David Cameron must act to hold the Sri Lankan government to account for its human rights abuses

The PM has consistently failed to pressure the Rajapaksa government over its human right abuses. There is too much at stake, for too many, for him to fail to do so yet again.

The Commonwealth Heads of Government Meeting (CHOGM), which will be held in Colombo from 15 to 17 November, takes place in the aftermath of a divisive civil war in Sri Lanka and deeply troubling questions about its human rights record. The end of the civil war in 2009 marked a turning point in the country’s history. Since then, the Sri Lankan government has not made the progress we had all hoped it would. And now, just days away from Sri Lanka hosting the summit, there is mounting evidence that the country risks going backwards.

Following her visit in August the UN’s human rights commissioner, Navi Pillay, concluded that the country is “heading in an increasingly authoritarian direction” and criticised the reported intimidation by the security forces of those human rights campaigners who tried to meet her.

Father Yogeswaran, a 70-year-old Jesuit priest who runs a human rights NGO, told of how he received a late-night visit from plain-clothed police officers who questioned him for hours about his meeting with Pillay. Amnesty International, Human Rights Watch and others warn that the government of Mahinda Rajapaksa is using the Commonwealth summit to paper over the lack of progress on human rights in Sri Lanka.

Undoubtedly, hosting this year’s CHOGM could have been an opportunity to promote change and progress in Sri Lanka. That has not happened.

Labour was for many months calling on the British government to use the question of whether the Prime Minister would attend as leverage to encourage President Rajapaksa to address human rights concerns. Instead, David Cameron chose to hand away his influence six months before the summit was even to take place by confirming that both he and the Foreign Secretary, William Hague, would attend. The Prime Minister should now reverse that decision.

Vocal condemnation of the Rajapaksa government by Canada, and the decision by Prime Minister Stephen Harper not to attend the summit, have helped to focus the Commonwealth’s attention on what is going wrong in Sri Lanka.

Yet, in spite of his own Foreign Office report, which lists Sri Lanka as a “country of concern” on human rights, David Cameron has consistently failed to pressure the Rajapaksa government. The Deputy Prime Minister, Nick Clegg – answering a question on Sri Lanka in the House of Commons in May – said that “if the Sri Lankan government continue to ignore their international commitments in the lead-up to the Commonwealth Heads of Government Meeting, of course there will be consequences”.

But six months later, and a week before the Prime Minister is due to fly to Colombo, it is unclear what those consequences could be.

Since Clegg’s comments in May, it seems that the Foreign Office has backtracked and dropped talk of the need for progress being made before the summit. Instead, it chooses to suggest that the event itself might “shine a light on what is going on in the country”.

The British government’s handling of this issue has been characterised by misjudgements and missed opportunities. It has regrettably missed an opportunity to exercise leverage over the past six months, which is why a change of approach in the next few days is so crucial.

The Foreign Secretary, William Hague, claimed that “there has been no widespread support for a change in location of CHOGM, and there is concern that the Commonwealth itself . . . should not be damaged, weakened or undermined by divisions over the location of the Heads of Government Meeting”.

However, the government is choosing to ignore that the Commonwealth stepped in to deny Sri Lanka the privilege of hosting the summit once before because of concerns about ill-treatment of its own people. That decision was taken by the Commonwealth in 2009, when Labour was in government, and when the UK strongly lobbied other Commonwealth countries to block Sri Lanka’s offer and plans to hold the 2011 summit in Colombo.

Sri Lanka was forced to wait until 2013 to host CHOGM and was given the opportunity by the Commonwealth in those two years to demonstrate to the world its commitment to improving human rights for all its citizens. Sadly it has failed to do so.

Now this month’s summit risks being overshadowed by questions about the host country instead of concentrating on the Commonwealth’s own agenda.

Inevitably, following the summit, attention will turn to the automatic appointment of President Rajapaksa as the Commonwealth chairperson-in-office for the next two years. There are many who have grave reservations about him representing the Commonwealth on an international stage. But if he does take up the chairmanship, he must be made to recognise that he has to do more to improve the human rights situation in his country.

The international community must stand united in its efforts to promote justice and reconciliation in Sri Lanka. Until now, David Cameron has proven unwilling to use the leverage he has to promote change in Sri Lanka. Yet there is too much at stake, for too many, for him to fail to do so yet again.

