A radical shift needed
By Faraz Shauketaly
Most people in Sri Lanka are fully aware that a growing number of the republic are protesting and publicly complaining of a myriad of problems. To be fair, Sri Lanka’s economy has always remained a little over the danger zone and it would be safe to say it has been for quite a while in the amber zone. In the past, growth was remarkable and principal indicators were resilient and stable. Indeed, such was the case throughout the Mahinda Rajapaksa Presidency with – for example – the exchange rate maintaining a position and not losing ground in any way to cause investor alarm.
All this changed, of course, with the advent of a new government grandly proclaiming Yahapalanaya or Good governance to be the base of their outlook for Sri Lanka. Sadly, for the nation, the bunch of self-styled good-governance advocates instead quite literally helped themselves.
There was the infamous Bond scam, there were the turning of the Nelsonian eye when it came to Excise collections, under payment of duties for most anything including vehicles especially at the upper end, Minister’s actively discarding due process and established procedure and the list went on and on – except, of course, the manifesto promises were never kept.
In between all of this no one expected a pandemic to come along and wreak havoc upon our shores. Claim and counter claim does its rounds but the fact is no one quite had the expertise to handle CV19 – a new global phenomenon.
The impact on our Tourism industry and on our remittances from our expatriate workers has caused absolute havoc on our economy.
The time may now be opportune for all our political parties to form a joint governance team to embark upon a radical change to our governance outlook.
No amount of confident speak that is put out by the master at the Central Bank can overlook some of the happenings that abound in Sri Lanka. These happenings always – not almost – affect the decision-making processes of overseas based investors seeking new and better opportunities to maximise returns.
The rule of law is always a hotbed of concern. Imagine would be investors studying that aspect of the Sri Lanka way: they will discover the strange goings on within the judicial circle. The Attorney General’s department having presumably studied case files decide to indict persons. At times these persons have temporarily lost their freedom being remanded. Thereafter, the same Attorney General’s department decides to withdraw the charges. And (in a strange twist) the one-time Attorney General is now the Chief Justice. Most liberal minded persons may be unable to comprehend what is going on or will take a pretty dim view of the original indictments and wonder if they were suffering from political lesions.
Of course, the Yahaplanists, too, departed from established procedure. They had a committee based around Temple Trees that basically decided which cases should be taken up by the then newly created FCID. There was a steady stream of persons going to the FCID, some remanded, and it was a virtual circus of the clowns. To so arbitrarily decide whom to look at is a departure from process. It could be argued then that this government was only putting right what was a departure in the past!
All of this is not by the way. It ought not to be so. Sri Lanka will need to up its ante when it comes to the application of the Rule of Law. All sensible investors with the medium to long term pitch in mind will want to feel secure that they are investing in a country that has people who are fairly well educated, where the infrastructure is also more or less par for the course, where the political stability is established and where they can if needed rely on the rule of law to protect their brand and their investment.
At the moment the nation additionally appears to need stability of policy. Not a system where the government is ruling quite often by the issuance of Gazette notices and equally as often changing those notices or amending them within a short period. This indicates that there appears to be a lack of planning and 360-degree consultative processes.
The move towards an all green economy is commendable and will have excellent benefits for our nation’s image in the future once we are well entrenched within a green economy, food, buildings, warts and all.
Save, of course, that none of this can be done literally overnight. The President had no sooner spoken that the import of all non-organic fertilisers was banned. The reaction was spontaneous. Farmers protested, the tea industry was particularly concerned that their exports of 300 million kilos of Ceylon’s finest would be challenged in some discerning markets at least, including the Japanese market.
Our Prime Minister, President Mahinda Rajapaksa the veteran politician that he is, was eloquent and on point when he called for unity within the ruling alliance which after all gave this government the majority they sought – a two thirds majority which they maintain is required for strong government. President Mahinda Rajapaksa pointed to the apparent exodus of the youth of Sri Lanka seeking opportunities in other territories. It is clear, that Sri Lanka is in an economic mire with the people of our country in an abyss of despair.
