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Sabry names culprits, asks for system overhaul

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Economic crisis: ‘Money printing cannot be stopped completely’

By Shamindra Ferdinando

Finance Minister Ali Sabry, PC, has said that the Secretary to the Treasury, Governor of the Central Bank, and senior economic advisors to the President, misled the Cabinet as regards the economic situation.

They repeatedly assured that the situation was well under control, despite difficulties, lawmaker Sabry has said. That team expressed confidence that issues could be successfully dealt with, lawmaker Sabry said.

Sabry said so in a live interview on Swarnavahini Monday (02) night, the first since his return from Washington, where he led the government delegation at talks with the International Monetary Fund (IMF) and the World Bank.

Sabry said that the Cabinet-of-Ministers had realised the gravity of the situation in August 2021.

However, he was not asked about his predecessor Basil Rajapaksa who was blamed for aggravating the economic crisis.

By the time the Central Bank floated the rupee in March this year even without bothering to inform the Cabinet-of-Ministers of its decision, irreparable damage had already been caused, Minister Sabry said.

He said those who managed the national economy had prevented the country seeking IMF’s intervention well over a year back. Had President Gotabaya Rajapaksa and the Cabinet-of-Ministers received proper advice, Sri Lanka would not have been in the current predicament, Minister Sabry said.

Prof. W. A. Lakshman (Dec 2019-Sept 2021) and Ajith Nivard Cabraal (Sept 2021-March 2022) served as Governors of CBSL, S.R. Attygalle was as Secretary, Ministry of Finance (Nov 2019-April 2022) whereas Dr. P. B. Jayasundera functioned as Secretary to the President (Nov 2019-Dec 2021).

Minister Sabry said that depending on how the government and the Opposition as well as other interested parties responded to the current crisis, Sri Lanka could overcome the daunting challenges the way India, Thailand and South Korea had done or end up like Lebanon or Venezuela.

During the interview conducted by a panel led by Saddha Mangala Sooriyabandara, MP Sabry said most MPs representing both the government and the Opposition seemed unaware of the ground situation.

Responding to a question on the availability of funding to meet the basic requirements, Minister Sabry said that foreign reserves were zero. Having mentioned specific loans that had to be honoured during the April-July period, Minister Sabry said, adding that Sri Lanka had resorted to the only tangible action plan available under the present circumstances.

According to Minister Sabry Sri Lanka was left with no alternative but to restrcuture debt as underscored by the IMF. He said the government would a team of experts to represent Sri Lanka at debt restructuring talks with the relevant parties. The President’s Counsel expressed confidence that the selection process could be finalised by the time the Cabinet-of-Ministers meets again next week.

Declaring that the debt restructuring process was complicated the task, Minister Sabry said that the issues included loans obtained from the IMF, WB and other similar institutions, bilateral loans obtained from Japan, China and India et al), and funds raised from international money markets at up to 7% interest.

He found fault with successive finance ministers for simply repeating what the Treasury and the CBSL provided.

Emphasising the accountability on the part of successive governments, particularly those who had served as finance ministers for the crisis that had engulfed the country, Minister Sabry called for a system overhaul. He questioned the utilisation of funds over the past several decades as financial accountability and transparency deteriorated to such an extent the fate of Sri Lanka depended on external factors.

Minister Sabry said that the economy had suffered a severe setback due to unasked tax reduction that deprived the government over Rs. 500 bn annually. The minister said that the tax cut announced soon after the 2019 presidential election had weakened the fiscal status, and therefore it could not be accepted as a prudent decision. Referring to R. Paskaralingam role during Ranasinghe Premadasa’s tenure as the President, Minister Sabry said that ‘yes men’ had caused irreparable damage. In the absence of proper parliamentary supervision and decision-making process based on data, successive governments had been proceeding on wrong paths, Minister Sabry said, adding that the pandemic and the war in Ukraine this year had made matters worse for Sri Lanka.

Minister Sabry quoted the IMF delegation during talks with his team in Washington as having said that a combination of debt inheritance, bad policies and bad luck had resulted in the current crisis.

