Saturday, April 18, 2015

Growth in Sri Lanka unsustainable due to structural barriers to competitive markets says World Bank

18 April 2015A report by the World Bank on South East Asia, noting structural barriers to competitiveness in Sri Lanka, predicted a decline in Sri Lanka's growth to 6.9 percent due to several factors including slowing down in the construction industry.

The report added that part of the decline in growth would be due to previous growth being artificially propped up by consumption due to increased public sector wages.

With competitiveness still remaining a challenge in Sri Lanka, due to the actions of the previous government, the growth of Sri Lanka will decline as the new government looks to make changes to move towards a more open and competitive market, the South East Asia Economic Focus report also added.

Noting that Sri Lanka's current growth had come from non-tradable sectors, the World Bank warned that it would be difficult to sustain future growth without increasing growth in export sectors, which lacked competiveness in Sri Lanka.

South Asia Economic Focus Spring 2015.pdf by Thavam Ratna

Good Governance in Sri Lanka - Asoka Bandarage

Saturday, 18 April 2015

The World Bank Group's Worldwide Governance Indicators are: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law and control of corruption. The defeat of Mahinda Rajapaksa at the Sri Lankan Presidential elections on January 8 is attributed to violations of these indicators, most notably the control of corruption. His regime was charged with nepotism, cronyism, abuse of financial transactions and conducting government business as if it were a "family company" (pavul samagama).

The new government led by Prime Minister Ranil Wickramasinghe (appointed by President Maithripala Sirisena who won the January 8 elections) has directed much of its energy towards investigating the charges against the Rajapaksa regime. Undoubtedly, state monies were squandered and pocketed by corrupt officials during the Rajapaksa government. Conclusive evidence of massive financial wrongdoing, however, is yet to be provided.

Some charges have turned out to be either exaggerated or false. A case in point is the allegation that the contractor from China commissioned to build the Colombo Outer Circular Road had reduced a sum of Rs.30 billion (about USD 225 million) from the cost of the project as a commission to be paid to powerful figures in the Rajapaksa government. The Chinese Embassy in Colombo has denied the charge.

The current government in Sri Lanka was elected into office came under the banner of good governance (yahapalayanaya) and anti-corruption. Upon assuming duties, the new Minister of Finance, Ravi Karunanayke declared that his government was not looking at just "minimising corruption but at eliminating it fully." He further elaborated that "Corrupt officials will be severely dealt with irrespective of their political affiliation and status...We criticised the Rajapaksa regime while in the opposition and now it is our turn to practice what we preached." Is this what is happening in Sri Lanka today?

Cronyism and Corruption
A government that comes to power promising good governance and accountability is expected to uphold strong ethical standards in making appointments and in the conduct of its affairs in general. Circumspection is especially required in making appointments to the highest offices pertaining to the country's economic and financial well-being. Sri Lanka does not have a shortage of qualified, experienced individuals with exemplary records who can fill important positions. However, individuals facing charges of serious financial and legal irregularities have been appointed to some of the highest offices by Prime Minister Wickramasinghe. These appointments and subsequent outcomes have raised public concern over good governance and anti- corruption.

Finance Minister Ravi Karunanayake, quoted earlier in this article, faces court charges for alleged money laundering a few years ago, violating Sri Lanka's Central bank regulations and the Exchange Control Act. He is accused of facilitating the transfer of Rs.390 million (USD 3 million) to Sri Lanka by Raj Rajaratnam, the infamous Tamil Sri Lankan American, billionaire and founder of Galleon Group hedge fund. Rajaratnam who was "convicted of conspiracy and securities fraud in one of the biggest insider-trading cases in the history of Wall Street" is currently serving an eleven year prison sentence in the U.S.A. A report by David Rose entitled "Crouching Tiger, Hidden Raj" published in Vanity Fair in 2011 revealed that Rajaratnam had links to the LTTE and provided funds to the terrorist organization.

