Author: TELO Admin

An individual has been arrested yesterday (August 14) in connection with a forewarning about an attack on Indian High Commission in Colombo related to international relations, the police spokesman said.

In a statement, Senior DIG Ajith Rohana mentioned that the Kollupitiya Police had received a complaint regarding the said forewarning.

The complaint was filed on Friday (August 13) by an official of the relevant institution.

Thereby, probes were initiated by Kollupitiya Police and were later taken charge by the Colombo Crimes Division (CCD).

Investigations led to the arrest of a former officer of Sri Lanka Air Force (SLAF) who was reportedly suspended from duty.

According to the police spokesman, the arrestee hails from Hindagala area and temporarily resides in Panagoda area.

Further investigations into the incident are being carried out by the CCD and the Kollupitiya Police.

Sri Lanka’s gross official reserves dropped to 2,833.5 million US dollars in July 2021, from 4,060 million in June after a billion US dollar bond and some other accounts were repaid in July, official data show.

Sri Lanka has been injecting unprecedented volumes of liquidity into banks as excess rupee reserves triggering a balance of payments deficit under so-called ‘Modern Monetary Theory’ (an extreme form of ‘stimulus’ after cutting taxes in a fiscal ‘stimulus’, triggering a run on reserves and credit downgrades.

The reserves are the lowest since July 2009, when the country had just finished a war and was rebuilding reserves. At the time monetary policy was tight and prevented a monetary meltdown amid the collapse of the Federal Reserve housing bubble.

In 2021 liquidity has also boosted imports, despite controls on items like vehicles, which bring the highest level of taxes, dollar for dollar, hurting tax revenues, triggering more money printing and reserve losses.

Sri Lanka is heavily steeped in Mercantilism and the link between credit, liquidity and monetary instability is not understood.

It is also the practice of Mercantilists to measure forex reserves in terms of imports, through trade bills need not be paid with reserves as long as liquidity is not injected in to commercial banks.

Sri Lanka’s gross forex reserves were 2.6 months of imports measured as the average of past 12 months in June 2020.

Though July import data is not released, but if imports are below the June level of 1.65 billion dollars and reach at least the February level of 1.52 billion dollars reserves are now around 1.8 months of past imports.

With the Peoples Bank of China swap, which can be drawn down and used to pay for Chinese imports, forex resources are about 2.8 months of imports.

State Minister for Money and Capital Market Nivard Cabraal has said that the reserve fall in July would be temporary.

The International Monetary Fund is expected to disburse around 800 million dollars in special drawing rights in August 2020, and the central bank is also negotiating a 250 million US dollar swap with Bangladesh Bank which has been approved in principle subject to a sovereign guarantee.

Central Bank Governor W D Lakshman had said that a 400 million US dollar swap is also expected from India.

However swaps indebt the central bank and analysts had warned that if liquidity is continued to be injected the monetary authority will end with negative foreign assets.

Last week some corrective action was taken in the form of a 05 basis point hike in the 12-month ceiling rate for Treasury bills, through which debt is monetized and liquidity is injected to trigger a run on forex reserves.

Responding to concerns raised by Chair of the All-Party Parliamentary Group for Tamils (APPGT), Elliot Colburn, over potential cuts in funding to UN Expert Committee, British Foreign Secretary, Dominic Raab, highlighted his concerns for the human rights environment in Sri Lanka and noted that his officials have been in contact with the Office of the UN High Commissioner to secure a level of funding which would enable for collection and analysis of evidence of war crimes in Sri Lanka.

In his letter, Colburn raised his concern that funding cuts of 58% for the UN Expert Committee would impact the operations of the OHCHR to investigate human rights abuses in Sri Lanka as mandated by the latest UN resolution on Sri Lanka, 46/1. Britain led the resolution which mandated for the Office of the High Commissioner “to collect, consolidate, analyse and preserve information and evidence and to develop possible strategies for future accountability processes for gross violations of human rights or serious violations of international humanitarian law in Sri Lanka”. Ahead of the head of the resolution a budget of $2.8 billion dollars was requested by the OHCHR to begin collecting evidence of mass atrocities that could be used for future war crimes trials.

