The Financial Crisis – Mismanagement, Fear Or Collusion?

By Upatissa Pethiyagoda –JULY 5, 2022

Dr. Upatissa Pethiyagoda

The crisis facing us is real and the future frightening. But what has caused it? The causes may be unclear and the correction is expected to be long. The causes are probably many, and the cascade will encompass many sectors. It has already led to shortages and long queues for fuel, rising costs and shortages of food and medicines. Social activities are curtailed, and closures of schools and offices, are forced impositions. The shortage of foreign reserves and rupee funds impact in many ways. Extremely unwise decisions such as the overnight banning of fertilizers and agrochemicals, reckless reductions of Income taxes and customs levies are part of this man made crisis. The irony is that the key perpetrators of this tragedy continue regardless and the others resign, (washing their hands off the mess and misery that they have caused), for acting in collusion with their bosses.

In seeking remedies, it may help to consider the dollar and rupee shortages separately. With no claim to originality, as these are so direct and obvious, that one is justified in suspecting collusion between politicians and officials, in preventing disclosure. In all this, it is the people who are impoverished.

The Rupee shortage

* Tighten the Tax net. It is revealed that some reckless reliefs have benefitted the Ultra-rich Corporates or individuals. Are there means to reverse these concessions and to recoup the losses?

* Are VAT collections duly passed on to the State as envisaged, or merely retained by concealment?

* Should not those who received Duty Free vehicles and illegally sold them (vehicle or permit) be charged the Duty concessions that they enjoyed? (MP’s in particular who have done so should not be spared.)

* Should not the (James) Bond scammers, and those who protected them in any way, be called to account? Abnormal receipts of donations to political parties at around this time should be scrutinized.

* Those blatantly favoured importers of sugar, garlic and cooking oils (and any similar ones) be required to pay the legitimate levies?

* A large stash of gold, seized by the LTTE from the residents fleeing Jaffna was said to have fallen into the hands of the Armed Forces and alleged to have been brought under escort to Colombo. The subsequent fate of this is not known.

* Reported street value of the enormous amounts of heroin and other narcotics detected amount to staggering millions. What happens to all this and the large captures of illegal alcohol?

* The latter might find use in hand sanitizers and cosmetics. It would be unethical not to destroy the narcotics and to ship them out. Seized cigarettes and tobacco products too may be legally taxed or sold under supervision and the proceeds credited to the Exchequer.

The foreign Currency deficit

* From time to time, there are references to wealth held in hidden Bank Accounts, Tax havens, immovable assets such as houses, farms, dummy companies and in various forms of money launderings. The Panama/Pandora Papers and Internet revelations (e.g The Ten Richest Politicians / Businessmen etc) are frightening revelations pointing to massive illegal earnings, mainly by Politicians as Bribes or Commissions, Drug Lords, Smugglers and other delinquents. There is little evidence of follow-ups. The criminals have only to be patient, until worse scandals are found and public attention is diverted towards them,

* There is ample evidence that politicians of all hues are involved in major scams. It is more than clear that they are shielding each other, despite the ferocity of intents to get at the criminals, nothing of the sort happens. Most elections merely change the actors, but the play goes on. It is clearly the case of “you scratch my back and I will scratch yours”. The Cahoot Principle. Having been diddled for the umpteenth time, we glory in the flattery that our people are “exceptionally politically mature”. “Bovine excrement”- ours is a sad tale of rejecting one set of rogues for another “Same lump of s..t ; different flies” is apt.

* Corruption cannot be achieved by an unaided person. There are many beads along the chain. When patent criminal administrators are brought back into high office, sometimes despite judicial strictures, we cannot but be silent. The hands of a system, pained by “contempt” seems to act severely, selectively and illogically.

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