Sri Lanka sued by bondholder in US following historic default

Sri Lanka was sued in the US by a bondholder after the South Asian nation defaulted on its debt for the first time in history while struggling to stop an economic meltdown.

Hamilton Reserve Bank Ltd., which holds more than $250 million of Sri Lanka’s 5.875% International Sovereign Bonds due July 25, filed the suit Tuesday in a New York federal court seeking full payment of principal and interest.

Sri Lanka, an island nation off the southern tip of India, fell into default in May after the expiry of a 30-day grace period for missed interest payments on two of its sovereign bonds. It was the first sovereign debt default by the country since it gained independence from Britain in 1948.

Hamilton Reserve, based in St. Kitts & Nevis, said in the lawsuit that the default is being “orchestrated by officials at the highest levels of government,” including the ruling Rajapaksa family, and accused Sri Lanka of excluding bonds held by domestic banks and other interested parties from an announced debt restructuring.

“As a result, these favored Sri Lankan parties stand to be paid principal and interest in full, while the Bonds — which are also broadly held by US retirement systems including Fidelity Investments, BlackRock, T. Rowe Price, Lord Abbett, JPMorgan, PIMCO, Neuberger Berman and other US investors — remain indefinitely in default and unpaid, causing American retirees tremendous suffering from potentially massive losses of up to 80% of their original investment value,” lawyers for Hamilton Reserve said in their complaint.

A group of Sri Lanka’s largest creditors, including Pacific Investment Management Co., T. Rowe Price Group Inc. and BlackRock Inc., has been set up and restructuring talks are expected to start soon, Bloomberg reported, citing people familiar with the arrangement who requested anonymity ahead of a formal announcement.

The island nation is grappling with a worsening humanitarian crisis after it ran out of dollars to purchase imported food and fuel, pushing inflation to 40% and forcing the default. Sri Lanka needs $5 billion to ensure “daily lives are not disrupted,” and a further $1 billion to strengthen the rupee, Prime Minister Ranil Wickremesinghe told parliament earlier this month.

Sri Lanka hired Lazard Ltd. and Clifford Chance LLP in May to serve as financial and legal advisors on debt restructuring as the country seeks a bailout from the International Monetary Fund.

Sri Lankan authorities on Monday began talks with the IMF, working toward an agreement that could offer creditors enough comfort to lend fresh funds to the bankrupt nation that’s seeking $6 billion in coming months.

The case is Hamilton Reserve v. Sri Lanka, 22-cv-5199, US District Court, Southern District of New York (Manhattan).

Source: Bloomberg

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Sri Lanka closes schools for fourth time this year amid worsening fuel shortage – Save the Children

Sri Lankan authorities announced over the weekend that State and government-approved private schools across Colombo and surrounding regions will be closed this coming week, in a further blow to children’s education already impacted by years of disruptions due to COVID-19.

The move comes amid a worsening nation-wide fuel shortage, with parents having to wait up to two days – or over 50 hours – in queues to refuel their cars. While parents queue for fuel, many children are either accompanying them for hours, or are staying home worrying about their parents’ wellbeing. Queuing for fuel is also keeping parents away from work, creating further financial stress on families.

Without enough fuel for both private vehicles and public transport, many children across the country have no way to get to school, even in regions where schools are formally open. Only 20% of public bus services across the country are in operation and private transport services, such as trishaws [motorised rickshaws], are also operating at partial capacity, with drivers stuck in long fuel queues.

Sri Lanka is facing its worst economic crisis since independence, with food security, agriculture, livelihoods, and access to health particularly affected. Many schools in Sri Lanka were closed for one and a half years during the height of the pandemic, but since they re-opened at the start of 2022, they have closed multiple times as a result of the current crisis.

This latest closure will further disrupt children’s education across major cities and towns, as well as prevent children from accessing free school meals, a lifeline for the country’s most vulnerable children. A recent needs assessment by Save the Children showed that 50% of families were struggling to support their children’s education as a result of the crisis and some children were already dropping out of school.

While the government of Sri Lanka has requested that schools across the country re-introduce online learning systems that were in place during COVID-19, many children and families don’t have the money to afford data. Children have also told Save the Children that in many rural areas, they don’t have access to the internet or share a device with multiple children.

