Editorial
Basil’s Budget

Monday 15th November, 2021
Finance Minister Basil Rajapaksa has spoken, and the people are trying to figure out what he has said, one may say with apologies to Bill Clinton. Ordinary Sri Lankans, at whose expense governments raise revenue by way of indirect taxes, expect various benefits such as salary increases, tax cuts, subsidies, etc., when budgets are presented. So, Budget 2022 may have gladdened the hearts of only government teachers and principals. Rs. 30 bn has been allocated for the revision of their salaries. One can only hope that there will not be a spate of copycat strikes, as it were, by other state workers, demanding better salaries. The Sri Lanka Government Officers’ Trade Union Association has already threatened to launch a strike unless public workers are given a pay hike immediately.
What matters more than anything else at this juncture is how the government proposes to straighten up the battered economy, shore up dwindling foreign reserves, stabilise the rupee, service debt, improve the country’s creditworthiness, and overcome the balance of payment woes while raising funds to bridge the budget deficit.
Debt servicing is one of the biggest problems the country is beset with. Finance Minister Rajapaksa, presenting the Budget, on Friday, did not forget to take a swipe at the yahapalana government, which, he said, had raised debt to the tune of USD 6.9 billion during a 15-month period between April 2018 and July 2019 alone, and the debt the present government had to repay included that amount. Governments borrow heavily, leaving repayment to their successors. The Finance Minister, did not say that the yahapalana government had repaid the loans the previous Rajapaksa government had drawn, and the country’s debt burden could have been lessened significantly if borrowed dollars had not been spent on projects such as the Lotus Tower, the Mattala Airport, the Suriyawewa cricket stadium, the Hambantota port, etc.
Minister Rajapaksa said something sensible about debt repayment. “We cannot solve this problem only by obtaining international loans. Therefore, we must adopt a special programme to encourage exports to earn foreign exchange.” This, no doubt, is the way out. But will the government care to do so? Another way of overcoming the country’s forex woes is to attract foreign direct investment. But foreign investors are wary of parking their money here owing to corruption. Who wants to invest in a country where many palms have to be greased to get anything done? How does the government propose to eliminate corruption and improve the country’s ease-of-doing-business ranking to attract foreign investment?
The need for tax increases and surcharges would not have arisen if the government had not opted for tax cuts to win the last general election. That politically-motivated measure the SLPP adopted after winning the 2019 presidential election was one of the main reasons for the widening of the budget deficit, the other factors being lockdowns, pandemic relief and the cost of vaccination drive. Tax cuts caused a drastic drop in the state tax revenue from 12.6% in 2019 to 9.2% in 2020, according to analysts.
The government decision to curtail expenditure related to the state service and carry out public sector recruitment only to fill vacancies is welcome. Curiously, it was only last month that Leader of the House, Education Minister Dinesh Gunawardena said the government had decided to recruit more graduates to strengthen the public sector by increasing its workforce!
The budget proposal for reviewing the eligibility of Samurdhi beneficiaries is also welcome. Relief programmes in this country are characterised by poor targeting, which has benefited various racketeers, and led to an increase in the economic burden on the ordinary public, who pays indirect taxes. The Finance Minister ought to ensure that his directive is carried out.
Minister Rajapaksa said there were about 300 state-owned enterprises, and the government had invested over Rs. 670 billion therein and spent as much as Rs. 75 billion to maintain them, but most of them did not yield returns. What does the government propose to do with the loss-incurring ones? Is it planning to divest them or run them as Public Private Partnerships? Most of these state institutions in debt could be turned around if properly managed without political interference.
The Finance Minister has proposed that Rs. 8.5 billion, which Perpetual Treasuries Ltd., has earned through the bond scams, be transferred to the state coffers. Similarly, will probes be conducted into the sugar tax racket and other such frauds which have benefited the SLPP financiers, and action taken to confiscate the illegally raised funds?
