A Brief Colonial History Of Ceylon(SriLanka)
Jack Layton’s open letter
Systematic Genocide of Tamils
Sunday, September 24, 2017
By Shaahidah Riza-2017-09-24
President's Counsel and member of the Lanka Sama Samaja Party (LSSP), parliamentarian Jayampathy Wickramaratne spoke to Ceylon Today about the salient points pertaining to the Interim report, of the steering committee, which centred on the Constitutional Assembly of Sri Lanka.
Emphasizing on the need to include the word Aekiya Rajya in the English and Sinhalese version of the Constitution, he added that the Sri Lankan lawmakers have a 'unitary mindset' and that the proposal by the TNA to include the term Aekiya in English is a good development.
Excerpts of the Interview:
?: How did you come to a consensus on the voting system?
A: Vast majority of people are against the preferential vote. They want MPs for the electorates. But at the same time they want the proportional representation, so that different shades of political opinion are reflected in the Parliament. What is proposed is a mixed member proportional representation system (MMP) where the candidate has to run for the electorate and run for the party. The overall composition of the Parliament is determined by the party vote which I think is important. You eliminate the preferential voting and everybody has his own MP at the electorate and at the same time the overall composition is proportionate.
?: What about the minor parties?
A: Minor parties will also benefit. For example if this proposed system was there for the last general elections the JVP would have got 12 seats instead of the six they have.
?: The electorates that presently exist are still those following the delimitations done in the 1970s. Will a new delimitation process take place to accommodate the new system?
A: Yes, there will have to be one. Now there are no electorates. We go by the old electoral divisions. But there have been large movements of population, for example, Kaduwela has more than 100,000 voters. Whereas in another area there will be only 20,000 to 30,000 voters. The population migration patterns have changed. Those have to be taken in to account, Including the IDPs.
?: The report indicates that the Constitution recognizes the Northern and Eastern Provinces as a single province. This indicates a merger?
A: That is only just one proposal. Everybody knows that proposal is the position of the TNA.
?: So, there will not be a merger?
A: My view is that I am not opposed to a merger of two or three provinces provided that the majority of the electors of each of the provinces agree. For example, I come from the Central Province. I have no problem joining with the Uva Province. But the people of the Uva Province and the people of the Central Province must vote in favour of voting in separate. The present Constitution also provides for this. The 13-A provides for possible mergers. But it also says that there should be a law on this. So, it is up to Parliament to pass a law. Parliament did have a law, the Provincial Councils Act. The provision was applicable for only one year. Now there is no law. So I don't know why people should get worried about it. The present provision should be left as it is and as an extra safeguard the people of each province must agree to it and the Parliament must be given the power to make that so. First, Parliament must pass a law. Otherwise this constitutional provision is meaningless. What if Parliament does not pass a law? You can't compel Parliament to pass a law.
?: You have the SLFP, JHU and a few other parties that want Buddhism to hold the foremost position without other religions being subjected to discrimination. However, the TNA wants the State to be secular. What is your idea?
A: there are two proposals. One is to retain the present provision, the other one is for Buddhism to have the foremost place. All agree that the foremost place for Buddhism should not be changed. But there is a different formulation suggested by some, that other religions should not be discriminated. TNA may want a secular State. But there are only two proposals. Both of which say Buddhism's present positions must be retained. While the TNA states that they want a secular State. They have also said that if the two main parties agree they do not have a problem with the report. In any case Sri Lanka is a secular State. Buddhism is not the official religion. What the Supreme Court has said, in two judgments, one in the sound pollution case and in the first 19-A case, indicates that although Buddhism has the foremost place there are also safeguards for other religions. Sri Lanka's secular State position is retained. Even the JHU acknowledges that. JHU stated, in its observation, that the foremost place in Buddhism is a mere decoration.
?: There are varied opinions on devolution. How do you resolve this?
A: I am very happy about the proposals on devolutions. And I am happy with what the TNA has also said, they have stated that as the SLFP and UNP have agreed on the devolution proposals, contained in the report, they are willing to go along with it. As the report also says the devolution proposals are based on proposals made to the steering committee and the various sub committees, by the chief minister of the Southern Province. The best proposals came from the seven chief ministers of the South who all belonged to the SLFP. Their proposals were based on thirty years of devolution. It is very practical. They looked at devolution as a way of solving the national question, they looked at it also as a tool of development to take the rulers closer to the people. Almost everything in the principles of devolution, that the steering committee agreed with, has come from the chief ministers in the South of the country.
