Who knew? Modi's black money move kept a closely guarded secret

People wait for a bank to open to withdraw and deposit their money, after the scrapping of high denomination 500 and 1,000 Indian rupees currency notes, in Ahmedabad, India, December 5, 2016. REUTERS/Amit Dave/File photo

By Douglas Busvine and Rupam Jain | NEW DELHI

Prime Minister Narendra Modi handpicked a trusted bureaucrat, little known outside India's financial circles, to spearhead a radical move to abolish 86 percent of the country's cash overnight and take aim at the huge shadow economy.

GRAPHIC: Modi's currency purge tmsnrt.rs/2fHr4je

GRAPHIC: How long will it take India to print new money? tmsnrt.rs/2hr8tto

Hasmukh Adhia, the bureaucrat, and five others privy to the plan were sworn to utmost secrecy, say sources with knowledge of the matter. They were supported by a young team of researchers working in two rooms at Modi's New Delhi residence, as he plotted his boldest reform since coming to power in 2014.

When announced, the abolition of high-value banknotes of 500 and 1,000 rupees ($7.50 and $15) came as a bolt from the blue.

The secrecy was aimed at outflanking those who might profit from prior knowledge, by pouring cash into gold, property and other assets and hide illicit wealth.

Previously unreported details of Modi's handling of the so-called "demonetisation" open a window onto the hands-on role he played in implementing a key policy, and how he was willing to act quickly even when the risks were high.

While some advocates say the scrapping of the banknotes will bring more money into the banking system and raise tax revenues, millions of Indians are furious at having to queue for hours outside banks to exchange or deposit their old money.

Labourers have also been unpaid and produce has rotted in markets as cash stopped changing hands. Not enough replacement notes were printed in preparation for the upheaval, and it could take months for things to return to normal.

With India's most populous state, Uttar Pradesh, holding an election in early 2017 that could decide Modi's chances of a second term in office, there is little time for the hoped-for benefits of his cash swap to outweigh short-term pain.

Modi has staked his reputation and popularity on the move.

"I have done all the research and, if it fails, then I am to blame," Modi told a cabinet meeting on Nov. 8 shortly before the move was announced, according to three ministers who attended.

DIRECT LINE TO MODI

Overseeing the campaign, with support from the backroom team camped out at Modi's sprawling bungalow in the capital, was Adhia, a top finance ministry official.

The 58-year-old served as principal secretary to Modi from 2003-06 when he was chief minister of Gujarat state, establishing a relationship of trust with his boss and introducing him to yoga.

Colleagues interviewed by Reuters said he had a reputation for integrity and discretion.

Adhia was named revenue secretary in Sept. 2015, reporting formally to Finance Minister Arun Jaitley. In reality, he had a direct line to Modi and they would speak in their native Gujarati when they met to discuss issues in depth.

In the world's largest democracy the demonetisation was revolutionary: it called into question the state's promise to "pay the bearer" the face value on every banknote.

At a stroke, Modi scrapped money worth 15.4 trillion rupees ($220 billion), equal to 86 percent of cash in Asia's third-largest economy.

The idea is backed by some economists, although the speed of its implementation is widely seen as radical.

"One is never ready for this kind of disruption - but it is a constructive disruption," said Narendra Jadhav, a 31-year veteran and former chief economist of India's central bank who now represents Modi's party in the upper house of parliament.

Modi, in his TV address to the nation, cautioned that people could face temporary hardship as replacement 500 and 2,000 rupee notes were introduced. Calling for an act of collective sacrifice, he promised steps to soften the blow for the nine in 10 Indians who live in the cash economy.

"BIGGEST, BOLDEST STEP"

Immediately after the address, Adhia sent a tweet: "This is the biggest and the boldest step by the Government for containing black money."

The boast harked back to Modi's election vow to recover black money from abroad that had resonated with voters fed up with the corruption scandals that plagued the last Congress government. Yet in office, he struggled to keep his promise.

Over more than a year, Modi commissioned research from officials at the finance ministry, the central bank and think-tanks on how to advance his fight against black money, a close aide said.

