Legal

British Bar Council calls on Sri Lanka rulers to respect judicial independence

Saturday March 18, 2023 7:26 am

ECONOMYNEXT – The Bar Council of England and Wales has called on Sri Lanka rulers to respect the independence of the judiciary, in the wake of judges being called before a parliament panel following an order on releasing funds for a local election.

Sri Lanka’s Treasury has no far not provided allocated funds to hold an election, effectively delaying it indefinitely, after President Ranil Wickremesinghe as Finance Minister set up a priority list for spending.

Instead of carrying out the order, judges are to be called before a Parliament committee.

The UN Basic Principles on the Independence of the Judiciary state that “it is the duty of all governmental and other institutions to respect and observe the independence of the judiciary”, and “there shall not be any inappropriate or unwarranted interference with the judicial process, nor shall judicial decisions by the courts be subject to revision, the Bar Council of England and Wales said.

“We hope that the parliamentary authorities in Sri Lanka will reconsider most carefully the appropriateness of questioning Supreme Court Judges before a parliamentary committee, and we similarly hope that the Sri Lankan government will consider most carefully whether it can be ever be right to encourage disobedience to court orders,” Chair of the Bar Council of England and Wales, Nick Vineall KC

The full statement is reproduced below:

Bar Council statement on judicial independence in Sri Lanka

Elections to Sri Lanka’s Local Authorities are supposed to have taken place by 19 March 2023. The Sri Lankan Parliament has allocated funds through the National Budget, but release of the funds has been blocked despite requests from the Elections Commission. On 3 March 2023 a three-judge bench of the Sri Lankan Supreme Court issued an interim order to the Attorney-General and to the Secretary to the Treasury to refrain from withholding funds for the elections to the country’s local authorities.

The Speaker of the Sri Lankan Parliament has recently accepted a request to refer the conduct of the three Supreme Court judges to the Sri Lankan Parliamentary Committee on Ethics and Privileges, and on 10 March the Sri Lankan Minister of Finance Shehan Semasinghe told Parliament that “it is a serious offence to implement the interim order before hearing the privilege issue by the Parliamentary Committee on Ethics and Privileges.” The Minister then requested the Deputy Speaker to advise all relevant authorities not to act on matters relating to the polls until the said Parliamentary Committee concludes its inquiry on the matter. The Parliamentary authorities have now written to the Court Registry asking for a copy of the interim order to be placed before the Committee on Privileges on 22 March 2023.

The UN Basic Principles on the Independence of the Judiciary state that “it is the duty of all governmental and other institutions to respect and observe the independence of the judiciary” and “there shall not be any inappropriate or unwarranted interference with the judicial process, nor shall judicial decisions by the courts be subject to revision.”

Chair of the Bar Council of England and Wales, Nick Vineall KC, said: “An independent judiciary is an essential and integral part of the rule of law. So too is the principle that governments comply with court orders.

International Commission of Jurists statement: Sri Lanka: Parliamentary action undermines independence of the Judiciary.

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Economy

Sri Lanka seeks to settle India ACU debt, credit lines over 5-years

Sunday March 26, 2023 9:22 am

ECONOMYNEXT – Sri Lanka has requested India to settle payments due to the country under the Asian Clearing Union mechanism and credit lines given in 2022 over 5 years, Indrajit Coomaraswamy, an advisor the island’s government said.

Sri Lanka is negotiating with India to settle the money over a 5-year period, Coomaraswamy, a former central bank governor told an online forum hosted by the Central Bank.

“Our request from the Indians is to settle it over five years,” he said. “That I think is still in the early stages of negotiation. The same with the one billion line of credit.”

Sri Lanka’s central bank owed the ACU 2.0 billion US dollars to the Asian Clearing Union according to a year end debt statement, issued by the Finance Ministry.

Sri Lanka owned India, 1,621 million dollars according to ACU data by year end, excluding interest.

India has given a 1 billion US dollar credit line to Sri Lanka as well a credit line for petroleum.

Sri Lanka in March 2024 has paid 121 million US dollar out of a 331 million US dollar IMF tranche to settle an Indian credit line.

Indian credits were given after the country defaulted in April 2022 as budget support/import when most other bilateral lenders halted giving money. (Colombo/Mar26/2023)

Bonds & Forex

Sri Lanka coconut auction prices up 1.16-pct

Sunday March 26, 2023 7:26 am

ECONOMYNEXT- Sri Lanka’s coconut auction prices went up by 1.16 percent from a week ago at an auction on Thursday, data showed.

The average price for 1,000 nuts grew to 83,219.45 from 82,260.58 a week earlier at the weekly auction conducted by Sri Lanka’s Coconut Development Authority on March 23.

The highest price was 92,500 rupees for 1,000 nuts up from the previous week’s 90,600 rupees, while the lowest was 76,500 also up from 70,000 rupees.

The auction offered 900,010 coconuts and 583,291 nuts were sold. (Colombo/Mar 26/2023)

Economy

Sri Lanka in talks for billion dollar equivalent Indian rupee swap

Saturday March 25, 2023 6:44 am

ECONOMYNEXT – Sri Lanka is in talks with India for a billion US dollar equivalent Indian rupee central bank swap, to facilitate trade, Indrajit Coomaraswamy, ad advisor to the government said.

“The amount is still uncertain it could be up to the equivalent of a billion US dollars,” Coomaraswamy told an online forum hosted by Sri Lanka’s central bank.

The money will be used to facilate India Sri Lanka trade, he said.

India has been trying to popularize the use of Indian rupees for external trade and also encouraged Sri Lanka banks to set up Indian rupee VOSTRO accounts.

However the first step in popularizing a currency for external trade is to get domestic agents, especially exporters, to accept their own currency for trade, like in the case of the US or EU, analysts say.

India’s billion US dollar credit to Sri Lanka given during the 2022 crisis is settled in Indian rupees (transaction need).

However the Indian government itself has chosen to denominate it in US currency for debt purposes (future value).

In most South Asian nations, receivers of remittances are willing to accept domestic currencies, leading to active VOSTRO account transactions.

Sri Lanka is expected to repay a 400 million US dollar swap with the Reserve Bank of India next year under an International Monetary Fund backed program for external stability and debt re-structuring.

Central bank swap proceeds sold to banks, which are then sterilized with inflationary open market operations, can trigger forex shortages and currency crises, analysts warn.

Sri Lanka went to the International Monetary Fund after two years of inflationary monetary operations by the central bank’s issue department (money printed to suppress interest rates) triggered the biggest currency crisis in its history and external sovereign default.

Sri Lanka had gone to the IMF 16 times with similar external troubles except for the April 2003 extended fund facility under Central Bank Governor A S Jayewardene which was a purely reform-oriented program with the World Bank (PRGF/PRSP) program at a time when he was collecting reserves with deflationary monetary policy and perhaps the lowest inflation since the Bretton Woods collapsed. (Colombo/Mar26/2023)