SRI LANKA’S TRANSITIONAL MOMENT AND TRANSITIONAL JUSTICE – RUKI FERNANDO

29/08/2016

(Light among the darkness: Hindu religious festival in Colombo July 2015 ©s.deshapriya)

Within the first month after winning the parliamentary elections in August 2015, the new Government made a series of commitments related to transitional justice. These were articulated through a speech by the Foreign Minister at the 30th session of the UN Human Rights Council.[1] These commitments were also reflected in the resolution on Sri Lanka that was adopted by the Human Rights Council on 1 October 2015.[2] The resolution came just after the UN High Commissioner for Human Rights had published a report which alleged war crimes and crimes against humanity and other serious violations of international human rights and humanitarian laws, by both the Sri Lankan government and the LTTE.[3]

Government’s commitments 

The present Government’s commitments included setting up an Office of Missing Persons (OMP), a Commission for Truth, Justice, and Guarantees of Non-reoccurrence, a Judicial mechanism with Special Counsel, which will have the participation of foreign judges, prosecutors, investigators and defence lawyers, and an Office for Reparations. The Government also committed to reduce the military’s role in civilian affairs, facilitate livelihoods, repeal and reform the Prevention of Terrorism Act (PTA), criminalise disappearances, ratify the Enforced Disappearance Convention[4] , review the victim and witness protection law, and range of other actions. Consultations to seek people’s views on transitional justice is underway across the country, under the leadership of some civil society activists.

The Enforced Disappearance Convention was ratified in May this year and the draft Bill to create the OMP was passed by Parliament on 11 August. There are positive features as well as weaknesses and ambiguities in the Bill[5]. Due to a history of failed initiatives, the minimal ‘consultations’ that occurred during drafting process and the lack of information on details, there appears to be very little confidence in the OMP amongst families of the disappeared. This is likely to be the case for other mechanisms, unless there’s a drastic change in approach from the government.

Reactions to transitional justice within Sri Lanka

Currently, the transitional justice agenda appears to be polarising Sri Lankan society. Opinion polls, and my own impressions, indicate that the Tamil community, particularly in the North and the East, who bore the brunt of the war, appears to favour strong international involvement. But the majority Sinhalese community appears to reject international involvement. Varying opinions have been expressed about forgetting the past, memorialisation, prosecutions, and amnesty. There are also different or contradictory opinions and expectations within each ethnic community and amongst survivors of violations and families of victims.

The Government’s transitional justice commitments have been criticised by the former President and his supporters. Even the release of a few political prisoners, the release of small amounts of land occupied by the military, and the establishment of the OMP to find truth about missing persons have been framed as an international conspiracy that endangers national security and seeks revenge from “war heroes”.

There does not appear to be an official Government policy document on transitional justice. The Government’s commitments have only been officially articulated in Geneva by the Foreign Minister and not in Sri Lanka . The Foreign Minister has been the regular advocate and defender of these commitments. Some of the meetings with local activists have been convened by him and the Secretariat for Co-ordinating Reconciliation Mechanisms (SCRM) is housed in the Foreign Ministry. All these contribute to the process being seen as emanating and driven by foreign pressure. Outreach on the Government’s transitional justice plans appears to focus on the international community and not towards Sri Lankan people.

The President and Prime Minister have not been championing the Government’s official commitments. For example, the duo have publicly stated that the commitment to have foreign judges in the judicial mechanism will not be fulfilled. Even this has not satisfied the critics alleging foreign conspiracy, and has disappointed some activists, especially Tamils, as well as survivors and victims’ families.

Developments on the ground

Monuments erected to honour the Sinhalese dominated military during the Rajapakse time continue to dominate the Tamil majority Northern landscape. Army camps that were built over some of the cemeteries of former LTTE cadres that were bulldozed by the Army after the war are still there. The loved ones of those whose remains were in these cemeteries have no place to grieve, lay flowers, light a candle, or say a prayer. While the numbers have reduced from those under the Rajapaske regime, intimidation and reprisals on families, attacks, and threats and intimidation of activists and journalists continue to occur. Limited progress on issues, such as the release of political prisoners, land occupied by military, continuing military involvement in civilian affairs in the North and East, reports of continuing abductions, and arrests under the PTA have raised doubts about the Government’s commitments. 

Although a few military personnel have been convicted and some others arrested on allegations of human rights abuses, the lack of progress in thousands of other cases only reinforces calls for international involvement for justice.

Towards Rights & Democratization beyond Transitional Justice framework

Unemployment, debt, and sexual and gender-based violence is widespread in the former war ravaged areas. The new Government’s economic and development policies are focusing on trade, investment, and mega development projects, which privilege the rich and marginalise the poor. Pre-war rights issues, such as landlessness, sexual and gender-based violence and discrimination, caste, rights of workers, including those working on tea estates, still need to be addressed.

A consultation process towards a new constitution drew a large number of public representations, dealing with many of the issues mentioned above. But the next steps are not clear, particularly in finding political solutions to the grievances of the country’s ethnic minorities.

The political leadership will have to reach out to all Sri Lankans, especially to the Sinhalese majority, about its reform agenda, while taking principled actions to win the confidence of numerical minorities such as Tamils and Muslims. At the national level, the coming together of the two major political parties and support of the two major parties representing Tamils and Muslims, makes this a unique opportunity to push towards radical reforms.

It will also be a challenge to go beyond a conventional transitional justice framework and use the transitional moment to move towards reconciliation, democratisation, and sustainable development, by addressing civil and political rights as well as economic, social, and cultural rights in a holistic manner, considering the yearnings of war survivors, victims’ families, and the poor, for truth, reparations, criminal accountability, and economic justice.

[1] Speech by Hon Mangala Samaraweera at the 30^th session of the Human Rights Council, Geneva, 14 September 2015.

[2] Human Rights Council Resolution, Promoting reconciliation, accountability, and human rights in Sri Lanka, 14 October 2015, UN Doc. A/HRC/RES/30/1 (adopted 1 October 2015).

[3] Human Rights Council, Report of the OHCHR Investigation on Sri Lanka (OISL), thirtieth session, 16 September 2015, UN Doc. A/HRC/30/CRP.2.

[4] International Convention for the Protection of All Persons from Enforced Disappearance, adopted 20 December 2006, UN Doc. A/61/488 (entered into force 23 December 2010) (“Enforced Disappearance Convention”).

[5] For more on OMP, see http://thewire.in/42687/sri-lankas-disappeared-will-the-latest-missing-persons-office-bring-answers/

( First published in Inform news letter)

Govt. fast tracks the superstructure reform process

by Jehan Perera-August 29, 2016

The constitutional reform process moving forward rapidly, though without a high level of publicity, indicates that the government leadership has a businesslike approach to political reform. It is reported that four of the six subcommittees who were given different areas of constitutional reform to deal with have handed in their reports to the steering committee on constitutional reform headed by Prime Minister Ranil Wickremesinghe, which is responsible for producing the draft constitution. The subcommittees are on Fundamental Rights, Judiciary, Law and Order, Centre Periphery Relations, Public Finance and the Nature of the State. The government appears to be making the best use of the opportunity that has presented itself in the form of the government of national unity, which gives it a 2/3 majority in Parliament, capable of getting even controversial legislation through. Some of the constitutional reforms will be controversial, especially those provisions that relate to the ethnic conflict. The absence of fanfare may be because the government prefers to get those through the parliamentary hurdle first before taking them to the people.

