News
Crisis cannot be tackled by fuel price increases alone: SJB prescribes IMF
By Shamindra Ferdinando
Samagi Jana Balavegaya (SJB) spokesperson Dr. Harsha de Silva, MP, yesterday (21) called for immediate remedial measures in the wake of Energy Minister Udaya Gammanpila’s shocking admission that the national economy was in such a bad shape it found it difficult to pay for oil imports.
Former UNP non-Cabinet minister de Silva said that there had not been a previous instance of a minister expressing fears of collapse of the banking system under their watch unless corrective measures were taken. The Colombo District MP recommended the government to seriously consider seeking IMF’s assistance before the situation further deteriorated .
Noting that both the Energy Minister and the Presidential Secretariat declared that state banks could be overwhelmed by staggering Rs 737 bn loans owed by the Ceylon Petroleum Corporation (CPC) and Ceylon Electricity Board (CEB), MP de Silva emphasised that the monetary crisis could not be addressed by increasing fuel prices alone.
COPE member MP de Silva appreciated Attorney-at-law Gammanpila for being frank in his assessment. The SJB MP explained ways and means of addressing the issues at hand when The Island asked whether the Parliament as an institution should adopt a common stand on national economy and take tangible remedial measures?
The Island also sought the MP’s suggestions on stabilising the economy.
Economist de Silva said that Minister Gammanpila is on record as having said that the Central Bank in a letter dated May 31, 2021 warned the Finance Ministry of dire consequences unless remedial measures were taken.
MP de Silva said that State Minister of Finance, Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal in a recent interview with Irida Lankadeepa confirmed Minister Gammanpila’s statement. However, it would be a grave mistake on the part of the government to believe such an extremely serious situation could be tackled by increasing fuel prices.
The former Policy Planning Deputy Minister said the issue at hand is so serious, it could not be fixed by just increasing fuel prices. “A macro prudential analysis must be undertaken by the Central Bank without further delay. The systemic risks must be identified and assessed. The vulnerability of the banking system must be immediately addressed beyond the mere inability of the CPC to make good on their payments,” MP de Silva said.
MP de Silva underscored the desperate situation the state banks were experiencing. The MP said that state banks were entering into dollar swaps at massive discounts. For instance, buying dollars today at Rs 199.99 with settlement in a year at Rs 181.99. “Consider the risk these state banks are running. Can they get dollars at Rs 181.99 in a year’s time or will the dollar cost Rs 210 or even higher? Whose money is at risk? Another glaring example is the plan to borrow USD 1 billion from ‘unsolicited’ bidders. This is unbelievable. Are we going to integrate our banking system with money laundering operators to allow them to clean black money? What will happen to our credibility in the longer run? These are all serious matters that need immediate attention.”
Responding to another query, MP de Silva asserted that the best option available to the SLPP government was to restructure the country’s debt. “If we, do it now, we should be able to come out of the crisis with only a re-profiling exercise, meaning a delay in our payments to the bond holders instead of asking them to take a haircut, meaning to agree to a reduction in principle,” he said.
The SJB heavyweight asked would working with the IMF acceptable than seeking deals with those hoping to clean their dirty money. The current crisis should be tackled by working with the IMF whatever the political agenda the SLPP hoped to pursue, the government had no option but to seek IMF assistance or face a catastrophe. MP de Silva said that he suggested six months ago that Sri Lanka had no option but to undertake a restructuring process with the IMF. Although the government had ignored warnings and declared it would never go to the IMF, the crisis triggered by the fuel price hike exposed the government. “Unfortunately for the people of Sri Lanka the more these people continue this delay in restructuring the greater the pain will be when it finally is thrust upon us. We need a soft landing. Not a hard landing,” Dr. de Silva said.
The former minister said that this would be raised in parliament. Referring to a media briefing called by Minister Gammanpila early this month whereas announced plans for a new oil refinery at Sapugaskanda, MP de Silva said that the PHU leader said that cash-strapped debt-ridden government lacked the wherewithal to make an investment therefore needed external financing amounting to USD 3 bn. The former Minister said that Minister Bandula Gunawardena and State Minister Dr. Nalaka Godahewa, too, acknowledged the severe financial difficulties with the latter explaining how the raging Covid-19 pandemic worsened the situation.
News
INS Airavat makes port call in Colombo
The Indian Naval Ship (INS) Airavat arrived at the Port of Colombo for Operational Turnaround on 01 Jun 26. The visiting ship was welcomed by the Sri Lanka Navy (SLN) in compliance with time-noured naval traditions.
INS Airavat is a Landing Ship Tank, commanded by Commander IP Patil.
During their stay in the island, the ship’s crew is scheduled to take part in a series of professionally enriching events and camaraderie-building programmes organised by the Sri Lanka Navy.
The Indian naval personnel will also tour several historic and prominent tourist attractions across the country before the ship concludes her deployment.
News
BASL asks govt. to abandon plan to raise retirement ages of CA and SC judges
… tells Prez such arbitrary change neither necessary nor desirable
The Bar Association of Sri Lanka (BASL) has urged President Anura Kumara Dissanayake to abandon the controversial plan to increase the retirement age of the judiciary, including the Court of Appeal and the Supreme Court.
In a statement issued by the BASL President Rajeev Amarasuriya and its Secretary Nalin de Silva, the BASL pointed out that the proposed increase of the retirement age of the judiciary would undermine the independence, integrity, dignity, and public confidence in the Judiciary, which is essential for the maintenance of the Rule of Law and democratic governance in Sri Lanka.
