News
Sri Lanka in dilemma over import restrictions removal – Economics don
The government has taken a number of steps to pass the International Monetary Fund (IMF)’s first review of its loan, Prof. Priyanga Dunusinghe, Department of Economics at the Colombo University says.
“The IMF made several recommendations. One of them is increasing the tax revenue of the government. It also wanted the government to make the Central Bank independent and ensure that the state-owned enterprises adhere to cost reflective pricing. The IMF also wanted a strong safety net. Some progress has been made on these fronts,” he said.
Prof. Dunusinghe said the government had already faced tough resistance to those moves.
“Not all goals set by the IMF have been met, but it’s obvious that the government is serious about meeting the targets,” he said.
Prof. Dunusinghe added that Sri Lankans must be proud that the government had repaid the loan taken from Bangladesh in 2022.
However, the decision to remove all import restrictions, apart from those on private vehicles, from October might be premature, he said. There are still restrictions on importing over 600 items, he said.
“We must do a thorough study first to see if we are in a position to do so. I know there is a lot of pressure on the government to lift import restrictions. There is a lot of pressure from the EU. They have opened their markets to us through GSP+, but we have closed our doors to their goods. The IMF is also not a big fan of import restrictions. I personally don’t think we are ready to let go of import restrictions so early,” he said.
“However, we can’t keep import restrictions going on for a long time as well. Sri Lankan products too are being sold to other countries and we need to show reciprocity,” he said.
“Some businesses might import large quantities of items to buffer up stocks. The government must ensure that the rupee is not greatly depreciated. We can control the import of goods through tariffs. We have signed agreements with the World Trade Organization (WTO) that we won’t go beyond certain tariff thresholds. However, there is room for us to operate. We can get rid of import bans, but we can still discourage imports,” he said.
Prof. Dunusinghe also said that politicisation of key institutions was a serious problem for the country as those with political affiliations were not keen on delivering bad news to their political masters.
“Sri Lanka is also talking about giving tax concessions to attract investors. We have tried this since 1977, without much success. We have not addressed what really deters investors, such as policy inconsistencies, corruption, and lack of infrastructure. We just give tax concessions, which are often used by crooks,” he said.
A programme to provide educational equipment to selected university students was held on Thursday (18) morning at the Head Office of the President’s Fund.
During the event, laptop computers were distributed to 14 students selected from applications received through Divisional Secretariat offices across the island. The President’s Fund has allocated Rs. 5.8 million for this initiative.
Accordingly, the President’s Fund has provided educational equipment to approximately 30 university students in 2025 and 2026. More than Rs. 9.8 million has been spent on this programme to date.
The event was attended by Secretary to the President’s Fund and Senior Additional Secretary to the President, Roshan Gamage, along with senior officials of the President’s Fund, parents, and other invitees.
(PMD)
Amidst ongoing accusations that the theft of USD 2.5 mn (nearly 1 bn Rupees) from the Treasury hadn’t been properly investigated, The Island learns that the relevant payments had been made to the actual creditor on the instructions of the Finance Ministry.
Confirming the inquiries made by us, authoritative sources said that payments had been made to several accounts through the US banks. Earlier, Sri Lanka released funds to fake foreign accounts in spite of warnings regarding the suspicions about the process.
The funds were part of a bilateral debt repayment to Australia with a settlement due in September 2025. The payment was part of a $ 22.9 million debt settlement.
The lapses occurred in the wake of far reaching changes regarding the debt management functions. In terms of a particular condition of the International Monetary Fund (IMF), Sri Lanka’s debt management functions that had been previously handled by the Central Bank were transferred to a new institution established under the General Treasury—the Public Debt Management Office (PDMO).
Sources said that regardless of the loss of USD 2.5 mn, Sri Lanka couldn’t have defaulted and therefore payments had been made.
Sources who closely followed the issue said that the government owed an explanation and public apology regarding the loss of USD 2.5 mn and how fresh payments were made.
Sources said that the USD 2.5 mn paid to fake accounts had been lost and could never be traced. CoPF Chairman Dr. Harsha de Silva has said that the NPP government has told the IMF that stolen USD 2.5 mn would be recovered from the public by introducing an amendment to the budget.
By Shamindra Ferdinando
The Court of Appeal yesterday (18) postponed until June 25 the hearing of a petition filed by former Minister Nalin Fernando seeking the dismissal of an indictment brought against him by the Attorney General in connection with the controversial ‘Carrom Boards’ case.
The petition was taken up before a bench comprising Justices P. Kumararatnam and Pradeep Hettiarachchi.
Appearing for the petitioner, President’s Counsel Ali Sabry, instructed by Attorney-at-Law Ramzi Bacha, informed court that Fernando had already been convicted and sentenced to 30 years rigorous imprisonment in a case instituted by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) arising from the same incident.
Counsel argued that the Attorney General had subsequently filed a separate case based on the same set of charges and maintained that subjecting an accused person to a second prosecution for the same offence was contrary to law.
He submitted that preliminary objections on the issue had been raised before the Colombo High Court but were dismissed by the trial judge.
The petitioner has therefore sought a declaration from the Court of Appeal that the indictment filed by the Attorney General is unlawful and requested that the charges be set aside.
The court directed that the matter be called again on June 25, when the Attorney General is expected to present submissions on the petition.
The case stems from allegations that during the 2015 presidential election campaign, 14,000 carrom boards and 11,000 checkers boards were imported and distributed through Lanka Sathosa outlets for allocation to political offices of former President Mahinda Rajapaksa, resulting in an estimated loss of Rs. 39 million to the State.
Based on those allegations, the Attorney General has instituted proceedings against Fernando before the Colombo High Court under the Public Property Act.
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