The most popular desire everywhere all around the world is of serving one’s own country. People feel honored when their sons sacrifice their lives for the esteemed and prestige of their homeland and it is really a hard luck for the whole youth of a nation if illogical restraints are hurdled into the way to completion of this sacred desire. Today the whole of the Indian nation is raising its protesting voice against BJP government’s decision of changing the procedure of induction into the Indian army. Now onwards, there won’t be the permanent soldiers but the temporary Agniveers defending the country. The status of the Agniveers would be like those of the daily-wagers and for a very short period of four years. For many of my esteemed readers the term Agniveer would be strange and new but today in India this term is very much popular and root cause of the rapidly disturbing law and order situation as well.
The Union Cabinet, according to media reports, has recently introduced the Agnipath scheme for the recruitment of soldiers in all three branches of the Indian Army including the Navy and the Air Force. This recruitment would be largely on a four-year short-term contractual basis. Just after a short period of four years the streets of India would be thronging with the innocent ‘Agniveers’ and there would be hundreds groups of extremists and terrorists alluring those Agniveers to join them. According to the details provided to the media the youngsters ranging from the age of 17 and a half to 21 years will be inducted into the three services of the Indian Army. After completion of the four-year tenure, 25% of the recruits will be retained for regular service and the remaining 75% would be said good-bye forever. It is yet not clear what those 75% would be doing after being kicked out of the army with no permanent benefits.
After getting a training of four years, experts apprehend, these Agniveers would be a hot-cake for those who are interested in establishing their personal armies and even for the groups involved in different terrorist activities. Moreover this new scheme of induction of personnel below officer rank would shatter the decades-old selection process which was however based on merit and there was a future surety to the employed ones. Now this tenure-track type of system of induction would give birth to depression and disappointment among the so called Agniveers. Reports say that every year around 45,000 to 50,000 soldiers will be recruited under this scheme and recruitment will be done twice a year.
Countless young men, who had been dreaming of becoming a part of the military forces, are protesting against the Agnipath scheme as they are unhappy over the changes in selection system. They say that after serving for four years in the army and after ending up with no pension and no monetary benefits, they would be standing nowhere. A number of experts on military affairs and opposition leaders belonging to different Indian political parties are of the opinion that this scheme would adversely impact the functioning of the armed forces. They are demanding the time-tested recruitment system which had been opted for decades.
More interesting is the fact that no specific criterion has yet been described for the selection of Agniveers. It seems that the selection procedure would be completed at local level and the local unit commanders would be all in all in making decisions. The only restriction is that of the age bracket. Keeping in view, India’s present ‘secular’ scenario, it is very much sure that in the suggested force there would be no place for the Muslim and the Sikh youth; only the Hindu young-men would be entertained. Since there would be only Hindu soldiers in this newly formulated force, it is quite sure that during their training, more poison would be injected in the veins of the Agniveers against the Muslims and other minorities and influenced by that venomous ‘preaching’, the Agniveers would target the Indian religious minorities like guided-missiles. After completion of the four year tenure, each of the Agniveers would be like a blazing suicide-bomber ready to explode on the minorities particularly on the Muslims and the Sikhs.
Mr. Modi’s desire of making India a Hindu country is not hidden from anyone; the present Agnipath induction scheme also reflects his desire. It seems that Mr. Modi has designed this scheme just to produce another RSS type of force which would be more skillful, more trained and more poisonous than the RSS. One finds a lot of resemblance between the RSS and the Agnipath force. An introduction leaflet about the RSS says, The initial motive behind formation of RSS was to provide character training through Hindu discipline and to unite the Hindu community to form a Hindu nation. The organization promotes the ideals of upholding Indian culture and the values of a civil society and spreads the ideology of Hindutva to strengthen the Hindu community.” In that entire introduction, there is no reference to the Indian nation; it is all about the Hindu nation. Various historians are of the opinion that the RSS drew its initial inspiration from the Italian Fascist Party which was very much vibrant during the World War 11. The RSS also started working on the same lines mapped out by the Italian Fascist Party and with the passage of time grew into a prominent Hindu nationalist umbrella organization sheltering rather feeding several affiliated organizations. These organizations patronize different educational institutions and think-tanks to spread Hindutva ideology. Now the Agnipath Force would provide another strong support to the RSS philosophy with the help of young Agniveers.
Mr. Modi is doing nothing unexpected by introducing Agnipath like schemes as ‘kill the minorities’ has ever been the salient feature of his character. His political party had been warning the Muslim and the Sikh community to get out of India. And above all the horrible pictures of burning houses and blood-dripping human bodies in Gujrat massacre 2002 are still there to describe Modi’s temperament but the problem is that in spite of all these facts and figures, Mr. Modi and his followers try to introduce themselves as the great ‘seculars’ and on the basis of that claim of secularism, they try to win sympathies and favors of the world. This ridiculous contradiction certainly needs world’s attention. No religion, either it is Hinduism or Sikhism, Buddhism or Islam advocates hatred; if someone tries to disfigure the philosophy of a religion in the name of love for that religion, he must be taken to task rather dealt with iron hands. Without doing so, an extremism-free world could never be dreamed of. Extremism is no doubt the first step to terrorism leading to a large scale endless destruction.
Mr. Ajith Nivard Cabraal, twice Central Bank Governor and former State Minister for Finance, issued the following media statement last week on exchange rate flexibility.
The decision to allow the Sri Lankan Rupee (LKR) to be flexible” from March 7, 2022 onwards is sometimes described by certain persons as being a unilateral” decision of then Governor Ajith Nivard Cabraal. Therefore, this statement is to provide the factual position so as to set the record straight.”The decision to allow flexibility in the exchange rate was taken by the Monetary Board of the Central Bank of Sri Lanka based on a Monetary Board Paper dated March 7, 2022 submitted by all three Deputy Governors (Mr Mahinda Siriwardene, Mr Dammika Nanayakkara & Mrs Yvette Fernando), Director – Economic Research Department and Director – International Operations Department.
The Board Paper stressed the need for changing the exchange rate policy immediately in order that the exchange rate acts as a shock absorber” in the face of adverse developments in the global front on Sri Lanka’s already fragile Balance of Payments, including the increase of the crude oil price to nearly USD 140 per barrel and the worsening Russia-Ukraine war.
Based on that Board Paper and the discussion at the meeting, the Monetary Board decided to ‘allow the market to have a greater flexibility in the exchange rate with immediate effect and communicate that the Central Bank is of the view that forex transactions would take place at levels which are not more than Rs. 230 per US dollar.’
From the above it will be clear that, while the Monetary Board had expressed its ‘view’ as to the level at which forex transactions would take place as a market guidance, a clear decision had been taken to allow for the flexibility of the LKR in the forex market. On the same day, a statement was issued to the media in line with the above decision.
Further, within about a week of floating the LKR, the President made a formal announcement that the government had initiated discussions with the International Monetary Fund (IMF) for a programme.
Subsequently, Governor Cabraal resigned on April 4, 2022, on which day, the LKR was trading at Rs. 289.73/299.99 per USD in accordance with the new ‘flexible’ exchange rate policy as announced by the Monetary Board. After Governor Cabraal’s exit, the Monetary Board chaired by the new Governor Dr. Weerasinghe continued with the ‘flexible’ exchange rate policy, whist the Government and CBSL also took a series of far reaching decisions which included the decisions to: sharply increase policy interest rates by 700 bps from April 8, 2022 onwards, and to discontinue repayments of forex loans and interest from April 12, 2022 onwards.
In the meantime, the LKR continued to depreciate to a range of Rs. 364.23/377.50 against the USD by May 12, 2022, at which point, the Monetary Board had apparently once again decided to ‘fix’ the exchange rate at a new range between Rs.355.00/Rs.365.00 per USD. Such move to ‘fix’ the exchange rate seems quite similar to the policy adopted by the Monetary Board chaired by Governor Professor W D Lakshman which ‘fixed’ the LKR exchange rate at a range of Rs.199.00/203.00 per USD from September 6, 2021 onwards.
It must of course be understood that there will always be conflicting opinions among stakeholders as to the value, timing and methodology to be followed in ‘fixing’, or ‘floating’ or ‘pegging’ a country’s currency. It is also quite possible that after decisions are taken to ‘float,’ ‘fix’ or ‘peg’ the currency, others could, claim that the decision was right or wrong or implemented differently.
However, it must be appreciated that the decision-making authority has to take its decision based on the prevailing circumstances, expert advice, practical ground conditions, judgment of future expectations and outcomes, etc. when viewed holistically. That is obviously why the Monetary Law Act provides the authority to the Monetary Board to change financial and monetary sector policies (including the exchange rate policy, interest rates, statutory reserve ratios, etc) when it deems appropriate to do so, from time to time.
It must also be appreciated that the implementation of policy measures is carried out by the professional and technical staff, of the Central Bank and they would naturally ensure that the policy measures being implemented are based on legal and binding decisions of the Monetary Board, which is the decision making authority, and not based on ‘unilateral’ decisions of a single person.”
Minister of Power and Energy Kanchana Wijesekera says that a token system to distribute fuel is to be introduced from tomorrow (June 27).
Speaking during a press briefing in Colombo today, he said the decision was taken at a meeting of the Security Council chaired by the President and the Prime Minister yesterday (25).
However, the Minister requested the public not to wait in queues at filling station until the next fuel shipment arrives as the stocks of fuel held by the Ceylon Petroleum Corporation (CPC) are being distributed only for essential purposes.
He further stated that the exact date of arrival for the next fuel shipment cannot be confirmed as the moment.
The Security Council had met last night, on the instructions of the President and the Prime Minister. Accordingly, they have decided that from tomorrow, if there are people queuing up at filling stations, the security forces including the Army, Air Force, Navy and Police will be deployed at every filling station from tomorrow to give everyone in the queues a token in the order they are queuing up,” he said.
He said that the token will be issued after obtaining their telephone number so that it cannot be changed. The minister said that by the day after tomorrow they will not be able to deliver to every filling station until they receive the next fuel shipment.
Until then, he said they intend to inform the consumers in the order of the tokens when a fuel bowser is delivered.
He therefore requested the public not to queue up for fuel in the next couple of days until the matter is managed in the coming days.
I know the pain. I know the pressure and the anger. It could be against me or the government or the ministry, the president or the prime minister, but I urge you not to line up at petrol stations in the next few days. You can get the token and go home,” he said.
Two ministers will be flying to Russia tomorrow (27) and they will discuss matters including fuel imports during the visit, according to Minister Kanchana Wijesekara.
The Minister of Power and Energy revealed this during a press briefing held in Colombo today. He was responding to a question raised at the media briefing regarding Sri Lanka not seeking oil from Russia.
Speaking further the Minister said that the misters are traveling on another diplomatic visit and hoped that the discussion would be held in due course during that visit and that a favorable answer would be forthcoming.
He said it is a misconception to say that they are not interested to obtain fuel from Russia. We have made requests, and there are diplomatic channels to go ahead with it.”
The truth is that the ship that was to come earlier had also been proposed to bring down a shipment from a Russian company. The first letter of credit was also rejected because of a ship from a Russian company from international banks.”
He said: As far as I know, two ministers are going to talk to Russia about certain issues on their way to another diplomatic affair. We hope to receive a favorable answer. It doesn’t matter who we get from. If we receive at a lower cost, we will try it.”
The Ministry of Education says that schools in the Colombo Zone and other major cities will remain closed next week, from June 27 to July 01.
However, the ministry said that rural schools can function as normal on Tuesday, Wednesday and Thursday during next week.
Accordingly, issuing a notice, the ministry informed that the educational activities in the schools during the week from 27th of June to 01st of July 2022 will be conducted according to the following manner:
1. The schools where students and teachers are not having transport difficulties must be conducted normally just as the rural schools were held from 20.06.2022 to 24.06.2022 and if there are teachers facing the transport difficulties, the principal will arrange a flexible timetable for them without considering from their personal leave.
2. The urban schools which were not held last week must be conducted 03 days a week viz. Tuesday, Wednesday and Thursday from 07.30 am to 01.30 pm. The discretion of deciding the number of days conducting primary classes in these schools lies with the principal.
For the absent days of the students the learning activities will be continued through inline teaching / assignments / home based activities.
3. Actions will be taken not to consider the absent days of the teachers due to transport difficulties as personal leave.
4. The Ministry of Education extends its gratitude to the teachers and principals who contributed to conduct the schools even amidst of transport difficulties from 20.06.2022 to 24.06.2022.
The caretaker Prime Minister is once again trying to complete the project given to him – his vision was to destroy agriculture, transfer agricultural land and see farmers in jeans. He even promised chewing gum and gold chains to the farmers in Polonnaruwa in 1999. This was the Parakumba era Ranil wanted to create! Imagine King Parakramabahu in jeans! Giving land is nothing but a subtle inducement to sell the land given to farmers by the state to farm. The land eventually gets sold to foreigners or enemies. When food is no longer produced in Sri Lanka, it is a lottery for importers. It ends any program for self-sustenance but opens doors for bogus western funding on the pretext of resurrecting agriculture. We have inherited land and resources, passed down to us by our ancestors, not to have it siphoned off as is being planned. The eventual outcome impacts Sinhalese, Tamils & Muslims. If those living on state land allocated for agriculture do not wish to continue, they should be told they can leave & that land can be given to someone who wants to continue agriculture. State land cannot be transferred into private ownership which results eventually in selling state land which is a violation of the Public Trust Principle as a Government is only custodian of the land & not owner to be handing ownership to anyone.
