Sri Lanka’s president is struggling to keep his promises of reform

The economy is weak and the opposition strong

Jan 17th 2018 | COLOMBO

AT THE time, it was seen as an astonishing victory. In retrospect, it was also something of a Pyrrhic one. Few expected Maithripala Sirisena to defeat the incumbent Mahinda Rajapaksa in the presidential election of 2015. After all, Mr Rajapaksa, although increasingly authoritarian, had presided in 2009 over the defeat of the separatist Tamil Tigers, ending Sri Lanka’s 26-year civil war. Mr Sirisena was merely a rebellious member of the president’s own Sri Lanka Freedom Party (SLFP). To win and then to govern, Mr Sirisena relied on the support of the SLFP’s main rival, the United National Party (UNP). As Sri Lankans prepare to vote in local elections on February 10th, that alliance has come to haunt him.

In theory, the alliance between the UNP and Mr Sirisena’s faction of the SLFP ended in December. But this is a polite fiction necessitated by the campaign. In practice, neither group has sufficient numbers in parliament to govern without the other. Mr Rajapaksa, who is backing a new outfit called the Sri Lanka People’s Front, has called on voters to treat the poll as a referendum on the government.

The lack of a fixed political base has coloured Mr Sirisena’s three years in office. The endless struggle to assert his authority over the SLFP has taken up much of his time and energy, while the alliance with the UNP has associated him with its unpopular economic policies. The president’s ambitious promises—to transfer executive authority from the president to parliament; to devolve power to the regions; to crack down on corruption; and to hold the army to account for the war crimes it is alleged to have committed in the final days of the war—have gone largely unfulfilled.

The powers of the president have been watered down, but not nearly as much as Mr Sirisena had pledged. A promised new constitution which would strengthen the powers of the regions has never materialised, to the irritation of the Tamil National Alliance, a party that supported Mr Sirisena’s presidential bid. No members of the former government have been prosecuted for corruption, nor have any wayward soldiers been brought to book. Building public trust in government was an important element of the government’s mandate, says Asoka Obeyesekere, the local head of Transparency International, an anti-corruption pressure group, but it has made no progress at all. Instead, the UNP has become embroiled in a corruption scandal of its own, and many observers worry that the investigating authorities are not independent enough to untangle it.

Meanwhile, runaway borrowing for vanity projects under Mr Rajapaksa left the new government with a balance-of-payments crisis. It had to turn to the IMF in 2016, and last year approved a tax overhaul to help rein in the deficit. Rising taxes and the falling rupee, in turn, have helped push up inflation, which has jumped from 2% to 8% during Mr Sirisena’s tenure (see chart). A common gripe concerns the price of coconuts, which has doubled over the past year—a blow given that coconut milk is a staple ingredient in local curries.

The local elections could deepen Mr Sirisena’s troubles. Politicians tend to follow the wind; if the SLFP performs poorly, power will ebb away from the president in anticipation of the presidential election in 2019 and a parliamentary one in 2020. It does not help that Mr Sirisena pledged to serve only a single term—another reason he may soon be viewed as a lame duck. 

Will AG’S Dept. shield PM?

January 17, 2018, 12:00 pm 

President Maithripala Sirisena seems to be happy that unlike other Presidential Commissions which took several years to complete their probes and ultimately produced reports which were not worth the paper they were written on, the Bond Commission completed its task within a very short period of 10 months and produced a report, copies of which have been submitted to Parliament.

The President has forwarded one copy to the Central Bank, another to the Bribery Commission, and one to the most important of institution, the Attorney General’s Department. The Central Bank has already decided to implement, not a recommendation of the report but an observation the Bond Commission made about the period which is prior to the mandate given to them by the President. Ranil Wickremasinghe & Co were jubilant about these remarks and were referring to the massive frauds committed by Mahinda Rajapaksa’s Government during Ajith Nivard Cabraal’s tenure as the Central Bank Governor. This also enabled them to point accusing fingers at the former regime and the result was converting Parliament to the Mustang’s tent of sorts.

The Central Bank announced they are seeking expert advice from professionals in the world who specialize in forensic audit with a digital footprint. But, what they would do to prevent recurrence of such a massive scam is yet to be known by the public.

On the other hand, the Bribery Commission has notified they have appointed five senior officials of the Bribery Department to study the recommendations of the Commission and to indict the officials and anyone else against whom a corruption charge could be maintained.

I believe Sarath Jayamanne, the Director General, will not let down the masses of this country by postponing action he ought to take and at least find the people whose names were mentioned and are indicted in the High Court.

It is also interesting to note whether the Prosecutors would hold the members of the United National Party, who were directly involved in the Bond Scam and whose names were mentioned at the Commission, responsible for striving to scuttle the publication of the Commission’s Report.

This matter came to light and became the focal point amongst those who knew about the Treasury Bonds, the manner in which Arjuna Mahendran acted at the first auction of the Bond, which resulted in the D.E.W. Gunasekera-led COPE summoning Arjuna Mahendran to give evidence before it, who mentioned the name of the Minister in Charge of the Central Bank, and said he followed the instructions given by him. The Minister in Charge of the Central Bank happens to be none other than Mr. Ranil Wickremesinghe, the Prime Minister of the present government.

It is necessary to understand the following facts and decide whether these items which I relate below could be construed as Circumstantial Evidence. For the reader, circumstantial evidence relates to a series of facts, other than the particular fact sought to be proved, and the party offering circumstantial evidence argues that this series of facts, by reason and experience so closely associated with the fact to be proved, so that the fact to be proved may be inferred simply from the existence of circumstantial evidence.

The fact to be proved is whether Ranil Wickremesinghe was involved in the Bond Scam and whether as the Minister-in-Charge, he did not take any steps to prevent the second massive fraud that took place.

The Bond Commission has elicited the following facts:-

1. The first COPE Report of D.E.W. Gunasekera (Chair) that inquired into the first auction scam reported that Arjuna Mahendran said in evidence that he did this on the instructions of Ranil Wickremesinghe.

2. Was Ranil Wickremesinghe the Minister-in-Charge of the Central Bank?

3. Has the Central Bank ever been under any other Minister other than the Minister of Finance before Ranil Wickremasinghe took over the subject of the Central Bank under him?

