Fortnightly Review & Analysis - Neighbourhood Studies (Vol 2 Issue XV)

Pakistan, Afghanistan, Nepal, Bhutan, Bangladesh, Sri Lanka & Maldives

August 1-15, 2017


New PM Elected, Jumbo Cabinet Sworn In

A new Prime Minister, Shahid Khaqan Abbasi, was elected by the National Assembly, after the incumbent Nawaz Sharif was forced to resign following his disqualification by the Supreme Court. Mr Abbasi got 221 votes (7 short of a 2/3 majority) in the Lower House. The candidate of the opposition PTI got a mere 33 (Imran Khan himself did not condescend to come and vote for his own candidate) and the main opposition party PPP got 47 votes. In his maiden speech after getting elected, Mr Abbasi promised that he will try and achieve 45 years of work in the 45 odd days he was expected to be PM before being replaced by Shahbaz Sharif.

In consultation with party leader Nawaz Sharif, the new Prime Minister formed a 47 member cabinet with more than two dozen cabinet ministers and a score of ministers of state. There were a few major changes made in the portfolios of ministers and one notable absence in the new cabinet. The previous Interior Minister, Chaudhry Nisar is no longer in government and his portfolio has been taken by Ahsan Iqbal who was the planning minister under Nawaz Sharif and the point-man from the Pakistani side in the China-Pakistan Economic Corridor project. The new foreign minister, Khawaja Asif, was earlier holding the portfolios of water and power and defence. Nawaz Sharif’s commerce minister, Khurram Dastgir, is Abbasi’s defence minister. Ishaq Dar has retained the finance portfolio. Sartaj Aziz, the de facto foreign minister under Nawaz Sharif has now become the Vice Chairman of the Planning Commission.

Abbasi has combined the ministry of water and power and ministry of petroleum into a Ministry of Energy and has kept the portfolio to himself. Lt. Gen. Naseer Janjua has been retained as the National Security Advisor. Mushaidullah Khan, who had earlier been forced to resign from the cabinet because of his disclosure that the ISI chief had been behind Imran Khan’s dharna in 2014, has been given the climate ministry. The new ministry has eleven ministers from South Punjab, a clear indication that the PMLN is trying to cement its hold in that region which has been neglected not just by PMLN’s provincial government but also the federal government.

Disqualified yet Defiant: Nawaz Sharif Whips up his Supporters

Former Prime Minister Nawaz Sharif virtually put on the war paint on his face when he embarked on his journey back home on the GT road (which is also the centre of gravity of political power in Pakistan) from Islamabad to his hometown Lahore. The GT Road was a political show of force by Nawaz Sharif to prove to his opponents, in both the ‘establishment’ and the opposition, that while they might have forced him out of the office of Prime Minister with relative ease, he remains a political force to reckon with because he retains the support of his voters. The journey to Lahore which normally takes four to five hours, as completed in four days, and huge crowds turned out in support of Nawaz Sharif. All along the way, Nawaz Sharif made fiery speeches targeting the judges for removing him without reason and insulting the mandate of the people. He also alluded to a conspiracy but never really specified the dramatis personae involved in the conspiracy. From the speeches made by Nawaz Sharif and his party leaders, it is clear that they are hinting at the military establishment which along with judges have orchestrated and engineered Nawaz Sharif’s ouster. The constant theme, or if you will refrain, in Nawaz Sharif’s speeches was how democracy had been undermined and how if he hadn’t been deposed, he would have made Pakistan into some sort of economic dreamland.

Although Nawaz Sharif has blown the bugle for battle, his battle plans are not very clear, either in terms of objective or even in terms of direction. Clearly, regardless of the numbers of people Nawaz Sharif manages to bring out on the roads in his support, there is little to no chance of the Supreme Court reversing his disqualification. His detractors and opponents believe that he is trying the pressure the judiciary before the Accountability court commences proceedings in the Panama Papers and disproportionate assets references that are going to be filed against the Sharif family on the orders of the Supreme Court. There are also reports that the ruling party is considering bring a constitutional amendment that will scrap the controversial Article 62 & 63 which was used to disqualify Nawaz Sharif. But this is easier said than done. Not only Imran Khan, but also the Pakistan People’s Party (PPP) has declared that they are not inclined to support such an amendment. The religious parties like Jamaat Islami and Jamiat Ulema Islam have threatened to take to the streets if there is any move to fiddle with these two Articles. Finally there is the big issue of the judiciary striking down such an amendment as a mala fide act.

