Imf, World Bank & Adb Agenda on Privatisation Volume Ii: ‘Dubious Deals’ in Sri Lanka What a Paradox !

By Nihal Sri Ameresekere

This Book dramatically spotlights with real case studies, the truism and reality, that politicians aspire for high political office, campaigning vociferously, avowing commitment to combat fraud and corruption, exploiting the economic anguish of poverty stricken people, however upon assuming political power, pathetically such avowed commitment becomes hypocritical hollow rhetoric, with them appallingly getting bogged down in the quagmire of corruption, vehemently castigated and denounced! Reality is that politicians are funded and and assisted by lackeys at elections, resulting in politicians getting obligated to lackeys, blatantly seeking returns on funding and support, at the expense of the abject poor. Case studies dealt with appallingly reveal that the idealistic agenda of IMF, World Bank and ADB pushing privatization only germinates the breeding of corruption, with such institutions becoming mere spectators, compromised to be viewed, as having aided and abetted in corruption, publicly denounced by them, ironically providing alleviation schemes for the upliftment of the abject poor. Fraud and corruption at the highest echelons in Government, involving international parties, are shockingly revealed, with intriguing diplomatic interventions. It is an unbelievable revelation from the stage of lofty idealism to the sublime apathy of deception, complicit with duplicity and hypocrisy, in enforcing the law unequally against opponents for political expediency, whilst those wielding power, themselves, have brazenly acted otherwise, perpetrating offences of much greater gravity, including also shielding lackeys and cronies. Amazingly, the highest judiciary, castigating corruption, upholds the dire need for governance and enforcement of the rule of law, including against the highest in the country. Brilliant in-depth research into real human behavior and wheeler-dealing in the upper echelons of Governments-an ideally invaluable Book for academics and professionals interested in political science, human behaviour, governance, public finance, commerce, rule of law, forensic accounting and privastisation, and for public interest activists.

• Language: English
• Publisher: AuthorHouse UK
• Release date: Nov 21, 2011
• ISBN: 9781467877909

Nihal Sri Ameresekere

Nihal Sri Ameresekere, F.C.A. (Sri Lanka), F.C.M.A. (United Kingdom), C.M.A. (Australia), C.F.E. (United States), is a Member, International Consortium on Governmental Financial Management and a Member, International Association of Anti-Corruption Authorities. Former Advisor, Ministry of Finance and Chairman, Public Enterprise Reforms Commission Sri Lanka. Has functioned as Senior Consultant on World Bank and USAID funded public sector economic reform projects. A multi-disciplinary professional, exposed to private and public sectors, and a public interest activist, with wide international exposure. Not a legal professional, yet has appeared in person before the Supreme Court, successfully advocating public interest litigations. He is a forensic accounting investigative specialist. Has dispassionately spoken out on matters of national and public interest. Ardently upholds the sacred precept, that public property is solely of the people, and managed in fiduciary trust by governments; transgression of which he has committedly combated. Has published exposés into transactions carried out, under the aegis of IMF, World Bank and ADB privatization agenda, incisively analyzing real case studies, exposing the shockingly dubious manner, in which privatizations have been perpetrated by the highest levels, disclosing the alarming indifference of international developmental agencies, completely eroding public confidence, crucial for meaningful privatization, to foster a free economy, characteristic with transparency. He emphasizes that `economic terrorism' germinates `armed terrorism', resulting in violation of human rights. `Concerns of humanity, transcends interests of nationality', he propounds; and that poverty alleviation schemes merely replace, at the cost of the poor, their own resources pillaged and plundered by socio-politically influential. Politicians vigorously campaign on election platforms, vociferously decrying fraud and corruption, vowing stringent action thereon. However, upon assuming office of government, get bogged down in the very quagmire of fraud and corruption, invariably peddled by powerful multinationals - as lucidly demonstrated through a series of other publications on his real life experiences thereon.

Book preview

IMF, WORLD BANK & ADB AGENDA ON

PRIVATISATION

‘DUBIOUS DEALS’

in Sri Lanka

What a Paradox t

Nihal Sri Ameresekere

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© 2011 Nihal Sri Ameresekere. All rights reserved.

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Published by AuthorHouse 11/17/2011

ISBN: 978-1-4678-8733-5 (sc)

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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

DEDICATION

To my father Sirisena, who paved the way for me to acquire knowledge, my mother Clair, who ingrained righteous values in me, my wife Lilamani, who steadfastly supported espousing the cause of the public interest, my children, Dhananjana, Dheeshana and Sharvajana, who unflappably faced social trauma consequent to my public interest litigations, my dedicated and tireless staff, who loyally maintained confidentiality, persons known and unknown, who supported me and stood by me.

PUBLICATIONS BY THE AUTHOR

65572.jpg IMF, World Bank & ADB Agenda on Privatisation

Vol. 1: ‘Pillage of the Plantations’ in Sri Lanka

Vol. 2: ‘Dubious Deals’ in Sri Lanka-What a Paradox I

Vol. 3: Colombo Port Bunkering Privatisation

Annulled as Illegal & Fraudulent "by Supreme Court

-with flawed Valuation by DFCC Bank,

involving John Keells Holdings, an UN Global Compact Co.

Vol. 4: Sri Lanka Insurance Privatisation

Annulled as Unlawful & Illegal "by Supreme Court

-handled by PricewaterhouseCoopers &

Ernst & Young, Chartered Accountants

65574.jpg Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government

Vol. 1: Sri Lanka’s First Derivative Action in Law

Vol. 2: Criminality Exposed, but perversely ‘Covered-up’!

Vol. 3: Controversial Settlement

Vol. 4: Pressures & Obstructions to Exposure (Part of’ Socio-Political Realities’ below)

65576.jpg Derivative / Hedging Deals

by Citibank, Standard Chartered Bank, Deutsche Bank,

with Sri Lanka Government’s Petroleum Corporation-Dubious & Illegal?

65578.jpg Overseas Corporate Structures, which hide ‘Real Owners’

Foreign Business empire of a Sri Lankan Entrepreneur?

65580.jpg United Nations Convention Against Corruption

to Combat Fraud & Corruption-a Cancerous Menace

with mere Rhetoric subverts UN Convention

65539.jpg Transparency & Public Accountability

Fiscal Mismanagement & Lack of Public Accountability

Case Study-Sri Lanka, a Country under the purview of lMF, World Bank, ADB

65542.jpg In Pursuit of Justice

Case Studies of several Legal Proceedings in the pursuit of Justice

65545.jpg Socio-Political Realities

(Includes Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government

Vol. 4 : Pressures & Obstructions to Exposure)

THE INTERNATIONAL ASSOCIATION OF ANTI-CORRUPTION AUTHORITIES

Message

Secretary General, International Association of Anti-Corruption Authorities (IAACA)

IAACA was established to promote and facilitate the implementation of the United Nations Convention Against Corruption (UNCAC). At its inauguration in Beijing in October 2006. the Inaugural Address was delivered by President Hu Jintao of the People’s Republic of China.

