News
Tissa Vitarana opposes going to IMF at All Party confab
Calls for 50% tax on income between Rs. 400,000 and Rs. 1 million
I am glad that this conference is being held when Sri Lanka is faced with one of the worst economic crises since independence. Before getting onto my speech, I wish to thank the President and Prime Minister for holding this meeting. Further, the presence of members of the Opposition is also welcome. This is a signal of the readiness of the Opposition to cooperate with the Government to overcome the crisis, as one nation.
However, I strongly disagree with the view that both the Government and the Leader of the Opposition hold that the solution lies only through the IMF (International Monetary Fund). The IMF solution will only lead to a further loss of dollars through the unrestricted opening of the economy to more imports and also lead to increased debt due to taking further loans.
It would have been better to have had an earlier meeting of the Government party leaders so that agreement on policy matters could have been reached among ourselves in the Government. I would support the view of the Tamil speaking MP’s that national unity is essential and could be achieved by fully implementing the 13th Amendment to the Constitution.
Due to shortages and high prices of basic essentials, most of them imported, like fuel (oil and gas), medicines and food, life has become a misery for most of the people (perhaps other than the super-rich). The knock on effects e.g. shortage of electricity, have added to the misery. The root cause is the shortage of US dollars (USD). The Foreign Exchange Reserve which was maintained at USD 7-8 Billion has come down to less than USD 1 Billion. This has led to our Fitch Rating dropping to 2C (1C means bankruptcy). The real value of the rupee has dropped from 200 to a dollar, to 285 per dollar. This has led to the non-acceptance of Letters of Credit (LC) from Sri Lanka by foreign suppliers. As a result it is only after payment in dollars that goods are sent from abroad, which means a delay of several months. But due to the shortage of dollars in the country this cannot be done even in time.
A similar crisis occurred during the 1970-75 SLFP/LSSP/CP Coalition Government. With the formation of OPEC, oil prices rose by more than five times and a ton of sugar went up from £ 42 to £ 600. The JVP insurgency damaged the economy and added to the cost to the country.
Dr.N.M.Perera, then Finance Minister, overcame the crisis and raised the Foreign Reserves from USD 1.3 Billion in 1970 to USD 2.7 Billion by 1975, thereby stabilizing the economy and providing sufficient US dollars for our essential imports. He strictly banned non-essential imports thereby reducing the foreign exchange deficit, which is the main cause of the lack of dollars. He encouraged the development of local industry and agriculture.
Since 1977 the UNP came to power with its neoliberal economic policies. These have been operative since then. These were designed by the USA (led by Prof. Friedman of the Chicago School of Economics), to continue to exploit the world’s resources (specially countries of the Third World, like Sri Lanka) to the advantage of the USA and its imperialist allies in the post-colonial era. This open economy, promoted by the WTO (World Trade Organization), which the UNP and its allies in Sri Lanka strongly support, led to unlimited import of luxury and other non-essential goods. The result was that the foreign exchange deficit was at time double the export income.
This ate into our reserves and also led to massive foreign borrowing. Successive Governments, the UNP more than the SLFP, went into both short and long term borrowing, often at a high interest rate. Last year alone Sri Lanka had to pay USD six billion for debt servicing. The question then is how can we pay this amount when our reserves are so low.
The only way out is to get a moratorium from our creditors, that is ask for time to delay the payments for a period of about five years. This would mean for this period we will have USD 30 Billion, to put our economy right and also immediately fund the import of essentials, with the restoration of LCs. This has been done by several countries in the course of past crises. I am told that Argentina and Uruguay among other countries have done so this time too.
Our solution should ensure that we do not increase our debt, a root cause of our problems. This would be the inevitable outcome of turning to the IMF for assistance. Further the IMF policy of unlimited imports would put us into deeper debt.
Concrete measures should be taken to rationalize our import structure. Nearly 25% of our dollars is allocated to the import oil and gas. The latter requirement can be effectively minimized by domestic bio-gas production using cookers produced by the NERD institution. Fuel should be rationed giving priority to public transport. There should be a total ban on non-essential imports. Other selected items should be subject to heavy taxes.
