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Midweek Review

Visit to Moscow amid US travel ban



General Shavendra Silva and wife Sujeewa Nelson at the Mikhailovskaya Military Artillery School(pic courtesy Ministry of Defence of the Russian Federation)

By Shamindra Ferdinando

General Shavendra Silva’s recently concluded visit (Oct 23 to Oct 30) to Russia should be examined against the backdrop of an unprecedented travel ban by the United States on the Sri Lanka Army Commander over hearsay war crimes accusations, including extrajudicial killings, during the last phase of the Vanni offensive.

Sri Lanka brought the war to a successful conclusion on the morning of May 19, 2009, on the banks of the Nanthikadal lagoon, despite a chorus of ‘expert’ opinion generated by the West over the years claiming that the country’s armed forces were incapable of defeating the LTTE and they had literally elevated the Tigers to a mythical and invincible status.

Combined Sri Lankan armed forces, however, conducted a relentless campaign, over a period of two years and 10 months, until Velupillai Prabhakaran was trapped in the one-time LTTE stronghold Mullaitivu. Prabhakaran was killed the day after the then General Sarath Fonseka’s Army declared the end of the war, on May 18, 2009. The Vijayabahu Infantry Regiment (VIR) was credited with the killing of Prabhakaran and recovery of his body more or less intact.

The US, one of the worst violators of human rights in many conflict zones, in the world, imposed a politically-motivated travel ban on General Silva, the first General Officer Commanding (GOC) of the much-celebrated 58 Division (formerly Task Force I).

Having launched offensive operations in early Sept 2007, from the Western front, the area popularly known as the Mannar rice bowl, the TF 1 troops fought their way northwards, captured Pooneryn (late Nov 2008) and then turned eastwards, crossed the Kandy-Jaffna A9 road, at Paranthan, and in quick succession stormed enemy defences at Elephant Pass and also brought Kilinochchi South under their control by early January 2009. With the fall of Kilinochchi, the Army stepped up offensive action leading to the final confrontation with Prabhakaran on May 19, 2009 in the environs of the Nanthikadal lagoon.

It must be noted here that Fonseka’s Army changed overall tactics in the northern and eastern theatres. The enemy simply had no answer to several fighting formations advancing on its bases and troops causing havoc, deep inside enemy held territory.

It would be pertinent to mention that the Army-raised TF 1 comprising two infantry Brigades on August 31, 2007, at Irattaperiyakulam camp under the leadership of the then Brigadier Chagie Gallage who carried out the first successful mission which resulted in the liberation of Silavathurai.

Earlier in April of that year, men Gallage led, captured the Thoppigala base of the Tigers, which some thought was impregnable. After its capture, ironically, then Opposition Leader Ranil Wickremesinghe tried to denigrate the victory as just the capture of a rock outcrop. We can recall that when Brig. Gallage went to announce the capture of the Tiger Jungle base at Toppigala he drove his own jeep like an ordinary soldier with a staff officer next to him also dressed like an ordinary soldier, but the media that had converged at his base close to the Black Bridge Batticaloa were not aware of the important if not symbolic achievement till it was announced over the TV and radio that night.In fact, Gallage spearheaded the Eastern campaign except the action at Mavilaru, conducted by the then Brigadier Prasanna Silva.

While TF 1 was steadily advancing from the Mannar Rice Bowl, Brig. Gallage suffered a heart attack in the Vanni west, Gallage had to undergo emergency surgery in Colombo. Fonseka brought in Shavendra Silva to command TF 1. The Army never revealed at that time military strategist Gallage suffered a heart attack on Oct 22, 2007, the day the LTTE mounted a commando-style raid on the Anuradhapura air base. Because of the calamity at the air base, Gallage had to be taken by chopper to Sigiriya air base and then flown to Ratmalana air base in a fixed aircraft. The rest is history.

Army Chief blacklisted

The US blacklisted Gen. Silva close on the heels of Commander-in-Chief of the Russian Ground Forces, General Oleg Salyukov’s five-day visit to Colombo in early Feb 2020 on the invitation of his Sri Lankan counterpart the then Lieutenant General Shavendra Silva. General Salyukov extended an invitation to General Silva to visit Russia though the eruption of Covid-19 epidemic prevented him from leaving the country as he was appointed as the head of the Task Force appointed to prevent the spread of the pandemic.

