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Monday, November 28, 2016

Business & Finance Sri Lanka's Rebirth 100% trusted

Joseph E. Stiglitz

Sri Lanka has been deservedly praised for the progress it has made since the end of the war against the separatist Tamil Tigers in 2009. The economy has grown at an average annual rate of 6.7 percent, and education and health statistics are impressive.
All developing countries face myriad challenges, but this is especially the case for a country that has suffered an intense 30-year civil war. The government will need to set priorities; but success will require a comprehensive approach.
Underlying wars, such as the fight with the Tamil Tigers are, typically, social and economic grievances such as real or perceived discrimination, and the failure of government to address wealth and income disparities adequately. Thus, more than transitional justice is required in Sri Lanka (or, to take another example, in Colombia, where peace with the FARC guerillas seems increasingly likely). What is required is full integration of the Tamils, Sri Lanka's embittered minority, into the country's economic life.
Markets on their own won't solve this problem. Sri Lanka will need balanced affirmative-action programmes that address the various dimensions of economic disparity and are attuned to the inequalities within the Tamil population. It will do no good to give a leg up to Sri Lanka's many rich Tamils, while leaving poor, lower-caste Tamils further behind.
Economic integration of the northern Tamil region will require heavy public investment in infrastructure, education, technology, and much else. Indeed, such investments are needed for the entire country. And yet tax revenue as a share of GDP is only 11.6 percent, about one-third that of Brazil.
Like many other developing countries, Sri Lanka simply enjoyed the fruits of high commodity prices in recent years (tea and rubber account for 22 percent of exports). Sri Lanka should have used the commodity boom to diversify its export base; the previous government of Mahinda Rajapaksa did not. With export prices down, and with tourism likely to suffer from the global economic downturn, a balance-of-payments crisis looms.
Some suggest that Sri Lanka turn to the International Monetary Fund, promising belt tightening. That would be hugely unpopular. Too many countries have lost their economic sovereignty in IMF programs. Besides, the IMF would almost surely tell Sri Lankan officials not that they're spending too much, but that they're taxing too little.
Fortunately, there are many taxes that the authorities can impose that would increase efficiency, growth, and equity. Sri Lanka has abundant sunshine and wind; a carbon tax would raise considerable revenue, increase aggregate demand, move the country toward a green economy, and improve the balance of payments. A progressive property tax would encourage more resources to go into productive investments, while reducing inequality and, again, boosting revenues substantially. A tax on luxury goods, most of which are imported, would serve similar goals.
Some in the country, citing inadequate inflows of foreign direct investment (despite marked improvement in the business climate), argue for lower corporate taxes. But such tax concessions are relatively ineffective in bringing in the kind of long-term investment that Sri Lanka needs; so to embrace them would needlessly eviscerate the already weak tax base.
Likewise, another frequently proposed strategy, public-private partnerships, may not be as beneficial as advertised. Such partnerships usually entail the government bearing the risk, while the private sector takes the profits. Typically, the implicit cost of capital obtained in this way is very high. And while the private sector can, and frequently does, renege on its contractual obligations (through bankruptcy) – or force a renegotiation under the threat of reneging – the government cannot, especially when an international investment agreement is in place.
Twenty-first century development strategies need to be different. They should be based on learning – learning to produce, learning to export, and learning to learn. There can be leapfrogging: in Sri Lanka's case, the benefits (apart from direct employment) to be gained from certain low-skilled manufacturing stages like garments may be limited. Given its education levels, Sri Lanka may be able to move directly into more technologically advanced sectors, high-productivity organic farming, and higher-end tourism.
But if Sri Lanka pursues such activities, it will need to ensure good environmental policies for the entire island. That will necessitate sound urban planning. Sri Lanka is fortunate to have a low level of urbanisation today; but this is likely to change in the next two decades. This gives the country the opportunity to create model cities, based on the adequate provision of public services and sound public transport and attuned to the cost of carbon and climate change.

Sri Lanka, beautiful and ideally located in the Indian Ocean, is in a position to become an economic hub for the entire region – a financial center and a safe haven for investment in a geopolitically turbulent part of the world. But this won't happen by relying excessively on markets or underinvesting in public goods. Fortunately, with peace and the emergence of representative political institutions, Sri Lanka today has a better opportunity than ever to make the right choices.

