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Minister Amaraweera wants IMF bailout, hints at letting national carrier go

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ECONOMYNEXT – Amid reports that cash-strapped Sri Lanka’s ruling coalition is split down the middle over an International Monetary Fund (IMF) bailout, another cabinet minister last week spoke in favour of IMF assistance, even going as far as to hint at the sale of the country’s national carrier.

“We will have to go to the IMF. There is nothing wrong with that… since we have no other option,” Environment Minister Mahinda Amaraweera said speaking to reporters on Wednesday (29).

Amaraweera is a member of the Sri Lanka Freedom Party (SLFP), which is increasingly at odds with the ruling Sri Lanka Podujana  Peramuna (SLPP). State Minister Dayasiri Jayasekara, the SLFP’s general secretary, had also recently advocated going to the IMF.

“Of course, we need to not accept every condition put forward by the IMF,” said Amaraweera.

“We have been informed that the central bank governor and the Treasury Secretary will be joining the cabinet meeting next Monday (03). I think we will be able to reach a final consensus then,” he added.

Co-cabinet spokesman and Media Minister Dullas Alahapperuma on December 21 told reporters that the cabinet had “exchanged views” on an IMF bailout for the second week in a row but no decision had been made.

Minister Amaraweera, meanwhile, also commented on SriLankan Airlines, the national carrier, and other under-performing state owned enterprises (SOEs).

“At this point, we may have to let go of certain institutes. For example, SriLankan suffers losses in the billions. These losses are borne by people who have never even touched [an aircraft],” he said.

A day before Sri Lanka raised fuel prices last week, Trade Minister Bandula Gunawardena told reporters that the IMF would ask to cut the bloated public sector, reduce the budget deficit, make state enterprises profitable, and raise fuel and electricity prices.

A few days earlier, State Minister Jayasekera said after last week’s cabinet meeting that the IMF imposes conditions such as making state enterprises profitable.

“It is a good thing to do that,” Jayasekera said.

Finance Minister Basil Rajapaksa had already said the state workers and state enterprises were a big burden on the economy.

Older IMF baiout programs typically involve cutting the deficit with tax hikes (revenue based), trimming expenses (spending based) expressed as a net domestic finance target, a foreign reserve target and a reserve money target.

However Sri Lanka’s last failed extended fund facility from IMF program where money was printed within the program to create forex shortages and worsen foreign debt, an inflation target was given and the budget target was defined as a primary deficit.

Instead of a measurable reserve money or ceiling on central bank credit an inflation target was given, allowing the trigger happy central bank to print money and trigger a currency crisis within the program.

Under revenue based fiscal consolidation, state spending soared and the currency collapsed from 151 to 183 under a so-called flexible exchange rate where the exchange flipped from pegged to floating rapidly and interventions were sterilized on top of it.



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No change in death toll, stands at 639 as at 0600AM today [11th]

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The Situation Report issued by the Disaster Management Center at 0600 AM today [11th December 2025] confirms that there has been no addition to the death toll in the past 24 hours and remains at 639. The number of missing persons has reduced by ten [10] and stands at 193.

There is a slight reduction in the  number of persons who are at safety centers and, stands at 85,351  down from 86,040 yesterday.  Five safety centers have also closed down in the past 24 hours and  873 safety centers are still being maintained.

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Regulatory rollback tailored for “politically backed megaprojects”— Environmentalists

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Investigations have revealed that the government’s controversial easing of environmental regulations appears closely aligned with the interests of a small but powerful coalition of politically connected investors, environmentalists have alleged.

The move weakens key Environmental Impact Assessment (EIA) requirements and accelerates approvals for high-risk projects, has triggered a storm of criticism from environmental scientists, civil society groups and even sections within the administration, they have claimed.

Environmental Scientist Hemantha Withanage, Executive Director of the Centre for Environmental Justice, told The Island that the policy reversal “bears the fingerprints of elite political financiers who view Sri Lanka’s natural assets as commodities to be carved up for profit.”

“This is not accidental. This is deliberate restructuring to favour a specific group of power brokers,” he told The Island. “The list of beneficiaries is clear: large-scale mineral extraction interests, luxury hotel developers targeting protected coastlines, politically backed hydropower operators, industrial agriculture companies seeking forest land, and quarry operators with direct political patronage.”

Information gathered through government insiders points to four clusters of projects that stand to gain substantially:

Several politically shielded operators have been lobbying for years to weaken environmental checks on silica sand mining, gem pit expansions, dolomite extraction and rock quarrying in the central and northwestern regions.

High-end tourism ventures — especially in coastal and wetland buffer zones — have repeatedly clashed with community opposition and EIA conditions. The rollback clears obstacles previously raised by environmental officers.

At least half a dozen mini-hydro proposals in protected catchments have stalled due to community objections and ecological concerns. The new rules are expected to greenlight them.

Plantation and agribusiness companies with political links are seeking access to forest-adjacent lands, especially in the North Central and Uva Provinces.

“These sectors have been pushing aggressively for deregulation,” a senior Ministry source confirmed. “Now they’ve got exactly what they wanted.”

Internal rifts within the Environment Ministry are widening. Several senior officers told The Island they were instructed not to “delay or complicate” approvals for projects endorsed by select political figures.

A senior officer, requesting anonymity, said:

“This is not policymaking — it’s political engineering. Officers who raise scientific concerns are sidelined.”

Another added:”There are files we cannot even question. The directive is clear: expedite.”

Opposition parliamentarians are preparing to demand a special parliamentary probe into what they call “environmental state capture” — the takeover of regulatory functions by those with political and financial leverage.

“This is governance for the few, not the many,” an Opposition MP told The Island. “The rollback benefits the government’s inner circle and their funders. The public gets the consequences: floods, landslides, water scarcity.”

Withanage issued a stark warning:

“When rivers dry up, when villages are buried in landslides, when wetlands vanish, these will not be natural disasters. These will be political crimes — caused by decisions made today under pressure from financiers.”

He said CEJ was already preparing legal and public campaigns to challenge the changes.

“We will expose the networks behind these decisions. We will not allow Sri Lanka’s environment to be traded for political loyalty.”

Civil society organisations, environmental lawyers and grassroots communities are mobilising for a nationwide protest and legal response. Several cases are expected to be filed in the coming weeks.

“This is only the beginning,” Withanage said firmly. “The fight to protect Sri Lanka’s environment is now a fight against political capture itself.”

By Ifham Nizam

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UK pledges £1 mn in aid for Ditwah victims

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Acting UK High Commissioner Theresa O’Mahony inspecting a school damaged by floods, during a visit to the Sri Lanka Red Cross operations in Gampaha.

The UK has pledged £1 million (around $1.3 million) in aid to support victims of Cyclone Ditwah, following Acting High Commissioner Theresa O’Mahony’s visit to Sri Lanka Red Cross operations in Gampaha.

“This funding will help deliver emergency supplies and life-saving assistance to those who need it most,” the British High Commission said. The aid will be distributed through humanitarian partners.

During her visit, O’Mahony toured the Red Cross warehouse where UK relief supplies are being prepared, met volunteers coordinating relief efforts, and visited flood-affected areas to speak with families impacted by the cyclone.

“Our support is about helping people get back on their feet—safely and with dignity,” she said, adding that the UK stands “shoulder to shoulder with the people of Sri Lanka” and will continue collaborating with the government, the Red Cross, the UN, and local partners in recovery efforts.

She was accompanied by John Entwhistle, IFRC Head of South Asia, and Mahesh Gunasekara, Secretary General of the Sri Lanka Red Cross.

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