Will 2023 be a year of further economic-political-social crisis?

 SPECIAL REPORT : Part 450

Published

  2022/12/28

By Shamindra Ferdinando

A steady stream of press releases, issued during 2022, by Colombo-based diplomatic missions, UN and its agencies, and those representing INGOs, depicted a pathetic picture of Sri Lanka. They dealt with financial and material assistance, provided on Sri Lanka’s request, and also in line with international response to the developing crisis here.

Ruling Sri Lanka Podujana Peramuna (SLPP), and other political parties, represented in Parliament, seemed to be blind to the rapidly developing crisis, especially against the backdrop of the country continually being denied the USD 2.9 bn IMF loan facility.

Having secured ‘staff level’ agreement on Sept. 01, various government spokespersons expressed confidence in obtaining the first tranche, by end of 2022. That hasn’t materialized.

It would be pertinent to mention that the agreement, on the urgently needed facility, has been held up, pending necessary approval of the overall plan by Beijing and New Delhi. The Treasury and the Central Bank are obviously uncertain when the much desired agreement can be finalized.

Foreign media releases highlighted Sri Lanka’s growing dependence on international assistance. Let me first discuss a statement, dated Dec. 19, issued by the World Food Programme (WFP). Carol Taylor, Communications Associate, WFP, Colombo, in a two-page statement, dealt with the food crisis, with the focus on Dustin Shiau, Senior Regional Programme Officer of the U.S. Agency for International Development (USAID)’s Bureau for Humanitarian Assistance (BHA).

Having to receive humanitarian assistance, 12 years after the successful conclusion of the war against the Liberation Tigers of Tamil Eelam (LTTE), underscored Sri Lanka’s plight.

Referring to the USAID official’s visit to one-time LTTE bastion, Mullaithivu, Taylor asserted the population there is among the worst affected. During the war, the WFP provided significant assistance to those trapped in LTTE held areas, particularly in the Vanni region.

According to Taylor, the US has provided USD 20 mn, in 2022, and of that USD 13 mn (approximately Rs 4.7 bn) enabled them to assist the needy, recently. Declaring that the WFP project got underway, in June, just ahead of President Gotabaya Rajapaksa’s ouster, the operation intended to provide food and nutrition assistance to 3.4 mn people.

Taylor estimated they had so far reached one mn people, including schoolchildren, benefited by the free meal programme.

The WFP press statement has substantiated assertions made by the international community as regards the developing economic-political-social crisis here. The government and the Opposition continued to play politics with an unprecedented national calamity caused by mismanagement of the economy, waste, corruption and irregularities.

Cash-strapped Sri Lanka received USAID financial assistance, amounting to USD 46 mn, to procure 9,300 tonnes of urea. The first consignment reached Sri Lanka in December.

Those in political authority should be ashamed, particularly because they failed to initiate a programme to purchase paddy. In spite of the intervention of President Wickremesinghe and Prime Minister Dinesh Gunawardena, the Wickremesinghe-Rajapaksa government never released funds, required to buy paddy. Agriculture Minister Mahinda Amaraweera owed an explanation as to whether the incumbent government has ceased the purchase of paddy. If so, there is no point in maintaining the Paddy Marketing Board (PMB) at taxpayers’ expense, while the private sector dominates the market.

The first consignment of urea, received in December, was meant to meet the requirement of 193,000 smallholder paddy farmers, in Jaffna, Mullaithivu, Mannar, Vavuniya, Anuradhapura, Trincomalee, Batticaloa and Moneragala districts. Additional stocks are expected, early next year, and, altogether, one million farmers are expected to receive fertiliser, procured by the Food and Agriculture Organization (FAO), on behalf of the USAID.

Addressing a small gathering, at the Colombo Port, US Ambassador Julie Chung declared that they have announced over USD 240 million in new assistance and additional loans for small businesses over the last year.

In the absence of a cohesive plan, with the Wickremesinghe-Rajapaksa government ensnared in a political crisis, the international community has stepped in. Sri Lanka currently lacks the wherewithal to at least start re-building the economy. Instead, those who ruined this country, over the years, are now preoccupied trying to play the role of its saviour, having brought the once proud nation to its knees.

The hapless Sri Lankan public should be eternally grateful for top South Korean official, Cho Sung Lea, for publicly issuing a warning to Social Empowerment Minister, Anupa Pasqual, for being late for a scheduled meeting at the Ministry, on Dec 21. South Korea Disaster Relief Foundation (SKDRF) President Cho Sung Lea took the State Minister to task for being 30 minutes late for a scheduled meeting in Colombo. The South Korean declared that with the likes of Pasqual, Sri Lanka has no hope of overcoming the continuing crisis. Lea emphasized the pivotal importance of the public having faith in their political leadership.

We will refrain from commenting on how lily white South Korean politicians, including top ones, have been over the years, for the moment, for our politicians often, without doubt, take everyone for granted, no sooner they become important ministers, having become drunk with power.

Having entered parliament from the Kalutara district, Pasqual, a senior member of civil society group Yuthukama, switched his allegiance to President Ranil Wickremesinghe by accepting a portfolio.

Perhaps, the South Korean should be invited to address Sri Lanka’s Parliament, possibly the mother of all problems in the country. Governor of the Central Bank, Dr. Nandalal Weerasinghe, in a hard hitting speech, delivered in Parliament on August 31, squarely held the irresponsible and reckless political party system responsible for the current crisis.

High profile Chinese agenda

US Ambassador Julie Chung at the Colombo Port where she officially handed over a large stock of fertiliser to Agriculture Minister Mahinda Amaraweera and (below) lorries loaded with bags of fertliser (pics courtesy US embassy, Colombo)

The situation is so bad, Sri Lanka has been compelled to ask for, and accept, whatever is offered by the international community. A range of assistance, offered, included stocks of rabies vaccines. India and Germany provided the funding needed to purchase rabies vaccines.

