There was a hive of activity this week in Colombo with a variety of international think tanks, strategists, analysts and senior military officers, Foreign Ministers and Ministers exchanging views and taking up positions – the focus being on the Indian Ocean and its surroundings.

Starting with the Defence Conference on Monday, the week concluded with the Indian Ocean conference. The Sri Lanka Navy, the US Embassy in Colombo and the India Foundation took the lead in these brain storming talkathons.

For Sri Lanka, it is a recognition that important players on the world stage and especially in and around the Indian Ocean, are interested parties to these dialogues. Had Prime Minister Mrs. Sirimavo Bandaranaike’s Indian Ocean Peace Zone (IOPZ) proposal to the UN General Assembly in 1971 aimed at stopping the proliferation of military bases and imposing ‘rules of the road’ for states been taken seriously, things might have been different today as these seas witness an escalation of tension and competing national interests.

India was not keen then, wanting an IOPZ regime that eliminated only ‘foreign’ (US and others)bases. Even though the Non Aligned Movement supported the proposal, the IOPZ was led to a slow painless death. Today, with the emergence of a Blue water Chinese Navy, everyone else is getting excited over the rights for all parties to have safe trade, air and sea navigation over the Indian Ocean.

The other positive factor is that by this engagement, as far as Sri Lanka is concerned, there is a marked shift away from yesteryear’s pre-occupation on allegations of human rights violations. This was what dominated the foreign policy agenda of the US and West. With the US State Department now being sidelined by the new dispensation in Washington, the Department’s holier-than-thou approach selectively picking on some countries and not others, has been thrown out of the window, and Sri Lanka can now look more to the future than the past.

Clearly, the US is left to rue this foreign policy miscalculation viz-a-viz Sri Lanka as China made quick inroads into the Sri Lankan economy in the meantime, and advanced its own geo-strategist game plan getting a firm foot hold in this country through the Colombo Port City and the Hambantota harbor projects. With the US State Department downgraded and itsDefence Department given the upper hand under the Trump Administration, it does not necessarily follow that it is good tidings for Sri Lanka and that the world is going to be a better place. No doubt, the US Navy’s Pacific Command based in Hawaii is renewing old contacts and cultivating new ones with its counterparts in Sri Lanka in a bid to counter growing Chinese influence. The super powers are making their moves on the global chess-board.

While India sent a high-level External Affairs Minister for the Indian Ocean conference, she had earlier sent a senior official from the ruling BJP on a quiet mission to meet the President and Prime Minister to express her concerns (to put it mildly) with developments surrounding the Hambantota harbour and Sri Lanka’s virtual capitulation to China on the issue.

The entire region is once again on the boil and the Indian Ocean must not become another hotspot like the South China Sea. Only a fortnight ago, on the occasion of the 70th anniversary of the Independence of both, India and Pakistan we had mentioned how sans a solution to the seven decade long Jammu-Kashmir dispute between the two countries, they are getting drawn further apart andmore into the laps of US (India) and China (Pakistan). Non Alignment is seemingly irrelevant to both.

This week, Pakistan asked the US Acting Assistant Secretary of State for South and Central Asian Affairs not to stop over in Islamabad on her way to Colombo for the Indian Ocean conference in retaliation to accusations by Washington that Pakistan was harbouring terrorists. India has just about resisted a push by China to bulldoze its way into building a highway through Bhutan having already planned one through Pakistan’s Baluchistan region to run rings round India.

In the midst of this, India is launching a South Asia Maritime and Logistics Forum next week in Mumbai, backed by the World Bank, to promote regional trade. Sri Lanka cannot take a “frog in the well’’ attitude in the fast moving external scenario unfolding, mindful as it ought to be, that there are currents and under-currents in the Indian Ocean and that its geo-political location is a ‘double-edged sword’. Sri Lanka cannot fall on its sword.

It is unfortunate that the contribution of local international relations think tanks to this week’s dialogue has been nil. Ad-hocism therefore still rules the roost, and without a national strategy, or plan, it only allows corrupt political leaders – past and present, to revel in this playing field at the expense of the future of the country.