What do they want? They are asking for clear cut division of power when national policy provision has been abused. These chief ministers want to be involved when decisions pertaining to national policies on devolving matters are taking place and not to take those powers in the guise of making national policies.
?: What is the decision on women's representation?
A: What we thought was let's see how it works in the local elections. We agreed on that principle. We have also included in the Provincial Councils as well. We passed the Bill last week.
?: How did you all handle the public security aspect?
A: Public security was not handled by the steering committee. It was a matter that came within the purview of the subcommittee on law and order which was chaired by Minister Sagala Ratnayake. That report goes into detail about law and order and other related matters. Everybody is concerned about it.
?: How did you all determine the principle of unitary State?
A: if you speak to the Sinhala people, the very large majority will say that they want an Aekiya Rajya. If you ask them what an Aekiya Rajya is they will say that they want an indivisible country. But the word unitary in English has a different connotation. That is our experience of 30 years. The legislature, the executive and even the judiciary has used the word Unitary. There is a case called Kamalawathi, which is about transfer policy pertaining to provincial teachers in the provincial public service. There is a Cabinet decision on transfers. Justice Mark Fernando, one of the best Judges we have had, who unfortunately had a unitary mindset, held that the Cabinet decision, at the centre, on teacher transfers amounts to national policy binding on the provinces. Then the Agrarian Services which was a devolving subject was handled by the Provincial Councils for the first three years of devolution and then there was an amendment to the Agrarian Services Act. The Act was not sent to the Provincial Councils for their views. When the matter was challenged even the State and even the Attorney General did not come to Court and say that they were making national policy.
But the Court (Justice Mark Fernando) said that this was national policy being made. It is up to the Government to say that the object of that statute was to make national policy. But I have stated elsewhere, in one of my writings, that the Supreme Court spoke for the Government where the Government took a different position before the Court with regard to national policy. Even if it was national policy, assuming, for argument sake, that Justice Mark Fernando was correct, it doesn't make Agrarian Services a reserved subject, when the Attorney General gave an opinion that the effect of that judgment is that Agrarian Services is no more devolved. How can he do that? Just because the national policy is made the subject does not shift from the provincial list to the reserved list. All the nine Agrarian Services Departments; officials, officers and hardware, and vehicles were taken back to the centre. In 2003, in a case called Maddumabandara; this matter was reconsidered and it was held that the Agrarian Services is a devolved subject.
Fourteen years have gone and Department has still not been given back to the province. So they have this unitary mindset, that is why the TNA has said that they will agree to 'Aekiya Rajya' in the Sinhala version, but it must be added to the English version as well. That is a very good development. What the Sinhala people want is the 'Aekiya Rajya' as an indivisible State.
The UK has been described as the mother of all unitary States and mother of all parliaments. In the 1920s by an Act of Parliament it allowed Ireland to be independent and the Republic of Ireland was born. In Northern Ireland, as a solution to the Northern Irish crises, the Good Friday Agreement emerged. The Good Friday Agreement provided for, the day the majority of the people of Northern Ireland wants to unify with the republic, Britain would accept it and that was accepted and approved by the Westminster Parliament.
Just last year the Westminster Parliament empowered the Scottish parliament to hold a referendum on whether Scotland should be a separate State. This shows that the word unitary is not a guarantee against separation. The people of this country want a guarantee against separation. So unitary has not helped. What is necessary is Aekiya in the sense that Sri Lanka is an indivisible and undividable country. And also the sovereignty of the people is in the Sri Lankan people. Sovereignty is not devided it is with the people as a whole. It is inalienable. The power to make the Constitution change is with the central legislature. The Provincial Councils will not have any say in the Constitution making process. But now we have a problem with regard to the 20-A determination. People like Udaya Gammanpila challenged the 20-A. They argue that the elections for the Provincial Councils are part of the franchise.
According to the Constitution presidential and parliamentary elections are included in the franchise. They have argued successfully that the elections to the Provincial Councils is part of the franchise of the country. What does this also mean?
It means that elections to the Provincial Councils are entrenched. It cannot be changed, it is part of the sovereignty of the country.
