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Some Strengths and Weaknesses of the Budget Speech 2022

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By Dr Laksiri Fernando

The budget speech that the Minister of Finance Basil Rajapaksa delivered in Parliament on 12 November 2021 was fairly structured with the following sections. That is a positive.

1. Preface.

2. ‘Global Challenges.’

3. Our Strengths.

4. The Challenges Before Us.

5. Policy Synopsis.

6. Development of the National Economy.

7. Revenue Proposals.

8. Macro-Economic Vision for Revival.

9. Conclusion.

But its content was the question owing to boasting, half-truths, contradictions, and unachievable pronouncements. If the Opposition was serious about countering the wrong policies, weaknesses, errors, etc., of the Budget, it could have possibly used the same format. Democratic politics is not about a ‘gang war’ between the government and the Opposition as appears to be the case in today’s Parliament. Debates should be more critical on the flawed policies with alternative perspectives being offered. .

In parliamentary democracies, there are ‘shadow cabinets’ and ‘shadow ministers.’ There should be a ‘Shadow Minister for Finance.’ It is mainly his/her role to present counter arguments, expose false data, and criticise misleading policies. The Opposition also should have a ‘official website’ where they could publish counterarguments or counter budgetary policies. Of course, it is also the duty of the media (as it is fairly done), academics and journalists to do the same critically and objectively.

A Family Preface?

The Preface correctly says, “We are passing through perhaps the most painful period of human civilisation.” This should mean the environmental disasters, Covid-19 pandemic and deaths, increasing poverty in poor countries, and evolving economic crises worldwide and others. Of course, these are challenges even in Sri Lanka. As a solution, he says:

“I first come to learn the concept of ‘Challenging the Challenges’ for the betterment of the public in my ancestral home in Madamulana. The Rajapaksas have a history of never being daunted by challenges. Mr. D. M. Rajapaksa, who is known as the “the Lion of Ruhuna”, who represented the second State Council in 1936, is known by the entire country. He is my father’s elder brother (loku thaththa).”

If the Minister was serious about the public nature of the challenges, he should not have given purely a family perspective on the subject. His phrase ‘Challenging the Challenges’ is a common phrase in many languages and in quotations of many authors. Tracing it to Madamulana may be suitable to a D.M. Rajapaksa oration, but not to a preface of a Budget speech.

He does not stop there. In the remaining eight paragraphs of the Preface (1.4 to 1.11) he boasts of his family, loku thatha, thatha, aiya, malli, thama, and their achievements. This is undoubtedly a record in Budget speeches in the world. He places Mahinda Rajapaksa at the center of this legacy who, in fact, got disgracefully defeated in 2015. This is what the Minister says: “The Hon. Prime Minister Mahinda Rajapakse, who is today in this House, is at the centre of the Rajapaksa Political Legacy.”

There is no mention of other Ministers, the Cabinet, or its collective responsibility. Not a word about other parties or its leaders other than what he has created as Podu Jana Peramuna.

Challenging the Global Challenges

The Finance Minister is correct in briefly outlining five global challenges: (1) increasing global social and economic disparities between the rich and the poor, (2) the slow progress in achieving the (UN) sustainable goals, (3) increasing environmental catastrophes, (4) limited assistance from bi-lateral and multilateral institutions, and (5) challenges in adopting to the post-pandemic ‘new normal.’

The degeneration of moral and ethical standards worldwide, particularly among political leaders with corruption, deals, misdeeds, and authoritarianism, is not mentioned at all.

However, without much relevance, he states, “The impact is worse on countries with trade focused economies such as ours compared to those economies dominated by the manufacturing sector.”

Even if his ‘vision’ of turning the present economy of Sri Lanka from ‘trade focused’ to ‘manufacture dominated,’ is commendable, the global challenges that he has outlined have nothing much to do with the difference. To my knowledge of economics, trade and manufacture are complimentary. While Sri Lanka undoubtedly should promote manufacture, a balanced approach might be the best without promoting one against the other as he has done. It is in the same section that he has arrived at a figure of Rs. 500 billion.

