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Editorial

Little headway in cleaning mess

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Thursday 9th March, 2023

Sri Lanka’s economic crisis is an orphan; nobody takes responsibility for it, but many are those who claim the paternity of what seems to be a nascent economic recovery process. The SLPP-UNP government is elated at the prospect of being able to unlock the 2.9 billion-dollar IMF bailout soon.

President Ranil Wickremesinghe rushed to Parliament on Tuesday and announced that China had pledged support for Sri Lanka’s debt restructuring, and the IMF bailout would hopefully become a reality towards the end of the current month. Making a special statement in the House, the President had the public believe that the economy was now stabilising with the rupee rallying against the US dollar and other major foreign currencies, and the people’s lot would begin to improve after a few months.

But making little headway in cleaning up the economic mess of its own making cannot be considered an achievement of the government by any stretch of the imagination. In fact, it is the IMF that deserves credit for initiating the process of putting the Sri Lankan economy back on an even keel regardless of its modus operandi, which is in part swingeing to the point of peeving the public.

Not everybody is well-disposed towards the IMF, and with reason, for it has a dubious reputation in many people’s eyes; it is seen in some quarters as a handmaid of the western bloc, whose quest for global dominance has taken on feverish proportions. But the fact remains that the IMF has become a necessary evil for the unfortunate nations that elect crooks and cretins, who ruin their economies, Sri Lanka being a case in point. Any port in a storm, as the saying goes.

We would have been able to avert the current, ripsnorting economic crisis if the Gotabaya Rajapaksa (GR) government had made a policy decision, allowing the Central Bank of Sri Lanka (CBSL) to seek IMF assistance at the first sign of trouble, the way the CBSL did at the height of the country’s war on terror in the late noughties. Instead, the GR regime put the CBSL in a straitjacket at the behest of some of its economic pundits, discouraging it from seeking IMF help, and, worse, it did not heed the warnings of the impending crisis. It pinned all its hopes on China, but help from Beijing was not forthcoming, and the economy went into a tailspin.

What is ailing the Sri Lankan economy is multifactorial. Some of the causative factors have been identified as economic mismanagement, excessive borrowing, waste, corruption, politically-motivated tax cuts, poor relief, handouts and subsidies, and the theft of public money including forex. They have to be eliminated if the economy is to recover fully. But the ongoing efforts to shore up foreign currency reserves are bound to go pear-shaped unless the existing exchange control laws are reformed urgently.

One of the main reasons for the present forex crisis is the deep-sixing of the Exchange Control Act of 1953, in 2017, when the UNP-ledYahapalana government introduced the current Foreign Exchange Act. Minister of Justice Dr. Wijeyadasa Rajapakshe has gone on record as saying that the Sri Lankan exporters repatriate only a fraction of their foreign earnings. CBSL Governor Dr. Nandalal Weerasinghe has also highlighted this fact, and called for remedial action. Dr. Rajapakshe told Parliament last year that Sri Lanka’s export proceeds amounting to USD 53 billion had been parked overseas.

The UNP was instrumental in rendering the time-tested foreign exchange control laws toothless in 2017, enabling racketeers to stash away billions of dollars in off-shore accounts.

The Exchange Control Act of 1953 required exporters to repatriate an equivalent or more of their export earnings via the Sri Lankan banking system, and made non-compliance a criminal offence. But it was made a civil offence in 2017, and, as a result, about 30 foreign exchange racketeers who would otherwise have faced incarceration and the confiscation of their properties got away with their crimes.

The need for action to restore the Exchange Control Act of 1953 cannot be overstated, and President Wickremesinghe ought to undo what the UNP-led government did in 2017. Will the self-righteous Opposition grandees who are all hat and no cattle care to push for bringing back the original exchange control laws to ensure that the country’s export proceeds are repatriated properly? They are duty bound to do so, for most of them were in the Yahapalana government.



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Editorial

Executive brinkmanship

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Pressure is mounting on President Anura Kumara Dissanayake to ensure that an Auditor General is appointed without further delay. But he has remained unmoved. He is determined to wear down the Constitutional Council (CC) and appoint one of his party loyalists as Auditor General. The CC has rejected his nominees—and rightly so; they are not eligible. Former Executive Presidents went all out to railroad the CC into rubber-stamping their decisions. They had no qualms about doing so while claiming to uphold the independence of the public service. President Dissanayake has failed to be different. His refusal to compromise amounts to brinkmanship; he is waiting until the CC blinks.