Maintaining support for reconciliation 100% trusted

Jehan Perera

THE government has been responsive to public pressure in multifold ways. It amended the budget in 16 different areas due to protests by trade unions and affected groups even though the budget deficit grew by more billions. It is investigating a case of abduction by one of its members. It has been responsive to concerns expressed by civil society about the absence of participation in both the constitutional reform and transitional justice processes. Prime minister, Ranil Wickremesinghe has appointed a 24-member committee from political and civil society to obtain views on constitutional reforms from the public. This committee will seek oral and written submissions from the public and a report will be handed to a cabinet sub-committee on constitutional reforms. In addition foreign minister Mangala Samaraweera has appointed an 11 member committee to discuss and provide input on issues pertaining to the Geneva process.
It is important in a democracy that the people believe their government is prepared to both listen to them and change its decisions accordingly. On the other hand, the government has to balance the national interest as against the interests of specific groups, and to look at short term in relation to long term interests both for itself and the country. Embedded in both the constitutional reform process and the transitional justice process are potentially explosive issues which can be exploited by extreme nationalists and opposition parties for political gain. Even at present the issues highlighted in the resolution of the UN Human Rights Council that Sri Lanka co-sponsored in Geneva, which relate also to truth seeking, reparations and institutional reforms, are being distorted as being solely about war crimes and taking war heroes to The Hague for trial by international tribunals.
The issue of equitable sharing of power between the main ethnic and religious communities who live in the country is another controversial issue that has a long history of conflict. The positions on the sharing of power that each community has is unacceptable to the others. A compromise is necessary. However, in the past the representatives of these communities would sit across the table and attempt to negotiate. This was most notably the case between successive governments and the various representatives of the Tamil people. At the present time, the fact that the government is a national unity government, and has the two main parties within it, and enjoying the support of all the ethnic minority parties, provides an unprecedented opportunity for consensual decision making. Instead of sitting across the table and bargaining with each other, this time there is an opportunity to sit on the same side of the table and address common problems together.

Different interests
HOWEVER, there is a gap between what is happening at the decision making levels of society and at the community level that needs to be noted. In the last days of 2015, I was in Anuradhapura to discuss issues of reconciliation with community leaders drawn from diverse backgrounds, including religious clergy, school teachers and local government officials. Looming large in any discussion in Colombo on the topic of reconciliation would be the issue of the resolution of the UN Human Rights Council, which the Sri Lankan government decided to co-sponsor, and the issue of inter-ethnic power sharing when it comes to constitutional reform. Accordingly the key components for the government to take on would be the establishment of a truth seeking mechanism, judicial mechanism to ensure accountability for past crimes, compensation for victims and institutional reforms to ensure that there will be no repeat of the past practices that led to conflict.
However, at the Anuradhapura discussion it became clear that the interest of the participants was not confined to the UN resolution and on whether the judicial mechanism should be hybrid or not, and whether confessing the truth is part of the Sri Lankan cultural heritage or not. Even before there could be a discussion on the Geneva process and its implications, a Buddhist monk from the audience interrupted to ask whether not giving school children their school uniforms, and instead giving their parents a voucher to purchase their own school uniform, was a practice of good governance. This comment was followed by an observation by a school teacher present at the discussion who said that it was an inefficient use of the school principal’s time, as he had to certify the receipts that the parents had brought to prove their purchase of the school uniform — there being thousands of such claims to be certified.
Another issue that was of particular interest to the participants was of the fertiliser subsidy, which was one of the 16 instances of reversals in the government budget, though evidently not to the satisfaction of the farming community. The government decided to convert the fertiliser subsidy in to an allowance of Rs. 25,000 for farmers who cultivate less than 2 hectares of land. Even though the overuse of low grade fertiliser provided at highly subsidised rates in the past is believed to be responsible for the kidney disease prevalent in the Anuradhapura area, it was clear that the reduction of the fertiliser subsidy was able to generate considerable emotion. It was such tangible issues, close to the lives of the people, that the participants at the discussion on reconciliation wished to discuss more fully. This preference will have to be taken into consideration in any mass educational campaign that is intended to build the support base for reconciliation in the country.

