criteria to release funds
By Amantha Perera
The real test for the new UNF government will come on
March 20 when Finance Minister K. N. Choksy presents the budget.
It would most certainly be the last chance for the government to
go ahead with painful yet necessary economic reforms.
That the economy is at the bottom of the barrel need not
be emphasised any more. Now the hour has come for the Ranil
Wickremesinghe government to decide, whether it will go
with reforms or bow to political pressure as the
Chandrika Kumaratunga led coalition did. The shying away of the
Kumaratunga government was the last act in plunging the economy to its
worst ever crisis.
week, IMF Deputy Director Anoop Singh was in town along with several
high ranking officers to discuss with the government its economic
policies. Singh, like most economists in Colombo, was willing to give
the benefit of the doubt to the new government that it would bite the
bullet and go ahead with reforms. "There is guarded optimism,"
he said during a presentation at the Ceylon Chamber of Commerce.
he was quick to point out that time was running out and that the
government needs to act fast. Time definitely is running out, the IMF
sponsored Stand-by Facility that came to Sri Lanka's rescue last year
has been suspended since the first tranche of SDR 103.35 million was
granted mid last year.
was suspended due to the PA government deciding that it was more
important to rule a rotting economy than to take action to turn the ship
around. The last straw in the deal was the pact with the JVP. The IMF
facility however would not be open forever. It will expire on June 19,
2002, unless the new government puts the criteria right and the IMF
releases the funds.
that, the key word is 'reforms,' across the board, no holds barred.
economy has lost its growth momentum," Singh observed, warning that
Sri Lanka might be foregoing advantages raked down the line since GDP
growth was minus 0.6% last year. He highlighted four areas of concern.
the negative growth rate would be far higher on a per capita basis. Two,
inflation is in double digits, unusual for an economy in recession.
Three, public debt is 100% of GDP. According to Choksy, the figure is Rs.
1,464 billion for last year. And four, the budget deficit is 10% of GDP.
To be precise last year it was 10.5%.
IMF prescription for the ailments is to fast track the reforms process.
On that front too Singh laid emphasis on key sectors. Top on the list is
the public sector, which according to the IMF economist, needs to be
consolidated financially. How that can be done is through pruning of
staff and funds.
Sarvananthan, an economist with the International Centre for Ethnic
Studies has argued that the bloated private sector is the biggest
impediment to economic revival. "Sri Lanka's public sector deficit
is among the highest in the world," Singh joined the chorus last
IMF Stand-by Facility in fact set strict limits to public sector
borrowing last year, but it is very unlikely that they were met even
marginally. With public sector debt ballooning, the economic ills of the
country have multiplied.
of the borrowings are from domestic sources which meant that the
government is taxing the savings of the private sector as it cannot
manage its own affairs. And most of the expenditure is not targeted at
development work but at meeting recurrent expenditure.
glance at the Vote on Account presented two weeks ago, will stand
witness to this. Of the monies allocated, Rs. 19,059 million is for
recurrent expenditure while just above half that amount is for capital
expenditure. Last year, while government revenue was 17% of GDP,
expenditure was 26%. These are imbalances that need correction. That
would be painful and only a strong leadership can withstand the
short-term political liabilities of such an endeavour.
second area of concern in Singh's list of rectification is the most
controversial - the financial sector. He argued that wherever
governments have huge stakes in the banking sector, such banks carry
loans and other facilities given under the influence of the government.
Higher the percentage of such non-performing loans, higher the weakness
of the sector. He termed the concept of government owned banks as
"a monumental illusion" of that past and that the government
needs to look at privatising or selling off its ownership in the state
is no longer a question of ideology, it is a lesson from the past,"
Singh opined. He further argued that the Central Bank should be made
independent and tasked with only controlling inflation. Such
independence would also create a mechanism of accountability.
