Category: News

Minister of Foreign Affairs Dinesh Gunawardena the new resolution against Sri Lanka, adopted by the United Nations Human Rights Council (UNHRC) seeks to interfere in all matters that are essentially within the domestic jurisdiction of a country.

Sri Lanka considers the resolution to be unwarranted, unjustified and a violation of the relevant articles of the United Nations Charter, in particular, Article 2(7) and the relevant sections of the UN resolutions 60/251 that provides for the mandate of the HRC, the minister remarked, delivering a special statement during today’s parliamentary session earlier today (March 25).

For the above reasons the resolution against Sri Lanka is illegal, he added.

Although the resolution says it is guided by the purposes and principles of the Charter of the United Nations, it has violated Article 2(7) of the Charter which states that nothing contained in the present Charter shall authorize the United Nations to intervene in matters which are essentially within the domestic jurisdiction of any state.

“We are a sovereign state that had been cooperating with the United Nations. We will protect our sovereignty. We are a democracy. We are the oldest parliamentary democracy in Asia. We have enjoyed universal suffrage for 90 years and today we are told that elections are not being held. We have held all the elections that could be held when the Election Commission decides.”

Foreign Minister says this resolution against Sri Lanka was pushed forward at the behest of a few countries representing one part of the world without the consent of Sri Lanka. “It is therefore unhelpful and divisive.”

He stressed that there is no moral right to interfere in the affairs of a sovereign country in this manner.

“No country has a greater interest in bringing about reconciliation among its people than Sri Lanka – a point that has been repeatedly been emphasized during the proceedings of the Human Rights Council.”

Minister Gunawardena, in his statement, pointed out that the list of co-sponsors of the resolution has amply demonstrated the divisive manner of such a country-specific initiative. He said it is clear from the result of the vote that there is no consensus within the Council on this resolution.

The resolution adopted on Tuesday (March 23), is intrusive of the sovereignty of the people of Sri Lanka and core values of the UN Charter, the minister said stressing that it can have an adverse effect on the ongoing efforts to maintain peace, reconciliation and development in Sri Lanka. “It will lead to polarization of our societies.”

Sri Lanka categorically rejects the proposal in this resolution to expand the role of the OHCHR, the Foreign Minister reiterated. “This sets a dangerous precedence and will have wide-ranging implications for all other countries.”

He went on to say that the Council cannot assume tasks that are not assigned to it by UN General Assembly in Resolution 60/251 or subsequent resolutions. This resolution is based on the rejected report on Sri Lanka by the UN High Commissioner for Human Rights presented at the 46th Session of the Human Rights Council which violates the principles of sovereignty and equality of all states and non-interference in internal affairs, he continued.

The report is one-sided and has exceeded the mandate of the Human Rights Council, Foreign Minister emphasized. He said the report contains unsubstantiated, unwarranted comments of essentially political nature, which no self-respecting sovereign nature can accept.

The minister pointed out that the report was compiled within months following the formation of the new government in Sri Lanka, without any field visits, while the whole world was grappling with the ongoing COVID-19 pandemic.

He said a well-orchestrated propaganda campaign was launched against Sri Lanka ahead of the 46th session of the Human Rights Council. This campaign was carried out with an extensive focus on Sri Lanka while reports pertaining to the situation in over 10 other countries were presented at relevant HRC session. The synchronized content of the propaganda against Sri Lanka and exploitation of the OHCHR mechanisms demonstrated a clear case of pre-mandated endeavour.

The new resolution, in an unwarranted manner, seeks to interfere in all matters that are domestic affairs of a sovereign country, Minister Gunawardena said further. He questioned the UN members whether Sri Lanka represents a case warranting the immediate attention of Human Rights Council. Sri Lanka only defeated a terrorist campaign and acted within the legal rights to defend its territorial integrity, he elaborated.

The minister says the Sri Lankan government is determined to achieve its main targets to improve the lives of its people despite the distractions from international bodies. “No sovereign government is bound to work according to the external prescriptions but be guided by the democratic aspirations of its people.”

The government remains committed to protecting those who have made immeasurable sacrifices to neutralize terrorism, to protect the territorial integrity of the country and to regain the right to life, he added.

