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More challenges now for rebuilding battered Sri Lanka

By Dr. S. Narapalasingam

The mere absence of the war that has destroyed many lives (more than 70,000 - no firm estimate is available), displaced tens of thousands of families from their habitats and inflicted untold suffering on virtually the entire population for more than two decades does not mean the return of lasting peace. This requires essentially, the elimination of the root causes that led to the violent conflict. However, the immediate need is the easing of the hardships of the victims of the vicious war. The reconstruction and rehabilitation programmes should be integral part of a genuine peace process. The attainment of the peace goal also requires the promotion of a sense of togetherness, understanding by the Sinhalese people of the problems faced by the ethnic minorities and the need for changes from the perspective of the future of all ethnic communities and the island nation. The extreme brutality of the war which the government resolutely continued at high cost aimed towards a conclusive victory for the armed forces has made the reconciliation and peace processes increasingly difficult.

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[Clean water distribution in the 'conflict zone'-in Valagnanyarmadam-more pics]

According to foreign diplomats and other analysts, the government’s military offensives intended to crush the LTTE in the battlefield have been “causing more resentment among the Tamils and sowing the seeds of future unrest” Various repressive acts are also “transforming Sri Lanka into a more repressive and intolerant nation”. To end the violence and secure a more stable peace, “the government must do more than it has to address the long-running grievances and ethnic antagonisms that lie at the heart of the conflict”. - ‘Resentments in Sri Lanka Reflect Challenges to Peace’ - NYTimes.com March 22, 2009. The resentment is quite openly visible among the Tamil expatriates. Adding insult to the injury is the pose of some Sinhala nationalists that they don’t know anything about the Tamil grievances or problems. They think these are just hallucinations!

Fundamental blunders

As stated previously by this writer, the internal strife escalated into a full-scale separatist war solely because of the cumulative effect of the discriminatory policies and practices of successive governments and the continued indifference of governments to the non-violent protests of the distressed Tamils. No determined effort was made to address the grievances and concerns of the ethnic minorities. These relate to their safety, security, individual and collective rights, education and employment opportunities and the (autonomous/ devolved) power to safeguard their interests and future. Not only the policies damaged unity and serenity, they also intensified the ethnic division promoting the separate ethnic identity of the communities. The ethnic majority-minority division severely hindered national development. This ethnic bias influenced the implementation of development plans. The Tamil majority areas were neglected. In general, undue importance was given to parochial interests ignoring the broad long-term interests and welfare of the entire country.

Nationalism and patriotism assumed narrow meanings to go with the political aims of those competing for dominant power. Democracy has also lost its true meaning. Even ancient history which has no relevance at the present time has been exploited for political mileage by the anxious power seekers. In short, it is the political class that is responsible for the country’s ethnic, economic and political problems.

Energized nationalistic forces

Many Sinhala nationalists believe without the full controlling powers over the entire island, the future of the Sinhalese is insecure. Some ‘patriots’ think the sacred island belongs to the Sinhalese and it is they who should have absolute power to decide the present and future welfare and development policies of the Sinhala nation. The ethnic minorities are the descendants of foreign immigrants and have no right to make any ‘excessive’ demand. They say the indigenous ethnic Sinhalese who constitute nearly 75 per cent of the total population will be generous enough to ensure the reasonable needs and aspirations of the ethnic minorities are met. But sadly the humanitarian outlook was not seen in the recent disasters in which many innocent Tamil civilians including infants and children died callously in Vanni

The flaunting term ‘national integration’ is only a mere slogan; yet to become a real process. There is nothing concrete on the ground to believe the process has started in earnest. The appointment of parliamentarians as ministers responsible for national integration and nation building has only short-term political significance. The basic conditions for launching earnestly the nation building process are missing. The biggest challenge for those concerned about the future of the country is to find a way to diminish the influence of the nationalistic forces on important political decisions. This started with their demand in 1957 that resulted in the abrogation of the B-C Pact. The reluctance to act with determination and courage ignoring the obstructive forces is the main reason for the present dismal situation. These radical forces gained strength mainly because of the divisive and power politics.