IMF Deputy Director also highlighted that the labour market and power
crisis need to be looked at seriously. The same two subjects have
figured prominently in the hit list that trade chambers have been
haggling over in meetings with government officials.
observed that for the economy to turn around, investments, both domestic
and foreign, need to flow into the market. He forewarned that the crisis
that has plagued the Sri Lankan economy can result in a prolonged
stagnation. "It is no less serious than it was in the East Asian
he gave the government credit for pursuing the peace option and the
economic option simultaneously.
the looks of it, the government is hoping that the peace process,
gathering momentum, will send the right signals to donours as well as
lenders. And that such a move would subsidise any shortfall created by
the peace initiative results in channeling hard currency in to the
country, at least some of the government's woes would be allayed. Money
brokers have argued that the Central Bank has been holding the exchange
rate down artificially. Some have remarked that if the bank releases its
hold, the rate might jump to Rs. 120 per dollar.
the recession has deflated import demand to an extent, allowing
IMF has been holding a series of meetings with top decision makers (see
box) and has conveyed its views. Singh who has been leading the
delegation asserted that whatever reforms that are put in place needs
the support of the population for them to succeed. That is where the big
question mark is.
is a formidable agenda. But the longer you wait, the cost will
increase," he warned. He revealed that the new government has
expressed its desire to continue with the Stand-by Facility, but stopped
short of divulging details.
the government is ready to reactivate the facility, what it means is
that it is ready to set the reforms in motion in accordance with the
agenda. On top of that, it would have to carry out other reforms that
have become necessary due to the present economic scenario. The
government has been holding a series of discussions with the chamber and
a high ranking source revealed that they were cautiously optimistic,
like the IMF. Two weeks back, chamber officials met with the Ministry of
Power and Energy to discuss solutions to the power crisis and soon
afterwards, Chamber Chairman Chandra Jayaratne wrote to members
requesting them to continue internal power generation capacity to the
maximum. It was a gesture of support for the government. But how long
such support would be forthcoming and whether the same would be true of
the voting masses is not sure yet.
reforms are painful, indications are that the government is taking at
least some of them. The real test will certainly come after March 20.
market liberalism and monopolies
has been up to its tricks once again. This time by trying to
wiggle its way into the delegation that will leave to India to
negotiate the purchase of 300,000 metric tons of wheat from India.
meeting was held at World Trade Centre office of K. H. J.
Wijeydasa, Advisor on Sustainable Development and Chairman of the
Inter Ministerial Committee on Food Security. It was attended by
officials from the Ministries of Foreign Affairs, Finance,
Co-operatives, Commerce and Consumer Affairs and the AG's
Department. While the meeting was in progress, in walks Lin Hsin
Hui, General Manager of Prima, with a colleague from the sister
company, Lanka Grain Elevators.
informed the meeting that Prima is well experienced in importing
wheat from India, but his assessment is not going to please the
Indian producers. Lin informed that Prima could only use 50% of
the wheat for milling, and in effect to produce flour. Which means
that if true, only around 35% of the 300,000 tons would be
processed into flour.
remaining 50% he says can be used by Grain Elevators who produce
animal feed. And there is more. Lin produced small bags filled
with straw, dust, gunny bags and other residue that he said were
part of a past wheat import from India.
has also conveyed its reluctance to import wheat from the Indian
government appointed agency, NAFEED. It conveyed at the meeting
that it will only import through 10 registered suppliers - all
western trading houses.
was no response to the matters raised by Prima. But Wijeydasa
informed the meeting that he has been appointed by the prime
minister to lead the delegation to India to finalise the MoU.
Prima has been informed that the company's recommendations will be
taken up with the Indian High Commission. How the Indians are
going to react to the assessment would be interesting to watch.
They surely would not play lap dog to western business interests.
does Prima wield so much power? Simple, it still enjoys a monopoly
when it comes to milling wheat in this country. All the talk by
the UNF government higher ups has been just a show, and no one has
taken any steps to take out 40% import tax on flour that would
kill the monopoly. If Prima refuses to mill the wheat that is
imported from India, no one knows what to do. This is what market
liberalism under the PA and now two months into the UNF government
Finance Minister K. N. Choksy indicated winding up the debate on
the Vote on Account, that the budget would deal with the Prima
anomaly. That better be true, it has been a far too long a wait
for the suffering masses of this country.
Minister Ranil Wickremesinghe and top ministers attended a dinner
hosted by IMF Resident Representative, Nadeem Ul Haque at his
residence on February 12. Among the guests were Power and Energy
Minister Karu Jayasuriya, Trade and Consumer Affairs Minister Ravi
Karunanayake and Minister of Economic Reforms Milinda Moragoda.
