A Brief Colonial History Of Ceylon(SriLanka)
Sri Lanka: One Island Two Nations
A Brief Colonial History Of Ceylon(SriLanka)
Sri Lanka: One Island Two Nations
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Back to 500BC.
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Thiranjala Weerasinghe sj.- One Island Two Nations
?????????????????????????????????????????????????Monday, January 29, 2018
Shipwrecked by Laughter of Gods
Prime Minister Ranil Wickremesinghe has decided that the Report of the
Bond Commission has absolved him, his party and his administration of
any responsibility for or wrongdoing in the Central Bank Bond Scam.
Development Strategies Minister Malik Samarawickrema, who is the eager
Hanuman to Ranil’s Rama, has claimed in a press interview that the
government has not lost a cent in the bond scam.
The Commission in its report has stated that their task was not a ‘witch hunt or a whitewash’.
The report has not done a ‘whitewash’. It seems to have scrubbed the
wall and the Prime Minister and his troupe have decided to paint it in
the most convenient hue that suits them.
The Bond Commission report informs us that it has striven to perform its
function as per Edmund Burke "With cold neutrality of an impartial
judge but also fairly." In hindsight, it appears that the commission
would have been wiser if it had taken note of another pearl of wisdom
from Burke. "Whoever undertakes to set himself up as a judge of Truth
and Knowledge is shipwrecked by the laughter of the gods."
The assurance that it is no witch hunt or a whitewash was totally
unneeded. Though two years too late, the appointment of the commission
was regarded as a step in the right direction. The Commission was
accepted and respected.
When serving judges are appointed to commissions, the people expect them
to retain utmost impartiality. People expect them to remain aloof from
political considerations.
Proper and appropriate way to question a Prime Minister
The Commission explains that it considered it proper and appropriate to
formulate the questions that it wished to ask the Prime Minister and
request the Prime Minister to furnish his answers by way of an Affidavit
rather than by way of time-consuming Oral Evidence.
The Commission’s decision not to summon the Prime Minister to give oral
evidence in this age of transparency is regrettable. The Commissioners
explained why it decided to "request the Prime Minister to furnish his
Answers, by way of an Affidavit, rather than by way of time-consuming
Oral Evidence."
He was not summoned we were told. He was invited to clarify some of his written answers. Why?
The Prime Minister is a politician. Explaining and justifying his
conduct, past, present and future is his full time vocation. Obligation
of giving oral evidence is a major part of his territory. If summoned he
was duty bound to appear before the commission.
His busy schedule is not a tenable proposition. The Prime Minister’s
high office has not prevented him visiting deities in their shrines in
India. His high office has not prevented him consulting expert medical
opinion in America. His high office has not prevented him attending
convocations in Australian universities to receive honorary Doctorates.
Surely, his appearance before the Commission would not have paralysed or
crippled the government.
That his governance mechanism has been brain dead for some time is neither here nor there.
It is noteworthy, that the Commission has treated the appearance of the
Prime Minister of the Republic before the Commission as an occasion
where only the principal law officer of the state should lead his
evidence.
It is a telling commentary on the Commission’s aloofness from politics. .
Tony Blair must be wishing that Sir John Chilcot possessed such
proprieties!
The Prime Minister has now announced that losses will be recovered. He
hasn’t said a word on the conduct of Mahendran, before or after the
report except for that famous defence - Arjuna Mahendran has done
nothing wrong.
Mistakes made but not by me
There is an explanation. People are sensitive to inconsistencies between
their beliefs and actions. There are three ways to resolve such
inconsistencies.
You can change your belief. You can change your action. The third is
more complex but very familiar. You change the perception of your
action! That is where the Prime Minster excels.
Two Social Psychologists Carol Travis and Elliot Aaronson published a
path breaking book in 2007 - ‘Mistakes were made. But not by me" It
explains how we make decisions that turn out to be mistakes. It is about
ordinary decisions and also decisions that can affect nations, lands
and millions of people.
The authors have brilliantly captured the self-entrapment that we create for ourselves.
