An Echelon Media Company
Sunday April 21st, 2024

Sri Lanka can trigger food shortages as in medicines with new trade controls: Bellwether

TRADE BLOCK: Sri Lanka’s import trade was progressively hit due to forex shortages from money printing and surrender rules. What other countries experience after default was experienced by Sri Lanka before.

ECONOMYNEXT – Sri Lanka has no food shortages at the moment except milk which are imported by a few large companies, but drugs and medical items are facing deadly shortages after the central bank created dollar shortages with money printing.

Sri Lanka is estimated to import around 200 million US dollars of foods a month including onions, potatoes, sprats, lentils and cereals and some types of rice from time to time.

Sri Lanka’s drug shortages are primarily created by the National Medical Regulatory Authority ,a deadly price control agency created by the ousted Yahapalana administration along with the central bank which is running the flexible exchange rate.

When the NMRA imposes price controls importers cannot sell at the current costs with the central bank depreciating the currency with money printing and a surrender rule. Therefore there are shortages.

They also cannot open Letters of Credit at banks due to dollar shortages created by money printing and the surrender rule.

The easiest way to create food shortages is to clampdown on the Undiyal/Hawala markets, open account food imports and force Pettah traders to open LCs or set Customs authorities on food importers who do not fully settle bills through official channels.

The Consumer Affairs Authority can also contribute to food shortages with price controls.

Starting NMRA without ending flexible inflation cum output gap targeting

This column warned as far back as 2015 when the then Monetary Board was printing money claiming inflation was low as commodity prices collapsed that restraining by law the central bank’s flexible policy was the answer not the NMRA. (Sri Lanka’s pharma control Neros fiddling while Colombo burns with falling rupee)

In 2018 when the outcome of the flexible inflation targeting cum output gap targeting gap become clearer, pointed out that Sri Lanka was not Greece where the currency was stable but a Latin America style central bank where the rupee collapses very steeply hitting consumer prices.

Flexible exchange rates or soft-pegs are the most dangerous monetary regime ever cooked up by economists or mercantilists.

This is what the column said at the time in (Sri Lanka is not Greece, it is a Latin America style soft-peg: Bellwether)

“Under Euro a local company can still repay foreign loans. They can also borrow domestically or use their bank deposits to repay foreign loans. There is no problem with importing goods as the Euro is accepted abroad.

“The prices of fuel or electricity did not go up steeply. They were same as any stable country in the Euro area like Germany or France. As there was no explosion in inflation the value of bank deposits were intact. While there is sovereign default and possible hair cuts on state debt there is no private default or haircut.

“But a falling currency imposes a hair cut on all state and private debt including bank deposits in solvent banks. Pensions are made worthless hitting old people the hardest.

“A collapsing soft-pegged currency will put all citizens other than the very rich, in severe difficulties unlike a strong floating exchange rate like the Euro.

Three sins and a currency collapse

“In a soft-pegged monetary regime like in Sri Lanka, the currency continues to fall each time the central bank intervenes in forex markets and then prints money to keep interest rates down.

“As long as the currency is not floated, there is no end in sight for exchange rate depreciation, especially if interest rates are not raised and credit does not slow. What usually happens in Sri Lanka and other soft-pegs is that in the end rates have to be hiked and the currency floated. This is the phenomenon been referred to as ‘rawulath ne kendeth ne’ in this column.

“In Latin America – unlike Greece – when the currency falls steeply, prices go up, and people ‘s living standards melt as most of the money goes to food and medicines. This makes the many businesses fail as demand collapses.

“Then banks have bad loans and suffer losses.

“Unlike in Greece, the government of a soft-pegged country cannot raise money from domestic markets and repay foreign loans even at prohibitive interest rates. The government may default. Downgrades will compound the problem, pushing interest rates up.

“As prices move up with currency depreciation the value of bank deposits evaporates. If the currency falls by 50 percent, local companies will now have to borrow more to repay foreign loans, making massive holes in their balance sheets even if forex was available to buy.

