If Perpetual is not relieved of its profits bond saga will be a pus vedilla

Wednesday, 24 January 2018 

When the Bond Commission was set up I wrote an article on 8 September 2017 titled ‘If at the end of the enquiry Perpetual gets to keep the vast amount of profit it made, then it is a pus vedilla’. Now the Bond Commission Report is out but the spectre of a pus vedilla has not gone away! The profits are still with Perpetual.

The clever ones know that if one is accused of some dishonest action, the best thing is to get a committee of enquiry set up. A committee of enquiry has no power to dish out any punishment. The Bond Commission too had no power to hand out any penalty/confiscate or tax the profits of Perpetual. They could only recommend further action.

So the Commission has recommended that the Attorney General and other authorities consider whether Perpetual Treasuries has done this that and the other (all specified by the Commission). In the meantime Perpetual keeps their profits frozen or unfrozen.
Past history

We know from past history that when the CID or Bribery Commission or any of the new organisations probe frauds, nothing happens for a long time. So when a commission suggests that some agency should investigate and take action, those accused will have a smile on their faces.

I can picture the smile of the Perpetual people. Maybe they will discreetly crack a bottle of bubbly. They know that the investigating authorities will find it all very complicated to unravel and to create a case that will succeed in court as clever people who indulge in dodgy practices make sure that it will be difficult to unravel.

When you add to this inadequate human resources in the investigating agencies, we know that more often than not nothing happens. That seems to be the fate of many so-called frauds that have taken place. Even if a case eventually comes to court it will be postponed many times, with the accused on bail and if there is a verdict it can be appealed, etc.
A brief look back at the bond scam

As so much has been written about the bond scam a “cannot see the woods for the trees” scenario has emerged. The bond scam is really a simple story. It is useful to go back to the beginning so to get it all into the correct perspective.

The Central Bank issues bonds to raise money for the Government. Only licensed bond traders can buy at the auctions. There are a number of licensed traders who have to come to the auctions and bid for bonds. They are all informed prior to the auction of the amount of bonds that will be up for auction.

The bond traders were informed that one billion bonds would be up for auction. They therefore came prepared to bid for one billion bonds. Lo and behold at the auction the Central Bank put 10 billion bonds for auction. All but one bond trader were unprepared to bid for 10 billion. The one that came prepared was Perpetual, Governor Arjuna Mahendran’s son-in-law’s firm. So that is part one of the first scam.
Converting bonds into profits

Getting a large volume of bonds did not mean that Perpetual had made a large amount of money. They had bonds in one hand and an equivalent amount of debt to banks in the other. They could convert this into vast profits only and only if they could sell these bonds to someone else at a higher price than what they paid for the bonds. Part two of the scam was successfully selling them to the EPF. That is how they made their vast profits.

I wrote an article setting this out clearly in February 2017. What was not in the public domain at the time was the jiggery-pokery that had gone on behind the scene to make to make the EPF buy the bonds that Perpetual had bought at auction. The evidence extracted at the commission sheds light on this dark world of bribery and manipulation.
What is missing in the Perpetual saga

What is missing is any clear plan that can be implemented instantly to relieve Perpetual of the profits they have made by directly or indirectly selling bonds to the EPF. What is totally reprehensive in this saga is robbing the EPF by selling them bonds at profit.

The EPF are also licensed bond traders and can always go to auction and buy bonds themselves. The EPF belongs to the workers in this country. It is the repository of their savings, which will finance their lives when they retire. They also hope that those managing the EPF will make their savings grow in value. This creates the further need to give back to the EPF the profits they have lost by buying bonds from Perpetual.

As I suggested in my article on 3 February 2017, there was indeed a very simple solution to do the important thing of relieving Perpetual of the profits they made. Parliament should approve a new tax with retrospective effect to tax at 95% profits made by any organisation selling bonds to EPF, ETF and NSB. The taxes so collected should be credited to the relevant organisation. This meets both objectives. To relieve Perpetual and others of the profits they have made and to return this back to the EPF. Retrospective tax legislation must generally be viewed as not desirable unless there are good reasons. In this particular saga there is every good reason for doing so as it is a sacrilege to make money from an institution owned by the workers to keep their savings. By making it applicable to all and any, it is also not a discriminatory tax aimed solely at Perpetual. I also said in my article that if the Government does not pass legislation to tax these profits, the opposition should propose the necessary legislation in Parliament

The simple solution

As I suggested in my article on 3 February 2017 there was indeed a very simple solution to do the important thing of relieving Perpetual of the profits they made. Parliament should approve a new tax with retrospective effect to tax at 95% profits made by any organisation selling bonds to EPF, ETF and NSB. The taxes so collected should be credited to the relevant organisation. This meets both objectives. To relieve Perpetual and others of the profits they have made and to return this back to the EPF.