Meanwhile, the Budget 2022 will not yield the intended results unless the government gets its act together on the health front. It may be recalled that the economy began to recover and the country recorded an economic growth of 8% during the first half of 2021 owing to the successful vaccine rollout. But thanks to the government’s refusal to impose travel restrictions in April to prevent an explosive spread of Covid-19, and resultant lockdowns, the economic growth rate is expected to drop to 5% or even 4% for the current year. The pandemic is spreading fast, and if the country happens to be locked down again, as feared by health experts, the economy will be in a far worse situation.
Editorial
Crime of booing

Tuesday 28th March, 2023
The efficiency of the police is truly amazing, the only problem being that it is selective. Our brave cops sprang into action and arrested a person after giving chase in Homagama over the weekend. His crime? He booed Minister Bandula Gunawardena while driving past a ceremony where the latter was laying the foundation stone for the construction of a Buddhist shrine.
What is the world coming to when those who have plundered public wealth, committed many crimes including murder and bankrupted the country are given police protection and citizens who express their displeasure at the government by booing are arrested? The Buddha forgave those who even tried to kill him, didn’t he? So, it defies comprehension why anyone should be arrested for jeering at a politician at a Buddhist religious event.
There is reason to believe that the police went above and beyond the call of duty to please Minister Gunawardena. Opinion may be divided on the protester’s action and the reaction of the police, but that is not what we intend to discuss, today. Suffice it to say that booing is symptomatic of bubbling public anger, which the government cannot contain with the help of the police. When a youth was arrested in April 2021 for sounding the car horn in protest against the police closing a road in Borella for a motorcade transporting a group of foreign dignitaries to pass, the media rightly questioned the wisdom of the government and warned that the situation was likely to take a turn for the worse. Police action did not deter the public from protesting. Subsequently, the then President Gotabaya Rajapaksa himself was booed while he was passing a long line of people near a milk food outlet. A few months later, the people took to the streets and ousted the President. That is how public anger wells up and fuels uprisings.
The police have reached peak performance during the past several months; their remarkable feats include using batons as magic wands to make unruly protesters in robes levitate over tall walls of the Education Ministry! While hunting down undergraduates, they have also arrested some underworld kingpins. When a restaurant owner was gunned down in Hanwella recently, not many expected his killer to be even identified, but the hired gun, known as Booru Moona was arrested in record time. The crime busters have also taken into custody some key figures in a drug cartel run by a criminal known as Harak Kata, who was arrested in Madagascar and extradited.
Curiously, the police lack this kind of high-octane performance where some crimes are concerned. The killers of a large number of persons including The Sunday Leader Editor Lasantha Wickrematunge and ruggerite Wasim Thajudeen are still at large, and their family members and friends have been seeking justice for more than a decade.
Worse, the police sometimes choose to turn a blind eye to serious offences committed under their nose. A few weeks ago, there was a public outcry over the presence of a large number of ‘unidentified’ armed men in uniform similar to that of the army near a university students’ protest in Colombo. Armed with assault rifles and clubs and iron rods, they were operating alongside the army and the police in full view of the media and the public. Both the army and the police have said those men are not their personnel. If so, who are they? It is a non-bailable criminal offence for anyone to carry firearms without permission and he or she must be arrested and produced in court. The police should have arrested those characters before cracking down on the protesting undergrads.
Will the police, who swing into action and arrest jeerers before one could say ‘boo’, so to speak, explain why they have not cared to identify the armed men who were seen with them near the Colombo University recently?
Editorial
Tissue of lies and other issues

Monday 27th March, 2023
There is no bigger lie than the oft-repeated claim in some quarters that the 21st Amendment to the Constitution has helped strengthen democracy by ridding vital state institutions of dirty politics. Perhaps, the doormat at the entrance to the President’s Office receives better treatment than the supposedly independent Election Commission (EC), which suffers many indignities at the hands of some government politicians.
