Top brass from the United States, Britain, Pakistan, Sri Lanka and Burundi were among those participants in Geneva:
Rules of war made simple for world military leaders
Mon Nov 3, 2008 12:34pm GMT
By Laura MacInnis
GENEVA (Reuters) - Senior military officers from 50 countries gathered in Geneva Monday to put international humanitarian law into simple language that can be understood in theatres of war worldwide.
The International Committee of the Red Cross (ICRC), which organised the two-week course with the Swiss Armed Forces, said that civilians accounted for the overwhelming majority of war casualties despite being protected in the Geneva Conventions laying out the rules of war.
"By making international humanitarian law more easily understandable and accessible to military personnel, the ICRC hopes to give combatants the guidance they need to make the right choices," the neutral aid organisation said.
Top brass from the United States, Britain, Pakistan, Sri Lanka and Burundi were among those participating in the workshop held in Swiss army barracks near the centre of Geneva.
ICRC President Jakob Kellenberger, while acknowledging that "a battlefield is hardly the best place to promote a sense of humanity," said military leaders needed to do more to protect innocent bystanders and their property from the worst of war.
Armed forces worldwide should integrate the rules of war into their doctrine, education and training, and set up a strong system of sanctions to respond to abuses, he told the group.
"The best way to prevent violations during armed conflicts or other situations of violence is to convince those in charge of field operations that it is always possible to manage them better," he said.
Lieutenant-General Luc Fellay of the Swiss Armed Forces said that laws of armed conflict are often misunderstood by soldiers, and can be interpreted inconsistently by their superiors. Continued...
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Monday, November 3, 2008
INDIA SHOULD PROVIDE 100% T6AX RELIEF TO DONORS WHO WISH TO PROVIDE HUMANITARIAN ASSISTANCE TO TAMILS IN THE NORTHERN PROVINCE OF SL.
INDIA SHOULD PROVIDE 100% TAX RELIEF TO DONORS WHO WISH TO PROVIDE HUMANITARIAN ASSISTANCE TO TAMILS IN THE NORTHERN PROVINCE OF SL.
The only humane thing the economic wizard of India, M M Singh can do is to provide income tax relief, to the generous donors from Tamil Nadu, and entire India to provide more humanitarian assitance to the Tamils of Sri Lanka. This is a man made
disaster mainly created by the 4 Rajapkase brothers, who are citizens and green card holders of USA, and General Sarath Fonseka who is also a permanent resident from USA, holding real estate in Tulsa Oklohoma.
India should show some good will towards the Tamils?
or is it too much to ask from the Delhi Wallahs?
It is a matter of months before he permanently reside in America, escaping from all the killings and atrocities he had committed in Sri Lanka with the help of his military forces. All those are crimes against humanity and the Tamils.
The least India and America could do is to provide Tax relief. Unfortunately, due to some dishonest acts by TRO officials in America, TRO and WTCC are banned and there is hardly any relief available from Tamils living in America and Canada.
TRO Canada although not baned like WTM, is not an approved charity in Canada.
M.Sreethran the head of Tamils Against Genocide is the CEO of TRO USA, and is under Federal investigations in the WTCC and TRO litigation.
T4J.
TAX FORUM: QUESTIONS & ANSWERS
Contribution to Sri Lankan Tamils Relief Fund
It is advisable to form a separate Chief Minister’s Fund satisfying the conditions under Sec. 80G(2)(a)(iiihf), have it registered under Sec. 12AA as a matter of abundant caution.
Will the contribution to Sri Lankan Tamils Relief Fund qualify for deduction under Sec. 80G? If it does so, will such relief be at 50 per cent or 100 per cent?
Presumably, the Fund has been formally formed by the State Government and that registration will also be obtained in due course under Sec. 12AA of the Income-tax Act. Even so, Sec. 11(1)(a) requires the exemption to be limited “to the extent to which such income is applied to such purposes in India”.
Since it is meant for application for relief of the Tamils in Sri Lanka, such amount applied may not qualify for deduction and on that score, Commissioner of Income-tax/ Director of Exemptions may not be in a position to give approval under Sec.80G(5)(vi).
Since such approval is a pre-condition for deduction under Sec. 80G, deduction even at 50 per cent may not be possible under the normal provisions.
Sec. 80G(1) read with sub-section (2) provides for 100 per cent deduction for some of the funds listed in Sec. 80G(2) such as Prime Minister’s National Relief Fund, Maharashtra Chief Minister’s Earthquake Relief Fund, Gujarat State Government Relief Fund for Earthquake and Andhra Pradesh Chief Minister’s Cyclone Relief Fund.
Surprisingly exemption for a Chief Minister’s Relief Fund generally covered under Sec. 80G(2)(a)(iiihf) though listed for relief is conspicuous by its absence for 100 per cent relief, notwithstanding the fact, that it is subject to the conditions “that it is the only fund of its kind..... under overall control of Chief Secretary or Department of Finance....”. Since Chief Minister’s Relief Fund is the only Fund of its kind now formed for relief of Sri Lankan Tamils and will presumably be subject to other conditions under Sec. 80G(2)(a)(iiihf), deduction at 50 per cent cannot possibly be denied.
Exclusion of Chief Minister’s Relief Fund satisfying the prescribed conditions for 100 per cent relief is a glaring omission, which is required to be made good.
As otherwise, it leads to discriminatory treatment as it happened in the case of Tsunami contributions in which case, those who contributed to Prime Minister’s Relief Fund for Tsunami Relief got 100 per cent deduction, while those collected by the State Government through Chief Minister’s Relief Fund were found eligible for relief only at 50 per cent under Sec. 80G. If Sec. 80G(1)(i) is not amended to include Sec. 80G(2)(a)(iiihf) or if no separate entry for 100 per cent relief is placed in the statute by amending Sec. 80G(1) and (2), the donors would not be entitled to 100 per cent relief as the law stands and as are available for other trusts and institutions for similar public causes.
It is advisable to form a separate Chief Minister’s Fund satisfying the conditions under Sec. 80G(2)(a)(iiihf), have it registered under Sec. 12AA as a matter of abundant caution and also move the Central Government to make appropriate amendments to law either by an Ordinance now or by an amendment during the next Finance Act or any Amendment Act.
In order that the donors through trusts and institutions may get the benefit, the amendment should be worded in the same language as under Sec. 80G(2)(d) for Gujarat Earthquake Fund, which reads as under:
“(d) Any amount paid by the assessee, during the period beginning January, 26, 2001, and ending September 30, 2001, to any trust, institution or fund to which this section applies for providing relief to the victims of earthquake in Gujarat.”
Meanwhile, a circular from the Central Government pending legislative change should facilitate appeal for donations. Hopefully, the State Government will be able to obtain such amendment or official assurance from the Central Government expeditiously.
S. RAJARATNAM
Is Rajaratnam connected to the Hindu and N.Ram?
The only humane thing the economic wizard of India, M M Singh can do is to provide income tax relief, to the generous donors from Tamil Nadu, and entire India to provide more humanitarian assitance to the Tamils of Sri Lanka. This is a man made
disaster mainly created by the 4 Rajapkase brothers, who are citizens and green card holders of USA, and General Sarath Fonseka who is also a permanent resident from USA, holding real estate in Tulsa Oklohoma.
India should show some good will towards the Tamils?
or is it too much to ask from the Delhi Wallahs?
It is a matter of months before he permanently reside in America, escaping from all the killings and atrocities he had committed in Sri Lanka with the help of his military forces. All those are crimes against humanity and the Tamils.
The least India and America could do is to provide Tax relief. Unfortunately, due to some dishonest acts by TRO officials in America, TRO and WTCC are banned and there is hardly any relief available from Tamils living in America and Canada.
TRO Canada although not baned like WTM, is not an approved charity in Canada.
M.Sreethran the head of Tamils Against Genocide is the CEO of TRO USA, and is under Federal investigations in the WTCC and TRO litigation.
T4J.
TAX FORUM: QUESTIONS & ANSWERS
Contribution to Sri Lankan Tamils Relief Fund
It is advisable to form a separate Chief Minister’s Fund satisfying the conditions under Sec. 80G(2)(a)(iiihf), have it registered under Sec. 12AA as a matter of abundant caution.
Will the contribution to Sri Lankan Tamils Relief Fund qualify for deduction under Sec. 80G? If it does so, will such relief be at 50 per cent or 100 per cent?
Presumably, the Fund has been formally formed by the State Government and that registration will also be obtained in due course under Sec. 12AA of the Income-tax Act. Even so, Sec. 11(1)(a) requires the exemption to be limited “to the extent to which such income is applied to such purposes in India”.
Since it is meant for application for relief of the Tamils in Sri Lanka, such amount applied may not qualify for deduction and on that score, Commissioner of Income-tax/ Director of Exemptions may not be in a position to give approval under Sec.80G(5)(vi).
Since such approval is a pre-condition for deduction under Sec. 80G, deduction even at 50 per cent may not be possible under the normal provisions.
Sec. 80G(1) read with sub-section (2) provides for 100 per cent deduction for some of the funds listed in Sec. 80G(2) such as Prime Minister’s National Relief Fund, Maharashtra Chief Minister’s Earthquake Relief Fund, Gujarat State Government Relief Fund for Earthquake and Andhra Pradesh Chief Minister’s Cyclone Relief Fund.
Surprisingly exemption for a Chief Minister’s Relief Fund generally covered under Sec. 80G(2)(a)(iiihf) though listed for relief is conspicuous by its absence for 100 per cent relief, notwithstanding the fact, that it is subject to the conditions “that it is the only fund of its kind..... under overall control of Chief Secretary or Department of Finance....”. Since Chief Minister’s Relief Fund is the only Fund of its kind now formed for relief of Sri Lankan Tamils and will presumably be subject to other conditions under Sec. 80G(2)(a)(iiihf), deduction at 50 per cent cannot possibly be denied.
Exclusion of Chief Minister’s Relief Fund satisfying the prescribed conditions for 100 per cent relief is a glaring omission, which is required to be made good.
As otherwise, it leads to discriminatory treatment as it happened in the case of Tsunami contributions in which case, those who contributed to Prime Minister’s Relief Fund for Tsunami Relief got 100 per cent deduction, while those collected by the State Government through Chief Minister’s Relief Fund were found eligible for relief only at 50 per cent under Sec. 80G. If Sec. 80G(1)(i) is not amended to include Sec. 80G(2)(a)(iiihf) or if no separate entry for 100 per cent relief is placed in the statute by amending Sec. 80G(1) and (2), the donors would not be entitled to 100 per cent relief as the law stands and as are available for other trusts and institutions for similar public causes.
It is advisable to form a separate Chief Minister’s Fund satisfying the conditions under Sec. 80G(2)(a)(iiihf), have it registered under Sec. 12AA as a matter of abundant caution and also move the Central Government to make appropriate amendments to law either by an Ordinance now or by an amendment during the next Finance Act or any Amendment Act.
In order that the donors through trusts and institutions may get the benefit, the amendment should be worded in the same language as under Sec. 80G(2)(d) for Gujarat Earthquake Fund, which reads as under:
“(d) Any amount paid by the assessee, during the period beginning January, 26, 2001, and ending September 30, 2001, to any trust, institution or fund to which this section applies for providing relief to the victims of earthquake in Gujarat.”
Meanwhile, a circular from the Central Government pending legislative change should facilitate appeal for donations. Hopefully, the State Government will be able to obtain such amendment or official assurance from the Central Government expeditiously.
S. RAJARATNAM
Is Rajaratnam connected to the Hindu and N.Ram?
SRI LANKAN DEFENSE BUDGETS EXCEEDS 200 BILLION RUPEES IN 2007, AND MUCH HIGHER IN 2008
REVENUES DROP IN 2007 TO 565 BILLION RUPEES AND DEFENSE EXPENSES 200 BILLION.