Retrospective tax legislation must generally be viewed as not desirable unless there are good reasons. In this particular saga there is every good reason for doing so as it is a sacrilege to make money from an institution owned by the workers to keep their savings. By making it applicable to all and any, it is also not a discriminatory tax aimed solely at Perpetual.

I also said in my article that if the Government does not pass legislation to tax these profits, the opposition should propose the necessary legislation in Parliament.

Politicians have a question to answer. Why has no politician of stature made a proposal in Parliament to approve a new tax that will capture the profits made by Perpetual? Mahinda Rajapaksa as he is now the head of the forces that oppose the Government should state his position on the profits made by Perpetual. Should they be allowed to keep them? If not should they be taxed? And if so why did he not propose in Parliament the simple solution of taxing at 95% the profits made by Perpetual?

Is it that he never thought of this simple solution? Is it that his advisors also never thought of it? There is something very troubling here and difficult to understand. We the public should not be pushed into nurturing disturbing thoughts about his silence on taxing Perpetual forthwith. He should state unambiguously his position on why he did not initiate steps as a leader in the opposition to tax the profits made by Perpetual.

Prof G.L. Peiris, he is a clever man. I know he is, as he was my Minister when I was Chairman of the Board of Investment. Why did he not make the suggestion to tax the profits made by Perpetual? His explanation will be appreciated.

GLP did something very curious. He has gone on and on (which is his style) wanting the Prime Minister to resign, knowing fully well that it will not happen. Even if the Prime Minister resigned, Perpetual would still keep their money. Surely he cannot be content to let Perpetual keep their profits? If so why has this clever man not said anything clever about a bomb proof method of relieving Perpetual of their profits? Is it just age catching up or is there some reason we don’t know?

Dinesh Gunawardene and Wimal Weerawansa are forever criticising everything done by the Government. We seldom see any new constructive suggestions from them. True to form they have not made any constructive suggestion about how to tax and take away the profit made by Perpetual. They too owe the public an explanation as to why they who probably make the most noise in Parliament have been silent about a tax to take away Perpetual’s profits.

Anura Kumara and the JVP are good at organising protests. Why have they been silent? Why have they not demanded that the profits made by Perpetual should be taxed and the funds returned to the EPF?

The Perpetual mystery

It is a mystery as to why the Government or the opposition has not endeavoured to change the tax law and tax the profits at 95% and return the money to the EPF. Each of us will have to try and guess the probable reason.

President calls P.M. ‘rogue’ ! Pressurizes AG and Bribery Commission to file cases against P.M. and ex finance minister !

(Lanka-e-News -23.Jan.2018, 1155PM)  It is a  well and widely known  fact it is no less a parson than President Maithripala Sirisena who  made solemn umpteen promises in public at the last presidential elections that he would be non partisan and impartial after he is  elected  ,and  swore openly  that he would abolish the abominable executive presidency within 100 days of his coming to power . It is also an incontrovertible fact , this  was the same Maithripala Sirisena who  reneged on   all those promises after becoming president ,and kicked out the people’s referendum within 48 hours most unashamedly to demonstrate he cannot be trusted even for a tuppence after seizing power. 

Now , it is the same president prone to villainies and treacheries who has cited the flimsy excuse  after dishonoring his promises most shamelessly that  he would continue as president until all the rogues ( Including himself ?)  are sent to infernal hell thereby demonstrating he is more a ‘joking turncoat ’ and less a  president who should be taken seriously.

Once again proving his true colors as a most untrustworthy and most opportunistic politician the world has ever known, who would even slit the throats of his sincere friends who  propelled him to the present position , at the altar of  his most selfish ambitions and power greed , President ‘Sword Sirisena’ alias Sillysena  who is by now a byword for ingratitude  and double deals  had openly exerted pressure on the Bribery Commission Director General and the Attorney General ( AG ) to file cases against P.M. and the former finance minister .

The president gave these instructions when Jayantha Jayasuriya and Bribery Commission Director General had inquired from the president about his ‘plan B’ when president  met with a group of lawyers including the  AG and the  Bribery Commission , Director General Sarath Jayamanne last week. 