Prime Minister Dinesh Gunawardena was economical with the truth, which he also stretched and bent, in Parliament on Friday, when the Opposition questioned him on the postponement of the local government (LG) elections. The PM, who is also the Minister of Provincial Councils and Local Government, said he would meet the members of the EC for a discussion on poll-related issues soon. There is nothing to be discussed about elections! The government should either allocate funds for the LG polls or officially inform the public that it is scared of facing an electoral contest and therefore cannot hold the mini polls. Its refusal to release funds for elections on some flimsy grounds has only eroded public confidence in the electoral process, and given a turbo boost to anti-politics, which is manifestly on the rise and rapidly eating into the vitals of the state.
It is a pity that PM Gunawardena, who gained national prominence by standing up to a dictatorial UNP government under President J. R. Jayewardene, taking up the cudgels for the people’s franchise and winning the Maharagama by-election, in 1983, against tremendous odds, is now backing those who are all out to put off elections. President Jayewardene scrapped the 1982 general election for fear of losing his five-sixths majority in Parliament, and held a heavily-rigged referendum instead, undertaking to hold by-elections in the electorates where the UNP would lose. He had to hold 18 such by-elections, four of which were won by the Opposition despite large-scale rigging and violence unleashed by the UNP. Anil Moonesinghe, Richard Pathirana and Amarasiri Dodangoda won the Matugama, Akmeemana and Baddegama electorates, respectively. Forty years on, Gunawardena and the late Pathirana’s son, Ramesh, are backing Jayewardene’s nephew, President Ranil Wickremesinghe, who is putting off elections!
Unfortunately, it is Finance Ministry Secretary Mahinda Siriwardena who has had to take all the flak for not making funds available to the EC. He has become a soft target that everybody who lacks the courage to take on President Wickremesinghe turns on. Government Printer, Gangani Liyanage, is also in a similar predicament. Siriwardena allocated funds for the EC, albeit in dribs and drabs, before being asked by the Cabinet and the President in no uncertain terms to stop doing so. The government has pinioned him to the wall, and the Opposition worthies are punching him, and not those who deserve their blows. Let those heroes be urged to pluck up the courage to attack the President instead of turning on the public officials whom the government has put in the straitjacket of zero-based budgeting. These mandarins find themselves in an unenviable position; the government is preventing them from carrying out their duties and functions according to their conscience, and the Opposition is bashing them.
The SLPP MPs keep saying that they want the LG elections held. It is they who postponed the mini polls first, in 2022. However, if these politicians who are as crooked as a barrel of fish hooks are being truthful for once, then it will be seen that all members of Parliament, save the single UNP member and perhaps several others who have pledged their allegiance to President Wickremesinghe, are against the postponement of elections, and, worse, the President is refusing to allocate funds for the LG polls against the will of the vast majority of MPs! Parliament controls public finance, and therefore it must be allowed to decide whether to allocate funds for elections. Let a resolution be presented to Parliament to that effect and a vote taken thereon urgently.
Minister Kanchana Wijesekera informed Parliament, on Thursday (23), that President Wickremesinghe had asked for a division by name on the government’s agreement with the IMF so that the public would know who was supportive of the IMF programme and who was not. The same modus operandi could be adopted, if a vote is taken anent the LG polls, so that the public will know who actually wants the elections put off. This is the most democratic way of deciding whether to hold the LG polls or postpone them.
North Korea is reported to have recently tested a secret weapon capable of causing tsunamis. The Rajapaksa-Wickremesinghe regime, which often warns that Sri Lanka might end up being a country like the hermit kingdom unless its economic programme is followed, has resorted to an ill-advised course of action that is fraught with the danger of triggering a tsunami of public anger. Its members have apparently forgotten the firenado, as it were, which hit them in May 2022.