“The opportunity to provide such services, both domestically and externally has been curtailed, resulting in a loss of income. As a result, the loss of revenue to the country and the Treasury has been unlike any other year before. The loss to the Treasury, according to our estimates, is over Rs. 500 billion.”

The nature of local productions and nature of exports undoubtedly are reasons for our economic predicaments and underdevelopment. Therefore, it will be commendable if the government makes genuine efforts to change the situation. But the claim that this year’s loss to the Treasury of Rs. 500 billion is purely a result of this economic imbalance is unbelievable unless the government supplies concrete evidence for the claim. This loss or a major part of it appears to be a result of mismanagement of imports and exports, and the enormous tax concessions given to the rich by the last Budget. Without direct import controls, higher taxes could have been imposed on unnecessary or luxury imports. Dialogues with importers could have been another measure.

Bloated ‘Our Strengths’

It is quite superficial to talk about ‘our strengths’ just after talking about global challenges as if Sri Lanka were at the forefront of changing the world! At the beginning of this talk is the boast about Rajapaksa family and its leadership again. Both the President and the Prime Minister are praised. If the Budget speech was following a kind of SWOT (strengths, weaknesses, opportunities, and threats) analysis, with the strengths, the weaknesses also could have been discussed. That is the way to go about economic change.

Among the strengths, there is only one paragraph with four sentences on Infrastructure: “Our infrastructure facilities are of high standard. The quality of our ports, airports, telecommunications, highways, roads, and electricity supply are very good.” Of course, there are certain aspects to be ‘proud’ about, but some are still in preparation (ports). What about railways? They are still in the colonial heritage.

The Minister suddenly says: “Also, through the 100,000-kilometre road project and the 5,000 bridges programme, the byroad network will be strengthened further, and the entire country will become a single network.” This 100,000 km roads programme was there even in the last budget, the only addition being the 5,000 bridges. Perhaps, there is a new determination to go ahead because, as alleged by many people, these road constructions are beneficial to political supporters.

The third strength is named “Non-aligned, friendly international relations.” Nine international organisations are particularly mentioned like ‘the World Bank, the Asian Development Bank, the European Union, the Japan International Cooperation Agency (JICA), the Kuwait Fund, the French Development Agency, the KfD, Korean International Cooperation Agency (KOICA) the OPEC for International Development, and the UN.’

There is no mentioning of the IMF under friendly organisations.

It is also surprising and intriguing that China or Chinese organisations are not mentioned as friendly countries or organisations. Mahinda Rajapaksa’s budget speech last year had much emphasis on China. It might be too early, however, to speculate whether this shows a shift of alliances in the international context and relations.

Question of IMF?

However, under the next section on ‘the challenges before us,’ the IMF is mentioned with some negativity. Basil Rajapaksa refers to Dr. N. M. Perera’s budget speech of 1970/71 ostensibly to prove his argument.

“In that he [N. M. Perera] states that instead of building foreign exchange reserves, we have used it for the importation of goods creating a foreign reserve crisis and, thereby, seeking the support of the International Monetary Fund (IMF). From the first IMF facility in 1961, successive governments have resorted to short term assistance from the IMF, and our leaders and financial sector experts have failed in introducing a sustainable long-term programme to manage our foreign reserves.”

There is no question that a country should try to manage its foreign exchange reserves without going to the IMF, if possible. I believe that is what Dr. N. M. Perera said and tried to do it. Of course, there were others who went to the IMF as an easy escape.

However, during recent administrations (Rajapaksa and Wickremesinghe) there has been a tendency to go for various dubious sources to seek foreign exchange loans and assistance when facing depleted reserves. Although no direct conditions are attached from these sources, these loans and deals have been a major reason for Sri Lanka’s deteriorating foreign exchange conditions throughout the years. There is no proper solution proposed in the Budget 2022 to this paradoxical situation.

Sri Lanka should not hesitate to go to the IMF. That is the most reliable and resourceful multilateral organisation, almost like a UN agency to deal with foreign exchange crises and reserves of member countries. It is up to the government to deal with the IMF properly, and negotiate any conditions attached when seeking foreign exchange or other assistance.



