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Crisis cannot be tackled by fuel price increases alone: SJB prescribes IMF

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By Shamindra Ferdinando 

Samagi Jana Balavegaya (SJB) spokesperson Dr. Harsha de Silva, MP, yesterday (21) called for immediate remedial measures in the wake of Energy Minister Udaya Gammanpila’s shocking admission that the national economy was in such a bad shape it found it difficult to pay for oil imports. 

 Former UNP non-Cabinet minister de Silva said that there had not been a previous instance of a minister expressing fears of collapse of the banking system under their watch unless corrective measures were taken. The Colombo District MP recommended the government to seriously consider seeking IMF’s assistance before the situation further deteriorated . 

Noting that both the Energy Minister and the Presidential Secretariat declared that state banks could be overwhelmed by staggering Rs 737 bn loans owed by the Ceylon Petroleum Corporation (CPC) and Ceylon Electricity Board (CEB), MP de Silva emphasised that the monetary crisis could not be addressed by increasing fuel prices alone. 

COPE member MP de Silva appreciated Attorney-at-law Gammanpila for being frank in his assessment. The SJB MP explained ways and means of addressing the issues at hand when The Island asked whether the Parliament as an institution should adopt a common stand on national economy and take tangible remedial measures? 

The Island also sought the MP’s suggestions on  stabilising the economy. 

Economist de Silva said that Minister Gammanpila is on record as having said that the Central Bank in a letter dated May 31, 2021 warned the Finance Ministry of dire consequences unless remedial measures were taken. 

MP de Silva said that State Minister of Finance, Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal in a recent interview with Irida Lankadeepa confirmed Minister Gammanpila’s statement. However, it would be a grave mistake on the part of the government to believe such an extremely serious situation could be tackled by increasing fuel prices. 

The former Policy Planning Deputy Minister said the issue at hand is so serious, it could not be fixed by just increasing fuel prices. “A macro prudential analysis must be undertaken by the Central Bank without further delay. The systemic risks must be identified and assessed. The vulnerability of the banking system must be immediately addressed beyond the mere inability of the CPC to make good on their payments,” MP de Silva said. 

MP de Silva underscored the desperate situation the state banks were experiencing. The MP said that state banks were entering into dollar swaps at massive discounts. For instance, buying dollars today at Rs 199.99 with settlement in a year at Rs 181.99. “Consider the risk these state banks are running. Can they get dollars at Rs 181.99 in a year’s time or will the dollar cost Rs 210 or even higher? Whose money is at risk? Another glaring example is the plan to borrow USD 1 billion from ‘unsolicited’ bidders. This is unbelievable. Are we going to integrate our banking system with money laundering operators to allow them to clean black money? What will happen to our credibility in the longer run? These are all serious matters that need immediate attention.” 

Responding to another query, MP de Silva asserted that the best option available to the SLPP government was to restructure the country’s debt. “If we, do it now, we should be able to come out of the crisis with only a re-profiling exercise, meaning a delay in our payments to the bond holders instead of asking them to take a haircut, meaning to agree to a reduction in principle,” he said. 

The SJB heavyweight asked would working with the IMF acceptable than seeking deals with those hoping to clean their dirty money. The current crisis should be tackled by working with the IMF whatever the political agenda the SLPP hoped to pursue, the government had no option but to seek IMF assistance or face a catastrophe. MP de Silva said that he suggested six months ago that Sri Lanka had no option but to undertake a restructuring process with the IMF. Although the government had ignored warnings and declared it would never go to the IMF, the crisis triggered by the fuel price hike exposed the government. “Unfortunately for the people of Sri Lanka the more these people continue this delay in restructuring the greater the pain will be when it finally is thrust upon us. We need a soft landing. Not a hard landing,” Dr. de Silva said. 

 The former minister said that this would be raised in parliament. Referring to a media briefing called by Minister Gammanpila early this month whereas announced plans for a new oil refinery at Sapugaskanda, MP de Silva said that the PHU leader said that cash-strapped debt-ridden government lacked the wherewithal to make an investment therefore needed external financing amounting to USD 3 bn. The former Minister said that Minister Bandula Gunawardena and State Minister Dr. Nalaka Godahewa, too, acknowledged the severe financial difficulties with the latter explaining how the raging Covid-19 pandemic worsened the situation.