Rejection of Elections

While there is endless debate on Local Government and Provincial Council elections among political parties, last week’s announcement from the Election Commission that there is a slowing down of young adults registering to vote must surely jolt political leaders. Some may already be planning methodologies to take advantage of such a situation. But one of the reasons attributed for this drop – voter apathy with politicians – must hurt politicians who believe they are doing so much for the country.

One is not sure how the Elections CommissionChairman came to the irresistible conclusion that there seems to be a vote of no confidence among youth that political parties are not delivering the goods. Even so, politicians with an ear to the ground might grudgingly concede, it is a fact. One consolation for Sri Lankan politicians is that this is a world-wide phenomenon. Starting with the rejection of the Congress Party in India, the Brexit vote, the defeat of the Clintons and then the outcome in France there is a trend to be seen. In France, no sooner had they elected a young President his popularity ratings have plummeted. There is dissatisfaction with the Establishment everywhere.

On the other hand, very soon we will see the spectacle of wanna-be councilors to Municipal and Urban Councils and Pradeshiya Sabhas and Provincial Councils flocking to different party headquarters for interviews to be candidates. What is this contradiction?That is because they know that is where the ‘gravy train’ is –duty free car permits to sell and become millionaires overnight, overseas jaunts, other perks and privileges. While that queue will be a mile long, the queue to register as voters for these elected bodies is receding. Res ipsaloquitor; the facts speak for themselves.

A delegation of the International Monetary Fund (IMF) was in Colombo this week ahead of a planned but now postponed visit by its head Christine Lagarde, to discuss Sri Lanka’s worsening economic situation. With the country in dire straits with an acute foreign exchange and debt crisis, the IMF’s reform menu for stabilising the economy, one can be certain, will be the standard road map the institution has for developing countries.

Markets must be allowed to work properly, it will say, meaning increasing interest rates, faster currency depreciation, and permitting loss-making enterprises such as the Electricity Board (CEB) and the National Water Supply and Drainage Board (NWSDB) to raise rates, fast-tracking revenue measures, more cuts in expenditure and for the State to sell its assets like the Hilton and upcoming Hyatt Hotels, Water’s Edge and Lanka Hospitals.

Sri Lanka has always skirted by through dependence on foreign aid and loans (bilateral and the likes of the IMF). IMF programmes have been part and parcel of the Sri Lankan economy for decades, and the current programme was not entirely due to any impending foreign exchange or balance of payment crisis but an attempt to get a seal of good housekeeping on the macro economy and to follow a consistent policy to increase revenue and restructure foreign debt.

One crucial element on the debt side is to convert US Dollars eight (8) billion of Chinese debt into equity starting with the Hambantota PPP (Public-Private Partnership) and for others to follow and for them to start generating revenue. The Colombo International Financial Centre (Port City) is a medium-term project that will take two years for landfilling and five years to build – whoever finances the infrastructure.

Related to this will be how the foreign exchange reserves and the rapidly depreciating exchange rate are managed. The need to attract more FDIs (Foreign Direct Investment) and more market access through Free Trade Agreements; expanding the tax base through a new Inland Revenue Act are imperative. Getting financial corruption under control with the same wheeler-dealers back in the game with the Yahapalana Government’s key players distorting decisions to feed corruption; and converting all the IPS, Harvard, McKinsey and Baker & Mckenzie work into a medium to long-term programme that is predictable and consistent are the fundamentals needed to fix what’s wrong in Sri Lanka. But indeed, that is a tall order.

A Fuel Formula – a formula that may see a price rise if world crude oil prices exceed a certain level; an Electricity Formula – a move that may see a rise in electricity prices – if the IMF’s formula is accepted (it has been pointed out that the CEB’s overdraft is in the region of Rs. 11 billion); and talks on the debt ratio vis-a-vis GDP i.e. the rising foreign debt as a percentage of the country’s income, were on the table.

In the IMF’s jargon, reforms will impose short-term costs but the economy will recover through medium-term gains, meaning lower income groups will face the brunt of this adjustment in the short-term, but benefits will trickle through to them in the medium-term, say beyond 2019 or 2020. By then, this Government will be facing impending elections, (along with the probability of dealing with a severe external debt crisis in 2019, and possible calls for wage increases) and is almost likely to abandon stabilisation measures and propose a ‘populist’ agenda, whatever that means.

