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ISBs amounting to USD 10,000 mn issued by Yahapalana govt. ruined economy, says Mahinda
SLPP leader and former President Mahinda Rajapaksa, MP yesterday (20) alleged that USD 10,000 mn in new ISBs (International Sovereign Bonds) issued between 2015 and 2019 by the Yahapalana administration, comprising the UNP and the SLFP, had debilitated the economy.
Rajapaksa said that when he was voted out in January 2015, the outstanding ISB debt was only USD 5,000 mn. The Gotabaya Rajapaksa government ( 2020-2022) paid off USD 2,500 million in outstanding ISBs, which meant that only USD 2,500 million in ISBs now remained from his era.
The following is the text of the statement: Around 40 professional associations and trade unions representing vital sectors of the economy and the public services have been agitating for a reduction in income taxes for many months. In the meantime, the high tax burden has precipitated an exodus of educated and highly trained professionals from the country giving rise to a new crisis. Following increases in the VAT through the Budget for 2024, tax policy is set to become a major political issue in 2024.
The call to reduce taxes is based on solid economic principles. When taxes are low, both individuals and corporations have more money to spend and invest and this acts as a driver of the economy. Low taxes was a cornerstone of my government’s policy and it made a major contribution to the unbroken nine-year economic boom that this country experienced between 2006 and 2014. So as not to burden the people with taxes, my government of 2006-2014 restricted the overall year-on-year increase in government tax revenue to around Rs. 100 billion a year. Through careful economic management, my government reduced the debt to GDP ratio from 90% at the end of 2005 to 69% at the end of 2014 thus ensuring the feasibility of the low tax regime.
However, over the past several years there have been well-funded propaganda campaigns promoting a headlong and mindless opposition to everything, even remotely associated with the name ‘Rajapaksa,’ including the low tax policy. In order to blacken the very concept of low taxes, some even claimed that the Rajapaksa-led governments reduced taxes to help cronies. That is an outright lie. Tax exemptions can be granted only under laws like the Board of Investment Act and the Strategic Development Projects Act in order to attract investors for specified projects.
After 2015, the low tax regime was rejected in favour of a high tax regime. Unsurprisingly, Sri Lanka’s growth rate declined precipitously after 2015 ending up at 0.2 below zero by 2019. Due to bad economic management, the period from 2015 to 2019 saw an increase in taxes while at the same time experiencing a precipitous increase in foreign debt. When I was voted out in January 2015, the outstanding International Sovereign Bond debt was only USD 5,000 million. The Gotabaya Rajapaksa government of 2020-2022 paid off USD 2,500 in outstanding ISBs which means that only USD 2,500 million in ISBs now remains from my era.
Over USD 10,000 million in new International Sovereign Bonds were taken between 2015 and 2019. Hence we still have an outstanding ISB stock of USD 12,500 million. It was this USD 10,000 million in new ISBs taken between 2015 and 2019 that broke the back of our economy. When the Covid-19 pandemic struck Sri Lanka a few months after I became Prime Minister at the end of 2019, we wrote to the IMF in March 2020 asking for emergency assistance. The IMF wrote back saying that our debt levels disqualifies us from their emergency relief package.
They then proposed a raft of conditions that would qualify us for IMF assistance but those conditions would have made it impossible for us to face the Covid-19 threat in the manner that we did in 2020 and 2021. The present government is now implementing stringent conditions as part of an IMF programme. Thus one thing led to another, finally resulting in a situation where we now see top professionals holding multiple university degrees and professional qualifications agitating on the streets, demanding a reduction in taxes.
The SLPP which I lead is a part of the government. However the present Head of the Government and Head of State is the leader of a different political party with different policies. In a situation where this country was faced with complete anarchy, Parliament elected a President to serve the remainder of former President Gotabaya Rajapaksa’s term. The new President successfully restored law and order to the country. He is now directing government policy as the Executive President. At this moment, the primary duty of the SLPP is to ensure a stable government until the next national elections.
In the future, every member of the public should pay special attention to the tax policy and the past economic practices of the political party they vote for. As elections draw closer, once again we see attempts to hustle people blindly and unthinkingly in various directions through ramped up propaganda and social media hysteria. Whatever decision the people make at the next elections should be based on rational thinking, proper facts and correct data. We are still living through the consequences of January 2015 and this country cannot afford another mistake like that again.”
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Delay in govt. response to UK sanctions on ex-military chiefs, and others causes concern
Admiral of the Fleet Wasantha Karannagoda said that he is still waiting for the government’s response to the UK sanctions imposed on three ex-military officers, including him, and a former member of the LTTE.