Upon the adoption of the UNCAC. then UN Secretary-General, Kofi Annan said-Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government’s ability to provide basic sendees, feeding inequality and injustice, and discouraging foreign investment and aid. UNCAC was described by Mr. Antonio Maria Costa, then Executive Director, UNODC. Vienna, as-a true global response to the global challenge posed by corruption worldwide .

IAACA is pleased that one of its Members. Mr. Nihal Sri Ameresekere. in keeping with the objectives of IAACA. has taken a step to author and publish a series of Books, dealing with real case studies in combating the global cancerous menace of economic fraud and corruption, which threatens good governance and the well being of people.

The contents of this series of Books would, no doubt, be of material relevance and of educational value to anti-corruption authorities globally.

Yours sincerely,

image003.jpg

Ye Feng

Secretary General of the International Association of Anti-Corruption Authorities

Vice President of the International Association of Prosecutors

International Director of Asia Crime Prevention Foundation

Member of the Prosecuting Committee of the Supreme People’s Procuratorate of the People’s

Republic of China

Tel: [phone]

Fax: [phone]

Mobile: [phone]

E-mail: [e-mail]

ADD:No.l47 BEIHEYAN STREET, DONGCHENG DISTRICT, BEIJING 100726, CHINA

TEL: [phone]S 0086-10-65209625 FAX: [phone]

WEBSITE: www.iaaca.org EMAIL: [e-mail]

image005.jpg

1612 K Street, NW Suite 1100

Washington, DC, USA 20006

202-457-0034 ■ fax: [phone]

Website: www.whistleblower.org

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Review

In a series of books, Nihal Sri Ameresekere meticulously documents and analyzes the ways in which corrupt forces in Sri Lanka and abroad plundered the country’s resources through the 1990s and early 2000s. He argues persuasively that the policies adopted by the government of Sri Lanka during this period, at the behest of the International Monetary fund (IMF), the World Bank, and the Asian Development Bank, set the stage for widespread corruption and allowed an unprecedented illicit transfer of public wealth into privileged and private hands.

Like many countries around the world during this period, Sri Lanka adopted a development agenda based on privatization. The government arranged the outright sale of facilities at the port of Colombo, of the national insurance company, and of the country’s prized tea plantations. In addition, Sri Lankan ministries entered into supply contracts with private banks and construction agreements with foreign firms. These arrangements, sales and transfers, which uniformly favored the private sector were, according to the international financial institutions, the high road to increased productivity, growth and social equity.

It was not to be. Instead, through primary sources, Mr. Ameresekere’s research shows, Sri Lanka’s productive and revenue-producing enterprises were sold to insiders at fraudulently low prices through back-room deals in collaboration with officials at the highest levels of government. Corrupt or incompetent auditors took a cut and predatory domestic and foreign investors benefited handsomely.

As an advisor to the Minister of Finance of Sri Lanka, and Chairman for a short while of the Privatization Commission, Mr. Ameresekere had access to individuals and documents that demonstrate the pervasiveness of the corruption and theft that emptied the Sri Lankan Treasury. Using primary sources, he demonstrates that systemic corruption was no secret to government officials, foreign investors or aid institutions. At best, those responsible looked the other way and at worst they participated. Beneficiaries included foreign banks and construction firms, the largest corporate conglomerate in Sri Lanka and financial and political elites. All of this took place in a country exhausted and impoverished by a brutal and protracted civil war.

The series of books documents extensive public interest litigation before the Supreme Court of Sri Lanka, where Mr. Ameresekere, who is not an attorney, successfully represented the public. In addition to documenting fraudulent privatizations, he covers hedging / derivative deals by foreign banks, fiscal mis-management by the Treasury, and an international construction project that defrauded the government. These books also reveal how the World Bank has misdirected its lending to the Sri Lankan judiciary, which might have addressed the corruption issue more effectively. In total, the series is a comprehensive chronicle about combating economic crime, fraud and corruption in the private and public sectors, as now addressed by the UN Convention Against Corruption.

For readers who seek firsthand accounts of the ways in which international financial fraud takes place, these books are invaluable. For those who want to know what has really occurred over the last twenty years of development, these books are an important contribution, for schemes such as those described by Mr. Ameresekere were surely not confined to Sri Lanka. Clearly and comprehensively, Mr. Ameresekere shows how it was that a few well-placed people appropriated the wealth of a country while claiming to strengthen its institutions and promote growth. Moreover, He shows that to date, few have been held to account and that this impunity is in itself a crime.

image007.jpg

Beatrice Edwards

International Program Director

Government Accountability Project

Washington, D.C.

image009.jpg

Pugwash Conferences on Science and World Affairs

Nobel Peace Prize 1995

www.pugwash.org

THE PRICE OF FREEDOM IS ETERNAL VIGILANCE

The 1987 stock market crash followed by the 2001 collapse of Enron in the US, with the consequential dissolution of the accounting firm Arthur Andersen, marked the prelude. It was followed by the 2008 financial meltdown on Wall Street with the bankruptcy of Lehman Bros and the spectacular corruption of Madoff. Collectively these events marked the end of the ‘Washington Consensus’ which, from 1980-2008, placed great faith in free market policies in a sort of creed of ‘market fundamentalism. If this strategy of hard economic power needed the final nail in its coffin, that was provided by the international financial crisis which continues to engulf the world. As Ban Ki-moon has said. While recently we have heard much in this country about how problems on Wall Street are affecting innocent people on Main Street, we need to think more about those people around the world with no streets. Wall Street, Main Street, no street-the solutions devised must be for all." These solutions must embrace the principles of the UN Global Compact and the UN Convention against Corruption.

The Washington Consensus has been replaced, we are told, by what the G-20 (which includes countries from the Global South) call the Seoul Development Goals with a recognition of the need for state intervention and for the Millennium Development Goals of the UN to be achieved. However we have still to see how things evolve. Certainly what has been ignored so far is the impact of all this on the developing countries of the world because we are dazzled by the success of China, India. Brazil and the ASEAN tiger economies. But that success was not achieved solely through the unloading of the Washington Consensus on these countries through the accelerated process of globalization. Nor were they part of the recipe in the economic cookbooks of the World Bank and the IMF. The democratic, rule-based safety nets of transparency, regulators and anti-corruption and anti-trust measures had to be devised and implemented as part of the system adopted by these developing countries whose success has now been achieved despite the World Bank and the IMF.

In the particular case of Sri Lanka the 1977 landslide electoral victory of the pro-Western Government led by J.R.Jayawardene led politically to an entrenchment of his power through a Gaullist Constitution and the deregulation of the economy with no holds barred. Indeed Jayawardene adopted the prescription of the World Bank, the IMF and aid donors saying Let the robber barons come! They did-and robber barons within the country also emerged. The prescription included redirection of public spending from subsidies; liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); Liberalization of inward foreign direct investment; Privatization of state enteiprises and Deregulation. These policies have been continued by successive Governments in a ‘crony capitalism’ form that continued despite the conflict with the terrorist LTTE that ended in 2009. The rule of law was frequently violated with impunity and private companies both foreign and domestic were complicit.