Douglas Alexander is the shadow foreign secretary

A Sri Lankan Army officer patrols ahead of the Commonwealth Heads of Government (CHOGM) meetings on November 10, 2013 in Colombo, Sri Lanka. Photograph: Getty Images.

This article first appeared in the 06 November 2013 issue of the New Statesman, Are cities getting too big?

Ralph Orlowski / Getty
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Labour's investment bank plan could help fix our damaging financial system

The UK should learn from the success of a similar project in Germany.

Labour’s election manifesto has proved controversial, with the Tories and the right-wing media claiming it would take us back to the 1970s. But it contains at least one excellent idea which is certainly not out-dated and which would in fact help to address a key problem in our post-financial-crisis world.

Even setting aside the damage wrought by the 2008 crash, it’s clear the UK’s financial sector is not serving the real economy. The New Economics Foundation recently revealed that fewer than 10% of the total stock of UK bank loans are to non-financial and non-real estate businesses. The majority of their lending goes to other financial sector firms, insurance and pension funds, consumer finance, and commercial real estate.

Labour’s proposed UK Investment Bank would be a welcome antidote to a financial system that is too often damaging or simply useless. There are many successful examples of public development banks in the world’s fastest-growing economies, such as China and Korea. However, the UK can look closer to home for a suitable model: the KfW in Germany (not exactly a country known for ‘disastrous socialist policies’). With assets of over 500bn, the KfW is the world’s largest state-owned development bank when its size is measured as a percentage of GDP, and it is an institution from which the UK can draw much-needed lessons if it wishes to create a financial system more beneficial to the real economy.

Where does the money come from? Although KfW’s initial paid-up capital stems purely from public sources, it currently funds itself mainly through borrowing cheaply on the international capital markets with a federal government guarantee,  AA+ rating, and safe haven status for its public securities. With its own high ratings, the UK could easily follow this model, allowing its bank to borrow very cheaply. These activities would not add to the long-run public debt either: by definition an investment bank would invest in projects that would stimulate growth.

Aside from the obviously countercyclical role KfW played during the financial crisis, ramping up total business volume by over 40 per cent between 2007 and 2011 while UK banks became risk averse and caused a credit crunch, it also plays an important part in financing key sectors of the real economy that would otherwise have trouble accessing funds. This includes investment in research and innovation, and special programs for SMEs. Thanks to KfW, as well as an extensive network of regional and savings banks, fewer German SMEs report access to finance as a major problem than in comparator Euro area countries.

The Conservatives have talked a great deal about the need to rebalance the UK economy towards manufacturing. However, a real industrial policy needs more than just empty rhetoric: it needs finance. The KfW has historically played an important role in promoting German manufacturing, both at home and abroad, and to this day continues to provide finance to encourage the export of high-value-added German products

KfW works by on-lending most of its funds through the private banking system. This means that far from being the equivalent of a nationalisation, a public development bank can coexist without competing with the rest of the financial system. Like the UK, Germany has its share of large investment banks, some of which have caused massive instabilities. It is important to note that the establishment of a public bank would not have a negative effect on existing private banks, because in the short term, the UK will remain heavily dependent on financial services.

The main problem with Labour’s proposal is therefore not that too much of the financial sector will be publicly owned, but too little. Its proposed lending volume of £250bn over 10 years is small compared to the KfW’s total financing commitments of  750 billion over the past 10 years. Although the proposal is better than nothing, in order to be effective a public development bank will need to have sufficient scale.

Finally, although Brexit might make it marginally easier to establish the UK Investment Bank, because the country would no longer be constrained by EU State Aid Rules or the Maastricht criteria, it is worth remembering that KfW’s sizeable range of activities is perfectly legal under current EU rules.

So Europe cannot be blamed for holding back UK financial sector reform to date - the problem is simply a lack of political will in the current government. And with even key architects of 1980s financial liberalisation, such as the IMF and the economist Jeffrey Sachs, rethinking the role of the financial sector, isn’t it time Britain did the same?

Dr Natalya Naqvi is a research fellow at University College and the Blavatnik School of Government, University of Oxford, where she focuses on the role of the state and the financial sector in economic development

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