The dilemma of President Mahinda Rajapaksa with regard to the political resolution of the ethnic problem, without which real peace will remain a dream, is the very forces he mobilized for his victory at the November 2005 Presidential election. It was clearly fought on communal lines, with his UPFA offering a hard-line stance on the ethnic issue, and his rival the UNP leader Ranil Wickremesinghe proposing a more conciliatory approach. Moreover President Mahinda Rajapaksa’s election manifesto – Mahinda Chinthanaya – promised to retain the unitary structure which in the minds of many Sinhalese ensures Sinhala majority rule/domination in the entire island vital for the protection and future of their race. In the present coalition government as well as in the opposition there are hardline members opposed to extensive devolution of powers to the ethnic minorities because they do not want to weaken the centralized Sinhala majority rule.

The JVP extended full support to President Mahinda Rajapaksa during the last Presidential elections mainly because of Mahinda Chinthanaya and also of the aversion to have a UNP leader as President of Sri Lanka. The majoritarian dogma blinds many Sinhala nationalists to the concept of multi-ethnic, multi-cultural and multi-religious nation and the reality that peace and harmony come from unity on diversity. A regionally divided nation runs the risk of a complete break-up sooner or later. The regional division too deepened in Sri Lanka because of ethnic bias. Had the past governments focused on economic development from a broad national perspective, the living standard of the poor people would now be considerably higher. The absence of durable peace and good governance has been the major obstacle to progress and prosperity.

The southern and northern radical forces

The JVP and the LTTE have opposed sensible political proposals consistent with the real configuration of the island’s population. The present system ignores the regional variations and assumes that one pattern of ethnic majority-minority division applies uniformly throughout the island. Both radical groups are the products of the failures of past governments to promote unity and balanced development. Although the JVP abandoned violence and entered the political mainstream, the present leadership has not given up centralism. Because of the attachment to this political ideology, the JVP was earlier said to be a Marxist party by many analysts. In the Sri Lankan context justification for centralism is practical with apparent loyalty to nationalism than Marxism. Likewise, Tamil nationalism is useful to the LTTE for seeking their political goal of independent Tamil (Eelam) state. The LTTE in the past had opposed all devolution packages offered during President Chandrika Kumaratunga’s term. When the UNP members burnt copies of the draft constitution Bill that provided for extensive devolution of powers to the regions in the House and sabotaged the move, the LTTE and their supporters were delighted. The island nation was to be reconstituted as a union of regions. It is noteworthy the rigid attachment of the JVP to the centralized Sinhala majority rule is matched by the LTTE’s wish for Tamil majority rule in the North-East. The difference is that the latter does not want any pretense of multi-party democracy.

JVP is not the only party that is against the full implementation of the 13th Amendment. Other Sinhala nationalist parties support the Rajapaksa regime because of its aggressive approach to crush the LTTE. There is also nothing definite on the political front for settling the conflict via constitutional reform. Hence, they have opted to remain silent. However, their boycott of the APRC (All Party Representative Committee) meetings indicates their hard line stand on political settlement. On March 10, the JVP categorically rejected the devolution scheme currently being drafted by the government based on the 13th Amendment. The ‘patriotic’ party believes it would “divide rather than unite the people”.

JVP General Secretary Tilvin Silva told the media that the government had no clear vision of what to do with the newly liberated North and as such different groups within the government were working to undermine the hard fought victories (of the military). He noted that implementation of the APRC proposals or a deeper implementation of the 13th Amendment as proposed by a group of Ministers would simply be handing over some areas to LTTE conspirators.