Referring to a hastily arranged meeting he had with Chinese Ambassador in Colombo Qi Zhenhong in the wake of the Chinese envoy expressing concern over Sri Lanka’s dialogue with the IMF, Minister Sabry said that an assurance had been received as regards Beijing’s continued support. Minister Sabry said that Sri Lanka needed the support of India, China and Japan.

The IMF loan facility could be finalised in about 6-8 months, the Finance Minister said adding that Sri Lanka expected USD 3-4 bn from the IMF over a three-year period.

Pointing out that international crude oil prices had recorded a staggering 138% increase due to the Russian invasion of Ukraine, Ministry Sabry said that the biggest issue the country faced was the supply of petroleum products. He revealed that out of the USD 500 mn Indian credit line for petroleum products, already USD 400 mn had been utilised and of the USD I bn loan facility, USD 200 mn had been sought for the import of petroleum products. Minister Sabry further said that the government had asked India to enhance USD 500 mn credit line for the import of petroleum products to USD 1 bn.

Sabry dismissed concerns over IMF conditions and explained how IMF conditions would help the country achieve financial stability.

He stressed need for gradual and an all-round revenue increase as part of the overall measures to stabilise the national economy. Sri Lanka was now paying the price for the failure of successive governments to streamline tax collection, he added. The state revenue had been 24 percent of the GDP in 82/83 but by 2020/2021 it had dropped to 8.6%, Minister Sabry said, pointing out the state revenue was not even sufficient to pay public sector salaries, pensions, Samurdhi and the maintenance of armed forces.

The Minister said that though money printing caused inflation it could not be totally stopped.



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Economic crisis: MR, ministers, CBSL Governor, Dr.PBJ ignored IMF warnings

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Dr. Jayamaha says Monetary Board acted regardless of strong opposition

By Shamindra Ferdinando

It was disclosed before the Committee on Public Enterprises (COPE) yesterday (25), the then Prime Minister Mahinda Rajapaksa, who served as the Finance Minister, had been briefed, in March-April 2020, on the impending financial crisis of unprecedented magnitude, but he had chosen to ignore the dire warning.

The parliamentary watchdog was told how the International Monetary Fund (IMF) had warned the then Governor of the Central Bank, Prof. W. D. Lakshman, and Treasury Secretary S. R. Attygalle, of Sri Lanka’s inability to procure loans unless the country undertook debt restructuring immediately.

COPE members received a briefing on the circumstances leading to the crisis when senior officials of the Central Bank appeared before the all-party body yesterday. CBSL Governor Dr. Nandalal has stated that the IMF warning hadn’t been heeded at all.

The COPE received confirmation of what has been widely speculated hours after UNP Leader Prime Minister Ranil Wickremesinghe, was sworn in as the new Finance Minister.

Janakantha Silva, Director Legislative Services / Director Communication, Parliament quoted Dr. Weerasinghe as having told COPE that following technical talks held in terms of the Finance Act pertaining to the IMF’s stand, recommendations were made to the then Premier and other senior officials. Dr. Weerasinghe has stated that the relevant decisions should have been made by the Premier, in his capacity as the Finance Minister and the entire Cabinet of Ministers.

The IMF has made its position clear after having asserted Sri Lanka lacked debt sustainability.

Asserting the failure on the part of those who managed the economy for causing a massive crisis, COPE Chairman Prof. Charitha Herath called it a crime. The first time entrant to Parliament recommended the setting up of a Special Parliamentary Select Committee to probe those who neglected their responsibilities thereby caused the current debilitating crisis. Prof. Herath blamed those few who managed the economy during that period.

SLPP National List MP Basil Rajapaksa succeeded Mahinda Rajapaksa in July 2021 as the Finance Minister whereas President Gotabaya Rajapaksa brought in SLPP National List MP Ajith Nivard Cabraal as the Governor of the Central Bank in Sept 2021. Cabraal quit in March to pave the way for Dr. Weerasinghe, the former Bank Deputy Governor to return from retirement in Australia, as its new Governor.

