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Tissa Vitarana opposes going to IMF at All Party confab

Published

4 years ago

2022/03/27

Calls for 50% tax on income between Rs. 400,000 and Rs. 1 million

I am glad that this conference is being held when Sri Lanka is faced with one of the worst economic crises since independence. Before getting onto my speech, I wish to thank the President and Prime Minister for holding this meeting. Further, the presence of members of the Opposition is also welcome. This is a signal of the readiness of the Opposition to cooperate with the Government to overcome the crisis, as one nation.

However, I strongly disagree with the view that both the Government and the Leader of the Opposition hold that the solution lies only through the IMF (International Monetary Fund). The IMF solution will only lead to a further loss of dollars through the unrestricted opening of the economy to more imports and also lead to increased debt due to taking further loans.

It would have been better to have had an earlier meeting of the Government party leaders so that agreement on policy matters could have been reached among ourselves in the Government. I would support the view of the Tamil speaking MP’s that national unity is essential and could be achieved by fully implementing the 13th Amendment to the Constitution.

Due to shortages and high prices of basic essentials, most of them imported, like fuel (oil and gas), medicines and food, life has become a misery for most of the people (perhaps other than the super-rich). The knock on effects e.g. shortage of electricity, have added to the misery. The root cause is the shortage of US dollars (USD). The Foreign Exchange Reserve which was maintained at USD 7-8 Billion has come down to less than USD 1 Billion. This has led to our Fitch Rating dropping to 2C (1C means bankruptcy). The real value of the rupee has dropped from 200 to a dollar, to 285 per dollar. This has led to the non-acceptance of Letters of Credit (LC) from Sri Lanka by foreign suppliers. As a result it is only after payment in dollars that goods are sent from abroad, which means a delay of several months. But due to the shortage of dollars in the country this cannot be done even in time.

A similar crisis occurred during the 1970-75 SLFP/LSSP/CP Coalition Government. With the formation of OPEC, oil prices rose by more than five times and a ton of sugar went up from £ 42 to £ 600. The JVP insurgency damaged the economy and added to the cost to the country.

Dr.N.M.Perera, then Finance Minister, overcame the crisis and raised the Foreign Reserves from USD 1.3 Billion in 1970 to USD 2.7 Billion by 1975, thereby stabilizing the economy and providing sufficient US dollars for our essential imports. He strictly banned non-essential imports thereby reducing the foreign exchange deficit, which is the main cause of the lack of dollars. He encouraged the development of local industry and agriculture.

Since 1977 the UNP came to power with its neoliberal economic policies. These have been operative since then. These were designed by the USA (led by Prof. Friedman of the Chicago School of Economics), to continue to exploit the world’s resources (specially countries of the Third World, like Sri Lanka) to the advantage of the USA and its imperialist allies in the post-colonial era. This open economy, promoted by the WTO (World Trade Organization), which the UNP and its allies in Sri Lanka strongly support, led to unlimited import of luxury and other non-essential goods. The result was that the foreign exchange deficit was at time double the export income.

This ate into our reserves and also led to massive foreign borrowing. Successive Governments, the UNP more than the SLFP, went into both short and long term borrowing, often at a high interest rate. Last year alone Sri Lanka had to pay USD six billion for debt servicing. The question then is how can we pay this amount when our reserves are so low.

The only way out is to get a moratorium from our creditors, that is ask for time to delay the payments for a period of about five years. This would mean for this period we will have USD 30 Billion, to put our economy right and also immediately fund the import of essentials, with the restoration of LCs. This has been done by several countries in the course of past crises. I am told that Argentina and Uruguay among other countries have done so this time too.

Our solution should ensure that we do not increase our debt, a root cause of our problems. This would be the inevitable outcome of turning to the IMF for assistance. Further the IMF policy of unlimited imports would put us into deeper debt.

Concrete measures should be taken to rationalize our import structure. Nearly 25% of our dollars is allocated to the import oil and gas. The latter requirement can be effectively minimized by domestic bio-gas production using cookers produced by the NERD institution. Fuel should be rationed giving priority to public transport. There should be a total ban on non-essential imports. Other selected items should be subject to heavy taxes.

This is a better solution than the issuing of permits, which leads to corruption. Foreign inputs required for industrial production for exports should be permitted. Promotion of science, technology and research for value added industries using local raw material should also be supported.