Therefore, it also means Provincial Councils cannot be abolished. If you can't delay provincial elections, surely you can't abolish Provincial Councils. So what is the effect of the judgment? Do we have a unitary State?
By Shivanthi Ranasinghe-2017-09-25
We do not realize the 'Sword of Damocles' we hung over our heads - not just over those in power, as the anecdote originally implies - when we co-sponsored the Geneva Resolution. Geographically we are strategically placed, rich in resources and our workforce is innovative, educated and ingenious when given the opportunity. Yet, the 'horse hair' by which the sword is hung is getting increasingly frayed as international pressure on us is mounting to incorporate provisions of international treaties into our local laws, which they themselves dare not pass in their own parliaments.
The Enforced Disappearances Bill, which was to be presented to the Parliament on 21 September, is a case in point. This is the government's third attempt to have it presented and passed in Parliament. Each time, due to pressures from various quarters, especially the Venerable Sangha, the government backtracked.
Among the many pressure groups this time Eliya too held a press conference on 19 September. Venerable Induragare Dhammarathana Thera, Rear Admiral Sarath Weerasekera, President's Counsel Manohara de Silva and Veteran Journalist C. A. Chandraprema sat as the panel to explain the danger of this beautifully packaged Bill.
The full title of this bill is, International Convention for the Protection of All Persons from Enforced Disappearance (ICPAPED). This title itself is deceptive and false. It clearly states that this is for the protection of all persons from enforced disappearances. Looking at the title only, no one would dispute with it as no one endorses enforced disappearances.
Yet, Article 2 of Part I itself clearly state, "For the purposes of this Convention, 'enforced disappearance' is considered to be the arrest, detention, abduction or any other form of deprivation of liberty by agents of the State or by persons or groups of persons acting with the authorization, support or acquiescence of the State, followed by a refusal to acknowledge the deprivation of liberty or by concealment of the fate or whereabouts of the disappeared person, which places such a person outside the protection of the law."
In plain English this means only those attached to the Government will be subjected. This will not extend to any non-state actor. Thus, the full force of this convention falls on the heads of our Security Forces without ever touching even a hair of a single terrorist, who for 30 odd years violated every possible human and humanitarian rights law.
Article 1 states that no excuse will be entertained; "no exceptional circumstances whatsoever, whether a state of war or a threat of war, internal political instability or any other public emergency, may be invoked as a justification for enforced disappearance."
In this context, Sanja de Silva Jayatilleka's Govt. has accepted ICJ's jurisdiction over Sri Lanka is extremely interesting. Its implications must be fully appreciated now that the Sword of Damocles is swaying so dangerously over our heads. She notes the UK's reasons cited for its inability to cede the Chagos Archipelago to Mauritius, despite its pledged commitment to do so, is because the archipelago is still "required for defense purposes". Mauritius in its letter to the Human Rights Council has expanded the exact 'defense' purpose UK is using Diego Garcia for, which is "as a transit point after September 2001 for rendition of persons to countries where they risked being subjected to torture or ill-treatment".
Britain is free to do so as it has not ratified this international treaty on Enforced Disappearances. Certainly Sri Lanka will not lean on the UK to ratify it. Though India's economy today rivals that of Britain, India will not prevail on UK. China is not interested in these kinds of arm twisting techniques; neither is Russia. The West who has made it the white man's burden to civilize the non-Caucasians will certainly never address it.
Thus British state agents will never be subject to the cruelties of this Bill and could go to other countries to 'forcefully disappear' those who they identify as 'enemy combats'. They recognize them as such so they are not bound by international laws that protect the rights 'prisoners of war'. They are escaping their own laws by taking their prisoners to offshore detention centers. Practicing thus they keep the average British citizen safe from psychopaths as well as those who challenge their status quo.
It must be stressed that our Sri Lankan Security Forces who overpowered terrorism did so within our own soil. They did not violate the borders or the sovereignty of another country to safeguard us. It must be further emphasized that since annihilating the Liberation Tigers of Tamil Eelam, our Forces had been engaged in peaceful projects like landscaping, farming, tourism, restoration of buildings and so on. Also, as de Silva pointed, with Yahapalanaya, the white van abduction culture has been eradicated.
He asked if the Constitutional Councils introduced via 19th Amendment made our institutions independent, why do we need a separate Office for Missing Persons (OMP). Does that imply that our Police are not independent or trustworthy?