EXPENSES IN 2008 AND 2009 WILL INCREASE, WITH EXPORT AND TOURISM PRICES DROPPING SHARPLY, AND OIL AND FERTILIZER PRICES INCREASING SHARPLY.
RAJAPAKSES ARE DRIVING THE ECONOMY TO THE GROUND, WITH THE THE ESCALATING VIOLENCE, AND DEATH/DESTRUCTION LOOMING WITH INCREASED POTENTIAL FOR 2008-2009.
Off Target
03 Nov, 2008 13:49:06
Sri Lanka defence, subsidy costs overshoot ahead of next budget
Nov 03, 2008 (LBO) – Sri Lanka's budget for 2009 will focus on keeping a military campaign on track while also providing resources to build infrastructure, while expenses in the current budget have overshot targets, a government minister has said.
Junior finance minister Ranjith Siyambalapitiya told ETV's Lanka Business Report show that managing the 2008 budget has been tough.
"Generating the budgeted income has been a challenge this year," Siyambalapitiya said.
"Expenses have risen. These will have an effect on the deficit this year."
Overshooting
In the past few years Sri Lanka's revenues have been routinely over-estimated, expenses under-estimated and the gap had been filled with printed money which drove inflation up or by foreign commercial borrowings, which put the national balance sheet at risk.
In the 2007 budget Sri Lanka's parliament was told that revenues would be 599 billion rupees. In November 2008, parliament was told that revised revenues would be 605 billion rupees.
Later revenues turned out to be only 565 billion rupees. Inflation topped 20 percent and a 500 million dollar sovereign bond was also sold. The 8.25 percent dollar bond is now trading at more than 20 percent in foreign markets.
The 2008 defence and subsidy budgets are set to overshoot.
"We budgeted defense spending at 166 billion rupees but it’s now increased by a further 28 billion," says Siyambalapitiya.
"I look at that as an investment. We were able to clear the Eastern province because of that spending."
Additional security spending this year will increase the defense budget by 16 percent to 194 billion rupees.
In 2009 the government plans to spend 177 billion rupees on security according to the appropriation bill which set out preliminary estimates for next year.
The subsidy on fertilizer – the international price of which is linked to crude oil - has also doubled to 30 billion rupees in 2008, Siyambalapitiya said. The government has already gone to parliament once to increase the fertilizer budget to 25 billion rupees.
Forward Focus
Minster Siyambalapititya says the upcoming budget this week will focus on keeping infrastructure projects on track while balancing defense expenditure at a time when the external conditions are becoming weaker.
"We hope to bring peace in 2009. Peace for all communities: Sinhala, Tamil, Muslim and Burgher," says Siyambalapitiya
"Next year's budget will bear a large responsibility to achieve this."
Sri Lanka Tamil Tiger guerillas pulled out of peace talks which started after a ceasefire in 2001 and in late 2005, stopped people voting in areas controlled by them.
A new government resumed a military campaign re-taking large areas from the Tamil Tigers, some of which had been previously taken and lost in the long drawn out conflict.
The biggest burden on the budget however may not be the war. It is a bloated public sector that is eating up more than half the tax revenue in salaries and pensions. After 2004, plans for a funded pension scheme were scrapped.
The public sector itself is made of super citizens, protected from income tax and given tax-free cars.
In 2008, the finance ministry tried to address the problem by limiting salary increases. But in 2009, the public sector will have to be given its pound of flesh.
The real economy is also facing pressures, and four years of imprudent budgeting has left the country ill-prepared for an external slowdown.
Already a tax-free access for Sri Lanka's exports to Europe appears uncertain in 2009, over European Union concerns on human rights abuses and child soldiers. The government has promised 150 million dollars in help to exporters to the EU, mostly apparel.
"2009 is also going to be a challenging year for many countries," says Siyambalapitiya.
"We are going to see how Sri Lankan citizens can be shielded from these shocks through provisions in this budget."
Tough Times
A burst commodity bubble has hit Sri Lanka's tea and rubber exports. Tea factory owners are asking for 50 million dollars in relief.
But a large part of the benefit of falling commodity prices has been lost with the state-run Ceylon Petroleum Corporation capping up to a third of its imports through hedging contracts.
Meanwhile, analysts warn that in trying to 'shield' citizens through the budget, the hardest hit could be the poor, as happened in the last three years, via 20 percent plus inflation.
State power to spend comes from three sources; taxes, printing money or borrowing.
Taxes pass the cost right back to the people immediately and transparently; printing money raises inflation later hurting wage earners and benefiting the rich asset owning classes; borrowing endangers the national balance sheet and passes the burden to the next generation.
Of the three options, taxes are the least harmful. But in Sri Lanka, taxes are the least favoured by politicians because a popular deception that 'the government bears the burden' cannot be kept going with taxes.
The 'government bears the burden' deception has been in existence long before 2004, when economic policy radically reversed and state led 'growth' was given pride of place.
Mangala Samaraweera, a politician who was a key architect of the current economic policies but is now in the opposition, said at the time that Sri Lanka should follow Venezuela and its 'mixed' economic policies.
Inflation Remedy
In 2008 when inflation in Venezuela topped 36 percent, Sri Lanka was only a little behind. In April 2008 Sri Lanka's consumer inflation hit 29.9 percent, the highest in its history, and the island changed its inflation index.
But the central bank had also started to tighten policy by that time.
The country is now grappling with a balance of payments crisis, triggered by retreating hot money brought into fill budget gaps and a central bank defence of a dollar peg with the rupee over valued by 18 percent by June due to past inflation.
The entire monetary program has been undermined by around 87 billion rupees of money printed poured into the system to sterilize foreign exchange interventions. Reserves are down to 2.6 billion dollars and deadly sterilized intervention is still continuing to preserve a peg.
The International Monetary Fund has warned Sri Lanka to abandon its dollar peg and move for comprehensive reforms 'front loaded' with better budgets. Since 2004 however IMF advice has been spurned, in favour of 'home grown' policies.
Sri Lanka's key 'home grown' prescription has been government expansion followed by inflation and rupee depreciation, as against fiscal prudence preached by the World Bank and IMF that brings low inflation and economic stability.
The burden of adjustment is put on the private sector.
The inflation-depreciation remedy has been cynically resorted to by all Sri Lankan political parties, after a central bank was created in 1950 abolishing a currency board that had at one time made Sri Lanka one of most prosperous nations in Asia.
In 1995 President Chandrika Kumaratunga of the Sri Lanka Freedom Party changed course, bringing anti-inflation policies and central bank reform. But in 2004, policy reversed again despite the very real results of low inflation and economic stability.
One of the worst abusers of the inflation-depreciation remedy has been Sri Lanka's United National Party, which scored the previous record for the highest inflation in the country in the early 1980s.
But in 2002 and 2003 the party improved on Kumaratunga's policies, taking over after a currency and economic crisis brought on by a bout of loose fiscal and monetary policy amidst an intensified conflict in 2000/2001 caused her government to fall.
Stability
The new administration continued privatization and tightened budgets further. Inflation fell to almost zero and real economic growth rose.
But analysts say even Sri Lanka's rulers who ran the country in 2002 and 2003 did not really recognize or value economic stability when they saw it, as nobody who is now alive had experienced real economic stability, except in foreign countries.
In 2004 such policies were bastardized as 'neo-liberal' on political platforms. So far Sri Lanka has also avoided a sovereign default.
Until recently Sri Lanka has also been cautious in not going for foreign commercial borrowings, which allowed real losses on government debt to be passed on to citizens and pension funds of private sector workers through inflation.
With foreign commercial borrowings however, of which Sri Lanka now has 3.5 billion dollars, the inflation-depreciation remedy is only partly successful. Foreign fund managers do not have to wait for depreciation to hit them.
Now the country has come a full circle from the 2000/2001 crisis, of loose policy, currency intervention and an intensified conflict with flighty hot money added to the mix.
Some of controls on imports imposed during the previous crisis has been revived.
Despite this, the island now faces a serious risk of a broad political consensus by all major political parties that fiscal imprudence, and the inflation-depreciation deception is the only certain path to power.
Sri Lanka's people should perhaps take serious note of a statement made by a German central banker and oft repeated by German politicians.
Otmar Emminger, a former president Deutsche Bundesbank, once said: "Price stability is not everything, but without price stability everything is nothing."
EXPENSES IN 2008 AND 2009 WILL INCREASE, WITH EXPORT AND TOURISM PRICES DROPPING SHARPLY, AND OIL AND FERTILIZER PRICES INCREASING SHARPLY.
RAJAPAKSES ARE DRIVING THE ECONOMY TO THE GROUND, WITH THE THE ESCALATING VIOLENCE, AND DEATH/DESTRUCTION LOOMING WITH INCREASED POTENTIAL FOR 2008-2009.
Off Target
03 Nov, 2008 13:49:06
Sri Lanka defence, subsidy costs overshoot ahead of next budget
Nov 03, 2008 (LBO) – Sri Lanka's budget for 2009 will focus on keeping a military campaign on track while also providing resources to build infrastructure, while expenses in the current budget have overshot targets, a government minister has said.
Junior finance minister Ranjith Siyambalapitiya told ETV's Lanka Business Report show that managing the 2008 budget has been tough.
"Generating the budgeted income has been a challenge this year," Siyambalapitiya said.
"Expenses have risen. These will have an effect on the deficit this year."
Overshooting
In the past few years Sri Lanka's revenues have been routinely over-estimated, expenses under-estimated and the gap had been filled with printed money which drove inflation up or by foreign commercial borrowings, which put the national balance sheet at risk.
In the 2007 budget Sri Lanka's parliament was told that revenues would be 599 billion rupees. In November 2008, parliament was told that revised revenues would be 605 billion rupees.
Later revenues turned out to be only 565 billion rupees. Inflation topped 20 percent and a 500 million dollar sovereign bond was also sold. The 8.25 percent dollar bond is now trading at more than 20 percent in foreign markets.
The 2008 defence and subsidy budgets are set to overshoot.
"We budgeted defense spending at 166 billion rupees but it’s now increased by a further 28 billion," says Siyambalapitiya.
"I look at that as an investment. We were able to clear the Eastern province because of that spending."
Additional security spending this year will increase the defense budget by 16 percent to 194 billion rupees.
In 2009 the government plans to spend 177 billion rupees on security according to the appropriation bill which set out preliminary estimates for next year.
The subsidy on fertilizer – the international price of which is linked to crude oil - has also doubled to 30 billion rupees in 2008, Siyambalapitiya said. The government has already gone to parliament once to increase the fertilizer budget to 25 billion rupees.
Forward Focus
Minster Siyambalapititya says the upcoming budget this week will focus on keeping infrastructure projects on track while balancing defense expenditure at a time when the external conditions are becoming weaker.
"We hope to bring peace in 2009. Peace for all communities: Sinhala, Tamil, Muslim and Burgher," says Siyambalapitiya
"Next year's budget will bear a large responsibility to achieve this."
Sri Lanka Tamil Tiger guerillas pulled out of peace talks which started after a ceasefire in 2001 and in late 2005, stopped people voting in areas controlled by them.
A new government resumed a military campaign re-taking large areas from the Tamil Tigers, some of which had been previously taken and lost in the long drawn out conflict.
The biggest burden on the budget however may not be the war. It is a bloated public sector that is eating up more than half the tax revenue in salaries and pensions. After 2004, plans for a funded pension scheme were scrapped.
The public sector itself is made of super citizens, protected from income tax and given tax-free cars.
In 2008, the finance ministry tried to address the problem by limiting salary increases. But in 2009, the public sector will have to be given its pound of flesh.
The real economy is also facing pressures, and four years of imprudent budgeting has left the country ill-prepared for an external slowdown.
