Sri-Lanka has been run by utterly incompetent people
since independence in 1948. The country’s economy has been run down.
In talking of Sri Lanka, this is what the former Prime
Minister of Singapore, Lee Kuan Yew says: "Sri Lanka - the Country will
Never be Put Together Again.”
“In 1965, we had 20 years of examples of failed states. So, we knew what to
avoid — racial conflict, linguistic strife and religious conflict. We saw Ceylon.”
“My first visit to Sri Lanka was in April 1956 on my
way to London. That same year, Solomon West Ridgeway Dias Bandaranaike won the
election as leader of the new Sri Lanka Freedom Party and became prime
minister.”
“He had promised to make Sinhalese the national
language and Buddhism the national religion. He was a brown "pukka
sahib" English-educated and born a Christian; he had decided on nativism
and converted to Buddhism, and had become a champion of the Sinhalese language.
It was the start of the unravelling of
Ceylon.”
“Riots
— we have seen in Sri Lanka, when they switched from English to Sinhala and
disenfranchised the Tamils and so strife ever after.”
“Sri-Lanka
has failed because it had weak or wrong leaders.”
World’s
Largest Cabinet
The country has the largest cabinet in the world with
more than 90 Ministers. But the Rajapaksa brothers control more than 80% of the
budget! The country is run like a corner shop!
The
Debacle of Hambantota Port
The port was inaugurated by Sri Lankan President
Mahinda Rajapaksa in November 2010 amid much fanfare and marked by the ceremonial
berthing of a Sri Lankan ship, Jetliner. But within weeks, speculation was rife
that all was not well. No ships had called on the port, fuelling speculation
that Sri Lanka's ambitions for the project might have been excessive.
It emerged subsequently that at the time of its
inauguration the port was not fully ready to begin operations. The government
went ahead with its opening on November 18 as it was the president's birthday -
an "auspicious day", as a statement issued by the Sri Lanka
Port Authority (SLPA) put it.
The Hambantota port is not producing expected revenue
and ships are being forcefully diverted from the port in Colombo. The port is
simply a white elephant.
It is known as Mahinda Rajapaksa Port!
Bankrupt
Airlines
Sri Lanka's state-run Mihin Lanka (familiar name
again!), a budget carrier, has lost 5.8 billion rupees since it was started in
2007 and it had a 5.6 billion rupee gap in the balance sheet despite capital
injections from tax money.
Mihin Lanka was started by the state despite the
country's full service airline, Sri-Lankan Airlines making losses throughout
most of its life on airline operations.
Critics have held up the state budget carrier as a high
profile example of tax banditry, arbitrary rule and lack of evidence based
policy-making.
All
Major Projects will be in Hambantota
In the last few years, major infrastructure development
projects have been launched - mostly in Hambantota district, far away from the
war ravaged north. Chinese moneylenders provide the capital on commercial
terms. Economic and commercial viability of the projects are not considered.
The
Rajapaksa regime wants to build everything in Hambantota for political reasons,
regardless of commercial viability. Hambantota is a small sleepy town.
It has just
built a new airport in Hambantota! It is known as Rajapaksa International
Airport!
The
Hambantota area is one of the poorest in the country and as such cannot be
expected to help the airport generate considerable passenger traffic.
Many
industry professionals have criticised the project, instead calling for the
government to improve the already crowded Airport in Colombo.
It has
also built a cricket stadium and it is known as Mahinda Rajapaksa International
Stadium – no surprise here!
Sports
Minister Mahindananda Aluthgamage told the BBC in 2011 that Sri-Lanka still
owed more than US $18 million to the Chinese construction firm that built the
stadium.
Riots and Looting
Looting of
businesses owned by minorities is common in the country. Many of the riots are
organised by the state and Buddhist monks.
There have
been major riots in the country since 1915.
The
Sinhalese-Muslim Riots (known as the 1915 riots) which began in Kandy soon
spread across the country. The British Governor of Ceylon Sir Robert Chalmers,
fearing he might lose control of the colony, on advice of Brigadier General
Malcolm, came down with a heavy hand on the Sinhalese community, declared
martial law on 2 June 1915 and ordered the police and the Army to shoot without
a trial anyone who they deemed a rioter. With the escalation of the violence
looting broke out in Colombo.
http://en.wikipedia.org/wiki/List_of_anti-minority_pogroms_in_Sri_Lanka
http://www.bbc.co.uk/news/world-asia-21840600
Insider Trading and Corruption
The stock market has fallen sharply, following hikes in
tariffs to tackle a worrying trade gap, as imports depleted limited foreign
reserves. The result is an economy set to grow by just 6 per cent, alongside
rising public discontent over increased living costs, which has sparked riots
and strikes.
A recent S&P report pointed to the country’s weak
external liquidity “in the context of low income levels, relaxed lending
practices and underwriting standards, as well as a weak payment culture and rule of law.”
S&P’s report drew attention to economic imbalances
produced by the annual 28 per cent growth in credit during the past two years.
The government has resorted to credit expansion to develop infrastructure
projects, and attract local and foreign investment.
While this credit boost generated a short-term lift in
the gross domestic product, signs of a debt crisis are emerging. It was
revealed in parliament that the biggest state bank, Bank of Ceylon, had written
off 11.3 billion rupees ($80 million) worth of bad loans last year. During the
past 10 years, two state banks, Bank of Ceylon and Peoples Bank, wrote off 125 billion rupees, with the loan
defaulters mostly backed by government politicians.
The S&P report also voiced concerns about
government manipulation of the stock market, through pension funds controlled
by the Central Bank.
Foreign Direct Investment (FDI) has largely been
limited to luxury hotels and other tourism related projects. According to
Sunday Times economist Nimal Sandaratne, foreign investment is being deterred
by perceptions of corruption and arbitrary governance, as well as “continuous
protests and violence” and “issues in media freedom that are highlighted around
the world.”
Such
allegations of cronyism and graft increasingly worry investors already alarmed
by the resignation of the country’s top financial regulator last year,
seemingly pressured by the administration to forestall investigations into
stock price manipulation.
Political Violence
“Things
are definitely getting worse”, says one western diplomat based in the country,
citing worries over threats to journalists, opposition politicians and civil
society figures, alongside a continuing spate of mysterious abductions of
regime critics and Tamil civilians.
“They are trying to run the government as a
dictatorial regime,”
former army chief, Sarath Fonseka says. “Corruption has increased ... but the
main opposition party is totally disorganised.” This pushes many to pin hopes
of change on international pressure.
Since the
first half of last year, Sri Lanka has faced a steady depletion of its foreign
exchange reserves, driven by rising import and oil costs. That forced the
central bank to hike interest rates and introduce import controls. It did not
help that the government achieved only half of its target for $2bn of foreign
direct investment during last year.
Human rights groups claim that there is a
“disappearance” every five days in Sri Lanka - which is a higher rate than any
country in the world, except Iraq.
Human
rights concerns have also seen British Prime Minister David Cameron face
growing calls to cancel or boycott a high-profile Commonwealth summit, due to
be held in Sri Lanka later this year.
Stephen
Harper, the Canadian prime minister, has already said he will not attend, while
two former British foreign secretaries, David Miliband and Malcolm Rifkind,
have called for the event to be moved to another country.
The
concerns echo the recommendations of a report last year from the UK
parliamentary foreign affairs select committee, which called on Mr Cameron not
to travel to Sri-Lanka.
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