Both he and Rear Admiral Weerasekera explained that both the OMP and ICPAPED are links of the same chain. Hence, it must be studied together and the two components are just part of a bigger plan.
For eight years our enemies have been levying war crime charges against our forces, pointed PC de Silva without evidence to prove it.
Therefore, they installed the OMP, empowering it to go to any police or military establishment, any time, without prior notice and confiscate any material as evidence. They can record any statement from any person and present it as evidence. In fact, witnesses may present their statement electronically without giving the accused the right to face his accuser, nor the right to cross examine the accusation. This is nothing short of a factory to generate evidence.
Rear Admiral Weerasekera explained that the target is not the perpetrator, but his command hierarchy. Thus, any lower rank soldier can be summoned by the OMP and either threatened, bribed or otherwise coerced to give evidence of a crime. However, it would be his commanding officer that would be held liable for failing to prevent that crime.
The simple truth is, explained the Eliya panel, the first attempt was to import foreign judges and prosecutors to Sri Lanka. When that failed, they moved to the next step, which is to export those who gave leadership to end terrorism to foreign courts.
The most contentious of this is the extradition clause. Chandraprema's Govt. in attempt to revive PM's enforced disappearances Bill explains it in detail. The government argues it will not be the case as we are not signatories to the Roman Statue and thus does not come under the jurisdiction of the ICC. However, Article 10 is clear that a foreign government (a member state) can arrest a Sri Lankan who is alleged to have committed enforced disappearances if found in their territories. Once arrested, they may try him according to their own laws, extradite him to another country in accordance with its international obligations, or hand him over for prosecution to an international criminal tribunal whose jurisdiction that member state has recognized. The only recognized international criminal tribunal is the ICC in The Hague.
De Silva explained our current laws allow another country to ask for a Sri Lankan to be extradited. However, if that person can prove that there is a political motivation behind the extradition request, the Sri Lankan government can decline.
However, this Bill has gone to the extent to deny that right to our citizens. Thus, even though it can be proven that Yasmin Sooka's NGO had a political motivation to charge General Jagath Jayasuriya, this Bill will not heed it.
PM Ranil Wickremesinghe has assured that the Bill is not retroactive. The argument presented is that the Offenses against Aircrafts Act No. 24 of 1982 passed by Parliament were made retroactively for the purpose of prosecuting Sepala Ekanayake for hijacking an Alitalia aircraft.
However, Mohammed Muzammil of the National Freedom Front on 17 September explained that at the time hijacking was not in our statues. When the then government passed ratifying three international conventions the Supreme Court decided the law governing the international convention had been in place before our parliament had passed that law.
The ICPAPED was passed in 1992. Thus its effect will only be applicable to Sri Lankans from 1992, affecting the war heroes alleged to have committed various crimes. Its time frame, he observed, is convenient to those responsible for the enforced disappearances during the second insurgency of the JanathaVimukthi Peramuna (JVP).
Furthermore, in the Ekanayaka case, the hijacking was an offense already committed and in the past. In the case of a person alleged to have disappeared, his status as missing is ongoing until his whereabouts are located or proven to be dead. Thus, the argument of retroactive does not apply at all to an ongoing case. Add to the contention, Chandraprema writes that anyone may report a case of disappearance within three months of becoming aware that such person had disappeared, who may have disappeared even a decade ago.
As his conclusion, PC de Silva observed it is not those who brought peace to this country who are the criminals, but those divided over political allegiance that passes these bills to be in power. In the question and answer session, the panel was asked what Eliya would do if the worst becomes the reality. The sad truth is, from the assurances PM Wickremesinghe gives it is clear he himself is not familiar with the Bill and appears to be merely repeating assurances given to him by someone else.
That means the enemy had infiltrated right into our ranks and is in either position of power or influencing power. We are facing the last line of defense and it is up to the citizens to ensure this Hunt for War Heroes Bill coming in the guise of protection for all of us from enforced disappearances is thrown to the bin and not legitimized as was done with the OMP.
A Mahanayake of a well-known temple in Uva province went to the presidential secretariat recently to meet the president. The president knows this Thera, who comes to him with various problems in the province and of Buddha Sasana. The president promptly resolves all those problems, but his last request is an impossible one. The president tells that the request will be considered, worships him and sends him off.