The unique opportunity that has presented itself in terms of constitutional reform is the existence of a government of national unity that is formed by the partnership of the two major political parties, the UNP and SLFP, which have hitherto always been on opposing sides of the political divide. Never before have these two parties formed a government together. One has always been in opposition to the other. This has also meant that whenever a government led by one them tried to come up with constitutional reforms or a political solution to the ethnic conflict, the other party in opposition always tried to undermine what the government was trying to do. Thus, both the 1972 and 1978 constitutions were essentially creations of one party, which those governments bulldozed into law without the support of either the major opposition party or the ethnic minority parties.

The inability of previous constitutional reform efforts to obtain a bipartisan consensus, let alone a consensus that included the ethnic minorities, was a fatal flaw that had catastrophic consequences to inter-ethnic relations and eventually led to protracted civil war. On this occasion, however, the government comprises both the UNP and SLFP which has a large voter base that supports them politically. The political support given to the government by the ethnic and religious minorities at the last elections has also created a political obligation on the part of the government to take their interests into account in fashioning the constitutional reforms. Although the SLFP is for all practical purposes divided, the official part of the SLFP is headed by President Maithripala Sirisena, who is giving increasingly forceful leadership to his more liberal faction of the SLFP.

NO FANFARE

However, the division in the SLFP means that a substantial number of MPs and local level politicians are supporting the nationalist faction led by former President Mahinda Rajapaksa. The existence of a nationalist Sinhalese opposition to the government in the form of the Rajapaksa faction of the SLFP appears to have pressed the government to steer clear of engaging in mass politics regarding the legislative reforms at this time. The government may be concerned that if the issues of constitutional reform or the reconciliation mechanisms are canvassed too strongly with the general population at this time, the nationalism that exists within the country, and in all its communities in competing ways, will lead to a rising tide of opposition from below which could influence, or even include the members of the official SLFP. This may explain why the government is proceeding with constitutional reform without much fanfare or engaging in mass politics on it.

This same pattern can be seen in the case of the reconciliation process. The government’s passage of the Office of Missing Persons Act (OMP) through parliament was achieved at top speed that has now become a problem as several legitimate amendments proposed by the opposition were neither discussed nor voted upon. The government has itself admitted that amendments proposed by the JVP, which is a party that itself caused and suffered from disappearances in the era of its insurrection in the late 1980s and early 1990s, were missed in the melee in parliament on the day that the OMP bill was taken up for debate and rushed through to ratification. The law regarding the OMP has also been criticized by civil society groups for the reason that it has not been prepared in consultation with victim groups and the civil society organizations that have tried to sustain them.

In the case of both the constitutional reforms and the reconciliation processes the government has shown it is interested in pursuing public consultations but on a limited scale by civil society organizations which have emerged as trusted intermediaries. The insights from this process of consultation have been useful and are being incorporated in the final drafts that the government is preparing for the new constitution. But it does not take the message of what the government is trying to do to the larger population. The government appears to be keeping that for a later phase when it will have to actually champion the reforms it is currently undertaking to win the hearts and minds of the people. At the present time the general population remain more or less as passive observers with regard to the two most important political processes underway in the country without knowing too many of the details as to what is happening in the country and why.

CIVIL SOCIETY

On the other hand, the political championing the reform process will necessarily have to take place at the time a referendum on the constitutional changes is called for by the Supreme Court. If there is to be a political solution to the ethnic conflict, which is the long unresolved and festering sore in the body politic, it is very likely that it will entail a referendum as such a solution will include some major changes to the constitution. At that point the government will need to go all out to win the referendum. Losing a referendum on constitutional change will have catastrophic consequences to the government and to the polity itself on a scale that exceeds the Brexit reversal in the UK. In the UK the prime minister felt obliged to resign but the UK is under the same ruling party that is negotiating its exit from the EU. However, if a referendum is lost in Sri Lanka, the government’s mandate to govern will itself be eroded, rival nationalisms will take the upper hand and ethnic relations will be sundered.

At the beginning of this year, the government provided civil society with an opportunity to get involved in the constitutional reform process by appointing a Public Representations Committee which was expected to go round the country and gather the views of the people on the main issues that require constitutional change. The PRC submitted its report about three months ago in May to the Prime Minister who is chairing the steering committee of the constitutional drafting process. The government also gave civil society a similar opportunity to play an intermediary role when it appointed the Consultation Task Force to ascertain the views of the general public on the reconciliation mechanisms it has proposed. This body has submitted an interim report on the first of the reconciliation mechanisms, the Office of Missing Persons, and is likely to submit the full report which includes the other three reconciliation mechanisms soon.

In the interim period civil society organizations that focus on peace building, human rights and good governance are seeking to influence the drafting of the legislation relating to constitutional reform and the reconciliation mechanisms in order to improve them. Civil society needs to also engage in an awareness creation and education campaign with its own networks of partners at the community and grassroots levels. Such a course of action will ensure that a network of conscientised opinion formers will be available in all parts of the country to give their support to the government’s campaign when it has to face the referendum on constitutional reform and implement the reconciliation mechanisms that it has passed into law. The changes in the superstructure of laws and institutions need to be accompanied by corresponding changes in the attitudes of the general population whose thinking has been conditioned by decades of nationalism, over centralization of power and focus on national security-centered policies which were justified as necessary in a time of war.

A New Truth Commission for Sri Lanka: Lessons from Other Models

August 26, 2016

Written by Akshan de Alwis, UN Correspondent

William Blackstone, perhaps the most influential jurist in Western legal thought, claimed in his 18^th century magnum opus Commentaries on the Laws of Englandthat “It is a settled and invariable principle in the laws of England, that every right when with-held must have a remedy, and every injury its proper redress.” Providing remedy for infringed-upon human rights has become one of the fundamental means of realizing the massive framework of human rights developed over the past century. From this goal of redressing violations has arose a novel perspective of justice – transitional justice.

Transitional justice is a broad and amorphous term; it covers far too many concepts and ideals to be fairly surmised in a single essay, let alone a paragraph. Under the umbrella term of transitional justice range the Nuremburg and Tokyo Trials to an annual prayer ceremony in Northern Uganda as equally legitimate forms of post-conflict justice. Nonetheless – from the numerous disparate definitions and materializations of transitional justice – a basic binding thread between the various visions can be found: the question of, as noted by Priscilla Hayner, “how to reckon with massive past crimes and abuses?”