President Gotabaya Rajapaksa has not missed a beat: he too has alluded to the political disunity and has openly stated that there are two types of persona in so far as his governance is concerned. He has clarified what prompted him to appoint a monk who has been known to be controversial.
No matter what the justification alluded to, the fact is that this appointment has caused much concern not only in our own Sri Lanka but amongst our trading partners whose inputs are essential to the progress of our nation.
One rule, one country is welcome by all of us here in Sri Lanka. However, to appoint a person who is considered a hardliner to the detriment of the minorities in our country is to stir the pot of disharmony and disunity. It could verily fan the flames of communal disharmony.
After 30 plus years of a communally-driven near civil war, all of us, in Sri Lanka, are only too aware of the damage this causes to the growth of our economy apart from the lost opportunities of communal unity. If we need one example it would be to study the phenomenal explosion of tourism in Sri Lanka post 2009. No liberal minded traveller or any corporate worth its salt, will wish to consider Sri Lanka if the country is again a de-facto war zone where personal security is at stake.
President Gotabaya called for and assured a revolutionary change. God bless him for at least saying that. It is exactly what we need on a number of fronts.
Leading the package of revolutionary change will necessarily be the attitude of all governments to that perennial problem of corruption and politically sponsored impunity.
Revolutionary change will need to address inclusivity: consultative processes may well be a tedious impediment to achieve fast-tracked development of government policies. It is unfortunately a case of that old but true adage, ‘Rome was not built in a day’. Any government will need to demonstrate real commitment to address corruption wastage and graft. Not mere words but action real at that is what is required.
It really is quite simple. Sri Lanka’s economy has so very badly been affected that there is no leeway for development and corruption at the same time. Our economy has reached a sort of plateau. If we are to forge ahead, we must have a zero-tolerance towards corruption and waste – the twin impediments that are currently raging across all important sectors.
The losses to state banks after having indulged politically exposed persons – read cronies of any government holding the reins of power – remains at an all-time high. The Minister of Finance has proposed that a principal amount of Rs 8,500,000,000 be returned to the Central Bank, calling it ‘illegally made money’. Most followers of that circus known as the Central Bank Bond Scam will no doubt be reminded that Perpetual Treasuries, the company at the epi-centre, reported profits totalling more than Rs 18 Billion.
A weekend newspaper reported that corporates with cross shareholdings and or directorships with Perpetual separately owed state banks and other state bodies sums greater than Rs 10 Billion. This may well be a smart move by the Minister of Finance enabling President Gothabya to maintain that at least one part of his manifesto undertakings has been completed at least by 50 percent. Nevertheless, the adventure that the former Guvnor of the Central Bank Mahendran embarked upon has cost our country very dearly indeed. It is unlikely that the principal shareholders have assets anywhere close to the monies our country has lost thanks to this escapade. The monies made have been distributed to several who also had a hand in this sordid affair and much of it would have taken flight to other jurisdictions. We are constantly reminded that the Guvnor who went back to his adoptive Singapore never did return to the land of his birth to answer questions that the Police in Sri Lanka would like very much to pose to him. We would not be surprised that if the rest of the profits found its way to friends, family and property and other fixed assets in other countries.
It is not a Radical Revolution change we need, rather we need all the perpetrators not just those now indicted for this matter, be indicted and in the event a custodial sentence be ordered it would arguably perhaps be best if the keys to those cells be thrown into the Indian Ocean.
President Gotabaya was elected because the people truly believed that he would be able to emulate some of what he achieved at the Defence Ministry and the Urban Development Authority. The vagaries and intricacies of Sri Lankan politics dictated that he be nominated by a registered political party in order to contest the election for the presidency. Very unfortunately it is some members of that very party that propelled him into the throne room who have withheld his progress. And when it comes to family, there really is a thin line between family and anything else. Friends and hangers on attached mainly to the former President Mahinda are costing this President dearly in terms of plummeting popularity. Just like what happened to President Mahinda – admittedly in that debacle, members of the family played a key role too.