Be that as it may, by re-connecting with his voters, and mobilising them by playing a victim, Nawaz Sharif is trying to remain relevant in Pakistani politics. While he has handed the reins of the government to the new Prime Minister, Shahid Khaqan Abbasi, and he will soon have to appoint his replacement as the party president, he wants to retain his political hold over the party and the electorate because once he allows that to slip out of his hands, he will be history in Pakistani politics. Nawaz Sharif also feels that he cannot allow anyone who in the future can challenge his primacy in the party to take the place occupied by him either in the government or in the party. This means that he will block Shahbaz Sharif’s elevation to the post of Prime Minister as well as to the post of party president. That Shahbaz Sharif will stay in Lahore is almost official now. The Pakistan Muslim League – Nawaz (PML-N) candidate from the National Assembly constituency that became vacant after Nawaz Sharif was disqualified, is his wife Kulsoom Nawaz, and not Shahbaz Sharif. There are also murmurs that Shahbaz will be denied even the party presidency. Naturally, this has given rise to rumours that all is not well within the Sharif family. The tweets of Shahbaz Sharif’s latest wife, Tehmina Durrani, questioning the GT Road march and the inconvenience it would put people to as well as the trouble it would create for the Punjab government have only fuelled the rumours of a division within the Sharif family.

Amid Sexual Harassment Charges, Imran Continues Targeting Nawaz Sharif

Opposition leader Imran Khan has continued to relentlessly attack Nawaz Sharif even after the latter’s disqualification. Imran Khan and his party questioned the decision of the former Prime Minister to go to Lahore by GT Road. The fact that the provincial government shut down the busy highway to all traffic in order to facilitate Nawaz Sharif’s march was strongly criticised by the Pakistan Tehrik-e-Insaaf (PTI) which also tried, albeit unsuccessfully, to stop the March by filing petitions in courts. Imran Khan accused Nawaz Sharif of targeting the judiciary and the army and threatened to take to the streets to defend the judiciary.

But even as Imran Khan kept firing his verbal fusillade against the ruling party and its leadership, he suffered a big setback after a young female parliamentarian from his party, Ayesha Gulalai, accused him and some of his cronies of sexual harassment. Ms Gulalai alleged that Imran Khan had sexted her – i.e. sent sexually suggestive text messages – and had been doing this for nearly four years. Not just Imran, but also his close crony, Naeemul Haq, ‘proposed’ marriage to her. The scandal was a Godsend for the PMLN which questioned Imran Khan’s moral character and along with Gulalai, wondered if his behaviour wouldn’t make him liable for disqualification under the very same Articles 62 & 63 under which Nawaz Sharif had been disqualified. The sex scandal, while making waves, has however still not gained the critical mass that could snowball into irretrievably damaging Imran Khan. But it is a potential bomb that could blow up on Imran’s face when the time to get rid of him comes.

Terror Attacks Raise Questions over Claims of Breaking the Back of Terrorists

The tall claims being made by the Pakistani security agencies – the Pakistan army has claimed clearing 90% of the area of the Rajgal Valley in Khyber agency where the military is carrying out Operation Khyber IV – of having broken the back of the terrorists seemed to fall flat once again in the face of yet another series of terror attacks, many of them targeting the security forces. On the eve of Nawaz Sharif’s GT road March, an explosives-laden truck exploded on the outskirts of Lahore. Fortunately, only a couple of people died in the blast but nearly 50 people were injured. Over a hundred vehicles were damaged in the explosion that occurred in a parking stand. The truck had reportedly been parked in the same place for over three days and despite a report of an abandoned vehicle to the police, no action was taken.