IMF Deputy Director Anoop Singh too was in attendance.
discussions, the government has reacted positively to some of the
recommendations by the IMF, but not all. "It is a bitter pill
to swallow, but we have to do it," a participant at the
meeting told The Sunday Leader.
month's budget proposals are likely to include some of the
reforms. Labour reforms are reportedly on top of the agenda, so is
government has also indicated that it will be doing away with the
National Security Levy and amalgamate it with the Goods and
Services Tax. "It will be a two tier tax, more like a value
added tax," a top government source said.
the issue of the state banks, government sources revealed that it
was not going to follow the IMF formula but was thinking of
reforming them through a different procedure. "We are going
also said that the IMF is likely to look at the option of
recommencing the Stand-by Facility soon after the budget is made
public. "They have indicated that they would do that,"
though lip-tied on the issue, said that the government has
indicated its willingness to go ahead with the facility. However,
whether the IMF will be satisfied with the extent of the reforms,
can only be gauged after the budget. "We are only giving the
prescription," Singh said.
last August, the Stand-by Facility has remained suspended with the
then PA government indicating to the IMF it was not capable of
meeting the criteria. If the facility would recommence, that would
mean that the funds would start coming after a seven month delay
and the reforms would need to be rescheduled.
the other reforms that have been indicated are taking off the
anomalies created by the Prima sales agreement and adopting a
market determined pricing structure for petroleum.
hand in Mathurata conspiracy
names of Presidential Secretary Kusumsiri Balapatabendi, Chief of the
President's Security Division Nihal Karunaratne and PA MP Ajantha de
Zoysa have transpired in a complaint dealing with a conspiracy to murder
a cabinet minister. Investigations have revealed that it was with
President Chandrika Kumaratunga's approval that some of the weapons
found in the possession of those arrested in this connection, were
sleuths attached to the Criminal Investigations Department have found
damning evidence which incriminates the secretary to the president, her
chief of security and a close friend in a conspiracy to cause mayhem in
the Maturata and Hanguranketha district. A plot was allegedly hatched to
murder former minister in the Peoples Alliance government, S. B.
de Zoysa, co-owner and ex chairman, Monaro/Group 4 Security Services
Ltd, and now a PA Member of Parliament, denied any involvement with such
a plan if, he says, it did exist. He
asserted that his men were at just at the wrong place at the wrong time
and have thus been unfortunately implicated in this case.
fact however that top cops assert a pistol released to Monaro Security
personnel was later found in the possession of a PSD officer at
Padiyapallella where the Monaro security personnel too were also taken
into custody by police has linked the two groups to a possible murder
both sets of men, one from Monaro security and the other from the PSD,
spent a night together at President's House in Kandy on December 1,
2001, before leaving in two vehicles for Maturata the following day.
100 rounds of ammunition for a .9mm pistol was released to PSD officers
minus the weapon. The .9mm
weapon later found on the person of a PSD officer was licensed to Monaro
/ Group 4 Security Services Ltd.
the day the men were arrested (December 2, 2001) S. B. Dissanayake was
confirmed to address an election rally at Hanguranketha to conclude his
campaign before polling day on December 5, 2001.
men from Monaro and the PSD were arrested together by the OIC for
Maturata, Rohana Dissanayake after they had fired at a Defender vehicle
carrying supporters of S. B. Dissanayake at Padiyapallella - Maturata.
issue now at stake is why these weapons were issued by Monaro to three
of their security officers who were found in the Maturata area together
with personnel from the PSD. How
a weapon licensed to Monaro was found on the person of a PSD officer and
why Ajantha de Zoysa made an unprecedented request from the president
when he sought approval to purchase five .9mm pistols instead of the
usual shotguns Monaro bought for their security personnel.
men from the PSD were found roaming this area fully armed ten days after
President Kumaratunga had concluded her visit to the district.
to investigative police officers, the plot was initiated and the plan
began to take shape on November 21, 2001. Ajantha de Zoysa, on an
official Monaro / Group 4 Security Services Ltd., letterhead, wrote to
Kumaratunga applying for five .9mm pistols.
fact that de Zoysa at the time was no longer chairman of Monaro did not
matter. What figured was his close relationship with President Chandrika
Zoysa himself admitted when questioned by The Sunday Leader
that he wrote directly to Kumaratunga seeking approval for five
pistols for the Monaro Group because the procedure to get the weapons
approved by the Defence Ministry is otherwise too tedious,” he said.
