Enlightenment with Sinhala New Year: Think afresh

Our politicians need to understand that the UNHRC report was not intended against SL, but against the country’s heavy alignment towards China; handing over Hambantota Port and Port City. During the past decade most of our dealings were with China bypassing other countries. Meanwhile, SL wishes to export its garments and others to US and Europe; but imports such as vehicles are suspended 

 Friday, 16 April 2021

A year has passed, under the traditional Sinhala calendar; an eventful year, mostly of calamities. First, coronavirus continued from the previous year resulting in the country being partially locked down. Government servants enjoyed a full year of paid leave. The Government is facing three major problems, shortage of funds for local expenses, shortage of foreign exchange for imports and settling past debts, possible issues resulting from United Nations Human Rights Commission (UNHRC) accepted resolution against the country. Let’s take a look one at a time.

 

Shortage of local funds 

Local income collection has fallen short of expenditure with ever-increasing Government employee numbers, cost of maintaining politicians, multiple expensive projects constructed without financial benefit to the economy, increased purchase price for paddy and the Rs. 10,000 salary increase to public servants.

 

Government servant numbers

In 2001, when Ranil Wickremesinghe was Prime Minister the state employees numbered around 800,000 and took steps to reduce to 700,000. When President Gotabaya took over in 2019 the numbers surpassed 1,800,000. In addition the President gave appointments to 60,000 graduates, also to 100,000 uneducated poor. With other appointments by various ministers, the numbers may be nearing two million. Do we need such numbers, mostly idling and which the country cannot afford? Each member requires a table, chair and space. Today tables and chairs are comfortable and expensive with a computer, offices are air-conditioned, all adding to costs.

The salary increase of Rs. 10,000 a month prior to general elections in 2015, increased the salary bill by nearly 50%. The increase resulted in raising prices, also the private sector too was forced to revise worker salaries.

Currently, funds do not appear a problem, as currency notes are being printed. With the corona pandemic all countries faced financial issues and are printing money. But our printing rate is higher, resulting in devaluation of the dollar exceeding Rs. 200. But where will this lead?

 

Foreign exchange shortage

Today the foreign currency reserves have reduced to $ 4.1 billion, only sufficient for three months’ imports. But how about settlement of oncoming massive loans? The country has already stopped all vehicle imports, also consumables as turmeric, maize, etc. encouraging local production.

European Union countries are questioning the acceptance of Sri Lankan imports when SL has stopped vehicle imports from them. The problem may escalate further. Until the tourism sector becomes normal, the problem may remain. But with additional loans to settle current loans, the issue would continue.

The foreign exchange crisis is a result of multiple loans obtained after ending the war and high interest loans during latter part of the MR Government. The loan-givers are extremely shrewd, follow each country’s ability to repay, and loan interest went higher. The impending loan repayments deprived the Yahapalanaya Government from development projects.

Today, with lower income from garment exports and the crash of the tourism sector, the Government is facing a critical situation. Along with tourism Air Lanka’s income crashed, but loan repayments of aircrafts purchased need be honoured.

 

Expensive politicians

Our big mouthed politicians are among the most uneducated in the world, around a hundred without even OL. When a newspaper group requested the parliament staff for qualifications of politicians, the request was turned down claiming invading personal privacy. But for their inability to understand the country’s problems and required actions, the public pays the penalty.

Our parliamentarians with ‘minister’ attached to their portfolio, each got eight duty-free vehicles, now disabled due to stoppage of vehicle imports. Each politician and their staff get salaries, housing, allowances and perks at the country’s cost. Our police force consists of 85,000 but 45,000 serve politicians.

 

UNHRC allegations

When the ending of 25-year-long war was eminent, some member states of the United Nations questioned the country’s obligations towards human rights and international humanitarian law, while countering terrorism.

The UNHRC Council in Geneva held a special session on 26 May 2009, within one week of ending the war, to discuss Sri Lanka’s humanitarian situation. The Council while condemning LTTE attacks on civilian population, proposed establishment of an International Committee to inquire into human rights violations and excesses by both parties during the war.

But President Mahinda Rajapaksa who was present, submitted an alternate resolution stressing the country’s sovereign right to act without outside interference, protect its citizens and combat terrorism. He proposed to enact a local mechanism to investigate into possible violations and bring them to court, which the Human Rights Council accepted. The acceptance was vehemently opposed by human rights organisations who were clamouring for punishing human rights violators.

But thereafter, President MR failed to take any action as promised.

In 2015 too UNHRC raised the problem. But Yahapalanaya Government presented a joint resolution with UNHRC committed to investigate violations and hold war crimes trials supported by foreign judges. During the entire period in office nothing happened. Recently, Mangala Samaraweera a member of the negotiation committee claimed the joint agreement was only to mark time.