In a courageous effort to assert the democratic freedoms of civil society, Nihal Sri Ameresekere set out, as a private citizen, to initiate public interest litigation to protect the resources of the people indiscriminate plunder. Trained as an accountant, he acquired a knowledge of the law astonishing for a layman earning the respect of the judges who heard him.

His heroic endeavours have now been recorded in a series of books outlining a relentless campaign beginning with the construction of Sri Lanka’s first Hilton Hotel, the privatization of plantations and other enterprises owned by the state, through to the privatization of the Colombo Port bunkering facilities, Sri Lanka Insurance, both annulled by the judiciary, and the hedging deals between some foreign commercial banks and the Ceylon Petroleum Corporation; and also the tracing of assets hidden in foreign jurisdictions.

The series of books also reveal the successful challenge and repeal of a controversial tax law pronounced by the judiciary to have defrauded public revenue, to be antithetic to the rule of law and violative of the Universal Declaration of Human Rights and International Covenant on Civil & Political Rights, and a successful challenge before the judiciary of the Appropriation Bill revealing the lackadaisical management of state funds.

It is a dramatic and well-documented record of the true empowerment of civil society in the defence of the wealth of the people from illegal and opaque deals blessed by a democratically elected government in the name of development. The books deserve a wide reading public as an inspiring example of the power of civil society.

image011.jpg

Jayantha Dhanapala

President

‘Looking alike on pleasure and pain, gain and loss, victory and defeat, then he ready for fight. If you fight in this spirit, you will not incur sin.’

‘‘But if you cío not fight this righteous battle, you would neglect your duty and Cose your fame and incur sin. And you will be Cowered in the estimation of those who thought highly of you, who will think that you have desisted from fighting through fear.’

‘Action alone is your sphere, its fruit should never he desired by you. Do not make the fruit of action your motive. To your actions without attachment to their fruits, indifferent to success or failure.’

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United Nations Convention Against Corruption

The United Nations General Assembly on 31st October 2003 adopted the Convention Against Corruption, with Antonio Maria Costa, then Executive Director, United Nations Office on Drugs & Crimes (UNODC) hailing it as-"a true global response to the global challenge posed by corruption worldwide".

Then Secretary-General United Nations, Kofi Annan said thus-Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government’s ability to provide basics services, feeding inequality and injustice, and discouraging foreign investment and aid

The United Nations Convention against Corruption-www.unodc.org, entered into force on 14th December 2005. Sri Lanka was one of the first State Parties to have ratified the Convention on 31st March 2004.

Preamble of the Convention

The States Parties to this Convention,

Concerned about the seriousness of problems and threats posed by corruption to the stability and security of societies, undermining the institutions and values of democracy, ethical values and justice and jeopardizing sustainable development and the rule of law,

Concerned also about the links between corruption and other forms of crime, in particular organized crime and economic crime, including money-laundering,

Concerned further about cases of corruption that involve vast quantities of assets, which may constitute a substantial proportion of the resources of States, and that threaten the political stability and sustainable development of those States,

Convinced that corruption is no longer a local matter but a transnational phenomenon that affects all societies and economies, making international cooperation to prevent and control it essential,

Convinced also that a comprehensive and multidisciplinary approach is required to prevent and combat corruption effectively,

Convinced further that the availability of technical assistance can play an important role in enhancing the ability of States, including by strengthening capacity and by institution-building, to prevent and combat corruption effectively,

Convinced that the illicit acquisition of personal wealth can be particularly damaging to emocratic institutions, national economies and the rule of law,

Determined to prevent, detect and deter in a more effective manner international transfers of illicitly acquired assets and to strengthen international cooperation in asset recovery,

Acknowledging the fundamental principles of due process of law in criminal proceedings and in civil or administrative proceedings to adjudicate property rights,

Bearing in mind that the prevention and eradication of corruption is a responsibility of all States and that they must cooperate with one another, with the support and involvement of individuals and groups outside the public sector, such as civil society, non-governmental organizations and community-based organizations, if their efforts in this area are to be effective,

Bearing also in mind the principles of proper management of public affairs and public property, fairness, responsibility and equality before the law and the need to safeguard integrity and to foster a culture of rejection of corruption,

Commending the work of the Commission on Crime Prevention and Criminal Justice and the United Nations Office on Drugs and Crime in preventing and combating corruption,

Recalling the work carried out by other international and regional organizations in this held, including the activities of the African Union, the Council of Europe, the Customs Cooperation Council (also known as the World Customs Organization), the European Union, the League of Arab States, the Organisation for Economic Cooperation and Development and the Organization of American States,

Taking note with appreciation of multilateral instruments to prevent and combat corruption, including, inter alia, the Inter-American Convention against Corruption, adopted by the Organization of American States on 29 March 1996, the Convention on the Fight against Corruption involving Officials of the European Communities or Officials of Member States of the European Union, adopted by the Council of the European Union on 26 May 1997, the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, adopted by the Organisation for Economic Cooperation and Development on 21 November 1997, the Criminal Law Convention on Corruption, adopted by the Committee of Ministers of the Council of Europe on 27 January 1999, the Civil Law Convention on Corruption, adopted by the Committee of Ministers of the Council of Europe on 4 November 1999, and the African Union Convention on Preventing and Combating Corruption, adopted by the Heads of State and Government of the African Union on 12 July 2003,

Welcoming the entry into force on 29 September 2003 of the United Nations Convention against Transnational Organized Crime,

Have agreed as follows.

Articles of the Convention

PREAMBLE

CHAPTER I-GENERAL PROVISIONS

Article 1 Statement of Purpose

Article 2 Use of terms

Article 3 Scope of application

Article 4 Protection of sovereignty

CHAPTER II-PREVENTIVE MEASURES

Article 5 Preventive anti-corruption policies and practices

Article 6 Preventive anti-corruption body or bodies

Article 7 Public sector

Article 8 Codes of conduct for public officials

Article 9 Public procurement and management of public finances

Article 10 Public reporting

Article 11 Measures relating to the judiciary and prosecution services

Article 12 Private sector

Article 13 Participation of society

Article 14 Measures to prevent money-laundering

CHAPTER III-CRIMINALIZATION AND LAW ENFORCEMENT

Article 15 Bribery of national public officials

Article 16 Bribery of foreign public officials and officials of public

International organizations

Article 17 Embezzlement, misappropriation or other diversion of property by a public official