Already a tax-free access for Sri Lanka's exports to Europe appears uncertain in 2009, over European Union concerns on human rights abuses and child soldiers. The government has promised 150 million dollars in help to exporters to the EU, mostly apparel.
"2009 is also going to be a challenging year for many countries," says Siyambalapitiya.
"We are going to see how Sri Lankan citizens can be shielded from these shocks through provisions in this budget."
Tough Times
A burst commodity bubble has hit Sri Lanka's tea and rubber exports. Tea factory owners are asking for 50 million dollars in relief.
But a large part of the benefit of falling commodity prices has been lost with the state-run Ceylon Petroleum Corporation capping up to a third of its imports through hedging contracts.
Meanwhile, analysts warn that in trying to 'shield' citizens through the budget, the hardest hit could be the poor, as happened in the last three years, via 20 percent plus inflation.
State power to spend comes from three sources; taxes, printing money or borrowing.
Taxes pass the cost right back to the people immediately and transparently; printing money raises inflation later hurting wage earners and benefiting the rich asset owning classes; borrowing endangers the national balance sheet and passes the burden to the next generation.
Of the three options, taxes are the least harmful. But in Sri Lanka, taxes are the least favoured by politicians because a popular deception that 'the government bears the burden' cannot be kept going with taxes.
The 'government bears the burden' deception has been in existence long before 2004, when economic policy radically reversed and state led 'growth' was given pride of place.
Mangala Samaraweera, a politician who was a key architect of the current economic policies but is now in the opposition, said at the time that Sri Lanka should follow Venezuela and its 'mixed' economic policies.
Inflation Remedy
In 2008 when inflation in Venezuela topped 36 percent, Sri Lanka was only a little behind. In April 2008 Sri Lanka's consumer inflation hit 29.9 percent, the highest in its history, and the island changed its inflation index.
But the central bank had also started to tighten policy by that time.
The country is now grappling with a balance of payments crisis, triggered by retreating hot money brought into fill budget gaps and a central bank defence of a dollar peg with the rupee over valued by 18 percent by June due to past inflation.
The entire monetary program has been undermined by around 87 billion rupees of money printed poured into the system to sterilize foreign exchange interventions. Reserves are down to 2.6 billion dollars and deadly sterilized intervention is still continuing to preserve a peg.
The International Monetary Fund has warned Sri Lanka to abandon its dollar peg and move for comprehensive reforms 'front loaded' with better budgets. Since 2004 however IMF advice has been spurned, in favour of 'home grown' policies.
Sri Lanka's key 'home grown' prescription has been government expansion followed by inflation and rupee depreciation, as against fiscal prudence preached by the World Bank and IMF that brings low inflation and economic stability.
The burden of adjustment is put on the private sector.
The inflation-depreciation remedy has been cynically resorted to by all Sri Lankan political parties, after a central bank was created in 1950 abolishing a currency board that had at one time made Sri Lanka one of most prosperous nations in Asia.
In 1995 President Chandrika Kumaratunga of the Sri Lanka Freedom Party changed course, bringing anti-inflation policies and central bank reform. But in 2004, policy reversed again despite the very real results of low inflation and economic stability.
One of the worst abusers of the inflation-depreciation remedy has been Sri Lanka's United National Party, which scored the previous record for the highest inflation in the country in the early 1980s.
But in 2002 and 2003 the party improved on Kumaratunga's policies, taking over after a currency and economic crisis brought on by a bout of loose fiscal and monetary policy amidst an intensified conflict in 2000/2001 caused her government to fall.
Stability
The new administration continued privatization and tightened budgets further. Inflation fell to almost zero and real economic growth rose.
But analysts say even Sri Lanka's rulers who ran the country in 2002 and 2003 did not really recognize or value economic stability when they saw it, as nobody who is now alive had experienced real economic stability, except in foreign countries.
In 2004 such policies were bastardized as 'neo-liberal' on political platforms. So far Sri Lanka has also avoided a sovereign default.
Until recently Sri Lanka has also been cautious in not going for foreign commercial borrowings, which allowed real losses on government debt to be passed on to citizens and pension funds of private sector workers through inflation.
With foreign commercial borrowings however, of which Sri Lanka now has 3.5 billion dollars, the inflation-depreciation remedy is only partly successful. Foreign fund managers do not have to wait for depreciation to hit them.
Now the country has come a full circle from the 2000/2001 crisis, of loose policy, currency intervention and an intensified conflict with flighty hot money added to the mix.
Some of controls on imports imposed during the previous crisis has been revived.
Despite this, the island now faces a serious risk of a broad political consensus by all major political parties that fiscal imprudence, and the inflation-depreciation deception is the only certain path to power.
Sri Lanka's people should perhaps take serious note of a statement made by a German central banker and oft repeated by German politicians.
Otmar Emminger, a former president Deutsche Bundesbank, once said: "Price stability is not everything, but without price stability everything is nothing."
Sunday, November 2, 2008
The New "Ram" Sethu in Tamil Nadu:
The New "Ram" Sethu
by Rajan Philips
N. Ram, Editor-in-chief of The Hindu, Chennai’s inimitable English daily, has emerged as the most influential eminent person on either side of the Palk Straits. Earlier in October, his paper condemned the chauvinistic eruptions in Tamil Nadu in support of the LTTE. Mr. Ram himself got on the phone with the Sri Lankan President to find out first hand what was going on in “India’s utmost isle.” No one else in Chennai or Delhi, not to mention Colombo, could have done better. Last week, Mr. Ram conducted a face-to-face interview with President Rajapakse in the “tranquil setting” of the Temple Trees.
[N. Ram, Editor-in-chief of The Hindu]
As interviews go, it was more platitudinous than probing; soft answers to softer questions instead of tough questions and firm commitments; a rather surreal fiddling when the objects of the interview are burning. Temple Trees must be the only oasis of tranquility in a city of barricades, check points, arrests and kidnappings. “Oppressive tranquility”, was how Pablo Neruda sensed the city’s ambience with some uncanny foresight, seventy years ago when he was a Chilean foreign officer in Colombo. As bridge building goes, the new Ram Sethu is a bridge for the establishments – of Colombo, Chennai and Delhi. The subalterns will have no access to it.
50 years ago, when communal violence targeting Tamils first engulfed Colombo, an even more eminent citizen of Madras, nay of all of India, the great Chakravarthy Rajagopalachari (Rajaji), used his Swarajya column to express sadness over the violence in Colombo and to chide the government of the day for breaking the island’s ethnic tranquility. The column must have stung Prime Minister Bandaranaike, for he used one of his parliamentary interventions to respectfully refer to Rajaji’s concerns. I was too young at that time to read the Swarajya, but I remember picking up the story from family table talk, and later reading Mr. Bandaranaike’s speech in the Hansard.
Old stories, old forces
The Hansard of 1956-59, the period during which Mr. Bandaranaike was Prime Minister until felled by an assassin’s gun, offers a reflection of the emerging contradictions in Sri Lanka’s politics. There was Philip Gunawardena, breathing fire at the Neanderthals (his term) who were setting fire to Tamil houses in Colombo; there was Colvin R de Silva perorating to the government front benches not to drag the country down the path of Sinhala Only; there were chauvinist voices telling Pieter Keuneman to go to Australia; there was S.J.V. Chelvanayakam, already inaudible, but insistently clinging to his faith in federalism; and there was Prime Minister Bandaranaike vainly trying to please everyone, and valiantly trying to enable the statesman in him to put back the communal genie in the bottle which the politician in him had uncorked to win the 1956 elections.
I am not trying to regurgitate old stories here, or to draw an uncharitable pair-wise comparison between Rajaji and Ram, on one side of the Palk Strait, and Bandaranaike and Rajapakse on the other side. But those of us, who have lived through the ethnic turbulences of the 1950s and every worse decade thereafter, have seen too much for too long not to raise alarm at the recurrence, as new faces, of the old forces who torpedoed Mr. Bandaranaike’s efforts to find a structural solution to the Tamil question. These forces still have sway, if not so much in the country, but certainly over the policy directions of President Rajapakse and his government. What is worse, President Rajapakse is not trying even half as much as S.W.R.D. Bandaranaike did.
But unlike Mr. Bandaranaike, President Rajapakse has a stranglehold on power. He has successfully internalized and emasculated all political opposition among the Sinhalese. The few checks against his regime occasionally emanate from the Supreme Court. For different reasons, India and the outside world could exert a limited influence on the government’s handling of the political solution to the Tamil question. But everyone concerned has given the green light to the government’s military offensive against the LTTE. The effects of this exclusive military plan on the Tamils are immediate and transparent, but it would be a while before the effects on all other Sri Lankans including the Sinhalese become apparent.
Let off the hook
In these circumstances, any political solution would be impossible if it does not have the commitment from and constant involvement by President Rajapakse. But there is a difference, a big difference, between the President’s support being a necessary condition for a political solution, on the one hand, and assuming that the President is in fact genuinely supportive of a political solution and is seriously striving to achieve one. The fact that the President says so to Mr. Ram is also not good enough as there is a mountain of evidence to the contrary. It could not have been that the visitor from Chennai was unaware of this evidence, but in a mutually-admiring encounter the guest is constrained not to embarrass the host with unedifying evidence.
Particularly insulting is the reference in the reporting of the interview to the tardiness of the All Party Representative Committee Process, and the assurance by the President that “I myself will take charge of the political process and see it through politically.” Come on! Mr. Ram knows enough people in Colombo to ascertain for himself that the real reason for the tardiness of the APRC was the President himself. Rather than probing what went wrong and how different the APRC process will be from now on, the interview simply lets the President off the hook and swallows the President’s words – hook, line and sinker.
Mr. Ram and his newspaper are well known for their uncompromising characterization of the LTTE as the deadliest terrorist outfit in the world that needs to be eradicated totally and absolutely. There is little that is exceptionable about this characterization, but what is utterly indefensible is its simplistic corollary that any process that seeks the defeat of the LTTE will automatically lead to the liberation of the Tamils. To its credit, India has emphasized the difference between defeating the LTTE and resolving the Tamil question that predates the LTTE and in fact gave rise to it in desperation. It is this measured diplomatic missive from Delhi to Colombo that created the possibility, as I argued last week, for the progressive forces within and outside the government to begin to influence the President to take a new direction and formulate a political solution independent of pursuing the military offensive.
[President Mahinda Rajapakse-AP file photo]
Alas, Mr. Ram’s interview seems to have given President Rajapakse enough room to wiggle out of a tight situation, showing off his new talking points: “A military solution is for the terrorists; a political solution is for the people living in this country.” And the new 4-D approach: Demilitarization; Democratization; Development; and Devolution. To the most significant question in the interview – “are they (the 4-Ds) in some order?” – President Rajapakse affirmed the order in answer: no devolution without development, no development without democratization, and no democratization without demilitarization. In short, no nothing without a military victory. And there is no Ram Sethu for the half a million repeatedly displaced people stuck between military solution and political solution.
Posted by transCurrents on November 1, 2008 10:01 AM |
by Rajan Philips
N. Ram, Editor-in-chief of The Hindu, Chennai’s inimitable English daily, has emerged as the most influential eminent person on either side of the Palk Straits. Earlier in October, his paper condemned the chauvinistic eruptions in Tamil Nadu in support of the LTTE. Mr. Ram himself got on the phone with the Sri Lankan President to find out first hand what was going on in “India’s utmost isle.” No one else in Chennai or Delhi, not to mention Colombo, could have done better. Last week, Mr. Ram conducted a face-to-face interview with President Rajapakse in the “tranquil setting” of the Temple Trees.
