Connect with us

News

Stop excessive money printing to avert a far worse crisis – SJB

Published

on

‘The only way prices can be controlled is not by gazette or emergency rule, but via the market itself’ 

In principle price controls fail, and they create shortages and black markets. The only way prices can be controlled is not by gazette or emergency rule, but via the market itself, says top Samagi Jana Balavegaya spokesman and economist Dr. Harsha de Silva.

Issuing a statement in the wake of the government doing away with price control, Dr. de Silva has said: “To do so, the reason why prices are increasing must be determined. Is it a temporary increase due to a supply shortage, say a drought or flood or is it because aggregate demand has increased due to increased money supply? The answer will depend on what is causing prices to rise.

“In the case of Sri Lanka, the massive expansion of money is the cause for continuous increase in prices or inflation. This is the reason for the rapid depreciation of the currency as well. The only short-term solution to reduce this excessive rate of money growth is to stop excessive money printing. If monetary accommodation is continued inflation could turn into hyperinflation and further depreciation of the currency leading to serious social unrest.

“However, the reality is that much of the population cannot bear the increasing costs. It is not a secret that middle-class families have had to cut down on expenses. The situation among the low-income families is a lot worse. People have had to give up meals. It is the responsibility of the government to ensure people don’t starve due to the total mess up of the economy by the politicized Central Bank that continuously ran its printing press a la modern monetary theory that was bound to fail. It is imperative that an income support mechanism be implemented for the most vulnerable immediately. This can be implemented via the Samurdhi scheme even though it is nowhere near ideal.

“Beyond the short term and in a more stable macroeconomic environment, we need to be more productive. For instance, accurate information on weather, better use of technology, application of right amounts of fertiliser, efficient storage and logistics would help improve the supply of agricultural produce. Similarly, the productivity must increase in manufacturing and services.

“In the meantime, the government must correct market failures by appropriate regulation to foster competition in the market. Take for instance the rice market. While there is more than enough paddy harvested there is a huge shortage of rice. That is because the rice manufacturing market has been captured by a few big millers and competition has been wiped out. The way to correct that market failure is to empower the hundreds of SME rice millers by providing them working capital and get their supply into the market. Instead, the government has now decided to import rice to control the prices. This wrong policy will make the problem worse, from market failure to government failure. When imports are stopped, all the SME millers would be out of business the big players will completely dominate the market.

“The SJB believes in a social market economy where competition will be encouraged with necessary amount of regulation to maintain a stable market. We will ensure that all parties to a transaction, the firm or the investor, the worker or the farmer and the regulator or government would together arrive at sustainable equilibrium so that longer term growth with equity could be maintained. However, given that the economy is in such dire straits, the truth must be told to the public that there is no free lunch and we as a nation will have no option but to work hard to a plan. And that plan will call for significant economic reforms and integrating Sri Lanka with global production networks. The resulting export-led growth, as opposed to the current import-substitution led growth, would significantly elevate living standards of our people while allowing for sufficient funding to provide safety nets for those in need.”



Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest News

Commander of the Navy pays courtesy call on Speaker of the Parliament

Published

on

By

The Commander of the Navy, Vice Admiral Damian Fernando paid a courtesy call on the Speaker of the Parliament, Dr Jagath Wickramaratne at the Office of the  Speaker, today (7 July
2026).

The meeting marked the Commander of the Navy’s first official interaction with the Speaker following his assumption of command of the Sri Lanka Navy. During the cordial discussion, they exchanged views on the Navy’s role in matters of national importance.

The formal meeting drew to a close with an exchange of mementoes, signifying the importance of the occasion.

Continue Reading

News

Prison mayhem leaves at least 26 dead; five officers killed in revenge violence

Published

on

Police and STF personnel rushing an injured prison officer to an ambulance after yesterday’s clash at the Negombo Prison.

At least 26 people, including five prison officers and 20 inmates, have been confirmed dead following violent unrest at Negombo Prison, hospital sources said yesterday, as authorities struggled to restore full control over the facility.

