On the slow action by the GoSL in dealing with corruption

Serendipity put up a good post on this vexed subject that drew a very good comment from an anonymous contributor. It says a lot that people need to understand and I've reproduced it below:

Comment 1:

Making good on Elections promises is not easy, when you use the due process rules of law, which the previous govt. did away with. It simply takes time. In the case of MPs and their families it is the same like when a Policemen are taken in, fellow officers also think long and hard, and until there is a cast iron case they don’t take action at the same speed as for us mere mortals. That is not an excuse but there are things that can easily and not easily be proved in a court of law.

Take the case of Al Capone the notorious gangster, he was in the end indicted on MAIL FRAUD as that was more easily proved over the real crimes he had committed, due to witness tampering etc.

Remember our Parliamentary Gangsters have the best lawyers at their disposal, and there is nothing worse than the case failing in Court after all the obvious evidence. Think about it you lose respect for even the law then!

Under Gota’s Law, Duminda would have been locked up immediately, and would have been shot dead, whilst trying to run away, when he was taken to a spot where drugs would be found. Under Maithri’s law, the witness protection bill only just passed in Parliament last week offering a modicum of protection for those who are willing to testify against Duminda!

Then you have Govt. MPs who will also be implicated if Duminda squeals, you have his brother Raynor helping the Govt. and thereby seeking some respite, and then you have the evidence. It looks now that investigations are looking into the source of funds in the 60 bank accounts. Then under what law do you arrest him? It is how they hide their dirty deeds that make it difficult.

Then we have a Police and CID that is actually incompetent in finding financial fraud, and exchange control violations, so prosecution takes time.

THE PUBLIC IS IMPATIENT – Ranil will be voted out of office due to this impatience – and we are back to square one.

Who do we blame Ranil or the public? Or even the 100 day Govt! It is a real catch 22 if you are intelligent, and a no brainer if you have been brought up under the Rajapakse way of doing things and thereby have become their slaves without our realizing it. Think about it!

 Comment 2:

To me above all the Rajapakses destroyed Sri Lanka’s environment in their 10 year rule, more than the British did in 150 year rule. That is not reversible whilst most other actions can be reversed through time. So I am a member of the public that votes on that basis, though I blame the Sirisena family too for their complicity in the environmental destruction.

I am afraid that due to public impatience, and elections in the offing, the Govt will take kneejerk decisions in bringing these crooks to book to please the public but in reality allow them to escape from the worst excesses using their legal rights and legal advice.

Some Countries have taken decades to find stolen money, and in the case of the Philipines, the Marcos billions took decades to find and repatriate. It is no different in the Rajapakse case as all their loot is recycled through their proxies like Dammika, Nimal, Ashok, Sumal and others, which make it very difficult to find. So their sons can say the Rs20M watch collection is NOT theirs but someone elses! It is typical that the sycho sycophants of the Rajapakse Regime are relishing this inability to find the loot! Saying none exists.

It is important the full extent of theft is disclosed to the public, and educate them that it is NOT easy to find it in a day, to make them understand reality.

Comment 3

Make no bones about the excesses of the Rajapakse Govt. It is clear as night follows day, and unbelievable that people cannot realize how he has completely destroyed Sri Lanka. You only have to look at his own Hambantotata, ruined beyond imagination, and let it be a lesson to all.

It is the word that Ranil a friend of Rajapakse’s for 40 years gave him upon leaving TT that bugs me, as he promised to protect his family!

If roles were reversed I doubt we could say the same, as one is a bandit, and the other whose word is his bond. Two different animals from two different worlds who happen to be friends. Perverse too because in politics Rajapakse destroyed Ranil’s credentials.

In this game of poker called politics, you have the nuts cases in the public, who think on their arses and in the end a minority of arses can determine the fate of a nation whether we hand it to crooks or crooks with a more altruistic intent!

The key point is the rule of law, which disappeared under the previous administration. Everyone must start off with the presumption of innocence, just because information is received a person is not automatically guilty. Even to take someone into custody it is necessary to be able to charge them. The fact that a car or a luxury house is uncovered is not enough, it will be necessary to first prove ownership and then go to a more difficult level of proving that these were bought from the proceeds of bribery. For that it would be necessary to investigate the various deals done and then trying to trace where money was paid. There is a short guide here, which the gist what it takes to prove bribery.

