The protection of domestic agriculture

President Sirisena has recently called for the protection of domestic agriculture and for import substitution policies to help local cultivation.

Highlighting on the agriculture sector development, Sirisena said it was “a shame” that the country was importing agricultural products which could be cultivated in the country, adding that the Government was spending over Rs. 6,000 million annually on imports of essential foods. Import substitution has been a point repeatedly highlighted by the President, who has insisted Sri Lanka has the capacity to expand its production to competitively meet domestic needs. 

He pointed that high imports had negatively impacted the local farming industry and by extension the entire economy. Thus, implementing new policies to encourage local agricultural products was essential for the country to regain its status of self-sufficiency, he stressed.

Such policy is not new, it has been followed before in various forms in Sri Lanka since the 1960's. President Sirisena is a decent man and I am sure he genuinely believes that helping farmers will alleviate poverty. Unfortunately he is wrong.

Protecting local farmers will help raise prices of agricultural produce and the farmers will undoubtedly be better off. But what of the consumers? The people who must pay higher prices for food, because cheaper imported food is either taxed or its import is banned?

It is easy to assume that townsfolk are richer than rural villagers and paying higher prices for food will leave them unaffected. This is to ignore the large number of urban and rural workers including casual labourers who are amongst the poorer section of the population and who will suffer in consequence.

The Sri Lanka Labour Force Survey for 2014 identifies that just 26.4% of the workforce (or 2.2m people) are employed in agriculture.  The vast majority (73.6%) are employed elsewhere. The statistics do not reveal sectoral break ups but the number employed in agriculture would certainly include the tea plantation workers (several hundred thousand of them); leaving these out means that the beneficiaries of agricultural protection would be an even smaller proportion of the population.

The classic debate for agricultural protection took place in England in the 1840's in the case of the Corn Laws. The laws, which protected rich landlords at the expense of the poor labourers were repealed in 1846.

Sri Lanka already suffers from high food prices thanks to duties imposed on essentials from canned fish to dhal, simply because the Government sees this as the best way to raise revenue.

The Government needs to work on lightening this burden consumers, not increasing it.

How should we vote?

Indi had written something urging citizens to vote for good people.  Just before the last election I did an assessment of the candidates.

What we have now is something of a re-run of the same issues but with the advantage of having a short track record of the Sirisena administration to compare against Mahinda.  

Looking back at the past few months the worst fear of the Sirisena candidacy - that there would be continued dictatorial rule under a new face has not been realised. Sirisena has not abused the powers of the presidency and some powers were curtailed - despite the best attempts of the Rajapaksa camp to stymie these efforts.

While there have been problems, there is an improvement in the rule of law and governance. Sure, things are not perfect but on the whole thing have been better. Even the notorious Mervyn Silva is quiet.

In stark contrast to the presidential poll, this campaign has been the most peaceful and by all accounts the fairest in a couple of decades. The elections commissioner is asserting his independence and the candidates seem to be abiding by rules, for the most part.

At the end of the day, this is what we really need as the foundation of society: a state run on a system of law, not one run on the whims of a handful of people.

Society also seems far more peaceful; just over a  year ago we had violence in Aluthgama, but since January things have been quiet and restrictions on freedom of expression have abated. In contrast, the Mahinda campaign is playing on fear of minorities and threatens to turn the clock back.

Of course there is a great deal more to be done and the current Government is not without its flaws, but at least we are moving in the right direction.

They say the first thing to do when you are in a hole is to stop digging. The Sirisena administration may not have done a lot but least they have stopped excavating.

The Rajapaksa camp is busy organising spades, mammoties and backhoes to get back to what they know best.

The choice now is fairly clear.

CA Sri Lanka, Audit Firms & Their Slaves - some thoughts

A former accounting trainee V Kanthaiya had written an article faulting accounting firms for underpaying their trainees and going on to describe this as modern day slavery. There is some substance to his complaint but the charge of slavery is perhaps taking things too far. Serendipity has weighed in on the side of the student, these are my thoughts on the matter. 

