by Taraki; Daily Mirror, Colombo, January 7, 2004
Lankan leaders providing political building blocks for the LTTE?
Money and resources are at the bottom of almost all problems and conflicts of humanity. The conflict in Sri Lanka too can be explained from this perspective.
The LTTE negotiators did not understand the nature of this fundamental problem when they entered the peace talks. Their main intent at the time was to work out a mechanism that would help them provide the dividends of peace to the Northeast. But they left the matter largely in the hands of the United National Front’s negotiating team, which in due course presented them (after consultations of course) with the concept of the Joint Task Force (JTF).
The UNF team was able to make the LTTE’s chief negotiator believe that the JTF was going to be a good administrative mechanism that would help the Government of Sri Lanka and the Tigers jointly utilise funds for rehabilitating and building the war ravaged parts of the northeast. (There was even speculation that the erstwhile leader of the EROS, Veluppillai Balakumar, was going to be nominated as the LTTE’s main representative in the JTF)
That the Tigers who had no political status in the GOSL would have decision making power over the utilisation of funds (in whatever form) meant that the JTF had to be a semi-independent body – functioning outside the parameters set out by the constitution regarding the management of the country’s finances.
Hence no sooner was word out that a Joint Task Force would handle funds for the northeast semi-independently of the Sri Lankan government system, the opposition and ‘concerned patriots’ got ready to challenge the legality of the body in the Supreme Court.
It was clear as daylight to any who cared to turn the constitution’s chapter on finance that the JTF wouldn’t survive the scrutiny of the Supreme Court.
So the much-hyped JTF idea was dropped. Then the UNF negotiators came up with another idea. And then another called SHIRN – which still uselessly survives in Kilinochchi.
The experience the Tigers gained by their failure to secure a mechanism for jointly acquiring and spending funds to rebuild the northeast brought them face to face with the stark truth about the Sri Lankan fiscal system.
The truth which is fundamental to the conflict is that there isn’t an iota of space for even basic fiscal devolution in the Sri Lankan constitution and system of administration.
In fact, the constitution expressly prohibits the sharing of the country’s wealth. The Parliament has the sole control over Sri Lanka’s public finance.
Article 148 of the constitution states very clearly: “Parliament shall have full control over the public finance. No tax, rate or any other levy shall be imposed by any local or any other public authority, except by or under the authority of laws passed by Parliament or of any existing law.”
The constitution is also very categorical that there shall be only one consolidated fund of the Republic “into which shall be paid the produce of all taxes, imports, rates and duties and all other revenues and receipts of the Republic not allocated to specific purposes” (Section 1 of Article 149).
It is also expressly stipulated that no sum can be withdrawn from the fund except under the authority of a warrant by the minister of finance and that no such permission can be issued unless the sum has been passed by a resolution of Parliament for a specific financial year “or is otherwise lawfully charged on the consolidated fund”.
Therefore any fund for rehabilitating and rebuilding the Northeast the utilisation of which the Tigers too can control would be illegal.
Many would argue that all this is history now.
No. The negotiations on setting up a body to give the Tigers partial control over funds to rebuild the Northeast may not have got anywhere practically – but politically its has thrown up some interesting issues which should be grasped correctly by squabbling rulers in Colombo if they have any genuine interest in resuming talks to end the conflict (if anyone thinks the ceasefire ended the conflict they are pathetically wrong).
Let me first paraphrase the politically most important of these issues. “The Sri Lankan Parliament has total control over the country’s wealth. The unitary nature of the Sri Lankan state necessarily requires a system of elections (however modified) in which the majority Sinhalese would constitute the majority of members of Parliament and hence the government. Therefore Sinhalese not only have sole and full control over the wealth of the nation but also expressly prevent anyone from sharing it legally”.
In an ethnic conflict the argument carries weight in the light of recent negotiation patterns in similar situations elsewhere in the world. Resource and wealth sharing is one of the fundamental issues in the peace processes to settle conflicts in the mineral and oil rich regions of Africa, including Sudan and Nigeria.
The so called international community does not find it uncommon that an ethnic group in conflict is demanding what it perceives to be its fair share of the national wealth and the resources which it considers its own – an integral part of its homeland.
Professor Itse Sagay, a former head of Law department of University of Benin, in a lecture on the question in Nigeria states: “Resource control in my view involves three major components: The power and right of a Community or State to raise funds by way of tax on persons, matters, services and materials within its territory. The exclusive right to the ownership and control of resources, both natural and created within its territory. The right to customs duties on goods destined for its territory and excise duties on goods manufactured in its territory. Resource control, which in certain circumstances can be referred to as fiscal federalism (in a federation), goes hand in hand with true federalism. This was recognised and implemented faithfully in (Nigeria’s) Independence and Republican Constitution -1960 and 1963.
The question of fiscal devolution and resource control have rarely been central to the conflict resolution process in Sri Lanka. However much the leaders in Colombo may wish to overlook the matter today it is an inescapable fact that it is considered quite legitimate in all conflict resolution processes.
The Jaffna GA’s well-documented statement on 27 December 2003 in Chavakachcheri that the GOSL has not spent a cent on rehabilitation and development in Jaffna in the last two years has reinforced the position of those who argue that the central issue of the conflict is the sole and full control the Sinhalese enjoy over the wealth and resources of the country.
Apart from the central role it assumes in the resolution of ethnic conflict, the concept of ‘fiscal federalism’ is considered a stimulant for economic development in fast growing economies.Fiscal devolution promotes better tax collection and impels state governments to provide better services and infrastructure necessary for development, economists say.
Three years ago India’s Eleventh Finance Commission and the Eightieth Amendment to the Indian Constitution further expanded the scope of fiscal devolution in that country mainly with the view to stimulating economic growth.
In arguing his case for greater fiscal devolution the architect of Andhra’s success story Chief Minister Chandrababu Naidu says: “The performance of Andhra Pradesh’s State tax collection was better than Central taxes. The growth rate of the State’s own major taxes was 11.5 per cent while Central taxes collection in Andhra Pradesh was 5.4 per cent while comparative Central taxes all India is -1.68 per cent” (Hindu, May 7 2002).
Sri Lanka’s brush with fiscal devolution in the 13th Amendment was a sham through and through.
No argument is compelling enough to move the Sri Lankan leaders and their followers in the south to even remotely consider the prospect of fiscal devolution even as an interim measure – or for that matter even fiscal federalism.Such is the nature of their myopia.
They know not that they are providing the political building blocks of the LTTE’s revenue system.
http://www.dailymirror.lk/2004/01/07/opinion/3.asp
originally published January 7, 2004