This calls for, at a minimum forensic accounting skills and specialised legal expertise, which I doubt are in plentiful supply here. Wisely, they are seeking assistance from the World Bank to investigate, but all this takes time.

To some extent I think the Government has been overwhelmed by the mountain of corruption that is being unearthed-it was so widespread and blatant that people are simply tipping off the Government. The assets are being seized but gathering proof that will stand up in court is the problem.

People also need to realise that this is not the only problem that the Government needs to tackle.

They need to tackle this while trying to run the normal administration, fix the crisis in international relations, try to sort out some of the mess in public finances, all the while looking over their backs-with MR and the gang playing spoilers, especially within the SLFP.

A daunting task, that I would not wish on my worst enemy. Lets hope they can stay the course.

Sri Lanka's new foreign policy

Indi had posted a good summary of the change in Sri Lanka's foreign policy. I wrote this as a comment, responding to Sach's questions. Sach was sceptical of the postponement of the OHCHR report and was worried about the security of the country. He hoped that under MR, Dayan Jayatilleka would run the foreign ministry.

The reason for the postponement is because there is now some commitment to improving human rights.

These rights did not exist in Sri Lanka. Bharatha Lakshman, Khuram Shaikh, Nihal Perera, the worker in Katunayake, the fishermen in Chilaw, the people of Rathupaswela :these were just some of the people who were murdered and whose families could get no justice. The questions raised by the UN are with the war and the Tamils, but the same issues affect all of us, even if you may not have realised it. The people listed above probably did not either-until they were affected.

Therefore addressing questions of human rights is a priority. MR campaigned for this in 1989 when he went to Geneva. The situation now is no different.

The LLRC was set up under MR but it was supposed to be just an eyewash to fool the international community, whcih is why very little was implemented. Now that there is a committment to improving the rule of law and human rights we have got some leeway.

Have you forgotten that Dayan was kicked out by MR a long time ago? Sajin Vaas was running the show. Dayan is now singing MR's praises because he wants to come back.

You are worried about security ? What about KP, Karuna, Pillayan and Douglas who were running amok under MR? Are you saying that every single refugee is a terrorist?

To get to the root of the issue - the way to solve problems permanently is to address the causes. People who are angry may take up arms - the solution is not to keep the boot at their throats but to look at their grievances.

Lobbying does happen but there doing the right things goes a long way. Sri Lanka did not pay lobbyists in the past, it was only due to the mismanagement that this was the only thing left to try-and it was not even working.

Who was worse JR or MR ?

Sbarrkum had put up a post comparing JR and MR. This is my take on the question.

It is a tricky question, undoubtedly JRJ's regime was a turning point, he set the stage for autocracy and escalated the conflict to the level of a real war.

But what of MR, the man who took the maximum use of JR's constitution and then made it worse, via the 18th amendment?  After the conflict ended he expanded the draconian PTA, which now incorporates the key provisions of the emergency regulations, so that we are now effectively under permanent emergency regulations.

What of his dismembering of the judiciary?  JR started it but it is at a whole new level now.

What of MR's stoking of new inter-religious tensions? Against the Muslims and Christians. New tensions were created out of nothing. International pressure resulted in the genie being placed back in the box, but trust between communities is fractured.

We still do not know what happened in the last few months of the war. Even I have been surprised by what is emerging on corruption. Who knows what will emerge on the war?

We may have to wait awhile before we can assess the real legacy of MR, so a favourable comparison with JR may be premature.

Fortunately it appears that both of these are now in the past, perhaps we may hope for a better future?

Related posts here and here.

Presidental election 2015: Assessing the candidates

Some people, while acknowledging the shortcomings of the present administration are still doubtful about voting for the common opposition candidate. They wonder if there will be real change, the new man may not make the constitutional changes promised, so we end up with the same situation as before. They also worry that the infrastructure projects may stop. How can we assess the candidates?

A study of the manifestos is not very helpful, the two don't seem very different, even the President has now promised to reform the constitution. In any case they are a list of promises, what we need to know is if they will be implemented. 

The election campaign may offer us a clue, since it is recent and ongoing. We have witnessed a wave of violence, the abuse of state resources and violations of election law. The list is longer than in 2010.  (See lists of incidents compiled here and here). To no great surprise, the majority of victims of the abuse have been the opposition. Despite repeated provocation the cleaner campaign by the opposition is welcome and sends a positive signal.  

