GSP Plus extension conditional, says EU; Sri Lanka to lose the free ride

(June 22, 2010, Colombo - Lanka Polity) Press Office of the Delegation of the European Union to Sri Lanka and the Maldives issuing a press release said today that the reports on the GSP Plus concessions to Sri Lanka stating that the benefit would be offered to Sri Lanka unconditionally was not true.

The European Union says that the date of 15 August on which Sri Lanka would cease to benefit from GSP+ will not be extended unconditionally.

The European Union says that it has informed the Government of Sri Lanka of its readiness to propose to the Council of the European Union to maintain GSP plus preferences for Sri Lanka for a limited additional period, subject to a clear and written commitment by the Government of Sri Lanka to undertake a well defined number of human rights related actions, within a 6 months time frame beginning in July of this year, and to provide reassurances as to the sustainability of progress registered under the GSP plus dialogue.

The European Union says, “Only if a written commitment to this effect has been made by the Government of Sri Lanka, by 1 July 2010, would the European Commission put such a proposal to the Council of the European Union, without prejudice to the final decision.”


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Setting fire to Tamil silver screen in Sri Lanka

(June 20, 2010, Colombo - Lanka Polity) A fresh terrorist organization calling themselves ‘Democratic Tamil People’ sent warning letters to the cinemas in Northern and Eastern Provinces of Sri Lanka banning screening Indian Tamil movies in the cinemas anywhere in the two Tamil speaking Provinces.

Meanwhile, an unknown group believed to belong to the same ‘Democratic Tamil People’ set fire to a screen of a cinema in Eastern town Kaththankudi. The cinema was showing an Indian Tamil movie. Kaththnkudi police is investigating the incident. Noone has been arrested yet and no one would be as normally happens in these areas.

The action of the ‘Democratic Tamil People’ is believed a tit for tat for the boycott of IIFA award ceremony held in Sri Lanka by Indian Tamil cinema artists and technical staff. Some media said that the hitherto unknown ‘Democratic Tamil People’ had told in its notice that they do not want the Indian Tamil cinema artists that boycotted the Colombo IIFA. (Apawa Epa nam Apatath Epa)

Ordinary Sri Lankans, either Tamil or Sinhala speaking were not interested in IIFA and most of the people of the Northern and Eastern Provinces were not at least aware of an IIFA. The war-victimized Tamils of the Northern and Eastern Provinces have enough woes than IIFA to worry.

The terrorists that banned screening Tamil movies in Northern and Eastern Provinces are appeasing no Tamils but the government that incurred a massive loss both financially as well as in propaganda through IIFA.

Meanwhile, several managers of cinema halls in Colombo and other areas out of the Northern and Eastern Provinces said that they have not received any warning notices. Major market for Tamil movies in Sri Lanka is still in Colombo. The managers however, were shocked with the news and expected the authorities would provide protection to them.

A major Tamil cinema complex in Colombo is belonged to the family of a Sinhala cinema director whose footage hard copy of a movie glorifying war was recently stolen by unknown persons at a Colombo studio.

Sri Lankan cinema was highly contributed by South Indian cinema before 1983. Tamil artists directed Sinhala films and many Sinhala cinema songs that are still popular were created with immense contribution of Tamil artists and technicians.

In 1983, state-sponsored Sinhala racists set fire to many cinemas and a few studios that belonged to Tamils. Thirty-year war spared few cinemas in Northern and Eastern Provinces for the Democratic Tamil People’ terrorists to ban screening films. Sri Lankan cinema industry is almost collapsed.


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Sri Lankan workers to have one more holiday; the Victory Day

(June 19, 2010, Colombo - Lanka Polity) Sri Lanka is to have war victory celebrations every year on May 18 and the government will have to become the day another holiday.

Sri Lanka already has 25 public holidays and the number will increase to 26, if the victory celebration day is added to the list.

The victory celebrations in massive scale cannot be conducted without proclaiming the day a holiday at least to the city where the celebrations are held. Om the other hand, the celebrations will become a propaganda loss comparing to the massive expense for the programme if people will not watch it in television. Therefore, it will become another unavoidable holiday.

Too many holidays is considered a factor discouraging the foreign direct investment to the country.

In public sector, the employees enjoy nearly one third of the years either holidays or leaves. Meanwhile many public sector employees in already overstaffed institutes idle without specific duty


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What victory are we celebrating in Sri Lanka?

