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‘Changing medication will not help unless we change the doctor to solve the country’s problems’ – Eran Wickramaratne, MP
MP Eran Wickramaratne speaking in the debate on the Central Bank of Sri Lanka (CBSL) annual report – 2020 in Parliament last week said that under this government, Sri Lanka is currently facing crises such as higher spending than revenue, higher import expenditure than exports indicating a deficit in the current account and widening budget deficit.
He said what needs to be done is to change the doctor rather than changing the medication to resolve these problems faced in the country.
He further said that the cost of living and the price of petrol have gone up and the country was facing huge problems. Even a school child realizes that government revenue has declined. Now 70% of government revenue is spent on interest on loan repayment. Lebanon is the only country in the world that pays higher interest than Sri Lanka as a percentage of national revenue.
Wickramaratne said that it was first thought that changing ministers was useless for this issue and the policies should be changed. But the Government ministers were saying that though the opposition was pinpointing the disease they did not propose any solution.
The solution to the problem in this country is to change the doctor. There is no point in changing the medication, he suggested.
Today Sri Lanka is facing a dual crises. One is that spending is higher than our national revenue. This is an average deficit of 7.6 per cent of GDP since 1990. Incomes began to fall since 1995. This problem has been exacerbated by the gradual decline in the country’s revenue from 17.3% to 11.6% of GDP from 2006 to 2014 under the Government of President Mahinda Rajapaksa.
“However, the previous government had set its sights on the increase of revenue in 2018. We then said that we should take a basic step to reduce the budget deficit and increase revenue. Accordingly, the good governance government was able to increase the revenue to 13.5% by 2018. But due to the 2018 coup, government revenue fell to 12.6 percent, Wickramaratne further said.
The second structural crisis is the deficit in the current account. Since 2000 exports revenue continue to decline as a percentage of GDP. As a result of these two issues, we have to borrow internationally and locally, he said.
Governments in our country have not addressed these fundamental issues. Even today this government does not seem to have focused on this need. If there is a change in policy, we look forward to hearing about that change in the next budget.
Minister Cabraal, who spoke today, for the first time in 2007 went to the international market as the Governor of the Central bank and obtained a $ 500 million ISB (International Sovereign Bond) loan to address the issues of the budget deficit.
Of course, he is now delivering sermons telling different stories that the government does not need international money. That was the first time Sri Lanka had obtained an ISB loan through Mr. Cabraal. The then government started borrowing in 2007 as a new source to cover the fiscal deficit. Since then, it has continued to borrow dollars at higher interest rates. This is the problem faced by this country now.
Under such a context who will come and invest in Sri Lanka? We borrowed and created white elephants. This Government during its previous regime launched projects such as Nelum Kuluna and Hambantota Conference Hall that do not directly benefit the people or the country. Implementing such projects making use of loans is not an appropriate decision. Bandaranaike Conference Hall is a gift from China.
Even in the future, if we take a loan, we should invest them in a project that would generate income for the masses and the country.
Everyone remembers that in the last quarter of 2018, the foreign reserves stood at $ 7.8 billion. But by the time of the 2018 coup, it was down by $ 1 billion. Sri Lankan rupee depreciated by 10 rupees. Although GDP was said to have declined during the previous government, the average growth rate remained at 4.3% until the third quarter of 2018. This government has lied that growth has slowed. This problem in this country arose because of the conspiracy that preceded the Easter attack.
The previous government introduced a modernized Finance Bill for national accounting. The accounting system was changed. The income from it gradually increased. Now it must be said that the Central Bank has done some mathematical gimmicks with its report.
The Central Bank report 2020 showed that expenditure has decreased in that year. The national accounting by the CBSL continues to be calculated on cash basis. CBSL has changed the accounting system into accrual basis in 2020 and though it showed that the budget deficit is 11 % by transferring the expenses of Rs 420 billion to previous year’s account. Actually the deficit is 14 % of GDP, the highest fiscal deficit recorded in this country in 38 years.
Another gimmick was to show that the total debt to GDP ratio by 2020 was 101%, but it is 109% when combined with loans obtained by state-owned enterprises separately. In addition, the Petroleum Corporation’s debt of Rs. 345 billion increased by 16% by 2020. In 2019 it went up from Rs 297 b to Rs 345 b while the world oil prices were low, while the country used less oil because of the lockdown. When the oil prices fell the government did not pass on the benefit to consumers.
There was a third gimmick in this report. Although it is said that our foreign borrowing has come down, this is really a numbered game. The value of international sovereign bonds is stated in market value, but it should have been stated based on the face value. The billion dollar ISB paid recently was also based on face value. Therefore, in order to know the true value of the loan, the face value of the loan must be stated. If the face value is mentioned, the amount of foreign loans will increase further.
Wickramratne urged not to use this numbered game if we are to create credibility and the confidence in investors and rating agencies when building a country. He also called on the members of the Monetary Board to protect the independence of the Central Bank.
News
New Chancellor appointed to General Sir John Kotelawala Defence University
President Anura Kumara Dissanayake has appointed Air Chief Marshal Kolitha A. Gunathilake (Retd.) as the new Chancellor of General Sir John Kotelawala Defence University.
The letter of appointment was presented to Air Chief Marshal Kolitha A. Gunathilake (Retd.) by Secretary to the President Dr Nandika Sanath Kumanayake at the Presidential Secretariat on Monday (05) afternoon.
