Columns

• Calls for the appointment of presidential commission of inquiry to probe allegations
• He and other parties reject PSC on bankruptcy, claiming it is loaded with Basil supporters; SJB to form opposition-led PSC

By Our Political Editor

“We will seek a meeting to make this appeal after learning more details about the sinister plot,” he told the Sunday Times. The first account of his claims was contained in a 135-page booklet titled “The hidden story of nine” which he published in April this year. He declined to provide details saying they “could be misrepresented.” They would have to be first presented to President Wickremesinghe to establish a Presidential Commission of Inquiry. He said the President was aware of the revelations in his booklet and had acknowledged them during a speech when he was in London recently. “We do not want other parties to dilute the evidence we have,” he argued.

Wimal Weerawansa

He said he had originally made the request for such a commission from former President Gotabaya Rajapaksa before he went out of office. However, that appears to have been misconstrued. That was how he appointed a three-member Board of Inquiry, he said. He was alluding to the  panel chaired by Admiral of the Fleet Wasantha Karannagoda and comprised onetime Army Commander, General Daya Ratnayake and Air Force Commander Roshan Gunathilake, who is ranked Marshal of the Air Force.

As reported in these columns on May 7, a state agency has already conducted preliminary investigations into the allegations in the 135-page book which was printed in Sinhala. Weerawansa said that Russian and English copies of the book were now in print. There would be 10,000 copies more of the Sinhala version. He said he hoped to have them released by next month. The Russian copies make clear that more material linked to the United States connection has now been garnered. Weerawansa, a source said, had again made critical references to the alleged involvement of the United States Ambassador in Sri Lanka, Julie Chung. However, she has continued to flatly deny the accusations and describe them as “false.”

Julie Chung offers prayers

The idea behind a state agency probe on his initial revelations, a government source said, was to ascertain the veracity of claims made on matters related to national security and similar issues. As reported earlier, when Gotabaya Rajapaksa held office as President, Weerawansa was considered a close confidant.  Both he and his party were also opposed to the United States. A decisive beginning of the Aragalaya (protests) was the events that took place outside the Mirihana private residence of former President Gotabaya Rajapaksa on March 31 last year. They left 40 persons including 24 policemen injured and 54 were arrested.

Here are extracts of those aspects as claimed by Weerawansa in his book:

“President Gotabaya and the rest at home had felt the threat of death. The President’s Private Secretary Sugishwara Bandara had told his close friends and some members of the Rajapaksa family that they were risking death.

“By this time there was a close rapport between US Ambassador Julie Chung and President Gotabaya Rajapaksa. After the violence, the Ambassador called on the President. She had told him she sympathised with him about the pressure he had come under and said her prayers were with him. She went on to offer prayers in front of him. The President on the following day describing the incident to a Minster had given the impression that he was taken up by the gesture.

“Though President Gotabaya did not quit after the Mirihana incidents (involving his private residence) he moved to the President’s House on the advice of the security chief. The protests were spreading, and clashes were taking place near fuel stations. US Ambassador Chung in a twitter message on April 2, 2022, defended the right for peaceful demonstrations and said she was closely monitoring the situation and thereby setting the stage for protests at Galle Face. The slogan here was Gota Go Home. The question was posed by journalists as to who would replace Gotabaya, but the response was it could be thought of, after he is sent home……”

Weerawansa also made a string of allegations against former Army Commander and now Chief of Defence Staff, General Shavendra Silva. He has, however, denied them strongly. In one instance, he has filed legal action in courts against Weerawansa.

Weerawansa claimed, “There is a great public interest in what we have revealed so far. We will tell President Wickremesinghe what more has happened. In the national interest, it is imperative that they are probed.” He said we now know more about “the plans to form a caretaker government with certain persons being thrust to important positions. “Some of what we know has fallen into place,” he said. “Recently, the US Central Intelligence Agency (CIA) chief was in Sri Lanka with some 20 others. We want the people to know what is going on.”

Once a vociferous defender of the SLPP government where he was a Cabinet Minister, Weerawansa together with colleague Udaya Gammanpila was sacked from the Cabinet by the then President Gotabaya Rajapaksa. A source familiar then with the presidential household explained the reason for the sacking. Gotabaya Rajapaksa was quoted as saying that he had been advised by a very close relative in the family to remain united with his brothers, much like a stack of firewood or daramitiyak bound together. Hence, he had decided to sack the duo on the request of younger brother Basil Rajapaksa.

