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Yahapalanaya and CB governor

4 July 2016 12:04 am - 1     - {{hitsCtrl.values.hits}}

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resident Maithripala Sirisena finally brought a stalemate between him and the Prime Minister to an end, appointing respected economist Dr. Indrajit Coomaraswamy as the Governor of the Central Bank. His decision would have averted potential uncertainty in the financial market as it opens today    (Monday). 
Making the appointment, the President has called the shots, and sent strong signals that he is in control. But his choice of the appointee, Dr. Indrajith Coomarawamay who has a proven track record, earlier as a Deputy Governor of the Central Bank and then at the Commonwealth Secretariat suggests, he did so in a sensible and constructive way, a stark contrast from his predecessor, who preferred to stooges over anyone with professional competence. Also, the President seemed to have acted in a more sensible way than his own Prime Minister, who insisted on the continuation in the office of Arjuna Mahendran, the outgoing governor who was engulfed in a controversy over previous bond sales and allegations of insider dealings. 

 

 

"The AG in his report submitted to the COPE last week, states that an avoidable estimated loss of Rs. 889 million was incurred in the sale of Central Bank Bonds on February 27 last year, and an avoidable loss of Rs.784 on March 29, this year"

 


Mr. Wickremesinghe believed that the COPE, which is headed by the JVP MP Sunil Handunnetti, nonetheless has a majority of UNP MPs would clear Mr. Mahendran of any wrong doings. Hence his preference was to a stopgap appointment of Charitha Ratwatte until Mr. Mahendran gets his name cleared. However, that would mean disregarding devastating revelations made by the Auditor General on his report on CB bond dealings. The Auditor General in his report submitted to the COPE last week, states that an avoidable estimated loss of Rs. 889 million was incurred in the sale of Central Bank Bonds on February 27 last year, and an avoidable loss of Rs.784 million was incurred in the Bond sales on March 29, this year, amounting to a total loss of Rs. 1,674,256,805 (or over Rs 1.6 billion) in bond issues conducted on February 27, 2015 and March 29, 2016 .   
The report further states :“Moreover if other bond issues conducted during the period in which direct issue of bonds were temporarily suspended — from February 27, 2015 to March 2016 — are calculated for benefits and losses, the likelihood of the above estimated total loss may go up.  
And the report alleges that“it is not established that the Central Bank Governor acted with professional due care when performing his duties.”  

 

 

"The President was right to think ‘enough is enough’ and to bring the whole controversy to an end"
 


 “It is emphasised that this report is compiled within the parameters of the responsibilities and subjects of the Auditor General. Beyond that, it was not examined whether any criminal or illegal acts which the Auditor General could not determine occurred. If there is a need to conduct such examination, I recommend that the assistance of a specialised agency be obtained.”  
Now to dismiss the Auditor General’s report as a matter of opinion, as Minister Lakshman Kiriella has sought to do would smack of everything that the Yahapalana administration decried of its predecessor. Arjuna Mahendran was not found guilty of any charges; in fact the Supreme Court dismissed a case against him on technical grounds. However, his name is tainted in the eyes of the public; perhaps, because the Joint Opposition turned all its guns on him in full force, sensing him as a weak link in the current government. That might not have done justice to Mr. Mahendran, however, risking the tricky cohabitation of the current administration of the UNP and SLFP members (and to some extent the JVP as well) over the differences of opinion over one individual would not augur well for the entire government. More so in the context of current economic woes, thought much of those are inheritance from the prodigal predecessor.  And the President was right to think ‘enough is enough’ and to bring the whole controversy to an end. And when doing so, the President opted to extensive consultation; he asked the Premier to suggest more names for a possible appointment and when he failed, send five names to him to pick from.    And, there is another important element that shaped the turn of events: the civil society, which is finally wielding a degree of leverage over the government and does so in a more realistic fashion. Though this country has seen civil society activism, long before Independence, and most articulate       (and indeed the cash-rich) of it has largely been disconnected from the larger ‘real’ civil society. For, the champions of those groups, generally the Colombo centric NGOs, the ethnic question was the source of all evil, and devolution was the panacea for all problems. That was a worthy cause for some, and a good means to milk the Scandinavian cash-cows for the others. However, the wider society faced with more immediate problems and an existential threat of terrorism was least impressed. That campaign led nowhere. The second group which got into organized activism more recently, while the Ven. Sobitha Thera at the helm took a more nuanced approach to the social problems. They viewed the absence of democracy and accountability at the Centre as the primary cause of the problem. And that is a concern which evokes a sense of immediacy to the majority of the public, who had been through the Rajapaksa arrogance.     Their campaign was partly responsible for propelling Maithripala Sirisena to presidency. Their lobbying could still generate a positive impact. The President was in part responding to the civil society concerns when he decided to appoint a new governor. The Premier earlier promised to the National Movement of Social Justice not to re-appoint Mr. Mahendran until the latter was cleared by the COPE.  And as recent report suggest, the civil society campaign has an impact in reinvigorating the anti-corruption campaign. 

 

 

"Ultimately it is the civil society activism that compelled the government to investigate at least one of them. It will be sad if the Yahapalanaya has to be defended from the members of the Yahapalana government."

 


The MR acolyte Sajin Vass was arrested last week and remanded by a Magistrate. Shocking allegations of extortions from a Tamil businessman and bank accounts running into 610 million rupees are now being investigated. However, as the Sunday Times political editor noted yesterday: “…Under the United National Front (UNF) Government, Vas Gunawardena was treated with velvet gloves. He moved around with armed, camouflage-wearing Police commandos (STF) ordered on the telephone by a politician on the Government side.”  The new administration’s handling of anti-corruption investigations is a sad indictment of the contrast between the promise and delivery of Yahapalanaya. There is a tendency not to probe crooks who are less threatening to the administration, probably with the hope that they would switch allegiance to the new administration if and when their assistance is needed. Ultimately it is the civil society activism that compelled the government to investigate at least one of them. It will be sad if the Yahapalanaya has to be defended from the members of the Yahapalana government. 

FollowRangaJayasuriya @ RangaJayasuriya on Twitter  

  Comments - 1

  • Percy Monday, 04 July 2016 07:29 PM

    This is a valuable lesson to politicians who try to become a "Supermen" forgetting the mandate given by the voters. Percy


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