Finance Minister Karunanayake had an order to be present in Court in Colombo on 29 January 2015 to face the money laundering charges. However, the presentation of the interim budget of the new Sri Lankan government was fixed for the exact same date! As Karunanayake could not be in the Parliament and the Courts at the same time, the court case was postponed. No other information on this court case can be found in the media. Questions raised by H.L.D. Mahindapala, the doyen of Sri Lankan journalism, on the implications of the Karunanayake case are pertinent here:

Will there be attempts to cover-up the case? As some of the key departments handling this case (example: Exchange Control) come under the Finance Ministry will there be pressure brought to manipulate/cook the evidence in courts? Is this going to be the first of many cases that are likely to recur in due course to undermine the independence of the judiciary?

Even more serious charges of legal and financial irregularity are involved in the appointment of Arjuna Mahendran as Governor of the Central Bank of Sri Lanka. Mahendran a Sri Lankan born Tamil and a citizen of Singapore, was given Sri Lankan permanent residency within 24 hours of his appointment, a privilege not available to many others awaiting Sri Lankan residency and dual citizenship. The activist group, Voice against Corruption has stated that it will file legal action against Mahendran in Singaporean High Courts for violating emigration laws of that country. Mahendran is also a close friend of Raj Rajaratnam. Indeed, many Sri Lankans are asking if Wickramasinghe's nomination of his friend Mahendran as the Governor of the Central Bank represents good governance or cronyism?

On February 27 Sri Lanka faced what is being called the "biggest ever public financial fraud committed" in the country's history by alleged blatant abuse of power by Arjuna Mahendran to help his son-in-law, Arjun Aloysius.

The story is that the Central Bank's 30 year treasury bond rate had suddenly changed from 9.5 percent to a high 12.5 percent as did its decision to accept bids of Rs.10 billion, ten times more than the earlier requested Rs.1 billion. Mahendran's son-law, who apparently had insider information gained high profits as the main bidder at the expense of banks and other financial institutions who made their bids according to the public information given by the Central Bank.

The "entire business community was shocked" by the alleged treasury bond fraud. Petitions and demands for financial accountability and demands for Mahendran to resign are mounting. The government appointed a committee to investigate the "insider trading" allegations and Mahendran has been put on leave. However, the public and the media are not kept informed of the progress of the investigation or when a decision on the case can be expected. Mahendran continues in the position of Governor of the Central Bank while the country bears the economic and social costs of the failure of good governance and corruption control.

Financial irregularities combined with the stoppage of infrastructural and economic projects begun by the previous government is contributing to the loss of confidence of investors, employment opportunities and economy stability. Recently, the government of Singapore refused to accept the Sri Lankan government's request to obtain a foreign loan of USD 1 .5 billion through the Singapore stock market on grounds that it cannot honor a Sri Lankan government document signed by two individuals facing charges of financial corruption, namely Sri Lanka's Finance Minister Karunanayake and Governor of Sri Lanka's Central Bank, Mahendran.

The current regime in Sri Lanka came into power pledging to dissolve Parliament in 100 days and to hold general elections. The 100 days have now elapsed, but the government is yet to announce the dates for parliamentary dissolution and the elections. Meanwhile, an unelected, interim government led by Wickramsinghe continues in office making appointments and policy decisions inimical to all the Worldwide Governance Indicators.

Human rights, corruption and other charges against the Mahinda Rajapaksa regime have received extensive international media coverage. Yet, there is hardly a word about the massive allegations against the current regime, even the Mahendran affair, despite their seriousness and international linkages. All governments everywhere must be held accountable to the same principles of good governance. There cannot be double standards on voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law and control of corruption.

Lawlessness In Customs Costs Govt Dearly: Tyre Importer Says

April 18, 2015

A reputed tyre importer whose trade has been severely affected by a large-scale fraudulent tyre imports says that all his representations made to the Director General Customs has been completely overlooked, even without a acknowledgement notice served on the complaint made.

DGC Jagath Wijeweera

Further to the representations made to us by the said importer, we have launched our own investigations into this affair and now we can reveal that it is a plausible and real complaint, which leads to disclosure of massive scale revenue loss incurred by the government.

Customs adopt completely outlawed Customs Valuation System

It is revealed that despite a landmark judgment(CA/392/2012) recently pronounced by the Court of Appeal (October 2014), wherein it was declared that the valuation procedure adopted for customs purposes for the determination of value for imported goods is completely outlawed, arbitrary and in violation of the law governing the valuation of goods for Customs purposes, the Department of Customs has absolutely disregarded this court ruling and has failed to put in place a fool proof vibrant valuation process to determine the valuation of goods for customs purposes, in accordance with the GATT Valuation Agreement (Article VII).

