Columns

• Finance Minister Basil Rajapaksa will grant MPs duty-free permits to import vehicles
• President Gotabaya Rajapaksa will meet an SLFP delegation on Tuesday
• SJB fails to get its act together
• US complains of corruption in large scale projects and in government procurements

 

Tasked with reviving the economy by overcoming multiple challenges such as the COVID-19 pandemic, New Finance Minister Basil Rajapaksa held a series of meetings with experts. He is seen here in discussion with members of the Government Medical Officers’ Association.

Though most civil society groups blame it on what they call “authoritarian” trends, true in some respects, the reason is largely different. It is an accepted norm, if not a religion, for any opposition in a democracy to oppose a government on issues that affect the people. It is the opposition’s fundamental duty. That way, there are checks and balances. It is the people who benefit. One is reminded of the words of Sir Winston Churchill, British Prime Minister during Second World War. He said, “Some men change their party for the sake of their principles. Others their principles for the sake of the party.”

It was neither in the case of the Samagi Jana Balavegaya (SJB), the largest opposition in Parliament albeit the country. It emerged out of a crisis within the United National Party (UNP), when there were overwhelming demands that their leader Ranil Wickremesinghe, a former Prime Minister, quit. He agreed but did not do so. Wickremesinghe is now his party’s lone bonus seat MP in Parliament. The UNP had polled only two percent of the votes cast at the parliamentary general elections on August 5, 2020.

The SJB faced its major political challenge after the Government announced an unprecedentedly steep increase in fuel price from midnight on June 11. That it came when the country was under a lockdown (officially called travel restrictions), it is now clear in hindsight, and it paid off. The Government was able to ward off large-scale protests though prices of goods and services shot up unprecedentedly. Among them was the common man’s packet of rice and curry. In essence, the fuel price hike affected every Sri Lankan from different walks of life.

The first response of the SJB was to travel in a motley collection of earth moving equipment, tractors, excavators among them, to Parliament. Thereafter, its leader Sajith Premadasa and other MPs held placards and protested at the top of Japan-Sri Lanka Friendship Road that leads to Parliament.  Nothing wrong, one would say, for the opposition was playing its role.

It is thereafter that Premadasa consulted the party’s parliamentary group on further action. This is where the SJB slip began to show. It was Colombo District parliamentarian S.M. Marikkar, who came up with the proposal that a vote of no-confidence should be moved only against Energy Minister Udaya Gammanpila. His strategy? He argued, even during seminars the party held at the office of the Leader of the Opposition at Sir Marcus Fernando Mawatha that such a move would divide the ruling alliance members. How he worked that logic is not clear, but Premadasa seemed taken up. So, the decision was endorsed by the others. The idea behind Marikkar’s argument, no doubt with good intentions, was transparent. If indeed the Government were to be divided in two, one section would have called for Minister Gammanpila to be dumped. That is even before a no-confidence motion was moved. There was no such move. Even Finance Minister Basil Rajapaksa was not in favour of a steep increase, and he fell in line with the SLPP whip to vote against the motion. The SJB leader Premadasa does not require hard intelligence to discern this situation. The leader of any political party, one presumes, knows his political strategy, a sine qua non. Why did he go wrong?

On the other hand, any experienced opposition leader knows that the idea behind a no-faith vote is not to win, more so when numbers are formidably loaded against his party. It is purely to register the party’s protest in a strong way that it leaves a strong footprint about the opposition’s power. Yet, for some unexplainable reason, the SJB failed to sound out other opposition parties. That they were on the same page as the SJB on the steep fuel price hike is all too well known.

“What the SJB did was politically wrong and poorly thought out. We know that the price hike had left divisions within the ruling alliance,” declared Anura Kumara Dissanayake, leader of the Janatha Vimukthi Peramuna (JVP). He told the Sunday Times, “They never consulted us or even the Tamil National Alliance (TNA). Now, the SJB has ended up uniting those in the Government who held diverse views.” The JVP leader said those in the SJB knew, as much as others in the country’s political firmament, that there were the so-called Basil Rajapaksa faction and its rivals in the alliance. “At whose behest did the SJB labour so hard to unite and protect the warring groups,” he asked. He noted that it was a betrayal of the people who voted for the SJB.

