By Shanti Wijesinghe –
Mr Richmond Peiris has made an important comment on the article “Percy Mahendra and his Cintanaya” (Colombo Telegraph, 17 November 2014). It deserves to be quoted in full:
“Most articles on this Web say that Mahinda Rajapaksa can not win the next PE but the prestigious Forbes investment Magazine published in USA, in its 30th October issue emphatically notes that President Mahinda Rajapaksa will win the January elections; the political stability has been cited as a reason to invest in Sri Lanka.
Giving Ten Reasons to Invest In Sri Lanka, a Forbes editorial states that from an investor’s point of view, the case for Sri Lanka is getting strong.
Sri Lanka has one of the best cases for an economy with the stars aligned in its favour,……..
I would like to know your comments.
First of all, I wish to thank Mr Richmond Peiris for the reasonableness of his question, the spirit of inquiry in which he raises it, and not the least, his courteous manner.
My answer is a bit long. It is for that reason that I decided to make this a separate piece, which ensures it better exposure. Besides, I thought the answer is an opportunity to unravel a relatively unknown area of Rajapaksa rule, too important to be lost in a string of comments.
Instead of pursuing a principled foreign policy executed by trained foreign service professionals as was the case under all previous governments, the Rajapaksa regime has resorted to appointing kinsmen and cronies to diplomatic positions. Since such appointees are inept, the regime has resorted to hiring lobbying firms to conduct foreign policy, especially for purposes of attracting foreign direct investment (FDI). The propaganda of these firms is part of the propaganda machine the regime has built as one of its arsenals in perpetrating its undemocratic, and immoral rule.
At the end of the war, the regime fantasized about FDI as the cornerstone of its programme of economic development. While publicly espousing a strong anti-western sentiment, it secretly lusted for western, especially American FDI. As usual, it got about the task of attracting FDI not the right way (i.e., by crafting a socio- economic environment hospitable to investment), but the wrong way, (i.e., by hiring lobbying firms to sell the idea to potential investors).
There is no public information on how these firms performed their contractual obligations, but we have enough clues in the periodic bulletins issues by some of the embassies in some of the major capitals of the world. These give glowing accounts of the idyllic suitability of the country as a place in invest. They also give us similar accounts of social gatherings, typically in the embassies, where prospective investors were wined and dined (at the expense of the citizens of Sri Lanka).
The regime seems to have little realized that investors are neither fools not romantics, and are not persuaded by false propaganda and empty rhetoric. “We have defeated terrorism” is excellent fodder for the Sinhala Buddhist supremacists, but does not cut ice for hardened businessmen. Rather, their decisions are based on hard facts of hospitability and profit. No investor is going risk investing his money in a banana republic that has no rule of law, and no independent judiciary.
It is telling that out of over 50 projects offered for the international business panel of the CHOGM, only two have attracted investors. While the propagandized objective of spending a massive sum of the country’s money to host the CHOGM was to attract investment, the outcome has been nothing but one more Rajapaksa tamasha at the expense of our labouring citizens.
In a story in The Hill dated October 23, 2014, reporter Megan R. Wilson gives us a picture of the hectic lobbying activities the Rajapaksa regime has launched in the US. While the focus in Wilson’s story is lobbying activity to ward off the UNHCR probe, it is clear that the broader purpose is to portray of overall perfection in all areas, especially the climate for FDI. Wilson starts by telling us that the government of Sri Lanka has hired its eighth lobbying firm for the year. The firm, named Levick, is subcontracted through Liberty International Group, a government affairs firm owned by former Republican Congressman (for Florida) Connie Mack.