Hasna*, 16, a student from Colombo, told Save the Children:

“Standing in the line for kerosene oil made me very sad. We’ve never had to do something like that before, but now we have to go, and there’s nothing to do. My mother has headaches, and that makes me scared.

“Going to the queues is a huge expense for us – the bus used to be 30 Rupees (8 cents USD), but now we have to pay 200 Rupees (56 cents USD), so we all try to go together and split the cost. But now the situation with the trishaws [motorised rickshaw] is the same with buses – everyone’s on strike and there are no buses. The only reason I was able to go for my O-Levels in a trishaw is because the driver knew us, and was willing to stay in line only because it was us. Otherwise, I wouldn’t have been able to go.”

Ranjan Weththasinghe, Save the Children’s Director of Programmes in Sri Lanka, said:

“A recent needs assessment by Save the Children shows that 50% of families are really struggling to support their children’s education and some children are already dropping out of school. Parents are having to decide whether to buy data to access online classes, or use this money for food. Faced with such a decision, families make the life-saving choice. But at what cost?

“Children across Sri Lanka have had a terrible two years, with COVID-related school closures completely disrupting their ability to get a basic education. This economic crisis is making things worse. Not only are schools closing once again, but families have even less resources at their disposal to keep kids learning than they did before the pandemic.

“We are deeply concerned that this worsening economic crisis is going to hold back Sri Lanka’s children for possibly years to come. Children are the country’s future. Their needs must be the priority. Now is the time for the international community to show solidarity with the people of Sri Lanka.”

The UN and humanitarian organizations are calling on donors to urgently provide life-saving assistance to the women, men, and children most affected by the crisis to prevent the humanitarian situation deteriorating in the country.

Save the Children Sri Lanka is implementing a ‘food for education’ program across 887 schools in seven districts in the country, many of which will be impacted by the latest closures. The project complements the government’s school meal program to improve children’s nutrition and reduce the dropout rate from schools across the country.

Notes:

Save the Children conducted a rapid needs assessment from May to June 2022 from a total of 2309 households across nine districts in Sri Lanka.
Save the Children Sri Lanka aims to help one million people through humanitarian assistance implemented in vulnerable communities in nine districts across the country. Save the Children’s response will provide immediate food and nutrition needs to the most vulnerable populations and protect and diversify livelihoods. It will provide support to children, in small and resource-poor schools in rural and urban areas, to ensure they have uninterrupted access to education.
Sri Lanka was formerly an upper-middle income country, however the pandemic in 2020 resulted in the country being downgraded to lower-middle income status.
The World Bank suggests that over 500,000 people in Sri Lanka may have been pushed into poverty as a result of the COVID-19 crisis and this number is now likely to increase.
Sri Lanka was progressing steadily towards the 2030 Agenda for Sustainable Development, especially in relation to poverty reduction (SDG 1) reductions in maternal, neonatal and infant mortality (SDG 3), and in literacy, enrolment and completion rates for primary and secondary education (SDG 4). However, the current economic crisis threatens reversing many of these gains, including the peace dividends.

STC (Source)

Sri Lankan Economy Heading Towards A Dangerous Phase By Ameer Ali

Sri Lanka is moving into an uncharted territory and a dangerous one with negative economic growth and critical shortages in consumer essentials. Economic crisis has now turned into humanitarian crisis and unless supply shortages are eased and consumer queues are shortened the situation may soon develop into a law-and-order crisis. The nation is confronting the effects of a double whammy. A self-inflicted catastrophe at home is coinciding with adverse market reaction arising from anti-inflationary measures adopted by industrial economies. It is going to be a nightmare to say the least for a reshuffled team of managers headed by a stopgap Prime Minister, who has to work with an unpopular but autocratic president Gotabaya Rajapaksa whose erratic policies brought catastrophe in the first place. Working relations between the two leaders are reported to have soured as the tussle over the tenure of CGSL’s Governor demonstrates.