Different impacts
THE message from Anuradhapura was that issues of constitutional reform and transitional justice, important though they are for national reconciliation, for the ethnic minorities and for the international community, are of less immediate consequence to the lives of the majority of people who are not national level decision makers or seek to influence them. What is of more consequence to them are matters of economic resources that impact on their lives on a daily basis. School uniforms, fertiliser subsidy, kidney disease and viable livelihoods are priority concerns that also need attention and responsiveness if the government is to obtain the political support of the people regardless of successes in constitutional reform and transitional justice.
Unfortunately the perception amongst the people at the grassroots level is that the government is favouring the rich over the poor. The lifting of the tax exempt income from Rs 500,000 to Rs 2 million a year was an entirely unexpected bonanza to those who are relatively well off in Sri Lankan terms. On the other hand, the increase in tax from Rs 2 million to Rs 10 million on collection centres for toddy will have a negative impact on the earnings of toddy tappers, who are amongst the low income earners and who are spread throughout the country.
There is a need for the government to follow the model it is adopting with regard to obtaining the views of the people on constitutional reform and transitional justice and utilise the services of civil society organisations that are in close contact with the economic life of the people, such as the Sarvodaya Movement. They can be a part of government mandated committees, as in the case of the civil society committees appointed to ensure people’s participation in the constitutional reform and transitional justice processes. There is also a need to ensure greater public and academic discussion on issues of the economy and on ensuring an improved environment for economic investments to be made. At the present time the discussion is more on issues of crooked deals and corruption rather than on creating an investment-friendly environment that could contribute to the economy. Progress on reconciliation will be easier if the economy is also growing and contributing to the betterment of the lives of all people irrespective of their ethnicity.
Jehan Perera is the executive director of the National Peace Council of Sri Lanka.

NO STRINGS ATTACHED An execution's dangerous ripple effect 100% trusted

Aasha Mehreen Amin

The execution of Shiite cleric Nimr al-Nimr in Saudi Arabia, along with 46 other men accused of being involved in terror attacks and Al Qaida, has taken most observers by surprise. It may be interpreted as a deliberate show of Sunni power in the intensifying sectarian crisis in the Middle East. The resulting violence that led to protesters setting fire to the Saudi Embassy and the ultimate severance of diplomatic ties between the Sunni dominated Saudi Arabia and Shia Iran, is likely to escalate the volatility of the region and will be a major cause of worry for the world in general. With the two countries already involved in proxy wars from Syria to Yemen this execution may well be the catalyst for making the war on terror an even more complicated affair than it already is.
Human Rights Watch and other organisations have condemned the execution saying that the country's justice system was 'flawed with the absence of an appeal code' and that the terrorism law in Saudi Arabia is too broad and vague allowing for anyone to be accused of being a terrorist. In Nimr's case, he was accused of "inciting protest and … discord". His arrest in 2012 was hardly surprising in a country where dissent can be punished with death. He was a Shiite leader who led many anti-government demonstrations and had openly criticised the royal family for what he termed as discrimination against the Shiite community in Saudi Arabia. He was sentenced to death in 2014. HRW has alleged that there was no lawyer present during Nimr's interrogation and trial which no doubt, makes his execution even more unacceptable to the European Union and also embarrassing for long time ally, the US, which has already lost some of its charm after a nuclear deal with Iran.
But what has enraged Shiites around the world especially Iranians is that Nimr was lumped with AL Qaida operatives who had been found guilty of carrying out terrorist attacks in Saudi Arabia. In the Shiite world therefore, Nimr is a martyred hero who had to give his life for protesting the violation of rights of his religious community. Saudi Arabia's stance is that Nimr was trying to instigate secession and he had been punished according to the law of the land (Sharia Law) and due process was maintained, the carrying out of the sentence along with 46 others being merely coincidental. The timing however, raises questions regarding what exactly Saudi Arabia's role will be in the complex crises brewing in the region. In December, Saudi Deputy Crown Prince and Defense Minister Mohammed bin Salman declared the formation of a 34 nation coalition to fight terrorism militarily, with Bangladesh joining on a false impression, Pakistan not even knowing it had been included and Indonesia – a Sunni Muslim dominated country rejecting it. Although the Saudi coalition against terrorism seems to have faded away from public discourse, Bangladesh must unequivocally, disengage from it. It must also stay clear of the sectarian conflict as it reaches a new dimension provoked by the execution.
The presumptuous declaration and the fact that none of the Shia dominated countries such as Iran and Iraq were invited to join, indicated an attempt to create a purely Sunni fraternity that would be ready to use military power in the region according to the briefing by the Saudi Deputy Prince. Whether this was just a reaction to Iran and Iraq's growing involvement in the war against ISIL or for other reasons is not clear. Now with the execution of Nimr and Iran's Supreme Leader Ayatollah Ali Khamenei declaring that Saudi rulers will face “the divine hand of revenge” for their actions, the Shia- Sunni divide is bound to grow wider and more belligerent from both sides.