The IMF is lending a paltry sum not exceeding $500 million a year totaling $1,500 million over the 2016-2019 period. Sri Lanka’s repayment needs, due to commercial borrowing of the previous Administration, banks and state-owned enterprises, are a minimum of $1,500 million a year annually from 2017 onwards. The IMF facility will only cover part of this repayment and for the balance we are told by the IMF, to borrow at high interest rates through syndicated loans or international bonds.

Resorting to foreign commercial loans or allowing foreign investors to buy in the domestic bond market is, in general, a recipe for future financial crisis. The IMF programme seems badly negotiated by not taking this factor fully into account compared to the previous Rajapaksa regime’s effort in raising $2,600 million from the IMF. That regime, on the other hand, frittered away the $2,600 million in record time leaving the present Sirisena-Wickremesinghe Administration to pick up the pieces.

IMF measures are probably unavoidable once a crisis strikes. However, the pain imposed on the poor and leaving growth mechanisms to the market inevitably lead to retrogression in policy execution. So the IMF support cycle repeats itself once in few years.

Preventing the crisis from occurring is the key. A widening budget deficit, pressure on the balance of payments, an overheating economy all are clearly tell-tale signs of economic mismanagement. The Government’s inability to recognise such signals emanating from a mal-functioning economy early, and to take prompt corrective actions have led it into the IMF’s arms. However, averting the crisis is only one side of the coin. Realising a diversified export base is the other side as our rate of growth is constrained by the size of the deficit in the balance of payments.

The current and or any future Government will have to find ways to overcome the commercial debt hangover inherited from the exploits of the last Government’s financial wizards. Over the next decade every year from 2017, the Government will face a mini or major crisis: it must fund large roll-over repayments, try to maintain stability while achieving realistic growth rates, if it is to avoid further doses of IMF medicine. A tough task to pull off, for any Government.

How has the current Government faced up to these gigantic tasks? We have a Finance Ministry and a Central Bank at odds touting the theory of twin deficits and flexible exchange rate as mantra. The Prime Minister, who has put forward elaborate plans over the last two years, wants new institutions, complementary laws or committees to solve emerging issues. We have a President fond of setting up reconciliation committees for each minor problem ranging from lottery ticket margins, licence payments on vehicles and recognition of SAITM degrees — and an economic vision rooted in the 1970s.

The scorecard is not encouraging. In this dark scenario, the Joint Opposition is gleefully awaiting its turn in 2020 or earlier to impose its authoritarian ‘home-grown’ economic and political philosophies on the suffering population.

A bleak future awaits Sri Lanka unless the Government rolls up its sleeves and comes up with a coherent strategy and implements it expeditiously. IMF support, if required, will be peripheral to this exercise.

This story was originally published by The Sunday Times, Sri Lanka

Interestingly, if not ironically, the British Government having voted to exit the European Union (EU) in accordance with the wishes of a majority of its people, is now looking forward – or maybe looking back – at the Commonwealth once again.

The 53-nation Commonwealth, the third largest global grouping, next only to the United Nations and the Non-Aligned Movement, was often contemptuously dismissed as a club living in the somewhat inglorious past of the British Empire serving neither man nor beast. And then, Britain, the primus inter pares in this club, itself dumped the Commonwealth for a new and more attractive bride – the EU, until it found that was a mistake.

Marking Commonwealth Day last Monday, a day long forgotten except by the titular head of the group, the Queen of the United Kingdom, Britain’s Prime Minister Theresa May spoke of a “truly global Britain”, a clear reference to looking beyond Europe – and re-engaging with other countries, mainly the Commonwealth of nations.

The week before, Trade Ministers from 35 of the 52 member-states, including Sri Lanka’s Trade Ministers met in London. (Yes; we have two Trade Ministers). The fact that the Commonwealth Trade Ministers were meeting for only the first time since 2005 spoke for itself.

Sri Lanka’s International Trade Minister Malik Samarawickrama gave a sound-bite to the media on the sidelines of the meeting saying it was the right time “for a new Commonwealth trading bloc”. Unfortunately, we have no further information on what this ‘new Commonwealth bloc’ is until the Minister enlightens us.

Britain’s decision to sideline its age-old trading partners in the Commonwealth was recognised at that very meeting and the country was asked, not necessarily to beg forgiveness, but to re-approach with “a degree of humility” old partners who were cast aside.

