Connect with us


The beginning of the end for the regime, but no new beginning for the country



by Rajan Philips

The countrywide people’s protests and the November 16 Colombo political protest have made one thing clear. The Rajapaksa brand is now irreparably damaged in the Sri Lankan political market. The regime is not going to fall tomorrow. The 160/60 budget vote in parliament proves that. For all the turmoil in the country, the Opposition Leaders cannot make all their MPs vote against the government on a budget that everyone is laughing about. But there is no mistaking the beginning of the end for the Rajapaksa hold on state power. The fall will be softened if the end and the exit are democratic and constitutional. It will turn hard and violent if extra-constitutional methods are unwisely deployed to stay in power by putting down protests. Such methods are foredoomed to fail in the end. The fury of the people is unmistakable and unstoppable. And in Sri Lanka’s social formations with myriads of kinship and old-school ties, the soldiers are more socialized than the state is militarized. Military-led Task Forces notwithstanding!

At the same time, the beginning of the end for the Rajapaksas is not automatically the start of a new beginning for the country. The prospects of the decline and fall of the Rajapaksa dynasty have triggered prognostications about who is best positioned to pick up the reins after the newest dynasty fall. In particular, the Colombo protest rally defying all attempts by the government to scuttle it, has inspired a flurry of commentaries and predictions on the political fortunes of Sajith Premadasa. In fact, the commentaries about him, be they for or against, are more cutting and colorful than what the man himself has to say about himself or his politics.

Contenders and Pretenders

Of all the opposition detractors of the regime, Mr. Premadasa has the largest parliamentary contingent and electoral following. But he is yet to make a convincing impact on the people about his own self-belief and political intentions. Among other contenders, if not pretenders, Champika Ranawaka is by far the biggest self-believer in his own qualifications, credentials, and even destiny, to become President – one day. But he also has the thinnest of a political base or presidential launch pad. The JVP/NPP leader Anura Kumara Dissanayake has been consistently scoring high marks among seasoned political observers and politically sensitized middle classes – including those who would rather have him not say anything about socialism. Recently, he has even exorcised the JVP of its 1980s (second coming) past. How that will reward the JVP in an election is still a known unknown.

Speculations and contentions are rife about who should/would take the lead in the emerging vacuum and how ‘new’ alliances are likely to be formed. There is something common about these speculations, and it is also the same thing that is missing from them. More often than not, speculations are predicated on past political experiences, on one or more versions and interpretations of past experiences. This is inevitable in political commentary and analysis. You look (longitudinally) to the past for comparison, and/or (cross-sectionally) to other societies for similarities and differences. But at times, past comparisons are becoming ‘period narratives’ of historical parallels, akin to period (historical) dramas in television entertainment.

What seems to be getting missed, or not sufficiently emphasized, is the specific set of current circumstances in Sri Lanka. Some of them are even unique, either when looked back to the past, or looked across among other societies. Apart from commentators, and among frontline political leaders, only Anura Kumara Dissanayake and Champika Ranawaka come anywhere close to formulating anything substantial in interpreting the current situation and suggesting a response to it. This is quite different from the 1950s and 1960s when Sri Lanka’s parliament dominated the national discourses on politics, political economy, and yes, the constitution. The Hansard then was the go-to reference book for academics and journalists. Now, what is produced in parliament might be too toxic to qualify even for the President’s organic fertilizer specifications. And the challenges facing parliament and the country are far more daunting than what they were facing then.

Even as parallels go, it would be a stretch to see parallels between now and say 1964 or 1970, if not 1977. When a Political Scientist contrived a parallel between SWRD Bandaranaike’s electoral defeat in 1952 and Sajith Premadasa’s in 2019, an Emeritus Engineering Professor dismissed it as trying to find parallels between skew lines in 3-D space! Inasmuch as we are discussing the displacement of the Rajapaksa alliance potentially by a new alliance led by Sajith Premadasa, it is possible to see some similarities between 1994 regime change and what might happen as the final act in the current scenario. There are also significant differences.

