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IMF says addressing corruption key aspect of its programme for SL

CPC, CEB need to recover costs until end of Fund’s loan package
By Rathindra Kuruwita
The Ceylon Petroleum Corporation (CPC) and Ceylon Electricity Board (CEB) had to recover costs until the end of the IMF programme, Sarwat Jahan, IMF Resident Representative in Sri Lanka, told a press conference in Colombo yesterday.
The IMF also wanted the government to restructure the balance sheets of a number of other State Owned Enterprises (SOEs), Jahan said, adding that the IMF was concerned about the impact of the programme on the most vulnerable people and it had asked the government to have social security floors to ensure that their welfare is met.
“The amount of money that can be allocated depends on the fiscal space it has. As it is 0.6 percent of the GDP can be allocated for social security. This can be increased when the economic situation improves,” she said.
IMF Director of Asia and Pacific Department Krishna Srinivasan said that Sri Lanka would be subjected to a country diagnostic exercise and that addressing corruption was a key aspect of this programme. “Sri Lanka came to us for this program. This shows that they have recognized that corruption is a serious issue. Sri Lanka has carried a number of prior actions before the agreement was signed with the IMF and that shows Sri Lanka is committed to the reforms process,” he said.
Given below is the opening remarks by Krishna Srinivasan.
“I am here in Colombo—my first visit to Sri Lanka—to further strengthen the IMF’s engagement with a broad spectrum of stakeholders in the country. In addition to meeting with the President and top leadership of the country, I have been able to engage with members of the opposition, civil society organizations, trade unions, think tanks, and other stakeholders. An IMF staff team, led by Peter Breuer, is also currently in Sri Lanka and will be here until May 23 for regular consultations ahead of the first review mission later this year. The team will communicate further with you at the end of its visit.
“To put things in perspective, before I talk about Sri Lanka, let me offer a few thoughts on the global and regional outlook.
“2023 looks to be a challenging year for the global economy. Global growth is expected to decelerate and bottom out in 2023, as rising interest rates and Russia’s war in Ukraine weigh on activity. Global inflation is easing but remains stubbornly high. And banking strains in the U.S. and Europe have injected greater uncertainty into an already complex landscape.
Against this uncertain global backdrop, Asia-Pacific remains a dynamic region. Despite weakening external demand and monetary tightening across major economies around the world, domestic demand has so far remained strong. Growth in Asia and the Pacific is projected to increase this year to 4.6 percent, up from 3.8 percent in 2022. As a result, the region would contribute around 70 percent to global growth. Asia’s dynamism will be driven primarily by the recovery in China and resilient growth in India, while growth in the rest of Asia is expected to bottom out in 2023, in line with other regions.
“This dynamic outlook, however, does not imply that policymakers in the region can afford to be complacent. Headline inflation has been easing, but remains above targets in most countries, while core inflation has proven to be sticky. Although spillovers from turmoil in the European and US banking sectors have been limited thus far, vulnerabilities to global financial tightening and volatile market conditions, especially in the corporate and household sectors, remain elevated. Growth in the region is expected to fall to 3.9 percent five years out, the lowest medium-term forecast in recent history, reflecting a combination of factors, including an aging population, falling productivity, and scarring from the pandemic.
Risks to the outlook are to the downside, owing to the possibility of stickier global and regional price pressures, the disconnect between market views regarding the monetary policy path in advanced economies and what is being communicated by their central banks, the possibility of additional turmoil in global financial markets, adverse spillovers to the region from China’s medium-term growth slowdown, and deeper geo-economic fragmentation.
“What does this challenging global environment mean for Sri Lanka?
Sri Lanka, as you know, has been facing a severe crisis because of past policy missteps and back-to-back economic shocks. We have been deeply concerned about the impact of the crisis on the Sri Lankan people, particularly the poor and vulnerable groups, and about the economic costs of the delay in the country’s access to external financing.
“On March 20, the IMF Executive Board approved a 48-month Extended Fund Facility of about 3 billion U.S. dollars to support Sri Lanka’s economic policies and reforms. This marked an important step towards the resolution of the crisis. Sri Lanka immediately received an initial disbursement of about $330 million from the EFF arrangement, which is expected to catalyze new external financial including from the Asian Development Bank and the World Bank. Given the weak external environment and domestic policy tightening, aimed at restoring macroeconomic stability, the economy is expected to contract by 3 percent in 2023, before registering a modest growth of 1.5 percent in 2024. Prospects hinge quite critically on the implementation of the economic reform program.
“As you know well by now, the reform program supported under the EFF arrangement is built on strong policy measures and prioritizes five key pillars.
“First, an ambitious revenue-based fiscal consolidation,which is accompanied by stronger social safety nets, fiscal institutional reforms, and cost recovery-based energy pricing to ensure the state’s ability to support all its essential expenditures.