The NPP’s election manifesto, A Thriving Nation: A Beautiful Life, attributes the deterioration of the public service to ‘political appointments’ and state workers making political decisions. Among the steps the NPP has promised to take to straighten up the public service are ‘merit-based appointments and promotions’. This principle has fallen by the wayside where the question of appointing the Auditor General is concerned.

The government should take cognisance of the possible negative effects of the prolonged delay in appointing the Auditor General during a period of disaster response and international relief and rebuilding support.

The Bar Association of Sri Lanka has called upon President Dissanayake to appoint a person with proven competence, integrity, and independence, who commands wide acceptance as Auditor General forthwith. It has stressed the need to appoint a nonpartisan professional as the Auditor General to safeguard the integrity of the National Audit Office and inspire the confidence of both citizens and international partners in the financial governance of the State.

Transparency International Sri Lanka, the Civil Society Organizations (CSOs) and the other good governance activists, too, have faulted President Dissanayake and his government for the inordinate delay in appointing the Auditor General. They are of the view that a strong, independent Auditor General enables Parliament and the public to scrutinise government expenditure, identify irregularities, prevent misuse of funds, and ensure that those entrusted with public resources are held to account. The delay in appointing the Auditor General has weakened the effectiveness, authority, and the independence of the entire public audit system and created space for inefficiency, mismanagement, and corruption, they have noted. The situation will take a turn for the worse if the government succeeds in having one of its cronies appointed Auditor General.

The government is apparently playing a waiting game in the hope that the reconstitution of the CC due next year will provide a window of opportunity for it to appoint one of its loyalists as Auditor General.

Why the government is so desperate to place a malleable person at the helm of the National Audit Office is not hard to understand. If it succeeds in its endeavour, the next Auditor General will be beholden to the JVP/NPP. When an ineligible person is elevated to a high post, he or she naturally becomes subservient to the appointing authority. Such officials go out of their way to safeguard the interests of their political masters in case of irregularities involving state funds and other accountability issues.

A protracted delay in appointing the Auditor General or the appointment of a government supporter to that post will increase the risk of mismanagement of state funds and corruption, lead to the erosion of public trust and confidence in the National Audit Office, undermine legislative oversight and impair fiscal discipline. Most of all, the government’s failure to appoint a competent, independent person of integrity as Auditor General will diminish donor confidence especially at a time when the country is seeking disaster relief funds from the international community. There is no way the government can justify its refusal to appoint the current Acting Auditor General as the head of the supreme audit institution. He is obviously the most eligible candidate.

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Editorial

Selective transparency

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Saturday 27th December, 2025

The NPP government has released a cordial diplomatic letter from Indian Prime Minister Narendra Modi to President Anura Kumara Dissanayake, and gained a great deal of publicity for it as part of a propaganda campaign to boost Dissanayake’s image. Such moves are not uncommon in politics, especially in the developing world, where the heads of powerful states are deified and their visits, invitations and letters are flaunted as achievements of the leaders of smaller nations. However, the release of PM Modi’s letter to President Dissanayake is counterproductive, for it makes one wonder why the government has not made public the MoUs it has signed with India?

PM Modi’s Sri Lanka visit in April 2025 saw the signing of seven MoUs (or pacts as claimed in some quarters) between New Delhi and Colombo. Prominent among them are the MoUs/pacts on the implementation of HVDC (High-Voltage Direct Current) Interconnection for import/export of power, cooperation among the governments of India, Sri Lanka, and the United Arab Emirates on developing Trincomalee as an energy hub, and defence cooperation between India and Sri Lanka.

The NPP government has violated one of the fundamental tenets of good governance––transparency; there has been no transparency about the aforesaid MoUs or pacts, especially the one on defence cooperation. They cannot be disclosed without India’s consent, the government has said. This is a very lame excuse. The JVP/NPP seems to have a very low opinion of the intelligence of the public, who made its meteoric rise to power.

When the JVP/NPP was in opposition, it would flay the previous governments for signing vital MoUs and pacts without transparency. But it has kept even Parliament in the dark about the MoUs/pacts in question.

