By Dr Kumar David | South Asian Analysis Group
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It is clear that the government is very frightened. I do not know what Maria Otero and Robert Blake did or said to Lanka’s political leaders but they seem to have pressed on all the panic buttons; the behaviour of GoSL has changed dramatically since this January visit. What has been publicly said by the Americans is that they will move a resolution at the UNHRC calling on Sri Lanka to implement the Lessons Learnt and Reconciliation Commission’s (LLRC) recommendations and follow up on the accountability issues that the LLRC pussyfooted around with. (Accountability is a euphemism for alleged human-rights violations and alleged war crimes by the Lankan military).
Is there more than meets the eye?
True, if such a resolution is carried by the assembly (it is by no means clear whether this will happen) it will be a slap in the face for the Rajapakse siblings, but not for the country. What’s wrong with implementing excellent LLRC recommendations or probing the bloodletting in the Vanni in the final stages of the war? There could be other reasons for the government to get into a funk; perhaps incriminating personal evidence, perhaps broad economic threats. There are two ways in which the West can cripple Lanka’s economy; enforcing an embargo on imports of Iranian oil and imposing trade sanctions. The EU and US are our biggest export markets accounting for 50% between them.
An oil embargo is quite frightening because 93% of Lanka’s petrol, diesel and kerosene are derived from Iranian crude and our only refinery (Sapugaskanda) is designed for that type only. Alternative supply lines for similar crude have proved difficult to source and Lanka has a line of credit with Iran which it can forego only at a cost. Newspapers are talking of petrol rationing, but fuel supply disruption will be curtains for the haulage fleet, public and private transport, industry and tea factories. It is unlikely to come to this since Lanka’s leaders will capitulate before the precipice unless they intend to set off on a xenophobic, isolationist and militarist strategy in the belief that it will stir waves of mass support. But this is a very dangerous option. Washington and Delhi are unlikely to countenance military rule by an erstwhile China embracing Lankan regime.
An interesting side show is that the US State Department has brushed New Delhi aside and taken control of the international ‘Sri Lanka desk’. Priority is now reversed; Delhi is number two and follows at a respectful distance. The US had no option, given Delhi’s monumental blunders in handling the Sri Lanka issue in recent years when it was assigned the lead role. The latest gaffe was when Indian External Affairs Minister Krishna pranced on the Colombo stage six weeks ago attributing various promises to President Rajapakse ; four days after he waltzed away the President all but called him, in effect, a downright liar. From Delhi since then: Dead silence!
The Delhi-Colombo relationship has become a Jack and the beanstalk story. Brave Jack has felled the beanstalk with a mighty made in China axe and the giant is splayed in a thin paste all sputtering on the ground. Obviously Indian policy makers are foxed by what to do in Geneva; not even a hint of a leak creeps out. A tough line backing Washington will reassert authority but the current Indian Administration has timidity stamped all over it. Hence I am not taking bets.
The panic in Colombo is objectively justified. Even a best case scenario: Defeat of the US resolution and an Indian abstention (can India vote against a pro-LLRC, pro internal accountability resolution without making itself irrelevant to Lanka once and for all?) will only buy time. Old father clock is grinding forward with determination and the Rajapakses are with their backs to the wall. Its do or die time, so will they swallow the bitter medicine and ‘do’? The alternatives are suicidal.
Empty pocket goes to market
The way in which the Sri Lankan government mishandled the February price hikes is incomprehensible folly. It removed a fuel subsidy that had been in place for years, raising prices of diesel and kerosene by nearly 37% and 49%, respectively; it let the rupee float (fallen 5% already, probably settling 10-15% lower next month); imposed an 18% annual credit growth curb on banks (credit growth has been bounding along at nearly 40%); raised domestic electricity prices by 25% to 40% depending on consumer category, and upped central bank benchmark interest rates by 0.5%.
Justification or otherwise of these steps apart, isn’t this all-in-a-day big-bang a manifestation of suicidal inclinations? And there was an IMF team in town with euthanasia kit ready to hand. I cannot see how the government can avoid mass confrontation when inflation will soon soar to high double digits (despite manipulation of statistics). Has it decided it is ready for a show down and will crush unrest? The military in Sri Lanka is ruthless, so is the hegemonic core at the centre of state power; on the other hand the SLFP, the ruling party, is known for its populism and enduring soft relationship with a large mass base. It’s not that I can’t predict what will happen between the options of retreat and repression; this time it is inherently unpredictable. At times there is a Heisenberg’s uncertainty principle in politics as well; intrinsic unknowability.