President Sirisena the serpent that gobbled hoppers , and more dangerous than a serpent which gobbles eggs ,had himself told openly based on his own conclusions , that P.M. is a rogue  , and laws shall be enforced against him. Sword Sirisena who prefaced  his speech by  saying ‘ I cannot stab myself and die because the knife is golden’ , had gone on to state  , “I came to make this country and go home. The first man  who joined with me and signed to make  the country has himself  ‘screwed’ it up .“ This bond scam was committed with the knowledge of the P.M. ‘ This was done to collect money for the UNP elections. The P.M. cannot escape from that. He  is now trapped well and truly. He is skilled in this type of underhand activities . Wasn’t  this type of thing done by him  in 1988-89 ? You know better about this than I ( addressing Sarath Jayamanne , the BrIbery Commission, DG) , president has told. Weren’t you the one who conducted P.M.’s  case ? the president inquired from Jayamanne.

Jayamanne who was baffled by the question posed suddenly  to him , said, ‘ so far no issue has cropped up regarding the P.M. , Sir.’  The president has then got agitated  and said , ‘No,  no, In 1988 -89 Batalande case , wasn’t it you who questioned Ranil?’  ‘Hence , you must be knowing about him more than I.’ 

Thereafter , Sword Sirisena turned his attention solely and wholly to  the Bond Commission report . Based  on that  cases shall  be filed against P.M. and  former finance minister Ravi Karunanayake , he insisted.

Jayamanne  who was not that silly as Sillysena, in a state of shock replied, merely on the report alone cases cannot be filed . However , Jayantha Jayasuriya went on to talk about filing cases. It is noteworthy under the laws in SL ,  a criminal case can be filed  only by the Police. In the circumstances , an investigation must first be done by the CID based on the Bond Commission report before any case is to be filed. 

It is a pity , even if Sirisena goes raving mad (if  he is not already) and persists in  his foolish instructions , nowhere in the Bond report is it  stated , the P.M. and the ex finance minister are responsible for the Treasury bond lapses. Yet, Sword Sirisena in his characteristic Sillysena style pressurized the AG  to file action against them based on the Bond report.

When the AG said he would proceed  , the president asked him again , ‘ when is that ?’  The AG then promised Sword Sirisena he would take steps to file cases next week or in the first week of February. Accordingly , notices may be issued on P.M. and Ravi Karunanayake. 

Later, Sirisena when addressing the Elpitiya election rally revealed , he instructed early morning to implement the plan B .

The infamous brief-less lawyer  Shiral Lakthileke the president’s co ordinating secretary who is always waiting eagerly for an opportunity to  fish in troubled waters and bungle everything and undo what is done , along with ‘Athe Kurulla’ in charge of the social media  via the internet  are giving huge news publicity that Ravi Karunanayake is going to be arrested. 

Sword Sirisena addressing another election rally on the 22 nd  mentioning Ravi Karunanayake’s name and P.M.’s said , when he is taking action against the rogues , his hands shall be strengthened. 

A reputed political analyst speaking to Lanka e news pointed out , if Sirisena in order to gain cheap political mileage at the forthcoming elections takes UNP leader Ranil into custody before elections  , that would without any trace of doubt  backfire on  him. 

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by     (2018-01-24 00:04:41)

Uva Chief Minister chamara surrenders, granted bail

Camelia Nathaniel-Wednesday, January 24, 2018

The Uva Province Chief Minister Chamara Sampath Dassanayake who surrendered to the Badulla Police yesterday through his attorney was later granted bail after being produced before the Badulla District Court.

He was facing charges of having made the Badulla Tamil Maha Vidyalaya Principal kneel before him, for not accepting a letter given by him for the admission of a student to that school.

He surrendered to the Badulla Police last morning and was produced before the Badulla District Court yesterday afternoon.

Education Minister Akila Viraj Kariyawasam has instructed the Education Secretary Sunil Hettiarachchi to conduct an investigation into the incident on the manner in which the zonal education officials and the principal had acted with regard to this issue. He also ordered an investigation into the actions of the Chief Minister and whether he had put pressure on education officers.

The Minister noted that initially with the said principal denying these allegations it had seemed like a political incident, but with the information into the incident coming to light, the need for a comprehensive investigation had arisen.

Therefore, the Education Minister had instructed his Secretary to investigate allegations leveled against the Uva Provincial Education Secretary and other education officials for having tried to hide the incident and the manner in which they had acted and give him a detailed report pertaining to this incident.