Article 18 Trading in influence

Article 19 Abuse of functions

Article20 lllicitenrichment

Article 21 Bribery in the private sector

Article 22 Embezzlement of property in the private sector

Article 23 Laundering of proceeds of crime

Article 24 Concealment

Article25 Obstructionofjustice

Article 26 Liability of legal persons

Article 27 Participation and attempt

Article 28 Knowledge, intent and purpose as elements of an offence

Article 29 Statute of limitations

Article 30 Prosecution, adjudication and sanctions

Article 31 Freezing, seizure and confiscation

Article 32 Protection of witnesses, experts and victims

Article 33 Protection of reporting persons

Article 34 Consequences of acts of corruption

Article 35 Compensation for damage

Article 36 Specialized authorities

Article 37 Cooperation with law enforcement authorities

Article 38 Cooperation between national authorities

Article 39 Cooperation between national authorities and the private sector

Article 40 Bank secrecy

Article41 Criminalrecord

Article 42 Jurisdiction

CHAPTER IV-INTERNATIONAL COOPERATION

Article 43 International cooperation

Article 44 Extradition

Article 45 Transfer of sentenced persons

Article 46 Mutual legal assistance

Article 47 Transfer of criminal proceedings

Article 48 Law enforcement cooperation

Article 49 Joint investigations

Article 50 Special investigative techniques

CHAPTER V-ASSET RECOVERY

Article 51 General provision

Article 52 Prevention and detection of transfers of proceeds of crime

Article 53 Measures for direct recovery of property

Article 54 Mechanisms for recovery of property through international cooperation in confiscation Article 55 International cooperation for purposes of confiscation

Article 56 Special cooperation

Article 57 Return and disposal of assets

Article 58 Financial intelligence unit

Article 59 Bilateral and multilateral agreements and arrangements

CHAPTER VI-TECHNICAL ASSISTANCE AND INFORMATION EXCHANGE

Article 60 Training and technical assistance

Article 61 Collection, exchange and analysis of information on corruption

Article 62 Other measures: implementation of the Convention through economic development and technical assistance

CHAPTER VII-MECHANISMS FOR IMPLEMENTATION

Article 63 Conference of the States Parties to the Convention

Article 64 Secretariat

CHAPTER VIII-FINAL PROVISIONS

Article 65 Implementation of the Convention

Article66 Settlement of disputes

Article 67 Signature, ratification, acceptance, approval and accession

Article 68 Entry into force

Article 69 Amendment

Article 70 Denunciation

Article 71 Depositary and languages

(United Nations Convention Against Corruption-Mere ‘rhetoric’ to combat Fraud and Corruption, only subverts United Nations Convention-by same Author)

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When I saw the effect that corruption and kick-backs were having on our businesses and our ability to compete, I determined that it had to stop. Nothing so encourages inefficiency and mediocrity, nor so discourages talent and endeavour.

Lee Kuan Vew

From The Dhammapada* of Lord Gauthama

Buddha

about 2550 years ago

65547.jpg Well done is that action of doing which one repents not later, and the fruit of which one, reaps with delight and happiness.

65549.jpg Should a person do good, let him do it again and again. Let him find pleasure therein, for blissful is the accumulation of good.

65551.jpg An evil deed is better left undone, for such a deed torments one afterwards. But a good deed is better done, doing which one repents not later.

65554.jpg Those who know the essential to be essential and the unessential to be unessential, dwelling in right thoughts, do arrive at the essential.

65556.jpg Those who discern the wrong as wrong and the right as right—upholding right views, they go to realms of bliss.

65558.jpg Those who are ashamed of what they should not be ashamed of, and are not ashamed of what they should be ashamed of—upholding false views, they go to states of woe.

65560.jpg Those who imagine evil where there is none, and do not see evil where it is—upholding false views, they go to states of woe.

65562.jpg Easy is life for the shameless one who is impudent as a crow, is backbiting and forward, arrogant and corrupt.

65564.jpg One who, while himself seeking happiness, oppresses with violence other beings who also desire happiness, will not attain happiness hereafter.

65566.jpg All tremble at violence; all fear death. Putting oneself in the place of another, one should not kill nor cause another to kill.

65568.jpg Neither in the sky nor in mid-ocean, nor by entering into mountain clefts, nowhere in the world is there a place where one may escape from the results of evil deeds.

65570.jpg There never was, there never will be, nor is there now, a person who is wholly blamed or wholly praised.

* The preachings of Lord Gauthama Buddha

Contemporary Realities

Case Studies in a Third World Developing Country

Revealing socio-political realities

Incisive insights unraveling the socio-political realities in a third world developing country. The duplicitous hypocrisy of the developed world and international developmental agencies visa-vis the just and equitable enforcement of the ‘rule of law’. The dubious management of the resources of the people, which are held in trust, on their behalf, by democratic governments or even by Kings.

" The ruler’s trusteeship of the resources of the State which belong to the people is a part of the legal heritage of Sri Lanka dating back at least to the third century BC as pointed out by Justice Weeramantry in his separate opinion in the International Court of Justice in the Danube Case, by quoting the sermon of Arahath Mahinda to King Devanampiya Tissa as recorded in the Great Chronicle-Mahawamsa* "-June, 2009, Supreme Court of Sri Lanka

# With the cancerous menace of rampant fraud and corruption, does not the unbridled pillage and plunder of the resources of the already impoverished vast majority of poor people, by few persons socio-politically powerful, influential and affluent, further impoverish them?

# Is it not a curious paradox, that schemes and designs to replace, such pillaged and plundered property of the poor people, through ‘poverty alleviation programs’, ironically are financed from the very funds of the poor people or by debts to be re-paid by them or their future generations?

# Despite the adoption in December 2005 of the United Nations Convention Against Corruption, specifically identifying as culprits, ‘politically exposed persons’, do not such persons unabashedly continue to peddle fraud and corruption, and are shielded through socio-political influences, and publicly sanctified by religious leaders seeking the ‘limelight’?

# Should not the pillage and plunder of the property of the poor people, referred to as ‘economic terrorism’, perpetrated by ‘economic terrorists’, condemned internationally in contemporary times, be first dealt with, as the root cause for the germination of terrorism?

# Denying the impoverished helpless vast majority of poor people equitable social justice, does it not ultimately lead to disillusionment, alienation, frustration, social unrest, insurrection and justifiable rebellion?

# Does not therefore, the pillage and plunder of the resources of the poor people, consequently result in armed struggles and armed terrorism, with brutal counter offensives by the international community, to destroy such terrorism?

# Ironically, do not such brutal counter-offensives, with the utilization of further resources of the poor people, which consequently give rise to despicable violations of human-rights, with concerns of humanity righteously transcending parochial interests of nationality, justifiably raise international concerns, however, at a very belated stage?

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* The Mahawamsa The Great Chronicle is the single most important work of Sri Lankan origin, written in Pali language translated to Sinhala and English, recording the history and heritage from 543 BC

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1

POLICY PRONOUNCEMENT

On the fraud perpetrated in circumstances of’wrong-doer control’, in the construction of the Colombo Hilton Hotel, I filed on 13th September 1990, a derivative action in law, in the District Court of Colombo in Case No. 3155/Spl., on behalf and in the right of the owning Company of the Colombo Hilton Hotel, namely, Hotel Developers (Lanka) Ltd., (HDL), in its interest and for its benefit, and that of its Shareholders, which included the Government of Sri Lanka, as its major Shareholder, who had issued State Guarantees, on behalf of HDL, to Mitsui & Taisei Consortium of Japan, for the financing of the turn-keyfixedprice construction of the Colombo Hilton Hotel.

