Thopigala: Military success but road to nowhere
The army has finally captured Thopigala at some cost and it has inflicted greater losses on the LTTE if reports available to us are to be believed. The government is crowing about a great triumph and indulging in countrywide celebrations, though public response is less than lukewarm. The LTTE on the other hand is sulking and threatening to attack military and economic targets, but this may be a case of sour grapes because if the LTTE can do more than it is doing now it would have done so already. However, the LTTE does seem to have successfully extracted the majority of its cadres allegedly “trapped” in Thopigala.
All this is a sheer waste of human lives and resources and an effort by the main parties to the conflict to hide the bitter truth and distract the public. Extrapolating from studies done by the Marga Institute it is possible to say that the cumulative costs of war from 1983 to the present are about twice Sri Lanka’s annual GDP. Kumar Rupesinghe of the Anti-War Front estimates that this year’s defence expenditure of Rs 135 billion will escalate to Rs 300 billion next year. The government is anxious to distract the people from concern about spiralling living costs, massive corruption scandals, serious law and order lapses and accusations of having paid off the LTTE during the presidential elections. The LTTE is in the pits internationally, is suffering repeated military setbacks, and its operations and preparations are often detected and destroyed. It is unable to wash off the terrorist label and unless it can do so it will be unable to give leadership to the Tamil people. However, even if distortedly, the aspirations of the Tamil nationalist movement are manifested through the TNA and LTTE; the other Tamil movements are far from able to match this influence.
We do not hesitate at this time to assert once again that this war is a dead end; it will not solve the ethnic conflict but only make things worse by decreasing the possibility of negotiations and inflaming communal feelings. If the government together with the main opposition offers a substantial devolution package to the Tamils the LTTE will not be able to hang on to the military option.
Vasu goes to court again, and even again
In the June 2007 Newsletter we highlighted that Democratic Left Front Secretary Vasudeva Nanayakkara (VN) had filed a Fundamental Rights petition in the Supreme Court (SC) ) in respect of the sale of 90% shares of Sri Lanka Insurance Corporation (SLIC) to a consortium led by tycoon Harry Jayawardena. VN has since filed a second such petition in respect of the sale of 90% of Lanka Marine Services (LMS) to John Keels Holding. In both cases VN alleges massive fraud, under pricing, flouting of Cabinet and tender procedures and a loss of revenue to the government running into several billion rupees in each case. The Committee on Public Enterprises (COPE) previously denounced these privatisation measures as instances of blatant plunder of state assets.
In both cases the SC has given leave to proceed. The respondent list in the two cases reads like a Who’s Who of political and government luminaries: P.B. Jayasundera, Price Waterhouse and Coopers, Aitkin Spence, K.N. Choksy, Milinda Moragoda, Karu Jayasuriya, Ranil Wickremasinghe, Chandrika Kumaratunga and dozens more Colombo celebrities. The SC also directed that Harry Jayawardena’s name be added to the list of respondents in the SLIC case.
In the LMS case the petition further alleges that former president Kumaratunga and the Land Commissioner agreed to fraudulently transfer eight acres of prime Colombo land near the port, free of charge, to John Keels more than two years after the privatisation was completed. The property belongs to the Ports Authority hence Kumaratunga and the Lands Commissioner do not in any case have the authority to transfer someone else’s land.
It is reprehensible that Parliament prevaricates and the government fails to have the law enforcement authorities stand idly by without investigating such mammoth rackets and prosecute the culprits. It is possible that it is the sheer audacity and scale of these frauds and the sickening negligence of the law enforcement authorities that persuaded the SC to allow a Fundamental Rights petition filed by an individual in the public interest to go forward.
A third most interesting recent cases in which also the SC has given leave to proceed is the Fundamental Rights petition filed is in respect of the Acquisition and Cross-Servicing Agreement (ACSA) which also we described in the June Newsletter. One can understand the political sensitivity of the issue if leave to proceed was given though the action eventually failed. The argument that the signing of the ACSA by Secretary Defence without Cabinet approval was in violation of the constitution was not specifically dealt with by the bench when it dismissed the petition. It will be interesting to read the reasoning in justification of the decision when it becomes available.
Communist Party Youth League Convention
The DLF salutes the CP for the impressive scale and style in which it conducted its 12th Youth League Convention in Matara on July 8th. The Matara esplanade was decked out in red, ample protection from sun and rain provided by large canopies and tasteful and enjoyable dance and musical entertainment provided in between sessions.
Most important, however, is the political line adopted at the convention endorsed the programme adopted by the 5-party Socialist Alliance which focuses on:
– Concrete suggestions to contain the cost of living.
– A demand to stop the war and commence negotiations.
– A demand to stop abductions, assassinations and ransom extraction; we have reason to believe that the government can catch much bigger fish.
– A demand for more effective apprehension and prosecution of high level persons involved in corruption.
There was a public meeting after the Convention at which Vasudeva, Tissa Vitarana, DEW Gunasekera, Mrs Ferial Ashraf and several others spoke.
Socialist Alliance and the APRC
The five-party Socialist Alliance which includes the DLF, CP and LSSP has taken a common position on devolution. The basic position is as follows:
– A devolution and power sharing arrangement which will be acceptable to a majority of the Tamil and Muslim people.
