Feb 282014
EU terror ban on LTTE challenged

The European Union’s ban on the Liberation Tigers of Tamil Eelam (LTTE) hangs in the balance today after a hearing at the European Court of Justice (ECJ) in Luxembourg exposed serious flaws in the original evidence used to proscribe the movement in 2006. Judges expressed concern at the European Council’s use of an Indian anti-terror law as a suitable precedent for banning the LTTE, saying there was no evidence that the Council checked if terror suspects had access to a fair trial in India. The court was also dismayed by the Council’s use of Wikipedia as a credible source for keeping a terrorism ban on the LTTE. Lawyers for the LTTE left the court in a positive mood, expecting a judgement within the next six months.

Representatives from the European Council, European Commission, Netherlands and Britain all defended the inclusion of the LTTE on the EU’s terrorism list.

A Sri Lankan government delegation also observed the proceedings, and the court room was packed with over a hundred diaspora Tamils.

Victor Koppe, the Amsterdam-based attorney for the applicant, told the court that, “There can be hardly any doubt that the LTTE was fighting a legitimate struggle against an extremely oppressive regime which some have even labelled as genocidal.”

Koppe compared Sri Lankan President Mahinda Rajapaka with Syrian leader Bashar Al-Assad, before reminding the court about Britain’s chequered stance on terrorism: “the same government that stands before you today was once quite keen on labelling Mandela a terrorist and not a legitimate fighter against an oppressive regime.” The UK delegation said it noted Koppe’s comments on British foreign policy but said it was outside the scope of this hearing for the UK to respond.

Koppe concluded that “the refusal to delist the LTTE prevents the Tamil diaspora from organising itself into an effective partner in the defence of Tamil rights through political means.”

Koppe’s argument hinged on four key points. Firstly, that the LTTE were combatants in an armed conflict and as such should have been governed by international humanitarian law not anti-terrorism mechanisms. Next, Koppe’s team took issue with the authenticity of sources used by the Council to justify its ban on the LTTE, which included Wikipedia pages. Thirdly, the Council’s reliance on India and Britain’s decision to ban the LTTE was questioned. Lastly, Koppe argued that the factual situation had changed following the military defeat of the LTTE in 2009 and the absence of any attacks for almost five years.

The Dutch government delegation said parties to an armed conflict were still governed by other laws, citing this in defence of the conviction of five Tamils in the Hague in 2011 for LTTE fundraising, and adding that senior judges in Germany and France had reached similar conclusions.

The European Commission said that the LTTE did not pose a terrorism risk in the future provided the asset freeze remained in place. Otherwise, there was a likelihood that the LTTE would resume fighting when they recovered the capability.

The UK said it was legitimate for their Home Secretary, rather than an independent judge, to have banned the LTTE in 2000. Furthermore, evidence could be withheld from Parliament when passing anti-terror legislation. The four-strong UK delegation refused to comment when TamilNet approached them after the hearing.

Judges spent two hours questioning the parties, directing the majority at the European Council. The judges said there was no evidence that the Council had checked the fundamental rights situation in India before making the contested decision in 2006 to ban the LTTE. The court doubted whether there was due process in India to challenge a ban on the LTTE there, in which case any judgement was not compatible with EU standards. European Council countered that the ban would have passed based on the UK position alone, regardless of the ban in India.

The judges were also dissatisfied that the Council’s evidence for a terror ban on the LTTE included a list “contextual material based on well publicised events”, some of which were internet references and Wikipedia pages about terrorist acts allegedly committed by the LTTE.

The advocate for the European Commission mentioned in passing during his closing remarks that a colleague had nearly been killed by the LTTE.

[Full Coverage]

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Feb 262014
EU made big mistake in banning LTTE: Henricsson, former head of SLMM

It was a big mistake for the EU to ban the LTTE. There was pressure from the USA and the Sri Lankan government, said Major General Ulf Henricsson, who was heading the Sri Lanka Monitoring Mission (SLMM) in 2006. “I would say that was a big mistake, because it stopped the possibility to get a peaceful solution and negotiation,” Henricsson told TamilNet in an interview in Sweden on Saturday. Acting on solutions now, compared to Bosnia, he cited lack of interest in the West. He was stressing on the importance of India in acting on the question, but said that India is not interested in getting engaged. China and India and other countries are not interested in having the international community on that territory, he added.

