UN going the whole hog
By Shamindra Ferdinando
The newly formed Civil Society Platform (CSP) on Monday (13) dealt with entire range of accountability issues and the re-imposition of a state of emergency on the pretext of addressing food distribution. The media received the comprehensive statement endorsed by 30 organisations, and 36 individuals, soon after the Geneva-based United Nations Human Rights Council (UNHRC) declared its intention to go ahead with fresh investigation, as mandated at the 46th session.
The hard-hitting CSP statement should be examined against the backdrop of a dialogue between a new collective of civil society activists, grouped as Sri Lankan Collective for Consensus (SLCC). The civil society appears to be divided over their strategy in respect of President Gotabaya Rajapaksa’s government. However, UN Rights Chief, Michelle Bachelet, one-time Chilean President, in her hard-hitting statement, at the onset of the 48th session, made reference to the meeting President Gotabaya Rajapaksa had with SLCC on August 3. That is a quite a development. But, nothing has changed in Geneva and the war-winning country is on the UN agenda.
A recent statement, issued by the Executive Director of the National Peace Council (NPC), Dr. Jehan Perera, on behalf of SLCC, dealt with several contentious issues.
The statement issued, subsequent to a meeting the group had with newly appointed Foreign Minister Prof. G.L. Peiris, raised the following issues: the declaration of State of Emergency, Cabinet of Ministers giving the go ahead for the Legal Draftsman to prepare ‘NGO legislation,’ continuing harassment of NGOs, abolition/amendments to the Prevention of Terrorism Act (reference was made to those who had served the LTTE and the 2019 Easter Sunday carnage suspects), implementation of the 13th Amendment to the Constitution, and holding of long-delayed Provincial Council polls, land issues in the Northern and Eastern Provinces, language issue, hate speech and misuse of the ICCPR Act, step-motherly treatment of Tamil-speaking people, by denying them participation at national events, and targeting of the Muslim community.
The above litany, however, sounds only too familiar and the chorus is the same. They have packaged themselves under the new name SLCC, but being backed by the West, have been pushing the same agenda for decades. The CSP is no different. No one ever bothered to ask for an explanation from the TNA for recognising the LTTE as the sole representative of the Tamil-speaking people, in 2001, thereby paving the way for the Eelam War IV a couple of years later. Similarly, no one ever inquired into the clandestine relationship between UN Colombo and the LTTE. Geneva is also silent about the origins of Sri Lanka terrorism (Indian intervention).
As happened in Afghanistan, with the now infamous independent media of the West, which unquestioningly only pushed the narrative of the military industrial complex of mainly the US and the UK, for decades, have now suddenly metamorphosed into finally questioning what went wrong, only after all their lies about Afghanistan and elsewhere began to crumble overnight. Interestingly, they are pointing fingers at everyone else, except at themselves, for not having done the job as an objective media. Theirs has been, for quite some time, an embedded media that cheered on the military industrial complex and the Wall Street. May be there, too, it was all due to filthy lucre.
Prof. Peiris, who had served as the Foreign Minister during the then President Mahinda Rajapaksa’s second term (2010-2015), received the same ministry on Aug 16. The academic, who once headed the government delegation for Oslo-arranged talks with the Liberation Tigers of Tamil Eelam (LTTE), has assured the SLCC of the government’s readiness to work with the civil society.
The SLCC statement, headlined ‘Promise of a fresh approach for resolving national issues’, at the onset, insisted that the discussions the group so far had with President Gotabaya Rajapaksa, the then Foreign Minister Dinesh Gunawardena, Finance Minister Basil Rajapaksa, Justice Minister Ali Sabry, Youth and Sports Minister Namal Rajapaksa, Regional Cooperation State Minister Tharaka Balasuriya and Foreign Secretary Admiral Jayanath Colombage failed to yield the desired results. So they still want the pound of flesh paid for by the West and nothing less?
Prof. Peiris seems confident that the government’s interaction with the civil society can be utilised in their dialogue with the international community, whereas the SLCC assured the new administration of its support to address concerns among the international community. However, their support would depend on the government’s readiness to address the issues raised by them.
In addition to Dr. Perera, who had represented Sri Lanka at the Geneva-based United Nations Human Rights Council (UNHRC), in March 2018, on the invitation of the late Foreign Minister Mangala Samaraweera, several other prominent civil society activists joined the discussion with the government. It would be pertinent to mention that the SLCC has quite justly accepted that it did not represent, what it called, the larger civil society and recognised themselves as a group of individuals, drawn from multiple sectors of society, religion, academia and non-governmental organisations, dedicated to a country established on the high sounding ‘ideals of pluralistic coexistence, human rights and justice’, but found nowhere in the world, especially not among the self-appointed good guys of the West. Just look at how they still treat their Blacks, especially by their famed law enforcers.
