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SL wouldn’t have been in this mess if IMF conditions had been complied with – State FM



By Shamindra Ferdinanado

State Finance Minister Ranjith Siyambalapitiya has said that Sri Lanka wouldn’t have ended up being bankrupt if previous governments had adhered to agreements with the International Monetary (IMF).

Reiterating that the country is experiencing the worst ever economic crisis, lawmaker Siyambalapitiya warned that the government would be under IMF scrutiny this time around.

Appearing on weekly Hiru political programme Salakuna on Monday (26), the Kegalle District MP, who had previously served as State Finance Minister during Mahinda Rajapaksa’s tenure as the President, said that successive governments hadn’t been honest with the IMF. “We conveniently forgot what was promised to the IMF after having received a couple of tranches,” MP Siyambalapitiya said adding that the IMF would be alert now.

The State Finance Minister said that the first tranche amounting to USD 400 mn was expected in January 2023. The SLFPer emphasised that the financial mess couldn’t be settled with the USD 2.9 bn received from the IMF over a period of four years. However, the agreement with the IMF would restore the foreign governments’ faith in Sri Lanka, the State Minister mentioned.

Pointing out that Sri Lanka had received IMF loans on 16 previous occasions and the recently finalised Staf- Level agreement would lead to the 17th loan facility, MP Siyambalapitiya said that he signed the 15th agreement on behalf of Sri Lanka.

Responding to Hiru anchor Chamuditha Samarawickrema’s query whether economic crimes had been perpetrated as referred to by the United Nations Human Rights Commissioner’s latest report on Sri Lanka, lawmaker Siyambalapitiya said that there were no such crimes here. Therefore, the Geneva statement was not applicable to Sri Lanka. But, when Samarawickrema pressed the Minister on the accountability on the part of former President Gotabaya Rajapaksa’s government for the economic fallout, the lawmaker acknowledged the wrongdoing on their part.

Commenting on former President Gotabaya Rajapaksa’s government depriving the Treasury of over Rs 500 bn by implementing a wide tax cut, soon after the last presidential election, State Minister Siyambalapitiya faulted those who advised the President on economic matters. The State Minister said that the economy was handled by Presidents and Ministers who didn’t know the subject. When Samarawickrema pointed out that the former President was advised by Dr. P.B. Jayasundera, MP Siyambalapitiya said that he didn’t know that. Subsequently, MP Siyambalapitiya acknowledged the role played by Dr. PBJ, who then functioned as Secretary to the President, and previously as Secretary to the Treasury.

During an heated exchange, the State Finance Minister said that the then government reduced the number of tax files from 1.5 mn to 400,000 and the number registered taxpayers from 1.7 mn to 500,000. The MP said that the country was in a pathetic state today as successive governments followed wrong economic policies. The Covid-19 eruption in 2020 and external factors, too, contributed to the overall deterioration of the situation, the MP said.

In spite of clear indications that the country was heading for an unprecedented crisis, the powers that be steadfastly refused to seek IMF interventions. Instead, they continued the same harmful policies.

Asked whether as the State Finance Minister he felt the need to inquire into those responsible for the economic crisis, the MP said “Geneva was conducting investigations.” Samarawickrema asked why Geneva should be placed in charge of such an investigation when the responsibility lies with Sri Lanka. The Minister said: “I won’t hand over investigations to Geneva. I acknowledge the policies followed by successive governments were utterly wrong.

State Minister Siyambalapitiya also explained actions taken by him to explore ways and means of recovering losses suffered by the Treasury as a result of reduction of duty on a kilo of imported sugar from Rs 50 to 25 cents on Oct 13, 2020. The Minister said that Sri Lanka lacked laws to deal with those who perpetrated the sugar scam, adding that one of the sugar importers immensely benefited from the duty reduction.

State Minister Siyambalapitiya strongly defended his decision to accept ministerial portfolio, regardless of specific instructions from party leader Maithripala Sirisena not to do so.

Dismissing accusations that he switched allegiance to President Ranil Wickremesinghe for personal benefit, lawmaker Siyambalapitiya said that some of them accepted portfolios, as the Samagi Jana Balavegaya (SJB), the JVP and others would never have joined the government. They always feared the consequences of President Wickremesinghe overcoming the crisis, MP Siyambalapitiya said.


