Editorial

It is in the backdrop of some skilful investigative journalism by the UK’s Financial Times on the mysterious Chinese-American behind the even more mysterious St. Kitts bank which holds Sri Lankan International Sovereign Bonds (ISBs) that the IMF team was in Colombo this week negotiating the lending agency’s second tranche under its Extended Fund Facility (EFF).

The newspaper revealed some intriguing information about the case filed by the Hamilton Bank, in a New York court against Sri Lanka for the settlement of its ISBs. The true identities of those behind this ‘bank’, would lead to those responsible in Sri Lanka for entering into the sale of these ISBs with this seemingly dubious offshore entity.

The governments of the United States, Britain and France have asked to intervene in this case. This could be seen as a move in favour of Sri Lanka’s efforts towards debt restructuring, and taken as an indicator that the Western Alliance is looking at Sri Lanka more sympathetically than before. It is a reflection of an element of backing for its IMF-led reform programme.

The IMF delegation in Colombo made some right moves such as meeting with a joint delegation of the mainstream parliamentary Opposition. Any IMF programme is a long-term one for the country and requires a national consensus. It was unfortunate the JVP/NPP opted to stay away. Probably not wanting to identify themselves with the IMF, it is a risk they take with the public who ask if not the IMF, what is the credible alternative they have.

Recently, an appraisal report of the IMF gave a positive forecast that Sri Lanka’s external reserve assets which had dropped to near zero (USD 1.7 billion) triggering the collapse of the economy last year can rise to an unprecedented USD 14 billion by 2027 “despite current account deficits right through till 2027″. It says the reserves are to grow from outsized disbursement in project disbursement; large project disbursement from the World Bank, Asian Development Bank etc.; cash flow from the IMF’s EFF, and greater Foreign Direct Investments (FDIs).

However, as always, there is a rider. The IMF programme is subject to ineptitude in the state’s capacity execution which includes the unfair imposition of personal taxes and domestic debt write-down which falls on particular income groups and a bungled safety net for the poor that can cause political and social unrest. Corruption is a major bottleneck. FDI execution is not up to the mark. State capacity for project disbursement and fast-tracking privatisation of loss-making State Owned Enterprises (SOEs) are slow.

The IMF team went public at a news conference and with a statement on their visit at the conclusion of their visit. They complimented Sri Lanka’s efforts at reform, but things will look better, they say, if it is implemented “effectively”. They indicate the economy is doing better, but add that the Government is not collecting enough revenue to meet its expenses and call for the elimination of tax evasion, among a host of other measures and ‘things to be done’, on Sri Lanka’s long and painful road to “full economic recovery”.

One step forward, two steps back?

Along with hundreds of other countries, Sri Lanka marked the International Right to Know Day last Thursday (28th), but with a marked difference. This year, the looming shadow of a so-called Online Safety Bill hangs over the nation. Critics say that its objective is not fair regulation but rather to confer a government-appointed body with unchecked powers to carry out arbitrary crackdowns using a wide raft of vaguely drafted offences carrying stiff penalties. This, they argue, will potentially ‘chill’ even the legitimate use of online spaces.

These are far from reassuring developments. President Ranil Wickremesinghe played a key role in the overhaul of Sri Lanka’s antiquated media laws, particularly in enacting a long-awaited Right to Information Act (2016) to generous international plaudits. Since then, Sri Lankans have vigorously used the RTI Act probably to the astonishment of the House which gave its unanimous assent to the Bill.

RTI use, even in far-flung corners of the land, has ranged from challenging corrupt practices from municipal to local level and ensuring adherence to environmental safeguards in mega projects to making the police accountable for using expired tear gas canisters. The Right to Information Commission has taken on an encouragingly pro-information, pro-citizen role as an independent arbiter of the public interest.

Even so, challenges remain. The transition from a ‘closed’ public service riddled with corruption to an RTI-based governance culture is very much a work in progress. Recent reports have found that the record of voluntary information disclosure by key Ministries, particularly in regard to procurement matters, is far from satisfactory. Sri Lanka is not unique in this respect; that performance is poor in South Asia and beyond.

Bad practices must be rectified, and the nodal agency (the Media Ministry) must pull up its socks and get its slumbering RTI Unit to wake up. A transparency portal in which all procurement and project information of relevant Ministries, at the central and provincial level, is carried, would be a good start. The Office of the President, the Wildlife, Public Administration and Agriculture Ministries are among the more pro-active. The rest fall way behind. This would also signal the Government’s ‘good faith’ in the debt restructuring process and rocky negotiations with the International Monetary Fund (IMF).

The Government must also refrain from enacting new laws overriding the RTI Act and setting back gains of the past few years. Moreover, it was under a Wickremesinghe administration that the country repealed criminal defamation laws more than two decades ago. So, is the President aware that the Online Safety Bill brings criminal defamation through the back door by criminalising the ‘wilful’ making or communicating of a ‘statement of fact’ intending to ‘harass’ a person? ‘Harassment’ is defined as, inter alia, publishing anything that ‘violates a person’s dignity’. Surely, an offence of ‘protecting the dignity’ reads as painfully outdated in today’s world?

Repression breeds further repression, the ‘stifling of democratic opinion’ today will lead to ‘catastrophic violence’ tomorrow, as the Supreme Court has warned in the past. The Government may be advised to heed that sensible advice.