News
Dr. Godahewa warns govt. over its IMF strategy
‘Current crisis has given us an opportunity to rectify wrong decisions’
By Shamindra Ferdinando
SLPP lawmaker and one-time prominent Viyathmaga activist Dr. Nalaka Godahewa says the government has not been able to bring talks with the International Monetary Fund (IMF) to a successful conclusion for want of a cohesive action plan to reduce expenditure and increase revenue.The former Minister said so when The Island sought the former mercantile executive’s response to the current status of government negotiations with the IMF.
“The issue at hand is that we haven’t been able to convince the IMF of our plans to address the daunting task. The government cannot sidestep contentious issues as the IMF expects us to come up with a clear action plan to enhance income and reduce expenditure,” the Gampaha District MP said.
Responding to another query, Dr. Godahewa warned the government that finalization of an agreement with the IMF wouldn’t be possible as long as the government delayed presenting a proper plan. The lawmaker questioned the validity of the presentation made by the Finance Ministry to the IMF delegation. Had the government convinced the IMF and as well as other lenders an agreement could have been reached during the recently concluded talks in Colombo.
Participating in a discussion arranged by a group of Kelaniya undergraduates over the weekend, Dr. Godahewa explained the responsibility on the part of the government to reveal how it intended to repay debt.
Instead of repeatedly giving excuses and warnings of further deterioration of the economic status, the government should without further delay address four key issues namely how to increase foreign/domestic income, bring down expenditure in foreign currencies/domestic expenditure.
Dr. Godahewa said that the unprecedented economic crisis had given the incumbent government an opportunity to take appropriate remedial measures to rectify a spate of wrong decisions taken by successive governments over the past several decades. Unfortunately, the government seemed not capable of taking advantage of what the former media minister called a golden opportunity to push for required reforms with the support of all political parties represented in Parliament and other stakeholders, particularly the trade unions.
Dr. Godahewa warned that printing of currency notes continuously to meet budget deficit was nothing but a horrendous blunder.The government should concentrate on expenditure control while being tough on waste, corruption, irregularities and mismanagement, the new entrant to Parliament said. According to Dr. Godahewa, waste, corruption, irregularities and mismanagement perpetrated by successive administrations had caused significant loss of revenue over the years and the incumbent government was no exception, the ex-minister said.
Commenting on public sector enterprises, the Gampaha District lawmaker said that though there were 420 such ventures, the Treasury considered only 52 of them important. Of those categorized as important, the CEB (Rs 21.4bn), CPC (Rs.82.2 bn) and SriLankan Airlines (Rs 170.7 bn) suffered a staggering loss of Rs 270 bn in 2021.
Dr. Godahewa said the country could no longer afford to bear such huge losses. Therefore, restricting was nothing but an urgent necessity, the government MP declared, pointing out that the government lacked the wherewithal to sustain utterly incompetent public sector.
Dr. Godahewa gave a breakdown of the public sector. According to the latest available data, there were 1,402,000 in the state sector comprising ministries and departments 792,000, Provincial Councils and Local Government 390,000 and state enterprises 220,000.
In 2021 alone, their salaries and other payments cost the government Rs 845 bn whereas 672,000 pensioners received payments amounting to Rs 270 bn. Therefore, the total expenditure stood at Rs 1,115 bn (Rs 845 b +Rs 270 bn), Dr. Godahewa said, adding that amounted to staggering 80 percent of the total income.
The MP called for the pruning of the public sector declaring it was a very heavy burden. Public Administration Secretary Priyantha Mayadunne recently said that Sri Lanka could manage with about 500,000 public servants though the current strength of the public sector is 1.5 mn.Dr. Godahewa said that all unnecessary posts and positions should be gradually abolished.
Benjamin Netanyahu’s cabinet has approved a deal with Hamas for a ceasefire in Gaza after more than 460 days of war in which Israeli forces have killed more than 46,788 Palestinians and wounded 110,453.
The deal, which was approved in the early hours of Saturday morning and is expected to take effect from Sunday, involves the exchange of captives held in Gaza for Palestinian prisoners held in Israeli jails, after which the terms of a permanent end to the war will be finalised.
With longstanding divisions apparent among ministers, Israel delayed key meetings of its security cabinet and cabinet, which were supposed to vote on Thursday, blaming Hamas for the hold-up.
Netanyahu’s office had claimed that Hamas reneged on key parts of the agreement to obtain last-minute concessions. But Hamas senior official Izzat al-Risheq insisted that the group remained committed to the ceasefire deal.
Hamas said in a statement earlier on Friday that obstacles that arose in relation to the terms of the Gaza ceasefire agreement had been resolved at dawn that day.
Netanyahu’s office said Hamas would start freeing captives “as early as Sunday” providing the deal was given a go-ahead by the Israeli cabinet.
The ceasefire agreement was announced by mediators Qatar, Egypt and the United States on Wednesday. The deal outlines a six-week initial ceasefire, the gradual withdrawal of Israeli forces from many areas of Gaza and a surge in humanitarian aid.
[Aljazeera]
By Nimal Gunathilake
Agricultural experts have expressed concern about the government’s decision to release rice stocks purchased and stored at lower prices to the market as such action could lead to a significant drop in rice prices during the 2024/25 Maha harvesting season.
Professor Buddhi Marambe, from the Department of Crop Science at the Faculty of Agriculture, University of Peradeniya, has criticised the move, noting the government’s earlier claims that previous administrations had failed to store even a grain of rice. He expressed surprise that tenders had been called to sell 119,000 metric tonnes of Keeri Samba rice under such circumstances.
Prof. Marambe has warned that the release of rice at reduced prices will allow mill owners, traders, intermediaries to suppress rice prices during the Maha season. He has pointed out that the extent of damage to rice cultivation caused by heavy rains and flooding has not been fully assessed.
Professor Marambe has highlighted that an accurate evaluation of the damage to rice cultivation is still pending, but it is estimated that at least 50,000 hectares of farmland have been affected. As a result, he projected that Sri Lanka could lose between 250,000 and 360,000 metric tonnes of rice.
The government has acknowledged a rice shortage and imported over 170,000 metric tonnes of rice through public and private sector collaboration. However, a solution to the scarcity of Rathu Kekulu rice has yet to be identified.
There are some tea estates where the workers do not have access to clean drinking water, National People’s Power (NPP) MP Kitnan Selvaraj has said.
He said that instead of addressing the common issues faced by the estate workers, regional political parties have been distributing local and foreign aid and assistance among their political supporters.
“Everyone knows that several foreign countries and multilateral organisations provide aid to the estates. When it comes to housing for example, instead of choosing those who are most needy, they have chosen their henchmen,” he said.
Moreover, leaders of regional political parties have occupied some bungalows in state owned estates. “We have removed some of them already, and we will get rid of all of them soon,” he said.
Selvaraj said the NPP is discussing what future housing for estate workers should look like. “We have not come to a decision yet. However, I think that if we can build vertically, we can save space and keep building for future generations. We don’t necessarily have to hold on to the earlier way of life, or living, for estate workers,” he said.
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