A suicide bomber riding a motorcycle blew himself next to a military truck near a bus stand in Quetta, killing 15 people, including eight soldiers, and wounding another 40. Although no group claimed responsibility for the attack, Interior Minister Ahsan Iqbal claimed that the attackers came from ‘another country’. A day earlier, a roadside bomb was detonated in Bajaur agency killing 3 people travelling in a bus and injuring another 24. The same day, terrorists not only gunned down two cops who were guarding a Shia mosque in Dera Ismail Khan but also killed a DSP and his guard in Karachi. Pamphlets recovered at the crime scene claimed that the attack had been carried out by a new group Ansarul Sharia Pakistan, which in recent weeks has also claimed other attacks on law enforcement agencies personnel. A few days before this attack, an ISI official was gunned down in Multan. Around the same time, a suicide bomber blew himself up when an ISI led team conducting an intelligence based operation in Upper Dir raided a house. Four soldiers, including an army major, were killed in the blast.

Lashkar-e-Taiba/Jamaat-ud-Dawa forms Political Party with Muslim League Label

Even as Pakistani authorities extended by another two months the preventive detention of the 26/11 terror attacks mastermind and Lashkar-e-Taiba/Jamaat-ud-Dawa (LeT/JuD) chief Hafiz Saeed, and has decided the keep both the JuD as well as its ‘welfare’ wing, Falah-e-Insaniyat Foundation (FiF) on the terror watch list, the terror outfit has floated a new political party – Milli Muslim League (MML). Although the party has still not been registered by the Election Commission of Pakistan, the move to form a political party is being seen as the culmination of a long process initiated by the Pakistani establishment to ‘mainstream’ the jihadist outfit. The danger however is that instead of mainstreaming the jihadists, the Pakistani state will end up jihadising the mainstream.

Although the LeT/JuD has always treated democracy as un-Islamic, the new party has declared that it will advance the ‘ideology of Pakistan’, adhere to the 1973 constitution, transform the country into an ‘Islamic welfare state’ and fight for ‘freeing Kashmir from India’s clutches’, it has at the same time made clear that it will continue to strive for an Islamic caliphate or emirate. The president of the party, Saifullah Khalid, denied any direct links with the LeT/JuD but did not deny the ideological affiliation with the internationally designated terrorist organisation. He also openly expressed his gratitude for the yeoman services rendered by Hafiz Saeed! Interestingly, he railed against the political class, especially the former Prime Minister, Nawaz Sharif, who he accused of corruption and being friendly towards India. In its first public rally, the MML announced that it would put up a candidate in the by-election for the National Assembly seat vacated by Nawaz Sharif. This is seen as being a spoiler for the Pakistan Muslim League-Nawaz (PMLN) because according to some analysts the constituency is likely to see a very keen contest between the PMLN and PTI and because the MML will be able to attract a few thousand votes, it could make the difference between victory and loss for the PMLN since many of PMLN’s core supporters and the MML’s prospective voters are common.

Missing Persons in Sindh

The missing persons (enforced disappearances) saga seems to have returned with a vengeance, this time in Sindh, where at least a dozen human rights activists, most of them Sindhi nationalists, have been ‘taken away’ (read kidnapped) by security force personnel. Despite widespread protests in Sindh – Pakistan’s ‘independent’ media has either ignored the story or unreported it – many of these activists remain ‘missing’. Not only have people been picked up, family members of some of the Sindhi nationalists who have gone underground have also been warned that they would suffer horrible consequences if their these people gave any protest call on the occasion of independence day. Clearly, the irony of celebrating independence day by threatening the people who are supposed to have become independent has escaped the ‘kidnappers’ belonging to the intelligence agencies. Pakistan’s ‘independent’ judiciary, which is so brave and daring when it comes to taking on the civilian government, has so far failed to provide any relief, much less succour, to the family members of the ‘missing’ persons against the illegal and brutal actions of the ‘deep state’ and the military establishment.


McCain Plan and US policy

Although the delay in unveiling the Trump administration’s new Afghan policy continues, the likely trajectory of the policy can be discerned from statements and interviews of top US officials. The broad elements of this policy are likely to include greater pressure on Pakistan to change what Gen. HR McMaster, National Security Advisor (NSA) to the US President, has called ‘Pakistan’s paradoxical policy’ of supporting terrorists who also cause great harm to that country. According to the US NSA, Pakistan will have to get rid of the safe havens and support bases given to the Taliban, Haqqani network and other terror groups operating in Afghanistan. Another element of this policy is to give greater power and flexibility to the US military to do what it needs to do to win the war.

