Monday, June 28, 2010

Sri Lankan monks protest UN panel

By Eranga Jayawrdane (AP)

Clerics and lay members of a Buddhist nationalist party protested on Monday against a United Nations' panel tasked with investigating alleged human rights violations during Sri Lanka's civil war.

The National Heritage Party consisting largely of monks said UN Secretary-General Ban Ki-moon's appointment of the three-member panel last week was interfering in Sri Lanka's domestic affairs and helping terrorism.

Dozens of monks, laymen and laywomen marched to the U.N. office in Sri Lanka's capital Colombo, chanting slogans against the world body.

"The U.N. has no right, authority or mandate to appoint a committee. It's an interference with Sri Lankan affairs," party leader Rev. Omalpe Sobitha told the gathering. "The U.N. is acting as an agent of terrorism."

Sri Lankan military forces last year defeated the Tamil Tiger rebels, ending 25 years of civil war.

The rebels — designated a terrorist organization by the United States and the European Union — fought for an independent state for ethnic minority Tamils, mostly Hindus, after decades of marginalization by successive governments controlled by majority ethnic Sinhalese, most of them Buddhists.

According to the U.N., more than 7,000 Tamil civilians were killed in the last five months of the war that ended in May 2009. Human rights groups have accused both government forces and the now-vanquished Tamil Tiger rebels of deliberate targeting of civilians.

Ban's committee led by former Indonesian Attorney-General Marzuki Darusman, also the U.N.'s special rights investigator for North Korea, has been asked to advise him on the alleged abuses during the war's final stages.

The Sri Lankan government has already opposed the move as "an unwarranted and unnecessary interference with a sovereign nation."

Buddhist monks here are considered protectors of the nation and wield big influence in the country's social and political affairs.

© Brandon Sun

Read More

Bookmark and Share

Monday, June 28, 2010

'India's views matter, don't care about the world' - Sri Lankan President

Interviewed by K Venkataramanan

Clearly upbeat over the outcome of his recent visit to New Delhi, Sri Lankan President Mahinda Rajapaksa recently spoke to 'Times of India' in an exclusive interview about India and its concerns, his troubled ties with the internationacommunity, especially the United Nations, and the constitutionachanges he proposed.

Rajapaksa presented the post-war rehabilitation of Tamil refugees as one that was actually unbelievably fast rather than the tardy exercise the world says it is. "We have sent back most people to their homes, about 80-90%," he said. In the course of a two-hour-long conversation with K Venkataramanan at his Temple Trees residence in Colombo, he also hinted at giving himself an opportunity for more terms in office by amending the present Constitution which limits a president's tenure to two terms. Rajapaksa described the incarceration of his political rival, ex-army chief Sarath Fonseka, as something that was not of concern to him as it was a judicial matter, and spoke candidly about his support for an ethnically mixed population in the north, where traditionally Tamils constitute an overwhelming majority and his belief that Tamils and Muslims should choose to be part of a national parties instead of limiting themselves to regional or communal identities.


Your popularity in the country is at its height. But aren't you worried about the international image of the country and your own personal image abroad?

Why should I worry about others? If India and neighbours are good with me, that is enough for me.

The UN has made adverse remarks about the human rights situation and many have called for an international investigation into war crimes in the last phase of the war.

They should understand the country's situation. Earlier, they said Prabhakaran was the world's most ruthless terrorist. But now, suddenly, when I defeated him, they are talking differently. I wonder if they would say the same if bin Laden were to be defeated. They can advise us, but they can't force us. No one can force us to do this and that.

The international community, including EU, even India, frequently asks you to speed up the process of finding a political solution. Where do you stand on that?

We will take our own time and the solution, you can't ask for an instant solution like instant noodles. Constitutions are not for one or two days. It is not a magazine which is published weekly or monthly. We can't change the Constitution frequently. We will have to take our own time. We will certainly change all this. My commitment remains.

The European Union has threatened to suspend GSP Plus tariff concessions for Sri Lanka.

I am not bothered. These concessions were offered soon after the tsunami. Now the tsunami (rehabilitation) is over, it helped us at that time. Now we must find new markets. Our people must know this: when I called the elections, they (EU) immediately called for suspension of tariff concessions. It was a politically motivated decision. If the EU doesn't want to give it (concessions), let them keep it. I don't want it. We have gone and explained what we have done. Now we have appointed it (an inquiry commission), not because someone wanted me to, but because I am committed to that.