This is a better solution than the issuing of permits, which leads to corruption. Foreign inputs required for industrial production for exports should be permitted. Promotion of science, technology and research for value added industries using local raw material should also be supported.
The tax system should be drastically revised as indicated in Table 1.
As an incentive, company taxes should remain low only for value added industries, that use local or foreign raw materials, especially for export and import substitution. Unfair exploitation of local human and material resources must be minimized, especially for the local market. Incentives must be given for tourism and remittances from abroad. Indirect taxes must be minimized.
The adoption of a floating exchange rate system is a progressive step in the present context. The public and private loss making institutions can be made profitable like in Kerala, India by utilizing the “Solidarity Principle”. Here the ownership of an enterprise is given to the employees and the profit is shared equally among them. Stop taking inflated foreign loans. The above changes should be associated with a wage-price freeze (which led to the success of Roosevelt’s “New Deal”).
The Presidential Secretariat (PS) yesterday said that prison regulations concerning Buddhist monks serving prison sentences were expected to be adopted within the next two weeks.
The PS said: “Once they come into effect, arrangements will be made for Buddhist monks to be taken outside prison in their robes, based on the recommendation of the relevant Nikaya or chapter.”
The process to amend prison regulations was initiated on 08 October following discussions between President Anura Kumara Dissanayake and the Maha Sangha. The President called the meeting amidst controversy over producing General Secretary of Bodu Bala Sena (BBS) Ven. Galagodaaththe Gnanasara in civilian attire in court.
A special five-member Committee was in the process of studying the current regulations and standing orders under the Prisons Ordinance, the PS said.
The Committee is chaired by Prince Senadheera, Secretary to the Ministry of Buddhasasana, Religious and Cultural Affairs. Its other members are Piyumanthi Peiris, Additional Secretary to the Ministry of Justice, Wasantha Ariyaratne, Additional Secretary to the Ministry of Public Administration, R. M. G. Senaratne, Commissioner-General of Buddhist Affairs, and A.C. Gajanayake, Commissioner-General of Prisons.
The first meeting of the special Committee was held at the Presidential Secretariat on the 9th, chaired by Prince Senadheera. Attorney-at-Law Harshana Nanayakkara, Minister of Justice and National Integration, provided the necessary policy guidance for the Committee’s work.
The proposals concerning Buddhist monks would be presented to the Maha Sangha by the middle of next week to obtain their views and recommendations before their implementation, PS stated.
The Communist Party of Sri Lanka (CPSL) has alleged that the ruling UNP, in a ridiculous bid to whitewash illegal US sanctions on Iranian oil carriers stranded off Sri Lanka, has taken on itself the blame for refusing to supply humanitarian aid to the trapped crews of the oil tankers.
The text of the statement issued by Dr. G. Weerasinghe,
General Secretary, CPSL: “The Communist Party of Sri Lanka condemns the attempts by the USA to prevent essential supplies of food and water to the 19-20 Iranian oil tankers stranded off the coast, which are running short of food, fuel, and fresh water. It urges the Government of Sri Lanka to face up to the criminal actions of the US Government and do its duty under international humanitarian law.
On 30 September 2026, the Wall Street Journal reported that US officials had threatened Sri Lanka with sanctions if it continued supplying the tankers. These tankers (stranded about 24 km off Sri Lanka, within the Exclusive Economic Zone) which already discharged their cargoes, are empty and unable to return to Iran owing to the illegal war being waged against that country by the USA and Israel.
In response to this report, on 4 October, Foreign Minister Vijitha Herath denied that Washington put pressure on the Government of Sri Lanka which, he claimed, always abides by international maritime law. However, he clarified that the Government would enforce US sanctions.
A US Embassy spokesman had earlier stated that Washington is working with allies to cut off “illicit Iranian revenue,” warning that supplying fuel, food, or provisions to sanctioned vessels could expose companies and individuals to US sanctions, including civil or criminal penalties.
