Addressing corruption critical before international assistance

A team from the International Monetary Fund (IMF) concluded a mission to Sri Lanka last week and reaffirmed the organisation’s commitment to support the country in the wake of the worst economic crisis in contemporary history. However, even though the IMF said that “significant progress” was made in discussions with the Sri Lankan Government, a staff-level agreement on the Extended Fund Facility (EFF) arrangement was not finalised. 

Though the exact areas of discussion are not known to the public it could be reasonably assumed that key among the concerns are debt restructuring, reduction of government expenditure, independence of key institutions and the necessity to address corruption.

In response to the IMF statement on the talks with Sri Lanka, the powerful US Senate Foreign Relations Committee tweeted on its official handle, “Any IMF agreement with Sri Lanka must be contingent on CBSL independence, strong anti-corruption measures and promotion of the rule of law. Without these critical reforms, Sri Lanka could suffer further economic mismanagement and uncontrollable debt.”

It is clear from both the IMF statement, the response from the US Senate’s Foreign Relations Committee and numerous indications from bilateral partners that corruption is a major concern in going forward with assistance to the Sri Lankan Government. It is no secret that Sri Lanka has for long years had a systemic problem with corruption. However, the Rajapaksa administrations under both presidents Mahinda and Gotabaya have taken this to a new level.

President Gotabaya Rajapaksa when serving as Secretary to the Ministry Of Defence was accused of misusing State funds to build a monument to his parents and was featured in numerous military deals during the conflict including the purchase of second hand MiG-27 ground attack aircraft. President Mahinda Rajapaksa and his children are equally tainted with claims of money laundering, embezzlement, and misappropriation of State funds. Former Finance Minister Basil Rajapaksa is known as ‘Mister Ten Percent’ for his alleged profiteering out of Government projects. Rajapaksa relative and former ambassador Jaliya Wickramasuriya was recently found guilty of embezzlement in the United States while another relative Nirupama Rajapaksa featured prominently in the Pandora Papers scandal. The list of accusations, indictments and financial scandals concerning the Rajapaksa family is long and unsavoury.

With such a past record of corruption at the very highest levels of government and what is considered the ruling family, it is natural for international partners, including the IMF, to be cautious in their dealings with the regime. Though there may be sympathy and genuine desire to support Sri Lankan people during this economic calamity it is reasonable to expect certain demands on transparency and checks and balances. Therefore, there is an immediate impetus for the Government to address these concerns and secure the funding necessary to come out of the current economic crisis.

The good confidence building measure would have been appointing a Cabinet of Ministers who would have inspired confidence among the stakeholders as having financial integrity. Instead the current Rajapaksa-Wickremesinghe Cabinet is filled with individuals who are, for a lack of a better word, crooks. Prasanna Ranatunga who was recently convicted for soliciting a bribe and handed a suspended sentence continues as a Cabinet Minister, Tiran Alles, the Minister now in charge of the department of Police had himself claimed that he acted as an intermediary in providing hundreds of millions of rupees to the LTTE in 2005 to ensure a boycott of the presidential election, and Minister of Trade Nalin Fernando was arrested in 2018 while attempting to flee the country over accusations of misappropriating Rs. 39 million while serving as the Chairman of State-owned Sathosa. These are only a handful of examples and the records of many other cabinet ministers are no better.

It is imperative for the international partners to hold the Rajapaksa-Wickremesinghe administration responsible for the disbursement of funds that are to be given to Sri Lanka. However desperate the situation may be, it would be a travesty for funds earmarked for the welfare of Sri Lankans and the recovery of the economy to be syphoned by a corrupt regime. The demands for transparency by our international partners are therefore welcomed.