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Eran takes govt. to task for errant policies



By Saman Indrajith

Samagi Jana Balavegaya MP Eran Wickramaratne warned in Parliament Thursday that Sri Lanka should prepare for its worst budget deficit in 35 years and the situation, which he said was due to the policy errors of the government.

 “Expenditure increases during a health crisis but that is not what has happened. Capital expenditure came down during this period. The crisis has occurred due to the collapse in government revenue. This is the policy errors, which, he said, had to be rectified urgently. He was taking part in the debate on six notifications under the Ports and Airports Development Levy Act, three Orders under the Customs Ordinance and six Orders under the Revenue Protection Act presented to the House for approval by the government.

Wickramaratne said that under the previous government, Sri Lanka had achieved and improved fiscal position after several years with the budget deficit kept at 5.3 per cent of GDP during that period.

“This however began to deteriorate by the end of 2019 because of the government‘s irresponsible statement, in the run up to the election, on taxes and while the fiscal position has deteriorated, the situation has got progressively worse in 2020.

“Government revenue has declined by 28 per cent compared to 2019. Recurrent expenditure has increased by l0 per cent. The budget deficit has increased by 41 per cent. Development spending that is capital expenditure has decreased by -1.1 per cent. And the government debt has increased by Rs. 1.020 billion in just six months rising from 13,000 billion to over 14.000 billion from January to June in 2020.”

MP Wickramaratne said that the fiscal results would get worse as the year progressed with an additional cost of a 10 per cent increase in the government staff cadre.

The import ban would begin to hit government revenue in the second half. “Corporate taxes will be sharply down and Sri Lanka should prepare for its worse budget deficit in 35 years,” he said.

The SJB MP said that in spite of the reduction in tax relief to the public there had been no benefit felt by the people.  “Prices of essentials have in fact increased despite the reduction and exemption in some taxes. Food price inflation reached 12.9 in July. The national consumer price index reached 6.1 per cent in July. These are not our statistics. These are statistics coming out of government departments,” he said.

MP Wickramaratne said the previous government had been able to rectify a regressive tax system.  The direct “tax percentage was 25 per cent in 2019 and 75 per cent was indirect tax. When we took responsibility for the government, the direct taxes were only 12 per cent and we have been able to correct a regressive tax system taking away or lessening burden on the poor in this country.”

The external sector as a result of the poor fiscal management had also lost the opportunity in the global capital markets and the country was paying its external debt by running down the reserves.  By the middle of 2019, the government reserves had been USD 859 billion, Wickremaratne said. But within one year in June 2020, the reserves were USD 6.7 billion. Therefore, there were major debt repayments. In 2020, 2021 and 2022, Sri Lanka would have to pay mainly on sovereign bonds. Sri Lanka had another USD 4 billion debt maturing in 2020 and 2024.

The country’s debt was about 87 per cent of GDP and of this 57 per  cent of was foreign debt, non-concessional as opposed to only 2.5 per cent, 15 years ago, Wickramaratne said, adding that most of the non-concessional borrowings of 75 per cent equal to US Dollars 15.3 billion were international sovereign bonds. “China has now displaced Japan as the largest bilateral creditor to Sri Lanka amounting to 12.4 per cent of government debt. Out of $ 4.1 billion of Chinese lending to Sri Lanka, only $ 760 million are classified as official bilateral debt. The rest are considered as commercial.”

MP Wickramaratne said that external debt in Sri Lanka was predominantly by the public sector and very high in relation to current account receipts. The pressure would intensify in 2020, when current account receipts would fall sharply amidst the down turn in tourism, exports, remittances and capital markets financing costs as they go up.”

He added that the government had an issue with State-Owned Enterprises (SOEs) particularly as they had issued guarantees to the Ceylon Petroleum Corporation (CPC), the Road Development Authority (RDA), the National Water Supply and Drainage Board, Ceylon Electricity Board (CEB) and SriLankan Airlines. “SOEs like CEB CPC and SriLankan Airlines are problematic for every government and therefore, we need to restructure the debt. Giving government guarantees is only manhandling the data, making the government look good.” Eventually that risk is not a contingent liability.

Wickramaratne charged that the government had mishandled the fiscal part at the beginning and then turned to the Central Bank and wanted the CB to do something about the monetary space.

“Despite the fact you forced out two members of the Monetary Board, Dr. Dushni Weerakoon and Nihal Fonseka, and despite the threat to senior members in the CB, it is not a matter of people, it is a matter of policy that you need to correct. They have done their utmost. They have provided the liquidity, but the credit growth in May, June and July has been negative. It cannot be solved only on the monetary side because you have little space on the fiscal side.”


