Columns

• Forming a stable government after the elections and reviving the economy will get top priority
• SLPP and main opposition parties begin their campaigns in a small way; pledges to follow health guidelines; manifestoes being prepared
• Central Bank acts fast after Governor and top officials get a public blast from President

By next week, the number of infected cases is expected to reach the 2,000 mark. However, that is not to say that all is well and good for Sri Lanka. If the fight against the horrendous scourge has led to no clusters remaining, returnees from abroad are adding to the total. The accompanying challenges in different spheres are mounting. Some are turning out to be toxic pin pricks which could rise to newer heights in the weeks and months to come. For the common people, it simply means more precautionary measures and belt tightening even further as the economy takes a hard beating.

This week, 8.3 million people worldwide were affected by the deadly virus. India registered 12,281 cases in just one day, its highest so far. Its southern state of Tamil Nadu is on a lockdown again as the number of cases rose to more than 55,000. That such a development would impact on Sri Lanka in many ways is to say it mildly. Tourist arrivals will dwindle and curbs in trade could follow.

And now, both Indian and Chinese troops have clashed high up in the Galwan Valley beyond Ladakh in the Himalayas. India said 20 soldiers including an officer were killed. A further ten who were captured were later returned. This major incident, the worst since 1967, sparked outrage in India. Premier Narendra Modi came under pressure to retaliate. He consulted leaders of political parties to reach consensus on a response to the alleged incursion by Chinese troops.  Exacerbating feelings was live coverage of the military funerals on television. A new campaign to boycott Chinese made goods to India is under way whilst the Indian Railways cancelled a large contract for rolling stock. Military top brass from both sides are locked in discussion to de-escalate the crisis. China, on the other hand, has accused Indian troops of ‘aggression’ – a charge which New Delhi denies and blames Beijing’s troops.

The growing tensions between the two nuclear neighbours would impact Sri Lanka. Soon after his election at the presidential polls in November, last year, the first to speak to President Rajapaksa was Premier Modi. This was even before he took his oaths. Rajapaksa’s first official visit was to India, just two weeks after his election. Modi was to become the first foreign head of state to visit Sri Lanka, but Covid-19 put paid to it.

Then followed Prime Minister Mahinda Rajapaksa’s visit to New Delhi in February this year. Significantly, he urged Premier Modi to extend a moratorium on loans to Sri Lanka. Even before the advent of Covid-19, it was clear an economic crisis was looming large. “Five years of Yahapalana (good governance) rule and the fallout from the Easter Sunday bombings were causes,” Premier Rajapaksa told the Sunday Times in an interview. See box story for interview.

In May, President Gotabaya Rajapaksa telephoned Premier Modi in New Delhi. In that conversation he urged the Indian Premier to provide US$ 1.1 billion SWAP facility by increasing the current US$ 400 million limit. Though the limits are placed in US dollars, the arrangement covers amounts equivalent to both Indian and Sri Lankan currencies. Ties between Colombo and New Delhi turned out to be just as good as the previous Sirisena-Wickremesinghe government if not much better.

This week, Sri Lanka voted at the United Nations in New York for India to become a temporary member of the Security Council. This is despite lobbying from Canada and Norway. India received 184 votes from 192 countries that voted. In a surprising development, Colombo-based diplomatic sources said, Sri Lanka refrained from voting when three WEOG (West European and Other Groups) vied for two seats in the Security Council. The contenders were Canada, Ireland, and Norway. This did raise some eyebrows among some western diplomats in Colombo.

On the other hand, China, which has helped with military hardware throughout the separatist war, has maintained close ties with the Rajapaksas. It funded the Hambantota Port project and the Mattala Mahinda Rajapaksa International Airport project among others during the previous Rajapaksa regime. A planned visit to Beijing by President Rajapaksa in April was called off due to the Covid-19 pandemic. Aid for more projects and loans is on the pipeline. Amidst these are fears of a resurgence of the coronavirus as sections of Beijing remain under a lockdown. If the previous outbreak was reportedly from a wet market in Wuhan, this time, reports say, it had been at the meat and seafood sections of the Xinfadi food centre, Beijing’s largest wholesale food market. Needless to say, that Colombo’s diplomatic balancing act both with New Delhi and Beijing now becomes more delicate.