The SLCC comprises (1)Ven. Kalupahana Piyaratana Thera – Inter religious Alliance National Unity, Chairman, Human Development Edification Centre working for peace Reconciliation and Ecology for more than 25 years. Peace activist for more than two decades (2) Bishop Asiri Perera – Retired Bishop/President of Methodist Church (3) Rev. Fr. C.G. Jeyakumar – Parish Priest Ilavalai and Lecturer at the Jaffna Major Seminary, Human Rights Activist (4) Dr. Joe William – Founder member and Chairman of National Peace Council, Director, Centre for Communication Training and Convenor, Alliance for Justice (5) Prof. T. Jayasingam – Director NPC, former Vice Chancellor of Eastern University and former member, Public Service Commission of the Eastern Provincial Council (6) Prof. Kalinga Tudor Silva – Professor Emeritus Dept of Sociology, University of Peradeniya (7) Dr. Dayani Panagoda – Social Activist, former director of Secretariat for Coordinating the Peace Process and Lecturer, former member of the Official Languages Commission (8) Ms. Visaka Dharmadasa – Peace Activist, Chair of Association of War Affected Women (9) Dr. Jehan Perera – Executive Director of NPC (10) Dr. P. Saravanamuttu – Founder and Executive Director, Centre for Policy Alternatives (11) Hilmy Ahamed – Vice President, Muslim Council of Sri Lanka, Civil activist with 35 years of communicating on issues of Peace and Justice, Chairman of Young Asia Television (12) Sanjeewa Wimalagunarathna – Former Director of Secretariat for Coordinating Reconciliation Mechanisms (13) Rohana Hettiarachchi – Executive Director PAFFREL (14) Javid Yusuf – Former Ambassador to Saudi Arabia, former Principal, Zahira College and Founder member and Governing Council member, National Peace Council NPC (15) Varnakulasingham Kamaladas – President, STA Solidarity Foundation, Vice President Batticaloa-Ampara Hindu Temples Federation, former President of Inland Association of Non-Governmental Organisations (INAYAM) Batticaloa, and (16) Ms. Sarah Arumugam – Human Rights Lawyer.
Dr. Perera emphasized that they were prepared to work with any party to achieve genuine post-war national reconciliation.
The livewire behind the NPC Dr. Perera responded swiftly to several questions posed to him regarding the latest civil society initiative.
(1) The Island: Did the SLCC reach consensus with what it called ‘wider Sri Lanka civil society’ regarding the dialogue you are having with the SLPP administration?
No, we did not. SLCC is a loose collection of individuals drawn from civil society organisations that have reconciliation and peace building aims in their work. We have no one leader or office-bearers. Each of us is part of other networks where we have discussed the stands we take. But we do not speak as their representatives. Our common position is commitment to a united Sri Lanka that is founded on ideals of pluralistic coexistence, human rights and justice.
(2) The Island: When did you set up the SLCC?
We could say it was on June 23, 2021. That was the day we decided on our name. This followed two earlier consultations, organised by the Association of War Affected Women (AWAW), which were held in Kandy, to have an in depth discussion on the lessons learnt through our reconciliation process. We felt there was a need for a group, such as ours.
(3) The Island: Did you have discussions with the TNA (Tamil National Alliance) or other Tamil parties, represented in Parliament, regarding the current initiative?
We have not met with the TNA as yet, though we plan to meet them, and other parties, too. Earlier on we met with Charitha Herath of the SLPP, leader of the DPF Mano Ganesan, General Secretary of the SJB, Ranjith Madduma Bandara. More recently we met with Leader of the Opposition Sajith Premadasa. We had arranged for a meeting with the Chairman of the National Movement for Social Justice, Karu Jayasuriya, but this was postponed and we hope to have it soon.
(4) The Island: Who decides the agenda?
Agendas of the meetings are decided by consensus, prior to the meeting, based on the need and the responsibilities of those whom we meet. Usually, following a self-introduction, we present the issues highlighted in the memorandums we have submitted.
(5) The Island: You represent the NPC, Dr. Pakiasothy Saravanamuttu represents the CPA and all others in the SLCC are members of various civil society groups. Do the SLCC members represent those organisations in the ongoing dialogue?
Those in the SLCC are mostly heads of organisations, who will naturally be in line with the positions of their organisations in any discussions on principle or decisions arrived at. But they are here as members in their personal capacities.
(6) The Island: Did the SLCC ever discuss these issues with the late Mangala Samaraweera?
No, we did not.
(7) The Island:
On the basis of BHC cables (Jan-May 2009), Lord Naseby, in Oct 2017, challenged the massacre claim of 40,000 on the Vanni east front as mentioned in the Darusman report. In June 2011, US Embassy staffer, Lt Col Smith, at the 2011 Defence Seminar, in Colombo, denied war crimes accusations (weeks after the release of Darusman report).
(8) The Island: Did government representatives or the SLCC referred to/discussed/raised the need to examine the BHC cables during discussions?
We limited our discussion to issues that we presented in our memorandums to them with a view to be forward looking. This included the Office of Missing Persons and its work. We did not discuss the death toll, at the end of the war, or issues of war crimes.
Some of them had been involved in previous peace initiatives, including the Oslo project, finalised in Feb 2002. The SLCC has essentially pursued issues that had been taken up by a section of the international community (those who voted for Geneva resolutions or conveniently abstained) both during the conflict and after. Let me reproduce the SLCC’s stand on three key issues verbatim as mentioned in a memorandum handed over to Prof. Peiris.
Prevention of Terrorism Act:
Until the promised amendment of the Prevention of Terrorism Act, to cease using this law to detain people and to expedite the release of those taken into custody, under its draconian provisions, either on bail or totally where there is no legally valid evidence to justify their continued detention, especially when they have not even been charged. This applies to both long term LTTE prisoners and more recent Muslim prisoners with only a peripheral relation to the Easter Sunday bombings.
