Sunday, September 17, 2017

International Book Fair In Colombo & The Thirst For (Critical) Knowledge

By Siri Gamage –SEPTEMBER 17, 2017

Siri Gamage

This month the annual international book fair is being held in Colombo. It is reported that hundreds and thousands Sri Lankans of all ages will flock to Bandaranaike International Sammanthrana Salava (Conference hall) to taste a sample of books published by local and international writers. Listening to Mr Vijitha Yapa in a recent Pathikada interview, it seems that the book publishers association of Sri Lanka have gone into much trouble to organise this mammoth event for the benefit of the reading public in Sri Lanka and visitors to the Island. A few notable books are to be launched during the book fair and school children in particular gets a discount, as are others in some measure.

According to Mr. Yapa, people still want to buy books and read even though the Internet has made inroads into the minds of reading public. Newspapers are also still popular among the readers in this Internet age when in other countries newspaper sales are declining. Among the books available for sale are those published in English and local languages. I am not sure if there are books in other world languages also for sale but a large number of Sinhala and Tamil translations will be.

Sri Lankans have been prolific writers and readers for centuries. They have put pen to paper to record their thoughts, experiences, imaginations etc. using whatever the languages they were familiar with and learned. Before the invention of pen and paper by the westerners, Sri Lankans used a traditional method and style of writing. Such writings pertaining to fields such as religion, medicine, history, are deposited in collections of Ola leaf or pus kola poth bundles. Writing, reading, and reflecting on human life, experiences, challenges, defeats and victories are part and parcel of a people who have developed their cultures and knowledge tools for centuries.

Writing and reading what we experience today or our ancestors experienced yesterday through fiction or non fiction provides not only much food for thought for us to be able to navigate our own lives but also important leads for next generations. Moreover, reading stimulates our critical faculties to look beyond day-to-day events and discourses in order to be able to detect ‘enduring patterns’ in our socio economic, political and cultural systems. The same applies to reading in international languages. When we read books in English or other world languages, we not only acquire insights about life experiences of other peoples and nations but also about their social systems along with specific knowledge fields such as various disciplines, e.g. social sciences, humanities.

However, when we read such books it is important to understand that knowledge imparted by books and other publications is not neutral and objective as some may want to portray. Writers who have certain biases in choosing the subject, topic, characters, the plot etc produce knowledge in specific social contexts. Writers are inclined to include certain messages in their work, whether they pertain to our economic, political, cultural and other fields. Some writers tend to go with the flow and depict human life in its romantic and fascinating dimensions. Others tend to be critical of existing social order due to its inequalities and imperfections and imagine or propose alternative possibilities. This is not unusual because there is a close nexus between knowledge and power as Michael Foucault (1926-1984) has amply demonstrated.

Writing itself is a powerful activity. One not only imparts messages –latent or manifest – to the reading public through writing but also influences the readers to change their thinking habits and patterns in a certain way. Moreover, books encourage readers to become writers thereby continuing the tradition of scholarship. Some writers have the abject intention of cultivating an audience. Others publish books on the basis of their continuing scholarly and creative activities as they evolve. Yet others are one-time publishers with no continuity or consequence.

It is pleasing to see that there are hundreds if not thousands of translations of books published in English and other world languages in the country and in the exhibition. While many young and old do not have the capacity to read in English due to lack of desire or circumstance, availability of translations make it possible for such readers to access world knowledge in their own languages. Thus the authors who translate books from other languages are doing an immense service to the reading public who is otherwise disenfranchised. Translations assume further significance because there is a concerted effort by the native English speaking countries to hegemonise the world of knowledge and knowledge practices by making English the only world language. This effort has economic and political implications to the advantage of native English speaking countries. This tendency also has the potential to erase the language diversity existing in the world while encouraging those who speak other languages to assimilate knowledge (ideas, arguments, perspectives, theories, methodologies) embodied in the books published in English to the exclusion of others. Language, literature, art, culture, creative work and other knowledge fields cannot be restricted to one language. Human imagination exists in multiple forms and they are expressed in multiple languages as a matter of course.

There seem to be a tendency in post colonial societies such as Sri Lanka to consider that the knowledge available in English as superior, objective and reflecting the only truth compared to knowledge available say for example in Indian, Sinhala, Japanese or Chinese languages. This is a myth created by ‘modernist thought’ during the British colonial period as part of the colonial project. Through my academic publications, I try to show this is not the case at least in social science writings. Knowledge available in social sciences in the English medium is PROVINCIAL rather than UNIVERSAL as writers such as Dipesh Chakrabarthy has shown.

