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World Affairs








Budget  debate: Least focus on economy

Ravi Karunanayake, Ranjith Siyambalapitiya,
Sunil Handunnetti and Nimal Siripala de Silva

By Dilrukshi Handunnetti
Our Lobby Correspondent

The Appropriation Bill is no longer serious business. Nor is the associated parliamentary debate for there is an absolute lack of comprehensive debating on policies or programmes. At the end of a 22-day debate, besides the hot air, not even a legislator is left with a clear picture of the state of Sri Lanka's economy.

Such is the drab and dullness of it all, it is a welcome change when at least single issues emerge during the traditional debate, and this happened in a big way on Monday, when the Finance Ministry vote was taken - the hedging deal holding center stage.

Easy way out

Opening the final day's debate was UNP's Kabir Hashim who thought that the government was taking the easy way out by vilifying the removed CPC Chairman, Asantha de Mel and making a sacrificial lamb out of Petroleum Minister A.H.M. Fowzie, while allowing the brains behind the dubious deal, Central Bank Governor Nivard Cabraal to go scot free.

"The others too are certainly liable. But what about the person who caused the state to lose US $ 400 million through imprudent decisions which were sold to the cabinet by even holding a slide show to brainwash them? If nobody understood the issue, Cabraal sure did, and that makes him certainly culpable," charged Hashim.

The MP warned that it was Cabraal who wanted to expedite the deal, which naturally led the CPC Chairman to stand convinced that Cabraal would know what he passionately proposed.

Then he asked for the impossible - accountability and acceptance of responsibility. "Following the terror attacks in Mumbai, Minister Shivraj Patil and National Defence Advisor, M. Narayanan accepted responsibility and resigned. "Guess we will never witness such honorable conduct," Hashim lamented.

Instead of dealing with the policy issue raised by Hashim, Deputy Finance Minister Ranjith Siyambalapitiya first parroted out statistics to show that Sri Lanka indeed was recording considerable growth despite the global economic downturn, and next mounted an attack on the UNP's economic blueprint, Regaining Sri Lanka.

Heavy taxes

He had an interesting explanation to give with regard to the heavy taxation that is now imposed on the people. "Yes there is taxation. But these taxes once gain go back to the people through projects and programmes. You have no concept of how an economy works," he said.

What was more, Siyambalapitiya lambasted the opposition parties that were poised to vote against the budget that evening that 'only LTTE sympathisers could vote against the budget, specially one that was aimed at building a national economy complete with import substitution.'

Taking the government to the cleaners was JVP's Sunil Handunnetti. In a blistering attack, Handunnetti noted it was a tragedy that there was a finance minister for the District of Kegalle, ridiculing Siyambalapitiya for failing to meet arguments that are of national importance.

Taking his cue from Hashim, the Marxist critiqued the hedging deal for absolute lack of financial prudence and said it was a gamble that would cost the economy that is already in recession, heavily.

"I am stupefied that the Central Bank Governor had advocated a venture that is now going to make only losses. Who told him to gamble, though his name and his companies were onetime linked to other gambles?" he demanded, reminding the House of Cabraal's connection to the illegal GoldQuest Pyramid Scheme.

Moving on to other issues, he thundered that A.A. Wijepala, the former Inland Revenue chief had been appointed to head another vital financial institute.


"What is this fascination? He is suspected of having been party to South Asia's largest tax fraud, and he gets rewarded. Not forgetting your reluctance to remove him immediately when the VAT scam was being probed. Also not forgetting that vital files connected with the VAT scam went missing while he remained at the top slot at the Inland Revenue Department," sniped Handunnetti.

Following him was another firebrand parliamentarian, UNP's Dayasiri Jayasekera. Speaking more on the collapse of the local industries ranging from kurakkan making to livestock development, he said it was a joke to hear the UPFA speak of economic management and a prosperous Sri Lanka.

"There is prosperity in some quarters, and that's when you count the number of cabinet ministers and their fat bellies," parried Jayasekera, instantly getting a few government types worked up, nevertheless instantly proving Jayasekera's theory of potbellied government politicians.

