EIU predicts growth rate dropping to 4.1% in 2008

UNP, JVP, SLMC, SLFP (M) plan continuous
protest campaigns

Gotabaya's belligerence may cost
Sri Lanka the GSP Plus

Ranil calls on ARFRO to define military secrets

Defence Ministry admits presence
of disgruntled personnel within

While Defence Secretary Gotabaya Rajapakse declared war on the media and opened another human rights front for President Mahinda Rajapakse to deal with at a time Sri Lanka was dangerously close to losing the GSP Plus facility over its rights record, the opposition turned the heat on by taking to the streets last week over the rising cost of living and media freedom issues vowing to fight on until the administration is brought to its knees.

Economic crisis

That Sri Lanka is in the throes of a serious economic crisis there is no gainsaying with most people struggling to eat two square meals a day and the gravity of the situation was underscored by President Rajapakse indicating he will not be able to meet a salary increment the judiciary has asked for despite warnings of dire consequences from Chief Justice Sarath N. Silva, no less.

The fundamental rights application filed by the judges is coming up before the Chief Justice on June 9, the day he celebrates his 64th birthday and it remains to be seen how the Supreme Court responds to the government's refusal, but on the streets, the UNP, SLFP (M), SLMC and the JVP have made it clear they will fight on with last week being just a teaser for a starter.

Solutions

The problem for the government of course is that there are no quick-fix solutions to the crisis - with the economic woes expected to mount in the weeks to come and the cabinet memorandum submitted last week by President Rajapakse to deal with the situation as exclusively published in The Sunday Leader only went to show the administration was really at sixes and sevens.

Such is the financial crisis confronting the government, not only is it seriously contemplating floating fuel prices and slashing the fertiliser subsidy but also adding to the employers and employees economic burdens by restructuring the Employment Provident Fund (EPF) scheme to raise more revenue.

The restructuring of the EPF scheme the government is proposing to do as admitted by Labour Minister Athauda Seneviratne, is by  increasing the employers contribution from 12% to 13% and the employees contribution from 8% to 10% thus giving the state an additional three per cent revenue each month from the private sector under the guise of restructuring the scheme.

Financial strain

The bottom line is,  in these tough economic times, while the private sector will be put under greater financial strain with an additional one per cent burden, the employees too will be taking home two per cent less of their income at a time  they are already struggling to make ends meet.

For the government however it is a means of raising more revenue to meet its expenditure and splurge on ego boosting projects such as Mihin Air and maintaining a giant cabinet, while sugar-coating it as a greater saving for the employees.

With over six million workers in the private sector the government has figured it can raise billions of rupees to meet expenditure without having to print more money using this method little realising it will lead to greater agitation.

Nightmare

Thus, rather than providing salary increments to meet the cost of living nightmare which the government knows may well lead to spiral inflation, it is going in the opposite direction and creaming more out of the employers and employees prompting the opposition to plan a series of agitational campaigns.

The government strategy of raising more revenue by further emasculating both employers and employees was also indicative of the bankruptcy of ideas to overcome the crisis which is aggravated by an ever-increasing defence budget as the war too continues to take its toll, human and economic.

Given this situation while the UNP-led opposition launched a mini vehicle protest on Tuesday, June 2 over the fuel price hike for a starter, followed with another by the JVP the following day, a more sustained campaign is now in the offing with the Marxists and the UNP coalition to march separately and strike together at the appropriate time.

The JVP in fact gave a hint of what is in store with its All Ceylon Peasants Organisation threatening serious consequences if the farmer subsidy is slashed, an issue the government has already decided on with President Rajapakse stating he can no longer foot the full subsidy which it is claimed has gone up from Rs.15 billion to Rs. 40 billion.

The JVP however is not biting with Polonnaruwa District MP, S.K. Subasinghe calling on the government to drop its plans of slashing the subsidy or face countrywide protests.

