To most ministers in the UPFA government, the thick stack of cabinet papers for a postponed weekly meeting last Thursday night seemed routine or mundane.
They ranged from accounts of the Human Rights Commission, awards of contracts to private firms to build highways, appointment of retired officials to various positions and other matters relating to infrastructure development. Yet, those seemed important since ministerial approval was required statutorily for the appointments to be made or funds to be apportioned.
Instances of how other issues also play out came when President Mahinda Rajapaksa, who is the Minister of Ports and Highways, briefed ministers in a note on how a Chinese-backed consortium will operate the South Container Terminal of the bustling Colombo Port. When the government invited proposals for "financing, construction and operation" of the terminal in 2009, only a single proposal came. It was from China Merchants Holdings (International) Company Limited based in Hong Kong and Aitken Spence PLC Consortium or better known as the CMHI-Aitken Spence Consortium. Following the evaluation of their bid, they were selected.
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| Tiger flag at UNP May Day rally in Jaffna - Whodunit? |
The consortium was incorporated as a limited liability company in Sri Lanka under the name of M/s Colombo International Container Terminals Limited, where M/s China Merchants Holding (International) Co. Ltd., M/s Aitken Spence PLC and Sri Lanka Ports Authority hold 55%, 30 % and 15% shares respectively. The Cabinet gave approval to the venture to "Build, Operate and Transfer." The Sri Lanka Ports Authority and the Consortium signed the agreement last year in Shenzhen in China. It is a major city in Guangdong Province.
"However, presently," President Rajapaksa pointed out in his note that "M/s CICT has informed the Chairman of the Sri Lanka Ports Authority that M/s Aitken Spence PLC has requested M/s China Merchants Holding (International) Co. Ltd to purchase their entire shareholding percentage of the CICT, SLPA could purchase 6.43% of these selling shares. As a result, the total share of SLPA at CICT shall increase from 15% to 21.43 per cent." In other words, now the South Container Terminal Project of the Colombo Port will be run by the state owned SLPA with the Chinese company.
The monotony of an otherwise drab session was first broken by External Affairs Minister G.L. Peiris. He hurriedly circulated a 'supplementary cabinet paper' on the implementation of the Lessons Learnt and Reconciliation Commission (LLRC). He noted that the responses of the leaders of political parties, who are constituent partners of the UPFA government, were now being received. He recommended that an official Committee headed by Presidential Secretary Lalith Weeratunga be appointed "to decide which are appropriate for implementation". He noted that the work of the proposed committee "requires extensive co-ordination". The proposal was unanimously approved by the ministers. Weeratunga is expected to name other members of the committee which will get down to its task immediately.
It is now clear that the secret Action Plan which Peiris is now formulating will incorporate the recommendations of the committee. The Sunday Times (political commentary) of April 22 revealed how the UPFA government has decided to heed the key provisions of the US-backed resolution adopted by the UN Human Rights Council. The most important, it was revealed, was the formulation of an Action Plan, which the resolution demands should detail "the steps that the government has taken and will take to implement" the recommendations of the Lessons Learnt and Reconciliation Committee (LLRC). As reported in these columns, Peiris has formulated the outlines of the Action Plan. Though he wants the Action Plan to remain a secret, senior US Embassy officials in Colombo who are maintaining a regular dialogue with the External Affairs Ministry on his visit to Washington DC prefer his going public before leaving Colombo.
However, this is only informal advice and not a pre-condition. It is purely to obviate any possible criticism against the US over purported "secret deals" that may follow otherwise. Peiris and an entourage are scheduled to meet Secretary of State Hillary Clinton on May 18. A new addition to the team is Environment Minister Anura Priyadarahsana Yapa though the basis of his selection as a second minister in the team is unclear. He was one of the many government ministers in the Sri Lanka delegation to the UN Human Rights Council in Geneva. Others, as reported earlier, are Lalith Weeratunga, Secretary to the President, Sajin Vass Gunawardena, "monitoring" MP of the External Affairs Ministry, Namal Rajapaksa MP and Kshenuka Seneviratne, Additional Secretary in the Ministry of External Affairs.
With barely a week to go for his departure, it is highly unlikely that Peiris would want to release his Action Plan in Colombo and thus generate a public debate of any sort. Without any prejudice to Weeratunga, the chair, or other members of the committee that is being constituted as a result of the cabinet decision on Thursday, a number of vital issues do arise. The LLRC itself was made up of eminent persons from different walks of life. By Peiris' own admission to the cabinet on Thursday, the constituent parties of the UPFA government have been called upon to study the LLRC recommendations, a selected set of which were given to them at their meeting on April 18. It is now becoming clear that most constituent parties are examining almost all the recommendations and putting together their views.