Vision 2025: Part 1: Need for moving from a wish list to a concrete plan

Hosting the country with a series of vision plans

Monday, 18 September 2017

The Unity Government released its newest economic policy statement titled V2025 – the marketing tag for the goals it has set for realisation from 2017 to 2025 – two weeks ago.

Indeed, this has been the fourth of such statements which it has placed before the people during the last two-year period.

Vision 2025 Part 1 Need for moving from a wish list to a concrete plan.docx by Thavam on Scribd

Sri Lanka: V2025 — Dreams Vs. Reality

At present, the country’s per capita income is around USD 4,000. In order to reach the projected per capita income of USD 5,000, as envisaged in V2025, the GDP growth rate should be at least 8 percent a year in the next three years, compared with the growth rate of 4.4 realized last year and 4.7 percent estimated for this year. In other words, GDP growth rate should almost double from the present low growth trajectory.

by Prof. Sirimevan Colombage-Sep 18, 2017

( September 18, 2017, Colombo, Sri Lanka Guardian) The government launched a new policy document titled ‘V2025: A Country Enriched’ early this month. The launching event seemed to have been designed to attract the youth with choreographic acts in an ultra-modern stage setting. The few youngsters who appeared along with President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe on the stage posed questions to the two leaders.

The V2025 document starts with the statement, “Our vision is to make Sri Lanka a rich country by 2025. We will do so by transforming Sri Lanka into the hub of the Indian Ocean, with a knowledge-based, highly competitive, social market economy”. This vision along with the pledges that followed make the document impressive. Nevertheless, the feasibility of its ambitious targets needs to be considered in the context of the county’s political and economic realities.

Problems of implementation

This is the third policy document presented by the government during the last two and half years. The Prime Minister presented the first two economic policy statements to the Parliament in November 2015 and October 2016. The contents of all these statements are more or less similar. Most of the proposals mentioned in the earlier two statements were not implemented. Had they been implemented, of course, the need for a third one would not have arisen. Releasing the same types of statements at short time intervals in this manner causes market uncertainty and confusion discouraging domestic and foreign investors.

The brief booklet, consisting of around 50 pages, has a long list of wish list to be fulfilled during the next 8 years. Surprisingly, it does not elaborate any specific policy strategies to be implemented to achieve the envisaged objectives. It also does not contain any statistical tables or charts which would have been useful to substantiate the facts behind the Vision.

Macroeconomic vulnerabilities

Although strengthening the macroeconomic framework is cited as an important element in the document, no attempt seems to have been made to link the pledged progress with the macroeconomic setting, similar to the previous two statements. This is a common drawback that could be observed in the economic policies implemented in Sri Lanka in recent decades.

This is in contrast with the development mechanism applied in the aftermath of economic liberalization in 1977. The National Planning Department of the then Ministry of Finance and Planning compiled the Public Investment Programme in collaboration with the relevant line Ministries. It was a kind of an indicative planning mechanism devised to go hand in hand with the free market economy so as to facilitate private sector activities.

Such macroeconomic framework ensured resource balances while carrying out the development plans. Of course, resource balancing was not fully achieved during the implementation stages due to the impending financing gaps in fiscal operations and balance of payments, and the resultant inflationary pressures. Nevertheless, the macroeconomic framework provided a safety valve to avoid aggravation of such imbalances. Eventually, the planning outfit of the Ministry of Finance disappeared some time ago due to changes in the government and for various other reasons. Economic policies and projects implemented without a sound macroeconomic framework usually end up with resource imbalances, inflation, debt accumulation and a host of other problems, as experienced in recent times.

Over-optimistic growth targets

The document states, “Over the next three years, within the 2025 Vision, we will implement a comprehensive economic strategy to address constraints to growth. We will aim to raise per capita income to USD 5,000 per year, create one million jobs, increase FDI to USD 5 billion per year and double exports to USD 20 billion per year. These intermediate targets lay the foundation for our Vision 2025: Sri Lanka to become an upper-middle income country.”

At present, the country’s per capita income is around USD 4,000. In order to reach the projected per capita income of USD 5,000, as envisaged in V2025, the GDP growth rate should be at least 8 percent a year in the next three years, compared with the growth rate of 4.4 realized last year and 4.7 percent estimated for this year. In other words, GDP growth rate should almost double from the present low growth trajectory.

The country will reach the upper-middle income category by 2025, according to the document. This means that per capita income should be over USD 12,000 by that year implying a fourfold increase from the present level. In order to attain that target, GDP should grow by at least 15 per cent annually during the next 8 years. This is more than a threefold increase of the present GDP growth rate which is running around 4.5 percent.

