By Suranimala

With nominations for the December 5 General Election concluded yesterday, it is all systems go for an all out battle with no quarter given and none asked.

S. B. back with a vengeance

Following the stinging comeback last week by Dissanayake on television after his house was shown for public viewing, the president's one time blue eyed boy really put the cat among the canaries on Thursday with a devastating letter focusing on a wide range of what he has termed 'questionable' deals involving the presidential secretariat and the finance ministry.

Ironically, almost every one of the shady deals Dissanayake has cited in his missile is what this newspaper has highlighted with documentary evidence over the last several years.

But now with Dissanayake himself placing these issues before the people, having had a bird's eye view of the goings on in the PA government, it will undoubtedly compel both President Kumaratunga and Minister Mangala Samaraweera to not only give in equal measure but also defend their roles in the deals focused on.

Thus what Dissanayake has effectively done is made corruption an issue at this election, linking it up in the process to the overall failure of the government in economic management.

A case of kiss and tell

In fact statements made in parliament by none other than Anura Bandaranaike on the Thawakkal case and the Evans international deal where the government had to pay some Rs. 250 million to the company for reneging on the contract for the development of Fort after the Central Bank bombing despite the chairman of that company no less in writing casting aspersions on the president are to be printed in book form and distributed island-wide in the run up to the election.

Thus, what the PA rebels are planning to do is set the agenda for the election with the failure of the president and Minister Samaraweera to respond to the charges interpreted as an acceptance of their truth.

To make matters worse, in a classic case of kiss and tell, allegations of corruption made by the president against her own ministers like Anuruddha Ratwatte and Nimal Siripala de Silva are now placed on public record with no denial forthcoming from the president.

It was not many moons ago that The Sunday Leader highlighted president Kumaratunga's statement to an IMF delegation comprising local representative Nadeem Ul Haq and Jeremy Carter from Washington in the presence of then Industrial Development Minister G. L. Peiris, that Ratwatte was the most corrupt among her ministers.

It is pertinent to note that leave alone Professor Peiris, even the IMF delegates have not denied the fact, President Kumaratunga did make the statement in question.

On that occasion the president reportedly said if Prof. Peiris or she handled the Ceylon Electricity Board and the Ceylon Petroleum Corporations, enormous monies could have been saved by cutting down on corruption.

But now it is Professor Peiris who is subject to such allegations while Ratwatte continues in his own merry way as a minister with not so much as a public murmur from the president.

And an irate professor last week related to the UNP leadership at Opposition Leader Ranil Wickremesinghe's officials residence that the president who praised him for his honesty before an IMF delegation was today levelling charges at him while promoting the very persons she accused of corruption.

Referring to an example in the Telecommunication Ministry, Professor Peiris told the UNP hierarchy, he had recently raised with the president the prudence of having Lalith de Mel as its chairman only to be told it was necessary to have him to control the minister.

The tongue running ahead of the brain

The president alleged, Minister Nimal Siripala de Silva was corrupt and therefore it was important to keep Lalith de Mel in the post to monitor the minister, Professor Peiris told the UNPers. In fact the president who is noted for allowing her tongue to run ahead of the brain made a similar allegation when she met former Colombo District MP, Bandula Gunawardene after the crossover in a bid to woo him back to the fold.

On that occasion, Gunawardene had related the circumstances leading to the economic crisis confronting the country and asked how the president could justify the appointment of Ratwatte to the 20 member cabinet given her own allegations against the minister. "Is this the honest government we promised the people" he questioned and the president by way of response had said while she agreed with the member's sentiments, there was nothing else she could do due to her political predicament.

Said the president: "We are alike Bandula. All these problems can be sorted out if we can get together. Let's go to the beach, have a drink and talk, and sort all these problems."

The underlying message the rebels are thereby conveying to the electorate is that President Kumaratunga, for all her posturing, is only playing lip service to fighting corruption and is instead actively condoning corruption by appointing persons whom she believes to be corrupt as ministers.

Ronnie - A friend with all the luck

With that also goes the message that Kumaratunga's words mean nothing and should not be believed, for what she preaches is not what is practised.

On that note, the PA rebels are taking the battle right to the presidential doorstep with a view to drawing her and Samaraweera into battle, thereby setting the stage for an impeachment after the December 5 election.

It is with the same objective that UNP Assistant Leader Gamini Athukorale on Thursday, handed over a complaint to the Bribery Commission calling for an investigation into the activities of president's friend Ronnie Peiris and the patronage extended, if any, by the chief executive.