Improve the implementation of the 13th Amendment and expedite the holding of provincial council elections so that the ethnic minorities may enjoy a measure of self-governance in the areas where they predominate.
Targeting of Minorities:
The issue of Muslims being targeted continues to fester in proposed legislation regarding personal law, the continuing refusal to permit burial of Covid victims, except in a single designated location and the imprisonment, without trial, of a large number of Muslim persons, following the Easter bombings. All communities need to feel that they have been fairly consulted and treated without discrimination for national reconciliation to become a reality.
The 13th Amendment is quite a contentious issue, especially against the backdrop of India stepping up pressure over its implementation. The government is in a quandary as regards the much delayed Provincial Council polls. Today, the government, the Opposition, the civil society and the international community had conveniently forgotten the origins of the Sri Lankan imbroglio. Clandestine Indian intervention long before the July 1983 riots, most probably precipitated by the then 20th Century Fox JRJ openly flirting with the idea of giving the Trincomalee deep harbour to the US. The subsequent building up of terrorist power, leading to the forcible deployment of the Indian Army in Northern and Eastern regions, in July 87, paved the way for the 13th Amendment. Sri Lanka almost disintegrated.
Unfortunately, successive governments quite clearly failed to examine the current situation in a proper perspective. There had never been a genuine attempt to set the record straight. The incumbent government, too, pathetically failed to address accountability issues properly. Dr. Perera’s response to The Island query, based on Lord Naseby’s challenge and Lt. Colonel Smith’s denial of war crimes accusations six years before, revealed the failure on the government’s part to recognise the threat facing the country’s unitary status. Prof. Peiris and the SLCC owed the public an explanation how they discussed matters, including Office of Missing Persons, or OMP, leaving the primary accusation that the military killed 40,000 Tamil civilians on the Vanni east front. That is the charge Sri Lanka continues to face in Geneva, though Prof. Peiris’s predecessor, Dinesh Gunawardena, declared, in the Feb-March 2020, sessions, the government’s decision to quit the 2015 resolution. In fact, Sri Lanka is now facing a new investigation and actions so far taken by the incumbent government seems insufficient. As long as HRC turns a Nelsonia eye to all the grave crimes the West has committed and continuing to commit, from Palestine to Libya, Iraq, Syria, etc., how can we expect any fairplay from it. Maybe Minister Gunawardena played the only card there, we could have played, considering the ground realities.
The rationale in seeking the support of the civil society should be studied, taking into consideration the government’s failure to revisit accountability issues. Instead, having repeatedly promised the electorate in the run-up to the 2019 presidential and 2020 parliamentary polls, a robust defence at Geneva, the government appeared to have accepted the agenda, pursued by Ranil Wickremesinghe and the late Mangala Samaraweera.
The Sirisena-Wickremesinghe government established the OMP, in August 2016, less than a year after the signing of the Geneva resolution. The OMP came into being under controversial circumstances with the then Joint Opposition (now SLPP) accusing the Sirisena-Wickremesinghe government of jeopardising national security. Today, the incumbent government has accepted responsibility for taking forward the much maligned and controversial Geneva process, much to the disappointment of those who genuinely believed an attempt would be made to reverse the project.
Key architects of the yahapalana project are in the current Parliament. Ranil Wickremesinghe is the solitary UNP MP. The former PM entered Parliament on the National List whereas Maithripala Sirisena returned from his home base Polonnaruwa after having contested the last general election on the SLPP ticket. Sirisena’s SLFP is the second largest constituent with 14 lawmakers, including one National List MP. As regards the accountability issue, the government seems to be moving in a direction contrary to the much publicised promises made.
In the absence of cohesive Sri Lanka response to Geneva threat, interested parties, such as the Human Rights Watch (HRW) and Amnesty International, have been freely bashing Sri Lanka. Massive foreign funding to the civil society lobby here and various other outfits are meant to ensure they follow the dictates of their sponsors. Often repeated claims that they refrained from taking government funding should be examined taking into consideration how these groups pursued Western interests and those of various other parties.
Pawns of Peace: Evaluation of Norwegian peace efforts in Sri Lanka (1997-2009)
, released in 2011, two years after the eradication of the LTTE, provided an insight into foreign funding for a particular purpose. The Norwegian study dealt with funding provided to various peace merchants assigned the task of propagating the inevitability of a negotiated settlement in the absence of military muscle to bring the war to a successful conclusion. For Norwegians funding for such initiatives had never been a problem. Sri Lanka is a case in point. They lavishly spent on the dicey Sri Lanka project on the basis that the LTTE cannot be defeated militarily, the then government has no option but to accept a deal even at the expense of the country’s territorial integrity and sovereignty.
The Norwegian report revealed the funding of Sri Lankan outfits to the tune of USD 28 (NOK 210 mn) mn during the conflict. The recipients included Dr. Kumar Rupesinghe’s Foundation for Coexistence (largest single beneficiary with USD 6 mn during 2004-2008 period), the then Minister Milinda Moragoda’s MMIPE for humanitarian demining, Sarvodaya, Sewalanka (its former head Harsha Kumara Navaratne, an original extremely talented breakaway from Sarvodaya and now a member of the Human Rights Commission will soon relinquish office to take over Lanka mission in Canada as HC), Sareeram Sri Lanka National Foundation, Hambantota District Chamber of Commerce, One-Text Initiative, the National Anti-War Front also led by Dr. Kumar Rupasinghe, the National Peace Council, the Center for Policy Alternatives, the Forum of Federations and the People’s Peace Front.
