Columns

• Proposal aimed at broad-basing constitutional council; new high post committee recommended
• In a bid to obtain two-thirds majority and coax SLPP MPs to vote for it, Gotabaya delays appointment of state ministers
• As Lanka holds talks with IMF team, top world personality warns the lending agency of endemic corruption in Sri Lanka

By Our Political Editor

Though Justice and Constitutional Affairs Minister Wijeyadasa Rajapaksha claimed that 21A was approved last Monday, the President had wanted a clearer definition of the composition of the Constitutional Council (CC). Hence, he had suggested using the wording in the draft new constitution formulated by a committee headed by Romesh de Silva, President’s Counsel. This is in respect of nominating five persons by the Prime Minister and the Leader of the Opposition. The 21st Amendment said they should “consult the leaders of political parties and independent groups represented in Parliament” so the body “reflects the pluralistic character of Sri Lankan society, including professional and diversity.”

Instead of making provision for the Prime Minister and the Leader of the Opposition to decide on their nominees, the President recommended that it be broad-based. The nominees of each side for membership in the Constitutional Council, he recommended, should be picked by majority members of each group. In effect, this takes away the discretion of the Prime Minister or the Leader of the Opposition to choose the nominees.

Of course, the de Silva Committee on the new constitution, a government source said, had proposed the appointment of two High Post Committees. This is not to be confused with the High Post Committee that now examines diplomatic postings and other top appointments. The proposed body, to be named by the President, is to comprise the Chief Justice and four former judges of the Supreme Court or the Court of Appeal. They are to be responsible for all key appointments in consultation with a proposed Legislative Council (instead of the Constitutional Council) headed by the Prime Minister, in terms of the draft. The source said the President would appoint the Chief Justice, judges of the Supreme Court, the President, and judges of the Court of Appeal, the Attorney General, the Solicitor General and the Chairperson and members of the Law Officers’ Department (how the Attorney General’s Department is to be renamed). However, they are to be on the recommendations of the proposed High Posts Committee. These provisions may now be left out from a new constitution.

President Rajapaksa holding discussions with the IMF delegation on Friday

Key features

As previously reported, other than empowering a Constitutional Council to make higher appointments, 21A enables the President to hold only the defence portfolio. He could hold any other portfolio only for a period not exceeding two weeks. The President is also empowered to remove a Prime Minister if he or she is of the opinion that the Premier has “lost the confidence of Parliament.” It prohibits dual citizens from becoming MPs. Ministry Secretaries shall continue to hold office notwithstanding the dissolution of the Cabinet of Ministers. It seeks the creation of an Audit Service Commission and a Sri Lanka State Audit Service. It also proposes the setting up of a National Procurement Commission.

In essence, 21A restores to Parliament the functioning of a Constitutional Council that will be responsible for making higher appointments including that of judges. To that extent, it prunes down the powers currently enjoyed by the President and none of the other far-reaching ones. Of course, it has been formulated in such a way as to avoid what the framers believe would necessitate a referendum. Yet, it must be passed by a two-thirds majority.  As reported last week, that remains an uphill task for the Gotabaya Rajapaksa-Ranil Wickremesinghe government.

In what appears to be a move to coax Sri Lanka Podujana Peramuna (SLPP) parliamentarians, or as many as possible to vote for 21A, President Rajapaksa is holding back the appointment of State Ministers until these amendments are passed. Besides some twenty state minister posts, as revealed earlier, there are moves to also create the position of District Ministers thus taking the total to some fifty or more. Whichever way it works out, at the end of it, there will be a set of parliamentarians who will be unhappy and displeased that they were not counted.

On the other hand, the main opposition Samagi Jana Balavegaya (SJB), it is now clear, will not vote for 21A. Nor will the Janatha Vimukthi Peramuna (JVP) led National People’s Power (NPP). Both parties, in what seems an ill-advised move, chose to boycott this week’s Parliament sessions. It boomeranged on them when it was decided that the House would sit only for two days, Monday and Tuesday, in view of fuel shortages affecting MPs. Leaving Tuesday (when they walked out of the chamber), they were only absent the whole of Wednesday. That went against the very essence of why the public voted to represent them in Parliament. They ceded a free rein to the government and made no tangible gain.

