Category: News

President Gotabaya Rajapaksa expressed his apology to former Prime Minister Ranil Wickremesinghe at the All Party Conference over the remarks made by Central Bank Governor Ajith Nivard Cabraal in which he accused the former government for the present crisis.

In his speech at the conference, Cabraal has briefed the Sri Lanka’s current economic situation and had palmed the blame on the former Government for the prevailing crisis.

Responding to the remarks, UNP Leader Wickremesinghe expressed his displeasure and slammed Cabraal for making such a statement.

“This conference was convened by you (President Gotabaya) at the request made by the SLFP. I made my appearance upon a request made by Minister Nimal Siripala de Silva who insisted me to attend the conference because of the old friendship,” he said.

“Accordingly, we are here to discuss the present crisis and propose solutions to overcome the challenges. However, this is not a time to play the blame game,” he added.

Former Prime Minister proceeded to say that he regretted to see that the Central Bank Governor had started his speech by saying that “the present crisis is due to the shortcomings of the former Government.”

“If we are to drag this issue, it will end in the era of King Vijaya,” Mr. Wickremesinghe added.

Subsequently, President Gotabaya apologized to Mr. Wickremesinghe saying that “my apology if you are hurt.”

Former Prime Minister Ranil Wickremesinghe, the Leader of the United National Party Ranil Wickremesinghe requested the Minister of Finance Basil Rajapaksa to present a copy of the report of the International Monetary Fund on the negotiations with Sri Lanka to the parliament.

A heated argument ensued between the former Premier and the Finance Minister when the latter responded that the report cannot be presented as they have only received a draft and not yet the final report in full.

Speaking at the All Party Conference convened by the President Gotabaya Rajapaksa Wednesday, Wickremesinghe further stated that a new budget should be presented identifying only the essential expenses.

Responding to this, Finance Minister Basil Rajapaksa said that a new budget with relief to the people would be presented before the Sinhala-Tamil New Year.

The Governor of the Central Bank Ajith Nivard Cabraal spoke on the economic situation of the country and laid the blame on the previous Yahapalana government for the country’s present economic woes.

Objecting to the comment, Wickremesinghe who was the prime minister of the previous government slammed Cabraal for talking politics at the All party Conference and said the APC was not a place to play the ‘blame game’.

UNP leader Ranil Wickremesinghe told the Governor of the Central Bank that he was not here for petty politics.

“This conference is being held at the request of the Sri Lanka Freedom Party … we thought this was important, so we came here. We are here because of this serious problem in the country. We are not here to return to party politics, not to say who is responsible, that narrow politics as the Governor of the Central Bank said. He started saying that this was a mistake of the previous government. What if I answer it? What then, and the next answer? It will end with King Vijaya saying that if he had not come to Ceylon there would not have been this problem. That’s what happens,” he said.

“So I’m only saying one thing. In those days, there was a different policy. In those days, people had food to eat, drink, had petrol. I’ll say no more.”

President Rajapaksa apologized to Wickremesinghe, if any of the statements by the Central Bank Governor had caused hurt to MP Wickremesinghe.
The following is the full text of the initial remarks delivered by former Prime Minister and United National Party (UNP) leader Ranil Wickremesinghe at the All-Party Conference held today as published in Newswire.

The Government’s economic policies during the last two (2) years have seen a reversal of the free-market economy which created a large middle class.

The distortions in the free-market economy resulted in the interruption of the production, distribution, and consumption of goods and services. Our agricultural production has dropped, which has had an impact on the processing industry. We are seeing nearly 25% of Small & Medium Enterprises shutting down due to these policies. The country is facing widespread unemployment and a rising cost of living which has seen increasing hunger and malnutrition. The country’s debt to GDP ratio has risen to 119%.

It will take at least 5 years for Sri Lanka to emerge from this crisis. The two issues we face are to stabilize the economy in the next 2 years and to consolidate economic recovery.

The reversal of economic policies has shaken the confidence among both foreign and local investors. This has resulted in many of our youth leaving the country. The only way to reverse the damage is if there is a consensus regarding the principles in relation to the country’s economic policy. Political parties must operate within this framework.

