Hero’s Welcome For Oppressor Symbolizes Challenges Faced By Those Attempting Changes To Political Culture

By Javid Yusuf –January 29, 2018

The culture in a society is shaped by the values prevalent in a society and the practices followed by its citizenry. The political culture would therefore be reflective of the political values and practices of  ‘the sovereign people’. In a society that is greatly addicted to liquor a leader who bases his campaign on banning liquor and closing down bars will have a poor chance of  being elected to office in any election. If the society does not disapprove of violence in political life, such violence will continue to hold sway.

The conduct of the public (or at least a section of them) in relation to the incident where the Chief Minister of the Uva Province is accused of forcing a Principal of a girls’ school to kneel down in his presence as a punishment for not complying with his directive to admit a child to School further confirms that not all members of the public would find the incident abhorrent to their values.

What transpired last week after the Police produced the Chief Minister before the Courts and he was bailed out is quite revealing. A large crowd cheering the Chief Minister walked with him to his office where he was conferred blessings by a large number of religious leaders. The cheering crowd made the Chief Minster look like a hero who had accomplished a great feat that he and his supporters could be proud of and which action had been endorsed by religious leaders.

 

The conduct of the crowd that accompanied the Chief Minister from the Courts to his office provides valuable insights into the thinking of the public. While it would be correct to assume that the crowd did not represent a cross section of the public  and probably comprised the Chief Minister’s supporters the fact that a substantial section of the public was prepared to demonstrate their support for his abominal actions against the Principal showed they were insensitive to what was right and wrong.

Even if the Chief Minister had at any time felt a sense of remorse or regret at his conduct his cheering supporters would have emboldened him and given him the endorsement that he had done no wrong. And if the crowd had acted as an unthinking mob, the calm and serene religious leaders who were not emotionally charged conferring their blessings on  him would have undoubtedly settled any pangs of conscience that he may have had.

The public and religious leaders treating errant politicians as heroes is another new but increasing  feature of our political culture. Our TV screens often see politicians who are charged in the Courts on criminal charges being visited by religious leaders in the premises of the Welikade Prison to bless them and give them spiritual succour. While these religious leaders may believe in the respective politician’s innocence and therefore give them spiritual strength by blessing them, their doing so in public before TV cameras could send out wrong messages to the public and particularly to the younger generation who sense of right and wrong could greatly be dulled by these sights.

If these religious leaders wish to spiritually sensitise and bless the errant politicians who have been charged of criminal offences they could easily do so behind closed doors away from the glare of publicity.

 

Returning to the happenings in the Uva Province, the Chief Minister has been stripped of his position as Education Minister but retains his position as Chief Minister and Minister of Law and Order under which comes the Police. The purpose of him being removed as Education Minister is apparently to prevent any influence being brought with regard to the inquiry in respect of  the Chief Minister’s alleged actions. However as far as the public is aware his conduct is only the subject matter of a police inquiry with no Education Ministry inquiry being held.

It is not clear what offence the Chief Minister is being charged with but the inquiries have taken an unusual turn with the Principal being subject to a psychiatric examination on the request of the Police despite her being the victim.

The Government has now appointed Senthil Thondaman as the Minister of Tamil Education (whatever that means). One of his first tasks was to visit the Principal of the School and question her about the incident. What impact  appointing Mr. Thondaman, (who is no stranger to controversy according to Minister Mano Ganeshan) will have on any inquiry conducted by the Ministry of Education remains to be seen.

The dramatic happenings in Badulla continued on Thursday when Arumugam Ganeshamurthy a Provincial Councilor who had crossed over to the UNP from the CWC  a few days earlier was attacked when he arrived for the Uva Provincial Council meeting. The attack was like a scene from a Tamil movie with a large crowd of bystanders and the Police watching with crackers exploding in the background.

Ganeshamurthy was admitted to the hospital following the assault but next day the Police produced him before the Magistrate who granted him bail. According to the Police there had been several complaints against the Provincial Councillor on account of obtaining money on the pretext of giving jobs and he was produced before the Magistrate on charges of misappropriation  as well as on charges of unlawful assembly and assault. Why the Police had to wait until Ganeshamurthy was assaulted to take action on these complaints only they can answer. There has been no news of any arrests being made with regard to the assailants of Ganeshamurthy at the Provincial Council premises.

Fortunately the allegations against the Chief Minister has now come before the Human Rights Commission whose findings will establish the circumstances relating to the complaint of the Principal and the principles that should govern the handling of such situations and recommend suitable action against all those responsible.

Moving to the south of Badulla, in Kataragama an unfortunate incident occurred when a 43 year old man riding a scooter died after being shot at by the Police allegedly for not stopping when requested to do so by the Police. This resulted in public unrest with the Kataragama Police station being stoned by protesters. It was only after the Special Task Force was called in that the situation was brought under control.

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70 years after regaining independence: A managerial perspective

Sri Lankan military personnel march with the national flag during the island’s 69th Independence Day celebrations in Colombo on 4 February 2017 — AFP

 Monday, 29 January 2018 

We as a nation will celebrate 70 years of independence in a few days’ time. It was Peter Drucker who said that there are no good or bad institutions but well-managed or ill-managed institutions. I believe that it is equally applicable to countries. Has Sri Lanka been a “well-managed” country during the past 70 years? It prompts another question - are we really independent in a truly holistic sense? I think it is an opportune time to reflect on this in relation to relevant managerial thoughts.