In February 2020, President Gotabaya Rajapaksa withdrew from the joint UN resolution, and was forced to face a new resolution from UNHRC which was passed with 22 members supporting and 14 abstained out of the 47 members. The resolution displayed the displeasure of the Rajapaksa family returning to power, also the results of poor understanding and handling of the entire situation.

The President and the Foreign Minister were shocked, unable to believe what happened. President Gotabaya phoned the Chinese President, who assured continuous support and invited Gotabaya to visit China.

 

Meeting UNHRC resolution

Prior to attempting to meet the resolution, the basics of the resolution should be understood. Under the resolution Myanmar and SL were grouped together, as if both are similar. Looking at the past actions of US in Vietnam, Iran and other countries, Israel’s actions on Palestine and Middle East countries were far worse than what Sri Lanka had done. Thus punishing SL has other motives.

The first resolution in 2009, the allegations were mild and there were no countries attempting to punish SL with other motives. Failure to carry out any local inquiry by MR Government resulted in aggravating the situation.

 

US Ambassador’s offer of help

When the draft legislation for the Colombo Port City Commission was unveiled, US Ambassador Alaina Teplitz in a press conference warned the country of the need to be vigilant against unintended consequences. She warned that some may try to misuse the China-backed Colombo Port City’s easy business rules as a permissive money laundering haven amid concerns of tax leaks.

The Ambassador continued commenting on depreciating of the Rupee compared to US Dollar, problems of other countries, money printing, and how US and IMF had helped those in financial trouble.

What the US Ambassador hinted was US would be prepared to help Sri Lanka out of the troubles, financial and otherwise.

 

Coming out of the rot

What the US Ambassador hinted was if SL is prepared to move out of Chinese grips, US is prepared to help and the UNHRC resolutions could be settled. Thus our politicians need to have a fresh look at the world’s situation with our own and take necessary action for a possible solution.

Thus action would require:

1. Reducing dependence on China.

2. Increasing projects/investments with other countries, especially India.

3. Proposals to improve relationship among communities.

4. Additional investments in the north.

5. Inquiry into human rights violations during the war.

 

Chinese influence 

The construction of Hambantota Port by a Chinese company commenced in January 2008 and the first phase was opened in November 2010. President Mahinda Rajapaksa wished the second stage of the port too and it was constructed.

In 2016, the newly-elected Government found the port incurring heavy losses, making debt repayment difficult, and decided to privatise 80% stake and was purchased by the Chinese company CM Port Holdings paying $ 1.12 billion.

The expansion of Colombo Port for a harbour depth of 20 m to accommodate large container ships commenced in 2008 and was completed by Hyundai Engineering in 2012. Next was Colombo South Container Terminal, the tender won by Colombo International Container Terminals Ltd. a Chinese company, was completed on August 2013.

With experience in Sri Lanka, the Chinese proposed Colombo Port City and the Chief Guest at the inauguration in 2014 was Chinese President Xi Lin-ping, indicating the importance of the project.

Hambantota Port and Port City are practically owned and run by Chinese. The policy in line with the ‘One Belt One Road’ initiative is vehemently opposed by the West. Thus the UNHRC resolutions are mostly directed to influence Sri Lanka to reduce dependence on China. Now the Chinese are busy in expanding and developing the two main projects and need not be awarded any new projects.

 

Denying of projects to Japan and India

The President cancelled the Japan-funded Light Rail Transit Project, based on incorrect advise from his Viyathmaga group. In addition, when the President wished to allocate East Container Terminal to a joint venture between Japan and India, the award was prevented by Port trade unions supported by some of the Government’s own MPs. Although West Container Terminal was offered to Indian Adani Group, above actions may have changed Indian and Japanese abstaining from vote.

 

Development of Trincomalee with India

The Trincomalee oil tank farm built by the British in the 1930s with storage capacity of nearly one million tons idled unused. An agreement was signed in 2003 between Indian Oil Corporation (IOC), Sri Lanka Treasury, and Ceylon Petroleum Corporation (CPC) to lease oil tanks, the deal valid for 35 years, extendable for 99 years.

Indian PM Narendra Modi visiting Sri Lanka in 2015 expressed wish to develop Trincomalee as a regional petroleum hub. Later in 2015, Indian and Sri Lankan governments signed an agreement (MOU) to establish a 500 MW coal-fired power plant in Sampur, Trincomalee, but was changed for a liquefied natural gas power plant in 2016, but without further progress.

Thus the Trincomalee oil tank farm could be developed as the proposed energy hub with Indian and Japanese assistance and would include:

a. Crude and refined oil storage

b. An oil refinery

c. LNG import, gassification plant and storage

d. Gas-based electricity power generation

Above development would match Chinese investments in Hambantota or Port City.