There was much pressure on the exchange rate of the Lankan rupee (LKR) but only because of gross mismanagement by the Central Bank (CB). The country’s foreign reserves have fallen from $8.3 billion in August 2011 to about $5.2 billion at the time of writing. Why? Because CB depleted the reserves desperately fighting to shore up the LKR (sell dollars and buy LKR) and hold it at 114 to the dollar. But why such a big demand for dollars? Because the government relaxed import controls on luxury items, especially cars, which came flooding in (Colombo’s streets have become a driver’s nightmare), the trade deficit rose to the sky ($10 billion in 2011), and the tottering LKR rapidly lost value concealed by the CB pumping in dollars to buy it.
Now to continue in layman’s terms- this turned into a witch’s brew of recycling nightmares. The credit boom of the last two years was not because industry was borrowing for productive investment; no the chattering classes were borrowing and importing everything from luxury SUVs to simple Nanos by the boatload, not to mention stacks of consumer durables. Borrow and eat; recipe for disaster. When the CB soaked up LKR selling dollars, it had to find ways of getting LKR back into the market for circulation and economic activity, hence the low interest rate regime. “Come on banks, borrow from me and re-lend” said uncle CB. This is the story of Sri Lanka’s self-inflicted devaluation.
The petrol price story is another tragic-comedy. It is true that fuel prices have been subsidised for some years and the situation was not permanently sustainable. Well this is not quite true, petrol was marked above cost price to cross-subsidise kerosene (used for lighting and cooking in the tea plantations and some rural areas where firewood is short) and diesel (because of the haulage fleet and public buses). The subsidy was also spread over electricity prices and the Ceylon Electricity Board is a permanently loss making institution due to no fault of its own. The CEB does not pay its fuel bills, therefore the Petroleum Corporation is permanently ill-liquid, and somewhere along the line the government (the citizenry) picks up the tab. Oil prices have been hovering in the $100 per barrel region for a long time now and the government should have gradually adjusted the prices to market levels over the years. No, it did nothing for three years and then the Big-Bang; it removes in one fell sweep a subsidy so that the price of the fuels that most affects the subaltern classes rise by 40% to 50%! This is why I said suicidal tendencies.
Devaluation, jacked up fuel prices, rising interest rates and a credit squeeze all at once, all together, will mean not only high inflation (and visible instant anger on the street) but also a decline in GDP growth rates. The government claimed that real annual GDP growth in 2012 would be 8.3%, but that was before these fireworks. My personal estimate now is that it will be more like 6.5%; still not bad, but not enough to hold back anger because of great inequity of distribution, complicated, much more than in India, by corruption, because of a greater lack of transparency. This in turn is a consequence of much lower public civic consciousness.
I will close my story of the second drama in Colombo with some remarks about how the opposition to the government’s economic policies may develop. First I must remark, however, that the effort to divert attention by turning xenophobic anger in 150 orchestrated demonstrations starting 27 February to be sustained for the duration of the Geneva sessions did not get off to an impressive start. On the first day public servants (my friends) were told that they can depart from office, without taking leave, and join demonstrations. Marine Drive Colpetty, near the US Embassy, was a vast parking lot for vans in which protesters were bussed in. The Colombo demonstrations were moderately large but friends who had driven in from Tangalle in the deep south had seen nothing and the suburbs of Colombo stayed sleepy. I think there isn’t much enthusiasm and interest seems to be flagging from day-one. Turning attention away from economic concerns is not working.
The mood against price increases is building up in three sectors; fishermen from Chilaw (one life has been lost there in police firing) to Moratuwa and in Colombo City, in the trade unions, and more slowly but more ominously in the upcountry plantations. There is a possibility of Tamil fishermen in the north and east throwing in their lot. There is visible activity but it is not possible to say for sure whether a natural groundswell, apart from mobilisation by trade unions and the political opposition, is building in a big way. The next few weeks will show the shape of things to come.
