The Sundaytimes Sri Lanka » Columns Official website of the Sunday Times Newspaper in Sri Lanka Sat, 30 Jun 2012 19:33:49 +0000 en hourly 1 Fears over increasing foreign debt Sat, 30 Jun 2012 17:31:30 +0000 Pubudu The current balance of payments difficulties owing to the growing large trade deficit are being financed by further foreign borrowing; mostly commercial loans. Furthermore, additional borrowing is needed as there is a large repayment of debt and debt servicing costs in the coming months and foreign reserves are inadequate. The large foreign borrowing is a tacit admission that the net reserves position is weak, that there would be a balance of payments deficit and that the debt service payments this year are a strain on the reserves.

According to the Central Bank, the recourse to this additional borrowing would give it more room to defend the weakening rupee that reached a record low 133 to a dollar at the beginning of the week. There is an expectation that the strengthening of the reserves through such foreign borrowing would support the value of the rupee.

Current borrowing

The government is taking steps to sell sovereign eurodollar bonds worth up to $1 billion to add to its dollar reserves. This is in addition to the last tranches of the IMF standby facility. The issue will be Sri Lanka’s fifth sovereign bond issue since it first sold a $500 million five-year euro bond in October 2007. Recently the Bank of Ceylon issued a bond for US$ 500 million.

In addition to these are the IMF tranches of the standby facility and a World Bank soft loan of US$ 500million that is expected this year. It appears that 2012 would be a year of large foreign commercial borrowing. The foreign debt is likely to increase by at least US$ 2 billion during the course of this year.

The Central Bank sold a $1 billion, 10-year euro bond in July 2011 priced at 6.25 per cent. The new sovereign bond of US1 billion is likely to be at a higher interest rate of 6.5 to 7 per cent owing to the weaker external finances of the country and unfavourable ratings of international rating agencies.

The proceeds of the bond are expected to be used for the redemption of its Eurobond that matures in October this year. The Central Bank is expected to sell $150 million worth of 3-year Sri Lanka Development bonds to retire maturing securities used for development financing.

Foreign debt

The growing foreign debt is a serious economic concern. Foreign debt increased significantly in the last decade. The increase in foreign debt is particularly sharp since 2008. Between 2008 and 2009 foreign debt increased by 10 percent; between 2009 and 2010 by 14.4 and it increased by a further 14.5 percent last year. By the end of 2009 foreign debt had more than doubled what it was in 2000 to reach US$ 18 billion.

In 2010 it reached US$ 21.4 billion and at the end of last year it had ballooned to US$ 24.5 billion. The large borrowings this year is likely to result in the foreign debt reaching around US$ 27 billion.

Recent increases in commercial borrowings have also tilted the debt profile more towards commercial borrowing from the earlier bias towards concessionary loans from bilateral and multilateral sources. In 2011 the proportion of concessional debt decreased to 63 percent from71 percent in the previous year.

External debt servicing costs

The large increase in the country’s foreign debt in recent years and increasing foreign debt servicing costs is a serious concern. The Ministry of Finance and Planning estimates Sri Lanka’s foreign debt servicing costs comprising both principal and interest payments for 2010 at US$ 810 million.

The debt service payments was expected to be US$ 954.5 million in 2011 and expected to nearly double in 2012 to an estimated US$ 1,539.4 million. The sharp increases in debt servicing costs are due to increased borrowing in recent years, especially those since 2009.

External debt servicing costs were 12.6 per cent of export earnings in 2011. It was much higher in 2010 at 15.9 per cent and 19 per cent in 2009. This is not an excessive burden, but the increasing trade deficit and poor performance in exports make it a strain on the balance of payments.

Foreign debt servicing has been sustainable owing to the large inflows of foreign remittances. When these are taken into account the external debt servicing ratio falls to much lower levels.

Uses of foreign funds

It would be quite wrong to think of foreign borrowing as bad. Foreign borrowing can spur an economy to higher levels of economic growth than its own resources permit. Foreign borrowing can assist in resolving constraints in foreign resources for development, supplementing inadequate domestic savings for investment and undertaking large infrastructure projects.
It can also assist in overcoming temporary balance of payments difficulties.

However, the extent, costs, terms of borrowing, and use of funds have significant implications for macroeconomic fundamentals. Foreign borrowing could have either beneficial or adverse impacts on economic stability and development.

The use of foreign funds for investment in export earning or import saving enterprises could reduce the burden of foreign borrowing.

Foreign debt should be incurred for developmental purposes. According to the Ministry of Finance 75 percent of recent foreign borrowing has been for infrastructure development such as for power and energy, ports, roads, bridges, water supply, agriculture, fisheries and irrigation, among others. Nevertheless all infrastructure development is not necessarily justified from an economic perspective. Infrastructure projects that either save or earn foreign exchange are the least burdensome. Prioritisation of infrastructure development on this criterion is a prudent economic strategy.

The extent of borrowing, costs and terms of borrowing, of foreign funds and the use of funds have significant implications for macroeconomic fundamentals. These could have either beneficial or adverse impacts on long-term economic development. Therefore containing the foreign debt and decreasing debt servicing costs are vital for economic stabilisation and Sri Lanka’s economic development.

 Summing up

There has been a significant increase in foreign borrowing from international capital markets. These have been mainly to resolve the balance of payments difficulties caused by the widening trade deficit. Furthermore, the foreign reserves were inadequate to meet this year’s debt servicing costs. The resort to foreign borrowing should take into account the uses of the funds. Given the current balance of payments difficulties, it is imperative that government use of foreign exchange be pruned down to assist the balance of payments.

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A bitter mockery of theoretical guarantees Sat, 30 Jun 2012 17:33:24 +0000 Pubudu On June 26th, the International Day in Support of Victims of Torture, a colleague asked me as to why so much criticism was being made of the Sri Lankan Government’s lack of commitment towards eradicating practices of torture in the country.

After all, I was asked, is there not an Action Plan in place which focuses on the same objective specifically, are not constitutional and statutory provisions in place that prohibit torture, do not Sri Lankan courts entertain applications from torture victims and is there not a national Human Rights Commission monitoring state resort to such inhumane treatment?

A simplistic argument

The answers to these questions were quite simple. All the laws and actions plans in theory count for as naught if the Sri Lankan government, as a matter of state practice, encourages and facilitates torture in detention. The fact that such a state practice if not a state policy does actually currently exist has been documented through endless stories of victims whose complaints have not been disproved as false.

This is a practice that is evidenced against individuals of all ethnicities and stems from state policy that does not focus on a well functioning criminal justice system but instead uses terror and intimidation as a deliberate tactic of keeping dissent in check. It is this state policy that renders any defence of state actions by pointing to the theoretical guarantees in place as utterly simplistic, wrong and frankly, quite ludicrous.

Indeed, there are several levels at which legal impunity is afforded to perpetrators. Even when Sri Lanka’s Supreme Court was at its heyday in exercising its constitutional duty to protect rights, the very constitutional structure precluded vigorous interventions similar to the Indian Supreme Court. The manner in which even whatever judgments that it delivered were ignored by the political establishment is a separate question meanwhile.

Recommendation of LLRC still hanging in the air

And though it is sought to be made out on occasion that existing provisions of the Penal Code have been used by the prosecutorial and judicial authorities for good effect in combating grave human rights violations such as enforced disappearances and extra judicial executions, this is not demonstrably the case. The Code lacks a specific crime of enforced disappearances that is essential in the context of conflict related abuses. The recommendation of the Lessons Learnt and Reconciliation Commission that such a provision ought to be enacted has still not been given heed to.

In addition, the fact that the Penal Code lacks any provision relating to the concept of command responsibility whereby senior officers may be made liable for their silence in regard to the abuses committed by junior officers under their command is another problematic feature. In certain prosecutions, though the Attorney General has sought to use the provision of culpable inaction to argue that senior officers are found guilty on this basis, this has not been successful.

Limitations of judicial action

These problems in relation to the rights framework however pale into insignificance when compared to the manner in which impunity has been provided for rights abusers by denying the victims even that restricted extent of relief that the law provides.
The replacement of the normal law of the land by extraordinary emergency laws greatly facilitated the phenomenon of enforced disappearances from the 1980′s onwards.

These laws empower the admittance of confessions made to police officers above a particular rank even though the normal strictly prohibits this. Impunity was afforded in practical terms by the lack of effective prosecutions and by the refusal to acknowledge enforced disappearances as a serious problem. Conversely, police officers found responsible by the Supreme Court for the violation of fundamental rights from the 1980′s onwards were not only promoted, but their compensation and costs were paid by the Government.

At the constitutional level, though the Supreme Court developed a sound body of jurisprudence from the late 1980′s, restraining the power of the executive under emergency law, upholding the liberty of the subject and consistently ruling against custodial abuse, these decisions were disregarded by the political and military hierarchy.

