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.”
SC: Anti-Terrorism Bill needs approval at referendum and 2/3 majority to become law
Certain sections inconsistent with Constitution
By Saman Indrajith
Deputy Speaker Ajith Rajapaksa informed Parliament yesterday that the Supreme Court (SC) has determined that some sections of the Anti-Terrorism Bill were inconsistent with the Constitution and, therefore, the Bill had to be passed by Parliament with a two-thirds majority and approved by the people at a referendum.
Rajapaksa said that the Supreme Court had determined that the Sections 3, 4, 40, 53, 70, 72 (1), 72 (2), 75 (3) and 83 (7) of the draft Bill were inconsistent with the Constitution.
The SC has determined that sections 3, 40, 53, 70, 72 (1), 75 (3) should be passed by Parliament with a two-thirds majority and approved by the people at a referendum if they are to become law.
Sections 4 and 72 (2) of the Bill have to be amended as per the SC determination.
Section 83 (7) requires passage by a two-thirds majority in Parliament.
However, the SC had stated that it could be passed by a simple majority if the recommended amendments are accommodated, Rajapaksa said.
Opposition MPs say the Anti-Terrorism Bill is being introduced in an election year to repress Opposition parties.They said the proposed law is a threat to democracy itself.
“This Bill is being presented not at a time of terrorism prevailing in the country but during an election period. The Bill has not defined nor analysed what a terrorist is. Anyone can be arrested,” SJB General Secretary Ranjith Madduma Bandara said.
The MP said both the Anti-Terrorism Bill and the controversial Online Safety law were meant to quell democracy.
Harin’s claim that SL is part of India: Govt. says it is his personal opinion
Manusha accuses Wimal of having taken parts of Fernando’s speech out of context
By Saman Indrajith
Labour and Foreign Employment Minister Manusha Nanayakkara told NFF leader Wimal Weerawansa in Parliament to refrain from taking chunks of others’ speeches out of context and misinterpreting them for political mileage.
The Minister said so following concerns raised by Weerawansa over a recent statement by Tourism Minister Harin Fernando on India-Sri Lanka relationships.
Weerawansa said that Minister Fernando had recently stated that Sri Lanka was a part of India. “Was it Minister Fernando’s personal opinion or the government’s official standpoint? Was it the opinion of the Cabinet?”
Chief Government Whip Minister Prasanna Ranatunga said what Minister Fernando had stated was the latter’s personal opinion.
Minister Nanayakkara: “If anyone has read the entire statement made by Minister Fernando this type of question would not have arisen. The Tourism Minister was referring to historical relationships between India and Sri Lanka to ask Indians to visit Sri Lanka.
A distorted version of the speech by Minister Fernando is being circulated on social media. Certain parts have been removed while some words have been introduced to this edited version. Ones should read the statement in its entirety to understand it. We have not discussed this in the Cabinet meeting” Minister Nanayakkara said.
US backs Lankan journalists vis-a-vis Online Safety law
Under Secretary of State for Public Diplomacy Elizabeth Allen on Monday (19) declared US support for journalists here against the backdrop of enactment of ‘Online Safety Bill’
She spokes about press freedom and related issues at the Sri Lanka Press Institute Press Club.
A statement issued by the US Embassy quoted Allen as having said the U.S. Embassy is all in on supporting your incredible work. Sure, we might bump heads over a story now and then, but above all, we’re your biggest fans. We’re all in on programmes that hone your skills because we believe in your right to pursue journalism freely and fearlessly.
I want to thank you for protecting the rights and freedoms of journalists here in Sri Lanka and around the world, ensuring all citizens enjoy the right to express their ideas and opinions openly and freely. Even in difficult times, you continue to press forward and ask difficult questions. Your commitment to seeking out the truth and shouting it from the rooftops remains a democratic staple, and I truly appreciate what you do.
It’s only fitting that I begin my remarks this afternoon by telling a story that I think is relevant in light of today’s topic about the media’s role in a democracy.
Over a century ago, American media coined the term “muckraker” for journalists who delved into societal issues, exposing corruption.
Although the term carried a somewhat negative connotation, labeling these journalists as mere “gossip mongers,” today, we honor them as the pioneers of investigative journalism.
These muckrakers played a pivotal role in ushering in the Progressive Era, a time of significant social and political reform in American history.
Even President Theodore Roosevelt referred to them as “muckrakers,” criticizing their focus on society’s flaws through figures like Lincoln Steffens, whose work shed light on corruption and spurred a nationwide call for accountability and reform.
Steffens’ book ‘The Shame of the Cities,’ published in 1904, made him renowned for uncovering corruption within American cities, highlighting the nefarious links between political leaders, businesses, and organized crime.
His fearless journalism raised critical awareness about the urgent need for governmental and corporate accountability. Steffens wasn’t acting as a public relations officer for the government; his role was to uncover the truth; however unpleasant it might be.
Faced with the stark realities Steffens presented, American officials and the public were compelled to confront a pivotal question: ‘Is this the kind of country we aspire to be?’ The resounding answer was no.
Steffens’ work didn’t just expose wrongdoing; it sparked a nationwide demand for reform and played a crucial role in fostering a dialogue about the essential role of investigative journalism in ensuring power remains accountable.
This story showcases how freedom of the press and freedom of expression are not just fundamental human rights, they are also vital contributors to a country’s development and growth.
This brings me to my main point: how the global media space supports democracy and fosters peaceful, just, and inclusive societies.
In my mind, the correlation is obvious: When a government constricts the rights and freedoms of its citizens, the future and the development of the country will naturally suffer.
Globally, we’re witnessing serious and escalating challenges to media freedom. The United States stands firmly for the freedom of expression, advocating for press freedom both online and offline, and ensuring the safety of journalists and media workers worldwide. Unfortunately, these essential freedoms are under threat globally, including concerns raised here in Sri Lanka.
When governments intensify efforts to withhold information from the public by restricting internet access and censoring content, we must speak up. Notably, when Sri Lanka’s Parliament passed the Online Safety Bill in January, the United States voiced concerns over its potential effects on freedom of expression, innovation, and privacy.
It’s common to hear arguments against unfettered freedom of expression. Critics claim the media is biased, aiming to embarrass governments and undermine public trust. Others worry that without checks, freedom of expression may fuel the spread of misinformation. Some argue that an unchecked press can incite tension and compromise security. And there’s concern that continuous reports on corruption, violence, and political strife can tarnish a nation’s image, deterring investment and hampering development.
However, the media’s bias should lean towards the public’s interest, acting as a guardian to ensure that leaders fulfill their duties. This principle holds in Sri Lanka, the United States, and globally.
The challenge of negative press, often labeled as “fake news” or “biased journalism,” is not new. For generations, governments and the media have navigated a complex, sometimes adversarial relationship. This dynamic isn’t unique to any one nation; in the United States, for instance, presidents from both major political parties have experienced their share of friction with the press. This tension, a hallmark of democratic societies, plays a crucial role in fostering transparency and encouraging effective governance. It’s a familiar scene: politicians and journalists engage in heated exchanges, especially when leaders feel their actions are misrepresented, leading to accusations of inaccuracies and biased reporting.
The press’s duty is to deliver facts as they stand, shedding light on the government’s achievements as well as spotlighting areas where policies or programs fall short. This transparency not only informs the public but also strengthens the nation as it encourages constructive action and improvement.
And suppressing voices only complicates matters further. Attempting to conceal issues rather than addressing them is akin to hiding a broken tool rather than fixing it. True progress comes from collaborative dialogue, even if it means embracing the messiness of public discourse.”
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