1994 and 2021

In 1994, the UNP government after 17 years in power was long past toppling time. The UNP had accomplished many significant feats – a new constitution, the open economy, accelerated Mahaweli development, countrywide housing schemes, Test Cricket status etc. Many of them were controversial, not all of them beneficial, and some of them patently harmful. After 1994, the SLFP, its offshoots and their allies have been in power for 27 years, but with a clear internal break that came about in 2005. For eleven years between 1994 and 2005, it was Chandrika Kumaratunga who was at the helm, and she has been the only President in 43 years of the presidential system, to serve two full elected terms and retire in accordance with JRJ’s Constitution.

From 2005 to the present, it has been the Rajapaksa dynasty, and if President Gotabaya Rajapaksa were to serve out his full term till 2024/25, the dynasty would have lasted a full twenty years, including the five-year yahapalana interregnum. In fairness, this is only President GR’s second year of his first term. But he has come at the tail end of a tired family tenure. And although his admirers have been expecting him to magically rejuvenate the family, its power and, as a side effect, even the country, President Rajapaksa is presiding over withering family power and a suffering country. As in 1994, it is getting to be past toppling time. But there is a difference. There is no People’s Alliance or anything that can be seen as a parallel.

What is crucially missing is not the absence of a figure like Chandrika Kumaratunga who was seized by charisma in 1994 and led the PA to spectacular victories. What is crucial in missing is the groundswell of politics that sustained the People’s Alliance as a movement and energized its electoral machinery at every level and in every corner in the country. In his “Analysis of the Southern Provincial Council Election in 1994,” W. A. Wisva Warnapala recounts this dynamic and its effects in the South. They were successfully carried over to the presidential and the parliamentary election campaigns later that same year. There is no denying that President Kumaratunga’s achievements in office equally spectacularly fell short of her campaign promises. That disappointment 20 years ago raises key questions for the campaigns of today.

On the one hand, the organizational strength of the PA is not there today. On the other, all the institutional and individual factors that led to President Kumaratunga’s failures are abundantly present and even multiplied today. And the challenges facing the government and the country today are far more severe than they have been for any previous government. What is unique to today’s circumstances is the anger of the people against the government, against its incompetence and its insensitivity. The government is on the ropes because of the people’s anger and their spontaneous protests. If the government’s impending fall is a given, what cannot be taken for granted is that those who replace the Rajapaksas will govern differently and start a new beginning for the country.

Let us take the three factors differentiating 1994 from today – organizational strength in the campaign; institutional and individual failings in government; and new challenges facing the government and the country. In building up its organizational strength, the PA benefited from the fact that its constituent parties have been out of government for 17 years, and from the presence of new faces among its frontline leaders. Neither is the case today. There are no new faces today. And the current opposition parties are tarnished by their association with the betrayals and blunders of the Yahapalana administration.

The Yahapalana experience also seems to be making it difficult for the opposition parties and leaders to work towards a new alliance. These shortcomings, even if an SJB-led alliance were to come to power eventually in one or the other of the next elections, will fuse with the overall institutional failings within the state apparatus and make a new government to be no different from the current government, or its immediate predecessors. It will be, as the Yogi Berra saying goes, “Deja vu all over again”!

Fundamentally, nothing will change until political parties stop behaving as if they are in the pre-1977 political system. As I have been arguing recently, there have to be changes in how political parties operate, how they nominate candidates for elections, and once elected how parties and MPs work together constructively in parliament. Simply put, nothing is going to work if political parties and parliamentarians are not prepared to work together between elections. In the current situation, this work should be started in the current parliament by opposition MPs before the next elections, if they are honest and serious about governing differently after the elections. Although Sri Lanka is world apart from Germany in political ethos and culture, it will be instructive for any serious Sri Lankan MP to look at recent developments in Germany.

After 16 years, Angela Merkel and her centre-right Christian Democrats are being replaced in government by a new ‘traffic-light coalition’ led by the centre-left Social Democratic Party (red), and including the environmental Greens (green) and the business-friendly Federal Democratic Party (amber). The process of coalition forming went on for two months since the elections on September 26, to strike a governing agreement running into 177 pages. The agreement, reportedly based on firm continuity and bold changes, will be presented for ratification by the general membership of the three parties before the new government can assume office. This is expected to be in the second week of December. No one rushed, and no one wanted more power, a new amendment, or a new constitution.