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Misinterpreting President Dissanayake on National Reconciliation

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President Dissanayake

President Anura Kumara Dissanayake has been investing his political capital in going to the public to explain some of the most politically sensitive and controversial issues. At a time when easier political choices are available, the president is choosing the harder path of confronting ethnic suspicion and communal fears. There are three issues in particular on which the president’s words have generated strong reactions. These are first with regard to Buddhist pilgrims going to the north of the country with nationalist motivations. Second is the controversy relating to the expansion of the Tissa Raja Maha Viharaya, a recently constructed Buddhist temple in Kankesanturai which has become a flashpoint between local Tamil residents and Sinhala nationalist groups. Third is the decision not to give the war victory a central place in the Independence Day celebrations.

Even in the opposition, when his party held only three seats in parliament, Anura Kumara Dissanayake took his role as a public educator seriously. He used to deliver lengthy, well researched and easily digestible speeches in parliament. He continues this practice as president. It can be seen that his statements are primarily meant to elevate the thinking of the people and not to win votes the easy way. The easy way to win votes whether in Sri Lanka or elsewhere in the world is to rouse nationalist and racist sentiments and ride that wave. Sri Lanka’s post independence political history shows that narrow ethnic mobilisation has often produced short term electoral gains but long term national damage.

Sections of the opposition and segments of the general public have been critical of the president for taking these positions. They have claimed that the president is taking these positions in order to obtain more Tamil votes or to appease minority communities. The same may be said in reverse of those others who take contrary positions that they seek the Sinhala votes. These political actors who thrive on nationalist mobilisation have attempted to portray the president’s statements as an abandonment of the majority community. The president’s actions need to be understood within the larger framework of national reconciliation and long term national stability.

Reconciler’s Duty

When the president referred to Buddhist pilgrims from the south going to the north, he was not speaking about pilgrims visiting long established Buddhist heritage sites such as Nagadeepa or Kandarodai. His remarks were directed at a specific and highly contentious development, the recently built Buddhist temple in Kankesanturai and those built elsewhere in the recent past in the north and east. The temple in Kankesanturai did not emerge from the religious needs of a local Buddhist community as there is none in that area. It has been constructed on land that was formerly owned and used by Tamil civilians and which came under military occupation as a high security zone. What has made the issue of the temple particularly controversial is that it was established with the support of the security forces.

The controversy has deepened because the temple authorities have sought to expand the site from approximately one acre to nearly fourteen acres on the basis that there was a historic Buddhist temple in that area up to the colonial period. However, the Tamil residents of the area fear that expansion would further displace surrounding residents and consolidate a permanent Buddhist religious presence in the present period in an area where the local population is overwhelmingly Hindu. For many Tamils in Kankesanturai, the issue is not Buddhism as a religion but the use of religion as a vehicle for territorial assertion and demographic changes in a region that bore the brunt of the war. Likewise, there are other parts of the north and east where other temples or places of worship have been established by the military personnel in their camps during their war-time occupation and questions arise regarding the future when these camps are finally closed.

There are those who have actively organised large scale pilgrimages from the south to make the Tissa temple another important religious site. These pilgrimages are framed publicly as acts of devotion but are widely perceived locally as demonstrations of dominance. Each such visit heightens tension, provokes protest by Tamil residents, and risks confrontation. For communities that experienced mass displacement, military occupation and land loss, the symbolism of a state backed religious structure on contested land with the backing of the security forces is impossible to separate from memories of war and destruction. A president committed to reconciliation cannot remain silent in the face of such provocations, however uncomfortable it may be to challenge sections of the majority community.

High-minded leadership

The controversy regarding the president’s Independence Day speech has also generated strong debate. In that speech the president did not refer to the military victory over the LTTE and also did not use the term “war heroes” to describe soldiers. For many Sinhala nationalist groups, the absence of these references was seen as an attempt to diminish the sacrifices of the armed forces. The reality is that Independence Day means very different things to different communities. In the north and east the same day is marked by protest events and mourning and as a “Black Day”, symbolising the consolidation of a state they continue to experience as excluding them and not empathizing with the full extent of their losses.

