New Year Questions & Dilemmas 

By Rajan Philips –

The year 2022 ended on a high football note with more than half the world’s adult population watching the World Cup Final in Qatar on the penultimate Sunday of the year. Christmas came a week later on the last Sunday of 2022, giving extra time for the seasonal cup of kindness, more so for Argentina which won the World Cup beating France in a penalty shootout after two hours of riveting football. For Qatar and the Arab World, hosting the World Cup had other meanings. It turned out to be a most politically charged sporting event in recent times, with spectator support ranging from pro-Palestinian sympathies to anti-Iranian slogans in solidarity with the prolonged and widespread protests against the government in Iran. 

Not surprisingly, the western media took the old approach of Orientalism (Edward Said’s celebrated concept critiquing the West’s ‘patronizing’ and ‘essentializing’ approach to studying others) in treating the Arab world as one static and monolithic culture. The western media was also a bit rich in cavilling at the apparent religious orthodoxy of the Middle East, forgetting the historical ties between football and churches in England and in Europe, and the continuing connections between them throughout South America. The media carping over the Qatar venue was eventually fizzled out by the level of football and the intensity of games that endured throughout the tournament. 

2022 might officially be the last year of Covid-19 if the WHO goes ahead, as it has indicated earlier, and declares 2023 to be Covid-free. But the indication came before the current Covid convulsions in China, and the world can only keep its fingers crossed having gone through an almost identical experience in early 2019. The last four years of Covid-19 have been a unique experience to the current occupants of the planet. Even though the world is far better equipped now to handle another Covid chapter, if, God forbid, one were to open anew, the direct and indirect Covid aftermaths are everywhere. Hopefully, Covid-19 will not be a renewed problem in 2023 for Sri Lanka, which has quite a slate of other crises to contend with in the new year.  

Sri Lanka’s Dilemmas

For Sri Lanka, 2022 drew to a close with Gotabaya Rajapaksa leaving for the US, leaving the problems he created in 2022 to be carried over to 2023. The New Year question for  President Wickremesinghe is which comes first – economic recovery or national reconciliation? The two can go on parallel tracks but the President has enough detractors to pounce on him if there is some tangible progress on the reconciliation front by February 4, but no IMF agreement by that time. On the other hand, if the reconciliation initiative were to fail for whatever reason, that would be a huge setback and frustrated expectations will become a drag on the much needed economic takeoff. 

Mr. Wickremesinghe, who has said that he has been keeping out of ‘party politics’ after becoming President, would be well advised to keep it that way in decisions over the timing and conduct of local government elections. He should leave it to the Election Commission to do its job and keep himself at a far enough distance from party campaigns for the local elections. He might, however, consider including referendum questions on the local election ballot to gauge the people’s opinion on nationally important matters.      

On the economic front, it is somewhat puzzling why the President has not considered initiating an All-Party conversation on the economy, similar to the one on reconciliation. In fact, an APC on the economy should have come earlier and it had better be now rather than later, or, worse, never. The President could also expand the circle of consultation on the economy by including the Governor of the Central Bank and a cluster of economic experts. 

The Opposition SJB has already called for a Parliamentary Select Committee to probe into the decision makings of the Gotabaya Administration that led to Sri Lanka’s uniquely ‘man made’ economic crisis. Others want to extend the probe to assess any potential impact of the Foreign Exchange Act No 12 of 2017 on the current forex crisis insofar as loopholes in the law have been used by exporters to stash away their forex earnings in foreign accounts without bringing them home. 

Obviously, this is a ruse to entrap Ranil Wickremesinghe to share the blame equally with the Rajapaksas for the current crisis. That may be all right with the alleged Ranil-Rajapaksa duopoly, but it would be far fetched to blame the current crisis on the 2017 law. According to published dates and dollar amounts, 65% of export incomes were repatriated until July 2021. The current repatriation rate is 23%, and the decline began after July 2021, due not so much to the 2017 law as to the more recent collapse of the rupee against the dollar. Hedging against adverse fluctuations in exchange rates was touted by the export community as one of the two main advantages of the 2017 law, the other being the access to foreign currency loans at currency-specific interest rates which are lower than interest rates for rupee loans. 

As well, of the now estimated $53 billion export incomes currently stashed way, $35 billion has been attributed to quite a separate, and potentially illegal, process involving offshore accounts dating back all the way to 2007. The very beginning of the Rajapaksa yugaya. Add to that all the anecdotal totals of all the other monies that have been spirited away throughout the yugaya, Sri Lanka should be able to find enough stashed away dollars to, at least partially, honour its debt payments and meet forex needs for essential imports. 

The government’s focus should be on fighting corruption, specifically targeting corruption in foreign exchange, and determining the breakdown in forex stashing for the period before 2017, between 2017 and 2021, and after 2021. But forex investigations should not scare away established and above-board exporters. Already big exporters are jittery and are looking for greener pastures abroad. Foreign currency earnings are not only required to boost the country’s balance of payments, but are also essential for the very survival of businesses as the CB Governor Nandalal Weerasinghe has recently warned. In its desperation for FDI, the government is ready to transform Colombo’s Port City into a bunkering harbour after previously selling it as the glittering Dubai of South Asia.  

Crime and Corruption

One of the positive aspects of an IMF agreement would be the commitment to fight corruption, which will not be so with bilateral debt restructuring agreements.  Perhaps the President should ponder a third All-Party Conference on corruption along with his initiatives on the economy and reconciliation. He should also be more objective, if not careful, in selecting his personal advisers and avoid imposters who could bring national embarrassment to the President by exposing themselves to allegations of being ‘petophiles.’ 

What I am calling here as the petophile saga involving a presidential advisor and his hyperactive accusers is a rather minor symptom of the depraved conditions that Sri Lankan society is steadily sinking into. The peddling of drugs, attacks on university dons, rising murder rate, extortions, criminal cheating and breach of trust are among the graver symptoms of the island’s social malaise. Perpetrators of crimes are seldom apprehended or prosecuted, while the victims of criminals such as those vulnerable to substance abuse are targeted for harsh treatments and not rehabilitation. 

The urgency of this situation was brought home before Christmas by the horrific killing of Dinesh Schaffter. Dayan Jayatilleka has called it “a surreal crime: the gruesome, cruel death of a decent, personable businessman belonging to a well-established family,” one that “illustrates the decay of Sri Lanka in the current period,” and whose “horror is bound to impact the image of the country and its business climate.”  No one will disagree. 

The onus is on the police to find the culprits, not to broadcast tendentious theories through inspired media leaks. There is growing suspicion that this case is on track to enter Sri Lanka’s long list of unsolved cold cases. If so, it would certainly be considered by UNHRC in Geneva as yet another addition to Sri Lanka’s “emblematic cases.” They are symptomatic of Sri Lanka’s social decay and its broken down law enforcement. 

The United Nations Office on Drugs and Crimes (UNODC) lists drugs, crime and corruption in addition to terrorism as serious threats to peace, security, human rights and development both globally and within individual countries. Sri Lanka officially prides itself for eliminating terrorism, but has miles to go in combating drugs, crime and corruption. In fact, the incidence of drugs and crime has only increased in the years after terrorism was defeated. This aspect of the Sri Lankan crisis never features on the political radar unlike economic recovery or national reconciliation. There will be no sustainable economic recovery or national reconciliation so long as the national menaces of drugs, crime and corruption continue unabated.

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