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Editorial

A budget oozing overoptimism

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Thursday 19th November 2020

Prime Minister Mahinda Rajapaksa, who is also the Minister of Finance, has presented Budget 2021, which looks a good story with a happy ending. It has offered something to everyone, and is bound to go down well with those who are to benefit from tax exemptions and other such relief. All 75 budgets presented in the Sri Lankan Parliament have been tales told by Finance Ministers. Most budget proposals, especially the progressive ones, have remained unimplemented, all these years, for want of funds mostly due to failure on the part of successive governments to meet their revenue targets and curtail wasteful expenditure.

As for Budget 2021, proposals to abolish PAYE and the withholding tax and increase the personal income tax threshold will benefit a large number of people. But it will be swings and roundabouts for them if indirect taxes increase, as feared in some quarters. Steps taken to develop local agriculture and industries through tax exemptions, etc., and allocate additional funds for developing public health and education sectors are welcome. The proposed expansion of the university system, however, is a task that the government has to carry out cautiously, taking into consideration the need to ensure their standards. Even the existing universities are experiencing a severe dearth of qualified teachers and facilities. There are some more progressive budget proposals, and they are welcome. One can only hope that there will be enough funds for their implementation.

The devil is in the detail, though. When one reads Budget 2021 carefully, one sees that several crucial issues have not been addressed in a satisfactory manner. The government has made numerous expenditure commitments as regards development and social welfare, but how does it propose to meet the revenue shortfall resulting mainly from tax concessions and a significant decrease in foreign earnings? Borrowings, both foreign and domestic, will not be easy.

The government has undertaken to reduce the budget deficit to 4% of GDP by 2025. This is a very ambitious target. One may recall that it was first set by a UNP-led government, in 2002. The then Prime Minister Ranil Wickremesinghe declared, in Parliament, that the budget deficit would be brought down to 4% of GDP by 2008. (His government fell in 2004!) Later on, the Mahinda Rajapaksa government undertook to achieve that target. Now, another Rajapaksa government has repeated the same promise. It seems to believe that the economy will expand at such as rate that its revenue will increase automatically. It is being overoptimistic.

The success of any programme to reduce the budget deficit to the expected level hinges on the government’s ability to increase revenue to at least 10.8% of GDP, in 2021, as economists argue. This goal will be unattainable without new tax proposals. A shortfall in revenue collection may lead to a much higher budget deficit than 8.8% of GDP. Such a situation can be averted only by curtailing public investment, inter alia, to match lower revenue. This means most ministries will not receive allocated funds for the implementation of envisaged projects in such an eventuality.

It will also be an uphill task for the government to fulfil its expenditure commitments while reducing public debt from 90% of GDP to 70% of GDP and ‘minimizing the risk in debt composition caused by sourcing of foreign loans’. How the government is planning to achieve this target is not clear.

As for the envisaged budget deficit, 8.3% of GDP is expected to be financed through domestic borrowings. Enough domestic financial resources in terms of savings will not be available for the government to borrow such a large amount domestically, and the Central Bank may have to print money as it has done this year in view of the pandemic. If money printing continues, it will result in serious problems such as higher inflation and price instability.

The government has expressed serious concern about slow progress in foreign-funded projects and low returns therefrom. Pointing out that the number of programmes implemented annually with foreign financing has increased exponentially, the PM has said in Budget 2021: “However, a significant number of projects worth more than USD 6.000 million show slow progress. The main deficiencies identified in monitoring of project planning, feasibility, implementation are deviation of the projects from national requirements, and frequent cost and time escalations resulting in low returns … Due to these expenditures, productive investments which could have been implemented at a lower cost are not adequately financed …” Has the government forgotten that most of these problems are also due to rampant corruption involving politicians and bureaucrats. How does it propose to tackle corruption, which will put paid to its efforts to keep the costs of development projects low and increase returns?

Meanwhile, Budget 2021 does not reveal how the Treasury is going to meet USD 6 billion worth of foreign currency debt obligations falling due during 2021 while having only USD 5.5 billion official reserves with the Central Bank. If the government fails to raise at least USD 6 billion external borrowings, it will be forced to default on its external debt obligations––absit omen!––and this has never happened in Sri Lanka. If it were to happen, Sri Lanka would have a hard landing currency crisis similar to ones faced by Greece, Argentina and Zimbabwe, in the past.

Overall, we view Budget 2021 as a government attempt to achieve a set of highly ambitious goals within an overoptimistic macroeconomic framework.



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Editorial

Old wounds, fresh probes

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Monday 12th October, 2026

Fifty-one government MPs have proposed a parliamentary select committee (PSC) probe into the 1983 anti-Tamil violence, known as Black July, and make recommendations to Parliament. Their call has come close on the heels of a private member’s motion presented by Democratic Tamil National Alliance MP Selvam Adaikalanathan, demanding that a Presidential Commission of Inquiry be appointed to establish the truth about the 1983 ethnic violence, assess the damage and recommend measures to prevent its recurrence. The government has argued that a parliamentary select committee will be a far more effective mechanism than a presidential commission to examine the tragic events, enforce accountability and promote reconciliation.