Dr. Harsha de Silva pointed out that the then Finance Minister Mahinda Rajapaksa delegated his responsibilities to the then State Finance Minister Cabraal who refrained from briefing the Parliament as regards the actual situation. Dr. de Silva said that the IMF’s declaration of debt sustainability should be examined against the backdrop of the revenue cut imposed on the recommendation of the then Secretary to the President and one time Central Banker and Treasury Secretary Dr. P.B. Jayasundera that deprived the Treasury of Rs 600 mn in taxes.

Dr. de Silva asked who decided on the tax cut in spite of the IMF specifically advising the government not to do so. The top SJB spokesperson and COPE member asked who decided on such reckless course of action.

COPE member and SLPP lawmaker Rear Admiral (retd) Sarath Weeraselera has said that tax cut was declared to encourage business and trade.

When COPE raised contentious issue of the Central Bank wasting precious funds to prevent depreciation of Sri Lanka Rupee, Dr. Weerasinghe has said this was the responsibility of the Monetary Board comprising five persons. The then Monetary Board member Dr. Ranee Jayamaha has revealed that the then Governor Prof. W.D. Lakshman, Treasury Secretary S.R. Attygalle and nominated member Samantha Kumarasinghe decided on that course of action in spite of her and Sanjiva Jayawardena, PC, opposing them. They had registered their protest in writing.

Dr. Weerasinghe assured the COPE that in spite of the difficulties likely to be experienced within the next three to four months he would try to achieve objectives.

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People’s Bank remains firmly committed to the nation’s progress

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The People’s Bank is known for its commitment towards the betterment of the country. As one of the largest financial services providers in Sri Lanka, the Bank has been continuously featured in the 1000 Best Banks in the world by the world renowned ‘The Banker Magazine’ in the years of 2018, 2019, 2020 and 2021.

CEO/GM of the People’s Bank Ranjith Kodituwakku recently spoke to the media about the bank’s journey so far, and its present and future vision.

Could you share some insight about the present progress and stability of the People’s Bank?

People’s Bank was mainly initiated for the purpose of making banking facilities accessible to the general public. At present we have the country’s largest customer base of over 14 million and largest branch network of 742.

Our total assets have grown to Rs.2.6 trillion, and our deposits exceed Rs. 2.0 trillion. Our loans and receivables have exceeded Rs. 1.9 trillion. We are happy to announce that we also received the highest pre-tax profit of Rs. 30.4 billion and Rs. 23.7 billion pre-tax profit during the year 2021.

* People’s Bank has introduced a number of new innovations to the local financial sector, how are they faring?

People’s Bank became the first commercial bank to work in Sinhala and Tamil. It pioneered the act of printing cheque books in Sinhala and Tamil which were only printed in English earlier.

People’s Bank also introduced the Gold Mortgage Loan Service in 1962. Through this, we were able to free people who were caught in the clutches of money lenders.

On World Women’s Day in 1993, a branded ladies account “Vanitha Vasana” was launched, and to build future security for our student population, the “SisuUdana” account was launched coinciding World Children’s Day in 1996.As of today, most students deposit their savings at People’s Bank.

People’s Bank also was the first bank in the country to implement a complete digital transformation for the entire operating model, covering all aspects from the lowest to the highest levels of the Bank.

The bank’s Self Banking Units (SBUs) are a pioneering introduction to our digitalization programme of which there are over 265 islandwide. With ATMs, CDMs and bill payment machines (KIOSK) installed herein, you can experience convenient and efficient banking which operates 24 hours a day, seven days a week, 365 days a year, all year round.

All of our branches now have instant access to People’s Wiz which enables quick account opening. Over a million people are registered with the People’s Wave app, which allows you to bank from anywhere. People’s Bank also launched the People’s Pay Mobile App in support of the Central Bank’s efforts to promote digital transactions without the use of cash. In addition, the People’s Website offers online banking and People’s Wiz Credit provides personal loans within 24 hours. We have won numerous local and international awards for digital banking.

* People’s Bank was established to boost local agriculture, rural economy, upgrade small and medium-scale entrepreneurs by assisting every level of ordinary people with the bank. What are the contributions given by People’s Bank to those sectors?

Since the inception, People’s Bank’s main focus was on developing the rural banking system and uplifting the people. Even today, this focus remains unchanged within the bank. If you take the last year, People’s Bank granted loan facilities to SME businesses to the tune of Rs. 63.0 billion.

