Another brawl in Parliament :

Government calms furore over CB Governor

The COPE committee tug-of-war between Deputy Minister Ranjan Ramanayake and former minister Mahindananda Aluthgamage reached new heights last week with the two MPs exchanging blows inside the Parliamentary premises.

Deputy Minister Ramanayaka was busy recently with his arduous ‘mission’ against Aluthgamage, a politician with a dubious track record who recently got an appointment as a member of the COPE committee. The appointment came under fire from many quarters who thought Aluthgamage’s track record would mar the reputation of the committee probing into the conduct of state-owned institutions.

Last week, however, Ramanayaka declared war against Aluthgamage over a vehicle parked at the MPs’ housing complex in Madiwela. Ramanayaka took a group of journalists to see a Defender parked at the housing complex, saying it belonged to Aluthgamage.

Ramanayaka was accompanied by another UNP Parliamentarian, Ananda Aluthgamage, a cousin of the UPFA MP.

Ramanayaka telephoned a high-ranking official at the Department of Motor Traffic and asked him about the registration of the vehicle, in the presence of the group of reporters.

The official said the vehicle had not been registered. However, both Ramanayaka and Ananda Aluthgamage alleged that Mahindananda had used the vehicle for his election campaigns in the Kandy district.

After the incident, Ramanayaka accidentally met JVP Leader Anura Kumara Dissanayake near the lift reserved for the MPs at the Second Floor of the Parliamentary complex. Ramanayaka lamented that Dissanayake and his party were not “doing much” about Aluthgamage and asked whether there was an arrangement between the two parties.

Dissanayake vehemently denied Ramanayaka’s allegations and said the JVP had lodged several complaints against Aluthgamage.

The JVP leader also said his party did not have any deals or agreements with politicians facing corruption charges.

At this point, Aluthgamage too walked towards the two MPs and asked Ramanayaka as to why the latter was leveling various allegations against him. The UPFA MP said he had been accused of crimes he had never committed!

Mahendran controversy

British Prime Minister David Cameron speaks to the press in front of 10 Downing street, on Friday. - AFP Photo

This heated argument went on and according to eye witnesses, it ended in fisticuffs.

For a moment it looked like a scene from an action movie as Ramanayaka was known for his heroic acts on the screen. However, MPs Anura Kumara Dissanayake, Kumara Welgama and Ranjith Zoysa rushed to the scene and settled the fight between the two politicos.

Interestingly, both MPs later denied that there was a fight.

They said there was a heated argument over the defender controversy and there wasn’t any ‘physical assault’. However, many eyewitness accounts contradicted their version of the story.

While Ramanayaka and Aluthgamage were involved in a heated battle over Defenders, the country’s political circles were heated up over the questions surrounding the reappointment of Central Bank Governor ArjunaMahendran.

The country’s civil society, which played a pivotal role in President Maithripala Sirisena’s January 2015 presidential election campaign, also played a decisive role in the campaign against the re-appointment of the incumbent Central Bank Governor.

They held a round of meetings with the President and the Prime Minister, last week, over the controversy surrounding the re-appointment of Central Bank Governor Arjuna Mahendran and several other matters involving the ongoing anti-corruption investigations.

At their first meeting, however, the Prime Minister did not make any assurance over the re-appointment of the Central Bank Governor. He said he would discuss the matter with the President and arrive at a final decision.

Despite the impasse on the CB Governor’s matter, the two leaders and the civil society representatives reached an understanding on anti-corruption investigations.

The civil society leaders, quite obviously, were livid at the current state of affairs when it comes to certain high-profile anti-corruption investigations, initiated by law enforcement authorities.

At the meeting, the President and the Prime Minister agreed to remove certain ‘roadblocks’ hindering the progress of ongoing investigations.

Dissanayake vehemently denied Ramanayaka’s allegations and said the JVP had lodged several complaints against Aluthgamage. The JVP leader also said his party did not have any deals or agreements with politicians facing corruption charges.

“These roadblocks are mainly practical difficulties faced by officers conducting investigations.

They stem mainly from political circles,” a civil society leader who attended the meeting told the Sunday Observer.

“We stressed that they should let the rule of law take its own course,” Puravesi Balaya (Citizens’ Power) Co-convener Gamini Viyangoda said after the meeting.

According to him, the civil society representatives pointed out to the President and Prime Minister that the name ‘Financial Crimes Investigation Division’ (FCID) should not be changed at this point as the people have identified the FCID with the anti-corruption drive.

“The name-change might give the impression that the process that has begun would be stopped. They agreed to consider our opinion,” he said.

Although there was no solid understanding on the re-appointment of Mahendran, the civil society representatives considered the meeting as a ‘positive development’.

