By Malinda Seneviratne –

Malinda Seneviratne

There’s a term that even those who use it at every turn these days hadn’t heard or understood not too long ago. Yahapalanaya or Good Governance. There’s another word that is now being used a lot which was almost unheard of and which, even now, is not quite understood: bonds.

Regardless of familiarity or knowledge there are certain definitive statements that can be made of both. Today, it is clear that few believe that this Government is serious about Yahapalanaya because it is being observed in the breach. We need not elaborate. With respect to bonds, it is clear that the integrity of key players including the Governor of the Central Bank is severely compromised.

Arjuna Mahendran is under a cloud. A dark cloud. There are calls for his removal. Of course some of those who want him removed have objectives that have nothing to do with the alleged wrongdoing and indeed they don’t even have the moral right to make such demands having been directly or indirectly involved in or sanctioned one way or another similar acts during the previous regime. However, that alone is not reason enough to dismiss objections to Mahendran remaining as Governor. The findings of even the ‘friendly’ committee appointed to inquire into the Central Bank Bond Issue last year alone would be sufficient to warrant caution (in the very least) when contract renewal comes up.

There are other worrisome factors. The Big Beneficiary of the process is Arjun Aloysius, the Governor’s son-in-law. The inquiring committee clearly expressed suspicion over what appears to be inside knowledge of decisions about to be taken by the Central Bank which, eventually, translated into big takings for Aloysius. The Bank of Ceylon was named as a possible accomplice and an inquiry into its behavior strongly recommended.

How did Arjun Aloysius become a billionaire overnight? Central Bank bonds. Who is the Big Boss of Central Bank bonds? His father-in-law. There are dots and they will be joined. There’s another possible joining of dots: Aloysius and the Finance Minister Ravi Karunanayake. They are very good friends. Now, a person claiming to be a senior officer in the Finance Minister, writing on the basis of anonymity in Colombo Telegraph and going solely on statements made by the Minister on the ‘Face the Nation’ show on Sirasa TV opines, ‘Karunanayake appeared to be unaware of the loss caused by the Bond issuance’. Whether or not this is true, the Minister must surely know that there were massive benefits to his friend.

Today it would be hard to find anyone in the Central Bank or anyone who is well versed in these kinds of matters openly supporting the Governor or championing his ‘innocence’. The President has called for his removal. Several of Karunanayake’s colleagues in the Cabinet have echoed this call. Staunch supporters of Maithripala Sirisena’s presidential bid have followed suit. There is a lot of pressure, then, on the Prime Minister at this point.

There may be people who want the Prime Minister to eat humble pie. However, there can be more than one reason for him to act decisively in this matter and still come off strong with his much-talked-of integrity intact. Ranil Wickremesinghe is often described an intransigent man who is not easily swayed by objection or show of strength. He has a reputation for standing by what he believes is correct, however unpopular it may be. He is also a person who has expressed more confidence in systems as opposed to personalities – hence his abiding interest in institutional reform. He believes in checks and balances.

It was during his previous tenure as Prime Minister that the 17th Amendment was passed (although it was the JVP that brought it up in Parliament). He was Prime Minister when the counter-democratic 18th Amendment was effectively abrogated and the 19th Amendment passed, thereby re-constituting independent commissions on the lines of the 17th Amendment. As such he must see the folly of appointing loyalists or friends to positions of immense authority such as the one Mahendran holds right now. The previous Governor was a political appointee. This Government was opposed to such appointments. Mahendra to be fair had certain credentials, but nevertheless his appointment has to be understood as a continuation of a bad precedent. The Bond Issue controversy emphasizes this point. Qualified and experienced officials of the Central Bank were not considered for the post by the previous regime. That’s how Nivard Cabraal became Governor. It was a bad precedent. It was also a travesty of justice to those who were in line for that position in terms of seniority and capability. The Prime Minister would find it hard to say that there was no one in the Central Bank or any other state institution who was as capable as Mahendran. His edge may have been ‘trust’ but that is exactly where Mahendran has let the Prime Minsiter down.

It is high time that sobriety returned to the business of appointing people to offices that can have a sweeping effect on the entire population as well as the overall economic health of the country. It is shocking, in short, that the Constitutional Council has no say in the appointment of the Central Bank Governor. There is no screening process whatsoever. The Prime Minister can and must use this moment to put the institutional arrangement in order. It is not about Mahendran and his possible deceit that should govern the decision – it is the drive to put in robust systems which include clean, transparent and morally defensible recruitment.

Of course there will be detractors who will try to make political capital in the event that Mahendran is not re-appointed. On the other hand, a brave and necessary decision coupled with a strong statement reiterating the general principles of Good Governance can only help. He could also indulge in a little democracy-play on heeding the voice of the people. This will allow the Prime Minister to recover something of what he has lost in the matter of integrity with respect to the vexed issue of the Central Bank Governor and the Bond Issue scandal.

*Malinda Seneviratne is a freelance writer whose articles are archived on his blog, www.malindawords.blogspot.com. Email: malindasenevi@gmail.com. Twitter: malindasene