Throughout this year, China provided significant assistance as Sri Lanka struggled to cope up with increasing difficulties. Despite having haughtily questioned Chinese intentions here, with the Yahapalana government causing serious row, and the crisis over the rejected carbon fertiliser shipment, during Gotabaya Rajapaksa administration, Sri Lanka, over the past two years, received significant Chinese assistance.

The political leadership here should be aware that foreign assistance does not come without strings attached. A Defence Ministry press release, dated Dec. 21, dealt with a financial grant amounting to Rs 5 mn, received by that Ministry, from the Chinese Embassy.

Following a joint request made by State Defence Minister, Premitha Bandara Tennakoon, and Defence Secretary, Gen. (ret.) Kamal Gunaratne, the Defence Ministry has received a Rs 5 mn grant for the utilization for the development of the National Cadet Corps (NCC).

The latest Chinese grant, received for the benefit of the NCC, is part of the overall funding programme, covering several important fields, including agriculture and fisheries.

Recently, China announced their decision to donate school uniform material, worth USD 13.51 million, to meet 70 percent of Sri Lanka’s requirement, in 2023. According to a Chinese Embassy statement, the first batch of material is already on its way to Sri Lanka. The first batch contains 2,374,427.5 meters of white shirt/ frock material, 350,031.5 meters of white trouser material, 150,003.5 meters of blue trouser material and 138,134 meters of saffron coloured robe material for monks.

In a twitter message, the Chinese Embassy said that the total length of the material is about 10 times the distance from Colombo to Jaffna. China also supports a free midday meal programme for schoolchildren. Much to the relief of farmers and fishers, China provided 10.6 mn liters of diesel, to be distributed among the two badly affected communities. This was part of the RMB 500 mn (USD 76 mn) emergency grant China voluntarily extended to Sri Lanka. In addition, Sri Lanka sought to convince China to provide a credit line for fuel. China made the offer during Gotabaya Rajapaksa’s presidency (between the March 31 protests – outside the President’s private residence, at Pangiriwatte, Mirihana – and the May 09 attacks on the Galle Face and Kollupitiya protesters). Initially, China declared a 200 RMB grant and later made an additional commitment, amounting to a further RMB 300 mn. The total grant was meant for the urgent purchase of medicine, food, fuel and other essentials.

The Chinese announcement was made in the wake of Sri Lanka suspending debt repayment on April 12. But Agriculture Minister Amaraweera brashly declared that China was responding to a request by President Ranil Wickremesinghe.

China has gradually enhanced its role in the Northern and Eastern Provinces, since the last presidential election, in late 2019. The continuing political-economic-social crisis has facilitated the Chinese agenda as the government has no option but to accept whatever assistance is granted as it couldn’t meet even the basic needs of the population. The executive, the legislature and the judiciary are enmeshed in controversies, at different levels, as the country plunges further into abyss.

Beijing underscored its expanding interests in the Northern and Eastern regions by its Deputy Chief of the Chinese Embassy Hu Wei undertaking a three-day visit in the second week of this month. Wei was there to supervise the distribution of fuel, 9,000 metric tons of rice, among students from underprivileged families, and 100 sets of solar lights to 38 schools across the Eastern Province.

Chinese Ambassador Qi Zhenhong toured the North in December, last year, at the time the economy was experiencing difficulties, though the public were yet to feel it. (Mirihana was to erupt four months later). During the high profile visit, the Chinese envoy took a boat ride to the Adam’s Bridge, widely referred by the Indian media as ‘Rama Setu’, a row of limestone shoals across the narrow Palk Strait between Mannar and Rameswaram, in Tamil Nadu. Some interested parties raised concerns over Qi Zhenhong’s visit to the North, against the backdrop of the suspension of a solar energy project that was to be carried out in three Jaffna islands, with ADB funding.

New Delhi’s strategy on track

In spite of the absence of sustained protests, since UNP leader Ranil Wickremesinghe’s election, through a parliamentary vote, as the President, in July, this year, the country is still in a deeply troubled state. It would be a grave mistake, on the part of the government, to believe that the absence of long queues, for basic services, didn’t mean the end of the crisis. In fact, the continuing power cuts, and the possibility of much longer electricity interruptions, on a daily basis, coupled with the unprecedented hike in power tariffs, can trigger protests.

The recent meetings the Research and Analysis Wing Chief, Samant Goel, had in Colombo with President Wickremesinghe and Basil Rajapaksa, who wields political power over the ruling Sri Lanka Podujana Peramuna (SLPP), meant how concerned New Delhi is with developments here. Obviously the Indian Spy Chief’s visit underlines their interest here as the Wickremesinghe-Rajapaksa government struggles to cope up with daunting challenges.

Having invested here, heavily, over the years, especially having provided much needed financial assistance, this year, that prevented the total collapse of the Colombo administration, New Delhi is obviously deeply committed to further consolidate its position in this tiny nation. India provided extraordinary financial support, prompting India basher JVP leader Anura Kumara Dissanayake to publicly appreciate New Delhi’s response to the crisis here.

But, China poses quite a challenge, having had the opportunity, over the years, to develop a network of friends at the right places. One-time Foreign Secretary, Shivshankar Menon, who had served in Colombo as High Commissioner (1997-2000), dealt with this issue in ‘Choices: Inside the Making of India’s Foreign Policy’, launched in Oct. 2016.

In spite of President Wickremesinghe’s repeated declaration that his government wouldn’t take sides in international or regional conflicts, Sri Lanka is embroiled in a China-US battle for supremacy. Sri Lanka is caught up in ‘Quad,’ strategy. The four-nation security and political alliance, comprising the US, India, Japan and Australia, is pursuing an anti-China agenda. The developing economic-security-social crisis has weakened Sri Lanka’s defences. Therefore, the country is susceptible to Chinese, as well as Quad strategies.

