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BASL: Looming economic crisis could impact rule of law and democracy

Published

5 years ago

2022/01/16

The Bar Association of Sri Lanka (BASL) on Friday warned that looming economic crisis could impact rule of law and democracy and called on government to address the economic crisis without any further delay.

The BASL in a statement signed by its Secretary Rajeev Amarasuriya said that the BASL was gravely concerned of the signs of a looming economic crisis in Sri Lanka and its possible impact on the Rule of Law and Democracy and on the living conditions of the people.

“We believe that the present crisis is the crescendo of the crisis emanating from the systematic undermining of the rule of law and governance based on executive convenience and expediency rather than on institutional independence and autonomy over a long period of time by successive governments,” the BASL said.

It said that the spiraling inflation, shortages of essential goods including gas, the unavailability of foreign currency, the inability to remit monies overseas, the downgrading of Sri Lanka’s ratings by multiple international rating agencies; the temporary closure of the fuel refinery at Sapugaskanda; reports of the operations of certain foreign airlines being suspended; warnings of a possible power crisis are all indicators which demonstrate the urgency of the need for the Government to address the economic crisis without any further delay.

Full text of the BASL Statement: The Bar Association of Sri Lanka (BASL) is gravely concerned of the signs of a looming economic crisis in Sri Lanka and its possible impact on the Rule of Law and Democracy and on the living conditions of the people.

The spiraling inflation, shortages of essential goods including gas, the unavailability of foreign currency, the inability to remit monies overseas, the downgrading of Sri Lanka’s ratings by multiple international rating agencies; the temporary closure of the fuel refinery at Sapugaskanda; reports of the operations of certain foreign airlines being suspended; warnings of a possible power crisis are all indicators which demonstrate the urgency of the need for the Government to address the economic crisis without any further delay.

In this respect, a downturn in the economy can have far reaching adverse consequences to the Rule of Law and Governance of a Country. At its worst, economic decline can result in a complete breakdown of Law and Order, but even prior to that, serious repercussions flow from growing financial hardships that have to be borne by citizens that perpetuates inequality and the ability of citizens to enjoy or vindicate their rights, be they public or private rights. It goes without saying that the worst affected by economic hardship are the most vulnerable in society.

It is an undisputed fact that since March 2020 there has been a gradual erosion of foreign reserves from approximately USD 7 billion. Although it was announced by the Central Bank that the reserves have increased to USD 3 billion, it remains to be ascertained how much of that are usable reserves to repay the debt and used to redress the prevailing balance of payments crisis. Even out of the available reserves a large proportion contains moneys obtained in the form of short-term foreign exchange swaps.

There have been several sovereign credit ratings downgrades in the corresponding period by all the major credit rating agencies. The latest being the downgrades by Fitch Rating Agency to CC and Standard and Poor’s (S & P) to CCC. The International Sovereign Bonds yields across all tenures have remained in double digits for over a period of 2 years. This has made rollover of maturing sovereign bonds not feasible.

There have also been reports of a flight of foreign capital both from the equities and as well as the money markets. Foreign participation in both markets at present is only negligible. The Economist magazine named Sri Lanka as one of the most vulnerable countries to the expected fallout in emerging markets from the anticipated raising of interest rates by the Federal Reserve of the United States. Debt to GDP from approximately 85% in 2019 is now estimated to have risen to approximately 104% of GDP. However, in the same period the government revenue as a percentage of the GDP has fallen from approximately 12% to 10%. Year on Year headline inflation in the month of November 2021 was recorded at 9.92% and December 2021 recorded a double digit figure of 12%, the highest in the past 7 years. The Net International Reserve Position of the Country has been negative for over three months consecutively. All of this has resulted in the scarcity of foreign exchange to sustain essential imports.

The ability of the government to meet its total dollar requirements of approximately USD 6.9 billion in 2022 is being questioned, although the Central Bank has pledged that such commitments will be met. Questions as to the stability of the financial sector are also being raised.

The BASL notes with deep concern the statement made in late December by the Joint Chambers of Commerce calling upon the government that if actions as envisaged by the recently announced Roadmap by the Central Bank of Sri Lanka are not materialized within the anticipated timeframes to reconsider other alternative courses of action available to the country such as engaging with the IMF to explore the funding options they can offer. The Joint Chambers have warned that if conditions do not improve many local companies would look to relocate their business operations overseas and that the ability to attract Foreign Direct Investment (FDI) into the country will be constrained.

The BASL acknowledges that the government has been confronted with extraordinary challenges in the form of the pandemic which has caused disruptions to the economic activities. It also recognizes the fact that the government has taken measures to address the challenges arising thereof. Similarly, the Government has sought to undertake remedial measures to address the fallout from the prevalent crisis consequent to the loss of access to financial markets and the resulting paucity of foreign exchange domestically thereof. However, none of those measures have brought about the desired results and have failed to build confidence to reverse the flight of foreign capital from the equities and money markets. Neither have these steps resulted in regaining access to international financial markets to raise debt.