As Britain moved away from the Commonwealth (its funding dried up so much that the Commonwealth Press Union once known as the Empire Press Union, had to fold up, one day short of a hundred years of existence), so did the other Commonwealth countries move away from Britain. They had to seek new trading partners. Many countries found a great new economic partner — China.

China has spread its tentacles — and its influence far and wide, especially in the Asia-Pacific region and Africa where much of the Commonwealth membership is. As everyone knows, Sri Lanka too has had to look to China in recent years for economic succor, though not necessarily in trade.

Last year, Sri Lankan exports plummeted by as much as 3 percent and this decline continues despite what was an anticipated prognosis that a new pro-West Government in 2015 would attract more markets abroad. With its mainstay, garments only showing a marginal increase, and the EU still keeping Sri Lanka waiting for the GSP+ concessions, the country’s Balance of Payment problems have aggravated. The domino effect on the ordinary citizen is felt by inflation topping income levels and the resultant rise in the Cost of Living.

With the rupee continuing to slide to the US dollar, some expecting it to hit Rs. 160 sooner than later, all imported items will be costlier. Economic analysts point out that if the Sri Lankan consumer, especially the growing middle class, is forced to cut back on his or her lifestyle, it would have a knock-on effect on foreign investors who will not see Sri Lanka as a worthwhile market to invest in. The only attraction then in Sri Lanka would be for manufacturers seeking re-export facilities to third countries.

Our Economic analyst, Dr. Nimal Sandaratne, a former Deputy Governor of the Central Bank said last week in his column that Sri Lanka’s crisis is because of “the fundamental weaknesses in the trade balance, capital outflows, the non-realisation of expected inflows of Chinese capital and inadequate foreign investment”. Our exports earnings are only a little over a half of our import bill.

Many economic analysts blame inconsistent statements and actions by the National Unity Government for the lack of investor confidence in Sri Lanka. UNP Ministers and SLFP Ministers talk differently on economic policy leading to confusion all round. Unable to articulate their intentions properly, coupled with a veil of secrecy in what the pro-free market UNP Ministers want to do has given rise to suspicion that a cabal is dictating the Government’s economic agenda. This in turn, has met with objections from SLFP Ministers, including the President. SLFP Ministers more comfortable with an outdated pro-centralised economy are often tripping up the UNP Ministers, the result being the Government is going nowhere.

Sri Lanka is not ‘the only girl on the beach’ anymore. Many other countries have already made inroads into markets which Sri Lanka long thrived on; tea, apparels, tourism and while some of these newly emerging countries have already forged into diversified fields like electronics, Sri Lanka stagnates. Free Trade Agreements with Singapore, China etc., controversial as they are, still remain on the drawing boards and an FTA + called ETCA with India has already raised an anti-Indian bogey.

Going back to Britain’s Commonwealth ‘Born Again’ strategy, it is pertinent to note that while it calls for a return to the past, an all-party parliamentary group for Tamils (Sri Lankan Tamils only, it seems) just late last month slammed the Government of Sri Lanka for slow progress in post-war reconciliation and the setting up of a war crimes tribunal with foreign judges via the UNHRC Resolution 30/1 in Geneva.

The British Government, with its Lilliputian allies like Macedonia and Montenegro, who have nothing to do with Sri Lanka are now the new promoters of Resolution 30/1 in Geneva. Only MP Ian Paisley defended Sri Lanka in the House of Commons committee saying when Britain rejects an international inquiry into ‘Bloody Sunday’ or the Iraqi invasion, it runs the risk of being hypocritical in asking others to hold international inquiries. To a lesser degree, the former foreign affairs state minister Sir Hugo Swire said that the very fact that the parliamentary group was for the interests of the Tamils in Sri Lanka displayed how anti-integration the British Parliament might be seen to be and added that what all Sri Lankan communities want right now is “economic prosperity”.

Last month, Sri Lanka marked 69 years of Independence from Britain, but it has not sunk into many British MPs that the writ of Westminster no longer holds sway over this country. Maybe, they are only pandering to some of their constituents, but the British Government will have to make a call on wanting to do business with its old Commonwealth partners, while hauling some of them over the coals at the same time.