The Norwegians also provided funding to the TRO (Tamil Rehabilitation Organization) an LTTE front organisation. The Norwegians went to the extent of providing funding to the then LTTE Peace Secretariat though it knew the group was rapidly preparing to resume hostilities. When Norwegian funding of LTTE front organisations drew strong condemnation, they funded the setting up of a Buddhist academy in Kandy in addition to reconstruction of Buddhist temples on the southern coast destroyed by Dec 2004 tsunami.
However, Prof. Peiris in a note recently submitted to diplomatic missions, based in Colombo, ahead of the 48 Geneva sessions, emphasised that the March 2021 resolution adopted by a divided vote hadn’t been accepted by Sri Lanka, rejected establishment of an external evidence gathering mechanism targeting Sri Lanka and questioned the rationale in spending meager financial resources on such a politically motivated Geneva initiative. The FM’s note dealt with progress made as regards port-war reconciliation with the focus on OMP operations, Office of Reparations, Office for National Unity and Reconciliation, Sustainable Development Goals, National Human Rights Commission, Presidential Commission of Inquiry, Accountability, PTA, Pardon to ex-LTTE cadres, Resettlement of IDPs, Releasing of Lands, engagement with the civil society (Prof. Peiris referred to the discussion President Gotabaya Rajapaksa had with SLCC on Aug 3, 2021) and International Human Rights and other Treaty Obligations and Engagement with the UN Special Procedures Mandate Holders.
Growing foreign dependency and India’s USD 4 bn lifeline
By Shamindra Ferdinando
The Japanese embassy and UNICEF (United Nations Children’s Fund, previously known as United Nations International Children’s Emergency Fund), on 16 March, 2023, issued a joint statement that dealt with the impact the developing political-economic-social crisis is having on the poor in Sri Lanka.
The statement focused on the suffering of the children and measures taken by UNICEF, in consultation with the Governments of Japan and Sri Lanka, to provide relief to the needy.
However, what really captured public attention was the declaration made by the Japanese Ambassador, in Colombo, Mizukoshi Hideak, that with the latest contribution, amounting to USD 1.8 mn, the total Japanese financial assistance, provided through UNICEF alone, exceeded USD 3.8 mn, since the beginning of last year. That is definitely a significant package provided through a single UN agency, particularly against the backdrop of the unceremonious cancellation of the Japan- funded Light Rail Transit (LRT) project, in late Sept., 2020, by the Gotabaya Rajapaksa Government.
The directive, in this regard, was issued on 21 Sept., 2020, by Dr. P. B. Jayasundera, in his capacity as Secretary to the President, to the then Transport Secretary, Monti Ranatunga. That move ruined Sri Lanka’s relations with Japan.
Whoever advised the then President Gotabaya Rajapaksa to terminate the project, without consulting Japan, as head of the Cabinet-of-Ministers, he couldn’t absolve himself of the responsibility for the ruination of vital relationship with Tokyo. Had it not been the case, Japan, most probably, would have delivered a substantial assistance to Sri Lanka, at the onset of the ongoing unprecedented crisis.
Sri Lanka made a failed bid to secure as much as USD 3.5 bn loan from Japan, during the tenure of Sanjiv Gunasekara as Sri Lanka’s Ambassador in Tokyo. Gunasekara, a close associate of President Gotabaya Rajapaksa, resigned in the wake of the 09 May, 2022, violence, that gave a turbo boost to the campaign against his government.
Unlike Japan, India provided direct aid in various forms to Sri Lanka, struggling to cope up with what became an insurmountable crisis to overcome on our own. India has repeatedly declared that the continuing assistance is in line with Premier Narendra Modi’s much touted ‘Neighbourhood First’ policy. Sri Lanka received concessional credit facility, amounting to USD 1 bn, in March last year. In addition to that, by the second week of March this year, Sri Lanka received other lines of credit, worth over USD 3 bn. Therefore, the total Indian assistance is worth over USD 4 bn, a staggering amount as Sri Lanka’s debt before the Japanese and Indian interventions stood at over USD 53 bn. Indian intervention cannot be compared, under any circumstances, with assistance provided by any other country.
The Indian assistance is of immense importance as the International Monetary Fund (IMF), after much deliberation, promised USD 2.9 bn over a period of four years. The delay on the part of China to provide an assurance as regards debt-restructuring support, hindered the finalization of the tripartite agreement involving Sri Lanka, creditors and IMF. Finally, China gave that assurance, in writing, early this month.