Editorial
More heavy lifting to be done

As President Ranil Wickremesinghe tirelessly stressed, the signing off on the Extended Fund Facility (EFF) with the International Monetary Fund marks a new beginning. “Forget the past and the old games,” he has said seeking the cooperation of both the opposition and the media for a great leap forward. He has made the point that the IMF arrangement of USD 2.9 billion opens the doors for further credit adding up to USD 7 billion from elsewhere. When he met editors and other media heads on Thursday he said we have to continue negotiations with bilateral and multi-lateral lenders as well as private creditors which he admitted would be the most difficult.
The bad news when this was being written on Friday was that unless there is a dramatic change of heart on the part of the executive, the likelihood of the scheduled local government elections in the foreseeable future appears more than remote. There are, of course, a clutch of cases before the courts at present and which way the determinations will go is not clear right now; also in which direction the dice will roll once the courts rule. But it is patently clear that both the president and the government want these elections as much as they want a hole in the head.
There is no need to labour the reason why the incumbent establishment does not want local elections at the present moment. This, notwithstanding SLPP General Secretary Sagara Kariyawasam’s mealy-mouthed protestations that his party does not wish these elections put off. The electorate is very well aware that these elections cannot mean a change of government. Wickremesinghe is safely ensconced on his presidential throne until Gotabaya Rajapaksa’s term runs out in November 2024. Wickremesinghe is constitutionally empowered to dissolve parliament whenever he wishes from now until then. That’s the whip-hand he holds over his SLPP backers who made him president. It will safely ensure that they will not rock the boat during his tenure.
Just as much as the president and his government do not want any election in the short term, the opposition parties are literally panting that these be held soonest for reasons that are all too obvious. The last time the country elected local bodies was in February 2018 and the Rajapaksa party was the comfortable winner. The credit for this within the SLPP was widely apportioned to Basil Rajapaksa, its national organizer. That election victory heralded the coming of Gotabaya Rajapaksa in November 2019 and the Mahinda Rajapaksa government the following August. This is why the opposition, principally Sajith Premadasa’s SJB and the JVP-led National People’s Power (NPP), is striving might and main to have this election one way or another. The present signal is that they will not succeed in this endeavour. But as in cricket, there is no certainty in the outcome.
Though the president requested that the old games must not be played any longer, his supporters don’t practice what he preaches. There was a vulgar display of firecracker lighting, in true Sri Lankan style, greeting the announcement that the IMF deal was through. Everybody and his brother well know that this polluting lighting of strings of firecrackers greeting election results, politicians arriving at meetings and other similar events are funded by the politicians themselves. Some ghouls even lit crackers when President Premadasa was assassinated. We don’t know whether last week’s cracker lighting was a command performance or of old habits persisting. Whatever it was, it was unseemly.
The mere fact the IMF deal is through does not mean that the country is going to emerge from the economic morass in which it is mired. A great deal of heavy lifting remains to be done. The initial benefits cannot be more than a trickle. Possibly the June negotiations down the road may be an opportunity to offer some tax relief to professionals loudly protesting that the new rates are totally unrealistic. We run a letter from a retired Commissioner General of Inland Revenue in this issue who says that in his view, the problem is not with the rate of taxation which is between six and 36% but with the exemption threshold.
He rightly says that given today’s hyper-inflation. high cost of electricity, water and essential food, the Rs. 1.2 million exemption threshold is far too low. He believes that if this is raised to at least Rs. 1.8 million a year, it may be possible to win the unions over and reduce the tax burden on high income professionals. He has said this should not impact on the IMF agreements and the time has come for a compromise between the government and protesters. Clearly the now retired writer will not have access to actual numbers. But given his long service in the tax department, he would have an instinct for these matters.
It is also pertinent to say here that it is time the government makes a statement about the safety of the country’s banking sector. There are many worries on this score particularly after what happened recently in the U.S. and in Switzerland. It is well known that our state banks have been captive lenders to insolvent state-owned enterprises with such loans underwritten by the government. The fact that the IMF deal was successfully concluded, no doubt, is a reassuring factor about the stability of our commercial banking system. Nevertheless, a statement from the government will reassure constituents.
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