– The Province and not the District to be the unit of devolution.
– Support for the Tissa Vitarana proposals as a starting point for discussion.
While the DLF has expressed its support for the Expert Committee Majority Report we are satisfied that endorsement of the Tissa Vitarana proposals by the Socialist Alliance is important to move forward in unity. Unless the President and the SLFP agree to drop their insistence on an explicitly unitary model and District-wise decentralisation the APRC process will end in failure.
The Socialist Alliance plans to hold a meeting with the President to convey this message along with cost of living, governance and other important issues which we hope to discuss.
Need for two-level price mechanism for essential commodities
Free-market economics rejects the concept of subsidies and opposes different price levels for the poor and for others. This is fine in theory and ensures efficient resource allocation provided income levels across society are reasonably equitable and provided even the poorest families receive an income adequate for survival. But this is not the case in Sri Lanka. About a quarter of the population lives on less than two dollars per person per day and about 50% of the population is facing immense stress in making ends meet as a consequence of spiralling cost of living escalation in recent months. It is simply not possible for a family of four to survive in an urban environment on less than about Rs. 15,000 ($135) per month at mid-2007 price levels; in rural areas the availability of non-monetised inputs reduces the pressure a little.
The Socialist Alliance therefore calls upon the government to make available a basket of about 12 essential commodities to low income households at a lower price than the prevailing market price. These commodities should include consumer essentials such as rice, sugar, dhal, dried fish, onions and flour. We call upon the government to accept this in principle and set up an appropriate expert committee to work on the mechanics such as cut-off income level, quantity per family or per person and procurement and distribution mechanisms.
If the government directly enters into the local purchase or import and distribution mechanism for these essential items it can procure and distribute them at much reduced costs. This will also have the knock-on effect of containing prices in general.
Russia and the West
We are not in the least surprised by the rising tension between the West and Russia; the standoff has deteriorated rapidly in the last three months. Britain expelled four Russian diplomats following the rejection of a request for the extradition of a former KGB agent Andrei Lugovoi and four British diplomats received the same treatment.
A more serious confrontation is American determination to station strategic missiles in Poland and the controlling radar in the Czech Republic to counter the purported Iranian nuclear menace. The US denies that the missiles are a threat to Russia but Putin dismissed the Iran threat theory as poppycock. He tore up the treaty on Conventional Forces in Europe and setoff alarm bells across Europe. Russian heavy armour can now move right up to its European borders.
The tinder box also includes a possible Russian UN veto of Kosovo independence followed by unilateral American recognition of a Kosovo state, conflict over proposals for new gas pipelines to Europe, and human rights criticisms against Russia. Patronising Clinton era grand designs, for incorporating a new market oriented Russia with the West, have receded into oblivion.
The backdrop to all this is the wholesale privatisation of the Soviet economy which commenced in 1992. Described as the “financial swindle of the century” what American advisors and Yeltsin era apparatchiks did was to value all state property at 150 billion rubbles, which Russian nationalist Vladimir Zhirinovsky described as a $400 billion robbery. The intention was to found a gargantuan mega-oligarchy and sabotage the economy of the former USSR.
Fraud on this scale simply could not stand, it had to unravel, but how much further the economy will backtrack away from capitalist relations is still uncertain. Conviction of oil magnate Mikhail Khodorkovsky for fraud, theft, misappropriation of state property and tax evasion and the tearing apart of his oil company Yukoshas is an example of this unraveling. The Tech an American university newspaper said: “The Yukos situation has highlighted a political struggle in Russia between reform-minded officials favouring a market economy and others, often with a background in the state security services, who are determined to retain a strong dose of state control. Putin has been trying to steer a course between the two”.
Putin has since veered further against the market; Russia is not traversing the anticipated path to market capitalism. It is as yet neither unequivocally capitalist nor socialist by a long chalk, an ambiguity it shares with China and Vietnam.
New political formation
We are watching with interest a new political formation in the making; it will probably go by some such name as National Congress; at its core is the UNP and the so-called Mango group. Chandrika has come out into the open and declared her support. Several NGOs have been invited to throw in their lot with the formation. A few left parties were approached and we have reliably learnt that the United Socialist Party (Siritunga Jayasuriya) will not participate and that the Left Front (Vickremabahu) is also unlikely to participate.
When negotiating with NGOs and these parties the organisers explained that the programme of the new alliance is to act against human rights violations, governance and corruption concerns and to take a public stand in favour of federalism regarding the national question. However, when things materialised at the 26th July UNP-Mango rally and public meeting the overwhelming priority was to bring down the government and hold fresh parliamentary elections. Progressive NGOs and the two left parties are, obviously, not interested in making themselves a UNP election vehicle; they had judged correctly that the peace and human rights issues were being used for this purpose.
An issue based alliance that does not fall under the leadership of the UNP, steers clear of liberal economics, avoids an implicit alliance with Washington, and confines itself strictly to the stated issues may have served a useful purpose. However, the way in which the National Congress is shaping up is not as a fighting alliance on crucial issues but as a UNP electoral mobilisation. That said, the 26th July rally, though smaller than hoped for by the organisers, attracted a moderately large crowd and serves as a last warning to the government to stop the war, present a meaningful devolution package and get serious on economic concerns.