The commission is about the lessons learnt and what should be done for national reconciliation. You must have your own view on this. What will you say are the lessons learnt from this conflict and what are your suggestions for national reconciliation?

The people must trust each other. We have to build that trust. In Colombo, about 30 years ago, Sinhalese were the majority. Today, they are a minority, about 27%. There are more Tamils and Muslims now. But I don't see this as a problem. I believe in mixed population. Earlier, there was and they had no problem like this. Only politicians make althese issues for their own ends.

There are fears of complete Sinhalisation of the north and east. Will the Sinhalese people be settled in those areas in large numbers?

They were there, you know. They were chased by Prabhakaran, so, if anybody wants to go there, yes, they can. What if somebody were to say that in Colombo, the Tamils have come in large numbers?

Is it true there are 25,000 Chinese workers in Sri Lanka?

How can it be 25,000? Must be the Chinese who work here as dental technicians. They have been here for such a long time. I remember during the time of the Sirimavo Bandaranaike regime, the opposition started a campaign saying Bandaranaike had sold this country to China. And they came out with photos of these dental technicians. They took their photos and were publishing it saying China, China. I feel it is the same cry of China, China now. Others are saying India, India. Now they are saying we are selling this country to India. The JVP has declared we are selling this country to India.

Between all these developments, where do you see your relations with China?

We are a non-aligned country. Our neighbours are Indians. I always say, Indians are our relations. From the time of Emperor Asoka, we have had that culture. The whole culture, irrigation, architecture has been built up over the last 2,500 years. You can't break that. But that doesn't mean we won't get commercial benefits from others. From China, or Japan, or whoever. They will come here, they will build, they will go back. India comes here, they will build and they will stay. This is the difference. In simple terms, whenever our relationship is stronger and we get close to India, this campaign begins. They start to say India has started to rule, and they know India is very sensitive about Pakistan or China. So they will use these factors to upset the Indian public. Well, I think even the LTTE used this point.

How do you see your recent visit to India and the joint statement that spoke of cooperation in various fields?

I think it was a very successful visit. The agreements that we signed, in fact most of them, are concerned with development work, especially in the north, infrastructure development, railways, housing projects (50,000 houses in the north and east), power plant project in Sampur. All those things are necessary for development of this country.

Some of these ideas have been around for 2-3 years. However, not much progress has been made. Do you think work will speed up now?

I very much hope so. We need to have targets. Earlier, we could say the delay was due to the terrorist problem or something. Now we cannot say all those things. We agreed that all projects will be started by 2010.

How do you foresee Indo-Sri Lankan relations over the next five years?

It will be very strong. We had certain things in the past, but now it is very good, we understand them, they understand us. This is the best time we have had at all levels. Even the people-to-people contacts, business, politicians.

Do you think India has something to contribute to resolution of ethnic and political issues in Lanka?

I think a solution must come from among ourselves. It must be a homegrown solution. You can't bring something from outside and implement here. We must know what it is and people must accept it. If the majority rejects it, we can't ignore that. So, any solution must be acceptable to all communities. And 13th amendment (to devolve power), India's proposal, with that we introduced provincial councils (in the north and east). From there, of course, we have to develop it.

So the 13th amendment plus (for more decentralisation) is a reality.

That plus is mine (Laughs). Yes, it is a reality. I want to go and discuss first with the Tamil parties. We want to see that the provinces are able to share the powers at the Centre. This is very important.

That's where the idea of the Upper House (Senate with members nominated by provincial councils) comes?


Do you think the situation is more conducive for a solution, with the consent of the Tamil National Alliance?

Yes, but they must also realize our difficulties, and the concerns of the majority. We have a saying in Sinhala: "Someone burnt by fire, will be scared of even fireflies."

You mean fears of the majority?

I mean the fears of all. They also must realize all this. Without the majority, you can't implement it. This is what happened to the 13th amendment. It is only the diaspora who want to keep these issues, the conflict, alive. The younger generation has moved on. Now, there are younger Tamil leaders emerging.

What is your total vision for the Tamil people who had suffered during the war?

If the south gets gold, you can't give iron to the north and the east; I want to give them gold too. This is the simple answer. For the last 30 years, they didn't get all this. They must feel that there is no discrimination.