Former Minister, Prof. Tissa Vitharana’s recent declaration that the US may revive its efforts to secure Sri Lanka’s consent for the once-rejected MCC (Millennium Challenge Corporation) as well as SOFA (Status of Forces Agreement), shouldn’t be disregarded as ramblings of an old man.

During the Yahapalana administration (2015-2019), the US sought to finalize MCC, SOFA and ACSA (Acquisition and Cross Servicing Agreement) though Washington managed to secure ACSA, thanks to the then President Maithripala Sirisena’s support. A much weaker Sri Lanka is now a playground for big players, as political parties, represented in Parliament, pulled in different directions, for their own survival, without thinking of the greater good of the country.

Sri Lanka’s relations with Quad member Japan suffered irrevocable damage as a result of the unilateral cancellation of the Japanese-funded Light Rail Transit (LTR) project, in Sept. 2020, a month after the Sri Lanka Podujana Peramuna (SLPP) obtained a near two-thirds seats at the last parliamentary elections. The cancellation of the project, without consultations, angered the Japanese who could have provided significant assistance at the onset of the financial crisis here. Japan went to the extent of ignoring Sri Lanka’s specific requests for an urgent loan facility though some assistance was provided later.

Contrary to former Chairman of the Committee on Public Enterprises (COPE) Prof. Charitha Herath’s claim that the decision to call off the LTR project remains a mystery, the National Audit Office has revealed the existence of a Cabinet memorandum, dated Sept. 24, 2020, in this regard.

Having unilaterally suspended debt repayment, on April 12, 2022, Sri Lanka enters unchartered financial territory in the New Year with the hope a consensus can be reached on the USD 2.9 bn IMF facility as soon as possible early next year. But, Sri Lanka’s hopes remain largely dependent on Indian and Chinese acceptance of the overall plan. Regardless of Sri Lanka’s plight, the response of India and China would be largely influenced by their overall strategies.

Unfortunately, Sri Lanka (Government and Opposition) lacked a tangible action plan to face the daunting challenges in the coming year. Both seemed unprepared to face the crisis and unexpected developments can cause further destabilization. The recent allegations, pertaining to former lawmaker Prof. Ashu Marasinghe, following the release of a video by Adarsha Karadana, who had been living with him, is a case in point. There is absolutely no need for the writer to repeat what is now in the public domain. But, let me repeat what Karadana, who had been living with Prof. Marasinghe, who switched sides after having entered the political scene with the intervention of Wimal Weerawansa, speculated about the Wickremesinghe-Rajapaksa government granting the former National List MP top diplomatic positing. Let us hope the government would prove Ashu Marasinghe’s ex-paramour wrong.

The year that was: How ill-advised, reckless decisions ruined GR’s mandate

 SPECIAL REPORT : Part 449

Published

  2022/12/21

A woman officer receives the sword from President Wickremesinghe at the recent passing out parade at the Army’s most prestigious seat of learning at the Sri Lanka Military Academy (SLMA) at Diyatalawa where 352 fully fledged Cadet Officers, to the Sri Lanka Army, joined the war-winning Army (pic courtesy PMD)

In spite of speculation over possible alliance between the SLPP and the UNP, serious issues remained to be addressed. The continuing disagreement on allocation of Cabinet portfolios underscores the crisis the government is faced with, though President Ranil Wickremesinghe speaks confidently of his plans to address the issues at hand.

By Shamindra Ferdinando

About a year before violent protests erupted outside the then President Gotabaya Rajapaksa’s Mirihana residence, over the crippling shortages of essential services and supplies, possibly exacerbated by some hidden hands, like the way Aragalaya was mainly bank rolled from abroad, or the mysterious forces who torched several dozen private homes of the then government politicians across the country, in a very systemic manner, on the night of May 09, the seventh executive President said that the people would decide whether he contest the next presidential election.

President Rajapaksa was addressing a gama samaga pilisandara programme at Yombuweltenna, Walapone, where he declared that only 14 months had been completed of his 60-month term. The President said that as he had plenty of time no one should be concerned about him not contesting again.

The then Senior Presidential Advisor, Lalith Weeratunga, sat on the President’s right. A confident Gotabaya Rajapaksa wore a light purple t-shirt, black trousers and a facemask as Covid-19 was raging. Referring to the last presidential election, in Nov 2019, Gotabaya Rajapaksa declared that the next time, too, the public would decide the outcome. It was not to be.

President Rajapaksa launched the gama samaga pilisandara programme on Sept 25, 2020, in the Badulla district. Yombuweltenna was the venue for the 15th programme in President Rajapaksa’s ambitious political project, meant to consolidate the electorate by going to the people at the grassroots. It was not to be.

Having won the presidency comfortably, just over a year earlier, President Rajapaksa was on a powder keg as a result of the rapidly deteriorating financial situation, primarily caused by the unprecedented pandemic in living memory, and some foolhardy and hasty decisions. Slashing of taxes, running into billions, after the presidential election, to give an impetus to the private sector to make the economy roar, drying up of Lankan worker remittances, for the first time, and the failure on the part of the government to initiate talks with the International Monetary Fund (IMF) for an urgently needed loan facility, had caused irreparable damage. Had President Rajapaksa realized the implications of that disputed decision, he could have avoided the humiliating exit from the Presidency. It was not to be.

About five weeks after the Walapane programme, President Rajapaksa imposed ban on the importation of fertiliser and agro chemicals. That move was perhaps meant to save USD 300-400 mn annually spent on the importation of fertiliser thereby ease pressure on the Treasury. It was not to be.