There was also some bad news for the SJB.  Speaker Mahinda Yapa Abeywardena, read out the determination of the Supreme Court on the draft amendments to the constitution which they wanted to move in Parliament. This was in the form of a private member’s motion which sought to abolish the executive presidency. The SC said several provisions were inconsistent with the constitution and hence required not only two-thirds majority but also a national referendum. Tamil National Alliance senior parliamentarian Abraham Sumanthiran chided the SJB and said, “If you wanted help, we could have drafted a better document for you.”

Although 21A was to be published in the government gazette last Monday, Cabinet approval for the 37-page document had been tabled with no certificate of approval from the Attorney General. This certificate affirms that the provisions of the amendment are in accordance with the present constitution. Hence, it is being placed before the ministers tomorrow for formal approval. It is now clear that the second reading of 21A will not take place until August, a period by which, there are fears, the ongoing shortage of essentials would exacerbate, and the political climate would change dramatically. The counter to this argument is the possibility of reaching a staff-level agreement with the International Monetary Fund (IMF). This agreement could enable the IMF board to approve an Extended Credit Facility Arrangement (ECF) for a fixed term of three or five years. This, it is pointed out, is besides enhanced support from India and western countries. Yet, an impending interim budget in August would come as a crushing blow to most Sri Lankans with impending cuts in welfare measures and increased taxation.

Worsening fuel crisis

At the centre of this issue is the lack of fuel and the resultant power cuts for longer hours. Contrary to all propaganda, cooking gas (LPG) is not available but there are still long queues not only in the Greater Colombo area but also in almost every town. The dearth of cooking gas has already forced the closure of smaller hotels and restaurants. When Health Minister, Keheliya Rambukwella, a former government spokesperson who is quite familiar with denial syndromes, told last Monday’s government parliamentary group that there was no shortage of medicinal drugs, eyebrows were raised. MPs were angry, for they have been at the receiving end of the people. He also said there were separate arrangements to provide fuel to the medical sector on Fridays. Doctors and medical staff left their hospitals, particularly in the Greater Colombo area, and queued for their fuel supplies. There were no doctors to treat the patients and most doctors did not get fuel. Some waited for as many as 18 hours and went back without fuel.  Is this not very poor crisis management?

Weeks earlier, Energy Minister Kanchana Wijesekera, declared that there were adequate fuel stocks, but the supplies have now run dry, and the long queues remain. The government has again appealed for help from India so it may keep the needed essentials flowing despite weeklong gaps that have already become hotbeds of anger and frustration. Among the minister’s solutions this week is to denationalise the petroleum sector so that multinationals could rush in. What does he do with the state-owned Ceylon Petroleum Corporation (CPC)? He even wants them to provide Sri Lanka fuel on credit for one year. Should not his priority be to help find adequate stocks instead of engaging in much-publicized micromanagement? And those gaps, with government leaders either helpless or ineffective, are turning out to be the nucleus of a new and fast-growing national security threat.

Despite these developments, some government parliamentarians were livid at last Monday’s group meeting because their leaders were not present. This included former Prime Minister Mahinda Rajapaksa, former Finance Minister Basil Rajapaksa and Namal Rajapaksa MP. Prime Minister Ranil Wickremesinghe turned up on time but left early due to other engagements. One of the participants lamented that there was no purpose served in attending such events if their leaders were not interested in hearing their woes.

A deeply worrying factor has been the recent warnings by the state intelligence mechanisms of a fearful explosion of violence leading to bloodshed. Influential sections of this community are also concerned that the political leadership has failed or is too busy to grasp the seriousness of this situation countrywide. These sections point out that in the past, when there were instances of crime shooting up, Police together with civilian groups in different areas had localised programmes to curb the crime rate. However, they point out that there is now a national tragedy, but the enforcers of law and order are finding themselves impotent. It is not their fault. Whilst theft and robberies are growing, Police have been forced to cut down on patrols and manning checkpoints. Even investigations into theft and robberies have been hampered. They are deployed outside fuel stations and areas where there are protests or demonstrations preventing them from carrying out their designated tasks. At least 16 people have died so far while waiting for hours in fuel queues. Most of them are from poor families and there has been no word about compensation for them. They paid with their lives for the mismanagement by one person, the President of Sri Lanka, Gotabaya Rajapaksa. He has presided over the country’s bankruptcy.