Overview
The topic reminds me of a beautiful composition of the great Bengali poet Rabindranath Tagore (1861-1941) titled ‘Let my country awake’.

Where the mind is without fear and the head held high;

Where knowledge is free;

Where the world has not been broken up into fragments by narrow domestic walls;

Where words come out from the depth of truth;

Where tireless striving stretches its arms towards perfection;

Where the clear stream of reason has not lost its way into the dreary desert sand of dead habit;

Where the mind is led forward by Thee into ever-widening thought and action;

Into that heaven of freedom, my Father, let my country awake.

I believe the relevance of the above to Sri Lanka is immense. As a learner of management, let me use a familiar lens to look at Sri Lanka. It is what is commonly known as PESTEEL, representing political, economic, social, technological, environmental, ethical and legal factors. It is worthwhile to see how “independent” Sri Lanka is in the context of each of the above factors. In essence, it is a search to see the degree to which Tagore’s “heaven of freedom” is present in multiple dimensions.


Rhetoric and reality 

We regained our independence from the British in 1948. Has it been a real transformation of power to locals or a mere replacement of British rule with Sri Lankans under Dominion status? Did we have ‘statesmen’ as opposed to politicians with a strategic vision as to where the country should be directed to? Did we align our actions with a set of strategic priorities such as agriculture and industry growth? There are more questions than answers.

Having become a republic in 1972 and moving beyond to have an executive presidency under a new constitution, Sri Lanka moved ahead but certainly with a multitude of teething challenges. Did we see the continuation of pragmatic decisions of a previous regime by an incoming regime or the opposite? When Singapore wanted to be like Sri Lanka, and when they surpassed us in style, we were crawling with the bleeding wounds of political blunders. Where were the planning, organising, leading and controlling? The harsh reality emerges.

The end of terrorism in establishing civil rule across the country heralded a new era of opportunities for much-needed national reconciliation. The absence of war versus the presence of lasting peace are paradoxically different in a Sri Lankan context. We are yet to reach a consensus on the way to rule the country with the best possible governance structure. The way Nelson Mandela created a “rainbow nation” with South Africa’s black, white and brown communities living in harmony is a guiding example for us.

The most recent example involving tea exports to and asbestos imports from Russia shows clearly that we are not economically independent. One may argue that whether any country in the contemporary world can really be economically independent. The issue is more to do with fair or unfair economic practices. The ongoing deliberations at the World Economic Forum taking place in Davos where world leaders are at loggerheads is a vital sign of the acute need for “inter-dependence”.

The much publicised bond scam and associated wrongdoings highlight the need to have better financial discipline. It also exposes the ugly head of corruption which has been a regular phenomenon in the administrative system of the country. As we sadly saw with the Meethotamulla mayhem, mismanagement overpowered management on many fronts. The current liquor debate involving “bars and bras” (as a reputed Editorial identified it) is just the tip of the iceberg of unresolved social issues. Ethnic and religious tensions also have added fuel to the fire where social harmony is concerned. In essence, we see the need for a holistic approach towards national prosperity with the right decisions and actions.



From independence to interdependence 

“Interdependence is and ought to be as much the ideal of man as self-sufficiency. Man is a social being. Without inter-relation with society he cannot realise his oneness with the universe or suppress his egotism. His social interdependence enables him to test his faith and to prove himself on the touchstone of reality.” That’s how Mahatma Gandhi viewed interdependence.

Moving from independence to interdependence is not moving back to “dependence”. It is much deeper and delightful. Interdependence is important to individuals, interactive teams, institutions, industries as well as independent nations. The primary aspect in interdependence is synergy. Stephen Covey, in his bestseller ‘Seven habits of highly effective people’, describes synergy as follows: “Synergy means that the whole is greater than the sum of its parts. It shows that the relationship, which the parts have to each other, is a part in and of itself. It is not only a part, but also the most catalytic, the most empowering, the most unifying and the most exciting part.”

Synergy we see in nature is associated with the complex term symbiosis. It is close and often long-term interaction between two or more different biological species. In other words, a close prolonged association between two or more different organisms of different species that may benefit each member. Way back in 1877, Albert Bernhard Frank used the word symbiosis to describe the mutualistic relationship in lichens. It is also described as the living together of two dissimilar organisms, as in mutualism, commensalism or parasitism.

The term “symbiotic relationship” is often used in the area of sociology. The word symbiosis has first been used to describe people living together in a community. It is, in fact, a true adaptation from the biological meaning of “living together of unlike organisms”.


Leading towards interdependence 

It is worthy to mention the most vital need of leadership at multiple fronts in taking the country forward. Leaders by default should be performers. They should practice what they preach. They should inspire, influence and instruct in such a manner so as to initiate result-oriented action.

In contrast, laggards are passengers. They hamper the progress by being lazy and lethargic. Indecisiveness resulting in inaction is often common in their approach.

Do we see more leaders or laggards? The answer lies in the results they achieve. Let me focus more on business managers and public administrators leaving politicians aside. It is better to light a candle than curse the darkness. Living with leaders and laggards leaves us with a fewer number of choices for achievement. Leaders have to be far more effective to overcome the ineffectiveness of laggards. My preferred choice is to become a servant leader, in engaging laggards or even transforming them.

