Rajan Philips Courtesy The Island

Prime Minister Wickremesinghe is expected to appear tomorrow at the inquiry to answer direct questions from the Commissioners, after submitting an affidavit of answers to their questions in writing. The revelations this week about phone calls between UNP parliamentarians, serving on the Parliamentary Committee on Public Enterprises (COPE), and Arjun Aloysius, the young principal of Perpetual Treasuries Pvt Limited (PTL), has led to wildly contrasting reactions. Second tier Joint Opposition MPs are calling for an inquiry into the alleged contacts between UNP MPs and the PTL chief. One of them has gone so far as to ask President Sirisena to leave the (UNP) government and appoint a new Prime Minister (Don’t JO MPs know that 19A has erased the President’s power to remove a sitting PM?). According to another story, dismissed by many as fake and floated by the Rajapaksa entourage, the President has been sending signals to the Prime Minister to temporarily step down before appearing at the inquiry.

On the other side, the UNPers on COPE are crying foul that they are being publicly tarnished based on phone records and that their social relationship with Mr. Aloysius (hence the calls) did not in any way compromise their roles and responsibilities in the Committee. They want a full inquiry into the contents of the phone calls involving not only the COPE UNPers, but all 225 parliamentarians. The media also appears to be split in that some of the outlets are reporting one side or the other, and not both. The build up to tomorrow’s full serial event has been going on for some time and is public knowledge. What the fallout would be after tomorrow is anyone’s guess. The government is about halfway through its term, a point where, and especially for this government, it could be either the end of the beginning or the beginning of the end. What will it be? It depends!

It depends on whether President Sirisena and Prime Minister Wickremesinghe are able to start all over again from where they stood before the country on 10 January 2015, made their pledges and raised people’s expectations – that together they will break with the past and take the country in a new and better direction. There has to be a free and frank discussion between the two men and honest acknowledgements of the mistakes and mistaken actions by one another, their ministers and their parties. Everyone knows the commissions and omissions of this government, but what no one can figure out is whether the President and the Prime Minister have ever tried to talk about them one on one, and to do anything about it.

Without a candid discussion and a united effort to reverse the wrongs that have been committed and act on what have hitherto been omitted, the derailed government train is not going to be put back on track. The blessing in disguise is that every instance of commission and of omission is so obvious and so wieldy that all that needs to be done is for the two leaders to keep working on them, one at a time, more than one at a time, or even all at a time – as their wit and resources would permit them. If so, it could be the end of a bad beginning. If not, it will be the beginning of a worse ending.

Ending a bad beginning

Take the biggest act of commission: the Central Bank fiasco. The Commission of Inquiry will do its work, thanks to the excellent choice of the three Commissioners and the way they have been acquitting themselves. There are many facets to this inquiry that are arrayed in a bewildering spectrum – ranging from human avarice, calculated impunity, plain stupidity, political misjudgement, and all the way to institutional breakdown and technical confusions. We all get what is at the human and political end of the spectrum. These facets are easy to grasp and easily digestible for instant gratification. But we would be poorer at the end of this accidental process of catharsis, if we do not learn about what went wrong technically and institutionally at the Central Bank, and how long they have been going wrong.

The rot certainly did not start in February 2015. It got metastasized. There have been plenty of allusions that the impunity in and around the Central Bank even after the election was predicated on an unspoken understanding of quid-pro-quo between those who came in the door after January 2015 and those who went out the door. The unspoken understanding spectacularly crashed when the cash hit the fan and the country. The sheer volume of transactions and their brazenness were breathtaking. Equally breathtaking were the highhanded attempts to cover up and the presumption that everything could be buried under an August parliamentary election victory and the crumps of a million jobs. In the end, it was poetic justice that the UNP did get a majority in parliament because of the bond scam.

Beneath all the layers of sensational stupidity, what went wrong institutionally and technically at the bank is yet to be fully exposed. At the inquiry itself, there has been plenty of cross-examination theatrics befitting a criminal trial in an original court. Precious little has been forthcoming in contrast, by way of technical education or enlightenment except when the Commissioners took to probing themselves. And they are our last best hope.

Nonetheless, the President and the Prime Minister do not have to wait for the Commission’s report and recommendations. There is plenty they can do starting now. As the Executive President, Mr. Sirisena has the constitutional duty and the responsibility to ask the Prime Minister if there is any good reason why the Central Bank should not be relocated to the Finance Ministry where it had been for all its life until 2015. There was no good reason why it was moved in the first place from the Finance Ministry to the Prime Minister’s portfolio by gazette notification. The only plausible reason might have been that the former Finance Minister, Ravi Karunanayake, could not be trusted with the commanding institutions of the Ministry: the Central Bank, the state banks and other financial institutions.

There could not have been a sillier reason than that. If someone is not fit for a job, don’t give the job to that candidate. Don’t change the job description to suit the candidate. What is common sense and commonplace in any low level hiring, public or private, is blatantly breached in making cabinet appointments. That is the second biggest commission of error by the President and the Prime Minister. But before I turn to the cabinet, let us see why the ministerial location of the Central Bank is such a litmus test for good governance.

First, it should not have been done in the first place. There is tradition and there are also legal implications of not having the CB in the Ministry of Finance. It has nothing to do with who the Finance Minister is, or who the Bank Governor is. Taking the Central Bank and other banks out of the Finance Ministry is no different from landing Legal Drafting under the Defence Secretary in the Rajapaksa government. Good governance does not mean that what was not permissible under country bumpkins in the old government is now allowable under a city sleek Prime Minister in a new government. Will relocating the Central Bank to the Finance Ministry start putting good governance back on track? No, but it is the wrong question to ask.