This story was originally published by The Sunday Times, Sri Lanka

Marshal Josip Broz Tito of the former Yugoslavia is credited with the famous quote of yesteryear that Non-Alignment meant “signalling left and turning right”. Or maybe it was the other way around, but the drift was clear.

Today, the Non-Aligned Movement (NAM), launched in the 1950s and which went on from strength to strength till the mid-1970s in the midst of the Cold War period is no longer relevant. Sri Lanka, one of the pioneers of this movement is now in the forefront of giving the Movement the boot as being “irrelevant” in the modern day, but Movement’s principles may still be relevant.

NAM was essentially an anti-West movement of nations that were emerging from colonial, mainly Western, rule. It was led by countries like Cuba and Iran at times, and today its chairman is Venezuela, a virulently anti-American state.

The super-power equation has also changed in recent years. With the collapse of the Soviet Union, the US became the sole ‘policeman’ of the world, but not for long. Russia (which, inter-alia, kept the nuclear arsenal and military hardware when the Soviet Union was dismantled – and has enormous natural gas and oil resources) has bounced back into contention and superpower status, discarding its Communist policies along the way.

President Maithripala Sirisena visited Moscow this week rekindling diplomatic relations established 60 years ago with a country that is largely ignored when the UNP sits in office.

The new player in the super-power game is China, which is already flexing its military muscle in its immediate neighbourhood, especially in the sea lanes of the South China Sea with a long-term view to extending its influence to the Indian Ocean and beyond to the African seas. Hambantota is, therefore, of key strategic interest to China and its People’s Liberation Army-Navy (PLAN). Those in Sri Lanka negotiating a controversial partnership with China to manage the new harbour in the city have come up against some ‘hard ball’ tactics from the Beijing end and seem weak-kneed in response.

China seems to have worked with an iron fist in a velvet glove, so to speak, showing disinterest in economic investment in Sri Lanka unless it gets its pound of flesh. Having compromised the Sri Lankan Government in the first place by building a port in double-quick time, China is now tying Sri Lanka to a debt crisis it partly created; a debt Sri Lanka hasn’t the money to repay thanks to the folly of the previous Administration.

There still remains some confusion about the proposed Agreement with the Cabinet announcing go-ahead plans and President Sirisena suggesting a sub- committee go into its merits. At least there is one commendable clause that no activities of a “military nature” whether on land, sea or air, in and around the port-city will be permitted other than with the permission of the Government of Sri Lanka.

The fact that the US Pacific Command did some joint military manoeuvres in Hambantota with the nascent Sri Lankan Coast Guard cannot be a mere coincidence. That they were concluded on the eve of the visit of the Chinese Defence Minister to Colombo last week seems a VHF (Very High Frequency) signal to the Chinese not to jump to the conclusion that Hambantota is their turf already.

How much the VHF signals are picked up by Colombo’s political and defence establishments only they will know. The US Defence Department was never in sync with its State Department over the northern separatist insurgency in Sri Lanka. Once, the US DefenceAttache in Colombo defended the Sri Lankan Armed Forces and their conduct in defeating the LTTE at the height of the State Department’s thrust in Geneva to belittle the same Armed Forces and tie the country to a resolution at the UN Human Rights Council calling for a tribunal to probe allegations of war crimes. The straight-talking Defence Attache was sent packing post-haste for his public comments.

As President Sirisena held talks with his Russian counterpart Vladimir Putin, a string of proposed Agreements were announced with China in the wake of the Chinese Defence Minister’s visit. None of them has been made public so far. The defence relationship with China is long-standing given that country’s unstinted help in quashing the northern separatist rebellion in Sri Lanka. The Chinese state-owned enterprises need to be factored in commercial roles in Sri Lanka’s strategic assets (ports, airports, highways, power generation) and Sri Lanka’s OBOR-Maritime Silk Route –parts of which the US calls “the Maritime Super Highway” – weighs heavily in Beijing’s favour.

In the midst of this, Sri Lanka is on the verge of extending its 2007 Acquisition and Cross Services Agreement (ACSA) with the USA. Signed by the then Defence Secretary Gotabaya Rajapaksa and US Ambassador Robert Blake, it allows America logistic support, supplies and services in Sri Lanka, especially its ports in case they are needed.