There is no reason why the government cannot appoint a Presidential Commission to probe Black July. The calls for fresh probes into the 1983 anti-Tamil pogrom indicate that questions about the adequacy of previous investigations have remained unresolved for more than four decades. Those efforts did not result in a comprehensive, independent and effective process for holding the organisers and perpetrators of the violence criminally accountable.

The problem with parliamentary probe committees is that the ruling party can manipulate them by appointing a majority of their members. How the UPFA government used a PSC in 2012 to harass the then Chief Justice Dr. Shirani Bandaranayake before clearing the way for her ‘impeachment’ is a case in point.

The current government led by the JVP should have launched an investigation into the 1983 anti-Tamil pogrom much earlier. A thorough probe may shed light on hitherto undisclosed aspects of organised anti-Tamil violence, and the survivors of the pogrom and the families of the victims deserve justice. The Jayewardene government falsely blamed the JVP, the Communist Party and the Nava Sama Samaja Party for the pogrom and proscribed them. The JVP could not have its proscription removed and remained underground. The Jayewardene regime created conditions for the second JVP uprising, which plunged the country into a bloodbath.

Several other campaigns of violence, including mass killings, have not been properly investigated. The JVP’s terror campaign in the late 1980s and the equally brutal counter terror operations conducted by two UNP governments, under Presidents Jayewardene and President Ranasinghe Premadasa, claimed tens of thousands of lives. Those crimes must also be investigated. The incumbent government promised to launch a probe into the Batalanda torture chamber, but baulked at doing so. Maybe it did not want to open a can of worms. The JVP-led government has taken steps to reopen or expedite investigations into high-profile assassinations and other crimes under previous governments. But it has not ordered a probe into the extrajudicial execution of its own founding leader, Rohana Wijeweera, while in state custody, in 1989.

In June 2014, the Retired Senior Police Officers’ Association requested the Presidential Commission to Investigate Complaints Regarding Missing Persons to investigate the massacre of approximately 600 policemen by the LTTE in the Eastern Province in 1990. The commission identified the massacre as one of several grave incidents requiring further investigation by a special probe team with a view to gathering evidence for criminal proceedings. The police personnel surrendered to the LTTE on the orders of the Premadasa government. It is believed that many of them may have survived if they had been allowed to fight. SJB MP Chaminda Wijesiri has been sentenced to an 18-month jail term for obstructing, threatening and assaulting a group of police officers, but the massacre of 600 policemen has not been probed. This contrast raises an uncomfortable question: why do the police act decisively in individual cases while the 1990 massacre of their own personnel remains uninvestigated.

Any future PSC probe into the 1983 ethnic violence should focus on the findings of previous investigations, their inadequacies, why their recommendations were not fully implemented, whether fresh evidence could be ascertained, and, most all, what practical steps could be taken to address the continuing demand for truth and accountability.

One can only hope that the proposed PSC probe is not intended to distract public attention from the government’s failure to fulfil its election pledge to hold the Provincial Council elections within one year of assuming office.

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Editorial

Comeuppance for some, lessons for others

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The past few weeks have seen several high-profile arrests, much to the delight of critics of former rulers whose governments were widely associated with abuse of power, the suppression of democracy, political interference in key state institutions and corruption.

The arrest and remand of former First Lady Shiranthi Rajapaksa have triggered what may be described as a social media feeding frenzy, with government propagandists having a field day. The Rajapaksas and their allies were accused of manipulating legal and judicial processes for political expediency and harassing the Opposition when they were in power. Today, the boot is on the other foot, and they are crying foul. If only they had realised then that those who manipulate the law for political ends might one day find themselves at the receiving end of the same treatment.

It is hardly surprising that the JVP-led government is accused of resorting to show arrests and detentions to divert public attention from pressing issues and advance its political agenda. The government has gone on the offensive, seeking to neutralise key Opposition figures politically. Its modus operandi brings to mind Maslow’s hammer, the cognitive bias of relying excessively on a familiar tool or approach to tackle every problem, much like someone who has only a hammer and sees every problem as a nail. Critics see the suppression of dissent as ingrained in the JVP’s political culture and consider it naïve to expect a JVP-led government to refrain from using state power against its political opponents. After all, successive governments have done so, setting deeply damaging precedents.

Minister and Leader of the House Bimal Rathnayake took great pains in Parliament on Thursday to debunk the Opposition’s claim that the government has launched a witch-hunt against its political rivals. He sought to convince the House and the public that the government had nothing to do with most of the court cases and investigations against the Opposition politicians and their family members. He said all cases against Opposition politicians, except a few, had been filed during the Yahapalana and SLPP governments. If it is true that the cases were initiated under previous administrations, can the JVP/NPP leaders legitimately claim credit for fulfilling their pledge to punish the corrupt? Shouldn’t that credit go to the UNP and the SLFP, the two main constituents of the Yahapalana coalition?

