The Sunday Times Editorial –

Sinha Ratnatunga - Editor Sunday Times

One factor that backfired in the shooting at a legitimate political meeting in a remote village in the deep south last week was that the resonance was heard in Colombo.

The culprits could not have anticipated the fallout. They would have believed it would be just another statistic of unsolved crimes in police records, and a message delivered to the JVP that it has got enemies, and very hostile ones at that.That it happened to the JVP is indeed ironic; that it is the JVP which must complain today of its democratic rights to hold political meetings without being sprayed with bullets being under threat. The fact remains, however, that the JVP has now come clean and is engaged in parliamentary politics. This makes any attack on a JVP meeting undemocratic and a criminal act.

Accusations and counter-accusations are flying like the bullets that night. The Government asks the question as to why it should attack a pocket meeting in a remote village and attract unwanted flak when it is already under the microscope for alleged human rights violations. It was quick to point the finger at internecine rivalry between the Marxist parties.

The JVP was equally quick to pin the blame on a ‘contract job’ executed by hit squads of the Government in a district well secured by the security forces because of the regular presence of the President and his family.

While the main suspect was identified by three witnesses on Friday, what has come out clearly from the attack is the fact that the one accused by the JVP of leading this squad has a string of arrest warrants issued against him by the courts of law but there is evidence to show that he not only walked about freely, but took part in election rallies on behalf of the ruling party.
This does not show the state’s security apparatus in good light. What it shows is that the rule of law is subverted at the expense of political expediency.

The state’s version of events need not be easily dismissed. Over and again, the state’s intelligence agencies have been blamed for not keeping an adequate tab on budding terrorist movements both in the south and the north. These have later exploded into full blown insurgencies. And yet, it is the credibility of the state’s security services that is at stake when fugitives are permitted to roam free as long as they are affiliated to the ruling party – and the state’s security services are mere spectators.

That notwithstanding, it is also a well established fact that intelligence agencies often exploit — or create ideological or personality differences in subversive groups by arming one against the other. The capacity for another insurgency cannot easily be ruled out in the north and the south. Complacency is the worst enemy of the state security machinery. Foreign parties may well be watching with covetous eyes. It could not have been for nothing that the North Korean embassy was shut down in the wake of the 1971 southern insurgency while Indian involvement in the northern insurgency is, hopefully, now only history.

Eternal vigilance is the price of liberty. The Katuwana shooting — and even more so, the bigger picture around it — is an early warning signal that the country is not fully at peace with itself and that the rule of law is far from restored.

Bank’s increasing conflicts of interest

The Central Bank has long had its share of controversy, but not so much as in recent times. Its long running if not bitter feud with the Ministry of Finance is a public secret and its unconventional decisions are the subject of continuing debate. Rather than providing independent counsel, it has, like the police, become a mere appendage of the ruling party.

This week the Bank’s Employees Provident Fund (EPF) section released a media statement challenging an international rating agency that put Sri Lanka’s banking system, not surprisingly, in the “very high risk” category.

These rating institutions this week also put five big US banks on a similar category sending a chill down the US financial system and shaking the Obama administration, but in Sri Lanka we take things lying down. The Central Bank’s recent intervention, nay interference in the board rooms of private commercial banks by buying into their shares through public funds, raised eyebrows in traditional, conventional banking circles. The less said about the fitness of some of these Government appointees the better, but the wisdom, of the Central Bank intervening and creating conflicts of interest is what is most fundamental.

Whether the EPF section convinces the Sri Lanka public or not, its denial that there is a conflict of interest in the Central Bank’s capacity to regulate funds, like that of the EPF when it is directly a player in the stock market itself, and thereby win the confidence of the world banking community is what is relevant. And more so, when the country’s Monetary Board also maintains a deafening silence on this matter. It is more likely that this community will take what an international rating agency says than what the EPF section of the Central Bank says of itself.
Like in the case of the police, the Central Bank is fast losing, if not having already lost, the confidence of the public. It suffered a severe blow when it said that the rupee was doing fine until the President flatfooted the Bank in the last budget and devalued the rupee and then went on to free float the rupee this year as balance of payments tumbled.

Opposition legislators are asking, and quite rightly so, why Parliament, and its oversight committees are dragging their feet on summoning the Central Bank before them to explain the investment of the savings of millions of Sri Lankan workers in the private sector through the EPF, and the Employees Trust Fund (ETF) in the shaky Colombo Stock Market.

One thing they could ask is for the Bank to produce the opinions of successive Attorney Generals who advised against such investments on the basis of conflicts of interest that would arise. It is said that the Bank is hanging on to an opinion of one of the former Attorney Generals but a greater elucidation of the legality of its action is worth the while.

Conflicts of interest are now an almost forgotten principle of good governance. It is almost a joke as far as this Government is concerned. The Colombo Stock Market is the very antithesis of such a principle, but to play with the hard-earned savings of the workers of this country, in a market that is on footing as sound as quick sand, is playing with fire.

Whether the Central Bank has an open general licence to do as it pleases is something Parliament, as the custodians of the people’s purse must seriously consider.