“Second, restoration of public debt sustainability including through a debt restructuring to ensure stable financing of the government’s operations.
Third, a multi-pronged strategy to restore price stability and rebuild reserves under greater exchange rate flexibility to alleviate the burden of inflation, particularly on the poor, to foster an environment of investment and growth, and to ensure Sri Lanka’s ability to purchase essential goods from abroad.
“Fourth, policies to safeguard financial sector stability, to ensure that the financial sector can play its key role in supporting economic growth.
“And fifth, structural reforms to address corruption vulnerabilities and enhance growth. Anti-corruption and governance reforms are imperative to ensure the hard-won gains from the reforms benefit the Sri Lankan people. Sri Lanka is the first country in Asia that has undergone the IMF governance diagnostic exercise. The IMF governance diagnostic report is expected to be published by September this year—the mission visited Colombo in March and engaged closely with stakeholders and civil society organizations on this critical reform area. We look forward to further discussion with them.
“Commendably, Sri Lanka has already started implementing many of the challenging policy actions in these five areas. It is now essential to continue the reform momentum under strong ownership by the authorities and the Sri Lankan people, more broadly.
“Economic impact of the reforms on the poor and vulnerable needs to be mitigated with appropriate measures. In this regard, we welcome the authorities’ firm commitment to strengthen social safety nets, including through a minimum spending floor, well-targeted spending through the new social registry and establishment of objective eligibility criteria.
“Let me conclude by saying that the IMF supported program is an opportunity for all Sri Lankans to come together to work through this crisis to restore economic stability and put the country on a sustainable growth path. The key is implementation. The IMF is here to help you along the way.”
News
LG polls: Sajith spurns UNP’s March 20 deadline

SLPP rebel group distances itself from RW
By Shamindra Ferdinando
Samagi Jana Balawegaya (SJB) leader Sajith Premadasa yesterday (16) said that his party wouldn’t allow its agenda and timetable to be decided by political parties that weren’t even represented in Parliament.
Lawmaker Premadasa, who is also the Opposition Leader, said so when The Island sought his response to the UNP setting March 20 deadline for the SJB to declare its intention to join forces to contest the upcoming Colombo Municipal Council election. The main Opposition SJB parliamentary group consists of 40, whereas the UNP doesn’t have a single seat in the current Parliament. In the previous Parliament, the UNP was limited to just one national List MP.
The UNP also declared its readiness to expand the alliance to contest the local elections in other parts of the country. Nominations are scheduled to close at 12 noon on March 20th.
Colombo District parliamentarian Premadasa emphasized that they had decided to contest under the SJB’s telephone symbol. Members of the SJB-led coalition were also contesting under the telephone symbol, the SJB Leader said. The SJBer indicated that there was neither space no time for negotiations with the UNP.
Elections are to be held to 336 local bodies. The 336 LG bodies consist of 28 Municipal Councils, 36 Urban Councils and 272 Pradeshiya Sabhas. However, the Kalmunai Municipal Council, Dehiattakandiya Pradeshiya Sabha (Ampara District), Mannar Pradeshiya Sabha (Mannar District), Punakari Pradeshiya Sabha (Kilinochchi District), and Elpitiya Pradeshiya Sabha (Galle District) are excluded from the forthcoming election.
The last LG polls were held on Feb. 10, 2018. Former SLPP Minister Dr. Ramesh Pathirana told The Island that their efforts to somehow unite various warring factions, ahead of the LG polls, weren’t successful. Dr. Pathirana had been among the group of dissident SLPP MPs who contested/backed the New Democratic Front (NDF) led by Ranil Wickremesinghe at the last general election.
Dr. Pathirana said that they would be fielding independent groups for selected LG bodies, while some returned to the SLPP, and the rest got back to the SLFP. At the time of last general election, the group, represented by Dr. Pathirana, consisted of about 60 SLPP MPs.
Dr. Pathirana indicated that their group had completely distanced themselves from Wickremesinghe-led political grouping that backed the UNP leader’s candidature at the presidential election and contested the general election under the NDF’s Swan symbol.
Dr. Pathirana stressed that they couldn’t pose a proper challenge to the National People’s Power (NPP) at the LG polls unless various SLPP factions rejoined. The SLPP secured 145 seats at the 2020 general election and at the next it was reduced to just three.
Opposition sources said that due to the much deteriorated status of the UNP it would find it extremely difficult to field fully fledged teams at LG polls. Sources confirmed that no political party represented in Parliament had shown any interest in joining forces, let alone the main Opposition party.
The UNP didn’t even contest the Elpitiya LG polls held soon after the last parliamentary polls in late Nov. last year.
