edit in The Sunday Island, Dec 3, 2023
What has been widely described as the “historic” Supreme Court judgment which by a majority 4-1 decision of a five-judge bench held the Rajapaksa brothers, Mahinda, Gotabaya and Basil and other unelected officials including two past Governors of the Central Bank, a former Secretary to the President, a former Treasury Secretary and some members of the Central Bank Monetary Board responsible for landing the country in its current economic predicament. The judgment delivered on Nov. 14 was in time for the 2024 Budget, already passed at the second reading now being debated on the third reading is being freely quoted in the legislature.
The petitioners included the opposition Samagi Jana Balavegaya as well as some public interest activists maintained inter alia that reduction in government revenue due to unauthorized tax concessions costing government coffers Rs. 681 billion and the failure to rectify and retract the granted tax breaks had led to the economic downturn.
It also urged that the lack of transparency and accountability in high level decision making had resulted in the economic crisis the country continues to grapple with. Given the wide discussion the judgment triggered both in Parliament and outside, former President Mahinda Rajapaksa who has held the finance ministry on several occasions during his own presidency and that of his brother felt compelled to reply.
This he did in a tightly written and well argued statement published last week. Many observers believe that former Central Bank Governor Nivard Cabraal played a major role in drafting the statement that Mahinda Rajapaksa signed. Cabraal has the necesssary skills and the knowledge to make out a good case. In essence what the former president did, citing facts and figures, was to blame the previous Yahapalana leaders for the country’s bankruptcy.
He in effect said he left a healthy economy when he went out of office in 2015. He charged that it was his successor Maithripala Sirisena’s government which engaged in reckless financial profligacy leading the country to where it is at present. He claimed that raising nearly 15 billion dollars by way of international sovereign bonds was an altogether rash act.
However, the opposition argues that Sirisena’s administration was left with no option but to resort to expensive commercial borrowings to pay off the loans to build the Rajapaksa-era white elephants, including the Mattala airport, the Lotus Tower and Nelum Pokuna.
Growth during Mahinda Rajapaksa’s decade in power is also partly attributed to high defence expenditure. Every time a bullet was fired, it also boosted the GDP! Government expenditure is a key factor in calculating GDP and the lavish military budget helped swell GDP numbers.
President Rajapaksa, in his statement, used the Colombo Stock Exchange as a barometer for measuring what he claimed to be his successful economic management. But market watchers point out the existence of well-known cases of pump-and-dump in the stock market at that time. They also say that stock market investments by the EPF, holding the retirement funds of a very large number of private sector employees, need investigation. While a stock market could be an indicator, among other factors, of the health of an economy, it is not a sole criterion to be used. The MR defence statement used other indicators like GDP and Debt:GDP ratios.
The majority judgment has found that the respondents, Rajapaksa et al, had directly contributed to the results that led to the country’s present situation. It has held that they should have taken steps to resolve matters that negatively impacted on the economy and not allowed the problem to further aggravate. Saying that the respondents had full knowledge of the situation and power to prevent the calamity, the judgment has determined that there has been a violation of public trust and breaching of relevant constitutional provisions. All this, of course has been grist to the opposition mill. But the inescapable fact known to all is that the process has been growing over a period of many decades with the country being plagued by continuing deficit budgeting.
Just as much as incumbent President Wickremesinghe must be credited for pulling the country out of the unprecedented predicament it had plunged into, with never before seen queues for fuel particularly and acute hardship to ordinary people, President Mahinda Rajapaksa must also be credited for ending the long drawn war which cost the country much blood and treasure.
But the peace dividend that should have accrued has not yet been realized. Our defence expenditures continue to be in the billions and we have armed forces numbers totally unrelated to a country of our size not facing any external threat. But we have done little or nothing to trim their size and reduce the unaffordably huge expenditures lavished on them. There is also no effort whatever to reduce our bloated public service guzzling the lion’s share of state revenue.
Much finger pointing occurs on either side of the political divide on a daily basis. Maithripala Sirisena who became president on UNP votes and claimed that he would have been six feet under the ground had he lost the election, attempted in 2018 to get rid of his benefactor, Prime Minister Ranil Wickremesinghe, and install his once upon a time bete noir Mahinda Rajapaksa in his place.
Wickremesinghe who led a Mahinda hora chorus in the parliamentary chamber was elected to the presidency by the Rajapaksa party by whose grace and favour he continues to lead the country. We are heading for an election year and what will eventually happen in 2024 is an open question. All we can do is hope that the gods will smile down on us. https://island.lk/mr-defends-himself/