It is regrettable that the proponents of the resolution seek to create ambiguous mechanisms with funds of millions of US dollars at a time of severe financial constraints faced by the UN.

Pointing out that the UNHRC is wasting money to engage in an unnecessary inquiry against Sri Lanka, the Foreign Minister called upon the proponents of the resolution to diversify the money allocated for the implementation of this proposal to improve the lives of people affected by the conflict. He urged them to direct the funds to a more positive cause.

Speaking on the vote on the UNHRC resolution, he highlighted the fact that some countries that voted in favour of Sri Lanka withstood immense pressure. He thanked the countries for braving such adversities to reject the resolution.

Despite the vote on the resolution against Sri Lanka, the island nation will pursue its domestic mechanisms as pledged before the UN agencies aimed at bringing about reconciliation and lasting peace, the minister stressed.

“Sri Lanka will continue to engage constructively with the UN and its agencies in the same spirit of cooperation for the betterment of the people including through the achievement of sustainable development goals, in keeping with the domestic priorities and policies as well as international obligations and undertaking.”

The Foreign Ministry is currently in the process of studying what it should do at the 76th session of the UN General Assembly regarding the United Nations Human Rights Council (UNHRC) seeking an additional programme budget of US $ 2.8 billion to implement the resolution on Sri Lanka, an official said yesterday.

The official said the Ministry would study the technicalities in the process and decide how it should respond to the situation.

The UNHRC has sought approval for such budgetary support at the 76th General Assembly to cover expenses required by the Office of High Commissioner for Human Rights (OHCHR) to report on Sri Lanka’s situation as envisaged in the resolution.

The related cost has not been included in the programme budget for 2021 and 2022. The latest budgetary requirements’ that arose after the adoption of the resolution is to be brought to the attention of the General Asembkly.

Of the estimate, US $ 137,400 is sought for general operating expenses, US $ 130,000 for contractual services and US $ 41,200 for staff travel. Besides, US $ 75, 400 has been sought to be spent for meeting participants and witnesses.

The OHCHR is to appoint 12 investigators on Sri Lanka for the investigative and evidence-gathering mechanism. In seeking the approval for the programme budget, four trips have been proposed for staff members for fact finding, information collection and awareness rising.

Among the matters proposed to be carried out by the OHCHR are commissioning and analysis of satellite images and the establishment of an information evidence repository.

Pakistani Permanent Representative to UN in Geneva Khalil Hashmi who spoke before the vote on Sri Lanka said allocation of such a large amount of money raised serious concerns when the UNHRC was facing a liquidity crisis.

Sri Lanka is controlling the price of the rupee with great difficulty and the it could fall to as much 300 to 350 to the US dollar, given past trends, Trade Minister Bandula Gunewardene told parliament without giving a time frame for the target.

“Now it is with the greatest difficulty (ithar visharler amaruwen) that the exchange rate is controlled at 200 levels (to the US dollar),” Minister Gunewardene told parliament this week.

“What if this rupee goes to 250, or 300 or 350? It can go to that level (ehemer ven-ner puluwan) because when we got independence we paid only 4.77 to the US dollar.”

Minister Gunewardene did not give a timeline for 350 rupees.

Sri Lanka got independence from British rule in 1948.

At the time Sri Lanka had a currency board which could not legally print money to control interest rates and the exchange rate was fixed (externally anchored) 1 to 1 with the Indian rupee from 1885.

The Indian rupee was originally a silver based currency. While the rupees produced by the Board of Commissioners of Currency of Ceylon could move against gold standard moneys such as the sterling, it could not depreciate against the anchor Indian rupee currency.

A currency board (a hard peg) is prohibited from issuing notes against Treasury bills and can only issue notes against foreign currency inflows, making it impossible to generate excess demand and balance of payments crises.

The Board of Commissioners of Currency was set up in 1885 by British administrators after the collapse of the main note issuing bank at the time, the Oriental Bank Corporation, which suspended payments in May 1884. Sri Lanka had several note issuing free banks.

At the time a series of chartered and free banks had fired a bubble, which collapsed bringing commodity prices including coffee down, generating bad loans in many banks in Asia and Ceylon.