[N. Ram, Editor-in-chief of The Hindu]
As interviews go, it was more platitudinous than probing; soft answers to softer questions instead of tough questions and firm commitments; a rather surreal fiddling when the objects of the interview are burning. Temple Trees must be the only oasis of tranquility in a city of barricades, check points, arrests and kidnappings. “Oppressive tranquility”, was how Pablo Neruda sensed the city’s ambience with some uncanny foresight, seventy years ago when he was a Chilean foreign officer in Colombo. As bridge building goes, the new Ram Sethu is a bridge for the establishments – of Colombo, Chennai and Delhi. The subalterns will have no access to it.
50 years ago, when communal violence targeting Tamils first engulfed Colombo, an even more eminent citizen of Madras, nay of all of India, the great Chakravarthy Rajagopalachari (Rajaji), used his Swarajya column to express sadness over the violence in Colombo and to chide the government of the day for breaking the island’s ethnic tranquility. The column must have stung Prime Minister Bandaranaike, for he used one of his parliamentary interventions to respectfully refer to Rajaji’s concerns. I was too young at that time to read the Swarajya, but I remember picking up the story from family table talk, and later reading Mr. Bandaranaike’s speech in the Hansard.
Old stories, old forces
The Hansard of 1956-59, the period during which Mr. Bandaranaike was Prime Minister until felled by an assassin’s gun, offers a reflection of the emerging contradictions in Sri Lanka’s politics. There was Philip Gunawardena, breathing fire at the Neanderthals (his term) who were setting fire to Tamil houses in Colombo; there was Colvin R de Silva perorating to the government front benches not to drag the country down the path of Sinhala Only; there were chauvinist voices telling Pieter Keuneman to go to Australia; there was S.J.V. Chelvanayakam, already inaudible, but insistently clinging to his faith in federalism; and there was Prime Minister Bandaranaike vainly trying to please everyone, and valiantly trying to enable the statesman in him to put back the communal genie in the bottle which the politician in him had uncorked to win the 1956 elections.
I am not trying to regurgitate old stories here, or to draw an uncharitable pair-wise comparison between Rajaji and Ram, on one side of the Palk Strait, and Bandaranaike and Rajapakse on the other side. But those of us, who have lived through the ethnic turbulences of the 1950s and every worse decade thereafter, have seen too much for too long not to raise alarm at the recurrence, as new faces, of the old forces who torpedoed Mr. Bandaranaike’s efforts to find a structural solution to the Tamil question. These forces still have sway, if not so much in the country, but certainly over the policy directions of President Rajapakse and his government. What is worse, President Rajapakse is not trying even half as much as S.W.R.D. Bandaranaike did.
But unlike Mr. Bandaranaike, President Rajapakse has a stranglehold on power. He has successfully internalized and emasculated all political opposition among the Sinhalese. The few checks against his regime occasionally emanate from the Supreme Court. For different reasons, India and the outside world could exert a limited influence on the government’s handling of the political solution to the Tamil question. But everyone concerned has given the green light to the government’s military offensive against the LTTE. The effects of this exclusive military plan on the Tamils are immediate and transparent, but it would be a while before the effects on all other Sri Lankans including the Sinhalese become apparent.
Let off the hook
In these circumstances, any political solution would be impossible if it does not have the commitment from and constant involvement by President Rajapakse. But there is a difference, a big difference, between the President’s support being a necessary condition for a political solution, on the one hand, and assuming that the President is in fact genuinely supportive of a political solution and is seriously striving to achieve one. The fact that the President says so to Mr. Ram is also not good enough as there is a mountain of evidence to the contrary. It could not have been that the visitor from Chennai was unaware of this evidence, but in a mutually-admiring encounter the guest is constrained not to embarrass the host with unedifying evidence.
Particularly insulting is the reference in the reporting of the interview to the tardiness of the All Party Representative Committee Process, and the assurance by the President that “I myself will take charge of the political process and see it through politically.” Come on! Mr. Ram knows enough people in Colombo to ascertain for himself that the real reason for the tardiness of the APRC was the President himself. Rather than probing what went wrong and how different the APRC process will be from now on, the interview simply lets the President off the hook and swallows the President’s words – hook, line and sinker.
Mr. Ram and his newspaper are well known for their uncompromising characterization of the LTTE as the deadliest terrorist outfit in the world that needs to be eradicated totally and absolutely. There is little that is exceptionable about this characterization, but what is utterly indefensible is its simplistic corollary that any process that seeks the defeat of the LTTE will automatically lead to the liberation of the Tamils. To its credit, India has emphasized the difference between defeating the LTTE and resolving the Tamil question that predates the LTTE and in fact gave rise to it in desperation. It is this measured diplomatic missive from Delhi to Colombo that created the possibility, as I argued last week, for the progressive forces within and outside the government to begin to influence the President to take a new direction and formulate a political solution independent of pursuing the military offensive.
[President Mahinda Rajapakse-AP file photo]
Alas, Mr. Ram’s interview seems to have given President Rajapakse enough room to wiggle out of a tight situation, showing off his new talking points: “A military solution is for the terrorists; a political solution is for the people living in this country.” And the new 4-D approach: Demilitarization; Democratization; Development; and Devolution. To the most significant question in the interview – “are they (the 4-Ds) in some order?” – President Rajapakse affirmed the order in answer: no devolution without development, no development without democratization, and no democratization without demilitarization. In short, no nothing without a military victory. And there is no Ram Sethu for the half a million repeatedly displaced people stuck between military solution and political solution.
Posted by transCurrents on November 1, 2008 10:01 AM |
Saturday, November 1, 2008
Sri Lanka's Deficit, Foreign Debt Put Economy at Risk, IMF Says
Sri Lanka's Deficit, Foreign Debt Put Economy at Risk, IMF Says
By David Yong
Nov. 1 (Bloomberg) -- Sri Lanka's widening current-account deficit, a dependence on foreign borrowings and an overvalued currency pose ``serious risk'' to the nation's economic stability, the International Monetary Fund said.
The South Asian economy, facing among the highest inflation in Asia exceeding 20 percent this year, must undertake reforms to ease consumer prices, consolidate public spending and increase financial supervision to reduce the pressure on the local currency, the IMF said.
``Amid increased international risk aversion, raising external finance will become increasingly challenging,'' the Washington-based agency concluded in a report yesterday after a consultation on Oct. 17. ``Sri Lanka's external accounts are vulnerable to a reduction in investor risk appetite.''
The risk of a global recession pushed up the number of worldwide borrowers at risk of credit rating cuts to the highest this month since September 2005, Standard & Poor's said in a report yesterday. The IMF agreed last month to consider emergency loans to Hungary, Ukraine and Iceland to prevent the turmoil in global credit markets from escalating.
Sri Lanka's current-account deficit will widen to $3.33 billion, or 7.9 percent of gross domestic product, in 2008 and 8.2 percent in 2009, the IMF forecasts, versus 4.2 percent last year. Economic growth will slow to 6.1 percent in 2008 and 5.8 percent in 2009, from 6.8 percent in 2007, it said.
Currency Risks
Governor Novard Cabraal and policy makers at the Central Bank of Sri Lanka on Oct. 20 kept its benchmark repurchase rate at six-year high of 10.5 percent, unchanged in 20 straight meetings since February 2007 to cool prices. Inflation accelerated 28.2 percent in June, the highest in Asia, as global crude oil traded near a record.
The government's increased reliance on dollar-denominated short-term commercial debt add to public debt distress, while rising bad loans among local lenders suggest the banking system could face ``sizeable vulnerability'' to higher borrowing costs, the IMF said.
The central bank's foreign-exchange reserves are expected to increase by 7 percent to $3.27 billion, enough to finance 2.2 months of imports and cover 57 percent of short-term foreign debt, the IMF forecasts. The country's external debt will amount to about 46 percent of its gross domestic product this year, down from 52 percent in 2007.
The IMF said risks to external stability are associated directly with a loose fiscal policy and a build-up of short-term and foreign-currency debt and recommended authorities ``monitor closely short-term foreign liabilities and maturity risk.''
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.
IMF Executive Board Concludes 2008 Article IV Consultation with Sri Lanka
Public Information Notice (PIN) No. 08/140
October 31, 2008
Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.
On October 17, 2008, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Sri Lanka.1
Background
Sri Lanka has achieved strong growth averaging 6½ percent since 2002, raising per capita income to about $1,625 (above regional peers) and reducing the poverty rate from 22.7 percent to 15.2 percent over 2002-07. The authorities' Ten-Year Development Plan ("Mahinda Chintana") launched in early 2007 aims to sustain this performance by strengthening infrastructure investment. Rapid growth, together with rising fuel and food prices, has accelerated the inflation uptrend that began in 2006. The year-on-year (yoy) rate of inflation has edged down to 25 percent in August, but core inflation has risen and headline inflation has remained well above the rates prevailing in Sri Lanka's major trading partners and in the region.
Monetary policy tightening in 2007 was insufficient to contain inflation in 2007, but additional measures were taken in early 2008 to slow reserve money growth. Credit growth more than halved to 10.7 percent (yoy) as of July 2008. Monetary conditions tightened through early 2008 but then eased; interest rates on government securities fell as foreigners were granted greater access to the market. Policy rates were last raised in February 2007 as the Central Bank conducted monetary operations through the sale of its holdings of government securities. Access to the Central Bank's standing facilities is limited to 3 times per month per bank, with additional borrowing attracting a 19 percent penal rate.
The fiscal deficit declined by 0.2 percentage points to 7.8 percent of GDP in 2007. Revenues undershot expectations by a wide margin owing to exemptions, with the effect on the deficit broadly offset by declining transfers and subsidies (with pass-through of rising commodities prices). The fiscal deficit is projected to decline modestly relative to GDP in 2008. The budget limited tax holidays, increased excises on consumer durables, and raised customs surcharges, but also granted tax concessions, waived VAT on development projects, and cut VAT on petrol. Second-quarter data suggest that revenues would remain low (about 15 percent of GDP), but current expenditures (particularly wages and subsidies) are set to rise, and adjustment would likely fall on capital spending.
In 2007, the continued brisk pace of exports resulting from high international tea prices (a key export), improved EU access for garments exports, subdued imports, and strong remittances bolstered the current account, with the deficit more than financed by rising capital inflows. Gross official reserves rose from US$2.5 billion at end-2006 to US$3.1 billion as of end-2007, and to nearly US$3.2 billion as of end-September. In 2008, however, soaring oil prices sharply increased the oil import bill, amid softening external demand and worsening external financing conditions. The external current account deficit is projected to widen sharply in 2008.
Public debt/GDP edged down in 2007 and is expected to decline further in 2008, reflecting favorable debt dynamics (high growth and negative real interest rates) and rupee appreciation. However, increased use of foreign-currency financing poses significant risks. Foreign borrowing reflects a strategy to reduce domestic crowding out, but a widening current account deficit and bunching of near-term debt repayments imply sizeable gross external financing needs at a time when global credit markets are unsettled and likely to remain so.
Sri Lanka's domestic financial markets have been largely immune to the global financial turbulence. Sri Lankan institutions reportedly have little or no direct exposure to U.S. sub-prime assets, while a significant portion of net foreign inflows reflects investments by non-resident Sri Lankans. Money markets have been volatile but have generally reflected domestic developments, as has stock and bond markets. However, domestic fixed-income markets increasingly open to foreigners.
Although indicators show moderate non-performing loans and relatively healthy capital and liquid asset ratios for the banking system as a whole, weaknesses persist in one state-owned bank. Banks prudently built large capital buffers during the credit-cycle upswing, but rising non-performing loans (NPLs) suggests growing credit risks. Moreover, significant liquidity, credit, and market risks remain, and vulnerability to higher interest rates is sizeable. The authorities are currently implementing the Basel Core Principles.