While there is a problem of underpayment, things have improved a great deal over the past few decades.

In my father's day one apparently had to place a bond with the firm in order to be admitted as a trainee. The bond was non refundable but the allowance paid to the trainee over the four years was equal to the value of the bond. In other words 'allowance' the students received was only a repayment of the original bond, excluding interest. In effect students had to pay for the privilege of being a trainee!

Although current allowances are still low, at least they represent actual payment from the firm and it is a big improvement on the amount of Rs300/- that was the standard starting monthly allowance twenty years ago.

I do notice that the trainees work great deal harder, much longer hours and do more demanding work (although the firms themselves take less and less responsibility-the representations made by management are now at ridiculous levels- the firms take almost no responsibility at all - almost everything is taken on the representation of the management!) The firms do not even perform the simple service of putting the accounts into the audit format, which used to be standard previously, all work is passed on to the client.

I do think the firms could increase the training allowances, at least in line with inflation; I don't think they have been revised in the last 5 or perhaps 10 years.

My bigger grouse with the profession is its hasty embrace of the ill-conceived IFRS basis of accounting. IFRS was a knee-jerk reaction to problem that was fundamentally in the sphere of economics, all that accountants needed to do was ensure better disclosure of contingent liabilities and positions held in the market. This could have easily been achieved by way of notes, there was no need to turn the fundamental basis of accounting, developed over a couple of centuries on its head.

The basic principle in accounting is the proper recording of transactions, with IFRS the accounting system records notional, unrealised gains and losses that can distort reality.

Nothing illustrates this better than the 'poster boy' for the introduction of IFRS in Sri Lanka: a certain firm called Touchwood Investments PLC.

In their eternal wisdom, the auditors and accountants of Touchwood determined that the true position of Touchwood would only be reflected by adopting IFRS methodology, which they proceeded to do with gusto, neglecting to notice the minor fact that the so called investment scheme is what is known as a Ponzi scheme.

That a Ponzi scheme could be dressed up to appear as a legitimate investment is a damning testament to the fundamental flaws inherent in IFRS.

Such is the complexity of IFRS that management and even accountants have difficulty understanding their own figures. This provides lucrative opportunities for accounting firms to sell additional consultancy services to clients, which suits the profession very well.

Unfortunately it is now deeply entrenched so no one has the sufficient incentive to unwind it, at least until the next big implosion in the banking sector.

Related Post : Touchwood - Sri Lanka's listed Ponzi scheme

Colombo's last Gothamba Rotti cart

This evening when returning home I came across something that I had believed was extinct: a man wheeling a cart selling gothamba rotti.

Piyadasa, making gothamba rottis.

These were a familiar sight years ago, the carts would go by in the evening, 'bell' clanging. The 'bell' was not a real bell but the head of a small mammoty which would be stuck with a small metal rod to make that familiar clanging sound. There would be a sudden shout - "gothamba rotti- does anyone want?" there would be a split-second decision and someone would be sent running out to flag it down.

People would need to be quick, the carts were generally wheeled at quite a fast pace. As children my cousins and brothers would run out looking for the cart. If it had gone past we would sometimes chase it down the road, plate in hand, with someone else running behind with a bowl of eggs-needed to make the egg gothambas.

If caught in time, the owner would turn the cart in the driveway or porch of the house and make whatever rottis the household wanted before moving on.

Sometimes the rotties would be made on the side of the main road, which would attract neighbours and passers-by who would stand around waiting to place their orders. The stove in the cart had a small metal pipe attached into which the owner would blow, whenever the fire died down. As children we would eagerly take turns to keep blowing at the fire.

Although gothamba rotti is available in shops I have always preferred it from a cart, the rotti is is much lighter and crispy. The wood fire adds a distinct aroma to the rotti that gives it a unique flavour not found in ones in the shops.

I had not seen a rotti cart in years, so I stopped immediately and ordered some. Not a lot has changed from what I remember I my childhood although he has added cheese, chocolate and vegetable to the traditional plain and egg gothamba's. I seem to remember that the carts had some kind of brake but Piyadasa has improvised his own.