The saving grace is that the government has approximately three more years to go before they will be obliged to go to the polls.
Presumably before that time, the SLPP will want to put a few cases behind their back – like the Bond scam – sort out the food production and of course stabilise the forex rates.
Much depends on the myopic nature of the Sri Lankan mind-set. If they forget about the hardships, we have endured for the past three years they may neglect to elect a whole new set of people – emulating President Gotabaya’s expressly stated advisory delivered recently.
In which case what will be in store for us? More of the same? Can we really expect a revolutionary change? Hope springs eternal.
Singarasa Case should guide GoSL’s Geneva policy
BY Dharshan Weerasekera
In 2005, the Sri Lankan Supreme Court ruled in the seminal case Singarasa v. Attorney General (SC/SPLA/182/99) that the U.N. Human Rights Commission (the predecessor of today’s U.N. Human Rights Council) did not have jurisdiction, within Sri Lanka, to make recommendations on behalf of the petitioner. In doing so, the court decided that Sri Lanka’s accession to the optional protocol to the International Covenant on Civil and Political Rights (ICCPR) in 1997 had been done in a manner contrary to the Constitution, and hence illegal.
This case has invaluable lessons to teach in regard to the present government’s ‘Geneva Policy.’ By ‘Geneva Policy,’ I mean the government’s stance to the UNHRC’s follow-up resolutions to Sri Lanka’s unilateral withdrawal, in March 2020, from the co-sponsorship of Resolution 30/1 of October 2015. In response, the Council adopted Resolution Resolution than 30/1. Among other things, it establishes an evidence-gathering mechanism to collect evidence of war crimes and other crimes against Sri Lankans.
Meanwhile, in September 2022, the High Commissioner released a report on Sri Lanka’s progress in implementing the recommendations of Resolution 46/1. The government has officially rejected both, Resolution 46/1 and the High Commissioner’s report, on grounds that they were done without Sri Lanka’s consent and, therefore, contrary to the founding principles of the Council. (See A/HRC/51/G/1, paras 1.1, 1.2). However, the Foreign Ministry, in its response, lists various things that the government is doing to comply with Resolution 46/1.
I argue that the government, continuing to comply with the Resolution while, at the same time, rejecting it in principle, without first obtaining a definitive interpretation of the relevant legal position, from an international forum, or even the Sri Lankan Supreme Court, creates a dangerous precedent. Given the fact that state practice is one of the sources of customary international law, the government’s conduct has the potential to do irreparable harm to the long-term interests of the country.
Unfortunately, there is little, or no, discussion of these issues in local newspapers, and academic journals, and it is in the public interest to start one. In this article, I shall discuss: i) the facts and reasoning of the Singarasa judgment, ii) the High Commissioner’s report and the government’s reply, iii) assess of the government’s position, and draw the relevant conclusions.
The Singarasa case
In 1991, the High Court of Colombo convicted Singarasa of five charges, under the Prevention of Terrorism Act. The charges dealt with alleged attempts by Singarasa, and others, to attack the Army camps,in Jaffna and its suburbs. Singarasa appealed against the conviction to the Court of Appeal and then the Supreme Court. He also complained to the U.N. Human Rights Commission. The HRC could entertain petitions under the Optional Protocol to ICCPR. Sri Lanka had ratified the ICCPR, in 1980, and acceded to the protocol, in 1997. The HRC said that, Sri Lanka was under obligation to release Singarasa.
The main issue, in this case, is whether Sri Lanka’s accession to the ICCPR, and the related protocol, gives a right to an international body to intervene in the domestic sphere to determine Singarasa’s fate. The court answers ‘no,’ because of the following reasons. The court starts with the premise that the authority for the President to enter into international agreements comes from Article 33(f) of the Constitution. Article 33(f) states: “To do all such acts as, not being inconsistent with the provisions of the Constitution…he is required or authorized to do.” It follows that the President cannot agree to anything inconsistent with the Constitution.
