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Tuesday November 29th, 2022

Prison officials warned not to assist convicted criminals inside the jails

NO ROOM FOR CORRUPTION IN PRISONS – Defense Secretary Kamal Guneratne warns Prison officials of consequences if criminals are mollycoddled/Defense Ministry handout

ECONOMYNEXT- Secretary to the Ministry of Defense Major General (Rtd) Kamal Guneratne has warned Prisons officials to refrain from getting involved in corruption and supporting convicted imprisoned inmates.

“Never let yourself repent on the deathbed that you fed and educated your children with money given by criminals like Wele Suda or Kanjipani Imran,” he told officials he met yesterday a media release issued by the Ministry of Defense said.

The release said that the Secretary said that investigations have “commenced investigations into prisons officials who have links to corruption and to the underworld.”

Guneratne also reminded that President Gotabaya Rajapaksa, other government officials and the public were looking forward to seeing a corruption-free and respectable service from the prisons officials.

Moreover, he said although the Prisons Department is functioning under the Justice Ministry, he has a right to get involved in issues related to the department as over 27,000 prisoners in the island-wide prisons were apprehended by the officers who were attached to the Defence Ministry.

“Police officers, including the STF, are taking risks to lives to nab criminals in the country to maintain the law and order,” he added.

He went onto say that the public believes are many good officers and corrupted officers in the Prisons Department and when the President was elected, he had told him that the condition of the Prisons was deplorable and underworld activities and organised drugs smuggling are operated in the prison.

He also added that the State Intelligence Service (SIS) has analyzed thousands of telephone calls that have originated from inside the prisons.

“Today the entire prisons system is being criticized everywhere in the country. If a remanded drug user comes out of the prison after a few months as a drug dealer, there is something radically wrong in the system,” Guneratne said

Meanwhile, he also requested the officials to treat the inmates equally.”Majority prisoners in prisons are innocent. All inmates should be treated equally. When one sleeps uncomfortably on the floor, another cannot sleep on a double layer mattress. Look into their problems, then they will start loving you from their heart,” he said. (Colombo/June19/2020)

Reported by Imesh Ranasinghe


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A new Sri Lanka monetary law may have prevented 2019 tax cuts?

ECONOMYNEXT – A new monetary law planned in 2019, if it had been enacted may have prevented the steep tax cuts made in that year which was followed by unprecedented money printing, ex-Central Bank Governor Indrajit Coomaraswamy said.

The bill for the central bank law was ready in 2019 but the then administration ran out of parliamentary time to enact it, he said.

Economists backing the new administration slashed taxes in December 2019 and placed price controls on Treasuries auctions bought new and maturing securities, claiming that there was a ‘persistent output gap’.

Coomaraswamy said he keeps wondering whether “someone sitting in the Treasury would have implemented those tax cuts” if the law had been enacted.

“We would never know,” he told an investor forum organized by CT CLSA Securities, a Colombo-based brokerage.

The new law however will sill allow open market operations under a highly discretionary ‘flexible’ inflation targeting regime.

A reserve collecting central bank which injects money to push down interest rates as domestic credit recovers triggers forex shortages.

The currency is then depreciated to cover the policy error through what is known as a ‘flexible exchange rate’ which is neither a clean float nor a hard peg.

From 2015 to 2019 two currency crises were triggered mainly through open market operations amid public opposition to direct purchases of Treasury bills, analysts have shown.

Sri Lanka’s central bank generally triggers currency crises in the second or third year of the credit cycle by purchasing maturing bills from existing holders (monetizing the gross financing requirement) as private loan demand pick up and not necessarily to monetize current year deficits, critics have pointed out.

Past deficits can be monetized as long as open market operations are permitted through outright purchases of bill in the hands of banks and other holders.

In Latin America central banks trigger currency crises mainly by their failure to roll-over sterilization securities. (Colombo/Nov29/2022)

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Sri Lanka cabinet clears CEB re-structure proposal: Minister

ECONOMYNEXT – Sri Lanka’s cabinet has cleared proposals by a committee to re-structure state-run Ceylon Electricity Board, Power and Energy Minister Kanchana Wijeskera said.

“Cabinet approval was granted today to the recommendations proposed by the committee on Restructuring CEB,” he said in a message.

“The Electricity Reforms Bill will be drafted within a month to begin the unbundling process of CEB & work on a rapid timeline to get the approval of the Parliament needed.”

Sri Lanka’s Ceylon Electricity Board finances had been hit by failure to operate cost reflective tariffs and there are capacity shortfalls due to failure to implement planned generators in time. (Colombo/Nov28/2022)

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Sri Lanka new CB law to cabinet soon as IMF prior action

ECONOMYNEXT – Sri Lanka’s new central bank law will be submitted to the cabinet as a prior action of International Monetary Fund with clauses to improve governance and legalize ‘flexible’ inflation targeting, Central Bank Governor Nandalal Weerasinghe said.

Under the new law members of the monetary board will be appointed by the country’s Constitutional Council replacing the current system of the Finance Minister making appointments.

“It will be a bipartisan approach,” Governor Weerasinghe told an investor forum organized by CT CLSA Securities, Colombo-based brokerage.

“The central bank’s ability to finance the budget deficit will be taken out. Thirdly the flexible inflation targeting regime will be recognized in the law as the framework.”

The law will also make macro-prudential surveillance formally under the bank.

There will be two governing boards, one for the management of the agency and one to conduct monetary policy.

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