Weerawansa’s Uttara Lanka Sabhagaya is backed by parliamentarians Jayantha Samaraweera, Nimal Piyatissa, Uddika Premaratne, Gamini Waleboda, Mohamed Muzzamil, Udaya Gammanpila, Vasudeva Nanayakkara, Weerasumana Weerasinghe, Professor Tissa Vitharana and Gevindu Kumaratunga.

Complete joke

Weerawansa also commented on another controversial issue now before Parliament. He described as a “complete joke” a move to appoint a Parliamentary Select Committee (PSC) to probe how Sri Lanka went bankrupt. “To me, it is clearly a move to whitewash Basil Rajapaksa, who was the finance minister in the SLPP government. Otherwise, why has the SLPP General Secretary Sagara Kariyawasam been named as the Chairman of the PSC? Why have members who are close backers of Basil Rajapaksa been included in the PSC?” he asked.

Weerawansa revealed that the Uttara Lanka Sabhagaya will attend the first meeting of the PSC, if it ever holds sittings, to lodge its protest. “Thereafter, we will express our displeasure over their appointment and walk out. We will not take part in any of their proceedings because they are biased and the exercise is designed to help none other than Basil Rajapaksa,” he said. This is an attempt to make a joke of Parliament. Another such move by a Basil Rajapaksa loyalist is to empower ministers to decide to extend the life of local councils, he claimed.

The Parliamentary Select Committee to probe Sri Lanka’s bankruptcy, according to recent developments, will be bereft of any opposition parliamentarians. JVP Spokesperson Vijitha Herath told the Sunday Times, “I resigned from the PSC on bankruptcy. The fourteen member select committee has nine parliament members representing the government. All these members are associates of the person responsible for the bankruptcy of the country — Basil Rajapaksa.

“Therefore, we do not believe that this committee would serve any purpose or find reasons for the bankruptcy and recommend remedial actions.

“It is useless to stay in such a committee which would have biases. The majority members would cover up the actions that made the country bankrupt.

The Speaker had appointed Sagara Kariyawasam, as the chairman of the select committee. He (Sagara Kariyawasam) is also a key Basil Rajapaksa loyalist, and the remaining eight members too are persons responsible for the economic breakdown and bankruptcy of the country. The rest of the government representatives are Pavitharadevi Wannarachchi, D.V Chanaka, Mahindananda Aluthgamage, Jayantha Ketagoda, Major Pradeep Udugoda, Sanjeewa Edirimanna, Nalaka Bandara Kottegoda and Professor Ranjith Bandara.

“Allowing them to investigate bankruptcy is a joke, these members could conceal the real reason for bankruptcy of the country. They will waste time and the tax money of the people,” he pointed out.

SJB moves

The news of the PSC also resonated elsewhere. A controversial former Cabinet minister, who had been discussing the matter with a group, had declared that he would not hesitate to “topple the government” for being ignored a long time from being appointed a cabinet minister. When the news reached a government top runger, a message went back that his son who is in a Sri Lanka mission abroad and another in a secretariat in Colombo would have to find jobs. The politico not only retracted his earlier position but also is now on the frontlines garnering support for a no faith vote on a present Cabinet minister over shortages.  The main opposition Samagi Jana Balavegaya (SJB) is also opposed to the composition of the PSC.

SJB General Secretary Ranjit Madduma Bandara said, “We withdrew from the PSC because its members were among those who contributed to bankruptcy. The committee comprises supporters of a former minister, and they will favour him. It’s like asking from a thief’s mother whether her son is a thief like the Sinhala adage ‘horage ammagen pena ahanawa wagey’. As the main opposition party, we cannot stay in such a disgraceful select committee.

“We have planned to set up an opposition’s parliamentary select committee to investigate the bankruptcy of the country soon. We are inviting all the opposition parties to join our cause against corruption by taking part in our own select committee, Madduma Bandara said.

This select committee would have members from the common opposition as well as other opposition parties. “Our party too has a committee on bankruptcy at the party level. That committee, which is led by Mujibur Rahuman, consists of 10 to 15 members of parliament as well as other politicians in the party.

“The SJB is calling for local council elections. We even went to the Department of Elections on Wednesday (July 12, 2023) to discuss having early elections and to complain of the delay. We will protest. We are also taking legal actions and would relentlessly pressure the government to hold elections and allow democracy to prevail.”