Enjoyment of a living standard based on desired lifestyle choices and income has become a challenge. Our members who are mostly self-employed are particularly vulnerable and adversely impacted by these events as savings and assets form the bedrock of their economic safety net. Some of the measures taken by the Government have directly impeded the ability of our members to perform their professional duties, particularly the purported regulation that compels the conversion of foreign inflows into rupees within a stipulated time period.

We believe that the present crisis is the crescendo of the crisis emanating from the systematic undermining of the rule of law and governance based on executive convenience and expediency rather than on institutional independence and autonomy over a long period of time by successive governments.

In these circumstances, the BASL calls upon the government to seek the assistance of acknowledged independent and non-partisan experts both domestically and internationally and also of multilateral institutions that have a proven record of providing resources financially as well as in the form of technical expertise that will enable sustainable solutions to this crisis.

It is our belief that such assistance will result in the prescriptions that manifest to the world Sri Lanka’s belief in institutions as a country where effective governance is not contingent on personalities. It will manifest the fact that Sri Lanka has the desire and institutional capacity to respond to the exigencies brought by the present crisis via prescriptions that subscribe to the Rule of Law. Moreover, it is our belief that only such a response will create the institutional framework that ensures the efficient collection of revenue and the result in the efficient allocation of scarce resources and the formulation of monetary policy that ensures economic stability rather than a permissive one which facilitates executive expediency and convenience.

The achievement of these outcomes is in our opinion indispensable to resolve the crisis at hand.

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Published

4 hours ago

2026/09/10

Sahan Weerasooriya

GL / Harshana

Opp. lashes out at Justice Minister for disparaging remarks about CLA

By Shamindra Ferdinando

The Joint Opposition yesterday (09) tore into Justice and National Integration Minister Harsha Nanayakkara over some disparaging remarks about the Commonwealth Lawyers Association (CLA) in Parliament on Tuesday (08).

The Convenor of the Opposition grouping, former Law Professor Peiris questioned Minister Nanayakkara’s declaration that the CLA was a private club that granted membership on payments received. Emphasising that the CLA consisted of those in the legal profession in Commonwealth countries, Prof. Peiris told the weekly media briefing at the Flower Road Office of former President Ranil Wickremesinghe that the views expressed by the organisation couldn’t be discarded under any circumstances.

Prof. Peiris dealt with Nanayakkara’s response to the CLA’S concerns about several issues, including the composition of the five-member panel of judges. “How could Minister Nanayakkara dismiss concerns raised by CLA on the basis of the paid-membership of the organisation?” Prof. Peiris asked. If membership became an issue, the government would have to reconsider Sri Lanka’s UN membership, the ex-External Affairs Minister said, pointing out that the country had to make regular payments to retain membership of other UN agencies, as well.

Prof. Peiris said that indefensible attacks on international organisations could cause irreparable damage to the country. Appreciating the CLA’s report on the Supreme Court proceedings on the 01 and 02 September, Prof. Peiris stressed the importance of what he called total transparency in the judicial process. He said that whatever the outcome of a particular legal process, it couldn’t be done behind the backs of the public.

Referring to legal processes regarding the 6th Amendment and 13th Amendment, in 1983 and 1987, respectively, Prof. Peiris said, on both occasions the then Chief Justices Neville Samarakoon and S. Sharvananda constituted benches consisting of all Supreme Court judges.

But, the incumbent CJ Preethi Padman Surasena, in spite of the majority of petitioners demanding all available 13 justices to hear the case, decided to leave out those on the seniority list from second position to fourth position.

The government got offended because the CLA pointed that out for the whole world to take notice, Prof. Peiris said. The former parliamentarian noted that the CJ hadn’t even give a reason for declining the widespread call to involve all available 13 judges. According to him, there had been instances where CJ’s appointed seven justices to hear a particular case. Prof. Peiris cited the 2018 bench of seven judges that heard the petitions against President Maithripala Sirisena over the dissolution of Parliament and a panel constituted in 2023 to hear the 2019 Easter Sunday carnage that claimed the lives of 270 people.

The issue at hand is that the five-member panel of judges hadn’t been selected on the basis of seniority, Prof. Peiris said, once the SC determination was sent and released through the Speaker, they would meticulously examine that to make their position known to the people. Prof. Peiris said that what they really wanted to know was that if seniority hadn’t been the basis for selection what the criterion was.