What about the rehabilitation process? Is there an overall architecture for the entire process of resettlement and rehabilitation to include economic activities and livelihood opportunities?

Yes, we have a programme, we have a plan. I have appointed a Presidential Task Force which undertook the entire planning process with government agencies to implement. We are slowly implementing it. The first stage is demining and the second stage is to send the people there. When you are resettling them, they must have roads, hospitals, schools, the village headman's office, divisional secretary's office, in short the basic infrastructure. We have all the officials in place. Now, we have to resettle nearly 47,000 displaced people. Of these, some 19,000 are with their relatives. Even the people who are in camps who have no houses will soon be resettled.

In this process, do you think it would be better to have locally elected representatives? Is there a plan to hold the Northern Province elections?

Yes. They need pradesiya sabhas (local councils). The next step is holding the provincial council elections. But we need some time, as we have had enough elections.

There are complaints that the Eastern Province CM does not have any power and that implementation is centralized.

He has all the powers. Now he (Eastern Province chief minister Pillaiyan) has gone abroad. He has taken 27 members or so abroad. They have gone on a study tour! I thought that money could have been used to build some roads. These are not controlled by us.

In the last parliamentary election, Tamil and Muslim parties that contested as part of the UPFA did not use their own party names or symbols. Do you want them to be seen as only a part of national parties, or should they have their own independent parties?

It depends. The main political parties will also put up their own candidates. I would like to see that all these people do not stick only to those areas. When you have political parties which stick to only to those areas, they could get communal. It is much better that they join the national parties. They should join the majority, the whole country. Whether they are Tamil, Sinhala or Muslim, they are citizens of the country. They are not separate citizens.

Do you plan to change the powers of the president?

There are some ideas. I want to go to the parliament. I do go to meet people and for functions. I miss parliament.

Is it merely about attending Parliament, or about making the office accountable to Parliament?

Now, under the proposed Constitution, the president should attend Parliament once in three months. There are proposals that there should be an executive PM and a ceremonial president. These are ideas of those who want to destabilize the whole country. They don't want a strong leader.

What is your vision for the country, covering the political and development questions and all the challenges faced by your presidency?

Without development, there is no peace, and without peace, there is no development. If peace is there, development will come. The development should be people-centric. You can't remain isolated in the world. You have to win over all these people: neighbours, Asians, European Union or the US. As a non-aligned country, I believe in being closer to all the countries. But we must do this in our independent ways. Unfortunately in the past, our foreign policy was wrong. We antagonized neighbours. I will never do that. I know the consequences.

What about the future of Sarath Fonseka, who remains in custody?

I am not interested to know. There is a case. If he is freed also, I am not concerned. The matter is with the judiciary. I will not interfere with the case. After the victory, he wanted to raise another 200,000 soldiers. When I asked him why, he said he wanted small army camps everywhere. I said he couldn't do that as it was the job of the police to maintain law and order. And he said there was an external threat also. I wanted to know from where and he said, from India! I told him I will handle that. That was his mentality. He wanted to fight the whole world.

He has made statements that war crimes were committed.

When he is in Parliament, he goes there very early and stays there throughout the day until the staff tell him that they have to go home. He gets all the freedom there and speaks to people.

Will you get a third term? There are rumours that you are going to amend the Constitution to remove the two-term restriction for anyone to hold the president's office.

For that you have to wait and see. It is only after six years. I prefer to be in Parliament, but after six years I might also decide to retire. So, what I always say is, it is a democratic right of a person or citizen to contest. Let the people decide. By the Constitution, you can't restrict it. It is the people's right to elect their leaders. The losing candidate has no restriction, and can keep contesting, but the winner is not allowed to contest more than two times.

© The Times of India

Read More

Bookmark and Share

Monday, June 28, 2010

Indian Navy chief in Sri Lanka, to talk defence ties

By Sutirtho Patranobis

In the first such high-profile visit since 2004, Indian navy chief Admiral Nirmal Verma arrived in Colombo on Sunday for five-day official tour. A guided missile destroyer of the Indian navy, INS Delhi, one of the largest warships built in India, also reached Colombo port.

The last visit of an Indian navy chief was in September 2004 when Admiral Arun Prakash had come to Sri Lanka

Verma would be meeting President Mahinda Rajapaksa besides being the chief guest at the Commissioning Parade of the new batch of Sri Lanka Navy Officers at the Naval and Maritime Academy in Trincomalee in eastern Sri Lanka.