September 24, 2017, 10:59 pm
A paper presented by Prof. S. Ratnajeevan H. Hoole Member, Election Commission, Sri Lanka at the 8th Annual Meeting of the Forum of Election Management Bodies of South Asia, 23-27 Sept. 2017, Kabul, Afghanistan on the theme "Election and Dispute Resolutions & No Voter to be Left Behind."
A paper presented by Prof. S. Ratnajeevan H. Hoole Member, Election Commission, Sri Lanka at the 8th Annual Meeting of the Forum of Election Management Bodies of South Asia, 23-27 Sept. 2017, Kabul, Afghanistan on the theme "Election and Dispute Resolutions & No Voter to be Left Behind."
For all of us to defend the institutions we represent is the human condition. Thus, country reports and like documents tend to gloss over the failures of our institutions. This enhances our view of ourselves. However, it is in owning up to these deficiencies that causative factors are resolved or at least ameliorated. None of us has a perfect democracy. We have ideals that we strive to achieve and move towards.
Sri Lanka’s is a multiparty democracy. We have our failures that have impeded our island nation’s progress towards democratic-franchise for all communities. Social, political and economic influences have undermined our democratic ideals. For example, five of our failures are provided below.
1) At independence in 1948, 11% of our population were Tamils of recent Indian origin enjoying the franchise. One of the first acts of Ceylon’s Parliament was to disfranchise them. Voters were left behind.
2) The Sri Lanka Freedom Party under its then leader Sirimavo Bandaranaike, enacted a new constitution in 1972, and used that effectively to extend her term by two years. She also did away with Article 29 of the previous constitution affording protection to minorities. The change made Sri Lanka a very different country from the pluralistic society previously envisioned.
3) In 1982 President J.R. Jayewardene, who had been elected in 1977, with his party commanding a two-thirds parliamentary majority, held a referendum on extending the life of parliament by 6 years without an election. According to the book by Paul Brass,"The December 1982 Referendum saw rigging on a grand scale, with UNP supporters – especially those in the party’s trade union – resorting to ballot stuffing, intimidation, and violence to ensure a UNP victory." Yet, our Department of Elections certified the result.
4) In the 1994 elections, the separatist group, the LTTE, ordered a boycott of the elections. It was understood that anyone who defied the ban would be executed. Thus, only one rival militant group was a key contestant and their members got elected to parliament with as few as 9 votes. We certified the result instead of cancelling it.
5) Perhaps the big success of the Election Department was the Jan. 2015 Presidential Elections. The story is yet to be told fully – and may never be unless the then Election Commissioner and present Chairman of the Election Commission writes a book as he promises to do upon retirement. As the incumbent president seemed to be losing, troops under the command of his brother were moving to the capital city of Colombo, where the nation’s votes were being counted under our watch. The Election Commissioner ordered the police assigned to him to "shoot aiming for the head." The Presidency changed hands peaceably.
The courts have now determined that the Secretary to the outgoing President with the former Director General of the Telecommunications Regulatory Commission had defrauded the state of Rs. 600 million to distribute religious clothing to Buddhists just before the 2015 elections. They have each been sentenced to three years in jail with a hefty fine. While it shows the sea change in high-ups being sentenced for the first time, the impunity that pervades Sri Lanka is seen to be difficult to shake off – both, although sentenced to rigorous imprisonment, were found to be "sick" in prison and given luxury quarters in the prison hospital. Curiously, that President in whose cause the fraud was perpetrated making him answerable, has not been touched. It shows that challenging impunity at top is a long process.
However, despite the monumental failures of our democracy, Sri Lanka is moving towards its ideals under international pressure. The President’s Secretary, effectively the Head of the Civil Service, being jailed was unthinkable till recently.
We as the people of a country are best off operating in a fraternity of global partners sharing best practices. Examples are forums such as FEMBOSA, and the Commonwealth Electoral Network, as well as international organizations like the UN Human Rights Commission and INGOs like The International Federation of Electoral Systems. Not only do we learn from each other, but such forums bring likeminded partners to put pressure on offending parties and publicise problems. Methods used are often consultative and advisory, as with INGOs that need government permission for presence in a country, and at other times coercive and directly confrontational, as often necessary. Some call the latter colonialism in new forms but for those at the receiving end of a bad government, it is welcome relief.