By way of contrast, the president’s objective was to ensure that Independence Day could be observed as a day that belonged to all communities in the country. It is not correct to assume that the president takes these positions in order to appease minorities or secure electoral advantage. The president is only one year into his term and does not need to take politically risky positions for short term electoral gains. Indeed, the positions he has taken involve confronting powerful nationalist political forces that can mobilise significant opposition. He risks losing majority support for his statements. This itself indicates that the motivation is not electoral calculation.

President Dissanayake has recognized that Sri Lanka’s long term political stability and economic recovery depend on building trust among communities that once peacefully coexisted and then lived through decades of war. Political leadership is ultimately tested by the willingness to say what is necessary rather than what is politically expedient. The president’s recent interventions demonstrate rare national leadership and constitute an attempt to shift public discourse away from ethnic triumphalism and toward a more inclusive conception of nationhood. Reconciliation cannot take root if national ceremonies reinforce the perception of victory for one community and defeat for another especially in an internal conflict.

BY Jehan Perera

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Recovery of LTTE weapons

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Sri Lanka Navy in action

I have read a newspaper report that the Special Task Force of Sri Lanka Police, with help of Military Intelligence, recovered three buried yet well-preserved 84mm Carl Gustaf recoilless rocket launchers used by the LTTE, in the Kudumbimalai area, Batticaloa.

These deadly weapons were used by the LTTE SEA TIGER WING to attack the Sri Lanka Navy ships and craft in 1990s. The first incident was in February 1997, off Iranativu island, in the Gulf of Mannar.

Admiral Cecil Tissera took over as Commander of the Navy on 27 January, 1997, from Admiral Mohan Samarasekara.

The fight against the LTTE was intensified from 1996 and the SLN was using her Vanguard of the Navy, Fast Attack Craft Squadron, to destroy the LTTE’s littoral fighting capabilities. Frequent confrontations against the LTTE Sea Tiger boats were reported off Mullaitivu, Point Pedro and Velvetiturai areas, where SLN units became victorious in most of these sea battles, except in a few incidents where the SLN lost Fast Attack Craft.

Carl Gustaf recoilless rocket launchers

The intelligence reports confirmed that the LTTE Sea Tigers was using new recoilless rocket launchers against aluminium-hull FACs, and they were deadly at close quarter sea battles, but the exact type of this weapon was not disclosed.

The following incident, which occurred in February 1997, helped confirm the weapon was Carl Gustaf 84 mm Recoilless gun!

DATE: 09TH FEBRUARY, 1997, morning 0600 hrs.

LOCATION: OFF IRANATHIVE.

FACs: P 460 ISRAEL BUILT, COMMANDED BY CDR MANOJ JAYESOORIYA

P 452 CDL BUILT, COMMANDED BY LCDR PM WICKRAMASINGHE (ON TEMPORARY COMMAND. PROPER OIC LCDR N HEENATIGALA)

OPERATED FROM KKS.

CONFRONTED WITH LTTE ATTACK CRAFT POWERED WITH FOUR 250 HP OUT BOARD MOTORS.

TARGET WAS DESTROYED AND ONE LTTE MEMBER WAS CAPTURED.

LEADING MARINE ENGINEERING MECHANIC OF THE FAC CAME UP TO THE BRIDGE CARRYING A PROJECTILE WHICH WAS FIRED BY THE LTTE BOAT, DURING CONFRONTATION, WHICH PENETRATED THROUGH THE FAC’s HULL, AND ENTERED THE OICs CABIN (BETWEEN THE TWO BUNKS) AND HIT THE AUXILIARY ENGINE ROOM DOOR AND HAD FALLEN DOWN WITHOUT EXPLODING. THE ENGINE ROOM DOOR WAS HEAVILY DAMAGED LOOSING THE WATER TIGHT INTEGRITY OF THE FAC.

THE PROJECTILE WAS LATER HANDED OVER TO THE NAVAL WEAPONS EXPERTS WHEN THE FACs RETURNED TO KKS. INVESTIGATIONS REVEALED THE WEAPON USED BY THE ENEMY WAS 84 mm CARL GUSTAF SHOULDER-FIRED RECOILLESS GUN AND THIS PROJECTILE WAS AN ILLUMINATER BOMB OF ONE MILLION CANDLE POWER. BUT THE ATTACKERS HAS FAILED TO REMOVE THE SAFETY PIN, THEREFORE THE BOMB WAS NOT ACTIVATED.

