Constitution, the decisions indicate that there is a rationale for interpretations that seek to give predominance to the Constitution as the basic law of the land.
As Mr. Alagaratnam PC and other Counsel for the petitioners argued in the Dhammika Perera case, interpreting section 64 (5) of the Elections Act as giving an absolute discretion to the Secretary of a Party or the leader of an independent group apportioned a seat, to fill a vacancy in that seat, means that he/she can ignore completely the criterion on eligibility for apportioned seats, so clearly set out in the 14th Amendment, when it introduced a concept of apportioning 29 seats. This is surely a situation where an interpretation must be adopted that recognizes rather than undermines the significance of basic Constitutional provisions on eligibility to occupy a seat in the legislature.
In CPA vs Kabir Hashim, Sripavan CJ delivered a short judgment, when refusing leave to proceed in a petition challenging the nomination of Sarath Fonseka to a vacancy in an apportioned seat. His Lordship held that the issue of filling vacancies was not considered in Article 99A of the Constitution (on apportioned seats). This was regulated by the procedures detailed in Section 64 (5) of the Parliamentary Elections Act which, His Lordship said, gave a discretion to the secretary of the party or the leader of an independent group to nominate the person to fill a vacancy in an apportioned seat. His Lordship did not, with respect, address the substantive requirements for eligibility to occupy an apportioned seat, that were set out in Article 99A, when the 14th Amendment to the Constitution created this new category of seats in our Parliament. His Lordship’s opinion also takes a different approach to ordinary law vis- a-vis the Constitution as the “supreme law of the land,” in the cases referred to earlier.
It is with respect difficult to consider the decision in CPA v. Kabir Hashim as a judicial precedent that binds the Supreme Court, and prevents the matter being considered again in light of the specific language in Article 99A of the Constitution on eligibility to occupy an apportioned seat in Parliament. The Supreme Court has not followed a strict approach to the concept of “stare decisis” or binding precedent in a context where the structure of our courts has changed through both statutes and post independence Constitutions. The capacity of a superior court to contribute to development of the law without being fettered by previous decisions is reflected in important decisions of judges like Basnayaka CJ in Bandahamy v. Senanayake (1960) 62 NLR 313 and Wanasundere J in Walker Sons v Gunathilleke (1978- 19801 SLR 231.
It is in the public interest that the meaning of Article 99A and the policy on apportioning 29 seats in Parliament is clarified and addressed in any further amendments to the Constitution. Giving a complete discretion to a non-State official like a Party Secretary to choose persons entitled to fill vacancies in apportioned seats based on electoral votes, undermines voting rights. There is also the public interest in having persons qualified to occupy these apportioned seats being nominated initially, or in filling vacancies that are created later. More specific criterion of eligibility to take apportioned seats will also address the public interest in bringing a diverse range of experience to the legislature of the country through the National list. Such an amendment should also clearly make defeated candidates not eligible to occupy such seats.
The Dhammika Perera case raises once again an issue of public concern in regard to filling vacancies in the 29 apportioned seats in Parliament, either through the national or electoral list. Clarifying the law can be done without delay through the contemplated current Constitutional reforms. If this is not done, it seems important for the Chief Justice to appoint at least a Divisional Bench to provide a clear interpretation of Article 99A of the Constitution or point to the important need for clarity on this matter through a Constitutional amendment.
Litigation in the courts and ground realities indicate that there are many important unresolved issues that require constitutional reform. Even within the current Presidential system, the cumbersome procedure for impeachment of a President and also judges of the Supreme Court, and appointments on the National List, clearly require significant review and reform. And yet, ad hoc constitutional reform efforts like the 19th Amendment, 20th Amendment and the proposed 21st Amendment, seem to ignore public concern for reforms in these important areas. There should be public advocacy to ensure that all these areas are addressed immediately in the current constitutional reform process.
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