In the realm of traditional jurisprudence, this question is self-evident: crimes are addressed by criminal justice. However, in the case of many transitioning states, the criteria for a stringent criminal justice system can rarely be met in dealing with the legacy of human rights abuses. The rules of evidence may be impossible to meet, witnesses may not be willing to testify in an adversarial system, and the political situation may not allow for a truly free and independent trial. The nascent norm of transitional justice attempts to address these roadblocks with a litany of tools for a diverse set of demands and circumstances. Memorialization, reparations, lustration, and commissions of inquiry are some of the many manifestations of transitional justice. But the dominating force in transitional justice is that of the truth commission, which has become the international community’s cure-all for transitioning states.

While the initial batch of truth commission experiences were middling, by increasing the disciplinary scope of the process, a more robust and successful model has precipitated over the last decade. Instead of thinking of a truth commission as a salve or a temporary measure to heal an injured body politic, the modern truth commission sees reconciliation, truth-building, and societal reconstruction as a constantly ongoing process. The mandate of transitional justice is never truly over: the phantom pain of conflict can never fully be healed; even generations later, the scars of conflict will remain.

Given these seemingly endless complexities and near-impossible mandate, what can a truth commission hope to achieve? To answer this question requires an understanding of the evolution of the truth commission. By examining the width and breath of truth commissions, a holistic vision of a truth commission can be developed that eschews easy description and instead realizes the multidisciplinary potential of transitional justice.

While the Nuremberg Trials are perhaps the first example of transitional justice, they bare as much resemblance to the modern truth commission as fish to man. Despite the claims that war crimes tribunals, truth commissions, and commissions of inquiry are all Western constructs designed to suppress the developing world, the first truth commissions emerged out of the “global south.” The progenitors of the truth commission were not a result of Western pressure, but instead of incalculable grief in developing nations emerging from conflict. The first official truth commission was in Bolivia, but it would take Argentina in 1984 to pioneer the truth commission with the Nunca Más (Never Again/No More) report. Just the name of the report itself highlights the visceral anguish that the first truth commission attempted to mitigate. While not necessarily truth commissions in name, inquiries into previous war crimes were undertaken in Uganda, Zimbabwe, Guatemala, El Salvador, Nepal, and the Philippines.

The Rettig Report, officially known as the National Commission for Truth and Reconciliation Report in Chile, was the first of these kind of bodies to formally adopt the language of “truth and reconciliation.” But the climactic development point for the truth commission is most definitely that of South Africa’s Truth and Reconciliation Commission (TRC).

Although it may have formally appealed to Western concepts of human rights, the TRC deployed an organic model of state, culture and society. Drawing on Plato’s views of society, the body politic is viewed through general principles of organicism, holism, and collectivism in which it is the purpose of the individual to maintain social harmony and the health of the state. This perspective is exemplified in the writings of TRC Chair, Desmond Tutu. In justifying the controversial amnesty legislation, which enabled the commission to grant amnesty to perpetrators, Tutu writes:

Social harmony is for us the summum bonum – the greatest good. Anything that subverts or undermines this sought-after good is to be avoided like the plague. Anger, resentment, lust for revenge[…] are corrosive of this good.

The main metaphor of the organic state is society as a sick body that is in need of healing. The TRC carried out this healing and thus promoted national reconciliation. Metaphorically phrased, the TRC opened the wounds of the suffering nation and cleansed them, thus healing the national body politic. The morality of the nation-state becomes a question of Platonic moral and political hygiene. Here, the focus is not as much on individuals, but on the nation-state. Reconciliation between individuals in the sense of victim–offender mediation was not attempted in South Africa; sub-national social groups such as classes, races or genders are not to be reconciled with one another either. Instead, the reconciliation proposed by the TRC works at a much higher level of abstraction. The nation-state is to be reconciled with itself. Ultimately, the TRC is but another tool to respond to the classic Weberian problematic of state legitimacy.

But South Africa’s truth commission served a vital tool. It was the standard model to which each subsequent truth commission was held to, allowing for transitioning societies to fork their own vision of transitional justice. It became a platform for a vibrant and diverse set of transitional justice forms, each suited for the individual situation of each nation. The modern truth commission does what South Africa did not: focus on the individual, vulnerable groups, and rich narratives that refused to bend to politics.

Nowhere is this modern truth commission perspective more visible than in Timor-Leste. Reeling from years of Indonesian occupation, the Timor Leste developed a Commission for Reception, Truth and Reconciliation with the help of the United Nations. Its main work in East Timor was to carry out Community Reconciliation Procedures (CRPs) in every district, with the aim of reintegrating low level offenders. The framework chosen to shape these meetings was the adat (customary law) ceremony called “biti bot” or “unrolling of the mat.” The mat is laid out in a public space and the occasion is dignified by the display of sacred heirloom objects. The meeting is presided over by elders and spiritual leaders, who arrive dressed in ceremonial attire of traditional textiles, silver breastplates and headdresses of feathers or silver horns. They open the proceedings by chanting ritual verses, then take their places and share betel-nut – a gesture symbolic of good relations all over South-East Asia. The participants arrange themselves around the four sides of the mat, with the CRP panel on one side, facing the community members, and the deponents and victims to the panel’s left and right respectively. The hearing requires a full admission and apology in the presence of the community. The victim confronts the perpetrator, is entitled to question them closely and must eventually say what will help them feel better. Perpetrators must then undertake redress as directed.

While the success of truth commissions cannot be quantified, international observers from all over the world have heralded East Timor’s quasi-legal efforts as ground-breaking. Ultimately, the truth commission exceeded its planned goal of hearing 1000 cases. By the end, it had received a total of 1541 statements from deponents requesting to participate.

Thus the modern truth commission is not bound by the Western legal legacy – the words of Blackstone and Plato no longer play into the mandate of transitional justice. Instead, what is the centerpiece of a truth commission is the nation itself. The truth commission incorporates and fuses community. By internalizing the unique facets of a conflict, the truth commission can be molded into an institutional structure that can provide for generations. Think not of the truth commission as some sort of probe, an inflexible tool wielded by the West to humiliate the developing world. Instead, the truth commission is a malleable mechanism of empowerment, aimed at integrating into a nation and providing something – whether it be truth, reconciliation, or respect – which has yet to be provided through normal means.

Sri Lanka’s latest efforts to set up a TRC provides ample opportunity to learn from other models. When Maithripala Sirisena surprisingly won the presidency in 2015, ushering in a unity government with Ranil Wickremesinghe as Prime Minister, Sri Lanka was poised to enter a new, forward-looking era. It seemed possible that the myopic politics of Mahinda Rajapaksa were a thing of the past. This hope was compounded by Sri Lanka’s sponsoring of UN Human Rights Council Resolution 30/1, which called for a credible judicial mechanism to investigate alleged human rights abuses during the end of the civil war.

With the tabling of Resolution 30/1, the Sri Lankan government devised a four part plan to ensure accountability: a truth commission, reparations and missing persons offices, and, most importantly, an independent special court for war crimes with international oversight. Out of these four mechanisms, the government has publicly announced progress in the Office on Missing Persons (OMP). The government has promised that the truth commission will be launched by the end of the year. The OMP still needs to be approved by Parliament.

