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Keerthi: IMF conditions painful but necessary

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Country paying heavy price for delaying decision

By Shamindra Ferdinando

Former Governor of Uva, Southern and Central Provinces Rajith Keerthi Tennakoon yesterday (16) said that those who objected to the government seeking IMF’s assistance had ruined the economy.

President Gotabaya Rajapaksa had, in his address to the nation on Wednesday, expressed his willingness to seek IMF assistance, Tennakoon said.

Tennakoon, one-time Executive Director of polls monitoring body CaFFE told The Island that in fact Sri Lanka had been engaged in discussions with the IMF since February 2019 in the run-up to the presidential election.

But the talks had suffered a setback following the change of government following the 2019 presidential election, Tennakoon said, adding that one of conditions was the enactment of Monetary Law Act to bring about discipline the financial sector and stability, Tennakoon said.

According to him, one of the key conditions had been to remove Secretary to the Finance Ministry from the five-member Monetary Board. The IMF believed far reaching changes were necessary to restore financial discipline, particularly uncontrolled printing of notes that had caused inflation.

Tennakoon said that Finance Minister Basil Rajapaksa favoured IMF’s intervention. As soon as he succeeded Mahinda Rajapaksa as the Finance Minister in July last year, Sri Lanka sought the IMF intervention. Much respected former Governor of the Central Bank and head of a Sri Lanka overseas mission arranged the IMF’s intervention, Tennakoon said.

Responding to queries, Tennakoon said that the government would be asked by the IMF to implement the late Mangala Samamaweera’s formula that helped Treasury to collect well over Rs 1,900 bn in 2019 and the current dispensation lost well over Rs. 500 bn due to a controversial decision to do away with a range of taxes, including PAYE (Pay As You Earn), NBT (Nation Building Tax), Withholding tax, Capital Gain tax imposed on the Colombo Stock Exchange, Bank Debit tax and unprecedented reduction of VAT (Value Added Tax).

Tennakoon said that the 15% VAT and the 2% NBT which amounted to 17% imposed on all goods and services were unified and reduced to 8%, effective from the first of December 2019.

He said that the decision was taken at the first cabinet meeting of the incumbent government held on Nov 27, 2019.

Sri Lanka would be also asked to introduce pricing mechanisms for electricity and fuel if the government wanted IMF’s assistance, Tennakoon said. Interest rates, too, shouldn’t be subjected to political whims and fancies, Tennakoon said, adding that the IMF conditions would cause tremendous pressure on the government though it was in such a desperate situation it couldn’t take a tough stand.

As many as 40 loss-making state enterprises including national carrier SriLankan were likely to be identified for privatization or re-structuring, Tennakoon said, urging political parties not to sabotage current efforts at reaching consensus on national economy.

The one-time favourite of former President Sirisena emphasised that the government should without delay inquire into the circumstances leading to the Central Bank suddenly floating rupee over a week ago. It would be pertinent to ask whether the Central Bank has sought Cabinet approval before the announcement was made, Tennakoon said, alleging the country suffered due to the Finance Ministry and the Central Bank pulling in different directions.

The civil society activist alleged that for want of a cohesive action plan, the government inadvertently caused serious mistakes though nothing could be as bad as handling of the national economy.

Tennakoon said that the IMF’s role undermined Pohottuwa policies but the ruling party couldn’t do anything about it. Commenting on social media reports of CBSL Governor Cabraal being asked to step down immediately, Tennakoon said that no one could force him to do so. Cabraal could continue till July 4, 2022 as he was in the process of completing the period allocated for his predecessor, Tennkoon said, adding that though the President could replace Cabraal after July 4 it wouldn’t help to address the crisis.



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Iranian ships stranded, Lanka fears US sanctions

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‘Companies may face US sanctions’: Lanka to put ‘national interest’ first as 19 Iranian vessels seek help

(ToI) Sri Lanka said on Friday it would “prioritise our national interests” before providing assistance to the crews of 19 Iranian ships anchored in international waters near the island nation.The crews are facing shortages of food, water and fuel. A foreign ministry spokesperson cited the risk of US sanctions against Sri Lankan companies supplying the vessels as a key concern.