He also described the government’s moves to implement the 13th Amendment fully as a betrayal of the mandate given to it by the people in the 2004 parliamentary and 2005 Presidential elections. He alleged that the government has appointed a committee comprising Ministers Douglas Devananda, Rajitha Senaratne, Dilan Perera, Prof. Tissa Vitarana, and DEW Gunasekera and others, “all ardent advocates of the division of the country" to expedite the process of putting sections of the amendment into practice. The LTTE too rejected the 13th Amendment and like the JVP held an anti-Indian stance. But now, it is the JVP that is still against anything that has Indian connection. The presence of 52-member Indian military-medical mission in Pulmoddai, Sri Lanka to treat the civilian casualties of the war is resented by the JVP. The party is also against the involvement of other foreign countries and international organizations in Sri Lanka’s internal affairs.

The division and the weakness in the leadership of the main opposition party - the UNP, give considerable support to the present regime to execute its own political agenda. Although there are many political parties with diverse political ideologies in the coalition government, the agenda is that of the Executive President and his close advisers. This too reflects the present muddled state.

Sri Lanka’s financial and economic problems

The high level of corruption, nepotism, indiscipline, impunity for some lawbreakers, abuse of power and misallocation and mismanagement of public finances in Sri Lanka is also the cause for the present chaos. Singapore is a model of good governance and efficient use and management of the scarce resources. Sri Lankan leaders think they have all the power and resources they need and use them as they like for their benefit. There are cases where funds worth several billions have been spent on some nonviable projects like ‘Mihin Air’ which could have been used elsewhere for more deserving purposes. It is doubtful whether there were proper feasibility studies in such ambitious projects.

Singapore’s average per capita income was lower than Sri Lanka at the time of independence (then Ceylon). It is now more advanced, peaceful and prosperous because the political leaders acted responsibly with foresight and in the wide interest of the entire society. Singaporeans were fortunate to have had Lee Kuan Yew as the founding father of independent Singapore. His focus was on the economy and the development of the relevant institutions, skills and infrastructure. He was very mindful of the importance of safeguarding the unity of the multi-ethnic society. (Reference - Former Singapore Premier and Minister Mentor Lee Kuan Yew’s speech at the 30th anniversary of “Speak Mandarin Campaign” on 17 March 2009 - while English remains the common language of all Singaporeans, Chinese parents are advised to use Mandarin in their homes.)

Besides the long-standing ethnic problem, Sri Lanka is now facing other national problems for three reasons One is the set of shortcomings mentioned above, which is related to the weaknesses in the administration organized to serve the short-term interests of those in power. Hence these cannot be considered as mainly due to the inefficiency of the senior administrators. The politicization of the public service started with the adoption of the first Republican constitution in 1972. It is now the dominant feature of the administrative system. The second problem is related to the enormous spending on the so-called war against LTTE terrorism. From the unfolding events, this expenditure is serving a political purpose, as there is little sign of winning the real peace essential for the rapid development of the country. The third is the problem caused by the present global financial crisis and economic recession.

Although the impending problems were known, the Government and the Central Bank presented an optimistic picture, saying Sri Lanka was unaffected by the global credit crunch and economic recession. But this has been contradicted recently by eminent sociologists and economists, who have said that Sri Lanka is not immune to the global economic crisis. Based on the interview with Lankan sociologist Sunil Ranasinghe, Melani Manel Perera reported in ‘AsiaNews’ that although the global recession is having a major impact on the country, in order to continue its war against Tamil Tiger rebels vigorously “the government is downplaying the problem, accusing those who talk about crisis of deceiving the population”. The war has also helped to conceal the shortcomings in other areas.

Milinda Moragoda. Minister of Tourism has explained very lucidly in his article published in the Sunday Island of March 8, how all the national economies are linked and major changes in the world economy affects individual countries. With special reference to the mistaken view of some nationalists that “we are surrendering to colonial interests”, he said, “look at Vietnam, South Korea, Singapore, Malaysia, Taiwan and yes, even India and China – all of them have actively sought to integrate into the world economy, while successfully maintaining their independence, integrity and identity, have grown into strong economies”. He also said that some are contented giving “a convenient excuse not to facie up to unpleasant realities”.

