SPECIAL REPORT : Part 417
Successive governments allowed exporters to keep their USD earnings out of the country. Governments also turned a blind eye to people sending back money through illegal means (black market), especially with the help of private foreign currency dealers whatever the USD rate is. Basil Rajapaksa, during his short stint as the Finance Minister, went to the extent of commending the black market route much to the surprise of his colleagues. A British and Sri Lankan passport holder says Sri Lanka paid a huge price for turning a blind eye to what was happening. The promotion of the black market, at the expense of the banking system, cannot be condoned under any circumstances, he says, and those responsible should be named and shamed.
By Shamindra Ferdinando
INS ‘Gharial’–a Landing Ship Tank of the Indian Navy-arrived at the port of Colombo on the morning of April 29 amidst the worst ever economic-political-social crisis experienced in post-independence Sri Lanka now threatening to plunge the country into chaos. The vessel brought a large consignment of drugs and other medical supplies required by Sri Lanka as the country struggled to maintain it’ashealth services.
The delivery of Indian medical assistance highlighted the pathetic failure of the incumbent dispensation to meet the basic needs of the population. INS ‘Gharial’ left for the Maldives at 4:30 pm on May Day.
Prof. Channa Jayasumana, in his capacity as the Health Minister accepted the Indian medical supplies onboard the Indian LST. Indian High Commissioner Gopal Baglay was there to welcome the Health Minister. Prof. Jayasumana recently succeeded Keheliya Rambukwella following the massive violent explosion of public anger at President Gotabaya Rajapaksa’s private residence at Pengiriwatta, Mirihana, on March, 31 over the economic fallout.
Rambukwella continuously dismissed claims pertaining to the shortage of drugs and other medical supplies at State-run hospitals. Therefore, the Minister maintained that as sufficient supplies had been available there couldn’t be a shortage of drugs and medical supplies.
Having been twice elected to Parliament from the Kandy electoral district, Rambukwella switched his allegiance to the then President Mahinda Rajapaksa during his first term. Media Minister Rambukwella succeeded Health Minister Pavitradevi Wanniarachchi, in August 2021, in a mini-cabinet reshuffle that also conveniently removed Dullus Alahapperuma from the Energy Ministry to facilitate the controversial deal on the Yugadanavi power station.
Separate statements, issued by the Indian High Commission and the Health Ministry following the handing over of the Indian supplies, exposed how the Health Ministry tried to cover up a serious shortage of drugs and medical supplies at the Peradeniya Teaching Hospital.
The statements issued by the Indian High Commission clearly stated that the consignment of drugs and medical supplies, delivered on April 29, were meant for the Peradeniya Teaching Hospital whereas the Health Ministry statement made no reference at all to the Peradeniya hospital crisis that was first reported on March 29, 2022, during Indian External Affairs Minister Dr. S. Jaishankar’s visit to Colombo.
The Indian HC statement stressed several important issues (1) Indian Navy ship was especially deployed to ensure the expeditious delivery of the medical consignment, a gift from the people of India (2) The delivery was in response to a request from the Peradeniya Teaching Hospital after Dr. Jaishankar’s intervention after hearing difficulties experienced by hospital authorities (3) India has received more specific requests from Sri Lankan state hospitals and now is in the process of scheduling dispatches and (4) Of the USD 1 bn credit line provided by India to Sri Lanka, USD 200 mn has been allocated for the supply of drugs and medical supplies.
Let me reproduce verbatim the last paragraph of the Indian HC statement that dealt with the overall assistance provided so far this year. Eldos Mathew Punnoose, head of Press, Information and Development stated: “India has been extending expeditious support to Sri Lanka in the recent past.
Overall economic assistance which stands close to USD 3 billion in 2022 alone has been of various kinds:
USD 1 billion credit line for essentials; USD 500 million credit line for purchase of petroleum products; USD 400 million bilateral currency swap; and over USD 1 billion under the Asian Clearing Union Framework. The USD 1 billion credit line is operational and 16,000 MT of rice has already reached Sri Lanka, among other items, under this credit line.”