The situation was so precarious, Sri Lanka couldn’t have even provided the free text books that have been given, annually, to the student population ,from the time of the JRJ regime. Those who had been at the helm of political power, over the past three decades, to varying degrees, ruined the economy, and, by 2021/2022, Sri Lanka was unable to provide even the basic requirements, like cooking gas, kerosene, petrol, etc., as even remittances from our expatriate workers, which in the past amounted to about seven billion dollars per year, dropped drastically due to the illegal underground banking system, hawala/undiyal, hijacking much of it from the normal banks. The government didn’t have the means to provide school text books for the 2023 academic year. In consultation with India, of the USD 1 bn concessional credit facility, over USD 10 mn was utilized by the State Printing Corporation, and private importers, to procure printing paper and other material from India. India met 45% (four mn students) of the total requirement. Indian High Commissioner Gopal Baglay visited the SPC, on 09 March, 2023, to dispatch a consignment of textbooks to schools. Education Minister Dr. Susil Premjayantha joined Baglay. The Indian High Commission statement, issued two days later,, was aptly titled ‘India’s support for text books investment in Sri Lanka’s future.’
The government and the Opposition should be ashamed of their failure to provide for the children’s need.
Perhaps, a Parliamentary Select Committee (PSC) should be appointed to examine the circumstances leading to Sri Lanka’s bankruptcy status. Decades of utterly irresponsible management of the economy, coupled with an explosive mixture of causes – waste, corruption and irregularities – caused the current crisis.
Political parties, represented in Parliament, are responsible for the continuing crisis, to varying degrees.
Controversy over ISBs
The Island discussed some of the issues at hand in last week’s midweek piece, headlined ‘All praise for Lanka’s saviours!
What Dr. Coomaraswamy didn’t say was that as the CB Governor, he was also directly responsible for the Yahapalana government borrowing a record USD 12.5 bn from the international bond market, at high interest rates, from private lenders, primarily in the West. So what did that government achieve with such huge borrowings? All that the Yahapalana regime achieved, with all that money, we cannot see, except to lay the foundation for the current debt crisis?
Our comment on the basis of recent claims that the Governor of the Central Bank, Dr. Coomaraswamy (2016-2019), only told one side of the truth, attracted responses from several parties, including the Central Bank.
Consequently, the writer discussed the borrowing of USD 12.5 bn, and related matters, and was told the following: First, it is important to point out that the Governor, Central Bank, has no authority to approve or undertake any borrowing on behalf of the government. The borrowing limit, in any given year, is set by Parliament. Therefore, the government cannot borrow beyond the limit set by Parliament. In addition, all external borrowing has to be approved by the Finance Minister, and the Cabinet of Ministers. The Governor and the CBSL only have an advisory role. On ISBs, they have marketing and issuance as additional responsibilities once the Cabinet approved the transaction.
It is also important to recognize that ISBs are only one channel for external commercial borrowings. Others include short-term SWAPs, foreign term loans/syndicated loans and external flows into government rupee securities. The article dealt with only one instrument, having ignored the switching that was undertaken during 2015-19 to increase the maturity and reduce the cost of foreign borrowing.
As regards the USD 10 bn increase in ISBs outstanding during 2015-19, USD 5 bn of this increase can be attributed to switching away from shorter term (one year or less) and more expensive SWAPs and highly volatile foreign portfolio investment (hot money) in Government rupee securities to longer term (5 and 10 years) and less costly ISBs. SWAPs were reduced from approximately USD 2.5 bn to USD 500 mn.
Volatile and foreign investment in government rupee securities was reduced from USD 3.5 bn to USD 600 mn. In addition, during the course of 2019, a second ISB of USD 2 bn was issued to create a stronger buffer of external reserves to address the inevitable increase in uncertainty going into elections due shortly thereafter. (The money required for 2019 had been raised through an ISB, issued in March 2019.)
So about USD 7 bn of the USD 10 bn increase in the stock of ISBs outstanding, during 2015-19 may be attributed to increasing the stability and reducing the cost of the ISBs outstanding by switching instruments and raising the buffer provided by external reserves prior to a period of uncertainty, associated with elections.
The remaining increase of USD 3 bn may be partly attributed to the fact that borrowing incurred earlier had not resulted in a sufficient increase and/or saving of foreign exchange. Hence money had to be borrowed to repay debt incurred earlier. In fact, Verite Research found that 89 percent of external debt, repaid during 2015-19, could be accounted for by liabilities incurred prior to 2015.
The adverse debt dynamics were recognized and the Medium Term Debt Management Strategy was published in April 2019 to chart the way to sustainability. In addition, the Active Liability Management Act (2018) was introduced to expand the tools available to the CBSL for managing external debt sustainably. The CBSL, as the economic adviser to the Government, also advocated that there should be a primary surplus in the budget and that non-debt creating inflows (such as exports, remittances, tourism proceeds, FDI, inflows into the CSE and government securities) should be increased to enhance the capacity to service debt while supporting the level of imports necessary to achieve the growth potential of the economy.
They also pointed out that only one of the ISBs, issued during 2015-19, has been settled to date. This amounted to USD 500mn. They expressed the view that it is not possible to sustain the argument that servicing ISBs, incurred during 2015-19 ,led to the standstill in debt repayments in April 2023.
Treasury bond scams and tax cuts
Sweeping tax concessions to the rich and reduction of VAT, that had been introduced by President Gotabaya Rajapaksa’s government to encourage business in 2019/2020, escalated the financial crisis, leading to the declaration of the state of bankruptcy, two years later. No one in the Gotabaya Rajapaksa’s cabinet dared to challenge such far reaching tax concessions and VAT reduction.
