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News Features


One year of Mahinda Chinthanaya
President remains strong despite hiccups

By Santhush Fernando
Exactly a year ago the backwoods politician from the deep south Mahinda Rajapaksa ascended the pinnacle of Sri Lankan politics when he took oaths as the fifth Executive President of the country before Chief Justice Sarath Nanda Silva.
Most people are divided over his ascendancy to the country’s leadership. Some would say that Rajapaksa strove himself and worked himself up to the position he is holding currently, while others would just relegate his victory to sheer good luck and to the LTTE preventing a large number of voters in the North and the East from exercising their vote.
The Presidential election in 2005 between President Mahinda Rajapaksa and UNP candidate Ranil Wickremesinghe was a run down to the wire and the difference of total votes between the two main candidates was a mere 1.86 percent. But Rajapaksa clearly commanded more popularity among the people in the South where he won with large majorities.
His candidacy from the Sri Lanka Freedom Party (SLFP) was too in jeopardy until the last moment. Even after been selected as the SLFP Presidential Candidate he was left high and dry without any tangible support from the then incumbent President, Chandrika Kumaratunga and bulk of the SLFP stalwarts. However he was able to win the confidence of the Janatha Vimukthi Peramuna (JVP) and the Jathika Hela Urumaya (JHU) and also 28 other parties.
President Mahinda Rajapakse’s first year in office seems to be of mixed nature where he had achieved in certain aspects as well as not in other areas. Although branded as an extremist and a hawk by some, President Rajapakse showed much restraint in handling affairs of the country especially with regard to the North and East issue.
  Despite all three rounds of peace talks ending in deadlock, even with the LTTE boycotting Oslo talks he was able to win the confidence of the international community which led to banning of the LTTE by the European Community on May 29.
 Compelled to remain with a hung Parliament, not commanding a clear majority, President Rajapaksa was able to maneuver and gain the support of the Ceylon Workers Congress (CWC) and Upcountry People’s Front (UPF) on August 25.
As the JVP and JHU continued to show opposition to Rajapaksa’s policy he was able to gain the support of the main opposition the United National Party (UNP) on October 23.
 The high water mark in President Rajapaksa’s one year was the signing of the Memorandum of Understanding to implement a three point common national agenda on the North and East Conflict, Electoral Reforms and Good Governance with the UNP.
 Militarily too there were both ups and downs. Although there were attacks and retaliation from both sides a major scale warfare was not launched until the closing of the Mavil Aru sluice gates by the LTTE on July 20 causing hardships to Serunuwara farmers. However after a major offensive the forces were able to reopen the sluice gates around August 10.
 Meanwhile the LTTE launched a major offensive in Muttur on August 1 and kept it under siege until it was recaptured by forces on August 5 after fierce fighting. LTTE was charged for killing 100 Muslims fleeing to government held areas at Pachchanur while government forces were suspected to have killed seventeen aid workers of the French NGO, Action Contre la Faim (Action Against Hunger- ACF) on August 5.
 LTTE launched offensives in Jaffna by attacking the Palaly Air Base, in Trincomalee by attacking the Naval Base and Harbour and at sentry points in Amapara and in Batticaloa on August 11. Main supply route to Jaffna A9 road was closed and is closed ever since.
 At least 61 schoolgirls were killed and 129 were wounded when Sri Lankan Kfir jets bombed an LTTE training compound Vallipuram, Mullaithivu on August 14, although the LTTE denounced the and said that the schoolgirls were attending a residential course on first aid.
 Government was successful in its preemptive operation to capture Tiger held Sampur launched on August 28. During 55 Party Convention of SLFP on August 4 President Rajapaksa joyously announced that security forces have captured Sampoor. Around 50 Sri Lanka Army troopers were killed in action and 108 wounded during the offensive.
 In the Northern frontier too President Rajapaksa tried his luck. Sri Lanka’s military on September 9 launched a ground offensive Saturday against the LTTE territory in Muhamalai, after heavily bombarding the area for two days. At least 25 soldiers were killed and around 125 wounded. Army claimed to have advanced 1 km into LTTE-held territory in the Muhamalai.
 There were several downfalls during President Rajapaksa’s regime as well. When ten unarmed Muslim workers were found butchered near the Radella Tank, Potuvil on September 10, it caused the wrath of the hitherto largely neutral Muslim community’s fall upon security forces. As the massacre had taken place near Shasthraveli Special Task Force (STF) training camp located near Lahugala National Park , many suspected security forces hand in it.
 But the biggest blow came on 11 October 2006 when Army troopers who broke through the Muhamalai FDL were repulsed leaving 75 dead bodies of Sri Lankan soldiers inside the LTTE territory in Kilali. Three tanks were damaged and one destroyed, according to LTTE military spokesman. Meanwhile, SLA sources in Colombo claimed 133 were killed and more than 300 wounded in the Sri Lankan offensive.
 Later on October 16the LTTE blasted a lorry laden with explosives in an open space in Digampathana Junction in Habarana where more than 24 Sri Lanka Navy (SLN) vehicles and buses with more than 340 sailors were parked, killing 99 and seriously wounding 150. 8 civilians were also killed in the explosion.
 Two days later on October 18 a 15 Sea Tigers in five boats entered the Sri Lankan Naval Base Dakshina, in the southern port city of Galle damaging four Sri Lankan naval vessels and installations. At least three explosive laden attack vessels, attacked naval crafts including a ship and destroyed a Fast Attack Craft (FAC) and two water jet inshore patrol vessels anchored in the port. Later mobs looted around 20 shops owned by Tamils.
  In a severe blow to the already faltering peace process Jaffna Tamil National Alliance (TNA) parliamentarian Nadarajah Raviraj was shot dead in Colombo on November 10 also killing his bodyguard Sergeant Lakshman Lokuwella. The Police have so far failed to arrest the assassins.
 Earlier the MP was critisisng the Sri Lanka Army for shelling Vaharai where 47 Internally Displaced Persons from Trincomalee, were killed on November 8.