The tax system should be drastically revised as indicated in Table 1.

As an incentive, company taxes should remain low only for value added industries, that use local or foreign raw materials, especially for export and import substitution. Unfair exploitation of local human and material resources must be minimized, especially for the local market. Incentives must be given for tourism and remittances from abroad. Indirect taxes must be minimized.

The adoption of a floating exchange rate system is a progressive step in the present context. The public and private loss making institutions can be made profitable like in Kerala, India by utilizing the “Solidarity Principle”. Here the ownership of an enterprise is given to the employees and the profit is shared equally among them. Stop taking inflated foreign loans. The above changes should be associated with a wage-price freeze (which led to the success of Roosevelt’s “New Deal”).

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Foreign warships commended for their assistance during weather disaster in Sri Lanka

Published

5 hours ago

2026/01/1

Priyan

Highlighting the spirit of global and regional cooperation, the Sri Lanka Navy acknowledged the invaluable support by foreign warships, which had arrived to take part in the International Fleet Review (IFR) 2025, extending much-needed Humanitarian Assistance and Disaster Relief (HADR) operations, during the recent weather disaster in Sri Lanka.

The IFR 2025 was held off the Galle Face seas, marking the milestone 75^th anniversary celebrations of the Sri Lanka Navy.

Representing the Government of Sri Lanka, Prime Minister Dr. Harini Amarasuriya graced the event and received the traditional naval salute from onboard SLNS Gajabahu, as the participating foreign warships paid their honours.

Eight (08) foreign naval warships arrived in Sri Lanka by 27 November to take part in the IFR under the theme “Sailing Strong – Together”. The participating warships included the Bangladesh Navy’s BNS PROTTOY, the Indian Navy’s aircraft carrier INS VIKRANT and INS UDAYGIRI, Iran Navy’s IRIS NAGHDI, the Maldivian Coast Guard’s CGS HURAVEE, the Royal Malaysian Navy’s KD TERENGGANU, Pakistan Navy’s PNS SAIF and Russian Navy’s GREMYASCHCHY.

Due to the disaster-situation triggered by severe weather conditions across the island, foreign warships that arrived for the event were promptly redirected to support humanitarian efforts. Particularly, helicopters deployed from the Indian Navy’s aircraft carrier INS VIKRANT and Pakistan Navy’s PNS SAIF played a praiseworthy role in search and rescue missions for affected communities.

Accordingly, the warships representing each nation joined the IFR, honouring proud maritime traditions and in acknowledgement of Sri Lanka and its Navy. Their participation also reinforced collective cooperation and partnership needed to address non-traditional maritime threats in the region, as well as natural disasters driven by climate change.

The Prime Minister expressed gratitude to a group of diplomatic officials, present on this occasion, for their support in the disaster relief operations. The officials, who were present on the occasion, represented the High Commissions and Embassies of Bangladesh, India, Iran, Maldives, Malaysia, Pakistan, and Russia in Sri Lanka.

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I invite you to step into 2026 with renewed energy, hope, and determination – PM

Published

7 hours ago

2026/01/1

Priyan

Prime Minister Dr Harini Amarasuriya in her New Year message invited all Sri Lankans to step into 2026 with renewed energy, hope, and determination.

The PM’s New Year message:

“As we move forward to the New Year of 2026, it is timely to reflect on the year 2025 that has passed. The year 2025 can be granted as a year having made a number of decisive and progressive steps with a people oriented government.

I am confident that, within a new political culture, we were able to strengthen transparency in state governance and lay the foundation for an efficient and corruption free public service.

We can be satisfied with the progress achieved in several key areas during 2025, including economic stability, the increasingly positive and optimistic international perception towards our country, the establishment of transparent systems of governance, and the strengthening of the sovereignty of the legislation system.

However, the unfortunate disastrous situation we experienced towards the end of 2025 was a challenging period for our nation. While it deeply moved us all, the spirit of solidarity, compassion, and collectivity shown by Sri Lankans during that difficult situation received admiration across the world.

As we step into the New Year 2026, we hold commitment to overcoming those challenges, healing from the disaster, and restoring the lives and livelihoods that were affected.