Why did India fund the development of Most Ven. Maduluwawe Sobitha Thera village Elapathagama in the Anuradhapura district during yahapalana administration? India made available Rs 300 mn for the project, launched in memory of the late Ven. Maduluwawe Sobitha, the architect of Mahinda Rajapaksa’s defeat at the 2015 presidential election. Karu Jayasuriya, who sought Indian assistance, in his capacity as the Speaker today heads the National Movement for Social Justice (NMSJ) the brainchild of the late Ven. Sobitha.
Jayasuriya, who poses as a Mr. Clean in local politics, always clad in immaculate white clothing, owed an explanation as to why he sought foreign funding for a political project. No point in finding fault with India for seeking to enhance its clout. The Indian project seems on track and facilitated by the deterioration of Sri Lanka’s national economy.
Tamil Nadu Chief Minister M. K. Stalin, too, sought to take advantage of the situation. Sri Lanka shouldn’t be surprised the way the State government unanimously passed a resolution urging “the central government to positively consider the request of the Tamil Nadu Government to immediately send food and other essential commodities including lifesaving medicines from Tamil Nadu, to the people of Sri Lanka, who are facing severe hardships; Stalin cannot be unaware of the Indian assistance programme.
We also should not forget the fact that arch villain in the US State Department, responsible for many a bloody regime change around the world, especially in the toppling of the legally elected government in Ukraine in 2014, where she was seen handing out sweets in the streets of Kiev, while the US instigated maidan rebellion was in full swing there, led by Nazis, was here recently.
India’s great generosity could be due to it seeing a hidden Western hand in the burgeoning problems here. Already the West has taken up the human rights club to hammer India with over Kashmir no sooner New Delhi refused to toe the one sided Western narrative on Ukraine, while they have had no qualms about atrocities committed in Yemen and elsewhere, with their blessings.
While we don’t condone even for a moment some utterly imbecile decisions of this government that have exasperated the country’s problems, yet at the same time we can’t help in suspecting a Victoria Nuland led American plot here. Did she come here to give the go ahead to a bloody regime change with willing local quislings, especially among the Western funded NGOs? Don’t forget the fact that former US Secretary of State John Kerry foolishly crowed publicly about how they funded the regime change here in 2015!
At the mercy of foreign countries
The incumbent government obviously let down the people. Having repeatedly promised to do better than the previous administration, accused of twice robbing the Central Bank and betraying the war-winning military at the Geneva-based United Nations Human Rights Council, the Sri Lanka Podujana Peramuna (SLPP) within two years presided over the collapse of the national economy. It was no doubt speeded up by the successfully drying up our worker remittances (billions of dollars) by an underground banking network. Here again our intelligence failed us badly.
The Indian statement that dealt with the pathetic state of Sri Lankan hospitals should be examined against the backdrop of how the current dispensation pleaded with the international community to help run state hospitals.
Indonesia, in consultation with the World Health Organization (WHO) offered essential medicines and medical equipment worth USD 1.6 mn. Altogether 3.1 tonnes of humanitarian assistance was to be delivered in two batches-the first arrived in Sri Lanka on April 28 and the rest will be on May 08. Sri Lanka received a cheque for 700,000 Thai Baht. The Sri Lankan mission in Bangkok, in a statement issued on April 29, quoted President of the National Assembly and Speaker of the House of Representatives of the Kingdom of Thailand, Chuan Leekpai as having said 700,000 Thai Baht was not much, but the gesture represented a feeling of true friends, helping each other in difficult times.
Italy, too, announced emergency aid to the tune of Rs 125 mn (341,115 Euros) to procure drugs and medical supplies. The Italian mission in Colombo said that their contribution would be channlled through the Italian Bilateral Emergency Fund at the World Health Organization (WHO) to allow payment to suppliers abroad directly as per planned procurement by the Ministry of Health in line with supply-chain management processes.
