Politics

JVP, LTTE and CBK's catch 22

Inside Politics

By Suranimala 

While confusion reigned in government over the post tsunami disaster management, President Chandrika Kumaratunga last week gave vent to her foremost concern of perpetuating herself in office, drawing in the process an immediate backlash......

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> Fuel prices yet to reflect cost benefits

JVP, LTTE and CBK's catch 22

Chandrika Kumaratunga, Nandana Gunatilleke, Jayantha Dhanapala, S. Puleethevan and G.L. Peiris

Inside Politics

By Suranimala 

While confusion reigned in government over the post tsunami disaster management, President Chandrika Kumaratunga last week gave vent to her foremost concern of perpetuating herself in office, drawing in the process an immediate backlash from the opposition.

Sri Lanka's entire political, social and economic agenda was drawn up over the last several years by the President with the aim of abolishing the executive presidency and perpetuating herself in office and plans were drawn up to put it in motion end January via the mechanism of a constituent assembly.

But the tsunami put paid to all those grandiose plans and it was back to the drawing boards for Kumaratunga and her confidantes, who of course saw new hope in the aftermath of the outpouring of international goodwill to rebuild Sri Lanka.

Opportunity

With the international community pledging massive funds, the President saw the opportunity of detracting from the constitutional requirements for elections by focusing on the reconstruction of Sri Lanka and moved to build an all party consensus to strengthen her case.

But, as she is wont to do on many occasions, the President missed the opportunity by starting off on a wrong foot, naming her confidantes rather than personnel with a proven track record of post disaster management to spearhead the relief and rehabilitation operations, without so much as a courtesy consultation with the other stakeholders.

It was only after formulating her teams, the President not only invited the opposition for talks but also looked towards a formal arrangement with the LTTE to reconstruct the north east areas under Tiger control.

However, the crucial moves made by the President soon after the tsunami including the sidelining of Prime Minister Mahinda Rajapakse and the JVP had already created ripples in government and was only aggravated with the LTTE also turning more hostile following her decision to prevent UN Secretary General, Kofi Annan visiting the LTTE controlled areas to witness first hand the havoc wrought by the tsunami.

And while committee upon committee was appointed to handle the relief and reconstruction operations, the international community soon realised the government not only lacked a clear and cogent vision for the reconstruction of Sri Lanka but was also pursuing petty personal political agendas on the back of the tsunami disaster.

Furthermore, with the President attempting to ensure all funds pledged would be channelled directly through her, the NGO sector too soon started branching out on their own, with the end result being the funding itself getting diluted so far as the government went. In essence, rather than harnessing the abundance of goodwill available, the President in a bid to charter an individual course for political gain soon started alienating the other stakeholders.

The end result was a hopelessly confused policy on post disaster management with the affected masses fast losing hope of rebuilding their shattered lives even as the powers that be politicked.

Confusion

And given the resultant confusion, not only egos but also policy clashes erupted within the government, the case of Tourism Minister, Anura Bandaranaike and Tourist Board Chairman, Udaya Nanayakkara being a case in point.

Likewise, with the Mano Tittawela committee TAFREN, comprising a group of businessmen allocating each member one or more subjects to deal with, clashes with the line ministries also erupted, Highways being one example.

The Highways Ministry headed by Prime Minister Mahinda Rajapakse had already drawn up plans for the reconstruction of the damaged roads, which plans had been called for by Ken Balendran who was assigned the task of dealing with the subject by TAFREN.

And upon seeing the plans, Balendran had wanted drastic changes made, which when brought to his notice, Prime Minister Rajapakse blew a fuse, asking his officials whether Balendran's job was to identify contractors for allocating jobs.

It is in the midst of this state of confusion that the JVP also came out strongly against the President, criticising not only the manner in which the reconstruction effort was being handled but also the selection of personnel.

Given this scenario, the international community as well as the multilateral agencies such as the World Bank decided to draw up their own plans for the reconstruction efforts  with the north east also made a focal point.

In fact, when the Canadian delegation headed by Prime Minister Paul Martin met with the TNA trio, R. Sambandan, P. Joseph and Gajan Ponnambalam, a specific assurance was made that all Canadian assistance would be channelled through NGOs and not the government.

The problem the government faced on this score was dealing with the LTTE since the international community was adamant a colour blind policy should be adopted in the relief and reconstruction efforts with the LTTE necessarily having to play an important role in the exercise.