Thankfully, due to the intervention of India and the political organization of our plantation workers, despite their statelessness all those rendered stateless have been offered Sri Lankan citizenship and their franchise. Thus external inputs are sometimes necessary to make a country do justice to its citizens.
Women’s participation in governance is an area where Sri Lanka fairs poorly with only 5% of our MPs being female. However, there has been a reversal of late. Parliament has enacted laws to force a 25% quota for women in Local Government. There is continued opposition and the Bill was gazetted, passed with substantial modification at the Committee Stage, and is again being modified as this paper is being written.
This sunrise as it were on women’s rights has been because of external criticism and advice. Field trips have been organized for MPs to visit countries that have successfully included women. Training programs have been funded for women encouraging them to be candidates. Foreign leaders have come to canvass our political leaders on this score. They made us do what we should have done by ourselves.
Caste is another frontier where obstacles exist but are not admitted, which makes a solution even more difficult. The agricultural castes dominate and the Executive Prime Minister and later the President have all been agriculturist Sinhalese – except when during a violent insurrection no one wanted to be President. The Northern Provincial Council of 38 has only two of depressed caste origin, while the provincial demography has over 50% from the depressed castes.
Such inequalities are entrenched in the socio-political order. It is a given that Sri Lanka is a Sinhalese Buddhist country where Buddhism is foremost and must be fostered by the state. As a new constitution is being drafted, this clause so inimical to concepts of democracy and an egalitarian order, will be retained, both the President and Prime Minister are on record as having said. Certain flags need to be waved to win elections.
That attitude asserting Buddhism has twisted Sri Lanka’s democratic fabric into a grotesque shape. Towards the end of the civil war with the LTTE in 2009, the UN estimates that over 40,000 Tamil civilians were massacred by the army. Others give a higher figure of over 70,000.The government, on account of pressure from the global community, had in 2014 cosponsored UNHCR Resolution 30/1 promising prosecution of war crimes through a credible transparent processoverseenby international judges.
The problem is that in our communalist polity, Sinhalese soldiers who killed Tamil civilians are national heroes. Punishing the killers is political suicide. Promises of prosecution thus becomea game of double-speakwhere we do not know what or whom to believe. The ruling coalition’s Malik Samarawickrama announced:
"The UNP welcomes the statement of the Cabinet of Ministers, the Prime Minister and the President to use the full force of the law against those causing religious tensions, racial hatred and undermining the efforts at reconciliation since the new government came to power."
(This paper reflects the author’s own views as a Member of the Election Commission and not necessarily those of the Election Commission or the Government of Sri Lanka.)
Vision 2025: Part 2
Analysis so farMonday, 25 September 2017
In Part 1 of the article series on the Government’s Vision 2025 published last week (available at: http://www.ft.lk/columns/Vision-2025--Part-1--Need-for-moving-from-a-wish-list-to-a-concrete-plan/4-639757), it was pointed out that the present vision document was just the fourth of such visions pronounced by the Government during the last two year period.
These documents which started from the election manifesto of the United National Party presented to the electorate in August 2015 had one underlying theme.
That was the new economic philosophy of the Government which was styled as ‘Knowledge-based Highly Competitive Social Market Economy’, a concept adapted from Germany which had introduced it after the Second World War. Germany’s vision had been to have a third way, different from the Western capitalism and Soviet Union’s communism which had been ruling the world at that time and proved to be ineffective to meet the aspirations of all the people in a country. Apparently, UNP too had felt that it needed a new ideology, different from the extreme state expansion policy which had been adopted by the previous Mahinda Rajapaksa administration.
However, it was pointed out in the previous article that three shortcomings in the first three policy statements, namely, lack of consensus among the ruling coalition parties on economic policy, failure to sell it to people and the Minister of Finance taking the country in the opposite direction, had hampered their proper implementation. Hence, the need of the day had been identified as translating the wish list in the vision into implementable concrete plans.
V2025 has two time bound goalsAs pointed out previously, Vision 2025 has two time-bound goals, four intermediate goals to be realised by 2020 and one final goal to be achieved by 2025. The four intermediate goals have been to increase the average income of a Sri Lankan, also known as per capita income or PCI, from the present $ 4,000 to $ 5,000, generate one million jobs, increase foreign direct investments or FDIs to $ 5 billion per annum and double the country’s exports from the present $ 10 billion to $ 20 billion. The final goal has been to make Sri Lanka a rich country by 2025.