Ceylon Teacher’s Union General Secretary, Joseph Stalin expressed objection to the Chief Minister being granted bail. The Ceylon Teacher’s Union staged a protest in Armour Street, Colombo in protest of the leniency shown towards the Chief Minister.

“This is a complete drama and we are totally against the Chief Minister being granted bail. Further, none of the education officials including the Provincial Education Secretary, Director and others were penalised for having tried to cover up this incident.

"They should have been removed for having acted in this manner, but nothing was done,” he told the Daily News.

Stalin warned that they would continue their action until those responsible for this incident are punished accordingly.

The books that we read, the books that read us

• To get to the solution you need to understand the reasons for the problem
• All Sinhala cartoon series were dubbed, mostly from Europe
• No society can survive without writers, critics and artistes
• We have not had any real, proper critic and writer since Samaranayake

 2018-01-23

My friend Dhanuka Bandara, currently studying in the United States, sent me a comment the other day: “The decline of a reading culture is a serious problem, rather acute in America. I have even concluded that this has caused the current crisis in Western civilisation.” I was and still am not qualified to argue on the latter point, but I agreed wholeheartedly with his first point. It doesn’t take a rocket scientist, after all, to comprehend the fact that we tend to disparage reading, and with it those who prefer to read more than anything else, as the years go by. The decline then is actually a descent, an inevitability that we choose to bring upon ourselves. Sadly.   

But then there are problems and there are solutions. To get to the latter, you need to understand the reasons for the former. The issue here is that the current discourse on literacy plays out between the academics and the intellectuals on the one hand and the defiant dilettantes and the bohemians on the other. This dilemma, sadly, is worsened by the tendency of contemporary society to categorise and classify, between what is prescribed and what is prohibited (when it comes to what is read, written, and expressed). The minute you concede ground to this false distinction, and maintain a rift between what you should read and should not, the problem we are talking about here starts to materialise, and we end up becoming a nation of non-readers.   

Why is being such a nation such a problem? Simply, that a culture that is opposed to readers is also opposed to writers, and simply, that a culture that is opposed to writers is opposed to creative, independent thinking, the kind of thinking that got us to where we are, culturally and socially, from where we were before. This is as true for those who read and write in the mother tongues as it is for those who prefer English, and in fact it’s truer of the former in very, many respects. A civilisation is predicated almost entirely (not completely though) on the language it thrives on, and once that language is cut off from literature through prohibitions on what we read, only an aberration can result. An aberration because we can no longer discriminate on our own, for ourselves.   

 Speaking at an official function a few years ago, a former Rector at S. Thomas’ College (I have unfortunately forgotten the name) observed, rather interestingly, that the impending death of the Sinhala language (a death that has a number of pallbearers and doomsday prophets, by the way) could be traced to a deterioration in our mass media. What he meant was that his generation and his children’s generation lived through the culture that saw, and enjoyed, Pissu Poosa, Dosthara Hondahitha, and (later) Tintin, Naana Katha Malliya and Koombichchi. All these series were dubbed, mostly from Europe, and they managed to teach us the subtle intricacies of dubbing a foreign popular culture into the mother tongue (something I will get to in my next article). We revelled in seeing them and at the same time read into the language that was being articulated, unlike today, when children are exposed to a half-uprooted, neither-here-nor-there entertainment and media culture (particularly on television).   

I don’t think it’s a coincidence that there are parallels between the way children behave and the way they are depicted by our film and television directors. The difference between the Somaratne Dissanayake of Saroja and Siri Raja Siri and the Somaratne Dissanayake of Bindu and Siri Parakum is really a difference, not of personal conviction or sensibility, but of the attitudes entertained towards youngsters by adults. The children of those earlier films had an agency of their own, and in being themselves they transcended their youth in ways that their age could not do justice to. The same could have been said of the television serials which depicted them, particularly Channa Perera’s miniseries that revolved around boy scouts (I am thinking of Punchi Weerayo here). But what did we get with Dissanayake’s later films? Children who had and have to be taught and picked up and carried around forever, endlessly. (Perhaps that’s why entire sequences are repeated again and again in Siri Parakum: for us to get them, as though our attention spans have slackened.)    