The PA for its part realises the odds are heavily stacked against it and are hoping to deflect the effect of the continuing cross-overs by attracting high profile personalities to the PA platform.

Apart from the mayors of Galle, Matara, a, Provincial Minister from the North Central Province, P. Dissanayake, Chief Minister of the Uva Province, Samaraweera Weerawanni, the PA big wigs who have joined the Untied National Front to face the hustings are former Ministers and MPs S. B. Dissanayake, G. L. Peiris, Mahinda Wijesekera, Wijepala Mendis, Lakshman Kiriella, Nandimithra Ekanayake, Ediriweera Premaratne, Arumugam Thondaman, Muthu Sivalingam, R. Yogarajan, Bandula Gunawardene, Parakrama Gunawardene, J. Wijekoon and Ananda Moonesinghe, not to mention Rauf Hakeem and his team.

The PA's counter has been to attract the likes of Arjuna Ranatunga and Susanthika Jayasinghe but the latter case backfired badly.

The former cricket captain of course hails from a traditional SLFP family with his father, a former minister and brother a provincial council minister making it a foregone conclusion, Ranatunga will hitch his tent to the PA.

Ironically however, while Ranatunga decided to throw his hat into the ring after retirement, it was the former cricket captain himself who sought to bring to an abrupt end the athletic career of the Olympic Bronze Medalist by attempting to lure Susanthika into the PA camp albeit without much success.

Initially while Ranatunga sounded out Susanthika with a view to using her as a weapon against S. B. Dissanayake, it was Prime Minister Ratnasiri Wickramanayake who invited her for a chat and offered her a seat from the Kalutara district.

While Susanthika out of courtesy did not reject the offer off hand, she used the opportunity to raise impediments placed in the path of her husband with regard to a business project, which the prime minister said he would look into.

Telling the PA off

Hardly 48 hours lapsed after this meeting when Director Presidential Security Division, Nihal Karunaratne called on Susanthika with yet another offer, this time from the president.

What the president requested was for Susanthika to come on the PA national list and travel the country addressing public rallies obviously to target S. B. Dissanayake. Once again Susanthika was non committal, not wanting to be a cat's paw. Susanthika of course used the opportunity to tell the PSD chief, she had still not received the property promised by the government after her Olympic success.

Thereafter Arjuna Ranatunga discussed the matter with the president focusing on the concerns raised by Susanthika where reference was also made to the property. At this discussion, after considering the pros and cons of the exercise Ranatunga told the president he would follow up the matter with Minister Mangala Samaraweera.

In the meantime, there was another telephone call from the Prime Minister's office inviting Susanthika to Kalutara for a discussion on the business problem facing her husband, and lo and behold, when the athlete arrived at the scene, a meeting was in full swing with TV cameras at the ready.

Taken by surprise, Susanthika informed the prime minister's media secretary, it was not fair by her to spring a surprise of that nature on her and declined to make a speech when invited to do so.

The following day, however, Arjuna Ranatunga was to telephone her again seeking an appointment for them to visit Mangala Samaraweera and finalise her nominations.

But by this time Susanthika decided enough was enough and ducked the meeting, opting to continue with her athletic career.

The medal winning athlete was to later tell her mentor, former UNP MP Daham Wimalasena that unlike Arjuna who has already retired, she has many more years to go and would not want to be made use of in this fashion.

What has now surprised many is being a sportsman himself, Ranatunga's role in trying to deprive Sri Lanka the prospect of another medal at the next Olympics by attempting to lure Susanthika into politics at this stage of her career, especially in the backdrop of Ranatunga being appointed cricket captain of Sri Lanka under a UNP regime despite his obvious connections to the SLFP.

Paying for damages

Meanwhile in another offensive, even as the Elections Commissioner Dayananda Dissanayake is getting activated to ensure the state media does not abuse its powers in the run up to the elections, the opposition has put on notice the Lake House Chairman, Lucien Rajakarunanayake and the editors, they will be held personally liable for damages for any defamatory material published in this period.

Professor Peiris who discussed this issue with Opposition Leader Ranil Wickremesinghe last week was of the view, since it is the state that would otherwise have to pay damages, the chairman, board of directors and the editors should be held liable in their personal capacities, a view Wickremesinghe endorsed.