In case of any eventuality, such as a super-power clash in the vicinity, Sri Lanka can opt not to take sides and decline these facilities, preventing US military movements.

However, such a step could be considered a ‘hostile act’. Not helping a friend in need is as bad or as good as, helping the enemy. Furthermore, there are murmurs that there are changes contemplated to the ACSA to permit military operations to be launched from Sri Lankan soil. Fuelling these reports is the fact that, in return, the US has given two years grace for Sri Lanka at the UNHRC. In the circumstances, it may be prudent to consider an amendment to the Exclusion clause of the Agreement to suspend its applicability in times of war, and call for a consultative mechanism followed by a public statement clarifying the position.

While nothing is official, and this Government is playing things close to its chest, the super-power geo-political gymnastics is sucking Sri Lanka into shadowy war games; China using the ‘debt card’ and the US using the ‘UNHRC card’ to exert pressure on Sri Lanka. The Indian Ocean Peace Zone proposal initiated by Sirmavo Bandaranaike is now sunk into the depths of the ocean but not so the UN Law of the Sea Conference also spearheaded by Sri Lankan Ambassador Shirley Amarasinghe — as China, India, the US and even Japan extend their naval capabilities and presence in these warm — now simmering, soon boiling, waters. Prime Minister Ranil Wickremesinghe recently referred to ‘non-state actors’ also indulging in “maritime terrorism” in the Indian Ocean disrupting economic growth.

With Sri Lanka’s central location in the Indian Ocean, its national security concerns and foreign policy based on geographic location, geo-political realities and geo-economics to replace the fading Non-Aligned Movement, building and balancing military relationships with India, China, the US and Japan will be crucial if Sri Lanka is to remain ‘a friend of all and an enemy of none’. More so, if the Non-Alignment principles are to remain the golden thread that runs through the fabric of its foreign policy.

This story was originally published by The Sunday Times, Sri Lanka

Interestingly, if not ironically, the British Government having voted to exit the European Union (EU) in accordance with the wishes of a majority of its people, is now looking forward – or maybe looking back – at the Commonwealth once again.

The 53-nation Commonwealth, the third largest global grouping, next only to the United Nations and the Non-Aligned Movement, was often contemptuously dismissed as a club living in the somewhat inglorious past of the British Empire serving neither man nor beast. And then, Britain, the primus inter pares in this club, itself dumped the Commonwealth for a new and more attractive bride – the EU, until it found that was a mistake.

Marking Commonwealth Day last Monday, a day long forgotten except by the titular head of the group, the Queen of the United Kingdom, Britain’s Prime Minister Theresa May spoke of a “truly global Britain”, a clear reference to looking beyond Europe – and re-engaging with other countries, mainly the Commonwealth of nations.

The week before, Trade Ministers from 35 of the 52 member-states, including Sri Lanka’s Trade Ministers met in London. (Yes; we have two Trade Ministers). The fact that the Commonwealth Trade Ministers were meeting for only the first time since 2005 spoke for itself.

Sri Lanka’s International Trade Minister Malik Samarawickrama gave a sound-bite to the media on the sidelines of the meeting saying it was the right time “for a new Commonwealth trading bloc”. Unfortunately, we have no further information on what this ‘new Commonwealth bloc’ is until the Minister enlightens us.

Britain’s decision to sideline its age-old trading partners in the Commonwealth was recognised at that very meeting and the country was asked, not necessarily to beg forgiveness, but to re-approach with “a degree of humility” old partners who were cast aside.

As Britain moved away from the Commonwealth (its funding dried up so much that the Commonwealth Press Union once known as the Empire Press Union, had to fold up, one day short of a hundred years of existence), so did the other Commonwealth countries move away from Britain. They had to seek new trading partners. Many countries found a great new economic partner — China.

China has spread its tentacles — and its influence far and wide, especially in the Asia-Pacific region and Africa where much of the Commonwealth membership is. As everyone knows, Sri Lanka too has had to look to China in recent years for economic succor, though not necessarily in trade.

Last year, Sri Lankan exports plummeted by as much as 3 percent and this decline continues despite what was an anticipated prognosis that a new pro-West Government in 2015 would attract more markets abroad. With its mainstay, garments only showing a marginal increase, and the EU still keeping Sri Lanka waiting for the GSP+ concessions, the country’s Balance of Payment problems have aggravated. The domino effect on the ordinary citizen is felt by inflation topping income levels and the resultant rise in the Cost of Living.