In this scenario, President Gotabaya Rajapaksa is confronted with multi-faceted issues. His immediate twin priorities are the successful conduct of parliamentary elections on August 5 and the immediate resuscitation of the economy. The two issues figured prominently in his actions this week.

He agreed to a meeting with the Election Commission’s three members — Mahinda Deshapriya (Chairman), Dr Ratnajeevan Hoole and Nalin Abeysekera, both members. Assisting President Gotabaya Rajapaksa were Dr P.B. Jayasundera (Presidential Secretary), S.R. Attygalle (Treasury Secretary), J. Ratnasiri, Secretary to the Ministry of Public Administration, and Dr Major General Sanjeeva Munasinghe, Secretary to the Ministry of Health.

The main concern of the EC delegation related to matters arising from the Covid-19 pandemic. They want to convert to law the guidelines given to them by Health Services Director General Dr Anil Jasinghe. This is through a Gazette notification so those violating the provisions could be prosecuted. This, the Commissioners believe, will be a strong deterrent to the poll being disrupted by those defying the guidelines and thus creating fear among other voters.

Another cause for concern was for the EC to make it compulsory for state officers to engage in election duties. A gazette or an official announcement drawing attention to creating provisions under the Establishment Code is to be made. Those violating it could be punished. At present there is no such provision. President Rajapaksa has agreed that the government will meet additional expenses necessitated by the introduction of health guidelines. EC Chairman Deshapriya explained that the election would cost around Rs 7.5 billion, but the additional burden of health measures would raise it to around Rs 10 billion.  Among other matters discussed:

=  Make it mandatory for those returning to Sri Lanka from abroad to undergo 21 days of quarantine.

=  Opening airports for tourists to be carried out after the conclusion of the parliamentary elections.

=  Release of state vehicles for use by state officials.

=  To ensure that state run media (they were identified) adheres to “balanced reporting.”

=  Secure additional stocks of Face Masks and hand sanitizers (Isopropyl alcohol) for use at polling booths.

The EC has already embarked on training programmes with the help of District Secretaries and its own officers in principal towns. However, the campaigns by different political parties are yet to get into high gear. Most candidates are only circulating their messages, symbols, and photographs on the social media so far.

“We are looking forward to forming a government,” declared Premier Mahinda Rajapaksa. He told the Sunday Times, “We also need to provide the best legislative support to the President to take forward the proposals contained in his presidential election manifesto “Vistas of Prosperity” which has received an overwhelming mandate. Everyone who has any understanding of economics knows that what President Gotabaya Rajapaksa inherited from the Yahapalana government in November last year was an economy that was in shambles. We had to provide life support to many struggling businesses by reducing taxes. If a business house was worth one billion US dollars in 2014, its value had gone down by about 40% by 2019. You would have seen on television a leading business magnate openly describing the Yahapalana government as a plague (wasangathaya). So, our top priority right now is to put the economy right.” This year marks his fiftieth year as a parliamentarian.

SJB, UNP, TNA, JVP campaigns

Meanwhile, Samagi Jana Balavegaya General Secretary Ranjith Madduma Bandara said, “We are still in the process of making the manifesto. Our leader Sajith Premadasa has planned to hold more than 1000 meetings at electoral level.”

He said that the SJB has started meetings in parts of Colombo, Kalutara and Gampaha. “Our plan is to complete all the electoral level meetings by the end of this month. Our campaign is mostly based on social media platforms, digital and electronic media.”

According to him, the SJB Election Committee comprises Sajith Premadasa, Harin Fernando, Imitiaz Bakeer Markar, Tissa Attanayake, Kabir Hashim and himself.  Asked why former Minister Mangala Samaraweera had chosen not to contest the Matara District on the SJB ticket, he said, “That was his personal decision. He believed that he should resign from parliamentary politics and remain in social politics. He took this move because he could not give his personal and free opinion when he was contesting under the Samagi Jana Balavegaya.

“Samaraweera’s decision is good for him and for the party. His parting from the parliamentary election is an advantage for him and for us,” said Madduma Bandara.

United National Party (UNP) General Secretary Akila Viraj Kariyawasam told the Sunday Times; “We are not yet ready with our manifesto. There are several election campaign related committees appointed. Most of them are media related. The main election campaign committee comprises Leader Ranil Wickremesinghe, Assistant Leader Ravi Karunanayake, Navin Dissanayake and himself, he said. “We are carrying out our campaign in keeping with health guidelines. We will go from house to house and conduct small meetings. We have not finalised a place to have our first meeting. There will be no large rallies. We are still discussing our election promises to the people. “We will not heavily depend on electronic media as that would be a costly move.”