During a recent visit to Sri Lanka, I met some of the talented and passionate stakeholders working with the government to catalyze the transitional justice process. It was clear that one of the most important ways to accelerate the establishment of the TRC and to win public support for it is to transform the way in which the local communities perceive TRC. The key then is to focus on the political messaging: framing transitional justice in a way that transcends partisan politics, and positions it as a solution to larger problems of national exceptionalism.

Last year, Foreign Minister Mangala Samarawera told the press that Sri Lanka’s TRC was to be modeled after South Africa’s 1996 TRC. One important lesson to be learnt from South Africa’s TRC is the way in which it cultivated positive media attention. There are few transitional justice efforts that have so effectively captured the national imaginational as the South African TRC.  Each and every step seemed designed to make the biggest splash: from the appointment of high-profile members like Archbishop Desmond Tutu to the regularly televised broadcasts of “Truth Commission Special Report” each Sunday. 

The political leaders behind South Africa’s TRC understood the necessity of public support, and made a number of decisions to ensure media and public engagement.

While the Sri Lankan government’s effort to adopt a flexible, home-grown model used by more recent truth commissions will help to create a sense of national ownership of the process, communicating a clear and powerful narrative of transitional justice to the public will increase its national credibility and international stature.

 

About the Author: Akshan de Alwis is the UN Correspondent for the Diplomatic Courier.

Jaffna GA's letters cause anger among uprooted Tamils from Valikaamam North

[TamilNet, Monday, 29 August 2016, 23:31 GMT]



Occupying Colombo's Defence Ministry has instructed the SL Government Agent in Jaffna, Mr N. Vethanayagan to issue three different letters to the uprooted families in Valikaamam North, who are staying in the so-called welfare camps in Jaffna. A section of the people have been asked to prepare to move out of their camps and to accept alternative housing-scheme [being built by the occupying military]. Around 70 of the families staying at Sabapathipillai camp in Chunnaakam have received a second-type of letter that states that in the event their lands were to be permanently seized for military use, they would be compensated with ‘suitable’ and ‘lucrative’ alternatives. A third one asks the remaining to stay calm and wait for resettlement until the end of 2017. The letters have caused confusion and anger among the uprooted people who have been staying in the camps for more than 25 years. 

The move indicates that the SL military is not prepared to release the fertile lands it has appropriated from the people of Valikaamam North, say the representatives of uprooted Tamils from Valikaamam North. 

Informed sources at Jaffna District Secretariat told TamilNet that the GA was reluctant to issue such letters. But, he was instructed to do so after the insistance coming from Colombo after a ‘high-level’ decision made by the SL Defence Ministry and the SL President Maithiripala Sirisena. 

Currently, 1,030 families uprooted from Valikaamam North are residing in 31 so-called welfare camps in Jaffna. Most of them are poverty-stricken. 

There are more than 54,000 uprooted Tamils who reside outside these camps. They have not received any letters. 

The SL Military is trying to exert pressure on the poverty stricken families residing in the camps to accept alternative solutions in order to permanently seize their villages. 

Security Can Coexist With Human Rights

By Somapala Gunadheera –August 29, 2016

Somapala Gunadheera

I felt sad to learn from the media that thousands who were displaced by the civil war were still roughing it out in refugee camps, waiting for their native lands to be released by the Army. According to the newspapers thirty one welfare camps are situated in seven Divisional Secretariats of the Jaffna District, housing 936 families, comprising 3,260 people.

The news took my memory back to 1997, when I visited the Poonthottam Camp in Vavuniya, as the first chairman of the Resettlement and Rehabilitation Authority of the North. It was a pitiable sight with thousands of refugees from the Peninsula cramped in dingy enclosures. Moved by their sad plight, I started transferring them back to Jaffna by boat first through Trincomalee and then through Mannar as the west coast became accessible. But some of the transferees could not be settled in their own lands for security reasons, as neighbouring army camps were exposed to attack by the LTTE. It is this residue that is reported to be still suffering in makeshift digs that were then expected to last only a few months. It is painful to reflect that toddlers that I transported twenty years ago, have now grown up to adulthood but are still living without a roof of their own over their heads.

To my mind this stagnation is a result of the clash of two interests. One relates to security and the other to human rights. Understandably, with bitter memories of the ravages caused by the LTTE insurrection, the South gets worked up at the thought of reducing security camps in the North, imagining from their armchairs that such a move would jeopardize security, exposing the North to recapture by terrorist forces. In the first place, terrorism in the North has been so much controlled on the ground that its resurgence has become a far cry, as the Northern Commander has declared recently. Secondly, there is enough crown lands in the Peninsula to accommodate a perfect security regime without compromising its legitimate objectives. On a recent trip through the Peninsula, I noticed large stretches of abandoned land that was in use when I was a Cadet in the Jaffna Kachcheri in 1957.

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Geneva Resolution being implemented – Mangala

By Shamindra Ferdinando-August 30, 2016

Foreign Minister Mangala Samaraweera on Monday assured that the the process implementing the Geneva Resolution was on track

Strongly denying a dispute within the ruling coalition over the process, Minister Samaraweera stressed that President Maithripala Sirisena had been consulted before the Government of Sri Lanka (GoSL) co-sponsored the Resolution at the Sept/Oct, 2015 sessions of the UNHRC in Geneva.

The Matara District MP vowed to proceed with the process regardless of resistance by hostile elements hell-bent on sabotaging the peace initiative.

Foreign Minister Samaraweera Monday evening called a special session with the media, including members of the Foreign Correspondents Association to explain the measures taken by the government to address accountability issues. Having explained the circumstances under which the GoSL had reached agreement on Resolution 30/1, Minister Samaraweera declared the agreement as Sri Lanka’s biggest achievement recently.

Minister Samaraweera revealed that at the time the issue had been taken up at the Geneva-based United Nations Human Rights Council (UNHRC), he had been with President Maithripala Sirisena in New York. Foreign Minister Samaraweera said that he had been able to obtain the president’s advice, comfortably while Prime Minister Ranil Wickremesinghe coordinated with Colombo-based diplomats involved in the process.

Acknowledging the government’s failure to include a recommendation made by the JVP relevant to the Office on Missing Persons (Establishment, Administration and Discharge of Functions) Bill when it was presented to parliament on Aug. 23, 2016, Minister Samaraweera said that it would be accommodated to enable the process to go ahead.

Minister Samaraweera said that the Constitutional Council would soon recommend to President Maithripala Sirisena seven members to the Office of Missing Persons (OMP). In an obvious reference to recent media reports pertaining to the appointment of Mano Tittawella as the Secretary to the OMP, Minister Samaraweera insisted that a Secretary hadn’t been appointed to the proposed office.

Declaring that the Sirisena-Wickremesinghe administration wouldn’t do anything inimical to Sri Lanka’s interests, Minister Samaraweera insisted that the Geneva Resolution co-sponsored by the GoSL wasn’t meant to establish a hybrid court as propagated by various interested parties. Responding to a query by the media, Minister Samarasinghe said that foreign judges wouldn’t be included in the proposed judicial mechanism under any circumstances though the GoSL could secure the services of foreign experts. Minister Samaraweera said that hybrid courts had been set up in some countries where the UN intervened.