Moreover, in recent times, the number of citizens seeking relief from the Court, particularly in relation to infringements of the right to freedom against torture for example, has decreased. Despite some decisions of the Court in cases that were politically controversial and necessitated much publicity, there has been a marked decrease both in the number of petitioners coming before Court and the Court’s positive response to such applications.

Downgrading of constitutional institutions

At the criminal justice level, the performance extremely problematic as referred to earlier. The number of convictions for enforced disappearances, extra judicial executions and torture (even under the special law enacted for this purpose) has been minimal. The pattern has been, in consequence of a particularly grave violation to arrest some persons and then immediately release them on bail.

Thereafter, cases are kept pending for decades with the witnesses and the victims ultimately tiring of the process.
The collective fate that befell two important commissions; the Bribery and Corruption Commission and the National Human Rights Commission evidenced this in no uncertain terms.

The first was set up by a law unanimously passed in Parliament in 1994 (Act, No 19 of 1994); however it has been wholly ineffective, catching only insignificant and lower ranking public officials in its net while stupendous frauds and corrupt acts engaged in by heads of institutions and politicians have been bypassed. During long periods of its existence, it has been almost non-functional due to its infiltration by political elements, the infighting of its officials and efforts by successive governments to use it for their own political ends.

The National Human Rights Commission (NHRC, Act, No 21 of 1996), on the other hand, was established through a law that was significantly flawed in many respects; it allows the body to engage only in conciliation and mediation with the end result that its directions were substantively ignored by not only the police hierarchy but also other government departments and officials; its members are not stipulated to be full time, thus resulting in their giving only part time commitment to the work, Section 31 of the

Act confers powers on “the Minister” to make regulations regarding implementation, including conducting investigations and the Commission is not empowered to approach courts directly as petitioners in instances of grave human rights violations or even refer such questions to the appropriate court. The lack of the NHRC’s authority has been further aggravated in recent times by the disregarding of the 17th Amendment’s provisions as to appointment of its members (when this amendment was in operation) and thereafter the 18th Amendment which effectively put paid to the independence of all the constitutional commissions. The NHRC’s downgrading from category A to category B by the International Coordinating Committee of Human Rights Institutions, is therefore not surprising.

Failure of law enforcement

The fate of the National Police Commission (NPC) to discipline the police and restore the service to some measure of independent functioning is also another good example. Like the NHRC, the NPC was also deliberately dismantled by the political establishment.
The failure of effective law enforcement is a central question in Sri Lanka today.

A number of measures to redress the question of legal impunity, including revision of the prosecutorial and investigative process and the initiation of an effective witness protection system is imperative. Ideally, an office of an Independent Prosecutor with legislative safeguards to ensure independence from government and having independent investigative staff should be established. The investigative/prosecutorial machinery set in place should follow special procedures in relation to investigating and prosecuting complaints by women victims of torture.

Until these steps are taken, the Sri Lankan government’s promises of commitment to rights protections of its people remain only a bitter mockery.

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Can Sri Lanka be a hub – and haven – in the Indian Ocean? Sat, 30 Jun 2012 17:35:36 +0000 Pubudu In the context of shifts in the global balance of power and the new emphasis on the Indian Ocean as a region of strategic importance, there has been an urgent need for broader discourse in Sri Lanka on the impact of these developments, particularly in relation to foreign policy formulation.

The unfortunate consequences of the lack of such discussion have been keenly felt in recent times, with policy being shaped in an ad hoc manner, in reaction to situations rather than in anticipation of them.

The tilt towards India and China as emerging power centres in global politics, and how Sri Lanka adjusts to its ramifications, have not been a special focus of attention. This is in spite of the country having had links with both Asian powers going back to ancient times, and friendly relations strengthened by people-to-people contacts and other bonds of religion and culture down the ages.
In a new series of open-ended discussions launched on Friday, the Bandaranaike Centre for International Studies (BCIS) has attempted to address this lacuna.

The first session was attended by a group of around 30 comprising mainly BCIS students, a few academics and even a few schoolchildren.  They engaged in a spirited discussion on the topic of the “Future of the Indian Ocean – Geopolitics and Sri Lanka.”  The informal monthly gatherings to discuss issues relating to international relations, or “IR evenings” as they are called, are open to the public.

There were no policymakers or diplomats present at this discussion. Policy makers especially stand to  benefit from the research-and-analysis related resources of institutions such as the Kadirgamar Institute and the BCIS. Prof. W.I Siriweera, BCIS Director, mentioned the hope of developing the BCIS as a main ‘think tank’ on international relations issues.
Dr Harinda Vidanage, former BCIS director who led Friday’s discussion, set the tone with his assertion that Sri Lanka is ‘at the centre of the Indian Ocean,’ but that ‘centres’ are not just geographical. Centres are made discursively and through connections that are made. Sri Lanka’s aspirations to be a ‘hub’ in the region could be ‘a little problematic’ if it was assumed that this would come about simply by virtue of geographic location, he suggested.

Sri Lanka would have to market itself as a hub, and show what it could offer that others (e.g. India) could not. We are competing with other hubs, such as Myanmar which is generating much interest .Hillary Clinton has flown to Myanmar more times than to any other state in the recent past he said. Myanmar was ‘not a democracy but everyone is supporting it’ he observed, with a hint of irony. He suggested that for Sri Lanka in the post-war context there was a need for a policy shift ‘more aligned with China, Russia and Latin America.’

On the concept of Sri Lanka as a hub, he argued that the idea of a ‘peace zone’ is something ‘embedded in us.’ “We
should promote (the idea of) a hub as a haven.”  This would be in the context of a security policy that ensures co-existence in the Indian Ocean. Owing to its geographical location Sri Lanka has historically been a meeting place for all kinds of peoples, and their rivals.

Dr. Vidanage outlined the developments that made the Indian Ocean the ‘most active global space,’ sandwiched between the Atlantic and Pacific oceans. There seemed to be echoes of Robert Kaplan (‘Monsoon – The Indian Ocean and the Future of American Power’) in his references to the ‘choke points’ in the energy supply routes, located at the Strait of Hormuz through which 40 percent of global oil cargo passed, and the Strait of Malacca. A tremendous increase in naval and merchant sailing could be expected with the energy requirements of both India and China due to triple in the next 50 years, or less.

There was a major energy race taking place with both states scouring for oil all over the world. The Chinese, Indian and US navies were also competing for supremacy in the region Vidanage said. The US was deploying 60 per cent of its naval assets in the Asia Pacific, China was sending ships, India was re-fleeting.

These states were also engaging in surveillance operations in the region using cutting edge technology. In diplomacy there was a shift from ‘hard power’ to the concept of ‘smart’ or ‘soft power.’

The question of Sri Lanka’s foreign policy priorities repeatedly came up during the discussion that followed.  How realistic was the shift towards Russia and China, when there was trade dependency on the West?

How relevant was the concept of Non Alignment in the light of new developments? There were comments on the Western emphasis on reforms in governance etc for Sri Lanka, and the fact that this was not a priority for China, which was not concerned with other countries’ mechanisms of governance.

It was observed by one participant that the concept of the Indian Ocean as a Peace Zone was originally proposed by Sirimavo Bandaranaike, but that ‘others hijacked it.’ “We did not define it properly’ he noted. Other points commented on were, the need to ‘identify our friends,’ the need to understand the changes in and around the Indian Ocean, the need to understand how the West functions, and that alliances are never stable. India’s focus on projects in the North and East of the country and the government’s decision to turn down India’s offer to develop the Palali airport were also touched on.

It was observed that there was no single centre of power now, but that the traditional hegemon is ‘still there.’ The waning of western power is not happening as fast as we think. Vidanage noted that the US finds India the ‘last line of defence’ for democracy, in the matter of containing China and also the spread of fundamentalism. A participant observed that there was a need to establish diplomatic relations with many more countries – in Africa and Latin America for instance – if Sri Lanka was to market itself as a true hub.  Sri Lanka could not ‘fight’ with any.

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A to Z: Don’t blame the ministers Sat, 30 Jun 2012 18:00:57 +0000 Pubudu My dear Bandula and SB,

I thought I must write to you because I heard that everyone is talking about both of you these days, and it is like the A to Z of education: from the ‘A’ Levels to the ‘Z’ score, and I’m sure you must be familiar with these by now.

I must congratulate both of you because you have done what no other ministers of education before you did: you have got no less an institution than the Supreme Court to approve the ‘A’ Level examination and the ‘Z’ score!

Of course, they found a little mistake here and there but then, no one is perfect, are they? What we now know is that our universities will have the best of the best: not only have they got the best ‘A’ Level results and the best ‘Z’ scores, they have also overcome whatever errors there are in the system!