The nation needs more servant leaders who see their role as an obligation to serve others. They should also possess the required competence and confidence. This offers fresh insights about our traditional leadership hierarchy. Instead of looking up to see how your boss is doing, you should look in front to see whether your customers are delighted or not.

Subservient laggards do the contrary. It is frustrating at times to see them in abundance in offices that are supposed to serve people. Seeking personal glory instead of serving the public has become a painful experience for many. Living with leaders and laggards is not comfortable. Yet, it is the reality. Transforming laggards into leaders is not so easy. Yet it is necessary. Recognising and rewarding true leaders is one key step towards sending a clear message to laggards. Leadership development at all levels needs fresh thinking and focused action. The often quoted maxim echoes in my mind. “Those who serve deserve leadership.”


Way forward

On one hand, the Sri Lankan corporate sector needs such interdependence more than at any other time in converting the rapid economic growth into a more holistic, transparent and inclusive one in being more ethical and effective. That is how it should be playing the role of “engine of growth”. On the other hand, the public sector as the “driver” of that engine should be playing the role of a facilitator. Here is another vital need for inter-dependence involving the public and private sectors.

As Aristotle said a long time ago, “We are what we repeatedly do. Excellence, then, is not an act, but a habit.” This applies to interdependence very much. It all should begin with the right positive attitude towards prosperity. The much awaited vision for Sri Lanka, published by the Government, which aims to make Sri Lanka “an enriched country” by 2025, can only be possible with proper management on all fronts. There is no better time to reflect on interdependence than now when we celebrate 70 years of independence.

(Prof. Ajantha Dharmasiri can be reached through director@pim.lk, president@ipmlk.org or www.ajanthadharmasiri.info.)

“We’ll create a system where anyone can travel first class” – Tilvin

January 29, 2018

“When we travel to other countries the flight depends on the invitation. We travel by any class the donor selects. It is not an issue for us. Those who kept mum when Mahinda Rajapaksa travelled with an entourage of 300 to 400 people when he travelled abroad or those who had tight lips when special flights were arranged to bring down dogs to this country are the ones who talk about a photograph of Comrade Anura Dissanayaka on board. The system that we want to build is not one that the members of one family could travel first class but a system where first class is available to anyone who wants to travel,” says the General Secretary of the JVP Tilvin Silva.

He said this joining an interview with a Sunday newspaper.

Excerpts from the interview:

There are only two weeks for the local government election. What have you got to say about it?

We have almost completed our campaign at a very satisfactory level. We have addressed a large portion of the society. We have been to various places in the country. In all these places we noticed that the people are ready to move on a progressive path. The biggest advantage in the election campaign is for the JVP. The government or parties with the government have no advantage at the election. On the other hand, the groups with Mahinda Rajapaksa too have been rejected by the people.

It has been established throughout the country that only the JVP could stop frauds and corruption and develop the country. We believe that a new tendency in politics would come into existence with the local government election.

Doesn’t every party say the same story?

We are unable to give figures now stating these are the local councils we can win. However, we could emphasize that we would achieve a massive victory. People who never supported us in previous elections, those who had never attended our meetings and discussions have rallied with us at the election. Also, a large number of intellectuals, professionals and artists directly or indirectly support our campaign. All of them tell the people to cast their vote for the JVP. As such, we could definitely say that we have the best advantage at the election.

You had been saying you would form a broad front to face elections. However, you have entered the fray all by yourselves. What happened to the broad front?

Of course, we would enter the forthcoming provincial council election too as the JVP. However, the broad front we have talked about would be created in the future. Those forces that would form the broad front are supporting us at the election in different ways. Some of them are on our nomination lists as well.

Also, university lecturers and professors, artists, professionals and scholars are rallying around this front. As such, the front will come forward with strength in the near future.

The people who support political parties and their leaders were called ‘henchmen’. They had to come down to that level. Will people call these individuals and organizations that rally around the JVP and the front it leads also as ‘henchmen’?

There is a clear difference between ‘henchmen’ and those who support us. The reason such ‘henchmen’ support their political parties and their leaders and the objective of individuals that support us is different. Their aspirations and wishes are different. The expectations of ‘henchmen’ are personal. They expect various privileges when the party they support comes to power. However, those who rally with us do not have personal agendas. Their aspirations are for a righteous country, righteous society and progressive and democratic administration. They do not support a political party expecting to get a house, a vehicle, positions or other privileges. It is such people that rally around the front we create.

The parties in the government say any work for the village or the town could be done only if the parties that rule are given power in local councils. Won’t it be disadvantageous to the JVP if people accept this view?

First of all, I should say this talk about only the party in power could carry out development is a blatant lie. The UNP, the SLFP and the clique calling themselves the ‘joint opposition’ have blackened their names politically. A large number of individuals who have been accused of frauds, corruption and crimes and have been prosecuted are in all three groups. As such, many of them are unable to face the society.

Despite forwarding nominations for the election, they are scared of the response they would get from the masses. This is why they come out with various fabrications. This talk about the ruling party should be given power in local councils is a story without any essence. All these are people who have destroyed the village or the town. They have destroyed the economy and now they have nothing to tell the people. We made Thissamaharama Pradeshiya Sabha the best local council in the country on two occasions. With this, we have proved this talk is a lie. We tell the people if they want to see how local councils could be developed without the power of the ruling party give the power of the local council to the JVP.