4. After the resignation of Ajith Nivard Cabraal, wasn’t there any qualified person in the Central Bank or in Sri Lanka to be appointed as the Governor of the Central Bank?

5. Did Mr. Ranil Wickremesinghe publicly criticize the consulting fees paid to a French national who had connections with the IMF, hired by the Mahinda Rajapaksa government?

6. Did Mr. Ranil Wickremesinghe know that Arjuna Mahendran is a citizen of Singapore, which does not recognize dual citizenship, and therefore was unable to take an oath of allegiance to the Sri Lankan Government?

7. Did Mr. Ranil Wickremesinghe defend this appointment referring to Section 11 of the Finance Act and say that there was no impediment of appointing a non citizen as the Governor of the Central Bank?

8. Did the Prime Minister, even if he could have appointed a foreigner as the Governor of the Central Bank, when the Governor refused to take oaths, inform that fact to the President in order to remove him; as it is very clear under Article 170 of the Constitution, the interpretation to the word ‘public officer’ does not exclude the Governor of the Central Bank?

9. Similarly, Article 61D, very clearly states that a person appointed to any office shall not enter upon the duties of his office, until he takes and subscribes the oath described in the 4th Schedule, and further, the Establishment Code, under the 2nd paragraph Section 10:6:2, says that any public servant should take an oath of allegiance to the Constitution, if not he will automatically lose his position as the Governor of the Central Bank.

10. Under these circumstances, by the action of Arjuna Mahendran, has the Prime Minister condoling the same, committed an impeachable offence and should he not be answerable?

11. When in evidence, before the COPE committee chaired by D.E.W. Gunasekera, Mr. Arjuna Mahendran stated that he changed the method of selling the Bonds on the instructions of the Prime Minister, what did the Prime Minister, as the Minister-in-charge of the Central Bank do to contradict the statement made by Arjuna Mahendra?

12. As Mr. Arjuna Mahendran who has no authority to take any instructions from the Minister-in-charge of the subject, had thereby clearly violated the Monetary Laws, what corrective actions did the Prime Minister take?

13. Did one of the junior members and a State Minister of the UNP Mr. Sujeewa Senasinghe, file an action in the District Court and obtain an interim injunction preventing the release of the D.E.W. Gunasekera Report?

14. Did the Prime Minister who always articulates the Supremacy of the Parliament, citing the decision made by the former speaker Mr. Anura Bandaranaike, reprimand his junior minister for having sought to prevent the issuance of the D.E.W. Gunasekera Report, and obtaining an order against the Supremacy of Parliament?

15. When this matter came up in Parliament and in answer to a question raised by Dinesh Gunawardena MP, did the Prime Minister say that he would appoint a Parliamentary Select Committee and handover the files to the Financial Crimes Investigation Division?

16. Is there any proof that he has done either. If the report was submitted to the FCID, did the FCID record a single statement from any of the people who were involved in this scam?

17. When the matter became very public and accusations were leveled against the Prime Minister, did the Prime Minister appoint a Committee comprising his followers and members of the United National Party (Legal Division) to inquire into these allegations?

18. Did the Prime Minister know that this Committee had no power to summon any officials and did not have the financial resources to carry out a thorough inquiry?

19. Did the Prime Minister absolve himself and Arjuna Mahendran by referring to the report tabled by the above Committee, headed by Gamini Pitipana?

20. Even this Committee, in all sincerity, has made a very poignant recommendation that as they were suspicious of the last transaction a forensic audit with a digital footprint should be immediately carried out.

21. Did the Prime Minister laugh at the recommendations and tell the Members of the Committee that the Sri Lankan public would soon forget the controversy when another controversy erupts?

22. Instead of flaunting the Pitipana Report why did he not carry out the only recommendation it made, if the Prime Minister was genuinely finding out whether there was scam in auctioning the bonds?

23. Did his protégé and the blue eyed handsome member of his party write a book in defense of Arjuna Mahendran, and on the manner in which the Bonds were issued, and an exposition to the public that there was no fraud involved? Was any government official present at the book launch, and was a copy handed over to the Prime Minister?

24. Did the Prime Minister request the President to dissolve Parliament so that the D.E.W. Gunasekera Report will never be made public?

25. When the second COPE Committee was established, headed by Mr. Handunnetti, did one of the supporters of the United National Party Ven. Kinyawe Palitha Thera file a Fundamental Rights Application seeking the intervention of the Supreme Court to stop the implementation of the Second COPE report? What was the interest that Ven. Palitha Thera had on the recommendations of the COPE report, unless he was the representative of the Minister-in-Charge of the Central Bank?

There may be similar items of evidence known to the excellent team headed by Dappula de Livera and Yasantha Kodagoda. Therefore, even on the matters enumerated by me, shouldn’t the Prime Minister be questioned thoroughly by an independent police team under the supervision of the AG’s department? Could one under the political culture in Sri Lanka question the second most powerful person in Sri Lanka, unless he temporarily resigns his position as the Prime Minister?

And finally, under whose pressure did Jayantha Jayasuriya, the present Attorney General, remove the elite team who did a magnificent job and earned the plaudits and accolades of the entire nation, and give its work to the Head of the Civil Section of the AG’s department?

The common excuse would be to tell the President he did this in order to ensure justice and fair play, and the new team will look at the recommendations more objectively and without bias. When this was told to a senior professional, he said, "Please tell this to the Chinese Barber, and he, without cutting your hair will die of laughter".

Lanka e news is pummeling me; MP’s are calling me pickpocket ; I cannot run the government–president walks out abruptly!

(Lanka-e-News - 17.Jan.2018, 11.00PM)  President Pallewatte Gamaralalage Maithripala Yapa Sirisena got up from his seat during the cabinet meeting yesterday (16) and went away saying’ I cannot run the government any longer.’

President Maithripala thereby  created another ignominious world record , via this  stupid conduct as the first State leader who went out abruptly leaving the cabinet members in the lurch  when a cabinet meeting was in progress. 

Sirisena behaved this silly and insanely , citing the grounds that Lanka e news is castigating him ,and M.P.s are calling him a pickpocket. 