The court then assesses the signing of the ICCPR, in 1980, and the subsequent accession to the optional protocol, in 1997, separately. The court points out that the ICCPR requires that the respective signatories adopt domestic legislation to implement the provisions of the covenant. This does not conflict with our Constitution and hence is lawful.
However, when acceding to the optional protocol, the government had issued a declaration that envisioned that the rights of Sri Lankan citizens could be adjudicated in tribunals, and forums, outside this country. The court points out that the institutions, through which Sri Lankans can vindicate their rights, within this country, are exhaustively set out in Article 105 of the Constitution, and the HRC is not one of them. Therefore, the court deems the accession to the optional protocol illegal. The court states:
“Where the President enters into a treaty or accedes to a covenant the content of which is inconsistent with the provisions of the Constitution or written law it would be a transgression of the limitation in Article 33 (f) and ultra vires—such acts of the President would not bind the Republic qua State.” (p. 11)
The High Commissioner’s report and the Government’s reply
The most disturbing aspect of the High Commissioner’s report is its description of the progress made by the impugned evidence-gathering mechanism. It states: “OHCHR continues to develop the information and evidence repository using an e-discovery platform….OHCHR commenced identifying material held by other actors and engaging with information providers. To date, the databases of two organisations have been migrated into the repository, and negotiations with other information providers are ongoing.” ((A/HRC/51/5, 4th October 2022, para 54.)
The report also details what the OHCHR plans to do with this information. It says: “To develop possible strategies for future accountability processes, the project team started mapping potential accountability process at international level, including through consultations with relevant stakeholders, in particular national authorities, victims and civil society organisations.” (para 56.)
In sum, it is clear that a vast operation is underway, not just to collect evidence against Sri Lanka but to set the groundwork to help prosecute Sri Lankans before various national and international forums. To the best of my knowledge, the founding statutes of the UNHRC, as well as the OHCHR, do not give enforcement capabilities to these institutions to prosecute or assist in the prosecution of people for violations of human rights and other offences.
Their respective mandates to protect and promote human rights are to be carried out with the consent of all nations concerned and in a spirit of “cooperation and constructive international dialogue.” Therefore, through the impugned mechanism the OHCHR has now arguably expanded its mandate to include an enforcement component, seemingly without any debate or discussion of the matter before the Council.
To turn to the government’s response, in the introductory paragraphs of the said document, the government rejects both resolution 46/1 as well as the High Commissioner’s report on grounds that they violate the UN’s founding principles. However, for much of the remainder of the report (which runs to 16 pages) the government enumerates the various things it has been doing to implement various provisions of the resolutions. For instance, the government discusses the work being done under the Office on Missing Persons, Office for Reparations, and so on.
On the OMP, the report states inter alia: “The OMP conducted panels of inquiries as part of the verification process. More than 89% of persons (1207 of 1370 applicants invited for inquiries) met with members of the panel and their testimonials were recorded.” (A/HRC/51/G/1, 9th September 2022, para 46)
Meanwhile, on the Office for Reparations, the report says, “The office processed 5964 claims for payment, by the end of 2021, and paid a sum of Rs. 399.8 million in settlement, out of the allocated sum of Rs. 800 million….Upto the end of 2022, the OR received Rs. 226 million to pay compensation and 2097 claims were settled utilizing Rs. 153 million.” (para 56)
In sum, even though the government has nominally rejected resolution 46/1 and by extension resolution 30/1 as well, the government is expending great energy, including enormous sums of money, to comply with various provisions of those resolutions.
Assessment of the policy
The Singarasa case establishes that the President, when conducting foreign policy, is exercising the power conferred under Article 33 (f) of the Constitution. One cannot suppose that it is consistent with the Constitution to comply with the provisions of a resolution that the Government itself considers to be in violation of the founding principles of the UNHRC.