It is miraculous to expect such swift growth within a short time span of 3 – 8 years. The average GDP growth rate achieved throughout the last four decades following the liberalization of the economy in 1977 is only 5.1 percent a year. The country’s potential growth remains only around 4-5 percent. The reason is that Sri Lanka has failed to move from its traditional factor-driven growth model to technology-driven growth model, unlike the fast-growing East Asian economies. Hence, raising GDP growth to 8 percent as envisaged in the new document does not seem to be feasible.

More importantly, the GDP growth predictions implied in the Vision document are far above those can be found in the Staff Report of the International Monetary Fund (IMF) for the second review of the Extended Fund Facility concluded in June 2017. The annual growth projection presented in that report (compiled in consultation with the local authorities) for the period 2018-2021 is only 5.0 percent, which appears to be more realistic. If we use these figures, the maximum per capita income that could be reached in 2020 will be around USD 4,600, which is lower than the level envisaged in the Vision.

Export projections are over-ambitious

Doubling of annual export earnings from the present level to USD 20 billion, as expected in the V2025,will require an annual export growth of at least 25 percent. Again, it contradicts with the official projections given in the IMF report which forecasts an annual export growth of only around 5 years for the next four years.

It is illusive to expect doubling of export earnings, considering the dismal performance of the export sector in recent decades. Although industrial exports account for nearly 80 percent of total export earnings, Sri Lanka still depends on low value added, low-tech and labour intensive basic industries, mainly garments which account for almost one half of total export earnings. Other industrial exports consisting of food and beverages, rubber and leather products, machinery and transport equipment and petroleum products too are primary level industries.

The East Asian countries, by contrast, phased out such primary industries decades ago and diversified their industrial structure towards high-tech products such as electronic and electric equipment, vehicles, computers, ships, medical apparatus, and optical and scientific equipment.

Given our traditional and static industrial structure, a miraculous growth in exports cannot be expected in the next few years. The much talked about achievements such as GSP+ or the planned free trade agreements like the Economic and Technical Cooperation Agreement (ETCA) with India can do very little to boost the export sector. The reason is that export constraints arise mainly from domestic factors rather than from limited market opportunities abroad.

Dwindling FDI inflows

Foreign direct investment (FDI) is expected to rise to USD 5 billion per year during the next three years, according to the intermediate targets given in V2025. This seems to be a gross exaggeration, as the official projections given in the IMF report indicates FDI inflows of only around USD 1 billion per year over the period 2018-2021.

A five-fold increase in FDIs cannot be expected, given the unfavourable domestic conditions and the global capital market developments. Domestically, factors such as macroeconomic disarrays, political instability, poor business confidence and corruption have made severe dents in the country’s image in front of foreign investors. Meanwhile, inward remittances from migrant workers have been declining in recent months worsening the balance of payments situation.

In the circumstances, the government would be compelled to depend on foreign borrowings on commercial terms to carry out the huge infrastructure projects such as the central highway. In the circumstances, the reduction in the debt burden as envisaged in V2025 too is doubtful.

Wrap-up

The V2025 booklet looks more like a hurriedly-prepared election manifesto targeting the upcoming elections, rather than a coherent policy document addressing the structural weaknesses in the economy. It contains a long list of “We will …” statements. This implicitly indicates that the political authorities are yet to introduce the much-needed policies. This is rather an unfortunate situation, as Sri Lanka has already completed 40 years of economic liberalization by now. The neighbouring countries which launched economic liberalization much later have overtaken us.

The government is fast losing time to implement any long-term development programme, as it has already completed over one half of its term. Amid this time constraint, it pledges to fulfill many promises within the fastest possible time span of next eight years including the immediate interim period of next three years.The credibility of the projections given in the document is questionable due to their wide deviations from macroeconomic realities, as discussed here. The absence of any policy strategies in V2025 to tackle the economic challenges too leaves much ambiguity.

In the meantime, it is not yet clear how the recently established National Economic Council chaired by the President would take up this document. All these point to market uncertainties deterring the country’s economic progress in years to come.

(Prof. Sirimevan Colombage, Emeritus Professor, Open University of Sri Lanka, could be contacted at sscolom@gmail.com)

Sil Redi Case Vindicates Call For Abolition Of The Executive Presidency

By Javid Yusuf –SEPTEMBER 18, 2017

Javid Yusuf

Two legal proceedings were much talked about during the past week-the Commission probing the Central Bank Bond transactions and the so called Sil Redi case in the High Court of Colombo.

Both these proceedings confirm that the administration of justice in this country is live and kicking and has the potential to mete out justice to all irrespective of the issues involved.

Apart from the evidence that has so far transpired before the Commission of Inquiry, what has been the subject of discussion among the public is the Commission’s order that Arjun Aloysius who is the central figure in the matter before the Commission is entitled to, if he so chooses (as he has now done ), not to give evidence and that he cannot be compelled to do so even though his evidence is relevant.