With the rupee continuing to slide to the US dollar, some expecting it to hit Rs. 160 sooner than later, all imported items will be costlier. Economic analysts point out that if the Sri Lankan consumer, especially the growing middle class, is forced to cut back on his or her lifestyle, it would have a knock-on effect on foreign investors who will not see Sri Lanka as a worthwhile market to invest in. The only attraction then in Sri Lanka would be for manufacturers seeking re-export facilities to third countries.

Our Economic analyst, Dr. Nimal Sandaratne, a former Deputy Governor of the Central Bank said last week in his column that Sri Lanka’s crisis is because of “the fundamental weaknesses in the trade balance, capital outflows, the non-realisation of expected inflows of Chinese capital and inadequate foreign investment”. Our exports earnings are only a little over a half of our import bill.

Many economic analysts blame inconsistent statements and actions by the National Unity Government for the lack of investor confidence in Sri Lanka. UNP Ministers and SLFP Ministers talk differently on economic policy leading to confusion all round. Unable to articulate their intentions properly, coupled with a veil of secrecy in what the pro-free market UNP Ministers want to do has given rise to suspicion that a cabal is dictating the Government’s economic agenda. This in turn, has met with objections from SLFP Ministers, including the President. SLFP Ministers more comfortable with an outdated pro-centralised economy are often tripping up the UNP Ministers, the result being the Government is going nowhere.

Sri Lanka is not ‘the only girl on the beach’ anymore. Many other countries have already made inroads into markets which Sri Lanka long thrived on; tea, apparels, tourism and while some of these newly emerging countries have already forged into diversified fields like electronics, Sri Lanka stagnates. Free Trade Agreements with Singapore, China etc., controversial as they are, still remain on the drawing boards and an FTA + called ETCA with India has already raised an anti-Indian bogey.

Going back to Britain’s Commonwealth ‘Born Again’ strategy, it is pertinent to note that while it calls for a return to the past, an all-party parliamentary group for Tamils (Sri Lankan Tamils only, it seems) just late last month slammed the Government of Sri Lanka for slow progress in post-war reconciliation and the setting up of a war crimes tribunal with foreign judges via the UNHRC Resolution 30/1 in Geneva.

The British Government, with its Lilliputian allies like Macedonia and Montenegro, who have nothing to do with Sri Lanka are now the new promoters of Resolution 30/1 in Geneva. Only MP Ian Paisley defended Sri Lanka in the House of Commons committee saying when Britain rejects an international inquiry into ‘Bloody Sunday’ or the Iraqi invasion, it runs the risk of being hypocritical in asking others to hold international inquiries. To a lesser degree, the former foreign affairs state minister Sir Hugo Swire said that the very fact that the parliamentary group was for the interests of the Tamils in Sri Lanka displayed how anti-integration the British Parliament might be seen to be and added that what all Sri Lankan communities want right now is “economic prosperity”.

Last month, Sri Lanka marked 69 years of Independence from Britain, but it has not sunk into many British MPs that the writ of Westminster no longer holds sway over this country. Maybe, they are only pandering to some of their constituents, but the British Government will have to make a call on wanting to do business with its old Commonwealth partners, while hauling some of them over the coals at the same time.

On March 8, various events marked International Women’s Day, a day dedicated to recognise the role of women around the world and their contribution to home, society and country, indeed the world at large. To call them the ‘fairer sex’ as they were once referred to as a compliment may not be politically correct in modern times, illustrating how the lexicon has also changed with changing mores.

Equal rights are their fundamental theme – equal pay for equal work as the men; equal opportunities etc., that have also seen the downside where men no longer offer their seat in a bus to a woman as was the case in a bygone era.

It is sometimes amusing, if not annoying to see diktats coming from the outside world demanding gender equality in Sri Lanka when this country has made vast strides on that front starting from universal adult franchise way back in 1931 to universal health and education access. Yet clearly, there is more to be done in bringing about parity.

Whether a stipulated quota for women in Parliament or Local Government councils is the panacea for all ills given the male-dominated corrupt political environment is questionable. There’s so much more that can be done outside the legislative bodies in real terms by the many women already engaged in numerous social service organisations. Unfortunately, the present generation has been unable to get as actively involved as their elders due to pressures at their workplaces.