On a question about the absence of political solution in the reports and resolutions of the last five years, whether this gives space and time for Colombo to complete the genocide, and whether there is a continued injustice committed, Henricsson said, “I would say you are right.”

“Sri Lanka does not want to have a settlement.”

“I would say one of my favourites on Sri Lanka is Gothabya Rajapaksa. As long as he is there as the Minister of Defence, you will not have a solution. This man does not want any peaceful settlement,” he added.

* * *

When asked to compare Bosnia and Sri Lanka where he worked, he said that these conflicts are more similar than different.

The IC took two years to respond and engage in Bosnia.

“But it was on our own backyard.”

“I would say that it turned when the opinion in the single countries turned against and told the politicians we have to do something. That was a difference you had the pressure from the public opinion and the media, which made the governments in UN to react. You didn’t have that pressure on Sri Lanka.”

Henricsson in his interview was hinting that the responsibility to act lies with India and with the pressure of public opinion and media in India.

Full transcript of the interview follows:

TamilNet: During the final stages of the Vanni war, Tamils across the world took to streets in large numbers and demanded the international community to stop the war. But, the International Community didn’t do it. The international community is now accused for this failure by all the reports. Now, the Tamils demand to stop the continued-genocide. But, the IC is not prepared to stop even that. It is not even recognizing the genocide. Is it a continued failure?

Ulf Henricsson: Yes. I can agree on that. But, Sri Lanka is not the only place where we see this. We have – for example today – the conflict in Syria.

The international community can’t or don’t want to engage in all the conflicts. You don’t have the resources, and you don’t want to pay for it. You have the opinion in a lot of countries against such engagement.

Sorry to say, but Sri Lanka is far away from Western Europe and North America.

Without pressure from the opinion and media, nothing happens. That is a problem. And that [problem] happens also for Sri Lanka, as also in many other places.

Most countries are not engaged in this process. For a Swede it is very far way. It is easy to ignore it. If we have had one conflict, then the engagement would have been better.

You have of course also a big player north of you: India. What India says is very important for this region. I don’t think India is very interested in being engaged, sorry to say. But, I think there is definitely from a moral point of view yes, but it is a matter of engagement.

TamilNet: You have experience in monitoring peace both in Bosnia and in the island of Sri Lanka. The Bosnian situation was very well recognized as genocide and the IC delivered an appropriate political solution. But, there is an unwritten censorship imposed by the world Establishments in considering the case of Eelam Tamils as a question of genocide. Do you find any duplicity of the International Community on this?

Henricsson: Well, I would say that in former Yugoslavia it took the international community two years to react on and to engage. We were as bad then in Yugoslavia too without the proper actions.

There was a big difference for Europeans because it was close to us. It was on our own backyard.

I would say that it turned when the opinion in the single countries turned against and told the politicians we have to do something. That was a difference you had the pressure from the public opinion and the media, which made the governments in UN to react. You didn’t have that pressure on Sri Lanka.

I would say that these conflicts for me are more similar than different.

When I went to Sri Lanka a French colleague told me don’t think you are going to Bosnia now. But the biggest difference in the mission was the weather! But the mechanics behind the war was the same – it was about money, property and power. All conflicts, you see Syria, whatever. It is not about ethnicity and religion. You use it as fuel for the conflict. If you have a decent social and economic justice, then you will not have conflict.

TamilNet: You have mentioned that there is a lack of pressure from the [global] media in the case of Sri Lanka. What causes this?

Henricsson: First you have of course difficulty for the media to work on Sri Lanka. You have restrictions from the government and a reclusive country. You are not welcome. That’s one reason.

For the big media in the western part of the world North America and Europe, it is not interesting for the people. You don’t sell papers. That’s a hard fact.

I don’t know how to do it. You have to engage the opinion. You have to get the international community to act. The UN, for example.

But, the UN is the sum of all members and there you have a lot of countries that are not interested in being engaged on Sri Lanka.

You have for example China, India. Because you are on their backyard and if you start to react on what happens of Sri Lanka you make an example, you go into another region and react.