The Commission’s order has been based on the legal dictum embodied in the Sri Lankan Law that no person can be compelled to give evidence which is self incriminating. The Commissioners in their order have interpreted the law on the subject and set out their reasoning in arriving at such conclusion. The Commission has refused to play to the gallery by compelling Arjun Aloysius to give evidence but rather to use the words of the Commission in their order chose to be ‘coldly neutral’. The Additional Solicitor General has voiced his disagreement with the Commission’s order as he is entitled to do and has indicated that he would discuss the matter with the Attorney General.

While the Commission’s order has understandably puzzled members of the lay public who may not understand the complexities of the law. The fact that judges have to apply the law to the evidence before them and cannot take into consideration extraneous factors is something not easily understood by laymen.

Sections of the political establishment have been quick to jump to their own conclusions. The Leader of the National Freedom Front Wimal Weerawansa who functions as a de facto Joint Opposition spokesman criticized the Commission last week and screamed his disapproval of the Commission’s order. Of course considering the NFF leader’s conduct in humiliating the former Chief Justice Shirani Bandaranayake when she was arraigned before the Select Committee of Parliament his disparaging comments with regard to the Commission’s order are not in the least surprising.

The Commission in its order has also gone to great lengths to list out the matters on which Arjun Aloysius’ evidence would have been relevant and therefore helpful to the Commission in coming to a finding on the matters within its remit. In doing so the Commission has been fair to Arjun Aloysius enabling him to take an informed decision whether to give evidence before the Commission or not.

The other legal proceeding that has evoked a great deal of public interest is the judgement and fall out of from what is popularly known as the Sil Redi case. Once again the order of the High Court judge has attracted many observations and been subject to discussion in several forums.

In order to understand the High court Judge’s reasoning that led to his finding in this trial it is necessary to study the judgement in the case which is not yet readily available in the public domain. The reasons in a judgement delivered by a Court sets out the reasoning that guided the Court in arriving at its finding at the conclusion of the trial. As is often the case there may be different views with regard to the interpretation of the law or evidence but the reasons set out in the judgement provide the parties concerned an understanding of why the judge came to his conclusion in his judgement.

Reforms Sri Lanka needs to boost its economy

Monday, 18 September 2017

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Many Sri Lankans understand the potential benefits of lowering trade costs and making their country more competitive in the global economy. The majority, however, fear increased competition, the unfair advantage of the private sector from abroad and limited skills and innovation to compete.

Yet, Sri Lanka’s aspirations cannot be realised in the current status quo.

While changes in trade policies and regulations will undeniably improve the lives of most citizens, I’m mindful that some are likely to lose. However, many potential gainers of the reforms who are currently opposed to them are unaware of their benefits.

Implementing smart reforms means that government funds will be used more effectively for the people, improve access to better healthcare, education, basic infrastructure and provide Sri Lankans with opportunities to get more and better jobs. Let me focus on a few reforms that I believe are critical for the country. First, Sri Lanka needs to seek growth opportunities and foreign investment beyond its borders.

First, Sri Lanka needs to seek growth opportunities and foreign investment beyond its borders.Experience shows that no country in the world today has been able to create opportunities for its population entirely within its own geographic boundaries. To succeed in this open environment, Sri Lanka will need to improve its skills base, better understand supply and demand chains as well as produce higher quality goods and services

Experience shows that no country in the world today has been able to create opportunities for its population entirely within its own geographic boundaries. To succeed in this open environment, Sri Lanka will need to improve its skills base, better understand supply and demand chains as well as produce higher quality goods and services.

Sri Lanka attracts less foreign investment than other comparable economies - and only a small proportion of these investments generate diversified exports or jobs. Enhancing the Board of Investment’s capacity to attract and retain foreign investment, creating a one-stop shop that streamlines all foreign investment-related approvals in Sri Lanka, will be key to attracting more businesses. Second, Sri Lanka needs to improve its trade regime.

Trade as a proportion of GDP has decreased from 88% in 2000 to 50% in 2016, while the composition of exports has remained stable with a high concentration on garments and raw materials.

The country needs a solid trade policy – a reason why the Government recently approved the National Trade Policy - to provide guidance on how to create the capacity for Sri Lanka to attract foreign investment, access international markets, adopt new technologies, build capacity and enhance trade within and outside the region.

A significant part of this effort will also include improving trade competitiveness by reducing the time and cost required to fulfill regulatory processes to import and export. For this purpose, two key initiatives are the development of a trade information portal and an electronic single window for trade that will bring all aspects of trade onto one easily accessible platform for stakeholders.