Can anything be more disingenuous than politicians’ claims that they keep their hands off the legal process and the administration of justice? Governments in this country are notorious for making the wheels of justice turn at a politically expedient pace, often resorting to flimsy excuses to justify their shameful actions. While justice delayed is justice denied, justice hurried is justice buried. Justice must be neither delayed nor rushed to achieve political ends. It must be allowed to take its course, free from political interference. This has not happened under any government during the past several decades.

Some suspects are arrested and remanded or detained even before investigations against them get underway in earnest. Such action ought to be the exception, if it is warranted at all, rather than the rule. Otherwise, it could turn law enforcement into political theatre and investigations into a witch-hunt in the eyes of the public. The police and the Commission to Investigate Allegations of Bribery or Corruption must therefore act with such impartiality and professionalism that they cannot reasonably be accused of staging arrests to help the government of the day score political points. As legal experts have pointed out, premature arrests before investigations have established reasonable grounds for suspicion, risk violating individual liberty and the presumption of innocence, compromising the gathering of reliable evidence, and undermining public confidence by making law enforcement appear politically motivated or driven by a desire for publicity rather than justice. Perceptions matter as much as reality when it comes to the dispensation of justice.

The incumbent leaders ought to remember that they, too, will eventually lose their grip on power and may sooner or later have to answer for their actions. Their administration is already facing very serious questions over several controversies, including the release of 323 shipping containers without mandatory inspections, coal procurement, the disappearance of US$ 2.5 million from Treasury funds and alleged import rackets. When the Rajapaksas were at the height of their power, who would have imagined that some of them, too, would one day find themselves in remand prison? The incumbent leaders and their associates would do well to learn from their predecessors’ predicament.

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Editorial

Another motion of no-confidence

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Saturday 10th October, 2026

It will soon be showtime in Parliament. The Opposition has submitted a motion of no confidence against Speaker Dr Jagath Wickramaratne to Secretary General of Parliament Kushani Rohanadheera. Debates on no-confidence motions invariably descend into slanging matches, with members of both sides of the House trading insults and dragging one another’s reputations through the mud.

The motion of no confidence reportedly contains about 50 allegations, including misconduct, misuse of public property, financial irregularities, conflict of interest and violation of parliamentary procedures. The Opposition has called upon the Speaker to step down immediately.

The fate of no-confidence is not difficult to guess. What determines the outcome of a vote on such a motion is the numbers the opponents and the proponents can muster. There is no such thing as a conscience vote in the Sri Lankan Parliament. The Opposition has only 66 members as opposed to the government’s 159 including the Speaker. Some Opposition MPs are accused of running with the hare and hunting with the hounds. They disappear during crucial votes in the House. So, the no-confidence motion against the Speaker is doomed. The Opposition cannot be so naïve as to expect a different outcome; it is apparently planning to use the motion to inflict maximum possible damage on the government.

Gone are the days when the Speakers acted impartially, commanding the respect of all members of the House. Over the past several decades, the Chair has been reduced to little more than an appendage of the government of the day. Hence the Opposition’s frequent complaints of grievances. Worryingly, the campaigners for democracy and rights and privileges of lawmakers act out of expediency rather than principle once ensconced in power.

Ideally, the Speaker should be independent of political parties if he or she is to act impartially. Time was when political parties did not field candidates to challenge the Speakers at general elections. That helped A. F. Peiris (1952) and R. S. Pelpola (1960) enter Parliament without facing competition. The practice was that a Speaker would not normally be opposed at the next general election, reflecting the expectation that the office should be impartial and above party politics.

There have also been instances where the Speakers were elected unanimously in Parliament. They include Speaker Wickramaratne, his predecessors Asoka Ranwala and the late Anura Bandaranaike. Sadly, Ranwala had to resign over a degree certificate issue and Dr Wickramaratne is facing a no-confidence motion.

A government with a parliamentary majority can shoot down no-confidence motions with ease, but the issues raised by the Opposition do not go away. The SLPP-UNP government defeated a no-confidence motion against the then Health Minister Keheliya Rambukwella over a procurement scam, but subsequently he was prosecuted. It also defeated a no-confidence motion against Speaker Mahinda Yapa Abeywardena. But both the SLPP and the UNP suffered humiliating defeats at the last general election. Most of the SLPP MPs who voted to defeat the no-confidence motions against Rambukwella and Abeywardena could not even contest the last general election. The NPP MPs defeated a no-confidence motion against the Energy Minister Kumara Jayakody, but he had to step down subsequently albeit over some other allegation and legal action. This is something the JVP/NPP politicians who think no end of their supermajority ought to take cognisance of.

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