Wilson quotes Mark Irion, the president of Levick, saying that his firm is contracted “to utilize communications supported advocacy to tell Sri Lanka’s amazing story of recovery after a decades long civil war against a brutal terrorist organization, as well as to assist the Central Bank in communicating opportunities for trade and investment between our two nations”. Levick’s work will include “outreach to US media, opinion leaders and possibly US officials concerning issues of importance to the client, including assisting in establishing additional relations between the Central Bank of Sri Lanka and the United States Government.” Let us remember that this is a regime that publicly slings mud at the US and the west in general, while secretly spending large sums of the country’s money to curry favour with the Americans. The phrase “utilize communications supported advocacy” is lobbyese for buying expensive TV advertising time.
According to Wilson “the contract with Liberty International Group — set to last from August 2014 to the end of next July — is worth $760,000. Levick is charging a monthly retainer of $60,000, according to the subcontract”. She further adds that “The Democratic Socialist Republic of Sri Lanka has hired six Washington firms since May, including R&R Partners, Madison Group and Beltway Government Strategies.
According to disclosure forms, says Wilson, the firms will lobby members of Congress and State Department officials “with the purpose of raising situational awareness of Sri Lanka and its strategic importance to the United States” and “[laying] the groundwork to promote Sri Lanka as a business and travel destination.” Among the firms Wilson lists are Majority Group, Patton Boggs, Brownstein Hyatt Farber Schreck, Qorvis Communications, and Thompson Advisory Group. (Wilson’s piece can be found here ).
Jehan Perera, Director, National Peace Council of Sri Lanka in his circular dated April 15, 2013 refers to this favourite activity of the regime: “The Sri Lankan government … has hired not one but two US companies that it believes are adept at public relations campaigning and are paying them to get the government’s message across.” From Wilson’s account, we know that the regime has hired not two but eight firms. Indeed the entire message of Wilson’s piece is the frenzy of what she calls “hiring up”.
It is against this broad background that we have to understand the claims of the Forbes magazine that Mr Richmond Peiris cites. The Forbes editorial’s rosy picture of the hospitability of Sri Lanka for FDI is derived not from any impartial evaluation of the ground reality of Sri Lanka, but from the propaganda of the lobbying firms, which in effect are paid agents of the Rajapaksa misrule.
It is true that the Forbes editorial quotes some Sri Lankan business professionals making extravagant claims for the economy, especially the performance of the Colombo Stock Market (CSM). But there has been plenty of public discussion on the manipulations of the CSM, and not particularly hushed talk about the need to have the blessings of the regime if one were to do well in business. One look at the editorial shows that it mentions the peace and tranquility after a brutal war, the political stability brought about by strong leadership, the large-scale infra-structure development, booming tourism and so forth. But this is standard government propaganda. In fact even the phraseology of the Forbes editorial at times smacks of regime language.
The Forbes writers seem to have talked only with those who are with the regime, for whom the environment is certainly hospitable. But for a rational economy to function on the basis of open and fair competition, the environment should be hospitable for all. Had the Forbes writers talked with an economist like Dr Harsha de Silva or a respected commentator like R.M.B. Senanayake, they would have been able to produce a more balanced account of the economy and prospects for investment in Sri Lanka. To take one economic example, infra-structure development, no mention is made of the fact the both the new harbor and the new air port are non-functional and a drain on the economy. To take one political example, no mention is made of the drastic reduction in the regime’s majority at the recent Uva provincial elections. Reading the editorial, the impression I got is that it is not unlikely that one or more of these lobbying firms have contacted the Forbes magazine, and had a hand in the editorial. Indeed, I would not be surprised if the fright which has overwhelmed the regime recently, caused by their virtual loss of the Uva election and the gathering unity and strength in the anti-regime forces, has made it give its lobbying firms a not too gentle nudge. (For the Forbes editorial, click here)
To the credit of the “robber barons”, they seem to exercise better judgment, and better common sense than the journalists of the Forbes magazine. But in defence of the Forbes magazine, we can understand them not devoting much time and effort over a small, insignificant, dictatorship wallowing in the political culture of the Middle Ages, when their readership’s interest and sympathies lie squarely in a community of nations that places value on modernity of thought and behaviour in both citizens and their leaders.