By then the Finance Ministry has perpetrated a scam reducing the duty on the importation of white sugar by a big margin without passing on the benefit to the consumer. It may have been a case of paying back the import mafia for financing the previous election campaign of the SLPP. Such shenanigans had been resorted to by virtually all past governments. Even the two massive bond scams would have been to reboot the UNP’s war chest that had been badly depleted due to the long recess in the opposition. Last November State Finance Minister Ranjith Siyambalapitiya confirmed that sugar scam caused Rs 1.6 bn revenue loss.

The culpability of the then immensely powerful and once very talented Presidential Secretary Dr. P. B. Jayasundera for the economic fallout should be investigated. One-time Treasury Secretary Jayasundera, who quit in Dec 2021 amidst a simmering controversy over the crisis, has been blamed for the unprecedented and continuing crisis. But can the Cabinet of Ministers chaired by the President absolve itself of the responsibility for Sri Lanka’s predicament? Regardless of ill-fated decisions that had been taken on the advice of Dr. P.B. Jayasundera et al, ministers cannot pass the buck. The Cabinet of Ministers should be held responsible for the continuing crisis. The responsibility of Governors of Central Bank Prof. W.D. Lakshman (Dec 2019-Sept 2021) and Ajith Nivard Cabraal (Sept 2021-March 2022) as well as the five-member Monetary Board should be examined. Two of those who had served the Monetary Board during the tenures of Prof. Lakshman and Cabraal remained therein. Can Dr. Ranee Jayamaha and Sanjeewa Jayawardena, PC, absolve themselves of the decisions taken/not taken during Dec 2019-March 2022. The role played by the then Finance Secretary S.R. Attygalle, too, should be examined. Surely the country will not believe that they were all simply awestruck by the all-powerful presidency.

President Rajapaksa brought in Dr. Nandalal Weerasinghe and Mahinda Siriwardena as the Governor and the Finance Secretary, respectively in early April this year.

By then, the economy was in ruins. Unprecedented protest at Pangiriwatte, Mirihana, on the night of March 31 may have been the test run to launch the high profile campaign that forced President Rajapaksa to flee the country and handover the reins to Ranil Wickremesinghe as the Premier. Samagi Jana Balavegaya (SJB) leader Sajith Premadasa’s refusal to accept the premiership when it was offered to him will remain a political mystery. Perhaps lawmaker Premadasa who also served as the Opposition Leader never expected the SLPP’s hare-brained strategy to hand over power wholesale. Offering the premiership to the United National Party (UNP) that had just one National List seat in parliament seemed so ludicrous perhaps no one really expected the strategy to succeed. But at least he had the backbone or received the signal from hidden puppet masters to take it with both hands. And for all purposes aragalaya was snuffed out overnight contrary to what its activists claimed before cameras earlier.

President Rajapaksa wouldn’t have anticipated in his wildest dreams having to reach a consensus with UNP leader Wickremesinghe as regards the presidency.

Wickremesinghe has achieved the unthinkable. Having failed to re-enter parliament at the last parliamentary election in the backdrop of the party being unable to win a single seat but avoided a complete whitewash by scraping a National List slot. Wickremesinghe has turned the political environment upside down. The ruling SLPP, struggling to cope up with internal dissent, has been compelled to play ball with Wickremesinghe, who shrewdly changed the political landscape. The elevation of Mahajana Eksath Peramuna (MEP) leader Dinesh Gunawardene, Wickremesinghe’s school buddy at Royal College, to the position of Premier wouldn’t have happened under a Rajapaksa administration. There hadn’t been a previous instance since the introduction of the Proportional Representation system of an MP with just two other members in parliament receiving the premiership. The MEP parliamentary group consists of Premier Gunawardena, Gampaha District MP Sisira Jayakody and the premier’s son, Yadamini Gunawardena accommodated on the SLPP National List.

SLPP ignores stern warning

Amidst a much deteriorated economic situation, a major internal crisis erupted in the ruling SLPP over the shady finalisation of a disputed agreement with the US based New Fortress Energy in respect of a new LNG terminal, the Yugadanavi power plant as well as gas supply to Sri Lanka’s power plants caused irrevocable damage to its relationship with its partners, the National Freedom Front (NFF), Pivithuru Hela Urumaya (PHU) and Democratic Left Front (DLF). In spite of NFF, PHU and DLF being represented by 06, 01 and 01 MPs, respectively, the extraordinary clash between the arrogant SLPP and Ministers Wimal Weerawansa, Udaya Gammanpila and Vasudeva Nanayakkara quickly developed into a deadly political battle. The developing political and economic crises-a lethal cocktail quickly destabilised the Rajapaksa administration.

President Rajapaksa allowed the situation to develop. In the wake of fierce attacks on the New Fortress Energy deal, strangely concluded in the dead of the night. The President’s Office threw its weight behind those who had been accused of manipulating the Cabinet process to sell 40 percent stake in the Yugadhanavi power station held by the Treasury along with the related other above deals.

It would be pertinent to ask whether President Rajapaksa authorized the then Presidential Spokesperson Kingsley Ratnayake to arrange disgraced CEB Chairman M.C.C. Ferdinando to defend the deal. Struggling to cope up with the crisis caused by its own incompetence, the administration brought in Ratnayake and Sudewa Hettiarachchi of Sirasa and Swarnawahini, respectively, to turnaround the situation. The government seemed to have wrongly recognised the crisis as an issue to do with not having the required media hype.

The powers that be until the very end believed costly media projects could turn around the situation. They refused to take remedial measures.

