ISSN: 1391 - 0531
Sunday September 9, 2007
Vol. 42 - No 15
Financial Times  

Playing to the gallery

Is the Opposition Leader Ranil Wickremesinghe playing to the gallery?

Many, including his supporters in the private sector, believe so ever since the flurry of rash statements on the recent US$500 million commercial loan issue. The latest one on Thursday saw many a business leader flip: “Is he crazy? Is he foolish? What in heaven’s name is happening?” one asked.

For a political leader who has consistently been pro-private sector, the recent statements including his one on Thursday where he told a UNP-farmers’ group that the loan violated the laws of the land and a future UNP government would take action to cancel HSBC’s licence if they were involved, has got many wondering what is going on in the opposition.

Though the statement was dismissed as “playing to the gallery” it not only incensed many leaders in the private sector but also caused a lot of anxiety in the banking sector, and some HSBC clients, prompting the bank to issue a statement. Without referring to Ranil’s latest comments, the bank said, “HSBC maintains the highest standards in all our banking operations and adheres to all laws and regulations in every country in which we operate.”

The UNP leader’s declaration that a future UNP government will not honour the loan sought by the government has itself sparked a major controversy raising a fundamental question. If the UNP in opposition is objecting to a sovereign government resorting to commercial borrowings (for whatever purpose), won’t the UNP in government face the same heat from an opposition party? It could create another economic mess as party goes after party on the commercial borrowings side.

So what is the provocation for the latest shoot-off-the-hip statement? There is a school of thought within the party that it would be difficult to penalize a bank that has lent to an elected government and that such a transaction must be honoured. Following this the new line of attack is to threaten the bank – not the government -- with action if it goes ahead with a loan which the UNP said is flawed and for a purpose other than stated.

There is no doubt that the loan itself raises many questions and would result in Sri Lankans being called upon to pay through their noses. Nevertheless the Opposition Leader’s statements will certainly lead to even bigger repercussions given the impact it has on the economy.

As we said earlier, while many dismiss the threat to cancel the licence of Sri Lanka’s biggest foreign bank that has been operating in the country for decades, there is some trepidation and concern as to whether this would actually be carried out.“Politics or not, leaders in the country have to be careful in what they say. They must also be credible. This could send wrong signals to the international community and international business,” said a business leader.

What is most surprising is that while Ranil has always been pro-enterprise, pro-business and pro-investment, his comments are on the other side of the track and contrary to stated policies.

Business leaders have condemned the statement and hope saner counsel will prevail with any future UNP government not resorting such crazy, ill-advised ideas in which not only will the UNP be a loser, but the whole country.


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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.