Meanwhile, Senator John McCain has come up with his detailed strategy of stabilising Afghanistan and ensure that it ‘never again becomes a sanctuary for terrorists to attack the US, its allies and its core interests’. One of the pillars of this strategy is ‘imposing graduated diplomatic, political and military costs on Pakistan’ if it continues to support the Islamist insurgents in Afghanistan. McCain’s strategy advocates increasing troop levels in Afghanistan and giving a freer hand to US forces to target the Taliban and other terror groups. The strategy also involves a regional dialogue to promote reconciliation in Afghanistan. The problem however is that with President Trump reportedly asking some very tough questions about the Afghan war and even wanting to replace the commander of US forces in Afghanistan, there is growing uncertainty inside Afghanistan over whether the US will abandon the country. At a time when the terrorist attacks are mounting by the day, such uncertainty will not only undermine the resolve of the Afghan people and Afghan state but also strengthen the hands of the terrorist groups and embolden and encourage them to continue mounting attacks.

Security Situation

Islamist terror groups continued their savage onslaught on Afghanistan, targeting diplomats, security forces, and civilians and even occupying, albeit for brief periods district centres in not just the South of Afghanistan but also Northern Afghanistan.

In Kabul, a suicide car bomb attack targeted the Iraqi embassy, ostensibly in retaliation to the fall of Mosul to Iraqi forces. The Islamic State claimed responsibility for the attack which fortunately did not cause any casualties except of the two attackers. But in another bombing of a Shia mosque in Herat about 30 people were killed and over 60 injured. Although no group claimed responsibility for the attack – the Taliban expressly denied any involvement – it is believed that it was one again the Islamic State terrorists who were behind this attack. The Taliban also denied reports that they had worked together with the IS terrorists in massacring 50 villagers in the Sar-e-Pul province in Northern Afghanistan. The savagery of the massacre in Mirza Oleng village where even women and children were not spared was quite extraordinary, and while all reports suggested that the operation was a joint IS and Taliban attack, the Taliban spokesman disingenuously wondered why civilians were being targeted. This was rich coming from the Taliban who have been responsible for the killing of thousands of Afghan civilians. Quite clearly, the massacre punctures the self-serving propaganda that somehow the Taliban are different from the IS and that while it is possible to do business with the former, the same isn't possible with the latter. It is precisely this sort of muddled thinking – the Western version of the Pakistani policy of ‘good terrorist, bad terrorist’ – that has brought Afghanistan to the current pass. Meanwhile, the Taliban managed to capture a district headquarter of Ghormach district in the Faryab province. In the south, however, the af security forces managed to beat back a Taliban attack on the Gereshk district in Helmand province.


Sushma Swaraj Visits Nepal to Attend BIMSTEC Meet

India’s External Affairs Minister (EAM) Sushma Swaraj visited Nepal (August 10-11) to attend foreign ministerial meeting of Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). This was Ms. Swaraj’s sixth visit to Nepal and the first since the Deuba government assumed office in June 2017. The EAM called on the President of Nepal, Smt. Bidya Devi Bhandari and Prime Minister Sher Bahadur Deuba. While there is no official confirmation on the Doklam issue having been discussed with the Nepalese leadership, it is widely speculated in the media that EAM was likely to have conveyed India’s point of view to the Nepalese leadership at the highest level. It may be noted that Ms. Sushma Swaraj’s visit to Nepal was taking place only a few days before that of the Chinese Vice-Premier Wang Yang and at a time when Beijing and New Delhi are locked in a border standoff at Doklam, with both countries seeking greater cooperation from Kathmandu.

During her call on the President, EAM recalled the extremely successful visit of former President, Shri Pranab Mukherjee to Nepal earlier this year which re-strengthened the age old ties between the two countries. She also mentioned the enthusiasm with which India was looking forward to the upcoming visit of Prime Minister Deuba to India scheduled for August 23-27.

Member States Agree to Revitalize BIMSTEC

Nepal, as the current chair of BIMSTEC, hosted the Ministerial Meeting of BIMSTEC countries in Kathmandu. A press release from the foreign ministry stated that the meeting reviewed the progress of the outcome of the BIMSTEC Leaders’ Retreat held in Goa, India on October 16, 2016 and the status of implementation of various activities following the 17th Session of the Senior Officials’ Meeting held in February, 2017.