Bandula, we knew from the outset that you were the best man for the job of Minister of Education. Surely, the best man to oversee the entire system of free education in the country is a tuition master famous for making his riches from mass scale tuition classes for ‘A’ Level students?

What is encouraging, Bandula is that you still remain the humble tuition master that you were despite becoming a minister. Why, even those days you wanted students to fail their ‘A’ Levels because they would then return to your classes the next years as well. And you still do that, with great success!

And Bandula, who can forget the time you spent as the Minister of Trade? Prices were skyrocketing (and they still are!) and cartoonists were having a field day ridiculing you. I am sure you feel sorry for those cartoonist chaps, which is why you keep providing enough material for them!

Then there was your famous remark, Bandula, that a family of three could live on two thousand five hundred rupees a month. I am afraid you will have to increase that amount by a few rupees if the child in the family is an ‘A’ Level student, because re-correction costs 250 rupees a subject!

And SB, don’t think that we have forgotten you. Like Bandula, we knew that you too were the right man for the job. Who better than a former student union leader at a university to tackle the country’s universities which always seem to be in a crisis?
Very few people have the talent — and the courage — to give these troublemakers a taste of their own medicine, but you do, SB. That is why you can reply to them in choice language, even from public platforms. You seem to have the perfect qualifications for the job: a lack of decorum and dignity!

Of course, SB, we should have always suspected that you possessed those qualities. Who can forget the fact that you were jailed by the Supreme Court for contempt of court for talking about balu nadu theendu nearly nine years ago?
I am sure you have learnt your lessons, SB.

Now, you don’t go about insulting the Supreme Court, you just set your sights slightly lower. That is why you keep insulting university students and university lecturers who keep harassing you with various demands.

Recently we saw you putting your talents to good use, insulting even doctors and their Council which refuses to recognise that medical college you approved! If you say that a medical college should be recognised, that should be good enough, isn’t it? What do doctors know about them anyway?

But pardon me, Bandula and SB, even though I fully support both of you I need to clarify just one matter: who got you into this mess with this ‘Z’ score business? Both of you were doing such a great job with our education system that I am beginning to wonder whether it is all a conspiracy?

Why SB, there you were, the day after the court announced its verdict saying that you had nothing to do with the ‘Z’ score and that your ministry was merely doing the paperwork for university admissions-and nothing more.

Then Bandula, the very next day you were telling us that you too had nothing to do with the ‘Z’ score and that your job was to only conduct the ‘A’ Level examination. If there was something wrong, it was not your fault, you were insisting.
Now, Bandula and SB, if both of you had nothing to do with the ‘Z’ score, maybe someone was trying to get you into trouble? It could be the JVP who did this. Or, if we are to believe Wimal, it could be the Americans. And, if we are to believe Champika, it could even be the Indians!

Of course, Bandula and SB, I don’t believe the theory that this was in fact a conspiracy by Ranil. I know there are people who say that he sent both of you into the government from the UNP so that you will ensure its downfall but frankly, I don’t think the chap is capable of even that!

So, be careful, Bandula and SB. I am sure this country needs you. If we had more people like you, every decision will be challenged in the Supreme Court and in the end, what is correct will be done. That is why you are my heroes!

Yours truly,
Punchi Putha

PS-Now, don’t you worry about all those people asking you to resign. Believe me, both of you are indispensable. Without you, who would we laugh at and who would the opposition complain about? So, whatever you do, please don’t resign — for sheer entertainment value, you two are hard to beat!

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Menon calls for elections to the Northern PC Sat, 30 Jun 2012 18:15:16 +0000 Pubudu It was past midnight signalling the dawn of Friday when the voice on the radio crackled. “Good morning Colombo Airways. This is Bravo Juliet 135,” said the Indian Air Force pilot from the cockpit of a Brazilian-built Embraer 135 jet. The radio contact with the incoming aircraft from New Delhi was handed over to Colombo Radar and thereafter to Air Traffic Controllers at the Bandaranaike International Airport. Later, ground controllers took over to park the jet on the apron. Some distance away a fleet of vehicles including armed escorts were on standby for a quick drive to Colombo.

Alighting from the aircraft was Shiv Shankar Menon, India’s National Security Advisor, an official who holds cabinet rank and plays a strategic role in day-to-day affairs of the Congress-led government in New Delhi. Indian High Commissioner Ashok Kantha and officials of the protocol division of the Ministry of External Affairs shook hands with the visitor. Immediately thereafter, he was whisked away to the Taj Samudra Hotel overlooking the Galle Face Green. Hours later, as the Sun’s rays enveloped Colombo, Menon, a former envoy to Sri Lanka and one time Foreign Secretary, embarked on a chapter that is easily one of the most critical phases in Indo-Sri Lanka relations.

As exclusively revealed in The Sunday Times last week, Menon’s mission was to convey to the government in “the strongest terms” New Delhi’s concerns over a string of important issues. His meetings in Colombo originally listed for one-on-one dialogues with President Mahinda Rajapaksa and Defence Secretary Gotabaya Rajapaksa were to later extend to at least two others — talks with Economic Development Minister Basil Rajapaksa and a briefing to Rajavarothayam Sampanthan, leader of the Tamil National Front (TNA).

External Affairs Minister G.L. Peiris was also present when Menon and President Rajapaksa met at a breakfast session.
There was tight secrecy over the number of important issues Menon discussed with President Rajapaksa. There was no news conference nor local media were invited. Even the Colombo-based Indian media corps, who are usually privileged to have a private briefing, had to be content with a carefully crafted media statement from the Indian High Commission. It was circulated to them.  Menon spoke only a few words to them other than engage in light hearted banter. The local media were advised through SMS by the High Commission’s spokesperson to refer to their website for the same news statement. This is what it said:

Remarks by National Security Adviser Mr. Shivshankar Menon at aMedia Interaction in Colombo
(29 June 2012)”My visit to Sri Lanka today has been in the context of regular consultations and exchange of views between the Government of India and the Government of Sri Lanka.

“I called on H.E. President Mahinda Rajapaksa this morning. Foreign Minister G.L. Peiris was also present at the meeting. Thereafter, I met Mr. Basil Rajapaksa, Minister of Economic Development and Mr. Gotabaya Rajapaksa, Defence Secretary. I also met the TNA leader Mr. Sampanthan.

“I discussed recent developments, bilateral relations and areas of common concern. I was also briefed about steps being taken by the Government of Sri Lanka on political reconciliation and settlement. While this is a Sri Lankan issue and something that Sri Lanka has to do, we will continue to remain engaged with all concerned and offer any support required in this regard.
“India has always stood for a united Sri Lanka within which all citizens can live in equality, justice, dignity and self-respect. We have worked closely with the Government of Sri Lanka on relief, rehabilitation and resettlement of IDPs. India’s assistance was appreciated by the Sri Lankan leadership in all my meetings. We remain committed to continue our cooperation.
“We also discussed the fishermen’s issue.

It was noted that the practical arrangements of October 2008 should be adhered to until an alternative mechanism was agreed upon. We agreed that fishermen’s associations on both sides, which had met in the past and reached some understandings, needed to meet again to work on developing this further. This could then serve as the basis for finding a solution to this humanitarian issue.

“On the bilateral front, we noted that most of the Indian-assisted projects were proceeding well and several projects, particularly those relating to the development of railway infrastructure in the Northern and Southern Provinces, were being implemented well ahead of schedule. In the past two years, India has committed US$ 750 million under lines of credit and another US$ 350 million under grants-in-aid. There are a number of other new projects under consideration.

“We also discussed maritime cooperation and other security related issues. It was agreed that we could take this further.
“Sri Lanka is our close neighbour, with whom we enjoy a multifaceted and dynamic relationship. We look forward to strengthening and further developing this engagement.”

At least two key factors were the cause for Menon’s visit to Colombo. One arose from the report Sushma Swaraj, leader of the opposition in the Lok Sabha, handed over to Prime Minister Manmohan Singh. This was after her return to India following a week-long trip leading an all-party parliamentary delegation. Among the key points she raised with UPFA leaders during the visit was the implementation of the LLRC recommendations “with regard to information on missing persons and detainees, investigation of cases of disappearances and abductions, promotion of a trilingual policy, reduction of high security zones, return of private lands by the military and demilitarization, including phasing out of the involvement of military activities and restoration of civilian administration in the Northern Province.”

Ms. Swaraj noted the assurance given by the Government of Sri Lanka in Parliament that it would ensure the withdrawal of security forces from community life and confine their role to security matters.

The second factor is the upcoming Universal Periodic Review (UPR) at the UN Human Rights Council in Geneva. Sri Lanka’s human rights record is expected to come up for review in early November. The UPR involves a review of the human rights records of all 192 UN Member States once every four years. It is a significant innovation of the Human Rights Council which is based on equal treatment for all countries.