© SAAG
Friday, March 02, 2012
Sri Lanka: A two-act drama unfolding in Colombo
Friday, March 02, 2012
"We were not present in Sri Lanka battle zone" - MSF contraditcts Defence Secretary's claims
Médecins Sans Frontières (MSF)
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MSF made numerous requests to the government for access to the battle zone in northern Sri Lanka and these requests were repeatedly denied, despite MSF’s extremely serious concerns about the fate of civilian populations who were trapped in the heavy fighting.
In this interview published in India on February 6 and reproduced in the Sri Lankan media, Sri Lankan secretary of defense secretary. Gotabaya Rapjapaksa is purported to have said that MSF-France teams were present in the battle zone during the fighting.
“ . . . Mr Gotabaya said international agencies, including the French MSF (Médecins Sans Frontières ) and the Indian medical team, were present in the battle zone to receive survivors and surrendered militants.”
Ahead of the final offensive, in September 2008, along with most other international organizations, MSF was given a government directive to leave Kilinochchi.
Thereafter, MSF repeatedly requested permission to enter the battle zones to provide medical care to the civilian population. Permission was sought from numerous ministries, including the Ministries of Health as well as Defense, but at no point was this request granted during the final stages of the conflict in late 2008 and 2009.
It is only after the end of the fighting in May 2009 that MSF was able to provide medical assistance to the victims of the conflict in North Vavuniya, and this was outside the battle zone at the Omanthai checkpoint.
MSF provided surgical support in Vavuniya hospital and in addition established an emergency field hospital for the displaced population living in camps in Menik Farm.
Again, all of this activity was outside the battle zone.
In 2012, MSF-France remains committed to working alongside the Ministry of Health to support the district general hospital of Mullaitivu and develop assistance in mental health care in Mullaitivu District.
© MSF
Friday, March 02, 2012
Sri Lankan government aides and Tamils spar at UN session
AFP | Yahoo! News
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"After 30 years we are now coming out of a state of war and we want to engage with the Tamil diaspora," Sri Lankan human rights envoy Mahinda Samarashinghe told the heated meeting.
He and other Sri Lankan government officials reiterated that there was no justification for a US-backed move to censure the country over its investigation into alleged war crimes.
Some Tamils said they had been photographed during the meeting by a person with Sri Lankan government accreditation and they complained to UN security officials about intimidation.
At the opening session of the human rights council on Monday, Britain's minister of state for foreign affairs, Jeremy Browne urged Sri Lanka to implement the recommendation made in the Lessons Learnt and Reconciliation Commission (LLRC).
"Where states fail, institutions of the UN should act to make change," said Browne.
Samarashinghe said Sri Lanka has taken steps to act on the recommendations and also referred to a five-year national plan of action for the promotion of human rights that was presented at the meeting.
"We resent deeply being told how to run our house," said one member of the Sri Lankan delegation who also attacked Western NGOs.
But he was countered by Tamils who said government reconciliatory promises were never kept.
Amnesty International Sri Lanka expert Yolanda Foster challenged the Sri Lankans to make public their findings on killings and disappearances saying the government has not come clean on its promises to victims of violence.
Sri Lanka has faced strong international criticism over the bloody finale of its civil war in 2009 but has avoided censure at the Human Rights Council amid hopes overseas that the government would come up with a domestic plan.
Human rights groups estimate that up to 40,000 civilians perished in the final months of the government's military campaign to crush the Tamil Tigers, who waged a bloody decades-long campaign for a separate homeland for the Tamil minority.
The UN estimates some 100,000 people died during Sri Lanka's ethnic conflict between 1972 and 2009.
© AFP
Thursday, March 01, 2012
Sri Lanka’s biggest policy overhaul since civil war risks inflation bump
By Anusha Ondaatjie | Bloomberg
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Sri Lanka’s biggest overhaul of economic policy since the end of its civil war risks a bump in inflation while auguring increased stability by aiming to curb the island’s trade deficit.
In less than two weeks last month, Sri Lanka let its currency weaken to a record low by shifting toward a more freely floating exchange rate, raised fuel prices and boosted interest rates for the first time since 2007 to damp credit growth. The moves aim to curb an excess of imports such as oil over exports, as Sri Lanka’s post-conflict resurgence buoys domestic demand.