The Ministers adopted the Joint Statement that seeks to forge stronger ties and cooperation among the member states to revitalise the BIMSTEC process. The meeting also endorsed the appointment of the next Secretary General of BIMSTEC from the People’s Republic of Bangladesh with the current Secretary General from Sri Lanka completing his tenure.

On the sidelines of the BIMSTEC Meeting, the EAM also met the Bhutanese Foreign Minister Damcho Dorji, Wasantha Senanayake, Sri Lanka’s Minister of State for Foreign Affairs, Nepal’s former PM and now Leader of Opposition K.P. Sharma Oli, former PM and Maoist leader Pushpa Kamal Dahal Prachanda, Madhesi Morcha leaders of the Rashtriya Janata Party of Nepal (RJPN).

RJPN to Contest Polls even if Parliament Rejects Constitution Amendment Bill.

The agitating Rashtriya Janata Party Nepal (RJP-N) has decided to participate in the third phase of local level elections in Province 2 scheduled for September 18. The decision followed a meeting between the Prime Minister and the RJP-N at which the ruling coalition assured RJP-N of putting the Constitution Amendment Bill to vote at the earliest. However despite the agreement, the ruling parties do not have the required support of two-third lawmakers to endorse the desired amendment. The RJP-N has said it will accept results of the voting. Prime Minister Deuba has said that he would move ahead with the amendment process after his India visit scheduled for August 23-27. The main opposition party, the Communist Party of Nepal-United Maxist Leninist, or CPN-UML, has warned that putting the Amendment Bill to vote will further distance the party from the ruling coalition. UML’s Secretary Pradeep Gyawali stated that his party would lend support to the amendment. The CPN-UML regarded the proposal a political scheme of the ruling coalition to keep the Madhesis on their side in the run up to polls. However, the Minister of Commerce and a Nepali Congress leader, informed that the ruling parties are determined to take the CPN-UML into confidence to get the amendment endorsed.

PM Deuba asks Election Commission to Prepare for Provincial and National Polls

Prime Minister Sher Bahadur Deuba has asked the Election Commission (EC) to prepare for holding both the provincial and federal polls in one go. PM’s statement comes amid the Election Commission’s call to announce the date of the provincial and federal elections by August 17. Deuba clarified that holding the elections together was necessary to ensure timely polls for meeting the Constitutional deadline and also to cut the costs. When the EC officials pressed for endorsement of two election-related laws, Deuba claimed that the laws would be passed soon. Besides, the Constituency Delimitation Commission would submit its report within the stipulated period. The EC also requested the government to decide immediately whether to adopt electronic voting as it needs time to train people on the use of electronic voting machines.

However, the Chief Election Commissioner (CEC) Ayodhee Prasad Yadav proposed to hold elections to the federal House of Representatives before the Provincial Assembly elections. He added that there was not enough time to hold both the elections before January 21, 2018, the deadline set by the Constitution to hold the polls. Accordingly to the CEC provincial polls will be impossible to hold as laws related to the elections and the reports of Constituency Delineation Commission are not finalized yet. Yadav proposes to hold the parliamentary polls in November-December only if the government announces the date within next one week.

China Announces USD 1 million Support for Flood Victims

In Nepal, incessant rains flooded hundreds of villages leaving around 110 people dead. Across Nepal’s southern border, 13 districts have been hit by severe flooding. Boats and helicopters are being used to distribute food packets medicine and drinking water to those affected. Over 200,000 people have been provided with temporary shelter across 250 relief camps set in school and government buildings. Approximately six million people have been affected by the floods and over 48,000 homes submerged in the Tarai region. Nepal Red Cross warned that shortage of drinking water and of food could create a humanitarian crisis.

The Chinese government has announced a donation of USD 1 million as an emergency fund. Vice-Premier of State Council of the People’s Republic of China Wang Yang made the announcement during Nepal-China Deputy Prime-Minister level meeting.