Supply disruptions and slowdown in economic activities caused by the war in Ukraine and Covid pandemic respectively had allowed the evil of inflation to raise its ugly head in the industrialized world and the fight against inflation has taken the usual route of raising interest rates. US raised it by 0.75% for the first time since 1994, Australia did the same, UK raised it by 1.75% and EU is contemplating on a rise of 50 basis points in days to come. These increases will have a flow on effect on commodity prices, and for an import dependent economy like Sri Lanka it would mean increase in import prices and further depreciation of the rupee culminating in steeper increase in cost of living. That would make life excruciatingly painful to a population that is already struggling to survive with shortages in food, fuel, medicine and other necessities. RW’s warning of things to get worse before getting better is going to be realized with unparallel severity.

The eagerly expected IMF stabilization package with debt restructuring, the details of which are yet to be drawn out, would take at least months if not a year to come into effect. Even then, unless that package comes with generous provisions for immediate relief to low-income earners, the poor and needy, life is not going to be comfortable to the majority of people. IMF’s remedy works at best in the long run and is not helpful to solve the immediate problems facing the people. Bridging funds from the World Bank and the Asian Development Bank must be expedited before IMF reforms come into operation.

Ranil Wickremesinge and the CBSL chief have already introduced certain fiscal and monetary measures along the lines acceptable to IMF advisors. These measures, although are necessary to achieve macroeconomic stability, themselves would add to the economic pain of consumers considerably. These reforms are not going to reduce supply shortages that are crippling households at the moment. Therefore, over the next twelve months at least, the country desperately needs direct humanitarian assistance by way of food, fuel, medicine and other essentials from anywhere in the world. Time has come to think outside the box.

Without such assistance, according to Jens Laerke, a spokesperson for UN office for Coordination of Humanitarian Affairs (OCHA), Sri Lanka would be in “a full-blown humanitarian emergency”. What a turn of fortunes or misfortunes to an island that never faced such dire situation in its recorded history. The irony is that the economic managers who were immediately responsible for this calamity are still in power and calling the shots.

So far only India and to a lesser extent China have come forward to lend a hand. The reason for their readiness to help is more than altruism and falls into the realm of geopolitics. Japan too has promised to aid and Australia has decided to advance $50 million to emergency food program. However, apart from a few, assistance is not forthcoming that readily and generously from others, which makes one to think whether Sri Lanka’s foreign policy is set on the right track. With the fuel crisis disrupting the normal functioning of virtually every sector of the economy, one is driven to wonder what would have been the situation had Sri Lanka maintained its extremely friendly relations with the OAPEC (Organization of Arab Petroleum Exporting Countries) nations? Sometime back, when there was a similar crisis during JR’s presidency, he at once dispatched his Foreign Minister Hameed to Libya, and Gadhafi did not send his visitor back empty handed. Before JR, when there was a foreign exchange crisis during Sirimavo’s Leftist Coalition Government, it was her Minister of Education Mahmud who was sent to the Arab Middle East to seek assistance, which helped to ease that crisis temporarily. Even today, it is the Arab Middle East that is providing employment to Sri Lanka’s surplus labour and it is the hard-earned dollars from that labour that replenish the treasury’s coffer, at least to a limited extent. Why then the new economic managers are not thinking of a Muslim delegation to the Middle East at this time of fuel shortage? To be honest, the current Minister of Foreign Affairs is not the right person to be sent to that part of the world, not because that he is not a Muslim but because that his lack of sensitivity and compliance with injustices done to the local Muslim community under GR’s presidency didn’t go well with the Muslim world. At least OIC’s resolution against Sri Lanka on the eve of UNHRC’s meeting in Geneva in 2020 should have alerted the government that fences have to be mended with the Arab world. This is not to rekindle the past in the parochial interest of Muslims or Islam, but to draw attention during a time of emergency to the cultural nuances of that region, which, if understood rightly and handled wisely, could bring in immense benefits to the country. The fuel crisis provides a good opportunity to rethink about Sri Lanka’s relations with Arab Middle East. There is an old Tamil lyric: aadukira maattai aadi karakkanum, paadukira maattai paadi karakkanum (one should milk the dancing g cow with dance and singing cow with song).

Rajapaksa regime’s distancing from the Non-Aligned Movement and leaning more towards China at the expense of India, the West and others is proving to be costly at present. India is no doubt getting closer, because it has ulterior motives. China also will continue to help to outbid India. Yet, Sri Lanka’s foreign policy regime needs a new setting. During the last three years in particular, considerable damage had been done to Arab-Lanka relations. It needs serious reparation. That requires a team of highly qualified and professional diplomats, possibly with fluency in the language of the area to which they are posted to. How many foreign language speaking diplomats, apart from English, does the country have at present? The entire foreign policy department needs an overhaul.