Verma is expected to pay his respects at the memorial for the Indian Peace Keeping Force (IPKF) soldiers, killed during operations here between 1987 and 1990, constructed by the Sri Lanka Navy in Colombo.

During his visit to Colombo for the 2008 SAARC summit, Prime Minister Manmohan Singh, was expected to open the memorial. However, the memorial was never officially unveiled.

Verma will visit the Kankesanthurai Harbour in Jaffna to discuss its repair and rehabilitation. To initiate the project, Indian Navy Survey Ship ‘Nirupak’ would be commencing hydrographical survey of KKS harbour from June 30.

Verma's tour is being seen here as part of efforts to strengthen Indo-Lanka defence ties in post-LTTE era. "The visit will promote bilateral relations and mutual cooperation between the two countries and help Sri Lanka to enhance security in a post LTTE era," the Sunday Island newspaper quoted a Naval officer as saying.

"Indian and Sri Lankan Navy Chiefs have been engaged in wide ranging mutual interactions over the years. They have jointly participated in a number of prestigious maritime defence forums which include the 19th Sea Power Symposium held at the Naval War College in the USA and Indian Ocean Naval Symposium (IONS) held in UAE," the High Commission of India said in a statement.

The Indo-Lanka joint statement issued in New Delhi after Rajapaksa's visit earlier this month had also mentioned strengthening of bilateral defence ties.

© Hindustan Times

Read More

Bookmark and Share

Monday, June 28, 2010

Tarzie Vittachi’s “Emergency ’58” re-visited

By Emil van der Pootan

Having first read Tarzie Vittachi’s seminal description of the anti-Tamil riots shortly after it was published and smuggled into what was then Ceylon, I was curious to see whether my original impressions of that book would hold true a half-century later and whether there were any lessons for 21st Century Sri Lanka in that slim volume.

I spent most of the most violent of those days in Colombo as a student, just leaving his teens, at Aquinas University College which I thought, at the time to be the most arch-conservative of post-secondary institutions because of (and not despite) the likes of Fr. Tissa Balasuriya who was one of my teachers and who appears to have gone through a significant metamorphosis (for the better!) in the intervening years.

My political leanings were towards the Trotskyist left which then (and for decades after) contained my two older siblings in the various configurations of the “British Section of the Fourth International.”

People of my political inclinations saw the Sri Lanka Freedom Party’s (SLFP’s) chauvinist horde and their leftist “Sinhala only” allies of Philip Gunewardene’s Viplavikari Sama Samaja Party (VLSSP) as the generators of that mini-Holocaust, ably assisted by communalist Tamil political elements from the other side of the great divide that was developing. I did then, as it seems the vast majority of non-Tamil Ceylonese still do, equate Federalism with separatism. This misconception I carried for many years until a long sojourn in Canada in which country, despite very strong separatist tendencies — that occasionally wane — in the province of Quebec, I realised by ground-level observation and active involvement in the political processes of that country that a Federal state of some kind can come closest to being the ideal arrangement for two solitudes to live in tolerance and understanding if not absolute peace and harmony.

The foregoing should provide the reader with an adequate idea of where I am coming from with regard to the subject.

When the book was hot off the presses it didn’t seem to capture the violence and excitement of that time and, therefore, left something to be desired. Today, however, with the benefit of sober hindsight and reflection it does seem to do justice to the events of that troubled time in a historically accurate and objective manner.

What is particularly eerie and troubling about the narrative is that one is left with the distinct impression that 1958 has already repeated itself once and promises to do so again thanks to this country’s politicians who, while screaming their loyalty to the nation, proceed to act in a manner that is sending Sri Lanka down the road of destruction and despair again. All in the cause of self-aggrandisement and short-term political gain.

For the last year, we have had a situation where the armed forces of this country, having doused a conflagration of significant proportions, the government of the day was afforded the opportunity to do those things that could have ensured that there would be no recurrence of that horror at a later time. But, it seems that the politicians of this land didn’t learn anything then and aren’t giving any signs of doing so now

After 1958, politicians of every stripe proceeded to re-ignite the fires of racism despite their experience of the terrible destruction that would ensue. They are doing that again, seeking to provide “respectability” to that effort by talking about a homogenised society where the obvious language, religious and other specificities that are the historical reality of this country are to be ignored.

