‘IMF deal no panacea for all our ills’
By Shamindra Ferdinando
Gampaha District MP Dr. Nalaka Godahewa has accused the cash-strapped government of planning to sell-off profitable state enterprises to raise funds. Comparing the proposed privatization of SriLankan Catering with the sell-off of the Hambantota port, in 2017, by the Yahapalana government, Dr. Godahewa pointed out that such strategies would be disastrous, in the long term, as the Treasury lost annual income from such highly profitable ventures.
One-time Viyathmaga activist estimated the annual SriLanka Catering profits at Rs. 3bn. The government has also been accused of planning to sell-off other cash cows, like the SLT and the SLIC.
At a meeting organized by the ‘Nidahas Janatha Sabhawa,’ in Kandy, over the last weekend, lawmaker Godahewa dealt with the developing economic-political and social crisis with the focus on the controversial staff-level agreement with the International Monetary Fund (IMF) for a USD 2.9 bn loan facility. Among those present were SLPP rebel group members Prof. G.L. Peiris, Prof. Charitha Herath and Prof. Channa Jayasumana.
Acknowledging the daunting challenge, faced by President Ranil Wickremesinghe’s government in coping up with the unprecedented economic fallout, Dr. Godahewa stressed that the incumbent administration couldn’t, under any circumstances, deprive the right of the Parliament to receive a copy of the agreement with the IMF.
The IMF, on September 01, announced the finalization of the agreement for what it called Extended Fund Facility (EFF) for USD 2.9 bn meant to restore macroeconomic stability and ensure debt sustainability. Demanding that the agreement be tabled in Parliament, without further delay, Dr. Godahewa alleged that the government was making a silly attempt to portray the EFF funding, made available over a four-year period, as panacea for the economic fallout.
“The developing crisis is so acute, the economic recovery cannot be solely dependent on the IMF loan facility,” Dr. Godahewa told The Island, urging the government to take the public into confidence, without further delay.
“If the Parliament is responsible for public finance and enactment of laws, there cannot be any justifiable reason to deprive its members of their right to know the contents. The issue at hand is whether the Cabinet-of-Ministers is aware of the IMF deal,” Dr. Godahewa said.
Addressing the gathering in the hill capital, lawmaker Godahewa said that the public response, as well as of theirs to the staff-level agreement, would depend on the contents of the agreement.
He urged the government to disclose the agreement on increasing of taxes, as well as services provided by the government and the impact on the hapless public. Profit-making state enterprises, guarantee a transparent process in respect of the proposed restructuring of both loss- /profit-making state enterprises, agreement on pruning of the public sector, compensation for those to be retrenched, free health and education, he said.
Dr. Godahewa said that the government couldn’t go ahead with such a far reaching agreement, without consulting all political parties represented in Parliament. The Parliament couldn’t be deprived of its legitimate right to be informed and assert overall authority regarding the agreement, Dr. Godahewa said, finding fault with the government for not taking the Parliament into confidence, before the Central Bank announced Sri Lanka’s decision to suspend repayment of debt.
At the time the CBSL Governor, Dr. Nandalal Weerasinghe, made the announcement, Gotabaya Rajapaksa served as the President and head of the Cabinet-of-Ministers, whereas some described the move as a pre-emptive negotiated default.
Dr. Godahewa asserted that the government should have discussed the issue at hand with creditors before such an announcement was made. Such unilateral actions undermined political and economic stability, in addition to creditors losing confidence in the country.
Strongly condemning efforts to deceive the public, on the basis of the much-touted agreement with the IMF, Dr. Godahewa reminded the government that the promised USD 2.9 bn loan facility to be received, over a period of four years, whereas Sri Lanka needed approximately USD 4 bn for repayment of its outstanding debt this year.
Pointing out that Sri Lanka required USD 4-5 bn, over the next couple of years, to service its debt, Dr. Godahewa asked the government to divulge how it intended to address the daunting task.
The MP warned President Wickremesinghe, and the SLPP, not to refrain from settling the debt during the remainder of Gotabaya Rajapaksa’s presidency.
The SLPP, on July 20, ensured the election Wickremesinghe by Parliament, as the 8th President, to complete the remainder of his predecessor’s term. Gotabaya Rajapaksa was elected in Nov 2019 for a five-year period, with a thumping majority.