A civilisation is predicated almost entirely (not completely though) on the language it thrives on, and once that language is cut off from literature through prohibitions on what we read, only an aberration can result

In other words, children on screen had a sensibility they could call their own. They revelled in being the adults they were not, in a rather boy-scout-ish, intelligent way. Naturally, we revelled in being them. They were both book-smart and street-smart, and what they did was often supplemented by what they read. There was no real differentiation between the two, a wholly different world to what has transpired now: a culture whereby children are, on the one hand, pushed to mature beyond their years in terms of what they do, and on the other hand, constricted when it comes to what they read. We are a nation of readers limited in what we are given to read when we are young, which would not be so bad if this did not lead us to that problem I highlighted above: the emergence of a nation of non-writers, non-critics, non-artists. No society can survive without writers, critics, and artists, just as no society can survive without doctors, lawyers, and engineers. It is a crazy, roundelay issue, come to think of it.   

At a recent seminar-of-sorts I had to speak at, I was given a rather clichéd but perennial topic: the importance of reading. I pondered on the topic for some hours before writing down the points I wanted to get across at this seminar. Which, by the way, all congealed into the following truism: in as much as the act of reading, and of inculcating the habit of reading, is important, what is even more important are the mechanics that go into that habit, i.e. the questions of what should be read, what should not be read, whether one should remain in a library like one would in an ivory tower, cut off from the rest of society. To the best of my ability I brought out what I felt to be a pertinent fact: that it is as important to be a “kavi karaya” (a poet) as it is to be a “wada karaya” (a doer). I’d like to think that the audience gathered at this seminar-of-sorts got my point, because I intended them to: it was held in a library.   

Dhanuka used to write a lot when I started out in this field, years ago. For reasons which I still can’t fathom, though, he left that field. A pity, because in him I continue to see the kind of writer we haven’t had since Ajith Samaranayake. Perhaps that’s a national tragedy at one level: we haven’t had any real, proper critic and writer since Samaranayake, certainly not in the English press. But I rather think that’s inevitable, since we continue to be a nation not only of non-readers, but also of anti-readers.   

Towards a healthier tomorrow, today

After vanquishing polio, the South-East Asia Region continues to make life-saving advances in newborn and child health



 Wednesday, 24 January 2018

Seven years ago this month, the South-East Asia Region recorded its last case of wild polio virus. In 2014, three years later, the region was declared polio-free. Not a single case of wild polio virus has been recorded region-wide since, sparing millions of children the risk of contracting the paralysing and life-threatening disease. The region’s achievement, and its contribution to global polio eradication, is one of the world’s great public health success stories.

Our progress continues. Last year, three million more children in the region survived the first five years of life than in 1990 – the most dramatic reduction anywhere in the world. The region’s contribution to global under-five mortality meanwhile dropped to 25%, down from 37% at the start of the same period. The region has now achieved the Millennium Development Goal target for under-five mortality, while a few of its member countries have already surpassed the child health-related Sustainable Development Goals. In short, across the South-East Asia Region, more children than ever are not only surviving, but are growing into strong, healthy and productive adults. To maintain this trajectory and ensure all countries achieve the Sustainable Development Goal (SDG) targets, accelerated progress is nevertheless needed. By 2030 all countries should have reduced under-five mortality to at least as low as 25 per 1000 live births, while neonatal mortality should be at least as low as 12 per 1000 live births. Maternal mortality – a related concern – should meanwhile be reduced to less than 70 per 1000 live births. To achieve these targets, concerted action is needed.

First, member countries should expand access to good quality health services, especially for women, children and adolescents, with universal health coverage (UHC) remaining a top priority. Through targeted investments countries can greatly reduce each of the leading causes of maternal, newborn and under-five deaths (a Regional Flagship Priority), including complications associated with prematurity, pneumonia, birth asphyxia, diarrhoea, sepsis and birth defects. Notably, better services will have the added benefit of encouraging institutional deliveries. As per the Decade of Action on Human Resources for Health, a good way to achieve these outcomes is by recruiting more health workers, advancing the skills of health workers at all levels of care, and finding innovative ways to retain health workers in rural and hard-to-reach areas. Second, and complementary to UHC, Member countries should focus on mitigating cause- and context-specific mortality. Even where national averages are good, for example, children belonging to poor or marginalised groups can suffer mortality rates well above national levels, often due to easily preventable diseases such as pneumonia or diarrhoea. By pursuing equitable access to safe water and sanitation and reducing indoor air pollution, for example, Member countries can forge progress that not only reduces mortality from these diseases, but also – crucially – helps ensure no child is left behind. This is especially so when combined with the promotion of health-positive habits such as handwashing and toilet usage generally, and exclusive breastfeeding for the first six months of a child’s life specifically.

