November 2015. France was in the middle of the worst conflict situation since WW II. Coordinated bomb and assassination attacks were carried out by the IS terrorists.
The first of them took place in Saint-Denis, near the Stade de France in a friendly football match between France and Germany, attended by then President Francois Hollande. On the refusal of entry to the stadium, three terrorists blew themselves up in what became the first suicide bombings in France.
The other attacks then took place in Paris, in several streets, where three individuals strafed terraces of cafes and restaurants; two of them fled, the third blew himself up. The longest and deadliest attack happened in the theatre of Bataclan, where 1,500 were watching the concert. The official death toll was 130 with 413 injured, about 100 of them seriously.
In one of the first steps to prevent repetition of such disastrous events, the finance minister of France formally requested the European Central Bank (ECB) to terminate the issue of EUR 500 currency notes. It would not be an easy decision. By then, more than half a billion EUR 500 notes (amount to US $ 300 billion or nearly Malaysia’s GDP) were in circulation.
After comprehensive deliberations, the ECB announced in May 2016 that it would stop further issuing EUR 500 notes by the end of 2018. They will not be replaced by a new series. Instead, the demand is met by issuing more EUR 100 and EUR 200 notes. The old notes will be phased out with time and may be in another 10 years, there will only be few EUR 500 notes in circulation. Like our own Rs.2,000 notes, they would die a natural death.
The correlation may not be apparent but this was done for a good reason. Euro 500 (about Rs.100,000) is several times greater than many of the largest circulating notes of other major currencies, such as the US $ 100 bill. (Only Rs.18,000) Thus, a large monetary value can be concentrated into a small volume of notes. This facilitates the crimes that deal in cash, including money laundering, drug dealing and tax evasion. Drug and terrorism-related crime, shown by multiple studies, could drop at least by half, following this move.
On the other hand, there is little reason in the contemporary environment to have a currency note of such high value. All legal transactions can be more conveniently carried out electronically. High value cash transactions are only necessary if the transaction were not to be recorded. EUR 100 and EUR 200 currency notes are more than adequate for a rare instance omnipresent e-payment/m-payment systems might not help.
One may think Sri Lanka has enough previous experiences in fighting terrorism. Its first encounter with the beast was in 1971, when a petite group of youth inspired by Fidel Catsro’s and Ernesto ‘Che’ Guevara’s successful rebellion in Cuba, attempted attacking police stations
The Rs.5,000 note, the largest denomination in Sri Lanka, according to the Currency Department of the Central Bank of Sri Lanka, constitutes 65 percent of cash in circulation. That is over 80 million Rs.5,000 currency notes. Will 4/21 events result in similar phase out of Rs.5,000 note? No way! Hard to imagine such lateral thinking would be forthcoming, either from Janadhipathi Mawatha or generally the majority of the old-school banking community, who still lives with a 19th century mindset. Their problem is not too much cash in circulation. They see nothing wrong with it. What they cannot understand and therefore dead scared are the electronic payment systems.
Sad that few ‘banking experts’ with little knowledge of payment and settlement systems, let alone the difference between the two, still mistaken that any electronic payment system means a risk of automatic transfer of their money to Nigeria.
The Information and Communication Technology Agency (ICTA), the apex body for ICTs in the island, once had ambitious and comprehensive plans of implementation a National Payment Platform. That sadly was sabotaged by few with vested interests. Thus, while electronic payment systems proliferate only gradually, cash in circulation – particularly large denomination notes – will increase in volume indirectly facilitating black-money transactions. This is exactly what the terrorists and narcos anticipate from an inefficient government, could be one good example of not acting smart.
Another could be not limiting the number of SIMs issued by one telco to an individual to one. Rarely anybody needs more than one SIM from the same operator. Limiting the number of SIMs per individual will have a direct impact to terrorist and narco inter-network communications. (The counter argument: Terrorists use stolen SIMs. Still a user has a far better incentive to report a phone missing faster, if she cannot buy a new SIM) Key questions: Why we never even think such relatively easy and economical solutions? Is there something wrong on our approach in addressing this ‘elephant in the room’?
Why past successes may not hold good
One may think Sri Lanka has enough previous experiences in fighting terrorism. Its first encounter with the beast was in 1971, when a petite group of youth inspired by Fidel Catsro’s and Ernesto ‘Che’ Guevara’s successful rebellion in Cuba, attempted attacking police stations and government agencies in the South, thinking they could topple the government. An almost déjà vu but with different and more advanced guerrilla tactics took place about two decades later in 1988-89.