(June 18, 2010, Colombo - Lanka Polity) Sri Lanka celebrates the war victory marked by killing of Tamil rebel leader Velupillai Prabakaran on May 18, 2009 a year and a month later. The victory celebrations were postponed a month ago since the floods displaced around half a million people, a large number from Colombo itself.

Yesterday an ethnic Sinhala man was arrested by police for enlarging a photo of Velupillai Prabakaran. Police intelligence officials are now interrogating him to identify may be his mindset. It seems having a photo of Prabakaran in possession a sin if not an offence in post-war Sri Lanka.

It is not a bad idea giving another holiday to Sri Lankan workers. But, the government need to tackle the issue of a large number of employees especially in the public sector idling on working days as well.  

Even an year after the war, the only change perceivable in Sri Lanka is the relative peace of being free from frequent bomb explosions. Ethnic polities are still as much divided as they were in the war time.

No person with a sense can say that the country is in the path of development about which the government boasts. No serious rapid growth of investments and growth of tourists that will be effective to achieve the goal of being Asia's Wonder.

One thing happening in Sri Lanka is the development of infrastructure with the funds raised from the open financial market at relatively higher interest rates. Massive rackets of commissions and other malpractices haunt this 'development.'

The nation is entangling in a crisis of debt day by day.

The most crucial issue of Sri Lanka at the moment is the number of terms the President can hold the post and the successor of President Mahinda Rajapaksa, either his son or one of his powerful brothers.

We, the Sri Lankans, have got up late on Wednesday and in front of the television watching the victory parade lazily sipping tea.


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Sri Lanka further into the debt crisis

(June 16, 2010, Colombo - Lanka Polity) 'Sri Lanka government has plans to sell $275 million of dollar-denominated bonds locally this month to pay for maturing debt.

Three months ago, Sri Lanka failed to raise a targeted $100 million through a debt auction.

The Central Bank of Sri Lanka will issue $175 million of two-year debt and $100 million of three-year paper, the Central Bank of Sri Lanka said on its website.

Subscriptions for the so- called development bonds close on June 18.

The nation raised $92 million by selling development bonds through competitive bidding in March, and the central bank subsequently raised $8 million through placements that month.

Sri Lanka's public debt repayments and interest is amounting to 767 billion rupees this year. It is 44 percent of the overall budget expenditure of 1,780 billion rupees.

Last year government debt hit 4.1 trillion rupees. Of it, 1.8 trillion rupees was foreign debt, a 22 percent rise, according to Central Bank annual report: “The ratio of debt service to government revenue increased further to 117.5 percent from 90.5 percent.,” the report said. Total debt servicing rose by 39 percent to 825.7 billion rupees in 2009, including a huge interest payout of 309.7 billion rupees that comprised 26 percent of total expenditure.

World Bank Director for South Asia Ernesto May launching the World Bank’s South Asia Economic Update 2010 in Colombo last week noted: “South Asia has very high levels of public debt—over 60 percent of GDP for the region. As seen in Europe with markets focusing on highly indebted countries, markets will start penalising those with high debt.” He pointed out that Sri Lanka’s debt was the second highest in the region after the Maldives—increasing from 81 percent of GDP in 2008 to 86 percent in 2009.

Out of this massive debt services burden, 36.5 percent is for foreign debt. Sri Lanka should target investment led growth and minimize borrowings which could lead to a future debt crisis, former Malaysian prime minister, Mahathir Mohamed said. "Don't depend too much on loans, the better thing of course is to invite foreign investors to come in and create jobs and bring in capital into the country," Mohamed told reporters at a media briefing in Colombo.

Allocations for health and education were as low as 52 and 46 billion rupees respectively—a total of 10 billion rupees less than for 2009. The budget for 2009 was itself 12 billion rupees lower than the amount for 2008. The combined allocation for health and education this year is less than half of defence expenditure in 2010.

The government promised an IMF team in May that it would considerably reduce recurrent spending. It intends to cut government subsidies to the Ceylon Electricity Board, Petroleum Corporation, Central Transport Board, railways and postal services. Total losses in these sectors amount to 49 billion rupees and can only be reduced by axing jobs, cutting wages and increasing prices.