State land is not for sale – State land can only be leased
84% of Sri Lanka’s land is held in Trust by the State. A Govt is only custodian of the Land. This means a government has no moral or legal right to sell the land. The govt can only lease the land. Therefore, the government cannot give title ownership to any state land & this is an illegal act & can be reversed by legal channels. Constitutionally too the Government cannot give title ownership of state land to private hands (local or foreign).
This is the golden rule.
Getting the farmer to do what the Government cannot do!
Given this scenario – What the government is cunningly trying to do by giving title ownership to state land is to get the farmer to sell the State land as the Govt cannot directly sell State land.
State land ownership cannot be given to one segment of people
State land belongs to not only this generation but future generations as well
We are enjoying what has been passed down by our ancestors.
Farmers are only a segment of the State (People)
A Government cannot give a segment of the State title ownership of the land
This violates fundamental right on equality” to all, clearly established in Article 12(1)
If a government is giving ownership of state land to farmers – then they must give title ownership of state land to all 22million people as well as include provision for state ownership for future generations. This is something that cannot be done, which is why a government cannot give ownership of state land to one segment of society or sell state land except lease it.
Farmers are in debt
If farmers are in debt, it is because they have taken loans & they cannot pay the loans.
This means without title deed ownership, they have been able to take loans.
This nullifies the claim by those promoting the need to have title ownership of land to obtain loans & that without title ownership of the land they cannot take loans.
State Banks and private banks give loans and have been doing so for decades.
The banks will provide details of how they give loans to farmers.
Farmers in debt given title ownership
Silent message – Leave State land + Give up Farming
A farmer in debt & given title ownership is one step towards luring him to give up farming & give up his land. The outcome is suppressed by a campaign to project notion that the government is doing a great favor to the farmer by handing him title ownership of state land.
Six dangerous scenarios are created by handing title ownership.
From a farmer living on state land, once given title ownership to this land, he becomes a private land owner & the state washes its hands from any responsibility or assistance to him.
Farmer then can be lured to sell land now under his ownership – this money invariably will get divided amongst large family living on acres of state land. Ultimately he may not have much left.
A farmer living for generations on state land with his family after selling newly owned land will be asked to vacate the land with his family.
This farmer & family will have to find alternate place to live & livelihood– Govt is not bound to help
Imagine 50,000 farmers given title ownership to state land & lured to sell their land, leaving farmers & family without a land to live, without a home to live in, without a livelihood to live on? Look at the ultimate outcome of giving title ownership!
If farmers are given ownership of state land – All citizens have right to demand title ownership of State land as well. This will create an ugly precedent & unwanted trouble for Sri Lanka.
What are the options
Covid and the current economic crisis has shown us that we cannot rely on importing food. We have to grow our own food & we have to protect food security of Sri Lanka.
Farmers are farming on state land.
The Government has to provide all assistance to all its departments & officials to help farmers & farming.
If farmers have fallen into debt – the Govt has to work out a relief package for them after auditing why they have fallen into debt.
If farmers require training on modern ways of farming – this has to be given to them.
If farmers are unable to sell their products because of third party mafia – the govt has to stop it & take quick action.
Farmers have to be regarded as crucial to Sri Lanka’s self-sustenance. No government can allow farmers to farm with difficulty on their own without assistance. The problem has arisen primarily due to lethargy of governments and inefficiency of public officials tasked to help farmers. These officials have to be changed & governments need to buckle up with a proper national plan that is practical and not just nice on paper.
If any farmer does not wish to continue farming – the solution is not to give him title ownership of state land (with ulterior motive to having the land sold by the farmer), but to offer him an alternative :-
He can leave farming – but in so doing, he & family have to vacate state land & find alternate livelihood & this land will be given to a farmer wanting to farm
He can be helped with loans & continue farming on leased State land (govt should also consider writing off old loans)
When foreign governments & international monetary organizations ask a government to privatize state land & enable foreign ownership – a government has to think of crafty ways to forsake State land. Offering title ownership is that crafty plan.
Farmers must look beyond the joy of owning a piece of paper & the bigger dangers that lie ahead for the farmer & his larger family who loses state patronage after becoming a private land owner. Politicians and activists realizing these dangers must explain to the farmers the ultimate outcome.
The USA needed supportive persons in Sri Lanka if its plan to take over Sri Lanka was to succeed. Though Sri Lanka did not realize it at the time, Neelan Thiruchelvam was USA’s best link with Sri Lanka.
Neelan Thiruchelvam was a leading advocate of Tamil separatism from the 1970s onwards. Unlike the rest of the leaders of the Tamil Separatist Movement, Neelan came from the social elite in Sri Lanka. He was also clearly the best educated, the most articulate, and the most knowledgeable regarding political concepts, though he was certainly not the great legal mind he was projected to be.
He had a high profile, and high standing, both locally and abroad, on the subject of Tamil Separatism, camouflaged as ‘minority rights.’ His death was a blow from which the Tamil Separatist Movement has never recovered.
The USA link would have come about when Neelan went to the US for further studies. He went to Harvard on a Fulbright scholarship and obtained his doctorate there. Later he was Edward Smith Visiting Fellow and Lecturer at Harvard Law School as well as Fello2w in law and modernization at Yale Law School (1972–74).
The regard in which Neelan was held by the USA became known in Sri Lanka only after his death. When Neelan died, USA cried. There was a condolence meeting attended by US officials in a Washington. What this showed was not Neelan’s greatness but his usefulness to the US.
U.S. President Bill Clinton said he and his wife were “shocked and saddened” by Neelan’s tragic death. Hillary Clinton had been “deeply moved” by her meeting with Neelan in 1995. With his death, a powerful voice for reconciliation in Sri Lanka has been silenced, he said.” Samantha Power, Special assistant to US President and senior director for multilateral affairs and human rights said that she became friends with Neelan, when she came to Sri Lanka to have discussions with President Rajapakse in 2010.
TIME recognized only two Sri Lankans in its obituaries column. they were Neelan and Prabhakaran. TIME carried an obituary of Neelan when he was assassinated in 1999. TIME said that Neelan was a tireless activist in the sphere of human rights and on behalf of ethnic minorities. He was highly regarded around the world as a legal scholar and an advocate for peaceful resolution to interethnic strife.
Due to the US link, Neelan was also recognized elsewhere in the western world. UN Chief Kofi Annan also expressed sympathy on his death.Condolences and condemnatory messages came from the Foreign Ministers of Canada and Australia. The Times (London), The Guardian, The Independent, The New York Times, and Toronto’s Globe & Mail, observed analysts.
Mangala Samaraweera, Foreign Minister in Yahapalana government, was very pro-USA. Mangala Samaraweera was in Washington in February 2016 as Foreign Minister for a Sri Lanka – U.S. Partnership Dialogue. There was a media presentation where US Secretary of State Kerry met with Sri Lankan Foreign Minister. Mangala looked strained. He was not his bouncy self. Probably due to the gravity of the occasion. (https://youtu.be/dQ7SdFkhcdg)
Sri Lanka under Samaraweera as Foreign Minister supported the 2015 UNHRC Resolution on Sri Lanka put forward by USA. in his apparent school boyish and sycophantic eagerness to endear himself to the Western promoters of the UNHRC resolution of October 2015 on Sri Lanka and his naive rush to placate the expatriate Tamil groups, who are still pursuing the Eelamists agenda through other means with the apparent acquiescence of their patrons in the West, he conceded far more than what the drafters of the resolution had expected, said Mathias Keitel. In many countries, compromising the national constitution with such audacity would have resulted in prosecution before the courts.
Many people were alarmed by his style.Mathias Keitelsaid that the interests of Sri Lanka are being systematically compromised by its buccaneering foreign .Minister Mangala Samaraweera. Dr Dayan Jayatilleka pointedly observed in a recent article, that Foreign Minister Samaraweera poses an existential threat to the State’s sovereignty and security, and gravely jeopardizes political stability and governability.”
Minister Samaraweera was in Los Angeles after attending the 71st Session of the UN General Assembly in New York. About 200 residents from Southern California were present at the September 25 event, 2016, which was the first featuring a visiting government dignitary in that period. Notably absent were Buddhist monks from the local Sri Lankan temples.
In contrast to other Sri Lankan leaders who from time to time have addressed the expatriate community here, Mr. Samaraweera, speaking for about 20 minutes, solely in English, did not have one good thing to say about Sri Lanka from independence to present. None of the warm nostalgia for the homeland usually evoked by leaders from all sides of the political divide.
Quoting extensively from the late Lee Kuan Yew, Prime Minister of Singapore, he painted a grim picture of a country that couldn’t evolve,” a nation, contrary to the promise shown when it became independent, is still struggling to move forward.” Touching on Sri Lanka’s economic future, he said the government will take measures to make it easier for foreign investors to do business in the island as well as for foreign nationals to buy land.
Journalists based in Washington and New York have noted that, from the time Mangala Samaraweera assumed office as Foreign affairs minister, he has taken upon himself to denigrate the previous leadership of the country before his Western counterparts, sometimes embellished with unsubstantiated tall yarns, (One recalls his tales of the Rajapaksas siphoning off $50 billion to foreign tax havens or Mahinda Rajapaksa’s election campaign being funded by the Chinese). Badmouthing a previous leadership which could return to power at some point, with foreign counterparts, is not in the country’s best interests.
The former Army Commander, Mahesh Senanayake was among those who had been sent on compulsory leave in 2010 after Fonseka suffered defeat at the Presidential election. The government accused him and others of backing Fonseka, and trying to stage a military coup against President Mahinda Rajapaksa.
Senanayake left the country and went to USA where he worked on intelligence in Afghanistan and Libya then held a senior position in the American embassy in Dubai. He served USA for five years.
He returned to Sri Lanka in 2015 and was reinstated by President .Sirisena. Mahesh Senanayake was a candidate at the Presidential election of 2019. Had he won, US would have felt comfortable with him. He did not win. Thereafter he left the country. He now lives in Dubai and works as a Consultant-Advisor to National Airlines, USA, said the media.
Senanayake had a distinguished service in the army. He participated in the Eelam war. He was actively involved in all operations in the North and East and was also instrumental in introducing the Long Range Reconnaissance Patrol concept to the Sri Lanka Army.
Senanayake served as the Regimental Centre Commandant of the Special Forces Regiment, Commander 211 Infantry Brigade – Vavuniya, Commander Special Forces Brigade and the General Officer Commanding 52 Division -Varani, Jaffna. He also held the position of Director of the Army Command and Staff College and Director of Planning at the Army Headquarters during the decisive period of the humanitarian operation.
Gen. Senanayake has been honored with the Rana Wickrama, Rana Soora, Vishishta Seva Vibhushana and the Uththama Seva medals for his unblemished services in the Army and his gallantry and bravery in the face of the enemy during the Eelam operations.
Mahesh Senanayake had trained in USA. He is an alumnus of General Staff College, USA. He had followed CGSC course in 2000. General Mahesh Senanayake (Rtd) was inducted into the United States Army Command and General Staff College (CGSC) International Hall of Fame in 2021. He is the first-ever Sri Lankan Army Officer to receive this honor.
He has been conferred this honor in recognition of his outstanding military leadership for the nation and commitment to preserving global peace, said USA. His contribution towards the resettlement of internally displaced persons and reconciliation process following a 27 year civil war in his country is truly noteworthy. He was a trusted and important partner in bilateral cooperation between our two countries.”
General Senanayake said, I am extremely happy and honored as a Sri Lankan, to be inducted into the International Hall of Fame, which only a very few military and civilian members have been fortunate to receive. Since 1973, only 287 global military leaders received this prestigious honor and I am humbled and proud to have been able to bring this prestige and fame to my country. I am grateful for the knowledge, wisdom and experience I received from CGSC this was definitely instrumental in charting out my military career and I am grateful for the CGSC for this honor and recognition.”
Give Aussies a Ticker Tape parade as a farewell gesture by driving them through the streets of Colombo (Galle Road near Galle Face Green) once this popular Australian cricket tour is over.
This is exactly what the Australians did in Melbourne on February 17, 1961 when they bid goodbye to the West Indian Cricket Team led by Frank Worrell.
Australia beat West Indies by 2 to 1 in a close contest which went down to the wire.
In a time of misery let us thank the Aussies for bringing smiles on to faces of our fellow Sri Lankans in more ways than one.
Cricket always brings people together. This Australian tour has really caught the spirit and imagination of the cricket loving Sri Lankan public. It has helped to drown our sorrows and anxieties.
In the following video clip, we see Sri Lankan Cricket fans cheer Australian Cricketers in an extraordinary display of warmth and generousity of spirit towards a rival foreign team rarely seen in playing fields.
‘Extraordinary’ Colombo crowd reception has Aussies stunned | Sri Lanka v Australia 2022
Mr.Patrick Brown Mayor of Brampton,Ontario/ Candidate for Leader of the Conservative Party of Canada. Office of the Mayor City of Brampton 2 Wellington Street West. Brampton, Ontario L6Y 4R2
Dear Mayor Patrick Brown:
I just received an email about YOU which said, Patrick Brown and the Brampton City council passed the controversial Tamil Genocide Memorial on Brampton Public property with blatant disregard to the peace loving Canadians. Brampton Parks and recreational facilities are for the benefit of all residents regardless of race, religion or ethnic origin……”
Hey! Patrick, this is one more incident to prove positive that my proclaiming that Patrick Brown is a Clown in Conservative politics.” Are you Nuts or What?