How the loss of as much as Rs 600 bn in revenue, as alleged by the Opposition ,due to tax concessions and reduction of VAT, contributed to the current crisis, should be examined, also taking into consideration (1) Treasury bond scams perpetrated in Feb, 2015 and March 2016 at a time the CBSL has been under the then Prime Minister Ranil Wickremesinghe, in his capacity as Minister of Policy Planning and Economic Affairs (2) Enactment of new Foreign Exchange Act in 2017 in the wake of Treasury bond scams. Critics say the repealing of time-tested exchange control law that has been in place for decades paved the way for exporters to ‘park’ export proceeds overseas. Of the 225 MPs, 94 voted for the new law whereas 18 voted against. In spite of Justice Minister, Dr. Wijeyadasa Rajapakse, PC, taking up this issue, both in and outside Parliament, remedial measures hasn’t been taken, to date. The Finance Ministry owed an explanation as to how it intended to compel the exporters to bring back export proceeds (3) Continuing public-private sector partnership in corrupt practices, particularly mis-invoicing (under invoicing and over invoicing of imports/exports) (4) Pivithuru Hela Urumaya leader Udaya Gammanpila, MP, has moved the Supreme Court against the Central Bank Bill. The Attorney-at-Law alleged that the new law violated Article 3 and 4 of the Constitution hence needing the approval of the people at a referendum. In addition to Gammanpila, Dr. Gunadasa Amarasekera and Jathika Nidahas Peramuna leader Wimal Weerawansa, too, moved the Supreme Court in terms of the Article 121 against the Bill titled ‘Central Bank of Sri Lanka.’ Former JVP MP Wasantha Samarasinghe, on behalf of the Jathika Jana Balavegaya (JJB), too, moved the Supreme Court in this regard.
A warning from Hanke
The country is in a bind. In spite of the execution of the agreement with the IMF later this month, the situation remains dicey. The absence of economic recovery plan continues to cause further instability.
Therefore, the government and the Opposition should seek a consensus on a national action plan, even if Local Government polls cannot be conducted in late April, regardless of the Supreme Court intervention.
Steve Hanke, Professor of Applied Economics, at Johns Hopkins University, in the USA, recently issued a dire warning to Sri Lanka. Appearing on CNBC’s ‘Squawk Box Asia,’ Prof. Hanke declared Sri Lanka needs institutional reforms in order to achieve long-term debt sustainability.
Referring to Sri Lanka and what was described as emerging markets (Argentina and Montenegro), where he played a key role in establishing new currency regime, former economic advisor to US President Ronald Reagan warned “Unless you change the institutions and the rules of the game, governing these countries, they’re always going to remain in the same … situation that they’ve been in for a long time.”
Prof. Hanke added: “In fact, most of the personalities, involved in Sri Lanka ,at the high level, are exactly the same as they’ve been for years. So nothing has changed.”
In other words, those who have ruined Sri Lanka are spearheading the economic recovery process. The American is spot on. Sri Lanka is in a pathetic situation. Those who had systematically brought Sri Lanka to its knees, by pursuing ill-fated policies, emerged as its saviours. That is the bitter truth. The role of the executive, legislature, and judiciary, needs to be examined. Those who have moved the Supreme Court against the Bill, titled ‘Central Bank of Sri Lanka,’ have quite conveniently forgotten how the Yahapalana government, and Central Bank, twice perpetrated Treasury bond scams. What would have Prof. Hanke said if CNBC raised Treasury bonds scams during ‘Squawk Box Asia.’
If not for Deepa Seneviratne, the then head of Public Debt Department, Governor Arjuna Mahendran’s role couldn’t have been proved. Former Auditor General Gamini Wijesinghe said so at an event organized by the Colombo Municipal Council years ago.
Sri Lanka cannot forget Prof. Hanke’s remark in the CNBC programme. “You have to remember that we have a country that since 1965 has had 16 IMF programmes and they’ve all failed. You get temporary relief in anticipation of a bailout. But in the long run … none of these IMF programmes work.”
It would be pertinent to briefly examine how interested parties brazenly protected perpetrators of the Treasury bond scams.
Having named Mahendran as the Governor, regardless of the opposition from President Maithripala Sirisena, those planning to commit the first daylight robbery of the Central Bank moved Deepa Seneviratne to the Public Debt Department as its head, in spite of her not having had any previous experience in the particular division. It seems they had obviously felt comfortable in having a lady officer there they thought they could manipulate her to suit their need. But Seneviratne turned tables on the bond thieves by putting up a note to register her strong opposition to Mahendran’s move. She should have been rewarded for her fearless stand with at least a national honour if not an international one, even from bodies like the UN, the Transparency International, Amnesty International, etc. But it seems that even these international busy bodies have their own political angles.
It would be of pivotal importance to keep in mind that President Sirisena appointed a Commission of Inquiry (CoI) in January 2017, about 10 months after the second robbery, and two years after the first.
The Commission comprised Justice K.T. Chitrasiri, the late Justice P S Jayawardena and retired Deputy Auditor General V. Kandasamy. Sumathipala Udugamsuriya functioned as its Secretary. CoI issued a devastating report that implicated Perpetual Treasuries Limited (PTL) in the Treasury bond scams.