Dr. Godahewa said that a tangible action plan was needed as the country experienced a USD 5 bn deficit in income and expenditure. Therefore, the SLPP-led government couldn’t overcome the crisis, through political jugglery, and effective measures were required to increase the income. The one-time Chairman of the highly profitable Sri Lanka Insurance Corporation asserted that foreign reserves should be increased to at least USD 10 bn. That would be the key to solving the crisis, Dr. Godahewa said, strongly criticizing the government for not addressing the issue seriously.
Lawmaker Godahewa said that the government shouldn’t exploit the balance of payments crisis to sell off national assets. Referring to the giving away of the Hambantota port on a 99-year lease by the Yahapalana administration, Dr. Godahewa asked whether anyone knew how USD 1.1, received from the Chinese deal, was spent.
During thenCOPE proceedings, several months ago, both the Finance Ministry and SLPA officials admitted that they weren’t aware how USD 1.1 bn was spent.
President Ranil Wickremesinghe’s address at the UNGA: ‘Sri Lanka’s journey to rebuild trust and global solidarity’
President Ranil Wickremesinghe addressed the UN General Assembly in New York on Thursday (21) on the theme “Rebuilding trust and reigniting solidarity” and its relevance to Sri Lanka’s recent challenges.
He mentioned how Sri Lanka faced significant social, economic and political challenges in the past year, including threats to democratic traditions but has managed to achieve a democratic transition.
He highlighted efforts made to stabilize the economy, including economic reforms and foreign assistance and said that his intention is to lead Sri Lanka towards sustainable recovery and growth, benefiting all segments of society and ensuring peace, prosperity and reconciliation.
The President also discusses the global geopolitical landscape, emphasizing the inter-connectedness of various challenges, such as climate change, debt and sustainable development. He stresses the need for international solidarity and climate finance, particularly for smaller, climate-vulnerable and debt-ridden countries.
President Wickremesinghe mentioned Sri Lanka’s commitment to climate action, including renewable energy goals, forest conservation and emissions reduction while expressing concern about the impact of climate change on food security, clean energy and livelihoods, emphasizing the urgency of mobilizing climate finance.
The President called on developed countries to fulfill their commitments, provide assistance and assume their share of responsibility, while underscoring the importance of restructuring the international financial system to address climate change and sustainable development.
Additionally, the President emphasized the need for reform in multilateral institutions like the UN, particularly the expansion of the Security Council’s composition and the importance of disarmament and the impact of global military expenditures.
Overall, the President’s speech highlighted the challenges faced both by Sri Lanka and the world, and emphasized the importance of solidarity, climate action, disarmament and multilateral cooperation in addressing these issues.
Following is the full speech delivered by President Ranil Wickremesinghe at the 78th session of the United Nations General Assembly;
“Rebuilding trust and reigniting solidarity“ is an appropriate point of departure not only for reflecting on the challenges before the multilateral today, but also for reviewing developments in my own country, Sri Lanka, over the past year.
At this time last year, amidst multiple global crises, Sri Lanka was experiencing its most challenging period in recent times socially, economically and politically, which had a devastating impact on people’s lives.
Even our Democratic traditions were threatened by attempts to occupy our Parliament and bring it to a halt. Nevertheless, we succeeded in bringing about a democratic political transition, due to our deeply entrenched and resilient democratic traditions.
Resorting to the re-graduation of Sri Lanka’s economy, coupled with the gift of fertilizer from the United States’ Government which led to a bumper harvest, has assisted us in ensuring stability during that period.
The reforms I have since initiated in the economic, financial, institutional and reconciliation fronts have been directed on the one hand towards rebuilding trust and confidence between the people and the government; and on the other, towards laying the foundation for economic stabilization and recovery. Sri Lankans are already witnessing the positive outcomes of these measures in their daily lives and the revival of confidence internally and externally in the progress of the country.
It is my intention to lead the country towards sustainable and stable recovery and growth which will benefit all segments of Sri Lankan society in all parts of the country, ensuring a future of peace, prosperity and reconciliation for the present and future generations of women and men. In reaching this goal, we will be accompanied by the support, trust, and solidarity of our own people and of the international community.
As we turn the corner towards the 80th anniversary of the UN and prepare for the Summit of the Future in 2024, we see the fragmented geopolitical landscape of a multi-polar world where new centers of global power have emerged.
Accompanying this systemic change, are, on one hand, great expectations of development and human progress with millions of people rising out of poverty to prosperity.
On the other hand, we see a world where former big power rivalries and geopolitical tensions have reignited in open war, overlapping with new theaters of conflict and tension on land and in the oceans. Security Alliances have expanded and recent arrangements have been formed to deal with strategic threat perceptions in old and new theaters of conflict. North-South divisions are widening with the digital divide, the financial and debt crisis and the energy transition. Contrary to the promise of 2030, today we are seeing levels of poverty and hunger not witnessed since decades.