The said Case upon being supported by my Senior Counsel, P. Navaratnarajah, Queen’s Counsel, Learned District Judge P. Wijeratne Esqr., promptly ordered the issuance on 17th September 1990 of Enjoining Orders, restraining Mitsui & Taisei Consortium of Japan and the Japanese Architects, Kanko Kikaku Sekkeisha Yozo Shibata & Associates, from claiming and/or receiving any monies for the construction of the Colombo Hilton Hotel, from HDL or the Government of Sri Lanka, under the State Guarantees, and also directed that Notices of Interim Injunctions be issued, which were so issued.

Consequently, after a comprehensive Inquiry into the matter, the Learned District Judge P. Wijeratne Esqr., on 28th October 1991, having been satisfied and upholding my prayers therefor as justifiable, issued Interim Injunctions, restraining Mitsui & Taisei Consortium of Japan and the Japanese Architects, Kanko Kikaku Sekkeisha Yozo Shibata & Associates from claiming and/or receiving any monies for the construction of the Colombo Hilton Hotel from HDL or the Government of Sri Lanka, underthe State Guarantees, which had been issued.

Thereafter, with the Court of Appeal of Sri Lanka on 31st January 1992 granting Leave to Appeal to Mitsui & Taisei Consortium and the Japanese Architects, Kanko Kikaku Sekkeisha Yozo Shibata & Associates on the aforesaid Order delivered by the Learned District Judge in issuing Interim Injunctions, on a Special Leave to Appeal Application made by me to the Supreme Court of Sri Lanka, against such Order of the Court of Appeal granting Leave, the Supreme Court on 27th May 1992 granted me Special Leave to Appeal against the said Order of the Court of Appeal.

Consequently, after hearing arguments into the Appeal, the Supreme Court of Sri Lanka on 2nd December 1992 delivered an historic landmark Judgment, upholding a serious prima-facie case of fraud, with real prospect of success in being proven, and further upholding the Interim Injunctions, which had been issued by the District Court of Colombo, observing that they had been issued to prevent the devious siphoning ofa large scale of foreign exchange from HDL and the country. (Colombo

Hilton Hotel Construction-Fraud on Sri Lanka Government—Vol. ItoIV—by same Author)

The foregoing unprecedented litigation in Sri Lanka, involving reputed multinationals, aroused widespread controversy in the country, with extensive media exposés, particularly moreso, since it involved leading personalities closely associated with the United National Party Government. This matter became a much publicized and discussed national issue, in view of the high profile political ramifications. For my such action, I was propelled into the limelight in the public domain. This Case was causing embarrassment to the United National Party Government, with one of its prominent influential Members of Parliament of Sri Lanka, K.N. Choksy, P.C., M.P., later its Minister of Constitutional Affairs, being a Defendant in my Case, as one of the prime wrong-doer Directors.

During the time of the above litigation, Chandrika Bandaranaike Kumaratunga returned to Sri Lanka in 1992 from having been in exile in London, where she had decamped to, with her two young children, after the brutal broad daylight assassination in 1988 of her late husband Vijeya Kumaranatunga. Upon her return to Sri Lanka shejoined the Sri Lanka Freedom Party, which had been formed in 1951 by her late father, Prime Minister S.W.R.D. Bandaranaike, a brilliant scholar of the Oxford University, UK, who also was assassinated on the morning of 25th September 1959.

Upon her return to Sri Lanka, Chandrika Bandaranaike Kumaratunga entered politics and the first Election she faced was in May 1993, whereat she contested under the Opposition People’s Alliance of which the Sri Lanka Freedom Party was a constituent Party, and she was elected, as the Chief Minister of the highly populated Western Province, obtaining nearly a third of a million votes of the people. This Election was just after the historic landmark Supreme Court Judgment in December 1992 in my Colombo Hilton Hotel Case, which was an embarrassment to the ruling United National Party Government, against whom she won with an overwhelming majority.

Thereafter in March 1994, she gave a fresh impetus and enthusiasm to the People’s Alliance at the Southern Provincial Council Elections, where she ensured that the People’s Alliance was led to victory. These two Elections paved the way for the downfall of the once powerful United National Party Government, which swept into power in 1977, with an unprecedented 576th majority in the Parliament of Sri Lanka, and held onto power for 17 years until 1994, to be defeated with the entry into politics by Chandrika Bandaranaike Kumaratunga, giving leadership to the Opposition People’s Alliance.

My much publicized Case on the fraud in the construction of the Colombo Hilton Hotel, was a major issue, which was highlighted on the People’s Alliance Election platform in the above Elections, turning the tide turned against the United National Party Government. In the Southern Provincial Council Election, a special booklet on the Colombo Hilton Hotel construction fraud was published by the Ravaya Editor, Victor Ivan, who was one of those persons, who played a ‘key role ‘in the Election campaigns of Chandrika Bandaranaike Kumaratunga. In December 1993, Victor Ivan published a full exposé on the Colombo Hilton Hotel construction fraud in his English Magazine Counterpoint.

(Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government-Vol. 2-Criminality Exposed, but Perversely Covered-up-by same Author)

Since my Case vis-a-vis the fraud in the construction of the Colombo Hilton Hotel, which was pending at that time, was a major controversy on the political platform in the country, President D.B. Wijetunga, Leader of the United National Party, invited me in June 1994 for a discussion, and endeavoured to persuade me to settle and withdraw my said Case, specifically pleading that it was causing a major setback to the United National Party Government at the then forthcoming General Elections in August 1994.

Such discussion was had with me by President D.B. Wijetunga, with the presence of the General Secretary of the United National Party, Gamini Wijesekera and the Hon. Attorney General, T.J. Marapana, President’s Counsel, who later became the Minister of Defence of the United National Party Government of Prime Minister Ranil Wickremesinghe, formed in December 2001. (ColomboHilton

HotelConstruction-FraudonSriLankaGovernment-Vol. 2-CriminalityExposed, butPerverselyCovered-up-bysame Author)

At the August 1994 General Elections which followed, Chandrika Bandaranaike Kumaratunga led the People’s Alliance to victory, forming a coalition Government, with a ‘wafer thin one ‘vote majority in the Parliament of Sri Lanka, and assumed office, as the Prime Minister of Sri Lanka. On the eve of the General Election in August 1994,1 was interviewed over the national Television Channel vis-a-vis the fraud in the construction of the Colombo Hilton Hotel, as had been arranged for by Victor Ivan, who played a pivotal role in the election campaign of Chandrika Bandaranaike Kumaratunga.