Hence, calling upon state officials to select what they deem is most suitable means another bureaucratic mechanism is judging what has already been determined by ruling party members. Hence, there is little or no difference if the committee, instead of the constituent parties of the UPFA, were earlier called upon to whet the recommendations and select what they determine "are appropriate for implementation."
However, that would still be a package picked by the country's bureaucracy instead of one determined by politicians. The urgency, in the wake of the impending US visit by Peiris and his entourage, confounds the situation. The opposition, no doubt, would also have some justification in saying that the UPFA politicians have washed their hands off by placing the most important decisions in the hands of the bureaucracy. Thus, they could argue, with equal justification, that any blame arising out of the final selection of recommendations would be directed at the officialdom.
The Communist Party of Sri Lanka (CPSL), a constituent partner of the UPFA has broadened the scope of its responses to the LLRC recommendations by calling for even constitutional amendments. It wants the parliamentary system to be strengthened and the executive presidency abolished. Party leader D.E.W. Gunasekera told the Sunday Times, "We have already sent our views to the President on the LLRC report. We are generally for its full implementation even though we have some reservations on issues like land rights which we have mentioned in our communication to the President. But we have gone even further and asked that there be radical constitutional changes. One is the abolition of the executive presidency and the strengthening of the parliamentary system."
The only cabinet minister from the Democratic Left Front (DLF), Vasudeva Nanayakkara, is now convalescing after surgery. A spokesperson for the party, Dudley Kalansooriya, told the Sunday Times, "The government must implement the recommendations of the LLRC without delay. Otherwise we will not be able to bring about reconciliation between the different communities. The Ministry of National Languages and Social integration which is headed by DLF secretary Vasudeva Nanayakkara has already taken steps to implement the language policy of the country which is also strongly recommended by the LLRC."
Other UPFA constituent party leaders who reacted to the Sunday Times report were:
Udaya Gammanpila (Hela Urumaya): "The LLRC report is a comprehensive one. It has addressed both serious as well as trivial issues. We are still discussing the report. The matter has been postponed due to Vesak. We will make a public statement after Vesak."
Dinesh Gunawardena: (Mahajana Eksath Peramuna): "We have been asked for our views. We have sent some of our views on the report of the LLRC. We hope to forward some more observations soon. This report is lengthy and addresses a wide range of issues. We need time to study it. We hope to give our response by the end of next week."
Piyasiri Wijenayaka (National Freedom Front): Our political bureau is still discussing the LLRC recommendations. We are yet to reach a consensus on how to respond to them. It will be finalised after the Vesak holidays and then forwarded to the President. We will also make it public."
Tissa Vitarana (LSSP General Secretary and Senior Minister): "We have sent our views to the President. We welcome the LLRC report and endorse it. The report has dealt in depth on issues including the root causes for the conflict. We are happy that certain recommendations have been implemented. For example 90 per cent of the IDPs have been resettled.
"No outside force should force the implementation of the LLRC report. Some sensitive issues will take time to be sorted out. We have to win the hearts and minds of the minorities and bring about reconciliation. All stakeholders should strengthen the hands of the government to find a political solution. Those engaged in talks with the government should carry the talks forward. We should also have a time frame within which to implement the recommendations."
The main constituent partner of the UPFA, the Sri Lanka Freedom Party (SLFP) will also make its own observations.
As can be seen from Peiris' approach, all opposition political parties have been left out. This includes the main opposition United National Party (UNP), the Janatha Vimukthi Peramuna (JVP) and even the Tamil National Alliance (TNA). The latter, however, has an opportunity to make its viewpoints on key issues known if the current imbroglio is overcome so talks could resume between the party and the government. In such an event, the TNA's new ally, the UNP, will also be on board. Together with the TNA, they will also serve on the proposed Parliamentary Select Committee.
In Washington DC, preparations are being made for Peiris to make several appearances besides his bilateral meeting with the Secretary of State. Susan Rice, the United States' Permanent Representative to the United Nations in New York, will fly to the capital for a meeting with the Sri Lanka delegation. The delegation is also scheduled to meet Samantha Power, Senior Director of Multilateral Affairs in the National Security Council. The latter visited Colombo and is familiar with the situation in the country. The head of a local organisation in Colombo is also known to meet her periodically in Washington to bring her up to date on developments. Peiris is expected to deliver an hour long lecture on Sri Lanka - Challenges and Opportunities, on May 15 at the Woodrow Wilson International Centre for Scholars.