The governments in power then successfully encountered these insurgences – if we can call them so – with blunt military action and little or no strategy. The groups were of local origin with no serious international association. Even with their rudimentary set up, the government was in a far more advanced position, technically and strategically than the rebels.
The Northern challenge was a different matter. The Tamil rebel groups, unlike their Southern counterparts, had somewhat powerful international associates. Though vehemently denied, Tamil Nadu support in early training and support for Tamil rebels were apparent. Following the 1983 communal riots, at least half a million Tamils migrated to the West, creating a sizable diaspora community that sympathised and sometimes financially and technically assisted the rebels’ cause.
India intervened at a crucial stage of battle in 1987. A good move, that didn’t work largely due to the mistrust between the two countries. It did one good thing though, by reducing multiple rebel groups to one.
From the beginning, the same blunt techniques that were successful in the South have been applied against the Northern rebels too. After repeated failures, the government crucially changed its strategies after 2005. These are well documents so no need for further elaboration. (For instance, former Navy Commander Admiral Wasantha Karannogoda’s book ‘Adhishtanaya’ provides a detailed account of the naval strategies that ruined the LTTE’s supply of arms and attacks by sea, while in a less organised manner, C.A. Chandraprema’s ‘Gota’s War’ and Major General Kamal Gunaratne’s ‘Road to Nandikadal’ too elaborate the strategies used by Army) The point: What made the victory over the LTTE possible were these well-thought strategies – not the blunt attacks as happened earlier in the South.
The recent threat by the extremist Islamic groups takes us to new heights. It is not merely a local challenge like that of the JVP’s in ‘70s and ‘80s. It is even far more complicated than the LTTE threat. While frontend could be local, as we see from the ongoing investigations, they could have strong links with the international terrorist network such as IS, which carried similar attacks in France, Belgium and elsewhere.
The LTTE had limited financial resources and a small set of youth, who carried out the suicide attacks because poverty offered them no choice. The fall of the LTTE could be at least partially due to their limited financial resources. The extremist religious networks are global. They find no issues with finance. As the terrorist portfolios have shown, they don’t have to depend on the deprived youth to carry out their missions.
Sri Lanka, for them, is only a point in a bigger map of interest. The scariest point: Like what happened, they could carry out another coordinated attack in Sri Lanka, as a reaction to an international event (like Christchurch last time), which Sri Lanka had nothing to do with. How difficult the prediction of such an event would be?
If that does not scare you, read this. The Indian security agencies, according to ‘The Economic Times’, India, suspect that the recent terror attack in Sri Lanka was financed by a Pakistan-based drug cartel. Drug smugglers, according to them, based in Pakistan, have been using the Sri Lankan sea route for the last seven years to export drugs to Europe after a clamp down on the Central Asian and Russian drug routes. This could be a serious possibility.
One could also link it with the possible objective of 4/21 attacks, as the security diversion always helps drug smugglers depend on the international trafficking across Sri Lanka. The unprecedented sizes of the consignments of cocaine and heroin seizures during the last six months clearly indicate their final destination could not be Sri Lanka – relatively a smaller market with a demand, according to the National Dangerous Drugs Control Board estimations, of four kilogramme heroin per day and almost no cocaine. What we have been doing is disturbing an international drug trafficking channel. That could be seriously upsetting the powerful drug cartels. They may retaliate in ways unthinkable.
From a Grama Niladhari mindset to global strategic mind set
The Sri Lankan leaders have traditionally been attempting addressing the local issues with the same mindset the village headmen to Grama Niladharis had for ages. That was largely reactive. Happens something unusual – say, a fresh threat from the elephants from a nearby forest – a Grama Niladhari may first call a meeting with the all important personnel in his village, starting from the chief prelate of the temple. Everybody, in such situations normally offers a view.
Then they may act collectively. Each gets a responsibility, depending upon their competences and levels of authority. Now, this arrangement would have been great as long as all problems they face take place in that small sphere. The issues that cross those boundaries have no solutions within that domain. They have to reach out, certainly.
Religious terrorism and drug trafficking are both global, not local issues. The global matters demand global solutions. These should be addressed carefully with regional and international cooperation. It makes sense when other countries too, at regional and international level, face similar challenges. Why reinvent wheel? Sometimes it could be just a matter of replicating solutions.
We have been living in an island for centuries, if not millennia. Over the long history of Sri Lanka, we have many unpleasant experiences of ‘farangis’ invading us, taking advantage of our weaknesses and repeatedly breaching our trust. Such information, over generations, is now hardcoded into our genes. Thus, we have good reasons to be paranoid.