Attached to that email was an image on a Facebook poster of You pretending that you were a Cardboard -Sandow emulating the German Bodybuilder Eugen Sandow of the 1880s, in a singlet vest showing pumped up pectorals, trapezoids, deltoids, biceps and serratus muscles.,
And here is what it said – an image of a film camera projecting the words –TAMILS FOR PATRICK PRESENTS – PATRICK BROWN in & as. MR, BROWN – Barrie to Brampton”.
You know what Patrick Brown, that tough image of you does not impress me nor phase me out. My challenge to you for a public debate on your Godfather love in”: with the Tamil community still stands. You tell me where and I will be there with bells and whistles.
My three incentives to get you to debate me still stand.
I will pay You a debating fee of $500 from my pocket, If your debating fee is a $1000 I am prepared to send a hat around during the debate and you can have every penny and dollar notes that have been dropped into the hat;
I will let you have the former rooky Tamil MP Rathika Sitsabaiesan, your sidekick when you bicycled with her showing the film Sri Lanka’s Killing Fields, to parliamentarians, and former MP Paul Calandra, your friend in Tamil Love-ins, to sandwich you as prompters during the debate, and
I will let you have 10 of your Brampton City Councillors stand 25 feet away from me after the debate and pelt me with rotten eggs and tomatoes for the next 30 seconds. This is on one condition, that I am allowed to wear a helmet.
The challenge is on Patrick Brown, will you accept it? Prove to me that you are no tough cardboard Sandow, and that you are a real Sandow ready to demolish your critics on your “Tamil Love-ins”, like me?
There was another attachment with the original email. There was a photo of you wearing some kind of a halloween costume to depict that you have now been baptized to be the Godfather of the Brampton’s Tamil Snow-Tiger community.
Your face still looked white, and the garb was white with a shawl, with a yellow band running down
the middle.
Patrick that image was hilarious and I couldn’t help but laugh at you. There were words beside your photo which said, B2B -MR . BROWN: FromBarrie to Brampton – (and some tamil letters after). Hmmm,,, Did B2B” mean Bullshxxxer2Bullshxxxer”Hmmm..a strange way to introduce You, I thought.
The text beside your photograph said – Patrick Brown – A name well known in the Canadian Tamil Community. He is one of the noteworthy young political leaders who do not hesitate to associate himself with the Tamil community in Canada….”
Hey! Patrick, if it was a classic Tamil man that you wanted to be portrayed as when you were Christened as a true Tamil and given you the name Sivapatrik Brownlingam, then the ethno- cultural make-up artists failed you badly and miserably..
Here’s what should have been done – stripped you completely and painted your face and body with one of the 50-shades of a Tamil-brown with a diluted Kiwi brown shoe polish.
Your upper torso should have been bare, and your lower body should have been covered with a pure white rectangular piece of cotton cloth. It should have been wrapped around the waste and brought between your thighs and up again covering Your crotch,
There should have been a white consecrated thread (Janeau) tied across
your body dropping down from one shoulder which suggests the development of a male from a boy to a young man.
There should have been three horizontal lines of ash across your brown Kiwi shoe polished face
and a large red moon dot (bindu) between the eyebrows, which depicts your ‘Third eye”.
The three horizontal lines of ash on a Hindu Tamil represents Lord Siva’s
three fold power of Will (iccha shakti), knowledge (Jnanasakti) and action (kriyashakti).
Hey Patrick, if you want to be adopted as a Tamil Godfather, don’t be a God damn joker, Do it properly.
And I hope your Tamil constituents won’t let you down, when you finally establish the first Canadian-Tamil Kingdom of Brumpton-Eelam-Makkum’s First Viceroy. Good luck Patrick!
Now that you and your stupid Brampton Councillors passed the controversial Tamil Genocide Memorial on Brampton’s public property, when it had been established even in the UN that there was no Tamil
Genocide, so be warned, with a copy of this letter to the Chiefs of the First Nation peoples of Canada,
I will request them to ask You and your Councillores that you establish a Memorial in the City of Brampton for the Genocide victims of the First Nation Residential School kids. This happened at our own door steps and not 14,012 kilometers away as you and your foolish Councillors said did happen in Sri Lanka. Well…you all opened a can of worms, and I hope you all are ready for the fall-out.
Mayor Patrick Brown when are we going to have a public debate on your
‘Love-ins; with the Canadian Snow-Tigers. Don’t be a cardboard
Sandow Patrick. Show us you debating strength and skills. I am no politician, I am
just a Geologist-Palaeontologist-Museologist and an Award winning
Published Canadian poet still romancing with my Motherland, Sri Lanka,
And no one is going to hurt her unfairly, and that includes YOU, Patrick Brown,
I want to meet you across the debating table. Will you gift me with that
luxury.
Sincerely Asoka Weerasinghe (a Canadian-Sinhalese-Buddhist)
If one believes in the simple mathematical calculation and minimum political honesty by public representatives in the Indian Parliament and State legislative assemblies, the largest democracy on Earth is expecting a lady tribal President in New Delhi. As Draupadi Murmu, a simple Janjati family woman turned a teacher turned a politician, gets the recommendation from the ruling Bharatiya Janata Party-led National Democratic Alliance government for the Presidential elections scheduled for 18 July next, her victory becomes almost imminent.
Hailing from Mayurbhanj locality of Odisha, who taught in Shri Aurobindo Integral Education Centre, the NDA’s Presidential candidate earlier served Jharkhand as its Governor and her own State as a minister. After arriving in New Delhi, Murmu has filed her nomination papers in presence of Prime Minister Narendra Modi, Union home minister Amit Shah, defence minister Rajnath Singh, BJP national president JP Nadda, UP chief minister Yogi Adityanath, MP CM Shivraj Singh Chouhan, Assam CM Himanta Biswa Sarma, etc. Her main opponent will be a seasoned politician, who had lately shifted his loyalty from the saffron party. Yashwant Sinha, a former Union minister, has been declared as the joint opposition candidate for the Presidential polls.
Election Commission of India had recently announced the schedule of Presidential elections as the five-year tenure of President Ram Nath Kovind comes to end on 24 July 2022. The nominations (for 18 July
polling) are accepted till 29 June and the poll-result will be available on 21 July. For records, any citizen of Bharat can become the country’s President after fulfilling a few conditions. The aspirant must be at least 35 years old and he/she has the qualification to be elected as a member of Lok Sabha. On submitting the nomination, the aspirant needs 50 recognised proposers and 50 seconders.
Unlike other democratic nations, the common Indias do not elect their President directly, but the Head of the Republic is voted by the people’s representatives (meaning the Parliamentarians and
Legislators) with the basis of Electoral College. It includes 543 members of Lok Sabha (the lower house of Parliament), 233 members in Rajya Sabha (the upper house) and 4,033 members of legislative assemblies across the vast country. Value of an MP’s vote in Presidential elections varies with the total number of Legislators in State (including Union Territories) legislative assemblies. An MLA’s vote-value depends on the number of electorates of the concerned State/UT.
The ruling BJP has 92 Rajya Sabha members (including four nominated MPs, who cannot vote) and 301 Lok Sabha MPs, which is more than the half of combined strength of both the houses. The saffron party also enjoys support from its alles like Janata Dal-United, Rashtriya Lok Janshakti Party, Apna Dal, Asom Gana Parishad, Mizo National Front, National People’s Party, etc. As the BJP retains power in 18 States, it enjoys impressive numbers (along with the political allies) among Legislators too.
Meanwhile, in Murmu’s home State, the Biju Janata Dal government chief Naveen Patnaik urged all political parties of Odisha to support her (even though they are not NDA allies). Patnaik, who is in power for over two decades, also appealed to the opposition parties to withdraw their candidate (Yashwant Sinha). Andhra Pradesh chief minister YS Jagan Mohan Reddy indicates his party YSRCP may support Murmu. Others which may join the league comprise BSP (Uttar Pradesh), TRS (Telangana), AAP (Delhi & Punjab), JMM (Jharkhand), AIADMK (Tamil Nadu), etc.
For the ruling BJP, there were a number of choices for the Presidential polls including the incumbent vice-President Venkaiah Naidu and a few reputed Governors of different States. But the party, which has been facing public angers (ofen turned violent) for the Nupur Sarma-Profet Muhammad controversy, Agniveer defece policy, other burning issues, silently picked up an efficent and honest Santhal political personality to replace a Dalit (Kovind is the second Dalit President of India after KR Narayanan) in Rashtrapati Bhawan.
The struggling life of Murmu can also impress anyone who looks through her days from a poor tribal family to complete her studies at Bhubaneswar Ramadevi Women’s College against all odds. Born on 20 June 1958, Murmu started her career as a teacher before joining the Odisha politics. She was elected to the State legislative assembly twice as a BJP member. Murmu served various portfolios as a minister of the State government in Bhubaneswar. Incidentally she became the first woman Governor of Jharkhand (2015 to 2021).
Her first reaction over the development was a big surprise. ‘I am surprised, I was not able to believe it,’ said Murmu while speaking to journalists and added that she would work with the constitutional guidelines if elected to the coveted post. PM Modi in an initial tweet commented that Murmu has a rich administrative experience and had an outstanding gubernatorial tenure. Meanwhile, the Akhil Bharatiya Vanvasi Kalyan Ashram (ABVKA), backed by BJP’s influential ideologue
Rashtriya Swayamsevak Sangh, termed Murmu’s candidature as a
historic moment for 120 million Janajati people of India.
Janajatis are an integral constituent of tradition and inheritors of an esteemed culture of the great Indian nation. However they have been overlooked and disregarded for many centuries,” said Ramchandra Kharadi, president of ABVKA, which is identified as India’s largest tribal non-government welfare organisation. He asserted that a historical decision has been taken to nominate a Santhali Janajati lady as the Presidential candidate when the nation is celebrating the glorious 75th years of its independence.
Energy minister Kanchana Wijesekera said oil cargoes due last week did not turn up while those scheduled to arrive next week will also not reach due to “banking” reasons.
Sri Lanka has virtually run out of petrol and diesel after several expected shipments were delayed indefinitely, the energy minister said Saturday while apologising to motorists for the worsening fuel crisis. Kanchana Wijesekera said oil cargoes that were due last week did not turn up while those scheduled to arrive next week will also not reach Sri Lanka due to banking” reasons.
Sri Lanka is facing a serious shortage of foreign exchange to finance even the most essential imports, including food, fuel and medicines and is appealing for international handouts.
Wijesekera said the state-run Ceylon Petroleum Corporation was unable to say when fresh oil supplies will be on the island. The CPC had also shut its only refinery over a shortage of crude oil, he added. The refinery started operation earlier this month using 90,000 tonnes of Russian crude oil bought through Dubai-based Coral Energy on two-month credit terms.
Wijesekera said he regretted that deliveries of petrol, diesel and crude oil shipments due earlier this week and next week” would not be fulfilled on time for banking and logistical reasons”. Scarce supplies left in the country will be distributed through a handful of pumping stations, he said.
The Ministry of Education has issued a statement regarding the manner in which academic activities will be conducted in schools during the coming week (June 27 – July 1).
Schools in cities and suburbs which did not have schools last week have been directed to conduct schools on Tuesdays, Wednesdays and Thursdays – three days during the week. The principals of these schools have been given the power to decide the number of school days for primary school activities.
Relevant academic activities are to be conducted through online methodology and home-based activities on days when students are not coming to school.
Accordingly, the academic activities of other schools where there is no fuel shortage for transport activities should continue in the coming week in the same manner as implemented from June 20 to 24.
Furthermore, the Ministry of Education has instructed the principals of these schools to adopt a flexible policy of exempting their teachers from personal leave in view of the inconvenience caused to them in reporting for duty due to fuel shortages
The Minister of Finance has issued an order to reduce the amount of foreign currency retained in possession by an individual in Sri Lanka from USD 15,000 t0 USD 10,000 or its equivalent in other foreign currency.
The directive, issued pursuant to Section 08 of Foreign Exchange Act No. 12 of 2017, is effective from the 16th of June.
In a statement, the Central Bank of Sri Lanka (CBSL) said the decision was taken with the intention of attracting foreign currency in the hands of the public into the formal banking system.
According to the CBSL, an amnesty period of 14 working days effective from the date of the Order (June 16, 2022) is granted for persons in, or resident in, Sri Lanka who hold foreign currency notes in possession for the following:
• To deposit into a Personal Foreign Currency Account or into a Business Foreign Currency Account as specified in the Order, or
• To sell to an Authorized Dealer (A licensed commercial bank or National Savings Bank)
At the end of the said amnesty period, the CBSL has the right to initiate actions against persons who hold foreign currency in possession by violating the Order, in terms of the provisions of the Foreign Exchange Act.
For further information, the general public can contact any licensed commercial bank or National Savings Bank, or refer to the Order under Section 8 of the Foreign Exchange Act published in the Gazette (Extraordinary) Notification No. 2284/34 dated 16 June 2022 via the official website of the Department of Foreign Exchange (www.dfe.lk).
They can also contact the Department of Foreign Exchange via 011-2477255, 011-2398511 and dfe@cbsl.lk.
A high-level delegation representing the U.S. Department of the Treasury and the U.S. Department of State will visit Sri Lanka from June 26- 29, the U.S. Embassy in Colombo says.