President Sirisena went to the extent of dissolving Parliament, in June 2015, to prevent the Committee on Public Enterprises (COPE) tabling its report on the first bond scam. SLFP leader Sirisena owes an explanation. Justice Chitrasiri’s CoI didn’t inquire into that aspect. Sri Lanka’s response to waste, corruption, irregularities and mismanagement is baffling. Let me end this piece reminding how the Bar Association of Sri Lanka (BASL) secured a substantial sponsorship from Perpetual Treasuries Limited (PTL) deeply mired in a bond scam, in 2016, for the Law Asia Conference during the tenure of its then President Geoffrey Alagaratnam, PC. The BASL never explained why it obtained PTL sponsorship even after the exposure of Treasury bond scams. That partnership also escaped the CoI. The rest is history.
Knowing what is now happening to the US economy with a string of bank failures and unprecedented bailouts, especially due to hoodoo economics it introduced in recent decades, like repeated quantitative easing (blindly printing trillions of dollars leading many to say the dollar is now only good as toilet paper) that has been practiced to ensure its world hegemony, the whole world might be hit with bank failures and even by a depression worse than the one that befell with the stock market crash of 1929. Already the contagion has spread to Europe with some leading banks there also requiring help.
Washington’s debt now stands at USD 31 trillion and climbing, but our own debt burden is still under USD 55 billion. So if we can get our exporters, who have stashed export earnings abroad, to bring them back, the picture here will not be as scary as it is made out to be. Even Minister Wijeyadasa Rajapakse has said that our export proceeds that have been parked overseas is in the region of USD 55 billion.
Soonwe will start receiving the IMF bailout, but our economic whiz kids have not done anything to plug the massive foreign exchange leak that has been freely draining foreign currency from the country, since the nineties, by way of private foreign exchange dealers who have been allowed to sell foreign exchange to any Tom, Dick and Harry, including drug dealers, to take their sales proceeds out of the country!
We would also like to ask the relevant authorities what they have done to recover monies stashed abroad by Lankans illegally that were exposed in great detail by the likes of Panama Papers and Pandora Papers.
A Miscellany of Thought
N. A. de S. Amaratunga (2022)
A Review by G. H. Peiris
I cannot claim to have the scholarly competence to place under critical scrutiny all items in this collection of writings authored by Professor N. A. de S. Amaratunga, and published in The Island from time to time since the early years of the present century. Accordingly, this ‘review’ is no more than an attempt to convey to a wide readership my gratitude for what I have learnt from Professor Amaratunga’s insights on a series of metaphysical and secular issues that have figured prominently during the recent past in the arena of debate and discussion among our intellectual elite, my appreciation of his rational perceptions and his subtle banter in responding to bizarre elements in our public affairs.
As a brief introduction to the author I should state that Professor Amaratunga’s career record is featured by several decades of distinguished and dedicated service to the University of Peradeniya in teaching, research and clinical work. Acquiring advanced skills in the field of ‘Maxillofacial Surgery’, he has provided physical and psychological relief of life-long impact to thousands of patients. He is also credited to have trained several of his junior colleagues in the Faculty of Dental Science, had has served as its Dean. The offer he received from the Peradeniya University of the Prestigious Award of the ‘Degree of Doctor of Science’ is testimony to his eminence in Sri Lanka’s community of scholars and professionals.
What probably enhances Professor Amaratunga’s status among the intellectual elite of Sri Lanka is the fact that his talents, interests, and concerns have not been confined to professional expertise. He has authored several creative writings in Sinhala which the cognoscenti place at par with the best works of that genre. More relevant than all else to the present ‘commentary’ is his capacity for elucidating the essence of certain complex metaphysical issues – especially those of Buddhist philosophy ‒ with the same clarity of thought seen in his contributions to media forums on current affairs.
In his ‘Introduction’ to the volume Professor Amaratunga makes a categorical statement regarding the paradigmatic guidelines of his ‘thoughts’. They are rendered below in abridged form as follows:
(a) The distinctive elements of our island civilisation are derived from Theravada Buddhism and the Sinhala language.
(b) The leadership of Sri Lanka’s mainstream politics since the termination of British rule in the mid-20th century has continued to be impaired by a cultural duality – on one side of the divide, the ‘alienated’ whose behavioural values and norms bear the imprint of subservience to values prescribed by the ‘West’, and, on the other side, those who treasure our civilisational heritage and understand the needs and aspirations of the majority of our people.
(c) His standpoint is that of an ardent ‘nationalist’, in the sense that he is unequivocally committed to safeguarding and promoting Sri Lanka’s national interests.
On literature, Professor Amaratunga adds that he is inclined towards the need for ‘social relevance’ of the fine arts, and believes that the paradigm of ars gratia artis (‘art for art’s sake’) is inappropriate for Sri Lanka, especially in creative writing.
The ‘miscellany’ of this volume is structured to constitute four ‘Sections’ – titled as: 1. ‘Literature and Culture’; 2. ‘Religion’; 3. ‘Economy’; and 4. ‘Health’. The first two of these ‘Sections’, consist respectively of 25 and 19 essays of unequal length. In these ‘Sections’ the reader could pick out from different points of the temporal sequence in which they are arranged items that constitute a mutually cohesive group from the viewpoint of content. For example, in the first ‘Section’, there are six such items, each serving as a contribution to an ongoing media debate, but when considered as a group would be seen as an invaluable enrichment of understanding on a significant feature of the educational system of the country – such as, say, the impact of the nation-wide ‘Fifth-standard Scholarship Examination’ or ‘The general decline of standards in higher education’. Likewise, in the total of 18 articles in ‘Section’ 2, thirteen items could be considered as a mutually cohesive group of thoughts that illuminates certain vitally significant aspect of Buddha Dhamma and Buddhism as practiced in Sri Lanka.