Admittedly, a resolution of the UNHRC does not rise to the level of a treaty or covenant. However, there should now be a serious debate in this country about whether the reasoning above should apply to such resolutions which continue to target Sri Lanka on the world stage.
Furthermore, if, as I have suggested, the OHCHR has expanded its mandate by exploiting the provisions of Resolution 46/1 to acquire capabilities that were never envisioned in the relevant founding statutes, permitting such conduct to continue has the potential to set precedents in customary international law, with grave consequences for Sri Lanka, as well as other nations.
Therefore, Sri Lankan citizens are entitled to know the legal basis for the government’s continued compliance with provisions of Resolution 46/1, while nominally rejecting the Resolution. The only institution that can provide a legal opinion binding on the government is the Supreme Court. The President has the capacity, under Article 129 of the Constitution, to request an advisory opinion of the Supreme Court on any matter of public importance.
In these circumstances, it is incumbent on the government to seek an advisory opinion as to whether it is lawful for the government to continue complying with provisions of Resolution 46/1 unless and until the UNHRC clarifies its position in regard to the impugned mechanism.
It is in the interest of all Sri Lankans to keep a close eye on what the government is presently doing in Geneva. There is a famous legal maxim that says, “The laws assist the vigilant, not the sleepy.” Ultimately, it is the Sri Lankan people who will pay the price for any mistakes or missteps that successive governments make in regard to their “Geneva Policy.’
(The writer is an Attorney-at-Law)
Human Papillomavirus vaccine: one that can prevent a cancer
This article has been written as a fervent plea to the parents of little girls of the eligible age group. Please make sure that your precious daughters get this vaccine. It will be an investment for their happiness in the future.
By Dr B. J. C. Perera
All vaccines by definition are substances that are used to stimulate immunity against a particular infectious disease or a specific causative organism. Such vaccines are used to prevent the occurrence of the said diseases in humans and animals. Several vaccines have been introduced to combat such infectious diseases over the last few decades. In some countries, the use of some of these vaccines has led to the elimination of dreaded diseases like Diphtheria, Tetanus, Whooping Cough or Pertussis, Polio, Measles, German Measles or Rubella, just to name a few.
Sri Lanka has a very efficient and inherently equitable system that looks after the Expanded Programme of Immunisation (EPI) for children and young people. In general, we have been extremely successful in this programme and can boast of over 90 per cent coverage for the vaccination of all children. We have successfully eliminated polio, the last case being confirmed as far back as 1993, and we are free of diphtheria, tetanus, measles and German measles or rubella. The success of the EPI is due to many factors that include government commitment, the unstinted dedication of parents, the promotion of the programme through all media channels and the dedicated work of all grades of healthcare personnel. The very high literacy rate of the populace of our country enables all information regarding vaccination to be most conveniently conveyed to the population. Sri Lanka has been hailed as a country that has achieved so much in this field, but with so few resources. It has been cited as a model to the entire Asian region as well as even the world.
In addition to their undoubted effectiveness in protecting against infective microorganisms, some of these vaccines have other bonus effects. At least two of the vaccines in use today have telling effects in preventing certain cancers. One is the Hepatitis B vaccine. It provides protection against liver cancer. The other is the more recent Human Papillomavirus vaccine (HPV vaccine) which protects females against cancer of the neck of the womb, which is also referred to as the cervix of the womb. That disease is generally referred to as Cervical Cancer.
The Human Papillomavirus (HPV) is sexually transmitted and most people become infected sometime during their lifetime. In the majority, it is soon after becoming sexually active. Most infections are asymptomatic and usually clear up spontaneously, accounting for remission in 90% within two years. Only 10% of persistent HPV infections with certain genotypes of HPV can persist and progress to changes in the cervix. If infection from cancer-causing HPV types persists over 10-15 years, women can go on to develop precancerous lesions that, if left untreated, develop into cervical cancer. This process takes an average of 20-30 years from infection to the development of cervical cancer.