Members of the delegation include Deputy Assistant Secretary of Treasury for Asia Robert Kaproth and Ambassador Kelly Keiderling, who is also the Deputy Assistant Secretary of State for South and Central Asia.
The visitors will meet with a wide range of political representatives, economists, and international organizations.
In all their meetings, they will explore the most effective ways for the U.S. to support Sri Lankans in need, Sri Lankans working to resolve the current economic crisis, and Sri Lankans planning for a sustainable and inclusive economy for the future, the U.S. Embassy said further in its statement.
This visit underscores our ongoing commitment to the security and prosperity of the Sri Lankan people,” said U.S. Ambassador to Sri Lanka, Julie Chung. As Sri Lankans endure some of the greatest economic challenges in their history, our efforts to support economic growth and strengthen democratic institutions have never been more critical.”
Over the past two weeks, the U.S. has announced $120 million in new financing for Sri Lankan small and medium-sized businesses, a $27 million contribution to Sri Lanka’s dairy industry and $5.75 million in humanitarian assistance to help those hit hardest by the economic crisis.
The United States also committed $6 million in new grants to provide livelihood assistance to vulnerable populations, and technical assistance on financial reform that will help stabilize the economy.
In the coming months, the U.S. will continue to support Sri Lankans as they revive their economy, combat food insecurity, and promote public health and education. The United States also strongly supports Sri Lanka’s decision to seek assistance from the International Monetary Fund, which can provide the most durable resolution to the present crisis.
The preceding essay recorded the diplomatic exchanges between the government of USA and the government of Sri Lanka after Ranil Wickremesinghe became Prime Minister in May 2022. In the same month, Ambassador, Julie Chung met with several officials in Colombo. These interviews were mentioned in the media, often accompanied with a prominent photo. This gave USA further visibility in the island. It was intended to show that once again the USA had come to stay in Sri Lanka.
Julie Chung, the U.S. Ambassador to Sri Lanka had met with Ranil Wickremesinghe even before he became Prime Minister. Ambassador Chung had met with UNP Leader and former Prime Minister Ranil Wickremasinghe on March 21 at the latter’s private residence in Colombo, reported the media. The official Twitter account of Ambassador Julie Chung said, Thank you RW for meeting with me to discuss ways the U.S. and Sri Lanka can work together to find sustainable solutions to today’s urgent economic challenges .
U.S. Ambassador Chung called on Speaker Mahinda Yapa Abeywardena in Parliament, on May 27. This was her first meeting with the Speaker.The U.S. Ambassador said that she hopes the government, including the new Prime Minister, would be able to bring about political stability and overcome the current economic crisis, reported the media.
The Ambassador also emphasized the need to carry out the political reforms desired by the people and to safeguard democracy in the country.She also wished to enhance relations between the two countries through the Sri Lanka-USA Parliamentary Friendship Association. The Speaker expressed his gratitude to the United States of America for its continued support to strengthening democracy in Sri Lanka.
Ambassador Julie Chung met Foreign Minister GL Pieris. She told him that the United States is a friend of Sri Lanka and United States will continue to support Sri Lanka during this difficult time. U.S. Ambassador met with Justice Minister Ali Sabry and discussed their ‘shared commitment’ to the rule of law. Ambassador Chung met Kanchana Wijesekera, Minister for energy and handed over a US grant of USD 19 million for use in the power and energy sector. Newspapers carried a photo of Chung and Wijesekera.
Ambassador Chung met the Janatha Vimukthi Peramuna (JVP) leaders on May 14to discuss the current crisis in the country. The Ambassador visited the party’s Pelawatta head office and held discussions with JVP leader Anura Dissanayake and Information Secretary Vijitha Herath. Ambassador Chung said she met with the JVP Leaders to discuss the urgent challenges facing Sri Lankans.
The US delegation and the JVP leaders spent about an hour discussing the current economic, political and social crisis in Sri Lanka. I continue to meet with a wide range of political representatives to encourage the Sri Lankan government’s efforts to move toward solutions to the economic crisis,” the Ambassador said in a tweet.
Ambassador Chung met with Commander of the Navy, Vice Admiral Nishantha Ulugetenne at the Navy Headquarters on 20th May 2022. It was the first official interaction between them, said the media. During the cordial meeting, the U.S. Ambassador and Commander of the Navy exchanged views on several matters of bilateral importance, also the expeditious transfer of Ex U.S. Coast Guard Cutter Douglas Munro which was undergoing refurbishment at Seattle, U.S.
US ambassador called on Commander of the Air force and discussed bilateral issues. The news report carried a photo of the two at the meeting.
Ambassador Chung met with the American Chamber of Commerce in Sri Lanka. Ms Chung said that the U.S. is committed to working with the local partners to foster a Sri Lankan economy that is sustainable, innovative and inclusive. She further discussed with AmCham ways to increase the prosperity of all Sri Lankans, reported the media.
USA also made well publicized donations, during this period. The aid was routed through U.S. Agency for International Development (USAID).
In April 2022, it was announced that the Sri Lanka Institute of Biotechnology (SLIBTEC) will collaborate with the USAID to boost innovation in the biotechnology sector by establishing Sri Lanka’s first Biotechnology Innovation Park. Technical expertise will be provided through USAID’s PARTNER project for the next two years. SLIBTEC will use this support to develop its operational framework. PARTNER will also provide support in areas such as the park design, research management policy and training opportunities.
In June 2022 it was announced that USAID is partnering with the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and the Association of Public Finance Accountants of Sri Lanka (APFASL) to strengthen Sri Lanka’s accounting and auditing sectors. This partnership will train approximately 600 public sector accountants and audit professionals and 1,200 officers on IT applications and other platforms. The training, conducted in all nine provinces, will strengthen the capacity of public sector accounting and auditing professionals on the recent developments and applications of SLPSAS 11-20, enhancing public sector financial management functions.
On June 15 Ambassador Chung attended a signing ceremony for an agreement that will provide technical assistance to VEGA Innovations to help them further develop Sri Lanka’s electric vehicle sector.
VEGA Innovations is a Sri Lanka-based electric vehicle automobile manufacturer of electric two-wheelers, three-wheelers, supercars, and electric vehicle chargers. It provides electric vehicles (EV) research and development services to clients throughout the world, as well as designing and manufacturing EV components such as high-performance inverters, drive trains, and battery packs.
The agreement, to be funded by USAID, will support VEGA Innovations’ efforts to promote the adoption of electrical vehicles, including electric tuk tuks”. It will also help pilot a charging network for electric vehicles and support the manufacturing of locally designed batteries and inverters.
On June 13 Ambassador Chung attended the signing ceremony for a Memorandum of Understanding with the Sri Lankan Department of Agriculture, for a $27 million project that aims to double the milk production of Sri Lankan dairy farmers participating in the U.S. Department of Agriculture’s Food for Progress initiative. The project began in late 2017 and has already benefited 25,000 Sri Lankan dairy farmers, increasing their milk production by an average of 68 percent to date.
The Embassy of the United States of America announced in June 2022 that the U.S. International Development Finance Corporation (DFC) had approved $120 million for helping small and medium-sized businesses .
For seventy years, the United States has provided foreign assistance, loans, and trade opportunities to help grow the Sri Lankan economy and support the Sri Lankan people,” said Ambassador Chung, when inaugurating this project.
The projects include a $100 million direct loan to the Commercial Bank of Ceylon, to expand lending to micro-, small-, and medium-sized enterprises (MSMEs) and address the credit gap for women-owned businesses, which represent 25% of MSMEs in Sri Lanka.
A $15 million loan was given to BPPL Holdings PLC, a polyester yarn manufacturer incorporating recycled plastic materials. The loan will support increased production and strengthen Sri Lanka’s recycling infrastructure in support of efforts to reduce plastic waste in Sri Lanka. A $5 million loan went to Ma’s Tropical Food Processing (Private) Limited, a sustainable food company, to finance its expansion and grow its supplier network.
USA is now becoming aware of the need to recognize the cultural interests in the countries it wishes to dominate. Ambassador Chung visited Kandy in March to preside over events marking two milestones in the United States’ long-standing support to preserving Sri Lanka’s diverse cultural heritage.
On 14 March, Ambassador Chung and University of Peradeniya Vice Chancellor held a closing ceremony for the US Ambassadors Fund for Cultural Preservation (AFCP) project that documented and preserved four traditional ritual dance forms and related crafts.
The USD 116,000 grant, initiated in 2016, supported the university’s effort to preserve and to share the following performing arts traditions: 1) upcountry Kandyan Kohomba Kankariya dance, 2) Northern and Eastern Tamil Koothu dance drama, 3) Adivasi rituals and cultural practices from Eastern Province, and 4) a southern dance-drama rituals and performance from the Kolam tradition in Southern Province. Recordings of these intangible forms of Sri Lanka’s heritage are now archived under the Department of Fine Arts, Faculty of Arts, and University of Peradeniya.
Since 2001, the AFCP has funded 14 projects in Sri Lanka, including the conservation of the Rajagala Buddhist forest monastery, the preservation of Buddhist, Hindu, and other collections in the Anuradhapura Archaeological Museum, and the restoration of the Batticaloa Dutch Fort. The preservation of the intangible heritage of ritual music and dance forms of the Adivasi, Tamil, and Buddhist communities discussed above was one of these projects.
.Then on March 15, Ambassador Chung and Director General of Archeology launched a new project, a $265,000 grant for the conservation of the Kings’ Palace in the Dalada Maligawa premises.
Professor Charitha Herath is doing an excellent job as Chairman of COPE and deserves the accolades and thanks of the public for this performance. He calls a spade a spade and has already made a few upstarts of high posts admit their mistakes. He is even prepared to propose changes in the Standing Orders of the Parliament to punish the miscreants responsible for the present economic crisis. Recent COPE examination revealed many questionable expenditure-like projects in the CEB which are not in operation, but Project Managers appointed and paid fat salaries. CEB has also been meeting the income tax liabilities of taxable CEB officials. The Port spends a huge sum of money to provide free meals to employees. The amount spent on cashew nuts was Rs 47 million. But what COPE can do is merely to name and shame and perhaps propose changes in the system.
One thing that is worrisome is that COPE examinations are postmortem exercises. Most times the offenders are not in the scene at the time the corporation goes before COPE.. It is like closing the stable door after the horses have bolted.
COPE examinations are based on the report of the Auditor General and COPE does not go beyond the immediate report of the Auditor General.
Is it not possible to introduce a preventive system where the Auditor General reports to the COPE when it comes to his notice a major fraud or irregularity taking place in an institution? Auditor General has his representative in all major corporations and the Agenda of Board meetings and board papers are made available to the AG’s representative before a board meets. Therefore, he should be getting prior information of a brewing fraud. In addition, there is no shortage of whistleblowers in our institutions who would be monitoring suspicious activities and bring them to the notice of the AG’s representative and he in turn can make an immediate report to the AG who then can use his discretion and make a confidential report to the Chairman of the COPE. It is then left to the Chairman of COPE to take immediate remedial action by summoning the parties concerned. If such pre-audit is not allowed under the present standing orders, they should be changed to adopt this procedure. Pre-audit will be an effective deterrent to such fraudulent activities.
Stray information on granting deeds of lands in the news is fairly indicative of the fact that Prime Minister Ranil Wickremasinghe has unofficially commenced implementing the MCC Project in Sri Lanka, which he stated he will sign if he, the UNP won the 2019 Presidential Election. At the election President Rajapaksa made a firm statement that he will not sign the MCC Compact Agreement.
I enclose a news item I have just read in Economy Next:.
Sri Lankan landowners without deeds to be legally granted ownership
Friday June 24, 2022 5:28 pm
ECONOMYNEXT – Sri Lanka plans to legally grant land and house ownership to millions of people who do not have a deed to their own lands and homes, Prime Minister Ranil Wickremesinghe’s office said.
Quoting Tourism Minister Harin Fernando, the statement said on Friday June 24 that between 1,000 and 3,000 deeds will be issued to land owners every week under a newly launched programme with the objective of giving legal rights to those who have lost their land.
The programme, titled ‘Land for All’, began Friday morning at the prime minister’s office in Colombo, it said. The project is implemented by the Ministry of Tourism and Lands through the Land Reforms Commission and the Department of the Land Commissioner General.
Title deeds were issued in Puttalam and Kurunegala Divisional Secretariats on Friday parallel to the event in Colombo, the statement said. (Colombo/Jun24/2022)
This is serious news and deserves immediate attention by our leaders to arrest give away of the sovereignty of our country. One important aspect of the MCC Compact Programme was to bestow full rights of ownership to land alienated by the Crown. Our founder leader D.S.Senanayake had gone to great pains to evolve a method of ensuring that land alienated by the crown should always remain with the peasantry.
It is important to note that Prime Minister Ranil Wickremasinghe is actually a make shift Prime Minister appointed in this time when Sri Lanka is facing an unprecedented economic crisis. Instead of handling the economic crisis by implementing programmes to get back to production and employment he is busy with other tasks like privatising assets and now he has actually commenced implementing the MCC Project provisions though very unofficially..
It is time that the Presidenbt who handed over the country to Ranil Wickremasinghe should make a note of what is really happening.