Around the globe, there was a rallying call on March 8 under the theme “Be Bold For Change” calling for “ground-breaking action” to build a more gender-inclusive world. Even in the United States, there were complaints of discrimination with a demand for a ‘Day without Women’, with women workers staying at home on that day to prove a point.

Issues like violence against women, sexual abuse, maternal mortality, femicide and HIV infection, the lack of economic security and leadership positions and the lack of respect from the opposite sex were among the gamut of issues that still concern women worldwide. In some countries women are not allowed to drive a car and girls not allowed to go to school.

Amidst all this, we keep returning to one of our biggest issues – that of working women in West Asia. Last year, about this time, we referred to these women breaking their backs doing menial jobs in those inhospitable climes, leaving their families and a string of social problems back home.

There are more than half a million of these women workers and governments continue to give them step-motherly treatment even though it is their sweat and tears that put money in our national purse. We said last year that there is a huge dearth of women diplomats stationed in West Asia to counsel and comfort these working women who have diverse needs, some of them psychological.

Alas, this call has fallen on deaf ears – for years, at Government level. At least now that there is a woman Minister of Foreign Employment, she could use her influence in the Cabinet even if the Foreign Ministry is dragging its feet on the matter. As everyone agrees, March 8 ought not to be the only day of the year to focus on the rights and plight of women.

The rice scandal

Alarm bells were rung with the dawn of 2017 that the worst drought in four decades was going to create a major shortfall of the staple food of the people of Sri Lanka — rice. Foreign Governments were asked for help. But how much of this problem is of the Government’s own making?

In 2015, Sri Lanka recorded a good paddy yield showing a 42.6 per cent increase compared to the previous year bringing in a total yield of 4.8 million metric tonnes.

The Central Bank annual report for 2015 went on to say; ‘The increased paddy production during the year and the large volatility observed in production in the past few years highlight the need for the country to build a rolling stock of paddy through improved storage facilities, while encouraging the manufacturers of value added rice based products, and exploring the possibility of exporting excess rice production’.

However, Sri Lanka has now gone on to call for food aid and import rice on the grounds of a shortage. Despite the drought conditions experienced during 2016, farmers in Polonnaruwa (a district which brings the highest paddy production along with Ampara) whom the Sunday Times interviewed this week (please see Page 10) believe that paddy production has not been that bad to have to rush to import rice.

They claim that most of the stocks end up with big-time rice millers who are hoarding stocks until the prices are favourable to them. It is the main millers — commonly referred to as the ‘paddy mafia’ who dispatch their lorries to areas where the paddy yield is high and purchase stocks. Our INSIGHT Team saw one of the Polonnaruwa storage facilities, the size of a football field. The Government’s Paddy Marketing Board (PMB) is thoroughly inadequate to meet this private sector domination. In Parliament, a TNA MP accused the PMB itself of holding back stocks — in a Public-Private Partnership of a nefarious kind. The harvesting season is just starting and the situation will be the same, farmers told our reporters.

Small-time paddy millers say they do not get sufficient stocks to be milled through the PMB and that they do not have the capacity to buy paddy from the farmers as some of the main millers do by sending containers into interior areas.

Pakistan and Indonesia have come forward to donate 10,000 M/t and 5,000 M/t of rice. It has now become a bad habit for a Government to be asking for foreign assistance at every turn without putting its own house in order.

The Government has now given permission to import 250,000 M/t of rice and the import duty on rice was reduced so that it can be sold at a lower price. However, there is evidence that the imported rice is being mixed with local rice and sold at a higher price. The Consumer Affairs Authority is conducting raids, but with limited officials it has faced problems.

As a result, consumers continue to pay a high price for rice – between Rs 80 and 100 a kg, adding to the cost of living.

Then there is the unscrupulous trader who uses a deadly dye to turn white rice to red. In Polonnaruwa, a court held that a consignment was not even fit for animals and had to be burnt as our front page picture depicted a fortnight back. The trader was fined Rs. 3,000 for this as the law stipulates. From top to bottom, the business of rice reeks.

This story was originally published by The Sunday Times, Sri Lanka