Commenting on the potential budget cut Elliot states:

“The budget cut effectively means the mechanism will only retain two posts, as well as removing the post of coordinator for the mechanism. This makes it extremely difficult (if not impossible) to carry out the mandate of the mechanism – to collect, consolidate, analyse and preserve information and evidence; to develop possible strategies for future accountability processes for gross violations of human rights or serious violations of international humanitarian law in Sri Lanka; to advocate for victims and survivors; and, to support relevant judicial and other proceedings” he stated.

Colburn added:

“It took many years since the last resolution for the UN Human Rights Council to act on Sri Lanka. The establishment of the mechanism was a step in the right direction for the justice and accountability for the victims. If it collapses now, or is unable to function optimally, then the risk is that this may be the end of the internationalisation of the process […] The Tamils in Sri Lanka and in the diaspora, victims of heinous crimes committed by Sri Lanka, who had high hopes for the mechanism to be a step in the right direction to achieve justice are devastated to learn that mechanism could be rendered ineffective”.

Addressing these concerns, Raab highlighted the work of the British Foreign Office to secure funding noting that on “6 June, the Advisory Committee on Administrative and Budgetary Questions (ACABQ), an independent expert subsidiary body of the General Assembly, agreed a level of funding for 2021 that would allow OHCHR’s work to get underway”.

He added that “although less than originally requested we understand that the ACABQ considered that the reduced initial resourcing allocation, would not reduce its effectiveness during the commencement of initial operations”.

Raab further noted that there will be further discussions later this year in the General Assembly to approve the 2022 budget for OHCHR, where resourcing is expected to increase. In concluding his letter he reaffirmed Britain’s commitment to the UN resolution stating:

“We will continue to monitor the implementation of this mechanism closely, and engage as appropriate, including in budget negotiations in the autumn”.

The National Investigation Agency (NIA) probing the seizure of five AK-47 rifles and `3,000-crore worth of heroin from a Sri Lanka boat off the Kerala coast on March 25 has found that a Pakistan national was the main handler of the smugglers.

Similarly, two residents of Chennai allegedly have associations with members of Liberation Tigers of Tamil Eelam (LTTE).

The NIA got these details while questioning Suresh Raj, aka Chinna Suresh, 39, and Soundarajan, aka Soundar, 21, in the past 13 days. Both were first arrested by Tamil Nadu Q Branch. Later, following a directive of the NIA court, they were brought to Kochi and their arrests recorded in the NIA case.

“Both have revealed their incriminating role and their associations with foreign handlers including a suspect in Pakistan. The Pakistan national had supplied a large quantity of heroin, arms and ammunition. The NIA has identified the person and the operation of the gang that smuggles drugs and arms on fishing vessels. They also have given information about their mode of communication, which is mostly social media platforms. The accused used multiple mobile phones, SIM cards and social media accounts for secret communication with their associates abroad,” a source said.

The NIA has found that the conspiracy to smuggle drugs and weapons from Pakistan using fishing vessels started in the second half of 2020. Both also have links with members of the proscribed LTTE. “Suresh is a Sri Lankan national who had been staying illegally in India for the past several years without any visa or passport. He managed to obtain a PAN card, Aadhaar card, driving licence, voter ID card and passport of India using forged documents. He was arrested by the Q Branch from Angamaly last month,” the source said.(The New Indian Express)

The well-earned publicity that the ‘Integrated Country Strategy’ for Sri Lankan missions in India has received in the Indian media is welcome for more reasons than one. In particular, it deserves to be praised for acknowledging the ‘trust deficit’ that has re-emerged in the bilateral relations over the past year—after a relatively smooth sail in the five years before it.

With the acknowledgement also comes suggestions for setting right many, if not all the causes for the ‘trust deficit’. The latter has more to do with the contemporary political and economic realities, as different from the centuries-old cultural underpinning, from which both nations have unfortunately moved away over the past decades.