***

The economy
A bag of mixed fortunes

By Ravi Ladduwahetty
Despite the Government proclaiming vibrant economic growth for the end year of President Mahinda Rajapakse who is also the Finance Minister, the actual scenario is quite different.
The Treasury says that the economy for the year 2006 has grown by 8% vis –a- vis the projected growth rate  of 6% despite the oil shocks and the security risks.  The last such growth was reported as far back as 1978 and for 2006 the growth has seen an all round increase in agriculture, livestock, manufacturing and small and medium scale industries.
Regional development has also taken a special impact in the post tsunami era with greater provisioning for the farming community where the post tsunami work also contributed to this development. The 2007 Budget is expected to maintain this growth momentum, the Treasury has said in a document. However, if the Government has done so well in the economic development, the production costs should have declined and Cost of Living should have declined, but it has risen with unbearable consequences to the lives of the people.    
Despite the Government claiming that the unemployment had also dropped to 7% during 2006 in sharp contrast to 8.3% in 2004 and 7.7% in 2005, these statistics are without the North and the East  
The drain in the heavy foreign exchange in the light of the high fuel bills and the high price of the country’s imports, the reserves have been maintained to fund three months of imports which has been supported by the continuous flow of foreign worker remittances and the high receipts of tourism. There has been a notable feature in that there has been import of capital and intermediate goods reflecting the expansion of economic activity with the exports also showing high growth, the Treasury says. The oil prices have also impacted the cost of living through the higher electricity and transport costs. There has been an expansion of banking credit to the private sector which has resulted in demand, pushing prices upwards.
 Despite the proclamations, the transport costs have gone up.
 The total  recorded  foreign aid disbursement by September 30, 2006  amounted to US$ 887 million  on account of project loans, program loans and grants which is 60.2%  amounting to US$ 1157 million forecasted early 2006. 
 The Japanese Government, the World Bank and the Asian Development Bank have contributed US$ 449 million or 63.8% of the total disbursement. The Government of Japan’s contribution was US$ 198.8 million, Asian Development Bank – US $ 138 million and the World Bank  US$ 198.8 million.   It is also said that the total debt service payment  of the  as at August 31, 2006 was US$ 321. 3 million which includes the principal repayments of US$ 217.3 million and that the estimated debt repayment  for 2006 is  US$ 494.4 million.  The Government’s total debt stock as at  August 31, 2006  is at US$ 10.084.9 million,  as compared to US$ 9491.2 million  as at end 2005.
 If there was such a large inflow of foreign aid and with the well being of the economy, eye brows are being raised as to why the  Government has engaged in Dollar commercial borrowings to the tune of US$ 1.3 billion. 
The Foreign Reserves of the Government has declined to US$ 2400 million with the Rupee depreciating to 108 against the Dollar and 203 against the Sterling Pound. The Government has also borrowed at LIBOR + 1.8%.  The permanent overdraft of the Government also has an interest rate of 32%.Foreign Direct Investments have increased with the arrival of the tsunami funds but those projects too are far from over.      
 It appears that a Government which was dependent on the privatization proceeds in the post 1994 era with the divestitures of the major state assets  is now engaged in big time commercial borrowing and in Dollar borrowings too.
On the contrary and in a diametrically opposite position, the Colombo Stock Market has shown much more promise with the fundamentals being more positive.  There has been a year on year growth in the market in the last four years, despite the fragile peace process and there is expectation that the  market will see a 40% year on year growth for 2007 over 2006. Despite the   difficulties in the defence and  political fronts, the market  has seen improvements with solid corporate earnings  and also with record earnings in recent weeks  and also  coupled with the promotions that the Colombo Stock Exchange and its members are engaged in.
There is also expectations that the market will rise and influx of foreign funds into Asia with a special emphasis on India and Pakistan and more so into Sri Lanka in the event of the peace process taking the full turn for the better.        The sectors which are expected  to significantly show improvements  are the  telecommunications, banking  and power and energy  and especially Sri Lanka Telecom and John Keells Holdings  where  there is renewed buying interests and where the market is also expected to see a technical correction.