Meanwhile, the defence budget at 202 billion rupees ($US1.8 billion) or 21 percent of the total expenditure of 974 billion rupees allocated to government ministries. At a convention of public sector trade unions that are under Trade Union Confederation last week, Joseph Stalin Fernando, the national organizer of the trade union coalition argued that the government is increasing defense expenditure to suppress the workers' struggles.

However, the trade unions failed to gather the expected number of participants to the convention and some trade union leaders expressed wonder why the workers were so unresponsive in a time the government is breaking the promise of Rs. 2500 per month salary hike for public servants.

(Sources: World Socialist Website, Lanka Business Online)


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Sri Lanka regime's ugly game in between India and China

(June 14, 2010, Colombo - Lanka Polity) 'Though the Tiger is no more and Lankan Tamils are cowed, Indian Tamils and Diaspora Tamils together can still pose a formidable challenge to Colombo. And their capacity to do so will remain so long as the problems of the Lankan Tamils are unresolved."
-Thisaranee Gunasekara evaluating the outcome of the IIFA-2010 Bollywood award ceremony held in June in Colombo.

Sri Lanka President visited India following the IIFA debacle and the Hindustan Times had to report "The Pro-Tamil group's protest against visit of Sri Lankan president Mahenda Rajkapsa turned violent on Saturday (June 12) when suspected pro-tamil activists blasted railway tracks, just before a passenger train was to enter Perani railway station in Villupuram district, some 70 km south of Chennai in the wee hours."

This news creates a picture of a Tamil struggle in which the Sri Lankan part appears relatively peaceful amidst miserable conditions of the war-affected community while the Indian section looks getting more militant than before in addition to its successful lobby politics that made the IIFA a great disaster for Sinhala chauvinist Sri Lanka government.

Tamil struggle poses to envisage in a broader spectrum of a struggle of world Tamils for a state. Being the heart of the Tamil polity, the Tamil Nadu with its 70 million Tamils naturally becomes the epicenter of the new struggle.

In a time the capitalist world is facing its worst economic crisis in the history, it is natural that the struggles against the system may restructure aiming outcome amidst a possible world crisis.

India is a nation threatened by a number of nationalist struggles seeking restructuring of geo-politics. Therefore, due to clearly understandable reasons, India cannot give way to the rise of the new wave of Tamil nationalism in Tamil Nadu.

One way of curtailing the trend is to find a sustainable solution for the ethnic problem of Sri Lanka. The island nation is the melting pot of the Tamil nationalism.

Thisaranee Gunasekara says "In a speech to a group of businessmen, on the first anniversary of the defeating of the LTTE, (Sri Lanka Army Commander) Gen. Jayasuriya said that “it is up to the government and the people now to fund the root cause of the problem and give a proper solution… I believe in the end a proper solution is needed” (The Straits Times – 11.6.2010).

"Unfortunately his words are likely to be unheeded, if not scorned. The Rajapakses will not deliver a political solution, because they do not believe in the existence of an ethnic problem, as the President himself had stated, publicly, time and time again. Disbelieving in the existence of an ethnic problem, they, logically, do not see the need for a political solution."

However, The Hindu reported Union Home Minister P. Chidambaram said on Saturday that there are positive signals from Sri Lanka on finding an amicable and acceptable solution to the issue of Tamils, who are fighting for equal rights.

But Thisaranee Gunasekara contradicts this idea. She says "Not only will the Rajapakses not deliver a political solution; even the restoration of normalcy or a real improvement in the living conditions of the North-Eastern Tamils is unlikely to happen, except marginally and minimally. The fact that the 2010 budget sets aside Rs.201 billion for defence but only Rs.2 billon for resettlement demonstrates the very low priority accorded by the government to Tamil wellbeing. It also reveals the regime’s inability/unwillingness to see the nexus between development and security. Given such a militarist mindset, reconciliation is but a mirage, a delusion spun occasionally by the state media, for purposes of propaganda."

Thisaranee points out that Sri Lanka will swing like a pendulum between India and China to manage the situation and eventually the island nation can be the battleground of the cold war between the two super powers. But one point she forgets is that India is more important to China than Sri Lanka and another 1987-like scenario can re-emerge.

In 1987, J.R. Jayawardane, who was playing in between India and Western super powers keeping all its eggs in the West's basket was eventually betrayed to India by the West that he venerated and kept his all trusts. China never bothers about the ethnic problem of Sri Lanka. She will not wage war against India once India attempts to use its powers to solve the problem. The possibility of China advising Sri Lanka one day to give way to India is very high. In such context, it will be the end of the road for the game of the Rajapaksas.

