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Government prepares to force the people to accept the economic burdens

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by Prof.Tissa Vitarana

The people continue to suffer more and more due to inflation but the Government’s response is inadequate. The price of food keeps rising while there is no increase in income. The result is that a large mass of poor are facing a grave crisis. To my knowledge a large number of families have only one meal a day. Some of them with difficulty provide two meals to their children.

Stories of children fainting in school due to hunger are widespread. There are also reports that school attendance has dropped and the education of the children is suffering. Even among lower middle class families there has been an adverse impact. The reports coming from the Medical Research Institute (MRI) and other such institutions suggest that the nutritional value of the food consumed has also deteriorated.

The MRI states that the income of more than 60% of families is below the poverty line. The current data suggest that among them the level of malnutrition is approaching 20%. This means that among children under five years of age, one out of five is malnourished. Not only is their physical development affected but also their mental development. This will have an adverse effect on the future generation.

In the face of this food crisis I appeal to the Government to give priority to addressing this problem. About a year ago I mentioned this situation to the former prime minister but there doesn’t seem to be any positive response up to now. The government should identify the families that are at risk. This can be done easily through the midwives and the public health inspectors (PHIs). The families that are at risk should be provided with dry rations, at least once a week, ensuring that essential food items reach those affected.

Even among those consuming a sufficient amount of food there is concern among nutritionists that the quality of the food from a nutritional point of view is inadequate. The high price of food which is continuing to increase (food inflation) needs urgent corrective measures. While welcoming the fact that the price of flour has been reduced by Rs.24/-, it is distressing to see that the price of a loaf of bread remains unchanged. The government should insist that bakers pass on the price reduction to the consumer. As a result of a number of problems that have arisen in the agriculture sector, like the scarcity of chemical fertilizer, the production of food, both rice and vegetables, have also reduced. There is a shortage of food according to media reports and this should be looked into and corrected.

The Paddy Marketing Board (PMB) has cut down purchasing paddy due to a lack of funds. In this context there are reports that the five main private mill owners are purchasing the paddy at a low price so that the farmers suffer. It would appear that this paddy is being stored in order to raise the market price of both paddy and rice. I have been informed that the government rice mills are also not fully operative. This situation must not be allowed to continue. I call upon the ministers and officials concerned to see that the government stocks are release to the market so that the price can be brought down. Profiteering in the food sector must be prevented by urgent government action.

Another area of concern is the shortage and high price of medicines, specially essential ones. There is an acute shortage in the government hospitals, and statements have been made by doctors that as many as 90 medicines, including essential ones, are not available. This is a very serious situation which may lead to increasing illness and even more deaths.

The government must take urgent action to see that this situation does not continue and that normalcy is restored. It is sad to see that donations of medicine have to be obtained from both local and foreign sources from countries like India, China and Japan. Adequate funds must be provided by government for the purchase of the required medicine as a matter of urgency. I have been informed that shortage of a large number of essential medicines exists both in the government and the private sectors and needs urgent attention.

The government tax policy is also a cause for concern. While indirect taxes which affect the poor are raised, the direct taxation is limited and done in a unfair manner. The middle class is being targeted while the rich and super rich are hardly affected. It is disturbing to see that the government gives tax holidays and waivers to the rich. Not surprisingly government revenue has fallen and both capital and recurrent expenditure have to be curtailed, adversely affecting the development of the country and the lives of the people.

When Sri Lanka was faced with one of its most severe economic crises in 1972/73, Dr.N.M.Perera, who was then the Minister of Finance, put the main tax burden on the rich, raising the upper limit to 70%. In today’s context too the government should take similar action by placing the main tax burden on those who can afford to pay.

The cost of transport has also gone up steeply. This directly affects passengers, but it also affects the price of goods. The lack of dollars also affects industries due to the inability to purchase essential foreign requirements, and many private and public enterprises have had to curtail production. This in turn leads to increased unemployment. The economy as a whole is contracting due to the above changes with reduced incomes of a large section of the population who are also badly affected by inflation and the high prices.

The suffering people are being forced into a situation where they have to openly protest. It is distressing to see that the Ranil Wickremesinghe – led government is strengthening the armed forces and the police. It is clamping down on reasonable peaceful protests. Are we heading for Fascist rule? This must not be permitted under any circumstances. While warning the public of the possible dangers it is essential that the trade unions become more active and warn the working and middle classes and prepare them to resist any moves to suppress the people and force them to submit to the burdens that are being contemplated.



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Sabry denies China caused SL debt crisis

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Foreign Minister Ali Sabry, PC, has dismissed assertions that China caused the current economic crisis here.The Minister made Sri Lanka’s position clear in an interview with WION’s diplomatic correspondent Sidhant Sibal. Asked whether Minister Sabry believed that the current economic crisis is due to China, its policy of debt crisis, the Minister has said: No, I don’t agree with that, which is a western phrase. We don’t agree with that. The Chinese never came and forced us to take money. Actually, we have gone and sought funds and they have respected that and invested in our country. They are the biggest investor in our country, we don’t agree with that phrase. Having taken the money we have put them into proper use or who so ever we can get in return is the issue for Sri Lankans, therefore we don’t associate with that kind of phrase, actually Chinese have been good friends for us and they have been the biggest investor in the country post conflict.