Figure 1. Sri Lanka’s foreign debt from 2000 -2020 ( from https://www.reuters.com/markets/rates-bonds/sri-lanka-edge-debt-burden-mounts-2022-01-17/)
As a layman in the subject of political economy, nonetheless interested in discerning the real background to the historic debt crisis that Sri Lanka is undergoing at present, I have been reading many reports, including expert views, opinion statements, institutional press releases, think-tank analyses, COPE reports, etc., that are plentiful on the internet. Based on these readings, I was able to synthesize a layman’s review, which I thought of putting out to a wider readership to stimulate constructive discourses from the more knowledgeable authorities and others alike, especially on the solutions that are available for our country to come out of this huge debt crisis. One of the major criticisms of the general public is that although warnings of this impending disaster had been made repeatedly at official meetings among technocrats and bureaucrats, the general public was not sufficiently alerted early enough, especially via popular media, to shake up the bureaucracy to make a timely course correction.
We all are now aware that Sri Lanka has an accumulated foreign debt of US $ 51 billion at the time of pre-emptive sovereign default of foreign currency repayment which happened in March/April 2022. The following Figure 1, with a series of histograms that appeared on the web, provides a relatively easy understanding of the progression of our cumulated foreign debt over the years since 2000 and its proportional ownership of creditors/lenders. It had been prepared by Reuters in January 2022 sourcing Central Bank information and colour-coded to apportion the foreign debt accumulated since 2000. The proportional ownership has been grouped into several categories of lenders in this chart, such as International Financial Institutions (IDA, ADB, etc. in red), foreign governments (Japan, China, India, etc. in orange), International Sovereign Bond Issuers (Goldman Sachs, Black Rock, and Pacific Investment Management, Vanguard, etc., in green!!) and other capital market lenders (Exim banks, etc., in pale green).
This figure reveals that a higher proportion of foreign funding for Sri Lanka’s development projects as well as to bridge the annual budget deficits in the early 2000 period, came via bilateral and multilateral donor contributions (red and orange color codes), when Sri Lanka was still a Lower Middle-Income Country (LMIC). However, this trend has been changing since 2007 or so, when Sri Lanka started obtaining loans at relatively higher interest rates from International Sovereign Bonds (ISBs) and other Financial Capital Markets. The contribution of ISBs increased significantly from around 2015 and reached an all-time high in 2019 almost at the same time when Sri Lanka was elevated to an Upper Middle-Income category (UMIC) for a short period of time by the World Bank. However, a year later, Sri Lanka was down-graded again as a lower-middle income country after it recorded a US$ 4,020 per capita income for 2020. Apparently, when a country reaches an Upper Middle-Income level, it is not entitled to concessionary loans but must seek funding from International Capital Markets at the internationally prevailing competitive interest rates. Sri Lanka’s access to international capital markets (with International Sovereign Bonds issuances since 2007) brought a shift to commercial borrowing and an increase in external interest rates to be paid back in short periods of time.
Consequently, Sri Lanka’s foreign debt apportioning in 2022, as per Figure 1, which has been computed using information from Sri Lanka’s Central Bank, indicates that over 35% of the island’s debt is owned by US and UK-based ISBs. The balance of foreign debt in 2022 is owned by the aforesaid bi-lateral and multilateral agencies. Some of these latter agencies, usually charge lower interest rates on concessionary terms. They have even gone to the extent of being more compassionate to express their willingness to further delay the debt repayment while at the same time being charitable enough to donate humanitarian aid in the form of food, fuel, and medicine during this crisis period. It is clear that the root cause of Sri Lanka’s default, at this time, is due to the disproportionate accumulation of ISBs and other such financial instruments in recent times. Higher interest rates over short periods of time needed to be paid, for refinancing the loans already taken. (See the graph)
This annual progression of the ‘sovereign debt trap’ also led to the speculation of unsustainability of Sri Lanka’s foreign debt from 2019 onwards leading to a progressive downgrading of credit ratings by the three leading credit rating agencies – Moody’s Investor Services, Standard and Poor’s (S&P), and the Fitch Group. This downgrading by credit rating agencies further deepened Sri Lanka’s debt crisis, pushing us into one of the worst economic crises in modern history.
The Verite Research Strategic Analysis Working Paper published in October 2021provides an analysis on this. For the five years, from 2021 to 2025, the annual average repayments due on servicing external debt maturities is US$ 4,400 million. In contrast, from 2015 to 2018, the government only had to repay an annual average of US$ 2,700 million as external debt repayment. To meet those debt repayments, during 2015 to 2018, the government borrowed on average US$ 1,900 million through ISBs in a year, as indicated in Figure 1. Since the beginning of 2020, the yields of ISBs have more than doubled and the credit ratings of the sovereign bonds were also downgraded multiple times, in 2020, leading to high risks of default in 2021 preventing further borrowing from the international markets. This forced the government to use its already depleting reserves to meet the external debt obligations, while at the same time, meeting the urgent healthcare emergencies resulting from the rapid spread of the COVID 19 pandemic which demanded lockdowns over months, associated economic losses and also for meeting increasing healthcare needs.
While it has been widely reported in the western media that Sri Lanka is a victim of a ‘Chinese debt trap’, our increased dependency on International Sovereign Bonds, over recent times is also equally, if not more, responsible for the default, at this time, as Sri Lanka has been compelled to borrow money from international capital markets at higher rates to be paid back over short periods of time. These funds were needed for the repayment of the loans already taken for the settlement of earlier taken loans/their interests while providing at the same time, the shortfall of social welfare benefits from the lost tax revenue as a result of ill-advised tax rebates granted in 2019. The resultant drop in revenue amounted to 3% of GDP – from 12.6% in 2019 to 9.2% in 2020. The revenue as a share of GDP for 2020 has apparently been the lowest in the post-independence history of Sri Lanka that led to huge deficits which need to be financed through borrowing, resulting in increasing debt.
Notwithstanding some of these unanticipated debilitating economic cataclysms, some political analysts speculate whether Sri Lanka was duped into a situation of ‘pumped and dumped’ by the Western interests. The World Bank up-graded Sri Lanka to a Lower Middle-Income Country (LMIC) in 1997, and then to the short-lived Upper Middle-Income Country in 2019 thus making it ineligible for lower interest rates for national development thus compelling to borrow from International Capital Markets. This fortuitously coincided with the 2019 Easter Sunday bombing spree which started the rapid downward spiraling of Sri Lanka’s economy.
On top of these, internal mismanagement of our economy also has contributed in no small measure to this predicament. The infamous bond scams, unbridled corruption and nepotism at the highest levels, imprudent decisions of the then monitory board of the Central Bank, and more significantly, holding on to such irrational decisions for a long period thus bleeding our foreign exchange reserves by over US$ 5.5, as reported by one of its members at a recent COPE meeting.
So, it surmises that both external interventions as well as internal economic mismanagement has contributed to the present-day debt crisis leading to ‘Arab Spring’ style protests by segments of the general public fueled by opportunistic politicians and their invisible handlers. It has been transmitted in some academic fora that Sri Lanka’s default seemed to follow a systematic, deliberate, and planned route to haul Sri Lanka into IMF’s and Washington’s clutches. This likelihood had apparently been in the air for some time – at least since the rejection of the Millennium Challenge Corporation (MCC) compact by the Sri Lankan Government in December 2019.
The MCC compact for Sri Lanka was designed to reduce poverty through improved transportation network and providing secure land titles to small holder farmers and other Sri Lankan landholders. The Special Presidential Commission Report which examined the draft MCC Compact has recommended the rejection of the Compact in its current form as it not only imperils Sri Lanka’s economic sovereignty but also undermines the land and human rights of her citizens. We need to be vigilant at this stage at which we are in a desperate situation in meeting day-to-day needs of the people as well as fulfilling debt obligations through their restructuring. There are indications that a number of stealthy moves are already at play to undermine the rights of the people (see recent press releases by Dr. Gunadasa Amarasekera of the Federation of National Organisations).
Some political analysts argue that this ‘staged default’ would enable the IMF to effectively take control of strategic geopolitical positioning by influencing Sri Lanka’s economic policy initiatives compromising its sovereignty. It is also speculated that by doing so, they can stave off the Chinese influence (despite China being a leading member of the IMF) and more significantly, make it difficult for Sri Lanka to source its oil, gas and other energy requirements at discounted rates from sanctions-hit Russia. Ironically, India continues to avail themselves to the discounted oil and gas supplies from Russia despite some resistance from her western partners while helping to meet our energy needs through loans and grants. It is a pity that Sri Lanka is far too late in looking into this possibility of negotiating with Russia directly for supplementing our long-term fossil fuel and other energy needs in exchange for our tea exports.
Sri Lanka is apparently caught between the devil and the deep blue sea for being located in a geostrategic position abundantly endowed with strategically important natural resources. While being at the centre of the Indian Ocean Sea Lanes of Communication (SLOC) with an extensive ocean and land-based mineral resources, including premium grade graphite and rare earth elements, some political analysts are of the view that Sri Lanka suffers from a ‘Paradox of Plenty’ or perhaps, a geostrategic ‘Resource Curse’. This phenomenon often afflicts countries blessed with abundant natural resources, like Sri Lanka. According to the Global Wealth Databook 2020 of the Credit Suisse Research Institute, the total wealth of Sri Lanka is estimated to be USD 351 billion while admitting at the same time that the quality of wealth data used for this estimation to be poor. A more realistic estimate could indeed yield even a higher value and Sri Lanka appears to be far from bankrupt, on that count. Despite all these, we have been having a slower economic development prone to poor governance, corruption and cronyism over successive political regimes since independence. This economic wealth of Sri Lanka may be a key constituent put on offer in attracting creditors to our national-scale real estate assets at this crucial stage of negotiations for debt relief.
The US Ambassador to Sri Lanka and the Maldives, Julie Chung, in a recent press release remarked that Sri Lanka is at the heart of the Indo-Pacific oceanscape, sitting next to some of the world’s busiest shipping lanes through which about half the world’s container ships and two-thirds of the world’s oil shipments pass. According to her, Sri Lanka has the potential to play a pivotal role in the health of world trade. It is not surprising, therefore, the former US Under Secretary for South and Central Asia, Alice G. Well, a few years ago, called Sri Lanka a ‘valuable piece of real estate’ in the Indian Ocean. Still others have termed Sri Lanka ‘an unsinkable aircraft carrier’ in the Indian Ocean – much more strategic than the Chargos Island which was handed back to the people of Mauritius by the British (and hence US occupation ended) in February 2019 after the International Court of Justice in the Hague ruled that the latter’s occupation of Chargos Island was illegal under International Law.
Furthermore, it was none other than the US Secretary Blinken who had recently reported that in today’s world, cyberspace and cyber security are increasingly important and, as part of their vision for the Indo-Pacific, the United States looks to coordinate with partners to ensure an open and secure internet and to implement a framework for responsible behavior in cyberspace.
With a background of this politico-geostrategic wealth, the Sri Lanka Government is up against tough bargaining with the IMF and their designated creditors to raise USD 8 – 12 billion or perhaps even more from the lease or sale of at least some of these valuable ‘real estate’ assets belonging to the public of Sri Lanka which have been grossly mismanaged over decades by successive governments. Dr. Nishan De Mel of Verite Research says, When the IMF determines that a country’s debt is not sustainable, the country needs to take steps to restore debt sustainability prior to IMF lending”. These steps would undoubtedly feel quite painful in particular to the poorest and most vulnerable sectors of the country.
Prime Minister Wickremasinghe recently stated in the Parliament that SriLankan Airlines, with all its assets would be the first to be privatized to relieve the debt burden. Among the other valuable public assets that are being considered to go under the hammer according to reports on the web are Mattala and Ratmalana airports, Sri Lanka Telecom shares, and the Sri Lanka Insurance Corporation to name a few. Then there are physical assets like Sri Lanka’s marine Exclusive Economic Zone which include the already identified oil and gas deposits, Under-sea Data Cable Routes, the strategic island’s telecom frequencies important for cyber-security. These are a part of this ‘real estate’ package – the cynosure of many powerful global political players backed by leading international financiers – up for negotiations in the name of debt restructuring. Some economists are of the opinion that divesting these strategic public assets resulting from mismanagement, corruption, and ignorance of the potential value of these resources, is tantamount to throwing the baby with the bath water!
The debt restructuring and bridge financing negotiations with the IMF, if successful, may be able to provide us short term debt relief tied with very stringent conditions such as tightening our monitory policy, raising taxes, reduction of government expenditure and wastage, introducing a fuel and utilities pricing formula reflecting the market prices, among others. Although Sri Lanka promised a number of similar adjustments in the during earlier rounds of negotiations with the IMF (in 2009 and 2016), none of them were implemented in full as planned since these would have resulted in high social and political costs.
With such a track record, the conventional IMF debt restructuring formula may not help to overcome our efforts in moving toward bridging the trade deficit. This is primarily because Sri Lanka continues to spend more foreign exchange than its receipt of revenue through the export of goods and services. This indeed has been the root cause of our long-term external debt problem. Economists argue that going to the IMF alone will not fix this problem. According to them, the IMF will simply put a sticking plaster on our arterial wound and send us home. If Sri Lanka continues haemorrhaging foreign exchange with its typical laissez-faire approach, we may have to go back again to the IMF in two years’ time asking for yet more debt relief!.
IMF has just concluded a joint technical session with Sri Lanka to determine a roadmap for restoring macro-economic stability and debt sustainability that will serve as a platform for the negotiations with other creditors/lenders, later. Furthermore, this joint initiative once implemented in compliance with IMF conditions, is expected to increase investors’ confidence and also in securing additional resources from the IMF, the World Bank, Asian Development Bank, and other such agencies.