Ironically, the JVP, which resorted to mindless violence in a bid to scuttle the signing of the Indo-Lanka Accord in 1987, has sought to justify the inking of an MoU/pact on defence cooperation between Sri Lanka and India and keeping it under wraps, about three and a half decades later. The signing of that particular defence MoU/pact marked the JVP’s biggest-ever Machiavellian U-turn. How would the JVP have reacted if a previous government had entered into MoUs with India and kept them secret? It opposed the proposed Economic and Technology Cooperation Agreement (ETCA) between Sri Lanka and India tooth and nail, didn’t it?

Whenever one sees the aforesaid letter doing the rounds in the digital space, one remembers the MoUs/pacts shrouded in secrecy, which have exposed the pusillanimity of the NPP government, whose leaders cannot so much as disclose their contents without India’s consent.

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Editorial

Desperate political sandbagging

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Friday 26th December, 2025

There is nothing more predictable than surprise in politics. After securing a two-thirds majority in Parliament last year and emerging victorious in most local councils, this year, the JVP-led NPP may have thought that it was plain sailing. But the government now has many unforeseen, seemingly intractable issues to contend with almost on all fronts. The disaster-stricken economy is expected to slow down, with relief and rebuilding costs escalating, and the deadline for the resumption of debt repayment approaching. Vehicle imports are bound to decrease, causing a sharp drop in the government’s tax revenue. The rupee is depreciating fast. As if these were not enough, the government is experiencing serious problems on the political front.

The defeat of the NPP’s budget in the Colombo Municipal Council (CMC), which the JVP/NPP seized control of through extensive horse trading, could not have come at a worse time for the government. The same fate has befallen many other NPP-controlled local councils. Most of all, the NPP has suffered a string of defeats in the cooperative society elections countrywide during the last several months.

Desperate times are said to call for desperate measures. Cyclone Ditwah and the attendant extreme weather events that badly damaged roads, tank bunds and river banks prompted repair teams to resort to sandbag revetment. But there have been many instances where sandbag facings collapsed, unable to withstand the intensity of floods and slope failures. The government politicians who boasted of having carried out swift restoration work have been left red-faced; they have failed to assess the severity of the problems they are trying to solve.

The NPP government has resorted to a method similar to sandbag revetment in a desperate bid to consolidate its control over some local councils which cannot secure the passage of their budgets for want of majorities. Its members have gone to the extent of setting the clock forward in such institutions, meeting in advance of the regular start time and declaring their budgets passed before the arrival of the Opposition councillors. What the NPP did in the Horana Urban Council the other day is a case in point, the Opposition says.

The NPP is accused of having inflated the number of votes for its Galle MC budget amidst a howl of protests from the Opposition and declared victory. The Opposition councillors prevented the council secretary from leaving the auditorium, put the budget to a fresh vote and defeated it. The Opposition has threatened legal action against the Mayors/Chairpersons and the state officials for violating the law. The government is likely to employ a similar method to have the CMC budget passed when it is put to a vote again next week. The JVP has no sense of shame, just like all other political parties that have been in power.

All self-righteous politicians, given to moral grandstanding, lay bare their true faces when their interests are threatened, and they face the prospect of losing their hold on power. The JVP/NPP is now without any right to be critical of its rivals who did not scruple to undermine democratic principles and traditions to retain power.

Gaining control of hung local councils is one thing, but running them to the satisfaction of their members and the public is quite another. The non-majority councils that the Opposition parties have gained control of could face the same fate as the CMC. This situation has come about because the country is without patriotic leaders. Ideally, the political parties that obtained pluralities in the hung councils should have been allowed to control those institutions, and they should have adopted a conciliatory approach and sought their political rivals’ cooperation to serve the public.

The shameful manner in which the NPP acted during the Galle MC budget vote is not unprecedented. One may recall that in January 2024, the SLPP-UNP government did something similar to secure the passage of its despicable Online Safety Bill. The then Speaker Mahinda Yapa Abeywardena stooped so low as to make use of a brawl in the House and declare the Bill passed. Interestingly, the SLPP and the UNP are among those who are raking the NPP over the coals for undermining democratic principles and traditions. So much for the self-proclaimed messiahs and their critics.

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