Commenting on Sri Lanka’s ties with China, WION quoted Sabry as having said: “Our relationship with Beijing is very strong for a long period of time, they have been our close friend. This year we have celebrated 70 years of economic ties with them, beginning with the Rubber Rice pact, we exported rubber to them and imported rice. So ours is a strong relationship and basically it has been a commercial relationship, economic relationship where they have come and invested heavily in Sri Lanka during a difficult period of time for us and during the 26 years of the conflict, during the last few years, Chinese supported us with supply of arms to get rid of the threat from one of the most ruthless terrorist organizations, the LTTE and in order to bring back peace to our country. In that context we have had a very good relationship with them. Sri Lanka always follows the dynamic, neutral foreign policy where we would want everyone to be a friend of Sri Lanka and enemy to none. That is our foreign policy, that is our relationship, so given this dynamic, we would continue the same thing but taking India’s sensitivities and security concerns to heart because that is very important for us.”

WION: How has the talks been with the IMF and has India played a role in facilitating the talks? I believe this is the 17th bailout you are trying to secure.

Ali Sabry: I started the negotiations with them, and they have studied, and staff-level agreement has been reached, prior action before the EFF, extended fund facility, we have agreed on. We have agreed and implemented some of those things. The EEF facility is for 2.9 billion, and the moment the IMF gets involved, it infuses confidence in the system, ADB, World Bank all come on the table, and we probably will be able to return to the money market, so that is why it is so important. India, had actually provided us with a lifeline during the most crucial time of our history, in terms of economy and those credit lines kept us going for a long period of time. I remember, when I was in Washington, your Finance Minister Sitharaman led your group and supported us in our discussion with the IMF and they have continued to do so. So it is important and Indian support is very critical to us. India has played a great role in supporting the neighbour in the most difficult time of its history.

WION: Why didn’t China offer financial assistance, as India did, during the recent crisis?

Ali Sabry: The Chinese also supported us just before the particular period of time, they also provided us with some financial facilities and credit line, also they did provide us some soft arrangement to bolster our reserves at the central bank, apart from that some humanitarian assistance also. We hope China will step up in providing us with debt restructuring assurances, along with India so that we can go to the IMF and resolve the matter once and for all and get back to the recovery path. So, it’s important for all creditors and all investors that Sri Lanka recovers and recovers fast. The longer the debt gets suspended, the longer it takes to recover. It is bad for all the creditors and investors; everybody understands that, including China.

WION: Has China offered to restructure…

Ali Sabry: We are still in discussions for that, they have been cooperative and part of the common platform where we share information, recently in Washington. They also took part on the virtual platform. So China, India, Paris club, and Japan are all cooperating with us, so we are in the final stage of trying to get the debt restructuring and assurances. We are hopeful all countries and all our friends will not let us down.

WION: Have you asked for more Indian support.

Ali Sabry:Not really, right now our economy has stabilized to some extent and we should be able to manage ourselves. Right now, we have reached out to India and the rest of the world, it’s not for aid or any more loans but basically investments. We are working with Indians and Indian companies and the government to work together in various areas for mutual interests, so that investment comes into the country and it will be beneficial for both Indians and Sri Lankans.

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Electricity users threaten legal action if power tariffs hiked again unilaterally by Minister

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CEB records Rs 6 billion profit in October

By Anuradha Hiripitiyage

The Ceylon Electricity Board (CEB) recorded a profit of six billion rupees in October, Electricity Users Association (EUA) Secretary Sanjeewa Dhammika told the media yesterday.Dhammika said that if the CEB increased the price of electricity again, the EUA would take legal action.

“There are 6.5 million users of electricity and I urge the Minister of Power and Energy not to take them for granted. Minister Kanchana Wijesekera, on Thursday, told Parliament that they will increase the electricity tariff again,” he said.

The CEB made a profit of six billion rupees in October. Electricity was produced using water, coal, and renewable sources, he said.

“The average cost of electricity production was around five rupees. A unit of electricity was sold at around 32

rupees. The Minister says they are still making a loss. The Minister has no power to increase tariffs. The Public Utilities Commission of Sri Lanka (PUCSL) can only increase the tariff. The current Minister has said there is no need for a PUCSL. He wants to increase tariffs the way he wants, without oversight. We won’t allow that to happen. Apparently, he has asked the Cabinet to review tariffs, once in six months,” he said.

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Baglay reiterates India’s commitment in line with ‘Neighbourhood First Policy’

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Indian High Commissioner Gopal Baglay on Thursday (24) reiterated their commitment to Sri Lanka’s capacity building endeavours in line with India’s ‘Neighbourhood First Policy’.

Baglay emphasized that training engagements between the Armed Forces have instilled a spirit of brotherhood and interoperability amongst the services and form the foundation of their abiding bonds. A large number of NDC India alumni in Sri Lanka have risen to the highest echelons of defence leadership, which testifies to the importance of nurturing these strong relations, according to a statement issued by the Indian High Commission here.

Baglay said so at an event to mark 50 years of association between National Defence College (NDC), India and Sri Lankan Armed Forces in Colombo. The special event celebrated the enduring bonds of cooperation, camaraderie and friendship between the militaries of India and Sri Lanka. Secretary of Defence, Chief of Defence Staff, Commanders of Sri Lanka Navy and Air Force along with other alumni and dignitaries from the Ministry of Defence and Sri Lanka Armed Forces graced the occasion.

Secretary of Defence, Gen (retd.) Kamal Gunaratne and High Commissioner Gopal Baglay jointly launched the webpage of the Alumni Association of NDC India in Sri Lanka at the event to facilitate closer and continued engagements between the two countries and the premier Indian defence institute. The webpage would be hosted on the website of High Commission of India (www.hcicolombo.gov.in/ndca) and act as a medium for the alumni to stay connected with their alma mater and keep abreast with the latest on defence cooperation between the two maritime neighbours.

As part of India’s unwavering commitment to capacity building of Sri Lanka Armed Forces and focus on regional cooperation, NDC India has made valuable contributions towards enhancing regional peace, security and stability and such forums effectively enable fostering of cordial and warm relationships between the two countries.

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