Nepal China Agreement on Post-Quake Reconstruction, Mining and Investment

Nepal and China have signed three agreements on bilateral cooperation during the visit of Chinese Vice-Premier Wang Yang. These include agreement on post-earthquake improvement of Araniko Highway, construction of a bridge in Timure of Rasuwa district. China will provide RMB 1 billion for these projects, which are considered extremely vital for bilateral trade. The second agreement covers carrying out feasibility study on exploration of petroleum products and minerals in various parts of Nepal. China is likely to invest Rs. 2.25 billion under this project. The third agreement is about promoting Chinese investments in Nepal. According to this pact, China will invest in modernization of agricultural and infrastructural development including roads, tunnels and electricity transmission lines.

Nepal’s Finance Secretary Shanta Raj Subedi and China’s Commerce Vice-Minister Yu Jianhua signed the agreements in Kathmandu on August 15. Nepal’s Deputy Prime Ministers Bijay Kumar Gachhadar and Krishna Bahadur Mahara and the Chinese Vice-Premier Wang Yang were present when the agreements were being signed. The Nepali delegation requested China to resume trade activities via Tapopani border point in Sindhupalchok district. The trade activities via this point got disrupted post-earthquake in Nepal.

The Chinese Vice-Premier Wang Yang paid a courtesy call on President Bidya Devi Bhandari. Smt. Bhandari expressed satisfaction over the ongoing mutual cooperation in various fields between Kathmandu and Beijing. The Vice-Premier also paid a courtesy call on Prime Minister Deuba. Besides appreciating the growing economic engagements in fields of trade, tourism and investment, the Prime Minister reiterated the commitment of Nepal for the implementation of agreements reached between the two countries in the past. In both the meetings, the Vice-Premier appreciated Nepal’s One China Policy. Mr. Wang Yang assured Nepal of continued Chinese support and cooperation to the socio-economic development efforts of Nepal.


Doklam Very Much a Bhutanese Territory

According to reports, Bhutan has forcefully countered reports in Chinese media that it has accepted Beijing’s claim over the Doklam plateau which has been subject of intense military face-off between Chinese and Indian forces and asserted that there was no shift in its instance.

Bhutan pushed back the Chinese propaganda as report in Chinese media were seen with official sources in Bhutanese government, informing that Doklam was very much a Bhutanese territory. Thimpu’s reiteration comes as the Indian and Chinese troops continue to reinforce their position not far from the Sikkim-Tibet-Bhutan tri junction. Bhutan had on June 29 issued a press statement which clearly stated that the construction of road by the Chinese in Bhutanese territory was a breach of trust which would later affect the process of demarcating the boundary between the two countries. Bhutan had further said that talks between the two countries were underway. It also recalled the written agreements of 1988 and 1998 stating that they agreed to maintain peace and tranquility in their border areas. The two countries also agreed to maintain status quo on the boundary as before March 1959 and refrain from taking any unilateral action, or use of force to change the status quo. Bhutan hopes that status-quo in Doklam area will be maintained as before 16 June 2017.

Meanwhile, during a sideline meeting of Bay of Bengal Multi-Sectoral, Technical and Economic Cooperation (BIMSTEC) Foreign Ministers, the Indian External Affairs Minister Smt. Sushma Swaraj reaffirmed Indian stand and support to the Bhutanese Foreign Minister Damcho Dorji in Kathmandu. The meeting was seen as a message to China that India and Bhutan continue to stay on the same page even as Beijing continues to unleash its tirade. The Bhutanese Foreign Minister hoped of a peaceful settlement of the Doklam dispute.

The India China stand-off in Doklam is almost two months old with neither side showing any signs of backing down. For both China and India the cost of unilateral withdrawal is very high. Meanwhile India continues to pump in additional troops and weapon system on the entire eastern front in face of the growing belligerence from China on Doklam.


Floods in Bangladesh Hit 20 districts.

Bangladesh is experiencing floods for the fourth time this year affecting the northern, north-eastern and central parts of the country. Approximately 4 million people are reported to have been affected. The worst affected districts are Dinajpur, Kurigram, Lalmonirhat, Rangpur, Naogaon, Sirajganj, Gaibandha, Thakurgaon and Panchagarh. The government has opened 1,392 emergency flood shelters. An estimated 282,479 people have taken refuge.

Hundreds of people are suspected to have died and millions displaced across the region. The rescue missions have set up shelters and efforts are there to get food, water and other amenities to the victims. According to Bangladesh’s disaster management Minister Mofazzal Hossain Chowdhury Maya, floods had already hit 20 districts and further 9 more districts including the low lying areas of Dhaka could be affected soon.