With regard to improved governance since the opposition candidate has not occupied positions of real power or influence we don't have much of a track record to go on. This is similar to the situation in 2005 when the President was first elected, he was a largely untested quantity.

However the opposition is a coalition which includes the constituents of the UNF Government of 2002-2004 which took significant steps to improve governance. The 17th Amendment which gave a measure of independence to the judiciary, police, the public administration and the elections commissioner was passed under their watch. They also passed the fiscal responsibility act which improved transparency.

Therefore there is a positive record to go on, which the candidate has pledged to support. Indeed the common pledge to reforms is the main factor that unites the disparate members of the coalition drawn from across the political spectrum. Having done it once before we may take it that the UNF will support these reforms.

What of the other members? Amongst the opposition are those who have in various ways felt the direct abuse of power (Sarath Fonseka and Hirunika Premachandra to name two) and therefore have real incentive to see reform. What if Sirisena simply buys over/ignores his partners and tries to hang on to power?  To an extent it boils down to personal dynamics.

The real beneficiary he reneges will be Sirisena, everyone else in the coalition will be the loser. If there were just a couple of players a backroom deal to renege or abandon the promise of reform in return for a slice of the spoils is a possibility. With a larger group it will always prove to be more difficult, especially when it involves strong personalities and players with a deep personal interest in it. Overall I reckon there is a good probability that the reforms will be pushed through.

The reforms of 2002-4 were passed through the usual parliamentary process, not smuggled through as  an urgent bill, which was the case with the 18th amendment and the expropriation act. Along with the impeachment of the Chief Justice and the expansion of the PTA these are the most significant political acts by this regime. Parliamentary checks have been subverted by cross-overs (47% of MP's are now with the executive) and other means. Overall we have seen a significant centralisation of power under the current administration. Given this record the new found interest in reform by the President sounds like election propaganda, like the reduction in prices of electricity and fuel. What is more worrying is the trend- towards ever greater centralisation of power and subversion of proper process. 

In terms of the infrastructure projects there have been concerns raised about costs and people wonder if the new Government will stop these projects, especially since some contradictory statements have emerged. It is worth noting that the Southern Expressway was actually started in 2003 under the UNF government. It was finished in 2011 and the President took all the credit. I don't think there is a serious issue with necessary infrastructure with the opposition but the financing will be different. The Southern Expressway was funded by the ADB and the Japan Bank for International Cooperation and cost far less per km than the Katunayake Expressway.

The debate on governance and the rule of law is esoteric but the consequences are very real, very fundamental. It was only six months ago that we had an outbreak of racial violence, the culmination of many smaller incidents. Preceding this was violence in Rathupaswella, Katunayake  and Chilaw which form a troubling pattern, symptomatic of the breakdown of the rule of law. Why do they keep recurring? Is it because people can get away with it? A call to the right person and the police will not investigate, the courts will not convict ? Are certain people untouchable?

In isolation they may be ignored, but taken together they form a dangerous, disturbing trend that calls for arrest. Things tend to get swept under the carpet and after a while we forget about them. Because we have not been directly affected we can allow ourselves to be lulled into a state of dangerous complacency. 

So what do voters have to assess the candidates? The record of the incumbent is clear. Clearer still is the need for reform. Will the contender stick to his promises?

In my own assessment I think there is a fair probability that he will.


Further Reading:

For an excellent critique on the decline of the judiciary see Nihal Jayawickrema's piece here.

Putin and Mahinda: Strong leaders, their policies and our fate

Some analysts, including the irrepressible Dayan Jayatilleka have a fascination with strong leaders. Strongmen, they believe will lead to strong nations. Vladimir Putin mesmerises such people, a man who they claim has taught the West a lesson in defiance and developed his country.

Mahinda is compared favourably with Putin and people are urged that if this model is followed it will surely lead us to greatness. The comparison between Putin and Mahinda is apt. Both share similar sentiments and follow similar policies.

But is this good for Sri Lanka?

After collapsing in the 1990's Russia's economy recovered from around 2000 onwards. Putin happened to be in charge and claimed the credit. The truth is that the economy recovered only due to high oil prices.

Historically this has been the case with the Soviet Union and Russia - the economy has largely been dependent on oil and natural resources. The Soviet Union collapsed after a period of sustained low oil prices in the 1980's.

After some decline in oil prices Putin's Russia faces a similar situation today. KAL's cartoon from The Economist sums it up.