Neutral, nonaligned countries of the global South such as Sri Lanka are once again constrained in-between new global power configurations facing those who not respect the sovereignty of our nations.
In numerous recent Declarations in the UN and beyond including at the G20 in Delhi, the BRICS in Praetoria and G7 in Hiroshima, we have agreed that our challenges are interconnected, across borders and all other divides. We must grasp the opportunity to unite in order to build an inclusive future.
It is an appropriate reflection of this current global predicament, that the theme of this year’s general debate is “Rebuilding trust and reigniting global solidarity”.
This year, in parallel with the UNGA, we have participated in three interrelated summits dealing with accelerating the SDGs, Financing for Development and Climate Ambition where we agreed that international solidarity and collective action is needed to address these simultaneously.
Cross-border financial impacts of crises such as climate change and the pandemic are impeding the ability of smaller indebted countries such as mine, to make progress on SDG’s and climate adaptation and mitigation. Conflicts and tensions among big powers are complicating the policy environment for the rest by adding uncertainty to economic and macro-financial stability, disrupting supply chains and causing inflation as well as food and energy insecurity.
Long before the SDGs, Sri Lanka had achieved high human and social development indicators which ranked us in a category well above other middle-income countries. Neither has Sri Lanka shirked its responsibility to the planet. Last year at COP27 we outlined our Climate Ambition Plan. We said that by 2030 we will have 70% renewable energy in electricity generation, increase forest cover by 32% and reduce greenhouse emissions by 14.5%. We will phase out coal by 2040, and reach net zero by 2050.
Our low carbon development trajectory gave us one of the lowest per capita carbon emission rates for a lower MIC country.
This year as a result of exogenous shocks and debt, the incremental progress we were proud to have reached has been reversed. Food inflation reached putting significant pressure on food security amongst vulnerable communities. At the same time children’s education and nutrition have suffered due to the pandemic and the economic crisis.
In parallel, last month in Sri Lanka we were grappling with the driest weather spell seen in recent years followed by torrential rainfalls.
Adverse climate outcomes spilling over onto our tight fiscal space just as we begin to stabilize from last year’s economic crisis. As a climate vulnerable developing country in debt crisis, the urgency to mobilize climate finance is greater today than it was ever before. However, despite promises made to which we were all witness, rich countries are not delivering to expectation.
Developed countries must do their part and fulfill what they agreed – assume their share of the common but differentiated responsibility, provide assistance for mitigation and adaptation and compensation for loss and damage.
National efforts alone will not suffice to ensure the success of the SDGs and reverse climate change. The need for global solidarity to restructure the international financial architecture is paramount. This is articulated loud and clear in multiple global fora including in G20, and the BRICS. The Secretary General’s SDG stimulus highlights the interconnections between the achievements of the SDGs, combatting climate change and the concrete interventions required by creditors sovereign and private, as well as by IFIs including to mitigate the debt crisis.
It is estimate that the 2008 financial crisis has cost the U.S. economy $4 trillion. Recent studies in the U.S. have stated that the impact of the pandemic on the U.S. economy from 2020 to 2024 would reach $14 trillion. These numbers would more than double if the rest of the global economy is added. We have not faced an economic crisis of this magnitude any time before in our modern history. The cost of World War 2 in today’s USD would amount to $4 trillion, and the Marshall Plan would be $ 150 billion.
This is the magnitude of the challenge before us. Therefore if we are unable to restructure the global fiscal order, then certainly we will fail in the struggle to reverse climate change and achieve the SDG goals.
There is still time for course correction as the crisis has not reached its peak. At the same time, the Paris Summit for a New Global Financing Pact will come up with the funding requirements.
Therefore, the Summit of the Future should not be crafting new programs, but re-structuring the present financial architecture to suit the needs of climate change and sustainable development.
This must be the priority of this General Assembly; we cannot afford to allow divisions to drive focus away from this crisis.
While key issues such as the Bridgetown Initiative and the necessity to address the debt of low-income countries are being discussed in this assembly, it is not commanding the attention it deserves. Unfortunately, the Security Council has failed to give priority to these connected issues of climate change, debt relief and sustainable development. This impacts the future of mankind. The survival of the planet must be our priority, we cannot afford to go into this war with a divided high command. The future of all species on the globe is dependent on our ability to put aside our rivalries until this crisis is solved.