That suggests that Sinhala Buddhist society is indivisible from the Sri Lankan nation and all other ethnicities, belief systems and cultures are marginalised to the extent that they cease, for all practical purposes, to exist. I find this just as stupid, ignorant and nasty as the comments that Vittachi quotes out of Hansard in the post-Emergency ’58 debate when, among other racist comments, one MP’s solution to the problem was “Destroy them!” (the Tamils). As a hint, this MP came from the deep south and his last name is only too familiar as far as absolute power in this country is concerned right at the moment.

I am no Cassandra but it is very obvious to anyone with even half a brain that the road that is being cleared is one that will lead to a situation where, even if there isn’t any LTTE-type uprising there will be continuing grief and the attendant malaise among a significant proportion of Sri Lanka’s population who have already been disenfranchised, in practical terms, and know it only too well. This is certainly not a recipe for engendering the kind of vibrant development, with or without high growth rates, that can and must make Sri Lanka a land of peace and tranquillity where all of its communities can lead decent lives. I am not talking here of a Mercedes in every garage but rather a chicken in every pot a few times a year. I am talking about a life of dignity and decency for all of its citizens, not just Lamborghinis for a chosen few.

But no, just as we had the outbursts of racist rhetoric after the cataclysmic events of 1958, we are seeing a repeat of that performance by the descendants of those merchants of malice and hoarders of hatred. The additional legions now at their command are those with the sophistication to make that exercise a covert rather than an overt one. I have described and named them often enough that I think a repeat would be redundant.

There are a few voices of sanity, compassion and intelligence which one hopes are being heard over the noise issuing from our Sri Lankan Tower of Babel. Chief among these is that of the Anglican Bishop of Colombo, the Right Reverend Duleep de Chickera. The responses to his periodic statements has not been as abusive and raucous as those directed at many other people who have had the temerity to voice a sentiment that might not be in sync with that of those spouting the current orthodoxies. However, it seems that, increasingly, his is very much a voice in the wilderness.

The others are the “peaceniks” as described by the hallelujah chorus of the Rajapaksa Sycophancy led by such as Malinda Seneviratne who don’t miss an opportunity to revile them, knowing very well that the level of abuse and insult they level at these individuals will only serve to elevate them further in the eyes of those they serve so well. Fortunately, their target group is expanding and that should make it a tad more difficult to direct white vans in their direction, if nothing else!

The alienation of the Tamils from 1956 onwards was accelerated by policies such as “quotas” being imposed to curtail their entry into the upper echelons of formal education and employment. Now the exclusion is de facto and not de jure and therefore that much more difficult to combat through exposure in the few forums still available to the dissenting voice.

The prime example of the continuing discrimination with enormous practical implications is the fact that, despite the law of the land requiring it, government services are not available in their mother tongue to Tamil citizens of this country, even when they live in areas where there is a preponderance of Tamil-speakers. Whenever this anomaly is pointed out, the government’s apologists are only too ready to deny that there is anything resembling discrimination in the matter, pointing out that the law provides for the provision of services in Tamil to those requiring it and, therefore, everything is tickety-boo! This epitomises what is happening in this country in the matter of the application of the most absurd semantics and which needs to stop if we are not going to be at the bottom of the Asian civilizational barrel which, goodness knows, already has a scummy enough population.

The alternative to the sea change that is required is not going to be an armed uprising such as that which the Tigers conducted so successfully for so many years and, before them, the JVP in 1971 and the late ’80s. It is going to be a descent into the kind of oligarchical hell that has distinguished the histories of places such as Haiti and the Congo. Significantly enough, in both those instances the good old Excited States of Amnesia tut-tutted around the injustice and brutality that occurred (and continues to occur) while making noises about “engaging the ruling regime in dialogue” etc. etc. Sound familiar?

We might still have the time and opportunity to change course but I doubt that, as long as we have a regime bent on imposing mediaeval governance on this country, that the required change will be affected. More important yet, as long as we have a rural population only too ready to accept that mediaeval governance and a middle class urban elite believing that they are not ever going to be the victims of the injustice and violence that comes with such an arrangement, the forces of despotism will not only survive but thrive.