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Sajith warns country is being dragged into authoritarian rule 

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Sajith Premadasa

Opposition and SJB Leader Sajith Premadasa has alleged that the current government is attempting to suppress freedom of expression and media freedom to lead the country towards authoritarian rule.

In a video message on Thursday (25), Premadasa said that in a democratic country, the four main pillars safeguarding democracy are the legislature, the executive, the judiciary, and the independent media, but, at present, the government is using the police to violate both the democratic rights of the people and the rights of police officers themselves.

He said that the government is working to establish a police state that deprives citizens of their right to access truthful information.

“For democracy to be protected, media freedom must be safeguarded, and space must be given to independent media. Instead, the government is interfering with the independent media process, using the police to suppress and intimidate independent media,” he said.

He noted that even when independent media present their views based on reason, facts, and evidence, the government attempts to suppress them. Such actions, he said, amount to turning a democratic country into a police state. “Do not suppress the voice of the silent majority, the independent media,” he urged.

Premadasa emphasised that independent media represent the voice of the silent majority in the country and must not be suppressed.

“Media repression is a step towards authoritarian rule, and the people did not give their mandate to create an authoritarian regime or a police state. If the government attempts to abolish democratic rights, the Samagi Jana Balawegaya will stand as the opposition against it,” he said.

The Opposition Leader further alleged that the government was interfering with police independence, stating, “Political interference has undermined the independence of the police, making it impossible for them to serve impartially. Suppressing freedom of expression is an attempt to lead the country towards authoritarian rule.”

Premadasa pointed out that the media has the right to reveal the truth, and interfering with that right is a violation of the rights of 22 million citizens.

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Wholesale mafia blamed for unusually high vegetable prices  

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Vegetable prices at the Peliyagoda Manning Wholesale Market surged to unusually high levels yesterday (26), raising concerns among consumers as the festive season drives up demand. The situation is expected to persist over the next few days, a spokesman for the Manning Market told The Island.

He said a sharp increase in the number of buyers visiting the wholesale market, ahead of upcoming festivities, had resulted in a sudden spike in demand, prompting wholesale traders to raise prices significantly. The price hikes have affected a wide range of commonly consumed vegetables, placing additional pressure on household budgets.

According to market sources, the wholesale price of beans climbed to Rs. 1,100 per kilogram, while capsicum soared to Rs. 2,000 per kilogram. Green chillies were selling at around Rs. 1,600 per kilogram. Prices of other vegetables, including beetroot, brinjal (eggplant), tomatoes, bitter gourd, snake gourd and knolkhol, also recorded unusually high increases.

The spokesman alleged that despite the steep rise in prices, vegetable farmers have not benefited from the increases. Instead, he claimed that a group of traders, who effectively control operations at the wholesale market, are arbitrarily inflating prices to maximise profits.

He warned that if the relevant authorities fail to intervene promptly to curb these practices, vegetable prices could escalate further during the peak festive period. Such a trend, he said, would disproportionately benefit a small group of middlemen while leaving consumers to bear the brunt of higher food costs.

By Kamal Bogoda ✍️

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Cyclone-damaged Hakgala Botanical Garden reopened with safety measures

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Hakgala Botanical Garden

The Hakgala National Botanical Garden, which was closed in the aftermath of Cyclone Ditwah, has been reopened to tourists from yesterday, the Ministry of Environment indicated.

The Ministry said the reopening was carried out in accordance with recommendations and guidelines issued by the National Building Research Organisation (NBRO) and the DisasterManagement Centre (DMC) after safety assessments were completed.

However, due to the identification of hazardous ground conditions, several areas, within the garden, have been temporarily restricted. These include the pond area, near the main entrance, and access roads leading towards the forest park where potential risks were observed. Warning signs have been installed to prevent visitors from entering these zones.

To ensure the safety and convenience of both local and foreign visitors, the garden’s management has introduced a special assistance programme, with staff deployed to guide and support tourists.

The Hakgala Botanical Garden was closed as a precautionary measure during the disaster situation triggered by Cyclone Ditwah. The Ministry noted that the garden has now been safely reopened, within a short period, following remedial measures and inspections, allowing visitors to resume access while maintaining necessary safety precautions.

By Sujeewa Thathsara ✍️

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