There was no way the Government was going to sacrifice the energy minister since the decision had the full blessings of President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa, and members of the Fuel Pricing Committee. Why then did Premadasa allow such a lopsided and ill-advised decision that portrayed the SJB in a poor light? Was it serious about performing the role of the opposition? There were many SJB MPs who privately expressed reservations over their decision. One of them, asked why he did not raise issue, declared it would amount to challenging the leader — a chance which he did not want to take. Premadasa had decided that the motion should be proposed by Marikkar who was responsible for the SJB strategy. He had asked Mujibur Rahman, Colombo District MP, to second the motion perhaps not realising the nuances. Another MP said, “It became a sensitive issue after our leader named the two to propose and second the motion on Minister Gammanpila, who held nationalistic views. In fact, Marikkar forgot to propose the motion when the debate began on Monday. Foreign Minister Dinesh Gunawardena pointed out it was a violation of standing orders only to be called upon by Premier Mahinda Rajapaksa to allow him to continue to speak. He said otherwise there would be a wrong impression that the Government was afraid of it.

Outcomes of no-faith motion

The most important outcome of the SJB’s no-confidence motion: did it help the Government to consolidate its ranks? Another: the vast majority of the ruling alliance members endorsed on the floor of the house the fuel price hike though privately they would have entertained reservations. Even SLPP General Secretary Sagara Kariyawasam withdrew his earlier call for Minister Gammanpila to resign and cast his vote against the motion. It is true that the SJB did not expect to win the no-faith vote. Yet, it left many questions unanswered. One is why only the energy minister was targeted instead of the entire government. Was that a move to “soft pedal” the issue? UNP leader Wickremesinghe failed in his efforts to move an amendment to the motion to make the Government answerable instead of only the energy minister. Speaker Mahinda Yapa Abeywardena ruled that it was not possible under Standing Orders — a subject on which the former Premier has been very conversant. Poking fun at the motion was National Freedom Front leader and Minister Wimal Weerawansa. When SJB’s Kabir Hashim was on his feet, he penned a handwritten note and had a Parliamentary Assistant deliver to him. It asked, “Can you also move a no-confidence motion against me too?”

Another major outcome — there were SJB members who voted in favour of the motion albeit the Government. They were Diana Gamage (National List), Aravinda Kumar (Badulla District), Ali Sabri Raheem (Puttalam District) and Ishaq Rahman (Anuradhapura District). One from the Sri Lanka Muslim Congress (SLMC), a partner member of the SJB, voted against the motion. He was Muszhaaraff Muthunabeen (Batticaloa District). Four more SLMC members were absent. So was All Ceylon Makkal Congress (ACMC) leader Rishad Bathiuddin who is now in hospital. However, SLMC leader Rauff Hakeem did vote for the motion. Thus, the SJB’s no-faith motion also highlighted differences within the main opposition party. The MPs in question had done so for a second time having voted for the 20th Amendment to the Constitution earlier.

Attempts to contact SJB leader Premadasa to obtain his response on the party’s first major effort in Parliament ending up in a faux pas failed. In the past months discontent over Premadasa’s leadership was cause for serious concern for him. So much so, he called upon the party stalwarts to ensure that the party’s parliamentary group adopts a vote expressing confidence in him. This was done but the rumblings have resumed, with at least one powerful politician with a nationalistic base, embarking on a military style takeover of the leadership. This is by no means through force but by setting up structures akin to military commands. He has been successful in establishing structures in different districts and is busy with pocket meetings. The focus has been on accusations that the SJB is not playing its role as a major opposition and allegedly compromising on its position on different issues. Such accusations have included alleged ties with ruling alliance leaders. The tie-up, insiders said, was to seek leniency over some irregularities in the disbursement of funds without proper recourse to laid-down procedures.

There was also an unexpected outcome. As reported in these columns, the Sri Lanka Freedom Party (SLFP), a partner of the alliance, has been sore with the Government allegedly on the grounds that it was overlooked in the past. At a Central Committee meeting, members (not holding government positions) said the party should quit being a government partner. Even its MPs voted against the no-faith motion. Now, President Rajapaksa has agreed to meet a delegation of the SLFP on Tuesday to address issues related to it.

Ahead of Parliament taking up the two-day debate, events triggered by SJB actions, including the vote of no-confidence, had been playing out. One was last Sunday’s meeting of the government parliamentary group held at the Janadipathi Mandiriya (President’s House). President Gotabaya Rajapaksa, Prime Minister Mahinda Rajapaksa and Finance Minister Basil Rajapaksa were present.  MPs had already been told through a three-line whip that they should vote against the no-confidence motion. Energy Minister Gammanpila was asked to explain the background to the increase in fuel prices. He was armed with a questionnaire that listed some 26 questions and answers. He first circulated it and later re-iterated that the decision to increase prices was not made by him alone. It was a collective decision by the fuel pricing committee as well as President Rajapaksa and Premier Mahinda Rajapaksa. There was some murmur among the MPs when Minister Gammanpila said there were oil deposits in the Mannar basin that would soon be found. A lone MP rose to say that there was no quarrel any more about the fuel price hike. However, it was time now for the Government to provide relief for the people who were affected.

