SPECIAL REPORT : Part 403
By Shamindra Ferdinando
Media Minister Dullas Alahapperuma over the last weekend quite clearly criticised the government’s much-touted Rs 229 bn relief package.
Matara District lawmaker Alahapperuma is the first SLPP Cabinet Minister to do so.
The journalist-turned-politician didn’t mince his words when he declared that the financial package failed to address the grievances of the population at large, though it provided relief to the public sector, pensioners and Samurdhi beneficiaries. Alahapperuma received the media portfolio in August 2020. Previously, he held the power portfolio but was shifted before the finalisation of the Yugadanavi deal, now challenged in the Supreme Court.
The Minister was addressing a gathering at the Thihagoda Divisional Secretariat.
The lawmaker emphasised the failure on the part of the government to take the public into confidence and the responsibility of the Cabinet members and the officials to speak the truth.
The lawmaker emphasised the failure on the part of the government to take the public into confidence and the responsibility of the Cabinet members and the officials to speak the truth.Emphasising the pathetic response of politicians, ministers and members of Parliament in the face of unprecedented and daunting challenges, lawmaker Alahapperuma issued a dire warning. Unless those who had been elected by the people made a genuine effort by making much needed sacrifices, the public would simply dismiss politicians as a set of crazy men.
Pointing out that public servants were a fraction of the population, lawmaker Alahapperuma questioned the suitability of the financial package announced by his Cabinet colleague Basil Rajapaksa, in his capacity as the Finance Minister. MP Alahapperuma reminded that the vast majority of people struggling to make ends meet, wouldn’t receive any relief. Therefore, the whole purpose of the financial package announced at a time when the country was experiencing severe economic pressure didn’t address overall public concerns.
The Media Minister also referred to Power Minister Gamini Lokuge’s declaration that there wouldn’t be power cuts whereas the General Manager, CEB, quite clearly indicated the real situation. Referring to social media, Alahapperuma, who had held important portfolios in the cabinets of Chandrika Bandaranaike Kumaratunga and Mahinda Rajapaksa underscored the responsibility on their part to tell the truth as the media couldn’t be suppressed.
Alahappeuma’s criticism of the Rs 229 bn relief package indicated that it hadn’t been properly discussed at the Cabinet level. Had it been deliberated at Cabinet level, perhaps MP Alahapperuma and some other ministers would have expressed their concerns. Perhaps, the media should raise this issue at the next post-Cabinet media briefing, chaired by Minister Alahapperuma, in his capacity as the Cabinet Spokesperson.
In addition to Minister Alahapperuma, Ministers Dr. Ramesh Pathirana and Udaya Gammanpila function as co-Cabinet spokespersons, though the latter had missed quite a number of briefings over the past few months. Mohan Samaranayake attends the briefing, in his capacity as the Director General, Government Information Department.
This week’s post-Cabinet briefing is scheduled for today (19) in view of President Gotabaya Rajapaksa opening the new session of Parliament yesterday.
It would be pertinent to mention that lawmaker Alahapperuma questioned the worthiness of the Rs 229 bn package at Thihagoda, Matara, while Foreign Minister Prof. G.L. Peiris, who is also the Chairman of the ruling SLPP presided over meetings in Galle, Matara and Hambantota, also on the same day to discuss ways and means of achieving the Sustainable Development Goals (SDGs) formulated by the United Nations.
At the Matara event, chaired by Prof. Peiris, Minister Alahapperuma and State Minister Kanchana Wijesekera, too, addressed the gathering. But, Alahapperuma took up the Rs 229 bn package at a separate event at Thihagoda. Since Ministers, Vasudeva Nanayakkara, Wimal Weerawansa and Udaya Gammanpila declared war against the highly questionable Yugadanavi deal in Sept last year, Prof. Peiris repeatedly attacked those who criticised the government policies in the open. The former law professor is of the view that whatever the disagreements, such issues should be taken up at Cabinet, parliamentary group or the party leaders level. Obviously, with the gradual deterioration of the national economy, as a result of the Covid-19 epidemic, unbridled waste, corruption, irregularities and mismanagement, dissenting views are growing within the ruling coalition.
The SDG goals such as education, gainful employment, clean water, safe environment, access to healthcare and protection of women and children are discussed at a time the government is struggling to meet the basic requirements of the public.
Lawmaker Alahapperuma should use the post-Cabinet media briefing today to tell the truth. Take the public into confidence. The country is in such a desperate situation, the SLPP can no longer play politics with the issues at hand.