Lanka e news is slinging mud at him because Lotteries Board advertisements were not given to it , while Marikkar  and other M.P.’s are accusing him as a pickpocket , president  lamented. The president then like  a madman to the shock of all the SLFP ministers left the venue of the meeting in a huff.

Later P.M. Ranil Wickremesinghe, the UNP ministers Malik Samaraweera ,  Akila Viraj Kariyawasam , Kabir Hashim, and SLFP ministers Mahinda Amaraweera , Mahinda Samarasinghe , Duminda Dissanayake , and others went and met him. Following a one hour discussion , the president agreed to come back  to participate in the meeting .Sirisena who attended the meeting the second time , again confirmed he doesn’t know how to conduct himself as a president and head of the state . He proved he is ‘president moron’  possessed by an evil resident within him , by terminating the all important  cabinet meeting prematurely, to run away like a retreating shot rabbit.

Following this bizarre and crude conduct of the president despite being the highest in the  hierarchy of the country , the SLFP ministers were dazed. One minister speaking to Lanka e news said, the ‘grip’ the president had over the government had now slipped out ,and he had only demonstrated his weakness before all .  

Editor’s comment :
The president leaving the cabinet sessions abruptly citing Lanka e news as a reason , we have one thing to say in that regard.. It is none other than the president who took action violating Democratic tenets when we exposed his  illicit warship deal in collusion with wheeler dealer Maharaja, by illegally barring the viewers of the news website from accessing it. This undemocratic action was not ours but the president’s . It is well for us to remember , for every action there is always an equal and  opposite reaction  , taught to us in grade 7.

President Sillysena  by his foolish conduct proved another salient point : He even does not know what he should do if he cannot run the government – not to walk out of  a meeting abruptly , rather tender his resignation from the presidential position !

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by     (2018-01-17 20:14:40)

Sri Lanka: Full Text of the Bond Report

( January 18, 2018, Colombo, Sri Lanka Guardian) On 16.01.2018, the Secretary to the Bond Commission that inquired into the Issuance of Treasury Bonds, forwarded the Soft Copy of its Final Report, which was handed over to His Excellency the President on 30.12.2017. The report and the relevant annexures can be downloaded from here.

CLICK HERE TO READ FULL REPORT 

SRI LANKA: Full Text of the Bond `Report by Sri Lanka Guardian on Scribd

List of Annexures, Documents, CD’s (Voice recordings) and other files

1. Annex i – Representations received by the Commission.
2. Annex ii – Marked documents and CD’s.
3. Annex iv – Written submissions by Attorneys At Law marked
appearance at the Commission of Inquiry.
4. Annex v

(a) Proceedings, Evidence & Summaries of
Witnesses.
(b) Oral submissions of Attorneys At Law, Orders
and Statements of the Commission of Inquiry.

Erratic Presidents & Dirty Tongues

By Granville Perera –January 17, 2018

Donald John Trump, the global bully and the President of the mighty Super Power, United States of America (USA) has got his brains checked and an all-clear certificate has been issued.  Our charming gentle giant Nishantha Muthuhettigama, MP from the Galle District in the Southern Sinhala bastion was probably the first politician who had his brains examined for sanity in Sri Lanka. Now it looks like, many more in Sri Lanka will have to undergo this important test.

We have a president who says that there are pick pockets amongst his coalition partner and the Young Turk Sirasa Marikkar calls the President a pickpocket. Wonder what made Marikkar deviate from the script provided by his wheeler dealing Maharaja, the sponsor of the political agenda against Ranil Wickremesinghe. Was this rhetoric a plant to destabilize the Yahapalanaya government and throw out Ranil Wickremesinghe from the Premiership? Money can do wonders and lots of opportunities to make people become desperate. Politics can make people go mad as we see this in our idiot boxes daily. Our brain doctors are in for a jolly good time ahead!

President Sirisena who started the pickpocket story too has become so erratic that he is playing to the gallery and seeking cheap popularity for his beleaguered Sri Lanka Freedom Party (SLFP) which he pickpocketed from Mahinda Rajapaksa. He is desperate not to be placed 4th in the forthcoming local government elections. He is now hitting hard with his rhetoric at the UNP diehards who crowned him as the executive President, including Ravi Karunanayake who carried him to the hot seat of the Presidency. The bond scam inquiry is typical of his attempt to gain cheap popularity. The COPE committee report and the Prime Minister’s committee report should have been sufficient if followed up with the Attorney General’s department and the suspects investigated and incarcerated.

If he was serious about punishing culprits, he would have negotiated this with Prime Minister Wickremesinghe. Instead, the President thought that he could take his Mudu Walige and thrash the shit out of the United National Party and gain popularity. It is now backfiring on him. The UNP sees this as his strategy to destabilize the UNP and have unleashed the backbenchers to be vocal. At the end of the day, he needs to take his sword out and commit Hara-kiri. He has already done this by asking the Supreme Court whether he can stay six years. The Supreme Court squashed his dreams of an extra year even though his humble servant the Attorney General gave a valiant effort to give him 365 days more. Now, all one could say is “Illang Keawa, Mahinda Wage”.

The President who heads the Cabinet of Ministers should sit through all the proposals and gazette notifications that are to be issued by his government. He is known to sit dumb and let everything go through, then comes out of the cabinet meetings and lambasts the UNP ministers for even proposing changes that he himself approved at the cabinet with his typical gamme kapatiya mentality. This has continued throughout the 3 years of Yahapalanaya and Ranil as PM has not stood by his men or party. For example, on two occasions, he has totally insulted and ridiculed our crown prince Mangala Samaraweera who along with Chandrika Kumaranatunga was the architects to get President Sirisena to eat Aapa. The first incident was when the price of Beer was reduced during the last November budget which the President overruled the day after and now he is infringing on the rights of our female folk to pick up their little shot or work at a place of their choice.

He has also unleashed his “pin amethi “ (the foul-mouth Dilan Perera) to attack his main coalition partner the UNP in and outside parliament. He has never bothered to censure or advice the chit MP to maintain the spirit of cohabitation.

The President is trying hard to take Sri Lanka on a high moral culture even forgetting his son’s attempted pony ride in Passikudah. It is time that we remind ourselves of his Navy commander’s daughter’s THANAPATI fiasco with Enrique Miguel Iglesias for which he threatened to take out his madu walige, which he never did.