He demanded answers to questions such as: How quickly India could print new banknotes; how to distribute them; would state banks benefit if they received a rush of new deposits; and who would gain from demonetisation?

The topics were broken up to prevent anyone from joining the dots and concluding that a cash swap was in the offing.

"We didn't want to let the cat out of the bag," said a senior official directly involved. "Had people got a whiff of the decision, the whole exercise would have been meaningless."

Under Adhia's oversight, the team of researchers assembled and modeled the findings in what was, for it, a theoretical exercise.

It was made up of young experts in data and financial analysis; some ran Modi's social media accounts and a smartphone app that he used to solicit public feedback.

Yet for all the planning, Modi and Adhia knew they could not foresee every eventuality, and were willing to move swiftly.

The announcement caused chaos, with huge queues forming at banks when they reopened after a short holiday.

New 2,000 rupee notes were hard to come by and barely any new 500 rupee notes had been printed. India's 200,000 cash dispensers could not handle the new, smaller, notes and it would take weeks to reconfigure them.

Filling ATMs with the 8 trillion rupees ($117 billion) in new banknotes that the finance ministry reckons are needed to restore liquidity to the economy is even trickier.

In a best-case scenario, in which India's four banknote presses churned out new 500 and 2,000 rupee notes designed to replace the abolished ones, it would take at least three months to hit that target.

SECRECY PARAMOUNT

Secrecy was paramount, but clues had been left.

Back in April, analysts at State Bank of India said that demonetisation of large-denomination notes was possible.

The Reserve Bank of India, the central bank, also disclosed in May that it was making preparations for a new series of banknotes that were confirmed in August when it announced it had approved a design for a new 2,000 rupee note.

The printing presses had only just started turning when the media finally started to run with the story in late October.

"The plan was to introduce it around Nov. 18, but there was a clear sign that it could get leaked," said one person with direct knowledge who, like others interviewed by Reuters, asked not to be named due to the sensitivity of the matter.

Some officials in the finance ministry had expressed doubts about scrapping high-value notes when the idea came up for discussion. They now feel resentment at the secrecy in which Adhia rammed through the plan on Modi's orders.

They also say the plan was flawed because of a failure to ramp up printing of new notes ahead of time.

Other critics say the Adhia team fell prey to a form of "group think" that ignored outside advice.

In the words of one former top official who has worked at the finance ministry and central bank: "They don't know what's happening in the real world."

(Additional reporting by Rajesh Kumar Singh, Manoj Kumar, Mayank Bhardwaj and Neha Dasgupta in New Delhi, Suvashree Choudhury in Mumbai and Subrata Nagchaudhury in Kolkata; Writing by Douglas Busvine; Editing by Mike Collett-White)

South Korea Picked a Tranquil Time to Impeach Its President

BY EMILY TAMKIN-DECEMBER 9, 2016

South Korea’s National Assembly voted to impeach president Park Geun-hye on Thursday, with 234 of 300 lawmakers voting to oust the embattled leader who is stung by corruption allegations.

South Korea’s prime minister, Hwang Kyo-ahn, now acting leader, apologized to the Korean people and said he feels a “deep responsibility” for all that has transpired.

According to prosecutors, Park allegedly shared confidential documents with a friend, on whose behalf she got money from business groups. A more lurid version is that Park was basically under the control of that friend, Choi Soon-sil, the daughter of a cult leader. In 2007, a diplomatic cable by the then-U.S. ambassador to South Korea, released by WikiLeaks, flagged the relationship between Park and Choi Tae-min, the cult leader.

“Park has also been forced to explain her own past, including her relationship some 35 years ago with a pastor, Choi Tae-min, whom her opponents characterize as a ‘Korean Rasputin,’ and how he controlled Park during her time in the Blue House when she was first lady after her mother’s assassination,” the cable read.

Park, daughter of former president Park Chung-hee, had offered to resign as the scandal grew. Her opponents said that resignation was an all too easy way out. They wanted her impeached.