It is noteworthy that the trade-related efforts led by Sri Lanka Customs are conducted in consultation with both the Government and the private sector. In fact, many of the Government’s trade and investment-related reforms are being developed in consultation with key stakeholders from the public and private sectors.

The Investment Climate Reforms, launched by the Prime Minister in July 2017, are a great example; the eightfold action plan was developed following in-depth key stakeholder consultations to understand the obstacles business owners and investors face in Sri Lanka.

This engaging and transparent approach is key to the success of the reforms and will contribute to raising Sri Lanka’s Ease of Doing Business ranking from 110 in 2017 to 70 by 2020. Ease of doing business means more and better jobs, higher quality goods and services at lower prices.

I have skimmed through some of the critical reforms but I haven’t touched on how positive outcomes can be achieved.

Follow-up articles over the next few weeks will offer some insights on how reforms have helped other countries and how Sri Lanka can take advantage of a more competitive economy to create opportunities for its people. So please engage and stay tuned!

(The writer is the World Bank’s Country Director for Sri Lanka and the Maldives. You can engage with her on Twitter through @Idah_WB. For more information on the World Bank’s programs in Sri Lanka visit www.worldbank.lk or www.facebook.com/WorldBankSriLanka).

Polls to be held under new electoral system!

Sep 17, 2017

President Maithripala Sirisena says that necessary arrangements are being made to hold local polls in all the electorates.

This was stated by President Maithripala Sirisena at a meeting at the President's official residence with the SLFP members of the North -Central Provincial Council.

The President points out that the people's expectations are not being fulfilled by politicians in the preferential system.They act for personal political victories before they think of the country.

Holding local elections is a victory for the people in the country, said President Maithripala Sirisena. Accordingly, the President says that he will take the necessary steps to hold the forthcoming Provincial Council polls through the divisional secretariat system and that he is committed to introducing the new system at the next parliamentary elections.

Ashika Brahmana

Sri Lanka: Sil Redi Verdict, Bond Scam and Executive Presidency

Sil Redi case showcases enormous power of the Executive Presidency and the need for it to be abolished

by Javid Yusuf- Sep 18, 2017

( September 18, 2017, Colombo, Sri Lanka Guardian) Two legal proceedings were much talked about during the past week-the Commission probing the Central Bank Bond transactions and the so called Sil Redi case in the High Court of Colombo.

Both these proceedings confirm that the administration of justice in this country is live and kicking and has the potential to mete out justice to all irrespective of the issues involved.

Apart from the evidence that has so far transpired before the Commission of Inquiry , what has been the subject of discussion among the public is the Commission’s order that Arjun Aloysious who is the central figure in the matter before the Commission is entitled to, if he so chooses (as he has now done ), not to give evidence and that he cannot be compelled to do so even though his evidence is relevant.

The Commission’s order has been based on the legal dictum embodied in the Sri Lankan Law that no person can be compelled to give evidence which is self incriminating. The Commissioners in their order have interpreted the law on the subject and set out their reasoning in arriving at such conclusion. The Commission has refused to play to the gallery by compelling Arjun Aloysious to give evidence but rather to use the words of the Commission in their order chose to be ‘coldly neutral’. The Additional Solicitor General has voiced his disagreement with the Commission’s order as he is entitled to do and has indicated that he would discuss the matter with the Attorney General.

While the Commision’s order has understandably puzzled members of the lay public who may not understand the complexities of the law. The fact that judges have to apply the law to the evidence before them and cannot take into consideration extraneous factors is something not easily understood by laymen.

The Commission in its order has also gone to great lengths to list out the matters on which Arjun Aloysious’ evidence would have been relevant and therefore helpful to the Commission in coming to a finding on the matters within its remit. In doing so the Commission has been fair to Arjun Aloysious enabling him to take an informed decision whether to give evidence before the Commission or not.

If it is perceived by one party that the judgement or the process leading up to a judgement is erroneous, the law provides that the aggrieved party can avail himself (as done in this case) of the appellate process whereby a higher Court will review the matter and mete out justice by quashing, confirming or varying the judgement after submissions by the parties concerned.
But what is more troubling is what has been happening after the judgement in the case was delivered. Former President Mahinda Rajapakse has publicly taken full responsibility for giving the order and stated that the two officials had only implemented a legitimate order. In a detailed statement the former President sets out the steps taken to use TRC funds and the justification for applying these funds to the Sil Redi project.