Opposition campaign

Subasinghe was to announce on Wednesday, June 4 that the JVP would launch a campaign on June 10 to safeguard the fertiliser subsidy with the distribution of leaflets opposite the Fort Railway Station followed by a countrywide protest campaign.

Targeting the farmer community who were pivotal to Rajapakse's electoral success, the JVP has also planned protest campaigns in Welimada on June 13, Embilipitiya (15) Mahiyangana (21) and Dambulla on June (29).

Subasinghe was to charge that in Polonnaruwa, the agricultural officers informed farmers who had not availed themselves of the subsidy as yet they would have to buy it at Rs.1200 and not Rs.350.

Said Subasinghe - "While using the war to justify all the hardships imposed on the people, the government is having Sajin Vaas Gunewardena as Director of Mihin Air on a salary of Rs. 500,000 and a cabinet of 108 ministers."

Broken promises

Added Subasinghe - "Though the Mahinda Chinthanaya was a 10 year plan, after three years, all the promises were broken. The government did not keep its promise even for five years. The very farmers who voted for him in 2004 would send him back home. Farmers also have to suffer the cost of living which has arisen by 40 per cent in the last six months with agricultural inputs increasing by 60 per cent. If the fertiliser subsidy that was provided for Rs.350 is not continued with, tough political decisions will be made by the farmers."

At the same time the Inter Company Employees Union which is linked to the JVP too issued a one month ultimatum to the government to increase private sector salaries by 25 per cent or face a crippling islandwide strike in the first week of July, once again a demand the administration is unlikely to meet due to the impact it will have on inflation and of course unemployment with several businesses forced to close under such conditions.

In fact the economic outlook  is appearing so bleak that the Economic Intelligence Unit in a country forecast for Sri Lanka dated May 30 says "real economic growth will slow to 4.1% in 2008 from 6.8% in 2007 before recovering to 4.5% in 2009."

The EIU further states "Sri Lanka's economic outlook faces strong downside risks - the exchange rate and investment growth are areas of particular concern."

It is in such a grim scenario that the government is facing the threat of losing the GSP Plus facility which would impact on almost a million people's direct and indirect employment and over US $ 1 billion in export earnings which undoubtedly will be a crippling blow to the economy and the government's war efforts.

Importance of earnings

In fact the importance of foreign exchange earnings for the country's economic well-being was underscored by President Rajapakse in his cabinet memorandum submitted to the ministers last week where he had proposed the appointment of a committee to go into the matter.

Said the President - "A ministerial committee headed by the Minister of Foreign Employment Promotion and Welfare and consisting of Minister of Vocational and Technical Training, Minister of Public Administration, Minister of Labour Relations and Manpower and other relevant officials of the Ministry of Finance and Planning as members to be appointed to work out a plan to increase overseas remittances by at least US $500 million to reach the annual remittance income of US $ 3,000 million this year."

Adds the President - "The Central Bank of Sri Lanka and commercial banks to work out a programme to increase foreign exchange remittances for overseas employees and others who are willing to invest in Sri Lanka."

Earnings

That underscores the importance to the government of foreign exchange earnings and while making such plans to attract remittances, losing nearly US $ 1 billion by way of export earnings, in addition to the loss of nearly one million jobs over the loss of the GSP Plus facility to say the least will be economic ruination and the President knows it.

And such economic ruination will also have a direct bearing on the government's war effort, for without money, a sustained campaign will be hard put to maintain and it is with that knowledge that the LTTE too is upping the tempo by exploding bombs randomly to queer the pitch for tourism and investment apart from the human costs involved and the knock-on effect a fear psychosis will have on the overall economy.

And it is in that context, Defence Secretary Gotabaya Rajapakse is shooting his own war effort in the foot and indirectly helping the LTTE by thumbing his nose at human rights and media freedom, oblivious to the consequences which inevitably follow such as international isolation and loss of facilities like the  GSP Plus.