This is not the time to mix politics or ideology with economics. More immediately, peoples’ and particularly children’s lives are in jeopardy. According to a UNICEF spokesperson, Sri Lanka is second highest in child malnutrition in South Asia. These children are the country’s future asset. If the new managers fail to generate enough humanitarian aid and ease the shortages, the country is destined to become chaotic and anarchical. There is a limit to peoples’ endurance. Already one hears of the army shooting in the air in Mullaitivu to disburse a Tamil crowd waiting to get some fuel? Why the army in the north while the police take charge in the south? Why is this discrimination? Is there something sinister and diabolical brewing behind the scene to misrepresent the crisis and turn it into a communal problem?

Sometime back GR promised UN Secretary General in New York that he would meet members of Tamil diaspora to discuss about Tamil issues. That never happened. Recently, a TNA parliamentarian has expressed his disappointment from Switzerland that Sri Lankan government is not willing to seek economic or financial assistance from Tamil diaspora at a time when the country needs assistance from any benefactor without strings attached. Why is this parochialism on the part of rulers?

The 14th Governor of CBSL, Dr. Indrajit Coomaraswamy, in a recent panel discussion organized by the bank had summarized the origins of the current catastrophe and expressed confidence in the success of IMF’s structural reforms. He had pinpointed a bitter truth that excess demand created by governments had cause a drain on treasury’s coffer. That demand was generated by plans to build and maintain white elephants in the name of economic development – a fact the Governor diplomatically avoided mentioning. Rajapaksa regime had been notorious for this wastage. Even now what on earth is the use of maintaining an army of 300,000 that consumes nearly 50 percent of budget expenditure salaries? People are paying the price for this unwanted profligacy by foregoing their minimum comfort. IMF structural reforms would take time to steady the sinking ship. The immediate worry is to bring relief to the daily suffering of households. This why we need to think outside the box.

*Dr. Ameer Ali, Murdoch Business School, Murdoch University, Western Australia

Sri Lanka PM talks debt restructuring, One China policy with Chinese envoy

Sri Lanka Prime Minister Ranil Wickremesinghe has discussed debt restructuring with Deputy Chinese Ambassador Hu Wei and has also assured him of the island nation’s “adherence” to the ‘One China Policy’, the prime minister’s office said.

“Sri Lanka was looking forward to discussing the debt restructuring with China (sic),” the statement said Tuesday June 21 afternoon.

China has lent the largest amount of commercial loans to cash-strapped Sri Lanka as a bilateral lender. Beijing has been hesitant to restructure Chinese debt claiming it would then have to do the same for other debtor nations.

Debt restructuring is crucial for Sri Lanka, now going through its worst ever forex crisis, to reach a deal with the International Monetary Fund (IMF). The Indian Ocean country has already hired France-based Lazard as financial advisor and London-based Clifford Chance LLP as legal advisor to support the country in debt restructuring.

The One China policy, the adherence of which Wickremesinghe had assured the deputy ambassador, is United States policy which recognises the People’s Republic of China as the sole legal government of China, but only acknowledges, and does not endorse, the PRC position that Taiwan is part of China.

The One China principle, on the other hand, that there is only one sovereign state under the name China, with the PRC serving as the sole legitimate government of that China, and Taiwan is a part of China. The statement from the PM’s office used ‘One China policy’ but did not get into specifics.

The deputy ambassador has also asked Wickremesinghe about Sri Lanka’s food security initiatives and “reassured the Prime Minister that China would be donating rice to Sri Lanka to help ease the food crisis”, the statement said.

Prime Minister Wickremesinghe had previously had warned of a possible food crisis in the coming months, which will add to the woes of Sri Lankans already reeling under the prevailing forex crisis.

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Lankan PM to visit India shortly

The Sri Lankan Prime Minister Ranil Wickremesinghe is to visit India shortly to meet his Indian counterpart Narendra Modi and other key Indian ministers, reliable sources said on Tuesday. The exact dates of the visit are being worked out, the sources added.

