Another aspect of the crisis

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It is not correct to perceive Sri Lanka’s balance of payments crisis as a sole outcome of the inadequacies in the country’s economic and monetary management. The rampant corruption has been a major factor of it. There was no desirable environment in the country conducive to maintaining proper financial management. 

Since the establishment of a presidential system of governance by the 1978 Constitution placing the President, the head of the State above the law, plunder of public property assumed a regular feature of the system of governance. Since then, corruption has become an uncontrollable and overwhelming menace. The failure of the State, including the balance of payments crisis, can be described as a dreadful consequence of the plunder of public property carried out by the rulers.


Vehicle mania

The provision of vehicles on a tax-free basis to Members of Parliament and later to Government officials can be considered as the forerunner of the procession of plunder of public properties. It can also be considered as a ransom offered to the MPs and Government officials by the Head of State to obtain their support for his agenda of corrupt and arbitrary programs. This corrupt system has led to create a situation in which all Members of Parliament and high-ranking Government officials were made loyal and obedient to the Head of State regardless of party affiliation. 

The price paid by Sri Lanka to maintain this corrupt system which appears superficially as an innocent system, is enormous. The number of vehicles provided to Government officials on a duty-free basis during the five years from 2010 to 2015 alone was 38,000. The value of tax revenue deprived to the Government in consequence of it was Rs. 143 billion which is almost three times the total amount spent on the Moragahakanda project, cost of which was Rs. 48.14 billion only. The 38, 000 vehicles had been imported for the use of high-ranking Government officials and not for politicians; if the CIF price of each vehicle is estimated at $ 30,000, the cost incurred in importing them will amount to $ 1.14 billion. 

This corrupt system depleted the Government revenue and increased the country’s import bill. It acted as an important factor in exacerbating the balance of payments crisis. This system quickly became a means of displaying snobbish extravagance and arrogance of official power. The political leaders as well as high ranking Government officials refused to use a vehicle used by others, no matter how good it was, and always utilised a brand-new vehicle. 

The market value of an official vehicle used by a super grade Government official was over Rs. 30 million. In 2016, the market value of a car imported for the use of ministers was 70 million. Two bullet proof vehicles were imported for the use of President Sirisena and the price of each was Rs. 59 million. This is an ugly and corrupt practice not to be found in any other democratic country. The Sweden Parliament has only four vehicles. In Britain, only the Prime Minister and the Leader of the Opposition are entitled to an official vehicle. 

How much money has been spent just to maintain this corrupt and wasteful vehicle system in Sri Lanka? How big a burden has it placed on the current crisis facing the country? The amount allocated for maintaining a child in a government orphanage is only Rs. 20 per day. The price of the bullet proof car used by the President is Rs. 59 million. This helps understand the true shape of the crisis that has engulfed Sri Lanka.


The role of JR

The bulk of the booty of the plunder made in different forms by presidential regimes which came to power from time to time often flowed into the pocket of the incumbent presidents. The President is the custodian of all public property in the country. The President also possesses the power to sell, lease or awarding them to any one as per his wish. Since the President stands above the law, there is no possibility of enforcing the law against him for the wrongs he commits in this regard. Although this is the accepted view held even by the judiciary of the country, I am of the view that, in terms of the Assets and Liabilities Act, even the President does not have the protection of immunity in the matters of illicit acquisition of assets. An investigation can be initiated and pursued against a president who has acquired assets by undue means even when he is holding the office.


Considering the enormous power and legal immunity enjoyed by presidents over public property, all presidents of Sri Lanka can be considered as those who have more or less benefited from the public property which were under their custody. J.R. Jayewardene should go down in the annals of history as an educated President who had introduced a system of corrupt, rowdiest system of administration to Sri Lanka. Perhaps he might not have foreseen what would happen to the country when the ruling power falls into the hands of a rowdy in the true sense of the word. 

My explanation to the question as to why a leader of the calibre of President Jayewardene had deliberately introduced such a corrupt and boorish system to the country is as follows; Napoleon was the hero of President Jayewardene. Napoleon employed a mercenary force to build a big empire. He allowed the occupying forces to 

plunder the wealth of the cities they seized. The opportunity to plunder the wealth of the conquered cities served as the most important factor influencing the militant spirit of Napoleon’s army. President Jayewardene employed the same methodology used by his hero for his mercenary army in respect of his MPs and government officials. He may have believed that the richer his group of MPs become, the more they would work to protect his power forever. He dreamed of a government that would continue to be in power for a long period like Singapore and Malaysia. He was by no means a leader who believed in democratic values. He pursued a policy of crushing the principle that public representatives and public officials should not transact business with the government, which is acknowledged as the number one principle ought to be defended in a democratic political system. Until he came to power this policy was strongly defended in the political sphere in Sri Lanka.

It is not easy to reverse a good policy which had been rooted in the political system, immediately. Although he opened the floodgates for his MPs to transact business with the government, the MPs might have had some apprehensions initially to enter upon this ugly path. In this backdrop, President Jayewardene exchanged 50 acres 

of barren coconut land owned by him for fertile coconut land belonging to the Land Reforms Commission probably to set an example for the MPs who were apprehensive. However, it soon became a matter of large-scale acquisition of valuable land owned by the Land Reforms Commission at nominal prices by the MPs of the ruling party and government officials affiliated to the Government. 

In addition, President Jayewardene allowed his MPs to act as government contractors and licensed businessmen. 