The Foreign Ministry announced that the International Committee of the Red Cross, too, has assured drugs and medical supplies and even humanitarian assistance whereas cash-strapped Sri Lanka engaged in a desperate exercise to procure essentials. The failure on the part of the Rajapaksas to come to terms with the reality has further deteriorated the overall outlook. The crisis rapidly developing at the network of state and private hospitals has been publicly acknowledged by Prof. Jayasumana whose appearance at an Indian Navy vessel that brought in drugs and other medical supplies reminded Sri Lanka utterly corrupt and inept political party system that they were only good at one thing. That was to rob the country. The Opposition is no better in having staged two daylight Central Bank robberies and those same MPs, who did their best to whitewash those crimes have no shame in now pointing the finger at the present rulers.
Since the forex crisis curtailed imports, including petroleum products, lawmakers and officials appeared with Indian High Commissioner Baglay and other officials at various occasions. Energy Minister Udaya Gammanpila and his successor Gamini Lokuge appeared with Indians when India delivered petroleum products. Then there was another picture of humiliation when trade officials, including Trade Secretary,
Bhandrani Jayawardhana received a consignment of Indian rice. As the situation deteriorates further Sri Lanka would go down further under debt as a result of 30 years of continuous mismanagement of the national economy by those elected by the people.
China-Lanka relations at a crossroads
Chinese Ambassador in Colombo Qi Zhenhong didn’t mince his words when he expressed concerns over Sri Lanka entering into a dialogue with Washington-based International Monetary Fund (IMF). Declaring that China is ‘sad’ over Sri Lanka’s move Qi Zhenhong, addressing the media at the Cinnamon Grand on April 25, faulted the latter over its strategy.
Having worked closely with Sri Lanka throughout the war against separatist Tamil terrorists, China is obviously annoyed and disappointed over the latest developments though they were not really surprising.
The India backing for Sri Lanka at the IMF must have compelled China to rethink its overall strategy vis-a-vis Sri Lanka. US ally India backing Sri Lanka at the IMF is clearly in line with the overall Western strategy pursued by ‘Quad’ comprising the US, Japan, Australia and India.
Ambassador Qi Zhenhong side-stepped a media query on Sri Lanka seeking IMF intervention at a media briefing at the Kingsbury on March 21. The Chinese envoy revealed Sri Lanka’s request for funds amounting to USD 2.5 bn, in addition to USD 2.8 bn obtained since the global Covid-19 pandemic eruption in early 2020. Subsequent media queries forwarded to the Chinese Embassy, in respect of Sri Lanka’s request for 1.5 billion US dollars in buyer’s credit and another billion-dollar loan, didn’t yield a positive response.
Obviously with the advent of Basil Rajapaksa, the dual US citizen and his pro-American line (read Yugadanavi deal concluded at midnight in utter secrecy, for example) the China’s distancing from us began.. When we were fighting the war with the separatist terrorists, the West always tried to trip us and it was China that stood by us. Actually by helping us to fight separatist terrorists Beijing did India a great favour as the real target of the West has always been the breakup of India.
The besieged government fighting for its survival even at the expense of Prime Minister Mahinda Rajapaksa may not know yet or haven’t examined the issues at hand in depth. What would be the consequences of Sri Lanka’s dialogue with the IMF? One of the key issues that had emerged since Ambassador Zhenhong’s April 25 media briefing is whether China would turn down Sri Lanka’s request for USD 2.5 bn or can Colombo do away with the Chinese funding and be at the mercy of the IMF?
The Chinese Ambassador called the second media briefing two weeks after newly appointed Governor of the Central Bank Dr. Nandalal Weerasinghe announced Sri Lanka would suspend payments on its foreign debt and initiate negotiations with creditors.
The IMF has declared that Sri Lanka’s debt is not sustainable or cannot be repaid with macro-economic adjustments involving rate and tax hikes alone and debt had to be restructured to reduce the gross finance need to a manageable level. China believes Sri Lanka is on the wrong path.