Other than these issues, the only other opposition member in the PSC is Shanakiyan Rasamanickam of the Tamil National Alliance (TNA). He told the Sunday Times, “Personally, I am not in favour of serving in the PSC. It is headed by a loyalist and supporter of Basil Rajapaksa who is 90 percent responsible for the bankruptcy. Therefore, my belief is that with this conflict of interest the committee would not be looking into how the bankruptcy occurred.

India visit of President

It is against this backdrop that President Ranil Wickremesinghe undertakes a brief visit to New Delhi on Thursday. Accompanying him are his Chief of Staff and National Security Advisor Sagala Ratnayake, Presidential Secretary Saman Ekanayake, and Ministers Douglas Devananda, Jeevan Thondaman, Kanchana Wijesekera, Foreign Secretary Aruni Wijewardena, and officials of the Ministry of Foreign Affairs.

Vinod Jacob, India’s Deputy High Commissioner in Sri Lanka and now promoted Ambassador to Bahrain, told the Sunday Times, yesterday that “India-Sri Lanka relations have scaled new heights in the past 14 to 16 months. On the Indian side, the guidance is provided by Prime Minister Narendra Modi’s Neighbourhood First policy. The success of this dynamic policy is writ large across the entire matrix of the bilateral partnership. As the Foreign Secretary of India, Vinay Kwatra said a few days back in Colombo, our objective is to ensure that the forthcoming visit of President Ranil Wickremesinghe to India is a huge success. Both sides are working hard to ensure substantive outcomes.”

Other than the India visit by President Wickremesinghe, the government’s priority of the Domestic Debt Optimisation (DDO) in different spheres continues to receive important attention. A leading international economist, Dr Shantha Devarajan responses to queries from the Sunday Times on how the economy has shaped since last year in a box story on this page. In another development, the government has refused a visa for Canadian parliamentarian Gary Anandasangaree to visit Sri Lanka. He is the son of Veerasingham Anandasangaree, a Tamil parliamentarian from the north.