And third, we must not be complacent. Member countries should continue to strengthen routine immunisation programs, including surveillance. In recent years enhanced routine immunisation has been responsible for some of the Region’s greatest achievements in newborn, child and maternal health, including the elimination of maternal and neonatal tetanus. As the Region strives to eliminate measles – a major childhood killer – by 2020, Member countries must ensure each and every child receives two doses of the combined measles and rubella vaccine. To their immense credit, Bhutan and Maldives have already eliminated the disease, demonstrating that the 2020 target is readily achievable.

Importantly, Member countries must go beyond the ‘survival agenda’ and aim to ensure that every child in the Region can live, grow and thrive in an era of unrivalled opportunity. That means ensuring every child is adequately nourished and has the energy needed to engage in physical activity and play. It means ensuring every child lives in an environment where health hazards are mitigated or removed, and where early childhood development is invested in and nurtured, especially during the first three years of life. And it means ensuring that as every child grows into adolescence they can access the health services needed to navigate a phase of life that has its own special needs.

Each one of these outcomes and more can be achieved. As the region’s victory over polio attests, a whole generation’s health and wellbeing can be dramatically enhanced when the right priorities are set and society-wide commitment is secured. As countries across the region strive to reduce newborn, child and maternal mortality to levels at or below the SDG threshold, this opportunity must be fully grasped. Our children are our future. A healthier tomorrow must begin today.

The writer is the WHO Regional Director

Marketing Across Borders Under Conditions of Terrorism

Terrorism is a salient threat to organizational competitiveness in international marketing.

by Valbona Zeneli, Marshall Center, Germany
by Michael R. Czinkota, Georgetown University USA and University of Kent, UK
by Gary Knight, Willamette University, USA

( January 24, 2018, Washington DC, Sri Lanka Guardian) Terrorism refers to the risk or actual encounter of violent acts designed to cause fear and intimidation.  Despite posing an important threat to internationally-active firms, there is a paucity of empirical research that addresses the distinctive challenges that terrorism poses to the international marketing activities of firms.  Here we first provide a theoretical background on terrorism and its effects on international marketing in emerging markets.  We then relate terrorism to operational costs, marketing planning, supply chain management and distribution activities in the multinational enterprise (MNE).  We recognize significant costs in the international marketing budget of MNEs. Firms with substantial resources and international experience appear to have more alternatives, which allow them to cope better with the effects of terrorism than their less endowed peers.

Terrorism is a salient threat to organizational competitiveness in international marketing. It is the premeditated use or threat to use violence by individuals or subnational groups to obtain a political or social objective through the intimidation of a large audience beyond that of the immediate non-combatant victims.

For terrorists, perception matters! Terrorist attacks around the world have increased greatly in the past decades, spanning 92 countries and over 28,000 fatalities in 2015 alone. Most attacks are directed at civilians, businesses, and business-related infrastructure. The five countries most exposed to terrorist attacks in recent years are Iraq, Afghanistan, Pakistan, India and Nigeria.

Emerging markets are particularly affected by terrorism since their businesses and citizens have less of an opportunity to protect themselves. Among the possible environmental contingencies that can affect marketing organizations – such as weak economic conditions, rising energy prices, financial crises – terrorism is identified as potentially the most serious threat. Since terrorists select their targets with high flexibility, intensity and precision, international firms seek competitive advantage through the expansion of production, distribution, and the marketing of products and services across multiple national boundaries. Terrorism sharply reduces corporate enthusiasm to expand. Measures to counter terrorism in turn are based of restricted freedom of movement and increased government regulation, both of which impair global commerce. The border-crossing effect of terrorism creates slowdowns for international transactions reaching 2.5% of merchandise value, which is comparable to the average level of global tariffs.

International trade depends on the efficiency and cost-effectiveness of global transportation systems. Terrorism increases the transaction costs of international commerce and delays global supply chains and distribution channels. Terrorism’s main impact reaches far beyond its immediate and direct effects. Key are the long term results from the indirect effects that occur in national and global economies. These include widespread anxiety and uncertainty that affect buyer demand, shifts or interruptions in the supply of needed inputs, new government regulations and procedures enacted to deal with terrorism, and longer-term perceptions that alter patterns of global trade and investment. Terrorism can also affect managerial attitudes towards risk, shift the risk absorption capacity of firms, and reduce the likelihood of embarking on international ventures or new investments abroad.