In 1994, the People’s Alliance campaigned promising a new constitution and the abolishing of the executive presidency. Today, the present government is insisting on producing a new constitution drafted by an outside Committee of Experts. The government has not explained why a new constitution is needed if it is going to retain the existing presidential system. The real question is if this government, given its record so far on everything it has touched, can be trusted with the task of producing a new constitution.

Even informed constitutional observers seem to be missing this danger. The opposition parties have not pro-actively challenged the need for a new constitution. Instead, they seem to be waiting to react to the government’s unilateral draft when it is presented in parliament for adoption. What is needed is not a new constitution, but changes to election laws which may require amendments to the constitution. The opposition parties must push for new election laws even though their leading lights have not much credibility left after their pathetic record in the yahapalana government.

As for the new challenges facing the country, public health, public finance, economic hardships and climate change effects are new problems that were not there even five years ago – on the current scale and with potential to get worse. The present government has clearly demonstrated that it does not have the wherewithal to deal with them. For that, the people have turned against the government. The opposition parties can take advantage of the people’s anger against the government. But what do they have to show as alternative approaches before they get their turn to govern? Until this question is answered there will be no start of a new beginning for the country. Only the beginning of the end for the old regime.

Continue Reading
Click to comment

Leave a Reply

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


Singarasa Case should guide GoSL’s Geneva policy



BY Dharshan Weerasekera

In 2005, the Sri Lankan Supreme Court ruled in the seminal case Singarasa v. Attorney General (SC/SPLA/182/99) that the U.N. Human Rights Commission (the predecessor of today’s U.N. Human Rights Council) did not have jurisdiction, within Sri Lanka, to make recommendations on behalf of the petitioner. In doing so, the court decided that Sri Lanka’s accession to the optional protocol to the International Covenant on Civil and Political Rights (ICCPR) in 1997 had been done in a manner contrary to the Constitution, and hence illegal.

This case has invaluable lessons to teach in regard to the present government’s ‘Geneva Policy.’ By ‘Geneva Policy,’ I mean the government’s stance to the UNHRC’s follow-up resolutions to Sri Lanka’s unilateral withdrawal, in March 2020, from the co-sponsorship of Resolution 30/1 of October 2015. In response, the Council adopted Resolution Resolution than 30/1. Among other things, it establishes an evidence-gathering mechanism to collect evidence of war crimes and other crimes against Sri Lankans.

Meanwhile, in September 2022, the High Commissioner released a report on Sri Lanka’s progress in implementing the recommendations of Resolution 46/1. The government has officially rejected both, Resolution 46/1 and the High Commissioner’s report, on grounds that they were done without Sri Lanka’s consent and, therefore, contrary to the founding principles of the Council. (See A/HRC/51/G/1, paras 1.1, 1.2). However, the Foreign Ministry, in its response, lists various things that the government is doing to comply with Resolution 46/1.

I argue that the government, continuing to comply with the Resolution while, at the same time, rejecting it in principle, without first obtaining a definitive interpretation of the relevant legal position, from an international forum, or even the Sri Lankan Supreme Court, creates a dangerous precedent. Given the fact that state practice is one of the sources of customary international law, the government’s conduct has the potential to do irreparable harm to the long-term interests of the country.

Unfortunately, there is little, or no, discussion of these issues in local newspapers, and academic journals, and it is in the public interest to start one. In this article, I shall discuss: i) the facts and reasoning of the Singarasa judgment, ii) the High Commissioner’s report and the government’s reply, iii) assess of the government’s position, and draw the relevant conclusions.

The Singarasa case

In 1991, the High Court of Colombo convicted Singarasa of five charges, under the Prevention of Terrorism Act. The charges dealt with alleged attempts by Singarasa, and others, to attack the Army camps,in Jaffna and its suburbs. Singarasa appealed against the conviction to the Court of Appeal and then the Supreme Court. He also complained to the U.N. Human Rights Commission. The HRC could entertain petitions under the Optional Protocol to ICCPR. Sri Lanka had ratified the ICCPR, in 1980, and acceded to the protocol, in 1997. The HRC said that, Sri Lanka was under obligation to release Singarasa.

