Editorial

Whoever said politics makes strange bedfellows must be right.

Wednesday’s vote in Parliament to elect a President for the balance period of President Gotabaya Rajapaksa’s tenure exposed how blurred party loyalties are nowadays.

Eventually, the modern Grandmaster of political chess checkmated his main rival and his backers and then called for all sides of the divided House to get together for the sake of the country. With mounting sociopolitical and economic issues, only three brave souls came forward to take up the challenge. Radical elements outside Parliament say they haven’t given up their campaign, but even more importantly, the new President has to find the money for shipments of food, fuel, gas and medicines and to kick-start the stalled economy back to life. Sri Lanka is not just a bankrupt state, but nearly became a failed state: when its political system almost disintegrated and a sovereign government is unable to deliver the goods to its people.

The question of the new President’s ‘mandate’ keeps popping up from various quarters. If a mandate is so sacrosanct whatever happened to the one who had one? Britain never asked for Churchill’s mandate in the face of a war. And this country is in equal trouble now. The difference is that it is not a war by an external enemy, but one inflicted on its people by their own leaders, fully mandated and all.

The newly elected President is a senior politician whose baptism of fire goes back to the 1983 race riots when as a young Minister he had to support his President to bring about normalcy; then the 1987-89 southern insurgency and a full-blown northern separatist armed conflict. What the country is facing these days is primarily an economic war and parallel to that, secondarily, a political war. Constitutional government, and Parliament as the representatives of the people, had to wrest back the initiative if parliamentary democracy as we know it, was to survive. However much many feel that these MPs no longer represent the people, that is not how it works. The USA is conducting a Congressional inquiry these days into protesters storming Capitol Hill, their Parliament, calling it an “insurgency”, but here their ambassador sings from a different song sheet defending such behaviour.

In the UK, a Right of Recall Act exists where 10 percent of an electorate can petition through a specified procedure and limited to criminal convictions after appeal, or misdemeanour, the recall of an elected MP before his or her term is ended and have a by-election. Sri Lanka now has also done away with by-elections, but such a law should be considered here as well. Interestingly, one of the British MPs so recalled was Ian Paisley Jnr. for not disclosing a holiday in Sri Lanka paid for by the Mahinda Rajapaksa Government. The UK Election Commission has recommended some changes and future Constitution framers and Election Law drafters in Sri Lanka might want to look at these options.

And so, President Wickremesinghe has climbed the greasy pole of politics to the apex. Yet, not many envy his position. Given what happened to his immediate predecessor, the fickleness of high office is a stark reminder of how one’s place in history could change in a flash.

There’s a radical element baying for his ouster by extra-constitutional means even before he gets going. Friday’s dawn assault to clear the ‘peaceful protesters’ has not gone down well with human rights defenders, both genuine and duplicitous. Many see the new President as aloof and he has a trust deficiency that needs to be fixed. He must heed public opinion. On the other hand, he’s never been the numero uno and hardly had a full term in office. He once said he is not a baby-kissing politician like others, but rather someone who would ensure the availability of milk foods for babies.

What better time than now to prove it.

Lanka’s missing dollars

 An item in our newspaper two Sundays ago that received a lot of traction was the one headlined ‘Exporters, importers shift Rs 13.2 trillion overseas via dodgy invoicing’.

Over-invoicing and under-invoicing of trade have been a longstanding practice of many in the import-export business, and it continues to the peril of the country, especially at a time the economy has shrunk sharply and the country is desperate for foreign exchange (forex) to import essentials like petrol, medicine, and rice. Amid the country’s economic uncertainties, businesses are perhaps tempted to park their dollar earnings abroad for sheer survival and hand over only a portion to the Central Bank to comply with the rules.

Those who circumvent the rules are the winners along with corrupt officials in the three main revenue-generating agencies of the state — Customs, Inland Revenue, and Excise. The losers are those who play by the rules in the strictest sense.

The news item gave some startling statistics from the Washington-based think-tank Global Financial Integrity. The export-import figures cited are also recorded in the UN trade database. It said that those in Sri Lanka’s import-export businesses have not brought back US$36 billion (Rs 13.2 trillion) in export earnings over the last nine years. Essential forex for the country has leaked out through dodgy invoicing of shipments. On average every year, US$4 billion is being denied to the country. That amount is enough to import a year’s fuel (crude and refined) to Sri Lanka.

Given that successive Governments have adopted a hot-cold exchange rate policy, the tendency among businesses to resort to deliberately filing bogus Customs Declarations as well as the unholy nexus between business, officials and politicians will continue. The sugar duty scam, for example, involving the Government, cost the country Rs. 15 billion but no one was called to account.

The US dollar losses to the country from mis-invoicing of trade are mind-boggling. Such is the colossal leakage of foreign exchange through trade. Central Bank policy will have to adapt to this reality. With the Colombo Port City already venturing on its merry way as a separate autonomous entity, the likelihood of further siphoning of forex through its jurisdiction is only going to create a new dimension to an existing foreign currency problem.