And now she has been. Her future is now in the hands of the constitutional court, which will have six months to decide what to do with her. If it decides on impeachment, she will be removed from office, and South Korea will hold snap elections. If it decides against it, she will be reinstated to the presidency, where she will likely be able to remain until the end of her term in February of 2018.

South Korea’s domestic politics will be in a for turbulent few months, then — just as the arrival of a new American president promises to ratchet up uncertainty over Asia’s future and Seoul’s place in the now-wheezing U.S. pivot to Asia.

Photo credit: South Korean Presidential Blue House via Getty Images

Maya or Mayam – Call it what you may?

In Buddhism, Maya is both the name of the mother of The Buddha, but also in Pali it speaks of distortions (vipallasa) rather than illusion (magic).

by Victor Cherubim- Dec 9, 2016

( December 9, 2016, London, Sri Lanka Guardian) What we see and what we get is generally altogether different. You don’t need to know who said the world is an illusion, you perhaps know it is? An easy explanation of this is the use of “Exercise Machines” for weight loss. They only reduce fat from the skin of our bodies, not the “visceral” fat stored in the body. Research states: “reducing fat under the skin does not automatically reduce the risk of developing non communicable diseases such as diabetes, heart disease and high blood pressure.”

If we know through our intelligence and also our gut feeling that something is an illusion, how then do we get trapped into believing and acting accordingly or differently?

This is the great “con” of the world in which we live. It is simultaneously the essence of being, as some sages believe. We have the ways and means today to make black look white and white look black. We have subliminal advertising to do the trick. We have techniques such as constant repetition of a “mantra” or any statement to make our brain think and act differently. Besides, we have what is called, “frequency illusion.” Here the brain seeks out information that is related to us. What about “confirmation bias” when we surround ourselves with people and information that matches our beliefs, that confirm what we already think. We are thus “conditioned” and this is the world in which we live. We forget to challenge the decisions that our brain makes partly because of our laziness or rather our complacency and partly due to other neurological reasons.

The daunting reality according to Harvard Business Review is that “enormously important decisions made by intelligent, responsible people with the best information and intentions, are sometimes hopelessly flawed”.

Do we need course correction?

Donald Trump’s strategy in winning the Presidential nomination was undoubtedly “to bring jobs back to “job starved” America. But many know that it was “technology” that drove jobs out. It was outsourced abroad, not only due to cheap labour in China. It didn’t mean America was not great in technological advancement, but China was “prepared” to accept American technology to produce American imports. 

This is business. Now perhaps with Donald Trump’s nomination of Treasury Secretary Steven Mnuchin and Secretary of Commerce Wilbur Ross, it is hoped it won’t be a tall order to help boost jobs in the US. But, at what cost saving?

If we think in blinkers we become conditioned to a blinkered approach?

Simultaneously, is everything to be judged by what we see on the surface?

Besides, nothing in life is taken for granted for ever, so they say?

We now note that Angela Merkel has pledged to tighten immigration after her decision to welcome more than 890,000 asylum seekers to Germany last year.

This policy was attacked inside and outside her Christian Democratic Union with CDU suffering poor state election results earlier this year. Now the German Chancellor Merkel in her bid for a fourth four-year term has said she wants to ban “burkas” if she is elected next year. She says in an interview in August 2016 that women wearing a full bodied veil (burka) do not belong in Germany.

What is Maya?

Maya or Mayam literally means “illusion” or “magic”. It has multiple meanings in Indian philosophies and religions. In the Upanishads, depending on the context, Maya literally implies “extraordinary power and wisdom”. In later Vedic texts and modern Indian literature,”maya” connotes a “magic show, an illusion where things appear to be present, but are not what they seem.”

In Buddhism, Maya is both the name of the mother of The Buddha, but also in Pali it speaks of distortions (vipallasa) rather than illusion (magic).

For us laymen and women, in “Maya” we become attached to people, places and things and these bonds affect our judgment. This is particularly noticeable when we grow old. However, Lord Buddha commended us be “detached” as life is impermanent.