Both Wickremesinghe and Modi have been keen on meeting each other ever since Wickremesinghe assumed office in May. But the Sri Lankan leader had been busy trying to manage the unprecedented economic crisis his country has been undergoing. In addition, he had to manage a fractious parliament in which he had nil support to begin with. Adding to his challenges, was the controversy over his appointment as Prime Minister bypassing others with more support in parliament. Further, agitators on the streets were wanting both President Gotabaya Rajapaksa and Wickremesinghe to go home making way for a more legitimate all-party government.

Therefore, Wickremesinghe’s primary task, upon taking over, was to establish his legitimacy by proving majority support in parliament even if it was to be only a temporary patchwork of disparate elements. Eventually, and to his credit, fairly quickly, he did stitch together an informal, but working coalition with the help of the Rajapaksas’ political party, the Sri Lanka Podujana Peramuna (SLPP).

While the irate citizens of Sri Lanka were wondering if their rulers would ever take time off from mindless politicking and attend to their crying needs, India was steadily sending aid in the form of food, fuel, fertilizer and medicine which has now reached US$ 3.5 billion in value.

But many wonder if India will be able to continue with such inputs on such a massive scale, for long. India has to factor in the fact that no other country has come in with help in any substantial way. While China has had geostrategic issues troubling it, the Western powers are waiting for the IMF’s investigations and recommendations and the Sri Lankan government’s response to those recommendations.

Against this background, a desperate Sri Lanka has asked India for an additional US$ 500 million to buy fuel. A request to push through this deal expeditiously is expected to be high on Wickremesinghe’s agenda for his talks with Prime Minister Modi, Finance Minister Nirmala Sitharaman and Foreign Minister S.Jaishankar.

On their part, the Indians, comprising Prime Minister Modi, his ministerial colleagues and the Indian Security Establishment, will be keen on getting firm commitments from Wickremesinghe on implementing or speeding up a number of projects for which MOUs had been signed, some way back in 2017.

New Delhi will also be worried about the controversy whipped up by certain circles in Sri Lanka over the US$ 500 million renewable energy projects in North Sri Lanka given to Gautam Adani. The project had been given in an unconventional way circumventing the normal tender procedure. There is controversy over the pricing of power also. Modi and his ministers will be keen to know if Adani’s project will go through smoothly and unhindered.

The power situation in Sri Lanka is worrying not only Sri Lankans but also India. India, which imports most of its oil, cannot go on sending oil consignments to Sri Lanka. It is learnt that Adani might get a major coal-powered energy project also in Sri Lanka.

To rebuild the shattered Sri Lankan economy, IMF’s help is a must. And for its part, the Lankan government must implement the IMF’s recommendations without being influenced by lobbies with a vested interest in the old, rotten system. Western aid givers and lenders have made it clear that they will go by the results of the IMF’s mission and course Sri Lanka’s follow-up actions. An IMF team is currently in Sri Lanka on a 10-day visit.

Although queues in front of fuel and cooking gas outlets are still miles long, and shortages and high prices are hitting the lower middle class and the poor below the belt, sources close to the government see a silver lining. They point out that remittances from expatriate workers and earnings from exports have increased and are expected to further increase giving rise to the hope that with greater Western support following the IMF’s intervention, the economy will be on the road to recovery towards the end of the year.

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Supreme Court rejects petitions against Dhammika Perera’s appointment

The Fundamental Rights applications filed challenging the appointment of Dhammika Perera to Parliament, were rejected by the Supreme Court on Tuesday (21).

One Writ Application and Four Fundamental Rights Applications were filed with the Supreme Court challenging the appointment of Dhammika Perera to Parliament, by nominating him to the SLPP National List seat left vacat following the resignation of Basil Rajapaksa.

On Monday (20) Businessman Dhammika Perera promised to the Supreme Court that he will NOT take oaths as an MP or as a Minister UNTIL a decision is made with regard to the FR petitions challenging his appointment.

He made this promise when Five Fundamental Rights applications filed challenging his appointment were taken up at the Supreme Court on Monday (20).

The promise was made via President’s Counsel Romesh De Silva in the presence of Supreme Court Justice Priyantha Jayawardena, Yasantha Kodagoda, and Arjuna Obeysekera.