Also the bank introduced an agriculture-based Harvest Loan Scheme to create a self-sufficient country and granted loans of Rs.2.3 billion over a period of 15 months ending 31 December 2021 alone. The ‘Made in Sri Lanka’ loan scheme was introduced to promote local industries and ‘Saarabhoomi’ to encourage local production of fertilisers, pesticides, herbicides. ‘Vanitha Saviya’ loan scheme was launched to empower women entrepreneurs and ‘Business Power’ to uplift small and medium enterprises.

People’s Bank also launched the People’s Spark Entrepreneurship Development Programme with the aim of empowering Sri Lankan youth who are passionate about running their own business.

* What are the facilities given to customers when remitting money to Sri Lanka?

Sri Lankans working in foreign countries or any other person can send money to their loved ones and this money can be withdrawn conveniently from our 742 island wide network.

In order to recognise and encourage expatriate workers remitting money from abroad, the Bank launched a promotion called ‘Vaasi Kotiyai bonanza early this year. Under this promotion the Grand Draw winner who will be selected at the year-end will be presented with a Grand Prize of Rs.10 million. Additionally, Rs.1 Million Monthly winners will be selected every month, 22K gold sovereign weekly winners will be selected 48 times, while 10,000 daily cash prize winners will be selected 334 times until 31st December 2022.

In addition to that, we also provide loan facilities for those who seek foreign employment and to those who are already working abroad. We have also planned to introduce a special benefits package for Sri Lankan working abroad which includes insurance benefits and loans at concessionary interest rates.

* What’s your opinion about the stability of the banking system and what benefits are gained by transacting with a government bank and benefits receive by the society?

In addition to having a strong capital base, our banking system is closely monitored by the Central Bank and all local banks are run in compliance with the highest standards in the world.

State Banks specifically have the largest capital bases in the country and due to the government ownership, they enjoy extraordinary stability which in turn provides maximum security for customer deposits.

In addition, due to the large branch network and superior digital banking capabilities, customers can transact conveniently with People’s Bank.

Last but not least, the profits made by state banks are channeled back towards the development of the country which ultimately benefits customers.

* Finally, what is the contribution given by the People’s Bank through import and export trades?

People’s Bank works successfully with over 900 banks worldwide to facilitate import and export trades by issuing Letters of Credit to private and State owned enterprises. This function is invaluable to sustain normal lives of general public as it enables importation of essential items such as fuel, medicine, food and gas.

As I mentioned earlier, People’s Bank is driven by objectives that extend beyond mere profits. We work for the betterment of people and the country. As a Bank that is firmly committed to the wellbeing of the nation, we will continue to fulfill our responsibilities in this manner in the future.

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Governments harm children’s rights in online learning – HRW

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146 authorised products may have surveilled children and harvested personal data

Governments of 49 of the world’s most populous countries harmed children’s rights by endorsing online learning products during Covid-19 school closures without adequately protecting children’s privacy, Human Rights Watch said in a report released yesterday (25).

The report was released simultaneously with publications by media organisations around the world that had early access to the Human Rights Watch findings and engaged in an independent collaborative investigation.

“‘How Dare They Peep into My Private Life?’: Children’s Rights Violations by Governments that Endorsed Online Learning during the Covid-19 Pandemic,” is grounded in technical and policy analysis conducted by Human Rights Watch on 164 education technology (EdTech) products endorsed by 49 countries. It includes an examination of 290 companies found to have collected, processed, or received children’s data since March 2021, and calls on governments to adopt modern child data protection laws to protect children online.

“Children should be safe in school, whether that’s in person or online,” said Hye Jung Han, children’s rights and technology researcher and advocate at Human Rights Watch. “By failing to ensure that their recommended online learning products protected children and their data, governments flung open the door for companies to surveil children online, outside school hours, and deep into their private lives.”

Of the 164 EdTech products reviewed, 146 (89 percent) appeared to engage in data practices that risked or infringed on children’s rights. These products monitored or had the capacity to monitor children, in most cases secretly and without the consent of children or their parents, in many cases harvesting personal data such as who they are, where they are, what they do in the classroom, who their family and friends are, and what kind of device their families could afford for them to use.