Wihat is this game? It is none other than playing in others' soft corners permanently hoodwinking the world and sustaining the misery of the minorities of the island. Rajapaksas should be defeated in this game if Sri Lanka as well as the world polity needs to progress.

What Dr. Dayan Jayathilaka has to say is different. "When we antagonized India we could not win the war, but when we correctly managed relations with India, we won the war. If India had opposed us or not supported us, we may not have been able to win or withstand the Western moves to stop the war. There is a saying that there is no such thing as a free lunch. Every relationship is reciprocal. Sri Lanka has to reciprocate for India’s support," he says.

"We must bear in mind that we still need that support because, though the hot war has been won by us, a cold war continues against us in the global arena.

"We need India’s support to balance off those who are hostile to us or are influenced by the pro-Eelam trend in the Tamil Diaspora. India is our buffer with the USA. Delhi is under pressure to take a stand hostile to us, or to stop supporting us. That pressure comes from Tamil Nadu but not only from Tamil Nadu...from India’s civil society as well as some of India’s Western friends. If India stops supporting us, not even the Non Aligned Movement will defend us fully, because they take their cue from respected Third World states such as India." Dr. Dayan Jayathilaka adds.

In this context, the progressive elements of Sri Lanka must try their best to manage the conflicts as subtly as they can to achieve better results for the polity.

It should be understood that the attempts of a section of Sri Lankan business community and the left forces to mobilize people against India citing 'aggressive' nature of proposed Comprehensive Economic Partnership Agreement (CEPA) etc. are indirectly promoted by the ruling elite to maintain their chauvinist base of the politics. Progressive forces of the Lankan polity should work to broaden the purview of the polity to enhance their ability to grasp the better and sustainable outcome instead of narrow, quick popularity.


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Basilian neo-liberalism, Mahindian nationalism and high level Sovereign Rating Committee of Sri Lanka

(June 12, 2010, Colombo - Lanka Polity) Central Bank of Sri Lanka (CBSL) has initiated a programme to take the necessary steps to upgrade the country’s sovereign rating.

The significance of this move is that the government has moved further in the Basilian doctrine of neo-liberalism and it has appointed top officials of Indian company and and a local agent of a multi national consortium into this committee. This is a move against Mahindian nationalist and national economic policies that frequently denied Indian and Western multi national penetration of local economy.

Reportedly, this has annoyed local business leaders. After all, the two companies Nestle and IOC does nor or negligible very little to change Sri Lanka's performances according to these ratings, they point out.

“As announced in the Central Bank Road Map 2010 and beyond, the Central Bank of Sri Lanka (CBSL) will take the necessary steps to upgrade the country’s sovereign rating from the current B+ (stable)/B(positive) to an investment grade of BBB- or higher over the next four year period,” says the Central Bank.

Central Bank says that towards this end, a carefully designed, forward looking and effective strategy will be implemened with the participation and co-operation of the all stakeholders, country authorities, private sector business leaders, chambers and rating advisors.

Central Bank announces that it has now appointed the following high level Sovereign Rating Committee, which will make regular reviews on the developments of the economy and convey these improvements to the rating agencies through rating advisors to upgrade the country’s rating level.

Mr K G D D Dheerasinghe, Deputy Governor, CBSL (Chairman)

Mrs J Mampitiya, Assistant Governor, CBSL (Deputy Chairman)

Mr K D Ranasinghe, Chief Economist & Director of Economic Research, CBSL

Mr C J P Siriwardena, Superintendent of Public Debt, CBSL

Mr. U.R. Seneviratne, Deputy Secretary to the Treasury

Mr C N Wijayasekera, Additional Superintendent of Public Debt

Mr. Ashroff Omar, Chief Executive Officer, Brandix Lanka Ltd

Mr. David Saudan, Managing Director, Nestle Lanka PLC

Dr. Anura Ekanyake, Chairman, Ceylon Chamber of Commerce

Mr. Upali de Silva, Secretary General, Sri Lanka Banks’ Association

Mr. Dilith Jayaweera, Managing Director, Triad Advertising

Mr. K.R. Suresh Kumar, Managing Director, Lanka IOC Ltd





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