According to unconfirmed reports the prison officers were killed by rioters yesterday morning,  in retaliation, and weapons carried by those officers were grabbed by them.

Negombo General Hospital Director Consultant Dr. Pushpa Gamlath said nearly 100 injured persons had been admitted, following the clashes, and eight of the critically wounded had been transferred to the National Hospital, in Colombo, for further treatment.

The violence, which initially broke out on Sunday (5) between remand prisoners and convicted inmates, left two inmates dead and 38 others injured before being temporarily brought under control.

However, tensions flared again on Monday (6), with prison officials reporting renewed unrest inside the facility despite earlier assurances that the situation had stabilised.

Police said the initial confrontation was triggered by a dispute linked to the exposure of an alleged drug trafficking network, operating within the prison, and was reportedly orchestrated by a drug trafficker, identified as Suresh, who is said to have links to an underworld figure known as ‘Booru Moona’.

The violence rapidly escalated, with female inmates staging a protest on the Prison roof in support of those involved in the clashes, while relatives gathered outside demanding information on detainees. Police later facilitated visits for selected family members to hospitalised inmates.

The Negombo Prison, which houses around 1,800 remand and convicted inmates, descended into widespread disorder as rival groups clashed, with reports indicating that the violence later spread beyond the initial confrontation.

Authorities said rioting inmates had allegedly seized firearms during the renewed unrest on Monday, prompting heightened security measures.

The Sri Lanka Air Force deployed drones for aerial surveillance and a Bell 412 helicopter to monitor the situation, while additional military personnel were sent to reinforce security around the prison.

Prisons Department spokesperson A.C. Gajanayake said a special investigation team had been appointed, under the direction of the Commissioner General of Prisons, to probe the incident, while a separate police investigation is also underway.

Justice Minister Harshana Nanayakkara told The Island that he had called for a detailed report on the disturbances.

By Norman Palihawadane

Continue Reading

News

Cleaner, cheaper electricity gathers momentum with rapid progress in 50 MW Mannar wind power project

Published

on

Sri Lanka’s drive towards cleaner and cheaper electricity gathered fresh momentum with the reported rapid progress in the 50 MW Mannar Wind Power Project, which is expected to produce the lowest-cost wind-generated electricity in the country’s history while saving billions of rupees in annual fuel imports.

The Ministry of Energy announced that the first wind turbine for the project had already arrived in the country, while the remaining turbine components have reached the Port of Trincomalee and are currently being unloaded, signalling a major milestone in the construction of one of the country’s key renewable energy ventures.

The project, inaugurated by President Anura Kumara Dissanayake, in January this year, is expected to become a cornerstone of the government’s strategy to transform Sri Lanka’s electricity sector by expanding renewable energy generation and reducing dependence on imported fossil fuels.

According to the Ministry, electricity generated by the Mannar wind farm will be purchased at USD 0.0465 (approximately Rs. 14.37) per unit, making it the lowest tariff ever secured for wind-generated electricity in Sri Lanka.

Energy experts say the competitive tariff demonstrates the growing economic viability of renewable energy and could help stabilise future electricity prices.

The Ministry also estimates that once the wind farm is connected to the national grid, Sri Lanka will save approximately Rs. 4.7 billion annually by reducing the import of fossil fuels required for thermal power generation, easing pressure on the country’s foreign exchange reserves.

The Mannar project is expected to support the government’s ambition of substantially increasing the contribution of renewable energy to the national electricity mix, by 2030, while helping Sri Lanka move towards its long-term goal of achieving net-zero carbon emissions by 2050.

Hayleys Fentons PLC, selected through an international competitive bidding process, is responsible for the installation and maintenance of the wind turbines.

The National System Operator (NSO), operating under the Ministry of Energy, will oversee the integration and management of electricity generated by the project within the national grid.

By Ifham Nizam

Continue Reading

Trending