Asked by The Island whether he could shed light on Jaffna District Parliamentarian M.A. Sumanthiran on behalf of the Tamil National Alliance (TNA) declaring in Washington on June 14, 2016 that Geneva resolution 30/1 was subject to Sri Lanka agreeing to accommodate foreign judges on a local judicial mechanism, Minister Samaraweera claimed that he wasn’t aware of the said meeting. The Island pointed out that MP Sumanthiran made the statement before the ‘Congressional Caucus for Ethnic and Religious Freedom in Sri Lanka’ in the presence of Sri Lanka’s Ambassador in Washington Prasad Kariyawasam.

Minister Samaraweera declined to indicate when the judicial mechanism would be ready or the members of the body.

Minister Samaraweera pointed out that the Paranagama Commission tasked to inquire into accountability issues, too, received the backing for foreign experts from several countries, including UK, Canada and Australia. However, the GoSL was committed to ensure credible and transparent process as requested by those affected by violence as well as the international community.

Minister Samaraweera alleged that those who had accused the government of betraying the war winning armed forces caused irreparable damage to their reputation. Their relentless objections meant that they believed the accusations directed at the military, therefore feared credible and transparent investigations, Minister Samaraweera said.

Referring to varying figures mentioned by different parties, including the ICRC in respect of the total number of disappearances reported during the conflict, Minister Samaraweera said that the proposed OMP would undertake a comprehensive inquiry in this regard. Emphasizing that the country couldn’t further delay an inquiry, Minister Samaraweera recalled how he teamed up with the then Opposition MP Mahinda Rajapaksa during the second JVP inspired insurgency in the late 80s to represent the interests of the families of the disappeared. "We set up Mothers’ Front to pursue inquiries into disappearances," Minister Samaraweera said.

Samaraweera quoted MP Mahinda Rajapaksa as having said that he was ready not only to take their cases to Geneva but go to Apaya (hell). Minister Samaraweera said that now there was no requirement to go to hell as the government had settled the issue. Inquiries could be conducted here, Minister Samaraweera said.

The Minister alleged that the wartime Defence Secretary (Gotabhaya Rajapaksa) had facilitated about 200 hardcore LTTE cadres to secretly leave the country in the last week of the military offensive. The armed forces brought the war to a successful conclusion on May 19, 2009.

In addition to the OMP and the proposed judicial mechanism, Samaraweera also explained government efforts to finalise Draft Bill on the Truth Commission by October and present it to parliament before the budget on Nov. 10. "If we fail to do that, we will bring it to Parliament in January.".

Enforced Disappearances: Curse in the Killings Field

Enforced disappearances and extrajudicial killings continue unabated in Balochistan –  Voice for Baloch Missing Persons (VBMP)

(August 30 , 2016, Balochistan, Sri Lanka Guardian) “The 30^th of August is marked internationally as Enforced Disappearance day but in Balochistan, the blatant violation of human rights, extrajudicial killings and enforced disappearances of Baloch are continuing at the hands of the state agencies.” the statement issued by the VBMP has noted.

The state institutions and politicians justify their blatant human rights violations under the pretence of Pakistani patriotism; despite the obvious oppression and extreme deprivation imposed upon the Baloch society by this state.

Balochistan’s home minister (Sarfraz Bugti) admitted that more than 13500 people have been arrested in Balochistan during a period of the first half year; through National Action Plan. But state officials are unable to provide details or whereabouts of the “arrested” people, even the relatives of the victims are unaware of the fate of their forcibly disappeared beloved.

The arrested people are often killed in staged encounters and are falsely declared to be terrorists. On August 13, 2016, the dead bodies of Gazain Baloch and Salman Qambrani were found dumped in Balochistan. The last time they were seen alive was when they were arrested a year earlier on July 7, 2015, at their residence situated on Qambrani Road in Quetta. At that time, their relatives had gone to the area police station to register First Information Report (FIR) regarding their abducted loved ones. Although Gazain Baloch and Salman Qambrani were picked up by state institutes along with Frontier Corps and other forces in broad day light; before the eyes of hundreds of citizens. The police outright refused to file the FIR. Then the aggrieved people contacted the Human Rights Commission of Pakistan (HRCP), 

International Commission of Jurists (ICJ) and the Voice for Baloch Missing Persons (VBMP) and registered details with them for assistance in the safe recovery of the enforced disappeared Gazain Baloch and Salman Qambrani. Sadly such examples exist abundantly in Balochistan.

The Voice for Baloch Missing Persons repeatedly received complaints by effected families that torture is routinely used to coerce confessional statements from the detainees. One such example is the confession statements of Abdul Bari Nichari. The relatives of Abdul Bari Nichari communicated that he was arrested by police on October 19, 2015, after a quarrel with his cousins and put in lockup at a police station. 

Afterwards, the involved parties resolved their conflicts and he was released. Astonishingly, in a video aired by the provincial government, Mr Nichari is seen confessing about a bomb blast in the local bus which occurred on October 19, 2015. It’s absurd to think that a person who was arrested on October 19, 2015, and in the custody of the police could have detonated a bomb blast on a bus the same day.

This and other such incidents raise serious questions about the transparency and authenticity of confessional statements extracted from detained people by government officials. The organisation VBMP already challenged the authenticity of confessional statements from detainees, but now the evidence has validated those concerns. The organisation by this time revealed that enforced disappeared people are charged in fraudulent cases, and they are also being killed in fake encounters. Most often their bodies show marks inflicted by extreme acts of torture. Afterwards, the victims are falsely declared as terrorists. But the state institute’s trickeries have been publicly exposed.

Regrettably, no government institute and the judiciary are intervening in the ongoing inhuman activities in Balochistan, nor has the international community given sufficient attentions to atrocities on Baloch. Here in Balochistan, the media has also failed to fully portray the real picture. Hence all these factors give the state forces full impunity to commit human rights abuses and enforced disappearances.

The organisation Voice for Baloch Missing Persons often receives complaints from victim families that they are being harassed by state forces to withdraw from their struggle for safe recovery of enforced disappeared persons. The organisation condemns the inhuman acts of government institutes and demands for judicial rights and due legal process for all including Baloch missing persons because the national and international laws guarantee human rights to citizens without any discrimination.

In the accordance of 30^th August International Day for Enforced Disappearance, the organization Voice for Baloch Missing Persons (VBMP) once again invites attentions of political parties, human rights organizations, the justice providing bodies and urges the international community with United Nation to play their due role to investigate the catastrophic human rights abuses in Balochistan and reject Pakistan’s illegal practice of enforced disappearances.

