Editorial

On Thursday, the United Nations made a flash appeal announcing to the world that it was responding to a call from the Government of Sri Lanka for emergency food and medicine assistance. It was the ultimate ignominy for a country long accustomed to living on foreign handouts, but almost never pleading for food and medicine to avoid famine and the collapse of its exemplary health care system. Sri Lanka thus joined the ranks of 44 countries around the world requiring external assistance – 33 in Africa and 9 in Asia which includes West Asia.

According to the world food agencies, 73 percent of Sri Lankans are cutting back on food intake and half the harvest of rice is lost due to myopic policies of an Executive Presidency. The next harvest could be worse and the situation is expected to ease only thereafter with the reset of those policies. The shortage of seed, fertiliser and fuel is preventing the little food produce getting into the market. All this is in the midst of an impending global food shortage expected by October due to the war in Ukraine. Local Government councils are already getting prepared to have ‘soup kitchens’ for the poor and destitute in the months ahead.

Prime Minister Ranil Wickremesinghe opened a debate in Parliament on the state of the economy earlier in the week with MPs each given eight minutes to have their say. The debate was all sound and fury signifying nothing. His statement, however, outlined the precarious instability of the economy which includes an imminent food crisis of serious proportions, and the political instability that has a resultant impact on negotiations with the IMF for a life-saving bailout. An IMF team arrives next week for an in-person survey of the situation in Sri Lanka.

The PM appealed for unity among the diverse factions within the 225 MPs. These factions, even parties, like amoeba, seem to be splitting ever so often. As a result, he has opted for an all-party National Council comprising only party and faction leaders represented in the Legislature rather than a National Government. Given the political realities of the day, a smaller group would be easier to work with towards a national consensus. And when an Opposition MP complained that fuel distribution to fishermen was not being handled equitably, it was heartening to hear the Minister responsible inviting the MP to take part in the process.

The PM reserved part of his address for the key demands echoing from Colombo’s public promenade, the Galle Face Green, and resonating throughout the country; the demand to punish those responsible for the crash of the economy together with the demand to recover stolen assets of the nation.

A fortnight back, the PM himself said he was going to propose the setting up of a Parliamentary Select Committee to investigate those responsible for the “suffering of the people”. The parliamentary oversight committee, COPE, expressed the same sentiments a few days later after it had a meeting with the former Central Bank and Monetary Board high-ups.

Some startling bits and pieces of information tumbled out at that meeting, one of them being the breakdown of the separation of powers between the Central Bank, the Monetary Board and the Finance Ministry. The distinction between monetary policy and fiscal policy was blurred by the presence of the Governor of the Central Bank and the Secretary to the Treasury sitting on the Monetary Board that is responsible to maintain the international stability of the Rupee.

Questions arose over the influence of the Treasury Secretary, who takes orders from the Finance Minister, over decisions of the supposedly autonomous Monetary Board, especially in the disastrous policy of maintaining a fixed foreign currency exchange rate depleting the reserves in the process. A politicised Governor, who is a ruling party member weighing in did not help.

In an article published in the web edition of this newspaper on Monday, and elsewhere, a former Legal Director of the Central Bank asks if the then Finance Minister took the responsibility for such decision-making in writing – as stipulated in the law, or was it based on a majority decision of the Monetary Board packed with political acolytes, or worse still, was there an unwritten agreement between the Monetary Board and the rest.

The law prohibits the Government, or any of its agencies from raising a loan without the Monetary Board being consulted. Was this done over recent years in the multitude of loans that had been taken putting the country in this crisis for which the ordinary citizens are paying right now? And if not, why not?

On Tuesday, the former Finance Minister went public to say he cannot be blamed for the crash of the economy. Why then is the PM’s call for a Parliamentary Select Committee backed up by COPE limited to the headlines and nothing else as is often the case. The Government obtains loans from abroad and if they cannot even find out who is responsible for collapsing the economy locally, how will they ever chase behind kickbacks from unsolicited tenders and loans taken ostensibly for public investments?

Sophisticated strategic and legal advice is required to hunt for hidden assets that must have already been rendered enforcement-proof. Like in the case of debt restructuring, Sri Lanka does not seem to have the local expertise in the field of forensic audits and legal prosecutions to trace and recover from abroad, the assets stolen by Sri Lankan politicians and officials and stashed away abroad in third party “moneybox’ entities and shell companies.

During the last Government (2015-2019) a head start was given in the direction of recovering stolen assets by a team called START (Stolen Assets Recovery Task Force) comprising the Central Bank Financial Investigations Unit, the Police and the Bribery Commission collaborating with the World Bank and other foreign agencies, but the political will evaporated and the police investigative arm itself was corrupt and/or inefficient, providing half-baked reports to the Attorney General. START never finished its work. The few cases filed kept crashed in court as a result.

The professional organisations are no different to the Government in paying mere lip-service to any serious anti-corruption drive doing a major injustice to the nation and its people by their inaction.