Latin America style soft-peg

Sri Lanka set up a Latin America style central bank in 1950 with advice from a Federal Reserve ‘money doctor’ to become part of the Bretton System of failed soft-pegs.

Soon after World War II the US was intent on breaking the so-called ‘Sterling area’, where a partially closed trade system was taking place due to Bank of England money printing dating back from the war years was creating forex trouble with the ‘dollar area’.

Countries like Malaysia, Singapore and the Maldives which got independence around a decade later escaped the central banking debacle.

After the Great Depression the Latin America unit of the Fed had set up a series of money printing central banks which were supposed to do ‘counter cyclical policy’ in several countries, inspired by Argentina’s central bank set up by Raul Prebisch.

Many of those Latin American countries ended up with forex shortages, import substitution and sovereign default. Some central bank struck zeroes off the money, and accumulated more zeroes. Others dollarized.

After the currency board was converted to a soft-peg Sri Lanka had foreign reserves measured in 11 months of imports.

Un-anchored policy

Meanwhile Gunewardene said by 1978 Sri Lanka’s rupee was around 8 to the US dollar.

In 1978 it was devalued to 16 he said during then Finance Minister Ronnie de Mel’s budget.

By 2005 it was down to 105 to the US dollar.

When Mahinda Rajapaksa left office in 2014 it was around 130 he said.

During the five years of the last administration the rupee had fallen to 182 to the US dollar, he said.

Economic analysts had blamed ‘flexible’ policy involving un-anchored monetary policy (flexible exchange rate or no external anchor/flexible inflation targeting or no domestic anchor) for the currency collapse in the past five years, which happened despite steep and unpopular tax hikes and market pricing of fuel.

Gunewardene said the current administration had cut value added tax to help bring down prices and costs to business. Now unprecedented volumes of money was being printed to keep rates down and also finance the deficit.

In 2020, the highest balance of payments deficit of 2.3 billion dollars was recorded with over 650 billion rupees being printed, apparently under ‘Modern Monetary Theory’.

In 2015 the central bank printed money claiming inflation was too low, and in 2018 and 2019 money was printed to target an ‘output gap’. However the central bank has no growth mandate.

The central bank printed money to target an output gap, despite budget deficits coming down, triggering monetary instability.

Analysts have pointed to factors showing that interest rate were controlled as a final target, through overnight liquidity operations for call money, administrative price ceilings as well and outright purchases of longer terms bonds to influence the yield curve.

The resulting monetary instability then forces the central bank to apply brakes through a rate hikes rates and tighter liquidity.

However the currency collapse leads to a consumption collapse, implosion of domestic real capital and a relative inflation of foreign debt, driving short and long term growth down.

Such ‘stop-go’ policies also wreaked havoc in the US and UK in the 1960s and 1970s.

Analysts have called for a overhaul of the central bank or to re-establish the currency board to reign in monetary instability.

SELF-CORRECTING: Before an Argentina style central bank was set up in 1950 Sri Lanka had a self-correcting currency board providing sound money and free trade.

The result of the passing of a resolution concerning Sri Lanka in Geneva at the United Nations Human Rights Commission (UNHRC) has left many of our citizens asking questions as to how it will impact the country and its future.

Here are some of the questions we have been asked and the answers we gathered.

Question: Will there be sanctions against Sri Lanka as a result of the passing of the Resolution?
Answer: No

As Senior Researcher at the Centre for Policy Alternatives in Colombo Bhavani Fonseka points out the UNHRC does not have the power to impose sanctions. “Only the UN Security Council has that kind of power and that is an entirely different process.”

However, Fonseka says that “individual countries may impose targeted sanctions such as travel bans on certain persons.”

Countries or groups such as the European Union – which supported the resolution may withdraw special concessions such as the GSP+ which gives Sri Lankan exports a monetary advantage in those markets. That concession which had been withdrawn previously was restored after the 2015 Presidential Elections.

Opposition Member of Parliament Eran Wickramaratne observed: “An urgent fresh appraisal is needed to minimise the negative economic consequences of the resolution. We must not risk legal battles in foreign jurisdictions, travel bans, economic and trade embargoes. The economic consequences will be catastrophic.”