The Weerawansa-Gammanpila-Nanayakkara trio took on the government courageously in spite of the growing threat to them. Having failed to convince President Rajapaksa to reverse the controversial decision on the US energy deal, they moved the Supreme Court against the Cabinet of Ministers. They created history. In spite of the swift dismissal of the case by the SC, they pursued the campaign that commenced in Oct 2021. President Rajapaksa sacked Weerawansa and Gammanpila in early March 2022, several weeks before the eruption of public anger at Pangiriwatte.

Unfortunately, none of the other cabinet ministers had the guts to stand by their colleagues. Instead they reassured their commitment to a corrupt system that was on the verge of being toppled. The likes of Ali Sabry, PC, and Bandula Gunawardena remained silent though they disclosed the ugly truth in June 2022 (exclusive interview with Swarnawahini) and Dec 2022 (parliament), respectively. President Rajapaksa had to pay a very heavy price for allowing a corrupt cabinet to have its way. Those who had President’s or was it Basil’s ear pursued their own agenda regardless of the consequences.

Media and Transport Minister Bandula Gunawardena’s Dec 09 disclosure in parliament pertaining to the sugar duty scam that deprived cash-strapped Treasury of at least Rs 1.6 bn underscored the need to overhaul the system of governance. Minister Gunawardena has pinpointed those who perpetrated it. Thereby, the Colombo District lawmaker has implicated President Rajapaksa. Let us hope the former trade minister wouldn’t take cover behind parliamentary privileges to cover up those responsible. Should the so-called collective responsibility of the Cabinet of Ministers and parliamentary privileges be allowed to hinder investigations into the sugar scam?

Let us hope the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) inquiring into the sugar duty scam perpetrated on the issuance of a gazette notification that brought the tax on a kilo of sugar from Rs 50 to 25 cents goes the whole hog.

Weerawansa’s failed bid

The then Minister Weerawansa made a desperate but determined bid to convince President Rajapaksa to take remedial measures. The former JVPer earned the wrath of the SLPP by urging President Rajapaksa to play an active role in politics. Weerawansa declared that President Rajapaksa should immediately intervene in the political decision making process. The SLPP launched a scathing attack on Weerawansa who retaliated regardless of the consequences. An irate Weerawansa, in a statement issued on Oct 10, 2021 set the record straight as regards comments made at a Cabinet meeting attributed to him. Alleging that his comments had been correctly interpreted and were in the public domain, particularly social media, lawmaker Weerawansa declared (1) the public lost faith in the government not because the administration didn’t do what was expected of it but did what was not expected, (2) hasty cabinet decisions taken at a single sitting without proper consultation among members, and finally (3) President Rajapaksa should participate in the decision making process, attend party leaders’ meetings and play an active role in politics.

Over Weerawansa’s public declarations SLPP General Secretary Sagara Kariyawasam clashed with him on a number of occasions.

Weerawansa appeared to have quite conveniently forgotten that in spite of not holding any position in the SLPP, President Rajapaksa took decisions on behalf of the government. But that shouldn’t be misconstrued. There had been serious issues as the Rajapaksas pulled in different directions. The crisis at Litro gas owned by Sri Lanka Insurance exposed unbelievable trickery. The Committee on Public Enterprises (COPE) vigorously opposed Litro halting the state audit process contrary to basic financial rules and regulations. Litro hired two President’s Counsel Romesh de Silva and Sanjeewa Jayawardena to defend its controversial decision. Then COPE Chairman Prof. Charitha Herath is on record as having said that Litro spent over Rs 20 mn on lawyers.

Finally, President Rajapaksa removed Litro Chairman Anil Koswatte and brought in Viyathmaga activist Theshara Jayasinghe who pointed to high profile large scale corruption at the enterprise.

Investigations into hundreds of gas-related explosions revealed that the mystery change in the composition of gas was the primary reason for these incidents. Maybe it was a case of some outside party staging a “mission impossible” type of plot, probably at the point of export. Prof. Shantha Walpolage, the Chairman of the Committee that had been appointed by President Gotabaya Rajapaksa to probe the recent gas explosions made this revelation. Prof. Walpolage contradicted Theshara Jayasinghe claim that the composition remained unchanged. The Litro chairman made this declaration at a media briefing arranged by Kingsley Ratnayake on Dec 20, 2021. The government never revealed the truth. Gas-related explosions remains a mystery like so many other mysteries of that government.

The government again exposed itself by trying to deceive the public over its decision to increase the price of fuel in June 2021. Arrogant SLPP leadership clashed with Udaya Gammanpila, who hit back hard when SLPP

General Secretary Attorney-at-Law Kariyawasam lambasted the minister over the decision to increase fuel price marginally. The SLPP propagated the lie that fuel prices wouldn’t have to be increased if Basil Rajapaksa served in the cabinet as the finance minister.

Following a sustained campaign Basil Rajapaksa re-entered parliament in June 2021 on the National List. President Rajapaksa in spite of strong objections by some SLPP constituents cleared the way for his brother’s re-entry by doing away with the clause on dual citizens. The stage was set for the CEB deal with New Fortress Energy signed close to midnight on Sept 17, 2021. By then, M.M.C. Ferdinando has returned from retirement in Australia to be the CEB Chairman and worked overtime to finalise the deal to the satisfaction of then US Ambassador Alaina B. Teplitz.

A flawed Temple Trees project

The overall failure on the part of the Rajapaksa government to address the issues at hand should be examined against the backdrop of a despicable Temple Trees project to save Mahinda Rajapaksa’s premiership. Temple Trees engaged in a desperate bid to consolidate Premier Rajapaksa’s position amidst calls even by a section of the SLPP parliamentary group for the twice President to step down as the Prime Minister. Finally, Temple Trees gave a turbo boost to the public protest campaign by unleashing violence on Galle Face protesters and those camping outside Temple Trees.