Executive Board Assessment
Executive Directors commended Sri Lanka for its impressive record of economic growth over the last few years, with the rate of unemployment and poverty indicators falling. The authorities' bold decision to adjust administered fuel prices, transport fares, and electricity prices will reduce fiscal risks over the medium term. Directors welcomed the significant tightening of monetary policy to address inflationary pressures.
At the same time, Directors expressed concern that the combined build-up of macroeconomic imbalances, balance sheet vulnerabilities, high inflation, and external financing pressures poses serious risks to economic stability. The recent increases in international food and fuel prices and the global financial crisis have heightened the challenge facing the authorities. Amid increased international risk aversion, raising external finance will become increasingly challenging, and Sri Lanka's external accounts are vulnerable to a reduction in international investor risk appetite.
Against this background, Directors urged the authorities to put in place a comprehensive package of reforms aimed at bringing down inflation, limiting external risks, and helping to preserve Sri Lanka's impressive growth record. This would need to involve a front-loaded fiscal consolidation, complemented by monetary tightening, steps toward greater exchange rate flexibility, and a further strengthening of financial supervision and regulation.
Directors welcomed the authorities' plans for medium-term fiscal consolidation, as envisaged in the Fiscal Responsibility Act, and called for their decisive implementation in order to reduce pressure on the external account, inflation, and the exchange rate. They encouraged the authorities to implement promptly measures aimed at broadening the tax base by significantly rationalizing exemptions and to restrain current spending. The resulting fiscal space should be used to preserve infrastructure spending.
Directors noted the risks of public debt distress arising from the increasing reliance on dollar-denominated, short-term commercial debt. While recognizing the authorities' efforts to strengthen debt management, Directors saw a need for further improvements in this area, in particular by lengthening the maturity profile of debt to reduce refinancing risks, and by facilitating non-debt finance for development spending.
Directors commended the authorities for exercising significant restraint with respect to reserve money growth, and encouraged further monetary policy tightening to help anchor inflation expectations. In this context, most Directors suggested that raising policy rates toward market interest rates would reinforce the authorities' quantitative strategy by signaling their commitment to disinflation. A few Directors, however, were not convinced of the effectiveness of the interest rate channel in Sri Lanka, and cautioned that an increase in the policy interest rate might encourage capital inflows.
Directors took note of the staff's assessment that the real effective exchange rate of the rupee is overvalued, and that the de facto peg risks contributing to external instability by attracting speculative inflows that could reverse quickly. At the same time, they considered that risks to external stability are associated directly with a loose fiscal policy and a build-up of short-term and foreign-currency debt. Against this background, Directors saw fiscal adjustment as key to supporting external stability and providing room to raise productivity- and competitiveness-enhancing infrastructure spending. Most Directors noted that additional exchange rate flexibility would help ward off destabilizing short-term capital inflows, and encouraged the authorities to move in this direction as part of a comprehensive policy package that would underpin confidence in the currency.
Directors welcomed the authorities' efforts to strengthen the financial system, including the recent measures to address the maturing credit cycle, the progress made in implementing Basel II, the introduction of corporate governance guidelines for banks, and tighter oversight of state banks. Reforms to financial supervision and regulation should continue. Directors encouraged the authorities to monitor closely short-term foreign liabilities and maturity risk. They advised the authorities to limit state interference in the operations of state banks.
Directors encouraged the authorities to eliminate the exchange restriction arising from the import margin requirement on the importation of certain motor vehicles.
Sri Lanka: Selected Economic Indicators, 2005-2009
2005 2006 2007 2008 2009
Proj. Proj.
Domestic economy
Real GDP growth (year-on-year, in percent)
6.2 7.7 6.8 6.1 5.8
Inflation (year-on-year, in percent, period average) 1/
11.0 10.0 15.8 23.9 20.0
Inflation (year-on-year, in percent, end of period) 1/
7.5 13.5 18.7 22.2 17.7
National savings (in percent of GDP)
24.2 22.7 23.6 22.0 21.7
Gross investment (in percent of GDP)
26.8 28.0 27.9 30.0 29.9
Fiscal position (in percent of GDP)
Revenue
15.5 16.3 15.8 15.4 15.7
Expenditure & net lending
23.9 24.3 23.6 22.9 23.6
Primary balance 2/
-3.7 -2.9 -2.7 -2.7 -2.1
Overall balance 2/
-8.6 -8.0 -7.8 -7.5 -7.8
Net domestic financing
5.0 5.6 4.1 3.0 3.0
Total government debt
90.6 88.7 85.8 74.1 73.3
External economy (in millions of U.S. dollars, unless otherwise mentioned)
Exports
6,347 6,883 7,740 8,506 8,831
Imports
8,863 10,254 11,301 14,529 15,857
Current account balance
-650 -1,499 -1,370 -3,334 -4,069
(in percent of GDP)
-2.7 -5.3 -4.2 -7.9 -8.2
Capital and financial account balance
1,226 1,808 2,096 3,094 2,805
Of which, direct investment 3/
234 451 548 658 756
Gross official reserves (excluding ACU balances, end of period)
2,458 2,515 3,046 3,267 3,499
(in months of prospective imports)
2.5 2.4 2.3 2.2 2.2
(in percent of short-term debt) 4/
92.1 71.4 58.6 57.3 57.3
External debt (in percent of GDP)
53.3 50.2 51.8 45.7 45.4
Debt service (in percent of goods and services exports)
7.4 11.0 13.0 15.1 14.9
Total stock of public commercial dollar debt 5/
1,140 1,659 2,842 3,502 4,210
(in percent of GDP)
4.7 5.9 8.8 8.3 8.5
(in percent of gross official reserves)
46.4 66.0 93.3 107.2 120.3
Real effective exchange rate (percent change, period average) 6/
8.0 3.0 2.0 ... ...
Financial variables
Broad money growth (year-on-year percent change) 7/
19.1 17.8 16.6 12.0 11.7
Of which, net credit to government
13.2 43.2 4.7 4.5 0.2
Of which, credit to the private sector
26.3 24.0 19.3 11.7 11.3
Interest rate (in percent, end of period) 8/
10.1 12.8 21.3 ... ...
Memorandum items
Nominal GDP (in billions of rupees)
2,453 2,939 3,578 4,638 5,856
Nominal GDP (in billions of U.S. dollars)
24.4 28.3 32.3 42.1 49.4
Sources: Data provided by the Sri Lankan authorities; CEIC Data Company Ltd.; Bloomberg LP.; and Fund staff estimates.
1/New Colombo consumer price index.
2/Excluding grants and privatization receipts.
3/Includes privatization proceeds.
4/ACU balances are also excluded from short-term debt.
5/Staff estimates based on total stock outstanding of foreign exchange commercial debt plus nonresident purchase of rupee-denominated treasury bonds.
6/Negative implies depreciation.
7/Including foreign currency banking units.
8/Three-month treasury bill rate.
1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities.
end
Tamils buy Sri Lankan groceries and apparels worth over 1 Billion dollars in 50 countries where TRO has offices. 1 million Tamil diaspora also send money to their families and friends, as well as take vacations, invest in the stock market, and purchase real estate by way of flats/Condos mainly in Colombo.
Tamil charities also send over 60 million dollars to Sri Lanka past few years the monies collected by various Tamil charities worldwide.
Undoubtedly it has slowed down now that TRO has been banned in North America, and so has WTCC, and WTM. TRO UK was banned many years ago.
As long as the Tamil diaspora keeping filling their stomachs with Sinhalese groceries, it keeps the Rajapakses busy, laughing all the way to the bank, with a few billion dollars of Tamil money, and Cabraal busy printing Sri Lankan rupees.
Stock Market and real estate are another separate issue.
By David Yong
Nov. 1 (Bloomberg) -- Sri Lanka's widening current-account deficit, a dependence on foreign borrowings and an overvalued currency pose ``serious risk'' to the nation's economic stability, the International Monetary Fund said.
The South Asian economy, facing among the highest inflation in Asia exceeding 20 percent this year, must undertake reforms to ease consumer prices, consolidate public spending and increase financial supervision to reduce the pressure on the local currency, the IMF said.
``Amid increased international risk aversion, raising external finance will become increasingly challenging,'' the Washington-based agency concluded in a report yesterday after a consultation on Oct. 17. ``Sri Lanka's external accounts are vulnerable to a reduction in investor risk appetite.''
The risk of a global recession pushed up the number of worldwide borrowers at risk of credit rating cuts to the highest this month since September 2005, Standard & Poor's said in a report yesterday. The IMF agreed last month to consider emergency loans to Hungary, Ukraine and Iceland to prevent the turmoil in global credit markets from escalating.
Sri Lanka's current-account deficit will widen to $3.33 billion, or 7.9 percent of gross domestic product, in 2008 and 8.2 percent in 2009, the IMF forecasts, versus 4.2 percent last year. Economic growth will slow to 6.1 percent in 2008 and 5.8 percent in 2009, from 6.8 percent in 2007, it said.
Currency Risks
Governor Novard Cabraal and policy makers at the Central Bank of Sri Lanka on Oct. 20 kept its benchmark repurchase rate at six-year high of 10.5 percent, unchanged in 20 straight meetings since February 2007 to cool prices. Inflation accelerated 28.2 percent in June, the highest in Asia, as global crude oil traded near a record.
The government's increased reliance on dollar-denominated short-term commercial debt add to public debt distress, while rising bad loans among local lenders suggest the banking system could face ``sizeable vulnerability'' to higher borrowing costs, the IMF said.
The central bank's foreign-exchange reserves are expected to increase by 7 percent to $3.27 billion, enough to finance 2.2 months of imports and cover 57 percent of short-term foreign debt, the IMF forecasts. The country's external debt will amount to about 46 percent of its gross domestic product this year, down from 52 percent in 2007.
The IMF said risks to external stability are associated directly with a loose fiscal policy and a build-up of short-term and foreign-currency debt and recommended authorities ``monitor closely short-term foreign liabilities and maturity risk.''
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.
IMF Executive Board Concludes 2008 Article IV Consultation with Sri Lanka
Public Information Notice (PIN) No. 08/140
October 31, 2008
Public Information Notices (PINs) form part of the IMF's efforts to promote transparency of the IMF's views and analysis of economic developments and policies. With the consent of the country (or countries) concerned, PINs are issued after Executive Board discussions of Article IV consultations with member countries, of its surveillance of developments at the regional level, of post-program monitoring, and of ex post assessments of member countries with longer-term program engagements. PINs are also issued after Executive Board discussions of general policy matters, unless otherwise decided by the Executive Board in a particular case.
On October 17, 2008, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Sri Lanka.1
Background
Sri Lanka has achieved strong growth averaging 6½ percent since 2002, raising per capita income to about $1,625 (above regional peers) and reducing the poverty rate from 22.7 percent to 15.2 percent over 2002-07. The authorities' Ten-Year Development Plan ("Mahinda Chintana") launched in early 2007 aims to sustain this performance by strengthening infrastructure investment. Rapid growth, together with rising fuel and food prices, has accelerated the inflation uptrend that began in 2006. The year-on-year (yoy) rate of inflation has edged down to 25 percent in August, but core inflation has risen and headline inflation has remained well above the rates prevailing in Sri Lanka's major trading partners and in the region.
Monetary policy tightening in 2007 was insufficient to contain inflation in 2007, but additional measures were taken in early 2008 to slow reserve money growth. Credit growth more than halved to 10.7 percent (yoy) as of July 2008. Monetary conditions tightened through early 2008 but then eased; interest rates on government securities fell as foreigners were granted greater access to the market. Policy rates were last raised in February 2007 as the Central Bank conducted monetary operations through the sale of its holdings of government securities. Access to the Central Bank's standing facilities is limited to 3 times per month per bank, with additional borrowing attracting a 19 percent penal rate.