Amidst all these, there appears to be a silver lining in the dark financial clouds that hovering over Sri Lanka at present where even an adversity of this magnitude could be turned into an excellent medium or long-term investment opportunity. The silver lining in the dark horizon is that the leading international donor agencies are steadily moving towards ‘sustainable financing’ in compliance with the Paris Agreement on Climate Change in the present green economic era.
From left : Ms. Amena Arif, Country Manager of Sri Lanka and Maldives, IFC. Archil Mestvirishvili, Deputy Governor, National Bank of Georgia. Ethiopis Tafara, Vice President, MIGA Lay Rachana, Sustainable Finance Committee Chair, Association of Banks in Cambodia, Deputy General Manager/ Chief Risk Officer of FTB Dr. P Nandalal Weerasinghe, Prsent Governor, Central Bank of Sri Lanka, Serey Chea, Director General, National Bank of Cambodia Jan Van Bilsen, Senior Manager, IFC, Kyle Kelhofer, Country Manager of Cambodia, IFC
Sustainable finance refers to the process of taking environmental, social and governance (ESG) criteria (developed by the United Nations Principles for Responsible Investment – PRI) into account, when making investment decisions in the financial sector. These in turn will lead to more long-term investments in sustainable economic activities and projects.
Sri Lanka, too ,joined this bandwagon in developing a Roadmap for Sustainable Finance way back in 2016/2017. It is aimed at integrating ESG criteria into financial decision-making processes in order to help build a more resilient and sustainable green economy. These sustainable finance practices are expected to promote assistance to make the businesses greener, climate-friendly, and socially inclusive.
This Sustainable Finance Road Map for Sri Lanka was launched in 2019 with financial assistance from the Biodiversity Finance Initiative (BIOFIN) from the UNDP and technical support from the International Finance Corporation. In this ‘new normal’ era of post-pandemic banking, sustainable finance is expected to become a key mover in achieving social, economic, and environmental goals in a green economic milieu.
The Biodiversity Finance Plan (BFP) for Sri Lanka (2018 – 2024), prepared collectively by the then Ministry of Finance and Media, The Ministry of National Policies and Economic Affairs, and the Ministry of Mahaweli Development and Environment, in 2019, intends to support sustainable biodiversity management efforts of Sri Lanka by mobilizing finance for investing in biodiversity by both the public and private sector.
A considerable amount of background preparatory work, detailed in three technical reports (i.) Policy and Institutional Review, (ii.) Biodiversity Expenditure Review, and (iii) Financial Need Assessment, has gone into developing this Biodiversity Finance Plan for Sri Lanka. It is expected to achieve national biodiversity targets that include conservation, sustainable management, and equitable distribution of benefits among all stakeholders, the three main pillars of the Convention on Biodiversity.
During this process, the national biodiversity and climate change-related strategic plans viz. National Biodiversity Action plan (NBSAP 2016-2022), National REDD+ Investment Framework and Action Plan (NRIFAP 2018-2022), National Action Programme for Combating Land Degradation in Sri Lanka (NAP-CLD 2015 -2024), and National Adaptation Plan for Climate Change Impacts in Sri Lanka (2016 – 2025) have been consulted for estimating the financial gap constraining investment needed for their effective implementation.
In addition, the vision of the BFP is directly linked to the following Sustainable Development Goals (SDGs), Goal 13: Climate Action; Goal 14: Life below Water, and Goal 15: Life on Land. It is indirectly linked to several other SDGs such as Goal 6: Clean Water and Sanitation, Goal 11: Sustainable Cities and Communities, and Goal 12: Responsible Consumption and Production.
The BFP has been designed to meet the biodiversity financing needs of the country by mobilising resources for investing in conserving biodiversity, promoting its sustainable use, and equitable sharing of its benefits. This is to be achieved with the participation of all major stakeholders – the government, the corporate sector, and the community. Thirteen different finance solutions viz. sustainable standards and certification, eco-labels, green lending, corporate social responsibility, lotteries, payment for ecosystem services, green bonds, ecotourism, conservation license plates, carbon markets, lobbying for public budget allocations, and diaspora savings and investment, have been identified based on the information given in national and sectoral planning documents of Sri Lanka. Each of these has been elaborated on in some detail with action plans in the BFP 2018-2022 document.
Judicious resource mobilization
Most of the prioritised financial solutions listed above are already in operation, though at a modest scale. They need to be scaled up with judicious resource mobilization to be more responsive to the conservation and sustainable development, equitable sharing of biodiversity and ecosystem service benefits. Consequently, with all this background preparative work accomplished, Sri Lanka is in a strong position to make the current adversity into an opportunity of a lifetime.
Green Bonds: One of the fastest developing financial or refinancing solutions on a global scale is coming from issuance of sustainability-linked international sovereign green bonds and other similar instruments such as sustainability-linked bonds, climate bonds and social bonds. The repayment of debt using these green bonds and the like is tied to the achievement of instituional environmental, social and governance (ESG) targets, such as greenhouse gas emission reductions. The growth of green bonds in the global capital markets has been explosive in recent times and is increasingly attracting attention of the corporate entities around the globe. Global Green Bond investments have topped US$ 500 billion in 2021 for the first time and it is expected to reach $ 1 trillion this year.
Most of the green bonds in the world have been issued to finance relatively large projects in the areas of Renewable energy, Transport, Pollution prevention and control, Water and waste management, Environmentally sustainable land-use, agriculture and forestry, Reduction in carbon emission, and Green infrastructure, and since of late for Biodiversity conservation.
Importance of biodiversity
Governments, major financial centers and central banks world over are greening their financial systems by developing green bond guidance, green taxonomies, regulation, and reporting guidelines. Investors worldwide are waking up to the importance of incorporating biodiversity as part of ESG risk assessments and their effective management. This is due in part to the increasing focus on this topic since the United Nation’s Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (UN-IPBES) produced its landmark Global Assessment Report on Biodiversity and Ecosystem Services in May 2019, casting the spotlight on the alarming declines of biodiversity worldwide.
Although Sri Lanka has not yet availed herself of this innovative financial solution of investing in Green Bonds, it is ideally placed to benefit from this emerging opportunity, for Sri Lanka being one of 36 global hotspots of biodiversity. Sri Lanka has actively participated in sustainability-focused investments through the Sustainable Banking Network of the International Finance Corporation, and it is a fortuitous coincidence that the present Governor of the Central Bank, himself, has taken an active role in this global network activities in the past (see photo attached).
The Central Bank of Sri Lanka and the financial sector, in general, have been moving in the direction of sustainable financing with the preparation of the required technical details listed earlier. The latest addition to it is the ‘Sri Lanka Green Finance Taxonomy’ (a classification system established to provide guidelines for integrating sustainability into investment decisions), published by the Central Bank on 06th May 2022. Green Bond Principles (GBP) is one of several well-known taxonomies that provide guidelines specific to green bonds.
Consequently, Sri Lanka has already put in place the necessary institutional infrastructure in financial markets for entering into green bond initiatives. Furthermore, Sri Lanka has been raising international finance by issuing bonds since 2007. As such, the government and the financial institutions are quite familiar and well equipped with the necessary groundwork to enter the international (green) bond market. The BFP reports that the Government of Sri Lanka recommends the issuing of international sovereign green bonds as a sustainable finance solution to mobilize relatively large sums of debt capital for investing in large-scale biodiversity projects, combatting land degradation, arresting habitat and species loss, maritime reef conservation, coastal conservation, and sustainable energy.
All these project documents prepared with broader consultation and supported by the respective UN agencies (viz. NBSAP, NRIFAP, NAPCLD, and NAPCCI) are therefore, consistent with the global conventions as well as national-level policies and strategies on biodiversity, climate change, and land degradation.
The Wildlife and Forest Conservation Departments have carried out several biodiversity and ecosystem management projects, including the preparation of two pilot scale novel Landscape Management Plans – one for Sinharaja Rain Forest Complex and the other for Hurulu-Kaudulla-Kantale with financial support from the Ecosystem Conservation and Management Project (ESCAMP 2018-2022) of the World Bank. These plans are available as excellent opportunities for consideration in raising funds from international capital markets for restructuring at least some of the ISBs into Green Bonds. Similarly, Forestry Sector Master Plan first prepared in 1995 is being revised to meet the present-day forestry sector needs which again, together with NBSAP, NRIFAP, NAPCLD, and NAPCCI are good candidates for similar capital investment considerations during the debt restructuring process.
Sustainable energy
With respect to sustainable energy, especially the generation of electricity has become one of the most critical issues at present in Sri Lanka. The UNDP and ADB joint assessment of ‘Sri Lanka’s Power Sector – 100% Electricity Generation through Renewable Energy by 2050’ provides opportunities for green-bond solutions, among others in this area. Sri Lanka being one of the 43 countries of the Climate Vulnerable Group which are disproportionately affected by climate change, has signed the declaration at the 22nd COP meeting of UNFCCC in Marrakech, Morocco, in 2016, to reach these ambitious renewable electricity generation targets by 2050.
However, the UNDP-ADB joint assessment records that the Long-term Generation Expansion Plan (LTGEP) for Sri Lanka, 2015 – 2034 ( http:// pucsl.gov.lk/english/wp-content/uploads/2015/09/Long-Term-Generation-Plan-2015-2034-PUCSL.pdf) envisages adding at least two more coal-fired power plants, one in Trincomalee (2 x 300 MW) in 2029 onwards and the other in the Southern Region (3 x 300 MW) from 2027 onwards. The report however cautions that stiff resistance from local communities and possible litigation moves by environmental groups may lead to change this long-term generation plan. According to the same report (table 41: p 113), several thermal power plants are likely to be retired from operation due to their age -related mal-functioning and these capacities also will also need urgent replacements to ensure Sri Lanka’s growing electricity demands. Therefore, actual future coal-based capacity addition to our national grid may be much lower than planned. The same report adds that by 2050, the 100 percent Renewable Energy scenario can potentially save US$18-US$19 billion on imported coal as compared with the base case scenario, which relies heavily on coal.
‘Least cost principle’
The Ceylon Electricity Board’s long-term generation planning is based on the least cost principle” which has led to its focus on significantly cheap coal-based capacity development. However, they have not considered the environmental and health cost externalities in their calculations. Inclusion of the cost of carbon emission, air-quality and health related issues and other externalities would provide a more realistic picture of benefit/cost of the use of coal for electricity generation. Unfortunately, the natural resource economists have not yet brought these environmental and health costs associated with coal-fired power plants in Sri Lanka to the attention of the CEB. Alternatively, it may be that the information available either from Sri Lanka or our neighboring countries have not been taken into consideration in the calculation of ‘least cost’.
Unless these developments are taken into consideration, the roadmap developed as a part of the LTGEP, while making provisions for increased adoption of renewable energy in the electricity generation mix, is unlikely to be the basis on which the Sri Lanka can transform its power sector into a 100 percent RE sector by 2050. Consequently, there is a pressing need for updating the LTGEP with the global shifts to renewable energy sources mandated by the Sri Lankan government in compliance with the UNFCCC recommendations. Such projects could be very attractive for international donors, and they may rank very high in eligibility for Green Bond investments.
COP 26 summit
Furthermore, at the COP 26 meeting of the UNFCCC held in Glasgow in 2021 set a new gold standard on the ‘Paris Alignment of international public finance’ to move away from Coal – the single biggest contributor to climate change by the end of 2021. Sri Lanka along with Chile, Montenegro and their European partners pledged that no new Coal Power Plants to be constructed in their respective countries. Alok Sharma, the British Minister of State at the cabinet office who was also the COP 26 president announced that more than 40 countries reached a deal and pledged to phase out coal – the dirtiest fossil fuel – by the 2040s. Two notable exceptions apparently had been the USA and China although the US has pledged to end public financing for fossil fuel projects abroad without any carbon capture and storage technology, by the end of 2022.
In the light of these recent developments, there is more than a silver lining in our gloomy horizon that through effective engagement at the future negotiations with the IMF and the lenders/creditors, Sri Lanka can capitalize on its current debt restructuring process to transform some of her International Sovereign Bonds to Green Bonds for funding Non-conventional Renewable Energy projects. These projects typically involve renewable energy generation and emission reductions among other benefits. Shifting from a coal power to a solar power project in Sampur in eastern Sri Lanka may be one such project put forward by the national Thermal Power Corporation of India recently although the details of the agreement have not been made public, as yet.
Enormous potential
There is an enormous potential for Sri Lanka to tap into these green/sustainability bond markets to finance its infrastructure projects/investments such as in waste management, renewable energy projects, biodiversity conservation, public transportation, climate change adaptation and mitigation. As shown above, large/medium/small scale green investment project plans have already been prepared and the sustainable financing infrastructure is already in place, and what is needed is a matter of prioritizing these differently sized projects in consultation with appropriate stakeholder groups.
Sri Lanka is a relatively small island with unparallel diversity of physical, biological and cultural features. Most of her leading agricultural exports are in the hands of a diverse set of smallholders which, in a way, are more resilient to cataclysmic changes that may come with the vagaries of the climate from time to time. Therefore, the biodiversity finance projects need not only conserve and sustainably utilize the natural resources but also take adequate measures to distribute the benefits equitably among these smallholders who had been the backbone of the Sri Lankan enterprise.