China and India and other countries are not interested in having the international community on that territory.

That was the reason that Sri Lanka Monitoring Mission was run by Norway because of India didn’t want UN. They already had UN in Kashmir, they didn’t want UN in South in Sri Lanka. It is very complicated and there are not quick fixes.

TamilNet: After 2009, postmortem-reports have come from Norway and the UN. These reports were on the roles and failures of the many actors. But, nothing said concretely on the kind of political solution that should be delivered to the victims. Even the US resolution that is going to be tabled at Geneva is expected to call for only international investigation on the war crimes. There may be nothing on an international mechanism to stop the ongoing genocide. The five year process make many political observers to think that ‘space and time’ is given to the Sri Lankan State to complete the genocide. Do you think that there is a continued injustice, and that is deliberate?

Henricsson: I haven’t been in Sri Lanka since 2006. But, I have read and I would say you are right.

Of course, the government of Sri Lanka does not want to have a settlement.

I would say one of my favourites on Sri Lanka is Gothabya Rajapaksa. As long as he is there as the Minister of Defence, you will not have a solution. This man does not want any peaceful settlement.

TamilNet: But, is there an existing genocide and injustice?

Henricsson: I can’t say that. I will say that the situation has continued with a lot of incidents where people are killed disappeared and so on. That was the case in 2006 and it still is. You will never solve this until you have a democratic government that listen to all populace. The present government is not listening and do not work for a peaceful solution.

TamilNet: As the head of the peace mission in the island you were involved in the cases of the Moothoor massacre of aid workers in 2006 and in the Maavilaa’ru incident that is portrayed as something that triggered off the war in the island. You have already given affidavits on them and they have come in print. Reflecting back, do you think that the war and its ‘end’ were pre-designed or just star-crossed as the Norwegian peace facilitator Erik Solheim and former US Assistant Secretary Richard Armitage were implying?

Henricsson: I would say that Maavilaa’ru and Moothoor case triggered the final solution, but I think it was already planned. And we sought to stop it.

We called LTTE to open up the dams and it took rather long time and I talked to the government told don’t start this of course we can open the dams but nobody listened, neither the LTTE nor the government. The government wanted the conflict and LTTE made a mistake because they thought they were stronger than they were.

Both parties had the wrong attitude to the conflict. That is my view. It was obvious that the Moothoor case caused by the security forces or somebody linked to the security forces because otherwise we were there to monitor the situation. But, we were not allowed to check on this and that’s the reason for me having the opinion that it was the security forces that made this massacre, definitely.

TamilNet: You have gone on record stating that the EU ban on the LTTE did not happen in the European Parliament but in the coffee shops of Brussels under extreme British-American pressure. You were reportedly consulted on the matter before the ban on the LTTE declared in the EU in 2006. What were your submissions at that time?

Henricsson: We, the international community on Sri Lanka, the SLMM and the different embassies and the UN, advised the EU not to ban the Tamil Tigers.

We said you should put pressure on them to come to negotiating table, but it is too early to ban the LTTE. Everybody who worked on Sri Lanka and we had the word from diplomats who worked on Sri Lanka: OK we will wait.

But then, everything happened very fast. And of course a lot of pressure from Sri Lankan government to make this, and you had American pressure and so on. Then you had the sea incident outside Mullaiththeevu where EU just listened to the Sri Lankan government version.

They never phoned us to ask what happened because we had a different picture on that. Then it was to just pounce, and the ban came. Then you gave the government more or less a wild card to act, because the LTTE was terrorist then.

That was a part of the big war against terrorism. It was more a world-wide wish from the big powers. The LTTE also came in it. But, for me, it was a mistake.

I said if you should list the LTTE, list the Sri Lankan government too. Because, they used the same methods. That was obvious. So, I would say that was a big mistake, because it stopped the possibility to get a peaceful solution and negotiation, which I would say that the government did not want. The LTTE acted not too smartly in this situation, they were too stubborn.

TamilNet: In the globalized world of today, decisions affecting the entire humanity are ultimately taken by a very few, but masses of people, military officers, civil servants, diplomats and media persons are forced to implement those decisions. Many of them have their conscience. For the betterment of humanity in future, what do you think the conscience-minded could do in mobilizing themselves and in creating a better world?