When cleared by the government of President Gotabaya Rajapaksa, the document could be the guiding, if not the governing, principle for Sri Lankan missions in India, after the former Minister Milinda Moragoda takes over as the High Commissioner in Delhi later this month. Moragoda having authored the strategy paper along with his mission counterparts in Delhi, Chennai and Mumbai, the authors are also the implementers—and thus, know the dos and don’ts that lie ahead for them.

Age-old links: Naturally, the strategy paper refers to Buddhist links between the two nations, which actually dates back prior to the commonly-known era of Emperor Ashoka. In contemporary terms, the paper has proposed for Sri Lanka to send a stone from ‘Sita Eliya temple’ in Nuwara Eliya district, linked to the Indian epic, ‘Ramayan’, for the Ram temple construction at Ayodhya in north India.

Despite possible political fall-outs in India, especially in the future, the suggestion should be welcomed. It may slow down, if not set at naught, the recent efforts in Sri Lanka to establish Ravan, the antagonist in Ramayan, as a Sri Lankan sovereign independent of the Indian epic and also the earliest aviator in the world.

TRANSACTIONAL APPROACH

It is, however, in the contemporary context that the paper’s acknowledgement of trust-deficit between the two South Asian/Indian Ocean neighbours assumes immediate relevance and significance. As the report candidly acknowledges, “In recent years, the Indo-Sri Lanka bilateral relationship has been increasingly dominated by a transactional approach.”

There is truth in the assessment that the historic relations between the two nations have long since given place to self-centric claims, expectations and denials by both. Neither does India possess the elder brother/sister attitude any more, nor is Sri Lanka willing to stop playing the recently-innovated ‘China card’ viz its northern neighbour.

The “Team Milinda” paper, as it could be called, says that the ‘transactional approach’ is a ‘consequence of the changes in the geo-political equilibrium in the region that have resulted in a growing trust-deficit’. In diplomatic terms, this should be construed as a reference to China emerging as the bugbear in Sri Lanka’s India relations in recent years—but without naming the extra-regional power.

In real terms, China in this case is pitted more against the US than India, just as the latter pitted itself against the erstwhile Soviet Union in the Indian Ocean Region (IOR) during the Cold War era. But the end result is that the Chinese presence in and domination of the Sri Lanka scene, especially in economic and political fields—and not necessarily in that order—has nullified all efforts at improved ties between Colombo and New Delhi in the post-war era.

INVESTORS UNSURE

It suffices to point out that in the aftermath of the aborted trilateral deal on the East Container Terminal (ECT), also involving Japan, after President Gotabaya took over, Indian investors, big and small, have become unsure about putting in big money in the island-neighbour. True or not, they have come to believe that a twitch of the lips in distant Beijing could push Colombo to throw them out halfway through.

The one exception is the West Container Terminal (WCT) construction concession offered to the India-based Adani group, as if in lieu of the cancelled ECT pact. The strategy paper suggests that the WCT proposal should be cleared without delay. Other Indian investors would be closely watching developments on this front before deciding to put their money in Sri Lanka. In effect, this means that Colombo cannot hope to get all, or even much of the US $256-billion Indian FDI by 2022, as the Milinda paper recalls.

INCREASING PROTECTIONISM

Yet, there is truth in the strategy paper’s claims on wanting to realise US $675-million Sri Lankan exports to India, again by 2022. As the study points out, export prospects at present suffer from “increasing protectionism (in India), limited market access, a challenging and unpredictable regulatory environment as well as the ‘Make in India’ initiative, which prioritises local business and sourcing of local raw materials and products over imports”.

True, Prime Minister Narendra Modi revived the Nehruvian ‘self-reliance’ goal in the name of ‘Make in India’ after coming to power in 2014. But no specifics have been made available for India to exempt raw material imports from Sri Lanka, as indicated. For close to two decades now, Sri Lanka has deliberately missed all opportunities to discuss Indian protectionism and non-tariff barriers with the sincerity and seriousness that they deserve as a part of larger trade negotiations, especially after the bilateral Free Trade Agreement (FTA) in 1998 had proved its worth and usefulness for both.