Most online learning platforms examined installed tracking technologies that trailed children outside of their virtual classrooms and across the internet, over time. Some invisibly tagged and fingerprinted children in ways that were impossible to avoid or erase – even if children, their parents, and teachers had been aware and had the desire to do so – without destroying the device.

Most online learning platforms sent or granted access to children’s data to advertising technology (AdTech) companies. In doing so, some EdTech products targeted children with behavioral advertising. By using children’s data – extracted from educational settings – to target them with personalized content and advertisements that follow them across the internet, these companies not only distorted children’s online experiences, but also risked influencing their opinions and beliefs at a time in their lives when they are at high risk of manipulative interference. Many more EdTech products sent children’s data to AdTech companies that specialise in behavioural advertising or whose algorithms determine what children see online.

With the exception of Morocco, all governments reviewed in this report endorsed at least one EdTech product that risked or undermined children’s rights. Most EdTech products were offered to governments at no direct financial cost. By endorsing and enabling the wide adoption of EdTech products, governments offloaded the true costs of providing online education onto children, who were unknowingly forced to pay for their learning with their rights to privacy and access to information, and potentially their freedom of thought.

Few governments checked whether the EdTech they rapidly endorsed or procured for schools were safe for children to use. As a result, children whose families could afford to access the internet, or who made hard sacrifices to do so, were exposed to the privacy practices of the EdTech products they were told or required to use during Covid-19 school closures.

Many governments put at risk or violated children’s rights directly. Of the 42 governments that provided online education to children by building and offering their own EdTech products for use during the pandemic, 39 governments made products that handled children’s personal data in ways that risked or infringed on their rights. Some governments made it compulsory for students and teachers to use their EdTech product, subjecting them to the risks of misuse or exploitation of their data, and making it impossible for children to protect themselves by opting for alternatives to access their education.

Children, parents, and teachers were largely kept in the dark about these data surveillance practices. Human Rights Watch found that the data surveillance took place in virtual classrooms and educational settings where children could not reasonably object to such surveillance. Most EdTech companies did not allow students to decline to be tracked; most of this monitoring happened secretly, without the child’s knowledge or consent. In most instances, it was impossible for children to opt out of such surveillance and data collection without opting out of compulsory education and giving up on formal learning during the pandemic.

Human Rights Watch conducted its technical analysis of the products between March and August 2021, and subsequently verified its findings as detailed in the report. Each analysis essentially took a snapshot of the prevalence and frequency of tracking technologies embedded in each product on a given date in that window. That prevalence and frequency may fluctuate over time based on multiple factors, meaning that an analysis conducted on later dates might observe variations in the behavior of the products.

It is not possible for Human Rights Watch to reach definitive conclusions as to the companies’ motivations in engaging in these actions, beyond reporting on what it observed in the data and the companies’ and governments’ own statements. Human Rights Watch shared its findings with the 95 EdTech companies, 196 AdTech companies, and 49 governments covered in this report, giving them the opportunity to respond and provide comments and clarifications. In all, 48 EdTech companies, 78 AdTech companies, and 10 governments responded as of May 24, 12 p.m. EDT. Several EdTech companies denied collecting children’s data. Some companies denied that their products were intended for children’s use. AdTech companies denied knowledge that the data was being sent to them, indicating that in any case it was their clients’ responsibility not to send them children’s data. These and other comments are reflected and addressed in the report, as relevant.

As more children spend increasing amounts of their childhood online, their reliance on the connected world and digital services that enable their education will likely continue long after the end of the pandemic. Governments should pass and enforce modern child data protection laws that provide safeguards around the collection, processing, and use of children’s data.

Companies should immediately stop collecting, processing, and sharing children’s data in ways that risk or infringe on their rights.

Human Rights Watch has launched a global campaign, #StudentsNotProducts, which brings together parents, teachers, children, and allies to support this call and demand protections for children online.

“Children shouldn’t be compelled to give up their privacy and other rights in order to learn,” Han said. “Governments should urgently adopt and enforce modern child data protection laws to stop the surveillance of children by actors who don’t have children’s best interests at heart.”

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