If Peiris is now making strong efforts to iron out differences between Sri Lanka and the United States, with regard to Sri Lanka's neighbour India, it is a different story. It was only last week it was revealed in these columns that a visiting Indian parliamentary delegation told UPFA leaders that New Delhi's vote for the US sponsored resolution on Sri Lanka was not Tamil Nadu centric. They said it reflected the Indian government's acute disappointment over the conduct of their counterparts. In this backdrop, several efforts by Colombo to send a senior cabinet minister to New Delhi for talks remain stalled. The Sunday Times learnt that New Delhi wanted to know whether there was "anything substantial" Sri Lanka wanted to say and doubts over "credible measures" being taken on "assurances given to them."
Another event that was to break the monotony at Thursday's cabinet meeting related to an incident that occurred when the UNP-TNA joint May Day rally took place in Jaffna. A state-run television network had shown a group momentarily holding the rising sun flag of the militarily defeated Liberation Tigers of Tamil Eelam (LTTE). President Mahinda Rajapaksa, according to ministerial sources, told the Cabinet meeting he had spoken on the telephone earlier that day with UNP leader Ranil Wickremesinghe. When asked whom he suspected over the display of Tiger flags, he had replied it was the UNP deputy leader Sajith Premadasa. When the acting Minister of Media, Lakshman Yapa Abeywardena had pointed out that two persons, who were apprehended temporarily had a different story to relate. However, Rajapaksa, ministerial sources said, had asked whom he would believe, whether the other person or Wickremisinghe.
Wickremesinge told the Sunday Times, "I have never spoken to the President regarding this issue. I am aware; our General Secretary had spoken to the President when he met the President at a wedding ceremony in Colombo on Thursday."
Added Tissa Attanayake, General Secretary of the UNP: "I raised the issue with the President when I met him at a wedding in Colombo. I told him 'Apita Mada Gahanna epa' ITN eka veradi vedak karanne'. (Do not sling mud at us. The ITN is doing a wrong thing). He told me he felt that it was an attempt to sling mud at the UNP and that he too will make inquiries and find out the persons responsible in the next few days. But there was certainly no mention about Sajith (Premadasa)."
Acting media Minister, Lakshman Yapa Abeywardena told the regular news conference after the weekly cabinet meeting, "'The ITN did not send any reporters to Jaffna to cover the May Day rally of the UNP. It is a false allegation that the ITN was involved in displaying of LTTE flags. There are reports that the UNP supporters arrested the person concerned and handed him over to Gamini Jayawickrema Perera. He in turn has released them. He should have handed them over to the police.
"On the other hand the Sajith (Premadasa) faction is claiming that Ranil was in Jaffna to commemorate Babu, who killed President Ranasinghe Premadasa. Therefore, what Ranil (Wickremesinghe) has done is created a split in his own party by having the May Day celebrations of his party in Jaffna. However we are carrying out an inquiry as the display of the LTTE flag is a violation of the laws of the country.
Meanwhile we expect that Wickremesinghe will be able to bring the TNA leader to the Parliamentary Select Committee as the TNA leader Mr. Sampanthan was already seen displaying the national flag."
Abeywardena, the acting cabinet spokesperson, was making both a feeble and amateur attempt to widen the rift between Wickremesinghe and Premadasa. This is when he remarked that the Premadasa faction is claiming that Wickremesinghe went to Jaffna to "commemorate the death of Babu, the LTTE mastermind responsible for late President Ranasinghe Premadasa's death."
That the cheap jibe did not pay off came when the Jathika Hela Urumaya, a constituent of the UPFA, praised Sampanthan for holding out a national flag before their joint May Day rally commenced. Wickremesinghe was standing nearby. "The government is so bankrupt that it had sent two of its agents to display an LTTE flag and an "Eelam Map," at the UNP-TNA rally," parliamentarian Harin Fernando (UNP - Badulla District) told a news conference on Tuesday. He said he was at the rally. "The government was trying to create a Tiger bogey whilst claiming that the guerrillas had been wiped out three years ago. How can they display flags and escape through the very heavy security cordon in the heart of Jaffna," Fernando asked.
Even if there was no explanation at the cabinet meeting, an upcoming event has given rise to much speculation. All Ministers of the Sri Lanka Freedom Party (SLFP), the main partner in the UPFA, have been told that they should be present in Anuradhapura on May 15 and 16. Scheduled for this day is a major political exercise -- a house-to-house visit to different areas by groups of ministers. The idea, ministers have been told, is to enlist more grassroots level members to the SLFP.
