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Ex-President Sirisena blames open economic policies introduced in late 1970s for present ills

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By Saman Indrajith

Polonnaruwa District MP and former President Maithripala Sirisena told Parliament yesterday the national economy had been adversely affected by open-economic policies introduced in the late 1970s.

 Participating in the second reading debate on budget 2021, the former President said: “Local industries that had received a boost under the then Prime Minister Sirimavo Bandaranaike and Finance Minister Dr N. M. Perera collapsed after the introduction of open economic policies that depended on goods from overseas. The opening-up of the economy led to the country being flooded with imports, overwhelming local industries, local agriculture and some infrastructural mechanisms such as Regional Development Boards. As a result of those policies we have a sluggish economy today. The situation has been worsened by the COVID-19 pandemic.

 “We have chosen to promote local production as far as possible. I have faith in the incumbent President, who has understood the need of promoting the local industries, agriculture and national economy. I appreciate his policy of promoting local over international. I am sure that we can produce 99 percent of our food here. Therefore, I approve the limitations the president has imposed on some food imports to promote the local products. This government upholds the concept that we must solve our problem ourselves.

“I view these budget proposals as an attempt to reduce poverty by implementing as many programmes as possible to achieve self-sufficiency. The budget contains many progressive proposals. We should welcome the proposal to allocate funds for drinking water projects of rural areas.  We must appreciate the decision to allocate Rs. 7,000 million to for improving rural road network because rural economy cannot be uplifted without access roads enabling connectivity between the farm and the market. We should be thankful to the Prime Minister, who has, in his capacity as the Minister of Finance, included a proposal to allocate Rs 5000 million for developing rural dispensaries and maternity homes. In addition to the allocations made to the health sector, Rs 7,000 million is to be allotted to for the fight against COVID-19 pandemic.”



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Domestic debt restructuring will cripple EPF, ETF – JVP

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By Sirimatha Rathnasekera

The Employees’ Provident Fund (EPF) and Employees’ Trust Fund (ETF) will lose about 600 billion rupees during the proposed domestic debt structuring, Co-Convener of the JVP affiliated National Trade Union Centre (NTUC) Wasantha Samarasinghe claimed.

Samarasinghe is of the opinion that the government is planning not to pay 20 to 25 percent of the loans it has taken from domestic sources. Successive governments have borrowed significantly from the EPF and ETF, he said.

Samarasinghe said that due to the depreciation of the rupee, the real value of EPF and ETF funds had decreased by half. “In such a context, can these institutions take a 20 percent haircut? This might be a big problem to the workers,” he said.

The NTUC Co-Convener said that a number of domestic banks, too, had lent to the government and domestic debt restructuring might lead to a collapse in the banking system.

However, Central Bank Governor Dr. Nandalal Weerasinghe says that they are confident of reaching debt sustainability without re-structuring domestic debt, which would lead to problems in the banking sector.

“There have been concerns among domestic bond investors about rupee debt/internal debt to be restructured following comments made by President Ranil Wickremesinghe to the effect that financial advisors were looking at domestic debt. However, there has been no request to restructure domestic debt. We are confident that we can make debt sustainable without restructuring domestic debt,” Dr. Weerasinghe told the media at the CBSL’s 6th Review of the Monetary Policy stance for this year, at the CBSL head office auditorium, in Colombo, on Thursday.

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Powerful CEBEU says yes to restructuring but on its terms

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Sri Lanka will experience periodic power cuts until 2027 if the government did not take steps to increase electricity production, the Ceylon Electricity Board Engineers Union (CEBEU) said yesterday.Due to electricity shortages, the Norochcholai Power Plant had been operational non-stop, sometimes even without scheduled maintenance, CEBEU President, Saumya Kumarawadu said.

“A generator is down. We will get it back online within 14 days. We had started maintenance on another plant in June and it was to be back online in September. But it has been delayed till November,” he said.

Kumarawadu said there would be 10-hour power cuts without Norochcholai. However, the power cuts could be reduced in two weeks when the generator was restored, he said.

He added that while they support restructuring of the CEB, they oppose de-bundling and selling the CEB to various private actors.

“Power cuts might have to go on till 2026 or 2027 unless new plants come up. A proposal to build an LNG power plant is still languishing in the Cabinet,” he said.

The CEBEU President also said that the electricity tariff was last increased in 2012. In 2014, the tariff was reduced. Without increasing electricity tariffs, the CEB will have to get increasing amounts of money from the treasury.

“The government should have increased the tariff at regular intervals. We haven’t increased in a decade and suddenly we have increased by a large amount.That’s why it has come as a shock to people,” he said.

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SJB opposes blanket privatisations

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… questions logic of selling cash cows like Telecom and Insurance

The SJB was opposed to the privatisation of profit-making government entities, Chief Opposition Whip, MP Lakshman Kiriella, said yesterday, in Colombo.Kiriella said that President Ranil Wickremesinghe had told The Economist magazine that they are thinking of privatising Sri Lanka Telecom and Sri Lanka Insurance.

“These are two institutions that make a profit. What is the point in privatising these?” he asked.

MP Kiriella said that they are not opposed to privatizing SriLankan Airlines, which has been making losses for years.

“We can talk about these things in Parliament. Even when we privatize loss making entities we have to take a number of things into consideration. What will happen to the workers? How will we compensate them? How will we re-skill them? We have to talk about these things openly before doing anything,” he said.

The Chief Opposition Whip said that one of the main reasons why people oppose privatization is because everything is done in secrecy.

“People wonder why things are hidden from them. We need to be open and transparent when we restructure,” he said.

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