But given the bad blood between the LTTE and the government, which was exacerbated following the Kofi Annan visit and the Goebellsian propaganda of the state media announcing the death of Velupillai Pirapaharan, the good offices of the Norwegian facilitators were called in to bring the parties together at least to work out an arrangement to handle the relief efforts.

Hostile mood

The LTTE was by this time in a very hostile mood, not only due to the above-mentioned developments but the President's own statement that the Tigers were no longer in a position to fight and Pirapaharan decided to play hardball.

But by this time, both the government and the LTTE realised, unless they came to a working arrangement, funds for the reconstruction effort would not be forthcoming and decided to sit down and talk.

And talk not about the peace process but post tsunami reconstruction of the affected areas as a preliminary step. It was, for the LTTE, an opportunity for an interim to an interim administration set up and agreed to pow wow with the government.

However, the wounds of the Kofi Annan snub were still festering and with Opposition Leader Ranil Wickremesinghe also calling upon the UN Secretary General to send at least an emissary for a humanitarian visit to the LTTE controlled areas, Special Envoy Margaret Walstrom was despatched the following week, thus setting the stage for some cooperation between the two warring parties.

Accordingly, a meeting was arranged over the previous weekend at Norwegian Ambassador, Hans Brattskar's official residence down Gregory's Road for a delegation from the government and the LTTE to meet and discuss the handling of the post tsunami relief funds.

Having been kept out of the relief operations in the north east following the induction of the EPDP and the security forces, the LTTE also sensed an opportunity not only to get back into the scheme of things but also international acceptance by moving in on the opening and establishing their bona fides.

And with the decision to meet taken at the highest levels of the LTTE, Head, Tiger Peace Secretariat, S. Puleethevan and point man on rehabilitation, J. Maheswaran were appointed to do the talking for the north east with the government team comprising their counterparts in Colombo, Jayantha Dhanapala, Harim Peiris and Mano Tittawela.

These discussions lasted over a period of three days and by Wednesday, January 19, the LTTE had put its proposals on the table for the reconstruction effort.

The talks were essentially focused on how to manage the tsunami related funds and the LTTE initially proposed a joint committee to handle the entire coastal area affected by the tsunami, a proposal the government shied away from.

Dhanapala told the LTTE duo, the government would handle the reconstruction effort in the south and that they should focus on the north east requirements.

That for the LTTE was success number one. Having pitched their demand high to cover the entire coastal belt of the country, the Tigers successfully got the government to negotiate with them the reconstruction of not just the LTTE controlled areas but the entire north east.

Strengthening its case

The stage was thus set for the LTTE to move for an interim to the interim administration, thereby strengthening its case for an interim self governing authority at the next stage.

And with the government offering to negotiate the reconstruction of the entire north east with the Tigers, the LTTE proposed the formation of an apex body of three persons to manage the post tsunami funds. The three were to comprise one Tamil, one Sinhalese and one Muslim.

This apex body, the LTTE proposed, would be in overall charge of decision-making, while at district level separate committees would be appointed to handle the reconstruction effort. It was to be a bottoms up approach.

The LTTE further suggested breaking up the north east areas affected into six districts, Jaffna, Mullaithivu, Kilinochchi, Trincomalee, Batticaloa and Ampara, with each district having a committee of one or more persons to act as coordinators who would liaise with the apex body.

According to the LTTE proposals, Jaffna District would have one Tamil, Kilinochchi, (one Tamil), Mullaithivu (one Tamil), Trincomalee (one Tamil, one Muslim and one Sinhalese), Batticaloa (one Tamil, one Muslim) and Ampara (one Tamil, one Muslim and one Sinhalese), making a total of 11 coordinators, of whom six would be Tamils, three Muslims and two Sinhalese.

That would effectively give the LTTE a majority, much akin to the interim authority proposed earlier by the President and subsequently the UNF government.

In fact, walking out of the meeting on the final day, Puleethevan joked that the government would now, for the first time, have to start thinking like a minority.

With the Tigers having given their proposal, Puleethevan checked out of his Holiday Inn Hotel room and left for the Wanni on Wednesday, January 19, while Maheswaran took off for Australia, with the government team indicating they would make their response known shortly.

Dhanapala, of course, wanted the government to have the right to appoint the Muslim nominees to which the LTTE responded in the negative, stating it was a decision the Muslim groups in the east had to take.