I had never personally met Chandrika Bandaranaike Kumaratunga, but upon assuming Office, as Prime Minister in August 1994, she had requested A.S. Jayawardena, Secretary, Ministry ofFinance & Secretary to the Treasury to invite me and retain my services, as an Advisor to the Ministry of Finance, particularly to review past scandalous privatizations which had been carried out by the United National Party Government, and to formulate strategic policies and plans for carrying out future privatizations. Thus I was retained, as an Advisor to the Ministry of Finance in September 1994.

Condemning the United National Party Government for being riddled with rampant corruption, one of the major planks of the Election campaign of Prime Minister Chandrika Bandaranaike Kumaratunga was the-vociferously propounded commitment to combat fraud and corruption. Accordingly, as soon as she formed the People’s Alliance Government in August 1994, she caused Justice Minister G.L. Peiris to present to the Parliament of Sri Lanka a Bill on 4th October 1994 to enact the Bribery Amendment Act No. 20 of 1994, defining the offence of ‘Corruption’, as set out below, to be included as Section 70 in the Bribery Act No. 1 lof 1954, as amended.

"Corruption 70 Any public servant who, with intent, to cause wrongful or unlawful loss to the Government, or to confer a wrongful or unlawful benefit, favour or advantage on himself or any person, or with knowledge, that any wrongful or unlawful loss will be caused to any person orto the Government, or that any wrongful or unlawful benefit, favour or advantage will be conferred on any person—

(a) does, or forbears to do, any act, which he is empowered to do by virtue of his office as a public servant;

(b) induces any other public servant to perform, or refrain from performing, any act, which such other public servant is empowered to do by virtue of his office as a public servant; uses any information coming to his knowledge by virtue of his office as a public servant;

(c) participates in the making of any decision by virtue of his office as a public servant;

(d) induces any other person, by the use, whether directly or indirectly, of his office as such public servant to perform, or refrain from performing, any act,

shall be guilty of the offence of corruption and shall upon summary trial and conviction by a Magistrate be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding one hundred thousand rupees or to both such imprisonment and fine."

On the very same day, 4th October 1994, a Bill to enact the Commission to Investigate Allegations of Bribery or Corruption Act No. Act No. 19 of 1994 was presented to the Parliament of Sri Lanka by Justice & Constitutional Minister G.L. Peiris, to establish a Permanent Commission to deal with the cancerous menace of corruption which had taken deep root in the country.

In presenting the these new Statutes to the Parliament of Sri Lanka, Justice & Constitutional Minister G.L. Peiris inter-alia, propounded as follows: [English translation of the Sinhala-vide Hansard Columns 280, 281, 283, 284, 286, 406 :

Hon. Deputy Speaker, this is the first Bill that is being presented to this Parliament by the People’s Alliance Government. The objective of this is to establish a systematic foundation to eradicate bribery and corruption from our country. At the elections held on August 16 of this year, our people gave a mandate to the present Government with great anticipation and hope. Similarly, there was another objective. That was to pursue a fruitful process of action in relation to the situation of bribery and corruption that had taken root in the country. Similarly, the people of this country relied sincerely, that the People’s Alliance Government would honestly endeavour to fulfil this task.

Hon. Deputy Speaker, though there is a longstanding history and intrinsic value of the concept of Parliamentary Privilege, the present Government strongly believes, that such privilege should be used very carefully. If you consider British history, such parliamentary privilege has been used for the benefit of the public. If Parliamentary Privilege is used for the benefit of the Members of Parliament, we could only describe it as a course of action against public policy and legal tradition. Therefore, in such an instance, where there is an allegation against a Member of Parliament, if the approval of the Speaker, is required by law as a condition to investigate into such allegation, we believe that it is a totally wrong concept. Hence, the present Government by this Act, has taken expeditious steps to remove such legal requirement from the Sri Lankan law.

There is an offence defined under the law today as bribery and corruption. However its scope is limited and restricted. In certain instances, those who have committed wrong, have been those, who had squandered the wealth of our country and those, who have acted dishonestly and do not get caught within the scope of such crime. Therefore, the government has decided to define a new offence referred to as corruption. In today’s law there is no such widely defined offence There is a foundation and a policy rationale for such widely defined offence of corruption. The policy rationale could be described as follows: Any person cannot use public office for the purpose of private gain. That is the basic principle…Hon. Deputy Speaker, you are aware that there is a great resentment and hatred in our country concerning bribery and corruption. Therefore, it is the duty of the Government to formulate laws in conformity with public opinion."

Apart from the financial implications, there is also the question of an overweening sense of cynicism discerning discriminating thinking people in our country have expressed profound dissatisfaction with the extent to which corruption and bribery have taken root in our country. If this spirit of cynicism is not addressed there isa definite danger to the stability and tranquility of political and social institution in our country. That is why the Government was convinced that there should be a vigorous response to the issues of bribery and corruption

In October 1994, Prime Minister Chandrika Bandaranaike Kumaratunga was chosen to be the nominee of the People’s Alliance to be its Presidential Candidate at the Presidential Elections, which was to be held in November 1994.

As requested, I figured prominently and played a major role in Prime Minister Chandrika Bandaranaike Kumaratunga’s Presidential Elections campaign, particularly focusing upon the issue of combating fraud and corruption, and exposing some of the scandalous privatization deals, which had been perpetrated by the previous United National Party Government. Nevertheless, during this time I did not personally meet Prime Minister Chandrika Bandaranaike Kumaratunga.

Prime Minister Chandrika Bandaranaike Kumaratunga won an unprecedented mandate of 62% of the vote of the people, having on her main platforms avowed commitment to foster peace, combat fraud and corruption, and to uphold human rights. President Chandrika Bandaranaike Kumaratunga assumed Office, as the President of Sri Lanka on 12th November 1994-this was a meteorical rise to political helm within a very short period of time from May 1993 to November 1994-just a period of only l’Ayears!

For the very first time I personally met President Chandrika Bandaranaike Kumaratunga, on her formal visit, as the President of Sri Lanka, to the historic Kelaniya Buddhist Temple, at close proximity to the Colombo City, which Buddhist Temple is believed to have been dedicated to Lord Buddha, upon one ofHis sojourns from Indiato Sri Lanka. I met President Chandrika Bandaranaike Kumaratunga, in the precincts of this historic Buddhist Temple, whilst she was performing religious rites, under the sacred Bodhi Tree; I too having been invited for this religious function, she requested me to join in performing the religious rites.

To me this was significantly poignant, in that, one of my ancestors, as per historical records in the 16th Century, had been a lay custodian, Basnayake Nilame, of this sacred Kelaniya Buddhist Temple. More so there being a Shrine for the veneration of the mythical Lord Vibhishana, brother of mythical King Ravana of Sri Lanka (Lankapura). According to the ancient (Adi Kavyam) Sanskrit poetic epic, The Ramayana, King Ravana, with his divine powers had gone to India (Bharata) and had kidnapped and brought to Sri Lanka, the beautiful consort Princess Sita of Prince Rama (believed to be an incarnation ofLord ‘Vishnu).

