Backdrop

Revisiting Sri Lanka Perspectives after a two-month break, we find the month of May occupies a special place in Sri Lanka’s history with a seamless continuity of events in yesteryears. The effects of wasteful politics failing to reap two-and one-half decades of peace after the Tamil separatist war that ended in May 2009 with the death of Prabhakaran have continued. The fractured ethnic relations continue to be used as a political ploy by national parties, often using religious leaders to promote hatred. Under the patronage of Rajapaksas, political Buddhism is well entrenched to trigger public opinion.

It was also on a fateful day in May 1991, vengeful Prabhakaran masterminded the killing of Rajiv Gandhi. The slain former Indian prime minister was a friend of the Tamils. He acted proactively to settle Sri Lanka’s ethnic confrontation in their favour, signing the India-Sri Lanka Accord in 1987. The Accord protects Tamil identity and provides for limited autonomy the Tamils enjoy now. Prabhakaran’s mindless killing of Rajiv dissipated the ocean of sympathy Sri Lanka Tamils enjoyed in India. It is ironical the Tamil United Liberation Front (TULF) that extended lukewarm support to the 1987 Accord, in its morphed avatar as Tamil National Alliance (TNA) now wants India’s help to enforce it.

The Covid-19 pandemic added to the plight of the people already groaning under the economic mismanagement under Gotabaya. May 9, 2022 is also remembered for the infamous ‘Black Monday’ attack by goons of the ruling Sri Lanka Podujana Party (SLPP) and supporters of Rajapaksas on Aragalaya protesters to disperse them. The Black Monday attacks proved a disaster for the political fortunes of the Rajapaksas. To escape public wrath, they had to quit the government and seek sanctuaries at home and abroad. The Rajapaksas however persuaded Ranil Wickremesinghe, the leader of the United National Party (UNP) rejected by the people in the general elections, to become a proxy prime minister. Ultimately, Ranil was elected President by a majority of parliamentarians.

It can happen only in Sri Lanka that Ranil’s Faustian bargain with Rajapaksas to become President with no popular mandate is leading the fight for Sri Lanka’s economic recovery. It is to Wickremesinghe’s credit that he is doing a better job of economic recovery unlike the Rajapaksas whose populist policies plunged the national economy to the south. It is in this overall backdrop the happenings in the month of May 2023 have to be understood.

One year after Aragalaya

One of the key elements of Aragalaya protest was against the introduction of 20th Amendment by President Gotabaya Rajapaksa. The 20A had superseded 19A enabling the president to accumulate powers in his hands, particularly in exercising control over the so-called independent commissions and in making key appointments to high office. The 21A is a compromise between the motley collection of parties including Rajapaksa supporters that came together to ensure the Aragalaya protests do not push them into irrelevance. 21A makes the President more accountable to parliament and restores independent commissions.

Before the month ended, the continuing standoff between the Minister of power and energy, Kanchana Wijesekara, over the sacking of the chairman of the Public Utilities Commission of Sri Lanka (PUCL) Janaka Ratnayake, a Rajapaksa appointee, came to a boil when the parliament voted him out of office as chairman.

Ratnayake’s sacking had all the elements of a B-grade TV political serial. Minister Wijesekara as minister has brought some semblance of order in the distribution of energy resources to the suffering of the public. Sacking of Ratnayake was part of his restructuring exercise. But the dismissed PUCL chairman refused to budge and used the publicity garnered by the stand-off, to hint at contesting the next presidential election as a candidate. This minor incident showed the lack of spirit among stakeholders for any reform, even though members may speak eloquently on improving governance.

Incidents of corruption at high levels continue to be reported. They justify the common man’s distrust of the political class. Newspapers reported that a Chinese man with a forged Guinea passport was apprehended by the immigration staff while trying to enter Colombo international airport. The reports said the state minister for urban development and Housing, Arundika Fernanda, had instructed the immigration authorities to release him and permit him to enter the country as he was a ‘foreign investor.’