India doctor to operate on '500kg' Egyptian woman

COURTESY: DR MUFFAZAL LAKDAWALAImage captionEman's family says she hasn't been able to leave home for 25 years now

7 December 2016

An Egyptian woman, believed to be the world's heaviest woman at 500kg (1,102lb), will soon be flown to India for weight reduction surgery.

Eman Ahmed Abd El Aty, 36, will be flown on a chartered plane to Mumbai where bariatric surgeon Dr Muffazal Lakdawala plans to operate.

The Indian embassy in Cairo initially denied her visa request as she was unable to travel there in person.

After the surgeon tweeted to India's foreign minister that changed.

India's External Affairs Minister Sushma Swaraj, who is herself in hospital awaiting a kidney transplant, was quick to respond with an offer of help.

Ms Abd El Aty's family says she hasn't been able to leave home for 25 years now and claims she weighs 500kg.

If the claim about her weight is true, then that would make her the world's heaviest woman alive as the current Guinness record holder is Pauline Potter of the United States who weighed 292kg (643lb) in 2010.

• Mum gives birth to ‘heaviest baby’ in India, weighing 15lb
• 'World's fattest man' undergoes surgery
• Global obesity boom 'fuelling rise in malnutrition'

Dr Lakdawala, who has performed weight reduction surgeries on Indian minister Nitin Gadkari and Venkaiah Naidu, told the BBC that from looking at Ms Abd El Aty's medical reports and photographs, he believes that she weighs at least 450kg.

Ms Abd El Aty's family says she weighed 5kg (11lb) at birth and was diagnosed with elephantiasis, a condition in which a limb or other body parts swell due to a parasitic infection, Dr Lakdawala told the BBC in a phone call from Mumbai.

"They said when she was 11, she had gained immense weight because of which she could not stand up and would crawl.

"And then she suffered a stroke which left her bedridden and she has not been able to leave home since then."

Ms Abd El Aty is cared for by her mother and sister.

COURTESY: DR MUFFAZAL LAKDAWALAImage captionEman Ahmed Abd El Aty, who is 36, is being looked after by her mother and sister

Dr Lakdawala said Ms Abd El Aty's sister got in touch with him in October and he began raising money to bring her over to Mumbai as her family was too poor and unable to bear the costs of chartering a flight.

"We are expecting to fly her to Mumbai next week as soon as the formalities are over," he said.

Dr Lakdawala believes that Ms Abd El Aty does not have elephantiasis, but suffers from obesity-related lymphoedema which causes gigantic swelling of legs.

"She would need to remain in Mumbai for two to three months for the surgery and treatment after which she would be able to return home, but it would take two to three years to bring her body weight under 100kg," the surgeon said.

"I'm hopeful that I will be able to help her, I won't say I'm confident because I think that would be an exaggeration," he added.

What is bariatric surgery?

Bariatric surgery, also known as weight loss surgery, is used as a last resort to treat people who are dangerously obese and carrying an excessive amount of body fat.

In the UK, this type of surgery is available on the NHS only to treat people with potentially life-threatening obesity when other treatments have not worked.

Around 8,000 people a year in the UK currently receive the treatment.

The two most common types of weight loss surgery are:

• Gastric band, where a band is used to reduce the size of the stomach so a smaller amount of food is required to make someone feel full

• Gastric bypass, where the digestive system is re-routed past most of the stomach so less food is digested to make someone feel full

Where are you on the global fat scale?

SRI LANKA: Aspirations to justice defeated at all level

A Statement by the Asian Human Rights Commission on the occasion of Human Rights Day

In Sri Lanka, what remains widespread in political, social, and cultural life is widespread shameless impunity relating to every form of abuse of human dignity and human rights. This widespread shameless impunity is also widespread in the entirety of the legal system in Sri Lanka.

It has come to a point that it is no longer possible to obtain justice for any kind of human rights abuse in which the State officers, including the security officers are involved. The awareness that such impunity exists has itself become an encouragement for violations of people’s rights throughout the country. Wounded by such abuse, when the people go to courts, in almost all the instances they are defeated. The entire justice system is so arranged to defeat the aspirations of the people for justice.

