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Minister Amaraweera wants IMF bailout, hints at letting national carrier go
ECONOMYNEXT – Amid reports that cash-strapped Sri Lanka’s ruling coalition is split down the middle over an International Monetary Fund (IMF) bailout, another cabinet minister last week spoke in favour of IMF assistance, even going as far as to hint at the sale of the country’s national carrier.
“We will have to go to the IMF. There is nothing wrong with that… since we have no other option,” Environment Minister Mahinda Amaraweera said speaking to reporters on Wednesday (29).
Amaraweera is a member of the Sri Lanka Freedom Party (SLFP), which is increasingly at odds with the ruling Sri Lanka Podujana Peramuna (SLPP). State Minister Dayasiri Jayasekara, the SLFP’s general secretary, had also recently advocated going to the IMF.
“Of course, we need to not accept every condition put forward by the IMF,” said Amaraweera.
“We have been informed that the central bank governor and the Treasury Secretary will be joining the cabinet meeting next Monday (03). I think we will be able to reach a final consensus then,” he added.
Co-cabinet spokesman and Media Minister Dullas Alahapperuma on December 21 told reporters that the cabinet had “exchanged views” on an IMF bailout for the second week in a row but no decision had been made.
Minister Amaraweera, meanwhile, also commented on SriLankan Airlines, the national carrier, and other under-performing state owned enterprises (SOEs).
“At this point, we may have to let go of certain institutes. For example, SriLankan suffers losses in the billions. These losses are borne by people who have never even touched [an aircraft],” he said.
A day before Sri Lanka raised fuel prices last week, Trade Minister Bandula Gunawardena told reporters that the IMF would ask to cut the bloated public sector, reduce the budget deficit, make state enterprises profitable, and raise fuel and electricity prices.
A few days earlier, State Minister Jayasekera said after last week’s cabinet meeting that the IMF imposes conditions such as making state enterprises profitable.
“It is a good thing to do that,” Jayasekera said.
Finance Minister Basil Rajapaksa had already said the state workers and state enterprises were a big burden on the economy.
Older IMF baiout programs typically involve cutting the deficit with tax hikes (revenue based), trimming expenses (spending based) expressed as a net domestic finance target, a foreign reserve target and a reserve money target.
However Sri Lanka’s last failed extended fund facility from IMF program where money was printed within the program to create forex shortages and worsen foreign debt, an inflation target was given and the budget target was defined as a primary deficit.
Instead of a measurable reserve money or ceiling on central bank credit an inflation target was given, allowing the trigger happy central bank to print money and trigger a currency crisis within the program.
Under revenue based fiscal consolidation, state spending soared and the currency collapsed from 151 to 183 under a so-called flexible exchange rate where the exchange flipped from pegged to floating rapidly and interventions were sterilized on top of it.
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Sun directly overhead Pomparippu, Anuradhapura, Mihinthale, Galenbindunuwewa, Agbopura and Serunuwara about 12:11 noon today (11)
On the apparent northward relative motion of the sun, it is going to be directly over the latitudes of Sri Lanka from 05th to 15th of April in this year.
The nearest areas of Sri Lanka over which the sun is overhead today (11th) are Pomparippu, Anuradhapura, Mihinthale, Galenbindunuwewa, Agbopura and Serunuwara about 12:11 noon.
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Opposition NCM against Energy Minister defeated
A no-confidence motion brought by the Opposition against Energy Minister Kumara Jayakody was defeated in Parliament yesterday by a majority of 104 votes.At the end of the debate, 49 members voted in favour of the motion, while 153 voted against it.
The motion, submitted to the Speaker on 19 March, was signed by Opposition Leader Sajith Premadasa, SJB MPs, and other Opposition members.
It accused Minister Jayakody of failing to ensure the procurement of adequate and quality coal for the Lakvijaya Coal Power Plant in Norochcholai, alleging that such negligence amounted to a breach of ministerial responsibility over a critical national energy asset.
