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Prof. Dunusinghe debunks govt.’s claims about stabilising economy

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Prof. Dunusinghe

By Rathindra Kuruwita

Until Sri Lanka has access to international money markets, which will allow it to ensure there are no short-term dollar shortages, relaxing the restrictions on vehicle imports is out of the question, Professor in Economics at the Department of Economics at Colombo University, Dr. Priyanga Dunusinghe, said.

Even then, relaxing vehicle imports should be done in a slow and methodical manner, he said.

“A lot of people ask me whether I can give a date when this could be. However, giving a timeline is difficult because we have not yet managed to restructure our international debt. The government says this can be done in the middle of the year. Once the government manages that, we will have access to bilateral credit. After a while, we might be able to slowly relax restrictions on imports.”

Prof. Dunusinghe said people must not expect our economy to return to 2018 levels, soon after foreign debt is restructured.

He added that even if the government succeeds in foreign debt restructuring, it is improbable that the rupee will strengthen. It is likely that the rupee will hover around the current rates or be in a slightly depreciated state.

“We see increased economic activity, and with this, the demand for imports will rise. However, given that market mechanisms govern the exchange rate, I don’t see large fluctuations.”

Even with recent hikes, the tax revenue of the government is not adequate to cover the expenses. When the daily revenue is about 11 billion rupees, the daily expenditure is around 19 billion rupees, he said.

“The government needs to reduce its expenditure. It should also take steps to collect the taxes it can. The government says it has stabilised the economy, but many fear that it’s not a ‘stabilisation’ that can lead to growth in the medium term.”

Prof. Dunusinghe said Sri Lankans see Ministers still enjoying perks. They have not reduced their expenditure. There are also many issues with the procurement process.

Recently, Verite Research issued a report, and they said Sri Lanka’s procurement guidelines don’t allow for blacklisting contractors/suppliers involved in fraud and corruption, and the compliance gap is shown by the failure to maintan a blacklist for defaulting contractors.

“We are the only South Asian country that doesn’t blacklist contractors/suppliers involved in fraud and corruption. There are so many instances where companies provide low-quality goods to government agencies. We see so many substandard constructions. Things are increasingly getting worse. Companies make profit by selling a 100-rupee item at 250 to the government and make profit. How can the government reduce expenditures like this? If we make the procurement process transparent, a lot of waste can be reduced.”

Prof. Dunusinghe said corruption and bribery have to be stopped for the country to go forward. Government, as well as senior bureaucrats, have a significant role to play.

He added that Sri Lanka has a great potential for tourism. However, the country should be mindful that the industry seems to face extremely challenging situations once every three to four years.

“This is like a bubble that can burst. We should focus on tourism, but we must also focus on boosting exports. Remittances are also important, but overdependence on them becomes a curse. In recent years, we have become increasingly dependent on remittances and tourism, and we don’t focus on anything else. We don’t think about boosting exports. We send our youth and professionals abroad, hoping they will send a lot of money. This is how we plan on running our economy. Let me be clear: no country has developed from remittances.”

Prof. Dunusinghe said a strong export sector, based on correct Foreign Direct investment (FDI), is the path for development for Sri Lanka.

“Depending on tourism alone is also very risky. We need to diversify,” he said.



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No PC polls this year, says Tilvin

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Tilvin

The much-delayed Provincial Council (PC) elections cannot be held this year due to financial and legal constraints, JVP General Secretary Tilvin Silva has said in Jaffna.Silva said so, fielding questions from journalists after the opening of the NPP coordination office in the Jaffna District on Saturday.

When asked whether the government was under Indian pressure to conduct the Provincial Council elections soon, Silva answered in the negative, claiming that Sri Lankan and Indian governments maintained close and friendly relations with a strong level of understanding.

He said budgetary allocations had been made for the PC elections, but the government had been compelled to divert resources for disaster relief following the impact of Cyclone Ditwah. According to Silva, nearly Rs. 500 billion had to be allocated for relief measures, making it difficult to hold the elections this year. He further said legal complications in the electoral reform process had also contributed to the delay in holding the PC elections, noting that a parliamentary committee had been appointed to determine the electoral systems under which the PC polls should be conducted. Once the committee submitted its report and if no further issues arose, the elections could possibly be held next year, he said.