According to this revered mythological Hindu epic, Prince Rama consequently, with the assistance of the Hindu avaratar Hanuman, had come to Sri Lanka (Lankapura) to save Princess Sita, waging a war against King Ravana. In this war, Lord Vibhishana had taken the side of the Indian (Bharata) Prince Rama, and had stood against his own brother, King Ravana, courageously and righteously standing up for what was right, even against his own brother. Todate Lord Vibhishana is venerated for having stood up firmly and fearlessly for what was right, and combating what was wrong, regardless of thepersonalities involved.

At that time, I assisted the Secretary Ministry of Finance & Secretary to the Treasury, A.S. Jayawardena to compile the shockingly long list of adhoc import duty exemptions, which had been granted by the previous United National Party Government, which though required by law to be gazetted and tabled in the Parliament of Sri Lanka, had not been so gazetted and tabled in the Parliament of Sri Lanka.

Consequently, to regularize such grave omission, on 15th December 1994 tabling in Parliament Gazette Extraordinary Notifications Nos. 828/1 of 18th July 1994, 830/7 of 3rd August 1994 and 842/6 of 26th October 1994, in respect of Import Duty Exemptions, which had been granted by the previous United National Party Government, Justice & Constitutional Minister G.L. Peiris, (now Minister of External Affairs), made the following Statement-"vide Hansard Columns 1662, 1663-

" GRANT OF DUTY WAIVERS

I have tabled in the House today two sets of gazette extraordinary notifications-Nos. 828/1 of 18th July, 1994, 830/7 of 3rd August, 1994 and 842/6 of 26th, October, 1994.

The first refers to all the import duty waivers granted by the former Minister of Finance, Hon. D.B. Wijetunga, under Section 19A of the Customs Ordinance, during the year 1991. The second contains the import duty waiver granted by the same Hon. Minister during the year 1992 and the third contains the Duty Waivers granted by the same Hon. Minister during the first quarter of the year 1993.

Judging by the extraordinary size of these gazette notifications, the 1991 duty waivers running to 474 pages and 1992 duty waivers running to 488 pages, and the 1993 first quarter running into 117 pages, the Hon. Members will get an idea of the extent to which the legitimate income of the Government from import duties have been frittered away by the last regime during the two years 1991 and 1992 and during the first quarter of year 1993.

These ad hoc duty waivers have made a mockery of our tax system. I do not see why we should have a waiving of import duties, when the fair and logical thing to do would be to reduce duty altogether and to everyone. I find that, quite apart from exempting certain essential items, there have been extensive grants of ad hoc duty waivers to all and sundry, often for the flimsiest of reasons, and some for no valid reason at all. It looks as if this system of granting duty waivers has been used by the previous regime as a means of granting favours to their friends and cronies. Today, we are inundated with requests from various parties for such arbitrary duty waivers, but I have instructed my officials not to grant any, other than those that have been agreed to, in legal contracts, such as in the case of memoranda of understanding reached with non-governmental organisations and in terms of international treaties entered into by Sri Lanka. My intention is to limit the grant of reciprocal duty waivers only in case of treaties in respect of the last mentioned category, i.e. Sri Lanka’s international treaties and to organisations which have entered into contracts with Sri Lanka. I am also planning to conflne essential consumer items, such as foodstuff, to a low duty band, so that nobody needs to ask for duty waivers as a matter of special favour. In other words, we will make this system totally transparent and known to all.

The loss suffered by the country through this habit of granting duty waivers has been estimated at about Rs. 5 billion during each of the last 5to6 years. Also, most duty waivers result in the waiver of the related turnover tax applicable on the imported goods. The loss of revenue to the country on this account amounts to around Rs. 3000 million. Hence, the total annual loss of revenue is around Rs. 8000 million, which is over 6 percent of total government revenue-a staggering loss. To that extent, the Budget deflcit was higher or else we would have had to tax people more, in order to recoup this loss. Alternatively, the Government would have had to borrow that amount of money from the Central Bank, which is tantamount to printing money and would have added to the on-going inflation. Thus, when prices move up, everyone in this country pays for this mighty folly of subsidising a few. I cannot understand how any government would have countenanced such a practice, which is tantamount to robbing the Treasury.

UndertheCustomsOrdinance,Section 19Apermitsthe Minister in-charge of the Department, which is the Ministry of Finance, to exempt any goods imported, from Customs duties leviable, the whole or any part thereof, subject to such conditions being fulfilled before or after clearance as may be specified, if he deems it expedient in the public interest so to do. However, such an Order of the Minister comes into force immediately but has to be published in a gazette, and shall as soon as possible after its publication, be tabled in Parliament, which has the power to revoke any such Order, as provided for in Section 19A sub-section (2) of the Customs Ordinance.

I understand that the Minister has not delegated these functions to any of the officials. However, the practice of Ministry officials exercising this authority on behalf of the Minister, started some time in the late 70s. As the practice grew, there was no attempt to separately table individual duty waivers. Hence, the Treasury developed a habit of covering all these exemptions into one gazette notification, in respect of one year, and table it for the information of Parliament. The Parliament does not appear to have questioned the wisdom of this practice. After some time, even the gazettes were delayed. At the time we came to power, only those duty Waivers granted up to 1990 has been gazetted and tabled in Parliament. Although I present the 1991,1992 and the 1993 first quarter exemptions today, the value of 1993 and 1994 ones are yet to be gazetted.

The implications of this delay are quite serious. It is the Parliament which imposes all taxes, including duties and the power given to the Minister to waive duty or tax is a very limited one-first, it has to be in the general public interest and secondly he has to inform the Parliament as soon as possible. In fact, if the Parliament feels that the decision is wrong, it has the power to revoke the decision and collect the duty. Such discretionary powers should be exercised with utmost responsibility, care and diligence. I have no option but to table these before you. By-gones are by-gones and we have no option but to accept these, though there is legal power under Section 19A, for Parliament to revoke these orders, upon which the importer would be called upon to pay the duties. But I refrain from doing so because it will cause hardship, havoc and confusion at this time.

There is also an interesting question relating to fundamental rights enshrined in Chapter III of the Constitution of Sri Lanka, which provides for equality of treatment to all persons. Thus, the grant of import duty waiver for selected or individuals or institutions in this manner, could easily be! challenged by others who have not been granted similar concessions. It would have been very interesting if someone Challenged this practice in the Supreme Court. This goes to show how this practice is even ultra vires the Constitution, which we have all sworn to uphold.

What is more interesting are the types of goods for which ad hoc import duty exemptions have been granted. If you will take the trouble to go through the voluminous documents in front of you, you will see some of this.

Never did I expect to come across an example of financial chicanery of this magnitude in all my political life. In short, this whole thing smells and stinks. There are ghastly stories of people fattening themselves on import duty waivers. It has almost corrupted a large section of people, who have come to accept the negotiation of a duty waiver with their political masters as a fundamental right in this country for them to make profit.