Puleethevan said the Muslim nominees to the coordinating committees had to be decided by the Muslim parties representing the north east, once again throwing the government into a dilemma.

With the LTTE having submitted its proposals, it called for a meeting of the 21 TNA parliamentarians for Friday, January 21, to give a full briefing. It was the same day Anton Balasingham was to arrive in Wanni in preparation for Petersen's visit the following day.

Norwegian angle

What the Norwegians were hoping for from the talks was a positive response from the government sooner than later, enabling the facilitators to make an announcement of a breakthrough during Minister Jan Petersen's visit based on the formation of the apex body and the coordinating committees but it was easier said than done.

The Norwegians sent their advance team, Erik Solhiem, Lise Gold and Vidar Helgessen earlier in the week and Petersen was expected Friday, January 21, with a visit scheduled to the Wanni on Saturday to meet with the LTTE leadership to discuss the way ahead.

But the government was finding it tough to agree to the LTTE proposals, with Foreign Minister Lakshman Kadirgamar in particular taking a tough line on the composition proposed.

The thinking of the President and Kadirgamar was that giving the LTTE a majority in the district level coordinating committee would not only tantamount to recognising them as the sole representatives of the Tamils but also tacitly agreeing to the move for an interim to an interim administration.

The Kumaratunga-Kadirgamar duo also believe the LTTE is severely weakened following the tsunami and was as a result no longer in a position to bargain from a position of strength.

Accordingly, the Kumaratunga-Kadirgamar duo believed the heat can be turned on the LTTE by signalling the government meant business with even renewed arms purchases.

Kadirgamar had in fact said there was no urgency in rushing for talks with the LTTE but rather a step by step approach adopted to exhaust the Tigers.

Further, agreeing to the LTTE proposal would also mean the government having to effectively sideline the EPDP and locking horns with the JVP, which has agitated against giving the LTTE exclusive authority over the north east on behalf of the Tamils with regard to the reconstruction efforts. Moreso when the JVP has been kept out of the reconstruction efforts in the south.

The LTTE on the other hand will not agree to work with the EPDP and faced with this dilemma, the government decided to play for time.

Interestingly, it is the Wednesday the LTTE made its final proposal, the President decided to announce there will be no elections for another five years.

Unsure how to deal with the emerging situation vis-a-vis the LTTE and the JVP, the President's move was aimed at securing a comfortable majority in the House by indicating to the UNP there was no hope of them forming a government in the near future.

By this tactical move, the President hoped UNPers would join her in the reconstruction effort and agree for a non-confrontational constitutional manoeuvre to abolish the executive presidency as well as deal with the LTTE as a united force.

But once again Kumaratunga miscalculated, with the UNP response being swift and devastating. On the instructions of Party Leader Ranil Wickremesinghe, Spokesperson G.L. Peiris was quick to denounce the President's claim.

"Elections form the life blood of democracy and there should be elections at the right time. Abolition of elections or postponing polls would be a gateway to dictatorship. We demand the presidential election before the end of this year. If anybody is trying to postpone the elections, we will mobilise people's action to fight the dictatorship," Peiris said.

The UNP also charged the President of attempting to use the tsunami to perpetuate herself in office without making every effort to work to a coordinated plan to provide the affected people relief.

But the UNP's response paled into insignificance considering what went on behind closed doors at the UPFA executive committee meeting last week chaired by Minister Ratnasiri Wickremanayake, who is also now the president of the party following Kumaratunga's resignation.

JVP livid

The JVP came in for the executive committee meeting ready for battle being livid at President Kumaratunga's sidelining of the party on the relief and reconstruction efforts.

It is the Marxists who were from the mainstream parties hardest hit by the tsunami with their base in the south practically wiped out and saw Kumaratunga's move as an attempt to marginalsie them politically and decided the time had come to bell the cat.

The JVP, which had submitted its own plans for the reconstruction of tsunami affected areas had also been appealing for a meeting with the President to discuss their proposals but had little success, prompting Minister K.D. Lalkantha to publicly lash out at the Mano-Tara committees appointed by the President, describing them as a worse disaster than the tsunami itself.

The President's refusal to give the JVP an appointment was all the more rankling for the party considering Kumaratunga meeting with Opposition Leader, Ranil Wickremesinghe on two occasions.

