by Saman Indrajith
Leader of the 43 Brigade and independent MP Patali Champika Ranawaka has called for legal action against politicians and officials responsible for the country’s bankruptcy.Speaking at a meeting with the Executive Committee members of the Sri Lanka Parliamentary Journalists’ Association, at the Solis Banquet Hall, in Pitakotte, last week, Ranawaka said that legal action could be instituted under the provisions of the Monetary Law Act of 1950 against those who bankrupted the country.
“In addition, there are provisions in the Fiscal Responsibility Management Act that could hold filing cases against the secretaries to the Ministry of Finance and Treasury Secretaries who had violated these laws and failed to execute their responsibilities. There are laws that put limits in obtaining loans. These officials cannot place the blame only on the politicians. They too should be brought before the law. They did the very same as Sakviti Ranasinghe who asked the people to deposit money, promising 25 percent interest. Sakviti could not pay and declared bankruptcy. He was put in jail for 22 years but those who ruined the national economy have not been punished yet. What our Central Bank and the governments had been doing was very similar to the conduct of Sakvithi.
“We took loans. We invested some in development and lost the rest due to waste and corruption,” Ranawaka said, noting that Sri Lanka had been obtaining loans since 1954. “There is nothing wrong with taking loans as long as they can be settled. We used to obtain loans on very low interests from other countries and international bodies such as JICA, KOICA and World Bank. After Sri Lanka was declared a middle income earning country, we could not obtain loans for such low interests. Thereafter we had to go to the market to obtain loans for higher interests such as 8-10 percent to settle in five to 10 years. We obtained them in the form of International sovereign bonds (ISBs) and Sri Lanka Development Bonds (SLDBs). The ISBs and SLDBs were around four percent of GDP. Interest for the loans taken from the World Bank and Asian Development Bank was around 0.1 to 0.2 percent. For example, the LRT project from the JICA loan was less than 0.1 percent. It had a grace period of 12 years and further 40 years to settle completely. Instead of such loans, we opted for commercial loans which doubled in 10 years if we do not pay. What we are facing today is a crisis because of commercial loans.”
Ranawaka said that the Gotabaya Rajapaksa government had made a large number of blunders, which had ruined the economy. “He gave massive tax reliefs. He wanted to remove the Super-gain tax introduced by the Yahapalana government. It was a 25 percent tax imposed on 62 leading companies, including those of Dhammika Perera, who earned more than one billion rupees in profits. That tax brought in 56 billion rupees to government coffers. These businessmen opposed the tax and promised that they could use that 56 billion rupees for more projects that could generate around Rs 250 billions, following liberal economic policies. The Rakapaksas, who came to power promising to promote socialist economic policies, removed that tax. They brought down VAT and removed limits of income tax by upping the threshold to three million rupees. The result was a drop of those who paid income taxes from 1.5 million to 400,000. Their tax revisions resulted in a drop of around 40 percent of national income. The rating institutes, including the Moody’s, Fitch Ratings, the S&P, dropped us from B grade to C grade. That was one of the main reasons for our inability to obtain loans.
“It is true that the Yahapalana government obtained 12 billion US dollar loans. The then Governor of the Central Bank, Indrajit Coomaraswamy, went to the international market, when the interests were very low, and obtained loans to raise around eight billion US Dollars. Of that amount, we left UDS 7.2 billion as reserves. This government spent USD 5.5 billion during the corona pandemic period to keep the rupee value against dollars. That attempt was not successful because in the open market a dollar was around Rs 330-380. They not only failed to achieve the desired results but also lost the reserves, too. Corresponding to these, remittances from foreign countries dropped from USD 600 million a month to USD 250 million as Lankan expats opted to Undiyal. In the meantime, the government kept on spending on highways, carpeting 100,000 roads, building 13,000 houses and developing 100 towns. To cover up the loss, they printed more money. Total the value of the rupees in circulation was only 1,500 billion. Now, after the cash printing spree, we have 4,500 billion rupees in circulation. That is the main reason for the increasing prices of goods and inflation.”
Bid to use private member’s motion to put off LG polls alleged
By Shamindra Ferdinando
Former Foreign Minister Prof. G. L. Peiris has questioned the rationale behind President Ranil Wickremesinghe’s warning that the military will be deployed to curb protest vis-a-vis a Foreign Ministry undertaking to boost foreign trade and investment.