Question: Did Sri Lanka win or lose in Geneva?
Answer: We lost the vote

This is not a zero-sum game. To begin with, the Resolution did not target Sri Lanka as a nation or its general public. It equally pointed fingers at some members of the Sri Lankan Military and the Liberation Tigers of Tamil Eelam for gross Human Rights violations such as War Crimes and Crimes against Humanity.

It calls for transparent investigations and a process that would lead to healing and reconciliation.

The Resolution urges the government to implement recommendations already proposed by multiple commissions appointed by the Mahinda Rajapaksa administration. The report presented by the UN High Commissioner for Human Rights Michelle Bachelet also addressed the overtly anti-minority actions of the current administration.

Question: Was it a diplomatic failure?
Answer: Yes

Despite the government’s claim that the country “won” on the premise that abstentions equal support, some of our staunchest allies, such as India and Japan, who have contributed hugely to our economic and political development did not oppose the resolution. Instead, India used the occasion to reiterate at the debate on the resolution that it had the interests of the Tamil minority at heart.

Dr Paikiasothy Saravanamuttu, Executive Director of CPA called it “a diplomatic fiasco.”

Sri Lanka has in recent months spoken in favour of North Korea and Eritrea at the UNHRC making it impossible for Japan and South Korea as well as many African countries to support Colombo’s stand, some observers have said.

The hardcore vocal LTTE supporters, mostly concentrated in the West, had a muted celebration as the resolution condemned the Tigers for preventing civilians from leaving the warzone following its long-term strategy of using people as a human shield.

Amnesty International commented that the “resolution responds to an OHCHR report released in January, which warned that Sri Lanka’s persistent failure to address historic crimes is giving way to ‘clear early warning signs of a deteriorating human rights situation and a significantly heightened risk of future violations,’ and made concrete recommendations for “preventive action” for the Human Rights Council, including enhanced monitoring and reporting, and the collection and preservation of evidence, which has been mandated by this resolution.”

Question: Will Sri Lankans be charged by the International Criminal Court (ICC)?
Answer: No

The old claim made by the current government’s supporters that Sri Lanka’s “war-heroes” will be taken to the electric chair is absolutely incorrect, and pure misinformation used for propaganda purposes, former Parliamentarian Dr Jayampathy Wickremeratne said.

The ICC, Fonseka points out, “acts only when the domestic judicial process is unable to deal with a matter.” She points out the domestic set-up has to detain and hand over the person for trial. The ICC she says has no mandate to enter a country to carry out an arrest.

No action can be taken without the cooperation of the Government of Sri Lanka, she added.

Question: So what is the effect of the Resolution, will it affect the country immedietely?
Answer: No

The immediate action is to pass funds to create an office that will investigate, collect and preserve evidence of alleged War Crimes and Crimes against Humanity committed in Sri Lanka during the war.

Amnesty noted that the “resolution not only ramps up international monitoring and scrutiny of the human rights situation in Sri Lanka but also mandates the UN human rights office to collect, consolidate and preserve evidence for future prosecutions and make recommendations to the international community on steps they can make to deliver on justice and accountability.”

Its representative in Geneva, Hilary Power, was quoted as saying: “This is a significant move by the Human Rights Council, which signals a shift in approach by the international community. Years of support and encouragement to Sri Lanka to pursue justice at the national level achieved nothing. This resolution should send a clear message to perpetrators of past and current crimes that they cannot continue to act with impunity.”

Reported by Arjuna Ranawana

Political parties with racial or religious names will not be registered in future, the Election Commission said today.

The Commission will also look to amend the names of registered political parties with racial or religious names in consultation with the respective parties.

A number of minority political parties with names of a race or religion are registered in Sri Lanka.

A political party is treated as a recognized political party for the purpose of elections under Section 7 of the Parliamentary Elections Act No 1 of 1981 as amended by Parliamentary Elections (Amendments) Act No 58 of 2009.

The Elections Commission publishes a newspaper notice before January 31 every year (if the law has not directed otherwise) calling for applications.

However, if an election is announced during the month of January, the notice is published after the lapse of 30 days from the date of the election.