You say the present system in local government councils is chaotic. How would you change this system if you get power in local councils?

We hope to follow a new process in local councils that would bring in development. No one would be allowed to steal, bribe or have under the desk dealings and tender rackets would be completely eradicated. We have shown this could be done at Thissamaharamaya. A town or a village should be developed without any political bias. We have no system where only the party or members of the party benefit. The senior official in councils too would not be allowed to do whatever they like. We would work so that grants would be equally distributed.

Going on foreign tours spending large amounts of money has become a habit in many local councils. No one has brought any benefit to the councils from these tours. This should be stopped. Only the most essential things should be chosen.

The funds in the council should be usefully utilized. They should be used for the development of the council and the citizens. We have a methodical process to earn money and to spend them usefully.

All those councillors who get elected to local councils would not spend the allowances they get as members of eh council for their personal use. This would go to a common fund to be used for the common good of the citizens of the area. We have given this example and we would continue to do so. No other party could do this.

Recently, Parliamentarian Johnston Fernando had said that the JVP has been bought by Malik Samarawickreme. Now, this story has gone to court.

First of all, it should be said that the story is a blatant lie. Everyone knows who Johnston Fernando is. He is known for stealing and corruption and has been prosecuted for such crimes. We have already taken legal action against the mudslinging. It would show who the rogue is. The bankrupt politicians who stole from government institutions accuse us. There are politicians who have received money from the LTTE as well. We’ll expose such politicians in the future.

Anura Kumara Dissanayaka flying first class when going abroad has become an issue for some.
When there is nothing to say against the JVP they try to hang on to something. The photograph that was published in social media recently is a very old photograph. When going abroad we can go by any class. What’s wrong with that? Are only the fraudsters who plundered the resources of the country expected to travel first class?

When we travel to other countries the flight depends on the invitation we get from the organization that invites us. We travel by any class the donor selects. It is not an issue for us. Those who kept mum when Mahinda Rajapaksa travelled with an entourage of 300 to 400 people when he travelled abroad or those who had tight lips when special flights were arranged to bring down dogs to this country are the ones who talk about a photograph of Comrade Anura Dissanayaka on board. The system that we want to build is not one that the members of one family could travel first class but a system where first class is available to anyone who wants to travel.

PRECIFAC report is the biggest issue -PM

2018-01-29 09

The biggest issue at hand was the report of PRECIFAC, as it had recommended stripping former President Mahinda Rajapaksa’s Civic Rights for life, Prime Minister Ranil Wickremesinghe said at an election rally in Deniyaya.

He said that those who suggested the SLFP and Joint Opposition should unite, should consider the recommendations made by the Presidential Commission of Inquiry to Investigate and Inquire into Serious Acts of Fraud, Corruption and Abuse of Power, State Resources and Privileges, whether the two parties could get together in a situation, where the Commission had called for the stripping of Mr Rajapaksa's Civic Rights," he said.

The Premier said that he had requested Speaker Karu Jayasuriya to convene Parliament on February 8, 2018, to take up the debate on Bond Commission report and the PRECIFAC Report.

"There is no issue in having a debate on the Bond Commission report as there is nothing new about it. We have had several debates on the issue,” he said.

Mr Wickremesinghe reiterated that the ruling party should be given the mandate to run local bodies to avoid political turmoil that may occur if local bodies headed by other parties sabotage development work.

Minister of Law and order Sagala Ratnayake said the Minister of Justice would submit a paper pertaining to the setting up of Special courts to hear corruption cases in a few days time.

Minister Gayantha Karunathilaka said it would not be possible to change the President or the Prime Minister after the Local Government election as it was only a poll held to elect representatives for local bodies.(Yohan Perera)

Shipwrecked by Laughter of Gods

By Sarath de Alwis-January 29, 2018, 8:23 pm 

Prime Minister Ranil Wickremesinghe has decided that the Report of the Bond Commission has absolved him, his party and his administration of any responsibility for or wrongdoing in the Central Bank Bond Scam.

Development Strategies Minister Malik Samarawickrema, who is the eager Hanuman to Ranil’s Rama, has claimed in a press interview that the government has not lost a cent in the bond scam.

The Commission in its report has stated that their task was not a ‘witch hunt or a whitewash’.

The report has not done a ‘whitewash’. It seems to have scrubbed the wall and the Prime Minister and his troupe have decided to paint it in the most convenient hue that suits them.

The Bond Commission report informs us that it has striven to perform its function as per Edmund Burke "With cold neutrality of an impartial judge but also fairly." In hindsight, it appears that the commission would have been wiser if it had taken note of another pearl of wisdom from Burke. "Whoever undertakes to set himself up as a judge of Truth and Knowledge is shipwrecked by the laughter of the gods."

The assurance that it is no witch hunt or a whitewash was totally unneeded. Though two years too late, the appointment of the commission was regarded as a step in the right direction. The Commission was accepted and respected.

When serving judges are appointed to commissions, the people expect them to retain utmost impartiality. People expect them to remain aloof from political considerations.

Proper and appropriate way to question a Prime Minister

The Commission explains that it considered it proper and appropriate to formulate the questions that it wished to ask the Prime Minister and request the Prime Minister to furnish his answers by way of an Affidavit rather than by way of time-consuming Oral Evidence.