Henricsson: That was the ten thousand dollar question. I don’t know.

You have to engage people but how? It is very difficult.

We have talked about it earlier and normal people have a lot to do in their common days, they have lot of engagement: family, children the car, house everything.

This kind of situation as on Sri Lanka or Syria, or whatever, it takes a small part of your life. You don’t have the energy to engage in. It its too difficult. For a Swede it’s very hard to understand the conflict in Sri Lanka or what ever. We live in a quite different world, that’s a problem.

I have used a lot of time since I started on the Balkan, as to try and get people to engage, and they are engaged. When you talk about it in a lecture they are upset. Then it fades out.

The highest priority for us is to have secure situation and food for the day. And that’s the same in Sri Lanka. Most people didn’t want the conflict. Most people just want to have security and food for the day.

Then, for example on Sri Lanka, we talk about democracy. But, if you starve and have bad security, you don’t give a damn in democracy. Just not interested because your day is built to survive.

You have to be educated. I would say the best way of suppressing the people, is don’t educate them. If you can raise the education level, you’d have a better world but there are no quick fixes. It takes decades, maybe even centuries to solve it. That’s my simple view on Tamils in conflict.

TamilNet: What kind of engagement do you expect from the humanity to have a better world?

Henricsson: We need a lot of engage people that work and have the energy to work on it. We take small steps all the time but we are very anxious to make it quick. But, it will not happen quickly because you have a big recession. Those in power want to stay in power. If you look to Ukraine now, people want to stay in power. They want to protect their property and money. They are not interested in letting the other. The same on Sri Lanka. You have a political elite. They have interests. And those with money and property control the media and they control the message.

[Full Coverage]

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Jan 132014
Dale Mortensen and real crisis of unemployment

By Anushka Wijesinha

The economics profession lost a prominent labour economist this past weekend – Prof. Dale Mortensen, a 2010 Nobel Laureate. When I heard of his passing-away, it took me back to June last year in the little lake-side town of Iseo, in Northern Italy, where I was fortunate to have heard one of his last international lectures.
His analysis of how the prolonged crisis in Europe will hurt youth employment greatly influenced my thoughts on how ‘unemployment scarring’ will affect the vitality of Western economies for decades to come. His analysis of the consequences of ‘job polarization’ in the US on the strength of the American middle-class influenced my thoughts on how Sri Lanka too would be affected by skill-biased technical change as the economy grows in complexity.

Mortensen’s Nobel and beyond
Dale Mortensen, Professor of Economics at Northwestern University at the time of his passing-away, pioneered a new approach to studying important economic problems now known as ‘search theory’.

Together with Peter Diamond and Christopher Pissarides, Mortensen won the 2010 Nobel Prize in Economics for their analysis of markets with search frictions.
Utilizing the theory, Mortensen developed an original approach to investigating the labour market, revolutionizing how economists and policymakers view labour market matters and the role of government policy and regulation.

That original approach can, for example, explain why it takes so long for job seekers to find acceptable jobs even in good economic times, when vacancies are plentiful, or why firms with vacancies fail to fill positions quickly even though large numbers of people are unemployed.

Global recession and unemployment troubles
“It is five years since the great recession and employment continues to be well below trend”, he observed at the start of his lecture.

During the 2007-12 period, apart from Latin America, all other regions of the world experienced a decline in the employment-to-population ratio (including the US, Europe, East Asia and South Asia). Unemployment can be broken into two components – job destruction (the rate at which, or how frequently, people become unemployed) and unemployment duration (for how long they are unemployed).

One of Mortensen’s key new observations in that lecture was that the rise in unemployment in developed countries, post-crisis, is primarily due to an increase in the unemployment duration – the time required to find a job – and not necessarily due to job destruction. He looked at the relationship between unemployment duration and the job destruction rate between 2007 and 2011 and concluded that much of the recent unemployment, for most countries, can be explained by duration of unemployment.

