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The dawn of the New Year saw several crucial political developments occurring this week. As a result of this, battle lines are being clearly demarcated between major political parties, their initial target being the local government elections that have been scheduled for early February.

Arguably the most critical of the events that occurred this week was the handing over of the report of the Presidential Commission of Inquiry into the sale of Central Bank bonds by its commissioners, Supreme Court Justice K T Chithrasiri, Supreme Court Justice Prasanna Jayewardena and Retired Deputy Auditor General Kandasamy Velupillai to President Maithripala Sirisena on Saturday.

The Commission was appointed by President Sirisena to conduct an inquiry into the issuance of Central Bank bonds that took place during the time period of February 1, 2015 to March 31, 2016. The tenure of the Commission was extended several times. Its final extension was until December 31, 2017.

At the time of writing, the voluminous 1400-page report, which incorporates over 100 annexures including evidence given by 70 witnesses, has not been made public but there have been several requests to the President to do so.

Opposition parties

These requests have been made not only by opposition parties such as the Janatha Vimukthi Peramuna (JVP) but also from Sri Lanka Freedom Party (SLFP) ministers within the National Unity government which is a coalition between the SLFP and the United National Party (UNP).

While the President was to make a public statement on the issue yesterday (Wednesday), the most likely outcome was a referral of the report to the Attorney General who could then decide on what actions, if any, need to be taken. In the meantime, the big bone of contention was whether the report would be made public.

Already, the JVP has been in the forefront in making the demand for publication of the report. JVP leader Anura Kumara Dissanayake told a news conference that the President was duty bound to implement the recommendations proposed by the Commission and take action against those implicated by forwarding the report to the Attorney General.

“It is the President’s responsibility to present the report to the people because they have a right to know how so much of public funds had been misappropriated and about those involved,” Dissanayake said and added that the JVP would be making a formal request for a copy of the report under the Right to Information (RTI) Act.

While there is justification in the JVP’s claims, its motives are clear: to gain a political advantage for the upcoming local government election. While they may not say so publicly, several SLFP ministers are known to have suggested to the President that releasing the report would be politically advantageous for the SLFP at the poll, especially given the divisions within the party.

This is because those likely to be involved in the Central Bank bond issue are mostly UNP ministers and parliamentarians. Evidence led before the Commission revealed many of them had telephone conversations with those at the centre of the controversy. It also led to the resignation of high-profile UNPer and former Finance Minister Ravi Karunanayake who admitted to living in an apartment for which the rent was paid for by Arjun Aloysius, a key figure in the alleged scam.

Local government polls

By releasing the report, it is possible for the President to take the moral high ground and state that it was he who unearthed corruption in this government and take credit for this, thereby framing the mainstream SLFP as the cleaner, transparent party in the ruling coalition.

That would of course be detrimental to the UNP but it would also take the wind out of the Joint Opposition (JO)’s sails as they reorganise themselves as the Sri Lanka Podujana Peramuna (SLPP) for the local government polls. The JO is accusing the current government of corruption but many of its own leaders are facing charges of corruption when they were in office during the tenure of Mahinda Rajapaksa’s Presidency.

While the prospect is tempting for President Sirisena, it will come at a price: a potential deterioration of relations with the UNP. The two major parties in Sri Lankan politics have never cohabited in government prior to 2015 and when they are in coalition as they are now, a turbulent relationship is only to be expected. Indeed, this has been the case.

In this context, another noteworthy deadline elapsed last week: December 31, 2017 saw the end of the period which bound the UNP and the SLFP to a Memorandum of Understanding (MOU) for the purpose of forming a National Unity government. The original MOU was due to end in September 2017 but was extended until the end of the year.

Both parties are playing their cards close to their chest on the MOU but it is very clear that neither is in a hurry to tear up the agreement either. They have also indicated that any evaluation of the future of the MOU will be after the conclusion of the local government elections in February.

Education Minister and UNPer Akila Viraj Kariyawasam was to say that the MOU will be revisited after the elections, a sentiment echoed by Agriculture Minister and SLFP General Secretary Duminda Dissanayake. “We will convene the SLFP Central Committee no sooner the local government poll is over to make a decision on extending the MOU as we have done previously. We will have talks with the UNP once the election is over,” Dissanayake explained.

However, it was also evident that there are differences of opinion on this issue within the SLFP. Minister Susil Premajayantha publicly castigated former President Chandrika Kumaratunga for allegedly suggesting that the MOU should be extended. However, it transpired that Kumaratunga had made no such suggestion. In any event, Premajayantha is viewed by the mainstream SLFP as having strong loyalties to the dissident SLPP faction.

Ironically, a strong showing by the mainstream SLFP at the local government elections would consolidate President Sirisena’s leadership and enable him to take the initiative to extend the term of the National Unity government by extending the MOU with the UNP.

SLFP and the JO factions

Conversely, if the mainstream SLFP performs less than optimally and the SLPP is able to demonstrate its strength, there would be pressure on President Sirisena to unite the mainstream party with its dissident faction, possibly under terms dictated to by the SLPP. That would pose an interesting conundrum for President Sirisena because, even if the SLFP and the JO factions unite in Parliament, they still wouldn’t have a simple majority.

Meanwhile, the SLPP is sparing no effort to make a lasting impression on the voter, knowing that this election would make or break its prospects- and that of the Rajapaksas. It formally launched its local government campaign at the Sugathadasa Indoor Stadium on Tuesday where the focus of attention was former President Mahinda Rajapaksa.

Rajapaksa made a grand entrance with raised arms, surrounded by a bevy of dancing girls and the launch had all the hallmarks of a tamasha at the height of the Rajapaksa Presidency. If anything, the SLPP demonstrated that it has the funds and the organisational capability of putting up a big show.

Whether that will translate into votes at the election- given the dubious track record of the SLPP hierarchy- remains to be seen. Yet, it is on this issue that the political direction of the country- at least for the next few years- will be determined.