Our Google search of the NGram viewer system analyzed the extent of terrorism-related writings, and checked for correlations with the key terms ‘trade,’ ‘investment’ and ‘risk’. The results indicate a rapid increase of concern about terrorism since 1998. This development serves as an indicator of the growing preoccupation (in the English-speaking literature at least) with terrorism. Concurrently, and as expected in terms of theory-based postulations, actual risk increased while trade and investment interests declined.

We believe that terrorism will continue to be a significant factor in international marketing for decades to come. The rise of terrorism signals a new type of threat relevant to both developed and emerging economies. As governments increase security of public facilities, the likelihood of attacks against the softer targets of firms’ international operations is likely to increase.  Emerging economies need to find ways to increase their security in order to retain their attractiveness for foreign sourcing and investments. Corporate preparedness for the unexpected is a vital task. Innovative managers develop appropriate resources, and undertake planning and strategies to accommodate dislocations and sudden shocks. Terrorism represents an organizational crisis whose ultimate effects may be unexpected and unknown, posing a significant threat to the survival or performance of the firm.  Terrorism presents the firm with a dilemma that requires new decision-making and behaviors that will result in organizational change.  Firms that neglect to devote resources and capabilities to respond flexibly to terrorist triggered disruptions, risk sudden, sometimes even, total loss of competitive advantage. We follow the thinking of former U.S. Secretary of Defense Donald Rumsfeld who stated: “There are known knowns, which are things we know that we know. There are known unknowns; that is to say, there are things that we now know we don’t know. But there are also unknown unknowns, these are things we don’t know we don’t know”. The goal should be to analyze the role of terrorism under all three conditions.

Michael Czinkota teaches international business and trade at Georgetown University’s McDonough School of Business and the University of Kent. His key book (with Ilkka Ronkainen) is “International Marketing” (10th ed., CENGAGE).

Egypt's last major challenger to Sisi drops presidential bid after his arrest

Military says former chief of staff Sami Anan wants to drive wedge between army and people

Anan, a former army chief of staff, has reportedly been arrested by the army (Reuters)

Tuesday 23 January 2018

Egypt's former chief of staff Sami Anan pulled out of the presidential race on Tuesday, after he was arrested for "incitement" only days after announcing his intention to run.

Organisers of the campaign announced that he had called off his bid. They gave no details of his whereabouts following what they described as his detention. 

An army spokesman said that Anan's announcement to stand was intended to drive a wedge between the armed forces and the Egyptian people and that Anan had falsified official documents which stated his military service had terminated, which was required for former military officials to run for election.

But, speaking to MEE, Mahmoud Refaat, a lawyer and the spokesperson for Anan's presidential campaign, refuted these accusations, saying the were "all lies".

'Isn't it unusual that Sisi is accusing Anan of corruption just now?'

- Mahmoud Refaat, campaign spokesperson 

“What has happened is a crime. The regime is trying to terrorise everyone and it is time that the international community take a stand,” Refaat said.

"Sami Anan took all the necessary steps to run in the elections," he added.

"Isn't it unusual that Sisi is accusing Anan of corruption just now?," he asked, referring to Egyptian president Abdel Fattah al-Sisi.

Refaat went on to say that he was worried about Anan's safety and believed his life was under threat.

Mahmoud Refaat

✔@DrMahmoudRefaat

#Egypt: Abas Kamel the tight hand of #Alsisi lies to international media saying the presidential candidate Mr #SamiAnan is not arrested, and his pretend worries me for the safety of Mr #Anan@Europarl_EN @EUCouncil @eucopresident @congressdotgov @UN@bbc@CNNWorld@cnni

8:11 AM - Jan 23, 2018

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"Sisi threatened three days ago that anyone who announces his candidacy and is charged with corruption will be killed."

The army spokesman added that "the armed forces will not overlook the blatant legal violations [Anan] has committed which are a serious breach of the laws of military service."

The armed forces will not overlook the blatant legal violations

- Egyptian army statement

The spokesman said Anan had announced his candidacy "without getting permission from the armed forces ... or taking the steps necessary to terminate his service".

Anan announced his candidacy on Saturday, a day after the current president, Sisi, confirmed his run for a second term.

"I call on civilian and military institutions to maintain neutrality towards everyone who had announced their intention to run and not take unconstitutional sides of a president who will leave his post in a few months," Anan said on Saturday.