The same group held another discussion with the Prime Minister last Sunday over the same matter. They repeatedly requested the Prime Minister not to renew Mahendran’s appointment due to various allegations levelled against him.

They stressed that any attempt to reappoint Mahendran as the Central Bank Governor would cause an irreparable damage to the popularity of the government.

According to civil society leaders who were present at the discussion, the Prime Minister had finally informed them that Mahendran would not be reappointed to the position, until the end of the investigations against him.

Prof. Sarath Wijesooriya, Convener of the National Movement for Social Justice told our sister paper, the Daily News, that the Premier had concurred with their view point and the civil society leaders were confident that Mahendran would not be re-appointed until the end of the probe.

This announcement made by the civil society representatives on Sunday night brought the confusion surrounding Mahendran’s re-appointment to an end.

Sri Lanka will also be affected through the volatility in capital markets. Given that the country is looking at raising capital in the international market, falling investor confidence may hinder its ability to raise funds.               - IPS ReportZ

It was also revealed that the COPE committee was planning to submit its report on the Treasury bonds issue before June 30 - Mahendran’s final day in office. The COPE committee, chaired by JVP Parliamentarian Sunil Handunnetti, is expected to play a key role in determining the incumbent Central Bank Governor’s future.

By Monday morning, every party in the political fold knew that Mahendran would not be re-appointed to the position until the end of the COPE inquiry.

Therefore, when the Joint Opposition group formed by UPFA dissidents organised a protest in Colombo, on Friday, they were fully aware that Mahendran would not be re-appointed.

In fact, a few hours before the protest, Mahendran himself made it clear that he would not seek an extension of term until the conclusion of the COPE investigation.

He communicated the decision to the Central Bank’s Monetary Board, on Friday morning.

At that point, the Joint Opposition group calculated that they could cash in on the Central Bank Governor’s issues, dubbing it as a result of the concerted pressure, exerted by them, on the government.

It was against this backdrop that the UPFA’s rebel ‘Joint Opposition’ group organised a protest in Colombo on Friday, to snatch the credit for Mahendran’s decision to refrain from seeking an extension.

Several UPFA MPs namely Wimal Weerawansa, Vasudewa Nanayakkara, Mahindananda Aluthgamage, Johnston Fernando, Namal Rajapaksa and Rohitha Abeygunawardena were the key players at the protest.

Interestingly, all of them, except Nanayakkara, faced serious corruption charges, over the past 16 months.

The protest, however, hit a snag when MP Rohitha Abegunawardena sustained injuries when the group attempted to topple a road-barrier. The MP stumbled over one such barrier and another barrier, toppled by restive UPFA rebel supporters, fell on his head.

By Monday morning, every party in the political fold knew that Mahendran would not be re-appointed to the position until the end of the COPE inquiry. Therefore, when the Joint Opposition group formed by UPFA dissidents organised a protest in Colombo, on Friday, they were fully aware that Mahendran would not be re-appointed.

The video footage of the incident, captured by multiple TV stations, showed that it was an accident and the Police had nothing to do with it.

Abegunawardena was immediately rushed to a private hospital in Colombo and he was admitted to its Intensive Care Unit (ICU).

However, the UPFA MPs who spoke to media over the matter, attributed it to what they termed as ‘Police brutality’.

It showed that the group had no qualms about attempting to gain political mileage out of any situation.

UPFA MP Shriyani Wijewickrama was also admitted to the hospital after she sustained minor injuries during the protest.

Brexit and Sri Lanka

While the UPFA rebel MPs were demonstrating calling for Mahendran’s removal, Britain, on Friday morning, became the first country to vote to leave the European Union. Many political observers dubbed it as a historic decision that could have far reaching political and economic consequences.

The demographic divide of results showed some interesting trends. The final result saw a split in voting outcomes across the UK with Scotland (62.0%), Northern Ireland (55.8%) and London (59.9%) voting overwhelmingly to remain in the EU.

As expected, there was also a resounding vote from those under 24 years of age, voting to remain by 75%. Areas with higher incomes and higher levels of education also had a greater tendency to vote ‘Remain’.

It was common knowledge that the Sri Lankan government was supportive of the ‘Remain’ campaign. Even Prime Minister Ranil Wickremesinghe, two weeks ago, urged the people of the UK to choose to remain in the EU.

“The success of our strategy to diversify our exports earnings and improve our balance of trade depends on a stable global economy.

Therefore, the future of the European single market, which accounts for more than 30 percent of our export trade – with the balance of trade in our favour – is of critical concern to us, as its disruption would have global consequences.