Apropos of that reality let me close by quoting something I haven’t seen in print recently:

In Germany they first came for the Communists,
And I didn’t speak up because I wasn’t a Communist.

Then they came for the Jews,
And I didn’t speak up because I wasn’t a Jew

Then they came for the trade unionists
And I didn’t speak up because I wasn’t a trade unionist

Then they came for the Catholics
And I didn’t speak up because I was a Protestant.

And then they came for me –
And by that time no one was left to speak up.

— Pastor Henry Niemoller

© The Sunday Leader

Read More

Bookmark and Share

Monday, June 28, 2010

Sri Lanka: Budget deficit and public debt set to balloon

By Kumar David

The expenditure estimates for 2010 (Appropriations Bill) tabled in parliament on June 8, taken with the revenue and expenditure accounts for last year (2009) make for gloomy reading. The scene is getting ugly, much rougher than I had thought, another Greece with cutbacks and political turbulence in the making. The government will try to avoid a once and for all big-bang correction in its finances and will spread the pain over a few years to limit political backlash.

The final accounts for 2009 have not been released so I have made forecasts using available Central Bank data, and also January to October 10-month data and provisional annualised data in the Lanka Business Online website of 15 February and 14 June, respectively. I have rounded off numbers to eliminate clutter and present information in easy to remember format - for example 490-something would be rounded to 500, and anything between 9.75 and 9.79% would become 9.8%.

What the numbers say

My best, and I assure you pretty reliable estimates, of what happened last year are as follows: Government Revenue was Rs.700 billion, Government Expenditure Rs.1200 billion and therefore the Deficit Rs.500 billion. Observe that current expenditure was 170% of current revenue, that is, exceeded revenue by 70%. Now this is without including debt-servicing (interest and capital repayment) schedules. Interest and capital repayments to service public (government or sovereign) debt in 2009 were Rs300 billion and Rs500 billion, respectively (the latter figure is an estimate derived from Central Bank publications) and cover both local and foreign debt. Now don’t add these to the budget deficit or you will wet your pants. The other important number to bear in mind is Lanka’s nominal GDP, which was Rs.4900 billion in 2009.

Although debt servicing was Rs800 billion, new local and foreign debt of about Rs1000 billion (one trillion) was incurred to pay this and to eat even further into our children’s future. Therefore, in 2009, as in all the years since NM paid down our debts, we have, again, been borrowing ever more in a descending spiral to service previous loans, and in addition, borrowing over and above this to shell out for the shortfall of current revenue below current expenditure; that is drowning in a deepening pool of red ink.

If all this looks gloomy, the scenario for 2010 is worse. The gross outgoings in 2010 will be nearly Rs1800 billion. Current expenditure (both recurrent and capital) will be about Rs1000 billion and Rs785 billion more is needed for debt servicing. Observe that debt servicing is 45% of the gross, current expenditure only 55%! The order of magnitude of these two percentages will reverse in 2011 or 2012. To put it in layman’s terms, what we will then incur servicing past profligacy will exceed what we spend on living and capital for new development. But read on, there is worse to come!

Grimm’s & Anderson’s Fairytales

I have given you the briefest possible outline of expected 2010 expenditure. When the Budget is tabled, a few days after you read this, you will be entertained by fairytales of how the government expects to collect revenue and promises of not drowning in red ink. If you are a World Cup addict your first thought will be: “Give the bloody Finance Minister a Red Card!”

Let me tell you the 2009 expenditure story first. The Government first said that its revenue would be Rs855 billion, collected by a variety of mythological methods such as better tax collection, less corruption - ha, ha, haa! When the fib collapsed like a pack of cards it revised the budget in mid-stream and said “Ok, ok, 2009 revenue will be only Rs730 billion”. This too was plain Grimm’s fairytales; the best estimate is that 2009 revenue will turn out to have been only Rs700 billion. Want to bet? A bottle of single malt; all takers welcome.

Let’s move on. If government revenue, plus/minus whatever you like, was Rs700 billion in 2009, what do you expect it to be in 2010? If a Red Card holding Finance Minister were to tell you he’s going to raise, say Rs900, are you dumb enough to believe him, or will you say “Go tell it to the marines”? Realistically, Rs800 billion is the upper limit for what 2010 revenue will turn out to be.