He has also used the statement to critique the process of reasoning of the High Court Judge in accepting or rejecting the testimony of witnesses. This is usually a matter which is done during arguments before the Appellate Court where the Counsel from the Attorney General’s Department usually defends the reasoning in the judgement. Unilateral comments on a Court’s reasoning in a public forum and more so in political forums can cause damage to the image of the judiciary in the eyes of the non discerning public. While the former President has been careful not to cast aspersions on the High Court yet statements made on other political platforms do not always show such restraint.

Given all the details in his statement the Defence lawyers may have given due consideration to calling the former President as a Defence witness in order to clarify matters. Whether a witness should be called or not is however the Defence lawyer’s prerogative and he would have undoubtedly decided not to do so after deeming it not to be in the interests of the Defence to summon the former President as a witness.

Another matter of concern is the politicizing of the judgement in the case by the Joint Opposition by mounting a campaign to collect monies to pay the fines and compensation from the public using some members of the Buddhist Clergy. There are several aspects of this Joint Opposition exercise that needs to be examined here. The fines and compensation will not become immediately payable now that an appeal has been filed. What will happen to the monies collected if the appeal is upheld. How desirable is it to enlist the services of the Buddhist or for that matter any clergy to pay the fines or compensation in respect of a conviction which is essentially of a criminal nature. Would this amount to sanitizing by the clergy of action that a Court has held to be criminal and what message would this give the public in general and the youth in particular.

When the Buddhist clergy silently go round collecting alms most people will contribute thinking it is for religious purposes. Thus would it not be better for a group of Joint Opposition politicians in the interest of transparency to go along with them explaining the purpose for which money is being collected.

But beyond all this two fundamental matters relating to Governance stand out demanding the attention of the public and the Government.

The first is the enormous power exercised by one individual (the Executive President ) in whom executive power is vested by the Constitution. According to former President Mahinda Rajapakse he had given verbal orders to spend 600 million rupees on the distribution of Sil Redi in addition to expenditure on 7 other projects which means the total expenditure incurred on a mere verbal order would have been much more than 600 million rupees. Assuming that the former President’s order is legal as claimed by him it is mind boggling that one individual (the Executive President ) can by a mere oral order disburse public funds of such magnitude without the requirement to put down in writing the rationale and thinking behind such an order which in turn should have been preceded by a detailed discussion of the merits and demerits of such a course of action.

It is also an indication of the power that envelopes the holder of such office who is untrammeled by the ‘whims and fancies of Parliament’ nor financial and administrative regulations. Such power cannot be good for the individual holding such office nor can it bode well for the political health of the country. In such a context it is surprising that there are those who still advocate the retention of the institution of the Executive Presidency in a new Constitutional arrangement.

The other issue that impinges on the issue of Governance is the question of financial discipline in the public sector. There is an urgent need to tighten up procedures to ensure both the protection of public funds as well as to safeguard public officials from undue pressure from politicians to misapply such funds in an irregular manner. Tightening up procurement procedures as well as the speedy activation of the National Audit Bill by the Government will greatly assist in achieving these goals.

( The writer can be reached at javidyusuf@gmail.com)

The problem of Arjun Aloysius and the reach of the law

Sunday, September 17, 2017

The Order by the Commission of Inquiry into the issuance of Treasury Bonds by the Central Bank declining to compel Arjun Aloysius, principal shareholder and director of Perpetual Treasuries (Pvt) Ltd to give evidence before it, raises interesting points of law for consideration. Indeed, its effect has wider ramifications beyond the subject matter of this Commission.

Privilege against self-incrimination pleaded

In its Order, the Commission has exhaustively listed as to why it is ‘desirable’ that the CEO of Perpetual Treasuries give evidence with regard to matters that go to the heart of the financial scandal being inquired into. It has also detailed objections raised by his senior counsel to his being compelled to give testimony. These objections center on the constitutional protections that every person is entitled to a fair trial by a competent court and presumed innocent until proven guilty.

It was contended that if he is compelled to give evidence, that may tend to incriminate him. There was ‘every possibility’ of a charge or indictment being made against him. Therefore, compelling him to give evidence may prejudice his right to a fair trial in the event of him being prosecuted for an offence or offences. This was in the context of the well-established principle of evidence that an accused person cannot be made to incriminate himself.

The Commission is empowered under the 1948 Act to recommend ‘action that it considers necessary to be taken against persons whose conduct is the subject of the inquiry or investigation or who is in any way implicated or concerned in the matter.’ A further concern was a 2008 amendment to the Act which empowers the Attorney General to institute criminal proceedings in respect of any offence, on material collected by a Commission.

‘Implicated’ persons are not compellable witnesses

In accepting these contentions, the Commission’s reasoning was that under the Act, there are three categories of persons who will be summoned to appear. These categories comprise first, persons who are ‘implicated’; secondly, persons who are concerned; and thirdly, persons who consider it desirable that they should be represented. The CEO of Perpetual Treasuries was classified as belonging in the first category.