The delay in the system of adjudication is a sword hanging on the neck of every citizen who seeks justice. A person who goes to seek justice after having suffered a serious form of injustice is made to go around the circle in the court system for years and years at the end of which there is very little to expect, except the rejection of the demands that he or she has made from the system to give him or her justice. The political system benefits from this system of injustice and it will not be possible at all to make the political system function in any efficient manner for the benefit of the people so long as such a system exists.

In the past, the Asian Human Rights Commission has published details of cases, constantly, in order to illustrate how human rights of the people are abused and also how, at the end, the victim who seeks justice is humiliated and frustrated by the very system that is supposed to give justice.

On the occasion of Human Rights Day, 2016, the Asian Human Rights Commission is publishing a report on the failed justice system in Sri Lanka so that this issue – of the utter lack of possibility of gaining respect for human rights – can become a matter of public discussion, locally and internationally.

There is no future possibility of respect for human rights and justice within Sri Lanka so long as the fundamental reform of the justice system is not undertaken. However the political system that benefits from the system of injustice that remains in the country will not lift a finger to reform this system.

The least that can be done is to leave a record of this enormous system of injustice that remains within the country. Therefore, we publish this Report titled Crisis of the Justice System in Sri Lanka and call upon everyone with any decency and a desire for a change to reflect on this problem.

Access the full Report: http://www.humanrights.asia/news/ahrc-news/pdf/think-tank-outline

Think Tank- Outline for study on Sri Lanka.pdf by Thavam Ratna on Scribd

Democratising Majority Rule

Photo courtesy NewsIn.Asia

SOMAPALA GUNADHEERA on 12/08/2016

Sri Lanka has been exposed to veiled despotic and corrupt rule for some time. The malady persisted through the last regime and the people joined hands, two years back hopefully, to usher in a new era of liberty and good governance. Though the stress appears to have been noticeably reduced by more liberal policies and attitudes of the new regime, the root causes behind the problems continue to demonize governance.

Democratising Majority Rule.docx by Siva Thavam on Scribd

Food For Thought For The Drafters Of New Constitution!

By Afreeha Jawad  –December 8, 2016

Afreeha Jawad

Constitutional drafting warrants an extra ordinarily unique mindset where personal prejudices, narrow chauvinistic outlook and playing to the gallery for electoral benefits are cast aside. A broader vision based on egalitarianism, justice and social development needs prioritization – of which was neatly avoided in past constitutional engagements. Towards this end the grassroots need to be educated – ideal benchmark for this being  historical inspiration where people’s awareness is directed to a  socio/ political history that  once was in pre-colonial times when an all-inclusive system prevailed until the britisher’s unitary state. The study of history is to learn of the past, look at where we are in the present and locate ourselves in the future.

With all the complexities prevalent in pre-independence times of ethnic groups, and the multitude of castes ( discreetly operative now), there was a binding factor that glued these differences and brought about a complete, composite whole. The system’s restrictions in upward social mobility where the inheritance of cast based jobs is not writer concern in this article but despite that glaring social misgiving social diversity was upheld. None rose against the northern Tamil kingdom  nor the sinhala kings that married Tamil women –  the binding factor being royalty on both sides of the social dichotomy giving parity of status.

Nor was there any constitutional insistence that Buddhism should be prioritized over all other religions. Constitutions in fact were non – existent. What followed was absolute peace. The western sensitivity to Post-colonial systemic flaws of majority hegemony has led them into ground-breaking areas of sublime concepts such as egalitarianism or equality social justice and  societal development directed at parity of status to efface high degree polarization.

However, Buddhism needs to be prioritized for the survival of socio/economic/ political / religious elite. Same applies to Islamic states – all of whom will be marooned if not for religious identity. It is the height of irony when national characteristics are lying, cunning, deceit, opportunism, hatred ,revenge and jealousy among other vices,  how come that country calls itself a Buddhist, Muslim or Christian country? National characteristics contradict religious principles yet the ridiculous insistence on prioritizing religion!  This proves that identity politics is the name of the game. Religion and politics are twin brothers and its dependence on one another is mutual that sustains the system. The essence of all religions is to bring out the best in man instead we see the worst. What remains is political Buddhism, political Islam and so be it with Christianity.