Changing US employment landscape
In the US, the story is an interesting one, and this is best looked at using the ‘Beveridge Curve’. This maps the rate of new job openings vs the rate of unemployment. As per the curve, when vacancies go up, unemployment has to fall. But, according to the data he presented for the period 2000 to 2012 (looking at the previous downturn after the dotcom bust as well), the U.S. Beveridge curve appears to have shifted out. What does this mean? Essentially, it suggests that at a given rate of vacancies, the rate of unemployment is much higher. Mortensen argued that the increase in unemployment duration is the key explanation to this, because duration is very closely associated with the rate of job openings. Overall, all this suggests a more fundamental issue in the American labour market – that it may have become harder to match workers to jobs.

But differing viewpoints were expressed when this phenomenon was first observed. While Narayana Kocherlakota (President of the Minneapolis Federal Reserve) also believed firmly that this was due to mismatch, others like Christine Romer (former Chair of Obama’s Council of Economic Advisors) believed it was just cyclical effects based on depressed consumption spending and lower aggregate demand. Romer’s view was shared by those on the other end of the political spectrum as well. Martin Feldstein, Chair of Reagan’s Council of Economic Advisors, also believed that, “the high unemployment reflects the lack of demand rather than any fundamental problems with the US labour market”.

‘Middle-Skill’ mismatch and job polarization
In his lecture, Mortensen went on to dig deeper into this issue, focusing on the theory of mismatch.

He drew from the latest work by Acemoglu and Autor (2011) which explored the effect of skill-biased technical change by ordering workers by ‘task assignment’ and ‘skill group’. For instance, categorizing workers by the nature of the tasks they do – ‘non-routine cognitive’, ‘routine’, and ‘non-routine manual’. Using this model, he showed that it is the ‘routine’ worker category that has suffered the most from the recession and its aftermath.

Skill-biased technical change associated with the application of computers (information technology) as well as globalized trade has reduced demand for ‘routine’ tasks (manufacturing, clerical, and “back office” work). As Mortensen wrote in one of his last articles (November 2013), “Manufacturing occupations and administrative support used to employ millions.

But technological advances have enabled many of these middle-class jobs to be automated or moved offshore – a process that is expected to accelerate with growing automation of knowledge-based activities and advances in robotics”. As a result, this “middle-skilled” group of routine workers has been hit the most in the US as a result of the crisis. The middle-skilled also happen to form the backbone of the American middle-class. Hence, the widely spoken of prolonged effect of the financial crisis in the US is likely to be a prolonged depression of its middle-class and their feeling of a “jobless recovery”. This is particularly true of older workers than younger workers.

Heightened unemployment challenge in EU
In the EU, youth unemployment remains the biggest challenge. Youth unemployment across EU rose from 15 percent to 24 percent, and it explains much of Europe’s high overall unemployment.

Interestingly, the countries with the highest youth unemployment are those that are facing severe financial distress on one hand and suffocating austerity measures on the other, notably, Greece, Spain, Italy, Portugal, and Ireland.

By late last year, youth unemployment was 57 percent in Greece, 56 percent in Spain, 40 percent in Italy, 37 percent in Portugal, and 28 percent in Ireland. “These facts call into questions the efficacy of EC and IMF imposed austerity policies”, Mortensen argued in his lecture. The problem is no longer lost on EU politicians either. German Chancellor, Angela Merkel, has called youth unemployment, “perhaps the most pressing problem facing Europe”, and in late last year EU policymakers held a special youth unemployment summit and approved a new employment-promotion spending plan.

EU policymakers have reason to be worried. There is substantial evidence suggesting that when people are unemployed at a young age they are more likely to be unemployed and welfare-dependent later in life, and more likely to earn less wages, due to the “scarring effects” of youth unemployment. The effect is more pronounced the longer a young person spends out of work.

Implications for Sri Lanka
Mortensen’s work in general, and the selected aspects of it discussed here in particular, do have implications for Sri Lanka.

The first relates to the issue of job polarization. While quality and frequency of labour market data lags far behind that of the US, suffice it to say there are signs that the Sri Lankan labour market too is going through a period of transition. Wages in some sectors are rising, while vacancies in some industries remain unfilled persistently.
As technology takes a firmer hold in the country, and firms look to it to maintain their competitive edge, the resultant skill-biased technical change will adversely affect the employment prospects of a significant proportion of ’routine’ workers. They will find it difficult to fit into the new roles on offer, and will be left out of economic growth. To avoid this, there needs to be a robust programme of retraining, further/adult education, as well as increased flexibility on hiring rules, to help workers and firms adjust. Timely reforms can help, and Germany is a case in point. Having undertaken strong and focused labour market policy reforms during 2003-2008 – when the going was good – Germany was able to successfully weather the storm. As Mortensen also observed in his lecture, “Germany believed that labour market reform saved them from the recession”.