The FR applications were taken up for consideration on Tuesday (21)

Businessman Chandra Jayaratne, Journalist Roel Raymond, the Center Policy Alternatives are among the parties that filed these applications.

Beijing restless as QUAD comes to Colombo’s aid

A more “proactive” role in Sri Lanka is looming for the Quadrilateral Security Dialogue (Quad). The discussion forum between the United States, Japan, Australia and India is poised to provide aid to the country, grappling with the worst political-economic crisis in the post-independence era.

Economic and political analysts told AsiaNews that Japanese Prime Minister Fumio Kishida and Indian Prime Minister Narendra Modi have agreed to work together to assist the island nation. Japan’s initiative comes despite Sri Lankan President Gotabaya Rajapaksa canceling a .5 billion project funded by Tokyo to build a light rail in Colombo in September 2020.

Last year, the Rajapaksa administration then excluded Japan and India from a project to jointly develop a container terminal at the capital’s port, causing high diplomatic tensions. Friction with Delhi over the issue partly disappeared after India’s Adani Group won a contract to develop another terminal at the same port.

From the U.S. perspective, the Quad can help prevent Sri Lanka’s economic implosion, a scenario that in turn could trigger a humanitarian crisis with broader, destabilizing regional impacts. U.S. Senate Foreign Affairs Committee Chairman Bob Menendez revealed last month that Washington “is preparing long-term economic support” for Colombo, while Tokyo is providing food assistance to the crisis-ridden country.

According to Menendez, the Quad could do more by also providing badly needed fuel and offering technical support and advice in the areas of financial accounting, health care, food security and macroeconomic policy.

In Washington’s eyes, the Rajapaksas have brought Sri Lanka to the brink of financial ruin and humanitarian catastrophe. Mahinda Rajapaksa, first as president and then as prime minister, led the country straight into the Chinese “debt trap.” His brother Gotabaya then failed to take the necessary economic measures to avoid a default on sovereign debt. Today Sri Lankans of all backgrounds are calling for change, starting with the resignation of the current president.

About 10 percent of Sri Lanka’s billion foreign debt is owed to China, and Colombo is struggling to repay some of its loans from Chinese banks. Political analysts note that “the Rajapaksas are seen as very much bent toward China,” while the Chinese presence near Indian shores is seen by Delhi as “a strategic headache.”

Beijing is troubled by the Quad, considered by Xi Jinping to be the embryo of an “Asian NATO.” Referring to the Quad’s activism regarding Sri Lanka, Chinese Foreign Minister Wang Yi said there is never a shortage of newsworthy ideas: “They are like the foam in the Pacific Ocean or the Indian Ocean, which may attract attention, but they soon dissipate.”

AN (Source)

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Weerasekera warns TNA not to test patience of Buddhists

Former Minister Sarath Weerasekera today warned the Tamil National Alliance (TNA) not to test the patience of Buddhists.

Speaking in Parliament today, Weerasekera said that the TNA was making defamatory statements towards Buddhist monks and Buddhist teachings.

He accused the TNA of being the political party of slain LTTE leader Vellupillai Prabakaran.

Weerasekera said that when Prabakaran was killing people the Buddhist community did not harm ordinary Tamils.

The former Minister of Public Security said that there is a limit to the patience of Sinhalese Buddhists.

SJB & JVP boycott Parliament session, as mark of protest against government

Sri Lanka’s main opposition Samagi Jana Balavegaya (SJB) and the opposition National People’s Power (NPP) will boycott parliament this week, opposition leader Sajith Premadasa said and NPP leader Anura Kumara Dissanayake said before proceeding to walk out of the chamber.

The government has turned parliament into a talk shop and time spent in parliament is a waste of time and offers no solution to the people suffering outside, Premadasa told parliament on Tuesday June 21.

“We will boycott this parliament,” thundered Premadasa.

Janatha Vimukthi Peramuna (JVP)-led National People’s Power (NPP) leader Anura Kumara Dissanyaake echoing Premadasa’s statement said no useful solutions have come out of parliament so far.

Sri Lanka is going through its worst economic crisis in its post-Inedependence history, with long queues for essentials seen around the country.

Dissanayake said the government must present to parliament a short term plan or a roadmap with proposals for a way out of the crisis.

President Gotabaya Rajapaksa and Prime Minister Ranil Wickremesnghe are in two camps and conflict is brewing between them, claimed Dissanayake.