Top economist calls for improvement in governance to avoid another debt crisis Unless there is improvement in governance, there is a risk that Sri Lanka will have another debt crisis in a few years, an internationally reputed economist warned yesterday. The biggest impediment, Dr Shantha Devarajan, Professor of the Practice of International Development, Georgetown University, Washington, warned is the existence of a risk. He lectures at the Walsh School of Foreign Service at the university. He is also an advisor to the government of Sri Lanka. Dr Devarajan said, “The biggest impediment is weak governance that “has led to all these distortionary policies and caused the economic collapse of last year.” He said that a “full recovery, defined as strong and sustained growth of about three per cent a year at least, will take a couple of years.” That was his answer to my question on how long, in his view, it would take for a full recovery of the economy and what impediments were there. He said to achieve the growth envisaged, “there must be a resumption of investment (both foreign and domestic) which, in turn, requires a restructuring of the debt and reform of public policies, so that investors have confidence that their investments will be productive. Negotiations to restructure the debt are under way. The reforms needed include restructuring of the large number of unproductive public enterprises (such as Srilankan Airlines), Customs reforms and improvements in trade logistics.” Dr Shantha Devarajan Dr Devarajan answered a series of questions posed to him. However, he declared “no comment” when asked about the hardships that may be caused by the lowering of interest rates on the Employees Provident Fund (EPF) and the Employees Trust Fund (ETF) or on the need to have a smaller Cabinet of Ministers. Here are the questions and answers: Compared to last year, how do you view Sri Lanka’s economy this year? The economy is definitely doing better this year compared to last year (which was a terrible year for the economy).  First, inflation is down from over 50 percent last year to below 20 percent for the first half of this year and likely single digits by the end of the year.  Second, economic growth, while still negative, is less negative than the 9 percent contraction of GDP last year. Third, the foreign exchange situation has eased a little bit, as reflected in the appreciation of the rupee relative to the US dollar and the easing of some of the import restrictions.  This means that businesses can buy inputs to expand their production, including exports.  Finally, the government has been able to expand targeted transfers to the poor. This has helped cushion them from some of the acute hardship from last year. The Government says that by September it could claim that Sri Lanka is not bankrupt. Do you share this view? Or would that nomenclature continue for a longer period? What is important is the substance not the nomenclature.  When Sri Lanka is able to repay its (restructured) debt, it ceases to be bankrupt. If there is sufficient progress on debt restructuring with Sri Lanka’s creditors (both official and private), then the country will be able to resume repaying the reduced level of debt and no longer be considered bankrupt. There are fears that the second tranche of the International Monetary Fund will be delayed beyond September, the time limit set. What is your view? The key is whether there is sufficient progress on debt negotiations and in the economic reform programme by September for the IMF to conclude that the programme is on track and therefore release the second tranche. Now that the contours of the domestic debt restructuring are known, the negotiations with the external creditors are starting.  The government has undertaken many of the reforms, such as increases in taxes and reform of the welfare benefits scheme, which will help restore macroeconomic stability while protecting the poor.  However, there are some important reforms, including the restructuring of state-owned enterprises. This remains to be undertaken in the coming months.  In sum, while it will take a lot of hard work between now and then, it is possible for the review of the programme to be concluded by September. What are the areas where Sri Lankans must bear hardships in the coming months on the economic front? As the economy will contract by about 3 percent this year, Sri Lankans will continue to bear hardships in the coming months, albeit less than last year.  The reform programme is designed so that the burden falls on the middle and upper classes rather than the poor and vulnerable.  For instance, the increase in fuel and electricity prices affect the rich more because they consume much more electricity and fuel than the poor.  Furthermore, some of the savings from the reduction in fuel and electricity subsidies are going towards enhanced social transfers to the poor.  Similarly, the increase in income taxes mainly affects the people in the top 20 percent of the income distribution but it was the reduction in these people’s taxes in 2019 that, among other things, led to the crisis of 2022. New anti-corruption legislation is to be passed by Parliament. Do you think this will act as a deterrent? It will help, but more needs to be done. The IMF is currently undertaking an anti-corruption diagnostic of Sri Lanka and its recommendations will be available in September.  Sri Lankan civil society is preparing its analysis and recommendations on governance in Sri Lanka, and this should also be available around the same time.  I hope these recommendations will include some of the transparency measures that have been effective elsewhere, such as making public the declaration of assets by the President, the Prime Minister, and members of parliament; and information about procurement contracts above a certain threshold available to the public. What in your view are the other tough economic measures necessary to pull Sri Lanka out of the ongoing crisis? The economic measures are: (i) restructuring state-owned enterprises; (ii) taxing foreign investment (rather than granting tax holidays); (iii) reforming social transfers so that they are targeted towards the poor; (iv) reforming agricultural policies such as the Paddy Lands Act so that farmers can grow the most lucrative crops; (v) replacing regressive subsidies with targeted cash transfers to the poor; (vi) reducing restrictions on trade and improving trade logistics so that  Sri Lankan entrepreneurs can compete in global markets; and (vii) having an independent central bank that can resist demands from the finance ministry to finance fiscal deficits by printing money. These measures are not “tough” economically.  They follow standard economic reasoning and indeed have been advocated by many people for a long time.  They are tough politically. Certain vested interests, who benefited from the distortionary policies of the past, will suffer.  If these interests have political power, they can block the reforms.  But it is these political interests that have prevented Sri Lanka from realising its potential over the past 50 years, contributing to the economic collapse of last year.  As the protest (Aragalaya) movement showed, the Sri Lankan peopl will no longer tolerate this kind of political capture.  Therefore, I am hopeful that these much-needed economic measures will be undertaken in the coming months. There is an outflow of professionals from Sri Lanka. How does one stop this “brain drain” caused by the economic crisis? Why should we “stop” these Sri Lankans from seeking better opportunities elsewhere?  They are doing what everybody has been doing for centuries, namely, trying to better the situation for themselves and their families.  The fact that these people can find jobs in other countries should be celebrated, not decried.  Of course, one of the reasons they are leaving is the economic crisis in the country, but this means that we should try to solve the economic crisis (which many of us are trying to do), not stop these people from leaving. Some people are concerned that the outflow of professionals is leading to a shortage of workers (doctors, engineers, etc.) in the country.  The way to address this shortage (while the economic crisis is being resolved) is to allow workers from other countries.  Even before the current crisis, Sri Lanka was experiencing a shortage of workers at various skill levels.  Unlike other countries in similar situations (Malaysia, etc.), Sri Lanka is quite restrictive on migrant labour.  The reason is, as usual, political.  The incumbent professionals fear that their positions will be threatened, or their salaries reduced, and they seem to have political power.  But if these professionals are now leaving the country, it is much harder to sustain their position.  The current exodus of professionals may be the opportunity for Sri Lanka to have a more open policy towards labour flows, something that will be increasingly necessary as the working-age population shrinks and the population ages.