The Parties in Parliament must reach a national consensus on the short-term, medium-term, and long-term policies for the country. This must be an open dialogue, where the Government should take the lead while the Opposition must be ready to respond. To date, we have not seen any transparency or commitment from the Government. They have failed to provide us with the relevant data nor have they tabled the full IMF report in Parliament.

In the short-term we must work together to stabilize the economy, otherwise, the people will lose confidence in the country.

The country is faced with two immediate tasks: dealing with our foreign exchange deficit and rescheduling our foreign debts. This will be the first time that a government will have negotiated the scheduling of foreign debt. There are people in the Central Bank and the Ministry of Finance who can deal with the IMF in regards to the Extended Fund Facility. But there is no one who has experience in rescheduling debt. We must obtain two leading firms that can provide expertise in the financial and legal sphere. We also require the services of experts in financial analysis. These services must be obtained outside of Sri Lanka because we will require the best. The selection process of these firms must be done in a transparent manner, this must not be another questionable selection process. The Government must specify the selection criteria, and involve the political parties in Parliament. This cannot be left in the hands of an individual.

Section 5 of the Monetary Law states that the Central Bank has the responsibility of ensuring “Economic and Price stability” and a “Financial system of stability”. The Monetary Board of the Central Bank and the Ministry of Finance have failed in achieving these objectives. Monthly reports from the Ministry of Finance must be presented to Parliament. The new legislation will be required to enact a supervisory role to Parliament over the Central Bank to prevent the arbitrary deficit financing that is currently in place.

The Central Bank and the Ministry of Finance must adhere to a single strategy and speak publicly in one voice. Sri Lanka’s nominee on the Board of Governors of the IMF is the Minister of Finance. Therefore the Ministry of Finance must take the lead.

The new exchange rates have brought about pressure on the banks. Private banks are currently holding vast sums of dollar loans, while state banks are carrying a large foreign debt of several State-Owned Enterprises. There is a question over the balance sheets of the banks due to the conversion of dollar loans at the present exchange rate. The banking sector is on the verge of collapse, the Government must ensure that a safety net is enacted for the banks to prevent a collapse.

The price adjustments resulting from the Government’s economic policies have placed a huge burden on the people. Therefore, it is essential that relief is provided to the public. The IMF has also recommended, “a credible and coherent strategy to restore macroeconomic stability and debt sustainability, while protecting vulnerable groups and reducing poverty through strengthened, well-targeted social safety nets.”

The 2022 Budget is no longer relevant for the country. At this time of crisis, we must re-evaluate the non-essential expenditure and ensure that relief is provided to the public. 2022 will not be a year of development, but instead, this must be a year of relief.

Negotiations with the IMF will take a minimum of six (6) months, while the relief benefits from the Indian Credit Lines will not go beyond mid-May. The Government must find funding for the remaining four months until an agreement with the IMF and International Sovereign Bondholders is reached.

We have only one option, and that is to approach a few friendly nations that can form a consortium and request financial assistance and help implement a new economic plan. These countries must include India, Japan, China, and the European Union (EU) will work alongside the IMF. We had a similar consortium between 2002 and 2004 when the economy had collapsed and we were undergoing peace talks.

Our relationship with these countries is strained, and this is mainly self-inflicted. The Government decided to cancel several investment projects with India and Japan, these must be resolved. Similarly, this Government has brought about issues with China that must be addressed. Sri Lanka’s issue with the EU is related to the Human Rights Council in Geneva. Those concerns must be dealt with. Immediately measures must be taken to improve relations between Sri Lanka and these countries. If the Government can do so, then we will see increased confidence in the country that will encourage greater levels of foreign investment.

Article 148 of the Constitution has vested control of public finances in Parliament; however, the Parliament has so far been ignored. I call upon the Government to ensure that Parliament is informed of all developments, while all relevant reports are made available. The committees of public finance including COPE and COPA must be strengthened. Similarly, the Minister of Finance must take upon himself the responsibility of addressing Parliament monthly in regard to the present situation. If necessary, a Parliamentary Committee should be formed for consolidating this activity.

The President and his Government must take Parliament back into their confidence, otherwise, they will lose the confidence of Parliament.