Sri Lanka

Foreign Minister Ravi Karunanayake Resigns amid Bond Scam Probe

Sri Lanka’s Foreign Minister Ravi Karunanayake resigned on August 10 after being linked to a controversial financial trader under investigation for allegedly causing millions of dollars of losses to the country, according to a Committee on Public Enterprises (COPE) report. Karunanayake was accused to have connection with Arjun Aloysius whose family owns the controversial bond trading company Perpetual Treasuries Ltd. engaged in alleged dodgy bond transaction of February 2015. A Presidential Commission of Inquiry has now revealed many incriminating details of Minister Karunanayake’s alleged collusion with Aloysius. Perpetual Treasuries Ltd. had paid the monthly rental for the penthouse occupied by Minister Karunanayake and his family while he was then Minister of Finance Minister. The Joint Opposition (JO) ratcheted up the pressure for his removal by filing for No Confidence Motion after Karunanayake’s initial denials, counter accusations and aggression followed by widely discussed answer given to the Presidential Commission of Inquiry – ‘I Knew Nothing.’ It should be noted here that Arjun Aloysius is the son-in-law of former Central Bank Governor Arjuna Mahendran, who was at the center of the infamous ‘Bond Gate’ and was subsequently denied second term as the governor.

At the inquiry proceedings last week, Karunanayake, also the deputy leader of the ruling United National Partner (UNP), admitted his family had dealings with the controversial bond dealer but insisted he was not involved in bond dealings. Karunanayake, who was Finance Minister when the scandal broke, was shifted to the foreign ministry in a cabinet reshuffle in May 2017.

Karunanayake was under pressure to resign before voting for the No Confidence Motion, as his association with a scam, punched a hole in Unity Government’s electoral promise of ‘good governance’. His resignation on August 10 was hailed by Prime Minister Ranil Wickremesinghe as reflecting government’s commitment to tackling corruption. On his part, Karunanayake tried to earn some brownie points by flagging ‘matter of principle’ card, resigning with pride and this marks a new political culture and dared those who were accused of allegation charges to follow the suit.

Minister of Development Assignments Tilak Marapana was quickly appointed as Foreign Minister; the third in the Yahapalana (meaning ‘good governance’) government. He was earlier Minister for Law and Order Minister and was forced to resign in 2015 after he reportedly defended a controversial maritime security company linked to a major corruption case. In May this year Marapana was re-inducted into the cabinet as Minister of Development Assignments.

Canagey Resigns from ICTA on Orders of President Sirisena

Muhunthan Canagey, the CEO and Managing Director of the Information and Communication Technology Agency (ICTA) of Sri Lanka announced his resignation from the agency after being asked by President Sirisena to do so. This was another shocking development Karunanayake’s resignation during the fortnight. Canagey’s resignation comes after he questioned issuing of spectrum worth USD 25 million to the Capital Maharaja Group without any public auction or tender. In his opinion, the spectrum; a national asset, should have been used for digitization.

Some excerpts from his social media post: “I will never be part of aiding and abetting any fraud or corruption or delay in any implementation of Digitization in Sri Lanka. I have been raised from a child to speak my mind, boldly, fearlessly and honestly which are the very basic principles I live by and the rights that should prevail to me and any other human being. I am not willing to let go of that just because I need to protect my job at ICTA. Under this circumstance it is regrettable that I am tendering my resignation and start commencing my handing over of my duties.”

Mattala Airport to be Leased to Indian Company

Sri Lankan government has sought Cabinet approval for a 40-year lease of the Mattala International Airport to an Indian company. This comes soon after the agreement to lease the Hambantota Port to a Chinese company was inked last month. An Indian company had made a bid to develop the airport which was built under the previous regime with financial assistance from China. The airport and the harbour are in close proximity to each other.

PM Tells Parliament that Hambantota Port Agreement can be Amended

The agreement signed between the Sri Lankan Government and China Merchant Holdings to develop the Hambantota Port contains a clause which enables further amendments, Prime Minister Ranil Wickremesinghe told Parliament. Ports Minister Mahinda Samarasinghe had publicly stated that a clause enabling amendments in the future were included in the agreement while President Maithripala Sirisena had also given a similar assurance to Ceylon Petroleum Corporation (CPC) unions.