This raised the possibility that any ‘recommendation’ of the Commission and/or any proceedings that may be instituted by the Attorney General may rely at least partly, upon evidence which he may be compelled to give. If so, it was opined that the Commission would be acting in disregard of the well founded Rule of Law that an accused cannot be compelled to give evidence. A ‘somewhat artificial device’ of compartmentalizing Commission proceedings from a criminal prosecution did not find much favour. Evidently the Commission thought that resort to this device might detract from the “cold neutrality” with which it should act and may even invite the charge of being “over-zealous.’ This Order deserves particular scrutiny given its impact and importance.

The privilege against self-incrimination belongs properly, of course, to a prosecution or in some particular contexts, civil proceedings. Its application to a fact-finding Commission of Inquiry, which classically does not settle legal rights, is an extension which many would find somewhat concerning. Other countries have grappled with these same issues. Where fact finding inquiries are concerned, the weight of the precedents leans towards not applying the privilege against self-incrimination and thus ‘strait-jacketing’ the processes. However a signal difference here is the 2008 amendment which empowers the Attorney General to prosecute upon findings of these Commissions. This appears to have significantly contributed to tilting the scales for a contrary result.

Consequent ironies that arise

Undoubtedly this is an unforeseen development that is peculiarly incongruous. The 2008 amendment was due to persistent advocacy calling for the recommendations of Commission reports to be taken seriously and implemented properly. Documented studies showed disturbingly that even though Commissions had been appointed to inquire into a range of issues, from assassinations to gross human rights abuses since independence, their impact had been negligible.

It was to correct this palpable if not grotesque imbalance that a complete overhaul of the old Act was called for. However what transpired through a closeted process in 2008 led with force by the Department of the Attorney General was purely this one amendment to the Act, vesting more powers in its office.

Now given the interpretation of the law in this Order and with all due regard to the sincere concerns of Commissioners not to incur the charge of being ‘over-zealous’, certain paradoxical consequences may ensue. In fact, this interpretation has wider impact beyond the ‘bond scam’ matter.

Warnings in 2008 are now borne out

For example, if we look at the proceedings of the three Disappearances Commissions appointed in the 1990s and the all-island Commission appointed later which examined involuntary disappearances in all parts of the country during the second insurrection of the Janatha Vimukthi Peramuna (JVP), many high-level former ministers and politicians were categorized as individuals who were ‘credibly implicated.’ In fact, the Commissions chose to name them precisely on that basis, some by sending their names under registered confidential cover to the President while other Commissioners cited the names publicly in their reports.

These findings were, of course, before the 2008 amendment. If these Commissions had sat after 2008 and if the same interpretation had been applied as in the instant case, the result may well have been calamitously different. Even if few prosecutions took place after these Commission reports, at least the record reflected a fairly accurate picture of the level of state abuse that had taken place. Now it may well be quite different illustrating the perils of passing piecemeal amendments to laws. Empathy for hapless commission members caught on the horns of such unenviable dilemmas is in order.

Indeed, the potential dangers of this amendment were raised in 2008. The present controversy reflects this warning in action, albeit in an entirely unexpected context. Following the Commission order, Aloysius has declared that he will not be giving testimony. Certainly there is a certain delicious irony in witnessing the office of the Attorney General being hoist on its own petard, given that the 2008 amendment was offered by it, quite tongue-in-the-cheek style, to offset acerbic public criticism at the time that Commissions of Inquiry were quite useless.

Learning lessons even now

But the overall point is that ad hoc and craftily engineered amendments purely to ‘get over’ inconvenient criticisms do not serve the cause of justice. ‘Tinkering’ with laws is best avoided.

There is also no alternative to the criminal law working properly and effectively. Commissions of Inquiry serve a different purpose. And one cannot replace the other or for that matter, be bound by different contexts applying to the other.

This is a difficult but essential lesson that must be learnt

An Analysis: Report Of The Presidential Committee To Resolve Issues Related To SAITM

By Hema Senanayake –SEPTEMBER 18, 2017

Hema Senanayake

The whole nation was waiting for the final report of the Presidential Committee appointed to study and report proposals in resolving issues related to SAITM. The Presidential Committee so appointed has now handed over their eleven-page report to the president. The media has reported that president has received the report duly and has been studying it. Obviously, when reading the report, the president might be looking for specific proposals that might be possible in resolving the SAITM crisis soon. Believe it or not, president might have found that this report is the worst report of any Presidential Committee appointed so far.