The Government must initiate discussions with all Parties in Parliament, regardless of if they are present or not today. It is of utmost importance that we all reach an agreement so as a new program of recovery can be started. These actions must be taken, not for the future of us as Parliamentarians but for the future of the youth of the country.

It is a courageous step by the Sri Lankan Government to reach out to the International Monetary Fund for help now, said the United States Under Secretary of State for Political Affairs Victoria Nuland on Wednesday (23).

Speaking to reporters following a meeting with Minister of Foreign Affairs Professor G. L. Peiris in Colombo she said “We come at a particularly difficult and pivotal moment for Sri Lanka and you are a vital partner of the United States and at a key crossroads in the Indo-Pacific and we are eager to support you at this critical moment.”

“We are also encouraging provincial council elections and broadening of the democratic base,” said Nuland.

Watch the Full Press Conference Here:

The Parliament of Sri Lanka has amended controversial “anti-terror” legislation after a European Union threat to withdraw lucrative trading status, but opposition lawmakers said the changes would not stop abuses under the law.

The EU last year warned that the island nation could again lose its generalised system of preferences (GSP Plus) designation – a favourable trade scheme to encourage developing nations to respect human rights – if Colombo did not improve its rights record.

Tuesday’s vote to tweak the Prevention of Terrorism Act (PTA) comes after President Gotabaya Rajapaksa told a delegation from Brussels in October that he had committed to urgent reforms of the law.

But Sri Lanka’s main opposition parties withheld support for the amendments, saying they did not go far enough in stopping the arbitrary arrest of dissidents.

“What is needed is a complete scrapping of the PTA and not cosmetic changes,” opposition legislator Anura Dissanayake told Parliament.

The changes reduce detention without trial limits from 18 to 12 months, but still allow confessions coerced from suspects to be used against them in criminal proceedings.

International rights organisations have accused Rajapaksa’s government of persecuting minorities and targeting rights activists.

Rajapaksa was the top defence official in 2009 under the presidency of his brother Mahinda, when the pair crushed the remnants of the Tamil Tigers separatist movement and ended a decades-long civil war that claimed more than 100,000 lives.

Government forces were accused of war crimes, including the killing of 40,000 Tamil civilians in the conflict’s final weeks.

Successive governments have denied the charges and refused to allow an international investigation.

As many as 78 Tamil prisoners are behind bars under the PTA without being formally charged, some of them for more than three decades.

The EU previously withdrew GSP Plus status for Sri Lanka after accusing Colombo of failing to respect human rights and ensure accountability for alleged war crimes.

The concessions were restored in 2017 after earlier reform promises by Sri Lankan authorities.

By N Sathiya Moorthy

The double-quick meeting that Core Group envoys in Colombo had with Foreign Minister G L Peiris so soon after the 47th session of the UNHRC may be indicative of the predicament that both would be facing at the next session in September, where there will be a vote on Sri Lanka. The Core Group, where the ‘outsider’ US influence is predictable though the latter is formally to take over the leadership from the trans-Atlantic British ally after President Biden re-signed into the UNHRC, seems wanting a honourable way out.

In a way, for that to happen, they seem wanting some initiatives on which they would ‘feel’ convinced on Sri Lanka’s human rights front, as under the predecessor regime, but not with the ruling Rajapkasas as yet. That would mean that the government would have to come up with some way out to address a part of the UNHRC concerns even partially, whatever it means to the Tamils back home.

Yet, for the Core Group UK leader to issue a travel advisory against the nation, and pegging it also on possibilities of terror-attacks is mischievous, unwarranted and irresponsible. At a time when nations are supposedly working together to end terrorism, if White Hall really had inputs as neighbouring India had passed on ahead of the Easter serial blasts in 2019, London should have shared it with Colombo, and not issue travel advisories that do not seem to have a basis.

In comparison, Canada, another active member of the Core Group, which again has Sri Lankan Tamil Diaspora citizenry, hence voters, forming a critical electoral constituency in places, has based its travel advisory on real-life issues like the continuing economic crisis and forex issue. The latter is fair game compared to the former though even here the question arises if the Canadian advisory too owes more to domestic politics than domestic concerns for the post-Covid Canadian traveller.