It provides an opportunity for all States to declare what actions they have taken to improve the human rights situations in their countries and to overcome challenges to the enjoyment of human rights. The UPR also includes a sharing of best human rights practices around the globe. A team headed by Minister Mahinda Samarasinghe, President’s special envoy on human rights issues, is now preparing Sri Lanka’s report for the UPR.

President Mahinda Rajapaksa in conversation with India’s National Security Advisor Shiv Shankar Menon

As the head of a three-nation team, it would be India’s responsibility to review Sri Lanka’s report together with UNHRC members Benin and Spain. Thereafter, it would go before the Council. This report will hold the key to determine whether or not the human rights issues raised by India and the international community have been accepted and implemented by Sri Lanka.

Thus, the Sri Lanka report is of particular significance in the light of the March 2013 sessions of the Human Rights Council. Matters relating to the implementation of the US-backed resolution, which received Indian backing, have raised questions on the posture to be taken by India. During her visit to Sri Lanka, Ms. Swaraj spelt out New Delhi’s stance that India voted for the UN resolution because the Indian government was disappointed Colombo had not fulfilled the assurances given to it.

Menon covered most of these issues during talks with Rajapaksa. The Indian special envoy noted that the subject of reconciliation was entirely a matter for the government of Sri Lanka and New Delhi respected that position. India also appreciated moves by the government to appoint a Parliamentary Select Committee (PSC) to formulate a political package to address Tamil grievances. However, in the light of the current imbroglio, the result of Tamil National Alliance (TNA) refusing to participate until bilateral talks with the government are resumed alongside; Menon made what the Indian government believes is a way out to demonstrate that the Sri Lanka government was addressing reconciliation issues.

He proposed to Rajapaksa that elections be held to the Northern Provincial Council (NPC). He asked Rajapaksa to make a firm commitment through an official announcement. The Indian thinking is that if elections are held to the NPC, it will be a first step in an incremental process for Tamil political parties, which have demonstrated their ability to win the majority of votes in the north, to play a role in administering their areas. This is until such time the proposed PSC is set up to further examine other issues. This step, Menon explained, could give a signal to the international community that measures towards reconciliation had already begun.

A government source said Rajapaksa made clear he was willing to move forward. The source said he explained that he agreed “in principle” that elections should be held to the NPC but it would have to be after demining in all areas was completed and “other necessary conditions” were created. However, the source said the government was “seriously considering” holding NPC elections before the end of 2012.

Yet, the question remains whether a formal announcement would be made in the coming weeks. This is particularly in the light of elections being held to the North Central, Sabaragamuwa and Eastern Provinces. Nominations have been called from July 12 to 19 and speculation is rife that polls will be held on September 8.

Menon made clear to Rajapaksa that India’s stance on upcoming international events related to Sri Lanka would hinge on the action taken by the Colombo government. In this regard, he also apprised the President of the compulsions the government in New Delhi was facing from political parties in the southern state of Tamil Nadu.

Already, Dravida Munnetra Kazhakam (DMK) leader Muthuvel Karunanidhi is giving leadership to a Tamil Eelam Supporters Conference (TESO) to be held at Vallipuram in Tamil Nadu on August 5. Karunanidhi, the chairman of the conference, has tasked his son Stalin, DMK Treasurer, to head a reception committee to make arrangements. Five secretaries.– K. Ponmudi (a former State Minister), Dravidar Kazhagam General Secretary Kali Poonguntran, General Secretary, Viduthalai Siruthikal Katchi, General Secretary Ravikumar and DMK functionaries K.S. Radhakrishnan and advocate H.M. Jinnah. South Indian media reports quoted one of them as saying, “We want to hold the conference on the lines of the one held in Madurai in 1986. Besides inviting national leaders, we are planning to bring human rights activists from across the world and international leaders who are supporting the Tamil Eelam cause.”

It is unlikely the centre in New Delhi would grant visas to any foreign participants since India has said it has strong stakes in the unity and territorial integrity of Sri Lanka. The question yet remains whether the Indian government would take any other steps to prevent the conference from taking place. This is on the basis that Indian soil should not be allowed to be used to campaign for separation in a friendly country.

After the meeting with President Rajapaksa, Menon drove to the Presidential Secretariat for talks with Economic Development Minister Basil Rajapaksa. The subject of discussion centred mostly on development activities in the north and east. India has committed more than US dollars 1.1 billion on lines of credit and aid grants for development in the war-ravaged areas. Thereafter, Menon drove to the Ministry of Defence for one-on-one talks with Defence Secretary Gotabaya Rajapaksa. The Sunday Times learns that one of the key subjects of discussion was “demilitarisation” in the north.

Whilst Menon emphasised the need for less involvement of security forces in the life of the community, Rajapaksa was to explain the government’s position that it was not so. He detailed out the military “de-escalation” in the north and how troops were assisting in development activity.

There was a free and frank exchange of views on the subject, said a government source familiar with the talks. The Defence Secretary entertained Menon to lunch at his Ministry where some senior officials from both sides joined in.

Later, Menon met TNA leader Sampanthan to tell him that the Indian government had requested President Rajapaksa to hold elections to the Northern Provincial Council. He told him that a formal government announcement on the subject could be expected soon. Sampanthan in turn was to tell Menon about what he alleged were “appropriation” of private land by the military. He said this was going on apace.

Sampanthan told the Sunday Times, “We talked with each other about matters of concern. On the question of elections to the NPC, the government has given a number of reasons. It says land mines will have to be removed; the displaced have to be resettled and administrative issues overcome. How did they hold Presidential and Parliamentary elections?” Sampanthan said that since the Provincial Councils were established, there have been no elections to the Northern Province alone. In 1988 elections were held for the North-East Provincial Council. However, the Supreme Court ruled thereafter that the NEPC was not constitutional.

Economic Development Minister Basil Rajapaksa in conversation with India’s National Security Advisor Shiv Shankar Menon

After a brief conversation with Colombo-based Indian journalists, Menon flew by helicopter to BIA in Katunayake for his return flight to New Delhi on Friday evening. A diplomatic source who summed up the visit said, “He (Menon) has placed India’s cards on the table. How India is going to play the game in the upcoming weeks at international events linked to Sri Lanka will now depend on how much Colombo is able to heed Indian wishes including past assurances given to it. If there is some action, one can see a moderate stance as against inaction leading to a tougher Indian position. That is the essence of the visit.”

Other than that, there were also newer realities that have emerged as a result of the visit. One is the minimal or no role by the External Affairs Ministry other than Minister Peiris being present at the meeting with the President. Other than that, India has addressed serious issues of concern to it with only the trio, the three brothers who matter most in Sri Lanka – President Rajapaksa, Economic Development Minister Basil Rajapaksa and Defence Secretary Gotabaya Rajapaksa. It has been agreed that there would be visits by ministers to India and vice versa in the coming months. Menon also agreed to convey to his Prime Minister Manmohan Singh, a request by President Rajapaksa to send the Kapilavastu relics to Sri Lanka. This is during the ongoing Sambuddhatva Jayanthi celebrations.

Hours before Menon arrived, Opposition United National Party (UNP) Leader Ranil Wickremesinghe told a news conference that President Rajapaksa had not held the NPC elections though he had given several assurances. Here are excerpts from what he said:
“In 2008, when the elections to the Eastern Province were held, President Rajapaksa said he would go on to win the war and then hold provincial elections in the north as well. Elections have been held in all other provinces, but not in the north. Instead of holding elections for the north, they are going for the sixth round of elections. What we say is that elections should be held to the north first. Give the right for the Sinhalese, Tamils and Muslims to vote and elect persons whom they want. It is the people in the north who have failed to get benefits of the Provincial councils. They were set up on the request of the people of the north. Since the 1988 elections, no provincial elections have been held there.

“No democracy has been given to the people in the north. The people have not been given the right to elect members to the council. What is the difference between the Tiger guerrillas and the government? Prabhakaran too was against elections. That is the reason I lost in 2005. The LTTE wanted to rule the north for 10 years. So is it that the LTTE policies are today being implemented through Kumaran Pathmanathan? If this election is held and whoever wins a major international issue will be resolved. When the next session is held in Geneva the government can say that all provincial council elections have been held.
“Our party is ready to contest elections in the north.

If we win we take over power, if we lose we will remain in the opposition. Others are ready for this. I am not sure of the UPFA. Why isn’t this right given to the Tamils. Today there is a select committee proposed to discuss the LLRC report. Several present here and myself have been trying to get the TNA to take part in the proceedings. We have said elections in the north should be held. Even regarding the statement made by me in Parliament, there were only explanations made by the government, but nothing has been rejected. The failure to hold elections in the north prevents the process going through. I am not sure whether this is an attempt to prevent the LLRC report being discussed.

