Author: TELO Admin

Sri Lanka is facing a severe foreign exchange crisis after the pandemic hit the island nation’s earnings from tourism and remittances, Finance Minister Basil Rajapaksa said.

The government’s revenues were also far short of target as pandemic curbs hurt economic activity, Rajapaksa said during a debate in parliament Tuesday. The country is under an extended lockdown amid a record rise in Covid-19 deaths and hospitalizations caused by the delta variant.

The deteriorating reserves position prompted S&P Global Ratings to last month cut Sri Lanka’s rating outlook to negative. That helped stoke concerns the nation won’t be able to service $1.5 billion of debt due next year, as well speculation Colombo may turn to the International Monetary Fund for support.

Revenue from tourism has fallen to about $2 million a month this year, from more than $450 million two years ago, according to data from Trading Economics. Until recently, travel and tourism accounted for 5% of the $81 billion economy, whose foreign exchange reserves have now depleted to the lowest level since 2009 after repayment of $1 billion of debt in July.

Rajapaksa said Sri Lanka was receiving concessionary funds from the World Bank and Asian Development Bank to help face the pandemic.

“Our policy is to borrow loans with simple and concessionary terms without any conditions that will harm the country’s independence and sovereignty,” he said, without elaborating.

The government earlier this year imposed capital controls as it sought to use its own resources to meet external payment obligations instead of turning to the IMF, whose aid comes with strict conditions.

The United National Party (UNP) has pointed out that a general election system should be introduced for Parliament, Provincial Councils and Local Government Institutions and that 65 percent of the members should be elected under the divisional system and 25 percent under the proportional representation system.

Representatives of the UNP made these observations while testifying before the Select Committee of Parliament to Identify Appropriate Reforms of the Election Laws and the Electoral System and to Recommend Necessary Amendments, yesterday (07).

They also suggested that the number of members elected to local government bodies should be reduced by reducing the number of divisions. Whilst stating that 25 percent of the members elected to local government bodies should be women, the UNP also pointed out to the Committee the need to ensure the representation of minorities.

The Leader of the House, Minister Dinesh Gunawardena presided over the meeting. Former Minister Sagala Ratnayaka, who testified on behalf of the UNP, further stated that Parliament should be an institution with genuine representation in various electorates in Sri Lanka.

The UNP also stated that dual citizens or persons affiliated with another state should be restricted or barred from contesting at the general elections in Sri Lanka.

The party pointed out that the composition of the Parliament should reflect the demographics of the eligible voters to vote in the election as practically as possible and accordingly the members of Parliament should be elected by the voters and from the national list.

The UNP also said that the sources of funding for parties and independent groups at the general election should be revealed. They also pointed out that the expenses incurred by political parties and candidates at an election should be limited.

They were also of the view changing parties should not be allowed and if a member does change the party, he or she should automatically be removed from the party list.

The Vice Chancellor of the University of Sri Jayewardenepura, Senior Professor Sudantha Liyanage, member of the Committee of Experts appointed to analyze the proposals, presented to the Parliamentary Select Committee several models related to the local government election system at the Committee.

Prof. Sudantha Liyanage also pointed out the need to reduce the existing large number of seats in local government bodies.

The Committee Chair, Minister Dinesh Gunawardena stated that the general opinion is that the country needs a better mixed electoral system. He also pointed out the need to have a Member of Parliament responsible for a division.

Ministers Nimal Siripala de Silva, Pavithra Wanniarachchi, Douglas Devananda, Members of Parliament Anura Kumara Dissanayaka, Ranjith Madduma Bandara, Mano Ganeshan, M. A. Sumanthiran, Madhura Withanage and Sagara Kariyawasam were present at this meeting held.

Officials from the Delimitation Commission and the Attorney General’s Department were also present.

The next meeting of the Parliamentary Select Committee is scheduled to be held on the 13th of September, said the Secretary to the Select Committee, Deputy Secretary General & Chief of Staff of Parliament Ms. Kushani Rohanadheera.

The Epidemiology Unit of the Health Ministry reports that 1,141 more people have tested positive for COVID-19 in Sri Lanka, moving the daily total of new cases to 2,964.

This brings the confirmed tally of coronavirus infections reported in the country to 471,863.

A total of 388,278 recoveries have been confirmed in Sri Lanka since the outbreak of the pandemic last year.

As per official data, more than 73,000 active cases are currently under medical care at hospitals, treatment centres and homes.

Meanwhile, Sri Lanka registered 184 new COVID-related fatalities confirmed by the Director-General of Health Services on Monday (Sep. 06). The new development pushed the official death toll from the virus outbreak in Sri Lanka to 10,504.

State Minister of Money and Capital Markets, and State Enterprise Reforms, Ajith Nivard Cabraal is to step down from his portfolio and resign as a member of parliament to be sworn in as the Governor of the Central Bank.

The Daily Mirror learns that Cabraal will take over the Central Bank, replacing existing Governor Professor W.D. Lakshman who will take up a senior position in the IMF.

When the Daily Mirror contacted Minister Cabraal, he neither confirmed nor denied the news.

Cabraal will be taking over the Central Bank at a time when the country is facing a foreign exchange crisis.