Subsequently, Professor Peiris retained president's counsel Romesh de Silva to settle papers against the chairman of Lake House and Minister Mangala Samaraweera for statements allegedly defamatory of him (Professor Peiris).

Interestingly, in the letter of demand sent for Rs. 1000 million to Minister Samaraweera through Paul Ratnayaka Associates, he has been specifically warned not to dispose of his assets upon receipt of the letter of demand.

"Please note that our client will take steps available in law if you dispose of your assets after the receipt of this letter," the lawyers have written.

Likewise, in the letter of demand to Lake House Chairman Lucien Rajakarunanayake to the tune of Rs. 2000 million it has been stated inter alia: "Our client reserves his right to take further action against the Board of Directors in respect of gross dereliction of duties and breach of their fiduciary duties."

What the opposition has done thereby is to send a clear message, that with a change of government, the chairman, and editors are all on their own not just with regard to paying out damages but also footing the legal bills in court, lest they act with caution.

A battle for supremacy

In fact, prior to sending the letters of demand, Professor Peiris spoke to the Elections Commissioner and lodged an official complaint, prompting the commissioner to request the professor to send a written clarification.

"I will personally forward it to Lake House and let us see whether they will carry it. I will take it from there," Dayananda Dissanayake said.

Furthermore, Roy Jayasinghe, the Additional Secretary of the Industrial Development Ministry who was quoted in The Daily News article casting aspersions on Professor Peiris with regard to textile quota allocations, has himself denied in writing both to Lake House as well as Peiris that he ever spoke to the media on the subject.

Nevertheless, Lake House did not carry the correction leading to the inference there was express malice in the publication.

Opening another flank of attack, UNP Deputy Leader Karu Jayasuriya also filed action in the Supreme Court against the state media in a bid to mount pressure in what is increasingly becoming a no holds barred battle for supremacy.

Be that as it may, the opposition too faced a few hiccups over the nomination lists in the east and hill country relating to the electoral pacts with the Muslim Congress and the CWC but was eventually sorted out to the satisfaction off all parties concerned.

Sacrifices need to be made

The problem in the east surfaced with UNP organiser for Kalmunai, Myown Mustapha insisting that he be allowed to contest rather than be appointed on the national list. The UNP-SLMC agreement provided for the UNP not to field any Muslim candidates in its list but appoint a member from the national list.

But this decision was not taken kindly to by Mustapha who insisted on contesting forcing UNP leader Ranil Wickremesinghe to put his foot down on the basis that sacrifices need to be made all round, to ensure victory.

At the same time the problem with the CWC surfaced after former Minister Armugam Thondaman requested a slot in Kandy, Badulla and two in Colombo to the exclusion of the CWC dissident group led by former MPs Sathasivam.

That dispute too was settled Thursday night with Thondaman where an agreement was reached on the electoral pact, a task made easier with the defection of Sathasivam.

Thus it is all systems go with the count down for December 5 commencing today.

By Dayan Jayatilleka

This election has three possible outcomes. The three main post-election scenarios are;

(1) UNP plus allies win plurality

(2) PA plus ally (EPDP) wins

(3) PA (plus EPDP) forms administration with support -- but not participation -- of JVP.

Each scenario has sub-variants as spin-offs:

(i) UNP wins and co-exists peacefully with PA executive

(ii) UNP wins, co-exists briefly and then clashes with PA executive

(iii) UNP wins and cascade effect forces PA executive out (Philippines, Indonesia, Peru, Serbia outcome)

(iv) UNP wins and clashes with but cannot displace PA executive, resulting in permanent tug-of-war, fresh elections in a year.

(v) UNP plus allies win, invite PA into coalition, PA agrees

(vi) UNP wins, invites PA aboard, PA declines

(vii) UNP wins, invites PA aboard, section of PA joins

(viii) PA plus allies have edge and invite UNP to participate in national government, UNP agrees

(ix) PA plus allies win, invite UNP into national government; section of UNP agrees.

(x) PA plus allies win, try to co-opt UNP; UNP declines.

Economic Implications

Each of these scenarios have an economic policy perspective as corollary. Each outcome carries with it an economic prospect. Each prospect is fraught with its own dangers. Yet there is a set of economic options which is less risky than each of these three outlooks. That option is one that is not being looked at by any party, though it has the merit of being implementable by anyone who forms the government after December 5.