Customs Valuation Directorate: the best money making chance

Our investigations reveals that the Valuation Directorate of the Customs Department is the best money making machine for the officers posted there and there is a big competition amongst the Customs Officers to get a placement there. We can disclose that the competition to get a placement there is such that the annual transfer list reaches the Minister of Finance for the final approval.

Customs Officers maintain their own valuation records for improper purposes

The credible information collected from the Customs House Agents on this exploitation reveals that officers serving in the Valuation Directorate maintain their own ‘private valuation data records’ for improper purpose of demanding inducements from the importers. In most cases these ‘private valuation data records’ represent true transaction value declared for the Customs purposes by the genuine importers, which is naturally much higher than the values declared for similar goods imported by fraudulent elements.

18/04/2015

President Maithripala Sirisena who completes 100 days in office tomorrow seems to be struggling with his back against the wall not only to fulfill his election promises, but also for his very survival in the long run. In fact he is besieged by his friends as well as foes.

He is being pressurized by his friends such as the JVP and certain media outlets that toiled for his victory at the January 8 Presidential election, to keep his election promises, especially those on scrapping or considerably trimming of executive powers of the Presidency and taking drastic action against the corrupt politicians and officials of the past regime.

For some reasons unknown to the country the authorities under the new regime of President Sirisena are dragging their feet in taking action against corruption despite graphic details of them being carried in the media. Sri Lanka is a unique country in which the police have to wait for the court orders for months in order to arrest a man who was well known to have supplied lethal hardware for nearly thirty years to the LTTE, one of the most dangerous terrorist groups in the world six years ago, to kill and maim thousands of people while he was right under their nose.

The new government whose leaders have been exposing corruption running into billions of rupees before and after the Presidential election has failed to see a single corrupt politician or official behind bars in respect of those big-time financial crimes, during its first hundred days. This situation has led to the leaders of the previous regime to call the investigations into their criminal activities as mudslinging. Interestingly they are also questioning the authorities as to why the latter cannot arrest a single person if the allegations on corruption warrant doing so.

The President is in a dilemma on the question of constitutional reforms and on the matter of dissolution of the Parliament, two promises in his 100 day programme. To be fair by him, he seems to be prepared to totally scrap the executive powers of the Presidency. But some of the groups that worked for his election victory now want him to go back on his words only to slice off a portion of the Presidential powers.

The UNP, the main party that helped the President during the election tries hard to reduce as much of the Presidential powers as possible, while the President’s own party, the SLFP threatens him to scuttle the 19th Amendment that provides for the constitutional reforms on Executive Presidency unless electoral reforms accompany it. Besides, the JVP pushes for the dissolution of Parliament soon after April 23, as scheduled in the hundred day programme, irrespective of the main promises being not fulfilled.

A Port City or a Garden City for Colombo?

by Ranil Senanayake

- on 04/18/2015

The call for full transparency regarding the negotiations that led to the Port City must be provided to the public, however the deliberations and resolution at a political level will take a ponderously slow pace. The information that is now before us, suggest that the entire ‘Port City’ project, was done on the whims and personal interests of certain individuals in a process that allowed commencing the project without the proper approval procedure being adhered to. While the resolution of this conundrum will take its time, it will be useful to consider the alternatives to what has been set in train.

Alternatives must to be considered in the face of the as massive problems brought about by the lack of proper procedure, problems that will obviously slow or re-direct the implementation of this project. One of the glaring errors is the Environmental report obtained from Morotuwa University. While its findings are mired in controversy, it seems that this is the only document in existence that confers any sense of legitimacy to the project. However the limited scope of this document is seen in the fact that it only refers to the impact of a landfill on the sea front, there is no mention of the construction of a city on the reclaimed land or of the impact on the project on Colombo City! !

If a city is to be built on the reclaimed land, where are the permits that allow for such activity? It brings up the interesting question as to who will be the authority to issue building permits, the Colombo Municipality or a new city municipality? What will be the political makeup of such an entity? If some of the land is owned by another nation, will we have any control of activities there? There are further questions, what industry will be allowed or disallowed within this area? Where will they obtain the power and fresh water? How will air and sound pollution be mitigated? Until such questions are resolved it will be obvious that the proposed ‘Port City’ cannot enter a construction phase.

