Harim Peiris

Political and Reconciliation perspectives from Sri Lanka

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Archive for February, 2021

A not entirely united government opts to be hard line

Posted by harimpeiris on February 22, 2021

By Harim Peiris

(Published in the Island on 17th February 2021)

It is quite a feat for a powerful government to insult its own Prime Minster and party leader, but that is precisely what the SLPP succeeded in doing last week, when a carefully orchestrated measure to ease up the pressure on the Government through bringing Sri Lanka in line with the rest of the world on Covid-19 burials, went awry. The Prime Minister’s assurance to Parliament, to allow the burial of the Covid-19 dead, was welcomed in a tweet by the soon to visit, Prime Minister Imran Khan of Pakistan. However, this was not implemented and instead was contradicted by junior state ministers of the Government. Since the forced cremation of the Covid-19 dead, against the wishes and religious beliefs of the bereaved families, is a uniquely Sri Lankan practice, in non-conformity with World Health Organization (WHO) guidelines, the issue is being closely watched and monitored not just locally but also globally. Accordingly, the Prime Minister’s assurance was widely welcomed. But clearly, he could not carry the day. It certainly seems the Prime Minister is not totally in charge of the government; shades of the previous Ranil Wickremesinghe premiership.

However, in the context of Sri Lanka’s system of government, this is only to be expected because especially post the 20th Amendment to our Constitution, the governing authority has been totally centralized in the hands of the executive President. Accordingly, one might reasonably expect that the president’s slightest wish is government writ. Therefore, it was quite surprising to note, a few weeks ago, when the nearly half a billion-dollar, foreign investment by India’s Adani Group in the Eastern Container Terminal (ECT) of the Colombo Port was to go ahead, this in a country that is starved of foreign exchange, that the President was seemingly very much on board. The President, quite correctly observed, at various fora, that international obligations cannot be unilaterally abrogated and more importantly that his government had negotiated terms where the Sri Lankan Government through the Sri Lanka Ports Authority would retain a majority stake and accordingly what was occurring was an investment into a minority stake in the ECT. This in the context of other such foreign investments with majority stakes, namely the Chinese Government’s CICT and the SAGT. However, quite surprisingly the President’s wishes to bring in the Indian private sector foreign investment did not quite carry the day inside the Government.

To cap quite a tumultuous first quarter for the Government, Minister Wimal Weerawansa, a leader of a minor political appendage of the ruling alliance, namely the National Freedom Front (NFF), stirred up a hornet’s nest in political circles, when he called for President Gotabaya Rajapaksa to be given the leadership of the ruling party, rather than its current incumbent, Prime Minister Mahinda Rajapaksa. The public call by Minister Weerawansa was met with the immediate demand by the ruling SLPP’s General Secretary, that the Minister both withdraw his statement and apologize for the same. Neither has happened and to the contrary the Minister has reiterated his stand. The call for a leadership change and that too between the president and the prime minister, was quite surprising because there was no reason for Minister Weerawansa to either be so public about a possible leadership role change in the Government or to be out of place by commenting on the affairs of a party he does not belong to. Leading as he does, his breakaway wing of the JVP, styled the National Freedom Front (NFF), a party which has the distinction of never yet having ever contested an election on its own but always in alliance with the Rajapaksa political party, first the UPFA and now its successor the SLPP.

A Government opting to be hardline

Next week the United Nations Human Rights Council (UNHRC), based in Geneva, will hold its 46th session, mostly in a virtual or online format and a country specific resolution on Sri Lanka, taking the government to task on our deteriorating human rights situation, will most likely pass. The Government is losing friends like India and alienating allies, like the 57 member nation, Organization of Islamic Cooperation (OIC). As political analysts have pointed out, the report by Human Rights High Commissioner and former two-term President of Chile, Michelle Bachelet focuses more on the new hardline policy being adopted since the election of November 2019. Policies, pronouncements and practices, which seemingly indicate a complete unwillingness to accommodate plurality, recognize diversity and defend democratic gains. The High Commissioner reports worrying signs of a government becoming increasingly authoritarian and militarized. The UNHRC report on Sri Lanka, namely A/HRC/46/20 in section 19, page 7 states “(i) militarization of civilian government functions, (ii) reversal of constitutional safeguards, (iii) political obstruction of accountability for crimes and human rights violations, (iv) majoritarian and exclusionary rhetoric (v) surveillance and obstruction of civil society and shrinking democratic space and (vi) new and exacerbated human rights concerns”. As if in a great hurry to confirm the above contentions by its actions, the Government having earlier rejected the report in toto, the Minister of Public Security withdrew the Special Task Force (STF) guard provided to TNA spokesman and leader in waiting, MA Sumanthiran for his participation and support to a massive anti-government march styled (P2P), from Pottuvil in the Eastern Province to Polligandy in the Northern Province, a not too subtle reference to the “responsibility to protect (R2P), the global political commitment adopted by the UN General Assembly in 2005 to prevent or hold accountable for war crimes, prevent genocide, ethnic cleaning and crimes against humanity. The rationale given by the Minister was that MP Sumanthiran, a President’s Counsel, had violated court orders, which he denies doing. When the matter was raised by the Leader of the Opposition in Parliament, many speakers pointed out that alleged violations of court orders should be met with prosecutions in court and not the withdrawal of security. Now we await the Hon. Speaker’s ruling whether it is the threat assessment against the MP, which the Minister himself readily conceded or political servility to the wishes of the government, which determines state security for minority and opposition MPs. The world meantime from Geneva is watching.