Piyadasa's improvised brake system

I asked Piyadasa, the owner what happened to all the carts. He says everyone he know has given up, its hard work and people prefer to do other jobs. He thinks that he is probably the last cart that is operating in Colombo.

His day starts in the morning buying ingredients and preparing the dough, which he says takes pretty much the whole day. He then sets off in the evening at about 5pm and will be on the go on until 9pm or 10pm, when he finishes his last order. Then he wheels the cart back, washes it down before going to bed.

He is based in Borella and has a few set routes: Tuesdays, Wednesdays and Fridays its Cinnamon Gardens, on the other days it is the area beyond the Borella junction, towards Cotta road. He does have a phone number: so if you can now call him up to find out where he is and try some of his delicious rottis.

I'm staying up writing this because I feel like a stuffed christmas turkey after gorging on gothamba rotti.


Piyadasa : Gothamba Rotti Cart Mobile : 0725-813-455

The BBS is a Western conspiracy

The former president has revealed that the Bodhu Bala Sena (BBS), an organisation that claims to fight for the rights of Sri Lanka's Buddhists is in fact a conspiracy hatched by Western powers. It was allegedly launched by the opposition and Western powers to defeat him in the election. It is a pity that the article concerned did not get a response from the BBS spokesman to this charge, it would have been interesting.

The BBS was launched in mid 2011 but the former President called a snap election only in October 2014, two years ahead of schedule. How did those Westerners know when the election would be called?

They must have had amazing prescience, to have launched the BBS a full three years before the actual declaration of the election. The date of the election was known only to the ex-president and his astrologer. Perhaps the Norwegian's were also consulting an astrologer ?

He claims his election campaign was undone by the BBS, but then why did the ex-President, carrying all the power of the presidency fail to heed the appeals of the Muslim community and even his own ministers and do something about the BBS?

The US, one of the countries accused of sponsoring the BBS revoked the visa of  the General Secretary of the organisation Galabodaaththe Gnanasara Thero, which is a lot more than the Government ever did.

The BBS clearly broke the law on many occasions, yet no action was ever taken. He admits that he turned a blind eye to the antics of Mervyn Silva, perhaps he did so as well to the BBS.

The BBS seems to have gone underground after the election, perhaps stricken by the same mysterious forces that affected Mervyn Silva?

Update: The BBS has issued a statement urging the government not to harm Gotabhaya Rajapaksa. They claim that Chandrika Bandaranaike has some designs on Gota, which are at the behest of Western countries. Very confusing, these Western countries, no? One never knows what they are up to.

urge the government not to harm former defense secretary Gotabaya Rajapaksa - See more at: http://www.dailymirror.lk/70151/gota-s-life-bbs#sthash.RStKOYYh.dpuf

urge the government not to harm former defense secretary Gotabaya Rajapaksa - See more at: http://www.dailymirror.lk/70151/gota-s-life-bbs#sthash.RStKOYYh.dpuf

urge the government not to harm former defense secretary Gotabaya Rajapaksa - See more at: http://www.dailymirror.lk/70151/gota-s-life-bbs#sthash.RStKOYYh.dpuf

Gold ring worth Rs.1.8m, dropped by an MP in parliament

The Ceylon Today reported that a gold ring worth Rs.1.8m was discovered by an officer of the housekeeping unit when he went to clean the room where a group of MP's had been protesting.

It was returned to the MP, who was so grateful that he offered the ring as a gift to the housekeeper, who reluctantly accepted. The honesty of the housekeeper is commendable, behaviour we hope will be emulated by the august members who actually occupy the chamber.

Returning to the incident at hand, in the first place, what was an MP doing with a ring worth Rs.1.8m? He is clearly a wealthy man, especially since he could afford to offer it as a reward to the person who found it. What are his sources of wealth? has he made the declaration of assets, as required?

We knew that the MP's protesting against the summons issued on the former president were a rotten lot and probably corrupt to the core. If the ring was worth the amount reported the allegation of corruption may be levelled so why not dispel the allegation, follow the example of the housekeeper and go beyond the call of duty by making a public declaration of assets?