Unrealistic expectations

Possibly, Sri Lanka has moved away from China, rather over-dependence on Beijing, when it re-embraced India for economic aid and also approached IMF, though after a lot of heated debate, which is not going to end any soon. It does not mean Colombo is going to dump Beijing. In economic and political terms, no government in Sri Lanka can do that without enough aid to repay all of China’s debts, and adequate reassurance that Colombo would not require Beijing’s veto-vote in the UNSC, or its diplomatic backing at the UNHRC and other international fora, if and when the nation is dragged there.

The same applies to Russia, which too has bee a trusted friend at the UN, and where like China, it too does not mix politics with human rights – or, use the latter as a ruse to stalemate, if not check-mate, non-abiding nations. Just now, the West, which constitutes the core of the UNHRC Core Group also wants Sri Lanka to condemn Russia on the Ukraine War. It is not going to be easy for Colombo, but then, Sri Lankans should feel happy that the West has suddenly feels the importance of their nation, whatever be the circumstances, whatever the motive.

Clearly, someone somewhere seems wanting to link Sri Lanka’s position on Ukraine war to extraneous issues like UNHRC vote and IMF assistance. Or, that is what it looks like, and would remain so until greater clarity emerges. At the end of the day, IMF assistance, if not conditionalities, are as much political as they are economic, if not more of the former. It is obvious that an official team from the US, headed by U.S. Under Secretary for Political Affairs, Victoria Nuland, with focus more on these issues than possibly even on American investments in the country.

Symbolic backing

Definitely, circumstances beyond its own initiatives possibly have helped the government generate a certain goodwill in western governments. Rather, they are only test-flight on how Colombo would behave on issues of western interests whatever be the impact otherwise on the nation, per se. For instance, would and should Colombo endorse the western initiatives against Russia if it were going to harm the nation’s interests even more?

Clearly, having pulled the sanctions-trigger against Russia as if Moscow were an Iran or Iraq, Afghanistan or North Korea, the US-led West seems wanting to show up numbers beyond the western hemisphere. It’s akin to the US first involved NATO in its ‘global war on terrorism’ post-9/11, and then signed up one small country after another, to a make-belief global consensus.

This time round, they seem wanting it on the political, diplomatic fronts, as if nations like Sri Lanka, far removed from the European theatre of war, would be making a direct contribution to shaking Russia and President Putin – when those bigger powers could not do it by themselves. But they want it all the same, indicating that something was rotten in their planning from the very start.

As if reacting positively, even if in a symbolic way, reports indicate that government has decided to do away with fertiliser imports from Russia and Belarus. It is unclear if the decision also owes to the government’s current fascination for switching over from chemical to organic fertiliser. However, the decision would be tougher if Colombo were to ban other imports and exports, too. The nation may ill-afford export-ban in particular in these times of economic hardships, especially when read with Moscow’s continuing political ban.

It looks as if the US imposed sanctions believing that Putin would not have thought it all out before firing the first missile at Ukraine. Western Europe followed, not because they respected or feared the US – but because they feared Russia and Putin. Yet, the clarity with which they all have kept NATO out of the war, that too when Ukraine’s entry was the core issue, shows that they do not have stomach for an European War after 70 years of ‘cold peace’ after the Second World War.

One cannot argue that they are not fighting NATO’s war for Ukraine because Ukraine was not yet a member of NATO – and also does not want to become one, as recent reports have shown – does not wash. Afghanistan was not a NATO member, nor was the 9/11 attacks an Afghan war on NATO. It was a resourceful terrorist outfit that took the world’s mightiest of nations would not have been justification enough for NATO intervention.

Incidentally, only weeks earlier, on 24 July 2001, the LTTE had crippled Sri Lankan economy – as only the forex crisis has done now, and more – by targeting the Katunayake Airport. Of course, that was nothing compared to 9/11, where Osama bin-Laden had the cunning and audacity to cause a first-crash on the ‘Twin Towers’, which alone was an invitation for the global media to witness and record what followed. That they all had the grace and circumspection not to telecast what they saw and recorded went a long way in mitigating the all-American embarrassment of all times!