He knew it was contrary to the law. But he did not change the rules. Instead, he prevented law being enforced against the MPs who used to do business with the government. Here is an illustration of President Jayewardene’s true image on the subject of corruption. Following allegations of corruption against government Ministers and MPs, President Jayewardene was compelled to appoint a commission of inquiry headed by Supreme Court Judge Colin Thome in March 1986to investigate the allegations. 

The commission received a large number of complaints; there were a number of complaints against Cabinet Ministers also. At the end of September 1987, he abolished the Commission without giving any reason while the Commission was in progress. By the time the Commission was abolished, it had received 1973 complaints of which investigations of 634 had been completed. But none of them whose allegations had been substantiated were prosecuted. 


Emergence of a predatory system

The system of plundering public property 

of the country by the presidents who came to power in Sri Lanka, with the support of ruling party MPs was established and consolidated by using the methodology initiated by President Jayewardene. President Jayewardene converted the “Vaijayantha” house and land (the parental house of JR) situated near Vihara Maha Devi Udyanaya, Colombo, which his father had sold to China to construct a building for Chinese embassy, into a cultural centre that bears his name at the expense of the Government.  Following the example of President J.R. Jayewardene, President Ran-asinghe Premadasa built a museum in memory of his grandfather at Hegalle, Kosgoda at the expense of the Government. Thereafter, Pre-sident Chandrika acquired a valuable piece of land at Stanley Wije-sundara Mawatha, Colombo 7, for Vijaya Kumaratunga Foundation and also, she got a valuable piece of land at Madiwala worth around Rs. 350 million written in her name at the time of her retirement. Perhaps, she might have done this following the example set by President Jayewardene. However, she was unable to retain the land due to a lawsuit filed against her for her misdemeanour. 

Perhaps, it may be following the actions of previous presidents that the President Mahinda Rajapaksa set up a museum at Medamulana in memory of his parents at the expense of the Government, and later President Sirisena acquired a valuable mansion, which was built by combining two official government residences. How big is the cost incurred in this way alone by Sri Lanka for maintaining the pomp of presidents who have ruled the country?

The privatisation programs implemented in Sri Lanka have become an important source of ill-gotten wealth for the Head of State and his cronies. The radio frequencies of a country constitute an important source of income for that country. The frequencies used for radio and television broadcasting are considered to be one of the most valuable and limited resources belonging to the public. In other countries, broadcasting licenses are issued to the highest bidder according to a competitive system. There are more than 34 radio and television stations in Sri Lanka, but all except one or two of them have obtained licenses in an insidious and corrupt manner. It was one of the ways in which some presidents have made money after J.R. Jayewardene. 

There is always a big price to be paid to obtain a license. Under this system the big price at which the frequencies were sold went into the pocket of the political leader while only a nominal license fee was paid to the government treasury. The amount of revenue lost by the treasury in this sphere alone could have been huge. Also, due to the policy of issuing licenses for sale of liquor, sand and rubble, directly or indirectly, to the Members of Parliament, the treasury received only a nominal revenue, not the maximum revenue that could have been earned from the licenses issued for such purposes. The number of liquor licenses issued through MPs during the regime of President Chandrika was more than 1,000.

The development schemes pursued on foreign aid or foreign loans were another popular way used by political leaders to earn wealth in undue manner. Later, a number of development schemes which were of no much significance to the country, but had been exclusively designed to enable political leaders to generate revenue on a large scale in undue manner came to the fore. The funds required for them were obtained from financial institutions which grant loans on a commercial basis. High interest rates had to be paid for such loans. These loans also had a devastating effect on the balance of payments crisis. The fall in the share of export earnings by about 50% over a long period of time also served as an additional factor exacerbating the balance of payments crisis. 

The emergence of a system of governance with the Head of State placed above the law, the abuse of power by the Head of State with his/her followers to gain ill-gotten wealth, and this corrupt situation becoming a malignant cancer overwhelming and debilitating the state and its system of institutions which were supposed to ensure sound economic management can be said to have reduced the Government’s revenue and exacerbated the country’s foreign debt problem and made the country a failed and bankrupt State. In this context, the Auditor General must explain to the country as to how he had overlooked the predatory role played by presidents and MPs by misappropriating public property for their personal gain when they were in their temporary custody. 



Apart from finding a solution for the balance of payments problem, it is necessary that the powers enjoyed by the Head of State (President) to act arbitrarily and plunder the country’s public property with his political allies and cronies while staying above the law, should be abolished if Sri Lanka is to be rescued from its current predicament and make the corrective measures introduced to overcome the problem, lasting solutions. To do that, it is essential that the presidential system must be reformed to bring the President under the rule of law. This could only be done by making reforms that will grant the judiciary the complete power of review which will enable the judiciary to intervene in the elimination of corruption that has plagued the State.  

In other words, by abolishing the presidential system and effecting reforms that would lead to restoring the parliamentary system of governance and eliminating the degeneration that has taken place in the State. Since national unity is an indispensable condition for overcoming this crisis, nation building should be made a key component of the agenda of overcoming this crisis. The Parliament must be held responsible for the current unfortunate situation in the country and for the fault of allowing the State administration to continue as a consistent process of the plunder of public property for a long time. 

Therefore, in order to achieve the objectives of introducing reforms, the new constitution should be drafted not by Parliament but by a Constitutional Council consisting of people’s representatives.

courtesy Daily FT

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Disclaimer: Another aspect of the crisis - Views expressed by writers in this section are their own and do not necessarily reflect point-of-view

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