“There is no point debating here if no roadmap or plan is presented to parliament,” he said.

Sri Lanka Freedom Party (SLFP) general secretary Dayasiri Jayasekara also demanded a plan on solutions to Sri Lanka’s lengthening fuel queues.

Government MP Nimal Lanza said opposition parties including the NPP was uninterested in forming an all party government when overtures were first made.

“Don’t speak empty words and mislead the people. If you have a plan, we will raise both hands and extend our support,” he said.

National Freedom Front (NFF) leader Wimal Weerawansa claimed that some SLFP MPs and MPs from Lanza’s group had secretly proposed to President Rajapaksa that Wickremesinghe be appointed Prime Minister.

Refuting this claim, Lanza said: “Don’t get me started [on others].”

“However, there needs to be a government. We’re not going to attack a new government just for the sake of it. But a Prime Minister needs to have a plan. It doesn’t look like they even have an answer to the crisis.

“It was implied that Wickremesinghe would be able to pull billions of dollars out of his pocket soon after his appointment, given his supposed international connections. That hasn’t happened,” said Weerawansa.

Why Gotabaya should go? Why now?

Those who have followed this column might know that I have regularly expressed strong reservations about Gotabaya Rajapaksa during his previous stint as the secretary of defence and later his reincarnation as the president. Those concerns would be vindicated when the Sri Lankan judiciary is unshackled from routine political meddling and inherent bias toward the powers that be. Nonetheless, after the other Rajapaksas resigned and their dynastic project crumbled, I, for one, had rather been inclined to put up with Gotabaya Rajapaksa’s continuation in office for the time being for the sake of political stability.

Initially, it appeared as a reasonable trade-off in exchange for political instability. Now, I must admit I have been naïve. Gotabaya is not a source of political stability, but rather the stark opposite. He is the greatest source of political instability. Not only was he the primary catalyst who mothballed an otherwise manageable sovereign debt crisis into a calamity of unprecedented proportions. His continuation in the office against a myriad of calls for his departure is prolonging the crisis. He should leave the office for the sake of the country. To begin, he should announce a timeline for his departure, removing the greatest handicap for the formation of an all-party government.

Once a new all-party government is formed, he should make him redundant, (at maximum limiting himself to negotiate a safe way out). He should let the new government dig the country out of the hole, unencumbered by his presence. He should let Sri Lankans dream again, his government has been a long nightmare. If he and his ever-depleting number of sycophants cannot fathom why he should leave, here are a few reasons why his continuation would mean the ultimate demise of the nation.

No one wants him – save a few acolytes

First, for Sri Lanka to come out of the current economic misery, a trilogy of factors should converge: the Sri Lankan public, the political parties that would form the alternative government and the international community. None of them wants to deal with the incumbent president.

Sri Lankans, including many millions who voted for Gotabaya and SLPP, now view him as the source of their misery and want to see his back. He came to power in a race-baiting election campaign, now the hapless public is quarrelling in queues. Their frustration manifest in clashes with police, which have been responding with excessive force. Gotabaya is dragging the country towards another violent conflagration, which he might then use to cement his power.

The political opposition does not want meaningful cooperation with a government that Gotabaya calls shot. They view it as politically suicidal. Also, as the experience of Ranil Wickremesinghe reveals a political cohabitation with Gotabaya is also a meaningless and wasteful venture.

Intl. community more at ease with a govt without him

The international community, especially the democratic nations that always held reservations about Gotabaya Rajapaksa’s chequered history riddled with skeletons are less inclined to associate with his government. He snubbed the Japanese, Sri Lanka’s time-tested ally by cancelling the Japanese-funded Colombo Light rail project. He snubbed the Americans over the Millennium Challenge Cooperation (MCC) Grant. By snubbing the West, he and his acolytes believed China would open its chequebook. But, Chinese mandarins who might not have qualms about Rajapaksa’s authoritarian tendencies, or his brother’s kleptocracy, had already burnt their fingers funding similar irrational autocrats in Venezuela and Nicaragua. They gave him the boot. China after all is a mercantilist state, and the one with which, it would be the hardest to agree on bilateral debt restructuring. That would potentially poison the entire process.