In 1995, Dr Anne Szarewski, a renowned researcher from the United Kingdom, led a team who outlined the role of human papillomavirus in uterine cervical cancer detection and screening. Then the researchers began work on an HPV vaccine. Szarewski was also a chief investigator, principal investigator and author of key HPV vaccine trials and publications, who helped to develop the bivalent HPV vaccine. The word bivalent is used to indicate that it contains two strains of HPV. HPV infections are very common, often with minimal symptoms, but high-risk HPV strains can go on to cause other medical conditions, particularly cervical cancer.
In 2006, the first vaccine for Human Papillomavirus (HPV) to be used globally was approved. HPV vaccination has now gone on to become a key part of the effort to eliminate cervical cancer. According to the available research results, HPV vaccination could reduce the lifetime risk of cervical cancer by 35–80%; the rather wide range being due to several studies with different methods. The vaccine was initially promptly snapped up in the West, especially in the Scandinavian countries. In Sweden, the coverage of the vaccine is over 80 per cent. However, according to the data put out by the World Health Organization (WHO) in November 2022, the human papillomavirus vaccine against cervical cancer has been introduced in just 41 per cent of low-income countries, even though they represent much of the disease burden, compared to 83% of high-income countries. We have a set of 10-year data on the benefits of the vaccine and in certain Western countries, a significant drop in the morbidity and mortality rates of cervical cancer is already evident.
In Sri Lanka, the National Vaccine Summit in January 2015 recommended the usage of the HPV vaccine and the government introduced it in 2017 for girls within the age range of 10 to 13 years. That age group was decided on the premise that to get the best results, we need to introduce the vaccine before sexual activity starts. The vaccine was to be administered to the selected age groups in the schools free of charge and in the fee-levying private sector. To date, the vaccine is not available through the Immunisation Clinics of the Provinces and the MOH Clinics.
NOW HERE IS THE REAL CRUX OF THE MATTER. For a variety of reasons, the coverage of the HPV vaccine in the entire cohort of eligible girls in Sri Lanka is somewhere between 30 and 40 per cent. This is woefully inadequate coverage to get the best possible results, especially when looked upon in the light of over 90 per cent coverage of the other vaccines in the National Expanded Programme of Immunisation. Cervical cancer ranks among the five commonest cancers in women in Sri Lanka. HPV vaccine is just one of two vaccines that can prevent cancers. All children have had the Hepatitis B vaccine which protects against liver cancer, as it is given through the National Programme of Immunisation. But, and this is a BIG BUT, the only other vaccine, the HPV vaccine that can prevent cervical cancer, shows a rather low uptake.
We do need to escalate the uptake rate of the HPV vaccine to at least around 80 per cent to get reasonable benefits in the reduction of the morbidity and mortality that is currently seen in cervical cancer. I think we have to admit that due to very many reasons, the message has not gone through to the general population in the country. When inquiries are made from the mothers of eligible girls, the vast majority of them are not even aware of the existence of this vaccine and more importantly, the future beneficial potential of this endeavour. The age group selected is a rather tricky cohort. They get upset at the drop of a hat. The last thing they want is an injection. They will run away, as fast as possible, to avoid it. Some are so frightened that it is not uncommon to see them faint even at the sight of the syringe and the needle. One way of getting the cooperation of these little girls is to allow either the mother or the father to be present to hold her hand most reassuringly when the vaccine is administered. An additional initiative would be to make it widely available through the Immunisation Clinics for it to be administered to all those who have missed it when it was given in the school. This is particularly important as the vaccine is quite expensive when administered in the private sector.