General Silva’s wife, Sujeewa Nelson accompanied him on his second foreign visit since the imposition of the US travel ban. Their first overseas visit was in March 2021 to Islamabad on the invitation of the country’s all-weather friend Pakistan. General Silva and Sujeewa Nelson were invitees at Pakistan’s national military parade. A section of the foreign media condemned and disputed Pakistan’s invitation to General Silva on the basis of him being among those accused of war crimes.

Having solidly defended Sri Lanka at the Geneva-based United Nations Human Rights Council (UNHRC), both Pakistan and Russia have absolutely no qualms in inviting General Silva. Both countries voted against anti-Sri Lanka resolutions spearheaded by the West moved in Geneva.

The timing of the US ban underscored the Superpower’s intention to meddle in local politics. The announcement was made between the last presidential election held in mid-November 2019 and the parliamentary polls in August 2020. It would be pertinent to mention that the parliamentary polls, scheduled for April 25, 2020, had to be put off to August due to the Covid-19 eruption. The UNP suffered a very heavy defeat with the over 70 year-old party that had 106 MPs in Parliament (2015-2019) being reduced to a solitary National List slot.

Most probably the US never expected the then Maj. Gen. Silva to receive an opportunity to command the Sri Lanka Army. Had that happened, the US wouldn’t have had to blacklist the highly decorated soldier. Obviously, the UNP-led government and the then President Maithripala Sirisena didn’t agree on how to deal with Silva.

The failed constitutional coup in late Oct 2018 ruined the political relationship between President Sirisena and Premier Ranil Wickremesinghe. Therefore, no one would have been surprised by the yahapalana leaders’ disagreement on the Army Commander’s appointment.

President Sirisena appointed the distinguished ground combat commander as the 23rd Commander of the Army on August 18, 2019. Maj. Gen. Silva was also elevated to the rank of Lieutenant General effective the same date. Had efforts to deprive Silva of the top position succeeded, the US wouldn’t have had to play politics with the Sri Lankan military by imposing a controversial travel ban on him. Or had the Presidency been in the hands of the UNP it would have appointed one of its uniformed ‘yes’ men as the new Army Commander and definitely not one who helped to defeat the most ruthless terror outfit in the world.

Whatever the reasons, the stand taken by President Sirisena, the Commanding-in-Chief of the armed forces as well as the Defence Minister should be appreciated.

Following wartime Defence Secretary Gotabaya Rajapaksa’s triumph at the Nov 2019 presidential election, Silva was promoted to the rank of a 4-star General on Dec 28, 2020. With the retirement of Admiral Ravi Wijegunaratne on Dec 31, 2019, Gen. Silva was named the Chief of Defence Staff. Six weeks later the US categorised General Silva as a war criminal.

Denigration of an Army Chief

Why did the US categorise General Silva a war criminal well over a decade after the conclusion of the war? Let me remind the reader that Silva, in 2010, received the appointment as Deputy Permanent Representative of Sri Lanka to the United Nations, in New York. Silva is the one and only serving military officer in Sri Lanka’s history to be promoted to an ‘Ambassadorial’ rank in the country’s Foreign Service. Most importantly, why on earth the US found it necessary to declare Silva a war criminal having backed the war-winning General Sarath Fonseka’s candidature at the 2010 January presidential election.

In fact, the US played a significant role in building up a UNP-led coalition that included the Tamil National Alliance (TNA) in support of Fonseka. War crimes accusations against the Army seemed ridiculous against the backdrop of all predominantly Tamil speaking electoral districts in the North and the East voting overwhelmingly for Fonseka. But, incumbent President Mahinda Rajapaksa polled 1.8 mn votes more than Fonseka. The silly Opposition blamed Fonseka’s defeat on what the late JVP leader Somawansa Amarasinghe called a computer jilmart.

When the then government arrested Fonseka under controversial circumstances and was sentenced, the US intervened on the retired General’s behalf despite then US Ambassador Patricia Butenis having named Fonseka a war criminal along with the Rajapaksa brothers, Mahinda, Basil and Gotabaya. Butenis assertion is in the public domain thanks to secret Wiki Leaks. Butenis’ cable sent just weeks before the January 2010 presidential election underscored duplicitous US strategy.

Ten years after the 2010 presidential election, US Secretary of State Mike Pompeo tweeted: “I am designating Shavendra Silva making him ineligible for entry into the US due to his involvement in extrajudicial killings during Sri Lanka’s Civil War. The US will not waver in its pursuit of accountability for those who commit war crimes and violate human rights.”