The Middle Eastern countries, with deeper pockets, thanks to the rising energy prices, would have been more forthcoming with assistance had not been Gotabaya Rajapaksa regime’s track record of anti-Muslim dog whistling.
In the absence of friends, Gotabaya was left with India, which terms its assistance as a hallmark of ‘neighbourhood first’ policy — and in private perhaps, as the vindication of the ‘Indira doctrine’, India’s equivalent to the Monroe doctrine (that in times of contingency, the countries in India’s sphere of influence should seek India’s assistance first before reaching out to the others). However, Sri Lanka has already outlived Indian generosity and is still asking for more. Any future assistance would come with many strings attached, which Gotabaya Rajapaksa, the pseudo patriot seems to be content with.

President Rajapaksa knows his low international standing, hence the appointment of Ranil Wickremesinghe as his prime minister. But the international community knows better. They know that Mr. Wickremesinghe is a spent political force of dubious political utility. His contribution so far has been saving the Rajapaksas, much less the nation. The political instability and policy confusion that Gotabaya Rajapaksa creates, makes it harder for Sri Lanka to negotiate debt restructuring and intentional assistance. In the absence of progress in talks with the lenders and friendly nations, Sri Lanka slides further into the precipice. Gotabaya is perpetuating the misery of the people.

Political mandate exhausted

Second, he claims to have a political mandate. Alas, that was exhausted long ago. A president who single-handedly broke the back of the state, through his disastrous tax reforms, and then decimated the local agricultural sector, impoverishing 1.8 million farming families has neither moral right nor a political mandate to stay in power any longer. In any country where accountability matters, he should have been impeached, or in court for the gross mismanagement of the state affairs.

Avert a complete ruin like in Venezuela

Third, the recent history of international politics would reveal that the countries do not cease to exist as viable political and economic entities just because they were confronted with a severe debt crisis. Ireland was there in the early 2000s, and Greece went through a similar economic squeezing later in the 2010s. Argentina defaults habitually. But those states have remained viable entities. Countries that crumbled beyond redemption – such as Venezuela now and Zimbabwe in the early 2000s- did so for a different reason: demagogic leaders who prioritized their political survival over the survival of the nation, and hang on to power at the demise of their states as anything but a functioning entity.

Gotabaya Rajapaksa is carrying Sri Lanka in that direction. Economic predictions are dire. World Bank forecasts the Sri Lankan economy to contract by 6.8 per cent. UNICEF warns ‘one of a kind crisis’ in food security. Rajapaksa already oversees a state that has ceased to function in many areas. Long cherished pillars of the welfare state, free education and free healthcare are crumbling. Child malnutrition is rising. Public transport is at a standstill. Commuters are crushed to death riding in overloaded trains. The elderly are dying in fuel queues. Gotabaya Rajapaksa who has no public support, nor international partners (or common-sense wisdom), cannot address the country’s acute economic crisis. Instead, he is perpetuating it.

Fourth, a political chokehold cannot be sustained without the use of brute force. Yesterday, on his birthday, President Rajapaksa mobilized hordes of military personnel to the vicinity of

GotaGoGama. Like his counterparts in Venezuela and Nicaragua, Rajapaksa is switching to rule by force. Such a state quo also requires diverting a substantial part of the nation’s limited resources to the security apparatus of the state. That is in the making. See the cops who jumped the queues and pump full tanks in petrol stations.

As Rajapaksa resorts to militarization and brutalization of society, even the modest gains of ‘Aragalaya’ is evaporating. Premier Ranil Wickremesinghe is an accessory to this crackdown. The Sri Lankan public and the international community should not let them succeed.

Gotabaya Rajapaksa has brought the Sri Lankan nation to its knees. In any dispassionate analysis, the destruction he unleashed on the economy in two short years far outweighs the destruction that another race-baiting megalomaniac unleashed over three decades. That man is Veluppillai Prabakaran.

Gotabaya should go. To begin with, he should announce a timeline for his departure and invite the political opposition to form an all-party government. He should let them fix the broken state, negotiate international assistance and pass a constitutional amendment that restores the checks and balances of the government. The executive presidency should also go, the Rajapaksas have vindicated the danger of excessive powers vested with the office. A new constitution should follow. But, for the country to dream of a better future, Gotabaya should go.

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