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Tissa Vitarana opposes going to IMF at All Party confab

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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”).



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Wimal asks for PSC probe into top officials’ complicity in violence

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Colombo HC lawyers concerned over shocking developments

By Shamindra Ferdinando

National Freedom Front (NFF) leader Wimal Weerawansa, MP, says a Parliamentary Select Committee (PSC) should be appointed to investigate the role played by IGP C.D. Wickremaratne and Public Security Ministry Secretary Maj. Gen. (retd.) Jagath Alwis in the recent SLPP hothead attack on those demanding the resignation of President Gotabaya Rajapaksa and the Cabinet of Ministers, including Mahinda Rajapaksa.

Weerawansa yesterday (18) told The Island that Parliament should inquire into the unprovoked attack that triggered an extremely violent response by the public as well as those awaiting an opportunity to unleash violence on selected group of lawmakers on 09 May.

The former Industries Minister said he was confident that Attorney General Sanjay Rajaratnam, PC, would look into the issues at hand.

Responding to another query, Weerawansa said that Senior DIG Colombo Deshabandu Tennakoon’s claim that the IGP and the Public Security Ministry Secretary had interfered with his (Tennakoon’s) plan to disperse the SLPP mobs couldn’t be easily dismissed.

MP Weerawansa declared, in Parliament on Tuesday (17), that the IGP and the Public Security Ministry dissuaded the Senior DIG from performing his duties although he had received specific instructions from President Gotabaya Rajapaksa to stop the march on Galle Face. The former JVPer questioned whether those conspirators wanted to show the world the failure on the part of the police and the armed forces to maintain law and order.

Asked whether police headquarters and the Public Security Ministry had responded to his accusations, Weerawansa said he hadn’t been contacted by them so far.

Pointing out that the Human Rights Commission of Sri Lanka (HRCSL), inquiring into 09 May turmoil had recorded Senior DIG’s statement, Weerawansa said that the outfit could issue an interim statement on the matter.

The Colombo High Court Lawyers’ Association said that the shocking revelation, made in Parliament, should be expeditiously inquired into.

The Association’s President Attorney-at-Law Lakshman Perera said that the ongoing investigations had taken an unexpected turn in the wake of high profile specific allegations pertaining to the conduct of the IGP, as well as the Public Security Ministry Secretary. Pointing out that the HRCSL and the CID had already recorded DIG Tennakoon’s statement, pertaining to the incidents, and the officer was among a group of 22 persons slapped with a travel ban by the Fort Magistrate, lawyer Perera said that the CID couldn’t turn a blind eye to accusations directed at the head of the department as well as Secretary to the relevant ministry.

Lawyer Perera said that investigations couldn’t be completed without verifying accusations made in Parliament.

Lawmaker Weerawansa said that the question was on whose behalf the IGP and the Public Security Ministry Secretary intervened at a time the country was under emergency and after the Senior DIG in charge of Colombo received specific instructions from the President himself.

Although the SLPP goons did not shed any blood or cause any serious injuries, unlike the well-organized mobs that caused havoc across the country thereafter, MP Weerawansa said that he couldn’t comprehend why the police and the armed forces allowed the situation to develop to an extremely dangerous level.

The HRCSL in its initial reaction to the unprovoked attacks on those who had been demanding the resignation of the government condemned the violence caused by a group of people who made it very clear that violence was their intention.

HRCSL Chairperson retired Supreme Court Justice Rohini Marasinghe said: “The failure of the police to prepare for this eventuality and prevent and manage the violence and destruction is a gross failure of public order. There must be an immediate inquiry into this matter. The inaction of the police to prevent the clash is condemned.”

The Island brought the latest developments to the notice of the HRCSL yesterday as MP Weerawansa said that those who conspired and planned the project that involved those at the helm of Temple Trees then and the SLPP should be arrested. The conspirators shouldn’t be allowed to escape justice while the CID arrested those who carried out the actual attacks.

Police spokesman SSP Nihal Thalduwa said that the department couldn’t respond to what transpired in Parliament. Acknowledging that he was aware of the allegations made in Parliament, Attorney-at-Law Thalduwa said in case their response was sought through proper channels, whatever the queries would be answered.

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Dr. Pathirana says IGP, Public Security Ministry Secy. allowed goon attacks

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Galle District parliamentarian Dr. Ramesh Pathirana has reiterated that IGP C.D. Wickremaratne and Secretary to the Public Security Ministry, Maj. General (retd) Jagath Alwis had facilitated the 09 May unprovoked attack on anti-government protesters.

The former Minister Pathirana declared in Parliament yesterday (18) that National Freedom Front (NFF) leader MP Wimal Weerawansa’s allegation, pertaining to the origins of the violence, was true.

Dr. Pathirana said that he was among those who had brought supporters to attend a meeting chaired by the then Prime Minister Mahinda Rajapaksa. The vast majority of those who attended the Temple Trees meet on May 09 wanted to thank the war-winning President as he gave up active politics, the MP said. However, some unscrupulous members had instigated the participants there.

Dr. Pathirana said he had been at Temple Trees at that time and as he feared violence could erupt due inflammatory speeches, contact was made with Senior DIG in charge of Colombo Deshabandu Tennakoon. Dr. Pathirana said that the senior police officer had assured him that the police were ready to face the situation and confident of preventing those who attended the Temple Trees function from reaching Galle Face.

“Thereafter, I left Temple Trees for a meeting with President Gotabaya Rajapaksa. There were several other members. When trouble erupted, President Rajapaksa immediately got in touch with Senior DIG Tennakoon, who revealed he had been asked not to use force by the IGP himself.”

Dr. Pathirana said the President had asked the senior law enforcement officer why he didn’t carry out instructions issued by him (the President).

The Galle District MP emphasised that the IGP and the Secretary to the Public Security Ministry were responsible for the violence at Kollupitiya and Fort police areas which triggered violence in many parts of the country. (SF)

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New Deputy Speaker not from Rajapaksa political dynasty

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Newly-elected Deputy Speaker Ajith Rajapaksa said that he was not a member of President Gotabaya Rajapaksa’s clan.

The Hambantota District Sri Lanka Podujana Peramuna (SLPP) lawmaker said so when The Island asked him whether he, too, was a member of the Rajapaksa family now under fire over the continuing political-economic-social turmoil.

Rajapaksa polled 109 votes at a secret vote held in Parliament on Tuesday (17) to secure the Deputy Speaker’s post. MP Rajapaksa defeated Samagi Jana Balavegaya (SJB) MP Rohini Kaviratne, who polled 78 votes.

The SLPP rebel group members refrained from voting for Rajapaksa after the top SLPP leadership ignored their appeal to fill the vacancy through consultations with the SJB.

Rajapaksa succeeded SLFP’s Ranjith Siyambalapitiya, who quit the post twice, the second occasion after beating SJB’s Imthiaz Bakeer Markar at a secret vote.

Deputy Speaker Rajapaksha said that he had served as the Chairman of the Ambalanthota Pradeshiya Sabha in 1997. Subsequently, he became a member of the Southern Provincial Council.

Asked whether he was a resident of the Rajapaksas’ home base, Deputy Speaker said that he was from Pallerotta, Ambalantota. (SF)

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