Finance Minister Basil Rajapaksa took over. He gave an overview of the current economic situation. He was cautious enough to downplay the balance of payments crisis by pointing out that foreign reserves were no cause for worry. He noted that during the separatist war, foreign reserves had stood at just one billion dollars. However, he did not say which phases of the separatist war nor elaborate on the differences that existed. Lower foreign reserves did not affect living costs or result in the prices of consumer good sky rocketing. Very largely, military equipment and armaments were obtained from China. It is no secret that some payments are still outstanding. On top of that, there were levies that went to the conduct of the separatist war and sustain troops and did not impact on the public in the form of shortages.

Duty-free vehicles

Essential food commodities – rice, dhal, sugar, flour – among them have risen in price, sometimes out of reach of the lower middle class. More are due when rail and bus tariffs are increased. Finance Minister Rajapaksa forecast that with the revenue anticipated, reserves would rise to US$ 5.5 billion but did not give details. He charged that an official in a leading bank was advising clients who wished to open Letters of Credit with the bank to go to black market traders to buy US dollars. He has even named the individuals in these trading houses. He also charged that there was money making in the Central Bank too by some who were ganging up but added that the international situation would improve soon. The immediate focus, the finance minister said, was to boost tourism, exports and encourage Foreign Direct Investment (FDI). He said that ministers should not come to him with requests for supplementary estimates. They will not be allowed, not until the present crisis is over, he pointed out.

Then came good news for the MPs present. Finance Minister Rajapaksa pledged that he would issue permits for them to import vehicles. However, such vehicles will not be imported by the Government or funded by it. It would be a duty-free permit and the MPs will have to find the resources to open Letters of Credit and ensure these vehicles are brought in. There was ovation and clapping on tables as the remarks were made. No doubt such a move will see a spike in the black-market price of US dollars. It is not immediately clear whether the Government would extend rupee loans so the MPs could purchase dollars.

Finance Minister Rajapaksa also fired a broadside at Minister Gammanpila when he said that finding funds to import fuel was his responsibility. He said there was no need for other ministers to make public pronouncements that they needed money. He said anyone selling fuel would only look to the Treasury for payments or a guarantee.

A recent report on Sri Lanka was good news for the Government. Goldman Sachs, a global investment banking, securities and investment management company said, its “calculations point to Sri Lanka “comfortably” meeting all its external obligations falling due in 2021, leaving the country with an estimated US$ 6.4 billion in external reserves by the year-end, although the trajectory beyond that could be more daunting without additional external financing.

US State Dept. censure

However, there was bad news from the US State Department. In a report on investment climate in Sri Lanka, it made scathing references. It said, “Sri Lanka is a challenging place to do business, with high transaction costs aggravated by an unpredictable economic policy environment, inefficient delivery of government services, and opaque government procurement practices.  Investors noted concerns over the potential for contract repudiation, cronyism, and de facto or de jure expropriation.  Public sector corruption is a significant challenge for U.S. firms operating in Sri Lanka and a constraint on foreign investment.  While the country generally has adequate laws and regulations to combat corruption, enforcement is weak, inconsistent, and selective.  U.S. stakeholders and potential investors expressed particular concern about corruption in large infrastructure projects and in government procurement.  The Government pledged to address these issues, but the COVID-19 response remains its primary concern.  Historically, the main political parties do not pursue corruption cases against each other after gaining or losing political positions.”

Granting duty free permits to MPs is a politically astute move. Now that the MPs have already endorsed a fuel price hike, the Government will be able to continue to depend on their support for any other economically tough measures to tide over the current debt crisis. The Government is also aware that it was the time to enforce such measures since the opposition is disorganised and disoriented.

Last Tuesday, after Parliament voted by a two-thirds majority to defeat the SJB’s no-confidence motion against Minister Gammanpila, Finance Minister Rajapaksa turned up at Temple Trees for a meeting. Those present included Governors of Provinces, Ministers Pavithra Wanniaratchchi, Namal Rajapaksa, State Minister Channa Jayasumana, District Secrtaries from the Western Province and Chairmen of District Development Councils. He was buoyant and declared “I have just come from Parliament where we defeated the SJB no confidence motion by a two-thirds vote.”