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Ranil rejects Batalanda report wholesale

Former President Ranil Wickremesinghe yesterday rejected the Batalanda Commission report in its entirety.
“I wholly reject the report. No one can say the report was kept hidden. It was published as a sessional paper in 2000, but no one, including the JVP, asked for a debate,” Wickremeisnmghe said in a special statement.
He also said that there was no precedent in this country, or anywhere else in the world, of debating a sessional paper 25 years after it was published.
Making a special statement Wickremeisnghe said: “The Commission has only questioned my action to heed the request by then State Minister of Defence Ranjan Wijeratne to provide accommodation to the security forces which provided security to important state owned institutions in Biyagama during the height of the JVP insurrection of 1987/89.”
He pointed out that the Commission report mentions the heinous terrorist acts committed by the JVP during the 1988-90 period.
“I was only summoned as a witness. According to the Commission’s findings, I was implicated only in the matter of providing housing for police officers, which, as per regulations, should have been done through the Inspector General of Police. The report indicates that both Nalin Delgoda and I were indirectly responsibile for this process.
Apart from this, I was not implicated in any other allegations in the Commission’s report,” Wickremesinghe said.
The former President pointed out that the report was made available to Parliament in 2000, yet no party, including the JVP, requested a debate on it.
The full statement by former President Ranil Wickremesinghe:
In 1987, following the signing of the Indo-Lanka Accord, the JVP launched a wave of terror across the country.
During this period, President J.R. Jayewardene assigned the responsibility of securing key locations in the country to Cabinet Ministers. Several economically significant sites were located in the Biyagama area, including the oil refinery, diesel power plant, the substation supplying electricity from Mahaweli to Colombo, and the free trade zone. The military was deployed to safeguard these locations.
To accommodate security personnel, it was decided to provide them with abandoned buildings and houses owned by the Lanka Fertiliser Manufacturing Corporation. At the time, several employees of the Ceylon Electricity Board were residing in some of these houses.
During this period of terror, the Sapugaskanda Police Station was attacked, and its Officer-in-Charge was killed. In response, Deputy Minister of Defence Ranjan Wijeratne contacted me, requesting that the vacant houses in the complex be allocated to military and police personnel for their security. Consequently, the administrator at the time took steps to hand over the houses to Kelani Police Chief Nalin Delgoda.
Several individuals, including a Provincial Councillor, a cooperative society chairman, and a police sergeant, were assassinated during this period. Additionally, an attack was carried out on the residence of another Provincial Council member.
The government in power took steps to restore the country’s stability, rebuilding the economy and ensuring national security.
After 1994, President Chandrika Bandaranaike Kumaratunga appointed a Commission to investigate allegations of a torture centre in the Batalanda area. Several individuals were summoned before the Commission, and I was called as a witness. At that time, I was serving as the Leader of the Opposition. The establishment of the Batalanda Commission was politically motivated, but the attempt to use it for political gain was unsuccessful.
According to the Commission’s findings, I was implicated only in the matter of providing housing for police officers, which, as per regulations, should have been done through the Inspector General of Police. The report indicates that both Nalin Delgoda and I were indirectly responsibile for this process.
Apart from this, I was not implicated in any other allegations in the Commission’s report. The report also extensively documented the JVP’s terrorist activities between 1988 and 1990, detailing the background and listing numerous violent acts committed by the JVP in Chapter Three. The entire history of those events is included in the report.
Beyond these findings, no other accusations in the report are relevant to me, and I completely reject the report.
No one can claim that the Batalanda Commission report was hidden. It was made available as a parliamentary session record in 2000, yet no one, including the JVP, requested a debate on it. Many did not accept the report, which may explain why no steps were taken to debate it in Parliament.
It is also noteworthy that no political party that came to power has attempted to use the report for political advantage. Furthermore, there is no precedent in Sri Lanka or other parliaments for debating a session record 25 years after its publication.
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Gary Anandasangaree Canada’s new Justice Minister and Attorney General

Sri Lankan-born Gary Anandasangaree was sworn in as Canada’s new Justice Minister and Attorney General.He took oaths in the presence of Canada’s new Prime Minister Mark Carney.
The Canadian Bar Association welcomed the appointment of Anandasangaree as Minister of Justice and Attorney General.
“We look forward to working with him and his Cabinet colleagues. We also want to thank former Minister Arif Virani for his commitment to improving the justice system over the past few years, including his efforts to reduce judicial vacancies and strengthen access to justice,” the Canadian Bar Association said.
The CBA and the federal government share a common commitment to upholding the rule of law, promoting access to justice, and ensuring a fair and efficient legal system for all Canadians.
CBA members will continue offering their expertise and helping to shape laws and policies that reflect the evolving needs of society, while maintaining the integrity of Canada’s legal institutions.
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