“When we export 100 percent to EU, 40 percent goes to UK. That’s the reason why we attempted to take the benefit,” the deputy minister said. “We have to cope with foreign economies if we need to build up a strong middle class in the country.”

“The IMF Spring Meeting of 2016 concluded that the outlook for global economic growth has worsened, and one of the greatest risks to the health of the global economy is the possible exit of the UK from the EU, which would potentially lead to further financial turbulence.

“We in Sri Lanka – as well as many other Asian countries – cannot afford further financial turbulence and another global economic downturn.

“So we are very concerned about the probable impact of a British exit from the EU – on the global economy, on Sri Lanka, and on the UK,” Prime Minister Wickremesinghe said in an article, sharing his views on the matter.

In addition to the Prime Minister, several Cabinet ministers also actively supported the ‘Remain’ campaign. During their recent visits to London, Minister Harin Fernando, Deputy Minister Harsha de Silva and former UNP MP Rosy Senanayake addressed Sri Lankans living in the UK, explaining the implications to Sri Lanka if Britain decided to leave the EU.

Minister Dayasiri Jayasekera - who was in London for the Sri Lanka-England third Test match at Lord’s - also met Sri Lankan expats in the UK and urged them to support the ‘Remain’ campaign.

However, Britain has finally decided to leave the European Union and this has left Sri Lanka with no option but to adjust itself according to the circumstances. When the matter was raised in Parliament on Friday, Deputy Minister Harsha de Silva said Sri Lanka was taking measures to enter into a trade agreement with the UK, without delay.

Tax concessions

The Deputy Minister predicted Sri Lanka would lose 40 percent of the tax concessions that the country benefits from, when UK leaves the European Union.

He made these observations, on Friday evening, joining the second reading debate on the Right to Information Bill.

“Our government plans to enter into a trade agreement with the UK,” the deputy minister said, adding that Prime Minister Wickremesinghe would inform the House of the details of the proposed agreement with the UK.He said Sri Lanka would also suffer a negative impact with the global economic slump as a result of UK’s decision to leave the EU.

Responding to a comment by UPFA rebel faction MP Dinesh Gunawardana, the Deputy Foreign Minister said they had met UK Prime Minister David Cameron for a purpose.

He accepted the fact that they campaigned with the British government to convince the British people to remain with the EU.

“When we export 100 percent to EU, 40 percent goes to UK. That’s the reason why we attempted to take the benefit,” the deputy minister said.

“We have to cope with foreign economies if we need to build up a strong middle class in the country.”

‘Talking Economics’, the blog of the Institute of Policy Studies of Sri Lanka (IPS), Sri Lanka’s socio-economic policy think tank, on Friday, described how the decision to leave the European Union would affect Sri Lanka. The document was authored by IPS Researchers Suwendrani Jayaratne, Kithmina Hewage and Chantal Sirisena.

They said:

“Brexit is likely to slow down the economic activities of both the UK and other members of the Union. This will impact Sri Lanka’s exports, given the country’s dependence on both the UK and EU. EU is currently the largest export destination of the country with 28.8 per cent of Sri Lanka’s total exports going to the EU (US$ 3 bn).

“UK accounts for 10 percent of total exports from Sri Lanka (US$ 1 bn) and 34 per cent of the country’s total exports to the EU.

In terms of imports, UK accounts for just 1.9 per cent of Sri Lanka’s total imports and as such Sri Lanka enjoys a trade surplus with UK.

“Garments (HS 61 & HS 62) are the main export products from Sri Lanka to the UK, accounting for about 80 per cent of Sri Lanka’s total exports to the UK.

“Furthermore, if Sri Lanka is successful in regaining EU GSP Plus, the country will only be able to use the concessions till UK withdraws from the EU.

Subsequent to that, if Sri Lanka wants preferential access to the UK market it will have to negotiate a bilateral agreement with the UK which is likely to take years given all the negotiations that are likely to take place in the aftermath of the exit.

“Sri Lanka will also be affected through the volatility in capital markets. Given that the country is looking at raising capital in the international market, falling investor confidence may hinder its ability to raise funds. Investors have fled to the safety of gold and dollar investments, raising the price of gold to the highest in two years.“Much of the current political and market volatility can be expected to settle over the coming weeks as Britain and Europe provide a clearer direction of proceeding with Brexit.

The multidimensional nature of the EU and the significance of the British market are likely to influence the global political economy.

“Therefore, Sri Lanka needs to closely watch the post-Brexit developments both in the UK and EU and accordingly adjust policies to maximize gains to the country.”

It would be important to examine as to how the Sri Lankan government, which supported the ‘remain’ campaign, is now planning to deal with the post-Brexit UK.