The Commission’s decision not to summon the Prime Minister to give oral evidence in this age of transparency is regrettable. The Commissioners explained why it decided to "request the Prime Minister to furnish his Answers, by way of an Affidavit, rather than by way of time-consuming Oral Evidence."

He was not summoned we were told. He was invited to clarify some of his written answers. Why?

The Prime Minister is a politician. Explaining and justifying his conduct, past, present and future is his full time vocation. Obligation of giving oral evidence is a major part of his territory. If summoned he was duty bound to appear before the commission.

His busy schedule is not a tenable proposition. The Prime Minister’s high office has not prevented him visiting deities in their shrines in India. His high office has not prevented him consulting expert medical opinion in America. His high office has not prevented him attending convocations in Australian universities to receive honorary Doctorates. Surely, his appearance before the Commission would not have paralysed or crippled the government.

That his governance mechanism has been brain dead for some time is neither here nor there.

It is noteworthy, that the Commission has treated the appearance of the Prime Minister of the Republic before the Commission as an occasion where only the principal law officer of the state should lead his evidence.

It is a telling commentary on the Commission’s aloofness from politics. . Tony Blair must be wishing that Sir John Chilcot possessed such proprieties!

The Prime Minister has now announced that losses will be recovered. He hasn’t said a word on the conduct of Mahendran, before or after the report except for that famous defence - Arjuna Mahendran has done nothing wrong.

Mistakes made but not by me

There is an explanation. People are sensitive to inconsistencies between their beliefs and actions. There are three ways to resolve such inconsistencies.

You can change your belief. You can change your action. The third is more complex but very familiar. You change the perception of your action! That is where the Prime Minster excels.

Two Social Psychologists Carol Travis and Elliot Aaronson published a path breaking book in 2007 - ‘Mistakes were made. But not by me" It explains how we make decisions that turn out to be mistakes. It is about ordinary decisions and also decisions that can affect nations, lands and millions of people.

The authors have brilliantly captured the self-entrapment that we create for ourselves.

"As fallible human beings, all of us share the impulse to justify ourselves and avoid taking responsibility for any actions that may turn out to be harmful, immoral, or stupid. Most of us will never be in a position to make decisions affecting the lives and deaths of millions of people, but whether the consequences of our mistakes are trivial or tragic, on a small scale or a national canvas, most of us find it difficult, if not impossible, to say, "I was wrong; I made a terrible mistake." The higher the stakes — emotional, financial, moral — the greater the difficult."

Mahendran censured

The report finds Arjuna Mahendran to have knowingly acted improperly and wrongfully in intervening in established procedures of the Central Bank. It has found him to be the source of inside information received by Perpetual Treasuries – the errant primary dealer.

Arjuna Mahendran is an Economist and Investment Banker. He was requested by the Ranil Wickremesinghe-led administration to be the Governor of the Central Bank. The Prime Minister has stated that the selection was the result of a general consensus of the new government.

The claim that the choice was a collective decision of the government was not challenged before the Commission. The record now shows that he was appointed by the President on the recommendation of the Minister of Finance. The reassignment of the Central Bank to the Prime Minister in his capacity of Minister of National Policies and Economic Affairs was an executive action.

The resulting complexities arising from horizontal diffusion of power responsibilities have not been addressed by the Commission. Such an exercise would be outside the scope of its warrant.

Who made him Governor?

The Commission has not focussed on the process that made Mahendran the Governor. It explains that the he was appointed before the period covered by its warrant - 01st February 2015 and 31st March 2016.

The Prime Minister was not questioned why Arjuna Mahendran was considered the most outstanding candidate for the top job in the Central Bank.

Soon after the new Government was installed Arjuna Mahendran appeared before the Ceylon Chamber of Commerce in the company of Finance Minister Ravi Karunanayake to explain the new economic vision of the government. The current Governor served as moderator. Arjuna Mahendran was more than the Governor of the Central Bank. He was a pivotal player in Ranil Wickremesinghe’s Economic Think Tank.

Why did Arjuna Mahendran do what he is now stands accused of doing?

Economics has progressed beyond the rational choice theory. Today, Economic behaviour is a new discipline known as behavioural economics. It deals with the psychology of economic behaviour. Richard Thaler this year’s Nobel laureate specialises in behavioural finances!

The search for ways in which humans violate rules of rationality is a frontier-less land yet to be explored. The science of economics in the world of paper money is not a precise science.

Breakfast meeting – a non-event

.Why did two ministers and the advisor to the Prime Minister go to the Central Bank for breakfast with the Governor? Not to discuss bonds, they have insisted. Of course, a smart cookie would insist that Central Bank was the place where the new Governor was serving breakfast with choice Bacon!

The Commission has held that no decision was taken at the ‘Breakfast Meeting’ held on 26th February, to raise money for the Road Projects at the Auction of Treasury Bonds held on 27th February.

The Doctrine of Public Trust

The Bond Commission has determined that the "Governor and other members of the Monetary Board, Deputy Governors and other senior officers of the CBSL hold those offices subject to the `Public Trust Doctrine and are subject to Accountability.

It has determined that Deputy Governors Silva and Weerasinghe were negligent and were in breach of their responsibilities as Deputy Governors of the Central Bank. They had a duty to advise the Governor to desist from folly.