The fiscal deficit declined by 0.2 percentage points to 7.8 percent of GDP in 2007. Revenues undershot expectations by a wide margin owing to exemptions, with the effect on the deficit broadly offset by declining transfers and subsidies (with pass-through of rising commodities prices). The fiscal deficit is projected to decline modestly relative to GDP in 2008. The budget limited tax holidays, increased excises on consumer durables, and raised customs surcharges, but also granted tax concessions, waived VAT on development projects, and cut VAT on petrol. Second-quarter data suggest that revenues would remain low (about 15 percent of GDP), but current expenditures (particularly wages and subsidies) are set to rise, and adjustment would likely fall on capital spending.
In 2007, the continued brisk pace of exports resulting from high international tea prices (a key export), improved EU access for garments exports, subdued imports, and strong remittances bolstered the current account, with the deficit more than financed by rising capital inflows. Gross official reserves rose from US$2.5 billion at end-2006 to US$3.1 billion as of end-2007, and to nearly US$3.2 billion as of end-September. In 2008, however, soaring oil prices sharply increased the oil import bill, amid softening external demand and worsening external financing conditions. The external current account deficit is projected to widen sharply in 2008.
Public debt/GDP edged down in 2007 and is expected to decline further in 2008, reflecting favorable debt dynamics (high growth and negative real interest rates) and rupee appreciation. However, increased use of foreign-currency financing poses significant risks. Foreign borrowing reflects a strategy to reduce domestic crowding out, but a widening current account deficit and bunching of near-term debt repayments imply sizeable gross external financing needs at a time when global credit markets are unsettled and likely to remain so.
Sri Lanka's domestic financial markets have been largely immune to the global financial turbulence. Sri Lankan institutions reportedly have little or no direct exposure to U.S. sub-prime assets, while a significant portion of net foreign inflows reflects investments by non-resident Sri Lankans. Money markets have been volatile but have generally reflected domestic developments, as has stock and bond markets. However, domestic fixed-income markets increasingly open to foreigners.
Although indicators show moderate non-performing loans and relatively healthy capital and liquid asset ratios for the banking system as a whole, weaknesses persist in one state-owned bank. Banks prudently built large capital buffers during the credit-cycle upswing, but rising non-performing loans (NPLs) suggests growing credit risks. Moreover, significant liquidity, credit, and market risks remain, and vulnerability to higher interest rates is sizeable. The authorities are currently implementing the Basel Core Principles.
Executive Board Assessment
Executive Directors commended Sri Lanka for its impressive record of economic growth over the last few years, with the rate of unemployment and poverty indicators falling. The authorities' bold decision to adjust administered fuel prices, transport fares, and electricity prices will reduce fiscal risks over the medium term. Directors welcomed the significant tightening of monetary policy to address inflationary pressures.
At the same time, Directors expressed concern that the combined build-up of macroeconomic imbalances, balance sheet vulnerabilities, high inflation, and external financing pressures poses serious risks to economic stability. The recent increases in international food and fuel prices and the global financial crisis have heightened the challenge facing the authorities. Amid increased international risk aversion, raising external finance will become increasingly challenging, and Sri Lanka's external accounts are vulnerable to a reduction in international investor risk appetite.
Against this background, Directors urged the authorities to put in place a comprehensive package of reforms aimed at bringing down inflation, limiting external risks, and helping to preserve Sri Lanka's impressive growth record. This would need to involve a front-loaded fiscal consolidation, complemented by monetary tightening, steps toward greater exchange rate flexibility, and a further strengthening of financial supervision and regulation.
Directors welcomed the authorities' plans for medium-term fiscal consolidation, as envisaged in the Fiscal Responsibility Act, and called for their decisive implementation in order to reduce pressure on the external account, inflation, and the exchange rate. They encouraged the authorities to implement promptly measures aimed at broadening the tax base by significantly rationalizing exemptions and to restrain current spending. The resulting fiscal space should be used to preserve infrastructure spending.
Directors noted the risks of public debt distress arising from the increasing reliance on dollar-denominated, short-term commercial debt. While recognizing the authorities' efforts to strengthen debt management, Directors saw a need for further improvements in this area, in particular by lengthening the maturity profile of debt to reduce refinancing risks, and by facilitating non-debt finance for development spending.
Directors commended the authorities for exercising significant restraint with respect to reserve money growth, and encouraged further monetary policy tightening to help anchor inflation expectations. In this context, most Directors suggested that raising policy rates toward market interest rates would reinforce the authorities' quantitative strategy by signaling their commitment to disinflation. A few Directors, however, were not convinced of the effectiveness of the interest rate channel in Sri Lanka, and cautioned that an increase in the policy interest rate might encourage capital inflows.
Directors took note of the staff's assessment that the real effective exchange rate of the rupee is overvalued, and that the de facto peg risks contributing to external instability by attracting speculative inflows that could reverse quickly. At the same time, they considered that risks to external stability are associated directly with a loose fiscal policy and a build-up of short-term and foreign-currency debt. Against this background, Directors saw fiscal adjustment as key to supporting external stability and providing room to raise productivity- and competitiveness-enhancing infrastructure spending. Most Directors noted that additional exchange rate flexibility would help ward off destabilizing short-term capital inflows, and encouraged the authorities to move in this direction as part of a comprehensive policy package that would underpin confidence in the currency.
Directors welcomed the authorities' efforts to strengthen the financial system, including the recent measures to address the maturing credit cycle, the progress made in implementing Basel II, the introduction of corporate governance guidelines for banks, and tighter oversight of state banks. Reforms to financial supervision and regulation should continue. Directors encouraged the authorities to monitor closely short-term foreign liabilities and maturity risk. They advised the authorities to limit state interference in the operations of state banks.
Directors encouraged the authorities to eliminate the exchange restriction arising from the import margin requirement on the importation of certain motor vehicles.
Sri Lanka: Selected Economic Indicators, 2005-2009
2005 2006 2007 2008 2009
Proj. Proj.
Domestic economy
Real GDP growth (year-on-year, in percent)
6.2 7.7 6.8 6.1 5.8
Inflation (year-on-year, in percent, period average) 1/
11.0 10.0 15.8 23.9 20.0
Inflation (year-on-year, in percent, end of period) 1/
7.5 13.5 18.7 22.2 17.7
National savings (in percent of GDP)
24.2 22.7 23.6 22.0 21.7
Gross investment (in percent of GDP)
26.8 28.0 27.9 30.0 29.9
Fiscal position (in percent of GDP)
Revenue
15.5 16.3 15.8 15.4 15.7
Expenditure & net lending
23.9 24.3 23.6 22.9 23.6
Primary balance 2/
-3.7 -2.9 -2.7 -2.7 -2.1
Overall balance 2/
-8.6 -8.0 -7.8 -7.5 -7.8
Net domestic financing
5.0 5.6 4.1 3.0 3.0
Total government debt
90.6 88.7 85.8 74.1 73.3
External economy (in millions of U.S. dollars, unless otherwise mentioned)
Exports
6,347 6,883 7,740 8,506 8,831
Imports
8,863 10,254 11,301 14,529 15,857
Current account balance
-650 -1,499 -1,370 -3,334 -4,069
(in percent of GDP)
-2.7 -5.3 -4.2 -7.9 -8.2
Capital and financial account balance
1,226 1,808 2,096 3,094 2,805
Of which, direct investment 3/
234 451 548 658 756
Gross official reserves (excluding ACU balances, end of period)
2,458 2,515 3,046 3,267 3,499
(in months of prospective imports)
2.5 2.4 2.3 2.2 2.2
(in percent of short-term debt) 4/
92.1 71.4 58.6 57.3 57.3
External debt (in percent of GDP)
53.3 50.2 51.8 45.7 45.4
Debt service (in percent of goods and services exports)
7.4 11.0 13.0 15.1 14.9
Total stock of public commercial dollar debt 5/
1,140 1,659 2,842 3,502 4,210
(in percent of GDP)
4.7 5.9 8.8 8.3 8.5
(in percent of gross official reserves)
46.4 66.0 93.3 107.2 120.3
Real effective exchange rate (percent change, period average) 6/
8.0 3.0 2.0 ... ...
Financial variables
Broad money growth (year-on-year percent change) 7/
19.1 17.8 16.6 12.0 11.7
Of which, net credit to government
13.2 43.2 4.7 4.5 0.2
Of which, credit to the private sector
26.3 24.0 19.3 11.7 11.3
Interest rate (in percent, end of period) 8/
10.1 12.8 21.3 ... ...
Memorandum items
Nominal GDP (in billions of rupees)
2,453 2,939 3,578 4,638 5,856
Nominal GDP (in billions of U.S. dollars)
24.4 28.3 32.3 42.1 49.4
Sources: Data provided by the Sri Lankan authorities; CEIC Data Company Ltd.; Bloomberg LP.; and Fund staff estimates.
1/New Colombo consumer price index.
2/Excluding grants and privatization receipts.
3/Includes privatization proceeds.
4/ACU balances are also excluded from short-term debt.
5/Staff estimates based on total stock outstanding of foreign exchange commercial debt plus nonresident purchase of rupee-denominated treasury bonds.
6/Negative implies depreciation.
7/Including foreign currency banking units.
8/Three-month treasury bill rate.
1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities.
end
Tamils buy Sri Lankan groceries and apparels worth over 1 Billion dollars in 50 countries where TRO has offices. 1 million Tamil diaspora also send money to their families and friends, as well as take vacations, invest in the stock market, and purchase real estate by way of flats/Condos mainly in Colombo.
Tamil charities also send over 60 million dollars to Sri Lanka past few years the monies collected by various Tamil charities worldwide.
Undoubtedly it has slowed down now that TRO has been banned in North America, and so has WTCC, and WTM. TRO UK was banned many years ago.
As long as the Tamil diaspora keeping filling their stomachs with Sinhalese groceries, it keeps the Rajapakses busy, laughing all the way to the bank, with a few billion dollars of Tamil money, and Cabraal busy printing Sri Lankan rupees.
Stock Market and real estate are another separate issue.
Bruce Fein Compares Sinhalese Buddhists to Hitler
Bruce Fein Compares Sinhalese Buddhists to Hitler
Sat, 2008-11-01 14:31
By Stephen Long, Los Angeles
Bruce Fein has gone a wee bit too far this time. Just when we thought the former US Deputy Attorney General and Washington DC lobbyist/public relations mercenary was happily on to greener pastures representing the Turkish Government against its Kurdish rebels, he resurfaces today in defense of the LTTE with his most audacious accusations – using his most arrogant and insulting tone –ever.
In an incendiary, challenging letter to Dr. Subramanian Swamy, the President of the Janatha Party in Tamil Nadu, he writes: "Evidence is conclusive that Sinhalese Buddhists practice and celebrate a culture of genocide against any and all persons who differ in either ethnicity or religion…followed by a curtailment of food, medicine, education, shelter, and other humanitarian aid…schemes fueled by a Sinhalese-Buddhist supremacist philosophy constructed largely from the Mahavamsa and the creed of Dharmapala that deifies a racially pure Sinhalese Buddhist race just as Hitler saluted Aryan racial purity. Today, the culture of genocide found grisly expression in the club and knife attack launched by Sinhalese Buddhists against a Tamil family in the south while chanting, ‘All Tamils in Sri Lanka will be eliminated.’"
First of all, Bruce Fein is outright lying when he speaks in his letter of this club and knife attack, and tries to make it sound like it happened yesterday. If any such incident ever occurred it was undoubtedly back in 1983 when tensions and emotions unfortunately got the better of people and deadly riots broke out. The same thing happened here in Los Angeles with the riots in 1992. Hear this: there have been no recent documented attacks of this nature in Sri Lanka whatsoever.