The intelligence agencies have referred to the daily escalation of public protests and the skirmishes at the lengthy queues that have formed outside fuel stations. It has also led to clashes between Army soldiers and police personnel. One case in point was an incident in Warakapola this week when an Army officer attempted to jump the queue allegedly to help a friend, a lorry owner, to fill up his fuel tank when there was a large queue of motorists waiting. There are senior security officials who question the wisdom of posting armed troops outside fuel stations. They argue that it lowers the esteem of the troops who had won public respect after the military defeat of Tiger guerrillas. Even serving military officers concur the troops could have been deployed only if the Police wanted help. They point out that the task should have been handled by the Police together with their paramilitary arm, the Special Task Force, and even supplemented by personnel of the Civil Defence Force.

There have also been other serious issues, which the state intelligence mechanisms fear would contribute to national security issues. In several areas, gangs have begun to operate outside fuel stations, intimidating pump attendants or charging money from motorists who want to jump queues. This is said to be prevalent mostly in the outstations. They are also known to obtain fuel stocks for vehicles, drain them out and return for a refill. Human smugglers have seized the opportunity to lure youth into leaving the country to foreign lands, particularly Australia. Though the Sri Lanka Navy patrols have been able to intercept a few fishing trawlers with would-be asylum seekers, it is known that others get away only to be arrested when they arrive in that country. They face deportation. The Navy is also affected by the fuel shortage. Another worst impact has been a marked rise in drug smuggling. Telephone traffic from drug lords operating particularly from Dubai, Police said, had recorded a marked increase. There has been a rise in murders, mostly involving drug traffickers and their couriers.

These developments came in a week where Premier Wickremesinghe made a historic declaration in Parliament last Wednesday. Pointing out that Sri Lanka was “facing a far more serious situation beyond the mere shortage of fuel, gas, electricity and food,” he declared the economy had “completely collapsed.” Noting that “Sri Lanka has never faced a crisis of this before,” he added “if steps had at least been taken to slow down the collapse of the economy at the beginning, we would not be facing this difficult situation today.”

Those words, in his eighth statement since assuming office on May 13, are a scathing indictment not only on President Gotabaya Rajapaksa. It is also a damning censure on other members of his family including former Premier Mahinda Rajapaksa and ex-Finance Minister Basil Rajapaksa for ruining the country’s economy. Even in his previous statements, some televised and others made in Parliament, he has continued to emphasise aspects of mismanagement. On June 7, he noted, that the Government had lost between Rs 600 billion and Rs 800 billion in revenue with the abolition of the tax system introduced by the yahapalana regime. He said we were becoming a marginalized country in the world due to poor foreign policy. The indictments made in other statements are far too lengthy to list here.

The question that begs an answer is why leaders of the government, responsible for these anti-national acts, remain silent. One aspect which Premier Wickremesinghe did not mention but is widely known is the unbridled corruption. It is no secret that they have amassed wealth and led an ostentatious life. The response from President Rajapaksa has been a public admission that he erred. Should not this aspect be probed so the people including future generations to come will know who was responsible for the worst economic calamity and plunder of national wealth? That too under the garb of claiming to be self-acclaimed patriots to whom others were traitors.

Their actions have led to food inflation extending beyond 60%, rupee losing its value over 80% in just three months, and acute shortages of most essentials resulting in street violence. The collapsing rule of law has set a series of motions among the international stakeholders. Constantly alerted by their posts in Colombo of the rapidly deteriorating situation on the ground, alarm bells are ringing at various capitals.

Heightened diplomatic activities

A flurry of telephone calls between New Delhi and Washington, various agencies within the UN system bringing Sri Lanka into their regular discussions, the US Embassy in Colombo seeking additional capacity from Washington and Indian High Commissioner Gopal Baglay taking flights to Delhi at least three times in the past six weeks and twice in the last ten days, all point to a feeling of urgency before Sri Lanka falls into an abyss.

Confirmation of the dire situation came from Premier Wickremesinghe, when he told Parliament that Sri Lanka faced “a far more serious situation” than the shortages alone, and he warned of “a possible fall to rock bottom.”  Ironically this public revelation came while a nine-member IMF team was in Colombo from Monday, holding talks on how to structure what will be Sri Lanka’s 17th loan programme with the global lender. The IMF programme is crucial to access bridge financing from sources such as the World Bank and the Asian Development Bank. Various stakeholders including bondholders expect the IMF visit to give clarity on how much debt Sri Lanka can repay and what haircuts investors may have to take. According to Premier Wickremesinghe, the Government aims to reach a staff-level agreement with the organisation and have a framework in place for debt restructuring by the end of July. Although this suggested timing may seem too optimistic, discussions have progressed sufficiently well.  The Sunday Times learnt that a statement is expected in the coming days in Washington DC reporting on progress and likely timelines on board approval for an Extended Credit Facility Arrangement (ECF).