However, what the ministers are unaware of is why such a major effort is being undertaken at this time. Even if they know the same exercise would be spread out to other districts too, no knowledge of the exact reasons has fuelled considerable speculation. Some ministers feel it could be a precursor to the conduct of Provincial Council elections. Others speculate that the move is a prelude to a major re-organisation in the party and a possible cabinet re-shuffle. Such a re-shuffle, according to them, would see some new and strong personalities making a debut. Some even opine that it may be a public relations exercise to bolster the party's position in the light of phenomenal price increases in essential consumer items becoming viral. They point out that the SLFP leadership would want to counter on time the wave of feelings against the government. That is before the dormant opposition political parties, now torn apart with their internecine problems, are able to make even a symbolic headway.
Last Friday, the price of a 12.5 kilogramme cylinder of LPG cooking gas was increased by Rs. 350. What cost the consumer earlier was Rs. 2046, will now cost Rs. 2396. A 400 gramme packet of milk powder which was Rs. 268 has been increased to Rs. 329. A bag of cement which was Rs. 715 has been raised to Rs. 785. These increases alone will come as a major blow to lower middle class consumers. The rise in cooking gas means every cooked item like packets of rice, kottu rotty, hoppers, string hoppers and curries will go up in price. Yesterday, restaurateurs had raised prices to varying levels. A cup of milk tea with sugar was being sold at kiosks at Rs 50 and even more. Earlier, the increase in flour prices led to a price hike in bread and related products.
Since the end of last year, the upward revision of prices has continued. On November 23 last year the government depreciated the rupee by three per cent. However, on February 8, this year, the Central Bank stopped defending the rupee leaving it to slide vis-à-vis the dollar. Just this week, Treasury Secretary, Dr. P.B. Jayasundera declared that the economic fundamentals followed by the government have paid dividends. He said "the foreign reserves have topped the US$ 7 billion mark. The rupee would stabilise below Rs. 120 to the US dollar." Such a stabilisation would come when the government's "market and fiscal policy measures takes root," he said. A journalist asked why vehicle permits issued to politicians were raised from US$ 35,000 to US$ 50,000, Dr. Jayasundera replied it was "only a matter of a few hundred vehicle permits and it would not adversely affect the economy." He said by increasing the tax ratio on vehicle imports, the Treasury expects to save a minimum of US $ 700 million this year from an import bill of US $ 1700 million last year.
Economist and UNP parliamentarian Harsha de Silva told the Sunday Times, "The government tried to create an artificial situation during the past one and half years. They tried to show the currency (rupee) is strong and interest rates are low. Some people went on a spending spree using credit cards to buy TVs, fridges and other electronic items. It is now that the people have been hit by reality. Interest rates have gone up, credit card interest rate has gone up, loan rates have gone up and now the people are paying extra for the credit taken. They are having widespread consequences.
"Also the current cost of living index is not realistic. We are calling the government to recalculate the index in a realistic manner. The UNP has been warning about the unrealistic situation during the past one year. It now seems that the party has ended for the government. The government has to increase the salaries by at least Rs. 7,500 a month. The government has to change its attitude and look from where the growth will come. Unless the investors come into the country they will not be able to get over the situation. In 1977 and early 1991 many new industries came in, but now the situation is different."
Whether it is the government or the opposition that is right in their assessment of the economic situation is one key issue. However, there is another much bigger one that concerns most citizens of Sri Lanka who are not rich and not connected to influential politicians. They have to live within the means their limited incomes provide. They constitute the vast majority in this country. Yet, whilst they struggle to make ends meet in the midst of mounting consumer prices, politicians continue to have a field day. Dr. Jayasundera, who is a public official, cannot be faulted for raising the value of permits issued to politicians from US$ 25,000 to US$ 50,000. He is only acting on instructions and is unable to initiate such measures on his own.
That such increases occur when the people of Sri Lanka are undergoing immense hardships is proof that instead of austerity, there is more and more ostentation. Whilst luxury cars with higher engine capacity are being allowed to the politicians, those who already have them move around escorted by a number of bodyguards in a fleet of vehicles. With the Tiger guerrillas militarily defeated, that most politicians, if not all of them, do not face a "terrorist threat" is as obvious as night follows day.
Then, vast amounts of money are being poured on grandiose projects where cost factors are the least worry.
External Affairs Minister Peiris and his entourage will have the unenviable task of not only talking to top US officials about the March UN Human Rights Council resolution on Sri Lanka. In fact, his talks which are to mend fences with the United States would naturally persuade his delegation to present a new image of the government. Elsewhere, that image is getting clouded by rising prices, public discontent and the absence of austerity measures. Politicians seem to continue to be in a celebratory mood.
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