"As fallible human beings, all of us share the impulse to justify
ourselves and avoid taking responsibility for any actions that may turn
out to be harmful, immoral, or stupid. Most of us will never be in a
position to make decisions affecting the lives and deaths of millions of
people, but whether the consequences of our mistakes are trivial or
tragic, on a small scale or a national canvas, most of us find it
difficult, if not impossible, to say, "I was wrong; I made a terrible
mistake." The higher the stakes — emotional, financial, moral — the
greater the difficult."
Mahendran censured
The report finds Arjuna Mahendran to have knowingly acted improperly and
wrongfully in intervening in established procedures of the Central
Bank. It has found him to be the source of inside information received
by Perpetual Treasuries – the errant primary dealer.
Arjuna Mahendran is an Economist and Investment Banker. He was requested
by the Ranil Wickremesinghe-led administration to be the Governor of
the Central Bank. The Prime Minister has stated that the selection was
the result of a general consensus of the new government.
The claim that the choice was a collective decision of the government
was not challenged before the Commission. The record now shows that he
was appointed by the President on the recommendation of the Minister of
Finance. The reassignment of the Central Bank to the Prime Minister in
his capacity of Minister of National Policies and Economic Affairs was
an executive action.
The resulting complexities arising from horizontal diffusion of power
responsibilities have not been addressed by the Commission. Such an
exercise would be outside the scope of its warrant.
Who made him Governor?
The Commission has not focussed on the process that made Mahendran the
Governor. It explains that the he was appointed before the period
covered by its warrant - 01st February 2015 and 31st March 2016.
The Prime Minister was not questioned why Arjuna Mahendran was
considered the most outstanding candidate for the top job in the Central
Bank.
Soon after the new Government was installed Arjuna Mahendran appeared
before the Ceylon Chamber of Commerce in the company of Finance Minister
Ravi Karunanayake to explain the new economic vision of the government.
The current Governor served as moderator. Arjuna Mahendran was more
than the Governor of the Central Bank. He was a pivotal player in Ranil
Wickremesinghe’s Economic Think Tank.
Why did Arjuna Mahendran do what he is now stands accused of doing?
Economics has progressed beyond the rational choice theory. Today,
Economic behaviour is a new discipline known as behavioural economics.
It deals with the psychology of economic behaviour. Richard Thaler this
year’s Nobel laureate specialises in behavioural finances!
The search for ways in which humans violate rules of rationality is a
frontier-less land yet to be explored. The science of economics in the
world of paper money is not a precise science.
Breakfast meeting – a non-event
.Why did two ministers and the advisor to the Prime Minister go to the
Central Bank for breakfast with the Governor? Not to discuss bonds, they
have insisted. Of course, a smart cookie would insist that Central Bank
was the place where the new Governor was serving breakfast with choice
Bacon!
The Commission has held that no decision was taken at the ‘Breakfast
Meeting’ held on 26th February, to raise money for the Road Projects at
the Auction of Treasury Bonds held on 27th February.
The Doctrine of Public Trust
The Bond Commission has determined that the "Governor and other members
of the Monetary Board, Deputy Governors and other senior officers of the
CBSL hold those offices subject to the `Public Trust Doctrine and are
subject to Accountability.
It has determined that Deputy Governors Silva and Weerasinghe were
negligent and were in breach of their responsibilities as Deputy
Governors of the Central Bank. They had a duty to advise the Governor to
desist from folly.
There were good reasons for the Deputy Governors of the Central Bank not
to teach Mahendran monetary theory. Arjuna Mahendran was a key figure
in the economic pantheon Ranil assembled. It was not because those good
people were less informed of the doctrine but they were more informed of
his political clout.
The pursuit of a utopia is understandable. But an ideal utopia? The
Doctrine of Public Trust is invoked when dealing with situations not
covered by precise laws or regulations. That is also the fertile field
for patrimonial politics.
It has held "that, Deputy Governor Samarasiri was grossly negligent and
in grave breach of the duty and responsibility he had, as the Chairman
of the Tender Board. He had supinely obeyed the instructions given by
Mahendran.