The second relates to the jobless recoveries taking place in the US and EU. By this I do not mean merely the unemployment rate, but rather the wider problems caused by longer unemployment durations, the effect on incomes of middle-skill job losses (in the US), and the effects of high youth unemployment and resultant unemployment scarring (in the EU).

As I argued in a previous article, “Prolonged unemployment in Europe will depress wages and reduce purchasing power of the region’s people. It will have a significant impact on not just how much of Sri Lanka’s exports would be demanded there, but also who will buy them and what type of products will be demanded”. The heart of American consumerism that drove global exports – the middle-class – would not be as prosperous in the future as in the past and the next generation of young Europeans may not be as rich as they could have been, or their Asian counterparts will be. In the economies of the West, the effects of the great recession will be felt for much longer than the current recoveries in GDP may suggest.

(Anushka Wijesinha is Research Economist at the Institute of Policy Studies of Sri Lanka. For the full article and to leave a comment, visit the ‘Talking Economics’ blog at www.ips.lk/talkingeconomics)

Jan 072014
Pak’s latest GSP with EU, opportunity for Sri Lankan exporters: Qureshi
Sri Lanka’s second largest trade partner in SAARC is looking for more Lankan exports in the coming year, while also eyeing Sri Lanka’s sugar sector entry,

”Pakistan’s new GSP with EU is an opportunity for Sri Lankan exporters, and they can do more things. In fact, we should jointly explore whatever is possible within the rules and regulations of t hese new developments, said Pakistan High Commissioner to Sri Lanka Major General Qasim Qureshi, addressing Industry and Commerce Minister Rishad Bathiudeen during his new-year courtesy call on the Minister.

Addressing Minister Bathiudeen, Qureshi said, “We believe that there is strong unrealized trade potential between both countries. Through the Joint Economic Commission, we annually review our trade progress of our FTA so that it becomes increasingly ‘commercefriendly’ for both countries. And there is a trade imbalance between Pakistan and Sri Lanka and we want to reduce that.

Which means that we should also explore avenues and ways in which more products from Sri Lanka are exported to Pakistan.”

“So what we want to do is to expand the bilateral trade from the present annual level of $ 440 million to $ 1 billion in the coming years-perhaps even in a couple of years.

The way to do this is by exploring areas where we can see new trading starts between the two countries in not just the traditional trade items but also to look at new items and new products.

Also, Pakistan’s new GSP with EU is an opportunity for Sri Lankan exporters and they can do more things. Of course the rules of origin are from Pakistan. For example, Sri Lankan exporters can consider more raw material exports to Pakistani industries that are manufacturing to EU using this GSP. In fact, we should jointly explore whatever is possible within the rules and regulations of these new developments.”

According to the Department of Commerce, Pakistan is the second largest trading partner of Sri Lanka in the SAARC region after India.

Lankan exports to Pakistan topped $ 42.97 mn from January to June in 2013 and more importantly, registered a 27 percent surge from 2010’s $ 60.38 mn to $ 82.75 mn by 2012. The total trade has increased from US $ 158 mn in 2005 to US $. 433.69 mn in 2012 (and from January to June 2013, at $289.23 mn). The balance of trade has always been in favour of Pakistan.

Speaking on investments, Qureshi said, “We are also looking into getting new investments from Pakistan to Sri Lanka because we think that it is not only just commerce but mutual investments too can strengthen bilateral economic relations.

We are looking at some areas where we can bring investment from Pakistan to Sri Lanka and we are now keenly looking at the sugar industry in Sri Lanka for new investments.”

“I believe that in the coming year, we should maximize all opportunities presented by our FTA and enhance our bilateral trade levels.

Our exporters are already leveraging the PSFTA and it is time our exporters try on new product exports since there are more than 4800 product lines available to them under this PSFTA,” Bathiudeen said.

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