We see Rambo type CIA and RAW agents, behind every bush ready to attack with machine guns aimed us. This xenophobic mindset has prevented us regional and international cooperation always and it would be the single most obstacle we have to, as a country, overcome this time. Religious terrorism is a common threat. It should bring all states together, not too different from the way seven kingdoms united against a bigger and more fearful enemy in the form of white walkers.
International support against terrorism – easier said than done
Even a common threat does not necessarily bring all to a single front. Communism was a common threat in 1950 but that does not necessarily made the USA back South Korea in the Korean War. The conflict between two fresh Korean states, following WW II, escalated into warfare when the North Korean military (KPA) forces—supported by the Soviet Union and China—crossed the border and advanced south into South Korea in June 1950.
The USA had no policy dealing with South Korea directly as a national interest, so it bought time. Though never officially accepted, they say Koreans purposely let KPA take over Seoul and let them more into the country to win the USA interest. Even after war, the South Korean leaders went to extreme level to win the USA support. For instance, in 1961, the North Korean leader, Kim Il-sung secretly sent Hwang Tae-song, a former friend of Park Chung-hee – the President to be, to South Korea, hoping to improve inter-Korean relations. However, in order to dissipate the suspicions about his Communist leanings and assure Americans his firm stance as an ally, Park decided to execute Hwang as a spy.
Fortunately, such extreme measures are no more required in the contemporary global village environment. Now it is more a matter of placing ourselves at the right point in the international map. How that could be done? Is national security an isolated element? Not really. It is more complicated. Security could be just one aspect in a geopolitical package, where economy places a larger role. The challenge is how to find such a package.
Interestingly, this brings us back to a topic already in discussion prior to 4/21. While the current situation does not negate the significance, there can be several alterations to our thinking. We have just few months to a major election that of the interest of two regional super powers: China and India. What can they offer in terms of security? At what cost? What would be our economic opportunity cost in each case? These would be uneasy but relevant questions.
The worst possible option, economically and politically, will be attempting to manage things on our own. Our own financial and technical resources are no more able to address global issues. If piggybacking on a super power made some sense before 4/21, now it makes perfect sense
First, India. This could be the best friend we could have in security – if at all we are ready to treat Indians friends. The option might have an economic opportunity cost. Economic opportunities India might bring, even under best situations, can only partially balance the loss. In terms of security support, India has a developed and professional intelligent network and more than adequate military strength to assist a small nation with less than one-fiftieth times of its own population.
India also has similar interests, with Pakistan as its key rival. It was the Indian intelligence reports that correctly predicted the 4/21 attacks, though we selected to completely ignore them. With most probably Narendra Modi back in power soon, India itself will be directly hostile to Islamic terrorism.
What averts we investing in an Indian package is the unreceptive sentiments we, as a country, historically maintain and which still continues for no logical reason with ‘Big Brother’. Otherwise, there is little that prevents from us being another virtual state of India economically and politically maintaining only a cultural identity. We do have a political force ready to take this option forward, if the majority endorses so. The other equally attractive offer is from China. This would be certainly the case if former Defence Secretary Gotabaya Rajapaksa assumes the President’s office. His chances now, at the moment of penning this, appear thinner than Jon Snow’s assuming the throne but we do have two episodes to go and the Sri Lankan constituency is as unpredictable as George R.R. Martin. So, we will never know till the end. But getting back to China, it is a worthy friend to have both economically and politically.
The option naturally brings the opportunity cost of a regional bias that might breach Sri Lanka’s historical non-aligned foreign policy but that is worth the benefits. As I wrote elsewhere, with over a 1.4 billion heads, China is the world’s most populous nation. What makes China so powerful is not this population but its sheer economic power.
Since the introduction of economic reforms in 1978, under Chairman Deng Xiaoping, China’s economy has been one of the world’s fastest growing. Its annual growth rates consistently remained above 6 percent for this entire period. China’s GDP has grown from US $ 150 billion in 1978 to US $ 12 trillion by 2017.
Since 2010, China has been the world’s second-largest economy by nominal GDP and since 2014, the largest economy in the world by purchasing power parity (PPP). China is also the world’s largest exporter and second-largest importer of goods. Why mince words? China is big. Super big. Moving forward with China is a great option, if that is available.
The worst possible option, economically and politically, will be attempting to manage things on our own. Our own financial and technical resources are no more able to address global issues. If piggybacking on a super power made some sense before 4/21, now it makes perfect sense. And Presidential Election 2020 could be the right moment of commencing that journey.
(Chanuka Wattegama, an academic and a policy researcher, can be reached at email@example.com)