Thus, JVP firebrand and Chairman, UPFA, Nandana Gunatilleke suggested at the last JVP politburo the executive committee meeting should be used as a forum to challenge the President and her dictatorial rule. He said a radical force was necessary to effectively fight the battle and sought approval to throw the gauntlet. The politburo gave its blessings to Gunatilleke.

And at the UPFA executive committee meeting, Gunatilleke did not mince his words, accusing Kumaratunga of trying to run a dictatorship whilst tainting the JVP too with her bungling.

He said the UPFA has now reached a decisive stage in its existence and that the Memorandum of Understanding signed between the SLFP and JVP had been violated countless times by the President.

An irate Gunatilleke went on to say although the JVP has endured the situation for as long as it could, the party could no longer do so merely to keep the government alive.

Calling it quits

He added that the manner in which the President was behaving after the tsunami tragedy in particular was disgusting and forced the party to consider calling it quits.

"Maybe the President is planning to govern with her cronies with the money she gets to cope with the tsunami but the JVP cannot let her do that," Gunatilleke thundered.

Added he, "We don't need to cling to the alliance the way a tick does to a dog and if this situation continues, the JVP is ready to step down."

Continuing, Gunatilleke launched a scathing attack on the Mano-Tara task forces stating the whole country knew who were heading the three committees, adding it was a complete farce.

"The party leaders meetings are no better and nothing even came of them. No matter what was discussed, the President finally does what she wants," Gunatilleke said.

Given this onslaught, Ministers Ratnasiri Wickremanayake and Maithripala Sirisena tried to appease Gunatilleke, telling him the President found it difficult to give the JVP an appointment due to pressure of work. Wickremanayake proposed setting up a committee comprising JVP and SLFP members to set up a meeting with the President to discuss their concerns.

That proposal only helped further agitate Gunatilleke, who scoffed at it. "What world are you living in? How many committees has the President appointed by now? Has any one of them been of any use? Committees are only good for killing a great deal of time and allowing the problem to slip by unnoticed," he said.

Added the JVP firebrand - "As a party, we will have to make a decision. We have put up with this long enough. We want to give the President also this message. Go and tell her this. Even after that, if there are no results, the decision we take will be a tough one."

Minister Wickremanayake and Sirisena then suggested setting up a parliamentary committee to consult with the Presidential task forces and to give it legitimacy through a parliamentary mechanism but Gunatilleke said he doubted the President would agree to such a proposal.

"She is a lone player. I don't think she will like the idea. Try and see, but I seriously doubt it," Guantilleke said.

PM's complaint

Even Prime Minister Rajapakse has complained the President's confidantes were working on their own plans without any consultation process and was planning to go public with his own proposals for reconstruction through the district development committees.

It is this confusion prevalent in government that has prompted the donor community to map out their own plans for reconstruction with only minimal funding going directly to the government.

But for Kumaratunga, it is a catch 22 situation given the political complexities she is now confronted with and given the JVP's warning signals, will be hard put to deal with the LTTE as well, particularly when the Marxists have been kept out of the reconstruction teams in the south.

These developments would also effectively stall Kumaratunga's plans to legislate her task forces end January as announced since the LTTE too would want their arrangement legislated to give it legitimacy. All this has only added to the utter confusion unleashed by Kumaratunga in mishandling the post disaster management.

And the only hope now for Kumaratunga is to rope in the UNP or some UNPers to save the day for her but that too barring one or two exceptions is a hardsell.

Thus, the coming days and weeks will only see the situation getting murkier and murkier as Kumaratunga battles to survive in politics while the victims of the tsunami fight to rebuild their lives.

Fuel prices yet to reflect cost benefits

Minister Susil Premajayanth

By Mandana Ismail Abeywickrema 

The strengthening of the rupee, which has recorded a 6 per cent appreciation against the dollar over the last four weeks, and the static global fuel prices are yet to be reflected in local fuel prices.

Global oil prices have been on a decline since November 2004, and the anticipation of the local consumers for some sort of relief did not bear fruit. The reason, as explained by Power and Energy Minister, Susil Premajayanth in December was that the country was yet in the process of settling fuel bills from previous months when a barrel of oil was recorded at US$ 50.

As Premajayanth pointed out then, it would take Sri Lanka some time to reap the full benefits of the declining global fuel prices.

Even with the global fuel prices experiencing a slight increase last week, the Sri Lankan rupee has performed well and has so far appreciated 6.89 per cent against the dollar accruing huge savings on oil imports.