These are just a few of the critical questions that need to be answered before any building or other construction is allows on the filled land. There is of course the vexing question of sovereignty, whose laws and standards will prevail on this new bit of land? There will be no easy resolution to these questions.

Now that we have some filled up land in front of Colombo, it will be useful to see what other nations have done with such reclaimed land. One interesting example is the new landfill project in Singapore. In August 2007 Singapore announced ‘The Gardens by the Bay’ as an integral part of a strategy by the Singapore government to transform Singapore from a “Garden City” to a “City in a Garden”. The stated aim is to raise the quality of life by enhancing greenery and flora in the city. The Gardens by the Bay was intended to become Singapore’s premier urban outdoor recreation space, and a national icon. An international competition for the design of the master plan, held in January 2006, attracted more than 70 entries submitted by 170 firms from 24 countries. An area of 101 ha was set aside for the project. The final construction cost for the project, not including the price of the land but including an access road, drainage works, and soil improvement, was within a $1.035 billion allocated budget. The annual operating cost was expected to be approximately $58 million, of which $28 million was for operation of the Conservatory buildings. The project received 1.7 million visitors between June and October 2012 and has created tens of thousands of jobs and economic opportunities for Singaporeans.

Colombo city could do with beautification and development to enhance the quality of life of its citizens and to change its image into a welcoming venue for all citizens to enjoy. It could follow Singapore and build the land reclaimed for the defunct ‘Port City’ to become the premier urban outdoor recreation space in this region; we could create a national icon that truly reflects the beauty of this land and the aspirations of its people. It could deliver the ‘Bakti Pooja’ that we claim for our nation when we sing our anthem!

We could plant trees in the park and confirm the Greek Proverb that “A society grows great when old men plant trees whose shade they know they shall never sit in”.

Magistrates – The Weak Link In Policing

By Rajan Hoole –April 18, 2015

Dr. Rajan Hoole

Law Enforcement and the Security Services: Politicisation and Demoralisation – 9

Some police officers have been explicit in the contention that police corruption is what breeds terrorism. Tamils who are regularly taken in by the Police on suspicion would readily agree. Officers in charge of some police stations and certain officers in police units investigating terrorism have been known to hold persons arbitrarily to obtain money for their release. Reports of such officers have come from detainees held by the CDB, CSU, and the more recent TID. Amounts charged have recently been known to exceed Rs.100 000, driving affected families to desperate straits. The practice rose sharply following the LTTE’s terrorist attacks in Colombo in 1991, continued into the term of the PA government in the latter 1990s, and then spread into the estates peopled by Hill-Country Tamils.

Several police officers contend that the most promising first step in tackling the problem is to do with the role of the magistrate. The detention of a suspect even under the Prevention of Terrorism Act requires the Police to conform to some objective criteria of suspicion. They point out that in every recent case where a fundamental rights petition has been filed on behalf of a detainee, the Supreme Court has granted relief.

*In a typical case, the magistrate compounded a particular disability suffered by a Tamil in Colombo. A Tamil woman from Jaffna who could not read bus destination boards that were only in Sinhalese, boarded a bus pointed out by a bystander, got lost and was detained by the Police on suspicion.

Saturday, 18 April 2015

"Air Force helicopters were not used for the election campaign of the former President Mahinda Rajapaksa. However, if the payments for the used helicopters were not made those who hired them should do it", says the United People's Freedom Alliance (UPFA) General Secretary Susil Premajayantha.

He has further stated that he personally held the expenses for the helicopters he hired to transport Mahinda Rajapaksa during the election campaign.

“The Air Force air crafts were not obtained as UPFA. They have been used from time to time for individual needs. If the payments have not been made they should be questioned. The Air Force does not issue helicopters because UPFA made a request", he added.

Rs 38.48 unpaid
However, nobody has so far paid the amount of Rs 38.48 which is due to be paid for air travel during the election and Susil Premajayantha is due to pay Rs 2.6 million for the transportation facilities he has obtained.