Multilateral machinery which reflects the world of the past century needs to be reformed to meet the challenges of the present and the future, a machinery which has failed to find a solution to the longstanding Palestine question. The composition of the Security Council must be expanded to be representative of current global diversity and decision-making. In parallel, the role of the UNGA must be strengthened.
We are asking that the permanent members engage in a credible dialogue which will lead to a unified approach to combat these threats ahead of the next sessions.
While we seek solidarity and financing to alleviate poverty and climate challenges, global military expenditures have risen today to record levels reaching $2.24 trillion. This reflects the strategic trust deficit among the powerful, key arms control frameworks which were instrumental in maintaining system stability in the past have collapsed and nuclear conflict is once again under open discussion, potentially and apocalyptically triggered by autonomous control. We urge restraint in the increase of military expenditure which leads to escalation of conflict.
Developing countries have been the voice of sanity and reason in this regard for decades. In keeping with Sri Lanka’s longstanding position supportive of disarmament of WMD and nuclear weapons, this year Sri Lanka ratified the Comprehensive Test Ban Treaty. Yesterday, we acceded to the Treaty on the Prohibition of Nuclear Weapons.
The war in Ukraine has far-reaching and severe financial and humanitarian repercussions on food, hunger and debt in all parts of the world including Sri Lanka. It is recalled that the UN Charter vests on powerful states in the Security Council the responsibility to maintain international peace and security and to deescalate rather than ignite conflict.
We need to halt the momentum where this and other big power tensions are spilling over into established areas of international rules-based cooperation forged over decades of multilateral negotiation, ranging from international trade to ocean governance.
This international system is today undergoing vast changes. At the same time, it is being confronted with unprecedented challenges. We come to the United Nations to demonstrate solidarity in arriving at common solutions. What is at stake is not the future of the United Nations, but of our planet as a whole. Member States will need to find new ways of working together despite the increasing mistrust that has permeated international relations.
We who have not been able to find a solution to the Palestinian question must now be able at least to find a solution to the questions which threaten the existence of the present global community.
This can be achieved through the willingness of the permanent members to work together in solidarity with the developing world. They must show the way”
President Wickremesinghe also extended his sincere condolences to the victims and families of the natural disasters that hit Morocco and Libya in recent days and pledged solidarity with Moroccan and Libyan friends during this difficult time.
In terms of RTI Act House releases names of MPs who voted for new law
Abolition of time-tested Exchange Control Act
Only 18 opposed it and 113 skipped vote
By Shamindra Ferdinando
Amidst allegations that the abolition of the time-tested Exchange Control Act of 1953 contributed to the country’s bankruptcy and foreign exchange crisis, The Island, in terms of the Right to Information Act No 12 of 2016 requested from the Office of Secretary General of Parliament, the names of the MPs who had voted for the new law (Foreign Exchange Act No 12 of 2017) and those who opposed it.
According to parliamentary records, 94 voted for the Bill and 18 voted against it while 113 skipped the vote. The TNA voted with the UNP and the SLFP-led UPFA for the new law. The then Prime Minister Ranil Wickremesinghe, who moved the second reading motion in his capacity as the Minister of National Policies and Economic Affairs was among those who skipped the vote on July 25, 2017.
Justice Minister Wijeyedasa Rajapakse voted for the new law, which, he says, has helped unscrupulous exporters park export proceedings overseas to the tune of USD 100 bn. Two of the strongest critics of current economic policies namely Dr. Harsha de Silva and Eran Wickremaratne voted for the new law enacted in 2017.
Former Governor of the Central Bank Dr. Indrajith Coomaraswamy has publicly alleged that the new exchange law was not formulated in consultation with the Central Bank. The Governor led Central Bank team which appeared before the Parliamentary Select Committee (PSC) probing the 2019 Easter Sunday carnage declared that the new law hindered its regulatory powers.