The report comments on the conduct of Dr. Samaratunga Secretary Ministry of Finance and member of the Monetary Board.
"Since Dr. Samaratunga, Secretary to the Ministry of Finance, who was
present at this meeting, is also a member of the Monetary Board, he was
personally obliged to convey to the CBSL that the three State Banks had
been instructed to place Bids within a specified range of Yield Rates at
the Treasury Bond Auction to be held on 29th March 2016 and that the
three State Banks had been given an assurance that Bids at higher Yield
Rates would not be accepted at this Auction. There is no evidence that
Dr. Samaratunga did so.
To Goose and Gander - different sauces
The Commission has held these officials subject to the doctrine of
public trust. Is the Prime Minister exempt from the Doctrine of Public
Trust? Is he not accountable for the appointment of this Governor? Did
he not condemn the practice of private placements and advocate auctions?
Private placements can be rigged. Auctions too can be rigged. In this
business is not the tune but the piper who matters.
That explains Friedrich Hayek’s disarmingly simple critique of Central
Banks. "There is no answer in the available literature to the question
why a government monopoly of the provision of money is universally
regarded as indispensable. It has the defects of all monopolies."
Ranil the Economist
It is the Prime Minister who took over the responsibility of pulling the
nation from the brink of the abyss and provide us one million jobs, a
Volkswagen plant, and his vision of 2020 or whatever.
He brought Arjuna Mahendran back. He brought Paskaralingam back. He
brought Chairitha Ratwatte back. By mid-January 2015 he had assembled
all his knights at his round table.
The Bond Commission report does not fault the Prime Minster.’ If only he
was less trusting’ seems to be the refrain he has earned.
The report concludes that Mahendran and Deputy Governor Samarasiri
"deliberately and mala fide, misled the Prime Minister and sussed
materiel facts..." It says "… the Hon. Prime Minister would have been
better advised, if he had independently verified what had happened at
the CBSL on 27th February 2015 before making any statement, instead of
relying on the briefing note and reports submitted by Mr. Mahendran and
Depty Governor Samarasiri ."
This indeed is really thick. The Prime Minister should have sought a
second opinion on what was told to him by the Governor and the Deputy
Governor. The Governor was appointed on 23rd January 2015. The
Commission is of the view that his briefing notes in March 2015 should
have been independently verified!
An Authority of the Doctrine of Public Trust
Our Prime Minister is an authority on the Doctrine of Public Trust. In
an op-ed piece in the Sunday Times of 24th February, 2013, the then
Leader of the Opposition Ranil Wickremesinghe accused the then
government of betraying the doctrine of public trust. The Supreme Court
observations he quotes in his homily on public trust are the identical
judgements quoted by the report of the Bond Commission.
There is no doubt that our Prime Minister is very learned in the law.
Very interestingly, he has in the same essay defined the role of the
ideal Attorney General and criticised the then AG in precise and plain
language. "The Attorney General of the United Kingdom Dominic Grieve in a
speech to the BPP Law School on the ‘Role of the Attorney General’ said
"as Chief Legal Advisor to the Crown, I advise government departments
on how policy can be achieved in a lawful and proper way.
However that does not detract from the fact that in carrying out the
function of legal adviser to the Government, the Attorney General’s role
is to support and protect the rule of law. I think that the role of the
Attorney General as the Government’s Chief Legal Adviser was neatly
summed up by a former Attorney General, Lord Mayhew of Twysden who said:
‘the Attorney General has a duty to ensure that the Queen’s ministers
who act in her name, or purport to act in her name, do act lawfully
because it is his duty to help to secure the rule of law, the principal
requirement of which is that the government itself acts
lawfully’."Regrettably, our Attorney General has failed to maintain the
high standards of his Office. Furthermore, the Attorney General has also
deliberately misled the House."
Full Steam ahead
Let us go back to those exciting days of the first hundred days of
Yahapalanaya. Ranil took over the command. Did he tell Arjuna Mahendran
full steam ahead and damn the torpedoes? This writer has no reason to
doubt Arjuna Mahendran’s sanity.