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Saturday June 15th, 2024

International concern that Sri Lanka continues to cremate Muslim Covid dead

IMPORTANT VISIT – Imran Khan Prime Minister of Pakistan champions Muslims around the world/Facebook.com

ECONOMYNEXT – Human Rights activists and Western countries are expressing concern that Sri Lanka is walking back on an apparent promise to allow Muslim victims of Covid 19 to be buried.

Currently, the remains of all victims of the pandemic are cremated whatever religion they and their families belong to.

The controversial stand taken by the government of Sri Lanka against scientific advice and World Health Organisation approved standards has brought about a storm of protest from many countries of the world as well as Human Rights organisations on the island.

Last week Prime Minister Mahinda Rajapaksa was heard telling Parliament that the government will allow burial, but the Leader of the ruling Sri Lanka Nidahas Podujana Sandhanaya was shot down a few days later by Cabinet Spokesman Minister Udaya Gammanpila who said the PM “was expressing his personal opinion.”

Gammanpila said the Health Department would take the decision on the matter based on a report from the expert committee convened to examine the issue. In fact, the expert committee has reported to the Health Minister that burial can be allowed on December 28, according to its Chair, Senior Professor Jennifer Perera.

Today US Ambassador to Sri Lanka Alaina Teplitz tweeted expressing disappointment “to see that the Government and PM are backing away from ending discriminatory cremation policy. People, including loved ones recently passed, deserve more respect for their rights from a democratic government.”

The Rights watch group South Asians for Human Rights also expressed concern over “the timing and purpose of the Pakistan Prime Minister Imran Khan’s two days visit to Sri Lanka” next week which coincides with the virtual launch of 46th session of UN Human Rights Council (UNHRC).

Broken glass outside Muslim shop trashed in Minuwangoda by mobs/EconomyNext

The Council is due to discuss a new resolution on Sri Lanka will be discussed based on a highly critical report by the High Commissioner for Human Rights mandated. The issue where the government of Sri Lanka has been criticised for forcibly cremating the corpses of COVID infected Muslim persons.

In a statement, SAHR said it “believes that the Prime Minister’s visit is to garner support from the Organisation of Islamic Cooperation (OIC) to vote against a resolution on Sri Lanka that is due to come up on 23 February 2021. Further, Prime Minister Khan, during his visit, is expected to address the human rights concerns of Muslims and will hold talks with key government officials and party leaders.”

The organisation says it learns that Khan will address the issues faced by the Sri Lankan Muslim minority during his visit, “we are also apprehensive of the impact these talks would have on the Tamil minority in the country.”

In February 2020, Colombo withdrew its co-sponsorship of resolutions which calls for a process of transitional justice promoting reconciliation, accountability and human rights, and instead, to pursue a domestically designed and executed reconciliation and accountability process. “Support from Pakistan and other countries would permit the Sri Lankan government to deliberately bypass the proper process of transitional justice deserved by the victims who are mainly the Tamil and Muslim minorities in the country,” SAHR said.

“We believe that such bilateral occasions should not be used to address issues of one minority community while overlooking the concerns of another. Therefore, SAHR calls upon the Governments of Pakistan and Sri Lanka to respect the rights of all minorities guaranteed in the constitutions and to resolve and address their concerns while providing equal treatment to all,” it added.

A Muslim boy holds up a placard protesting the compulsory cremation of Covid dead/Journalists for Democracy

PM Khan is highly respected by Muslims around the world for taking up cudgels against Islamophobia, criticizing French President Emmanuel Macron and other European leaders for taking aim at Muslims.

He wrote a letter to Muslim countries around the world to join him in stopping Islamophobia.

As a result, Khan’s support for Sri Lanka was considered vital for Sri Lanka to get the support it needs in international fora to battle the Western countries support for the protection of the Human Rights of ethnic and religious minorities in Sri Lanka.

Today Pakistan’s leading newspaper the “Dawn” carried a column written by Amnesty International campaigner Rimmel Mohydin in which she said Khan should raise the issue of rampant Islamophobia in Sri Lanka and take it up with his counterparts.

Mohydin said on the issue of Muslim cremations Khan had publicly welcomed PM Rajapaksa’s statement that burials would be allowed. “He must now push them to gazette the step.”

“He must consider his responsibility as a Muslim leader. He must recognise that by not raising this issue with his counterpart, he would be seen as complicit in the indifference that often lets realpolitik trump standing up for what’s right. Otherwise, all of his promises will turn to ashes” she wrote.

