Sri Lankan soldiers keep watch outside the Ceylon petroleum corporation in Colombo. AFP
Sri Lankan soldiers keep watch outside the Ceylon petroleum corporation in Colombo. AFP

One dead in Sri Lanka shooting as constitutional crisis escalates



A constitutional crisis gripping Sri Lanka since the president’s shock dismissal of Prime Minister Ranil Wickremesinghe erupted into violence Sunday, with a man shot dead and two others injured in the capital Colombo.

Police said bodyguards for a Sri Lankan cabinet minister allied to Mr Wickremesinghe fired live rounds inside a government ministry as a mob loyal to president Maithripala Sirisena besieged the minister’s office. Three people were injured but a 34-year-old man died shortly after.

It was the first fatality since Mr Wickremesinghe was sacked on Friday and the president installed a former strongman as prime minister, triggering political chaos in the Indian Ocean nation.

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Sri Lanka's political dramas expose its wider vulnerabilities

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Mr Wickremesinghe has refused to vacate the prime minister’s official residence, barricading himself inside as 1,000 supporters, including chanting Buddhist monks, rallied outside.

The 69-year-old says his sacking is illegal, and wants an emergency session of parliament held to prove he still commands a majority.

Mr Sirisena shut parliament for nearly three weeks to forestall any challenge to his appointment of Mahinda Rajapakse, a former president accused of wartime abuses.

Mr Rajapakse sought blessings at a prominent Buddhist temple Sunday as he jostled to consolidate his claim to the prime ministership.

But Mr Wickremesinghe got a boost as Sri Lanka’s parliamentary speaker refused to endorse his sacking.

Karu Jayasuriya backed Mr Wickremesinghe’s request to retain his privileges and security until another candidate could prove a majority in parliament, saying it was “democratic and fair.”

He also warned the president that shuttering parliament risked “serious and undesirable consequences for the country”.

Officials loyal to Mr Rajapakse said police will now seek a court order to evict Mr Wickremesinghe from the residence, threatening to escalate the standoff.

Soldiers had been stationed near the residence, although Mr Wickremesinghe’s security and official cars were withdrawn Saturday.

Tensions were high across Colombo, with police leave cancelled amid warnings street violence could break out if the president did not immediately summon parliament to end the impasse.

“Don’t try to create a civil war in this country,” party legislator Karunarathna Paranawithana told reporters at the prime minister’s residence.

Regional neighbours and Western nations have urged all sides to exercise restraint and respect the constitution.

But violence broke out inside the petroleum ministry as police guarding minister Arjuna Ranatunga fired on a mob surrounded his office.

Witnesses saw Mr Ranatunga, 54, also a former World Cup winning cricket captain, rushed from the scene in a tactical helmet and body armour by police commandos.

In his first televised address to the nation since the crisis began, Mr Sirisena said Sunday he sacked Mr Wickremesinghe over personal differences.

“Apart from our ideological differences, we also had serious cultural differences,” Mr Sirisena said, referring to Mr Wickremesinghe’s liberal background and his own rural conservative upbringing.

He said he had no choice but to appoint Mr Rajapakse, and urged parliament to support him.

Loyalists to Mr Rajapakse – whose controversial decade-long rule was marked by grave allegations of rights abuses, the crushing of the Tamil Tiger uprising, and growing authoritarianism – still control the headquarters of two state-run television channels.

The controversial new prime minister visited a Buddhist temple Sunday in the central district of Kandy to seek blessings from monks.

Plans to appoint some cabinet members had been delayed until Monday, aides said. Mr Rajapakse is yet to make a formal statement since being elevated to the new post.

The strongman is seen as being closer to China than Mr Wickremesinghe, who had sought to re-establish stronger ties with traditional ally and regional power India.

The crisis has again put the Indian Ocean in the international spotlight following turmoil in neighbouring Maldives over its presidential election.

India said it was “closely following” events in Colombo.

“As a democracy and a close friendly neighbour, we hope that democratic values and the constitutional process will be respected,” India’s foreign ministry spokesman Raveesh Kumar said Sunday.

The United States and European Union ambassadors in Colombo have called on the Sri Lankan rivals to follow the constitution and avoid violence.

Privately-run newspapers on Sunday described Mr Sirisena’s move as a “constitutional coup”.

However, Rajapakse loyalist and former foreign minister GL Peiris said there was nothing illegal about sacking Mr Wickremesinghe.

The falling-out between Mr Wickremesinghe and Mr Sirisena has come to a head since the president this year backed a no-confidence motion against the man he had handpicked to lead the government.

The two allied against Mr Rajapakse in the 2015 election, but their relationship steadily soured.

Mr Sirisena initially said he would be a one-term president but has since indicated he will seek re-election next year – pitting himself against Mr Wickremesinghe who also has presidential ambitions.

This is the second time that a president has ousted Mr Wickremesinghe from office. In 2004, the then head of state sacked him and called snap elections.

After winning the premiership in August 2015, Mr Wickremesinghe amended the constitution to remove the president’s power to sack prime ministers to prevent a repeat of his earlier ouster.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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