Tamil National Alliance (TNA) stalwart Abraham Sumanthiran told the Sunday Times, “We have already begun our Election Campaign after the date was fixed for the election. Our campaign will be carried out according to state health authority guidelines. We will have more house to house visits. We will make sure that health guidelines are followed. The TNA has planned to have meetings at large open places where people would be able to keep their distance from each other. We are still drawing up the manifesto.”

Janatha Vimukthi Peramuna (JVP) spokesperson Vijitha Herath told the Sunday Times, “We have launched our campaign with small meetings in electorates.  These meetings are held at houses of party supporters. We have limited each meeting to 30 to 40 people. We also held a special educational workshop for active members advising them to carry out campaign according to the advice of health authorities. We will use the manifesto released for the 2019 Presidential election with some amendments.”

President slams CBSL
officials

Last Tuesday saw President Rajapaksa in one of his angriest moments since he became President eight months ago. Showing him livid, recorded video footage went viral on the internet when he reprimanded top officials of the Central Bank of Sri Lanka. (CBSL). That won him plaudits from government circles as well as the private sector which was awaiting its relief package to recover from the debilitating economic damage it had suffered. Yet, there were antagonists who claimed that the Central Bank could not be blamed since it was the duty of the Government to formulate plans. “You cannot blame your accountant if your business is going wrong,” claimed a UNP stalwart who did not wish to be named. However, it turned out that the President’s admonishment had pushed the CBSL into turbo speed to produce results. A video did the rounds of Central Bank lights on in the upper floors on Tuesday night. They were burning the midnight oil formulating urgent measures. First to edited excerpts of the President’s speech last Tuesday:

“The Health crisis cannot be turned into an economic crisis. The Central Banks of both big (powerful) and small countries have taken measures regarding this. The United States Federal Reserve has contributed US$ 600 billion to a programme. Today Australia and Japan would be announcing their donations. Even the small countries near Sri Lanka are also joining in. The US Federal Reserve has committed to use a full range of tools to help the economy through this unprecedented time. What are the tools that we have used? Nothing, the Central Bank of Sri Lanka has not done anything regarding this.

“This should have been done by the Central Bank and the Treasury; they are the ones responsible for monetary and fiscal policy. That should be done according to the economic policies set out by the president. You have many tools for this. However, our Central Bank does not use any tool but stays idle and asleep. We told you to give Rs 150 billion to the local banks. This is not a problem for businesses.  A huge amount of money is needed as a result of past mistakes. Why cannot they keep that money as a security and allow those people to get a loan. Then they can contribute to revive the economy.

“This is about money circulation. It is a simple matter. This is the basics of economics. What are you doing? Your mistakes affect governments. You have not looked into this. Look what had happened to finance companies. It is your responsibility to regulate and manage finance companies. You are not even doing that. You are not even regulating leasing companies. Look at the Edirisinghe Trust and Investments (ETI)  issue; You have done it wrongly. Now, they are unable to pay depositors. We even did not know that ‘The Finance’ (a finance company) is closed and we have to pay for that. You are not managing those matters.

“The ones at the CBSL are economists who get high salaries. What are you doing? You have a responsibility during the crisis, you should not idly sleep. You have to formulate strategies and resuscitate the economy. I have given you a strategy. If you cannot do that you should give me a strategy that you can work out by tomorrow morning.”

“Look at the other countries and what they are doing to save small and medium scale businesses. Why can’t our people do it?  Either some people are trying to put me in trouble or cause issues to the government. I do not need to talk to you like this if you do your duty properly.

“Eight months have passed after I was elected president. From the day I took office we are saying that we will resuscitate the fallen economy. I do not want to talk about the wrongdoings of previous governments. You all know the situation when the Central Bank was robbed. You were the people there. If you could have supported them why don’t you support me and work? People of the country know how we can work with such officials. The people have granted me a mandate to build the country. I only ask you to allow me to do this.

“The whole world is facing the COVID-19pandemic. It had created economic issues for the whole world; we were able to get the country back to normalcy before other countries due to the sacrifices made by the health authorities, the military, intelligence and the police.  Now we need to save the country before it faces an economic crisis. Don’t you think it is your responsibility to submit economic strategies during such a situation? This is a place where all the economists are. What have you done, what advice have you given me? You have done nothing.