If it is morality that our Grama Sevaka is talking about, then he has to stop every female from working in restaurants and prohibit any night shifts for our manikes working in our garment factories and free trade zones as they would not be available for our macho men to be taken care of at night. Almost every 5 star hotels have females working during night shifts, and the majority of housekeepers are females. Anything can happen in guest rooms. Further, It is estimated that there are 40,000 sex workers (known as “Ganikawa”) in the country, and nearly half of them operate in Colombo. What has he done to protect these women?  There are also probably another 500 gays (nangi’s) operating within the streets of Colombo. What has been done about this?

Read More

Bond probe commission:
Action recommended against Mahendran, Aloysius, Ravi, et al

Evidence has established PM didn’t ask AR to stop direct placements immediately

January 18, 2018, 12:22 pm

The presidential commission of inquiry which probed Treasury bond scams has determined that the then CBSL Governor Arjuna Mahendran provided 'inside information' to Perpetual Treasuries Limited (PTL) owned by his son-in-law Arjuna Aloysius and acted in collusion with that company.

The commission has recommended the Attorney General and other authorities consider whether PTL has used, gained and benefitted from 'inside information' at the Feb 27, 2015 bond auction and, if so, whether he should be prosecuted and twice the value of aforesaid sum of Rs 688,762,100 recovered from the PTL by way of fine in the event of a conviction.

Bond probe commission Action recommended against Mahendran, Aloysius, Ravi, et al.docx by Thavam on Scribd

CENTRAL BANK BONDS AND POLITICAL BOMBSHELL!

2018-01-18

The lender of last resort - The Central Bank of Sri Lanka is under heavy fire now, due to the release of extracts of the report on the Bond Commission appointed by the head of state. Further it is turning out to be a hot political issue, as one of the leading and popular TV channels in the country, has very vigorously launched a severe attack on one of the leading political personalities in the country. In the meantime, the report submitted by the Commission is expected to come before the parliament and the opposition has already announced the intention of bringing no-confidence motions against the Prime Minister and the Speaker. 

Therefore, it is our duty, as students of economics and political science, to evaluate scientifically the origin of the Central Bank of Sri Lanka, its gradual evolution, its varied functions and performance, its lapses and also to arrive at a judgment whether it has fulfilled the expectations of its founding fathers and the high degree of faith kept in/on it by the people of Sri Lanka. 

A Central Bank is an independent national authority that sets monetary policy, regulates banks and provides financial services, including economic research, covering every aspect and wide corners of an economy. For performing all these assignments, it has earned the prestigious name -The Banker’s Bank. A Central Bank is expected to stabilize the nation’s currency, keep unemployment low and prevent inflation. 

Central Banks stimulate economic growth by controlling the liquidity of the financial system. To control this liquidity they are fully armed with three sharp weapons. First and foremost, a central bank can set a reserve system/a reserve requirement. It has the legal authority to tell the network of commercial banks, how much cash they can possess each night. This ceiling can put a limit to a bank’s lending.

The second strategy of Central Banks is to use the open market operations to buy and sell securities from member banks. It changes the amount of cash in hand, without changing the reserve requirement. It is said that the European Banks manipulated this tool during the 2008 financial crisis. Further, it is pointed by financial experts that private and commercial banks bought government bonds and mortgage-back securities to stabilize the banking system. The third strategy used by the Central Banks is to set up definite targets on interest rates they charge from their member banks. By using this method, they guide rates for loans, mortgages and bonds. It is well understood, that raising interest rates slows growth, preventing inflation. This theory is well known as contraction monetary mechanism. 

Sweden, established the first central bank –’THE RISKS’ in 1668. The Bank of England, came next in 1694. Napoleon created the Banquet de France in 1800. Congress, opened the Federal Reserve in 1913. In Canada, the Bank of Canada entered the banking field in 1935 and the German Bundesbank joined the queue later. 

After gaining political independence from the British Raj in 1948, The Central Bank of Ceylon was set up in Sri Lanka by the post independence government, taking into consideration the importance of an active, robust monetary policy and a dynamic monetary sector to support, enhance and promote economic growth in all spheres of economic life. 

The Currency Board System that came into being, under the Paper Currency Ordinance No: 32 of 1884, looked after the functions of banking prior to the inauguration of the Central Bank in Sri Lanka. On setting up of a central bank in Sri Lanka, the then Government of Ceylon requested the services of the United States Government for technical, structural and financial advice. As a result of this request, the US Government appointed Mr. John Exeter, a reputed economist of the Federal Reserve Board of the USA to shoulder these responsibilities and assignments for the government of Sri Lanka. After studying the financial sector in Sri Lanka and her responsibilities towards achieving sustainable development, John Exeter submitted a very comprehensive report to the government in November 1949. Based on the recommendations of this report, The Central Bank of Ceylon was established by the Monetary Law Act of (MLA) of No: 58 of 1949 and commenced operations on August 28, 1950. 

It was renamed the Central Bank of Sri Lanka in 1985. 
The main objectives of the Central Bank were enumerated as follows by the MLA of 1949. 
1.Maintenance of Price Stability(Stabilization of domestic monetary values) 
2.The preservation of the par value or the stability of the exchange rate of the Sri Lankan Rupee(sustainable maintenance of exchange rate- stability) 
3.The promotion and maintenance of a high level of production, employment and real income in Sri Lanka.

When analysing the different tasks of the Central Bank and its relevance to the Sri Lankan economy, it is our duty as students of economics to turn to the pages of the doctoral theses submitted by Prof. H. A. de S. Gunasekara to the London School of Economics on the subject of ‘From Dependent Currency to Central Banking in Ceylon-An analysis of Monetary Experience 1825-1957’. In his well-researched thesis, Prof. Gunasekara has underlined the fact, that the Central Bank’s performance during the first years of its existence has not been fully successful to prevent the volatility of money supply originating from fiscal deficits and export fluctuations. 

Even the present day economists who have done in-depth studies of central banking performance from 1949 to date vindicates Prof. Gunasekara’s findings and is of the opinion, that the analysis outlined by him that the limitations of the Central Bank in a developing economy, saddled with the twin objectives of economic development and stabilization, still remain valid. 