“This IMF visit is very important – the country will need every help and support it can get,” said Lutz Roehmeyer, portfolio manager at Berlin-based bondholder Capitulum Asset Management. “For many international bondholders, this will be a key requirement to ensure they come to the table and talk about a debt restructuring in the first place,” the Voice of America (VoA) reported. In addition to this, a team from the US Department of the Treasury and the Department of State are set to arrive in Colombo tomorrow. They include Robert Kaproth, Deputy Assistant Secretary of Treasury for Asia, and Ambassador Kelly Keiderling, Deputy Assistant Secretary of State for South and Central Asia. They will be on a three-day visit, the US Embassy in Colombo said. A top-level four-member Indian delegation led by Foreign Secretary Vinay Kwatra arrived in Colombo just for the day on Thursday, June 23. The delegation included Secretary of the Department of Economic Affairs of the Ministry of Finance of India, Ajay Seth; Chief Economic Advisor to the Government of India Dr V Anantha Nageswaran and Joint Secretary of the Indian Ocean Region (IOR) Kartik Pande of the Ministry of External Affairs of India.

New Delhi seems keen to show hands-on assistance to the people of Sri Lanka whilst a prudent Finance Minister Nirmala Sitharaman has wanted her confidants to get a ground-level assessment. Days before the delegation arrived in Colombo, Sri Lanka’s High Commissioner Milinda Moragoda was given the green light to go public with a further request of $500 million as credit facility for fuel from India. This he duly obliged.

More than thirty bondholders said they have formed a group to negotiate with Sri Lanka. “The Group is ready to interact swiftly with the authorities and the IMF to help achieve a timely resolution of Sri Lanka’s debt-related challenges,” they said. Still, at least one, Hamilton Reserve, a St Kitts and Nevis-based bank, has filed suit in the Federal Court of New York Southern District, advised by lawyers Bleichmar Fonti & Auld against Sri Lanka. As reported last week, for countries with unsustainable debt, IMF financing may proceed before a debt restructuring is completed if: (i) Official bilateral creditors provide the IMF with adequate assurances that they will take steps to help restore debt sustainability; and (ii) in cases where a restructuring of debt to private creditors is needed, if the member has taken credible steps towards completing the debt restructuring process in a way that will achieve debt sustainability.

Corrupt politicians

Now with this legal case pending, it will take some talking to convince the IMF Board that Sri Lanka has been taking credible steps toward the debt restructuring process in a way that will achieve debt sustainability. What will all this mean for the Board to approve any Extended Fund Facility Arrangement (EFF), only time can tell. Sri Lanka has hired Clifford Chance and Lazard as legal and financial advisors to restructure its foreign debt. The Clifford Chance team is being headed by London-based partner, Deborah Zandstra, who has advised Argentina.

In a further development, a former number two in the United Nations, Mark Malloch-Brown — who served in the British Cabinet and Foreign Office, who was Deputy Secretary-General of the UN under Kofi Annan, and Administrator of the United Nations Development Programme (UNDP), has been a Vice-Chairman of billionaire George Soros’ Investment Funds, as well as his Open Society Institute, a Vice President at the World Bank, and Vice-Chairman of the World Economic Forum who also authored ‘The Unfinished Global Revolution’ — tweeted on Wednesday, “Sri Lanka has a history of diverting aid. @IMFnews must acknowledge the reason the country is in this mess by putting this issue on the agenda during their visit. Otherwise, they risk bailing out corrupt politicians instead of people in need.” In 2005 Time Magazine put Mark Malloch-Brown on its list of the 100 most influential people in the world. Such credible noises obviously deter creditors and potential future lenders.

It is clear from such informed comments and criticism that despite cover-ups where one politician strives to save colleagues on the opposite side, the story of corruption endemic in Sri Lanka has spread worldwide. Those in the yahapalana administration saved cronies on the opposite side after initiating international probes that were later dropped. No government or opposition politician is free from this accusation. It is the Sri Lankan people who have paid for it. Now they are suffering without essentials. Who can prevent them from becoming victims of this vicious cycle again? One is not sure whether those on the two sides of the aisle in Parliament are concerned. If they are, what is required first is not a 21A but stronger anti-bribery and anti-corruption laws. Will they ever come as one lot wants to make up for what they lost whilst another is waiting to follow suit?