Secondly, to challenge Dr. Swamy in such a way follows completely in line with the recent strategy of the LTTE as it crashes and burns. It has been implementing a last-ditch effort to try to stir up racial solidarity in Tamil Nadu as a way to get the Government of India to step in to stop the Sri Lankan war. Bruce Fein surely knows, of course, that Dr. Swamy was once a supporter of the LTTE and now he vehemently opposes it. This letter is a way to get back at Dr. Swamy for coming to his senses, changing his position, and strongly urging the Indian Government not to interfere at this time. Bruce Fein, your letter only proves that you are the LTTE puppet that you are. You had better watch yourself or you’ll have the Government of India chasing your Tiger’s tail for trying to incite racial hatred and foment a separatist revolution on its sovereign soil.
This is the same Bruce Fein, an attorney who represented three LTTE front organizations in the US and Canada this year. I guessed incorrectly when I thought he had stopped fighting for the LTTE when he moved on to the Turkish issue. I figured it was simply because they had offered him more money than donors from the Tamil Diaspora who had been paying his monthly $30,000 retainer fees. I also figured that by now the wealthy overseas Tamils had finally wised up to the fact that they had been duped and dumped by this creature of unmitigated greed.
Please note that before he joined any of the three Tamil organizations Bruce Fein once received $5,000 per month from a group of Sri Lankan patriots in Washington DC, and wrote articles for the Washington Times and other publications against the LTTE and in support of the Government of Sri Lanka. He told this group directly that if the Government would be willing to pay him a retainer of $5,000 per month he would continue to write and campaign in support of the Government. When the Government declined his offer he went over to the other side and became an advocate for the LTTE. Hence my endearing term for him: a Beltway prostitute, one of Washington’s finest.
By the way, for his new Turkish client he flipped back over in terms of his point of view. Now he advocates the exact opposite position he’s taken against the Government of Sri Lanka: he supports the Turkish Government’s right to defend itself against rebellious terrorists – while he outspokenly condemns the Sri Lankan Government’s right to defend itself against its terrorists – the LTTE. Can you believe it? He’s supporting both sides of the same issue working for two different clients: one a sovereign government, and one a terrorist group. What the hay? Morals, schmorals. Who cares as long as the money’s good? Besides, Mrs. Fein may want a new thoroughbred horse.
His latest PR gig (at least in terms of LTTE front organizations is concerned) is representing “Tamils Against Genocide,” whose mission is to convince the world that it is the intention and practice of the Sinhalese Buddhists majority in Sri Lanka to eradicate Tamils from the face of the earth. It seeks to haul the Defense Secretary, the President’s Senior Advisor, and the Military Commander in front of the world courts to stand trial for genocide.
Coming back to his comments in his letter to Dr. Swamy, he speaks so falsely of the Anagarika Dharmapala, and in such an insulting way, that Sri Lankans and Indians alike should cry "outrage!" The “creed of Dharmapala,” as you arrogantly refer to it, Mr. Bruce Fein, eventually led to both the Indian and the Sri Lankan independence movements. It was a creed based on the universal brotherhood of all humans – regardless of race, creed, caste, religion, or culture. Mahatma Gandhi was a close friend of Anagarika Dharmapala, and they worked together promoting their mutual creed of freedom and tolerance for all. Gandhi even declared himself a Buddhist through his relationship with Dharmapala – recognizing the fact that Hinduism and Buddhism were so closely related in history, culture, and spirit, and the fact that Buddhism was a philosophy of peace. Gandhi called the Buddha “a Hindu of Hindus.”
Anagarika Dharmapala was also the founder of the Maha Bodhi Society, which still has its headquarters in India. Dharmapala was mentored by an American, Col. Henry S. Olcott, who was co-founder of the Theosophical Society. Shortly after its inception Col. Olcott moved the TS headquarters from New York City to Adyar, near Madras, in Tamil Nadu. Dharmapala began his long ties with Tamils and Tamil Nadu at the age of twenty when he went with Olcott to live in Adyar, and worked tirelessly for the Society for many years. Anagarika Dharmapala maintained his ties with India for the rest of his life, and in his last will and testament he said that he wished to reborn an Indian in India in his next rebirth. In addition to Mahatma Gandhi, the Maha Bodhi Society was guided by many of India’s political and spiritual luminaries, including Nehru, Tagore, Radhakrishnan, Indira Gandhi, Rao, Shastri, Giri, and others.
For you, Mr. Fein, Esq., to refer to the, “creed of Dharmapala that deifies a racially pure Sinhalese Buddhist race just as Hitler saluted Aryan racial purity” is to desecrate the teaching and memory of one of the greatest peacemakers that ever lived. It has often been proposed that an “Anagarika Dharmapala Peace Prize” be established much along the same lines as the Nobel Peace Prize. How dare you! And besides, have you ever even read the Mahavamsa? I didn’t think so…
Tamils and Sinhalese have been living together in Sri Lanka in peace and harmony for a thousand years. They are still living together in peace and harmony in the South of Sri Lanka, and hopefully very soon will live that way in the North. Bruce Fein, you are making trouble in a land far away from your own home simply to line your own pockets. This is a grave offence, Bruce Fein, and according to the Buddhist philosophy you so disdain your karma is likely to suffer for eons. You bring pain suffering to many people, Bruce Fein, by promulgating your deceptions and lies. Indirectly or directly you are supporting the suicide bombers that have plagued Sri Lanka for twenty-five years.
To quote from the Buddha: “According to the seed that is sown, so is the fruit you reap. The doer of good will gather good result, the doer of evil reaps evil result. If you plant a good seed well, then you will enjoy the good fruits.”
Plant some good seeds for a change, Bruce Fein, and tell your wife she’ll have to do without a new horse – or at least wait until the Turks pay their bill.
- Asian Tribune -
Bruce Fein the former attorney who handled the Tamils For Justice Project since December 2008, ha sonce again put his foot in the mouth, and making himself a fool. Debating with a washed out Indian politician who is also a Brahmin and racist is nothing else but a political and publicity stunt. Tamils Against Genocide should have a better control and keep the Feins on a tight leash. After 130 days is this the "Publicity Stunt" TAG and the Feins pull on the Tamils and Indians.
Although some of the points made by Mr.Long are true and factual, there are many incorrect and ambiguous statements that Fein should counter.
Fein should not get involved in and debate on religious matters, or issues.
It is a shame and disgrace that TAG and Bruce Fein is wallowing in this political and
racist mud.
Mr. Long is unaware that it is not only the Turks and Tamils who is paying Fein, but even the Pakistani and Indian Muslims formerly from Kasmere are paying him for lobbying work which is hardly done. He is an attorney and should be used as an attorney instead of a vague position as "representative" which really does not mean "anything".
It is also that he is not covered and the clients are not protected under the ethics, and laws of the American Bar Association. He does not even have a proper agreement.
As for Tamils Against Genocide, no one owns up that they are officials or directors, and behave as a "secret organization" which is advantageous for financial purposes and gains. As usual there are no checks and balances, now that WTCC and TRO is banned in the USA, and WTM in Canada.
Without debates which will never happen, Bruce Fein and TAG should concentrate on the legal issues, for which hundreds of Tamils have paid thousands of dollars. Fein should put to good use, of the Torture witnesses and affidavits, Tamils For Justice has provided in the past 6 months, without wasting Tamil money and efforts.
Tamils For Justice:
Sat, 2008-11-01 14:31
By Stephen Long, Los Angeles
Bruce Fein has gone a wee bit too far this time. Just when we thought the former US Deputy Attorney General and Washington DC lobbyist/public relations mercenary was happily on to greener pastures representing the Turkish Government against its Kurdish rebels, he resurfaces today in defense of the LTTE with his most audacious accusations – using his most arrogant and insulting tone –ever.
In an incendiary, challenging letter to Dr. Subramanian Swamy, the President of the Janatha Party in Tamil Nadu, he writes: "Evidence is conclusive that Sinhalese Buddhists practice and celebrate a culture of genocide against any and all persons who differ in either ethnicity or religion…followed by a curtailment of food, medicine, education, shelter, and other humanitarian aid…schemes fueled by a Sinhalese-Buddhist supremacist philosophy constructed largely from the Mahavamsa and the creed of Dharmapala that deifies a racially pure Sinhalese Buddhist race just as Hitler saluted Aryan racial purity. Today, the culture of genocide found grisly expression in the club and knife attack launched by Sinhalese Buddhists against a Tamil family in the south while chanting, ‘All Tamils in Sri Lanka will be eliminated.’"
First of all, Bruce Fein is outright lying when he speaks in his letter of this club and knife attack, and tries to make it sound like it happened yesterday. If any such incident ever occurred it was undoubtedly back in 1983 when tensions and emotions unfortunately got the better of people and deadly riots broke out. The same thing happened here in Los Angeles with the riots in 1992. Hear this: there have been no recent documented attacks of this nature in Sri Lanka whatsoever.
Secondly, to challenge Dr. Swamy in such a way follows completely in line with the recent strategy of the LTTE as it crashes and burns. It has been implementing a last-ditch effort to try to stir up racial solidarity in Tamil Nadu as a way to get the Government of India to step in to stop the Sri Lankan war. Bruce Fein surely knows, of course, that Dr. Swamy was once a supporter of the LTTE and now he vehemently opposes it. This letter is a way to get back at Dr. Swamy for coming to his senses, changing his position, and strongly urging the Indian Government not to interfere at this time. Bruce Fein, your letter only proves that you are the LTTE puppet that you are. You had better watch yourself or you’ll have the Government of India chasing your Tiger’s tail for trying to incite racial hatred and foment a separatist revolution on its sovereign soil.
This is the same Bruce Fein, an attorney who represented three LTTE front organizations in the US and Canada this year. I guessed incorrectly when I thought he had stopped fighting for the LTTE when he moved on to the Turkish issue. I figured it was simply because they had offered him more money than donors from the Tamil Diaspora who had been paying his monthly $30,000 retainer fees. I also figured that by now the wealthy overseas Tamils had finally wised up to the fact that they had been duped and dumped by this creature of unmitigated greed.
Please note that before he joined any of the three Tamil organizations Bruce Fein once received $5,000 per month from a group of Sri Lankan patriots in Washington DC, and wrote articles for the Washington Times and other publications against the LTTE and in support of the Government of Sri Lanka. He told this group directly that if the Government would be willing to pay him a retainer of $5,000 per month he would continue to write and campaign in support of the Government. When the Government declined his offer he went over to the other side and became an advocate for the LTTE. Hence my endearing term for him: a Beltway prostitute, one of Washington’s finest.
By the way, for his new Turkish client he flipped back over in terms of his point of view. Now he advocates the exact opposite position he’s taken against the Government of Sri Lanka: he supports the Turkish Government’s right to defend itself against rebellious terrorists – while he outspokenly condemns the Sri Lankan Government’s right to defend itself against its terrorists – the LTTE. Can you believe it? He’s supporting both sides of the same issue working for two different clients: one a sovereign government, and one a terrorist group. What the hay? Morals, schmorals. Who cares as long as the money’s good? Besides, Mrs. Fein may want a new thoroughbred horse.
His latest PR gig (at least in terms of LTTE front organizations is concerned) is representing “Tamils Against Genocide,” whose mission is to convince the world that it is the intention and practice of the Sinhalese Buddhists majority in Sri Lanka to eradicate Tamils from the face of the earth. It seeks to haul the Defense Secretary, the President’s Senior Advisor, and the Military Commander in front of the world courts to stand trial for genocide.
