We do not know if the web editor coined the headline with tongue in cheek but it is possible that the headline could apply at some future date to the ongoing conflict in the Vanni. The predicted easy victory for the security forces is not happening so easily and the war, like the test match, is dragging on and being pushed to the wire. In the cricket match, it was one tragic mistake by a tail-ender, who dragged a ball well outside his off stump to his wicket, which both deprived him of a well deserved century and also triggered the quick collapse of the last four wickets. Can that happen to the Sri Lankan Tigers? Only time will tell.

For the present, we can only watch with a mixture of admiration and dismay. Admiration is for the performance of the Bangladeshis at cricket and dismay is at the mounting loss of young lives in the conflict at home. The sacrifice of these young men and women who are being killed or maimed could have been avoided or at least minimized to a great extent if only President Rajapaksa and the LTTE kept to their promises to the people whom they claim to represent.

The LTTE has repeatedly failed to seize opportunities to secure an honourable peace by spurning attempts, particularly by the Government of Chandriika Bandaranaike Kumaratunge, that sought to provide a constitutional framework to address minority grievances. President Rajapaksa promises justice to the minorities but has only rhetoric to offer. He has had and continues to have opportunities to offer a political solution to minority grievances but continues to spurn every such opportunity.

His twisted logic that this will be done once the war is over rings hollow. If, as his Government often says, the war is against the LTTE and not the Tamils, why does the war against the LTTE prevent the offer of a political package to the Tamils and Muslims? Indeed, if the government were sincere about offering a political solution, the war itself would have been rendered unnecessary. The LTTE would have been marginalised among Tamil opinion makers had the LTTE opposed such a solution worked out by consensus among the non-LTTE and non-Sinhala chauvinist political parties and civil society/religious groups.

Losing the larger picture

But sadly, President Rajapaksa has opted not to take that line. He seems unwilling or incapable of looking at the larger picture. Instead, he is going along with, or at least turning a Nelsonian eye to the lawless and reactionary actions of the obscurantist and fascist forces that are part of his Government.

In the North, Anandasangaree is quite right with his complaint that an armed group, seemingly enjoying the support of the security forces, is engaging in abductions, extortions and extra-judicial killings, replicating the actions of the LTTE in earlier years. The armed groups of today are totally insensitive to the feelings of civilians. Locals agree with Anandasangaree and say that people could be increasingly turning to the LTTE for protection from this armed fascist group. Civilians are being robbed in their homes by armed gangs in the night during curfew hours. It is possible that in addition to this armed group, lawless elements are also taking advantage of the breakdown in the rule of law. But, since the robberies are taking place during curfew hours, the armed gangs obviously are confident of immunity.

If President Rajapaksa is sincere about restoring democracy in the North, he should not be replacing one set of armed fascists by another. ‘The future minds of Jaffna’ deserve better than that. But first, genuine democracy must be restored in the rest of the country. Journalists should be free from intimidation, assault and arbitrary arrests. Lawyers should be free to practise their profession without death threats and without having their photograph and name ominously displayed on the web.

The Rajapaksa Government must learn lessons from a disastrous policy in the East that has brought about a multiplicity of armed groups and brought back a strong LTTE presence. Bishop Kingsley Swampillai, Bishop of Batticaloa and Trincomalee, was expressing the concerns of many locals when he complained of continuing abductions, violence and killings. It is a self-defeating policy to promote one armed group of fascists against another. And it is pity that continuing calls for a respect for the rule of law are being ignored. Sooner or later, such a policy will come to haunt the government.

The crisis in the Finance Industry

The Government’s economic woes are being compounded by a crisis in the banking and finance sector. Coming so soon after the huge losses suffered from a hedging deal in the petroleum sector, it is a disaster that will require professional management skills of a very high order to contain.

It has to be acknowledged that a hedging deal in the circumstances was, on principle, something worth pursuing. Crude oil prices were rising and a hedge was a way of insurance against further rises. A hedging deal should have had escape clauses if the crude oil prices moved outside defined margins. Apparently there was no provision in this agreement to cushion the loss to the Ceylon Petroleum Corporation in the event of prices dropping drastically as it did. The terms of the deal seems to have been largely in favour of the banks. We do not know if the Ceylon Petroleum Corporation sought the specifically expert professional advice that was necessary before they inked the futures agreement. If they did not, it was poor management.

It is also poor management that has led to crises in so many financial institutions, regulated and unregulated. The full impact of global financial crisis has yet to be felt by us. But what ails us now has nothing to do with the global crisis. It is sheer mismanagement and fraud.

The scams by Sakviti Master, Danduwan Mudalali and others are the result of unregulated fraud. The Central Bank cannot wash its hands saying that these were unregulated deposit-takers and that they had warned the public against investment in such institutions. They have a duty by the country to ensure that deposits by the public are safeguarded. If laws needed to be enacted for this purpose, then it should have been initiated. Most of these depositors are from the lower middle classes who need the income they will earn by investing their hard-earned savings. They are therefore prepared to take the risk (without realising the extent of the risk) by investing in deposits that offer high interest. In ignoring the unwarranted risks being taken by the unsuspecting public, the Central Bank does not seem to have learnt its lessons from the Pamruka Bank scam.

Going by reports available so far, the crisis in the Ceylinco Group seems to stem more from mismanagement and poor corporate governance rather than fraud. It appears that the Golden Key Credit Card Company which began as an issuer of credit cards, but at some stage accepted customer deposits. Even if this was within the terms of the Articles of Association, the knowledge that the company was offering high interest rates should have put the company’s affairs under scrutiny by the Central Bank. It was poor management both by the Central Bank and the Board of the company. One hopes that the company’s CEO Khavan Perera has not been made a fall guy for others.

The run on Seylan Bank began not because Golden Key was part of the same group of companies. It began after the Chairman of the Ceylinco Group made the unnecessary statement that he was going to divest his shares in Seylan to pay off the Golden Key depositors. It is a pity that the Central Bank allowed such a statement to be aired. If there were ongoing negotiations to sell the shares to a prospective buyer, an announcement should have been made only after the sale was completed. It was natural for Seylan depositors to be concerned when they heard the Chairman of the Bank make that statement.

There was no mention of any sale to a buyer. The appointment of a new Board to the Bank is not going to re-assure the depositors who will want to move their investments elsewhere. Like Pramuka, this is not a crisis that is going to disappear soon. The Central Bank has to be more pro-active if this crisis of confidence in the banking and finance sector is to be restored. The global crisis will soon hit us hard and our regulatory authority will need to re-assure the public that they have better professionalism and skills than they have shown in the past.

(Thie article is from the column NOTEBOOK OF A NOBODY written by Shanie in "The Island" of January 3rd 2008)