The text of the BASL statement: “The Bar Association of Sri Lanka (hereinafter referred to as “BASL”) notes with grave concern reports in the public domain that the Government is considering the introduction of an amendment to the Constitution to increase the age of retirement of Judges of the Court of Appeal and the Supreme Court.
It is the considered view of the BASL that the age of retirement of the judges of the Court of Appeal and the Supreme Court which has stood at 63 years and 65 years respectively from the promulgation of the 1978 Constitution, should not be changed arbitrarily and that such a change is neither necessary nor desirable.
To do so will result in the loss of public confidence in the integrity of the legal system and of the Government’s commitment to preserve and protect the rule of law and the independence of the judiciary. Members of the public are likely to question the motives of the Government in bringing in a Constitutional amendment solely for this purpose.
Your Excellency is no doubt aware that the cadre of the Judges of the Court of Appeal was increased from 12 to 20 Judges (including the President of the Court of Appeal) and that of the Supreme Court from 11 to 17 Judges (including the Chief Justice) by the 20th Amendment to the constitution certified on 29th of October 2020. With such enhancement, workwise, there cannot be a real requirement to extend the retirement ages of these judges.
Your Excellency is aware that altering the retirement age of judges of the apex courts would have to be done through a Constitutional amendment. For many years Sri Lanka’s Constitution has been subject to ad hoc amendments, sometimes in order to cater to the political needs of the government in power and often contrary to the interests of the rule of law, the independence of the judiciary and the judiciary.
Extending the retirement age of the sitting Judges of these Courts at this point of time is likely to be viewed by the public as a blatant attempt to interfere with the judiciary. We believe that to go ahead with such an ad hoc move will also be an affront to the Honourable Judges of those courts.
If the Government goes ahead with such a move it will set a dangerous precedent for future Governments too to introduce ad hoc amendments to the Constitution in respect of the functions of the Judiciary.
The independence of the Judiciary and the public confidence reposed in it, are indispensable pillars of the Rule of Law and the democratic framework of our Republic. In that regard, it is of paramount importance that the Judiciary must not only remain independent in fact, but must also be seen by the public to be wholly independent, impartial, and free from even the slightest perception of influence, favour, accommodation, or impropriety.
The Bar Association of Sri Lanka is therefore constrained, in the discharge of its duty to uphold and safeguard the Rule of Law and the independence of the Judiciary, to respectfully express its serious concern regarding any such proposed amendment, which is neither in the interests of the Judiciary and nor of the people.
In the circumstances, the BASL respectfully urges Your Excellency not to proceed with any proposed constitutional amendment seeking to increase the retirement age of the members of the Judiciary including Judges of the Court of Appeal and the Supreme Court.
We remain confident that Your Excellency will give due consideration to the importance of preserving and protecting the independence, integrity, dignity, and public confidence in the Judiciary, which is essential to the maintenance of the Rule of Law and democratic governance in Sri Lanka.”
Govt. declines to respond
A member of the Cabinet yesterday declined to comment on the BASL’s letter to President Anura Kumara Dissanayake. The Minister said that he wouldn’t comment for the time being.
News
New US tariffs proposed on 60 countries, including Sri Lanka
12.5% additional duties on goods imported from Colombo
The US has proposed additional duties of 10% or 12.5% on imports from 60 economies, including Sri Lanka, over their alleged failure to curb trade in goods made with forced labour.
The proposal made by US Trade Representative’s (USTR) office in terms of Section 301 unfair trade practices investigation to be released, news agencies reported, pointing out that the Trump administration was seeking to rebuild its emergency tariffs, which were struck down by a US Supreme Court decision in February.
The USTR said it determined that it would impose 10% duties related to the forced labour investigation on imports from Canada, Ecuador, the European Union, Indonesia, Mexico, Pakistan, Argentina, Bangladesh, Cambodia, El Salvador, Guatemala, Indonesia, Malaysia, Taiwan and Britain.
The trade agency said it would impose additional duties of 12.5% on the remaining 45 countries that were investigated.
“The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable,” US Trade Representative Jamieson Greer said in a statement. “This creates a dynamic where American workers are forced to compete globally on an unlevel playing field.”
According to the trade agency, the USTR found that Sri Lanka has failed to impose and effectively enforce a forced labour import prohibition.
The USTR noted that the results of its investigation indicate that the acts, policies and practices of Sri Lanka related to the failure to impose and effectively enforce a forced labour import prohibition are unreasonable and burden or restrict US commerce.
Accordingly, it has proposed to impose 12.5% additional duties on goods imported from Sri Lanka.
The USTR said it also was proposing a textile mechanism that would allow for a certain volume of apparel and textile imports to enter the US at a reduced tariff rate, though the duties and volumes were not disclosed.
The announcement comes ahead of the July 24 expiration of a 10% temporary tariff imposed by the Trump administration on February 20, the day the Supreme Court struck down US President Donald Trump’s tariffs under the International Emergency Economic Powers Act.
On Monday, the USTR proposed a 25% duty on many Brazilian goods as a result of a Section 301 investigation into the country’s digital trade practices and preferential tariffs. The trade agency is also expected to soon unveil the findings of another major Section 301 probe into the buildup of excess industrial capacity in 16 trading partners, including China.
In the forced labour findings, the USTR said it would exempt from the tariffs a number of products, including energy, rare earths and certain other metals, beef, coffee, certain fruits and vegetables, pharmaceuticals, organic chemicals and aircraft parts.
The USTR said it would accept public comments on the proposed tariffs and other remedies through July 6, with a public hearing scheduled for July 7.
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