 He warned that the government had dabbled in massive foreign borrowing to keep the dollar rate steady, an artificial act that would eventually result in a further economic downturn. "We have hedged and we are now in peril. We have borrowed at high commercial rates and promised bullet payments, we have mismanaged, wasted and invested imprudently, as in the case of Rs. 6 billion that will be voted for the failed Mihin Lanka project," he noted.

A lecture

A man who now regularly sounds amnesiac is Minister of Consumer Affairs, Bandula Gunawardena. He was on his feet next, giving the House a complete lecture on the global economic downturn, its impact on other nations and how to have an umbrella when there is rain, in economic parlance.

If Gunawardena said nothing new about the rising cost of living, high prices of essentials and why it is so difficult to bring the prices down, the reasons for this failure emerged from no other mouth but that of Wimal Weerawansa, now safely in the government fold, for all purposes that matter.

Weerawansa made his customary speech of praising the soldiers who sweat and toil to defeat terrorism for which the people should bear all the pains with dignity and gratitude.

"This is a historic moment in Sri Lankan history. What was said to be unachievable is being gradually achieved. There are difficulties, but bear them with dignity for others die in the north to save our future," was Weerawansa's clarion call.

As discussions over a broader coalition among opposition MPs were being mooted, there stood Education Minister Susil Premajayanth calling for all opposition parties and individual members to lend a hand to the government to defeat terror by forming a coalition with the government itself.

Common agenda

"We can create a common agenda. Actually we do have a common agenda which is to defeat separatism. I was touched by the many speeches maid by some UNP legislators during the Defence Ministry vote, especially the remarks made by Lakshman Seneviratne. I see true patriotism among many. Join us to make it a national victory and then we could use the same forum to tackle our economic problems which are no doubt causing serious concerns," Premajayanth invited.

Ridiculing the government's economic thrust was UNP's Ravi Karunanayake who had his own theory of the UPFA's budgeting. He noted that there was a Thoppigala budget the year before and this time around, a Pooneryn budget.

"There are catchy slogans, often connected to the military victories which are feats of the soldiers and not of the government. But you latch your wagon to their successes and seek cover behind that, for you have no other recourse," he remarked.

He noted that a 9.4% export drop was recorded in Sri Lanka and said it was the misfortune of a nation to have a Chief Government Whip who could boldly state that while America was in recession, Sri Lanka would feel no impact. "That's the status of this government," he sniped, claiming that if the government could curtail its wasteful expenditure such as the Rs. 2.4 million spent on the tamasha named Deyata Kirula, people could have been cushioned a little better.


Concluding the debate was Leader of the House, Nimal Siripala de Silva who smugly reminded the House that the UNP was in the habit of coming up with little ploys during each budget debate only to fall flat on their collective faces.

"Last year, an effort to buy MPs was launched. It was an operation that failed. Not like our operations. Just look at the war effort - we are victorious. Likewise, wait till the vote is taken today, we will again emerge victorious with a better majority than the one recorded last year," noted de Silva who spoke nothing about the status of the economy but lots about the political battle that is once again threatening to spill over.

Given the hot air generated and the deep, divisive politics in the House, the coming year could prove only more difficult. And there is no hope of any emerging consensus, an improved economy, a stronger opposition or a government that would act responsibly.

Taxes paid by some NGOs

Non-Governmental Organisation Allocated amount
World Vision Lanka (in terms of 30%) 5,774,525.00
World Vision Lanka (in terms of 3%) 19,248,918.00
Consortium of Humanitarian Agencies 17,520.00
Humidica International 735,532.95
National Peace Council 86,985.00
Seva Lanka Foundation 559,649.19