Designation of the Army Chief took place soon after Pompeo declared the US looked forward to deepening ties with Sri Lanka. How did the US expect to improve ties by blacklisting a hugely popular Army Chief?

In a previous statement, Pompeo said that allegations of gross human rights violations against Shavendra Silva had been documented by the United Nations and other organisations. US sanctions barred both Silva and his immediate family members from entering the US.

 “The Government of Sri Lanka takes strong objection to the imposition of travel restrictions on Lieutenant General Silva and his immediate family members by the Government of the United States, based on independently unverified information,” the Foreign Ministry said in a statement.

Lanka responds to US

Sri Lanka’s Ambassador in Washington Rodney Perera declared that the US decision hadn’t been based on independently verified information, but on the much-disputed OISL Report of 2015 and accusations propagated by various other organisations.

Ambassador Perera urged the US to verify the authenticity of its sources of information. Ambassador Perera said so addressing the American Foreign Service Association Club in Washington D.C. The gathering included several former U.S. Ambassadors and senior officials who served in Colombo.

Commenting on the inclusion of the family members of the Army Commander on the blacklist, Ambassador Perera declared: “Even though we are now in the 21st Century, even members of his family who have not been accused of any wrongdoing, have been subjected to a collective punishment reminiscent of the practice in medieval Europe.”

The career diplomat assured Sri Lanka would remain strongly engaged on this issue with the United States to have it review its decision. The assurance was given about a week after the US blacklisted the much decorated soldier. What have we done since then to disapprove unsubstantiated war crimes allegations against General Silva? In fact, the despicable project against the Commander of the Army is nothing but an affront to the country. Parliament never really took up the Western powers’ campaign against the war-winning military here. During Karu Jauasuriya’s tenure as the Speaker, the UNP politician never bothered to take it up with Western diplomats. One shouldn’t be surprised over that, as his party betrayed the military by co-sponsoring an accountability resolution on Oct.01, 2015. However, the failure on the part of incumbent Speaker Mahinda Yapa Abeywardena to speak on behalf of the military when foreign diplomats called on him, cannot be justified.

Before General Silva undertook the visit to Russia, Chief of Indian Army Staff General Manoj Mukund Naravane was here. In spite of India being a US ally, New Delhi went ahead with its Army Chief’s visit to Colombo. Naravane had been here with the Indian Peace Keeping Force during its deployment in terms of the Indo-Lanka Accord and had been based in Trincomalee. Now, the issue is how is it that those countries demanding action against the Sri Lankan military for eradicating terrorism on its soil are silent on India’s accountability issues here. Unfortunately, Sri Lanka lacked the political will to present its case properly before the international community.

Failure on the part of successive Sri Lankan governments to address accountability issues since the end of the conflict has underscored utter irresponsibility on the country’s part. Against that pathetic background, the Russian invitation extended to Gen. Silva is of paramount importance.

 Considered to be one of the highest honours, presented in recent times, the formal and elegant Guard of Honour parade with four squads of the Russian Land Forces, together with a Russian Army band distinctively featured the significance and the recognition the Russian Land Forces attach to the visiting Sri Lankan Army Chief.

General Silva after formal honours was ushered to pay floral tribute to the monument at Alexandrovsky Garden of Moscow Kremlin where the Tomb of the Unknown Soldier stands.

During General Shavendra Silva’s stay in the Russian Federation, he visited the Moscow Higher Combined Arms Command School and met its Commandant, Major General Roman Binyukov, Division Commander of the 4th Guards Tank Division in Naro-Fominsk and the Commandant at Mikhailovskaya before he visited the Military Artillery Academy, Military Medical Academy and several other places of military and tourist attractions.

Saliyapura bombshell

The writer earlier mentioned the change of command of the TF 1 in Oct 2007 following Gallage’s predicament, but what is of far more importance is what he said at Saliyapura Gajaba Regimental headquarters in the first week of Sept 2018 as his farewell speech when he retired from the service after an illustrious military career, much of it having spent leading combat troops. Gajaba veteran General Gallage didn’t mince his words when he questioned how having served the Army for well over 30 years he was compelled to retire being categorised as a war criminal. Why did Gallage have to say that? Gallage had sought a visa in Sept 2016 to visit his brother living in Australia. He wanted to visit Australia from Dec. 2016 to January 2017. Gallage’s brother, an Australian citizen of Sri Lankan origin, had visited Colombo especially to make representations to the Australian HC.