Both goals are ambitious and challengingThese are highly ambitious goals and, therefore, challenging. They are specially challenging given the high growth rates which the country has to achieve over the next eight-year period if it is to become a rich country.
In the intermediate target of elevating Sri Lanka’s PCI to $ 5,000, the country has to maintain on average a continuous growth rate of 9% per annum in each of the years from 2018 to 2020. Similarly, to become a rich country by 2025, Sri Lanka should have a PCI of little over $ 12,000, according to World Bank’s classifications. That requires Sri Lanka to accelerate its growth rate to above 16% per annum during 2021 to 2025.
Sri Lanka’s efficiency of capita utilisation, known as Incremental Capital Output Ratio or ICOR, is so low that it has to on average use five units of capital to produce one unit of output. Thus, the annual investment requirement to attain the first target of 9% growth is about 45% of the total output, known as the Gross Domestic Product or GDP. In the latter target, it is an exorbitantly high level of about 80% of GDP.
No alternative; everyone should tighten beltsTo maintain such a high level of investment, Sri Lanka has to, in the first place cut down its consumption drastically, known to economists as ‘austerity measures’ or to laymen, as ‘belt-tightening measures’. However, there is a limit to such austerity measures which Sri Lanka can safely introduce, given the high preference for consumption by all, ranging from politicians to bureaucrats to common men and women.
If belts cannot be tightened sufficiently, no alternative but use savings of foreigners
Hence, there will still be a gap between potential savings and the required investments. That gap, known as the savings-investment gap, has to be filled by using savings done by people in the rest of the world. Those savings are mobilised by a country by making foreign borrowings or attracting FDIs or allowing foreigners to invest in the country’s securities market, known as portfolio investments or simply getting foreigners to give free gifts or grants or by using all of them. In the past, Sri Lanka had tried to fill the gap mainly by borrowing from abroad but it had increased the country’s foreign debt to unmanageable levels.
Sri Lanka’s disappointing
Sri Lanka’s past track record with regard to economic growth has also not been very encouraging. On average, during the whole of the post-independence period, Sri Lanka’s annual economic growth has been at around 4.4%, as shown by Figure 1. In the first half of 2017, its growth has been still worse at 3.9%. Though the authorities have expressed hope that there would a bounce-back in the second half of the year, all the available indicators such as agricultural production and growth of exports have shown that the country would finally end up at an average growth of 4% in 2017.
High growth expectations amidst low performanceThough, in its latest projection, the Central Bank has expected that the growth rate would increase to 7% by 2020, as shown in Figure 2, the projection made by IMF has been significantly below that. In this scenario, the acceleration of the growth rate to a minimum of 9% per annum during 2018-20 and to 16% during 2021 to 2025 would certainly be an uphill task.
Linking accelerated growth targets to election cycleIn the case of the three previous policy statements, Sri Lanka still planned to be a rich country but it had assigned to itself a very long date for attaining that goal, namely, 2045. But in the Vision 2025, that long date has been advanced to 2025, a kind of an acceleration of the growth momentum planned previously.
As pointed out in the previous article, this acceleration had nothing to do with the country’s perceivable economic cycles. Instead, it had been linked to the country’s election cycle in which there would be two Parliamentary elections one in 2020 and the other in 2025. The Government’s wish to secure victory at these two elections is understandable. But the goals which it has set for itself and for sale to the electorate have been too challenging for its built-in capability.
A nation bent on consuming
Sri Lanka’s annual domestic savings are on average at about 20% of GDP. This means that when a Sri Lankan living in Sri Lanka earns 100 rupees, he spends 80 rupees on consumption. This is comparably a high level of consumption, compared with high savers in the region like Singapore or China which have a savings record of about 50% of their income.
and not saving
Relying on remittances to augment domestic savings is not advisableSri Lanka’s domestic savings are being augmented significantly by the inflow of remittances by Sri Lankan workers abroad. These remittances constitute about 8% of GDP; thus, the country’s national savings which include such remittances as well have been recorded at a higher level of about 28% of GDP over the last few years.
However, remittances are not a source of funding on which Sri Lanka can make too much of dependence since they are subject to constraints. On one side, Sri Lanka cannot send people out for employment without experiencing a labour shortage within the country. On the other, the employing countries also cannot do so continuously due to domestic political and economic problems.