Khan was scheduled to address the Sri Lankan Parliament, an honour that had been extended to PM Narendra Modi of India when he visited. However even though all arrangements were made, Parliament was abruptly told that what was to be the highlight of the visit had been cancelled due to a “tight schedule.” (Colombo, February 18, 2021)

Reported by Arjuna Ranawana

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Sri Lanka beats key IMF program targets for March 2024 amid rupee stability

ECONOMYNEXT – Sri Lanka has exceeded key quantitative targets set in an International Monetary Fund program for March 2024, based on preliminary data the Washington based agency said in a report.

The March data are not performance criteria on which reviews are conducted but are indicative targets which shows the progress of the program and are a stepping stone for a September review based on June data.

An indicative target for the primary balance (roughly overall deficit minus interest costs), was assessed at 316 billion rupees more than four times the 70 billion rupee target set in the program.

Primary balance can be a big surplus if the interest bill is high and capital expenditure is cut and is a type of crisis management tool after a central bank triggers a currency crisis by cutting rates with inflationary liquidity tools.

However, Sri Lanka’s Treasury has also kept a lid on most current spending. A state salary hike is however due after the currency collapse made life difficult for everyone.

Meanwhile more taxes have been collected from the people to finance the island’s bloated state.

A 750 billion rupees central government tax revenue floor has been exceeded to reach 837 billion rupees.

Central bank credit to government (outstanding stock) has been reduced to 2,691 billion rupees in March compared to a target of 2,800 billion rupees. In December the CB credit was calculated 2,742 billion rupees.

Net international reserves of the central bank were brought up to a negative 1,268 million US dollars exceeding the target of a negative 2,035 by almost 700 million dollars.

In order to collect foreign reserves, which is a type of appropriation of domestic savings of the people by the central bank (taking in deposits) and exporting it to the US and other countries to finance their deficits or by other agency debt in reserve currencies.

In order to collect such ‘deposits’ the central bank has to prevent them from being invested domestically.

It is achieved with deflationary policy through sell-downs of down its Treasuries holding to domestic banks or others, at a market rate, collecting interest from the government or repayments of re-finance credits, subject to any nominal changes in reserve money at a given exchange rate.

In 2024 the central bank allowed the exchange rate to appreciate, which can also reduce prices of traded goods boost real and nominal savings and make it easier to collect foreign reserves.

When domestic credit is weak it is easier to collect reserves. Reduced domestic credit and collection of reserves, including by private banks which then cannot be invested domestically, can push the external current account into surplus.

The central bank also met a 5 percent 12-month inflation target, with an achievement of 4.3 percent.

Sri Lanka’s economy grew 5.3 percent despite reserve collections, amid the stability provided by the central bank.

There were no central bank purchases of Treasuries from the primary market.

However the central bank injected overnight and term money to banks (not on a net basis) showing how easy it is for a rate-obsessed monetary authority to get around the requirement and create external instability again as soon as private credit recovered.

The central bank also allowed excess liquidity from dollar purchase to remain unsterilized for an extended period under its ad hoc pegging arrangement, getting a short term falls in rates, but triggering pressure on the rupee as a result in May and June.

It is not possible to collect reserves with a free floating exchange rate. (Colombo/June15/2024)

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Sri Lanka GDP grows 5.3-pct in first quarter of 2024 amid monetary stability

ECONOMYNEXT – Sri Lanka’s gross domestic product grew 5.3 percent in the first quarter of 2024 data from the state statistics office showed as the central bank continued to refrain from generating monetary instability.

Instead of printing money to cut rates under ‘flexible inflation targeting’ and printing money to boost growth by taking into account ‘potential output’ as permitted by its new monetary law, the central bank ran deflationary policy and also allowed the rupee to appreciate.

“The Sri Lanka economy experienced a more favorable economic condition[s] in the first quarter 2024, when compared to the first quarter in the year 2023,” the Department of Census and Statistics said.

“The high inflation had prevailed in the first quarter of year 2023, gradually reduced to a lower level by the first quarter of 2024 and this low inflation incentivized the economy by providing inputs at [a] much lower price.

The agriculture sector grew 1.1 percent in the first quarter of 2024, after also growing 1.6 percent last year.

Industry grew 11.8 percent in the first quarter, against a 24.3 percent last year.

The economy grew amid falling prices, the statistics office said in sharp contrast to the Anglophone macroeconomic claim that inflation is needed to boost growth, on which Sri Lanka has 5-7 inflation target has apparently been set.

