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Friday December 9th, 2022

Opinion: Reform the proposed 20th Amendment to strengthen, not weaken, transparency

Opposition lawmakers protest constitutional amendments in Sri Lanka on Sep 23, 2020

ECONOMYNEXT – Following parliamentary elections, President Gotabhaya Rajapaksa wasted no time in obtaining cabinet approval and thereafter Gazetting the proposed 20th Amendment to the 1978 Constitution of Sri Lanka. Many commentators have noted how the 20th Amendment as proposed will diminish parliamentary powers, erode judicial independence, and weaken independent commissions. But it is also critical for ordinary people—especially those who voted for the current government—to know that the proposed 20th Amendment will usher in an era of unchecked corruption shackling future generations. The President and the Prime Minister urge us that repeal of the 19th Amendment is necessary for economic development. What they don’t tell us is that the proposed reforms reduce transparency and oversight, at the expense of economic development. We can and must demand more from our elected leaders.

Passed in 2015, the 19th Amendment to the Constitution requires the Constitutional Council to appoint a qualified auditor as independent Auditor-General. The 20th Amendment empowers the President to appoint any person to this position in his sole discretion. Constitutional protection for the Audit Service Commission will disappear, and audits will no longer be required for the President and Prime Minister. Whereas the 19th Amendment strengthened the Commission to Investigate Allegations of Bribery or Corruption by allowing it to initiate its own inquiries, the proposed 20th Amendment removes constitutional protection altogether, meaning the commission could be abolished by a simple majority vote in Parliament. Even if the Bribery commission remains, the 20th Amendment as proposed will strip its power to commence investigations on its own motion. Finally, the proposed 20th Amendment outright abolishes the National Procurement Commission.

Who benefits from these changes?

The role of the auditor-general is to conduct independent audits of government operations. These audits allow Parliament to scrutinize government spending and “ensure better financial management and optimum use of public resources to maintain sustainable development.” If the National Audit Commission is abolished, so too is its surcharge power, meaning individuals who misappropriate public funds can no longer be held personally liable. How do ordinary Lankans gain by reducing transparency and accountability regarding the governmental use of public funds?

Likewise, the proposed 20A will abolish the National Procurement Services Commission, which serves to “formulate fair, equitable, transparent, competitive and cost-effective procedures and guidelines” for government procurements, and ensure integrity, transparency, and accountability. How is less transparency in big-budget government procurements a good thing for ordinary people?

Short answer? It’s not.

Enhanced anti-corruption measures in the 19th Amendment benefit all of us. While he served as President, Mahinda Rajapaksa commissioned the port project in Hambantota, financed with $1.1 billion in loans from China. The project was built with Chinese contractors, not local labor, and made losses from the moment it opened in 2010. When Mahinda ran for a third term in 2015, his campaign allegedly took kickbacks from the Chinese port fund as had been reported in the media then. With Sri Lanka unable to afford even interest payments on the billion-dollar loan, the Sirisena government had to default and ceded control of the port and 15,000 surrounding acres to China for 99 years. Now Chinese port authorities are trying to pressure local farmers to sell their land to make way for a Chinese industrial zone in Hambantota. Local residents are right to fight and not sell away what belongs to their children. But without independent audits and a robust bribery commission, the Hambantota debacle is bound to repeat.

Hambantota’s port was not an isolated case. President Gotabhaya was charged in 2016 with corruption for illegally transferring $75 million in state-owned weapons to a private security firm named Avant Garde to establish a floating armory. He was separately charged with misappropriating Rs. 33.9 million to build a memorial museum for his parents. While presidential immunity prevents these cases from moving forward, independent audit and procurement functions are essential to preventing misuses of public funds.

Today, the government is embarking on huge development projects, bringing more government institutions under the control of Rajapaksa family members and military officials. With no independent audit and no procurements commission, nepotism, cronyism, and corruption will go unchecked. By abolishing the audit commission and exempting the President and Prime Minister’s offices from audit, the 20th Amendment will permit daylight robbery of public funds. Because these high-ranking officials hold immunity from suit, no person will be able to challenge corruption in court.

So who stands to gain? Clearly, the Rajapaksas do. But what’s in it for the rest of us? If tomorrow the President wants to sign away all our natural resources or seize private property for a big-budget development project, financed by an onerous loan, who can stop him? What oversight or recourse will we have when public officials abuse our trust? The Rajapaksa brothers tell us that the 20th Amendment, complete with the above-mentioned reforms, is crucial to promoting economic development. But the World Bank (not to mention common sense) says the opposite—“corruption impedes investment, with consequent effects on growth and jobs. Countries capable of confronting corruption use their human and financial resources more efficiently, attract more investment, and grow more rapidly.”