Getting free money spending politicians to get a voluntary
Hence, it is safe for Sri Lanka to rely on domestic savings rather than national savings to finance its target level of investments. But to do so, it has to force all Sri Lankans to cut their consumption at least by another 10% of GDP allowing the country to increase its domestic savings rate from the current 20% to 30%. However, it requires everyone – politicians, bureaucrats and ordinary citizens – to take a cut in the present welfare levels. The biggest challenge for the Government is to change the mindset of both politicians and bureaucrats to take this hit.
cut is challenging
Avoiding the debt trap by going
However, even when the country’s domestic savings are increased to 30% of GDP through enforced austerity measures across the board, there will still be a sizeable savings-investment gap which has to be filled by using savings made by foreigners. Since the country is already in a foreign debt trap and the Government has made announcements that it does not want to increase these debt levels any more, the only available source has been the attraction of FDIs. In the intermediate targets set in Vision 2025, the Government wishes to increase FDIs from the present less than $ 1 billion to $ 5 billion by 2020. Based on the track record of the country, this is again an uphill task.
Sri Lanka should improve
What will go against the Government’s desire to attract FDIs is the general inefficiency of the public sector in the country, unpreparedness of the private sector for the changing global environment and the indecision of the political leaders. This has been demonstrated by Sri Lanka’s very low ranking in all the global indexes, as presented in Table 1. This is not a new development and the country had always been ranked low by those agencies even in the past.
its global ranking
Shooting the ranking agencies instead of shooting the rankWhen these reports were out, the reaction of the previous Mahinda Rajapaksa administration was that those compiling agencies were biased, prejudiced and vindictive and were carrying on a mission to destroy Sri Lanka’s bright future.
Hence, every time a new index result was out, there were angry retorts and promises of compiling Sri Lanka’s own indexes to represent its true state to the rest of the world. However, they were only promises and none of these homemade indexes was release subsequently.
Poor FDI recordThe result was that Sri Lanka could not attract worthwhile FDIs even after the end of the war when there was a lot of promise for such investments to take place. For instance, during 2005 to 2009, according to the Central Banking data, Sri Lanka had got on average an annual flow of FDIs amounting to $ 644. This number has slightly increased to $ 793 million during 2010 to 2014.
New Government’s track record of attracting FDIs is not better than previous Government
When the new Government came to power in January 2015, the promise of Sri Lanka as a destination of worthwhile FDIs was substantially increased on account of the pledge it had given to the rest of the world that it would usher an era of good governance, transparency, rule of law and law and order. Yet, FDIs it could attract during 2015 and 2016 amounted, on an annual average, only to $ 789 million, almost same as the country’s record during the previous post-war period.
In the absence of domestic savings, FDIs will be the saviourEven then, during the two periods under reference, those FDIs were mainly for the hospitality and real estate sectors, and not for high tech industries that could have revolutionised the country’s production structure, the need of the day.
The present Government was expected to take measures to improve the country’s standing on these indexes. But no action was taken for two years and the country’s standing deteriorated further during that period. Now that the Government is planning to accelerate economic growth to a very high level during the next eight-year period and it plans to depend principally on FDIs, it cannot ignore the falling standing of the country in the eyes of foreign index compiling agencies.
Are the claims on job creation in V2025 are correct?An important intermediate target of the Government during 2018-20 has been the generation of one million jobs. Vision 2025 claims that from January 2015 up to date 430,000 new jobs have been created within the economy.
However, this claim is not being borne out by the data that have been published by the Central Bank in its Annual Reports based on the data compiled by the Department of Census and Statistics. According to the Central Bank, as at the end of 2014, the number of people employed in the country had amounted to 8.424 million. As at the end of 2016, this number has declined to 7.948 million recording a decline of employment by 476,000.
Is it one or one and a
What it means is that if the Government’s objective is to create one million jobs over the level of employment that had prevailed at end 2015, it has to create nearly 1.5 million new jobs during 2018-20. This is again an uphill task.
half million new jobs in the
next three-year period?
Next part will analyse how exports should be increasedVision 2025 plans to double exports from the current level of $ 10 billion to $ 20 billion by 2020. The next part will examine the nature of the challenge faced by the Government to attain this goal within a mere three-year period and the policy package it should implement if it is willing to adopt a long date for attaining that target.
(W.A. Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at firstname.lastname@example.org.)