The forthright stand taken by Minister Alahapperuma against the backdrop of President Gotabaya Rajapaksa stripping Susil Premjayantha of his portfolios for being strongly critical of the SLPP’s agriculture policy, foreign currency crisis and runaway cost-of-living, should be applauded.
USD crisis
Three major groupings, namely the joint trade Chambers, Sri Lanka Chamber of the Pharmaceutical Industry and the Bar Association of Sri Lanka (BASL) recently warned the government of a rapidly deteriorating financial situation. The organisations contradicted the government’s claim of having the situation under control. All primarily blamed the growing foreign currency crisis for the current predicament.
In spite of some difficulties the Sri Lanka Chamber of the Pharmaceutical Industry, the apex pharmaceutical body responsible for the import of more than 80% of the medicines, contradicted the recent Health Ministry denial of medicine shortage. The Chamber of the Pharmaceutical Industry pointed out that the import of medicine is allowed only if the importer had foreign currency and certainly not taking into consideration the requirement. The powerful grouping warned soon there would be serious shortages as the foreign exchange crisis deepens.
Declaring that at the moment, medicines are the only commodity coming under price control, the Chamber urged the government: “There is no solution to this dilemma than removing the price control of medicines and implement a fair and equitable pricing mechanism which will link the price of medicines to the USD, inflation and direct costs such as raw material, fuel and freight charges, which will make the importing and marketing of medicines viable. As difficult as it may sound, the authorities will have to choose between having medicines at a cost and not having medicines at all.”
Overall, the joint trade Chambers, Sri Lanka Chamber of the Pharmaceutical Industry and the Bar Association of Sri Lanka (BASL) painted a bleak picture. The government owed an explanation as to why the Finance Ministry announced a Rs 229 bn relief package at a time the current dispensation was struggling to cope up with an extremely weak financial status.
The country hasn’t been in such a desperate situation even at the height of the war though the Liberation Tigers of Tamil Eelam (LTTE) made determined efforts to cripple sea supply routes. Over 12 years after the successful conclusion of the war, the national economy is on the brink. Debilitated Sri Lanka has been compelled to continuously seek assistance from both China and India regardless of consequences. Having lived beyond our means over the past couple of decades, the country now finds itself bogged down in an economic quagmire. Recent deliberations with China and India as regards multiple financial assistance underscored the crisis the country is in.
The government should consult the Opposition regarding Sri Lanka’s response to the crisis. In fact, the government shouldn’t work on the issue at hand alone but initiate a dialogue with the Opposition. Those represented in Parliament should seek a consensus on a rescue operation regardless of whatever differences they have on other matters.
The proposed new Constitution, inclusive of electoral reforms, postponed Local Government polls and law reforms based on the controversial ‘One Country, One Law’ concept seemed irrelevant as the basic supplies are interrupted in the absence of sufficient foreign currency.
A new phase in foreign relations
Sri Lanka recently appealed for further Chinese and Indian assistance. President Gotabaya Rajapaksa requested China to help restructure debt repayments as part of the efforts to help Sri Lanka weather the deepening financial crisis.
The request was made during a meeting with Chinese Foreign Minister Wang Yi at the Presidential Secretariat on January 09, 2021. In spite of repeated assurances given by Central Bank Governor Ajith Nivard Cabraal that foreign financial obligations would be met, the Opposition and some financial experts are on record as having said the country is on the verge of default, according to analysts.
“The President pointed out that it would be a great relief to the country if attention could be paid to restructuring the debt repayments as a solution to the economic crisis that has arisen in the face of the COVID-19 pandemic,” the President’s office said in the statement.
China is Sri Lanka’s fourth biggest lender, behind international financial markets, the Asian Development Bank (ADB) and Japan.
Sri Lanka has to repay about $4.5 billion in debt this year starting with a $500 million International Sovereign Bonds (ISB) which matured on Jan. 18 (yesterday). Central Bank announced that it was settled.
Although the Chinese Ambassador in Colombo Qi Zhenhong refrained from revealing China’s stand on Sri Lanka request when he met a selected group of journalists at Galle Face Hotel soon after Minister Wang departed, Beijing is very much likely to provide further assistance. Having invested in Sri Lanka in line with the ‘Belt and Road’ initiative and its flagship project Colombo Port City gaining momentum, China will surely throw its weight behind Sri Lanka.