“If the elections are held and the committee begins sittings we could easily face the situation in Geneva. Even we want to face the international challenges. That is the reason we say that the northern elections should be held first. Our campaign on this will continue. Our campaign is that the people should be given relief, corruption should be ended, law and order should be restored. Educational activities should continue. Thereafter the PC elections can be held. In fact what the government is doing is distracting attention, preventing the people demanding for salary increases. If the government holds the PC elections in the north under the 13th Amendment, it would also be a response to the claims made by Tamil extremist groups. Instead of that the government is telling the people to tighten their belts and creating chaos in the country.”

Whilst Wickremesinghe called for the conduct of elections to the NPC, his erstwhile deputy, Karu Jayasuriya said in a statement yesterday that the Presidential system should be abolished. “Too much power concentration in one person can only hinder and not advance democracy in a country. This is the reality we are all living today, whether politician, journalist or citizen,” he said.
Though some aspects of the implementation of recommendations of the Lessons Learnt and Reconciliation Commission (LLRC) are now under government’s consideration, there have still been no official responses to requests made by the UN Human Rights High Commissioner Navanethem Pillay.

One of her requests in May this year was to send a delegation of special procedure mandate holders to Sri Lanka in keeping with the US-backed resolution approved by the Council in March this year. The third element in the resolution is for the UN High Commissioner for Human Rights, in consultation with, and with the concurrence of, the government of Sri Lanka, to offer advice and technical assistance on implementing provisions in the resolution.

High Commissioner Pillay is also required to present a report to the Council on the matter at its 22nd sessions in March next year. She has also accepted a government invitation to visit Sri Lanka. EAM sources said yesterday that no official response has been sent so far to Pillay. The government was earlier averse to accepting special mandate holders to visit Sri Lanka. This is on the grounds that it would constitute “interference in the internal affairs of the country”. However, the government is not averse to Pillay’s visit though it is of the view that matters related to the US-backed resolution would not be discussed. However, the government has come under pressure from several international quarters to agree to a visit by special mandate holders and thus avoid adverse repercussions.

Though not directly related, the first test of strength in the international arena will come when Sri Lanka hosts the 58th sessions of the Commonwealth Parliamentary Association in Colombo from September 7 to 15. The theme of the event is “ensuring a relevant commonwealth for the future.” Among the subjects slated for discussion:

  • Empowering Future Generations through Access to Health and Education and Vocational Training. (Host Branch topic)
  • Should the Commonwealth Establish a Commissioner for Democracy, the Rule of Law and Human Rights?
  • The Politics of Constitution-Making, the Role of Parliaments in Relation to the People
  • Ensuring Adequate Parliamentary Scrutiny of Foreign and Commonwealth Affairs. (Small Branches Topic)
  • The Role of Parliamentarians in Conflict Resolution and Peace-Building.
  • Engaging Political Parties to Improve Gender-responsive Governance. (Gender-Related Topic)
  • Terrorism – The Threat to Democracy, Peace and Security.
  • Tackling Youth Unemployment.

Some of the western countries in the Commonwealth, like for instance Canada and Britain, will view progress on matters relating to the UNHRC resolution. If in their view, the measures called for have not been paid heed to, there is the likelihood of their raising issue or scaling down their respective delegations. That no doubt would be a test to determine how the measures adopted by the government have played out so far.

Yet, the Indian equation and the present heavy strain on relations between Colombo and New Delhi cannot be ignored. Menon has made what appears to be a last try before India decides on the direction it would take. The government cannot afford to ignore any more the Indian concerns or the leverage New Delhi has with the international community. With the conduct of foreign policy in the doldrums, an External Affairs Ministry in a state of limbo, it is imperative the government acts fast.

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Ranawaka not rattled by ministry rat Sat, 30 Jun 2012 19:13:26 +0000 Pubudu There was an unexpected visitor when Power and Energy Minister Patali Champika Ranawaka addressed the media on Thursday after taking part in a function where an agreement was signed to establish an early warning system to respond to nuclear accidents in Sri Lanka.

While the briefing was underway at the conference room of the Power and Energy Ministry, a rat crept from under the seats where the journalists were seated and climbed up a board that was behind the head table where the Minister sat along with several officials.

The rat’s  entry to the hall  set off a few screeches from  among the lady reporters  but unperturbed,  the  rodent climbed the board and sat exactly overhead where Minister Ranawaka  was seated and remained so till the news conference was over. The minister was not rattled and had more important things to deal with at the news conference.

It was only after that it climbed down and scrambled away, much to the amusement of those present. Along with the mosquito menace the Government may be burdened with a rodent menace as well, noted some participants.

All or nothing: Soysa’s threat to journalists

Deputy Education Minister Wijayamuni Soysa was attending a meeting at a school in Bandarawela last Thursday to discuss issues related to appointing a principal to a school in the area.

Media representatives were also invited along with the staff and parents. Before the event began, the Deputy Minister said he wanted his speech to be reported from start to finish. The journalists said it was difficult to carry out the Minister’s diktat due to space constraints.

Deputy Minister Soysa seemed not convinced and ordered the reporters to leave the meeting.What a way to communicate with the public!

VIP sing-song on Airbus from Rio

After attending the Rio +20 summit, President Mahinda Rajapaksa and his entourage embarked on a 16-hour-long flight back to Colombo on a chartered SriLankan Airlines Airbus 340.

The flight made a stopover for refuelling and tea in Johannesburg in South Africa. After resuming the journey the ministers in the delegation started a sing song.

Ministers Wimal Weerawansa, Champika Ranawaka, Anura Priyadharshana Yapa, Mahinda Amaraweera and Western Provincial Minister Udaya Gammanpila joined in the singing. They used some musical instruments purchased in Brazil during their shopping spree.

After the sing song went on for about three hours, there was another joining in. It was Presidential Secretary Lalith Weeratunga, an accomplished musician in his own right. He brought with him a type of drum (dolki) and sang popular hits of the late C.T. Fernando.

Beef ban for police dogs

The Police Kennels Division has decided to stop feeding beef to dogs. They were given a daily meal of a kilogram of beef as their main diet. There are 285 dogs assigned to the Kennels Division and deployed island wide.

The dogs were found with stomach disorder, skin diseases and fever regularly in the recent past, said an officer of the Police Kennels Division. This was cited as the reason for banning beef for police dogs. However, what would replace beef is not clear.

Once jailed, now SB won’t comment

A media briefing was held at the Higher Education Ministry premises on the subject of the Supreme Court order on ‘Z’ score calculations.

Minister S.B. Dissanayake who once served a jail term for case of contempt of court after making a remark about the judiciary, this time made sure to avoid making comments or replying questions from the media about the judgment.

As the University Grants Commission Chairman Gamini Samaranayake said legal assistance will be sought to clarify the court order, journalists were questioning the minister on whether he thought that the judgment had any faults or whether he would continue with the present ‘Z’ score calculation method despite the court order.

“We will follow the court order, that’s it. Please I was jailed once and cannot be going there for the second time,” he said.

Bandula mum at Cabinet meeting

The “Z ” score issue came up for discussion during last Wednesday’s Cabinet meeting where Higher Education Minister S.B.Dissanayake gave a lengthy explanation for what caused the blunder.

After giving him a patient hearing, President Mahinda Rajapaksa said it was Minister Dissanayake and Minister Bandula Gunawardena who are at the receiving end of all the brickbats due to the fiasco and asked others to help them overcome this hurdle and not do anything to aggravate the situation.

All the time during the “Z” score discussion, one person who remained silent was none other than Education Minister Gunawardena who seemed to be at a loss for words.

Chamal speaker at Rajapaksa wedding also

The Galle Face Hotel, one of the country’s oldest hotels, had an altogether new mask. Cutouts made it look different from the hotel that boasts of old world charm.

The occasion was the wedding of Minister Basil Rajapaksa’s daughter.It was Speaker Chamal Rajapaksa who delivered the welcome address at the wedding ceremony. While he went on speaking, President Mahinda Rajapaksa remarked, “Meya parlimenthuwe vitharak nemei ape pawuleth kathanayaka” (He is not only Speaker of Parliament, but also speaker for our family.)

All family members were invited to the wedding. However, there were hardly any politicians invited. Only Ministers Gunaratne Weerakoon (Galle District) and Felix Perera (Gampaha District) were present.

The event was full of different varieties of food but no liquor was served. In addition to the choices of their own all invitees were given a plate full of “kurakkan thalapa, aanama (a sauce made of lentils to eat thalapa), a piece of kiribath (milk rice), lunu miris (chillie paste) and a piece of purple coloured raja ala. (king yam).