In a planned economy or when there is a definite economic plan for a country, the tasks of a central bank is much smoother than in an unplanned economy. In a well planned economy, the economic or social targets are well set for a definite period, for 5-7 years. A central bank operating within this set course, knows the ambitions and objectives of the government in power and the welfare options it intends to undertake within this period. But in a market orientated economy this ‘assurance’ is absent. 

Therefore, in a market orientated economy, where the demand and supply theory dominates the relationship between the government and the central bank varies from a country to country.

There is a general consensus, that the central bank in a country should be allowed to handle its affairs completely free, without any kind of impediments blocking its freedom. The rationale behind this argument is that when there is direct or indirect political interference, the central bank will fail to conduct sound monetary policies aiming at price stability. There is another point of view, which elaborates that the central bank should be under the control of the government.

However, in practice Central Banks in market orientated economies operate between these two extremes and it is observed that they enjoy different layers of independence in different countries. 
In Parliamentary democracies, where the voice of the people is given priority consideration to satisfy the political constituency, the general tendency is to incur government expenditure for various populist welfare measures such as handouts, subsidies, and income transfers to households. Without pragmatic plans in store, ‘ job creation’ will also be undertaken in certain sectors and the final result will be surplus of employees, hindering the economic performance of the particular institution.

Economists who have researched this aspect of financing, point out, that this is one of the main reason for the prevailing and on-going budgets deficits . To finance these on going deficits, borrowing is the only alternative. In situations like this, the government in power expect the central bank to come into its rescue and the central bank will have to ‘print’ money to uphold the un-financed portion of the deficit. Further, there will be budgets and interim budgets. 
In the end, this vicious cycle will cause inflation. 

• The three-main objectives enumerated by the Monetary Law Act of 1949 by establishing the Central Bank have not reached the expected goals  
• A Central Bank is an independent national authority that sets monetary policy, regulates banks and provides financial services, including economic research, covering every aspect and wide corners of an economy.

In a situation like this, only an independent Central Bank can advice the government which is in power to refrain from ‘power-hungry’ solutions. The function of price stability should be the prerogative of the central bank. 

The yahapalanaya government which took over the political administration of the country in 2015, decided to transfer the subject of central banking and monetary policy from the Finance Ministry to the National Policies and Economic Affairs Ministry, headed by the Prime Minister. This arbitrary decision was carried out through a gazette notification, ignoring the provisions of the Monetary Law Act. It is the considered view of central banking specialists that these hurried manipulations has devalued the importance and integrity of the central bank and the ‘lender of last resort’ in the country has been down-graded and it has become only a consultative body now. 

During the last regime also, an outsider who did not posses any central banking experience was appointed as its Governor, although there were several Deputy Governors with rich experience and sterling qualities. Arbitrarily, their due promotions were neglected and suppressed. A former Governor is also alleged to have been involved in bidding for the commonwealth games and lobbying for his political masters lavishly spending rate-payers money. The bond scandals that have come up reveal that there had been ‘established precedents’ from 2008 and the present regime also followed the same course by appointing a foreigner to the top position of the CBSL and allowed him to use its position lavishly for the benefit of the kith and kin, ignoring the long-term national interests.

Therefore, we must come to the conclusion that the three-main objectives enumerated by the Monetary Law Act of 1949 by establishing the Central Bank of Sri Lanka have not reached the expected goals during the last seven decades due to haphazard political interference. 

The writer is an ex-Media Secretary to the Ministry of Higher Education and Ministry of Parliamentary Affairs

Sri Lanka: Bond Book — With Whom Arjun Aloysius Talks (Evidence C352)

The report by the Bond Commission handed over to the Sri Lankan President Maithripala Sirisena a few days ago, then the President decided made the report to the public. Here is an interesting evidence was given by the Mr. Yasanka Jayasinghe of the Police Department.

(January 18, 2018, Colombo, Sri Lanka Guardian) Mr. Yasanka Jayasinghe joined the Police Department on 18th March 2013 as a Trainee Sub Inspector. Having completed his training at the Sri Lanka Police Training College in Kalutara, he was posted to the Police Station in Galle. After serving in Galle for only three-days, he was transferred to Matugama and then to the Criminal Investigation Department. He commenced duties in the Criminal Investigation Department on 01st September 2014 and has been serving in that Division in the Police up to now. He is presently attached to the Technical Aid Unit in the CID and is engaged in the forensic examination of Computer devices, which includes the function of extracting data from telephones and other computer devices. Inspector Jayasinghe had undergone training conducted by the Federal Police in Australia on forensic examinations. Having examined computer devices, he had produced electronically generated evidence in cases such as the money laundering case of Mohammed Siam, the case where Saman Kumara alias Wele Suda´ was indicted and the murder case of Seya Sadewwani. He is making use of the devices named AKESO and UFED for his Forensic examinations. It is evident that the reports produced in evidence by him, have been prepared with the use of these technical devices. The Forensic report prepared by this witness on Communication Information Analysis was produced in evidence. The relevant evidence of this witness:

READ FULL TEXT OF THE REPORT 

1] Mr. Yasanka Jayasinghe stated that he carried out his forensic examinations relating to the matters that fall within the scope of this Commission of Inquiry and such examinations were performed, in the capacity of an officer attached to the Commission. He had been released from the Criminal Investigation Department for the performance of the aforesaid duties and functions of the Commission. In his evidence he stated that he examined, the data found in the telephone used by Mr. Arjun Aloysius and the material provided by the Service Providers, namely Sri Lanka Telecom PLC, Dialog Axiata PLC, Etisalat Lanka (Pvt) Limited PLC, Bharati Airtel Lanka (Pvt) Limited and Mobitel (Pvt) Limited, for the purpose of preparing his forensic reports. The information submitted by these Service Providers include, the telephone numbers and National Identity Card numbers of the persons to whom those telephone numbers were allocated. He further said that the information he collected was restricted to individual activity reports and to the short messages (SMS) of the relevant subscribers and that it only covers the period from 01st January 2015 to 26th June 2017. He has also annexed a document to his Forensic Report marked ³C360´ and the said annexure, marked 1.2 shows the dates on which the important events had occurred in relation to the issuance of bonds.