Up to December 10, 2004, the rupee depreciated by 7.7 per cent against the US dollar year on year, and recorded Rs.104.84 per US dollar. During this period, the rupee also depreciated against the Sterling Pound (14 per cent), the Japanese yen (9.5 per cent), the euro (12.6 per cent) and the Indian rupee (10.7 per cent). The pressure on the exchange rate is expected to further ease in the coming months with the expected increase in foreign inflows.

As a result, the impact of increasing global fuel prices would be inconspicuous considering the strength of the rupee.

Passing down

Passing down to the consumers these benefits is still an issue which has not even reached the agendas of the various discussions held by the authorities pledging to bring about some sort of relief to consumers.

That a reduction in fuel prices would have a cascading effect on consumer goods in general is a matter that seems to have eluded the minds of the authorities.

Speaking to The Sunday Leader last week, Premajayanth said that the government would indeed consider a price reduction in fuel within the next two weeks.

He also observed that Sri Lanka is yet to reap the benefits of the global oil prices as the country is still receiving fuel for orders made two months ago, when global prices were relatively high.

Premajayanth also pointed out that any price reduction would depend on the Ceylon Petroleum Corporation's (CPC) pricing formula.

However, he asserted that at present, everything looks favourable for a downward price revision.

"At the moment things are looking favourable and the government would definitely consider a price reduction," he said.

Loss-making

The CPC too while admitting that 'prices have come down slightly' noted that the market situation has not helped the Corporation, which is still running at a loss.

CPC, Chairman Jaliya Medagama attributed the losses to the low selling prices of fuel in Sri Lanka in comparison to international prices.

Medagama explained that the CPC still incurs losses on the sale of fuel in the country. CPC incurs a loss of Rs. 1.2 billion per month on fuel.

Petrol costs the CPC Rs. 69.48 per litre when the selling price of a litre is Rs. 68 (outstations) and Rs. 70 (Colombo).

Diesel costs Rs. 49.3 per litre although it is sold at Rs. 42 (outstations) and Rs. 44 (Colombo).

Kerosene costs CPC Rs. 42.24 per litre when a litre is sold at Rs. 25.50.

The losses, Medagama points out continues, while the government is still in the process of meeting parts of its high imports bill, dominated by fuel imports.

Fuel dominates the country's import bill and currently, Sri Lanka pays upto US$ 90 million for refined and crude oil.

According to the December Monetary Policy Review, total expenditure on imports amounted to US$ 715 million in October 2004, including petroleum imports of US$ 97 million. During the first 10 months, export earnings increased by 12 per cent to US$ 4,725 million, while expenditure on imports expanded by 20 per cent to US$ 6,429 million. Accordingly, in the first 10 months, the trade deficit grew by US$ 564 million to US$ 1,704 million compared to the deficit in the first 10 months of 2003. However, if the average international oil price had remained at the same level as in 2003, the trade deficit, according to the Monetary Board, would have increased by only around US$ 360 million to about US$ 1,500 million.

The fuel subsidy, which put much pressure on the Treasury most part of last year was also subjected to heavy discussion with the government's decision to minimise subsidies in its maiden budget presented in November last year.

The CPC was then informed by the Treasury of its decision to freeze the existing fuel subsidy.

However, the issue caused much concern when Premjayanth informed the Treasury that a serious decision would have to be made as CPC would have to come to an agreement with the government to find relief in another form - waiving off taxes like VAT and production taxes.

The issue about subsidy payments is still being negotiated.

Medagama explained that although the Treasury at one point decided to make price adjustments to reduce the burden on the state coffers, the matter is now being discussed. A final outcome of these discussions is expected to take some time.

The Treasury however has now agreed to set off the amount due as taxes from CPC.

Increases in the petroleum sector began on July 23 last year when the price of a litre of petrol was increased to Rs. 65 from Rs. 57. On August 13, the price was further increased to Rs. 68 with the latest being the September 24 increase of Rs. 2 within the Colombo city limits to Rs. 70 per litre of petrol.

A Rs. 32 litre of diesel was first increased on August 13 by Rs. 4 to Rs. 36. On September 24, a litre of diesel within the Colombo city limits was increased to Rs. 44 while in areas outside the capital,  prices were increased to Rs. 42.

The price of kerosene was not increased.