It is clear that the Muslim world especially, has to remain united in trying to combat terror groups like Al Qaida and ISIL. And individually most Muslim dominated countries, including Bangladesh, are quite aware of the crucial need to step up their efforts in terms of counterterrorism. Saudi Arabia, in the wake of innumerable terrorist attacks since 2003, has had a programme for the 'rehabilitation for convicted fighters' – young, radicalised Saudis who have been found guilty of terrorist activities who are 're-educated' to shun their extremist views and come back to normal. The programme is claimed by officials to be 100 percent successful. But its decision to execute a Shiite religious leader, who apparently only used the war of words not weapons, and its official severance of ties with Iran has created the danger of further tensions between Shias and Sunnis within Saudi Arabia and in other countries like Syria, Iraq and Pakistan, already afflicted with the disease. It will thus mean more sectarian violence and a perfect environment for ISIS and Al Qaida to radicalise young people, recruit them and carry out more attacks. Either way it spells disaster for both the western and eastern hemispheres.

President Obama visits a US Mosque 100% trusted

M. Serajul Islam

When Barak Obama was elected as the first black President of America in 2008 on the message of change for which the whole of the country was clamouring, the rest of the world was also excited. The reason was because by invading Iraq on false premises, President Bush had turned the United States and the world upside down. The destruction of Iraq in which hundreds of thousands of innocent Iraqis were killed as “collateral damage” and failure to rebuild a destroyed nation have been the direct reasons for the birth of ISIS. The trillions of US dollars spent for the Iraq misadventure encouraged and led by the neocons advising President Bush was also the main reason that had pushed the US and global economy into recession.
The Muslims everywhere were also as excited as the rest of the USA and the world with the call for change by President Obama. His message of change was interpreted in the Muslim world as releasing them from any responsibility for the actions of the perpetrators of 9/11 that was illogically, irrationally and forcibly tied around their necks. The Muslims believed that President Obama’s call for change would also bring them closer with the West. They also believed that he would take one of the fundamental reasons that have aggravated the West-Islam conflict namely the Israel-Palestine conflict seriously and resolve it under his leadership.
Thus, Muslims around the world were excited when he went to Egypt in 2009 and made from one of the oldest seats of learning in the world, the Al-Azhar University, dismantled the neo-con view on Islam. He quoted from the Qur’an to establish that Islam is a religion of peace and that the acts of terror in which some followers of Islam have indulged had roots in their colonial experiences where their colonial masters who were Christians had imposed injustices upon them. The President nevertheless stated that the violent acts of a few but potent force within Islam that led to the 9/11 attacks on US soil had justifiably bred “fear and mistrust” in his country about Islam and Muslims.