In another sordid incident, the All Ceylon Makkal Congress (ACMC) Puttalam MP, Ali Sabri Raheem, was arrested by Customs officers at Bandaranaike airport while attempting to enter the country carrying undeclared haul of 3.397 kg of gold worth SL Rs 75 million. He was also carrying 91 smart phones worth SL Rs 4.2 million. He was released after paying a fine of SL Rs 7.4 million after a brief inquiry. Customs have confiscated the gold and smartphones.

 Unless the government is able to curb corruption and aberrations of governance, we can expect another Aragalaya protest to gather strength among the younger generation.

Economic recovery

The International Monetary Fund (IMF) staff mission made a 12-day visit to Colombo during the month to discuss the recent economic developments and implementation of the IMF supported programme. In a statement the IMF said, “Following strong policy efforts, the macroeconomic situation in Sri Lanka is showing tentative signs of improvement, with inflation moderating, the exchange rate stabilising, and the Central Bank rebuilding reserves buffers.” However, the overall macroeconomic and policy environment remains challenging.

The mission said it discussed additional fiscal efforts that will be critical to ensure successful revenue mobilisation. The mission also discussed progress on debt restructuring, noting the ongoing discussions with both foreign and domestic creditors. The IMF expected to formally assess the performance under the programme to be undertaken in September 2023. The mission stressed the need to achieve timely restructuring agreements with creditors in line with the programme targets by then. It said the need to keep up the reform momentum, timely implementation of programme commitments on ensuring the independence of the central bank, improved governance and protect the vulnerable people are key for Sri Lanka to emerge from the economic crisis.

The President will have to bite the bullet to sell the IMF package to the people, tighten government expenditure and introduce tax reforms. Unless there is some consensus on the reforms among mainstream political parties, the President will not be able take the country through this difficult process.

Despite political gerrymandering by political leaders, India with $4 billion largesse is in the forefront of nations helping Sri Lanka’s economic recovery. The month ended with the State Bank of India extending a $1 billion credit facility till March 2024. Japan and Western nations are also helping Sri Lanka particularly in restructuring its economy with the help of the IMF.

During the month China’s vice premier for foreign affairs, Sun Weidong, visited Sri Lanka. The Chinese minister met Sri Lanka’s prime minister Gunawardena and assured that China will increase investments in several areas such as agriculture, trade and commerce, ports and infrastructure development. He also said that China will continue to provide economic assistance as well as support the country’s debt restructuring programme. However, China, the biggest of Sri Lanka’s debtors, has so far not relented to Sri Lanka’s request to defer Chinese debts.

In a significant move, Sri Lanka has signed an agreement with Sinopec Fuel Production and Marketing Dept, a Chinese company, to import, store, distribute and sell petroleum through a dealer network. The company gets a 20-year licence to operate 150 fuel stations currently operated by CPC and invest in 50 more fuel stations. Sinopec will rely on its own funds for fuel procurement from overseas during the initial year of operation.

China is well entrenched in Sri Lanka, probably next only to Pakistan, as its much trumpeted international finance city is coming up on the Colombo reclamation project. As China further firms up its presence in Sri Lanka, India and its Quad allies – Australia, Japan and the US – are likely to draw Sri Lanka strategically closer to further Indian Ocean security. Sri Lanka’s economic recovery is tangled in these strategic moves.

Tailpiece

‘Superstar’ Rajinikanth invited: Sri Lanka’s Deputy High Commissioner at Chennai, Dr D Venkateshwaran, has invited ‘Superstar’ Rajinikanth to visit Sri Lanka “as his presence will enhance cinema induced tourism as well as spiritual and wellness tourism,” according to a media report. The diplomat is said to have personally invited him to explore the “Ramayana Trail” and other Buddhist sacred sites, promoted by Sri Lanka tourism to attract Indian tourists.

Courtesy Col R Hariharan, Sri Lanka Perspectives May 2023

South Asia Security Trends June 2023; www.security-risks.com