His forthright comments on the practical way of seeking solutions to economic problems are equally relevant to Sri Lanka’s political problems. To quote: “The extremes never produce the solutions we need – the middle way does. No doubt the Opposition will want to treat this crisis as an opportunity to undermine the government, but before they do so they should think long and hard. If they were in government could they handle the current situation alone? The answer to that is clearly, no! Equally, the government does not need to be defensive; that can only make matters worse. Do they need the opposition to support them at this difficult time for our country? Yes!” His article under the title ‘Economic costs of war will haunt us for a long time’ was posted March 9 by LBO in its online bulletin with the comment “A Sri Lanka minister writes economic sense”.

Kath Noble in the article titled ‘How to look stupid’ published in ‘The Island’ 11 March 2009 wrote: “The Government ended up with a rather unattractive splash of egg on its face last week. After months of denying the need for a loan from the IMF, it had to admit that negotiations were underway. And the confession was all the more embarrassing given that these ever so passionate rebuttals had been preceded by what had seemed like years of denouncing the organization”. Sri Lankan government is now seeking 1.9 billion US Dollars emergency support loan from the IMF.

International community

The Sri Lankan government rejected brusquely a fresh call by the United Nations to allow UN human rights monitors to visit Sri Lanka saying there was “absolutely no need” for such monitors to be present on its soil. At the same time it declared the IMF is most welcome to re-establish office and resume work in Sri Lanka. IMF closed down its office in Colombo in 2006 and the staff left the island.

A second attempt to bring the present crisis in Sri Lanka for deliberation by the UN Security Council was thwarted again by China and Russia. The other permanent members who have the veto power, the US, UK and France are in favour of taking up the issue. According to latest report, UN Under-Secretary General for Humanitarian Affairs, Sir John Holmes is set to brief council members at an informal meeting that is not expected to lead to any action.

The concern of the US is clearly evident from various official statements on the issue and offers to help in rescuing the civilians stuck in the conflict zone. When three non-permanent members of the UN Security Council - Austria, Mexico, and Costa Rica tried for an “informal briefing” on the issue in the UNSC, the US envoy to the UN Ms Susan Rice supporting the move said, "The United States feels strongly, and concerned, about Sri Lanka” and wanted, “a full and updated information on the humanitarian situation” Not only the US but also many countries notably India have been pressing for a political settlement by devolving powers to the regions.

At last month’s US Senate Foreign Relations Sub-committee (Near Eastern South and Central Asia) hearings on the disturbing situation in Sri Lanka, the consensus was the only leeway the international community has at present to influence the Sri Lankan government to settle the conflict politically, is for the donors including the international financial agencies to link aid to the required political process. The Human Rights Watch (HRW) senior researcher Dr.(Ms.) Anna Neistat, who had been to Vanni, northern Sri Lanka recently briefed the committee on the plight of displaced and trapped civilians there.

Brad Adams, HRW Executive Director Asia Division on March 23 sent a letter to the Executive Directors of IMF on Sri Lanka's ‘Emergency Support Loan Request’. He said: “Based on our recent field research on the humanitarian situation in the northern Vanni area, we are deeply concerned that an emergency support loan for post-conflict resettlement will not achieve its intended objectives unless the Sri Lankan government takes serious steps to safeguard the rights of internally displaced persons and ensure an effective humanitarian response to the immediate conflict and post-conflict situations”.

