Second reading of the Budget passed with two thirds majority in House:
UNP WC passes three resolutions to expedite corruption investigations :
The second reading of the Budget was passed in Parliament, on Thursday, with an overwhelming two thirds majority.
This came against a backdrop where some assumed that the relations between the two main stakeholders of the government - the UNP and the SLFP – have strained.
The result of the second reading of the budget was a clear indication that the national unity government, formed over two years ago, is solid and stable.
Finance and Media Minister Mangala Samaraweera, during the second reading vote of the Budget, made a speech underscoring the line of thinking behind his Budget, which he dubbed as a “blue green Budget” aimed at energizing Sri Lanka’s economy.
Samaraweera, in his speech said, when this government came into power in January 2015, Sri Lanka was a country desperately in need of not only political reform, but economic reform as well.
Background
“The inhibition of freedoms, the environment of fear, and repression was felt by everyone. What was subtler, was the economic crisis that had been brewing for many years,” Samaraweera said.
“This economic crisis was neatly masked by glittery new infrastructure, impressive constructions, and carefully presented macroeconomic data.
Beneath this was a structural failure of the economic model of the previous regime. While post-war economic growth reached attractive statistical heights, this was driven by unsustainable fundamentals.
Growth was dominated by sectors such as construction, domestic retail, the financial sector, and domestic transportation,” Samaraweera added.
The Finance Minister explained that Sri Lanka was once the most liberal and globally integrated economy in the region – but over the last decade and a half, these reforms were rolled back and today, Sri Lanka is one of the most protected economies in the region, creating this inward orientation.
He said, “Sri Lanka’s economy was surrounded by a wall of tariffs and para-tariffs, imposed upon the whims of narrow protectionist lobby groups that thrived in an anti-competitive environment.”
Economic inequality increased as wealth became concentrated among a few business cartels and corporates close to the regime.
During this period there was little or no focus on the external economy.
Exports collapsed from 30% of GDP in the 1990s to around 12% by 2014. FDI had come to a standstill and concentrated in a few sectors such as, domestic services and real estate.
To make matters worse, during this period Sri Lanka’s government revenue also collapsed amid a plethora of exemptions, tax holidays, and irresponsible fiscal management.
When our government came to power, government revenue to GDP was around 11% - easily the lowest in our region and among the lowest in the world.”
Relief
It was in this context, Samaraweera said, that the Sirisena-Wickremesinghe government, which came to power in 2015, provided relief to a public that had been saddled with numerous economic burdens.
“We eased prices for a number of products, relaxed monetary and fiscal conditions and gave respite to a struggling populace. Since then we have gone about stabilizing the economy.
A series of significant fiscal reforms were undertaken, most recently the Inland Revenue Act.
Revenue has accordingly increased from 11% of GDP to 14.6% of GDP – a remarkable achievement for such a short period of time.
We are now on the cusp of a current account surplus in the Budget for the first time in decades.
External reserves have stabilized after being decimated by the significant external debt repayments that had to be made to service the debts of the previous regime.
The confidence of global markets has returned as indicated by the spike in foreign investments in debt and equity markets this year.”
He also added that this economic take-off cannot happen in the same unsustainable manner soon after the war.
“We can’t create an artificial demand stimulus, and given the accumulated debt, there is limited fiscal space to engage in a public investment drive.
The only avenue for sustainable growth is through private investment and the external sector,” he said, adding that this reality set the background to Budget 2018 which introduced some radical steps in terms of liberalizing the economy.
“This is why it is essential that we go about fast tracking liberalization.We identified the key constraints and bottlenecks to investment – both domestic and foreign.
Prime among these constraints include, limitations in access to affordable and productive land, labour, and capital.
There are vast tracts of land in the country tied up in completely unproductive use or are in fact abandoned.
The land legislative reforms we propose are with a view to freeing up this unproductive or unused land for productive use for investment, for enterprise.
Entrepreneurship
Our capital markets have miserably failed our SMEs and entrepreneurs.
A young entrepreneur with an exciting innovation will struggle to find a financial institution that would lend him or her money without asking for an arm or leg as collateral.
The next Google or Facebook could be developed in Sri Lanka, but in today’s capital market, it would probably go unfunded.
This is why we need reform – we need to fix systems that are not working.
The Enterprise Sri Lanka Credit Scheme, the SME Guarantee Fund, the Development Bank, will work together to mend our dysfunctional capital markets. This is the kind of reform I intend to drive in this Budget.
Capital market liberalization does not mean unfettered opening up of markets. In the past, successive governments’ role in financial markets has been in owning and operating numerous banks and financial institutions.”