The United States and Iran have been at war since February 28, when the US and Israel launched joint strikes against the Islamic Republic.

“Sri Lanka will put its national interest first before considering any help, and the companies that supply ships are aware of possible secondary sanctions from the United States,” spokesperson Thushara Rodrigo told reporters, ruling out any immediate assistance to the vessels.

Rodrigo clarified, however, that Sri Lanka had received no communication from the United States warning of repercussions if it decided to assist the vessels.According to Rodrigo, the ships are stationed 24 nautical miles off Sri Lanka’s coast.The Iranian Embassy said it had no information on the matter.

In March, a US torpedo attack sank the Iranian naval vessel IRIS Dena in Sri Lankan waters, killing 87 sailors.

The ship was returning to Iran after participating in a naval exercise at India’s invitation. A second Iranian vessel was brought to a Sri Lankan port after its crew reported technical problems.

Wounded sailors were treated at Sri Lankan hospitals, while those rescued from the second vessel were safely repatriated to Iran.

Sri Lanka is still recovering from an economic crisis, with both the United States and Iran serving as important trading partners. Washington played a key role in securing an International Monetary Fund bailout and supporting Sri Lanka’s agricultural sector to help avert a food crisis.

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Sri Lanka CERT warns of overseas university admission scams

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Sri Lanka CERT has warned the public of fraudulent social media advertisements offering admission to foreign universities after receiving complaints from parents and students who have lost hundreds of thousands of rupees to scammers.

The fraudsters reportedly pose as representatives of reputed foreign universities, promising admission, student visas, work permits and even eventual citizenship in return for registration fees and initial tuition payments.

They use convincing videos, photographs and documents circulated via email and WhatsApp to gain the confidence of unsuspecting victims before asking them to transfer money to foreign bank accounts. The scammers then disappear after receiving the payments, Sri Lanka CERT said.

The agency has urged prospective students and their parents to verify the authenticity of university representatives, documents and bank account details before making payments, and to seek overseas education opportunities only through legitimate and recognised channels.

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Navi Pillay’s Lankan affairs in focus as she wins 2026 Nobel Peace Prize

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Navi Pillay

Former UN High Commissioner for Human Rights and International Court of Justice judge Navanethem “Navi” Pillay has won the 2026 Nobel Peace Prize for her contribution to international law and efforts to promote peace, the Norwegian Nobel Committee announced in Oslo on Friday.

Announcing the award, committee chairman Jørgen Watne Frydnes said Pillay had “significantly enlarged the scope and impact of international law” and helped advance “a more comprehensive global legal order” with exceptional courage. He also praised her long career, which began as a lawyer confronting deep-rooted discrimination in South Africa, and described her as a person with a “firm moral compass”.

Pillay, 85, served as the UN High Commissioner for Human Rights from 2008 to 2014. Her tenure brought her into sharp focus in Sri Lanka, particularly over her assessment of the country’s human rights situation in the aftermath of the decades-long civil war.

During an official fact-finding visit to Sri Lanka from August 25 to 31, 2013, Pillay travelled to areas including Jaffna, Kilinochchi and Trincomalee, where she met civil war survivors, families of the disappeared and local communities.

Following the visit, she warned that Sri Lanka was moving towards authoritarianism and highlighted what she described as a persistent climate of fear.

She also reported intimidation and harassment of people who had sought to meet her during the mission.

Pillay urged the UN Human Rights Council to establish an international inquiry mechanism to investigate alleged war crimes and crimes against humanity committed by both government forces and the LTTE during the final stages of the 26-year civil war.

Her observations and recommendations became a significant part of international scrutiny of Sri Lanka’s post-war human rights record.

The Norwegian Nobel Committee received 287 nominations for this year’s Peace Prize, slightly more than a quarter of them being organisations. The committee traditionally considers efforts to promote peace, international fraternity and institutions that contribute to lasting stability.

Last year, Venezuelan opposition leader Maria Corina Machado won the prize for her campaign for a democratic transition in Venezuela. She was praised as a woman who kept the flame of democracy burning amid growing darkness.

The 2026 award marks the 125th anniversary of the Nobel Peace Prize, first presented in 1901. Over its history, the prize has recognised prominent figures and organisations involved in advancing peace, human rights and international cooperation.

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