The right question is- if the President and the Prime Minister cannot reach agreement and restore the Central Bank to its natal home, how can they be trusted to undertake any other restorative measure and put good governance back on track? Moving the Central Bank out of the Finance Ministry was one of the first acts of derailment. How the government deals with it now will be a test, or a sign, to see which way the Sirisena-Wickremesinghe government is heading in the second half of its mandate. The test, or the sign, can be applied to not just the Central Bank, but every other matter or instance of commission or omission, and how the President and Prime Minister will deal with each and every one of them as they move forward.

Restart, Muddling through, or Maverick Presidency

The first approach the two leaders could take is what I have been talking about, if not advocating: restarting from January 2015 and bringing to an end what has been for the most part a long and bad beginning. In this approach, call it the restart approach, the Central Bank and all other banking institutions will be reassigned to the Finance Ministry, to function as they used to not just before 2015, but really when the Finance Ministry was on its own and not a presidential portfolio as it has been from the time of President Premadasa. Then they can wait till the Commission of Inquiry produces its report to start acting on its recommendations in regard to bond procedures in the Bank.

The second approach is to keep going along the same old paths of the last two years. I will pejoratively call it ‘muddling through’ – although technically, in policy analysis, it describes one of the ways in which a government bureaucracy works. In this scenario, the Bank will remain under the PM, the PM and the President will keep going their separate ways, deliberately avoiding a principled confrontation about the government’s goings on, and conveniently pretending to see no corruption, hear no corruption, and speak no corruption. This will be the continuation of the status quo and the beginning of an inexorably disastrous end.

There is a third possibility, where the President can start asserting his powers far more than he has been doing until now. He has the constitutional authority to do that, although somewhat clipped by the 19th Amendment. In the current circumstances, the President also needs to show some maverick qualities. Does he have any? Historically, a good example would be Dahanayake, that most colourful MP from Galle and a short-term Prime Minister in sad circumstances. He would have gone to town if he is president now and perhaps all too gung ho for his own good. President Sirisena is quite measured, but can he be a little bit maverick – not only towards the PM and the UNP, but also to his SLFP Ministers who are acting as though they made Sirisena President?

Specifically, on the Central Bank, he will insist and make sure that the Central Bank and other financial institutions are reverted back to the Finance Ministry. He will show the same firmness and success that he did in having his away in not extending the tenure of the former Governor and getting the current Governor to occupy the position instead. He had his way as well in appointing the Commission of Inquiry into the bond matter, which although resented by many in the UNP has in fact given the government as a whole some respite and the opportunity to change direction. The ideal situation would be for the President and the Prime Minister to reach common ground and act in unity. That is the ‘restart approach.’ If that were not possible, the more rational way out for the President is to act maverick than to muddle through.

Acting maverick has political implications. They could be positive if President Sirisena could be more circumspect and even calculating in acting maverick. The challenge is if he would be so bold as to rely on his constitutional powers and distance him equally from the UNP wing of the cabinet and from the SLFP wing of the cabinet – not to play one side against the other, but to facilitate, or force if necessary, bipartisan consensus on the 100-Day Programme he campaigned for and most of which have not been touched even though he has been in office for over a 1000 days.

With Prime Minister and the UNP leaders, the President could and should insist on having people like Harsha de Silva and Eran Wickremaratne as frontline ministers in his cabinet while getting rid of old deadwood and corrupt UNPers. He could also insist on a more rational alignment of ministers and portfolios – and eliminate the odd pairings such as Highways and Higher Education, Finance and the Media etc. To the SLFP Ministers, the President should read the riot act and make it clear to them that he owes his position to the voters who gave him victory in January 2015, and they owe their position to him because he won and their candidate (Mahinda Rajapaksa) lost.

Vicious Triangle and the three wise men

Presidential power assertion could backfire, in that the UNP and the SLFP could start asserting themselves against one another, and severally against the President. The upshot will be a triangular stalemate, thanks to the 19th Amendment–because the President cannot fire the Prime Minister, even a reunited SLFP will not have the numbers to topple the UNP majority, the two parties are not going to unite to get the two-thirds majority to pass a resolution for dissolution and new election, and no one is likely to be interested in impeaching the President. Politically, it is the President who would be in a vantage position. He could reach out to the people over the heads of parliamentarians and mobilize their support to pressure parliament to implement the mandate they gave him in 2015.

But the President has his vulnerabilities too. The attacks against him in the LankaeNews have been apparently reason enough to have the electronic tabloid from abroad banned in Sri Lanka apparently under presidential orders. The former Finance Minister is alleged to be behind these attacks. But the three wise men of the UNP and all senior Ministers – Malik Samarawickrema (UNP Chairman), Kabir Hashim (UNP Secretary) and Mangala Samaraweera (man of both parties) took a different tack; and two weeks ago they went in delegation to express their concerns to President Sirisena about the political implications of Prime Minister Wickremasinghe testifying before the Commission of Inquiry. We do not know what the delegation of wise men was trying to achieve other than airing their concerns and indirectly appealing to the President to be more circumspect in his follow-up actions after the Commission releases its report.

The discussion apparently took a soul-searching turn to reflect on how a government that was popularly elected to expose the corrupt ways of the Rajapaksas has come to devouring its own leaders. The President’s deadpan answer was: “don’t blame me!” According to the Sunday Times political column last week, the President went on to name a “UNP Minister”, an “important person” and another “person holding a high office in a province”, as people who passed information to the Rajapaksas, tried to interfere on their behalf, or approached the President for potential mediation.

Those in political and social circles and many others know the identities of the Minister and the two important individuals. The question many are asking is why the President and the Prime Minister are not publicly naming (and shaming) these individuals and why they are allowing the Minister in question to remain in the cabinet. That is the ‘omission’ story of the government and its long and bad beginning that has lasted over two years. So will it be the end of that beginning, or the beginning of a worse end? It depends!