Addressing the Parliament, during the Budget committee stage debate, on 28 Nov., Prof. Peiris said the Foreign Ministry couldn’t expect to succeed in economic diplomacy while the government was resorting to repressive measures.
Prof. Peiris asked who would want to invest in a country where the people were warned of dire consequences if they held protests, and elections were arbitrarily postponed.
Referring to the long overdue Provincial Council polls, Prof. Peiris discussed how postponement of scheduled Local Government polls could further jeopardise Sri Lanka’s standing among the international community.
Prof. Peiris alleged that the government was planning to use private members’ motion submitted by Attorney-at-Law Premanath C. Dolawatta (SLPP, Colombo District) to put off scheduled Local Government polls further. The ex-Minister claimed that the motion meant to enhance youth representation in governance would be utilised to delay the polls indefinitely. He recalled how the Yahapalana government had postponed the Provincial Council elections indefinitely.
The rebel SLPP Chairman pointed out that the government had chosen MP Dolawatta’s motion, handed over recently, though SJB’s Imthiaz Bakeer Markar submitted a private member’s motion on the same lines much earlier.
MP Dolawatta handed over a copy of his motion to President Ranil Wickremesinghe on Oct 31. Prof. Peiris said that they wouldn’t find fault with the lawmaker for making proposals which the academic said were timely.
Prof. Peiris warned Foreign Minister Ali Sabry, PC, that Sri Lanka wouldn’t be an appealing destination for investments unless the government adopted tangible measures to curb corruption. Shocking disclosures at parliamentary watchdog committees underscored that corruption was at unprecedented level and needed immediate attention.
Speaking on behalf of the breakaway SLPP faction, Nidahasa Jathika Sabhawa aka Freedom People’s Congress Prof. Peiris said that the recent declaration by the World Bank that it would audit the procurement and distribution of fertiliser here meant that the world had no faith in our system.
Commenting on assurances given by the government that a new Anti-Corruption Bill would be introduced soon, Prof. Peiris said that existing laws were quite sufficient. The issue at hand is absence of political will to battle corruption, the former Minister said, meant flight of professionals and intolerable increase in taxes on business wouldn’t encourage Foreign Ministry’s drive.
At the onset of his speech, lawmaker Peiris asked whether the government was genuine about the recent declaration that the national issue could be resolved by the enactment of a new Constitution by the next Independence Day. Who would take such a promise seriously against the backdrop of all previous attempts undertaken by far more stable governments failing to achieve the desired results? the former law professor asked. The former minister also questioned the feasibility of forming an apparatus on the lines of the Truth and Reconciliation Commission of South Africa. Prof. Peiris asked whether those now at the helm really had the wherewithal to meet the South African standards.
State FM assures there won’t be shortage of milk powder
State Finance Minister Ranjith Siyambalapitiya told Parliament yesterday (29) that there would be no shortage of milk powder in the coming days due to the Customs holding a consignment of six containers of milk powder, imported into the country, for violating regulations.
Minister Siyambalapitiya said the six containers had 105,375 kilos of full cream milk powder, imported from New Zealand, via Malaysia. It reached the Colombo port on 20 Oct. It was only after the consignment had arrived in the Port that the importers submitted the letters to get the consignment released from the Controller Imports and Exports. Arrangements would be made to release the stock from the harbour on the recommendation of the Secretary to the Ministry of Trade and Food Security.
As such, there is no need for permission from the Controller Import and Export to release the stock, the minister said, adding that there were no limitations imposed on importing milk powder and there would be no cause for panic buying in fear of a shortage of milk powder in the coming days.
Dolawatta responds to GL
SLPP MP Premanath C. Dolawatta said his private member’s motion wouldn’t lead to the postponement of local government polls. He said he felt the need to restore the 25% quota for youth, even before he entered Parliament, consequent to the August 2020 general election. The government and the Opposition could quickly reach a consensus on the proposals, and avoid unnecessary complications. MP Dolawatta said so when The Island sought his response to accusations made by Prof. Peiris, who said that time was rapidly running out for Local Government polls. As the nomination process needed to be commenced soon to ensure that 341 Local Government bodies could be constituted by 20 March 2023.
Bid to use private member’s motion to put off LG polls alleged
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