Coming back to his comments in his letter to Dr. Swamy, he speaks so falsely of the Anagarika Dharmapala, and in such an insulting way, that Sri Lankans and Indians alike should cry "outrage!" The “creed of Dharmapala,” as you arrogantly refer to it, Mr. Bruce Fein, eventually led to both the Indian and the Sri Lankan independence movements. It was a creed based on the universal brotherhood of all humans – regardless of race, creed, caste, religion, or culture. Mahatma Gandhi was a close friend of Anagarika Dharmapala, and they worked together promoting their mutual creed of freedom and tolerance for all. Gandhi even declared himself a Buddhist through his relationship with Dharmapala – recognizing the fact that Hinduism and Buddhism were so closely related in history, culture, and spirit, and the fact that Buddhism was a philosophy of peace. Gandhi called the Buddha “a Hindu of Hindus.”
Anagarika Dharmapala was also the founder of the Maha Bodhi Society, which still has its headquarters in India. Dharmapala was mentored by an American, Col. Henry S. Olcott, who was co-founder of the Theosophical Society. Shortly after its inception Col. Olcott moved the TS headquarters from New York City to Adyar, near Madras, in Tamil Nadu. Dharmapala began his long ties with Tamils and Tamil Nadu at the age of twenty when he went with Olcott to live in Adyar, and worked tirelessly for the Society for many years. Anagarika Dharmapala maintained his ties with India for the rest of his life, and in his last will and testament he said that he wished to reborn an Indian in India in his next rebirth. In addition to Mahatma Gandhi, the Maha Bodhi Society was guided by many of India’s political and spiritual luminaries, including Nehru, Tagore, Radhakrishnan, Indira Gandhi, Rao, Shastri, Giri, and others.
For you, Mr. Fein, Esq., to refer to the, “creed of Dharmapala that deifies a racially pure Sinhalese Buddhist race just as Hitler saluted Aryan racial purity” is to desecrate the teaching and memory of one of the greatest peacemakers that ever lived. It has often been proposed that an “Anagarika Dharmapala Peace Prize” be established much along the same lines as the Nobel Peace Prize. How dare you! And besides, have you ever even read the Mahavamsa? I didn’t think so…
Tamils and Sinhalese have been living together in Sri Lanka in peace and harmony for a thousand years. They are still living together in peace and harmony in the South of Sri Lanka, and hopefully very soon will live that way in the North. Bruce Fein, you are making trouble in a land far away from your own home simply to line your own pockets. This is a grave offence, Bruce Fein, and according to the Buddhist philosophy you so disdain your karma is likely to suffer for eons. You bring pain suffering to many people, Bruce Fein, by promulgating your deceptions and lies. Indirectly or directly you are supporting the suicide bombers that have plagued Sri Lanka for twenty-five years.
To quote from the Buddha: “According to the seed that is sown, so is the fruit you reap. The doer of good will gather good result, the doer of evil reaps evil result. If you plant a good seed well, then you will enjoy the good fruits.”
Plant some good seeds for a change, Bruce Fein, and tell your wife she’ll have to do without a new horse – or at least wait until the Turks pay their bill.
- Asian Tribune -
Bruce Fein the former attorney who handled the Tamils For Justice Project since December 2008, ha sonce again put his foot in the mouth, and making himself a fool. Debating with a washed out Indian politician who is also a Brahmin and racist is nothing else but a political and publicity stunt. Tamils Against Genocide should have a better control and keep the Feins on a tight leash. After 130 days is this the "Publicity Stunt" TAG and the Feins pull on the Tamils and Indians.
Although some of the points made by Mr.Long are true and factual, there are many incorrect and ambiguous statements that Fein should counter.
Fein should not get involved in and debate on religious matters, or issues.
It is a shame and disgrace that TAG and Bruce Fein is wallowing in this political and
racist mud.
Mr. Long is unaware that it is not only the Turks and Tamils who is paying Fein, but even the Pakistani and Indian Muslims formerly from Kasmere are paying him for lobbying work which is hardly done. He is an attorney and should be used as an attorney instead of a vague position as "representative" which really does not mean "anything".
It is also that he is not covered and the clients are not protected under the ethics, and laws of the American Bar Association. He does not even have a proper agreement.
As for Tamils Against Genocide, no one owns up that they are officials or directors, and behave as a "secret organization" which is advantageous for financial purposes and gains. As usual there are no checks and balances, now that WTCC and TRO is banned in the USA, and WTM in Canada.
Without debates which will never happen, Bruce Fein and TAG should concentrate on the legal issues, for which hundreds of Tamils have paid thousands of dollars. Fein should put to good use, of the Torture witnesses and affidavits, Tamils For Justice has provided in the past 6 months, without wasting Tamil money and efforts.
Tamils For Justice:
Former Top Cyber Official from Sri Lanka at Center of World Bank Scandal, is linked to John Keels.
Former Top Cyber Official at Center of World Bank Scandal
Friday, October 31, 2008
By Richard Behar
In 1997, Mohamed Vazir Muhsin, a Sri Lankan accountant, was chosen by then-World Bank President James Wolfensohn as the first chief information officer in the institution's history. Eight years later, Muhsin was unceremoniously thrown out the door, and the bank's information security headaches reached migraine stage.
Early on in his tenure, Muhsin selected Satyam Computer Services, one of India's largest and fastest-growing technology firms, to create and maintain the software programs that would make the bank's information infrastructure into one of the world's most important data bases. Both sides found the deal highly beneficial.
By late 2005, when he was accused of improper ties with Satyam and ousted from the bank, "Mohamed was arguably the most powerful person in the bank," one insider who worked closely with Muhsin told FOX News.
So powerful, in fact, that he was able to conceive and arrange a bank loan in 2003 to his native Sri Lanka — bypassing the department that would normally have approved it. The project, known as "e-Sri Lanka," involved a no-interest, $53 million bank loan to Sri Lanka's government to help wire up that nation's communications infrastructure.
The loan was highly controversial. At one stage, bank officials suspended the project after complaints that the World Bank's information technology department had no business arranging loans to any government — let alone to one of "the world's most unstable countries," as the World Bank labeled strife-torn Sri Lanka in 2004. But after a Muhsin protege took charge of the bank's South Asia department, the project moved ahead that same year without any further delays.
That was not Muhsin's only controversial venture. In 1999, he and bank president Wolfensohn created a non-profit IT venture initially financed by the bank that they subsequently spun off from the institution, called the Development Gateway Foundation. Among the foundation's purposes was to create and run a database of all procurement tenders by almost every anti-poverty agency in the world, in the interest of greater economic transparency. Wolfensohn and Muhsin took two of the foundation's three board seats, while Muhsin served as its chief financial officer.
Last year, a World Bank evaluation unit blasted the foundation's governance as plagued by "conflicts of interest" for both men, as well as a vehicle that Muhsin had used for hiring large numbers of his IT department's staff without going through the normal bank budget process. By then, Wolfensohn had been gone from the bank for two years. (He did not respond to questions from FOX News for this story.) And Muhsin had gotten himself into much deeper trouble. (He also did not respond to questions from FOX News.)
By 2005, the bank had become suspicious about Muhsin's lifestyle, and there were increasing suspicions about his dealings with Satyam. A secret investigation was ordered. FOX News has obtained an investigative memo that planned "background reviews of all WB procurement and disbursement records for all contracts to Satyam." A leading corporate intelligence agency — Diligence LLC — was retained to do a net worth analysis of Muhsin and his family. A second investigative company was retained to do accounting and forensic examination of his computer hard drives.
Yet the case against Muhsin was on the verge of being swept under the bank's carpet until June 2005, when Paul Wolfowitz became the bank's president. Wolfowitz, who arrived from the Pentagon with a mandate to tackle bank corruption head-on, lit a fire under the Muhsin investigation, a former bank investigator tells FOX News. Muhsin was finally grilled for two days by bank investigators in September 2005, just weeks before he was set to retire. In early October, he was given two hours to vacate the building. (Wolfowitz himself left the bank in a cloud of controversy in May 2007.)
Muhsin is gone from the World Bank today, but his economic interests linger. He is a large shareholder and, since 2005, one of 10 directors of a Sri Lankan company, John Keells Holdings, that in February 2008 received a $75 million loan from the International Finance Corporation, the World Bank's private-sector lending arm. The loan is the bank's single-largest investment to date in the manufacturing and services sectors in Sri Lanka.
end:
World Bank should take action against corporate giant's corrupt conduct, which even the Supreme Court in Sri Lanka found them guilty.
Friday, October 31, 2008
By Richard Behar
In 1997, Mohamed Vazir Muhsin, a Sri Lankan accountant, was chosen by then-World Bank President James Wolfensohn as the first chief information officer in the institution's history. Eight years later, Muhsin was unceremoniously thrown out the door, and the bank's information security headaches reached migraine stage.
Early on in his tenure, Muhsin selected Satyam Computer Services, one of India's largest and fastest-growing technology firms, to create and maintain the software programs that would make the bank's information infrastructure into one of the world's most important data bases. Both sides found the deal highly beneficial.
By late 2005, when he was accused of improper ties with Satyam and ousted from the bank, "Mohamed was arguably the most powerful person in the bank," one insider who worked closely with Muhsin told FOX News.
So powerful, in fact, that he was able to conceive and arrange a bank loan in 2003 to his native Sri Lanka — bypassing the department that would normally have approved it. The project, known as "e-Sri Lanka," involved a no-interest, $53 million bank loan to Sri Lanka's government to help wire up that nation's communications infrastructure.
The loan was highly controversial. At one stage, bank officials suspended the project after complaints that the World Bank's information technology department had no business arranging loans to any government — let alone to one of "the world's most unstable countries," as the World Bank labeled strife-torn Sri Lanka in 2004. But after a Muhsin protege took charge of the bank's South Asia department, the project moved ahead that same year without any further delays.
That was not Muhsin's only controversial venture. In 1999, he and bank president Wolfensohn created a non-profit IT venture initially financed by the bank that they subsequently spun off from the institution, called the Development Gateway Foundation. Among the foundation's purposes was to create and run a database of all procurement tenders by almost every anti-poverty agency in the world, in the interest of greater economic transparency. Wolfensohn and Muhsin took two of the foundation's three board seats, while Muhsin served as its chief financial officer.
Last year, a World Bank evaluation unit blasted the foundation's governance as plagued by "conflicts of interest" for both men, as well as a vehicle that Muhsin had used for hiring large numbers of his IT department's staff without going through the normal bank budget process. By then, Wolfensohn had been gone from the bank for two years. (He did not respond to questions from FOX News for this story.) And Muhsin had gotten himself into much deeper trouble. (He also did not respond to questions from FOX News.)
By 2005, the bank had become suspicious about Muhsin's lifestyle, and there were increasing suspicions about his dealings with Satyam. A secret investigation was ordered. FOX News has obtained an investigative memo that planned "background reviews of all WB procurement and disbursement records for all contracts to Satyam." A leading corporate intelligence agency — Diligence LLC — was retained to do a net worth analysis of Muhsin and his family. A second investigative company was retained to do accounting and forensic examination of his computer hard drives.
Yet the case against Muhsin was on the verge of being swept under the bank's carpet until June 2005, when Paul Wolfowitz became the bank's president. Wolfowitz, who arrived from the Pentagon with a mandate to tackle bank corruption head-on, lit a fire under the Muhsin investigation, a former bank investigator tells FOX News. Muhsin was finally grilled for two days by bank investigators in September 2005, just weeks before he was set to retire. In early October, he was given two hours to vacate the building. (Wolfowitz himself left the bank in a cloud of controversy in May 2007.)
Muhsin is gone from the World Bank today, but his economic interests linger. He is a large shareholder and, since 2005, one of 10 directors of a Sri Lankan company, John Keells Holdings, that in February 2008 received a $75 million loan from the International Finance Corporation, the World Bank's private-sector lending arm. The loan is the bank's single-largest investment to date in the manufacturing and services sectors in Sri Lanka.
end:
World Bank should take action against corporate giant's corrupt conduct, which even the Supreme Court in Sri Lanka found them guilty.
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