Harim Peiris

Political and Reconciliation perspectives from Sri Lanka

  • July 2020
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Archive for July, 2020

An Agenda to Centralize Power

Posted by harimpeiris on July 16, 2020

By Harim Peiris

(Published in Groundviews on 15th July 2020)

The ruling Sri Lanka Podujana Peramuna (SLPP) handsomely won November’s presidential election with 52% of the popular vote and is accordingly the clear favorite and front runner to secure victory at the forthcoming general elections to Parliament. Further politically consolidating its premier position has been the post-election development where the political opposition has badly fragmented. A United National Party (UNP) faction led by former PM Ranil Wickramasinghe grabbed the party name and symbol and decamped from the new opposition alliance, the Samagi Jana Balawegaya (SJB) led by Opposition Leader Sajith Premadasa and is contesting the elections independently, with political nonentities similar to the sorry plight of the Sri Lanka Freedom Party (SLFP) sans the Rajapakses . This development has seen the UNP more critical of the SJB, rather than of the Government and seemingly being more allied with the Rajapakse led SLPP. In a continuation of the disastrous politics of 2015-2019, where both Prime Minster Wickramasinghe and President Sirisena, competed to woo the Rajapakses as political allies, only to see the politically shrewd Rajapakses, besting them both and winning the presidential poll in 2019. Now former president Sirisena is merely a candidate, not even the district leader, from his native Polonnaruwa district on the SLPP ticket and Mr. Wickremasinghe’s UNP is running a campaign as an appendage of the SLPP. Consider for instance, in contrast, the strident independent critique of the SLPP government and governance, articulated by the JVP and the UNP’s own lackluster campaign is one of seeking to further undermine and divide the opposition vote from within. Consequently, the UNP is badly trailing the SJB in the polls and likely to end a distant fifth place finish in Parliament behind the SLPP, the SJB, the TNA and the JVP, with a few seats mainly from the Western Province and the national list.

A political not a constitutional problem

The governing SLPP has certainly not been shy about its intentions, post-election and has been busy trying to secure a two third majority in parliament to repeal the 19th amendment to our constitution. The democratic reforms enhancing, independent institution creating and checks and balances strengthening component of our constitution. Which was probably the signature achievement of the previous government. Enacted early in its term and actually while it was a minority in Parliament. The leading lights of the SLPP government were all in Parliament at that time and the amendment passed near unanimously. To justify their volte face and the sudden desire to repeal the amendment, the Government is making some simplistic arguments which nonetheless warrant serious attention, because it is the policy of a government in office, who are favorites to win the election.

The main argument used by the SLPP in favor of repealing the 19th amendment is that the said amendment was the cause of the disfunction within the previous government, which was a coalition. Further that it caused friction between the President and the Prime Minister. Firstly, and most importantly, the friction between former President Sirisena and Prime Minister Wickramasinghe, was not a constitutional problem but a political one. They were political allies, whose natural political rivalry was mutually, so completely mismanaged that they became political opponents. The SLPP has argued that to prevent such a friction between the President and the Prime Minister, the first and second citizens of the State, must both be from the same party and ideally from the same family. Since the Rajapakse family is currently ruling, as president and prime minister and is indeed seeking a renewed mandate, this writer has no intention of publicly speculating about the political unity or otherwise of the current rulers.

Unifying through common values

We can examine this thesis, of party and family political unity, from recent Sri Lankan political history. Ranil Wickramasinghe and Sajith Premadasa were from the same political party, the UNP, and in fact generationally so but this did not prevent them, latterly in government and now in opposition, of going their separate political ways. Ranil loyalists did not support Sajith’s presidential candidacy or campaign and are now contesting elections separately. A bit further down memory lane, the most notable political siblings in the past were Chandrika and Anura Bandaranaike and their own political divergence, witnessed the two siblings on rival political platforms on many occasions. The Gandhi’s of India and the Bhutto’s in Pakistan, also demonstrate that having the same last (family) name and being part of the clan, does not necessarily lead to the absence of political rivalry. Sri Lanka’s ancient monarchial history also dictates that ruling families more often than not fought each other rather than stayed cohesively together.  Centralized power has been the solution proposed by the SLPP, because they define Sri Lanka’s problem as one of politically weak leadership and non-professional governance, which has not been able to implement a political program. A serious problem with the SLPP vision of course, is its desire to strengthen and solidify what LTTE suicide bomb victim, constitutional lawyer and former MP late Neelen Tiruchelvam described as the “anomaly of imposing a mono-ethnic state on a multi ethnic (religious) society’. The alternate definition of Sri Lanka’s problem and our lack of progress and indeed decline since our most promising economic situation at independence, was a mismanagement of ethnoreligious relations, together with shrinking the democratic space and freedoms along with the desire to internally divide and thereby rule, which witnessed armed rebellions against the state, in both the Sinhala South and the Tamil speaking North, the former with a leftist ideology and the latter with a separatist one. The post war return, from conflict and emergency rule, to a decency and common prosperity for all, lies much more in a moderate, democratic, pluralist and tolerant government and governance under the rule of law, rather than a jackboot, militaristic, authoritarian and majoritarian ethno-religious political program being proposed through centralization and concentration of power, with impunity. As the old African proverb says ‘if you want to go quickly go alone, if you want to go far, go together”.