The former Navy Chief said so in response to The Island query whether he was aware of the position taken by a three-member ministerial committee, consisting of Foreign Minister Vijitha Herath, Justice and National Integration Minister Harshana Nanayakkara and Deputy Defence Minister Maj. Gen (retd) Aruna Jayasekera.
The government named the committee in the wake of the UK declaration of travel bans and asset freezes in respect of Karannagoda, General Shavendra Silva, General Jagath Jayasuriya and Vinayagamoorthy Muralitharan, also known as Karuna. Maj. Gen. Jayasekera said that they inquired into the issue at hand.
Karannnagoda said that he would like to know the government’s recommendations if the ministerial committee briefed the Cabinet as per a decision taken by the Cabinet of Ministers. Karannagoda said that the issue should have been taken at the highest level as various interested parties continue to humiliate the war-winning military by targeting selected individuals.
Other sources, familiar with the issues at hand, told The Island that the government was yet to announce its stand.
Sources pointed out that the Opposition has been silent on what they called a matter of utmost national importance.
Cabinet spokesman Dr. Nalinda Jayathissa is on record as having described the UK move as a unilateral move and that committee was formed to examine the developments and recommend appropriate measures to the Cabinet.
Foreign Minister Herath told The Island the government was not successful in getting the British to withdraw sanctions. Describing the UK decision as unilateral, the Miniser said that the government conveyed its concerns but the UK didn’t change its stand.
The Island raised the issue with Minister Herath and Admiral Karannagoda in the wake of British MP of Sri Lankan origin, Uma Kumaran requesting the UK Foreign Secretary Yvette Cooper to expand on the government’s sanctions imposed on the four above-mentioned persons.
During a Foreign Affairs Committee meeting on 16 December, the MP for Stratford and Bow highlighted the lack of accountability and political will from the current Sri Lankan government to address war crimes and mass atrocities committed in Sri Lanka.
Sources said that David Lammy, who served as Secretary of State for Foreign, Commonwealth and Development Affairs at the time of the declaration of sanctions, had no qualms in declaring that the action taken against four Sri Lankans was in line with a commitment he made during the election campaign to ensure those responsible wouldn’t be allowed impunity. The UK government statement quoted Lammy as having said that this decision ensured that those responsible for past human rights violations and abuses were held accountable.
By Shamindra Ferdinando
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Sri Lanka outlines seven key vectors of international cooperation at Moscow forum
Sri Lankan Ambassador to the Russian Federation, Shobini Gunasekera recently presented a conceptual framework of seven key vectors that defined contemporary international relations and facilitated dialogue among States. She made the presentation at XI Moscow International Financial and Economic Forum held under the theme “Building Bridges: Partnership without Borders”.
In her address, the Ambassador emphasised that these vectors represent the channels through which ideas circulate, trade expands, and peace is strengthened, serving as guiding principles for cooperation amid global uncertainties. The seven key vectors highlighted were economic ties as a foundation for long-term stability; political choice and diplomacy through dialogue and multilateral engagement; security cooperation to address cross-border threats; cultural linkages through education, tourism, and professional exchanges; technological advancement, particularly in digital systems and artificial intelligence; environmental stewardship through collective action on renewable energy and climate change; and humanitarian obligations, including disaster relief and development cooperation.
Drawing on Sri Lanka’s experience, the Ambassador illustrated the practical application of these principles by highlighting the country’s strategic location in the Indian Ocean, its role as a trade and logistics hub, and its active engagement in regional groupings such as BIMSTEC and the Indian Ocean Rim Association, where the Russian Federation serves as a Dialogue Partner.
The potential for enhanced Sri Lanka–Russia bilateral cooperation was underscored, particularly through complementarities between Russia’s technological and energy expertise and Sri Lanka’s logistical capabilities and maritime infrastructure. She noted that such synergies could support joint initiatives in trade, innovation, tourism, and logistics, while cultural and scientific exchanges would further strengthen mutual understanding between the two countries.
Concluding her remarks, the Ambassador stated that sustained progress requires dialogue, mutual respect, and forward-looking partnerships capable of shaping a shared and stable future.
News
Sri Lanka third most preferred destination for Indians
Thailand takes top place
Travel website Make My Trip has named Sri Lanka as the third most booked international destination by Indian travellers for the festive period, following Thailand and the United Arab Emirates (UAE).
According to a report released by MakeMyTrip, an analysis of booking trends between 20 December and January 2026 compared to the same period last year, highlighted a growing interest in Sri Lanka as a preferred destination.
Thailand ranked first, while the UAE secured second place. Vietnam recorded a notable rise, moving from seventh position last year to fourth this year, followed by Malaysia, Indonesia, Singapore, the UK, the US, and Hong Kong.
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