Protest against disappearances

2016-08-30
The Collective of kith and kin of those who went missing launched a protest at Liptons Circus today and demanded lasting measures to prevent incidents of disappearances. The protest was held to mark International Day of the Disappeared. Pix by Damith Wickramsinghe

Searching for Answers: The Road to the OMP

Featured image courtesy VikalpaSL

RAISA WICKREMATUNGE on 08/30/2016

August 30 is the International Day of the Victims of Enforced Disappearances.

This year has seen the passage of legislation to enable the set-up of an Office of Missing Persons (OMP). While the passage of the OMP Act is a step forward in terms of transitional justice, it was a long and arduous journey to get here.

There have been numerous Commissions set up in the past to investigate into the missing, but the process has been beset with delays, and many continue to wait for answers.

It was perhaps fitting that the Parliamentary debate leading to the OMP Bill being passed was itself disrupted, with Foreign Minister Samaraweera being surrounded by supporters in order to ensure that he could finish giving his speech.

While setting up the OMP might seem like a positive step, there were several pitfalls. Rights organisations have flagged the lack of public consultations leading up to the Bill being presented in Parliament. As a result there has been some mistrust on the part of the missing, who have themselves come before many Commissions to present their story – with little to no results.

There was also a deliberate campaign to block the passage of the Bill, with former President Mahinda Rajapakse saying that those who supported it would ‘betray the armed forces of the country.’ In an attempt to counter the confusion and misinformation, Groundviews alsointerviewed several people on the consultation process, earlier in the month.

These events have been recorded in a timeline, which can be viewed here or below:

PRAGEETH EKNALIGODA ABDUCTION: MILITARY INTELLIGENCE INVOLVED – ASG

30/08/2016

Additional Solicitor General (ASG) Sarath Jayamanne told the Supreme Court (SC) that he had evidence to prove that Prageeth Ekneligoda was abducted by intelligence officers of the military. Further  he said that he would take full responsibility for what he had said. Mr. Sarath Jayamanne stated his position when providing answers to the petition filed by the two intelligence officers now in custody in relation tot the abduction on 29th Aug 2016.

This was reported by the  Ceylon Today:

Jayamanne revealed this before Bench comprising Chief Justice Sripavan and Justices Sisira Abrew and Upali Abeyratne, when providing answers to the petition filed by the two intelligence officers now in custody.

The petitions had been filed by W.G. N. Upasena and Lance Corporal Rupasena. The petitioners had alleged, in their petition, that they have no connection with the Ekneligoda episode and they had been held in custody without any reason for nearly a year, whereby their fundamental rights had been violated.

When President’s Counsel Manoharan de Silva, who appeared on behalf of the petitioners, made the submissions, the Additional Solicitor General explained to Court thus: “The Police of Sri Lanka could not find a single clue regarding the abduction of Ekneligoda, committed six years ago. It is only after the change of the regime that it became possible.

“What a crime it is when it is comitted by the intelligence division, which should instead be there to gather information to provide security to this country. “Morali Sumedhiran had met Ekneligoda. He had an identity card given by the LTTE. There was also a book with him with phone numbers, which indicated that he surrendered to the forces after the war. In that book there were phone numbers of very important persons in this country.

“Ekneligoda owned a land at Habarana. Along with Morali, and another individual, by the name of Nathan had gone in a three-wheeler to that land to meet Ekneligoda. It is the petitioner who drove the three-wheeler and on that occasion they have had discussions regarding the politicos, when Pradeep had severely castigated the politicos. There is recorded evidence of these, and those were recorded by the two visitors to the land.

“After that incident, Morali had said that his brother Nathan was coming to Colombo and had requested Ekneligoda to help him. These two individuals who went to the Rajagiriya office of Ekneligoda, after talking with Ekneligoda for a short while left the office along with Ekneligoda. When they came out there was another group outside. They blindfolded Ekneligoda and took him with them in a vehicle. He was taken to the Girithale Army camp. There, Pradeep was shown photos of many VIPs in the country and questioned.

“At that time Pradeep was in charge of the election campaign of Sarath Fonseka who was a presidential candidate. Evidence has surfaced that the cause of the abduction was a cartoon drawn by Pradeep,” the Additional Solicitor General said.
Sarath Jayamanne along with Senior State Counsel Dileepa Peiris appeared on behalf of the Attroney General.

Manoharan De Silva, PC, appeared on behalf of the petitioners.

Lawyers Sulakshana Senanayake, Hewamanne , Upul Kumaraperuma and senior lawyer J.C. Weliamuna instructed by Sanjeewa Kaluarachi appeared on behalf of Sandya Ekneligoda.

By Stanley Samarasinghe

President says no to break civil liberties of Muslims

Aug 29, 2016

One security staff personnel, a head of a security force had brought in a proposal at a crucial security staff meeting the other day to ban the Muslim women wearing the ‘Burka”. To this proposal president Maithripala Sirisena had not agreed.

This proposal had been brought forward with the clear intention to prevent the ISIS Islam principles in cultivating roots for Islamic terror. When the proposal was put forward the President had asked whether there had been any clues identified in regard to this attempt.

However there had been only two instances of involving the “Burka” that have been reported. One instance had been when a husband had come disguised wearing a “Burka”while returning from the Katunayake International airport to surprise his wife and the other instance was when thieves had entered a bank in Kandy area to rob the bank.

The President had added that some European countries are making attempts to ban the “Burka” but  it cannot be allowed here as in  such a background like what had happened in the past era when the religious conflicts and clashes took place, such repetition of events would take place.

The President had emphasized that there no reports from the intelligence services that ISIS terrorist organization is having links and is a target in this country. Hence in these contexts there is no necessity to raise alarms and in such a proposal to ban the “Burka” in this country. However the President had stated that not to listen to certain extremist persons in some organisations on this matter.

This view of the President was endorsed by the Prime Minister Ranil Wickremasinghe and the Minister of Foreign Affairs Mangala Samaraweera.

“உதயன்“ மீதான தாக்குதலுக்கு டக்ளஸே பொறுப்பு! ஈ.பி.டி.பி .யின் உறுப்பினர் ஆதாரத்துடன் தெரிவிப்பு

29-Aug-2016

உதயன் பத்திரிகை,  தினமுரசு வாரமலரின் ஆசிரியர் அற்புதன் நடராஜன் மற்றும் மகேஸ்வரி உட்பட யாழில் நடைபெற்ற முக்கிய கொலைகளுடன் ஈழ மக்கள் ஜனநாயகட்சியின் தலைவர் டக்ளஸ் தேவானந்தா உள்ளிட்ட பல உறுப்பினர்கள் சம்பந்தப்பட்டுள்ளதாக, ஈழ மக்கள் ஜனநாயக கட்சியின் நீண்டகால உறுப்பினர் சு.பொன்னையா குறிப்பிட்டுள்ளார்

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யாழ்.ஊடக அமையத்தில் இன்று (திங்கட்கிழமை) நடைபெற்ற பத்திரிகையாளர் சந்திப்பின் போதே அவர் இவ்வாறு ஆதாரங்களுடன் குற்றச்சாட்டுக்களை முன்வைத்தார். தொடர்ந்து குறிப்பிட்ட அவர்,

‘அரசாங்கத்துடன் இணைந்து வெள்ளைவான் கடத்தல் உள்ளிட்ட பல விடயங்களை செய்தவர்கள் ஈழ மக்கள் ஜனநாயக கட்சியினரே. உதயன் பத்திரிகை தாக்குதலின்போது அங்கு இருந்தேன். அந்த தாக்குதலை இராணுவத்தினரும் உடனிருந்தே செய்தார்கள்.