“Although inflation could spike, the measures taken are good in order to ensure longer-term economic stability,” said Sanjeewa Fernando, an analyst at CT Smith Stockbrokers Pvt. in Colombo. “It’s the biggest monetary and fiscal policy overhaul since the end of the war” in 2009, he said.
Sri Lanka’s foreign reserves have fallen about 25 percent from almost $8.1 billion in July as the trade gap swelled, prompting Standard & Poor’s to lower the island’s sovereign rating outlook to stable from positive yesterday. Fitch Ratings said this week that the depleted reserves have increased balance-of-payments risks.
Consumer prices may rise 6.7 percent on average in 2012 as a result of last month’s policy steps, according to Standard Chartered Plc. They climbed 2.7 percent year-on-year in February, the slowest pace in 28 months. Price pressures are expected to build during 2012 because of “strong growth and imported inflation,” HSBC Holdings Plc said in a note yesterday.
Currency Decline
The policy steps began with the rate actions on Feb. 3, the scrapping of the rupee’s trading band on Feb. 9 and the increase in energy costs from Feb. 12.
The local currency has declined 6.5 percent against the dollar so far this year, the worst performance in the world after Iran’s rial. It slid to a record-low 122.35 per dollar yesterday. The Colombo All-Share index is down 10.2 percent in 2012, the most in Asia.
Governor Ajith Nivard Cabraal’s decision to raise the reverse repurchase rate to 9 percent from 8.5 percent and the repurchase rate to 7.5 percent from 7 percent contrasts with cuts in nations from Indonesia to Brazil, as Europe’s protracted debt crisis pressures officials to shield growth.
The increases in borrowing costs, a more than 20 percent rise in transport and electricity prices and a shift toward a “largely floating exchange rate” make up a “bold” package of measures, said Sajjid Chinoy, an economist at JPMorgan Chase & Co. in Mumbai.
‘Unambiguously Positive’
While they will probably crimp growth and spur inflation in the “near term,” the “reforms are unambiguously positive in the medium term, and will likely ensure that growth is rendered more sustainable going forward,” he said in a note.
Sri Lanka’s $50 billion economy may expand 7.1 percent in 2012, according to Standard Chartered, less than its earlier estimate of 7.5 percent. Gross domestic product rose an estimated 8.3 percent last year, Cabraal has said.
The central bank said last month it aims to keep inflation in the “mid-single digit levels” in the second half of 2012. Credit granted by commercial banks to private businesses jumped by 34.5 percent in December from a year earlier, “substantially” exceeding projections, it said.
February’s steps will help bring down the trade and current-account deficits, Cabraal said on Feb. 14. The International Monetary Fund welcomed the move toward greater exchange rate flexibility in a Feb. 9 e-mail. It has disbursed $1.75 billion from a $2.6 billion program to boost the Sri Lankan central bank’s reserves.
Sri Lanka’s trade deficit exceeded $1 billion in both November and December. Its reserves fell to three months coverage of current-account payments at the end of 2011, from roughly four months in the middle of last year, S&P said.
© Bloomberg
Thursday, March 01, 2012
"There is plenty of room for both India and China" - Presidential advisor assures
IANS | The Pioneer
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Rajiva Wijesinha, who was here Wednesday on his way to Nepal, said, "India should not feel uncomfortable" about China's growing presence in Sri Lanka.
"We are good friends with both India and China," Wijesinha told IANS in an interview.
"And there is plenty of room for both."
Wijesinha, who studied at Oxford University and has worked as a professor, said Sri Lanka's geographical position makes it attractive for both the countries, "but (seeking) exclusive rights to Sri Lanka is a waste of time".
"Not at all, not at all," said Wijesinha when asked whether India should begin to worry about the projects being undertaken by China in the island nation.
Citing the example of Hambantota port, he said: "We first offered its development to India. When it didn't go ahead, it was given to China."
The port is located in Hambantota, one of the lowest per capita income regions in Sri Lanka, and the port will be an important catalyst for major economic development. The total estimated construction cost of Phase 1 of the project is $361 million, out of which 85 percent has been funded by the Ex-Im Bank of China.