The May 09 attacks followed by fiery speeches delivered by SLPP leaders were outdone by counter attacks by so called aragalaya activists, which included a physical assault on DIG Deshabandu Tennakoon on the streets. But, the losses inflicted by well organised gangs that went on the rampage as the military and police just looked on, were staggering.

They had the tacit support of some political parties. For about 72 hours gangs roamed the streets. The Wickremesinghe-Rajapaksa government never really probed those attacks. But, within 24 hours after being elected as the President on July 20, UNP leader Wickremesinghe ordered the military to clear the Presidential Secretariat. The President repeatedly warned that unauthorised protests wouldn’t be tolerated under any circumstances.

The May 09 incidents should be examined taking into consideration Temple Trees repeatedly declaring that there was no need for the Premier to resign. Temple Trees issued a spate of statements reassuring the public the Premier was in control and measures were being taken at his behest to restore normalcy.

But the May 09 explosion of mobs even overrunning Temple Trees brought that silly effort to an end, thereby paving the way for the UNP to secure the presidency after 28 years.

However, the Wickremesinghe-Rajapaksa government faces an uphill task of facing the electorate at Local Government polls early this year. The government will do whatever possible to put off Local Government polls though the Opposition is pushing hard to prevent any delay in the election. Putting off the election seems as important as securing USD 2.9 bn early this year. Having bragged about the IMF facility, now it is clear that funds wouldn’t be available as expected within the next few weeks.

Shocking claim in House: Bandula reveals how sugar importers, their henchmen trapped Prez

 SPECIAL REPORT : Part 448

Published

  2022/12/14

Regular revelations, pertaining to high profile scams that had undermined revenue collection, underline the pathetic failure on the part of Parliament to ensure financial discipline. The Central Bank, five-member Monetary Board, Cabinet of Ministers and Parliament as an institution should accept the responsibility for the current crisis. The likes of Bandula Gunawardena continue to pursue an agenda, beneficial to them, or they are simply clueless about how such rip offs are staged, in spite of their self-proclaimed economic wizardry. And only now they are awakening to what happened. But luckily for the country in the case of the Central Bank bond scams, those who staged it could not hoodwink everyone at the CB. Political expediency is the name of the game as the country plunges deeper into economic quagmire.

By Shamindra Ferdinando

Alleging the Wickremesinghe-Rajapaksa government planned to appoint altogether 70 ministers (30 Cabinet and 40 State Ministers), Samagi Jana Balavegaya (SJB) lawmaker Dr. Harsha de Silva recently challenged the government to name a country that sustained such a top-heavy administration, during an economic crisis.

The Colombo District MP gave the challenge on Dec. 09, the day after Parliament overwhelmingly endorsed the 2023 Appropriation Bill, with a majority of 43 votes – six more than at the Second Reading, on Nov. 22. The outcome is nothing but extraordinary as President Ranil Wickremesinghe, leader of the UNP, who presented the Budget on Nov. 14, in his capacity as the Finance Minister, had only one UNP MP in Parliament.

Having been rejected by the Galle District electorate, at the last General Election, in August 2020, Wajira Abeywardena entered Parliament, in July this year, after the Sri Lanka Podujana Peramuna (SL)) elected UNP National List MP Wickremesinghe as the eighth President. The UNP managed to secure only one seat at that election, through its national list, after the country, as a whole, rejected all its candidates. In addition to the UNP, eight other recognised political parties won one seat each, both elected and appointed.

Against the backdrop of former Finance Minister, SLPP strategist Basil Rajapaksa’s declaration that the UNP leader was the most suitable to succeed his brother Gotabaya Rakapaksa, in July this year, amidst violent protests orchestrated by interested parties, there cannot be any dispute over the ruling party’s support to Wickremesinghe’s agenda. In spite of the breakup of the SLPP, into at least three factions, it remains a formidable political force, with its largest group unquestionably loyal to Basil Rajapaksa/Mahinda Rajapaksa.

Therefore, the appointment of Ministers, and State Ministers, as demanded by the SLPP, is a necessity, regardless of the economic catastrophe facing the country. That is the political reality. Dr. Harsha de Silva cannot be unaware of that certainty. Having entered Parliament, on the UNP National List, in 2010, after a successful career in the private sector, De Silva, who had an opportunity to receive the Finance portfolio in the current government, choose not to do so.

The former UNPer, who had served as Wickremesinghe’s deputy on economic affairs, during the Yahapalana administration, questioned the rationale behind such a large number of ministers at a time of an unprecedented political-economic-social crisis. In addition to being the Prime Minister, Wickremesinghe held the Cabinet portfolio for National Policies and Economic Affairs in that government.

The one-time yahapalana non-Cabinet ranker compared the massive allocation of public funds for Ministers, and the controversial new tax structure that had influenced professionals, including doctors, engineers, academics and IT professionals, to leave the country. The economist called the new tax structure unjust. Having voted against the Appropriation Bill, Dr. de Silva declared that daunting challenges, faced by the country, couldn’t be addressed by more ministerial appointments. Reference was made to 10,000 IT professionals leaving the country since the change of government, in July, this year.

The developing crisis should be examined, taking into consideration how successive governments obtained assistance from the International Monetary Fund (IMF) on 16 previous occasions. In other words, Sri Lanka had continuously experienced balance of payments problems, during the war, and thereafter. The IMF ‘interventions’ had been almost routine and never really attracted public attention, or never being an issue at an election. In fact, IMF ‘interventions’ and the Yahapalana administration securing USD 12.5 bn in International Sovereign Bonds (ISBs), within four years (2015-2019), and nothing to show in terms of successful development projects, when compared with Mahinda Rajapaksa taking USD 3 bn (2007-2014) with many a feather in his cap. The UNP owed an explanation why such a huge amount in ISBs was taken. Perhaps the Yahapalana Finance Minister, Ravi Karunanayake (2015-2017), and State Minister, Eran Wickremaratne, MP, or Dr. de Silva, can explain the circumstances leading to the procurement of such a massive amount of ISBs, during that time, and nothing tangible to show in return, unlike the Rajapaksas, who carried out many development projects, while prosecuting a crippling war to a successful conclusion against the contrary advice of so-called experts.