The forgoing observations do not detract from the intrinsic value of the short contributions referred to. Indeed, in my amateur assessment, in Section 1, the items titled ‘Quality of University Education’, ‘Purpose of the Novel and its Appraisal’, and the twin items titled ‘Darwinian Evolution vs. Intelligent Design’; and in Section 2, ‘Truth in Buddhism and Realism in Literature’, and ‘Mind, Matter and Nirvana in Mahayana and Theravada Buddhism’, are examples of the author’s extraordinary depth of understanding and his skill of disseminating that knowledge in a lucid form.
It is in the 3rd Section of the volume titled ‘Politics’ that the real ‘miscellany’ of Thought is found, consisting of 78 items, and accounting for well over half the total page-length of the volume. Since they have been presented in a chronological order ‒ with the first item published in 2001, and the last in 2021‒ the list of items, at first glance, looks like a total mess which, indeed, is how our politics look. But a closer scrutiny show that all items in this list could be placed in one or another of 6 ‘Sub-Sections’ titled as ‘Ethnic Relations’, ‘Foreign Affairs’, ‘Electoral Politics’, ‘Development Plans and Projects’, and ‘Constitutional Issues’, with the chronology of the list providing the vicissitudinous background of each contribution which Professor Amaratunga has made, and each discussion or debate in which he has participated.
Once again I should emphasise that foregoing observation does not imply that the ‘Thoughts’ in this section, read individually, are either uninteresting or irrelevant to our present concerns. On the contrary they offer ideal readings both as reminders of the volatile scenarios we have passed though during the past two decades as well as the unshakable faith our politicians appear to have on the widespread dementia among the voter-population and on their own ability to hoodwink the electorate. Professor Amaratunga’s thoughts could re-kindle fading memories, especially on repeated failures to fulfil campaign pledges, the large-scale losses due to financial malpractices, the allegations of ‘war-crimes’ and of ‘violation of human rights’ in the counter-attack by the major powers of the North Atlantic alliance in retaliation to Sri Lanka’s close relations with the People’s Republic of China, the ingredients of success in the US-sponsored ‘regime change’ effort culminating in the establishment in 2015 of a puppet government in Colombo, the betrayal of our national interests by our own self-seeking representatives at the protracted Geneva inquisitions, the constitutional fiasco of August 2018, the euphoric Gotabhaya victory about a year thereafter, and then, the stunning exposure by the pandemic of the fundamental weakness of our dependent economy.
In the 4th Section of the volume titled ‘Health’, most of the items are devoted to diverse experiences witnessed globally and in Sri Lanka during the Covid-19 pandemic, but in an unconventional manner in the sense that they emphasise significant aspects that have not received adequate attention in the analytical writings on the pandemic. In my view the most significant issue highlighted in this section is the need for Sri Lanka to adopt development strategies towards self-reliance, especially in the availability of medicinal drugs and on food-security. Implicit in several items of this section is a forewarning of the risks entailed in the pursuit of development policies that enhance Sri Lanka’s macroeconomic dependence on the major global and regional powers.
Many items in this miscellany of thoughts contain a prominent element of dissent and disagreement with other participants in the media debates and discussion for which The Island has served as a major forum. But that dissent has all along been featured by a laudable sense of “civilised intelligence”. As a professional whose skills have an intense demand, his interests and concerns have not remained confined to his professional expertise – a feature often seen among other ‘specialists’ including those of the university community.
This volume is, first of all, a demonstration of intense and well-informed concern on a wide range of issues of vital importance to Sri Lanka. Had that quality been more widespread it is unlikely that those earning six-figure incomes would threaten collective action to bring the economy to a standstill to express their dissatisfaction on a relatively marginal erosion of monthly emoluments at a time of unprecedented national crisis, attempting to conceal their avarice with a façade of safeguarding democracy, or eliminating public corruption, or on grounds of their capacity to earn higher incomes outside Sri Lanka.
Yet another exemplary feature I discern in this ‘Miscellany of Thoughts’ is that its contents are not angry knee-jerk reactions when provoked by thoughts different to his own. Professor Amaratunga’s dissent is entirely free of the crude clashes often seen in the so-called social media. Nor are his thoughts based on a hurried consumption of internet ‘short-eats’. In his thoughts that extend beyond brief corrective interjections of ‘common sense’, what we see is an extraordinary depth of knowledge acquired through serious reading and a thorough understanding of the issues on which he had focused.
Loneliness of the Bottom Half
By Lynn Ockersz
There you crouch by your hearth,
Seeing your fires sputtering out;
Your hopes of a bubbly pot of rice,
Ending in inflationary smoke spirals,
Leaving you with the painful thought,
That your dignity as mother and wife,
Is gravely harmed and beyond repair,
For, a turn of events not of your making,
Has reduced you and yours to penury,
So much for that Trickle-down Theory,
That Pundits say will end your misery,
But they tell you not to stop dreaming,
Because soon you will be bailed out,
Of your State of longsuffering;
Thanks to Princely tips from ancient Italy.
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