 

Controlling Mervyn Silva; threewheelers and milk powder.

In an interview with the Sunday Leader, Mr Gotabhaya Rajapaksa said that he tried to control the notorious Mervyn Silva. This is entirely plausible, Mervyn Silva is a thoroughly bad hat and a public relations disaster. His maverick behaviour would certainly have been at odds with the orderly, controlled world of Mr Rajapaksa.

Yet he did not succeed, at least not entirely. Although the mind boggles at the thought, it is quite possible that without the controlling influence of Mr Rajapaksa Mervyn Silva's behaviour could have been far worse.

If the most powerful man in the country could not control him, we may conclude that Mervyn Silva was beyond any human control.

Yet something very strange has happened.

Since the beginning of this year that uncontrollable character, the man even the feared former  Defence Secretary could not control is as quiet as a mouse. He even filed a complaint exposing fraud and corruption, the act of a model citizen. Have the stars changed ? Or are unseen and inexplicable forces must at play? Otherwise what could have prompted such radical change?

Quite unrelated is the Government's attempt to curb another uncontrolled menace, the three wheelers. The Government says they must be regulated and are talking of amending the Motor Traffic Act and setting up a regulatory body.

Why do they need to look so far?

The first step is to start enforcing the Highway Code and root out the corruption in administering the driving test so that at the very least people getting licenses know the road rules. I never understood this business of cheating at the written exam of a driving test. The rules and signs are simple and things we have been taught from school, why does anyone need to cheat?

The retail price of milk powder is set by the Government, the Sunday Times wonders why prices have not fallen, despite a 43% decline in world market prices. What is interesting here is the level of tax: working from the figures quoted in the article Government taxes amount to at least 55% of the raw cost of milk. Apart from the tax, the article explains the reasons for the stickiness in prices:

"price-regulation that is wildly disproportionate to the highs and lows of the international market. “The prices are controlled by the Government in order to prevent excessive volatility affecting consumers,” said Deshal de Mel, economist".
 
“When prices increase significantly, the companies have to take a hit,” he explained. “On the flip side, when prices are dropping, you need to compensate the companies by allowing them to make some profit which, at such a time, would be at the expense of the consumer.”

This would be a good time to remove the price control on milk powder, there is probably room for prices to fall and if companies are certain that they will not be forced to sell at losses if prices rise they should be quite willing to cut prices.

Why nations must remember

"A tombstone is a memory made concrete. Human memory is the ladder on which a country and a people advance. We must remember not only the good things, but also the bad, the bright spots but also the darkness. The authorities in a totalitarian system strive to conceal their faults, and extol their merits, gloss over their errors and forcibly eradicate all memory of man-made calamity, darkness and evil. For that reason, the Chinese are prone to historical amnesia imposed by those in power. I erect this tombstone so that people will remember and henceforth, renounce man-made calamity, darkness and evil."

Yang Jisheng, Tombstone: The Great Chinese Famine 1958-1962

I have just started reading this book, the first Chinese account of Mao's Great Leap Forward. As a member of the Communist Party and a long standing journalist with China's Xinhua news agency he has used his position to collect materials from restricted archives detailing the famine.

Banned in China, the book was published in Hong Kong and has gone through eight editions in its original two-volume Chinese version. This translation is an adapted version of the two-volume Chinese original.

I also think there is a message here that all Sri Lankan's need to reflect on. We have been fed a diet of propaganda over the last decade that has seeped into the subconscious. We need stop and reflect, to start thinking again.

Dr. Radhika Coomaraswamy - Beyond Genocide

Radhika Coomaraswamy has written an excellent piece that should be read and digested by all Tamils, particularly the politicians and the diaspora.

Unfortunately this has been misunderstood by many. Even more thoughtful commentors such as Charles Sarvan  still view the argument from an academic or legal perspective- the very thing that Miss Coomaraswamy argues against.

What is necessary is an assessment of the real ground situation in Sri Lanka, what is happening and what may practically be expected to happen. 

