News
Economic crisis: MR, ministers, CBSL Governor, Dr.PBJ ignored IMF warnings
Dr. Jayamaha says Monetary Board acted regardless of strong opposition
By Shamindra Ferdinando
It was disclosed before the Committee on Public Enterprises (COPE) yesterday (25), the then Prime Minister Mahinda Rajapaksa, who served as the Finance Minister, had been briefed, in March-April 2020, on the impending financial crisis of unprecedented magnitude, but he had chosen to ignore the dire warning.
The parliamentary watchdog was told how the International Monetary Fund (IMF) had warned the then Governor of the Central Bank, Prof. W. D. Lakshman, and Treasury Secretary S. R. Attygalle, of Sri Lanka’s inability to procure loans unless the country undertook debt restructuring immediately.
COPE members received a briefing on the circumstances leading to the crisis when senior officials of the Central Bank appeared before the all-party body yesterday. CBSL Governor Dr. Nandalal has stated that the IMF warning hadn’t been heeded at all.
The COPE received confirmation of what has been widely speculated hours after UNP Leader Prime Minister Ranil Wickremesinghe, was sworn in as the new Finance Minister.
Janakantha Silva, Director Legislative Services / Director Communication, Parliament quoted Dr. Weerasinghe as having told COPE that following technical talks held in terms of the Finance Act pertaining to the IMF’s stand, recommendations were made to the then Premier and other senior officials. Dr. Weerasinghe has stated that the relevant decisions should have been made by the Premier, in his capacity as the Finance Minister and the entire Cabinet of Ministers.
The IMF has made its position clear after having asserted Sri Lanka lacked debt sustainability.
Asserting the failure on the part of those who managed the economy for causing a massive crisis, COPE Chairman Prof. Charitha Herath called it a crime. The first time entrant to Parliament recommended the setting up of a Special Parliamentary Select Committee to probe those who neglected their responsibilities thereby caused the current debilitating crisis. Prof. Herath blamed those few who managed the economy during that period.
SLPP National List MP Basil Rajapaksa succeeded Mahinda Rajapaksa in July 2021 as the Finance Minister whereas President Gotabaya Rajapaksa brought in SLPP National List MP Ajith Nivard Cabraal as the Governor of the Central Bank in Sept 2021. Cabraal quit in March to pave the way for Dr. Weerasinghe, the former Bank Deputy Governor to return from retirement in Australia, as its new Governor.
Dr. Harsha de Silva pointed out that the then Finance Minister Mahinda Rajapaksa delegated his responsibilities to the then State Finance Minister Cabraal who refrained from briefing the Parliament as regards the actual situation. Dr. de Silva said that the IMF’s declaration of debt sustainability should be examined against the backdrop of the revenue cut imposed on the recommendation of the then Secretary to the President and one time Central Banker and Treasury Secretary Dr. P.B. Jayasundera that deprived the Treasury of Rs 600 mn in taxes.
Dr. de Silva asked who decided on the tax cut in spite of the IMF specifically advising the government not to do so. The top SJB spokesperson and COPE member asked who decided on such reckless course of action.
COPE member and SLPP lawmaker Rear Admiral (retd) Sarath Weeraselera has said that tax cut was declared to encourage business and trade.
When COPE raised contentious issue of the Central Bank wasting precious funds to prevent depreciation of Sri Lanka Rupee, Dr. Weerasinghe has said this was the responsibility of the Monetary Board comprising five persons. The then Monetary Board member Dr. Ranee Jayamaha has revealed that the then Governor Prof. W.D. Lakshman, Treasury Secretary S.R. Attygalle and nominated member Samantha Kumarasinghe decided on that course of action in spite of her and Sanjiva Jayawardena, PC, opposing them. They had registered their protest in writing.
Dr. Weerasinghe assured the COPE that in spite of the difficulties likely to be experienced within the next three to four months he would try to achieve objectives.