News

Sri Lanka reiterates its territory won’t be used against India

Published

4 hours ago

2026/09/10

Sahan Weerasooriya

Indian Defence Minister Rajnath Singh listening attentively to President Dissanayake (pic courtesy PMD)

The Indian Defence Ministry in a statement issued yesterday (09) quoted President Anura Kumara Dissanayake as having assured visiting Defence Minister Rajnath Singh that Sri Lanka would never allow its territory to be used for activities inimical to India’s security interests.

The text of the Indian press release: “Visiting Indian Defence Minister Rajnath Singh called on President Anura Kumara Dissanayake in Colombo on September 09, 2026. The two leaders held substantive discussions on issues covering the entire spectrum of the multi-faceted partnership between the two nations, characterised by traditionally warm relations and mutual trust.

The two sides reaffirmed that as civilisational twins, close neighbours and maritime partners, India and Sri Lanka would continue to work together for their development and welfare of the people while working jointly to ensure the safety, security, peace and prosperity of the region. The senior Indian Minister conveyed greetings on behalf of Prime Minister Narendra Modi and underlined that the citizens of the two countries share deep friendship based on strong historical & civilisational links and people-to-people exchanges.

Extending a warm welcome to Mr. Singh, President Dissanayake recalled his interactions with PM Modi and reiterated that Sri Lanka would never allow its territory to be used for any activities inimical to India’s security interests.

President Dissanayake expressed his gratitude for the relief assistance provided by India as part of Operation Sagar Bandhu during Cyclone Ditwah and the comprehensive rehabilitation package extended by New Delhi to facilitate reconstruction and rehabilitation work across different parts of the island. The powerful Indian Defence Minister emphasised that as a closest friend and neighbour of Sri Lanka, India considered it not a favour, but a responsibility to provide assistance as the first responder and would continue to do so in the future as well.

Both leaders virtually inaugurated three Bailey Bridges constructed by the Indian Defence Forces. The two sides also exchanged MoUs on upgradation of L70 Guns for the Sri Lankan Air Force, and cooperation between National Cadet Corps (NCC) & National Defence Colleges (NDC) of both the countries. The MoU on Upgradation of six L70 guns for the Sri Lankan Air Force falls under a Government of India grant. The upgradation of these air defence guns will significantly strengthen the air defence architecture of critical assets in Sri Lanka. These air defence guns were earlier provided to the Sri Lanka Air Force by India.

The MoU on academic cooperation between NDC, India and NDC, Sri Lanka will facilitate knowledge sharing which will be a significant step in further strengthening the academic bonds between both the sister institutes. The MoU on NCC cooperation will formalise the NCC youth exchange programme between India and Sri Lanka. This exchange programme provides a valuable opportunity for NCC cadets from multiple countries across the world to come to New Delhi every year and participate in NCC events.”

News

UK-led Core Group calls Jaffna mass graves a ‘stark reminder’ but stops short of calling for international accountability

Published

4 hours ago

2026/09/10

Sahan Weerasooriya

Eleanor Sanders

Mass grave excavations in Sri Lanka are a stark reminder that thousands of cases of enforced disappearance remain unresolved, the Sri Lanka Core Group has told the UN Human Rights Council, urging Colombo to translate its stated commitment to reform into concrete progress, while again stopping short of calling for the international accountability that Tamils have long demanded.

The statement, delivered in Geneva, on Tuesday (08), during the Council’s 63rd session by the United Kingdom’s Human Rights Ambassador Eleanor Sanders on behalf of Canada, Malawi, Montenegro, North Macedonia and the UK, welcomed, what it called, the High Commissioner’s balanced assessment of the human rights situation on the island.

The group acknowledged that Sri Lanka had faced considerable challenges recently, including severe weather events and global energy shocks, and welcomed positive developments, including the ratification of the ILO Convention 190 and engagement on the Convention on the Rights of Persons with Disabilities.

“However, much further action is needed to build confidence in accountability and reconciliation efforts,” Sanders said. “Progress in several emblematic cases has not yet been accompanied by a comprehensive,

victim-centred accountability process to address past violations. Mass grave excavations are a stark reminder that thousands of cases of enforced disappearances remain unresolved. And reports of intimidation, harassment, and restrictions affecting civil society, journalists and victims’ groups, including in the North and East, still raise concerns.”

The group urged progress on democratic governance, including advancing legal and institutional reforms, resolving land-related issues, ensuring respect for human rights in detention institutions and strengthening independent institutions.

The statement follows a familiar pattern. In June, the group acknowledged “developments in certain mass grave investigations” and urged that excavations meet international standards, and in March it called for the repeal of the Prevention of Terrorism Act. At the 58th session it welcomed a series of measures Tamils regarded as superficial. Neither this statement, nor its predecessors, names Chemmani, calls for international oversight of the excavation, or addresses the demand for a referral to the International Criminal Court.