The professor said that now India is "moving quickly" and working at the Kankesanturai port in the north.
He gave the assurance that "India has nothing to worry about" regarding China and added: "China is not a Big Brother".
Wijesinha, who is advisor to the president for reconciliation, would like India to help out in providing micro-credit to the ex-combatants of the Liberation Tigers of Tamil Eelam (LTTE).
In May 2009, Colombo militarily crushed the LTTE, the last stages of the war leaving thousands of combatants and civilians dead.
India outlawed the LTTE in 1992, a year after a Tiger suicide bomber assassinated former prime minister Rajiv Gandhi.
The bloody war in Sri Lanka, Wijesinha said, left 300,000 internally displaced people. "About 10,000 combatants surrendered while another 1,000 were later caught."
"The idea is to provide micro-credit to the former combatants so that they can restart their lives through entrepreneurship," he said.
"We will soon approach India so that a sum of 1,000 lakh Sri Lankan rupees ($820,000) can be distributed to at least 1,000 ex-combatants."
Speaking animatedly on his favourite subject of education, he admitted that though his country has high literacy, "a lot still needs to be done".
"We have to fast forward education," said the professor who has published "Beyond the First Circle: Travels in the Second and Third Worlds".
He stressed that India has "done a lot" to help reconciliation in Sri Lanka.
"India has not done a song and dance about it," he said with a smile as he tried straightening his tousled hair.
© The Pioneer
Thursday, March 01, 2012
Sri Lanka's request is delaying tactic - HR Groups
BBC Sinhala
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Addressing the United Nations High Commission for Human Rights in Geneva on Monday, Sri Lanka's special human rights envoy Minister Mahinda Samarasinghe said internal processes are already in place, and appealed for more time to deal with human rights issues in the country.
Amnesty International (AI) researcher on Sri Lanka, Yolanda Foster says that there is nothing new in the government's argument for more time and space.
"Successive governments in Sri Lanka had asked for time but only delivered broken promises," she told BBC Sandeshaya.
Ms Foster said that abductions, killings and torture continued across the island within a persistent climate of impunity.
She recalled that The Lessons Learnt and Reconciliation Commission (LLRC) a year before had requested in its interim report to release a list of detainees to the families searching for the missing.
"Government has simply failed to produce this list," she said.
Time 'not a barrier'
Executive Director of Human Rights Watch, Brad Adams says that time is not a barrier if there is a need for the Sri Lanka government to investigate human rights abuses.
He said that Sri Lanka government had given promises to inquire into alleged human rights abuses committed even before the war.
"Even a commission appointed by the president failed spectacularly, All international members of the commission resigned", he said.
It has been two and half years since the end of the war, and he said, it is unimaginable to think that the Sri Lanka government would now initiate a credible process to investigate human right abuses.
He said that Minister Samarasinghe had said that those who have eyes do not see, and those who have ears do not listen.
"This is exactly what I could say about Sri Lanka government which for many years refused to hear the evidence when people tell them, and refused to see when people show them evidence," Brad Adams said.
© BBC Sinhala
Wednesday, February 29, 2012
Marie Colvin remembered in Jaffna
Tamil Net
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In the memorial event held in Jaffna, Editor of Yaazh Thinakkural Mr. A. Rajeevan, President of the student union of the Vavuniyaa campus of the Jaffna University Mr. Sakthi, the Director of Media Resource and Training Centre of the Jaffna University V. Thevananth and the Jaffna reporter of Lankadeepa and Dailymirror, Mr. Parameswaran, delivered speeches. The event took place at Yaazhpaadi hotel from 3:00 p.m. to 4:30 p.m.
Professor R. Sivachanthiran of the Jaffna University and Ms. S. Rachel, a doctoral research fellow from UK, currently engaged in a field research on the political developments in the island between 2005 and 2010, also took part at the event.
Rachel who spoke at the memorial event said that the journalists from remote cities get together to honour Marie Colvin because she was a peoples' journalist and said that it was an honour for her to attend the memorial event of Marie Colvin in Jaffna.
Thinakkural Editor Rajeevan in his address said Marie Colvin, who risked her life in covering the conflict in the island, remained attached to the Eezham Tamils throughout, and it was that attachment that made her to become a key witness to the final hours in Vanni. Her contribution was significant in raising the global awareness, he said.
