IMF cannot ignore corruption

It is now abundantly clear that the current economic crisis is a direct result of the policies and mismanagement of the Gotabaya Rajapaksa administration. Reels can be written on the incompetent handling of the economy since the President took office in November 2019. 

These would include, ill-advised tax cuts, bloating of the public sector, increasing Government expenditure, the hairbrain idea to ban chemical fertiliser that has devastated agriculture, the peg of the currency to an artificial exchange rate and much more. 

Yet what would not be apparent at first glance is the systemic corruption that has contributed significantly to Sri Lanka’s current economic predicament. From scandals involving the importation of commodities to the manipulation of the share market and the bond market have been reported. The same individuals who were the perpetrators, enablers and beneficiaries of these corrupt dealings continue to hold positions of power and are entrusted with the recovery.  International partners, including the International Monetary Fund (IMF), have a responsibility towards their own stakeholders and more importantly towards the people of Sri Lanka that any financial assistance provided to the Government is done so in a transparent manner with demands for checks on corruption. 

They will be dealing with one of the most corrupt regimes in Sri Lanka’s history with the ruling elites themselves accused of some of the most blatant financial crimes. At the crux of the problem is the lack of credibility and the public sentiment that the Rajapaksa family including the President and the Prime Minister are corrupt. They have been accused of numerous financial crimes starting from the ‘Mig Deal’ to ‘Helping Hambantota’ to much more.  

These financial crimes committed by the Rajapaksa family or associates have been exposed mostly due to international actions. Eight months ago, the International Consortium of Investigative Journalists (ICIJ) uncovered the financial secrets of former Minister Nirupama Rajapaksa and her husband, Thirukumar Nadesan, niece of the President and the Prime Minister.  

The documents reveal that Rajapaksa and Nadesan together controlled a shell company used to buy luxury apartments in London and Sydney, and art while using them also to make numerous other investments up to $ 160 million. 

In 2020, the UK’s Serious Fraud Office (SFO) discovered a massive financial fraud by Airbus Industries which exposed that the airline company had paid huge bribes to SriLankan Airlines officials between July 2011 and June 2015 to finalise an aircraft procurement deal completely unfavourable to the national carrier. 

Again, individuals associated with the Rajapaksa family were exposed in the scandal. Jaliya Wickremasuriya, a close relative of the President and Premier, and a former Ambassador of Sri Lanka, pleaded guilty in the case filed by the US Department of Justice recently to diverting and attempting to embezzle $ 332,027 from the Government during its 2013 purchase of a new Embassy building in Washington D.C. While international actions and revelations have exposed most of these corrupt dealings and some actions have been pursued in the international sphere, the judicial processes in Sri Lanka have failed to deliver justice in most of them. 

Leading figures accused of numerous financial crimes have either been exonerated or their cases withdrawn by the Attorney General. In such a scenario, the public have a right to be sceptical of the ability of the Judiciary to deliver justice on such high-profile cases within the country.  It is therefore imperative that international financial partners, including the IMF to whom the Government is seeking financial assistance, place certain checks in dealing with a manifestly corrupt regime. 

They must impose strict measures to ensure transparency in the disbursement of any financial assistance and prevent siphoning of such funds meant as assistance to the general public. This will be a significant measure in curbing the blatant corruption that has plagued this nation for decades.