2] The witness said that his Forensic Report indicates the call partners of the telephone conversations, the telephone which the call originated from and its directions, if it is an SMS whether it was an outgoing or incoming message, IP address and the identity of the Telecommunication tower to which the telephone calls were connected. According to the witness, this information is limited to the period from January 2015 to June 2017.

3] Mr. Jayasinghe stated that he used the Microsoft Excel software and IBM Analysis Notebook 2.9.0.5 for his examinations. He also said that he used the UFED device to analyze the data. He had subsequently prepared the said telephone Directory containing numbers and the usernames as stated in Paragraph 3.6 in his Report. In that Directory, the names of the persons who testified before the Commission are also mentioned. Accordingly, the time and the names of the persons who were parties to the conversations are found in the aforesaid Report.

4] The witness said that he examined the telephone to which the number 0722463361 is allocated to, which was being used by Mr. Arjuna Mahendran, for his analysis. However, he has not investigated, the conversations made between Mr. Arjuna Mahendran and Mr. Arjun Aloysius because of their close relationship. He further said that there were no conversations between Mr. Arjuna Mahendran and the Primary Dealers registered with the Central Bank other than the personnel from the Primary Dealer company, Perpetual Treasuries Limited. Then he said that he examined the call details between Mr. Arjuna Mahendran and Mr. Kasun Palisena who is the Chief Executive Officer of Perpetual Treasuries Limited and stated that there were 27 telephone conversations and 7 text messages between them. The witness said that in one of the text messages, Mr. Arjuna Mahendran has sent his email address to Mr. Kasun Palisena. The witness has also said that there were telephone conversations between Mr. Arjuna Mahendran and other persons working for Perpetual Treasuries Limited, in addition to Mr. Kasun Palisena.

5] Sub Inspector Jayasinghe also stated that Mr. Arjuna Mahendran had had 30 telephone conversations with Mr. Indika Saman Kumara who is employed at the Central Bank and some of those conversations had been made outside office hours. There were five text messages between these two persons. Mr. Arjuna Mahendran also had 19 conversations with another officer by the name of Padumanapan, working in the Central Bank. He further said that no telephone conversations were found between Mr. Arjuna Mahendran and Mr. Padumanapan until 01st April 2015, during which period Mr. Padumanapan was attached to EPF Department in the Central Bank. However, he stated that there were 129 calls and 4 text messages between Mr. Arjuna Mahendran and Mr. Padumanapan after Mr. Padumanapan was transferred to the Public Debt Department. He also said that Mr. Arjuna Mahendran had telephone conversations with the Hon. Prime Minister, Mr. Ranil Wickremesinghe and the Chairman of the Bank of Ceylon on 27th February 2015, which is the date on which the controversial bond auction was held. The witness has also given evidence, on the conversations made between the period 01st April 2015 and 04thApril 2015.

6] The witness thereafter mentioned the details of the telephone conversations Mr. Arjun Aloysius had with other persons during the period between 23rd October 2016 and 26th January 2017. The reason for this limited period is that the telephone used by Mr. Arjun Aloysius was not produced before the Commission of Inquiry for examination. Therefore, the details of the telephone conversations of Mr. Arjun Aloysius were limited to two and half months.

7] The witness also stated that there were 448 voice communications between Mr. Arjun Aloysius and Mr. Indika Saman Kumara during these two and half months and among those, 131 were Viber calls which had been made between 8 in the night and 8 in the morning. There were 61 conversations between Mr. Arjun Aloysius and Mr. Padumanapan. There were 703 Viber calls between Mr. Aloysius and Mr. Padumanapan.

8] Mr. Jayasinghe also stated that Mr. Arjun Aloysius and a person by the name of Naveen Anuradha who was released from the Central Bank to work at the National Savings Bank, had had 5 telephone conversations and 189 Viber calls. He also said that Mr. Arjun Aloysius had 48 conversations with Mr. Danuka Liyanagamage working at the Sri Lanka Insurance Corporation.

9] Mr. Jayasinghe said that Mr. Kasun Palisena had 38 telephone conversations with Mr. Indika Saman Kumara and; 14 telephone conversations and text messages with Mr. Amal Iroshan, who is the brother of Mr. Indika Saman Kumara. Mr. Kasun Palisena had had 22 calls and SMS messages with Mr. Danuka Liyanagamage.

10] Witness further stated that Mr. Indika Saman Kumara had 38 conversations with the wife of Mr. Arjun Aloysius, Ms. Anjalie Mahendran out of which eight conversations were in the night. Mr. Indika Saman Kumara had had 167 conversations with Mr. Sanjeewa Fernando who is another Director of Perpetual Treasuries Limited. He also had few other conversations with Mr. Ajahn Punchihewa and Mr. Pushya Gunawardena who were the Directors of Perpetual Treasuries Limited.

11] The witness said that Mr. Arjun Aloysius also had 387 telephone connections with Mr. Ravi Karunanayake for the period between 05th February 2015 and 20th June 2017 and there were 37 text messages between these two persons during the period 01st February 2015 to 31st March 2016. The witness also said that Mr. Arjun Aloysius had 320 conversations and 12 text messages with Mrs. Mela Karunanayake, the wife of Mr. Ravi Karunanayake and there were 18 messages with Ms. Onella Karunanayake and Ms. Shenelle Karunanayake who are the daughters of Mr. Ravi Karunanayake.

12] In view of the evidence already led on the Report of the COPE Committee headed by Hon. Sunil Handunnetti, Member of Parliament, details of the telephone conversations between Mr. Arjun Aloysius and the members of the said Committee was elicited in evidence through Sub Inspector Jayasinghe. Accordingly, the witness stated that he did not find any conversations between Mr. Arjun Aloysius and Hon. Handunnetti, Hon. Rauf Hakeem, Hon. Anura Priyadharshana Yapa, Hon. Lakshman Seneviratne, Hon. Wasantha Aluwihare, Hon. Lasantha Alagiyawanna, Hon. Dr. Harsha De Silva, Hon. Ranjan Ramanayake, Hon. Asoka Abeysinghe, Hon. Chandrasiri Gajadheera, Hon. Anura Kumara Dissanayake, Hon. Mahindananda Aluthgamage, Hon. Bimal Rathnayake, Hon. Weerakumara Dissanayake, Hon. Mavei Senadhirajah, Hon. Abdulla Maharoof, Hon. S.Sridharan, Hon. Velukumar, Hon. Dr. Nalinda Jayatissa, Hon. Prasanna Ranatunga, Hon. Gnanamuttu Sirinesion and Hon. M. A. Sumandiran P.C.