president endorsed the letter on the same day saying, “Just give,
give..., Ajantha what he wants. In his letter to Kumaratunga, de Zoya
wrote that he required the pistols in order to provide additional
security to transfer some money.
to de Zoysa's explanation, Monaro needed five .9mm pistols as a request
had been made by PA candidate for Hanguranketha, Jayaratne Dissanayake
that he needed security to carry cash, purportedly monies from the PA
party funds to Hanguranketha.
for all such security transactions, Monaro security personnel have been
supplied only with shotguns. This was the first time a request for pistols was made.
Seneviratne, Managing Director Monaro, explained that they decided to
opt for pistols for the first time as they are less cumbersome to carry
also avoids the hassle of being stopped constantly at checkpoints when
the shot guns are seen, he said.
president's approval meanwhile was received by Ajantha de Zoysa two days
later on November 23, 2001 in writing. The letter was signed by V. Malini Peiris, Additional
Secretary, Civil Security, Defense Ministry.
weapons were later purchased by Monaro on November 29, 2001, at
government stores in Welisara and taken to the Monaro armoury. There the
guns were released to three Monaro security personnel by the Manager
Monaro, M. P. Sendanayake who has said that he was authorised to do so
by Shehan Seneviratne, Managing Director, Monaro.
CID maintains that in his statement to the police, Seneviratne has
denied that he gave such authorisation.
Seneviratne however told The Sunday Leader
that he approved a cash escort. He says Sendanayake did phone him
and ask permission to release a cash escort to Jayaratne Dissanayake, PA
candidate for Hanguranketha. A cash escort, Seneviratne explained,
entails two gunmen and one carrier. Seneviratne recalls that he even
said these constant requests by politicians are a nuisance to the
company but to go ahead and provide Dissanayake with the necessary
personnel and weapons as Dissanayake was paying Monaro for their
have found that of the five weapons purchased by Monaro, two were issued
ammunition on December 1, 2001. The two .9mm guns released to the
security officers however were given without ammunition and minus any
User License Certificates.
Zoysa said that ammunition is not normally released to Monaro security
personnel. The weapons, he said, serve only as an outward security
User License Certificates for all five guns were applied for by Ajantha
de Zoysa only on December 3, 2001 and obtained two days later on the
5th. By this time, the three security personnel employed by Monaro had
been arrested at Padiyapallella, Hanguranketha on December 2, 2001 and
were in police custody.
three Monaro security personnel were arrested by the OIC Maturata,
Rohana Dissanayake on December 2, last year. They are K. Sunil, K. S.
Kumarabanda and C. J. Ranchagoda. According
to entry records maintained at Monaro, Sunil and Kumarabanda had been
issued two .9mm pistols each, minus ammunition. Ranchagoda was part of
the group purportedly as a ‘carrier for Monaro.
why he issued guns to his security personnel minus the User License
Certificates, Ajantha de Zoysa said that it takes time to secure such
documentation and since the weapons had been already released to Monaro
he did not see the point in holding onto them until the User License
Certificates had been got.
all, we were allowed to purchase the guns from the government armoury,
he said, adding that as such, there was nothing wrong in using them
before the ULC's had been secured.
that as it may, we will continue with the other details of the murder
Ajantha de Zoysa was mobilising three of his employees and arming them
for a mission, the presidential security division was also working
almost simultaneously with de Zoysa. On November 30, 2001, a grenade
launcher, hand bombs and four T 56 assault rifles were issued from the
PSD armoury to some of its personnel.
grenade launcher and the T 56 guns was issued together with 100 rounds
of ammunition for a .9mm pistol. A .9mm gun however was not issued to
any PSD personnel at this juncture. They were handed over only the
as far back as November 15, 2001, entries show that a .9mm pistol was
issued to police sergeant Kamal Premajayanth of the PSD.
The entry maintains that the gun was required in view of
President Chandrika Kumaratunga's proposed visit to Horamadulla,
Maturata on November 20, 2001 where she was scheduled to address an
the time PSD officer Premajayanth was arrested together with the three
security personnel from Monaro he had in his possession one .9mm pistol
together with 15 rounds of ammunition fixed to it. The weapon bore no.
compared with the Monaro records, it is the same number as the weapon
that had been issued by Monaro to the companies security officer who was
also arrested together with Premajayanth at Padiyapallella, Maturata.