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Did Expert Committee use similar standards evaluating MCC and Port City loans?

Posted by harimpeiris on July 8, 2020

By Harim Peiris

(Published in The Island on 08th July 2020)

Sri Lanka has at least US Dollars one and a half billion (USD $1.5B) debt repayment due later this year and both the status of the global economy in the Covid-19 environment and our own vulnerabilities caused through the pandemic, namely the total curtailment of foreign tourism, the drastic drop in expatriate worker earnings and reduced earnings from exports such as apparel, together with fiscal slippage, has downgraded our international credit ratings and made access to international financial markets prohibitively expensive.  Though our trade balance has been assisted in no small measure by the curtailment of vehicle imports and historically low global crude oil prices, (not passed on to the Sri Lankan public), we still have serious economic challenge ahead, especially with regards our foreign reserves, balance of payments and exchange rate. Pending subsequent confirmation through Central Bank numbers, in all probability, we are in a period of negative economic growth, increasing unemployment and rising inflation, or stagflation. Stagnant growth with inflation.  

It is in this context, that with much fanfare, an “Expert Committee”  was tasked by the SLPP Administration, to examine the Millennium Challenge Corporation (MCC) grant compact, which had drawn heavy fire from the SLPP even while in Opposition and rather predictably, last week the  Expert Committee, gave in their report, which is to be first given to the Cabinet of Ministers and then made publicly available. Predictably the Government’s experts have determined that the MCC grant compact had clauses which were “detrimental to the sovereignty of Sri Lanka and in violation of her constitution” and on those grounds it is to be rejected. 

The issue that arises is whether the SLPP and the its experts use the same criteria and standards when evaluating the MCC grant with the Port City loans and project. The SLPP, or its predecessor the UPFA Administration of 2010-2014, never saw a Chinese project with high priced loans, during that era, which it did not like and as experience has shown continues to be of very limited public or economic value. From the Port City to the Hambanthota Harbor, including the Mattala Airport, these white elephants are costly and unused. 

Firstly, the Expert Committee seemed to have come to a conclusion on “sovereignty” and “constitutionality” of the MCC grant compact (agreement), though the expertise of the committee was more economics and specifically public transportation rather than law and especially constitutional law. Generally speaking, all international agreements are run through the Attorney General’s department, which is the appropriate place for examination of constitutionality. There were no AG Dept seniors or constitutional lawyers among the experts, so one wonders how they came to conclusions on matters of constitutional law and sovereignty, which rather like justice is a challenging concept to be dealing with at the best of times. Conversely the Experts seemed to have made not much comment on their field of expertise, which is public transportation, a prime focus of the MCC grant.

The MCC grant compact did try and cut through some bureaucratic red tape, as does any foreign investment, in a concept similar to a Free Trade Zone, or through the BOI for fast tracked approvals. Sri Lanka has not significantly reformed our colonial era, pre-computerization bureaucratic procedures despite all the nationalistic rhetoric from our political platforms. This red tape is a serious constraint for the local SME sector, foreign investment and overall economic growth. 

Evaluating between the Port City and all Chinese projects and the MCC grant, the biggest difference, in that the MCC is a grant, a gift if you like, that is non repayable. A half a billion, dollar grant is no joke. In contrast, all the Chinese projects have been loans, generally at interest rates of about six percent and or higher, at a considerable premium to the international benchmark of LIBOR for US dollars. So, the experts of the SLPP actually prefer in practice, high priced loans to free money.  

The Chinese projects of the previous Rajapakse Administration’s era, were also all infrastructure related, a port, an airport and in the Port City, high priced apartments, hotels and office space. Looking around Colombo, we certainly don’t seem short of either high priced apartments or office space, hardly the priority. In fact, we are dangerously close to an asset bubble and Colombo is full of empty apartments. What we are short of though and do have a serious problem with is, transportation and traffic management, with the estimates of GDP lost or foregone due to congestion caused productivity losses being as high as one and a half to two percent annually or about one and a half billion dollars a year. A significant part of the MCC grant or about USD $350 million out of the total of $500 million, was all about addressing this issue or improving inter-provincial roads, improving access to markets, reducing transportation related losses on agriculture and lowering transport time and hence costs for industry. 

Another developmental constraint for Sri Lanka is efficient land usage. The solution is not reclaiming a few hectares of land from the sea at billions of dollars, while causing serious environmental damage, down the coast. It is efficient use of the land we do have. The MCC grant was to enable the government to compile a complete inventory of all state lands and to improve the evaluation system of all lands. Also, to build on the Government’s e-Land Registry initiative and to improve the Deeds Registry by digitizing existing records. Additionally, to improve tenure security for all land holders by moving properties from the archaic deeds system to a title registration system and while funding research to improve land administration policies. These are all international best practice in public administration of land.  Of course, efficient use of land, has a lot of opponents, from politically connected land grabbers to the use of state land through patronage, to the lucrative but archaic legal practice of writing deeds, which is open to fraud, as we regularly see and is also costly.The reality is we have looked a gift horse in the mouth, in a highly visible demonstration of double standards and given up the opportunity to increase our GDP growth by perhaps 1.5% annually, through an investment, which is a gift rather than a loan. We should all hope, that post-election sanity will prevail. 

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