Z-score crisis: Ministers add to the muddle

Who speaks for the government and whose view is official? Is there anything called “official” and “unofficial” positions on any one given issue?

These questions have become relevant again over the controversial “Z” score issue which was shot down by the Supreme Court. Official government spokesperson Keheliya Rambukwella admitted it had a negative impact on the country’s education system.
During his weekly post-cabinet news briefing, he conceded that the government would abide by the SC ruling and declared it was “quite concerned about what happened.” That naturally means that the government was admitting that something had gone wrong.

However, Minister Wimal Weerawansa, widely regarded as the government’s “political hit man” and reflects the inner thinking of the government on various issues, said the Z-score fiasco was not the fault of the government and hence Education Minister Bandula Gunawardena and Higher Education Minister S.B. Dissanayake could not be blamed.

Who blamed these two Ministers? – Well, well it was National Freedom Front’s politburo member Piyasiri Wijenayaka. He is one of Weerawansa’s right hand, sorry, left hand men. He announced that he had asked President Mahinda Rajapaksa to remove Ministers Gunawardena and Dissanayake.

He also wanted University Grants Commission chairman Gamini Samaranayake to resign.Weerawansa is the leader of the NFF. His own party cadres, not that many though, now ask whether their leader knew about Wijenayake’s request. Or was it a case of Weeerawansa speaking for a section of the government. In the light of so many contradictions, the public may never know.

Victory for Nonis despite dissent

With the London fiasco now over, Sri Lanka’s High Commissioner Chris Nonis fought it out again. This time it was to retain his second two-year term as vice president of the Royal Commonwealth Society. It is in the wake of strong lobbying by members of the British Tamil Forum.

At last Tuesday’s elections to the RCS, all other posts were filled uncontested. When it came to the election of the vice president, the chairman asked whether there were any objections. Two members of the Society, who are also members of the BTF, raised issue.
The matter was put to vote. Nonis received 39 as against his nearest rival who polled only 12. Peter Kelner was elected RCS chairman earlier and Danny Sri Skandarajah as president.

It was no doubt a feather in Nonis’ cap though it came after the dissenters recorded their protest in the RCS minutes. After all, the 2013 meeting of the Commonwealth Heads of Government is taking place in Sri Lanka.

Mayantha ousted from party post

Mayantha Dissanayake, son of the late Minister Gamini Dissanayake, has found himself ousted from the post of UNP organiser for the Uda Dumbara electorate. UNP insiders say the post has been given to another nominee.

Dissanayake’s supporters say he has been penalised “for his family connections” whilst UNP leaders point out that the change was part of a routine reorganisation.

Mayantha is the brother of UPFA Cabinet Minister Navin Dissanayake. Navin’s father-in-law Karu Jayasuriya is a former Deputy Leader of the UNP.

Air Force offers paradise golf

The Sri Lanka Air Force (SLAF) has started a special flight for golf players. They are ferried in their brand new air conditioned Mi 60 (50-seater) aircraft for a trip to Trincomalee in the morning and back in the evening. The price is Rs. 8,000 for the flight and a Rs. 6, 000 fee for golfing.

It is just about US$ 100 and makes it the least expensive golfing tour in the world. There is also an added attraction. For yesterday’s flight, there was another bonus. The SLAF dance troupe was also on board to entertain the visitors after a game of golf.

This then, is paradise.

Mangala tells CBK: ‘We want a party’

It was close friend Mangala Samaraweera who said “we want a party,” when former President Chandrika Bandaranaike Kumaratunga turned 67 on Friday. Otherwise, she had decided to take it easy.

So Kumaratunga held a dinner for four others —  her sister Sunethra, Samaraweera, Pakiasothy Saravanamuttu, Mano Tittawala and Pathma Maharaja. It was at the Spoons Restaurant in the Colombo Hilton.  Yesterday morning, Kumaratunga left Colombo for Kenya.

Controversy over Parliament post

The appointment of a new Assistant Secretary General (ASG) to Parliament has run into some controversy with the post now remaining vacant since February this year. The post fell vacant after the previous ASG was promoted as Deputy SG.
Advertisements were placed calling for applications to fill the post and while several were received there was also an applicant from within the staff of Parliament. However, the staff has doubts whether merit and qualifications would be the only criteria.

How’s this Babu throwing around Rolexes

The local Babu has become the talking point in well informed flying circles for his newly developed ability to win friends and influence people.

The language he speaks to win business, insiders say, is not vocal. It is through expensive gifts to the movers and shakers who have developed rich tastes for life.

The talking point now is how he presented gold Rolex wrist watches to the husband and wife of a paradisiac outfit. He did not want to offend the next in line in the outfit, so he presented a silver Rolex to him.

MR shows his colours to Herath

Barely 48 hours before the dissolution of three provincial councils, Sabaragamuwa Chief Minister Maheepala Herath was taking part in a TV talk show titled ‘Hathweni Peya’ on the state-run Rupavahini.

When the programme ended, he received a telephone call. It was from ‘Temple Trees’ for an urgent meeting with President Mahinda Rajapaksa. The meeting was convened to discuss the dissolution of provincial councils. “Mahee hondata hathweni peye katha kala” (Mahee, you did very well at the Hathweni Peya), Rajapaksa commented on Herath’s performance.
“Aei oya rathu pata kamisayak andey? Ethana background ekath rathu patai. Oyage kamiseth rathupatai. Dekama eka pata nisa oyage rupe ismathuwela penne nehe.”  (Why did you wear a red shirt? The background was also red. Both your shirt and the background were in the same colour so your face doesn’t stand out), Rajapaksa told Herath.

The episode made clear President Rajapaksa sometimes finds the time to watch TV talk shows where his government politicians take part.

Diplomatic blunders will boom in Diyatalawa

Come next week and heads of Sri Lanka diplomatic missions overseas will hold what is being touted in External Affairs Ministry circles as a “brain storming” session. It will be at the Army cantonment in salubrious Diyatalawa.

The idea is to identify shortcomings in the implementation of Sri Lanka’s diplomacy in the capitals our diplomats serve and to rectify them. When the conference ends, senior EAM officials say the government plans a new diplomatic thrust. Of the 59 heads of mission taking part, only 15 are career foreign service officers.

The others are political appointees.

In an External Affairs Ministry where cynicism surpasses optimism, a witty e-mail is doing the rounds. Here are some highlights:

  •  staging a dpl fiasco and managing the media fallout — case study of the Sri Lanka High Commission in London.
  •  cutting costs in overseas missions. How to subcontract all activities to a PR or lobby firm. A head of Sri Lanka mission to visit Colombo every month on government account for a case study.
  • how to ignore anti-SL resolutions in the legislature of the host country and hide the damage from the SL political leadership, the case study of the a mission in the Americas.
  •  how to avoid losing a major trade concession like GSP+ and getting damned by the 27 member European Union. A case study of the diplomatic mission in Brussels.
  • how to emulate the first foreign service officer ever, to campaign in a local election in SL for the ruling party while working in a western capital and win a reward of a ten-year continuous stay abroad with ambassador’s salary.
  •  how to victimise and marginalise efficient career diplonuts who refuse to  engage in illegal and other activities that are taboo for State officers.
  • How to write your own press releases after a meeting at a bar, cafe or car park and get it published in the Sri Lankan newspapers.

Some EAM officials say the event should have been held in Colombo allowing the heads of missions to interact with various international and local agencies relevant to their capitals. “Colombo is a distraction. A military camp is the best place where they could focus without any disturbance,” argued another.

The first non-military conclave in the Diyatalawa Military Academy precincts took place earlier this year when all government ministers and parliamentarians gathered for a dialogue.

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UPFA won’t talk on CoL Sat, 23 Jun 2012 19:11:46 +0000 Pubudu When the meeting of the Colombo Municipal Council (CMC) was held this week, UNP members raised the issue of the high cost of living.

However of the 20 UPFA members, only eleven were present and they also chose to keep mum.

Finance Ministry goes nuts over paddy

There were some blunders in the Sinhala version of the Finance Ministry’s much-hyped 2011 annual report released recently at a ceremony chaired by the President.

On page 457, Table 1.15 the caption is about paddy and wheat production but in the table its quantities are given in nuts … not in metric tonnes.

Ministers to probe threat to Muslims

A ministerial committee inclusive of members of constituent parties in the ruling coalition is to be appointed to look into the alleged threats to Muslim places of worship.

At a recent Cabinet meeting, Minister Rishard Bathiuddin took up the matter and urged President Mahinda Rajapaksa to intervene and allay the fears of the Muslims who felt their mosques and madrasas were under threat from ultranationalist groups.

The minister’s appeal to the President followed incidents in Dambulla, Borella, Dehiwala and Kurunegala where the Muslims were told either not to conduct daily prayers or relocate their mosques and madrasas away from areas sacred to Buddhists.