There is a new Government in Sri Lanka which has started to take some positive steps towards Tamil issues. They may be small, but remember that they have only been in office for about 50 days and that they are a rather shakey coalition who are under attack by extremists and elements of the former regime.

The resolution passed by the Northern Proncial Council and similar pressure tactics can be used to by the extremists to undermine and overthrow the new Government.

The recapture of the Sri Lankan state by the extremists will lead to an immediate crackdown on all liberals and harsh repression of all minorities. The extremists are smarting from defeat which they are blaming squarely on the minorities.

If they ever come back to office they will extract a painful vengence from those who helped eject them-particularly the Tamils but also the Muslims and the liberal Sinalese who were associated with this Government.

A return of the extremists will mean:
1. No movement whatsover on any war crimes or any other inquiry. Sri lanka will go the way of Zimbabwe or North Korea rather than submit to an international inquiry.
2. Further suppression to eliminate any future threats, real or imaginary, from the Tamils and minorities .
3. Vengence - which will be coupled with (2) above, in order to extract punishment for ejecting them from office. This can take many different forms, you can let your imagination run on this.

Overall things will be infinitely worse for all Tamils and all minorities.

Why then are they doing stupid things that can see the ejection of a more moderate Government?

In whose interests is this? For the diaspora Tamils, living overseas it may make seem like a fine opportunity to strike. For the Tamils living in Sri Lanka it will be a disaster.

In trying to redeem the dead, they condemn the living.

Remember that it was Prabhakaran who elected MR To power in 2005, by preventing Tamils from voting. The moderates were ejected and extremists installed because it seemed like a good strategy. What a brilliant idea that was.

We saw how that ended up. Ten years later they want to follow the same strategy? Have they learned nothing, absolutely nothing from history?

The new Government has signaled good intent and taken steps in the right direction. They have shown willingness to engage so by all means engage, but don't rock the boat. Give them some space to manoeuvre.

Rethinking logic: The mysterious world of Dayan Jayetilleka

Dayan Jayetilleka, erstwhile diplomat and academic has lately been engaged penning paeans to the former regime. This has drawn in criticism from a number of sources which he has responded to.

In his latest response he is tying himself in knots trying to find reasons to discredit his critics. His arguments are fundamentally flawed but he cleverly throws together unrelated facts to draw empathy from Mahinda's supporters while confusing others.

Let's try to look at what his has said here.

He claims that none of his critics wrote a full length article against either the LTTE or Wjieweera and attempts to claim the moral high ground on the basis that he did. Of what relevance is this?

If his critics were supporters of the LTTE then their opposition to MR may be viewed as mere carping by supporters of a defeated foe. Is this the case? Does the fact that none wrote against the LTTE immediately turn them into supporters of the movement? Even if they were supporters of the LTTE, does that fact automatically invalidate any arguments being raised now?

It does not, but this seems to be his reasoning.

Going on in the same vein, a piece espousing the military defeat of the LTTE, in support of the military or opposing Western attempts to stop the war by the critics of DJ would absolve them of their sins. Naturally, DJ having done both claims the high ground.

Is this valid? Why should the military solution be the foregone conclusion, the only solution? In the final months it may have appeared to be so, but could the war have ended earlier with a similar final outcome if a surrender had been arranged? This is only speculation but until we realise the full cost we are not in a position to weigh the balance.

DJ however, firm in his convictions and blind in his belief has all the answers on justice, legality and morality.

He confesses that power and the state must be placed above rights and Governance. That to my mind is the essence of fascism and its cousin communism as espoused by DJ's models from Mao to Stalin and his latter day reincarnation Putin, whose centralisation of power in Russia has come for much praise from DJ.

Stalin and Mao, strong, charismatic leaders are appealing subjects for study by students in distant lands. For the unfortunate populace who perished by the millions under these monsters things were not quite so appealing and we'd rather not have our own Big Chief back, thank you very much.

Notions of power and sovereignty are important only to rulers, what matters to their subjects is justice and governance.



 

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.