Therefore, the ongoing negotiations with the IMF, and Sri Lanka’s bilateral donors, meant to pave the way for USD 2.9 bn Rapid Financial Instrument (RFI), shouldn’t be considered something extraordinary. The UNP’s track record, pertaining to managing the national economy, too, is dismal. Can the UNP and its offshoot the SJB absolve themselves of responsibility for the 2015 and 2016 Treasury bond scams and the dilution of the Exchange Control Act in 2017? (State Finance Minister Ranjith Siyambalapitiya recently told the writer that the weakening of the Exchange Control Act meant clipping the Central Bank of its regulatory powers.)

All SJB MPs, including its leader Sajith Premadasa, served the Yahapalana administration, and the break-up of the UNP happened in early 2020. Had the then President Gotabaya Rajapaksa’s government negotiated with the IMF, in early 2020, as advertised by the lending body, perhaps the much respected wartime Defence Secretary could have avoided his calamitous exit. Dr. de Silva had been one of those who repeatedly pushed the Rajapaksa administration to seek the IMF’s intervention or face the consequences. But those who had the ear of President Gotabaya Rajapaksa, ensured the government refrained from seeking the IMF’s assistance, until it was too late.

Perhaps those at the helm would have expected both China and India, in competition, to throw lifelines to rescue Sri Lanka, but with Basil increasingly sailing the Lankan ship of state towards US and West in lockstep with New Delhi, Beijing literally called it quits. But now with India clearly showing the West that it is no vassal of any power bloc, may be both China and India can help stabilise and strengthen Sri Lanka. In fact, solid Sri Lanka will be an asset to New Delhi with our historic cultural, linguistic and religious links with the sub-continent.

However, no less than the Governor of the Central Bank, Dr. Nandalal Weerasinghe, told Parliament how the then Prime Minister Mahinda Rajapaksa, who also served as the Finance Minister, ignored warnings of the impending financial crisis of unprecedented magnitude.

The disclosure was made during the proceedings of the Committee on Public Enterprises (COPE) on May 25, 2022.

Dr. Weerasinghe didn’t mince his words when he told the parliamentary watchdog committee how the then Governor, Prof. W.D. Lakshman, and Treasury Secretary, S.R. Attygalle, received warning from the IMF that Sri Lanka couldn’t procure assistance unless the government undertook an immediate debt restructuring programme. Dr. Weerasinghe declared that the IMF made its position clear after quite rightly asserting that Sri Lanka lacked debt sustainability. The CBSL Chief’s revelation prompted the then COPE Chairman Prof. Charitha Herath to call the government’s failure a crime.

Having received his letter of appointment, on April 07, 2022, Dr. Weerasinghe, over the past eight months ,laid bare the truth. Appearing before the parliamentary watchdog committees, on several occasions, and a special talk delivered on August 31, after Wickremesinghe, in his capacity as the Finance Minister, presented an interim budget, the intrepid official told lawmakers what no one had dared to tell them before.

His message was clear. Political parties have collectively ruined the economy. Recognise the failure on their part without further delay, take immediate remedial measures or face the consequences. Dr. Weerasinghe warned that the next round of protests could be far worse than the first that forced Gotabaya Rajapaksa to give up his presidency.

A negligent Parliament

Declarations made in Parliament, when examined against the backdrop of an utterly corrupt political party system, can help the public to comprehend how those who had the ear of the powers that be exploited even the revenue gathering mechanism.

Media and Transport Minister Bandula Gunawardena should be urged to disclose those who perpetrated the massive sugar tax scam that actually caused a catastrophic impact on Gotabaya Rajapaksa’s administration. It simply ruined the President’s reputation.

What the former Trade Minister revealed in Parliament, on Dec. 09, pertaining to the sugar tax scam (reduction of duty on sugar imports) implicated the then President in a horrendous fraud that deprived the Treasury of billions of rupees in taxes. Even Gunawardena, too, should be held responsible as he, as the Trade Minister and a member of Gotabaya Rajapaksa’s Cabinet, cannot absolve his culpability. Why did he wait so long to tell the truth?

Let me repeat what Minister Gunawardena told the House on the particular day. Former much-sought-after economic tuition master underscored the need to identify ‘economic assassins’ without pointing the finger at Presidents Gotabaya Rajapaksa and Mahinda Rajapaksa. The Colombo District lawmaker said that there was no point in holding ministers responsible for the ruination of the economy. Gunawardena stressed the need to ascertain what really happened to the country.

Obviously, the lawmaker is making a fool of himself. How can the President, who is the constitutional head of the Cabinet-of-Ministers absolve himself of ill-fated decisions? Having first entered Parliament, in 1989, on the Mahajana Eksath Peramuna (MEP) ticket, and later having crossed over, served in the UNP-led government as the Finance Deputy Minister (2001-2004), lawmaker Gunawardena, too, must admit he is part of the corrupt system.

Referring to those who held the Finance portfolio, over the years, Minister Gunawardena said: “Ministers simply read out what was provided by officials (at the Finance Ministry). People think Ministers can decide on anything. But, that is not the reality.”