I understand new international bond floats adding to $1 billion are being planned. This would increase the nation’s indebtedness from $20 billion now to $21 billion (Rs23, 850 billion). In the course of the year more treasury bonds will be issued, IMF grants implored and other foreign and local debts incurred. All this, less the repayment component of the Rs785 billion debts servicing for 2010 mentioned before - I have not yet been able to break this into interest and repayment components - will add to sovereign debt.

Be assured that Sri Lanka’s sovereign debt by the end of the 2010 financial year will increase 10 to 15% above its end 2009 figure of Rs4100 billion (Rs4.1 trillion). That is, it will reach Rs4.5 to 4.7 trillion. This will push our debt to GDP ratio to over 90% for the first time - I estimate 2010 GDP at about Rs5100 billion assuming a growth rate of 4%. At the time when the Greek economy collapsed its debt to GDP ratio was about 120%.

Gaming the crisis

The government will have to game the crisis. Let us see if we can forecast what it will attempt. A Rs.2500 monthly salary increase was promised to public servants as an election gundu; but the government is broke so how to pay? Not to pay is to provoke a strike, but trapped between a rock and a hard place my guess is that it will dodge the commitment. The Rs.1000 billion expenditure estimate for 2010 in the Appropriations Bill is bollocks (less than even the Rs.1200 in 2009!) and the eventual figure will be about Rs.1400 billion. The Rs.1000 billion cannot include provision for this salary increase; so the government has shown its hand. Military spending however is retained at Rs200 billion; the Tamil militants have been wiped out, but dictatorship will have to deal with Sinhala opposition.

There will be slightly higher taxes on the rich, and revenue raising measures that affect everyone, including the poor, such as electricity, postal, petroleum, railway price hikes and VAT increases. However there is fear of political instability. It is after taking both aspects into account that I projected a 2010 revenue of Rs800 billion. Hence the eventual deficit will be around Rs.600 billion (1400-800). In any case the horrendous defence budget will not be touched; having finished off the Tamil militants the government still needs firepower to deal with Sinhalese militants in the next phase.

The 2009 budget deficit of Rs.500 billion was 10.3% of GDP, way above the 7% promise made to the IMF, and above 8% in the previous year, 2008. The 2010 GDP estimate of Rs.5100 billion makes a Rs.600 billion deficit 11.8% of GDP and comparable with Greece’s 12.5% at the time its economy collapsed. We are in bad company!

© Lakbima News

Read More

Bookmark and Share

Monday, June 28, 2010

EU gets tough; GSP Plus ends on August 15

By Leon Berenger

Sri Lanka will not receive any GSP Plus preferential tariffs for exports to the European Union from August 15, its envoy in Colombo said yesterday.

“There will be no further extensions. Sri Lanka must meet its international obligations,” EU delegation chief Bernard Savage told the Sunday Times. He said the EU expected the Government to heed the 15 conditions placed before it.

Last Wednesday, the Cabinet of Ministers at a meeting chaired by President Mahinda Rajapaksa, decided to reject outright the EU’s conditions. The conditions include the full implementation of the 17th Amendment to the Constitution, repeal of remaining parts of the Emergency Regulations and extension of invitation to UN special envoys who wished to visit Sri Lanka.

“We will reconsider our position only when we receive a formal response from the Government of Sri Lanka,” Mr. Savage said.

External Affairs Ministry Secretary Romesh Jayasinghe declined to say when such a formal response would be made. “Sri Lanka’s response to the GSP Plus issue has already been shared among the general public. External Affairs Minister G.L. Peiris has already announced the Government’s position,” he told the Sunday Times.

On Friday night, apparel exporters met to examine the impact of the EU move. The apparel industry, where over a million workers are employed, is the biggest beneficiary of the GSP Plus concessionary tariffs from the EU. They discussed production and exports after August 15.

Government Spokesman and Media Minister Keheliya Rambukwella told the Sunday Times, “even if we were to accept the demands, the time frame of six months is not enough. At least ten constitutional amendments will have to be made.” He said “at the end of the day it will be the poor workers who will be affected by these so-called sanctions, the very sector the EU wants to protect.”

He blamed the Tamil diaspora and the INGOs for the EU’s decision.

© The Sunday Times

Read More

Bookmark and Share
© 2009 - 2014 Journalists for Democracy in Sri Lanka

  © Blogger template 'Fly Away' by 2008

Back to TOP