Sanctions from the West have exacerbated the crisis in Russia - but are not it's primary cause. Russia's sclerotic economy is sustained largely by natural resources. Even if it is argued that sanctions are the cause of the current crisis it only serves to underline the folly of Putin's policy (like Mahinda's) of anatagonising the West. If Russia's economy with all the natural resources at its disposal is tottering what would our fate be?

Sure, we can all be proud of having a strong leader like Putin but Russia's fate will be ours.

Is that what we really want?


Some further reading here,  here and here.

The LTTE and the Presidential election

The President has proclaimed that he has won the war and defeated terrorism. It is claimed to be the first and perhaps only victory against terrorism. Prabakharan is definitely dead, not even the looniest elements of the diaspora cling to the belief that he is alive, even his son and family were killed. In the minds of some the killing of the children and family were necessary to prevent a resurgence of the movement.

After such total annihilation how then that the LTTE now appears to be in the forefront of this election? 

The whole hullabaloo seems to have intensified after the cross over of the SLMC and the announcement that the TNA will support the opposition. The Nation laments that the TNA has finally ended up in Maithri's camp. Was anyone seriously expecting any of the minorities to support the incumbent? After the series of attacks on the Muslims and the Christians which the state did little to prevent or investigate? And which linked the attackers to the State itself?

Perhaps they were optimistic. Perhaps they felt that enough cash would keep them in the fold?

One would be forgiven for thinking that we were back in 2005, when the LTTE did in fact play a crucial role in the election. It is undisputed that the LTTE called for a boycott, but why where the number of polling booths in the North and East reduced? Why were people forced to travel outside the LTTE areas to vote? Was it to make it easier for the LTTE to blockade roads, to enforce the boycott? Why was public transport curtailed on election day? Was the Government playing into the hands of the LTTE or was there something else? These are troubling questions that feed the speculation of a pact. (Some further info here).

Coming back to today's "issue", with all this history of dealmaking, even if the LTTE did exist in some form a pact would hardly be surprising although the Government media would by hypocritical in highlighting it now, particularly since Karuna, KP and several other former LTTErs are busy working for the Government. Pacts with the Government are in order, but not with the opposition?

Given the state of the LTTE today the accusation is merely absurd, one hopes it will be treated with the with contempt it deserves by the public. 

The Dictator's Handbook

Germany and Japan were militarised societies that glorified war and conquest, held human life to be cheap and regarded obedience to the state as the highest virtue.

This quote is from The Economist's review of two books on the second world war. It made me wonder if all the world's dictators are playing from the same rule book.

Years ago I listened to a satirical feature on the BBC World Service called The Ruler's Guide to Repression which set out the basic principles that any self-respecting dictator should follow.  Now, something similar has appeared in book form.

Subtitled "A Practical Manual for the Aspiring Tyrant" and carrying chapters on "Coming to Power Through Your Family", "You are the State", "The Range of Repression", and "Building Your Financial Empire"  it appears to be inspired by the Prince and is therefore a must-read for both for rulers and subjects, so pay heed.

The website carries some excerpts from the book which are hilarious, yet seem well grounded in fact. 

The book may be bought from the publisher here.

Jayawewa! Jayawewa! Thank you for voting!

Who will pay off Sri Lanka’s loans ?

Cerno wondered who should pay Sri Lanka's loans. I'm not sure but I certainly don't want it to be me!

I woke up from a dream the other night. I had been dreaming of Chinese loans and lying a awake in bed a solution to the problem came to me.

The Chinese loans are mostly project-based therefore the logical thing to do would be to swap the loans for equity. In other words, give the ownership of the projects to the Chinese in return for the cancellation of the loan.

In plain language, we default on the loans but dress up the process in enough financial fig leaves to make it appear that we are not. The Chinese will not go away empty handed either, they will gain ownership of the project together with whatever income that it generates. The projects have obviously cost far more than they are worth, but that is a question the lenders will have to ask of themselves. The citizenry and parliament were not privy to the full details of either the loans or the projects so will feel little responsibility for repayment. 

The Chinese will of course have to manage the regular operations of the project, whether it is the harbour, the airport or the highway; as the new owners the onus is on them to make the assets pay their way.

The Government will need to set up a regulator (such as OFGEM in Britain which regulates the energy industry ) to ensure that the pricing is not unreasonable and that basic service standards are met. We do not want the toll on the highways suddenly raised to Rs.10,000/- a trip just because the Chinese want their loans repaid.