Income and expenditure of NGOs

S No.    Institute Income Expenditure
1 Consortium of Humanitarian Agencies 268,180,187.00 257,118,137.00
2 Lanka Jathika Sarvodaya Shramadana Sangamaya 1,228,744,941.00 682,621,900.00
3 World Vision Lanka Institute 4,993,086,785.00 4,364,068,733.00
4 Forut Institute 844,175,991.00 777,086,737.00
5 Humidica International 653,761,985.00 613,388,600.00
6 Red Cross Society 91,526,942.00 85,998,703.00
7 Sri Lanka Red Cross 31,552,909.00 14,166,749.00
8 Tarades Homes 362,551,148.00 513,188,646.00
9 Stromme Foundation 502,540,399.00 292,576,223.00
10 National Peace Council 69,614,073.00 63,066,054.00
11 Tamil Rehabilitation Organisation 1,997,476,54.00 1,997,502,468.00
12 Seva Lanka Foundation 2,495,519,620.00 2,400,062,780.00
13 Foundation for Coexistence  142,532,089.00 102,856,173.00
14 Save the Children 2005 1,159,253,600.00 1,019,028,400.00
     Save the Children 2006 3,288,687,600.00 2,925,212,200.00
15 Christian Children's Fund 2005 105,331,814.00 37,205,012.00
    Christian Children's Fund 2006 70,803,908.00 66,138,739.00
16 Oxfam Institute 2006 1,804,175,357.00 1,765,139,360.00
17 Hammer the Forum 31.03.2006 31,552,910.00 14,166,749.00
  20,141,068,812.00 17,974,093,841.00

NGOs taken to the cleaners

Chairman, Select Committee of Parliament for Investigation of the Operations of Non-Governmental Organisations and their Impact, Vijitha Herath took some of the NGOs to the cleaners when he presented the interim report to parliament on December 8.

Herath observed that a large number of NGOs and INGOs functioned in violation of state policy and in contravention of the laws, besides which some of the organisations have engaged in projects activities in fields that are unnecessarily threatening to defence and demonstrated unwanted interference in certain fields such as education.

 Further, he told parliament that some operated in the north east, directly or indirectly assisting the LTTE while some have independently entered into agreements with RADA.

Huge difference

"Some have contracted to build thousands of houses but built less than 20% in certain cases," he charged.

 The Committee Chairman further observed that some agreements and functions were directly threatening Sri Lanka's status as a sovereign state while most lacked transparent accounting with funds being used for purposes other than those declared.

He said the committee proposed the introduction of a new act to administer and monitor all NGOs and INGOs operating in Sri Lanka, and until that is achieved to move urgent amendments to the existing laws.

"There is no provision to ban NGOs when acting in contravention of their mandates," he noted, calling for the appointment of a special committee to monitor the activates of NGOs for the time being and to remain answerable to parliament.

The interim report too sought to highlight some of the general observations of Herath.

The report recorded that post tsunami, many local and foreign NGOs began operating in Sri Lanka though most of their staff lacked prior training for emergency situations of disaster engaged in relief and rehabilitation at that time.

Interestingly, it quoted Executive Director of RADA, Shanthi Fernando having stated, "even though 59 non-governmental organisations signed memoranda of understanding with RADA to build 65,782 houses for those affected by the tsunami, only 3,270 houses have been completed so far."

It noted that even the executive director of the Foundation for Co-existence when summoned before the Committee of Inquiry admitted sans argument that the NGO sector in Sri Lanka did not follow a proper procedure and many shortcomings existed.


The report noted that most of the NGOs active in conflict resolution and peace building have embarked on this process by driving the fundamental attitude that "public sector institutions are inefficient" into the minds of people. 

The committee observed, by way of example, that the Berghoff Foundation, a German organisation invited to help build peace has ended up getting involved in internal state policies.

"We express our serious concern over the permission granted to the two foreigners, namely Eric Solheim and Dr. Nobert Ropers to issue instructions or accept them and to act upon them in Sri Lanka and organise or discuss modalities relating to a European trip for a terrorist organisation."

 The committee noted the said foundation hesitated to appear before the Select Committee and attempted to exert international pressure on the committee.