Finally, although Sri Lanka has been caught somewhat unawares in a fierce tropical storm, the charting out of it seems to be reasonably well laid out by the technocrats with the support from the international agencies. In order to steady the ship in these visciously turbulent waters, obviously we need a matching political leadership with a clear vision, calm but stern demeanor and strong commitment to steer the ship out of the rough seas to calmer waters. The least we need at this critical moment of despondency is a mutiny on board the ship which will only help those prying to grab the best of – as some would call it – ‘this unsinkable aircraft carrier’ in the Indian ocean. Concluded.
Sri Lanka has been hit by a triple whammy of economic shocks and has gone to the IMF for a bailout. It may just be the first domino to fall in a global debt crisis.
Sri Lanka is undergoing a full-scale economic collapse and political crisis, with every chance of further violent unrest. Last week the parliamentary speaker warned of an imminent hunger crisis. This week the new” prime minister, Ranil Wickremesinghe, a septuagenarian on his fifth stint as PM since the 1990s, warned that the country had run out of petrol, and that it desperately needed $75m of foreign currency to pay for essential imports to avoid social collapse.
For months, the government of president Gotabaya Rajapaksa has been struggling to cope with an inflationary spiral and a lack of foreign reserves that has led to shortages of food, fuel and medicines, and rolling power cuts. In recent weeks, public anger has spilled over onto the streets. There have been multiple cabinet reshuffles and failed attempts to form a national unity government.
But so far Rajapaksa has clung on – albeit without a fully functioning government – in part because the opposition doesn’t fancy the job of fixing his mess.
What’s caused the crisis?
A mix of long-run factors and shorter-term triggers. Sri Lanka’s economy has long been dominated by export-orientated crops and more recently the garment industry. Its economy is therefore highly vulnerable to global economic downturns and external shocks, with declines in exports driving regular balance-of-payments crises from the mid-1960s onwards.
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Still, until now post-independence Sri Lanka has never defaulted on its sovereign debt and was a relative success story by South Asian standards.
What went wrong?
Gotabaya Rajapaksa is from one of Sri Lanka’s dominant political families with influence dating back to the 1930s. In 2005 Mahinda Rajapaksa, Gotabaya’s brother, was elected president, and many other members of the family have taken up senior positions since then.
Even before the Rajapaksas took power, financial trouble was brewing”, says Karl Schultz on Bloomberg. During the family’s first stint in office (under the presidency of Gotabaya’s brother Mahinda in 2005-2015), the government took out big loans from China to invest in infrastructure projects. But many of those stalled and foreign debt more than doubled between 2010 and 2020.
Things got worse from 2019, due to a combination of terrible luck and disastrous policy decisions. In April that year, Sri Lanka’s thriving $4.4bn tourism sector took a big blow from a series of church bombings that killed nearly 300 people, including some foreign nationals.
What was the effect of that?
Tourism collapsed by as much as 80%, and then the following spring the pandemic hit, making any recovery impossible. Together, these blows would have challenged any government. But the Rajapaksas proved unequal to the task. Gotabaya Rajapaksa was popular for bringing an end to the 26-year civil war as a head of the ministry of defence in 2009, during the time when Mahinda was president.
Though accused of war crimes in the fight against the Tamil Tigers – and corruption – he was elected by a landslide in 2019 on a security-focused platform in the wake of the bombings. He then brought Mahinda back as PM, along with several more relatives as ministers. But untrammelled authority seems to have gone to the Rajapaksas’ heads”, says The Economist.
What have the Rajapaksas done wrong?
First, they immediately pushed through massive but unaffordable tax cuts that seriously weakened the government’s finances, despite warnings that they were recklessly dangerous. They then failed to reverse course as the pandemic halted tourism, downgrades closed the door to fresh borrowing and foreign reserves dwindled.
Next, with the economy and fiscal position worsening fast, in April 2021, the Rajapaksas banned the use of chemical fertilisers to try and save money. The predictable result was chaos, and a slump in rice production of between one quarter and one third – and an even bigger crash for tea, a key export earner.
A formal default looks imminent, and the government’s chances of clinging on appear slim. The threat this time round for the Rajapaksas’ survival is real,” political commentator Kusal Perera told the Financial Times. They want someone to take over who could diffuse this heat, and after a while to negotiate an exit path for them.”
The country is due to pay $8bn this year in debt repayments and interest on a foreign debt pile of $50bn. But its foreign reserves are now down to a few tens of millions of dollars – in effect nothing – leading it to suspend payments last month and start talks with the IMF on yet another bailout.
The government is also seeking new bilateral loans from the US, China and Japan. Sri Lanka is the first country to buckle” under the mounting pressure of the three-pronged” global crisis, says Larry Elliott in The Guardian – namely, the pandemic, the rising cost of debt, and the sharp increase in global food, fuel and fertiliser prices caused by Russia’s invasion of Ukraine. It’s the first, but unlikely to be the last.
Where’s next?
The list is long and varied”, says Elliott. The UN’s trade and development arm, UNCTAD, recently assessed that 69 countries are currently facing a triple whammy of shocks in the form of rising food prices, rising energy prices and tighter financial conditions.
Of these, 25 nations are in Africa, 25 in Asia and the Pacific, and 19 in Latin America and the Pacific. So far, the IMF has opened rescue talks with Egypt and Tunisia – both big wheat importers – and with Pakistan, which has imposed power cuts because of the high cost of imported energy.
Sub-Saharan African countries at risk include Ghana, Kenya, South Africa and Ethiopia. Argentina recently signed a $45bn debt deal with the IMF, and other Latin American countries at risk include El Salvador and Peru.
Rising interest rates and soaring inflation will leave many governments with unsustainable debts. Get set for a wave of sovereign defaults, says Jonathan Compton
It is unlikely that Barbados, Lebanon or Sri Lanka ever enters your investment thinking. Perhaps now they should. For although all are minnows in a sea of whales in financial terms, they are – to mix animal metaphors – dead canaries in the coal mine. In the last four years, each has gone bankrupt. Barbados defaulted on its foreign debt when a new government took office in 2018, Lebanon stopped paying after a series of economic crisis in 2020 and Sri Lanka did the same amid an economic meltdown last month.
All three went bust for what are effectively identical reasons, as did Argentina – which in 2020 defaulted for the ninth time in its history – and others. Economists would vigorously disagree, citing various theories instead, but the core problem in all cases is gargantuan government corruption – from elected politicians to lowly bureaucrats – robbing their treasuries and misspending whatever is left, along with woeful tax collection systems. Couple this with a complete lack of confidence in their legal systems and governance by domestic and foreign investors alike, and money flees abroad while economic activity plunges. Thus Sri Lanka, long self-sufficient in food, is now begging for foreign supplies as farmers can no longer afford to buy seeds or plant crops.
Sovereign default is a vague term, but one that can be defined as the failure by a government to pay the interest or capital on its foreign currency debt (usually bonds) when due. There are many sub-definitions of default, such as failing to repay local government debt, changing interest terms on loans, or radically debasing the currency. However, there are four immutable rules: sovereign default is normal, cyclical and (with very few exceptions) inevitable for every country; the contentious fourth rule is that sometimes it is the best option. These rules have been forgotten and although the world is slowly drowning in debt, investors are remarkably and foolishly unconcerned.
An unprecedented bubble
The huge growth in access and availability of credit dating from the World War II has stimulated an unprecedented level of real economic growth and wealth. There are multiple benefits to the ability to borrow. For governments, it allows them to build necessary infrastructure. Companies can invest and expand, and thus employ more people. People get the opportunity to enjoy a once inconceivable lifestyle, from home ownership to foreign holidays and a host of consumer goods. However, problems arise when the interest, the capital or both cannot be repaid.
We are in an unprecedented credit bubble. Before the pandemic, the numbers were already alarming. The total stock of global debt had already more than doubled between the 2008 financial crash and 2020 to $226trn or about 2.5 times the world’s total GDP. Partially because of the costs of the pandemic it has since soared to more $300trn (3.5 times global GDP), according to the Institute for International Finance. Notable within these numbers is that government debt has overtaken all the rest combined for the first time and that, unsurprisingly, China has roared into the room to the extent that the increase since 2007 in money terms in its non-financial-sector corporate debt and household debt has been greater than all the advanced economies combined.
Debt is always a high-wire balancing act, requiring a combination of being able to pay the interest, giving an impression you can repay the capital and, most importantly, convincing lenders you’re a good risk so that will pony up more loans. The spectacular surge in debt was possible primarily because interest rates persistently declined to zero and were even negative for several major countries. This allowed governments to issue bonds in record quantities not just for new borrowing, but also to replace older, more expensive loans with larger but overall cheaper new ones. Thus despite ever-rising debts, their interest costs tumbled.
This has reversed. Central banks have under-estimated inflation and are rushing to catch up with a rapid series of interest-rate increases. Suddenly new debt becomes more expensive. At the end of 2021, the governments of heavily indebted developed economies and raggedy republics alike were paying peanuts in terms of the interest cost as a percentage of their revenue, such as France at a mere 3.3%, or Sudan at 5.2%. Globally, interest costs were about 6% of all government revenue last year.
Yet as rates rise, the annual cost of borrowing reverts to the more normal level of low double digits, and higher for many countries. For the first time in nearly 20 years governments globally are going to find new funding for healthcare, pensions, education or infrastructure difficult, while painful cuts in previously untouchable areas will be required. The popular and electoral reaction to this situation is unlikely to be one of calm acceptance.
Japan leads the way
The financial strength of a given country is often measured by its debt-to-GDP ratio, the level of general government debt relative to the size of the economy. As a rule of thumb, over 90% is a default red flag. Yet it is an imprecise tool, as demonstrated by Japan. Its debt-to GDP has been above that level since last century and is a world-beating 260%, yet it’s having no problem in paying its interest bill or raising new loans. Many other advanced economies are also well above red-flag levels, such as the UK, US and many eurozone countries.
Japan offers a clue as to how some developed countries will – for a while at least – mitigate the inevitable squeeze. In Japan, the largest holder of bonds is the central bank and because it is a government subsidiary, the government doesn’t have to pay these back. It also now purchases 70% of all new bonds. Most of the rest are bought by banks, insurance and trust firms, not because their directors are especially dim or patriotic, but because they are forced to by the government for their core reserves and key ratios. It’s a brilliant three-card trick, which to date has allowed stagnant” Japan to enjoy an enviably high standard of living and for decades to keep interest rates ultra-low.
Other developed countries belatedly imitated Japan, witness the independent” Bank of England, which owns around a third of all UK government bonds. But, like all three-card tricks, eventually the sucker punters realise the con. In the case of Japan, the yen has been tumbling because of low interest rates. In the UK and US, inflation, an end to quantitative easing and other factors are pushing interest rates higher.
However, there is one further trick that these countries have left, which will be the last throw before governments must either slash borrowing – leading to recession – or default. These central banks will simply write off the bonds they have bought from their governments. Purists will be appalled because their books will no longer balance”, but does anyone really believe the books of central banks balance anyway? Meanwhile, bondholders will love it, since the risk of them not being repaid diminishes because debt-to-GDP ratios will have been slashed.
These options are available only to some of the G20 advanced countries. Most other nations are already being squeezed, despite the reality that interest rates remain far below long-term averages and massively negative in real terms, even after recent rises. Thus many economies are in for a battering.
Rising rates not only affect the price of credit, but also its availability. Suddenly, once-feted borrowers are finding their friends have disappeared. Meanwhile, the surges in commodity and food prices are shredding personal incomes. These are unlikely to revert to previous levels for many years, even if the invasion of Ukraine were to cease tomorrow, so there is no hope of relief to be had there. Since commodities and food account for a far higher proportion of personal expenditure in developing economies than in the wealthiest economies and domestic consumption is the key economic driver in most countries, this will weaken economic growth and thus tax revenue. A few commodity-producing countries will escape, but the economies of many commodity producers perceived as safe” have become more diversified, so benefit less.
A holistic view of the risks
I mentioned that high debt-to-GDP ratios are only a rough guide to financial strength. There are several reasons why they should be treated with caution. First, many countries may have a low ratio at the government level, but corporate- and personal-level borrowing in foreign currencies has been growing. Such mismatches – borrowing in one currency to invest at home in another – are notoriously destabilising.
Next is capital flows. Smaller countries are usually very dependent on foreign investment. This is always fickle and can swing on election results, threats from neighbours, or a rise in, say, energy and food prices. Weak or despotic leaders also spook the horses. Historical data shows a clear pattern. Sovereign defaults always surge following a spike in interest rates and a slowdown or reversal in capital flows – the conditions that we are seeing today.
Two major international bodies exist to ensure that in theory defaults neither happen nor spread. The less important is the Paris Club, founded in 1956. With 22 permanent members from wealthy countries, plus international observers, it meets frequently to resolve problems in indebted countries. Recently it has linked up with a G20 initiative called the Common Framework with similar aims. It is highly politicised: its members’ prime concerns seem to be either to protect their domestic banks from losing their shirts from foolish lending, or areas of specific self-interest. Thus France will fight hard to rescue Tunisia, but not, say, Kenya, while Britain will do the opposite.
The decline of the IMF
The better-known body is the International Monetary Fund (IMF). Every United Nations country has to pay into this, on a proportionate basis to the size of their economies and guarantee further funding (though many – such as the US – are in arrears). Its theoretical firepower after recent new commitments is immense at a trillion dollars. Still, my hunch is that neither the IMF nor the Paris Club will be able to cope in coming years, even if the IMF’s funders actually pay in.
The IMF was an idealistic and admirable creation (see below), but has become fossilised and disingenuous. I have watched its brazenness with admiration. Under its constitution it can never write off a loan. However, it has special powers to suspend payments, in some cases seemingly forever. It also claims to have suffered very few losses, which is mischievously dishonest.