The French Navy Ship ‘BEAUTEMPS BEAUPRE’ which arrived in Sri Lanka on a goodwill visit (09 May 25), departed the island on Tuesday (13 May).
The Sri Lanka Navy bade customary farewell to the departing ship at the Port of Colombo, following naval traditions.
During the ship’s stay in Colombo, crew members of ‘BEAUTEMPS BEAUPRE’ visited some tourist attractions in the country. In addition, the Commanding Officer and a group of
crew members of the ship called on senior officers of the Sri Lanka National Hydrographic Office (SLNHO) to discuss key hydrographic matters of bilateral importance.
News
“Clean Sri Lanka” joins hands to Improve facilities and sanitation at Kotmale Regional Hospital
Following the bus accident in the Garandiella area of Kotmale, a large number of injured individuals were admitted to the Kotmale Regional Hospital for treatment. In response, the “Clean Sri Lanka” programme has collaborated to improve the facilities and sanitation of the hospital.
Accordingly, the “Clean Sri Lanka” programme actively worked to clean the hospital ward complex and the hospital premises, aiming to create a comfortable environment for the patients’ treatment and to enhance other facilities.
A notable aspect was the voluntary participation of the local community in this effort. The “Clean Sri Lanka” secretariat appreciates the dedication shown by the doctors and hospital staff of the Kotmale Regional Hospital, who provided emergency treatment to those injured in this unexpected incident despite having access to limited resources.
Flaws in law blamed for chaos
The Samagi Jana Balawegaya (SJB) is in turmoil over naming of members to the Colombo Municipal (CMC) where it won 29 slots – 14 elected and 15 on the list at the recently concluded Local Government elections.
Political sources said that resistance was growing within the party over moves to accommodate defeated candidates as well as those listed at the expense of successful candidates. Among the defeated is SJB’s mayoral candidate Dr. Ruvaiz Haniffa.
Sources said that in terms of the Local Government Election Act there was no restriction in the number of defeated candidates that could be accommodated at the expense of those who were elected. As 25% of the members of a particular council has to be women, more successful members had to be dropped, sources said, pointing out that none of the female candidates were among the 14 SJBers elected at ward level.
The National People’s Party (NPP) won the CMC by securing 48 seats, including six from the list. Political sources said that in spite of both NPP and SJB declaring that they could a secure majority in the 117-member CMC. NPP polled 81,814 votes (48 seats), SJB polled 58,375 votes (29 seats), UNP polled 26,297 votes (13 seats), SLPP polled 9,341 votes (05 seats), SLMC polled 8,630 votes (04 seats) Independent Group 03 polled 5,934 votes (03 seats), Independent Group 05 polled 4,659 votes (02 seats)
United Peace Alliance polled 4,473 votes (02 seats), Sarvajana Balaya polled 3,911 votes (02 seats), Independent Group polled 3,640 votes (02 seats), People’s Alliance polled 2,754 votes (01 seat), National Freedom Front polled 2,398 votes (01 seat), United Republican Front polled 2,157 votes (01 seat), Independent Group 01 polled 1,909 votes (01 seat), Independent Group 02 polled 1,791 votes (01 seat), Democratic National Alliance polled 1,370 votes (01 seat) and National People’s Party polled 950 votes (01 seat).
Political sources said that the Local Government Election Act had caused much turmoil with many of those who had been elected by the people deprived of an opportunity to serve their respective local government body. Sources alleged that the system in place at Local Government was far worse than appointing defeated candidates to Parliament through the National List. In terms of the Parliamentary Election Act, an elected member could be replaced only by the candidate who polled the next highest number of votes at the election from the same district, sources said, pointing out Local Government winners at ward level were axed to accommodate both defeated as well as those on respective lists of political parties.
Sources said that once the appointment of all CMC members was finalised the number of elected people axed by political parties could be known. Sources said that perhaps political parties and election monitoring groups should inquire into the shortcomings in the Local Government Election Act.
by Shamindra Ferdinando
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