“When I devise a plan, you do not allow me to act on it. You block it. I only need to tell this. You give me a plan by tomorrow morning and show how we should overcome this economic situation. Tell me about your tools. Tell me ways on how to energise the economy. How should we help banks and help small and middle scale businesses? If I am wrong, please speak out. Tell me.”

President Rajapaksa’s tough talk to the Central Bank top brass had worked. Within 24 hours, the President’s Office announced, that the Central Bank has introduced new remedial actions to support the Government’s initiatives in reviving the economy. It is clear this reflects divergent positions between the Government and the CBSL.

Here are highlights of a statement the CBSL issued: “The Central Bank has introduced several new remedial actions to support the government’s efforts in reviving the economy, following the advice given by President Gotabaya Rajapaksa to high-ranking official of the Central Bank including its Governor, yesterday (June 16). Disbursement of Rs. 150 billion under the refinance scheme for the benefit of businesses affected by the COVID-19 pandemic is among some of the facilities to be provided by the Central Bank.

“Accordingly, the Central Bank will provide funding to Licensed Commercial Banks (LCBs) at the concessionary rate of 1% against the pledge of a broad spectrum of collateral, on the condition that LCBs, in turn, will lend to domestic businesses at the rate of 4%, while ensuring the best possible distribution of this facility. During yesterday’s meeting held with the Central Bank officials President Rajapaksa has directed them to provide loan facilities to collapsed enterprises under the existing refinance scheme using guarantees issued by the government equivalent to the amount due on account of contracts carried out in the past.

“Accordingly, the Monetary Board of the Central Bank, at its meeting held yesterday, decided to provide funds at concessionary rates using the guarantees. In addition, it has decided to introduce a new credit scheme exclusively for construction sector enterprises. The objective of this initiative is to provide loan facilities at the concessionary rate using the guarantees issued by the government equivalent to the amount due on account of contracts carried out in the past.

“Apart from these measures the Monetary Board of the Central Bank in support of the government’s efforts in reviving the economy, at its meeting held on 16 June 2020, decided to reduce the Statutory Reserve Ratio (SRR) applicable on all rupee deposit liabilities of licensed commercial banks (LCBs) by 200 basis points to 2.00 percent, with effect from the reserve maintenance period that commenced on 16 June 2020…”

Greater awareness of malpractices by some finance and leasing companies surfaced after seizers from one firm in Mirihana beat to death the head of the Professional Three-Wheeler Drivers Association. It is not only such companies that hire seizers. There are also reputed banks which use them to recover dues including non-payment of credit card fees by using illegal methods. Not only those defaulters who are harassed by these goons but also their relatives and friends.

It is time that the government warns banks that such acts under their supervision is both illegal and not in the public interest. Such seizers are usually those from the armed forces, the police who have been sacked for misconduct or known thugs with bad records. There are instances of midnight calls and even assaults to recover money. The banks hire companies that provide such services. There are instances when pressure is used on the Police by these banks when complaints are made.  Banks on the other hand say they have no other legal hold since recoveries are often difficult and after litigation, they receive only small amounts. Only a probe will reveal the degree of the malaise that has taken root.

The challenges before President Gotabaya Rajapaksa’s government are manifold compared with the corruption ridden Yahapalana regime. Not that corruption has vanished altogether. A lot more needs to be done. This is why the August 5 parliamentary elections are more important than previous ones.