I do not like to do this, but it is my duty as the Minister to table these in this House for your consideration. I am sorry the import duty waivers granted for the balance period in 1993 and 1994 are still being tabulated and printed for presentation in this House. I shall do that as soon as they are ready, In the future, I propose to lay down clear guidelines for the grant of import duty waivers only in the public interest. I intend to limit the grant of import duty waivers to essential imports donated to religious and charitable institutions, to donations for the welfare of the Armed Forces and for price and supply stabilisation of essential consumer goods as an emergency measure for limited periods. "

As Advisor to the Ministry of Finance my immediate and foremost task was to formulate strategic policies and plans for future privatizations. Having had consultations with Representatives of the IMF, World Bank, USAID and ADB, I formulated a Policy Frame Work and a Strategic Plan for carrying out future privatizations, for approval of the Secretary Ministry of Finance & Secretary to the Treasury A.S. Jayawardena and President Chandrika Bandaranaike Kumaratunga.

Hitherto privatizations had been co-ordinated by the Commercialization Division of the Ministry of Finance, with each privatization being handled by a Divestiture Committee, chaired by the Secretary of the relevant Line Ministry, under which such State Owned Enterprise, which was to be privatized functioned. The Director-General of the Commercialization Division of the Ministry of Finance, was a Member of all these diverse Divestiture Committees. My suggestion was to set-up an autonomous privatization Agency, which was named the Public Enterprises Reform Commission by President Chandrika Bandaranaike Kumaratunga, to carry out future privatisations.

Also at that time as Advisor to the Ministry of Finance, at the request of the Secretary Ministry of Finance & Secretary to the Treasury, A.S. Jayawardena, I assisted to formulate certain sections to be included in the Policy Statement of the Government of President Chandrika Bandaranaike Kumaratunga, which she presented to the Parliament of Sri Lanka, in her Address at the formal Opening of the new Sessions of the Parliament of Sri Lanka on 6th January 1995.1 was invited by her to sit in the front row in the Hon. Speaker’s Gallery in the President of Sri Lanka, together with her two children and her personal friend and Secretary, Padma Maharaja.

The full text of President Chandrika Bandaranaike Kumaratunga’s Policy Statement, presented to the Parliament of Sri Lanka, is given below:

image021.jpg

Hon. Members of Parliament

THE GOVERNMENT’S POLITICAL AGENDA

The year 1994 has been a momentous one for us in SriLanka. The people of our land have demonstrated remarkable dignity and wisdom through nearly two decades of a corrupt, oppressive, and destructive regime. They lived through the most horrendous suppression of fundamental human rights, a State structure which was corrupt and rotten to its very core, and which frittered away our national assets with gay abandon. They put up with a so-called economic development with no national objectives. The only objective was the pillage and plunder of the nation’s wealth by those at the helm of power and their favourites. This successfully enriched the privileged few and impoverished everyone else to such an extent that a majority of the population earned, relatively speaking, a lower income than in 1977.

The people suffered patiently for seventeen long and arduous years. The year 1994 brought three historic moments which saw the manifestation of a magnificent outburst of a people’s free pretest against the political terror, the corruption, the callousness, and the inefficiency of the previous regime. They expressed their unrelenting courage and desire for change-a positive and meaningful change for all sections and communities of the Sri Lankan polity; a change from oppression and terror to a truly operative democracy, in which the rule of law was firmly entrenched; and a change that would bring about sustainable economic development, increase production and employment, decrease inflation, and provide social justice and equity.

The people also pronounced loud and clear their deep and genuine yearning for peace and an end to the war in the North-East of our country.

It is truly remarkable that our people have shown an unswerving courage, consistency, and depth of commitment to these causes through four major elections held within a period of eighteen months. It is even more remarkable that this commitment survived two decades of state terror and corruption that besmirched the entire social and political fabric of our nation.

My Government is deeply touched and humbled by the warmth of popular feeling which culminated at the Presidential elections of November, 1994, in a victory on a scale that is without parallel in the democratic world. We are acutely conscious of the level of confidence and faith reposed in us by the people of Sri Lanka and of the immense expectations aroused by this. My Government has dedicated itself to discharge the unusually heavy responsibility placed upon us with all wisdom we can command, and with the utmost honesty, integrity and efficiency. We have formulated a set of policies that are structurally sound and consistent. There is a central theme running through and imparting substance to these policies, namely that political power involves a social contract between the Government and the people. My Government believes that political power is a trust placed in us by the people. It has a moral justification only so long as it is employed for purposes which promote the well-being of the community as a whole. The nation expects nothing less than this from our Government. We shall keep faith with our people.

When we took over the reins of government we did not simply take over the task of governing the country. We had to take over a Nation which had been turned inside out, and whose body politic had been besmirched beyond recognition, as a result of state terror, corruption, and callousness.

While engaging in the normal tasks of governance, my Government had to cleanse the political and administrative institutions. This is not an easy task, in the context of a bureaucracy ridden with corruption, whose powers of independent thinking and action have been seriously damaged by years of political intimidation. The political structures which were evolved in the last seventeen years for governing through intimidation and violence, do not leave room for the checks and balances exercised by the expression of the people’s will. It would be all too easy to slip back into authoritarian rule, employing the overriding constitutional powers accorded to the President. But our style of governance is radically different. Our resolute commitment to democracy and good governance gives us the courage, to resolve democratically the enormous problems facing the country.

To that end, my Government has already adopted several measures in the short period of 4 1/2 months that have elapsed since mid-August when we assumed office after winning the Parliamentary Elections.

The Redemocratisation Process

The first task undertaken by my Government was the drastic scaling down of Emergency powers which had been flagrantly and unrepentantly abused to the detriment of the core values of freedom. In the words of a well-known scholar Eternal vigilance is the price of liberty. And yet, the plethora of Emergency Regulations which had developed into an impenetrable thicket, made it not only difficult but quite impossible for even basic democratic freedoms to be asserted, much less enjoyed, in so hostile and uncongenial an environment. Democratic safeguards, embodied in the normal laws of the country, were overridden with impunity by the accretion of Emergency Regulations which were promulgated frequently for the flimsiest of reasons.

All nations acknowledge the need for Emergency rule during periods of unusual turbulence and upheaval. What is of importance, however, in any society where the preservation of democratic ideals is accepted, is that departures from the normal laws and legal institutions, should always be regarded as the exception rather than the rule. But tragically, by the time my Government assumed office, the erosion of democratic values as a direct consequence of Emergency rule had assumed alarming proportions. The Emergency, extended indiscriminately for almost a decade, had come to be accepted by the community at large as normal, everyday phenomenon. Our capacity to protest had become blunted; a dissenting view was seldom heard; and our ability to feel and to express outrage was no longer capable of effective expression. No greater tragedy can befall a society which respects even the basic elements of the democratic tradition.

Emergency regulations were resorted to for the purpose of dealing with a miscellany of matters which included the adoption of children, the regulation of the salt industry, the felling of timber, the control of Finance Companies and the like.

Within ten days of assumption of office, my government took action to rescind the Emergency in all parts of the Republic other then those where there