Many economists have described Budget 2018 as the most progressive Budget presented by the national unity government, after coming to power in 2015.
At the same time, it has drawn the support of the two main stakeholders of the government – the UNP and the SLFP.
The third reading, which is also known as the committee stage of the Budget, began on Friday.
The third reading vote, scheduled for mid-December, will officially mark the passage of Samaraweera’s first Budget in the country’s legislature.
Gamini Senarath allegation
Law and Order Minister Sagala Ratanayaka came out strongly against allegations levelled by some websites that he held a secret meeting with the former President’s Chief of Staff Gamini Senarath.
The websites accused Ratnayaka of standing in the way of the investigation into Senarath who is suspected to have embezzled over 4 billion rupees in public money, under the previous administration.
Ratnayaka was quick to issue a denial, asserting he did not want to have any kind of association with someone like Gamini Senarath, who is facing an inquiry over a large-scale corruption allegation.
The statement said, ‘it is widely known that a small clique affiliated with the top-brass leaders of the previous government were involved in large scale bribery and corruption cases.
Their corrupt practices pushed over 6.2 million people to come forward on January 8, 2015, in a bid to topple the Rajapaksa government. President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe, who gave leadership to these progressive forces, played prominent roles in this ‘silent revolution’.
The government of good governance and its Ministers came to power with the promise of investigating into these cases of large scale corruption and bringing the culprits to book.
“I, as Minister of Law and Order, have a special responsibility in this regard and I must state that I am committed and determined to fulfil that responsibility.
Despite many challenges and obstacles, the Sri Lanka Police, the Police Criminal Investigations Department (CID), and the Police Financial Crimes Investigations Division (FCID) and I, as the Minister, endeavour to deliver results, in this regard.
It is in this context that a section of the media, including some online publications and social media pages, have published news items indicating that former President’s Chief of Staff Gamini Senarath, who is suspected to have embezzled Rs 4 billion of public money, had a secret meeting with me.
This a baseless and malicious allegation. I have no reason to meet a suspect in a corruption case which involves billions of rupees of public money. I have nothing to gain by holding a meeting with a person of that ‘calibre’.
Therefore, I categorically deny this malicious allegation with the contempt it deserves. I am of the firm belief that a handful of bankrupt political elements with hidden agendas are behind this propaganda campaign.”
It was against this backdrop that the UNP Working Committee was held at the Sirikotha party headquarters with Prime Minister RanilWickremesinghe at the chair.
As the Working Committee meeting started, Law and Order Minister Sagala Ratnayaka presented a detailed report to the members on the current status of the bribery and corruption investigations.
“I am presenting this report as there seems to be a lot of misconceptions about the investigations. I think it is my responsibility to set the record straight,” he added.
Report
Ratnayaka’s report said, the Police Financial Crimes Investigations Division (FCID), which started its operations over two and a half years ago, had forwarded 92 files to the Attorney General’s Department for further legal action.
He revealed that indictments have only been filed with regard to 13 cases.
The Law and Order Minister then stated that the CID had investigated 38 cases, of which 14 deals with individuals and 24 on property matters.
Of the 14 high profile individuals, he said, only 6 had been indicted.
The Minister, in his speech, said, he did not intend to find fault with the Attorney General’s Department.
He said he knew that the Attorney General’s Department was finding it difficult to cope with a large number of investigations.
“There is a severe shortage of officials. I am aware of the problems the AG Department faces on a daily basis. I am only stating it because some websites and critiques blamed the UNP for these delays,” the Minister explained.
The Minister also revealed that the cases of Lasantha Wickrematunga, Wasim Thajudeen and Prageeth Eknaligoda have been delayed due to non-cooperation of some state institutions.
Although the Minister did not say it explicitly, it was clear to everyone that he was referring to some senior officials in the defence establishment.
Deputy Minister Ajith P Perera, who spoke after Ratnayaka, strongly criticized the military’s conduct when it came to crimes involving members of the Army.
“We should hold a press conference and make the public aware of the current situation. Those who do not support the investigations should be named and shamed,” he said.
Many UNP Working Committee members endorsed Perera’s proposal to hold a press conference to clear the air on the matter and explain the party’s position.
Resolutions
The United National Party’s Working Committee passed three separate resolutions for the expedition of action regarding cases involving corruption and frauds, under the previous government.
The party resolved that measures should be taken for the appointment of Trials-at-Bar at High Courts to hear such cases and the appointment of a special prosecution authority under the Attorney General.