சாள்ஸ் என்பவேர வெள்ளை வான் கடத்தல்கள் உள்ளிட்ட பல கொலைகளுக்கு பிரதானமாக இருந்தவர். நெடுந்தீவில் அரச உத்தியோகத்தர் நீக்கிலஸ் கொலைகள் பற்றியும் பொலி ஸாருக்கு அறியப்படுத்தினேன். ஆனால், பொலிஸார் எந்த நடவடிக்கையும் மேற்கொ ள்ள வில்லை.

ஊடகவியலாளர் நிமலராஜன் படுகொலை சம்பவத்துடன் தொடர்புடைய ஒரு சிலர் யாழ்ப்பாணத்தில் தற்போதும் இருக்கின்றார்கள். சிலர் வெளிநாடுகளில் இருக்கின்றார்கள். இந்த அரசாங்கம் கொலைச் சம்பவத்துடன் தொடர்படையவர்களை கைதுசெய்தால், மேலும் உண்மைகளை அறிய முடியும்.

இந்த தாக்குதலின் போது காயமடைந்த ராஜன் மற்றும் திவாகரன் ஆகியோரை பலாலி வைத்தியசாலையில் சிகிச்சைக்காக அனுமதித்தனர். அவர்கள் தற்போதும் உயிருடன் இருக்கின்றார்கள். உதயன் பத்திரிகை மீது தாக்குதல் மேற்கொண்டவர்களும், தாக்குதலை தூண்டியவர்களும் யாழ்ப்பாணத்தில் தான் தற்போதும் இருக்கின்றார்கள்.

நெல்லியடி, புங்குடுதீவு, காரைநகர், யாழ்ப்பாணம, வவுனியா உள்ளிட்ட பகுதிகளில் நடைபெற்ற கொலைகள் மற்றும் வெள்ளைவான் கடத்தல்களுக்கு முக்கிய காரணமானவர்கள் ஈழ மக்கள் ஜனநாயக கட்சியினர் தான்.

மகேஸ்வரி உட்பட தினமுரசு பத்திரிகையின் ஆசிரியர் அற்புதராஜா உள்ளிட்டவர்களை தனிப்பட்ட காரணத்தின் ஊடாக கொலை செய்தார்களே தவிர, விடுதலைப் புலிகள் கொலை செய்யவில்லை.

தாங்கள் செய்த கொலையினை விடுதலைப்புலிகள் செய்தார்கள் என விடுதலைப்புலிகள் மீது குற்றத்தினை சாட்டினார்கள் என்றும் அவர் பல திடுக்கிடும் உண்மைகளை ஊடகவியலளர்களுக்கு வெளிப்படுத்தினார்.

Economics of A.S Jayawardena Part III: AS’s short spell as Central Bank’s Economic Research Director



Monday, 29 August 2016

The summary of the episodes so far

The first part of this series looked at how AS, a radical socialist economist in his young days, was converted to a free market economic thinker. The second part dealt with how he took forward the mission of the Bank of Ceylon, as its GM, to transform it from the elite’s bank to the common man’s bank. 

His transformation was supported by his studies at both the London School of Economics and Harvard University and his association with the world-renowned economists he met at both places. 

The discipline he had got at LSE had helped him to work with Colvin R de Silva, a diehard Marxist, cordially as his advisor at the Ministry of Plantation Industry. Colvin, despite his socialist thinking and inclination, was a pragmatic thinker. His advice to AS was that the plantations were Sri Lanka’s national wealth and that wealth should not be destroyed by uneconomically breaking up and distributing to interested parties. 

Thus, AS was able to change the views of planners of the day who held very strong views as converting the newly nationalised plantations into ‘collective farms’, a very popular economic policy measure at that time. 

At BOC, he continued with the policy of the Bank to enter rural and remote areas with new banking products. One was pawning as a method of providing working capital to farmers between the cultivation and the harvesting periods. Another was extending agricultural credit to farmers through its new Agrarian Service Centres. It was a difficult mission for AS for two reasons. 

First, it was a politically turbulent time where the opposition had been agitating in the streets for early elections. The other was that he had to deal with a Minister of Finance who had believed that the he could do anything under the Sun. Yet, reports indicate that the Minister did not interfere with the administration of the Bank unduly leaving it to the Chairman and GM. Hence, AS was able to play an apolitical role at BOC. 

AS’s taking over the mantle of the Bank’s Economic Research Department

After the change of the Government in July 1977, AS returned to the Central Bank in December 1977 and was appointed as the Director of the Bank’s Economic Research Department, a position commonly known as DER, from January 1978. 

But he had to head an Economic Research Department sans its ‘statistics compilation part’. That part had been under its purview ever since the Bank had been established in 1950. But when AS became DER, it had been divorced into a separate Department of Statistics. The logic for the sudden divorce, as the Central Bank had claimed at that time, was that Statistics would compile statistics and Economic Research would analyse the same.

However, AS could function as DER only for two years. In 1980, he was packed and sent to IMF as its Alternative Executive Director by the Government opening a new career chapter for him. 

In effect, DER is the technical advisor to the Government

The post of DER is a prestigious position in the Central Bank. That is one of the two Departments mentioned by name in the Monetary Law Act or MLA which the Bank should necessarily have in its organisational structure. The Head of the Department is designated in MLA as Director with powers to call for information from any institution including governmental bodies. Failure to comply has been made a criminal offence in MLA. 

DER is also the only officer who can attend the Monetary Board meetings as a right according to MLA. Hence, by implication, DER is the technical advisor to the Monetary Board; by the same argument, since the Monetary Board is the technical advisor to the Government, by implication, DER is the technical advisor to the Government as well. Hence, the person holding the post of DER in the Central Bank should be an economist par excellence with wide knowledge on both the local and global economic conditions. 

John Exter: Economic Research is the brain of the Central Bank

John Exter, the architect of the Central Bank, has elaborated on the importance of ERD in his report to the Government as follows: “The Department of Economic Research is given special recognition in the draft law in order to emphasise its importance. While there may be a tendency in highly developed countries to attach too much importance to economic research, the opposite is more likely to be true in underdeveloped countries. It is to be hoped that the Central Bank will be able to demonstrate in Ceylon how much a properly organised and adequately supported research unit can contribute to the formation of policy. It may not be too much to say that the solid achievements of the Central Bank in the years to come will depend as much upon the successful development of this department as upon anything else” (p 17). 

DER shouldn’t be the mouthpiece of the government in power

Hence, DER is not expected to function as the mouthpiece of the Government in power or the Governor of the Bank. He should be an independent, impartial and objective economist who would guide the Monetary Board and the Government in the correct economic path. 