In spite of Western and Indian objections over the years, China has sustained its high profile project in Sri Lanka. The latest development is in the China Harbour Engineering Company’s (CHEC) spearheading the construction role in the second phase of the East Container Terminal of the Colombo Port. Politically influential Access Engineering PLC has teamed up with China Harbour Engineering Company of China Communications Construction Company Limited (CCCC). According to the Colombo Port City website, CHEC Port City Colombo (Pvt) Ltd through China CHEC is part of CCCC. The Chinese enterprise that has been active here since 1998, executed the Southern Highway, Outer Circular Highway, Hambantota Port, Mattala International Airport, Colombo South Container Terminal et al.
An Indian High Commission press release based on a statement issued by the Ministry of External Affairs in New Delhi on 15 January 2022 underscored the unfolding crisis. The press release dealt with a virtual meeting External Affairs Minister (EAM) Dr. S. Jaishankar had with Finance Minister Basil Rajapaksa on January 15, 2022, consequent to Rajapaksa’s visit to New Delhi last month.
Let me reproduce verbatim the relevant sections of the Indian statement: *Dr. Jaishankar conveyed that India has always stood with Sri Lanka, and will continue to support Sri Lanka in all possible ways for overcoming the economic and other challenges posed by COVID-19 pandemic. As close friends and maritime neighbours, both India and Sri Lanka stand to gain from closer economic inter-linkages.
*Both Ministers positively noted that extension of US$ 400 million to Sri Lanka under the SAARC currency swap arrangement and deferral of A.C.U (Asian Clearing Union) settlement of USD 515.2 million by two months, would assist Sri Lanka.
*The two Ministers reviewed the progress in extending the Indian credit facility of USD 1 billion for importing food, essential items and medicine and USD 500 mn for importing fuel from India.
*Mr. Rajapaksa recalled India’s long standing cooperation with Sri Lanka and deeply appreciated the gestures of support. He welcomed Indian investments in Sri Lanka in a number of important spheres, including ports, infrastructure, energy, renewable energy, power and manufacturing and assured that a conducive environment will be provided to encourage such investments. In this context, both Ministers noted that the recent steps taken by the Government of Sri Lanka for jointly modernising the Trincomalee Oil Tank Farm will boost confidence of investors, apart from enhancing Sri Lanka’s energy security.
*EAM brought up the issue of Indian fishermen detained in Sri Lanka. He urged the Government of Sri Lanka to ensure early release of the detained fishermen on humanitarian considerations.
* The two Ministers agreed to remain in close touch for guiding mutually beneficial bilateral economic cooperation towards long-term economic partnership for shared progress and prosperity.
Dependence on foreign powers
As FM Basil Rajapaksa promised, a ‘conducive environment’ has to be ensured for the speedy implementation of the Trincomalee Oil Tank Farm project. The FM cannot be unaware of Ven. Wakamulle Uditha Thera, on behalf of the JVP, moved the Supreme Court against the Trincomalee project. In addition to that petition, prominent Buddhist monks Ven Elle Gunawansa Thera and Ven. Bengamuwe Nalaka Thera, too, have moved the Supreme Court against the Trincomalee deal. Whether we like it or not, Sri Lanka’s position on the Trincomalee Oil Tank Farm as well as large scale poaching by Indian fishermen will be influenced by the growing dependence on India. The proposed agreement on USD 1 bn Indian credit facility to import food, essential items and medicine as well as USD 500 mn for importing fuel from India underscores Sri Lanka’s plight.
Shouldn’t the public be duly informed of the actual situation? In spite of repeated warnings over the impending crisis, the government took an arrogant stand. The SLPP ruled out an arrangement with relevant parties with the intervention of the IMF to restructure loans. Having presented a lacklustre Budget in Dec 2021 for 2022, the SLPP caused a debilitating setback by declaring Rs 229 bn relief package. As former minister D.E.W. Gunasekera recently pointed out in an interview with the Communist Party organ Aththa the entire amount required for the controversial relief package had to be printed at the expense of financial stability. The outspoken former General Secretary of the CP warned of dire consequences due to excessive money printing to finance such political projects. However, Gunasekera had no objection if that vast sum went to increase production in the country. Minister Alahapperuma’s Thihagoda statement is nothing but a clear evidence of growing concerns among those who fear the path the government is treading. Such criticism shouldn’t be ignored.
The bottom line is economically weaker Sri Lanka can be far easily influenced by foreign powers. The Yugadanavi deal with US energy firm promoted by the US Embassy in Colombo as well as the recently signed agreement on the Trincomalee Oil Tank Farms or the growing Chinese role here have to be considered against the backdrop of the confrontation between China and Quad alliance the (US, India, Japan and Australia).