The witness then stated that Mr. Arjun Aloysius had 2 conversations with Hon. Dayasiri Jayasekara, 2 conversations with Hon. Ajith Perera, 23 conversations with Hon. Harshana Rajakaruna, 23 conversations with Hon. Hector Appuhamy and 62 conversations with Hon. Sujeewa Senasinghe. This particular report was marked in evidence as “C352”

Women As Protectors Of ‘Family Culture’: The Play Of President & The Former President

By Anushka Kahandagama –January 17, 2018

The recent discourse about allowing and not allowing women to buy and sell alcohol in Sri Lanka provoked many discourses of power and gender equality in the country. The government announced in the last Wednesday that, it was amending the law which prevented women from buying and selling alcohol, agreeing that it discriminated against women and allowed women to buy alcohol after about four decades. After this decision, Movement for Consumer Rights Protection accused the Minister of Finance of encouraging of consuming the alcohol and urged the President to intervene in the matter. The Buddhist Sangha stated that the allowing of women to buy alcohol would destroy the Sri Lankan ‘family culture’. Against this background, President had ordered the government to withdraw its notification announcing the lifting of the ban. The irony is Movement for Consumer Rights Protection is violating the right of women (as consumers) to buy whatever they like as men. If the movement thinks that, allowing women to purchase alcohol is encouraging the nation to consume more liquor, the movement is out of their senses.

Apart from Buddhist Sangha being interfering with the alcohol issue, it is shocking to see Movement for Consumer Rights Protection is interfering with the problem in the same manner as Buddhist monks. The Movement for Consumer Rights Protection has become the violator of rights of the women consumers, and has become the gatekeepers of a ‘pure nation.’ It is important to see how this whole discourse of alcohol consumption of women has become a problem with ‘Nationalist’ importance during the election period. As according to Mahinda Rajapaksa, allowing women to participate in buying and selling alcohol is an act of degrading the women by the State, as women are respected as ‘mothers. If women are respected as ‘mothers,’ the State should allow women to partake in the rights which men are partaking. Most ironically, Mahinda Rajapaksa istalking about ‘respect of women,’ while an officer of his party asks for sexual bribes from a contest of the upcoming election, who wanted to contest under the MR’s party. It is clear how MR’s party is protecting and respecting women within their newly formed political party.

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Abortion: The agony of a nation

Thursday, 18 January 2018

Sri Lanka’s 130-year old anti-abortion law is clear: aborting a pregnancy except to save the life of the mother is a crime.

Section 303 of the Penal Code states: “Whoever voluntarily causes a woman with child to miscarry shall, if such miscarriage be not caused in good faith for the purpose of saving the life of the woman, be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both; and if the woman be quick with child, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”

The fact of the matter, however, is that abortion is commonplace. The most recent national study, a UN Population Fund-sponsored project in the late 1990s, estimated that some 650 abortions take place each day, country-wide [see Source 1, below]. The rate now is conservatively estimated to exceed 1,000 a day. Indeed, in a 2009 paper [2] Dr N.L. Abeyasinghe of the Department of Forensic Medicine and Toxicology of the University of Colombo estimated that for every 1,000 children born, another 740 had been aborted.

The law, which dates to 1883, thus not only makes criminals of hundreds of thousands of women annually but, because the medical profession is forbidden to administer abortions, forces women into the hands of unscrupulous quacks. Frequently the abortion is botched and the mother, in addition to losing her baby, ends up in hospital.

The Ministry of Health’s ‘Annual Health Bulletin’ (2001) estimated that 7-16% of female admissions to Government hospitals are the result of a botched abortion. That amounts to more than 100,000 hospitalisations annually: a huge toll on the hard-pressed national healthcare budget, and a huge cost (including dozens of lives lost annually) to womankind.

Because the whole idea of abortion is illegal, health workers cannot even offer counselling on this subject to prospective mothers (it would be aiding and abetting an offence). For the same reasons, neither can abortion be included in the schools sex-education curriculum. In short, the whole issue of abortion has to be swept under the carpet and, as a consequence, has become a source of unmitigated misery for millions of Sri Lankan women.

Unsurprisingly then, the Ministry of Health, numerous women’s-advocacy groups and the World Health Organisation itself, have long been lobbying for a reform of the law. They recognise the fact that despite it being a criminal act, about 1,000 women have an abortion every day. Their goal is to make abortion safe and, through effective family-planning counselling, to reduce the abortion rate itself.

The bill making the relevant amendments to the Penal Code, however, has had a painful history. Many politicians, ethicists and religious leaders are opposed to it. They do not want to open the stable doors to abortion at will, a concept clearly alien to Sri Lanka’s Buddhist heritage and its deep reverence for all life. Those who favour reform argue, however, that legalising early-term abortions, at least in special cases (discussed below), would allow the subject to be drawn into the sex-education curriculum, thereby improving awareness and leading to a decline in the abortion rate itself.

Agonising choice

As the law stands, even women who become pregnant as a result of rape must carry their babies to term. In fact, Dr. Abeyasinghe’s study [2] showed that more than 75% of women interviewed felt that abortion should be legalised if the mother was psychiatrically ill or had been a victim of rape or incest, or when there were foetal anomalies.

The decision to abort a pregnancy is surely among the most agonising choices ever to confront a woman. No one would make this decision lightly. But the fact of the matter is that almost 400,000 Sri Lankan women resort to abortion annually: that is a staggering figure that simply cannot be ignored. Putting all these women in prison is not an answer. The issue of abortion has to be addressed through a reform of the law.

‘Morning-after’ pill

The tragedy of abortion in Sri Lanka is that it is not usually an issue that confronts the better-educated well-to-do readers of English newspapers. They and their teenage daughters have ready access to information on contraception.