Sri Lanka needs to discuss contentious issues with China. It would be pertinent to ask whether Sri Lanka’s decision to enter into a dialogue with the IMF had been discussed with China the way Sri Lanka secured India’s backing for the move. Or did India advice Sri Lanka to take its woes to the IMF? Sri Lanka needs to set the record straight without further delay. Sri Lanka-IMF dialogue appeared to have dealt quite a serious blow to China-Sri Lanka relations and the failure to address China’s concerns may cause irreparable damage.
During yahapalana administration, also on the request of Speaker Karu Jayasuriya, China arranged the entire parliament to visit China. China also provided laptops to members of Parliament and senior officials.
Perhaps Justice and Finance Minister Ali Sabry’s recent meeting with the Chinese Ambassador must have helped stabilize the situation.
Galle Face uproar
The continuing political crisis against the backdrop of economic fallout continues to attract foreign attention. For over three weeks, the government has struggled to contain the volatile situation and the continuing large scale protests opposite the Presidential Secretariat and Prime Minister Mahinda Rajapaksa’s office/residence at Temple Trees, indicate the deterioration. To make matters worse for the government, the Maha Sangha has issued an ultimatum to Prime Minister Mahinda Rajapaksa to resign forthwith to enable consensus among political parties represented in Parliament. The ultimatum was issued the day after a top Australian diplomat received a briefing on the developments from the Foreign Secretary, Admiral Prof. Jayanath Colombage.
The unprecedented challenge to the government has received the attention of First Assistant Secretary, North and South Asia Divisions of the Department of Foreign Affairs and Trade of Australia, Gary Cowan when he met Colombage at the Ministry of Foreign Affairs.
First of all, the Foreign Ministry claim that the crisis was solely due to the Covid-19 pandemic cannot be accepted. Australia, being a ‘Quad’ member, is fully aware of the developments here and it would be nothing but silly to pretend Covid-19 alone caused the current economic crisis. The declaration that the government and President Gotabaya Rajapaksa were prepared for a solution in terms of the Constitution, too, cannot be taken seriously as the situation has reached a critical point, with the public demanding the resignation of both President Gotabaya Rajapaksa and the entire Cabinet of Ministers, including Prime Minister Mahinda Rajapaksa. There is no doubt that reference has been made to law enforcement personnel opening fire on those who blocked the main railway line at Rambukkana.
In spite of strong relations between the two countries, Australia is among those who punished the war-winning Sri Lankan military on the basis of unsubstantiated allegations, obviously towing the Western Line, dictated by Washington and London. Perhaps, the Foreign Ministry should have politely inquired as to how and on what basis Maj. Gen. Chagie Gallage was categorised as a war criminal and deprived of visa during the yahapalana administration. The Australian official was here to mark the 75th anniversary of the establishment of diplomatic ties between Australia and Sri Lanka.
The government seems to have conveniently ignored the ground situation. Former Foreign Affairs Minister and the leader of the Mahajana Eksath Peramuna (MEP), that has aligned itself with the SLPP on May Day declared the ruling party was still in control. Addressing supporters at Nugegoda, lawmaker Gunawardena emphasised that they formed a government not to quit in the face of protests. The MEP leader declared that the SLPP, and those aligned with the ruling party, had the mandate, both in and outside Parliament. The Chief Government Whip reiterated the commitment of President Gotabaya Rajapaksa, Premier Mahinda Rajapaksa and Members of Parliament to the government, amidst about one third of those elected on the SLPP ticket demanding the immediate resignation of the entire Cabinet of Ministers, including the Prime Minister. The absence of President Rajapaksa, the Premier, as well as the founder of the SLPP, Basil Rajapaksa, at the event, underscored the crisis the ruling coalition is faced with. The MEP leader appeared to have conveniently forgotten the government has suffered irreparable damage, therefore, incapable of exercising any political power.