Silva also said the government had taken measures to strengthen reconciliation and development in the North by releasing lands previously occupied by military camps and improving road infrastructure.He added that empowerment initiatives were being implemented under the Praja Shakthi programme and that both Sri Lanka and India were continuing to work in close cooperation.

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Weather conditions worsen, displacing 31,000 people

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More than 31,000 people across Sri Lanka have been affected by worsening weather conditions, as the southwest monsoon intensifies ahead of its full establishment, raising fears of renewed flooding in vulnerable low-lying areas, the Disaster Management Centre (DMC) has warned.

The DMC has said 31,072 individuals from 7,983 families have already been impacted by persistent rain, strong winds and rising water levels across multiple districts, with the situation most severe in the Gampaha District where 15,313 people from 3,950 families have been affected and one death reported.

Officials have cautioned that the scale of disruption could worsen as the southwest monsoon is expected to fully establish over the island around May 26–27, bringing heavier and more sustained rainfall to the southwestern region.

At present, 18 safety centres are in operation, sheltering 1,724 displaced persons from 446 families. One person has been injured and 859 houses have been partially damaged. Two houses have been destroyed.

The Department of Meteorology has forecast increased rainfall over the coming days, warning that conditions are likely to deteriorate further as monsoon activity strengthens.

Flood-hit areas remain widespread, with river systems still under pressure despite a brief easing in rainfall on Saturday. The Kelani River has returned to normal levels, but minor flooding persists along the Kalu River basin, particularly in the Millakanda area, where tributary water levels remain elevated.

Low-lying areas in Bellapitiya, Horana, continue to be inundated, while traffic on the Bulathsinhala–Kalutara road remains disrupted due to flooding in Diyakaduwa. Authorities have also flagged continued risk in Putupawula and Ellagawa along the Kalu River.

The Attanagalu Oya basin is also slowly receding, though residents in Dunamale have been urged to remain on alert. Several homes in Ja-Ela remain underwater, with residents alleging that delayed repairs to a damaged canal embankment worsened the flooding.

In a fresh blow to infrastructure, the Swarna Hansa Podi Ela bridge in Ja-Ela collapsed on Saturday evening, further disrupting local transport links, while the main Ja-Ela–Gampaha bus route remains submerged in parts of Yakkaduwa.

Meteorologists have warned that rainfall is expected to intensify again from May 26 to 28, when the southwest monsoon is likely to be formally declared over Sri Lanka, raising the risk of further flooding and landslides in already saturated areas.

by Norman Palihawadane and Chaminda Silva

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Dickoya double murder suspect arrested

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Police said a suspect wanted in connection with the murder of an elderly couple inside a shop in Dickoya town, Hatton, had been arrested on Saturday evening (23).

The arrest was made in the Bogawantalawa police area. Acting on a tip-off, the police arrested him while he was hiding in a house on a tea estate.

Police said stolen gold jewellery had been recovered.

Preliminary investigations revealed that the suspect, originally from Badulla, had been residing in Dickoya after his marriage.

Earlier on Saturday, Hatton Police released CCTV footage of the suspect and sought public assistance to trace and arrest him.

According to police, the suspect allegedly slit the throat of the elderly woman and killed her husband using a sharp weapon on Thursday (21) before fleeing with gold jewellery valued at around 18 sovereigns, including a necklace and earrings.

Investigations further revealed that the suspect had arrived in Dickoya town on the morning of May 21 and visited several jewellery shops claiming he intended to purchase a gold necklace, while loitering in the area.

Police said that around 1.15 pm, he entered the couple’s shop and remained concealed inside the premises before allegedly carrying out the attack.

Hatton Police added that the suspect is believed to have committed the murders and left the shop around 5.30 pm the same day before going into hiding.

by Norman Palihawadane

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