The country is overburdened with debt and trying to service these loans will be a punishing experience  for citizens, therefore a default at some point  seems almost inevitable. Given a choice between defaulting on the international bond market and defaulting on China, the Chinese options looks a lot safer, especially since we will not technically be defaulting at all, we will be assigning the project assets to the lenders.

It may not be possible to convert all loans in this manner due to geopolitical considerations-the harbour may be particularly problematic. The alternative would be to sell the assets to private investors (privatisation) and use the money raised to repay the debt but the problem is that due to the massive cost overruns on the project it will never be possible to recover more than a fraction of its value through a sale on the open market, which is why the debt swap option is the most attractive.

Moreover the Government can sweeten the deal further by liberalising regulation that will stimulate business activity, giving the projects a better chance of success. The Government has spun a web of red tape that is strangling business. For example reintroducing the automatic visa on arrival and removing the minimum pricing on hotels can be an imediate boost to tourism.

The debt/equity swap will involve a lot of legal paperwork, even more work will need to go into the role of the regulator and the formula for pricing but this is an option that is worth exploring. 

Groundviews: The Contest.

Groundviews had published an analysis on the election. I wrote this as a comment:
The problem, which the business community and anyone else who argues for continuity has ignored is the state of the public finances.

We have an unsustainable level of public expenditure, which is being funded largely by foreign borrowings. Thanks to a general slowness in the economies of Europe and the US we have been able to raise debt at reletively low rates, to finance our expenditure.

We cannot expect such a benign situation in the debt markets to continue indefinitely. Sooner or later interest rates will rise (as soon as the US/EU cut back on quantitative easing) and we will then face a steep rise in debt service costs, which will push us into the same debt trap that Greece faces.

This is not just my view, it is also the view of the IMF and the international rating agencies. Those who want to continue on this path are advised to peer over the cliff face, first.

What I wish for in a President

People dissatisfied with the choice of candidates at an election a may sometimes engage in wishful thinking speculating on an ideal leader. Someone of stature to whom we would unhesitatingly cast our vote. Nelson Mandela, for example or Lee Kuan Yew, a name that crops up frequently in Asia, or perhaps even Mahathir Mohamed.

Dayan Jayatilleka wishes for Deng Xiaoping the leader who reformed China and a worthy candidate,  although he then goes on muddle his argument by praising Putin forgetting that a Putin is what we are already saddled with.

I am much more practical in my approach. Sri Lanka is a small country, the talents of Mandela, Lee or Deng are suited to a much broader canvas. Why be so ambitious? Why not choose a lesser leader, one who while better than what we have is not such a world figure and is therefore more likely to take up the position?

I would settle for Omar Bongo.

 Not many many have heard of him but for 42 long years he ruled Gabon. Western concepts of governance he could not understand. He saw no distinction between himself and the state.

The suggestion of fiddling public finances flummoxed and infuriated him. Corruption, he once explained to a reporter, was not an African word. No more was nepotism: he simply looked after his family, supplying them with villas in Nice as well as the ministries of defence and foreign affairs. When French judges in 2009 froze nine of his 70 bank accounts, he was outraged. An attack on him was obviously an attempt to destabilise his country. (from the Economist obituary)

Gabon's mineral wealth helped to ease his rule.

A timber concession here, a stretch of paved road or a Bongo stadium there, disarmed anyone who objected to his way of doing things. Even Pierre Mamboundou, his most diligent opponent, was soothed after many years with $21.5m spent on his constituency. Business visitors to the capital found it chic, feudal and hospitable, like an Arab emirate; in Mr Bongo's time, Gabon's consumption of champagne was said to be the highest in the world. Everyone could be suborned or sweetened except his first wife, Joséphine, who became a pop singer after the divorce and sang cutting songs about her young replacement. (the Economist)

Whatever his faults, Mr Bongo did allow a modicum of prosperity to trickle down to his people, who enjoyed a slow but steady increase in living standards. He also brought relative tranquility, and order; rare commodities in Africa. There was apparently genuine mourning by the population at his passing.

This is all I would wish for in Sri Lanka.  They don't seem like much but I wonder if even that is too much to ask for.

Sri Lanka is not a rich land, so if Mr Bongo were to rule he would have little wealth to ease his passage. However having made so much in Gabon, he could surely be persuaded to serve here for more modest pickings. After all, some minister here made the very same argument; that it is better to have the old hands who have already made money than to get someone new who would need to start all over again.