Perspective

Just to put the issue in perspective given its importance to Sri Lanka's overall stability, the GSP Plus is a trade concession given by the European Union to Sri Lanka for the effective duty free import of over 7000 products into the EU market.

The GSP Plus facility is now coming up for renewal for the period 2009-2011 and every country wanting the facility including Sri Lanka must reapply and that is a non-negotiable condition as UNP Leader Ranil Wickremesinghe was told by the EU Commissioners during his recent visit.

Criticism

Sri Lanka has not done so yet and Wickremesinghe when he met with the captains of the apparel industry on Tuesday, June 3 was to tell them that the opposition despite the criticism leveled has done its best to secure the facility for the country and that it was now upto them to impress upon the President to apply for it

And whether or not the country will get the facility which it has enjoyed from 2005 depends not on the EU but the government based on certain criteria they have to fulfill, namely has Sri Lanka ratified and effectively implemented 27 international conventions on labour rights, environment, good governance and human rights.

That probably is why Minister G.L. Peiris last week gave his own spin on the timing of Sri Lanka's application, hoping no doubt the government can at least for the record indict some human rights offenders and have in place the necessary legislation though that prospect appears grim given the bombast of Defence Secretary Gotabaya Rajapakse.

According to a top source in the EU, to get the GSP Plus, the review exercise looks at ratifications, national implementing legislation, effective implementation on the ground and the scale of violation of rights under the conventions.

"If a country has complied with these conditions, GSP Plus will be granted. If not GSP Plus will not be granted: simple as that," a top source said.

And hitherto, within the EU, Sri Lanka is found wanting on the human rights front and threats issued to the media by the  Defence Secretary and the failure to prosecute anyone in the 15 high profile cases before the Commission of  Inquiry have all taken their toll with prospects of securing the facility at the moment "looking extremely remote."

EU delegation

It is in this backdrop that the EU is sending  its Joint Human Rights Ambassadors to Sri Lanka next week where the focus will be on the overall rights climate in the country with meetings scheduled not only with government officials and the opposition but also selected civil society leaders and media persons.

That alone should signal to the government independent sources too will be asked for an assessment of the human rights situation in the country.

The three Joint Human Rights Ambassadors Arjan Hamburger (Netherlands), Jan Nordlander (Sweden) and Silvia Escoba (Spain) will according to their mandate, familiarise themselves with the human rights infrastructure in Sri Lanka, both government and INGOs and appraise themselves of the human rights and humanitarian situation in the country including the prosecution of human rights offenders, child soldiers and the security of human rights defenders.

Human rights

In fact, they will in particular discuss the commitments of the government  with regard to the implementation and compliance of the international human rights conventions within the context of the GSP Plus.

Thus, in this context the bombast of Gotabaya Rajapakse against anyone who dares criticise his war effort and human rights violations may well cost Sri Lanka the GSP Plus facility and further isolate the country internationally, unless of course the President at least now reins him in and muzzle him.

 For, just last week having threatened the media, the Defence Ministry website which comes under his purview was to once again incite violence against journalists by branding selected media organisations and journalists as traitors and those supporting the LTTE.

And confronted with the reality that some information published in the media had to come from the defence establishment no less, the Defence Ministry has in a report published in its official website conceded there are disgruntled elements in the military though  not  explaining how that can be if all was well within the set up.

The question thus arises, what action the Defence Secretary has taken against such military personnel who are accused of leaking 'military secrets' to the media as opposed to hounding the media.

Enemies within

Says the Defence Ministry website - "The first and the most serious concern the Ministry has on the defence reportage is the unethical measures that have been used to obtain information by some of the so-called 'defence analysts'. It has been observed that some disgruntled personnel have been lured by these media people to give away even some of the most sensitive information  to the national security. Some 'analysts' even go on inducing heroism to their informants in armed forces as to show them as some sort of rebels or freedom fighters fighting a secret battle against their 'incompetent and corrupted authorities.'