There were good reasons for the Deputy Governors of the Central Bank not to teach Mahendran monetary theory. Arjuna Mahendran was a key figure in the economic pantheon Ranil assembled. It was not because those good people were less informed of the doctrine but they were more informed of his political clout.

The pursuit of a utopia is understandable. But an ideal utopia? The Doctrine of Public Trust is invoked when dealing with situations not covered by precise laws or regulations. That is also the fertile field for patrimonial politics.

It has held "that, Deputy Governor Samarasiri was grossly negligent and in grave breach of the duty and responsibility he had, as the Chairman of the Tender Board. He had supinely obeyed the instructions given by Mahendran.

The report comments on the conduct of Dr. Samaratunga Secretary Ministry of Finance and member of the Monetary Board.

"Since Dr. Samaratunga, Secretary to the Ministry of Finance, who was present at this meeting, is also a member of the Monetary Board, he was personally obliged to convey to the CBSL that the three State Banks had been instructed to place Bids within a specified range of Yield Rates at the Treasury Bond Auction to be held on 29th March 2016 and that the three State Banks had been given an assurance that Bids at higher Yield Rates would not be accepted at this Auction. There is no evidence that Dr. Samaratunga did so.

To Goose and Gander - different sauces

The Commission has held these officials subject to the doctrine of public trust. Is the Prime Minister exempt from the Doctrine of Public Trust? Is he not accountable for the appointment of this Governor? Did he not condemn the practice of private placements and advocate auctions? Private placements can be rigged. Auctions too can be rigged. In this business is not the tune but the piper who matters.

That explains Friedrich Hayek’s disarmingly simple critique of Central Banks. "There is no answer in the available literature to the question why a government monopoly of the provision of money is universally regarded as indispensable. It has the defects of all monopolies."

Ranil the Economist

It is the Prime Minister who took over the responsibility of pulling the nation from the brink of the abyss and provide us one million jobs, a Volkswagen plant, and his vision of 2020 or whatever.

He brought Arjuna Mahendran back. He brought Paskaralingam back. He brought Chairitha Ratwatte back. By mid-January 2015 he had assembled all his knights at his round table.

The Bond Commission report does not fault the Prime Minster.’ If only he was less trusting’ seems to be the refrain he has earned.

The report concludes that Mahendran and Deputy Governor Samarasiri "deliberately and mala fide, misled the Prime Minister and sussed materiel facts..." It says "… the Hon. Prime Minister would have been better advised, if he had independently verified what had happened at the CBSL on 27th February 2015 before making any statement, instead of relying on the briefing note and reports submitted by Mr. Mahendran and Depty Governor Samarasiri ."

This indeed is really thick. The Prime Minister should have sought a second opinion on what was told to him by the Governor and the Deputy Governor. The Governor was appointed on 23rd January 2015. The Commission is of the view that his briefing notes in March 2015 should have been independently verified!

An Authority of the Doctrine of Public Trust

Our Prime Minister is an authority on the Doctrine of Public Trust. In an op-ed piece in the Sunday Times of 24th February, 2013, the then Leader of the Opposition Ranil Wickremesinghe accused the then government of betraying the doctrine of public trust. The Supreme Court observations he quotes in his homily on public trust are the identical judgements quoted by the report of the Bond Commission.

There is no doubt that our Prime Minister is very learned in the law. Very interestingly, he has in the same essay defined the role of the ideal Attorney General and criticised the then AG in precise and plain language. "The Attorney General of the United Kingdom Dominic Grieve in a speech to the BPP Law School on the ‘Role of the Attorney General’ said "as Chief Legal Advisor to the Crown, I advise government departments on how policy can be achieved in a lawful and proper way.

However that does not detract from the fact that in carrying out the function of legal adviser to the Government, the Attorney General’s role is to support and protect the rule of law. I think that the role of the Attorney General as the Government’s Chief Legal Adviser was neatly summed up by a former Attorney General, Lord Mayhew of Twysden who said: ‘the Attorney General has a duty to ensure that the Queen’s ministers who act in her name, or purport to act in her name, do act lawfully because it is his duty to help to secure the rule of law, the principal requirement of which is that the government itself acts lawfully’."Regrettably, our Attorney General has failed to maintain the high standards of his Office. Furthermore, the Attorney General has also deliberately misled the House."

Full Steam ahead

Let us go back to those exciting days of the first hundred days of Yahapalanaya. Ranil took over the command. Did he tell Arjuna Mahendran full steam ahead and damn the torpedoes? This writer has no reason to doubt Arjuna Mahendran’s sanity.

Govt Tries To Slip ‘Protect Mahendrans’ Clause Into Debt Management Bill

January 29, 2018

The Yahapalan Government, in the process of introducing new regulations governing the management of the country’s debt, has scripted in provisions granting immunity against prosecution to Central Bank officials and members of the Monetary Board ‘if they act in good faith.’

The proposed regulations has ben gazetted and will be presented to Parliament within the next three months as the Active Liability Management Bill.

The said immunity is included in Section 9 which deals with ‘defence in criminal or civil proceeding.’ Accordingly members of the Monetary Board, officials of CB and those working for the line Ministry ‘cannot be held liable, either for criminal matters or civil matters for performing in good faith the duties and/or exercising the powers given to them by this Act or any regulation, Order, decision or directive issued and made.’