MR campaigning to form strong and stable Govt.Prime Minister, Mahinda Rajapaksa, has reached an important milestone – half a century in parliament – where he met with both successes and failures.Easily one of the more popular politicians in Sri Lanka, he was twice President. With his current term, he is also Prime Minister for the second time. Now a grandfather, Premier Rajapaksa kisses Nirvaan, son of Rohitha whilst mother Tatyana is in smiles “I took to politics in the 1960s and entered Parliament in 1970. Sam Wijesinha, the then Secretary General of Parliament and my uncle and kinsman from Giruwapattuwa convinced me to pursue a legal career,” Premier Rajapaksa told the Sunday Times in an interview. Encouraging me in no small measure was one of the country’s then foremost lawyers, Dr Colvin R. de Silva. He was then a minister in our government. “My peers told me that being a lawyer was a useful tool for a parliamentarian. Looking back, I realise that was valuable advice. I made many friends who were to later become politicians,” He said he was an MP in a government that had won two thirds majority in Parliament. Ragging at that time, he noted, was not what it has become today. “I was asked to make a speech” and “what I learnt there held me in good stead,” he added. Here are edited excerpts of the interview: MOST SIGNIFICANT ACHIEVEMENTS AND FAILURES IN HIS POLITICAL CAREER:  I think my most significant achievement was in providing the political leadership to win the war against the Liberation Tigers of Tamil Eelam (LTTE). My predecessors were afraid to make bold decisions and act on them. They tended to buckle under foreign pressure. I take pride in the fact that I was able to assert the political will to resolve an intractable problem that had affected this country for over three decades. I also count as my most significant achievements the building of several important infrastructure projects such as the Norochcholai power plant, the Upper-Kotmale project, the Southern highway, the Hambantota harbour etc which had been on the drawing boards for decades, but no government was able to implement. Many people do not seem to realise that the per capita income of Sri Lanka in US collar terms increased threefold during my nine years as President. The biggest disappointment that I had to face during my political career was the defeat of January 2015. I was betrayed by people I trusted, and thought were my friends. That was a defeat engineered through conspiracies and subterfuge. The entire campaign against me was based on lies. I acknowledge that that defeat came about due to our own weaknesses and shortcomings in certain areas. That defeat has hurt not only me and my followers, but the whole of Sri Lanka. ON BEING A POPULAR POLITICIAN IN SRI LANKA: I like working with people. The people know that, and they respond accordingly. I also have a policy of delivering what I have pledged to the people. I think my popularity among the people is based on these two factors. Even after the defeat of January 2015, the people did not want me to retire from politics. Politics is not just about working with people. One has to choose a good team of administrators, entrust them with responsibilities and get things going. My advice to all young aspirants to political office, will be that success in politics does not come easily. It is full time work. It is also pretty hard work. With school children ON LEADING THE AUGUST 5 PARLIAMENTARY ELECTION CAMPAIGN: We are looking forward to forming a strong SLPP government. We also need to provide the best legislative support to the President to take forward the proposals contained in his presidential election manifesto “Vistas of Prosperity” which has received an overwhelming mandate. Everyone who has any understanding of economics knows that what President Gotabaya inherited from the Yahapalana government in November last year was an economy that was in shambles. We had to provide life support to many struggling businesses by reducing taxes. If a business house was worth one billion USD in 2014, its value had gone down by about 40% by 2019. You would have seen a leading business magnate on TV openly describing the yahapalana government as a plague (wasangathaya). So our top priority right now is to put the economy right. ON THE DEVASTATION CAUSED BY THE COVID-19 PANDEMIC: We were in a tough position even before the Covid-19 outbreak due to five years of Yahapalana misrule and the economic fallout resulting from the Easter Sunday bombings. Now the Covid-19 pandemic has exacerbated the situation beyond measure. Chancellor Angela Merkel of Germany and President Donald Trump of the USA have both gone on record saying that their countries were in a better position to deal with the economic fallout resulting from the Covid-19 pandemic because their economies were doing well when the pandemic hit their countries. The same can be said by our neighbours India and Bangladesh as well. Sri Lanka’s position, however, was quite different, and the reason why this country is still functioning is because we have the best possible team in charge from the President downwards. A resounding victory at the parliamentary elections will help in the economic recovery efforts by helping build stability and confidence. ON CONSTITUTIONAL REFORM AND NON-FUNCTIONING PROVINCIAL COUNCILS: We will need a two thirds majority in Parliament even to revive the provincial councils system. The Yahapalana government made a complete mess of the local government and provincial councils elections systems. The Constitution will also have to be amended. Today, there does not seem to be anything wrong with the Constitution because Gotabaya is the President and I am the Prime Minister. If any political party other than the SLPP had been in power, the President and the Prime Minister would be at war with one another from day one. Constitutional reform is a must and we need a two-thirds majority for that. ON GOVERNANCE AFTER A POLLS VICTORY: This is a country that has been affected by three major calamities one after another. First came the five-year Yahapalana calamity, then the Easter Sunday calamity, and now the Covid-19 calamity. What this country needs above everything else at this moment is a stable government. The Cabinet will be as large or as small as is necessary to form a strong and stable government to take the country forward.