Sea Tigers

Carl Gustaf 84 mm recoilless gun was named after Carl Gustaf Stads Gevärsfaktori, which, initially, produced it. Sweden later developed the 84mm shoulder-fired recoilless gun by the Royal Swedish Army Materiel Administration during the second half of 1940s as a crew served man- portable infantry support gun for close range multi-role anti-armour, anti-personnel, battle field illumination, smoke screening and marking fire.

It is confirmed in Wikipedia that Carl Gustaf Recoilless shoulder-fired guns were used by the only non-state actor in the world – the LTTE – during the final Eelam War.

It is extremely important to check the batch numbers of the recently recovered three launchers to find out where they were produced and other details like how they ended up in Batticaloa, Sri Lanka?

By Admiral Ravindra C. Wijegunaratne
WV, RWP and Bar, RSP, VSV, USP, NI (M) (Pakistan), ndc, psn, Bsc (Hons) (War Studies) (Karachi) MPhil (Madras)
Former Navy Commander and Former Chief of Defence Staff
Former Chairman, Trincomalee Petroleum Terminals Ltd
Former Managing Director Ceylon Petroleum Corporation
Former High Commissioner to Pakistan

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Yellow Beatz … a style similar to K-pop!

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Yes, get ready to vibe with Yellow Beatz, Sri Lanka’s awesome girl group, keen to take Sri Lankan music to the world with a style similar to K-pop!

With high-energy beats and infectious hooks, these talented ladies are here to shake up the music scene.

Think bold moves, catchy hooks, and, of course, spicy versions of old Sinhala hits, and Yellow Beatz is the package you won’t want to miss!

According to a spokesman for the group, Yellow Beatz became a reality during the Covid period … when everyone was stuck at home, in lockdown.

“First we interviewed girls, online, and selected a team that blended well, as four voices, and then started rehearsals. One of the cover songs we recorded, during those early rehearsals, unexpectedly went viral on Facebook. From that moment onward, we continued doing cover songs, and we received a huge response. Through that, we were able to bring back some beautiful Sri Lankan musical creations that were being forgotten, and introduce them to the new generation.”

The team members, I am told, have strong musical skills and with proper training their goal is to become a vocal group recognised around the world.

Believe me, their goal, they say, is not only to take Sri Lanka’s name forward, in the music scene, but to bring home a Grammy Award, as well.

“We truly believe we can achieve this with the love and support of everyone in Sri Lanka.”

The year 2026 is very special for Yellow Beatz as they have received an exceptional opportunity to represent Sri Lanka at the World Championships of Performing Arts in the USA.

Under the guidance of Chris Raththara, the Director for Sri Lanka, and with the blessings of all Sri Lankans, the girls have a great hope that they can win this milestone.

“We believe this will be a moment of great value for us as Yellow Beatz, and also for all Sri Lankans, and it will be an important inspiration for the future of our country.”

Along with all the preparation for the event in the USA, they went on to say they also need to manage their performances, original song recordings, and everything related.

The year 2026 is very special for Yellow Beatz

“We have strong confidence in ourselves and in our sincere intentions, because we are a team that studies music deeply, researches within the field, and works to take the uniqueness of Sri Lankan identity to the world.”

At present, they gather at the Voices Lab Academy, twice a week, for new creations and concert rehearsals.

This project was created by Buddhika Dayarathne who is currently working as a Pop Vocal lecturer at SLTC Campus. Voice Lab Academy is also his own private music academy and Yellow Beatz was formed through that platform.

Buddhika is keen to take Sri Lankan music to the world with a style similar to K-Pop and Yellow Beatz began as a result of that vision. With that same aim, we all work together as one team.

“Although it was a little challenging for the four of us girls to work together at first, we have united for our goal and continue to work very flexibly and with dedication. Our parents and families also give their continuous blessings and support for this project,” Rameesha, Dinushi, Newansa and Risuri said.

Last year, Yellow Beatz released their first original song, ‘Ihirila’ , and with everything happening this year, they are also preparing for their first album.

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