A paradigm shift in economic policy in 1977

At the time when AS became DER, Sri Lanka’s economy had begun to undergo a complete change in its policy stance. AS called it “a watershed in economic history of the country”. Modern economists might call it ‘a paradigm shift’. This was because the package introduced in late 1977 was a complete departure from the policy package that had been in place in the previous periods. 

Chapter 1 of CB Annual Report is the prerogative of DER

One of the responsibilities of DER is to prepare the annual report of the Bank which the Monetary Board submits to the Minister of Finance. The contributions to the annual report come from various divisions suitably edited at various levels. But Chapter 1 of the report has been a prerogative of DER, permitting him to present his own economic philosophy, analysis and way forward suggestions. 

AS used this opportunity to bring forth a constructive criticism of the policy package that was discarded and the one that was just introduced. While highlighting the weaknesses of the discarded one, he critically examined the new package and laid out the essential ground conditions that had to be put in place for it to succeed.

Welcoming the economic liberalisation move 

In the Annual Report for 1977, he made the following comment on the sluggish industrial growth of the country: “There has been a strong emphasis on the public sector with regard to investment and raw material allocations in recent times; but the productivity of the sector has been much below expectations. This can be attributed to monopoly power, lack of incentives and of managerial expertise and heavy handed interference in production, pricing and employment policies. These problems have to be resolved if this sector is to be made efficient.....Many public sector enterprises make financial losses on account of uneconomic social obligations (such as regional development, price restraint to keep cost of living low) thrust upon them; and in such instances, financial profitability would not be a reliable indicator of efficiency.” (p 2). 

AS also commented on the predicaments which the private sector had to undergo in that state sector-led industrialisation policy era. He said: “On the other hand, private sector industry was faced with endemic problems of bureaucratic controls over raw material and machinery imports.....Those industries, by and large, have been protected for too long, sometimes enjoying considerable monopoly power and, as a result, have tended to be unenterprising and inward-looking.” He had therefore welcomed the liberalisation of the import of raw-materials and machinery by the new Government.

Correcting the overvalued exchange rate in 1977

Sri Lanka had maintained a fixed exchange rate system for nearly three decades since independence. This fixed exchange rate system could not survive after 1960s when the country had started to experience widening gaps between its foreign exchange inflows and foreign exchange outflows, a situation known as having a continuous deficit in the balance of payments. 

Under ordinary circumstances, the exchange rate has to depreciate in order to eliminate the deficit automatically. But, since the country had maintained a fixed exchange rate system, the rupee had been overvalued against foreign currencies. 

Despite this, the Government of Sirimavo Bandaranaike, on instructions from its powerful Minister of Finance, Felix R. Dias Bandaranaike, had revalued the rupee by 20%, as a political strategy to win the elections. 

AS, in the Annual Report for 1977, had faulted the Government on this count. He had remarked that the revaluation had been done by the Government. He said: “Although there was no clear evidence that the improvement in the payments position was due to any structural strength in the economy,” (p 3). 

Hence, the new Government had to allow the rupee to depreciate substantially, from around Rs. 8 per dollar to Rs 16 per dollar. As a consequence of this massive depreciation, the rupee value of the country’s foreign assets too increased significantly. But that increase was not a matter for rejoicing since, as the Annual Report 1977 had remarked, a fair portion of the increase was due to revaluing the external assets by using the depreciated exchange rate. 

The main malaise in the economy, according to AS

AS had diagnosed the main malaise in the country’s economy and summarised in the Annual Report for 1977. Sri Lanka had been successful in the past in containing population growth and achieving a more equitable distribution of income. 

However, the slow economic growth recorded by Sri Lanka had not permitted the country to sustain these achievements. Thus, the Annual Report had commented: “The new economic policy (of the new Government) stemmed from a basic diagnosis of the malaise, namely, that a continued allocation of a large volume of resources to consumption was inimical to economic growth and generation of employment; that the rigid control system that had been built up over the years had seriously distorted the relative prices, and had dampened private sector incentives; that the public sector which was fostered to fill the vacuum had become wasteful and complacent and that successive governments had failed to take corrective action but had resorted only to short-term palliatives which had only compounded the problems,” (p 4). 

Thus, according to AS, the solution lay in Sri Lanka’s shifting of a large volume of resources from consumption to investment. However, he warned that the success of the corrective measures by the new Government would depend crucially on its ability to carry it to its logical conclusion and the speed at which the new policy would bring about an increase in output, incomes and employment. It was also necessary, according to AS, for various Government machineries to fully understand the thrust of the new economic policies being pursued by the Government in order to ensure mutual consistency of the policies adopted by them. 

Moving from inward-looking to export oriented policy

This position was further elaborated by AS in the other Annual Report he had produced. Accordingly, in the first part of the Annual Report for 1978, he marked 1977 as a clear watershed on the economic history of Sri Lanka. 

Why did he say so? That was because the policy package had turned the country “away from a predominantly inward looking, tightly controlled and welfare oriented strategy to one which primarily emphasised export growth, competition and higher capital investment for economic growth and employment generation. The year 1978 was the first full year under the new economic regime, and several problems in adjusting from a controlled regime to a liberalised one were evident. But the spontaneous and immediate response of the economy to the new economic policy in achieving a high growth rate was the most encouraging feature of 1978,” (p 8).

The need for continuing with the reform program

AS’s reference here is to the real growth rate of 8.2% which Sri Lanka’s economy had attained in 1978.  But this high growth could just be one off event and not one that could be repeated successfully in the years to come unless the country had gone for a comprehensive economic reform program. 

Thus, AS advised the Government in the same Annual Rate as follows: “In the immediate future and in the long run, the maintenance of such a growth momentum would require a higher level of savings and investment and further policy decisions aimed at fostering economic growth. A difficult trade-off between the interests of consumers and producers would be required. Remaining monopolistic powers and non-productive controls would have to be whittled down. An acceptable balance between growth and equity will have to be worked out. The economy, in its performance in 1978, has clearly shown that, given appropriate policy climate, it has the potential of moving to a path of sustained economic development,” P 8). 

Abandoning the reform program in midway stream

The subsequent evidence has shown that this is where the Sri Lankan authorities had faltered. Instead of continuing with the liberalisation and reform program, it was stopped in midway stream and was not carried to a logical conclusion as AS had desired. 

The Government in power had relied on its investment in irrigation infrastructure and not on economic reforms for generating wealth and prosperity. The result was that the high growth reported in 1978 was just one off-event and could not be repeated subsequently. Even as early 1990s, the country’s economic reform program was practically at the same stage as it was started in 1977 and 1978. It was thus left to President Chandrika Bandaranaike Kumaratunga who advocated for a market economy with a human face in her bid for Presidency in 1994 to carry it to a logical conclusion. 

In her Government, AS was the Treasury Secretary for the first two years and Governor of the Central Bank for the remaining period. His contribution to economic policy reforms during this period will be discussed in a later piece.

(W.A. Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at waw1949@gmail.com).