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Felony Rules.

Sweden, Jan. 23 -- One million people, including 400,000 children, are facing a food crisis in Sri Lanka, in the aftermath of the recent floods, according to media reports. The absolute majority of these potential victims would be from the Eastern and Central provinces. For many of the victims from the Eastern province, who weathered the Tsunami and survived the war, this will be the third devastation in just five years.

Sri Lanka has a Minister, a Ministry and a Centre for Disaster Management (all of which costing the tax-payer a tidy sum). But does she have a viable plan to manage this impending disaster? Or will that task be delegated, by omission, to non-governmental entities, while the state attends to matters which matter to it -such as building nine stupas in nine provinces to celebrate the victory of the Eelam War; or getting cheering squads ready for the Cricket World Cup; or trying to ensure that nothing prevents the holding of the 2013 Commonwealth Summit in Hambantota, Sri Lanka?

The state is also fully engrossed in the urgent task of evicting around half a million Lankan citizens from their dwellings in Colombo. They must be evicted fast, so that they are not around to vote, when the Colombo Municipal Council election is held next year. They must be evicted fast, so that the lands can be 'developed' and leased or sold, preferably to foreigners for wads of dollars.

"When crimes begin to pile up, they become invisible. When sufferings become unendurable, the cries are no longer heard" Bertold Brecht (When evil-doing comes like falling rain)

Last week, an attempt at summary eviction of low-income families in Borella had to be postponed because the citizens, who had been given just one day's notice, protested vehemently at the injustice of it all. Unfortunately this breather will be just that - a breather. The regime will be back, with armed soldiers and riot police, because it needs foreign exchange these lands can bring, not just to service the gargantuan debt but also to alleviate self-made problems - such as the felonious oil hedging deal.

The Hedging Deal: A Criminal Folly

The petroleum hedging deal is back in news, because the arbitration process has gone against us. Therefore Sri Lanka will have to pay a "colossal sum of US$ 261 million (nearly Rs. 29 billion) with interest to the three foreign banks that demand compensation from the Sri Lanka Petroleum Corporation (SLPC) regarding the controversial hedging deal, as efforts by the government at the arbitration panel in Singapore had failed. Petroleum Industries Minister Susil Premajayantha said yesterday that Sri Lanka had no other option but to pay the compensation to the three foreign banks in full with interest" (Daily Mirror -; emphasis mine).

This month the regime sold a prime piece of land located opposite the Galle Face promenade to a Hong Kong based company for US$125 million; another piece of prime land is to be sold to a Chinese company for US$500 million. That is US$625 million. Thanks to the fallout of the felonious hedging deal, the country will have to pay three foreign banks US$261million plus interest. So a sizeable segment of the money made from selling prime Colombo land to foreigners will be spent on compensating other foreigners. About 40% of the money earned by selling land, which is the patrimony of all Lankan people, will be spent on paying for the felonious deeds of a handful of Lankan decision makers.

The current Petroleum Minister, Susil Premjayanth, has admitted that there was "a basic flaw in the agreement that benefited only the banks" (ibid). He is right; the agreement was totally skewed, in favour of the banks. To compound this original sin, the arbitration process too seems to have been mishandled by the Lankan side: "Minister Premajayantha said he was not happy with the way the dispute on the hedging deal had been handled. 'By the time I took charge of the Petroleum Industries Ministry, the case had been already handed over to lawyers and fees had been paid. I had nothing to do in respect of the case,' Minister Premajayantha said" (ibid).

So the government will have to pay, money which could have been used to avert the food crisis facing 400,000 Lankan children or build houses for the displaced or to ensure better facilities to underprivileged schools or provide good quality Jaipur feet to civilian and military casualties of the war. Instead this gargantuan sum of money will go to enrich two foreign banks - because of a criminally flawed decision made by several Rajapaksas appointees.

When the hedging deal first became news, there were media reports about unethical dealings between the Chairman of the Ceylon Petroleum Corporation and two the foreign banks in whose favour the deal was structured. "Local bankers, unconnected to the deal, say foreign trips funded by foreign banks for CPC officials to learn about hedging were unethical. A senior banking industry official, who declined to be named, expressed the view that impropriety accusations in the hedging agreements entered into with SCB and CitiBank are valid. 'If it is a proper commercial transaction, you don't need to take the CPC chairman on foreign trips,' one official said" (IPS - 8.12.2008).