Should unexpected sex occur, whether consensual or forced, they know to rush to the nearest pharmacy and buy themselves a dose of Postinor (levonorgestrel), the so-called morning-after pill (a misnomer, because they are most effective if taken within 12 hours of sex and so are better termed emergency contraceptives). Depending on which clinical study one reads, this reduces the risk of pregnancy by over 95%. Levonorgestrel is cheap (around Rs. 150) and can be obtained without a doctor’s prescription.

In the event levonorgestrel does not work (usually because it is taken too late), a pregnancy may occur. This would usually be detected after the patient has missed her first period after the sexual encounter and had a positive result in a pregnancy test; i.e. she is clinically pregnant. In that event an abortion is called for, it is possible within the first nine weeks of implantation to have a ‘medical abortion’ using RU486 (Mifepristone), under medical supervision.

I suspect that in Sri Lanka, as elsewhere, most ‘illegal’ abortions take the RU486 route. However, unless taken under proper medical supervision, the RU486 or the surgical options can result in serious complications resulting in hospitalisation of the mother. This leads to a double standard [4] in which the rich, with access to private health care, are at a huge advantage against the poor, who must necessarily turn to a quack.


Ethical landscape

Short of the extreme position that a pregnancy may never be aborted, is there an ethical space in which an early-stage abortion should be permitted? The worldwide acceptance of levonorgestrel suggests that for millions of women, terminating a potential pregnancy within three days of the sexual encounter is acceptable. RU486 offers a safe and reliable option to terminate the pregnancy shortly after it is clinically detected. Both these options are available for pregnancies of up to nine weeks’ duration, and no person would argue that a nine-week foetus is sentient in any sense of that word.

Until the 1980s, pregnancy tests could only detect a pregnancy after about six weeks had elapsed from the previous menstrual period (i.e. about a month after conception). Today, tests for hCG (a hormone) in the patient’s urine can detect pregnancy within a few days of implantation. As a result, we now know that about 30% of all conceptions result naturally in an ‘early pregnancy loss’: i.e., the mother discharges the foetus spontaneously [5].If 30% of all conceptions end naturally in spontaneous abortion, then surely early-stage physician-induced abortion itself cannot be such a terrible thing?

Given that Nature already terminates 30% of pregnancies, the ethical question before us is not so much whether abortions are acceptable as when (i.e. how many weeks after implantation).Clearly most people would be horrified by the idea of aborting a late-stage pregnancy. But an ethically acceptable alternative to criminalising hundreds of thousands of women would be to allow them (say) within the first nine weeks to have a safe abortion performed by a qualified doctor. In almost all these cases, this would mean taking medication as opposed to resorting to surgery.


Education and counselling

It is also fitting to ask why so many unwanted pregnancies occur in Sri Lanka. Much of the demand for abortions comes from married women with two or more children who do not want to have yet another one. Family-planning guidance and education then, are a key factor (as is awareness of the use of levonorgestrel).

We also need to recognise that young people nowadays are engaging in sex much earlier than previously thought. An island-wide survey of more than 3,000 Grade 12 and 13 students [6] found that almost 60% of boys and 30% of girls aged 19 had had sex. What is more, about 20% of youngsters reported having been in a “forced sexual experience” (i.e. rape). If that many 19-year old girls admit to having been forced into sex (bear in mind that many more would be too ashamed to admit it), the chances are that a fair proportion of them become pregnant: a rapist, after all, is unlikely to prepare for his crime by first donning a condom. How much worse is the girls’ plight if they have to have their abortions performed by quacks and cannot even confide in their mothers?

Sri Lanka needs to face up to the fact that its citizenry is engaged in sex in a diversity of scenarios, greatly increasing the risk of unwanted pregnancies (and, by the way, sexually-transmitted diseases). What is needed then is a sound curriculum of sex education in schools (the level of ignorance is astronomical [7]), equipping young people to deal with these challenges.

Girls need to be taught the facts of life as soon as they have their first period, and most importantly, what to do if they end up having unprotected sex. The need of the hour is not for obtuse pontification but for a sympathetic realisation of the plight of hundreds of thousands of women in Sri Lanka who face a dreadful predicament and to devise ways in which they can be helped [2]. Imprisoning hundreds of thousands of women may well be the only solution the law offers, but surely we can strive for more enlightened values than that?

On the bright side, there are signs that even the Catholic Church, hitherto a strident opponent of reform, is softening its stance on the issue. “We cannot insist only on issues related to abortion, gay marriage and the use of contraceptive methods,” Pope Francis was reported as saying [8], in a conciliatory tone similar to that he adopted when asked about gay clergy in the church: “Who am I to judge?”

The Pope clearly understands the meaning of the word “Catholic” (universal) in the name of the church he heads. “This Church with which we should be thinking is the home of all, not a small chapel that can hold only a small group of selected people,” he was quoted as saying. “We must not reduce the bosom of the universal Church to a nest protecting our mediocrity.” A sign, perhaps, that the church in Sri Lanka will not stand in the way of the proposed reforms? Then again, maybe not.

Sources

[1] Rajapakse, L. C. 2002. Estimates of induced abortion in urban and rural Sri Lanka. Journal of the College of Community Physicians of Sri Lanka,7: 10-16.

[2] Abeyasinghe, N. L. 2009. Awareness and views of the law on termination of pregnancy and reasons for resorting to an abortion among a group of women attending a clinic in Colombo, Sri Lanka. Journal of Forensic and Legal Medicine, 16: 134–137.

[3] http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=48619 [4] Kumar, R. 2013. Abortion in Sri Lanka: The double standard. American Journal of Public Health, 103(3): 400-404.

[5] Wang, X. et al. 2003. Conception, early pregnancy loss, and time to clinical pregnancy: a population based prospective study. Fertility & Sterility, 79: 577-84.

[6] Perera, B. & Reece, M. 2006. Sexual behavior of young adults in Sri Lanka: Implications for HIV prevention. AIDS Care, 18(5): 497–500.

[7] Thalagala N. 2004. National Survey on Emerging Issues Among Adolescents in Sri Lanka. Colombo, Sri Lanka: United NationsChildren’s Fund. 

[8] La CiviltaCattolicato, Issue 3918 (September, 2013).