Marie Colvin will always remain an inspiration to the Tamil journalists, who continue their work under severe threat to press freedom, said Mr. Thevananth in his speech.
Meanwhile, in a statement issued on behalf of the London-based International Association of Tamil Jouranlists, former BBC Tamil service journalist Ms. Aanandhi Suryapirakasam said that Marie would always be fondly remembered by the Tamil community all over the world.
© Tamil Net
Wednesday, February 29, 2012
Tamils 'face torture after UK deportation'
Sky News
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Human Rights Watch and Amnesty International have both voiced their concerns over the mass deportation of Tamils, which will be the UK's third since June.
Sky News has spoken to one man who was deported from the UK last year who claims he was tortured but managed to escape and get back to Britain.
He revealed lacerations on his back and burn marks on his chest - indicating that the UK's belief he would not be mistreated was wrong.
Going by the name of Hari, he said: "I was beaten up with plastic pipes, wires and batons. I was tied to a chair and burned with cigarettes.
"My head was covered in petrol... and I lost consciousness."
As a rebel Tamil fighter, Hari says he was subject to persecution and torture at the hands of the Sri Lankan government.
Campaigners say he is one of eight recent cases that prove torture is still happening, over two years since the country's 26-year civil war came to an end.
Brad Adams, Asia director at Human Rights Watch, told Sky News: "The British Government needs to be consistent.
"It claims that Sri Lanka needs to be held accountable at the Human Rights council in Geneva. But it's returning people to the possibility of torture.
"It has said that torture exists in the country, but because of its immigration policy, it doesn't want to keep asylum seekers in this country. So it's sending them back."
Protesters gathered outside the UN Human Rights Council in Geneva on Monday, demanding that the Council's 19th session discusses the situation.
Sri Lanka denies the claims, and has said men like Hari inflict the wounds on themselves in order to be accepted into countries like the UK.
But one of the Tamils scheduled to return to Sri Lanka on this latest flight told Sky that he was worried for his life.
His interpreter said: "The Sri Lankan forces have got his fingerprint, and they have his photo. They will maybe torture him, and kill him."
© Sky News
Wednesday, February 29, 2012
Sri Lanka: Indian Ocean Naval Symposium (IONS) begins
The Island
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The two day workshop conducted under the theme Enhancing Operational Efficiency through Sharing of Information and Coordination is attended by representatives from Australia, Bangladesh, France, Indonesia, India, Kenya, Kuwait, Oman, Pakistan, Saudi Arabia, South Africa, Tanzania, Thailand, United Arab Emirates and Iran.
The hosting of the workshop in Colombo by the Sri Lanka Navy shows the commitment and importance it gives to the "IONS’. The workshop, which will focus attention on maritime security and the freedom of the sea for safe navigation, will conclude on the 29th.
© The Island
Wednesday, February 29, 2012
Britain defends the decision to deport asylum seekers
By Charles Haviland | BBC Sinhala
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Another charter flight returning people to the island nation, including Tamil and Sinhala failed asylum-seekers, is due to leave on Tuesday.
But Human Rights Watch and Freedom from Torture say that the flights should be suspended because some ethnic Tamils been subjected to cruel treatment after arriving.
Courts satisfied about safety
The British Foreign Office told the BBC that the government only sends people back to Sri Lanka when it and the courts are satisfied that an individual has no protection needs.
It cited a ruling from the European Court of Human Rights that not all Tamil asylum-seekers require protection. And it said there had been no substantiated allegations of mistreatment of those returned from the UK.
In effect Britain is disputing strongly-worded statements released by the US-based Human Rights Watch and the British-based Freedom from Torture.
Beaten and raped
The former said last weekend that the Sri Lankan military and police have arrested some Tamil returnees, beating them, covering them in kerosene or raping them to force them to confess involvement with the Tamil Tigers.
The organisations say that although British High Commission officials meet most returnees and give them a small assistance package, this is far from adequate protection.
Police denies accusations
And they say deportation charter flights including one due to leave on Tuesday should be suspended.
The Sri Lankan police have strongly denied the allegations levelled against them, including those of rape. But they admit that some deportees are arrested at the airport.
© BBC Sinhala
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