As the government domestically disregards plurality, tolerance of democratic dissent and accommodation of diversity and isolates itself internationally, with severe repercussions for our export driven, tourism, foreign investment and worker remittance dependent, globally integrated economy, the possibility of seeing a course correction by the SLPP’s Rajapakse Administration, is rather remote. This does however position Opposition Leader, Sajith Premadasa and his SJB, as the sole alternative to the government’s ideology, of being the sole representatives of the Sinhala people.

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Unwise double standards on East Container Terminal

Posted by harimpeiris on February 5, 2021

By Harim Peiris

(Published in the Island on 05th February 2021)

Earlier this week, the Government officially announced that it would not proceed with the proposal to develop the East Container Terminal (ECT) of the Colombo Port, as a joint venture between the Sri Lanka Ports Authority (SLPA) and the Adani Group of India. The announcement by the government, through the Prime Minister no less, raises important questions marks and doubts over the vistas of prosperity and the claims of technocratic policy making and efficient governance, we were all promised by the Government at preceding elections.

Private investment into the Colombo Port

Firstly, a quick look at the Colombo Port would demonstrate that we already have the private sector operating terminals in the Colombo Port, namely the South Asian Gateways Terminals (SAGT), a John Keells Holdings investment and more recently, under the previous Rajapaksa Administration the Colombo International Container Terminal (CICT), a venture with the China Merchants Port Holdings. In both SAGT and CICT, the stake of the Sri Lanka Ports Authority (SAGT) is only fifteen percent (15%). In contrast the proposed joint venture for the ECT with the India’s Adani Group, was to have a majority (51%) Sri Lankan stake, through the Sri Lanka Ports Authority (SLPA) and the Adani group and other project managers, the balance minority stake only.

Further in the case of the CICT, the China Merchants Port Holdings, is a Chinese Government entity and so the investor is not a foreign private investor, but a foreign sovereign entity. The same Chinese Government entity, the China Merchants Port Holdings (China Merchants) also owns 85% of the Hambantota Port. So, the principal of private sector and foreign investor participation in Sri Lankan ports, is a clearly established Sri Lankan State policy, going back over twenty years, the SAGT having commenced operations in 1999.

Policy clarity and efficient governance

Foreign direct investment (FDI) is the name of the game for Sri Lanka, to both see significant foreign exchange inflows into Sri Lanka and also to significantly improve our infrastructure which will directly contribute to increased growth in our GDP. Both of these are areas where Sri Lanka lags behind our peer group in South and East Asia. Sri Lanka’s GDP growth of the past eight years or so, have been lower than our war era GDP growth and shipping, especially transshipments is a significant potential growth area, for which port capacity and operating efficiency are crucial.

Regarding foreign direct investment (FDI) as well, Sri Lanka lags behind her peer group, especially through equity investments. Further FDI into infrastructure, is harder to attract, than say service industry investments, because infrastructure investments are not only significantly larger, in hundreds of millions of dollars, but also because the projects are long term in nature. Accordingly, the investment by the Adani group would have been a huge foreign direct investment by a private (not government) Indian company and a precursor and confidence booster for other Indian investments. Sri Lanka, geographically positioned as we are, should endeavour to benefit ourselves from the economic growth and success story next door.

A crucial and essential feature of both public policy and governance is that there be both clarity and certainty. In that respect, honouring commitments and especially written agreements become crucial in the conduct of both international relations and commercial activity. The adherence to contracts and agreements is an essential feature of international, local and every common law tradition in the world.

It is in that context, that the previous Sirisena / Wickremesinghe Administration though extremely critical of the Port City and other grandiose projects of dubious utility value, honoured those contracts and proceeded with the projects because of binding nature of the agreements. It was therefore entirely predictable, the immediate Indian Government response to the Government’s announcement, through its High Commission in Colombo, when it announced that the Indian Government expects adherence and implementation of the tripartite Memorandum of Cooperation (MOC) signed between Sri Lanka, India and Japan, our largest bilateral donor by far, for the development of the ECT.

Reneging on contracts, tearing up the rule book and thumbing our nose at our closest (and giant) neighbour India, together with offending our largest bi lateral donor by far, Japan is very unwise and hardly likely to lead us to vistas of prosperity. Not only has Japan been a firm and reliable friend of Sri Lanka for over half a century, they have been Sri Lanka’s largest bilateral donor. The Japanese also have considerable sway over the Asian Development Bank, which has been one of the largest, long term concessionary lenders for infrastructure to Sri Lanka. Their proposed loan for the ECT was at a half percent compared with the hefty premium to Libor that all the Chinese loans came at. Compare half percent to say, four or five percent for a half a billion dollars. The math does not add up. This is also after the government unilaterally cancelled the Japanese light rail project, which was meant to address the rather obvious need for mass rapid transit in the Colombo district, beyond our colonial era railways.

The Government position seems very strange. We have declined foreign direct investment and torn up an agreement with our largest neighbour India and our largest donor Japan. We find the East Terminal in the Colombo Port strategic but not the Western terminal, or the SAGT or the CICT or even the Hambantota port, just the East Terminal. We can forgive those who suspect a hidden hand and it is not too hard to see from where. Monopolistic or oligopolistic behaviour is rational for the monopolist or the oligarch. The problem is when the Government is subject to their pressure.

In contrast to the Government, the main opposition Samagi Jana Balawegaya (SJB) of Opposition Leader Sajith Premadasa, has very wisely taken a well-balanced position on the ECT, saying a public private partnership is the best way forward.

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