News

Tissa Vitarana opposes going to IMF at All Party confab

Published

4 years ago

2022/03/27

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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Development projects can deliver results to the people more quickly when the political authority and the public service work together towards a common goal – PM

Published

12 mins ago

2026/09/20

Priyan

Prime Minister Dr. Harini Amarasuriya stated that development projects can deliver results to the people more quickly when the political authority and the public service work together towards a common, people-oriented objective.

The Prime Minister made these remarks while participating in a discussion held on Friday [September 18] at the Western Province Council Auditorium to review the progress of the development project to rehabilitate Rathmalana Kandawala Road and the drainage system on either side of the road, within the Dehiwala–Mount Lavinia Municipal Council limits in the Colombo District.

The project, which commenced on September 10, 2026, is scheduled to be completed before June 30, 2027. Implemented by the Provincial Road Development Authority (PRDA), the project includes the construction of a bridge at a cost of Rs. 64 million, the rehabilitation of the drainage system at a cost of Rs. 930 million, and the rehabilitation of the road at a cost of Rs. 115 million.

The Prime Minister also paid special attention to the progress of the responsibilities assigned to the Western Province Council, the Irrigation Department and the Ratmalana Divisional Secretariat in accordance with decisions taken at the previous committee meeting. Attention was also given to the current status of the plans being carried out by the Sri Lanka Land Development Corporation (SLLRDC), as well as the construction and maintenance activities being undertaken by the Provincial Road Development Authority (PRDA).

Commending the expedite and commendable progress of the project, the Prime Minister particularly appreciated the commitment demonstrated by officials of the relevant government institutions to work in close coordination with one another and in collaboration with the political authority.

The Prime Minister also emphasised the importance of taking measures well in advance to control flooding and minimise its impact on Colombo and several other districts in view of the rainy weather that may affect the Western Province during the latter part of this year.

The meeting was attended by the Chairman of the Colombo District Coordinating Committee and Member of Parliament Lakshman Nipuna Arachchi, Chairperson of the Ratmalana Divisional Coordinating Committee and Member of Parliament Samanmalee Gunasinghe, Chairman of the Roads Sub-Committee of the Colombo District Coordinating Committee Dewananda Suraweera, Mayor of the Dehiwala–Mount Lavinia Municipal Council Parakum Shantha, Chief Secretary of the Western Province K.G. Pradeep Pushpakumara, along with a number of government officials.

[Prime Minister’s Media Division]

News

Landslide Early Warnings issued to the Districts of Colombo, Galle, Kalutara, Kandy, Kegalle, Matara, Nuwara Eliya and Ratnapura

Published

59 mins ago

2026/09/20

Priyan

The National Buliding Research Organization has issued Landslide Early Warnings to the Districts of Colombo, Galle, Kalutara, Kandy, Kegalle, Matara, Nuwara Eliya and Ratnapura from 10:00 hrs on 20.09.2026 To 10:00 hrs on 21.09.2026

Accordingly,

LEVEL II (AMBER) landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Nagoda and Neluwa in the Galle district, Pasbage Korale in the Kandy district, Dehiowita and Yatiyanthota in the Kegalle district, Pitabeddara in the Matara district, Kotmale, Ambagamuwa and Norwood in the Nuwara Eliya district and Ayagama, Pelmadulla, Ratnapura and Eheliyagoda in the Ratnapura district.

LEVEL I (YELLOW) landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Seethawaka in the Colombo district, Palinda Nuwara and Bulathsinhala in the Kalutara district, Ganga Ihala Korale in the Kandy district, Deraniyagala in the Kegalle district, Kotapola in the Matara district and Ratnapura, Kalawana, Kuruwita and
Elapatha in the Ratnapura district.

News

Namal Rajapaksa Buddhist gambit fails, bail denied

Published

8 hours ago

2026/09/20

Thilina Walpola

MONETABRIEF – Namal Rajapaksa, son of Sri Lanka’s former leader Mahinda Rajapaksa, was denied bail by the Colombo chief magistrate despite pleading that he needed to attend important Buddhist rituals and travel to India.

The 40-year-old opposition MP’s lawyer, Shavindra Fernando, told the court that Namal had been invited to take part in a pinnacle-capping ceremony at the Pothgul Vihara temple on September 26.

“If my client fails to attend this event, it should be regarded as a disrespect shown to the chief incumbent of the temple,” Fernando said.

He added that Namal had also received an invitation to visit India from 27 September to 1 October and therefore sought bail.

However, he was remanded until September 29 in connection with allegations that he received kickbacks of $800,000 from the $2.3 billion Airbus aircraft purchase deal his father – Mahinda Rajapaksa – approved as president in 2013.

Deputy Solicitor General Janaka Bandara invoked the Buddha’s teachings in response to Namal’s lawyer, Fernando, saying that a judicial matter was far more important than attending a religious ceremony.

“According to what is being said here, the accused himself should have considered this while conducting dealings with Nimal Perera,” Bandara said, referring to the businessman who allegedly routed the bribe money to Namal.

Bandara quoted at length from a recent Supreme Court decision that expanded on the Buddha’s teachings, noting that when a ruler is righteous, the people follow; but when the ruler is dishonest, the citizenry follows that example too.

The 40-year-old MP was arrested on 4 September under the new anti-graft legislation parliament adopted unanimously in 2023.

Namal is primarily accused of accepting $800,000 out of a 1.4 euro million bribe that the then SriLankan Airlines chief executive, Kapila Chandrasena, is alleged to have received from Airbus after finalising a $2.3 billion purchase of aircraft in 2013.

Magistrate Asanga S. Bodaragama told the previous court hearing that he did not have the power to grant Namal bail because the Director-General of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) had issued a certificate under section 149 of the Act.

The provision stipulates that a magistrate may not grant bail when the CIABOC DG presents a certificate confirming that an offence under the Act has been committed.

The magistrate noted that he could grant bail only in “exceptional circumstances”, but there was no acceptable argument from the defence for him to do so.

A Buddhist temple festival and an invitation from India could not be considered good enough reasons to grant bail.

The businessman who acted as a conduit for the bribe – Nimal Perera – had turned state witness, providing details of how the money was given to Namal through two bank transfers in 2014 and 2015, the court was told.

Under the provisions of the August 2023 Act, Namal Rajapaksa could be held in custody until the conclusion of the trial, even though the magistrate remanded him until September 18, the maximum he could be incarcerated at a time.