Cerno says he has grown to fear speculation,  about the process of change and hopes that Sri Lanka will not (despite what far away analysts think), become a Somalia, a Pakistan, or some other third world hell hole.

I fear Cerno that we are already just that. We passed the Banana Republic stage some time back and we now seem headed in directions that even I don't want to contemplate.

Democracy, constitutions and politicians: what citizens need to know

Shammi has reminded me that today is my blog's birthday. I was not sure so I had to go back and check, but it indeed the anniversary.  What shocked me is that it has been nine years since I started.

It seems a very long time indeed. Ironically I started with a post criticising the President, shortly after he was elected to office and seem to have spent much of the time since criticising his administration.

I have been playing around with a primer on democracy. It's not finished yet but now that I feel obliged to put up something to celebrate the annivesary here it is.

Democracy is a highly complex political system. The original meaning of the term “democracy” was rule by the people, as opposed to rule by a monarch. In practice it meant rule by the people’s representatives.

In a democracy the ruler is only a representative, a servant of the people. The problem is that once elected, the servant is tempted to become the master. If he controls the state he becomes a king. How do we prevent this?

In a democracy this is prevented by:

a.      Not giving power to a single person. Sounds simple, but how is it done? Principally by sharing power.

Power is shared between several bodies including:

                           i.          Parliament, which makes laws. The president cannot make laws. Laws must be made by parliament.

                          ii.          The parliament itself has both government MP’s and the opposition MP’s. The opposition is there to ensure that parliament is simply not a rubber stamp of the president or the Government .

                         iii.          The laws made by parliament must be obeyed by all. But if an unjust law is passed what happens? People should be able to go to court to challenge the law. This is why independent courts and a judiciary are necessary. Judges are appointed independently and can review and change laws if they are not in keeping with the constitution or are otherwise unjust.

                         iv.          Laws are administered and enforced by the police and public servants. Appointments to the police and the public service must not be under the control of the president or ministers. If the police and public service are appointed by ministers/president, they only do what the politician’s want, not what the people need. This is why we need an independent police force and administration. Entrants to the police and public service should be chosen by way of competitive exam and the promotions, salaries and transfers must be determined by an independent commission. Not the MP’s, not the president.

                          v.          Many of the controls that limit power described above are set out in the constitution. This is why the constitution is important-it sets out the limits on power.

b.      Keeping the people informed of events. Despite all the checks above things can still go wrong. In order to correct anything we need to know what has gone wrong, so the media should be free. The Government should not own media outlets or control what is broadcast through censorship or by licensing. People should be free to criticise the rulers.

c.      

           The active participation of the people, as citizens, in politics and civic life. It is not only the president and the parliament who have a say. Ordinary citizens should also take and interest and participate in political debate, either as individuals or in groups. Groups that participate in political debate are usually called Non Governmental Organisations (NGO’s) – because they participate in politics but are not a part of the Government. Participation by citizens must be encouraged because along with the media they can help inform the people of what is happening.

Based on this scale how do we rank democracy in Sri Lanka today? Citizens need to observe and make up their own minds but here are some facts that they should consider:

 

1.      Parliament – opposition MP’s have been bought over by giving various ministerial positions and fat salaries. This is why we have a jumbo cabinet – opposition ministers are bribed to vote with the Government and no longer check power.

2.      Appointment of judges is no longer independent. The Chief Justice was removed arbitrarily and replaced by a Presidential aide. This has both weakened the independence of the judiciary and placed it under presidential control.

3.      Independent police and public service commissions have been removed. The independent commissions were set up under the 17th amendment which has now been repealed. All appointments, promotions, transfers are now subject to political control.  If police or public servants do not carry out political orders they will be punished (transferred, denied promotions or increments). They no longer serve the people.

4.       By eliminating the independent media and demonising NGO’s the government has prevented full participation by citizens.

These are just some of the issues, there are others that do not come immediately to mind but if citizens observe political processes carefully and understand the importance of process and procedure they will easily detect abuse.

 

 

More expropriation of assets: estate companies now in the gunsights of the Government

The Government has issued a menacing statement on the status of the privatised estate companies warning that "underpeforming" companies would be taken over by the Government.

Taken at face value the statement seems innocuous - what is wrong with cancelling the lease and taking over something that is underperforming?