The main issue, in this case, is whether Sri Lanka’s accession to the ICCPR, and the related protocol, gives a right to an international body to intervene in the domestic sphere to determine Singarasa’s fate. The court answers ‘no,’ because of the following reasons. The court starts with the premise that the authority for the President to enter into international agreements comes from Article 33(f) of the Constitution. Article 33(f) states: “To do all such acts as, not being inconsistent with the provisions of the Constitution…he is required or authorized to do.” It follows that the President cannot agree to anything inconsistent with the Constitution.

The court then assesses the signing of the ICCPR, in 1980, and the subsequent accession to the optional protocol, in 1997, separately. The court points out that the ICCPR requires that the respective signatories adopt domestic legislation to implement the provisions of the covenant. This does not conflict with our Constitution and hence is lawful.

However, when acceding to the optional protocol, the government had issued a declaration that envisioned that the rights of Sri Lankan citizens could be adjudicated in tribunals, and forums, outside this country. The court points out that the institutions, through which Sri Lankans can vindicate their rights, within this country, are exhaustively set out in Article 105 of the Constitution, and the HRC is not one of them. Therefore, the court deems the accession to the optional protocol illegal. The court states:

“Where the President enters into a treaty or accedes to a covenant the content of which is inconsistent with the provisions of the Constitution or written law it would be a transgression of the limitation in Article 33 (f) and ultra vires—such acts of the President would not bind the Republic qua State.” (p. 11)

The High Commissioner’s report and the Government’s reply

The most disturbing aspect of the High Commissioner’s report is its description of the progress made by the impugned evidence-gathering mechanism. It states: “OHCHR continues to develop the information and evidence repository using an e-discovery platform….OHCHR commenced identifying material held by other actors and engaging with information providers. To date, the databases of two organisations have been migrated into the repository, and negotiations with other information providers are ongoing.” ((A/HRC/51/5, 4th October 2022, para 54.)

The report also details what the OHCHR plans to do with this information. It says: “To develop possible strategies for future accountability processes, the project team started mapping potential accountability process at international level, including through consultations with relevant stakeholders, in particular national authorities, victims and civil society organisations.” (para 56.)

In sum, it is clear that a vast operation is underway, not just to collect evidence against Sri Lanka but to set the groundwork to help prosecute Sri Lankans before various national and international forums. To the best of my knowledge, the founding statutes of the UNHRC, as well as the OHCHR, do not give enforcement capabilities to these institutions to prosecute or assist in the prosecution of people for violations of human rights and other offences.

Their respective mandates to protect and promote human rights are to be carried out with the consent of all nations concerned and in a spirit of “cooperation and constructive international dialogue.” Therefore, through the impugned mechanism the OHCHR has now arguably expanded its mandate to include an enforcement component, seemingly without any debate or discussion of the matter before the Council.

To turn to the government’s response, in the introductory paragraphs of the said document, the government rejects both resolution 46/1 as well as the High Commissioner’s report on grounds that they violate the UN’s founding principles. However, for much of the remainder of the report (which runs to 16 pages) the government enumerates the various things it has been doing to implement various provisions of the resolutions. For instance, the government discusses the work being done under the Office on Missing Persons, Office for Reparations, and so on.

On the OMP, the report states inter alia: “The OMP conducted panels of inquiries as part of the verification process. More than 89% of persons (1207 of 1370 applicants invited for inquiries) met with members of the panel and their testimonials were recorded.” (A/HRC/51/G/1, 9th September 2022, para 46)

Meanwhile, on the Office for Reparations, the report says, “The office processed 5964 claims for payment, by the end of 2021, and paid a sum of Rs. 399.8 million in settlement, out of the allocated sum of Rs. 800 million….Upto the end of 2022, the OR received Rs. 226 million to pay compensation and 2097 claims were settled utilizing Rs. 153 million.” (para 56)

In sum, even though the government has nominally rejected resolution 46/1 and by extension resolution 30/1 as well, the government is expending great energy, including enormous sums of money, to comply with various provisions of those resolutions.