The motion also cited ongoing legal proceedings against the Minister, noting that he has been indicted by the Commission to Investigate Allegations of Bribery or Corruption and produced before the Colombo High Court under Section 70 of the Bribery Act, in connection with alleged acts of corruption during his tenure as Procurement Manager of the Ceylon Fertiliser Company Limited.
The motion read: Vote of No Confidence against Kumara Jayakody, Minister of Energy,— Whereas the Provision in Section 6 of the Part III of the Code of Conduct for Members of Parliament which states that: “The Members shall on all occasions act in accordance with the public trust entrusted with them and shall always behave with probity and integrity, including the use by them of any public resources.” has been violated; And whereas the following rules of conduct set out in Section 9 of the Part V of the Code of Conduct for Members of Parliament have prima facie been breached, namely:- “(a) to be conscience; (c) to act so as to merit the trust and respect of the people; (e) to hold themselves accountable for the conduct and duties for which they are responsible;” And whereas it is observed that the Minister has failed, in his capacity as a Minister of the Cabinet of Ministers, to discharge the fundamental duties incumbent upon him in accordance with Article 28 of the Constitution;
And whereas it is established that the Minister of Energy has failed to discharge his primary duty of ensuring the procurement of adequate and good quality coal for the Norochcholai Lakvijaya Coal Power Plant;
And whereas such gross negligence in overseeing a critical national energy asset constitutes a fundamental breach of ministerial responsibility;
And whereas the Minister of Energy has failed to carry out the subjects and functions vested in him by the Notification of Gazette Extraordinary No. 2412/08 of 25th November 2024 of the Democratic Socialist Republic of Sri Lanka, including taking necessary steps to reduce the losses at the institutional management level and technical damages that occur to the electricity generation and distribution system and reduction of costs for generating electricity and removal of uncertainties during generation;
And whereas the Commission to Investigate Allegations of Bribery or Corruption has filed formal indictments before the Colombo High Court against the incumbent Minister of Energy under Section 70 of the Bribery Act (Chapter 26) for the offence of “corruption” in connection with acts of corruption allegedly committed while he was serving as the Procurement Manager of the Lanka Fertilizer Company;
And whereas, in light of the foregoing, the Minister of Energy has irretrievably forfeited the confidence of Parliament and the people of Sri Lanka by causing losses to public finances, endangering national energy security, corruptly mishandling the procurement process, being subjected to active judicial proceedings for the offence of “corruption”, and betraying the Government’s own “anti-corruption mandate”, and his continued tenure as the Minister of Energy is contrary to the public interest, the rule of law, and the principles of good governance;
That this Parliament resolves that it has no confidence in the competence of Kumara Jayakody, Minister of Energy to function as a Minister of the Cabinet of Ministers any longer.”
by Saman Indrajith
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Chinese Ambassador assures Lanka China will not allow a fuel crisis to develop here
Chinese Ambassador to Sri Lanka Qi Zhenhong yesterday assured that China would not allow a fuel crisis to arise in Sri Lanka, under any circumstances, reaffirming Beijing’s continued support to the country.
The Ambassador made these remarks addressing the media after attending a dry ration distribution programme for 350 low-income families at Sri Chandananda Buddhist College, at Asgiriya, in Kandy.
Highlighting the longstanding ties between the two countries, Ambassador Qi said China has consistently stood by Sri Lanka and remains ready to extend assistance whenever required.
Amid concerns over global energy disruptions, stemming from the ongoing Middle East conflict, he noted that several countries are already facing difficulties, but stressed that China is prepared to support Sri Lanka at any time.
He said that any potential fuel shortage in Sri Lanka could be managed with the involvement of China’s Sinopec.
Reiterating Beijing’s commitment to Sri Lanka’s economic recovery and development, the Envoy also expressed hope that the current ceasefire in the Middle East would hold, while assuring that China stands ready to respond to any future developments and assist Sri Lanka as needed.
By SK Samaranayake
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