The following MPs voted for the new law: S.B. Dissanayake, Nimal Siripala de Silva, Gamini Jayawickrama, John Amaratunga, Lakshman Kiriella, Gayantha Karunatilleka, Rajitha Senaratne, Ravi Karunanayake, Kabeer Hashim, Sajith Premadasa, Mano Ganesan, Thilanga Sumathipala, Anura Priyadarshana. Yapa, Tilak Marapana, Vajira Abeywardena, S.B. Nawinna, Sarath Fonseka, Navin Dissanayake, Wijeyadasa Rajapakse,(Mrs.) Chandrani Bandara, (Mrs.) Thalatha Atukorale, D. M. Swaminadan, Abdul Haleem, Sagala Ratnayake, Daya Gamage, Faizer Musthapha, A. H. M. Fowzie, Dilan Perera, Lakshman Seneviratne, Ravindra Samaraweera, Niroshan Perera, Ruwan Wijewardene, Mohan Lal Grero, A.D. Premadasa Champika, Sujeewa Senasinghe, Wasantha Senanayake, Wasantha Aluvihare, Dr. Mrs. Sudarshini Fernandopulle, Eran Wickramaratne, Mrs. Sumedha G. Jayasena, Ameer Ali Shihabdeen, Lasantha Alagiyawanna, Faizal Cassim, Dr. Harsha De Silva, Ashok Abeysinghe, Karunarathna Paranawithana, Manusha Nanayakkara, Lucky Jayawardana, Vadivel Suresh, Edward Gunasekara M.S. Thowfeek, J.M. Ananda Kumarasiri, J.C. Alawathuwala, Seyed Ali Zahir Moulana, Ranjith Aluvihare, Abdullah Mahrooff, Srinal de Mel, Anura Sidney Jayarathne, K.K. Piyadasa, A.A. Wijetunge, Ajith Mannapperuma, Nalin Bandara Jayamaha, Hector Appuhamy, Sisira Kumara Abeysekara, Thushara Indunil Amarasena, A.Aravindh Kumar, Ananda Aluthgamage, K. Thurairetnasingam, Mavai S.Senathirajah, A. Adaikkalanathan, Sivagnanam Shritharan, E. Sarawanapawan, M.A. Sumanthiran, Charles Nirmalanathan, Gnanamuthu Srineshan, Ashoka Priyantha, Chandima Gamage, Mylvaganam Thilakarajah, Mohamed Navavi, Sujith Sanjaya Perera, Bandulal Bandarigoda, Imaran Maharoof, Ashu Marasinghe, Ishak Rahuman, Malith Jayathilake, Mujibur Rahuman, Harshana Rajakaruna, Jayampathy Wickramaratne, Thusita Wijemanne, Mrs. Rohini Kumari Wijeratne, Hesha Withanage, Sandith Samarasinghe, Chathura Senaratne and Wijepala Hettiarachchi.
The following MPs voted against D. V. Chanaka, Piyal Nishanta de Silva, Prasanna Ranaweera, Kanchana Wijesekara, Indika Anurudda Herath, Mrs. Sriyani Wijewickrama, Thenuka Vidanagamage, Shehan Semasinghe, Vijitha Herath, Bandula Gunawardane, C. B. Ratnayake, Nihal Galappathi, Gamini Lokuge, Rohitha Abeygunawardana, Wimalaweera Dissanayake, Udaya Shantha Gunasekara, Ranjith de Soysa and Roshan Ranasinghe. The then Speaker Karu Jayasuriya was in chair at the time the vote was taken.
Before the vote was taken the then UPFA MP Vasudeva Nanayakkara said the new law would lead to disaster. Quoting Washington-based Global Financial Integrity, MP Nanayakkara said that USD 1.99 bn had been moved out of the country through illegal means annually.
Easter Sunday carnage: Alles admits PCoI named SDIG
By Saman Indrajith
Public Security Minister Tiran Alles admitted in Parliament yesterday (21) that the Presidential Commission of Inquiry on 2019 Easter Sunday carnage had referred to Senior DIG Nilantha Jayawardena, the then head of State Intelligence Service (SIS) as one those against whom the PCoI recomemnded the Attorney General to inquire into.
Making a special statement, Minister Alles said that he had errored in Parliament the previous day when he declared PCoI didn’t mention the SDIG’s name. The Minister said:”In response to MP Hector Appuhamy, I said SDIG’s Nilantha Jayawardena’s name was not there in the Presidential Commission report. That was a mistake. Jayawardena’s name isthere in the report, but that reference was not a charge. The commission recommended to the AGl to consider whether action should be taken against him.”
MP Appuhamy raised a point of order, but the Speaker said that there was no need of further debating the matter which had been put to rest by the minister with his apology.
However, MP Appuhamy shouted that the Speaker wanted to hide facts by not giving time for opposition MPs. “The Minister is better than the Speaker and admitted that he made a mistake. The Speaker does not allow us to speak the truth. This sends wrong messages to society and that is why people attack us on the roads. I need to rectify the statement of the minister. The report does not tell the Attorney General to consider action. It recommends court proceedings against Jayawardena under a suitable provision of the Penal Code. That is the truth. How long are you going to keep hiding the truth,” the MP queried.
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