If the UNP wins, there will be improved economic management. Which is good -- though it probably isn't saying very much because it is impossible to manage anything quite as badly as the president and the PA mismanaged everything. The UNP will also want to catch up for lost time and turn things around. Which again is good. But its idea of doing so many will not be quite as good. That idea will be to open the capital market, totally free the exchange rate, slash public expenditure and 'liberalise' the labour market.

As for the first two options, they should talk to Mahathir Mohammed about the East Asia crisis, how he managed it and why he didn't open up further. The UNP has some friends of Mahathir's son in it, but in terms of economic policy, they are closer to Anwer Ibrahim. These days, however, I am agnostic on this subject of capital/currency reforms. We probably have to go the extra mile and a bit beyond, to survive this crisis.

Messing with public expenditure (expect by way of a slim cabinet and new 'walawwas') and the labour laws, is something else altogether. That's going the extra mile, right into a mine-field. The JVP is strongly entrenched among the younger workers, including the women workers. A UNP government also means a PA opposition -- and the PA in opposition will be irresponsibly agitational and populist. Any unilateral attempt to 'reform' i.e. remove labour laws, and that opposition (PA/JVP) will cut loose. The business community will lose more on the roundabouts (of worker unrest) than it gains on the swings (of scrapped labour laws). Cutting expenditure on education will bring out the JVP's high school and campus support. They can always be expelled or the campuses shut down, but that way they become full-time party cadres. Of course the UNP can then get into its 'zero-tolerance' head-smashing mode of the late 70s to mid 80s. The last time they did that, a few short years later, poor UNPers couldn't even bury their dead in accordance with the ritual obsequies. This time there's no Premadasa to save the system in the final reel.

Scenario 2 is of a PA win. As Kevin Spacey's heartfelt last words were in American Beauty : "Man, oh man, oh man!" The economic policy will be one of a market fanaticism not second to the UNP, but without the minimally sane, rational and efficient management of the macroeconomy that the UNP is capable of. And there's a basic sociological reason for that. A feudal leadership is incapable of modern capitalist development and modern capitalist management. So long as the feudals run the SLFP, and the SLFP runs the economy, they will run the country into the ground.

Scenario 3 is of a PA-JVP bloc. That's the scenario of an attempt at a mixed economy, which is needed -- but which translates itself, thanks to the PA's feudal leadership plus the JVP's lack of economic sophistication and realism, into a mixed-up economy. Here, the economy isn't run into the ground, but does run aground.

There is an alternative.

The point is that it doesn't have to be this way. Yes, there is a deep and deepening crisis. Yes, we have to try, at least to stay afloat. But we can do so without throwing half the passengers overboard for the sharks to feed on. Which is what the PA-UNP economic policy consensus at leadership and policy manager levels amounts to. Nor is it necessary to place more burdens in the boat and expect it not to sink. Which is what the PA-JVP accord entails.

With the global economy in trouble, further opening up would be as smart as opening up all the doors and windows of your house, lifting as many tiles off the roof as possible and then going out for a stroll, when there is stormy weather. There is a time for liberalisation. There is a time for further and fast-track liberalisation. That depend on domestic and external conditions. This manifestly is not the time. However neither is it the time for shutting up the economy because that could send out the wrong signals, and result in shutting down the economy.

What we need is to look for wiggle room, for autonomy, and to maximise it. We need to think this through and be creative in our thinking, guided always by a sense of national interest. Room (albeit marginal) for manoeuvre exists. Identification though, requires the proper grasp of global and national reality. And these are some of those realities:

(a) Though the world is strategically unipolar, it is economically multipolar.

(b) There has been a trend of a shift of global economic power Eastward, to the Asian and specially Pacific Rim area (see AG Frank's 'Re-Orient').

(c) In the context of a global downturn, only China's economy is registering high growth. It has a growth rate of 7.6% in the midst of global downturn -- and that's an economic miracle.

(d) China and Sri Lanka are both Asian countries, and ones which have had close ties. (Indeed a CPA opinion poll showed that China is regarded as Sri Lanka's most consistent friend, from whom we face no threats).

These realities can be capitalised upon in two interconnected ways:

(1) Intensified economic diplomacy aimed at South-South and regional ties. Bi-lateral and multilateral accords, chiefly in trade, and mainly in the form of state-level agreements.

(2) A major reorientation and refocussing of our economy towards China, through a concerted attempt at multifaceted economic ties. It is a big enough economy, not to suffer by helping us, while ours is small enough for any substantive agreements with China to constitute and adequate life-belt.