Moving forward with the goals such as initiating qualitative and sustainable transformation in the education sector, digitalizing all sectors of the public service, creating an enabling environment for entrepreneurs, artists, and creators with innovative ideas to rise on the global stage, and building a compassionate, environmentally friendly society free from drugs and harmful substances I would like to remind, at this moment, that the responsibility of rebuilding this nation rests upon the entire nation, together with the government, transcending differences of ethnicity, religion, or political affiliation, and united by a strong Sri Lankan identity.

Transforming all the challenges we experienced in the past year into sources of strength, I invite you to step into 2026 with renewed energy, hope, and determination.

I extend wishes for a victorious New Year filled with peace, happiness, and prosperity.”

News

National Audit Office reveals NHSL lapses

Published

9 hours ago

2026/01/1

Thilina Walpola

Reagent scandal:

Deputy Director of the National Hospital, Dr. Rukshan Bellana, has been interdicted by Health Service Committee (HSC) of the Public Service Commission (PSC) following a preliminary inquiry into several complaints received against him, government sources said.

They said certain matters referred by the Secretary to the Prime Minister Dr. Harini Amarasuriya and Inspector General of Police (IGP) Priyantha Weerasooriya, too, had been taken into consideration.

A Health Ministry official said there was no truth in Dr. Bellana’s claim, as reported in the 30th December edition of The Island, that the Health Ministry had sacked him on the approval of the HSC of the PSC over him taking up the massive Rs 900 mn fraud involving the supply of chemical reagents to the laboratory of the National Hospital of Sri Lanka (NHSL) in Colombo, which is the premier hospital in the country.

Sources said that there was absolutely no basis for this allegation. The official said that Dr. Bellana had been interdicted for issuing statements that caused controversy and turmoil among the public. That’s the most serious offence that had been taken into consideration when the decision to interdict him was taken, sources said. “There will be a spate of charges in the charge sheet to be issued soon.”

The interdiction of medical officers could not be carried out by the Ministry of Health and Mass Media, as the Ministry was not vested with disciplinary authority, sources added.

Dr. Bellana said he stood by what he revealed and had evidence to support his claim.

Health Ministry sources acknowledged that the National Audit Office (NAO) on June 6, 2025, had called for information in respect of chemical reagents procured by the National Hospital Colombo NHSL laboratory from 2022 to 2024.

Responding to another query, sources said that a separate investigation by the Internal Audit of the Ministry of Health was on into issues raised by the Audit query pertaining to the lab of the NHSL.

Having pointed out that the government paid Rs. 894,186,168 (2022), Rs. 713,652,615 (2023) and Rs. 936,152,767, totalling Rs 2,543,991,550 for chemical reagents during that period, NAO sought an explanation from the Health Ministry as to how Rs 12,894,697 worth of chemical reagents past expiry dates were found in six laboratories at NHSL during examination carried out on April 7,8,10,21 and 22 in 2025.

The NAO also raised the failure on the part of the relevant authorities to secure the approval of the Medical Supplies Division (MSD) before placing orders with local suppliers for chemical reagents.

The Health Ministry was questioned over the absence of proper stock keeping regarding Rs 2544 mn worth chemical reagents issued to NHSL laboratories. The NAO ascertained that Financial Regulations 751 had been violated. As a result of the absence of credible stock keeping, the NAO hadn’t been able to ascertain whether shelf-life expired chemical reagents were misused, the government authority stated.

The NAO asked for an explanation regarding the payment of Rs 912,838 over the required amount to a local private supplier (NAO named the supplier) for chemical reagents obtained.

In one of the most serious observations, NAO pointed out that shelf-life expired chemical reagents had been used for tests. The NAO raised this while pointing out the Health Ministry violated a key prerequisite in the procurement of chemical reagents that their shelf life should be at least 85% at the time of receiving consignments. Instead, all stocks procured had less than six months shelf life, NAO stated.

NAO declared that some suppliers refrained from mentioning the date of manufacture and the time of expiry.

The above mentioned were some of the issues that had been raised by Audit Superintendent Y.M. Sugathadasa on behalf of the Auditor General who is the head of the NAO. The post of AG remains vacant since December 8, 2025. Earlier incumbent W.P.C. Wickremeratne retired on April 8, 2025 after having served as AG for several years. President Anura Kumara Dissanayake and the Constitutional Council haven’t been able to reach consensus on a permanent appointment yet.

By Shamindra Ferdinando ✍️