 

Improving relationship with all communities

The most serious and longstanding human rights violation in the country, is our education system that ensures schoolchildren being separated on community basis, without allowing personal contact of children between communities. In addition, the country’s development is concentrated in the south. The major project proposed to support northern citizens, water from Moragahakanda delivered to north, was deliberately delayed for decades by southern politicians. I have detailed both in my article in Daily FT ‘Human rights: Solving two major HR issues with UNHRC assistance’.

Above facts were neglected by the local politicians as well as the UNHRC. Allowing personal contact between children could be resolved by introducing English medium education to all schools. The implementation would require a program and assistance from HR Council to get assistance from India to train English medium lecturers, also lecturers to convert our teachers to English medium.

Also our school curricula need updating to international standards. Improving education standards and English medium would end separation of schoolchildren under community basis and better employment opportunities to everyone.

 

Additional investments in the north

Another serious and longstanding human rights violation in the country, is the neglect of development in the north. The country’s development is concentrated in the south, implemented with taxes collected from every citizen irrespective of location.

The major project proposed to support northern citizens, Moragahakanda was deliberately modified, scope reduced and delayed by the southern politicians; it needs immediate implementation. The long-delayed project restarted in February with the commencement of a 24 km long tunnel by President Gotabaya, the completion expected to take five years.

If the balance sections of the project, nearly 200 km of canals to carry Moragahakanda waters to the north are completed by the time the tunnel is complete, similar to J.R. Jayawardene’s accelerated Mahaveli project, northerners would get water in five years, ending their water shortage for cultivation.

But the financial situation cannot afford the funding, thus UNHRC could request the countries such as UK, USA, Canada and Germany concerned of Tamil welfare to fund the projects constructed under UNHRC supervision.

 

Inquiry into human rights during war

Under the resolution UNHRC is expected to establish an office locally to monitor investigations and SL is expected to submit proposals to correct human right violations. Thus our proposals could include the two most important violations i.e. separating schoolchildren based on communities, to be corrected by bringing back English medium education and early completion of Moragahakanda project.

In addition, other allegations mentioned in the report need to be attended.

 

Discussion

Our politicians need to understand that the UNHRC report was not intended against SL, but against the country’s heavy alignment towards China; handing over Hambantota Port and Port City. During the past decade most of our dealings were with China bypassing other countries. Meanwhile, SL wishes to export its garments and others to US and Europe; but imports such as vehicles are suspended.

The US Ambassador in her speech extended a hand of reconciliation; it needs holding with both hands. The allegations and action proposed by the West against SL could be modified to our own advantage for the country’s development. But they would accept our proposals only if we display change of attitudes by action.

First, the President needs to apologise to Japan and request recommencement of the Light Rail Transit Project; keeping with the Cabinet accepted policy of four more elevated railway projects under different colours. Second, the President needs to discuss with Indian PM Modi, methodology of development of Trincomalee Oil Tank Farm as an energy hub as proposed by the Indian PM.

Above actions may solve issues with UN and some of the associated issues. But how about the financial problems? The salary payments of nearly two million Government employees; thus further employment to Government service needs to be stopped immediately and steps be taken to reduce numbers.

Also the most expensive political system. When President Sirisena had 2,500 support staff under him, Gotabaya reduced them to 250. The Ministers were given eight duty-free vehicles, now suspended due to stoppage of vehicle imports. The duty-free vehicle imports need be stopped completely for politicians as well as Government servants. Today, the police force numbers over 85,000, with over 50% support security of politicians, needs cutting down drastically. President Gotabaya proposes to increase police stations by 196 and recruit 10,000 policemen. In addition, tri-forces officers get promotions, additional staff are being recruited and aircrafts being purchased. Where are we heading? The Government needs to declare an austerity program commencing with politicians.

Currently, local expenses are settled with printed money, leading to escalation of Rs/$ from 180 to over 200. The depreciation leads to inflation and already the public is complaining of escalated food prices. Soon, the public would be on the streets demanding salary increases. Opposition politicians claim by the end of the Government term, Dollar would reach Rs. 300. But at the current speed reaching 300 would be much sooner. The Government offered Rs. 5,000 for three million poor families to celebrate Sinhala/Tamil New Year, costing Rs. 1.5 billion, clearly looking at Provincial Elections due soon. The Prime Minister proposed a new hospital complex to Kurunegala costing Rs. 10 billion. The PM’s love for Kurunegala and the number of messed up projects are well-known.

Let’s all hope anointing oil at the auspicious hour ending New Year celebrations, as per the tradition, our politicians would get enlightened to solve the problems for the country’s sake.