He said that the parliament needs to determine the amendments that need to be made, citing that the CPC trade unions had not raised any issues on the agreement other than being allowed to handle oil bunkering but the Ports Authority had not agreed to it.

The Hambantota Port had up to date incurred operating losses of Rs.9,814 million with an overall revenue of Rs.7,119 million. The overall loses had amounted to Rs.51,530 million. The total debt repayment to date had amounted to Rs.40, 813 million. PM Ranil justified his decision by saying we cannot leave this burden to future generations to settle. It will be possible to provide much needed employment opportunities to the younger generation.

China Not to Use Lanka’s Strategic Location for its Security Needs: Chinese Envoy

The Chinese Ambassador to Sri Lanka, Yi Xianliang, on August 6 assured Sri Lankans that China will never use Sri Lanka’s strategic location in the Indian Ocean for its strategic and security needs. He said China will make every effort to support Sri Lanka’s economic and social development and will never use this advantage for China’s strategic or security needs. He said “We (Chinese) have built infrastructure, hospitals, airport, harbour. Sri Lanka also is the first country to get the largest donation and financial assistance from China. We do not have any navy soldiers or any other soldiers in Sri Lanka. We have no intelligence in Sri Lanka. We have no such people present in Sri Lanka except the Chinese diplomats present here and I am the representative of China to Sri Lanka. But we have so many CEOs, Engineers, businessmen, teachers, professors in Sri Lanka. They are strengthening the cooperation between China and Sri Lanka and assist Sri Lanka and develop this island country and develop the economy and social affairs. We do what we say and we have kept our promise. So trust the Chinese as we are true friends of Sri Lanka.”

President Yameen Conferred Lifetime Achievement Award

President Abdulla Yameen Abdul Gayoom has been conferred the Lifetime Achievement Award at the Asia Human Resources Development (HRD) Awards 2017 held in Putrajaya, Malaysia on August 8. The Award was in recognition of his outstanding contributions towards nation-building and people development, and for the strength and support extended to professionals in the HRD field. In an acceptance message delivered in absentia at the ceremony, the President emphasised acceptance of the award on behalf of the people of the Maldives, noting that the Award was an acknowledgement of collective success.

The Lifetime Achievement Award is conferred on individuals who have either promoted the cause of learning or pioneered initiatives that have impacted people in a significant manner.

Abdulla Yameen 'Admits Receiving Bags of Stolen Cash'

As per a report published by Al Jazeera, Maldives President Abdulla Yameen has apparently admitted receiving ‘bags of stolen cash at his private residence’ after an Al Jazeera investigation named ‘Stealing Paradise’ exposed how he and his former deputy coordinated the theft of millions of dollars from state coffers. Abdulla Yameen has been accused of reversing much of the Maldives' democratic gains. Al Jazeera's investigation revealed how Yameen and Adeeb plundered at least $79m paid by tourism companies to the Maldives' treasury. Secretly filmed confessions obtained by Al Jazeera show three of Adeeb's associates explaining how they carried cash to the president and many politicians in the country. The investigation also found Yameen's ministers and aides plotted to launder up to $1.5bn through the Maldives central bank.

As per Al Jazeera report, Yameen told ruling party supporters that "Al Jazeera only saw the cash that entered my house, they did not see anything else." Yameen blamed his former deputy, Ahmed Adeeb, for the giant embezzlement scheme. He has previously said he was not aware the cash he received from Adeeb had been stolen, saying he believed it was gifts he had received from businessmen who supported him. On August 15, Yameen said the stolen money was also spent on electing ruling party officials to the parliament. Yameen has admitted that, “at the time, there were some lawmakers we wanted to get elected. Ahmed Adeeb spent on them. The cash that entered my house was not halal. And if those lawmakers believe that, they must resign."

Yameen’s apparent admission has caused uproar in the Maldives, with the opposition calling for his immediate resignation. The ruling Progressive Party of the Maldives issued a statement saying the president’s comments had been misconstrued and taken out of context. Yameen on his part has said that he would recover the stolen money "to save" his reputation, adding that Adeeb could only be freed from prison if he returns the embezzled funds.