GL: Suspension of IMF bailout highlights failure to meet anticipated revenue targets



Prof. G.L

By Shamindra Ferdinando

Top Opposition spokesperson Prof. G. L. Peiris yesterday (02) said that the government should take full responsibility for the suspension of USD 2.9 bn IMF bailout over Sri Lanka’s failure to achieve the anticipated revenue mobilisation.

The former External Affairs Minister found fault with the government for tax concessions granted to investors and the failure on its part to collect taxes, in spite of reaching an agreement with the IMF in that regard.

Referring to the declaration made by IMF delegation head Peter Breuer that the second tranche of about $330m would be delayed pending Staff-Level Agreement, Prof. Peiris pointed out that Sri Lanka and the lending agency had reached a staff-level agreement in early September last year.

Sri Lanka received the first tranche of USD 330 mn in the third week of March this year in terms of the Extended Fund Facility (EFF), spread over a period of four years.

While pointing out that revenue mobilisation had improved, the IMF said revenue was expected to fall short of initial projections by nearly 15 percent by the end of this year.

Addressing the media at the Nawala Office of Nidahasa Jathika Sabhawa, Prof. Peiris said that though the government tried to put on a brave face, the consequences of the indefinite delay could be quite catastrophic. He said the suspension of the programme could undermine debt restructuring talks with external creditors, governments, lending agencies and the commercial market.

Prof. Peiris said that the suspension of the programme, just after the release of the first tranche, was a matter for serious concern as the unexpected development could cause further erosion of investors’ confidence in the Sri Lankan economy.

Sri Lanka has obtained IMF assistance on 16 occasions.

Chairman of the Sectoral Oversight Committee on National Economic and Physical Plans Mahindananda Aluthgamage on Sunday told The Island the country was paying a very heavy price for the failure on the part of the Inland Revenue, Customs and Excise Department to collect the due taxes. Alleging that unpaid income taxes alone, over the past 15 years, amounted to a staggering Rs 904 bn, whereas revenue collecting authorities so far managed to collect Rs 1,643 bn though they were given a target of Rs. 3,101 bn for this year.

Prof. Peiris said that corruption in the public sector procurement process undermined the economic recovery process. The government defeated the Opposition moved no-confidence motion against Health Minister Keheliya Rambukwella over corruption in the public health sector, Prof. Peiris said, asserting that the IMF must be aware of how the government encouraged waste, corruption, irregularities and mismanagement.

Prof. Peiris urged the government to take tangible measures to address the concerns of the IMF. Unfortunately, the government sought to deceive the public by claiming that the process was on track and would proceed following staff-level agreement, he said. He asked whether the government wanted the people to believe there would be staff-level agreements before the release of each tranche.

Prof. Peiris said that the government should correctly identify the warning issued by the IMF. It would be the responsibility of the Wickremesinghe-Rajapaksa government to take remedial measures without further delay.

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LPBOA demands bus fare hike



By Rathindra Kuruwita  

Lanka Private Bus Owners Association (LPBOA) head, Gemunu Wijeratna on Monday (02) said they needed a five percent increase in bus fares following Sunday’s diesel price hike.

On Sunday, CPC, LIOC and Sinopec increased diesel prices by 10 rupees per litre.

Wijeratna said that the private bus owners had not increased bus fares when diesel prices were increased by 35 rupees per litre recently.

“With the latest price increase, short distance buses will lose Rs 1,000 a day. Long distance buses will lose Rs 2,500 a day. We can’t lose money like this. We want at least a five percent bus fare hike,” he said.

School transport providers have decided not to increase their charges.

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Discourse on crisis in Lankan health sector at CSR



A discourse on the crisis in Sri Lankan health sector, under the theme ‘What ails the health sector? What solutions?’ is scheduled to be held at 4.00 p.m. on Thursday, 05 October 2023, at the Centre for Society & Religion (CSR) Auditorium, 281, Deans Road, Colombo 10, under the auspices of the Socialist Study Circle. The speakers will be Dr. Vinya Ariyaratne, Consultant Community Physician, President, Sri Lanka Medical Association, Dr. Ananda Wijewickrama, Consultant Physician, National Institute of Infectious Diseases and Ravi Kumudesh President, Academy of Health Professionals. The discourse is open to the public.

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