Air Chief Marshal Kolitha A. Gunathilake(Retd.) has served as Commander of the Sri Lanka Air Force and as Chief of Defence Staff.
(PMD)
News
Govt. urged to halt ‘illegal’ presidential pardons
By Shamindra Ferdinando
The government is coming under pressure from civil society organisations to formulate a clear ‘mechanism’ to deal with requests for presidential pardons.
Representing civil society organisations, Gamini Viyangoda yesterday flayed the NPP government for the delay in taking action against Ven. Galagoda Aththe Gnanasara Thera, after the Supreme Court declared the 2019 presidential pardon granted to him by President Maithripala Sirisena null and void. He said successive Presidents had abused their executive power to release convicted persons from prison.
Purawesi Balaya activist Viyangoda pointed out that the Supreme Court ruled that President Sirisena had acted arbitrarily and failed to independently consider the relevant materials before exercising his executive power.
The Court of Appeal, in August 2018, sentenced Gnanasara Thera, General Secretary of the Bodu Bala Sena (BBS), to six years rigorous imprisonment for contempt of court over his conduct during proceedings concerning missing journalist Prageeth Ekneligoda. Viyangoda said that those who had been affected by the monk’s conduct have the right to know on what basis the President released him, in May 2019.
The Court of Appeal yesterday (05) ordered the relevant authorities to enforce the remaining period of imprisonment imposed on the Thera.
Gnanasara Thera, who had been subject to an open warrant for his arrest, was produced before the Court of Appeal, today, by prison officials.
Having considered the submissions made before it, the Court of Appeal directed the Commissioner General of Prisons to take the necessary steps to enforce the remaining period of the sentence imposed on Gnanasara Thera. Police on Saturday (03) apprehended the monk at a forest monastery in Kalutara. The Colombo Magistrate’s Court on Sunday (04) ordered the Thera to be remanded in custody till Monday.
Appearing for Gnanasara Thera, Attorney-at-Law Iresh Seneviratne, together with Attorney-at-Law Pasan Karunaratne, told the court yesterday that his client had been experiencing severe mental distress and had therefore gone to an ‘Aranya Senasanaya’, where he had been staying.
Viyangoda said that examination of presidential pardons, executed over the years, would reveal how successive leaders exploited the executive power to appease their own. Responding to The Island queries, Viyangoda said that Sirisena, in Sept. 2019, just two months before the presidential election, granted Jude Shramantha Jayamaha a Presidential pardon.
Jude Shramantha Jayamaha was sentenced to 12 years by the High Court, but the Court of Appeal revised that sentence to death, in July 2012, which the Supreme Court later upheld. Viyangoda said that though the Supreme Court, in June 2024, declared that the particular Presidential action was illegal and arbitrary, law enoforcement authorities were yet to take tangible measures to enforce the court directive.
Viyangoda stressed that no President should exercise the right to pardon a convicted on his or her own without following laid out procedures. According to him, Sirisena appeared to have simply ordered the monk, and the convicted murderer, released in response to appeals received by him. A comprehensive investigation could identify those who had been involved in these wrongdoings.
News
GL urges cautious handling of Saudi death row case, blasts govt. over BRICS affair
Convenor of Janathawadi Joint Opposition, Prof. G. L. Peiris, yesterday (05) emphasised the responsibility on the part of the government and others to act cautiously when making representations in respect of Sivarasa Anojan facing death sentence in Saudi Arabia over a controversial social media post.
Addressing the media at former President Ranil Wickremesinghe’s Flower Road Office, Prof. Peiris emphasised that whatever representations should be made through the Foreign Ministry.
The one-time External Affairs Minister warned of dire consequences of political party leaders, members of Parliament and civil society making direct representations and trying to get in touch with various Saudi authorities over the phone.
Prof. Peiris said that those who intervened on behalf of Anojan should keep in mind that Sri Lanka should be mindful of the Saudi way of governance and sensitivities.
The former Minister questioned the circumstances Sri Lanka was left out of the recent BRICS summit held in New Delhi. He recalled how former President Wickremesinghe discussed Sri Lanka’s entry into BRICS with Russian President Putin and received an invitation for the Summit there but as a result of the change of government, in Sept. 2024, Sri Lanka ignored that invitation.
That resulted in Sri Lanka being left out from the New Delhi summit, Prof. Peris said.
Prof. Peiris pointed out the absurdity in sending the Foreign Secretary to the BRICS Summit in Russia instead of the President, PM or the Foreign Minister to represent the country.
Referring to the forthcoming conclusion of the current IMF programme, initiated during Wickremesinghe’s time, Prof. Peiris said that Sri Lanka lost a great opportunity to benefit from BRICS by failing to represent the country at a higher level at the Russian summit.
The BRICS nations established the New Development Bank (NDB), originally called the BRICS Development Bank, Prof. Peiris said.
Dismissing NPP government’s explanation regarding Iranian ships awaiting necessary supplies but deprived by US imposed restrictions, the former Minister strongly criticised the administration’s response. According to him, this government responded in a similar manner when the US sank an unarmed Iranian frigate just outside Sri Lankan territorial waters in March this year.
Prof. Peiris declared that the government’s assertion that the US restrictions weren’t only directed at Sri Lanka but all Iranian vessels in other regions as well was not acceptable (SF)
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