Editorial

While war has broken out in Europe, Sri Lankans seem more focused on their daily battles at home.

Finance Minister Basil Rajapaksa’s suddenly cancelled visit to New Delhi last weekend to clinch the additional one billion dollar emergency aid package has not been rescheduled, yet. Everything is hush-hush. The Indian Foreign Minister had insisted he be present to meet the Sri Lankan Minister; why the Foreign Minister’s presence is required when it is a subject coming under the two Finance Ministers leaves little for guesswork.

This pressure from India may have been the reason for the Government to fast forward, though already very late, the decision to initiate a dialogue with the International Monetary Fund (IMF), seeking a bailout from its current economic crisis. India has also been asking Sri Lanka to utilise the “good offices” of the IMF.

What the IMF said this week after its Board discussed the Sri Lanka Country Report last weekend, however, has turned to be what everybody has been warning this Government about for months; bare economic realities that are being hidden from the people — basically that this country’s economy is on the rocks. In its press release on the country report, the IMF says: Sri Lanka’s public debt has risen to “unsustainable levels” and calls for a credible and coherent strategy to restore macroeconomic stability and debt sustainability.

At the end of a scathing indictment of financial mismanagement, it asks the Government to go fix its debt problems first and then come to the Fund if it wishes to implement a programme for recovery.

Does this mean this country is beyond redemption? It cannot be. No country just falls apart. The people will, no doubt, suffer, as they are right now, but what is crucial for Sri Lanka’s salvation seems to be to embark on a massive coordination effort with international lending agencies like the IMF, the World Bank, the Asian Development Bank and to negotiate with governments, international sovereign bond holders, commercial lenders from whom we have borrowed and need to repay.

For this, the Finance Minister needs smart advisers and skilled negotiators on debt restructuring. And to evaluate their advice clinically, we may have to even look at hiring international experts in addition to local expertise. The Government may have to pay through its nose for such expertise, from international financial restructuring firms and law firms, but options are limited.

Successive Governments of recent vintage have fared miserably in negotiating with foreign entities with whom they have entered into contractual obligations. The country has lost multi-millions of dollars in botched tenders and agreements and political incompetence. It has had to pay with real estate and assets. The Colombo Port City and the Hambantota Port concessions for a mess of pottage were national disasters. Even Parliament never had access to some of these agreements with some foreign Exim Banks.

The Finance Minister cannot, and must not, be left to negotiate alone, however desperate a situation his Government and the country is in. The stakes are far too high for this.

War in Ukraine: Strategic calculations to the fore

Whoever coined the phrase ‘Truth is the first casualty of war’ was telling the truth. And the truth on the war unfolding in Ukraine getting lost in the ‘fog of war’ is no different.

Ukraine is a victim of super-power rivalry. It played ball with the Western Alliance, and as the agent provocateurs fight ‘virtually’, the ‘poor souls’ of Ukraine have to pay with their lives to defend their nation.

Sri Lanka, like India, has remained ‘neutral’ on the issue. Back in 1956, then Prime Minister S.W.R.D. Bandaranaike said during the nationalisation of the Suez Canal and the invasion of Hungary that non alignment did not mean sitting on the fence. In a lengthy statement to the House of Representatives (Parliament) he spoke of ‘dynamic neutralism’ and condemned both the British forces in Egypt and Russian forces in Hungary.

Sri Lanka might as well sit on the fence and watch, like other South Asian nations — India, Pakistan and Bangladesh have done today. There’s nothing much they can do about the war and all Sri Lanka can do is make a point about a big nation violating the sovereignty of a small nation, the point Mr. Bandaranaike made in 1956. But that would be at the expense of antagonising a country like Russia with which it has a large trade in tea and even military hardware and which has been supportive of Sri Lanka at international forums whenever the Western Alliance has ganged up to crucify it.

India’s Government got into a bigger soup for remaining neutral, not for any principled stand of non-interference, but because it has not condemned Russia despite its alliance with the Western powers to fend off China. Its Foreign Minister explained that it is a “strategic calculation” India took into account. India is very much into “strategic calculations” these days as these words came into play even in recent dealings with Finance Minister Basil Rajapaksa.

There is no question; Russia deserves the condemnation of the world community for violating the territorial integrity of a neighbouring sovereign state. Still, international affairs today are all about “strategic calculations” and most international bodies are driven by political bias. So, it was the height of hypocrisy when delegates from those Western powers stormed out of the UNHRC sessions now in session in Geneva as the Russian Foreign Minister addressed it virtually. That has been the hallmark of international affairs ever since World War II ended, and as Mr. Bandaranaike said back then – the world got divided into two with one half hating the other.

None of those Western countries condemned India for violating Sri Lanka’s sovereignty back in 1987, even when Sri Lanka had a pro-West, right-of-centre Government. Coming from those Western powers that have themselves jumped into more than a dozen sovereign nations around the world over the years in Asia, Africa, Latin America and West Asia, it only added more irony to an otherwise dark and poignant moment in contemporary world history currently panning out in Europe.