Furthermore, from 9-11 September, the US Embassy in Colombo carried out a three-day maritime sanctions compliance workshop. Officers of the Sri Lanka Navy and Coastguard, as well as officials of the Ministry of Defence, Central Bank, Ports Authority and Merchant Shipping Secretariat, participated in this workshop. The officials were warned that any services (including fuel, food, or water) rendered to US-sanctioned vessels, such as the Iranian-linked tankers stranded off Sri Lanka’s coast, could expose companies and individuals to secondary sanctions, civil penalties, or criminal liability.
In fact, it is actions of the USA which are illicit. The US-imposed unilateral and secondary sanctions violate international law, sovereign equality, and the principle of non-intervention. Furthermore, the unprovoked US-Israeli aggression against Iran itself, which had shown no belligerent intent, is illegal in international law. Participation of government officers in the workshop itself is controversial.
According to unofficial reports, Sri Lanka’s national security establishment objected to the demands made by US officials and urged the government to lodge a protest with Washington, pointing out that under UNCLOS Article 98, SOLAS 1974, and the SAR Convention 1979, Sri Lanka is obligated to assist the crews.
However, the response of the National People’s Power (NPP) regime has been to attempt to whitewash the illegal actions of the USA and to take on itself the blame for refusing to supply humanitarian aid to the trapped crews of the oil tankers.
The pusillanimous behaviour of the NPP regime rips aside any pretence that it is in any way progressive or patriotic. Together with its major constituent, the Janatha Vimukthi Peramuna (JVP), it stands exposed as the handmaiden of US President Donald Trump’s reckless, warlike and imperialist foreign policy establishment. It begs the question whether the Government has signed secret war-related deals with the USA and thereby ditched Sri Lanka’s 70-year history of non-alignment.
The Communist Party of Sri Lanka, therefore, condemns these illegal attempts by the USA to prevent Sri Lanka from carrying out its humanitarian duty. It calls upon the Government of Sri Lanka to abide by international humanitarian law, work-out suitable strategies and to supply the stranded crews with essential supplies, including food and water. It also calls upon the Government to reveal any secret deals it has entered with the USA.”
An ex-LTTE cadre Sumathipala Suresh Kumar, alias Thavendran ‘Murali’, has told a three-member bench of the Colombo High Court, hearing the disappearance of media personality Prageeth Ekneligoda, that during the war they discussed plans to assassinate President Mahinda Rajapaksa and a group of government people. The alleged meeting took place in Habarana.
The bench consisted of A.G.U.S. N. K. Seneviratne (Chairperson), Dr. Nalin Hewawasam and Lakmali Hewawasam.Kumar said so giving evidence as the fourth witness on behalf of first, second and sixth accused in this case.
Ekneligoda disappeared on the eve of 2010 January 26 presidential election.
Kumar told court that Ekneligoda proposed to fire a missile at an aircraft carrying President Rajapaksa and other top people. There had been another person, identified as Nadan, there.
Asked by the prosecution whether he served as a leader of LTTE intelligence at the time he met Ekneligoda, Kumar said that he was a prisoner at that time. The witness claimed that he had gone with the Army and it was his first visit to that place where the meeting took place.
When the prosecution proposed that what he said was not true, Kumar denied that.
The nine accused are Army officers and men, including Lieutenant Colonel Shammi Arjun Kumararatne. The others are R.M.P.K. Rajapaksa alias Nathan, W.V. Priyantha Dilanjan Upasena alias Suresh, Seneviratne Mudiyanselage Ravindra Rupasena alias Ranji, Yapa Mudiyanselage Chaminda Kumara Abeyratne, Seneviratne Mudiyanselage Kanishka Gunaratne, Aiyasami Balasubramaniyam, Dangaha Gamaralage Tharanga Prasad Gamage and T.E.R. Peiris.
The fourth witness surrendered to the Army in May 2009 and during investigations it transpired that he was used by Military Intelligence to contact Ekneligoda in a bid to ascertain his intention during the presidential polls campaign.
Showers above 75 mm are likely at some places in the Western, Sabaragamuwa, Central, Southern, Uva and North-Western provinces and in Anuradhapura and Mannar districts.
New prison regulations for monks serving jail terms soon: President’s Office
CP alleges NPP has taken the blame for illegal US sanctions on Iranian vessels
Ex-Tiger witness claims Ekneligoda proposed to fire missile at MR’s plane
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