A responsible administration, an administration which cares about good governance, an administration which believes that development means developing the people would have initiated an impartial inquiry into the issue and instituted legal proceedings against those responsible. But that was done; nothing was done. Instead, the culprits have got away scot-free; some are still gracing the same positions they occupied at the time of the deal. It is the public that has to pay for their follies and crimes.

The Rajapaksa administration pursued Gen. Sarath Fonseka with vengeful intensity over a minor case of regulatory violation. When protests were made about the manner in which the war-winning Army Commander is being treated, the regime insisted that wrongdoers must be punished irrespective of their rank or station. Now is the time for the regime to act with identical severity towards those politicians and public officials responsible for the oil hedging deal, since their felonious deed is to cost the country millions of dollars. Will it? Or do the loft principles of probity and justice amount to nothing more than weapons to be used against political opponents, such as Gen. Sarath Fonseka? Are the supporters of the Rajapaksas allowed to cheat and rob with impunity, because they are supporters of the Rajapaksas?

The Rajapaksas may talk about good governance; but their record gives a diametrically opposite impression. There is even a minister for Good Governance; but the regime is acting deliberately and systematically to undermine good governance. Take, for instance, the persistent attempts by the rulers to un-fang the Bribery Commission: "Dealing another blow to the country's independent bribery and corruption investigative mechanism, 56 experienced investigation officers including the OIC attached to the Commission to investigate allegations of bribery or corruption, have been transferred overnight.. Although 56 new police personnel had been sent to the Bribery Commission they could not be appointed as investigative officers or given the responsibility of handling bribery and corruption inquiries as they had not gone through the proper recruitment procedure of the BC.. According to senior bribery officials this move would seriously affect future bribery investigations as policemen are seconded to the Commission based on a special recruitment procedure which includes an interview by a panel which includes the Commissioner and the Director General of the Bribery Commission... Another former senior officer said this is a further blow to the independence of the Bribery Commission... 'How can you expect an independent investigation against policemen involved in bribery and corruption from the police officers who are only appointed by the police department,' he asked" (Daily Mirror - 1.1.2011). In a state where felony is both widespread and acceptable, there is no place for a functioning Bribery Commission with experienced officers. And a state which has not lifted a finger to punish those politicians and bureaucrats who, in the pursuance of their own interests, dealt a crippling financial blow to the country cannot but be a felonious state.

Development or Underdevelopment?

'To the Manor Born' was one of the more popular British sitcoms of another age. A recent widowed woman belonging to an old established 'county family' was forced to sell her manor house (which had been in her family for several centuries) to pay for the debts her wastrel of a husband had accumulated. The manor is brought by an East End-born neue riche supermarket owner. The comedy was based on a real life trend which had been in existence in England and many parts of the world for hundreds of years: Aristocrats and other traditional landowners living beyond their means and selling family acreages to escape from tightening debt-traps. Is this to become the fate of Sri Lanka under the suzerainty of the Rajapaksas, those minor aristocrats from Hambantota?

The question cannot but obtrude given some of the recent trends. Land grabbing seems to form a major axis of the Rajapaksa development strategy; this land is then developed and sold to rich investors, mostly foreigners. This process is not limited to Colombo. Some months back, the inhabitants of a Ragamwela, traditional Sinhala village in the East (close to the potential tourist hotspot of Paanama) were hounded out by unidentified gunmen who torched their houses. In Kalpotiya, in the North Western province, another land-grabbing exercise is afoot, threatening the habitats and the livelihoods of local fishing communities. As M Aibu, a community leader in Kaplpitiya stated, "The tourism developers who got the permits and arrived here recently claims they are the owners of the land, they have the CCD, MOD, Tourist board and also from the AGA at Kalpitiya. So, who are we? Are we from any other country?" (Massive Scale Land and Sea-grabbing in Kalpititya - The Sunday Leader - 16.1.2011).

In the 1990's, the UNDP publicly acknowledged the existence of a reality that millions of people had experienced for decades. It officially unveiled a number of anti-development growth categories. These include growth which is achieved at the cost of environmental degradation and growth which is achieved by undermining of local communities: Futureless Growth and Rootless Growth.

The set of beliefs which placed economic growth at the epicentre of a country's development process has been disproven time and time again, and discarded by forward-thinking policy makers and politicians in favour of more holistic approaches. Unfortunately, the Rajapaksas' seem to have placed their faith on the discredited and disproven 'growth at any cost' strategy. And the cost of this anti-developmental economics will have to be borne by the country for generations to come.

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Publication:Asian Tribune (India)
Geographic Code:9SRIL
Date:Jan 23, 2011
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