Latest position on debt restructuring process
By Jayampathy Molligoda
According to the announcement made by the Managing Director of the IMF Kristalina Georgieva, the IMF Executive board meeting will be held on 20 March to consider and hopefully approve the EFF arrangement for Sri Lanka. In the meantime, the Ministry of Finance and the Central Bank in consultation with IMF have finalised the latest position of Sri Lanka’s Public Debt as at end 2022 just prior to commencement of debt restructuring negotiations with creditors. Having perused the document uploaded to the Ministry of Finance (MOF website) recently, which is a comprehensive summary of debt stock as at end 2022, I have tabulated the summary of the main facts and figures (See Table). As can be seen, the total public debt stock has skyrocketed to US $ 83.6 billion, which includes total foreign debt of US$ 45.6 billion and the local debt of 38 billion in US $ equivalent. The total debt as a % of GDP as stated in the above MOF doc is 128%. The public debt is expected be reduced to 100% of GDP in order to ensure debt sustainability in line with IMF supported program parameters coupled with ‘comparability of treatment principle’ whilst ensuring equitable burden sharing for all restructured debt.
However, I have my doubts about GDP computation here. As per the MOF doc page 1, the Nominal GDP was stated as Rs. 23.7 trillion for the year 2022. The $ exchange rate used for conversion as Rs.363.10 clearly indicating that it is the year end figure, they have taken the year end Exchange rate of Rs 363.10 per US$. It is pertinent to ask the question as to why ‘year- end exchange rate’ figure to convert our annual GDP in rupee to US dollars? It should have been the ‘average exchange rate’ as in the past so many years computed by CBSL. As a result, the GDP (in US$ terms) works out to US$ 65.2 billion only. That’s why the total public debt stock of US$ 83.6 billion works out to 128% of GDP – my initial query is; why did they take year-end figure of Rs363.10 instead of taking the average exchange rate?
Besides, the real critical issue is how to reduce the debt stock to a level of 100% of GDP in the context of declining GDP (- 7.8% in 2022) and on the other hand, our debt stock is on the rise. More importantly, if we take the total ‘multilateral debt’ out, then the foreign debt is US $ 34 billion only, which includes ISBs and bilateral loans. Assuming a higher ‘haircut’ of 33% for foreign debt is agreed upon, it works out to 11 billion thus reducing the total public debt to 73 billion only.
In this regard, The President in his latest open letter dated 14 March ‘23 to Sri Lanka’s official Bilateral creditors has clearly indicated that there will be equitable treatment of burden sharing in respect of all creditors (except IMF/WB/ADB) Quote; ” ..we reiterate our commitment to a comparable treatment of all our external creditors with a view to ensuring all round equitable burden sharing for all restructured debt. To that end, we will not conclude debt treatment agreements with any official bilateral creditor or any commercial creditors or any group of such creditors on terms more favourable than those agreed. …To this end we also confirm that we have not and we will not make any side agreements with any creditor aimed at reducing the debt treatment impact on that creditor.”
In the circumstances, my own view is we are reluctantly compelled to restructure local debt i.e.; TBs and, it is inevitable that the local debt of USD equivalent of 38 billion would also need to be taken into consideration for debt restructuring – otherwise there is no way of reducing the total public debt stock to the level that is required as per IMF conditions. This would create a serious issue for our ‘finance system stability’ and all our commercial banks will be in trouble. Further the deposit holders including pension funds are badly affected. The temperature of social unrest is brought closer to the boiling point.
As stated in the global research article by Jonathan Manz recently, former Chief Economist and Senior Vice President of the World Bank, and Nobel Prize winner, Joseph Stiglitz, has slammed the IMF for unleashing riots on nations the IMF is dealing with; he has pointed out that the riots are written into the IMF plan to force nations to agree with the average 111 conditions laid down by the IMF and they destroy a country’s democracy and independence. He has been a critique of IMF causing great damage to countries through the economic policies it has prescribed countries to follow in order to qualify for IMF loans. However, neither Stiglitz nor any other eminent economist has yet to come out with a practical and alternative policy framework to overcome the most serious economic and financial crisis faced in the 75 years of Sri Lanka’s independence.
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