Long before Modi came to power, bilateral trade had suffered and a trust-deficit made an appearance, instead, after the two nations initialled the forgotten Memorandum of Understanding (MoU) on a Comprehensive Economic Partnership Agreement (CEPA) at Colombo in 2008. Sri Lanka pulled back from signing the formal pact in the aftermath of a later-day anti-ECT kind of protest. The alternative ETCA negotiations for an ‘Economic and Technology Cooperation Agreement’, proposed by the successor Wickremesinghe regime, too fell by the wayside, again, as designed by Colombo.

TROUBLE SPOTS

In an altruistic fashion, Team Milinda’s strategy paper has focussed on Sri Lankan missions in India improving relations with Indian states, directly, wherever possible. It will bear fruit especially in terms of investments and large-scale trade for the Sri Lankan Consul-General in Mumbai to take up.

The real and unmentioned crux, however, lies in southern Chennai, which used to harbour strong views on the Sri Lankan ethnic issue and also the fishers’ dispute. The former is still an emotive matter, and the latter a life-and-livelihood concern in Tamil Nadu.

The strategy paper does not mention the ‘ethnic issue’, on which not only the government but people of Tamil Nadu are also concerned about. Then Prime Minister Rajiv Gandhi had signed the Indo-Sri Lanka Accord on the ethnic issue along with Sri Lankan President J.R. Jayawardene in July 1987. Hence, the Government of India continues to have similar and at times stronger concern about the Colombo dispensation having to meet the ‘legitimate aspirations’ of the island’s Tamil population—which has not happened, as yet.

As for the fishers’ dispute, successive political dispensations in New Delhi have reaffirmed its commitment to the 1974-76 accords on International Maritime Boundary Line (IMBL), thus conceding Katchchativu islet in Sri Lankan territory. On the larger issue of Sri Lankan Tamil fishers from the North especially continuing to oppose destructive trawlers from southern Tamil Nadu in particular competing with them in the waters that New Delhi has acknowledged as theirs, the issue remains to be resolved completely.

The ‘Milinda Paper’ makes great sense in wanting the affected fisher communities in the two countries to sort it out through negotiations. The talks that commenced as a private initiative obtained governmental blessings from both sides, but got stuck in the ocean waters at Chennai, in the first half of the last decade.

However, the Jayalalithaa-led AIADMK government in the state still took up the long-pending Centre’s proposal for equipping and training Rameswaram fishers, caught in the middle, in deep-sea fishing instead. The process is slow, and has also suffered owing to the rightful prioritisation of COVID pandemic management in the state.

In Sri Lanka, the Colombo government alone has all powers to negotiate on the fishers’ behalf, or facilitate such negotiations between fishing communities in the two countries. In India too, communication with foreign governments flow through New Delhi. It will, thus, be effective for the Sri Lankan government, the High Commission in Delhi, and the Deputy High Commission (DHC) in Chennai, amongst others, to continue communicating with the Tamil Nadu government and the state’s fishers through New Delhi—rather than directly.

Though unintended, Tamil Nadu Chief Minister M.K. Stalin seemed to remind Sri Lankan officialdom of the continuing Indian protocol in such matters, despite the political differences between Chennai and Delhi. Stalin wrote (only) to External Affairs Minister S. Jaishankar—and not formally to any Sri Lankan authorities—on reports of Sri Lanka Navy (SLN) opening fire mid-sea, injuring a Tamil Nadu fisher, Kalaiselvan, in the head.

Yet, the Sri Lankan Deputy High Commission in Chennai could continue work with home office whenever Indian fishers are inconvenienced after Sri Lankan Navy (SLN) arrests them mid-sea, along with their boats. The free-wheeling facilitation by the DHC and early release of the Tamil Nadu fishers in the war years definitely created a feel-good factor in the state. In turn, it got reflected to some extent when the state’s fishers began negotiations with their brethren from across the Palk Strait—until personality-centric domestic politics derailed the process at the most recent round in Chennai, 2014.

This article was first published on ORF.

DISCLAIMER:The author is Distinguished Fellow and Head of ORF’s Chennai Initiative