A significant event was a detailed briefing on the COVID-19 situation by Major General Suresh Sallay, Director of the State Intelligence Service (SIS), the country’s premier intelligence arm. After giving copies of maps with data containing progress of the vaccination programmes countrywide, he said almost 80 percent of those in the age group of 30 and above had been vaccinated. His brief suggested that COVID-19 was now being brought under control and priority consideration was being given to vaccination programmes in the different provinces. This view, however, is being disputed by medical specialists who say there is still a long way to go, and the situation is fraught with fears of new strains emerging. These specialists also contest the daily data put out by the Government on recovery, afflictions, and deaths.

In a brief speech Finance Minister Rajapaksa made fun of his new office by referring to himself as a mudal nethi Amethi or Finance Minister with no finances. He declared that his upcoming budget would ensure there was no deficit. Hence, there would be no need to delve at length over how such a deficit would be bridged. Of course, he did not make any references to the depleted reserves. Government sources say that informal contacts had been made with different sources to raise funds. There was also the likelihood of a visit to Colombo by an important foreign dignitary where more funds from his country are expected to be discussed.

The first official move by Finance Minister Rajapaksa is the gazetting of a Bill to provide amnesty to those holding funds in foreign banks if they repatriate them to Sri Lanka before December 31, this year. Those who disclose such taxable moneys, income or asset will be indemnified from investigation or prosecution. This is another means through which the Government wants to raise badly needed foreign funds. Of course, this is not the first time such a move has been launched. Even the previous yahapalana government prepared for such an effort but the move did not materialise. Both the SJB and the JVP have challenged the issue in the Supreme Court. JVP leader Anura Kumara Dissanayake claimed that the proposed moves were insidious. They were intended to find a way for businessmen and politicians of this Government to bring their ill-gotten money to the country, he claimed.

President Gotabaya Rajapaksa told ruling alliance MPs last Sunday that the Government would go ahead with the Bill to convert the Kotelawala Defence Academy into a university. He said there would be a workshop on August 3 for MPs to explain the different provisions. The Bill will be taken up for discussion on August 3. The Bill has already generated considerable controversy. The Federation of University Teachers Association has charged that universities and higher education would be ‘militarised’ through the envisaged General Sir John Kotelawala National Defence University Bill.

Another event that turned out to be significant was a meeting President Rajapaksa had with heads of state-run media and owners of private media at the Presidential Secretariat last Monday. From the plush conference room on the third floor, he spelt out his priorities. In attendance were Presidential Secretary P.B. Jayasundera and Senior Advisor Lalith Weeratunga. He later entertained them to lunch at the cafeteria of the Presidential Secretariat – the former MPs canteen when it was Parliament.

The thrust of his meeting was to make clear the Government’s top priority tasks to ensure normalcy. They were (1) to complete the ongoing vaccination programme and complete it early. The Government has taken steps to ensure stocks of vaccine are on hand; (2) to ensure there is adequate fertiliser available for all crops. Later, after the meeting he noted privately, that in the past chemical fertiliser which was three and half time more  had been imported. He did not give a time but said those stocks were available and hence there were no fears of a shortage. He cited the case of a well in his family homestead of Beliatte from which people in the vicinity drew water for drinking purposes. In the recent past it was contaminated – the result of excessive use of chemical fertiliser.

President’s second term

There was a query. A voice asked how are you going to do that in two years? The reference was to the remaining term of two years the President must complete his first tenure. This is when President Rajapaksa declared he could have, five more years. That could have passed off as a broad hint except that there was more emphasis on the subject by an official after the meeting ended, who reminded “remember the reference to the second term in office.” That meant emphasis on the subject. It was the main news story in most front pages of newspapers and the electronic media gave wide publicity. That made it the week’s talking point. Here was the President, who had only ended a third of his four-year term, talking about contesting the next presidential election. Why?

There was a mixed reaction. Sources close to the presidency argued that President Rajapaksa was only giving his close followers a message that he would be there to conclude the programmes that he had begun. That was to give them confidence and encouragement. Those present at the meeting noted that President Rajapaksa was “relaxed and quite composed” when he made those remarks. There were all kinds of tattle too, some sounding seemingly plausible but farfetched. Logically, such a declaration would only be firstly a message to anyone who was lining up to contest. There was speculation, particularly after he took over as Finance Minister, that Basil Rajapaksa would become the candidate. Then came speculation that it would be Namal Rajapaksa. At least, by making those remarks, President Rajapaksa has laid to rest rumours over who the candidate of the ruling alliance would be. That is also a message for the diverse groups of the alliance, now temporarily united after the no-confidence motion. Of course, there was some humour too in the issue. This week, Tourism Minister Prasanna Ranatunga declared the opposition was jolted after hearing the news of President Rajapaksa’s candidature. Though he does not realise it, he may well have overestimated the opposition.