The question is, what is defined as "underperforming" ? Returns below par?  Losses? For a start, lets assume that the definition means a company that is making losses.

The next question is: who bears the losses of a private company ? The answer is the financiers of the company - the shareholders and the banks. What happens when the State takes over the company?

The state becomes the financier-and naturally assumes responsibility for the losses. This means taxpayers and citizens. Why are we in an unseemly hurry to impose additional burdens on the public?

Any losses are a burden on the public, unless, by some magic, performance improves under Government control.  We have plenty of evidence to the contrary

For example Srilankan Airlines was consistently profitable under the management of Emirates. The Government, in a fit of pique, took over the airline, paying Emirates US$53m for its stake. Last year Srilankan lost some Rs.30.1bn (around US$231m). In just one year, the State managed to lose almost 5 times its original investment, a truly mind boggling feat.

The Committee on Public Enterprises (COPE) in its review for 2012 reported that only 11 of  235 state enterprises reported a profit. This should be sufficient evidence to stay the case against any state interference to "improve" management in any so called "underperforming" business. Things will be infinitely worse in the hands of the State.

This also raises an interesting question on the remaining estates owned and managed by the JEDB and the SLSPC. Not all the estates were privatised, there were some that were unsaleable at the time and these remained in State hands.

An excellent test of the Government's fitness to manage estates would be to publish a summary of the performance for the Government estates for each year between 1992 and 2014. We need the basic crop/yield figures, selling price per kilogramme, the turnover and the net profits or losses.

This can then be compared with a similar summary of the performance of the privatised estates. To be fair, what we need to compare is the relative change in finances (in percentages) from the starting position of 1992.  It does not matter if the State companies are still making losses, what we need to know if the position is better of worse against the starting point, with similar information on the private sector.

We can then draw an informed conclusion on the wisdom of this latest proposal en route to our Nationalist, Socialist Utopia,  


Related post: Felling Timber on estates to pay EPF/ETF dues.

 

Ranil’s House Of Tards - A response to Indi

Indi has written something more on the election, specifically on what appears to be the opposition's main platform-the abolishing of the executive presidency.

He highlights an issue that also worries me "Nobody is going to put themselves out of a job to see some other mutton-chop get it. "

This is a real danger. Power, once tasted is rarely given up. Remember that CBK  promised to abolish the presidency when she campaigned in 1994? She then went on to serve both presidential terms. What guarantee do we have that even if an opposition candidate wins, the presidency will be abolished?

No real guarantee at all. If it is a joint candidate or a coalition pushing for the abolishment there is a slightly better chance- the coalition partners or alliance will have to hold the incumbent to the promise-and the deed will need to be done in the white-hot heat of the immediate aftermath. Any delay will be fatal.

As an added safeguard, the steps or the process that will be followed to abolish the presidency must be made public as part of the campaign. it may include the formation of a constitutional committee, perhaps with international observers to guarantee that its objectives will be met.

People will then understand that there is a serious process in place to which some thought has been applied, not simply an electioneering slogan or gimmick.This will naturally add weight and substance to an opposition campaign.


An interim option could be that the 1978 Constitution be repealed entirely immediately on the change, restoring the 1972 constitution.  My personal preference would be for the restoration of the 1946 constitution, the only truly good one that we had but it is politically impossible - the name of the country, the position of Buddhism being two of the issues that no politician will contemplate touching. The next best thing is the 1972 constitution. Flawed though it is, it is better than what we have.


Under the 1972 Constitution the office of the president will still remain, but in a purely ceremonial role.  This will also have the added benefit of abolishing the evil provincial councils and banishing the horrible creatures who inhabit those bodies to eternal political limbo.

The constitutional committee can then either make amendments to the 1972 one or have the fresh on drafted. I wonder if the UN or some other body has a template of a constitution that can be adopted rapidly with few changes?

Any further thoughts on this?

Voting rights to expatriates - a bad idea

Serendipity had put up a post endorsing the call by the BBS to grant voting rights to expatriate Sri Lankans.

I think this is a very bad idea.

Expatriates who live overseas have no stake in affairs here. The do not pay tax, their lives are unaffected by the standard of governance. Their jobs are not impacted by economic policy, the purchasing power of their salaries is impervious to inflation in their homeland.

They do not have to rely on the public services of the country, their liberties and rights are dependent only on the situation in their country of residence.