How a highly educated team of professionals could compile such a useless report in regard to the resolution of the issues related to SAITM. I have no answer for this question. But I guess, when someone become prejudice in what he is believing in, naturally such thinking would reflect in what he is writing. Or else, the other possibility is that they themselves do not aware the basics of economics, business and public policy principles but, since the Presidential Committee comprised of a team of highly qualified professionals, we cannot imagine that they do not know the said basics. However, their report has now disappointed the whole nation, including Dr. Neville Fernando, the Chairman of SAITM. Now, I should give evidence for my conclusion.

What we are interested most are about the possible solutions proposed to resolve the main issue: that issue being what we want to do with SAITM. The committee has reported its solution on pages 3 and 4.

The proposals mentioned in the section 3.1.1 and 3.1.2 are the most important. Let me quote those two:

“3.1 Matters related to ownership and management of SAITM

1. Abolish the current shareholding and management structure of SAITM; i.e., the for-profit entity owned and controlled by Dr Neville Fernando and family.

2. In its place, create a new entity that is not-for-profit with a broad-based ownership structure. The best option will be to collaborate with one or more already established educational institutions along with some amount of public participation. It may take the form of a Public-Private-Partnership (PPP). This entity should conform to the (to be introduced) Minimum Standards and other quality control measures with improved governance over a specified period of time.” (quote ends)

The above two are the main proposals and the rest of others are just details or additional points that can be resolved easily.

Basically, the above proposals are not practical and would not resolve any issue. Anybody, must review these two proposals subject to the primary policy conditions set forth under the section 3.0 of this report. It says that;

“The Committee is of the view that any solution proposed to resolve the current issues related to SAITM must be in accordance with the Government’s commitment to enable some level of non-state higher education, including in medical education. The solution must be equitable to all stakeholders and not be a financial burden on the Government. It must be transparently implementable and monitored independently. It must be financially viable at the earliest and sustainable in the long term.”

Again, please read it carefully. It says that the solution must be equitable to all stakeholders and not be a financial burden on the government. The Chairman of the committee is Dr. Harsha de Silva who has a Ph.D. in economics. Forget about other members of the committee. My question to Harsha is how he explains the mechanism of the conversion of SAITM into a not-for-profit organization while ensuring fairness to the investments made so far by Neville Fernando without making any financial burden on the government.

For the above question his business solution is to broad base the ownership mentioned in the report under 3.1.1. It means a certain portion of the equity that is held by Neville Fernando must be issued to new investors. So, there is a possibility that the new entity would be a one with broad-based ownership and not-for-profit organization. All is good in theory. But investors want to make money on their investment. No one would come and invest to buy equity in a not-for-profit entity. If Harsha thinks otherwise, then one day, we will be able to issue not-for-profit bonds in the future. Perhaps, people would come and invest in not-for-profit SAITM, if investors get tax exemption. In the event, such tax exemptions would be a financial burden on the government. In short this is not a practical solution.

The other point is that the committee says that the current issues related to SAITM must be in accordance with the Government’s commitment to enable some level of non-state higher education, including in medical education. Does non-state higher education mean private education? Yet it is not what it means subjected to the solution proposed? The solution is for not-for-profit medical education under SAITM. This intimates that when come to medical education non-state hinger education means that it allows the establishment of not-for-profit medical colleges only. This is one step back than GMOA stance. In fact, as far as I know the GMOA is not against the setup of private medical colleges (but some students are) with the proper approval of Sri Lanka Medical Council and with a proper admission procedure. But what they oppose is the unscrupulous process and efforts of SAITM which the SAITM tries to get its recognition from SLMC with the support of possibly corrupt politicians.

Politics is real. Under the given political environment, the policy should be simple. I guess the best policy must be to change the SAITM’s business model in short term and allow it to transform into a private medical college in the long term ensuring wider private capital accumulation in this important sector. Like the GMOA, medical students of government colleges and the public in general would come to this economic reality soon. Hoping that, let me explain a little further about my idea.

Let us assume that SAITM recruits 300 hundred students per year. Out of this, SAITM might recruit 100 or 200 foreign students who pay for their education. This part would be for-profit and everybody would agree on it. Then, SAITM has to make a decision in short term to recruit the balance number of students with the approval of University Grant Commission. For a few batches, the cost would be capitalized and the education would be free for them and that is what the students want right now- free medical education. Perhaps, part of this cost may be the price the SAITM has to pay for operating without SLMC’s prior approval. However, it is the government’s responsibility to educate all stakeholders that total free education means lack of opportunities for our young generations. Still, if our students and parents were not convinced then SAITM could possibly operate as a medical college for foreign students only. If it happened then GOMA and SLMC have to justify as to why our students has to go to private medical colleges in foreign countries while having a private college in the country itself.