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ADB country chief hopes Lanka could sustain policy reforms despite elections
ECONOMYNEXT –The Asian Development Bank (ADB) expects Sri Lanka not to reverse its International Monetary Fund-led policy reforms despite elections soon, the ADB Country Director for Sri Lanka Takafumi Kadono said.
The island nation has witnessed repeated reversals of policy reforms in the past due to greedy politicians who misled the people to vote for them by sowing the seeds of subsidy mentality with unsustainable debts at expensive borrowing costs, economists say.
That led the country into an unprecedented economic crisis in 2022 with a sovereign debt default. Sri Lanka is still struggling to come out of the crisis.
The IMF has strictly placed some reforms including in state sector enterprises, fiscal and monetary sectors.
Sri Lanka has implemented the painful IMF reforms so far including higher personal income taxes, but economists have raised concerns over the sustainability of the current reforms due to possible changes in the policies in the event of a new president or government comes to power after democratic elections.
“If that kind of reversal happens, we also cannot justify our support,” ADB Country Director for Sri Lanka Takafumi Kadono told EconomyNext on late on Wednesday.
“We do expect these policy reforms to be sustained. So that is our expectation. That is the premise which we are providing our budget support. If they reverse, the whole premise will be collapsed. That kind of policy reversal cannot happen.”
The island nation had sought IMF bailout package for 17 times including the ongoing support. However, the authorities have failed to complete most of the past IMF loan disbursements due to politically motivated contradiction with the global lender’s tight fiscal policies.
Sri Lanka has shown some signs of recovery in the third quarter of 2023 with the economic growth turned to positive from contraction for the first time in seven quarters.
However, opposition political parties have promised to revisit the IMF deal if they come to power.
Higher taxes, soaring cost of living, and lack of salary hike have made President Ranil Wickremesinghe’s government unpopulour among the public, analysts say.
Wickremesinghe has said the country will hold both presidential and parliamentary election by 2025.
Some government politicians have told EconomyNext that the higher taxes would be eased from April and the authorities will try their best to meet the IMF conditions for the third disbursement in June this year.
The presidential polls should be held by October this year, but opposition parties have said President Wickremesinghe is in the process to delay the poll.
However, Wickremesinghe’s office last week said Presidential Election will be held “within the mandated period”, without giving an exact time.It also said the General Election will be held next year, “according to the current timeline”.
The Ceylon Petroleum Corporation (CEYPETCO) has announced a revision of fuel prices, effective from midnight on Saturday (May 30).
Accordingly,
the price of Auto Diesel has been increased by Rs. 15 to Rs.407 per liter,
the price of Super Diesel has been increased by Rs. 20 to Rs. 478 per liter.
the price of Petrol 92 Octane has been increased by Rs. 24 to Rs. 434 per liter
the price of Petrol 95 Octane up by Rs. 25 to Rs. 495 per liter
the price of kerosene by Rs. 20 to Rs. 285 per liter.
Former President Chandrika Bandaranaike Kumaratunga has called for a comprehensive reform programme within Sri Lanka’s Buddhist clergy, warning that repeated efforts to strengthen the Sasana have in the past been derailed by opposition from within sections of the Sangha itself.
In a statement addressed to the Mahanayake Theras of the three Buddhist chapters, Kumaratunga stressed that the long-term preservation of Buddhism depends on safeguarding both the Dhamma and Vinaya, or disciplinary code, and urged urgent internal reform to address what she described as deep-rooted structural weaknesses.
She noted that Buddhist history has consistently demonstrated that periods of institutional crisis were addressed through reform processes, citing precedents from the First Buddhist Council to reforms during the Kandyan era under Welivita Sri Saranankara Thera.
Referring to post-independence efforts, Kumaratunga said initiatives taken during the 1956 Bandaranaike administration to strengthen Buddhism were left incomplete following the assassination of former Prime Minister S.W.R.D. Bandaranaike.
She further stated that during her own presidency, plans to convene a Buddhist Council under the guidance of the late Madihe Pannasiha Mahanayake Thera had received government backing but were ultimately abandoned due to resistance from certain sections within the clergy.
The former President alleged that, on both occasions, vested interests benefiting from existing weaknesses within the Buddhist establishment had worked to obstruct meaningful reform efforts.
Warning that Buddhism in Sri Lanka is currently facing serious challenges, she called for a broad internal dialogue within the Sangha to identify root causes and implement both short- and long-term corrective measures.
Kumaratunga urged the Mahanayake Theras to take the lead in convening a Dharma Sanghayana, or Buddhist Council, and said she was prepared to work with senior lay Buddhist leaders to support such an initiative.
The Colombo Fort Magistrate’s Court on Friday ordered the arrest of former Minister Basil Rajapaksa, Tourism Promotion Bureau Chairman Bhashwara Gunaratne, Managing Director Rumi Jauffer and several others over the alleged misuse of Rs. 7.8 million belonging to the Tourism Promotion Authority during the 2014 Uva Provincial Council election campaign.
Magistrate Pasan Amarasena directed the Criminal Investigation Department (CID) to arrest and produce the suspects before court, after it was informed that they would be named under the Public Property Act on the advice of the Attorney General.
The CID told court that attempts to take the suspects into custody from their residences had been unsuccessful as they were not present.
The Magistrate also imposed an overseas travel ban on the suspects and ordered that the Controller of Immigration and Emigration be notified.
Investigations have reportedly revealed that the funds were used to print 12,000 T-shirts bearing an image of former President Mahinda Rajapaksa on one side and the name of a political party on the other.
According to the CID, the T-shirts were later distributed at a political event held in the Monaragala District.
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