Following that meeting the Australian department of Immigration and Border Protection issued a report titled ‘Potential Controversial Visitor’ citing war crimes and crimes against humanity as reasons for denying Gallage a visa.

In the absence of specific accusations against Gallage, Australia found fault with him for giving leadership to the 59 Division after the conclusion of the war. In other words, those who commanded fighting formations during the war (Divisions 58, 59, 57, 53, 55 et al) on the Vanni front and after can be humiliated. Gallage’s is a case in point.

Interestingly, the Army celebrated its 72 anniversary at the Saliyapura base last Oct with the participation of President Gotabaya Rajapaksa formerly of the Gajaba Regiment. In his speech at Saliyapura, Rajapaksa, who retired having achieved Lieutenant Colonel’s rank (1971-1992), acknowledged shortcomings on the part of his government. The government should examine the aptness of its response to war crimes accusations. President Rajapaksa made reference on Nov 6 to Sri Lanka having to face Geneva accusations though in a different context.

Designation of the Army Chief should be examined taking into consideration overall war crimes accusations directed at Sri Lanka. How can the government forget the US declined to issue a visa to Field Marshal Sarath Fonseka and the circumstances?

 Haven’t those in authority observed how Canada and Italy rejected retired Air Force Commander Air Marshal Sumangala Dias as Sri Lanka’s top diplomatic envoy?

British Conservative politician Lord Naseby in an interview with this writer in late Sept 2019 questioned Sri Lanka’s response to the accountability issue (Naseby disappointed in Lanka’s collective failure to use ‘Gash reports’ for its defence-Sept 25, 2019, The Island.’

Why didn’t Sri Lanka continue to refrain from effectively using British cables that had been obtained by Lord Naseby after near a three-year legal battle and wartime US Defence Advisor Lt. Colonel Lawrence Smith’s taking a view 100 percent contrary to the US and its allies as regards the accountability issue, at the 2011 Colombo Defence seminar? Nothing can be as important as the US official’s statement exclusively reported by The Island as it was made just two months after the much debated highly controversial Darusman report’s release. The split in the war-winning team with Fonseka’s entry into politics in late 2009, too, also contributed to Sri Lanka’s overall failure. Instead of countering lies, the first Rajapaksa administration squandered millions of USD in foolish image building projects.

Sri Lanka’s relations with the world should be examined in the context of Quad strategies and new trilateral security partnership AUKUS under which Australia would get a fleet of nuclear-powered submarines for the first time and Sri Lanka’s strong partnership with China. The ongoing controversy over Sri Lanka moving the Colombo Commercial Court against top Chinese fertiliser company, its local agent and the People’s Bank to stop payment for carbonic fertiliser consignment shouldn’t be allowed to ruin relations between the two countries. Like Pakistan, the emerging world power China is an all-weather friend, whose continuing support to Colombo is essential. Therefore, the issue at hand should be dealt carefully taking into consideration all factors. But, under no circumstances, should corruption be allowed to undermine Lanka-China relations.

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Midweek Review

Growing foreign dependency and India’s USD 4 bn lifeline



Baglay on an inspection tour of the State Printing Corporation

By Shamindra Ferdinando

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

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

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

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

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

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

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

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

Indrajit Coomaraswamy

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

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

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

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

Controversy over ISBs

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

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

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

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

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

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

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

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

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

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

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

Treasury bond scams and tax cuts

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

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

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

A warning from Hanke

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Midweek Review

A Miscellany of Thought



N. A. de S. Amaratunga (2022)

A Review by G. H. Peiris

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Midweek Review

Loneliness of the Bottom Half



By Lynn Ockersz

There you crouch by your hearth,

Seeing your fires sputtering out;

Your hopes of a bubbly pot of rice,

Ending in inflationary smoke spirals,

Leaving you with the painful thought,

That your dignity as mother and wife,

Is gravely harmed and beyond repair,

For, a turn of events not of your making,

Has reduced you and yours to penury,

So much for that Trickle-down Theory,

That Pundits say will end your misery,

But they tell you not to stop dreaming,

Because soon you will be bailed out,

Of your State of longsuffering;

Thanks to Princely tips from ancient Italy.

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