It adds: "The Berghoff Foundation sought international diplomatic intervention by making submissions with a view to discrediting and removing this Select Committee and this is a grave intervention made to the carrying out of powers vested with the Members of Parliament who have been elected for the internal matters of the country."

As for International Alert, an organisation that was banned for working with the rebels of Sierra Leone, had functioned here in a way that abetted separatism.


It adds: "International Alert has published a map showing half the country as belonging to Tamils. In this map they have marked a large area of land in the central hills and in the south as Tamil areas.  This map is even larger than the map prepared by the LTTE."

Further, the copy adds that the Ministry of Defence had received credible intelligence reports with regard to the activities of M.S.F. - France (Medicins Sans Frontiers), M.S.F. - Spain (Medicins Sans Frontiers) not registered, M.D.M. - France (Medico du Monde) and Doctors of the World - (USA).

For example, it adds: "At a health education project in Sampur, Medico Del Munde, MDM (Spain) had issued a certificate to one R.S. Seetha who participated at the event on voluntary basis, with the emblems of the Government of Sri Lanka and the LTTE which carried the signatures of Dr. Prop Coll - chief of the project and Dr. Wannan - Medical Services, Paddalipuram.  These activities reveal how simply these non governmental organisations have acted regarding the sovereignty, unity and the territorial integrity of Sri Lanka."

The committee reported an entry of a non-governmental organisation to the police, the main arm of security in Sri Lanka. In terms of a Memorandum of Understanding entered into by Transparency International based in Germany with Norad, a Norwegian organisation, a project had been carried out to look into the functioning of the Police Department of Sri Lanka with an aid package of US $ 79,000 from Norad and a report titled "The Police of Sri Lanka" had been presented.

"The TISL report contains a chapter on the corruption and frauds in the Police Department and this was directly connected to national security when there are so many institutions itself is a testimony to the fact that they are constantly on the watch to find an opportunity to intervene in the sovereignty and integrity of the country."

Tiger connections

On ZOA Refugee Care Netherlands, the report noted: "A letter sent in May 2005 by a project Manager of ZOA addressed to an LTTE member named T. Roshanthan inviting him to participate in a communication and leadership programme, which letter was found at Jeewananda camp and which showed that an office belonging to ZOA was situated in Thangavelayuthapuram was also submitted to the committee. The evidence of the Senior Superintendent of Police revealed that 400 houses had been constructed by ZOA and World Vision and these houses have been distributed among mahavir families."  

It faulted the Redd Barna organisation for having carried out a resettlement programme of Tamil people from Vavuniya in the upcountry areas in 1985 with SARVODAYA operating in Sri Lanka with the objective of changing the ethnic composition in the Wanni area.

As for the Sri Lanka Kolpin Society, it added that information was available to the effect that it had provided the LTTE with funds during 1996-1999.  "Although the time of taking legal action had expired when the information was received, it has been reported that the incidents reported were true."


Chunks were dedicated to the activities of the Tamil Rehabilitation Organisation (TRO).

The report noted that the TRO which operates in uncleared areas controlled by the LTTE was suspect of having assisted the LTTE with funds for procurement of weapons. 

"TRO had received US $ 10 million for post-tsunami activities from the USA alone by 2006.  The total amount of aid received during the period concerned was estimated to be Rs. 2.2 billion.  It is reported that in the month of August this year alone, the organisation and its affiliates in the north and east have received Rs. 60 million. 

"Most of these funds have been from the state of Maryland of the USA and the American authorities have also investigated whether part of this money has been channeled to buy weapons for the LTTE.  As a result, action was taken to ban the organisation in the United States of America."

The committee also took cognisance of the fact that Save the Children Sri Lanka "is an organisation that has aided the LTTE immensely."

It added: "This organisation had given financial aid amounting to Rs. 50 million to the TRO for 12 projects.  Save the Children has given evidence before the committee and said that those projects had run as elementary school projects and even after spending Rs. 30 million, only one pre school had been constructed, and the TRO had informed them that the remaining Rs. 30 million could not be returned, a fact that proves that TRO was handling their finances."


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