Assessment of the policy

The Singarasa case establishes that the President, when conducting foreign policy, is exercising the power conferred under Article 33 (f) of the Constitution. One cannot suppose that it is consistent with the Constitution to comply with the provisions of a resolution that the Government itself considers to be in violation of the founding principles of the UNHRC.

Admittedly, a resolution of the UNHRC does not rise to the level of a treaty or covenant. However, there should now be a serious debate in this country about whether the reasoning above should apply to such resolutions which continue to target Sri Lanka on the world stage.

Furthermore, if, as I have suggested, the OHCHR has expanded its mandate by exploiting the provisions of Resolution 46/1 to acquire capabilities that were never envisioned in the relevant founding statutes, permitting such conduct to continue has the potential to set precedents in customary international law, with grave consequences for Sri Lanka, as well as other nations.

Therefore, Sri Lankan citizens are entitled to know the legal basis for the government’s continued compliance with provisions of Resolution 46/1, while nominally rejecting the Resolution. The only institution that can provide a legal opinion binding on the government is the Supreme Court. The President has the capacity, under Article 129 of the Constitution, to request an advisory opinion of the Supreme Court on any matter of public importance.

In these circumstances, it is incumbent on the government to seek an advisory opinion as to whether it is lawful for the government to continue complying with provisions of Resolution 46/1 unless and until the UNHRC clarifies its position in regard to the impugned mechanism.


It is in the interest of all Sri Lankans to keep a close eye on what the government is presently doing in Geneva. There is a famous legal maxim that says, “The laws assist the vigilant, not the sleepy.” Ultimately, it is the Sri Lankan people who will pay the price for any mistakes or missteps that successive governments make in regard to their “Geneva Policy.’

(The writer is an Attorney-at-Law)

Continue Reading


Human Papillomavirus vaccine: one that can prevent a cancer



This article has been written as a fervent plea to the parents of little girls of the eligible age group. Please make sure that your precious daughters get this vaccine. It will be an investment for their happiness in the future.

By Dr B. J. C. Perera

All vaccines by definition are substances that are used to stimulate immunity against a particular infectious disease or a specific causative organism. Such vaccines are used to prevent the occurrence of the said diseases in humans and animals. Several vaccines have been introduced to combat such infectious diseases over the last few decades. In some countries, the use of some of these vaccines has led to the elimination of dreaded diseases like Diphtheria, Tetanus, Whooping Cough or Pertussis, Polio, Measles, German Measles or Rubella, just to name a few.

Sri Lanka has a very efficient and inherently equitable system that looks after the Expanded Programme of Immunisation (EPI) for children and young people. In general, we have been extremely successful in this programme and can boast of over 90 per cent coverage for the vaccination of all children. We have successfully eliminated polio, the last case being confirmed as far back as 1993, and we are free of diphtheria, tetanus, measles and German measles or rubella. The success of the EPI is due to many factors that include government commitment, the unstinted dedication of parents, the promotion of the programme through all media channels and the dedicated work of all grades of healthcare personnel. The very high literacy rate of the populace of our country enables all information regarding vaccination to be most conveniently conveyed to the population. Sri Lanka has been hailed as a country that has achieved so much in this field, but with so few resources. It has been cited as a model to the entire Asian region as well as even the world.

In addition to their undoubted effectiveness in protecting against infective microorganisms, some of these vaccines have other bonus effects. At least two of the vaccines in use today have telling effects in preventing certain cancers. One is the Hepatitis B vaccine. It provides protection against liver cancer. The other is the more recent Human Papillomavirus vaccine (HPV vaccine) which protects females against cancer of the neck of the womb, which is also referred to as the cervix of the womb. That disease is generally referred to as Cervical Cancer.