After Minister Bathiuddin’s appeal, the President agreed to set up a ministerial committee. It is expected that this committee will be named after the President’s return from his visit to Latin America.

Powerful young lawyer’s firm gets big business

There is a buzz in legal circles about a new law firm that has opened for business.
Not that the opening of a law firm is particularly hot news, except that in this instance, there is some mystery as to its senior partner.

Already, a posse of young female lawyers are making visits to government and semi-government establishments and presenting their visiting cards making legal officers stand up from their chairs and take notice. Chairmen, managing directors and directors are scratching their heads and have decided to take the path of least resistance. One of them said a quarter of its cases have been passed en bloc to this new firm.

They are not willing to say who the senior partner of this law firm is but they do say that some of the young lawyers are probably more senior than the senior partner. Your guess is as good as mine.

Soothsayer can’t find police weapon

Two Colombo policemen who had lost a weapon while on duty had decided to consult a soothsayer to find out where their lost weapon was. The men visited a soothsayer in a Colombo suburb and a scribe who was present overheard their conversation.

The soothsayer after completing his study of the occult told the policemen he could not detect where the weapon was. Instead he advised them to seek more earthly ways of finding the lost weapon.

Dentist Minister opens his mouth against PBJ, lady secretary 

Fisheries Minister Rajitha Senaratne allegedly slandered Treasury Secretary P.B. Jayasundera and his own Ministry secretary Damitha de Soysa using abusive language in the presence of around 50 persons including officials at a meeting at the Ministry conference room on Monday.
The two officials, who were abused, were not present.

Dr. Senaratne, who chaired the meeting, launched a violent, vituperative and malicious attack on the lady secretary, those present said. He also reprimanded Dr. Jayasundera for ‘acting foolishly in appointing people’ who have been warming chairs in the Treasury as secretaries.
Dr. Senaratne has failed to realise that it was the President who appoints ministry secretaries. Thus, he was indirectly criticising the President in front of everyone.

UNPers avoid Fonseka at wedding

Former Army Commander Sarath Fonseka was invited to a wedding of the son of a Muslim businessman at the Convention Centre in Colombo.

Former President Chandrika Kumaratunga and Minister Rajitha Senaratna were seated at a table when Mr. and Mrs. Fonseka walked into the reception hall. They too sat at the same table which had room for eight.

Several UNP politicians present at the venue seemed reluctant to sit at the same table with the couple despite some persuasion from the father of the groom. Finally the host escorted the former General to another section where many of the ladies were seated.

Why didn’t Fidel Castro meet MR?

A question being asked in diplomatic circles is why President Mahinda Rajapaksa was unable to meet the legendary Cuban leader Fidel Castro on his state visit to that country last week.

Yes, he met the widow of the revolutionary icon Che Guevara and was photographed by his photographer son, but what happened to the great Fidel? No official version came out from either side, and one wondered if it had anything to do with the health of the erstwhile Cuban leader. Not many government leaders visit Cuba anyway for Fidel Castro to have been tied up with engagements. Others, however, ask if this was a snub for keeping the ambassadors post in Havana vacant for more than one year.

The ambassador-designate Tamara Kunanayagam was reportedly present in Havana, on the invitation of President Rajapaksa, but then she is refusing to take up the job. The result was the unprecedented faux pas of a country’s Head of State making an official visit to a country where there is no ambassador to coordinate the visit.

No independence at the Square

The newly landscaped gardens and well-paved walks at Independence Square in Colombo are attracting a large number of people almost daily but a couple who went there recently found that there are some obstacles to visitors.

The couple was seated on the steps overlooking the lawn when some men clad in security uniform and one in plain clothes walked up to them and said couples were not allowed to sit on the steps for more than 20 minutes and if they wanted they could sit on the lawn for the rest of the time. After several minutes of arguing with the men, the couple decided to leave the square but only after telling them that there is no independence for visitors at the Square.

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Breaking the limp arm of the law Sat, 23 Jun 2012 17:59:38 +0000 Pubudu My Dear IGP,

I thought I must write to you because you and your department seem to be in the news these days, what with innocent people being killed for the crime of attending political meetings and wanted criminals surrendering quite voluntarily!

IGP, I know you are only doing your job-and it is a difficult job to do because you have to keep everyone happy-but I feel something is wrong in our country if armed men can storm a political meeting, shoot two people dead and then disappear without a trace.
It doesn’t help, IGP, when everyone appears to know who masterminded those killings and then you appear before the media and say that the alleged mastermind will be arrested only if there is evidence against him.

It is even more damaging when someone who claims to be the Director General of the Media Centre for National Security sits beside you and claims that he knows who is responsible for the killings-and that it happened because of an internal dispute among the rathu sahodarayas.
Common sense would dictate that if this gentleman knows who is responsible for the killings, he has only to let you know about that and then you will go about your job, which is to arrest those responsible. Instead, he chooses to make a public spectacle of the event as if to say that the alleged mastermind, you-know-who, is merely an innocent bystander.

Now, you could have excused him and put it all down to inexperience or incompetence if this was the first time this gentleman said something like this. But if I remember right, IGP, when a parliamentarian was an accused in the gruesome murder of one of his own party stalwarts, this gentleman leapt to the parliamentarian’s defence and declared that ‘he was not a suspect’.
Now, pardon me if I am wrong, IGP, but I thought that deciding whether someone was a suspect or not was the job of your department and eventually the Attorney General’s. Has there been a re-allocation of duties where the Director General of the Media Centre of National Security has been vested with those powers, IGP?

As if that is not enough, IGP, the alleged mastermind, who has been on the run for the past ten years, suddenly surrenders to the courts, apparently for the offences he allegedly committed ten years ago. Ah, isn’t this a wonderful coincidence and doesn’t he have an impeccable sense of timing!

I would have suggested to the Director General chap at the Media Centre for National Security that he should have posted bail for this gentleman and had him released but I didn’t do that because more surprises were in store.

That is when I really realised why everybody is saying that Sri Lanka is the miracle of Asia, or ‘aasiyaawe aascharya’ as they like to call it. Why, IGP, it so happens that this gentleman had made a visit to the prison, while there were five warrants issued for his arrest by your department! Maybe the prospective tenant was checking out his accommodation!

I am not sure what you should do in such circumstances, IGP. In fact, I am not even certain whether we need a police department anymore because everyone who is accused of some offences appears to be surrendering! Why, soon after this alleged mastermind surrendered to the courts, we had a senior minister surrendering to court as well!

So, IGP, I think you should seriously consider closing down your department and sending in your retirement papers. Why, on the one hand your department is unable to arrest any criminals on your own and on the other hand, they seem to be surrendering anyway. So, you might as well call it a day and save the government some money.

But before you do so, IGP, you will need to record the statement of that parliamentarian who was accused of being involved in the killing of one of the stalwarts of his own party. That young man disappeared soon after the incident and was then found to be in Singapore but was too unwell to speak-or so they had us believe.

Again, maybe because this is the land of miracles, he is now apparently alive and well and saying ‘Hello, kohomada’ to no less a person than our Prime Minister who happened to be at the same hospital.

Now, IGP, I think you should try to record a statement from him as soon as possible because he will either disappear or fall sick again or, maybe even surrender to courts in keeping with the latest trend that seems to be afflicting our most wanted men!

But of course, you really don’t have to worry about what happens to our criminals thereafter. We have this excellent system of dispensing justice speedily and effectively: they are referred to the Central Committee of the SLFP which usually exonerates even the worst offenders!
Yours truly,

Punchi Putha

PS-You also don’t need to worry about how you would spend your retirement, IGP. If you play your cards correctly, obey all the orders that come your way and then resign when you are asked to without making much of a fuss, you can still become an ambassador and enjoy the sights and sounds of Brazil, for instance!

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Familiar war of words as Katuwana takes centrestage Sat, 23 Jun 2012 17:44:07 +0000 Pubudu Last week, when Opposition Leader Ranil Wickremesinghe charged in Parliament that lawlessness reigns in the country, with all rules and regulations ignored by political authority, he was not stating anything new. Killings, threats and abductions of political opponents of the Government and others who oppose it, have been on the rise, despite the end of the Emergency in August last year.

In fact, what the UNP leader said, by way of a special statement last Tuesday to the House, was much of what he had stated on previous occasions, except for the reference to the June 16 killing of two JVP activists in Katuwana.

“Not only in Hambantota, this is the true situation all over the country,” he stated, referring to the Katuwana incident. “There is no law and justice prevalent in the country. Terror gangs reign in public in the North, South, East and West, and disappearances and abductions continue to take place,” Mr. Wickremesinghe said.