Doubtless many are Sri Lankan at heart. Granted that they love visiting the 'home' country but when they visit they are little more than tourists, enjoying the sights and sounds. They may speak the language and may have grown up here, have family and friends here, yet they remain only visitors.

Although their roots and attachment may be deeper than an ordinary tourist, they will eventually return to their regular lives overseas.

For me, this is the deciding factor. Their real lives are overseas.

If they have such little stake in affairs here, why should they vote?

Serendipity thinks that they will be less likely to be 'bought'. Possibly, but I fear that many of them view Sri Lanka through the eyes of tourists, rather than residents, as I pointed out here.

In fact, if we stop to reflect, the expats have already voted - with their feet. For whatever reason; economic, political, social, they have left, seeking a better life elsewhere.

No better testament is needed as to their real convictions. If we give expats the vote, we may as well give it to all tourists.

Why This Election Is Going To Suck : response to Indi

Indi had written a post on the upcoming election and I was rather surprised by his assessment of the current regime. It was a relative assessment, in comparison to its predecessors but I find it difficult to believe that we have seen anything other than steady decline since the 1950's.

Are they less racist?

True, JRJ is one of the biggest villains; he promoted the language issue before SWRD, sabotaged the B-C pact and orchestrated (not ignored) the 1983 riots, plus of course the stupid new constitution.

That sounds like fairly high bar to beat, but the new lot is now stoking new religious hatred between Buddhists and minorities. They also seem to be trying set the minorities against each other - Hindu v Muslim/Christian and also Christian v Muslim. 

They are also seem to be busy executing N.Q Dias's strategic vision to militarise and garrison the North - see the posts that I linked to here.

They have not (yet) ended by shedding the same amount of blood that JRJ's policies eventually did (perhaps partly because international scrutiny - witness the ebb and flow of the BBS before and after CHOGM, UNHCR summits) but in terms of intent I would say it’s pretty disastrous.

In terms of the productivity and the economy I admit that they have poured a lot of concrete all over the countryside, but so did the leaders of Greece and Spain.

Fueled by cheap credit from European banks Spain and Greece embarked on grandiose, ego-boosting infrastructure. From Olympic stadia, to opera houses to airports gleaming new infrastructure dotted the countryside. They looked impressive and generated a great deal of pride and while the money was flowing no one worried. No one understood the cost or felt the pain - until the debt needed to be repaid.

Sri Lanka is no different, the glittering façade, funded largely by Chinese and international debt gives the appearance of development and prosperity but is ultimately unviable. As long as the world economy remains in the doldrums and relatively cheap international credit is available, no one worries about the price. 

Official Government debt (including loans guaranteed by the Ministry of Finance) has ballooned by 64.5% between 2009 and 2013 (from Rs.4,328,495m to Rs. 7,120,075m). (This excludes debt raised direct by state owned enterprises and other agencies).

Sri Lanka’s Government revenue has been consistently below its recurrent expenditure, which means we are borrowing to repay interest on current debt, all the while taking on further debt to finance new capital expenditure.

Eventually lenders will begin to wake up and once the inflow of funds slows we will be faced with a debt crisis – being unable to repay debt and therefore unable to borrow further. Since public services are also (partly) paid for by debt these will either have to be cut back (painful austerity measures) or money will be printed locally leading to high inflation. Interest rates may spike when the Government starts borrowing locally with the knock on effects of driving private businesses down. This leads to declining investment, growing unemployment and all the rest that we have witnessed in so many other debt crises before and are particularly apparent in Spain and Greece today.

The well-oiled propaganda machinery which now paints Chris Nonis a gate crasher and denies an assault even took place will spring in to action blaming the international banks and lending agencies.

Of the politicians who hoodwinked the lenders with false statistics and promises and then pocketed the money (which is the main incentive for building white elephants in the first place), not a word is said.

As the Guardian says

As one of the smallest countries to host the event, the Greeks still speak of 2004 as a defining moment, when the country crackled with optimism, confidence and pride. The defiance of the doomsayers who believed the Olympiad would never get off the ground – given the chaotic countdown to the opening – still elicits cries of delight.

"For a short time we were the centre of the world, people knew that a place called Athens existed," said Dimitris Evangelopoulos, Greece's national track and field coach. "And we pulled off a good Games, everyone says it. "

And look where they ended. 

Our great moment of pride was in 2009. Since then the regime has taken Sri Lanka from flawed democracy to Banana Republic. We now seem to have set a course in the direction of a Pariah State.