It is our duty as citizens to think critically about whether the proposed reforms help or hurt us. This isn’t even about the Rajapaksas, although they certainly stand to gain from reduced oversight. At the heart of any government lies public trust. We place our hard-earned money and rights in the government’s hands and ask only that it acts in our collective interest. Essential to this trust is our ability as citizens to get progress reports from independent auditors and commissions to see that the government remains on the right track. An independent Auditor-General, Procurement Commission, and constitutionally protected commissions addressing audits and bribery are all vital to make sure our government works for us, and not at our expense. Sri Lankans must demand that the 20th Amendment strengthen, not weaken, audit, procurement, and anti-bribery functions, protecting their independence from political interference of any kind. (Colombo, September 27, 2020)

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Sri Lanka bond yields end higher, kerb dollar Rs370/371

ECONOMYNEXT – Sri Lanka bonds yields ended up and the T-bills eased on active trade on Friday, dealers said.

The US dollar was 370/371 rupees in the kerb.

“The bond rates went up, however more interest was seen in the short term bills by the investors” dealers said.

A bond maturing on 01.05.2024 closed at 31.90/32.20 percent on Friday, up from 31.25/70 percent at Thursday’s close.

A bond maturing on 15.05.2026 closed at 30.30/31.30 percent steady from 30.30/31.00 percent.

The three-month T-bills closed at 30.75/31.30 percent, down from 32.00/32.25 percent.

The Central Bank’s guidance peg for interbank transactions was at 363.18 rupees against the US dollar unchanged.

Commercial banks offered dollars for telegraphic transfers between 371.78 and 372.00 for small transactions, data showed.

Buying rates are between 361.78 – 362.00 rupees. (Colombo/Dec 09/2022)

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Foreign minister, US ambassador discuss future assistance to crisis-hit Sri Lanka

ECONOMYNEXT — In a meeting in Colombo, Sri Lanka Foreign Minister Ali Sabry and US Ambassador to Sri Lanka Julie Chung discussed ways in which the United States can continue to support Sri Lanka going forward, the Ambassador said.

Chung tweeted Friday December 09 afternoon that the two officials had reflected on the “twists and turns” of 2022, at the meeting.

Minister Sabry was recently in Washington D.C. where he US Secretary of State Antony Blinken.

A foreign ministry statement said the two officials held productive discussions at the Department of State on December 02 on further elevating bilateral relations in diverse spheres, including the 75th anniversary of diplomatic relations which will be marked in 2023.

Incidentally, Sri Lanka also celebrates the 75th anniversary of its independence from the British in 2023, and President Ranil Wickremesinghe has given himself and all parties that represent parliament a deadline to find a permanent solution to Sri Lanka’s decades-long ethnic issue.

The US has been vocal about Sri Lanka addressing concerns about its human rights record since the end of the civil war in 2009 and was a sponsor of the latest resolution on Sri Lanka passed by the United Nations Human Rights Council. Unlike previous resolutions, this year’s iteration makes specific reference to the country’s prevailing currency crisis and calls for investigations on corruption allegations.

In the lead up to the UNHRC sessions in Geneva, Minister Sabry Sri Lanka’s government under then new president Wickremesinghe does not want any confrontation with any international partner but will oppose any anti-constitutional move forced upon the country.

On the eve of the sessions on October 06, Sabry said countries such as the United States and the United Kingdom, who led the UNHRC core group on Sri Lanka, are greatly influenced by domestic-level lobbying by pressure groups from the Sri Lankan Tamil diaspora.

These pronouncements notwithstanding, the Wickremesnghe government has been making inroads to the West as well as India and Japan, eager to obtain their assistance in seeing Sri Lanka through the ongoing crisis.

The island nation has entered into a preliminary agreement with the International Monetary Fund (IMF) for an extended fund facility of 2.9 billion dollars to be disbursed over a period of four years, subject to a successful debt restructure programme and structural reforms.

Much depends on whether or not China agrees to restructure Sri Lanka’s 7.4 billion dollar outstanding debt to the emerging superpower. Beijing’s apparent hesitance to go for a swift restructure prompted Tamil National Alliance MP Shanakiyan Rasamanickam to warn of possible “go home, China” protests in Colombo, similar to the wave of protests that forced the exit of former pro-China President Gotabaya Rajapaksa.

The TNA will be a key player in upcoming talks with the Wickremesinghe government on a solution to Sri Lanka’s ethnic issue. (Colombo/Dec09/2022)

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India smogs out Sri Lanka’s China tower observers

 

ECONOMYNEXT – Sri Lanka’s Chinese-built Lotus Tower has halved visitors to its observation deck an official said as dirty air flowing from India triggered air quality warnings and schools in the capital closed.

“Masks are mandatory at the observation deck and roughly around 50 to 60 can go up to the observation deck at a time, time limits have not been altered and still persists at 20 minutes for observation,” the official told EconomyNext.

Prior to the smog, 120 observers were permitted at once to the deck.

However, even after limitations the Lotus Tower has continued to draw visitors, and revenues are coming in, the official said.

The tower built with a Chinese loan by the cash rich Telecom Regulatory Commission has been described by critics as a white elephant that eats the money earned from telecom operators mainly as spectrum fees.

Sri Lanka’s National Building Research Organization (NBRO) said India air heavily polluted with particulate matter was flowing across the island into a depression in the South West Bengal Bay. (Colombo/Dec09/2022)

 

 

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