| by FS
( November 11, Colombo, Sri Lanka Guardian) Anger, fury, resignation. This is how reasonable, law-abiding middle-class folk in Sri Lanka have reacted to recent developments in the past week, and earlier in the country. In all cases – the Malik Cader episode which culminates in his exit from the Securities & Exchange Commission (SEC) at the bidding of politically, powerful investors; the land deals in the tourism sector (especially Shangri-La and CATIC); the controversial assets bills which saw a government minister defend it with an absolutely, ridiculous statement, and the Duminda Silva affair – law-abiding citizens have watched with dismay these happenings.
Joining the fray, a high-powered official – at a meeting recently – angrily ‘blasted’ the Sunday Times for reporting on the controversy surrounding the stalled China National Aero-Technology Import and Export Corporation (CATIC) Galle Face deal saying such reports deter foreign investors, implying that the paper (and all media) should report ‘nice’ stories.
One could understand his anxiety since CATIC and Shangri-La were said, by the government, to bring in in excess of US$ 1 billion to fill the government’s cash-strapped coffers. According to latest reports, one project has so far (in advances) raised about $125 million (Shangri-La) while there are issues about CATIC’s advance of some $54.5 million.
So is the government going to label newspapers which are independent and seeking the ‘truth and nothing but the truth’ as ‘unpatriotic’ (like what happened during the last stages of the conflict)? Are we to ignore serious issues in deals and, the latest bill to take over former state assets when the role of the media is to be objective, balanced and be the watchdog of the public, not one’s bidding boy?
Furthermore, foreign investment has not picked up because of only newspaper reports but basic fundamentals of law & order, constitutional guarantees on the security of foreign investments (relevant particularly now with the assets bill) and governance.
As the developments unfolded this week, Cabinet spokesman Keheliya Rambukwella – to add insult to injury (the people’s right) – tells reporters on Thursday that the government “is in no hurry whatsoever to pass the Act (new assets legislation)”. Why, pray, then was it rushed to the Supreme Court for a ruling on its constitutionality without being discussed in and outside Parliament? Why the secrecy, if there is no hurry? The Cabinet spokesman’s response to this and other quick-fire responses in the past (as the government’s main firefighter) reminds one of the antics of A.J. Ranasinghe, a former minister who as cabinet spokesperson joked his way through crisis situations without a clue about the issues and its seriousness.
In the same breadth, we ask what has happened to the CATIC advance as doubts emerged last week over the actual amount ? If the government can release details of the Shangri-La advance and the Treasury account number that the money was deposited in, why can’t the same be done in the case of CATIC?
“The government had everything in its favour after winning the war. If so, why should it act with such impunity and arrogance,” noted a top businessman, among many ashamed with the state of affairs but reluctant to speak out publicly.
Cader’s exit from the SEC is the culmination of weeks of prodding by powerful investors for his removal after the regulator launched a crackdown on insider traders and market manipulators. SEC Chairperson Indrani Sugathadasa stood by her official, initially fearlessly, But on Wednesday caved in under enormous pressure and said that Cader had received another appointment at the Finance Ministry. In other words, he was transferred: the powerful lobby had won against the crackdown on manipulators. A regulator was brought down to its knees, sending a bad signal to foreign investors.
After an initial euphoria and turnovers soaring, the ‘hurrahs’ in the market ended on Thursday and trading returned to the normal dismal levels. The market will be waiting with bated breath to see whether Ms Sugathadasa will keep her word on continuing the investigations irrespective of any pressure.
The bigger issue however is the proposed law to revive underperforming and underutilised enterprises, a move that immediately saw some foreign investors put their plans on hold.
According to opposition legislator and eminent lawyer Wijedasa Rajapaksa, there doesn’t seem to be any common sense and rationale in this move. “Some foreign investors have put their plans on hold after hearing about this bill. Even locals are worried that their assets could be taken over by a simple amendment. It is a draconian piece of legislation.
Governments have failed to run businesses. Take CEB, CPC, Mihin Air or SriLankan which are all loss making. Pelawatte and Sevenagala were making profits. Now they are taking it back,” he said.
What is the urgency in this bill? Why couldn’t it have been tabled as a routine bill in Parliament and discussed? Why the secrecy? These are questions being asked in many quarters.
Economic Development Minister Basil Rajapaksa – seen as being among those behind this bill – was quoted in a newspaper as saying that there was nothing new in this and that the Competent Authority (referred to in the bill) was proposed in the 2010 budget.
To verify this, we checked the 2010 budget presented in parliament by Minister Sarath Amunugama on behalf of President Mahinda Rajapaksa and there is no reference (whatsoever) about a “Competent Authority” or takeover of enterprises. There no mention either of this move in the 2011 budget presented by President Rajapaksa. So what was the provocation for this sudden move, which the government (rather Rambukwella) says is in no hurry to proceed with?
It is reliably learnt that this proposal was made during pre-budget meetings organised by the Finance Ministry and will now be included as a revenue-earning measure in the budget to be presented in parliament on November 21.
With apathy setting in towards transparent decision-making and a disjointed opposition running all over with the government having field day, the public is more and more turning to the media for ‘relief’ in raising issues of public concern and ensuring checks and balances.