The Buddha is an embodiment of truth who preferred the beast infested wilderness over the palatial luxury and worldly kingdom of Dambadiva. He no doubt aligned himself with a higher purpose for the greater good of mankind sacrificing even family, kith and kin. Regrettably, politicization of this great personage  consolidates him as being representative of only the Sinhalese! This was very much present during the infamous Rajapaksa era when the Buddha and the temple were played around with for racial stimulation and power consolidation. If ever Wigneswaran opposed  to the Buddha statues in Jaffna, it is not because he loves the Buddha less but for certain his hate towards those statues  being made use of as representative of Sinhala colonization in the north  which in  historical fact was a Tamil kingdom under kings like Pararajasingham and Sankili, which history risks effacement under Sinhala nationalism. So apart from the exposure of a cast based society ,the clarion call to relieve history from the school curriculum as was once done only to be re-introduced much sooner than later.
 The tendency towards emotionally driven arguments overlooking rationality on the subject of northern Tamil rule of the past and even Tamil kings that governed this country may not sit well on the Sinhala palate.  Yet, fact over fiction prevails. Moreover, the pluralistic mindset and the graciousness of the ancient Sinhalese in accepting diversity is amply displayed. Federalism itself was nothing new to them. This very liberal mental elasticity, fast shrinking, is still an undying factor to this day in localities not very urban and a continuation of the  Rajapaksa regime may have transformed this  into a negative, racist, homogenous social whole. It is up to the present government to use  this grand period in history for reconciliation – an attempt so far overlooked by those in power. Talking of reconciliatory measures, it brings to mind a prudent presidential pronouncement.
 Sirisena once asked, “how would we feel if our lands were taken over by the military and we had no home to call our own?” This unfortunately was not repeated though it is a strong point in reconciliation. President himself may have been unaware of reaching out to the hermeneutical experience inculcated into this writer’s mind during her post graduate studies at the Colombo university. To view the experience of the aggrieved party as being one’s own was philosopher Hermenes’ trusted ideal. If the Sinhalese were a minority under Tamil hegemony batting a reversal, a replica of Wigeneswaran in the sinhala camp is to be expected.

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Establishment blues vs. Central Bank’s independence 


2016-12-08

Strongly denying the allegation that the Central Bank is politicized, Governor Dr. Indrajit Coomaraswamy last week told reporters in Colombo that it is not his institution but what is politicized is the country’s whole economic decision-making system. 

According to Dr. Coomaraswamy, this is the perennial challenge that he encounters in carrying out his role as the governor of the Central Bank.

 Hence, he called for a proper balance between economics and politics to employ prudent macroeconomic management as the country is now exposed to global capital markets and credit rating agencies more than ever, who could treat Sri Lanka brutally if the economy is badly handled.

 In response to the recent allegations levelled at his institution, Dr. Coomaraswamy stressed he does not see any politicization in the Central Bank as claimed but pledged that he would make an attempt to depoliticize the economic decision-making system plagued by undue political interferences for over 70 years by successive administrations.  

 “We need to depoliticize economic decision-making more. In fact, I have seen some commentary that the Central Bank is politicized. I don’t see that. You know I have been here for four or five months and the Monetary Law Act (MLA) is fairly clear in terms of the responsibilities of the Monetary Board and Central Bank,” he said.  

 The Central Bank recently came under fire by the country’s vocal Finance Minister Ravi Karunanayake, who repeatedly accused the monetary authority for being politicized while attempting to encroach upon the affairs of the Monetary Board of the Central Bank, risking the independence of the institution. 

  The budget for 2017 presented by Karunanayake last month in fact contained several proposals that could undermine the authority of the Central Bank.

 The budget proposed to increase the capital levels of the banks and primary dealers while directing the banks to provide loans to areas of the economy the government deemed important. These clearly fall under the Central Bank’s purview as the banking sector regulator.