Refaat also said that despite fears that Anan would be sidelined by Sisi after his announcement to run for president, he felt the need to take this step.

"Shafiq was blackmailed and that’s why he pulled out," said Refaat, referring to Ahmed Shafiq who announced earlier this month that he would not stand in the 2018 presidential elections, reversing a pledge to challenge Sisi at the polls.

"Despite these fear tactics, Anan announced his candidacy because Egypt is in real need for a man to save it from sinking," he added. 

Anan served as armed forces chief of staff from 2005 until he was retired by president Mohamed Morsi in 2012 and analysts said his candidacy might attract Egyptians nostalgic for the relative stability of the Hosni Mubarak era.

Read more ►

Shafiq quit Egypt election bid after threats of 'sex tape' and corruption slurs: Sources

When Mubarak, the longtime strongman, was forced to step down by the Arab Spring protests of 2011, he ceded power to the Supreme Council of Armed Forces (SCAF), an interim executive made up of 20 generals in which Anan served as number two.

Egypt will hold its presidential election in March, and a run-off vote the next month if no candidate wins more than 50 percent in the first round.

Several prominent figures who had been seen as potential challengers to Sisi had already ruled themselves out even before registrations opened on Saturday.

Sources close to Shafiq said he pulled out after being threatened with a smear campaign.

Last Monday, Mohamed Anwar Sadat, a dissident and nephew of the late president of the same name, said he would not stand either because the climate was not right for free elections.

Additional reporting by Arwa Ibrahim.

Female journalists kept at back of Pence’s visit to Western Wall

• Reporter says women ‘penned off’ behind male colleagues
• Arrangements contrast with those for Trump and Obama visits

Oliver Holmes in Jerusalem Tue 23 Jan 2018 19.24 GMT

A spiritual visit by the US vice-president, Mike Pence, to Jerusalem’s Western Wall has been overshadowed after female journalists were forced to stand behind their male counterparts in a fenced-off area.

While women and men are separated by the ultra-Orthodox Jewish authority that runs the plaza, both sexes are normally able to look into each other’s section. During previous visits by Donald Trump and Barack Obama, sexes were divided although female reporters and photographers were afforded an unobstructed view.

One reporter, Noga Tarnopolsky, said authorities had gone too far on Tuesday with female press members “penned off behind the men, which has zero to do with any ‘religious rule’”.

Images shared by reporters on Tuesday showed men in front on a raised and covered platform, blocking a clean line of sight.

View image on Twitter

Ariane Ménage@ariane_menage

When it's a bit hard to do your job / women journalists forced to stand behind the men at the separation fence at the western wall for Mike Pence's visit #PenceInIsrael #PenceFence

5:50 AM - Jan 23, 2018 · Israel 

Following complaints, White House personnel removed the covering so female journalists could stand on chairs for a better view.

However, diplomatic and political correspondent Tal Schneider, who writes for the Hebrew-language Globes newspaper, tweeted a photo of her view obscured even after the canvas has been taken down.

“[I]f you are a male you can do your work and get the best front seat and if you are a second class citizen as I am, this is what we see & report,” she wrote.

View image on Twitter

Tal Schneider

✔@talschneider

Follow me for a “clear” shot of the @VP visit to the western wall where if you are a male you can do your work and get the best front seat and if you are a second class citizen as I am, this is what we see & report

6:34 AM - Jan 23, 2018

Following decades of outrage over segregation in which men have a more extensive area and women are not permitted to read aloud from the Torah, the Israeli government agreed in 2016 for a multi-sex space to be opened.

But following pressure from ultra-Orthodox parties last summer, the cabinet of the prime minister, Benjamin Netanyahu, suspended the plan.

The ancient limestone blocks that make the Western Wall – the holiest site where Jews can pray – also constitute a site revered by Muslims, which they call al-Haram al-Sharif.

Pence’s stop at the wall completed a two-day visit to Israel, the highest-level US trip since Trump announced his recognition of Jerusalem as Israel’s capital. The declaration broke longstanding diplomatic consensus that the issue should be decided in peace negotiations between the Israelis and Palestinians.

The Western Wall sits in the Old City, which Israel captured in 1967 and later annexed in a move that has not been recognised internationally.

It was not clear if Pence’s entourage were involved in the arrangements for the Western Wall visit.
The vice-president has been accused of sexist double standards, reportedly not dining alone with women and insisting only male aides assist him when he works late.