 He weighed these facts and concluded that the religion of Islam and its glorious past, when reflected upon dispassionately, should convince everyone that it has been Islam “ that carried the light of learning through so many centuries, paving the way for Europe’s Renaissance and Enlightenment” and that “throughout history, Islam has demonstrated through words and deeds the possibilities of religious tolerance and racial equality.” The President also touched upon USA’s roots of friendship with Islam in its founding years. And he urged strongly for a new beginning between USA and Islam based on history and in that context considered it of the utmost importance for his country to withdraw from Iraq to “leave Iraq to the Iraqis” and resolve the Israel-Palestine conflict that he considered a major source of tension.
Unfortunately, the President did not follow up on the promises he had made to the Muslim world in Cairo with the same conviction with which he had spoken. He did not take any serious initiative on the Israel-Palestine conflict. He withdrew US troops from Iraq but by the time that was done, the occupation had caused the damages and the seeds of future tension were already sown. Thus many now conclude that the hundreds of thousands of Iraqis who were killed during the occupation without anyone bearing responsibility and the failure of establishing democracy in Iraq have been the twin causes for the growth of ISIS.
In his last year as President, he has watched and perhaps regretted that he did not follow up on his Cairo promises. Had he done so, he would not have seen the utter depths to which anti-Muslim bigotry in the United States has fallen these days making the neocons surrounding President Bush appear innocent. While there could have been some excuse to the anti-Muslim sentiments in the US following the 9/11 attacks because of the sheer magnitude of the violence that was a bull’s eye attack on US sovereignty; the bigotry that is now being witnessed in the United States led by candidates in the Republican Party who are aspiring to be the President of the country is unimaginable and unbelievable. True, largely under the influence of the media hype, ISIS has become a live threat to the majority of Americans to which ISIS barbarity shown around the world on the Internet has also contributed. Yet the truth is that so far, ISIS terrorists have not set foot in the United States and little has happened that would even be comparable to what the 9/11 terrorists led by Al-Qaeda had done. True also is the fact that ISIS’ terrorism has been horrific including its beheading of US journalists in captivity like James Folly but its victims have almost all been Muslims and non-Muslims under its territorial control. And all Muslim countries have condemned ISIS’ terrorism and have unequivocally stated that its actions are the antithesis of Islam.
Yet, led by Donald Trump with the pliant US media have created more security concerns from ISIS in the minds of Americans than there was following 9/11 attacks. President Bush who initially had faulted by his “crusade” comment in his first media reaction following 9/11 attacks immediately afterwards made serious efforts with politicians on both sides of the US political divide to underline that the perpetrators of the 9/11 attacks did not represent Islam or Muslims. Not so this time when Donald Trump in particular and Ted Cruz and Marco Rubio in collusion decided to use fear of Americans about ISIS for the new wave of absurd Islamophobia in their respective efforts to win the Republican ticket. According to White House Press Secretary, their anti-Muslim stance has been the poison that led to President Obama’s visit to the Baltimore mosque to assure American Muslims that they are as valued as US citizens as others who make up the US nation.
President Obama rebutted the current anti-Muslim rhetoric in clear and unequivocal language. He said:  “Let me say as clearly as I can as president of the United States: You fit right here …you’re right where you belong. You’re part of America too. You’re not Muslim or American. You’re Muslim and American.” He called the anti-Muslim rhetoric, as bigotry that he said had no place in the United States and that all Americans together “got to show that America truly protects all faiths. As we protect our country from terrorism, we should not reinforce the ideas and the rhetoric of the terrorists themselves.”
There was a sense of urgency in the President’s defence of Muslims in America not just because the bigotry of Donald Trump and others contradicted American values enshrined in its constitution but also because such bigotry is in total denial of understanding of Islam and Muslims and in particular, American Muslims. On the issues of equating Islam with terrorism and then making Muslims in America pay for it, reason and rationality, knowledge and reality have been trashed for narrow, parochial and hateful political agenda. American Muslims today are not just peaceful citizens but one of the most prosperous community in the country who are aware that their prosperity is dependent entirely on American values that they could deny only by putting at stake their own prosperity and their future.
President Obama was statesmanlike in his address in the Baltimore mosque. He spoke for over 40 minutes and the address was shown live on TV. It should put some sense to the majority of the Americans although it is not expected to have any impact on the bigots that are being motivated by the Republican presidential candidates. Nevertheless, the speech from the President though it came late as President Bush had pointed out was a case of better late than never. It is bound to have an impact on the saner section of Americans. Outside America it will restore America’s credibility as a nation upon whom the rest of the world could depend on to respect human values that are proudly enshrined in its constitution.

The writer is a retired career Ambassador. His email is