Speaking of the sugar tax scam, perpetrated in Oct. 2020, Minister Gunawardena said that he was at the Narahenpita Abhayaramaya when he heard the decision to reduce the tax on a kilo of imported white sugar, from Rs. 50 to 25 cents. In spite of being the Trade Minister at that time, lawmaker Gunawardena hadn’t been aware of the move until the media made the announcement. “During Cabinet proceedings, I strongly opposed the reduction of the sugar tax. I insisted the reduction of the sugar tax to 25 cents was wrong. But, President Gotabaya Rajapaksa was told by his advisors not to rescind that decision. Regardless of my opposition, they urged the President to stand by the reduction of the sugar tax to 25 cents.”

Minister Gunawardena looked quite silly repeating what Health Minister Keheliya Rambukwella said about the role played by R. Paskaralingam and Charitha Ratwatte during the previous administrations.

Minister Gunawardena said: “The people do not know the truth. SLFP General Secretary, Dayasiri Jayasekera, MP, reminded Minister Gunawardena how he, as a member of the then Joint Opposition, vigorously opposed the tax formula implemented by the Yahapalana administration. Having worked overtime to sabotage the revenue collection process, Gunawardena was now singing a different tune, MP Jayasekera declared.

What Minister Gunawardena didn’t say in Parliament, on that day, was that Finance Minister Mahinda Rajapaksa, too, had been with him when the media announced the slashing of sugar tax to 25 cents. When inquired, Mahinda Rajapaksa, too, has claimed he hadn’t been aware of the move. On the advice of Bandula Gunawardena, a Trade Ministry official has phoned the Secretary to the Treasury, S.R. Attygalle, to inquire about the development. Attygalle has promptly confirmed the decision.

Now that President Wickremesinghe has suggested an inquiry to ascertain the economic meltdown, sugar tax scam, too, can be examined. A Presidential Commission/Parliamentary Select Committee can question Minister Gunawardena regarding the sugar tax scam.

The following are some pertinent questions (1) If Mahinda Rajapaksa hadn’t been aware of the sugar tax reduction, who ordered the issuance of gazette. dated Oct. 13, 2020, pertaining to the sharpest ever decline in duty? (2) Had that been effected, without Finance Minister Mahinda Rajapaksa’s approval, why didn’t he reverse it? (3) Would Bandula Gunawardena name those who advised President Gotabaya Rajapaksa to maintain duty at 25 cents a kilo of white sugar (4) Did Bandula Gunawardena, at least, privately brief the then Chairman of Public Finance Committee, Anura Priyadarshana Yapa, of the sugar tax scam? (Gunawardena couldn’t have been unaware of the public condemnation of the sugar tax scam by lawmaker Yapa.) And (5) did Gunawardena criticize the issue at hand before his Dec. 09 speech in Parliament? And, perhaps, lawmaker Gunawardena can honestly explain his stand on his former Cabinet colleagues, Vasudeva Nanayakkara, Wimal Weerawansa and Udaya Gammanpila moving the Supreme Court against the New Fortress Energy deal, finalised on the night of Sept. 17, 2021, during Basil Rajapaksa’s tenure as the Finance Minister (June 2021-April 2022).

In spite of the summary dismissal of the case, the former ministers proved a point. Having turned a blind eye to years of skullduggery (condoned waste, corruption, irregularities and deliberate mismanagement), they had finally realised the ugly truth. The Cabinet-of-Ministers is not infallible. It can be corrupted.

The sugar tax scam and New Fortress Energy deal are just two of the high profile ‘transactions’ that received the blessings of the executive.

Perhaps State Finance Minister Ranjith Siyambalapitiya should look into Minister Gunawardena’s Dec. 09 declaration. Having vowed to recover the losses caused by the sugar tax scam, the SLFPer cannot ignore the accusations made by President Gotabaya Rajapaksa’s advisors. Was Bandula Gunawardena also referring to those who had been faulted by the then Finance Minister, Ali Sabry, PC, for the economic ruination? In an interview with Swarnawahini, in early June, this year, following his return from Washington where he led the delegation for talks with the IMF, the outspoken Minister alleged the Secretary to the Treasury, Governor of the Central Bank, and senior economic advisor/advisors to the President, misled the Cabinet-of-Ministers as regards the economic situation.

Prof. W. A. Lakshman (Dec. 2019-Sept 2021) and Ajith Nivard Cabraal (Sept. 2021-March 2022) served as Governors of the CBSL, S.R. Attygalle served as Secretary, Ministry of Finance (Nov 2019-April 2022), whereas veteran financial wizard Dr. P. B. Jayasundera functioned as Secretary to the President (Nov. 2019-Dec. 2021).

Exactly a month before Bandula Gunawardena’s Dec. 09 disclosure, State Minister Siyambalapitiya told Parliament that he would recover 30 percent of the Rs 16 bn loss in tax revenue, suffered as a result of sugar tax scam. The Kegalle District lawmaker assured Parliament that hereafter one person wouldn’t be allowed to take such decisions. Was Siyambalapitiya referring to the Finance Minister or Secretary to the Treasury or someone else?

Siyambalapitiya is on record as having told Parliament that 10 sugar importers benefitted from the tax reduction. One of them imported 45 percent of the total sugar imports and during the period of the tax relief received, the largest beneficiary increased sugar imports by a staggering 1,220 percent. The Minister also revealed that in spite of the tax relief state-run Sathosa (under Bandula Gunawardena) suffered losses that ran up to Rs 10 bn by procuring sugar at a higher cost.

Media Minister Bandula Gunawardena should be questioned on this. In spite of knowing the sugar scam, did Bandula Gunawardena allow Sathosa to cause a further loss of Rs 10 bn? The writer was among the journalists the Criminal Investigation Department (CID) wanted to question over the disclosure of a massive garlic racket exposed at the onset of the Gotabaya Rajapaksa administration. Instead of punishing the wrongdoers, the government felt it could suppress the reportage of the fraudulent transactions. At the end, the entire Cabinet-of-Ministers, including the President ended up with egg on their faces.