Sri Lanka Perspectives: June 2016

Col R Hariharan

Controversy about Central Bank governor

President Sirisena ended a period of suspense by announcing  that the controversial Central Bank of Sri Lanka (CBSL) governor Arjuna Mahendran would be replaced at the end of his 18-month tenure on June 30. He was considered close to Prime Minister Ranil Wickremesinghe , who wanted to extended his stay as head of the CBSL, while many within the ruling unity coalition were against it. Mahendran was also dogged by scandal and allegations of corruption and nepotism. So his extension as central bank chief became a political issue for the opposition to rally against Wickremesinghe, much to the embarrassment of President Sirisena who had not made up his mind on the issue.

On the other hand civil society activists who have been closely watching the Sirisena government who got a mandate with a promise of good governance also joined the demand for criminal prosecution of the governor on charges of corruption.  

The crucial charge against the governor related to decisions made during the CBSL issue of Rs 1 billion government bonds in February 2015. The bond issue was oversubscribed and the CBSL accepted offers for Rs 10 billion, ten times more than the original issue amount in the interest range of 9.55% - 12.5%. The accusations against Mahendran relate to issuing bonds ten times over the proposed value at a high interest rate as well as the allocation of Rs 5 billion worth of bonds to Perpetual Treasuries owned by Mahendran’s son in law at a higher interest of 12.5%.

President Sirisena probably made up his mind when he realized any extension for Mahendran would be construed as not in keeping with the spirit of good governance he had promised. After initially resisting the demand, Prime Minister Wickremesinghe also seemed to have reconciled to the idea of replacing him. In a TV interview, the prime minister clarified that he had no intention of defending Mahendran, but allegations against him should be proven to take action against him. He added that a three-member committee investigated the allegations against Mahendran and “decided he was correct. Then the police carried out an investigation and they said there were no facts to file a case against him.”  

UNHRC discusses Sri Lanka

The UN High Commissioner for Human Rights Zeid Al Ra’ad Al Hussein presenting an oral update on Sri Lanka at the 32^ndmeeting of the UN Human Rights Council (UNHRC) in Geneva has called for international participation in the accountability mechanism “will be a necessary guarantee for the independence and impartiality of the process” in the eyes of the victims. He added the Sri Lanka’s judicial institutions currently lacked the credibility needed for gaining their trust, keeping in mind the magnitude and complexity of the crimes alleged which the OCHR found could amount to war crimes and crimes against humanity. 

The High Commissioner also called for investigation into the allegations of Sri Lanka air force using cluster munitions during the Eelam War. He also asked Sri Lanka to address immediately into allegations of arbitrary arrest, torture, sexual violence and military surveillance.

Foreign Minister Mangala Samaraweera in his response to the UN High Commissioner’s report gave an account of the progress the government has made on accountability and reconciliation. Though there were divergent views on setting up a judicial mechanism with foreign assistance, he was confident the mechanism finally set up would have the confidence of the stakeholders including the victims with fair trial and due process guarantee.

However, he indicated the Secretariat for Coordinating Reconciliation Mechanisms and the new counter-terrorism policy to replace the much-abused Prevention of Terrorism Act were still in preparatory stage. On the other hand drafts of the bill on office of missing persons and legislation on convention for the protection of all persons from enforced disappearances would be presented in July.

The slow progress made by the Sirisena government in delivering its promises highlight “institutional blockades hampering reconciliation efforts, the complexity of party politics within the coalition and the importance of constitution reform” as the UN High Commissioner described it in his report. The government is also facing increasingly a restive army and a strong Sinhala nationalist army who are totally averse to war crimes investigation, let alone one involving foreign representatives as demanded by the UNHCR.

They seem to believe that the High Commissioner’s demand for foreign participation in the judicial process was included after the Sri Lanka government, the US and the Tamil National Alliance arrived at an understanding on the issue. This is likely to add to the political schism over the war crimes investigation; the demand for investigation into the alleged use of cluster munitions during the war and the government inquiring into it afresh is going to further increase the turbulence.

Written on June 30, 2016

[Col R Hariharan, a retired MI officer, served as the head of intelligence of the Indian Peace Keeping Force from 1987 to 90. E-mail: haridirect@gmail.com   Blog: http://col.hariharan.info ]

Courtesy: South Asia Security Trends, July 2016 issue. www.security-risks.com