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Saturday May 18th, 2024

Sri Lanka analysts frown upon Wickremesinghe’s high defence budget 

Image credit: SL Army

ECONOMYNEXT – Sri Lanka’s budget experts raised concerns over higher defence allocation in 2023 budget and said the move gives wrong signal on rationalizing the public spending.

President Ranil Wickremesinghe in his capacity as the finance minister presented 2023 budget in the parliament on Monday (14) which was expected to signal the policies needed to move out of the county’s economic crisis including hard reforms to satisfy the International Monetary Fund (IMF) to help approve an already agreed $2.9 billion loan.

Wickremesighe, who is also the defence minister, allocated 539 billion rupees for both defence and public security, while allocating 322 billion rupees for health and 232 billion for education, the budget document showed.

High defence budget comes when the country’s armed forces are not fighting any external or internal war. Wickremesinghe, however, allowed armed forces personnel, other than special categories, to retire after 18 years of service. The earlier duration for voluntary retirement was 22 years.

“The elephant in the room is defence. We are spending over 500 billion rupees to maintain the triforces and police. That’s a huge amount of money,” Sujeewa Mudalige, the Chief Executive Officer at PricewaterhouseCoopers told a post-budget forum on Tuesday (15).

“It’s 13-years since the end of the conflict. I Think there needs to be a review on this. The quantum of defence doesn’t mean you are secure. If you take 10% of defence at 50 billion rupees to double Samuradhi or imagine health or education getting an additional 50 billion, what transformation will the country get?”

Since the final years of the war, Sri Lanka has always given the top priority to defence and the highest budget allocation had always been given to it because of a large number of armed and police forces, who were mainly recruited during the war.

However, the public have now started to raise questions about if high public resources allocation for the armed forces is rational as there is no war.

“The president spoke of a youth led economy. So imagine what an extra 50 billion would go to the national vocational training? In a few years our defence bill will be at a trillion rupees. We got to review this,” Mudalige said.

“We are happy with one aspect, the military retirement age being brought down to 18 years of service. But I believe it should be further reduced to 10-years because after they are 45 (years), it’s hard to train.”

No politician has antagonized military leaders since the final stage of the war and the military personnel had been highly regarded by the general public despite international probe against their alleged human rights violations in the final stage of the war.

Military since the end of the war has been in forefront in rescue service during time of disasters.

A negative perception about military has been on the rise since armed forces had been allegedly involved in attacking independent protesters in July near presidential secretariat and disperse them from the site where they protested for more than four months.

“Public sector expenditure rationalization is difficult. But my fervent request is we need to look at defence as a starting point,” he said adding that when the economy is contracting, a 64 percent revenue is a very difficult task referring to Wickremesinghe’s tax hike target.

Dushni Weerakoon, Executive Director of the Institute of Policy Studies of Sri Lanka (IPS) said the government should release resources from the expenditure side that is supporting unproductive activities.
“The public sector is number one, whether it’s the armed forces or general public service and reallocates those resources to sectors that drive growth as well as the poorer segments of the population,” she said. (Colombo/Nov15/2022)

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  1. sacre blieu says:

    When in distress or victims of disaster, when people in such dire situations, are to be immensely commended and admired for that humanistic sense of duty. forces never hesitate to come to the rescue of people. But to use these magnificent people for political manipulation or lawless direction, thus denying basic rights is very regrettable.

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  1. sacre blieu says:

    When in distress or victims of disaster, when people in such dire situations, are to be immensely commended and admired for that humanistic sense of duty. forces never hesitate to come to the rescue of people. But to use these magnificent people for political manipulation or lawless direction, thus denying basic rights is very regrettable.

Sri Lanka’s ‘Sancharaka Udawa’ tourist fair seeks to involve universities

ECONOMYNEXT – Sri Lanka’s ‘Sancharaka Udawa’ tourism fair kicked off this week to promote interaction between industry stakeholders and relevant Government bodies, including the Tourist Police, and also universities.

“Several universities, including Colombo, Uva Wellasa, Kelaniya, Sabaragamuwa and Rajarata were given free stalls to facilitate student interaction with industry professionals,” Chairman of the Sancharaka Udawa Organising Committee, Charith De De Alwis said in a statement.

The event takes place today (18) at the BMICH and houses stalls for hoteliers, tour and transport services, with a goal of attracting 10,000 visitors.

Organized by the Sri Lanka Association of Inbound Tour Operators (SLAITO) and the Sri Lanka Tourism Promotion Bureau (SLTPB), the 11th edition of Sancharaka Udawa offers a platform for both B2B and B2C sectors.

“Sancharaka Udawa houses over 170 exhibitors and a footfall of more than 10,000 visitors,” De Alwis said.

This year’s edition will include participants from outbound tourism sectors to facilitate capacity building. The event provides networking opportunities for industry newcomers and veterans.

“The networking platform offers opportunity for small and medium-sized service providers integrating them into the broader tourism landscape. The anticipated outcome is a substantial increase in bookings particularly for regional small-scale tourism service providers.” (Colombo/May18/2024)

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Sri Lanka’s CEB sells LTL shares to West Coast IPP for Rs26bn

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board has sold shares of an affiliate to West Coast Power Company Limited, an independent power producer giving profits of 25.9 billion rupees in the March 2024 quarter, interim accounts showed.

The sale has been carried out as a transfer.

“Twenty-eight percent (28-pct) of share ownership of CEB within LTL Holding’s equity capital has been transferred to West Coast Power Company Ltd for a total consideration of Rs 26 billion as part of a partial settlement of outstanding dues…” the March interim accounts said.

“This transaction resulted in a net gain of Rs25.9 billion rupees which has been recognized and reflected in the ‘Gain from Share Disposal’ in the individual financial statement in CEB.”

LTL Holdings is a former transformer making unit of the CEB set up with ABB where the foreign holding was sold to its management.

The firm has since set up several IPPs.

West Coast Power operates a 300MW combined cycle IPP in Kerawalapitiya promoted by LTL group liked firms in which both the Treasury and Employees Provident Fund also have shares.

Its operational and maintenance contract is with Lakdhanavi, another private IPP. The firm has been paying dividends.

The capital gain from the transfer of shares helped the CEB post profits to 84 billion rupees for the March 2024 quarter.

CEB reported gross profits of 62.7 billion rupees from energy sales and 30.6 billion rupees in other income and gains in the March 2024 quarter. Other income was only 3.1 billion rupees in last year. (Colombo/May18/2024)

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Sri Lanka mulls mandating prices for shopping bags in supermarkets

ECONOMYNEXT – Sri Lanka may end the practice of supermarkets giving free shopping bags, as part of efforts to contain plastic use according to deliberations at a parliamentary committee following a supreme court decision.

Sri Lanka’s courts many years ago barred supermarkets from charging for plastic bags from customers after activists went to court.

However a Supreme Court ruled in March this year to overturn that.

The parliament Sectoral Oversight Committee on Environment, Natural Resources and Sustainable Development said it could not reverse the gazette issued under the Consumer Affairs Authority Act until it had received a copy of the ruling.

The committee said the ruling might prompt shoppers to bring their own bags, which would lead to a reduction in polythene waste.

It may only apply to supermarkets and not to smaller merchants, however. (Colombo/May18/2024)

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