The Human Papillomavirus (HPV) is sexually transmitted and most people become infected sometime during their lifetime. In the majority, it is soon after becoming sexually active. Most infections are asymptomatic and usually clear up spontaneously, accounting for remission in 90% within two years. Only 10% of persistent HPV infections with certain genotypes of HPV can persist and progress to changes in the cervix. If infection from cancer-causing HPV types persists over 10-15 years, women can go on to develop precancerous lesions that, if left untreated, develop into cervical cancer. This process takes an average of 20-30 years from infection to the development of cervical cancer.

In 1995, Dr Anne Szarewski, a renowned researcher from the United Kingdom, led a team who outlined the role of human papillomavirus in uterine cervical cancer detection and screening. Then the researchers began work on an HPV vaccine. Szarewski was also a chief investigator, principal investigator and author of key HPV vaccine trials and publications, who helped to develop the bivalent HPV vaccine. The word bivalent is used to indicate that it contains two strains of HPV. HPV infections are very common, often with minimal symptoms, but high-risk HPV strains can go on to cause other medical conditions, particularly cervical cancer.

In 2006, the first vaccine for Human Papillomavirus (HPV) to be used globally was approved. HPV vaccination has now gone on to become a key part of the effort to eliminate cervical cancer. According to the available research results, HPV vaccination could reduce the lifetime risk of cervical cancer by 35–80%; the rather wide range being due to several studies with different methods. The vaccine was initially promptly snapped up in the West, especially in the Scandinavian countries. In Sweden, the coverage of the vaccine is over 80 per cent. However, according to the data put out by the World Health Organization (WHO) in November 2022, the human papillomavirus vaccine against cervical cancer has been introduced in just 41 per cent of low-income countries, even though they represent much of the disease burden, compared to 83% of high-income countries. We have a set of 10-year data on the benefits of the vaccine and in certain Western countries, a significant drop in the morbidity and mortality rates of cervical cancer is already evident.

In Sri Lanka, the National Vaccine Summit in January 2015 recommended the usage of the HPV vaccine and the government introduced it in 2017 for girls within the age range of 10 to 13 years. That age group was decided on the premise that to get the best results, we need to introduce the vaccine before sexual activity starts. The vaccine was to be administered to the selected age groups in the schools free of charge and in the fee-levying private sector. To date, the vaccine is not available through the Immunisation Clinics of the Provinces and the MOH Clinics.

NOW HERE IS THE REAL CRUX OF THE MATTER. For a variety of reasons, the coverage of the HPV vaccine in the entire cohort of eligible girls in Sri Lanka is somewhere between 30 and 40 per cent. This is woefully inadequate coverage to get the best possible results, especially when looked upon in the light of over 90 per cent coverage of the other vaccines in the National Expanded Programme of Immunisation. Cervical cancer ranks among the five commonest cancers in women in Sri Lanka. HPV vaccine is just one of two vaccines that can prevent cancers. All children have had the Hepatitis B vaccine which protects against liver cancer, as it is given through the National Programme of Immunisation. But, and this is a BIG BUT, the only other vaccine, the HPV vaccine that can prevent cervical cancer, shows a rather low uptake.

We do need to escalate the uptake rate of the HPV vaccine to at least around 80 per cent to get reasonable benefits in the reduction of the morbidity and mortality that is currently seen in cervical cancer. I think we have to admit that due to very many reasons, the message has not gone through to the general population in the country. When inquiries are made from the mothers of eligible girls, the vast majority of them are not even aware of the existence of this vaccine and more importantly, the future beneficial potential of this endeavour. The age group selected is a rather tricky cohort. They get upset at the drop of a hat. The last thing they want is an injection. They will run away, as fast as possible, to avoid it. Some are so frightened that it is not uncommon to see them faint even at the sight of the syringe and the needle. One way of getting the cooperation of these little girls is to allow either the mother or the father to be present to hold her hand most reassuringly when the vaccine is administered. An additional initiative would be to make it widely available through the Immunisation Clinics for it to be administered to all those who have missed it when it was given in the school. This is particularly important as the vaccine is quite expensive when administered in the private sector.