Deputy Minister of National Policies and Economic Affairs Dr Harsha de Silva pooh-poohed concerns over the immunity clause. He told the Sunday Times that ‘most of the laws have this as a standard clause and there is nothing to be alarmed about.’

 

The Sunday Times, quoting unnamed analysts opined that ‘the immunity clause in the Active Liability Management Bill appears to have a wider meaning than what is contained in other bills.’

There is, for example, a safeguard through a connected clause in the Monetary Law Act under Section 47 on ‘Protection for acts done in good faith,’ where it is clearly stated that ‘No member of the Monetary Board or officer or servant of the Central Bank shall be liable for any damage or loss suffered by the bank unless such damage or loss was caused by his misconduct or willful default.’

In the case of the Central Bank bond issue scam, for example, misconduct and willful default have been established by the various commissions and committees inquiring into the same. As such the plea ‘I acted in good faith,’ does not stand.

 

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Govt. Bonds, what the people should know 

2018-01-30

The Sri Lankan Local Government elections are getting closer and the hot topic for many participating major political parties is the “Irregularities that had taken place at the Central Bank when auctioning Government Bonds”. Almost every Sri Lankan is talking about the alleged Bond fraud. The Opposition has deployed a strategy to pin the responsibility of the alleged fraud on the Prime Minister Ranil Wickremesinghe because he had appointed the Central Bank’s former Governor Arjun Mahendran who is at the centre of the entire scandal. It looks like the Bond Fraud when the parties opposing the UNP and Prime Minister Wickremesinghe call it, is likely to make a tangible change to the outcome at the local government elections in February unless the proper and truthful information is passed on to the public. 

A government bond is a debt instrument issued by a government to support government spending. In layman’s terms Government Bond is money that the Government borrows to make ends meet when there is insufficient Government income. In every country these bonds are issued by their respective Central Banks which are the Government’s Bankers. Needless to say as any other government function issuing the Bonds have very clear set of guidelines for the issuing authority to follow.

The problem that is going on now is because the Central Bank under the governorship of Mr. Mahendran had not followed the rules and regulations which they should have followed when they were auctioning the Bonds.

It is alleged that the Central Bank by not following these rules a primary market bond dealer, who is well connected to politicians of all major parties made a colossal profit at the expense of the people of Sri Lanka. A comprehensive report of Central Bank’s misconduct is on its way and rightfully whoever is responsible for these irregularities should be punished appropriately.   

The Government should not only investigate the misconduct of former governor Arjun Mahendran during his tenure in office but also investigate the previous CB governor Nivard Cabraal

In my view the Government should not only investigate the misconduct of former governor Arjun Mahendran during his tenure in office but also investigate the previous CB governor Nivard Cabraal whose blunders resulted in losses of billions of rupees to the country. The CPC Crude Oil Hedging deal which incurred losses of more than 14 billion rupees and counting because of utter negligence, ignorance and corruption. I was instrumental in getting down two well experienced industry specialists from the Chicago Mercantile Exchange who strongly advised the Central Bank and the Petroleum Corporation against the strategy they wanted to use to Hedge the Country’s Crude Oil exposure pointing out that a sudden drop in fuel prices could result in the Sri Lankan Government falling in to a massive “margin call” in their Hedging account. Neither the Central Bank nor the CPC was interested in the advice given to them by these specialists. In the same way having realised the impending loss for the Sri Lankan Government, the Chicago based Futures Commission Merchant who was among 20 of the largest brokerage firms in the world at that time backed out from CPC hedging deal. The Central Bank was ignorant about how this kind of trading functioned but it wanted to show that it had it under control. The deputy governor who was in charge of the hedging deal on Crude Oil had read a book on Hedging which he had on his desk and the devastating strategy they wanted to apply to the deal was one chapter of that book. It resulted in a loss of up to 14 billion so far.   

Some people made commissions out of this and there is no doubt on that

Newport Beach California-based Pimco is or used to be the largest bond-fund manager in the world, with nearly US$2 trillion in assets under management. Mohamed Aly El-Erian was the CEO of Pimco during the Greek Debt crisis and he was featured on all Business and regular news channels during that period for in-depth analysis on Greek Bonds. Mr. El-Erian is one of the most specialised and successful bond traders in the world. His success has elevated him to a point that the Trump administration is now considering him for the Vice Chair of the Federal Reserve Bank. At that time El-Erian and the rest of the experts on Bonds were trying to come up with only exit strategies if you have already had Greek Bonds in your portfolio which was extremely difficult at the time hence the issuing country of the Bond was considering to default. No one was thinking of buying Greek Bonds but Sri Lanka’s Central Bank. I am sure that they did not infringe any of guidelines laid down by the government for the Central Bankers to engage in such trade but if they were just watching CNBC or Bloomberg news and listening to Mr. El-Erian they might have refrained from making that investment. Later in the same year the Sri Lankan Central Bank unloaded the Greek Bonds at a loss of more than US$ 6 million. The Central Bank argued that although they lost US$6 million on the Greek Bond trade they still ended up with a profit on the Investment they made in 2011. The profit is made by taking a risk with our national assets. When you have a positive balance on trading there is no need to take a high risk trade like Greek Bonds against all odds. The Central Bank is not a proprietary trading account where market players take undue risk to make a killing. If you made good profits a Central Bank of a poor country like Sri Lanka should think of being more conservative and protect what we have. This entire deal has another side. Some people made commissions out of this and there is no doubt on that. Brokering Banks very commonly engage in such activity and prior to Greece when Argentinian Bonds were aggressively sold before defaulting took place the situation was the same. Very respectable Banks offered massive commissions to whomsoever brokered a sale.   