For example, Pakistan has borrowed 22 times. It has never repaid a cent, except either through new loans from the IMF or from the Gulf states, who also appear never to have been repaid. The IMF’s largest borrower is Argentina, which has defaulted five times since 1980. Like Pakistan, it goes through the pretence of repaying some debt, but takes more IMF money to do so.
The result is that the IMF has created dependent vassal states to which it is in turn in thrall. These countries can never be weaned off aid, but the IMF cannot be seen to write off the bad debts. The IMF list of outstanding loans and repayments shows $107bn on loan. Looking through this list, only a compulsive gambler would bet more than a quarter will ever be repaid. On top of this glaring problem of unrepayable debts, there is the damage the IMF often causes with its cures” – although rarely enforced – and its willingness to deal with any despot or dictator. It’s a sorry decline.
In total, 147 governments have defaulted on debts since 1960. Only eight countries have not defaulted or utterly debased their currencies since 1900. I know a major debt-default storm is coming because it has started. Defaults are already on the rise and are going up faster than the increasingly opaque data. Many defaults are bilateral – such as African and Asian countries failing to repay loans to China or Russia – and never reported. Most probably it spreads later this year and next among smaller or less developed countries. Yet so large is the debt bubble that there have to be some major casualties further out as interest rates rise.
For all the considerable academic work on signals of likely default, the best guide has been a country’s previous form. Proven serial defaulters – such as Argentina, Greece, Mexico, Portugal, Spain and Turkey – must be in the cross-hairs. So too may those with alarming debt-to-GDP ratios and little hope of growing out of the problem, such as Italy or South Africa. However, the EU countries on the list will probably be part of the endgame, as every ruse will be tried to avoid such an event. Despite being a historic serial defaulter, China is low on my list because it has very little foreign debt. However, it ranks highly for the likelihood of a banking collapse, because of its domestic debt splurge.
Should investors run for the hills? From government bonds, yes – if only because the 40-year bull market has ended. From cash too, given rising inflation. But they should also be strolling towards equities. Companies with the right characteristics can and do survive defaults and worse. Just as it was once thought impossible that bond yields could be negative, so it has been forgotten that on extreme occasions some companies have been seen as a better credit risk than their national governments. So don’t be fooled by those many hands out at sea waving at you to join them. They are not in a happy place.
I wish I knew what Bretton Woods was, but I’m too embarrassed to ask
The Bretton Woods agreement was born out of the need to have a more open and better regulated financial world after the end of World War II, avoiding the economic rivalries and protectionism that resulted from, and worsened, the Great Depression. In July 1944, 730 delegates from 44 countries gathered in Bretton Woods, New Hampshire, to discuss how best to go about achieving their aims.
The key outcomes of the conference included: establishing a system of fixed exchange rates, under which all currencies were pegged to the dollar and the dollar was convertible into gold; setting up the International Monetary Fund (IMF); and setting up the International Bank for Reconstruction and Development (IBRD), which later became the World Bank.
The IMF was intended to be a forum for international economic cooperation that would promote sound economic policies among its members – effectively the keeper of the rules. It would also provide financial support to members with balance of payments problems, so that regular international trade could function.
The IBRD originally provided funding to help countries that had been devastated by the war. Later, its aims shifted to supporting economic development – including funding infrastructure – and then it focused on attempting to reduce poverty in developing countries.
The IBRD became operational in June 1946 and the IMF in March 1947. The exchange-rate system became operational in 1958 when exchange controls were eliminated for current-account transactions and member currencies became convertible. While the IMF and World Bank still exist today, the exchange-rate agreement ended in the early 1970s when US president Richard Nixon ended the gold standard in America so that dollars could no longer be converted to gold. The system of fixed exchange rates fell apart and most major currencies began to float freely.
Prime Minister Ranil Wickremesinghe, who took office in May, was emphasising the monumental task he faces in turning around an economy he said is heading for rock bottom”
Sri Lanka’s prime minister says the island nation’s debt-laden economy has collapsed” as it runs out of money to pay for food and fuel.
Short of cash to pay for imports of such necessities and already defaulting on its debt, it is seeking help from neighbouring India and China and from the International Monetary Fund.
Prime Minister Ranil Wickremesinghe, who took office in May, was emphasising the monumental task he faces in turning around an economy he said is heading for rock bottom”.
Sri Lankans are skipping meals as they endure shortages, lining up for hours to try to buy scarce fuel. It’s a harsh reality for a country whose economy had been growing quickly, with a growing and comfortable middle class, until the latest crisis deepened.
HOW SERIOUS IS THIS CRISIS?
The government owes $51 billion and is unable to make interest payments on its loans, let alone put a dent in the amount borrowed.
Tourism, an important engine of economic growth, has sputtered because of the pandemic and concerns about safety after a spate of terror attacks. And its currency has collapsed by 80 per cent, making imports more expensive and worsening inflation that is already out of control, with food costs rising 57 per cent, according to official data.
The result is a country hurtling towards bankruptcy, with hardly any money to import gasoline, milk, cooking gas and toilet paper.
Political corruption is also a problem; not only did it play a role in the country squandering its wealth, but it also complicates any financial rescue for Sri Lanka.
Anit Mukherjee, a policy fellow and economist at the Centre for Global Development in Washington, said any assistance from the IMF or World Bank should come with strict conditions to make sure the aid isn’t mismanaged.
Still, Mukherjee noted that Sri Lanka sits in one of the world’s busiest shipping lanes, and so letting a country of such strategic significance collapse is not an option.
HOW IS IT AFFECTING REAL PEOPLE?
Tropical Sri Lanka normally is not lacking in food but people are going hungry.
The UN World Food Programme says nearly nine of 10 families are skipping meals or otherwise skimping to stretch out their food, while three million are receiving emergency humanitarian aid.
Doctors have resorted to social media to try to get critical supplies of equipment and medicine. Growing numbers of Sri Lankans are seeking passports to go overseas in search of work.
Government workers have been given an extra day off for three months to allow them time to grow their own food. In short, people are suffering and desperate for things to improve.
WHY IS THE ECONOMY IN SUCH DIRE STRAITS?
Economists say the crisis stems from domestic factors such as years of mismanagement and corruption.
Much of the public’s ire has focused on President Gotabaya Rajapaksa and his brother, former Prime Minister Mahinda Rajapaksa.
The latter resigned after weeks of anti-government protests that eventually turned violent.
Conditions have been deteriorating for the past several years. In 2019, Easter suicide bombings at churches and hotels killed more than 260 people. That devastated tourism, a key source of foreign exchange.
The government needed to boost its revenues as foreign debt for big infrastructure projects soared, but instead, Rajapaksa pushed through the largest tax cuts in Sri Lankan history. (The tax cuts were recently reversed.)
Creditors downgraded Sri Lanka’s ratings, blocking it from borrowing more money as its foreign reserves sank. Then tourism flatlined again during the pandemic.
In April 2021, Rajapaksa suddenly banned imports of chemical fertilizers. The push for organic farming caught farmers by surprise and decimated staple rice crops, driving prices higher.
To save on foreign exchange, imports of other items deemed to be luxuries also were banned.
Meanwhile, the Ukraine war has pushed prices of food and oil higher. Inflation was near 40 per cent and food prices were up nearly 60 per cent in May.
WHY DID THE PRIME MINISTER SAY THE ECONOMY HAS COLLAPSED?
Such a stark declaration might undermine any confidence in the state of the economy and it didn’t reflect any specific new development.
Wickremesinghe appeared to be underscoring the challenge his government faces in turning things around as it seeks help from the IMF and confronts criticism over the lack of improvement since he took office weeks ago.
He’s also fending off criticism from within the country. His comment might be intended to try to buy more time and support as he tries to get the economy back on track.
The Finance Ministry says Sri Lanka has only $25 million in usable foreign reserves. That has left it without the wherewithal to pay for imports, let alone repay billions in debt.
Meanwhile, the Sri Lankan rupee has weakened in value to about 360 to $1. That makes the costs of imports even more prohibitive.
Sri Lanka has suspended repayment of about $7 billion in foreign loans due this year out of $25 billion to be repaid by 2026.
WHAT IS THE GOVERNMENT DOING ABOUT IT?
Wickremesinghe has ample experience. This latest is his sixth term as prime minister. So far, Sri Lanka has been muddling through, mainly supported by $4 billion in credit lines from neighbouring India.
An Indian delegation was in the capital Colombo on Thursday for talks on more assistance, but Wickremesinghe warned against expecting India to keep Sri Lanka afloat for long.
Sri Lanka pins last hopes on IMF,” said Thursday’s headline in the Colombo Times newspaper.
The government is in negotiations with the IMF on a bailout plan and Wickremesinghe on Wednesday said he expects to have a preliminary agreement with the IMF by late July.
The government also is seeking more help from China. Other governments like the US, Japan and Australia have provided a few hundred million dollars in extra support.
Earlier this month, the United Nations began a worldwide public appeal for assistance. So far, projected funding barely scratches the surface of the $6 billion the country needs to stay afloat over the next six months.
To counter Sri Lanka’s fuel shortage, Wickremesinghe told The Associated Press in a recent interview that he would consider buying more steeply discounted oil from Russia to help tide the country through its crisis.
The Committee of Public Enterprises (COPE) has decided to further examine the controversial Adani Wind and Solar power project in the Northern Sri Lanka when the Ceylon Electricity Board (CEB) comes up for investigation.
The COPE said so after former Chairman of CEB M.M.C. Ferdinando appeared before the parliamentary watchdog committee yesterday (23) over a statement he made at the proceedings on June 10.
The COPE has made available Ferdinando’s explanation dated June 06, 2011 addressed to the Chairman, and members of the Committee On Public Enterprises. The text of the letter: I wish to place on record my unreserved apology for the comment I made at the COPE meeting held on 10.6.201 on a matter pertaining to the M/S Adani Investment in the Country. In replying to the allegation made against me on the proposed Mannar and Pooneryn Wind and Solar Project with Adani Energy Ltd to generate Renewable energy of 500 Mw, I explained the circumstances behind the issuance of my letter dated 25.11.2021.(a copy is attached for easy reference) During this discussion I became so emotional due to pressures and unreasonable allegation levelled against me to issue this official letter of request. Therefore due to the unexpected pressure and emotions I was compelled without limitation to express the word India Agamathi balakara bawa kiwwa” (stressed by the Hon Prime Minister of India), which is totally incorrect and I wish to withdraw the relevant statement as it was a genuine mistake and was never intended to cause any embarrassment to this Committee or any party.”
Ferdinando resigned after alleging that President Gotabaya Rajapaksa intervened on behalf of the Adani Group.
During yesterday’s proceedings, the COPE highlighted a problem created by Ferdinendo’s interpretation of the Adani investment as a government to government transaction though it was not. The COPE question is how Ferdinando arrived at the conclusion in the absence of any written documentation or at least a joint statement.
Political interference, mismanagement, corruption still galore
The Sirisena-Wickremesinghe government had not utilised USD 1.1 bn received for leasing Hambantota Port to China Merchants Port Holdings Company in 2017, to settle a loan obtained for the construction of the facility during Mahinda Rajapaksa’s administration, the Committee of Public Enterprises (COPE) was told yesterday.
Auditor General W. P. C. Wickramaratne participated in the COPE inquiry into the Sri Lanka Ports Authority (SLPA) audit reports of 2020 and 2021 and current developments.
The yahapalana government leased a 70% stake of the port for 99 years after declaring its intention to settle the loan. However, it transpired at the COPE proceedings chaired by Prof. Charitha Herath, on Wednesday (22) that the USD 1.2 billion received for the long lease had been utilised for other purposes.
The then Ports and Shipping Minister Mahinda Samarasinghe signed the agreement on Sri Lanka’s behalf after Arjuna Ranatunga gave up the ministry as he opposed the deal. The Island yesterday brought this development to the notice of Ranatunga, who promised to comment once he studied the matter.
The watchdog committee pointed out that though the Treasury had paid back the loan and interest in installments, proper accounts hadn’t been maintained. As a result of bank interest balance (Rs. 147,746 mn) and foreign reserve loss (Rs 31,545 mn) being removed from SLPA accounts sans approval from the Treasury or the Cabinet-of-Ministers, and state accounts, didn’t give any indication of the amount of foreign loans obtained for building Hambantota port.
During COPE proceedings, it was also revealed that the Magampura Port Management Services Company, which had brought fuel required for ships on a USD 24 mn loan secured from a local bank, kept the stock till it expired. Subsequently, the consignment was sold for USD 3.5 mn, thereby causing a loss of USD 20.5 mn. The COPE has advised the Ports and Shipping Ministry Secretary to initiate legal action against the board of directors as well as its advisors.
The COPE noted that the Sri Lanka Ports Authority had continued to make recruitments outside the procedures laid down by the Management Services Department and the Salaries Commission.
It transpired at the COPE meeting that overtime payments for 2021 alone amounted to Rs 5,850 mn. This included Rs.1,173 mn paid for workers assigned to sections categorised as overstaffed. As a result of recruitment of approximately 1,500 unskilled workers, the skilled workers had to be paid overtime. The COPE was told some workers earned monthly overtime for as many as 400 hours.
The COPE also questioned why only Rs 600 mn had been given to the Treasury from 2016 to 2021 though it earned revenue of Rs. 69,686 during this period.