Former Minister Wimal Weerawansa, who had made most number of air travels apart from Mahinda Rajapaksa, had stated that the particular amount should be paid by UPFA.

However, Susil Premajayantha has stated that since the air crafts were utilized arbitrarily the UPFA cannot take the responsibility of making due payments.

Illegal Consignment Re-Exported

By Nirmala Kannangara

Saturday, April 18, 2015

Questions have been raised as to who gave orders to Sri Lanka Customs to allegedly re-export an illegal consignment of Red sandalwood (Red Sanders) worth several billions of rupees secretly last month.

Illegal Consignment Re-Exported by Thavam Ratna

Prasanna exposes Wimal

SATURDAY, 18 APRIL 2015

Former minister Wimal Weerawansa, roused by certain media reports that former Minister of Economic Development Basil Rajapaksa who hurriedly left the country while the results of the presidential election were being released, has started publishing various fabrications in his website.

The website, notorious for publishing slanders and fabrications published yesterday (17th) that the Chief Minister for Western Provincial Council Prasanna Ranatunga would welcome Mr. Basil Rajapaksa at the Airport on the 21st and would accompany him to the Parliament where a media conference would be held.

However, Mr. Prasanna Ranatunga had denied going to welcome Mr. Rajapaksa condemning the false report.

Weerawansa, who has been enraged due to the end of the regime of Rajapaksa family that plundered public money on 8th January fabricate news to slander others and also attempt to arouse communalism and religious disharmony through his website and moves.

No nominations for 36 MPs – CBK proposes

18 April 2015

Former President and Advisor to the SLFP, Chandrika Bandaranaike Kumaratunge has proposed that about 36 MPs of the UPFA not be given nominations to contest at the next general election.Kumaratunge it is learnt has already discussed the matter with the SLFP and UPFA Leader, President Maithripala Sirisena.

Among the 36 MPs named by the former President are those who are pro-Mahinda Rajapaksa.

Parliamentarians who are facing corruption charges are also among those who will not be given nominations by the party at the next election.

Kumaratunge and Sirisena are expected to finalize the list of MPs who should not be granted nominations by the party.

It is learnt that once the list is prepared, these MPs will be sent charge sheets before the calling on the next general election.

Movie Review: Court: A Tale of Law and Injustice

Now running in theatres, Court, an award-winning multilingual drama, studies caste and criminalisation of political dissent through the prism of judiciary.

by Manisha Sethi-APRIL 18, 2015
So sings Narayan Kamble upon being released on bail. This ‘ballad of gratitude’ exposes the violence that lies at the heart of law. It places the machinery of law at par with the swords and guns that smash and drown people, much as it may pretend to be its exact opposite.

Movie Review Court a Tale of Law and Injustice by Thavam Ratna

Thousands of Iraqis flee as Islamic State makes gains in Sunni heartland

Displaced families from Ramadi wait in miles of traffic while fleeing an offensive by Islamic State militants in the Iraqi province of Anbar. (Ayman Oghanna/For The Washington Post)

More than 4000 families have fled Anbar in recent days as Islamic State militants threaten to overrun the city of Ramadi, the provincial capital of Iraq's Western Anbar province. (Ayman Oghanna/For The Washington Post)

By Loveday Morris April 17 at 7:44 PM

SADR AL-YUSUFIYAH — Thousands of families fleeing Iraq’s western city of Ramadi choked checkpoints leading to Baghdad on Friday, after anIslamic State advance spread panic and left security forces clinging to control.

Thousands of Iraqis Flee as Islamic State Makes Gains in Sunni Heartland by Thavam Ratna

A U.S.-Russia War Over Ukraine?

by Pat Buchanan

( April 18, 2015, Boston, Sri Lanka Guardian) “Could a U.S. response to Russia’s action in Ukraine provoke a confrontation that leads to a U.S.-Russia War?”This jolting question is raised by Graham Allison and Dimitri Simes in the cover article of The National Interest.

The answer the authors give, in “Countdown to War: The Coming U.S. Russia Conflict,” is that the odds are shortening on a military collision between the world’s largest nuclear powers.

The cockpit of the conflict, should it come, will be Ukraine.