Cabraal: Prez appoints members to Port City Economic Commission



By Shyam Nuwan Ganewatta

The President of the country would always appoint members to the Colombo Port City Economic Commission, entrusted with running of that city under the proposed CPCEC Bill, State Minister of Money & Capital Market and State Enterprise Reforms, Ajith Nivard Cabraal, yesterday, told the media, in Colombo.

State Minister Cabraal said that most critics of the Colombo Port City Economic Commission Bill had not even read it.

“Sri Lankans don’t need to obtain a visa to enter the Port City as some claim. The Port City will be administered by the Colombo Port City Economic Commission and the Bill we have presented details how the area will be governed,” Cabraal said responding to a question posed by a journalist.

The State Minister said that President Gotabaya Rajapaksa had asked him to counter the misinformation and fake news that was being spread about the Bill. Once people have read and understood the Bill, most who criticise it would have to change their tune, the Minister said.


Journalists also questioned the State Minister on the allegations levelled by MP Wijeyadasa Rajapakse. The State Minister said that Rajapakse had not even asked a question about the Bill during the Parliamentary Group meetings.

“As I said earlier, the Port City will be administered by Colombo Port City Economic Commission. All members are appointed by the President. The Chairman of the Commission too is appointed by the President. The President can get rid of them anytime he wants,” Cabraal said.

The State Minister added that no one would be allowed to withdraw money or assets from Sri Lanka and invest in the Port City. “This is a special economic zone. We need to attract foreign direct investments. We need to have ease of doing business in this zone and we have to make it an important financial hub in the region.”

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Two hotels to be built obstructing elephant corridor in Sinharaja – MONLAR



Forest land being cleared for the construction of a hotel

By Rathindra Kuruwita

The Bowitiyatenna elephant corridor, used by elephants in Sinharaja to travel to Dellawa – Walankanda forest had been obstructed by two businessmen by clearing a section of the forest to build hotels, Sajeeewa Chamikara of the Movement for Land and Agricultural Reform (MONLAR) said.

“One hotel is being constructed in the Dolekanda Grama Niladari area after clearing seven acres of forest land. The Kalawana Divisional Secretariat has approved the construction of the hotel ignoring environmental regulations. Right now, forests are being cleared, land is being prepared and buildings are being constructed using heavy equipment.”

Another hotel was being built at the Bowitiyatenna Elephant Corridor, situated in Godakawela Divisional Secretariat area by a businessman from Godakawela. He has cleared around eight acres of forest land, the environmentalist said.

The two hotels were obstructing the elephant corridors used by the remaining two elephants in the Sinharaja Forest Reserve. Now, the the people of Rambuka, Thanawela, Ellagama, Handiyekade, Kajugaswatte, Pothupitiya, Kopikella and Cypresswatte would have the elephans marauding their villages, the environmentalist said, adding that the residents of those villages would lose property and lives due to the hotels being constructed by obstructing the elephant corridors.

“Most of the forest areas surrounding the Sinharaja are to be annexed to the Forest Reserve because they are an important part of the forest network. These unscrupulous businessmen and politicians supporting them are attempting to carve out as much land as possible before these areas receive protected status. They are also doing their best to delay the declaration of these lands as protected areas.”

Chamikara said that the Central Environmental Authority (CEA) had the power to take action against those who carried out such illegal activities.

According to Section 23 (a.) (a.) of the National Environmental Act, when a project is carried out without environmental clearance, the CEA can produce such people before a magistrate’s court. If found guilty, a person can be fined up to Rs. 15,000 or imprisoned up to two years or subjected to both.

Chamikara said: “According to Article 27(14) of Chapter VI of the Sri Lankan constitution the state shall protect, preserve and improve the environment for the benefit of the community.” However, the CEA seems to have no interest in taking action against those who are building these hotels illegally. This is CEA’s attitude to almost all major environmental destruction that seems to be taking place these days.

“The government is silent when the Sinharaja forest is degraded and elephant corridors are closed by businessmen. The right to land seems to be a right reserved only for businessmen. We have the right to oppose these under article 28. (f) of the Constitution which states that we have a fundamental duty ‘to protect nature and conserve its riches.’ Article 28. (e) states that we also have a fundamental duty ‘to respect the rights and freedoms of others.’ Thus, we, the citizens have the right to oppose the illegal use of natural resources by powerful businessmen. If we do not oppose these moves as citizens, powerful businessmen will take over all our natural assets like they are doing at Sinharaja.”

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RDHS predicts Coronavirus spike in Jaffna over the weekend



By Dinasena Ratugamage

There might be a spike in COVID-19 cases in Jaffna this weekend, A.

Kethiswaran, Regional Director Health Services told the media yesterday. Dr. Kethiswaran made the prediction after 26 new cases were detected in Jaffna.

A large number of COVID-19 cases had been reported from Jaffna in the past few weeks. Thus, the people should adhere to health guidelines. If people did not follow the guidelines, there would be a spike in cases and then some places would have to be locked down, he said.

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