 It also proposed to set up a new payment and settlement system bypassing the Central Bank, which is responsible for any transaction involving the country’s financial system by law.    In a more recent development, the government was reported to have dictated foreign exchange management to the Central Bank as the governor was reportedly questioned by Prime Minister Ranil Wickremesinghe and the finance minister over his failure to control the weakening of the rupee against the dollar, which fell to Rs.150 a dollar last week.  Further, during the monthly economic affairs committee meeting held in the parliament complex last week, both Wickremesinghe and Karunanayake were reported to have charged the Central Bank staff for failing to implement the government policy decisions. 

   The Central Bank, according to the MLA, is not set up to carry out the government’s policy agenda but to function independent of any interferences and to give advice to the government if and when required on the economic policy.   But the finance minister appears to think that the Central Bank should only be monitoring the monitoring policy measures that the government wants to implement but not to advise on how to run an economy.

 In response to this criticism, Dr. Coomaraswamy defended his staff for discharging a highly professional job at the Central Bank as required by the MLA.

 “The members of the Monetary Board and Central Bank staff have been very professional. They work with great technical expertise to carry out the functions that have been given to the Central Bank in the MLA.

 So, I don’t see any politicization in the Central Bank.

 For me, really the challenge is to break the habit of the last 60 – 70 years, which is the highly politicized economic decision-making in this country. That is really the challenge, to change the balance between politics and economics,” he remarked.  Now, with these developments, many fear that the Central Bank’s independence is threatened as never before but it is ironical that the very people who came to power promising an independent Central Bank have conveniently forgotten their pledges and going in the reverse direction.  Dr. Coomaraswamy, a respected economist, took up the top job in July this year at the request of President Maithripala Sirisena. In his inaugural speech as the governor of the Central Bank he said it was their job to convince politicians that good economics is good politics. 

He however acknowledged that politics cannot be taken out of economics completely.

 “If it’s worthwhile for me to be here, I need to try to make that change. The Monetary Board is committed in doing that. I think my colleagues in the Central Bank are committed in doing that. That’s what we like to do,” he noted.

Non-existing ethnic problem in Sri Lanka

Featured image courtesy Justin Tallis – WPA Pool/Getty Images

DEVANESAN NESIAH on 12/08/2016

In his article under the above title in the Island of Saturday 3^rd December, my old friend P.S.Mahawatta pays me two inaccurate compliments. Firstly, he says, using the present tense, that I am a very good chess player. I am not. All my chess trophies were won several decades ago and it is nearly half a century since I was the National Chess Captain. He also attributes to me the following quotation, “Our children and our children’s children should be able to say with one voice – Lanka is our great Motherland and we are one people from shore to shore; we speak two noble languages but with one voice; and this constitution that our fathers fashioned together in times of yore shall serve our nation’s charter for the years to be”. This quotation is from a submission made by a group of senior citizens of Jaffna to the constitutional council in 1971. This group, the remnants of the Jaffna Youth Congress that peaked in the 20s, included my father but not myself. I believe it was my father who drafted the memorandum. While I endorse the sentiments expressed in the quotation, I cannot claim credit for it.

I disagree with P.S.Mahawatta on whether we do have an ethnic problem. The succession of ethnic violence and ethnicity based political crisis and the long civil war surely prove that we do have an ethnic problem. Perhaps if the policy of the Jaffna Youth Congress (not to be confused with the communal minded All Ceylon Tamil Congress) of teaching Sinhalese and Tamil in all schools in Sri Lanka as compulsory subjects had been adopted, there may have been no ethnic problem. In fact all leading schools in Jaffna taught Sinhalese as a compulsory subject till 1956.

I do hope that the efforts of the present government to resolve the ethnic problem succeed. But given our recent history, it will be a difficult task. A new constitution may be needed as part of the solution.