.9mm pistol which had been issued to Premajayanth from the PSD armoury
on November 15, 2001, was also found in the vehicle the PSD were
travelling in at Maturata.
de Zoysa claims that one weapon issued to Monaro's security gunmen,
Sunil and Kumarabanda, was found on their person while the other was
found inside the vehicle they had been travelling in. He denied that one
gun issued to Monaro was found on the person of Kamal Premajayanth, who
is attached to the PSD.
top cop however says that this is not so. He asserts that the weapon
bearing No. AN 882, which had been issued and licensed to Monaro was
found on the person of Kamal Premajayanth of the PSD at Padiyapallella,
Maturata where the Monaro security were also arrested.
fact the police' B' report filed in the magistrates court Kandy on
Tuesday February 12, 2002, states that this weapon licensed to the
Monaro Group was found on suspect No. 1' who has been identified as
Kamal Premajayanth of the PSD.
other weapon that had been issued to Monaro bore No. AN 827.
Premajayanth from the PSD was arrested at Maturata in vehicle No.
253-7622 while the Monaro security officers were also arrested on the
same day at Maturata in vehicle No. 252-6953.
police investigation has now found that these two vehicles belong to the
Ministry of Samurdhi Affairs, but had been handed over to Lt.
Wickremasinghe, Transport Officer, Presidential Security Division on
November 16, 2001. Wickremasinghe in turn had handed these two vehicles
to the PSD personnel on the instructions of PSD Chief Nihal Karunaratne.
de Zoysa claims that his men were in a vehicle belonging to PA candidate
for Hanguranketha, Jayaratne Dissanayake. Our investigation has found de
Zoysa's statement in this regard to be false.
exercise book at Monaro where the release of the weapons was entered has
now been sent to the government department for the Examination of
Questionable Documents to ascertain if the signatures placed against the
released weapons are genuine or if they have been forged by someone at
Monaro after the weapons were issued to the three security officers.
other issue around this conspiracy is why simultaneously a grenade
launcher and four T 56 weapons were issued to officers attached to the
groups of men were arrested together at Maturata on December 2, 2001,
mere hours before S. B. Dissanayake appeared on a public platform.
Rohana Dissanayake had been informed as early as November 23, that two
vehicles bearing the above registration numbers had been spotted roaming
the Maturata area.
Chief Nihal Karunaratne is also a suspect in a case where he threatened
the former OIC Hanguranketha, Gunaratne Bandara, with death on November
20, 2001 at a meeting at Horamadulla in the Hanguranketha area where
President Chandrika Kumaratunga was speaking.
Bandara instituted proceedings against the threat to his life and a
court warrant was subsequently issued for the arrest of Nihal
Karunaratne. The latter later surrendered and is out on a personal bail
of Rs. 100,000 as the case continues.
on December 2, 2001, following the arrest of the PSD and Monaro security
officers, Nihal Karunaratne telephoned DIG F. R. Alles and threatened
him saying if he did not release from police custody the PSD and Monaro
security personnel he, (Karunaratne) would come to Maturata with 1500
men and rescue them from prison.
DIG was unimpressed and refused point blank to release the men. Alles
was thereafter stunned when President Chandrika Kumaratunga came on the
line. Speaking to the DIG, Kumaratunga articulated similar sentiments to
that of Nihal Karunaratne, telling Alles to release the men. When Alles
continued to stand firm and refuse, Kumaratunga had mocked him saying in
Sinhalese, 'Oya koi club ekeda kathakaranne? Oya para veda karanna epa
apita, (What club are you
speaking from? Don't do this dirty thing to us.
true to form, had her lines crossed. On another occasion when she had
needed to speak personally with DIG Alles he had been contacted at a
club where he plays a regular game of tennis. Hence her reference to a 'club.'
cop was determined not to bow to presidential pressure. Kumaratunga
however was undeterred and Alles later received yet another telephone
time the phone call was from President's Secretary, Kusumsiri
Balapatabendi. The latter also requested the DIG to release the men
being held. This time Alles told Balapatabendi he would instruct OIC
Rohana Dissanayake to file a report on the case and request court to act
on the matter. He promised that the police would follow court orders and
act purely at the discretion of the courts.
courts subsequently ordered that the men be held.