What makes the article timely is the report that Canada will be sending 200 soldiers to western Ukraine to join 800 Americans and 75 Brits on a yearlong assignment to train the Ukrainian army.

And train that army to fight whom? Pro-Russian rebels in Ukraine whom Vladimir Putin has said will not be crushed, even if it requires Russian intervention. Says Putin, “We won’t let it happen.”

What are the forces that have us “stumbling to war”?

On our side there is President Obama who “enjoys attempting to humiliate Putin” and “repeatedly includes Russia in his list of current scourges alongside the Islamic State and Ebola.”

Then there is what TNI editor Jacob Heilbrunn calls the “truculent disposition” that has become the “main driver of Republican foreign policy.” A “triumphalist camp,” redolent of the “cakewalk war” crowd of Bush II, is ascendant and pushing us toward confrontation.

This American mindset has its mirror image in Moscow.

“Putin is not the hardest of the hard-liners in Russia,” write the authors. “Russia’s establishment falls into … a pragmatic camp, which is currently dominant thanks principally to Putin’s support, and a hard-line camp” the one Putin adviser calls “the hotheads.”

The hotheads believe the way to respond to U.S. encroachments is to invoke the doctrine of Yuri Andropov, “challenge the main enemy,” and brandish nuclear weapons to terrify Europe and split NATO.

Russian public opinion is said to be moving toward the hotheads.

Russian bombers have been intruding into NATO air space. Putin says he was ready to put nuclear forces on alert in the Crimea. Russia’s ambassador has warned Copenhagen that if its ships join a NATO missile defense force, Denmark could be targeted with nukes.

In coming war games, Russia will move Iskander missiles into the Baltic enclave of Kaliningrad on Poland’s northern border.

“Russia is the only country in the world that is realistically capable of turning the United States into radioactive ash,” brays the director of the television network Rossiya Segodnya.

As of now, the “pragmatists” represented by Foreign Minister Sergey Lavrov retain the upper hand.

They believe Russia can still do business with the United States and Europe.

“The ‘hotheads’ take the opposite view,” the authors write, “they argue that NATO is determined to overthrow Putin, force Russia to its knees, and perhaps even dismember the country.”

In Ukraine, Putin has drawn two red lines. He will not permit Ukraine to join NATO. He will not allow the rebels to be crushed.

Russia hard-liners are confident that should it come to war in Ukraine, Russia would have what Cold War strategists called “escalation dominance.” This is what JFK had in the Cuban missile crisis — conventional and nuclear superiority on sea and land, and in the air around Cuba.

With Ukraine easily accessible to Russian forces by road and rail, sea and air, and Russia’s military just over the border while U.S. military might is a continent away, the hard-liners believe Russia would prevail in a war and America would face a choice — accept defeat in Ukraine or escalate to tactical atomic weapons.

The Russians are talking of resorting to such weapons first.

The decisive date for Putin to determine which way Russia will go would appear to be this summer. The authors write:

“Putin will attempt to exploit the expiration of EU sanctions, which are scheduled to expire in July. If that fails, however, and the European Union joins the United States in imposing additional economic sanctions such as excluding Moscow from the SWIFT financial clearing system, Putin would be tempted to respond, not by retreating, but by ending all cooperation with the West, and mobilizing his people against a new and ‘apocalyptic’ threat to ‘Mother Russia.’

“As a leading Russian politician told us, ‘We stood all alone against Napoleon and against Hitler.‘”

As of now, the Minsk II cease-fire of February seems to be holding. The Ukrainian army and pro-Russian rebels have both moved their heavy weapons back from the truce lines, though there have been clashes and casualties.

But as Ukraine’s crisis is unresolved, these questions remain:

Will the U.S. train the Ukrainian army and then greenlight an offensive to retake the rebel-held provinces? Would Russia intervene and rout that army? Would the Americans sit by if their Ukrainian trainees were defeated and more Ukrainian land was lost?

Or would we start up the escalator to a war with Russia that few Europeans, but some Americans and Russians, might welcome today?

Patrick J. Buchanan is the author of the new book “The Greatest Comeback: How Richard Nixon Rose From Defeat to Create the New Majority.” To find out more about Patrick Buchanan and read features by other Creators writers and cartoonists, visit the Creators Web page at www.creators.com .