Thus going by the Defence Ministry's own admission there are enemies or to use its own jargon 'traitors' within the defence establishment and it is obviously a failure on the part of the defence authorities that such 'disgruntled' personnel have not been identified and court martialled rather than hounding the media.

For, given the Defence Ministry admission, these  so-called 'disgruntled personnel,' could just as well leak information to the LTTE while the Defence Secretary is busy threatening journalists for weaknesses in his own administration and without putting his own house in order first.

Military secrets

That the Defence Secretary cannot act as a law unto himself and take cover under 'military secrets' to shield all that is wrong in the country has now been taken up by  the Opposition Leader Ranil Wickremesinghe who in this connection met with the Association of Retired Flag Rank Officers  (ARFRO) who collectively count for over 2500 years in experience.

ARFRO which has a membership of over 140 comprise retired officers of the rank of  brigadier and above and include several former service commanders who have also served the country with distinction and it was this organisation Wickremesinghe invited recently for a discussion on the current security situation.

At this meeting where Generals Cyril Ranatunge, Lionel Balagalle, Gerry Silva, Devinda Kalupahana, Lohan Gunewardene, Air Vice Marshals Brendon Soza, Lal Perera and Rear Admirals D.K. Dassanayake and Abeyratne Banda. The Opposition Leader asked for their views on what steps should be taken to ensure safety of the troops deployed as well as how to safeguard the country  in a climate where the economy is collapsing.

The members of ARFRO, given the sensitivity of the issues involved said they would confer and meet with Wickremesinghe at a future date where specifics could be discussed.

With that done on Monday, June 2, Wickremesinghe wrote to General Srilal Weerasooriya, President ARFRO seeking 'clarification/definition of military secrets' in relation to media following which there was a hive of activity within the outfit.

Clarification

Wrote Wickremesinghe - "I have observed in the recent past that there is a 'conflict' between the independent media and government institutions where some sections have been accused of leaking military secrets. Some media persons have been harassed, assaulted and intimidated. This situation has damaged the image of Sri Lanka in the eyes of the international community."

Adds the UNP Leader - "The ARFRO as an independent body of distinguished officers, whose collective experiences of man years of active service with almost all having done their staff college training abroad on all forms of warfare, may I request you to clarify the meaning  of the term 'military secrets' so as to enable the media to give an accurate report of the present conflict and to express their opinion without endangering any pending operations. An early response from you would be much appreciated."

ARFRO meeting

Following the receipt of this letter the executive committee of ARFRO met and appointed a sub committee to report back comprising Soza, Dassanayake, Gunawardene with General Dennis Perera to be co-opted upon his return to the island on June 11.

Not stopping at that, 48 hours later Wickremesinghe took on the Defence Secretary directly in a bid to break the fear psychosis gripping the people in general and the media in particular, charging that it was Gotabaya who was the 'traitor' and not journalists.

Using the occasion of the  swearing in ceremony of  the 15 UNP-SLMC provincial councilors, Wickremesinghe charged that Gotabaya quit the army to go to America and was not in the country when the east was cleared under UNP rule or Jaffna captured under Chandrika Kumaratunga's presidency.

"The only way Gotabaya could have quit the army was to go abroad. So he approached General Ranjan Wijeratne saying he wanted to migrate to America. Ranjan also told me certain other things but this is not the appropriate forum to go into all that. So to me it is Gotabaya who is the traitor who ran away from the country without fighting the war and not journalists who have remained in the country to do their duty by the people and country," Wickremesinghe charged.

Yeoman service

He added that journalists who report on shortcomings in the prosecution of the war were doing yeoman service on behalf of the valiant soldiers who risk their lives defending the territorial integrity of the state.

The defence establishment reacted predictably to this charge with a barrage of criticism against Wickremesinghe while a demonstration was organised by the ruling alliance to block his entry into parliament on Thursday, prompting the Speaker to refer the matter to the Privileges Committee.