They are all in custody at the Bogamabara remand prison where
President Chandrika Kumaratunga took an unprecedented decision as Head
of State to visit them, even signing the visitor's book at the prison
Tuesday February 12, 2002, an identification parade of the suspects was
held at the Kandy Magistrates court. PSD Chief Nihal Karunaratne also joined the line of nine
suspects, which included the three security officers from Monaro and
five PSD personnel.
of the suspects have been further remanded in connection with creating
mischief, being in an unlawful assembly, having in their possession
deadly weapons and attacking a vehicle of a group of supporters of
Minister S. B. Dissanayake.
Karunaratne was released once more on a personal bail of Rs. 100,000.
The CID will now record a statement from President's Secretary K.
Balapatabendi in connection with this conspiracy.
police investigation believes that the grenade launcher was to be used
to attack the stage when S. B. Dissanayake rose to speak.
legal position on this case has reiterated that this conspiracy was
hatched to perpetrate violence in the Hanguranketha area and the two
main people involved in this plan are PSD Chief, Nihal Karunaratne and
Ajantha de Zoysa, MP.
warrant for the arrest of Ajantha de Zoysa MP, is expected to be issued
de Zoysa and PSD Chief, Nihal Karunaratne figure as key suspects in this
conspiracy to murder and create mayhem.
are now being posed as to whether President Kumaratunga was aware of
this conspiracy of planned murder and violence. The president's
subsequent actions attempting to release the men in prison
by-passing the laws of the land and her visit to Bogambara prisons to
personally see them has raised eyebrows.
CID investigation into this case once concluded will be handed over to
the attorney general's department. The file at present is being handled
by Rienzie Arsecularatne, President's Counsel, assisted by Gihan
Kulatunge, State Counsel, while overall directions on the case is being
supervised by the Attorney General, K. C. Kamalasabeyson.
now remains to be seen if ASP Nihal Karunaratne will pull the plug on
the police and dodge justice or if the government will act and hold
accountable those responsible for a conspiracy to murder a candidate and
now minister of the United National Front government, S. B. Dissanayake.
were at the wrong place at the wrong time Ajantha de Zoysa
de Zoysa vehemently denied being involved in any conspiracy to
assassinate a candidate for the United National Front at the last
were just at the wrong place at the wrong time,' he said,
explaining that the three security personnel from Monaro were not
in any way involved with members attached to the presidential
security division when they were arrested together on December 2,
claims that his men had been accompanying PA candidate Jayaratne
Dissanayake when they had come upon a fracas at Padiyapallella,
Maturata. He says the MP had got down from the vehicle together
with the Monaro security men to find out what the rumpus was all
about. Since they had all been armed, the police at the scene had
ordered them all to report to the Maturata police station together
with the PSD personnel on the scene.
Zoysa said that thereafter the MP was released but the men from
Monaro were held back because they had been armed.
denied that the Monaro security officers had shot at a vehicle
carrying supporters of S. B. Dissanayake.
Zoysa pointed out that Monaro has been in the business of
providing security for 25 years and have worked for various people
some of whom are now cabinet ministers.
are the largest cash-carrying unit in Sri Lanka. I have even
transported posters for a UNP candidate because he was afraid they
would get burnt,'' he said.
said it is not true that a gun issued to Monaro security personnel
was found on PSD officer Kamal Premajayanth.
know nothing of any plan to murder S.B. Dissanayake. I am in the
business of protecting valuables and life not destroying them,''
he said, adding,''Why should the PSD want to use a weapon from
Monaro when they have access to an unlimited number of weapons?
This does not make sense.''
fact of the matter is the collaboration of forces to carry out
this conspiracy after all, what were Monaro security
personnel doing inside a Samurdhi vehicle that had been released
to the Transport Officer of the PSD?
What monies was Jayaratne Dissanayake carrying to
Hanguranketha? And why did he need security personnel from Monaro
to assist him? Surely as an MP he would have had his own, armed
de Zoysa MP, has been served notice to appear before Kandy
magistrate C. V. Rajapakse on February 25, 2002.