At the time of independence the three major components of the ethnic problem were citizenship, language and colonisation. The citizenship issue came to a head immediately after independence with the Muslim members of parliament and the leading Tamil MPs joining the Government to deprive the Indian Tamils of citizenship and voting rights. The Government was motivated by the fact that they had a very narrow majority in Parliament and if all the minorities and the left parties joined hands the Government party may have lost the next elections. The biggest losers were, of course, the Indian Tamils who became almost unrepresented in Parliament. Despite the loss of the bulk of the voters, the electorates were not re-demarcated with the result that in the following election virtually all the seats previously won by Indian Tamil candidates were secured by Sinhalese candidates of the governing party. In effect, the voting power of the Indian Tamils was transferred to the Sinhalese voters of the electorates previously dominated by Indian Tamil voters. This situation resembled that which prevailed in the USA at the time of US independence. In that constitution Black American slaves were counted as three-fifths of a human being for the purpose of demarcating electorates but they remained voteless. There too the effect of this rule was to transfer the potential voting power of the Blacks to the Whites of the slave owning states to the detriment, primarily of the slaves but also of the White voters of the northern states without slaves. In the USA the abolition of slavery following the civil war sharply tilted the balance in favour of the northern states. In Sri Lanka, there was no such dramatic change but, following the Sirima-Shastri Agreement, large numbers of Indian Tamils went back to India and, correspondingly, those who remained gradually gained citizenship and voting rights.

In Sri Lanka an important consequence of depriving the Indian Tamils of citizenship and voting rights was to weaken the position in Parliament of the left parties (LSSP and CP) and other Tamil speaking minorities, especially the Sri Lankan Tamils. In fact, this was anticipated by a fraction of the All Ceylon Tamil Congress (ACTC) that broke off under the leadership of S J V Chelvanayagam and formed the Federal Party (ITAK). The ACTC joined the government. Unfortunately, at the very next election in 1952, it was the Tamil party which joined the government, the All Ceylon Tamil Congress that fared better, particularly in Jaffna, and even Chelvanayagam lost his seat. The Sri Lankan Tamil voters were slow to see the political consequences of the loss of citizenship and voting rights of the Indian Tamils, which greatly facilitated the movement for Sinhala as the only official language of the country. This movement was led by the newly formed SLFP under S W R D Bandaranaike but quickly followed by the UNP. There were inevitably other consequences, such as recruitment to the public services, all of which worked against the interests of the Tamil speaking people. The Muslim leaders voted for Sinhala only except for two Members of Parliament from the East and one Senator (A M A Azeez), originally from Jaffna, who resigned from the UNP on this issue.

The disenfranchisement and loss of voting rights of the Indian Tamils led to the promotion of the idea of a predominantly mono-ethnic Sinhalese nation ruling this island. The settlement of Sinhalese colonists, especially in the predominantly Tamil speaking East was accelerated, presumably with the view to making the East a Sinhalese majority. At present, the population of the East is almost equally divided between Sinhalese, Muslims and Tamils. Clearly, there is an ethnic problem in an island that was almost free from one prior to independence.

There were attempts to resolve the problem e.g. through negotiations between Bandaranaike and Chelvanayagam leading to the Bandaranaike-Chelvanayagam Pact, but this pact was unilaterally torn up by Bandaranaike in 1958. A decade later, there were negotiations between Dudley Senanayake and Chelvanayagam leading to the Dudley-Chelvanayagam Pact, but this too was unilaterally repudiated by Dudley Senanayake. Much later, in the early 80s, in the middle of the civil war, India intervened and President J R Jayawardena signed an agreement with India’s President Rajiv Ghandhi to introduce the 13^th amendment to the Sri Lankan Constitution with a view to resolving the ethnic problem. But this amendment was not effectively implemented, and the war resumed till it eventually ended in the year 2009 with the destruction of the LTTE that had claimed to fight on behalf of the Tamil people.

The end of the war did not resolve the ethnic problem, but the present administration that was elected in 2015 is making some attempts to resolve the problem. Hopefully this will succeed. However, given our recent history it will be a difficult task. In any case, what is clear is that the ethnic problem has not yet been resolved. Its resolution requires a new constitution in line with the quotation in the first paragraph.

Those who enjoyed this article may find “National Reconciliation – A pipe dream unless inclusivity achieved” and “Black July, Government promises and our future” illuminating.