Related Sri Lanka central bank pushing for high inflation target to boost growth

“Among ‘Industrial activities’, coinciding with the decline in input prices, the ‘Construction industry’ grew by 14.2 percent, parallel to this, the ‘Mining and quarrying’ industry too expanded by 18.3 percent during this quarter,” the Statistics Department said.

Sr Lanka’s services sector grew 2.6 percent, against a decline of 4.6 percent recorded last year.

The International Monetary Fund has also urged the central bank to give priority to stability.

Sri Lanka dropped the stability mandate in the earlier monetary law which was violated after the end of a civil war to push the country into serial currency crises especially after the International Monetary Fund gave technical assistance to calculate potential output.

Related Sri Lanka has a corrupted inflation targeting, output gap targeting not in line with monetary law: Wijewardena

Sri Lanka survived a 30-year civil war by giving priority to a stability mandate despite shortcomings in its operational framework but defaulted in peacetime amid activist monetary policy which denied monetary stability to the people. (Colombo/June12/2024)

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Sri Lanka’s NPP notes five-point crisis for economic growth sans details

Former JVP MP Sunil Handunneththi

ECONOMYNEXT — The leftist National People’s Power (NPP) has identified five crises that need resolving for Sri Lanka’s economy to progress, much of which emphasise a production economy targeting export growth though sparse on the detail on resource allocation.

NPP spokesman and former parliamentarian Sunil Handunneththi speaking at an event in Mulaitivu on Thursday June 13 said Sri Lanka is grappling with firstly, a collapse of the production economy, second, a budget deficit, third, a balance of payment crisis which has, fourthly, created a debt crisis, and finally, a resultant gap between haves and have-nots.

“We must first understand the crisis. We reocgnise five main crises that have the same impact irrespective of differences between the north and south.

“The first is the collapse of the production economy. We can see this historically. Agriculture that used to be some 30 percent of gross domestic product (GDP) has now fallen to 8 percent. Essential food is imported. We cannot produce the rice needed for the small population here. Things that can be made here are also imported.

“Second is the income crisis. For the people, their expenses are twice their income. The budget deficit is two or three-fold every day. Banks cannot give loans to businesses and industries because the government takes funds to address the budget deficit. The government takes most of the people’s savings for this,” he said.

The balance of payment crisis Sri Lanka is facing the third crisis, according to Handunneththi, which has triggered a debt crisis, in turn leading to a crisis of income disparity among the people.

“Third is the balance of payments crisis. Imports are two or three fold export income. The government has to take 11 to 12 billion US dollars in loans from foreign countries. When GDP is 80 billion US dollars, debt has gone over 100.”

“All this creates a massive gap between haves and have-nots. Without finding solutions to these crisis, there is no point distributing goods,” he said.

Handunnethi’s remarks appear to be departure from the NPP’s anti-corruption rhetoric which had centred its economic development policy agenda primarily on fighting corruption.

‘Fighting corruption’ and ‘recovering stolen assets’ have been popular slogans since the Aragalaya protests in Sri Lanka and the NPP has made it its central theme in its bid for power. The leftist outfit had also adopted a position that’s cautiously critical of the International Monetary Fund (IMF) and the reforms the international lender has prescribed for Sri Lanka in exchange for a 2.9 billion-dollar bailout.

However, NPP leadership had recently acknowledged the need to continue the IMF programme since the agreement has already been signed.

The Marxist-Leninist Janatha Vimukthi Peramuna, which controls the NPP, though it was never in government barring a brief stint in an Sri Lanka Freedom Party (SLFP)-led coalition in the early 2000s, has been instrumental in driving popular support against privatisation.

Three key policy pillars articulated by the JVP from 2001-2004 and embraced by mainstream politician Mahinda Rajapaksa’s administration in 2005 onward have been highlighted by experts.

From 2005, Sri Lanka halted privatisation, started recruiting tens of thousands of unemployed graduates into the public service every year with lifetime pensions, expanding an already bloated public sector and denying any benefit of a peace dividend to the country.

Sri Lanka also abandoned a price formula for fuel that had helped keep the rupee stable and inflation low from 2001 to 2003 even as global commodity prices went up from the ‘mother of all liquidity bubbles’ fired by the Federal Reserve from 2001.

From 2001 to 2003, state workers fell from 1.164 million to 1.043 million. By 2020, the public sector cadre has grown to 1.58 million with another batch of 53,000 unemployed graduates being paid tax money. (Colombo/Jun14/2024)

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