***

Mahinda Chinthanaya: What was achieved and what was not

Family, Society and Religion
Under an “affectionate Family” all expectant mothers who cannot afford a nutritional meal were promised with a basket of nutritional foods (Poshana Malla) free of charge. However the Government is yet to fulfill this in the entire country.
 According to the first five year plan although a new ministry for Children was set up the monthly allowance of Rs. 200 for the purchase of milk for every child and assistance promised to Children’s Homes, Day Care Centers and Pre Schools are yet to be fulfilled.
A Supreme Inter Religious Council was to be set up to enable the Head of State to seek advice from religious dignitaries in crucial crises facing the country under “ Virtuous State “ concept.
National Problem
President Rajapaksa promised to commence discussions with all political parties represented in Parliament and have simultaneous discussions with religious dignitaries and civil society organizations in the North and East, under the initiative of an “Undivided Country, National Consensus and an Honourable Peace”.
 Initial discussions were promised to be concluded within three months and move to have direct talks with LTTE Leader and to present a consensus has failed.
 Rajapakse promised that he shall present a specific timeframe and a clear agenda to the LTTE in order to recommence discussions. The agenda was to include vital concerns such as renouncing separatism, demilitarization, entry into Democratic process, discussion towards a final solution and the implementation.
 Move to obtain an Asian co-operation with India , China, Russia and Pakistan has not materialized and no discussions have been held with the Peace Co-chairs.
 The Cease Fire Agreement was to be amended and monitoring mechanism was to be reviewed while obtaining regional co-operation for it as well.
 Resettlement
Resettlement of all persons displaced by war was promised expeditiously and the interim payment of Rs. 150,000 for resettlement and a further Rs. 250,000 of a permanent abode under new authority “Jathika Saviya” have not been fulfilled.
 Also the defunct P-TOMS was to be replaced with an expanded and accelerated “Jaya Lanka” designed to immediately provide for rehabilitation of the tsunami affected persons with the participation and leadership of affected people.
Agriculture
President assured that people will be the owner of water recourses and that a National Irrigation Plan was to be set up. However action has been taken to market as a commodity under the new Water Resources Management Policy. The Dahasak Wew (10,000 tanks) programme did not see any progress during the past year.
 A National Land Policy is yet to be formulated and allocation of 100,000 land polts for cultivation is yet to the light of day.
 Although a bag of 50 Kg of fertilizer was promised at Rs. 350 this scheme is not fully functioning in most areas. For purchasing Paddy Marketing Board was to be re-established and a guaranteed price of Rs. 16.50 was promised for Nadu rice per Kg.
Power and Energy
President Rajapaksa promised the expeditious construction of thermal power plants (Norochcholai and Kerawalapitiya) and the hydro power plants ( Upper Kotmale ) according to the generation plans of the Ceylon Electricity Board (CEB).
 Although even delayed much and at a slower pace the Power Plant projects are off the ground. Moragolla, Uma Oya and Gin Ganga
Projects are to be completed within another five years but no tangible steps have been taken so far taken.
 Despite the strong assurance in the Mahinda Chinthanaya not to privatize the Ceylon Electricity Board (CEB) the new management approaches that are being introduced can be said to be equivalent to privatization. Furthermore the consensus of stakeholders especially the trade unions had not been sought.
Health, Education
Although under the National Education Programme, a move to teach Tamil to Sinhala students and vice versa under a new syllabus was proposed no such steps have been taken.
 Two fully fledged Tamil schools in Colombo and a Muslim Boys School in Kandy are yet to be established. Although mid day rice meal is provided in some schools a majority of students are not given the mid day meal.
 Under “University for All” Mahapola bursaries have been increased by Rs. 500 under the 2007 Budget.
 Employment
Although 10,000 more jobs for unemployed graduates in 2006 in his Budget speech President Rajapakse said that around 3,000 were recruited to Government. The 42,000 jobs previously recruited had not been given permanent appointments yet.
 Around 33,000 vacancies were promised to be filled ‘early.’ All volunteer teachers attached to Government schools along with other casual and temporary public servants were promised pe5rnants appointments. Under “Yowun Diriya” 50,000 well paid job opportunities during 2006 were proposed and tools and equipment for 100,000 personnel skilled in technical fields.
 Although under Livelihood Skills Programme formal training opportunities presently available in the Public Sector for the benefit of young school leavers were to be increased from 60,000 to 10,000 annually, no such has been accomplished in the first year of tenure.