Attention has been drawn in the letter to the stated aim, namely to "continue with the resettlement, rehabilitation and reconstruction work in the Northern Province, and the continued rapid development of the Eastern Province." which it considers essential "not only to uplift the living standards of the people in the areas affected by the decades long conflict, but also to successfully implement the government's efforts to bring a sustainable solution to the conflict." The HRW has raised doubts as “the government's current policies and practices are counterproductive to the intended goal of the IMF loan. First, the government's continuing disregard for the rights and well-being of civilians in the Vanni, who are almost entirely ethnic Tamil, erodes the trust of the Tamil population generally, making post-conflict stability and a lasting political settlement less likely”.

The Daily News on March 26 reported that the Public Administration and Home Affairs Minister Sarath Amunugama has emphasized that the IMF loan is solely for development. According to the Minister, the money is needed “not because of the failure of the local financial management.” It is “because of the global economic crisis”. He said, “the IMF has formulated the new relief package on the request of countries battered by the economic crisis. Therefore, Sri Lanka responded to the IMF to obtain this package. The IMF has come forward to support us and discussions are being carried out by Sri Lankan officials with the IMF officials. The IMF has not imposed any condition to grant the loan.”

LBO in its March 26 bulletin has explained the IMF’s new lending rules. Bailouts or standby arrangements (SBAs) need quick acting measures. A precautionary standby arrangement (PSA) is for “far-thinking” countries who think they may head for balance of payments trouble and want to be prepared ahead of time. Countries interested in ‘precautionary lending’ will have either access to the Flexible Credit Line (FCL), High-Access Precautionary Stand-By Arrangements (HAPAs) or the traditional SBA (for normal access levels).

Space does not permit to include here all the IMF facilities currently available. As an illustration, only the FCL is explained here. It has been designed in a flexible way to accommodate the needs of countries that have very strong fundamentals and policies but which already have financing needs resulting from the crisis, or could become vulnerable if the global downturn and deleveraging is prolonged.

With regard to the qualification, it is important the IMF must have confidence in the qualifying member’s policies and ability to take corrective measures when needed. At the heart of the qualification process is an assessment that the member (a) has very strong economic fundamentals and institutional policy frameworks; (b) is implementing—and has a sustained track record of implementing—very strong policies, and (c) remains committed to maintaining such policies in the future.

The relevant criteria for the purposes of assessing qualification for an FCL arrangement are (i) a sustainable external position; (ii) a capital account position dominated by private flows; (iii) a track record of steady sovereign access to international capital markets at favorable terms; (iv) a reserve position that is relatively comfortable when the FCL is requested on a precautionary basis; (v) sound public finances, including a sustainable public debt position; (vi) low and stable inflation, in the context of a sound monetary and exchange rate policy framework; (vii) the absence of bank solvency problems that pose an immediate threat of a systemic banking crisis; (viii) effective financial sector supervision; and (ix) data transparency

In conclusion

It is unrealistic to assume without genuine peace and stable conditions, IMF or other foreign loans can bring about rapid development. Actually, the urgent need for emergency support loan is because the level of Sri Lanka’s foreign reserves has dropped drastically, sufficient to pay for just 5 weeks imports. Moreover, unlike outright grants, loans have to be settled as agreed by the recipient and the ability to repay also depends on the future state of public finance. This in turn depends on factors linked to peace and stability.

In his address announcing the decision to rebuild the damaged rail track and railway stations in the North and resume the Yal Devi Express train service between Colombo and Jaffna, President Mahinda Rajapaksa spoke passionately about national unity and co-existence. He said, “By reconstructing the Yal Devi Railway Line we are defending the liberated North”. He also said that when this reconstruction is completed, “terrorism would not be able to raise its head again”. There is no doubt about the usefulness of such conciliatory moves but these are not the substitute for the political changes needed to settle agreeably the key issues that deprived the nation real peace, progress and prosperity. Reconstruction and rehabilitation should be an essential part of the new peace process. The present system is divisive and changes are needed to ensure unity in diversity. Without these the peace process will not succeed.

[The writer is Former Additional Deputy Secretary to the Treasury, Sri Lanka and UN Advisor, Development Economics/Planning]