Continue Reading


Latest position on debt restructuring process



By Jayampathy Molligoda

According to the announcement made by the Managing Director of the IMF Kristalina Georgieva, the IMF Executive board meeting will be held on 20 March to consider and hopefully approve the EFF arrangement for Sri Lanka. In the meantime, the Ministry of Finance and the Central Bank in consultation with IMF have finalised the latest position of Sri Lanka’s Public Debt as at end 2022 just prior to commencement of debt restructuring negotiations with creditors. Having perused the document uploaded to the Ministry of Finance (MOF website) recently, which is a comprehensive summary of debt stock as at end 2022, I have tabulated the summary of the main facts and figures (See Table). As can be seen, the total public debt stock has skyrocketed to US $ 83.6 billion, which includes total foreign debt of US$ 45.6 billion and the local debt of 38 billion in US $ equivalent. The total debt as a % of GDP as stated in the above MOF doc is 128%. The public debt is expected be reduced to 100% of GDP in order to ensure debt sustainability in line with IMF supported program parameters coupled with ‘comparability of treatment principle’ whilst ensuring equitable burden sharing for all restructured debt.

However, I have my doubts about GDP computation here. As per the MOF doc page 1, the Nominal GDP was stated as Rs. 23.7 trillion for the year 2022. The $ exchange rate used for conversion as Rs.363.10 clearly indicating that it is the year end figure, they have taken the year end Exchange rate of Rs 363.10 per US$. It is pertinent to ask the question as to why ‘year- end exchange rate’ figure to convert our annual GDP in rupee to US dollars? It should have been the ‘average exchange rate’ as in the past so many years computed by CBSL. As a result, the GDP (in US$ terms) works out to US$ 65.2 billion only. That’s why the total public debt stock of US$ 83.6 billion works out to 128% of GDP – my initial query is; why did they take year-end figure of Rs363.10 instead of taking the average exchange rate?

Besides, the real critical issue is how to reduce the debt stock to a level of 100% of GDP in the context of declining GDP (- 7.8% in 2022) and on the other hand, our debt stock is on the rise. More importantly, if we take the total ‘multilateral debt’ out, then the foreign debt is US $ 34 billion only, which includes ISBs and bilateral loans. Assuming a higher ‘haircut’ of 33% for foreign debt is agreed upon, it works out to 11 billion thus reducing the total public debt to 73 billion only.

In this regard, The President in his latest open letter dated 14 March ‘23 to Sri Lanka’s official Bilateral creditors has clearly indicated that there will be equitable treatment of burden sharing in respect of all creditors (except IMF/WB/ADB) Quote; ” ..we reiterate our commitment to a comparable treatment of all our external creditors with a view to ensuring all round equitable burden sharing for all restructured debt. To that end, we will not conclude debt treatment agreements with any official bilateral creditor or any commercial creditors or any group of such creditors on terms more favourable than those agreed. …To this end we also confirm that we have not and we will not make any side agreements with any creditor aimed at reducing the debt treatment impact on that creditor.”

In the circumstances, my own view is we are reluctantly compelled to restructure local debt i.e.; TBs and, it is inevitable that the local debt of USD equivalent of 38 billion would also need to be taken into consideration for debt restructuring – otherwise there is no way of reducing the total public debt stock to the level that is required as per IMF conditions. This would create a serious issue for our ‘finance system stability’ and all our commercial banks will be in trouble. Further the deposit holders including pension funds are badly affected. The temperature of social unrest is brought closer to the boiling point.

As stated in the global research article by Jonathan Manz recently, former Chief Economist and Senior Vice President of the World Bank, and Nobel Prize winner, Joseph Stiglitz, has slammed the IMF for unleashing riots on nations the IMF is dealing with; he has pointed out that the riots are written into the IMF plan to force nations to agree with the average 111 conditions laid down by the IMF and they destroy a country’s democracy and independence. He has been a critique of IMF causing great damage to countries through the economic policies it has prescribed countries to follow in order to qualify for IMF loans. However, neither Stiglitz nor any other eminent economist has yet to come out with a practical and alternative policy framework to overcome the most serious economic and financial crisis faced in the 75 years of Sri Lanka’s independence.

Continue Reading