It was also resolved that legal provisions should be made available enabling anyone to appeal to the Supreme Court directly against rulings by the High Court. Currently, such appeals are made to the Court of Appeal.
A committee comprising Sagala Ratnayaka and Thalatha Athukorale was appointed to brief the party Working Committee on a monthly basis on the progress of investigations, while a five-member committee comprising Ajith P Perera, Sujeewa Senasinghe, Nissanka Nanayakkara and Asendra Siriwardena was appointed to assist them.
Colombo Port City raised at UPR
This week too, the Finance Ministry took the frontline of the batting line up handling contentious issues for the government in the public space. Dr Harsha de Silva, Deputy Minister for Policy Planning & Economic Development, was Sri Lanka’s representative at the Universal Periodic Review (UPR) sessions in Geneva on Wednesday. His delegation included senior officials of the Ministry of Foreign Affairs, the Attorney-General’s Department, President’s office and the Permanent Mission to the UN in Geneva.
While Sri Lankan representatives were handling issues related to the country’s human rights, other forces were at play, relentlessly pushing another agenda. Two Geneva based NGOs, Franciscans International and Dominicans for Justice and Peace, had made submissions to the UPR, taking the human rights issues Sri Lanka faced in an entirely new direction. While the 30-year civil war and issues surrounding it were somewhat at an end in the glaring eyes of the West, and the reconciliation process was being managed by the government; submissions of these NGOS were claiming the Port City Colombo, as a human rights issue worthy of bringing before the UPR.
Both organizations, Franciscans International (FI) and Dominicans for Justice and Peace, are linked with an anti-Port City local NGO called The People’s Movement Against Port City, which has been extremely vociferous in pushing for the complete halting of the project. At the centre of this protest is a Catholic priest, Father Sarath Iddamalgoda, who is now using every possible means available to him to stop the project.
There are two types of priests within the Roman Catholic church: the secular clergy and those who are a part of religious orders. The first group is known as diocesan priests, and will often (though not always) be attached to a parish and are accountable to a local bishop. They train at a seminary, a theological college, and do not take vows of poverty or seclude themselves from the outside world. In many ways, they are the public face of the Catholic church.
Religious orders, by contrast, have more autonomy from the central church. They are not under the jurisdiction of a bishop (who in turn has been appointed by the Pope) and can live completely excluded from secular society, depending on the order they belong to. Monks and friars—such as the Dominicans, Benedictines, Cistercians (including Trappists) and Franciscans—live within their orders, though often will be connected to educational institutions and can run select parishes. Father Iddamalgoda is part of this renegade group and he is on a mission to convince the fishing communities that the Port City is a project that is threatening their livelihoods. Recent reports from Negombo, point towards the collection of signatures from fishermen for a petition, which a large number of them has refused to sign. While Sri Lanka is not a stranger to petitions in connection to human rights issues connected to the 30-year war, the submissions made regarding a development project and connecting it to human rights seems a peculiar phenomenon.
This week, President Maithripala Sirisena along with Prime Minister Ranil Wickremesinghe opened the latest addition of Asia Pacific’s leading luxury hotel group, the Hong Kong-based Shangri-La Hotels and Resorts in Colombo. The President took the opportunity to visit the topmost floor of this iconic building facing Galle Face Green, and as he gazed into the blue waters of the Indian Ocean sipping his cup of tea, his eyes could not have missed the biggest Chinese project being developed in the whole of South East Asia. As our tiny island becomes the cynosure of the world, one cannot but note that various elements are at work to throw a spanner in the works.
Fr. Iddamalgoda’s team has now taken to using foreign personnel on the ground to entice the simple fisher folk into some collective action in their protest. In fact, Franciscans International Human Rights Activist Budi Tjahjono had been in Sri Lanka, on a fact-finding mission in February this year, going across the country, talking to the fishing and other communities.
As Dr. Harsha de Silva said in his opening statement to the UPR, Sri Lanka participates in the Review, in the backdrop of a renewed and transformed local setting, led by the people of the county who voted for strengthening, promoting, protecting and upholding reconciliation and sustainable peace; equality and dignity for all; upholding the pluralistic nature of society; and for inclusive and equitable growth and development of the country at two historic elections that took place on January 8 and August 17, 2015.
He went on to say that promoting and protecting human rights is constant work in progress and the government has embarked on an extensive and inclusive consultation process involving Ministries and Departments; civil society representatives; and experts in different fields in manifesting a commitment to open and transparent processes, respect for engagement with citizens and bottom up approaches to policy making.