 The Central Bank argued that although they lost US$6 million on the Greek Bond trade they still ended up with a profit on the Investment they made in 2011. The profit is made by taking a risk with our national assets.

In most cases the people do not understand the functions and the technicalities of something like the Bond Market. Nevertheless who are attacking the UNP are very vocal about the Bond Issue so as to gain a political advantage at the forthcoming Local Government elections. There is one more important goal that these UNP bashers are trying to achieve. That is to accuse Prime Minister Ranil Wickremesinghe was a part of a financial irregularity. That is one thing that no one in the universe could accuse him of. The Prime Minister will never misappropriate public money. He does not need it. This allegations are made with a plan to destroy his record of being clean and to dampen his chances of being successful at the presidential election in the future. It is not too late for the UNP to embark on a strong campaign to counter the false allegations made against its leader and the party and most importantly to educate the common man with the simple truth. 

Gold worth Rs. 70 million busted in Jaffna

Monday, January 29, 2018 

The Sri Lanka Navy apprehended two individuals who attempted to smuggle 12 kilograms worth Rs. 70 million to India at Urumalaei seas in Jaffna, yesterday.

The apprehended individuals are Sri Lankan nationals.

The consignment of gold was in the form of 120 biscuits, each weighing 100g.

A dinghy used for the transportation of the consignment was also seized by the Navy.

The apprehended suspects, gold and dinghy were handed over to the Jaffna Provincial Customs Office for further legal action.

Further investigations are underway.

UNRWA services closed in Gaza in protest over US threats to cut aid

Palestinian employee of UNRWA hold a sign during a protest against a US decision to cut aid, in Gaza City on Monday (Reuters)

Monday 29 January 2018 

Schools, clinics and food distribution centres in the Gaza Strip were closed on Monday after 13,000 employees of the United Nations agency that serves the Palestinians walked out.

The Palestinian employees have been angered by a US decision to cut its annual contribution towards the running of the United Nations' Relief and Welfare Agency (UNRWA), which runs 278 schools in Gaza attended by some 300,000 students.

UNRWA is funded mainly by voluntary contributions from UN member states, with the United States by far the largest donor. Washington announced on 16 January it would hold back $65m - more than half its planned contribution this year - and demanded that the agency make unspecified reforms.

'I have a family of nine and I have never felt afraid for my job like today. US aid cuts will affect the entire community'

- Ahmed Abu Suleiman, teacher

Those joining Monday's action said the US funding cut would worsen hardship in the Gaza Strip, and they marched to the UN headquarters in Gaza City waving Palestinian flags and brandishing banners that read "Dignity is priceless."

"I have a family of nine and I have never felt afraid for my job like today. US aid cuts will affect the entire community," said 59-year-old English teacher Ahmed Abu Suleiman.

UNRWA spokesman Abu Hasna said the agency, which has launched an international appeal for funds, had enough money for three months of operations.

"We appreciate the fear and concern of employees for their jobs and for possible cuts in services," he said.

More than half of the two million people in the Gaza Strip are dependent on support from UNRWA and other humanitarian agencies. Unemployment in the enclave stands at 46 percent.

Although the action was characterised as a "strike", UNRWA's spokesperson Chris Gunness denied this.

"Contrary to some reports, there was no strike in Gaza today and UNRWA installations across Gaza were not closed because of industrial action," he told Middle East Eye in a statement.

"There was a memorable and peaceful solidarity walk by thousands of UNRWA employees from our office in Gaza City to the UNESCO office to hand over a letter to the President of the General Assembly, expressing concern about funding reductions and their potential impact.

"While people stayed away from work for a few hours, UNRWA had a prior deal with the Staff Union that essential services like food distribution would not be disrupted."

The move comes amid Palestinian anger over US President Donald Trump's 6 December decision to recognise Jerusalem as Israel's capital.

Speaking at the World Economic Forum in Davos last week, Trump criticised the Palestinian leadership for refusing to meet Vice President Mike Pence during his visit to the region and suggested such behaviour provided grounds for cutting aid.

"When they disrespected us a week ago by not allowing our great vice president to see them, and we give them hundreds of millions of dollars in aid and support, tremendous numbers, numbers that nobody understands - that money is on the table and that money is not going to them unless they sit down and negotiate peace," Trump said.

UNRWA was established by the UN General Assembly in 1949 after hundreds of thousands of Palestinians fled or were expelled from their homes in the 1948 war that followed the creation of the state of Israel.

Jordan's King Abdullah on Monday urged the international community to "fulfil its responsibilities" towards Palestinians in Jerusalem and support UNRWA.

"The international community must fulfil its responsibilities to protect the rights of Palestinians, Arabs, Muslims and Christians in Jerusalem," Abdullah said, according to a palace statement.

The city is "the key to achieving peace and stability in the region," he said.

East Jerusalem was under Jordanian adminstration before Israel occupied it during the 1967 Six-Day War. 

Israel, which signed a peace treaty with Jordan in 1994, recognises the kingdom's status as custodian of the city's holy sites.

Jordan in December called Trump's move "a violation of decisions of international law and the United Nations charter".