The UNP leader did not get the response he may have been anticipating from the Government side, to the matter he raised. Instead, House Leader and Minister Nimal Siripala de Silva ended up reminding the UNP of the time when grenades were being hurled inside the Parliament building, coffins were not being allowed to be carried above knee height and other sordid details which most UNP and JVP members would rather forget.

“A special police team has been appointed to investigate the incident,” Minister de Silva said of the Katuwana incident, adding that, the culprits would be dealt with no political interference of any sort to safeguard them. Such statements will be of little comfort to the families of the victims, given the dismal performance of the police in dealing with criminals who flaunt their political affinities loud and clear.

The Government’s response was the usual diversionary tactic that it has adopted for a long time, to avoid providing proper answers to issues that call into question its inaction to deal with a serious breakdown in law and order, blatant attacks on the media or brazen indiscipline among its party members.

As expected, the Katuwana killings led to a lot of noise from the few JVP members who were in the House, which resulted in sittings having to be suspended for a few minutes.

Tempers rose, as heated verbal exchanges took place between Government and Opposition legislators over the killings, with JVP MP Anura Kumara Dissanayake demanding justice for the slain party activists, as well as an end to the rule of the gun by thugs with affiliations to the ruling party.

The UNP Leader’s demand that the independent commissions be activated and government institutions depoliticised, as also suggested by the Lessons Learnt and Reconciliation Commission (LLRC), seemed to have fallen on deaf ears, because Minister de Silva said such concerns have been addressed by him in an earlier statement, and hence would not do so again.

The same week that Parliament was discussing the breakdown of law and order, it also took up the condolence vote on former MP Bharatha Lakshman Premachandra who was killed in a shootout between two UPFA groups in October last year.

Senior Minister D.E.W. Gunasekera who spoke on the condolence vote, suggested that it was time for Parliament to act to stop criminals roaming around with impunity, despite having open warrants issued against them.

“Parliament must take serious notice and due consideration, the statements made by judges in courts, of criminals with open warrants, evading arrest,” he said.

He could not stop himself from reverting to the charge he often makes, that the killing of Premachandra is a continuation of the culture of killing, which is a by-product of the political culture introduced to this country by the 1978 Constitution, which also introduced a preferential voting system. What he failed to say is, why subsequent governments, in several of which Minister Gunasekera served in a ministerial capacity, did not do anything to, either abolish the voting system, or curb the post ’78 Constitution’s culture of killing.

UNP Leader Wickremesinghe said that if the Government had learnt a lesson from the killing of the former MP, some subsequent unfortunate incidents, including the recent shooting at a political rally in Katuwana, could have been averted.

Learning lessons are not a strong point of, either this Government, or of the UNP. As the well-known saying goes,” Those who ‘refuse to’ remember the past are condemned to repeat it”. And repeat it they do.

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What constrains foreign direct investment? Sat, 23 Jun 2012 17:42:19 +0000 Pubudu The low level of foreign direct investment is a serious constraint to sustained rapid economic development. Despite an increase in foreign investment last year to a little above US$ 1 billion, this is inadequate to move the economy to higher levels of economic growth.
Moreover it is not only the amount of foreign direct investment that matters but the types of foreign direct investment.

The country has been unable to attract the kinds of investments that would have multiplier benefits to the economy from increased exports and transfer of technology.

Foreign investment is a significant driver of economic development. It fills the savings-investment gap and enhances investment and economic growth. FDI contributes to improving work ethics, discipline, skills and knowledge of workers. It is an important means of technology transfer and transmission of best practices in management and often brings with them international markets. It is the realisation of these economic benefits that has made former communist countries like China and Vietnam, and the formerly inward looking Indian economy to actively seek foreign investment.

Inadequate foreign investment

The 2011 annual report of the Finance Ministry said: “Despite policy reforms towards private sector development, the private sector investment is constrained by several factors which need urgent corrective actions by strengthening institutional set up,” The report points out that in 2011 the country obtained a record $ 1.06 billion in Foreign Direct Investment and private investment increased to 23.7 per cent of GDP.
However it points out that to achieve double-digit growth, foreign investment has to be increased to around 30 per cent of GDP.

The Finance Ministry report said, “As promotional agencies particularly in investment, tourism and export have operated under traditional institutional framework with red tapes, lack of investor friendly institutional environment, poor coordination with other Government agencies and lack of conclusive decision making process,”

The inadequate inflow of foreign investment made the Treasury Secretary who is also the Secretary to the Ministry Economic Development to ponder over the reasons for this disappointing performance. According to Dr. P.B. Jayasundera, there are several deficiencies in the administration that discourage FDI. The weaknesses Dr. Jayasundera pointed out were administrative, organisational and bureaucratic. He pointed out that there was a lack of focus in investment priorities. He was critical of the approval processes for foreign investors as investors have to deal with multiple agencies. Inadequate flexibility of the Ministries and agencies to promote private sector into commercial activities were serious drawbacks according to Jayasundera.

Absence of coordinated promotion by BOI, Tourism authorities, EDB, Tea Board, Foreign Investment Bureau and the highly compartmentalised bureaucracy, he argued were disincentives for foreign investors. Outdated institutional setting in investment promotion agencies and inadequate professional skills were also deemed to be deterrents. He even contended that price controls on some selected commodities: milk, poultry, and cement instead of using price formula and regulatory supervision.

Now that the secretary himself contends that these are constraints, there can be no doubt that these are prevailing weaknesses. They are administrative, organisational and bureaucratic bottlenecks for investment. Important as these may be there are other broader economic reasons why investment, both domestic and foreign, is not coming in either the amounts or the types of investment desired.

Significant factors

The earlier contention was that the country was not obtaining adequate foreign investments owing to terrorism, the ongoing war and insecurity. These were definite constraints to foreign investment. In fact these were deterrents and discouragements since the 1983 ethnic violence that escalated into terrorism and the prolonged war. Many investors, especially large Japanese investors, were much concerned about insecurity in the country and did not invest here.

However the misconception was that peace alone would be adequate to encourage foreign investors. After three years of peace, it is now quite clear that peace is necessary but not a sufficient condition to induce foreign direct investment.

Policy uncertainty in the investment regime; the Termination of Workers Act of 1971 that is still on the books; policy inconsistency between the main decision making bodies: Treasury, Central Bank, and leading ministries; poor overall governance and an unsatisfactory law and order situation; absence of supportive infrastructure and high cost of doing business are among the factors that have been inimical to developing a conducive climate for foreign investors. The classic case of a deterrent to private investment was the government’s takeover of assets of lossmaking and underperforming businesses.

Foreign investment is influenced by political and economic stability, tax and other incentives, labour regulations, work ethics, social and economic infrastructure, and costs of production, potential domestic market and an overall assessment of political and economic conditions. Some investments are deterred by perceptions of corruption. The political situation is stable as the government is secure to rule for at least another four-year period and has a huge majority in parliament. However, this very “stability” could be a factor discouraging investments as policies and governance have become arbitrary and uncertain rather than based on principles, discussion and debate. The continuous protests and violence; issues in media freedom that are highlighted around the world are unfavourable features.

Economic factors

Macroeconomic conditions of the economy matter. The high fiscal deficits, a large foreign debt of over US$ 21 billion, debt servicing costs that absorb a high proportion of revenue, external debt servicing cost of 20 percent of export earnings, the massive trade deficit, potential inflation and volatility in currency value, are among other macroeconomic indicators that dissuade foreign investment. Labour legislation is another area where investors find the lack of freedom to hire and fire an inflexibility. There are fears that inflation may rise again owing to the weaknesses in economic fundamentals.

Costs of production play an important role in investor determination of investment locations. Sri Lanka is no longer a cheap labour country. There are other countries such as Vietnam and Bangladesh where labour is probably cheaper. Labour regulations in the country also affect investment: labour regulations do not permit labour discontinuance either owing to changing market conditions or on disciplinary grounds. Several production costs too are high; this is especially so with respect to energy costs that is deemed one of the highest.

Further, the possibility of selling in the domestic market is limited. Large countries like India and China offer good prospects of local sales. This is why countries such as India and China are manufacturers of cars. Since Sri Lanka is a location for export manufacture, the recession in western countries offers poor prospects for exports. The exception to this trend of low foreign investment is the recent purchase of land in prime property areas for construction of large international hotels.

There have been improvements in social and economic infrastructure. There are a wide range of international schools, private health facilities have improved immensely, and the road network developed. The country is no doubt a pleasant location for foreigners to reside.


Factors determining foreign investment are many. For one or more of these reasons, the international investment community does not appear to consider Sri Lanka a favourable destination for investment. Whatever be the precise reasons for tardy foreign investment, the government must look into the reasons and provide a climate for enhanced foreign direct investment. Without a larger inflow of foreign investment, sustained economic growth of 8 per cent or more is unrealistic.

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