“If exchange controls come, there will be no dollars to buy with the domestic money they have borrowed.
“It is not possible to import goods freely when a soft-peg collapses because there will be forex shortages due to sterilized intervention. Import controls may also come.

“As the cost of fuel or electricity goes up (oil prices are now falling and there is rain in Sri Lanka) if prices are not raised, more money will be printed to subsidize energy, pushing the currency down.
“In Latin America, energy price controls have led to money printing and rationing. There can be power cuts and fuel shortages.

“In Sri Lanka because of price controls of the National Medicines Regulatory Authority medicines, drugs can go off the shelves.

“In Latin American soft-pegs many price controls were imposed. Instantly goods go off the shelves and black markets appear.

“With import controls more businesses will fail. People will be laid off as revenues fall. Banks will make more losses. Rates will rise eventually. More businesses can fail.

“If this situation continues for several months, there may be runs on banks. If money is printed to bail them out, the currency falls even more. This phenomenon was seen in many Latin American soft-pegs and also Indonesia during the East Asian crisis.

“Debt to GDP will explode until inflation catches up. The share of foreign debt will also increase. This is what happens in Latin America. It is not Greece.

Monetary Meltdown

In 2021 when bad central bank policy continued this column warned that if a float was botched running out of reserves due to ‘fear of floating’ that is found in flexible exchange rate central banks, default and a meltdown was likely.

Soft-peggers do not float in one go but tries to adjust the currency little by little. However it can backfire. The IMF also advised the central bank to adjust little by little. It was done. Two months after the float the rupee is still adjusting little by little.

This column warned against this type of half-hearted floating and half-hearted bond auctions. It is extremely disappointing to this columnist to see these warnings coming true.

This column has said in the past that dire warnings are made in the hope that the central bank’s usually flexible policies would be abandoned.

This is what was said in August 2021 when the central bank continued with trying to target an output gap with the peg already broken in (Sri Lanka’s monetary meltdown will accelerate unless quick action is taken: Bellwether)

“The central bank itself is likely to be insolvent on its dollar liabilities before the end of the year unless money printing is halted.

“However any kind of half-hearted Treasury bill and bond auctions, partially failed bond or bill auctions with some volumes of printed money will lead to progressively higher interest rates but the reserve losses and currency depreciation will continue.

“Soft-peggers are not good at floating. Partial interventions (flexible exchange rate) will lead to even higher interest rates and more losses of confidence.

“In Argentina, short term rates went up to 60 percent due to the ‘flexible exchange rate’ (which is neither floating nor pegged) that had caused so much damage to Sri Lanka since 2015 coupled with an unsterilized disorderly market conditions (DMC) rule, which also lacks credibility.

“The high interest rates can kill many businesses. The high rates from partial floating can kill finance companies and banks.

“When dying banks are bailed out with printed money, it is generally even more difficult to control the exchange rate.

“Inflation and cash shortages will lead to a consumption collapse which will also destroy businesses. Low reserves will lead to a default on foreign debt as happened to the Weimar Republic.

CAA, NMRA a big threat

“When the rupee starts to fall, the price controls will come. The Consumer Affairs Authority (CAA) had already stopped Laugfs Gas.

“It will impose many more price controls. Many more shortages will occur. It will be a big threat to the ordinary people. People will be branded ‘black marketers’.

“The money printers are already getting ready to hike the fine on those who break price controls by 100 times.

“The National Medicinal Drugs Authority (NMRA) could be an even bigger threat. NMRA price controls will make it impossible for drug importers to operate. There may be shortages of some types of medicines.

“The import substitution firms, also called ‘cronies’ will manage.

“It is even possible that oil imports will have to be curtailed, if more money is printed to pay state “workers and meet other expenses.

“What happens to soft-pegs countries is that eventually the currency is floated when it becomes apparent to the Keynesians driving policy, that there is no way to rebuild reserves. When the rupee is floated price controls may again cause havoc.

Avoiding Worst Case Scenario – Monetary Meltdown

“So what is the worst case scenario?

“The worst case scenario is that the nothing will be done and the central bank will continue to print money to keep the ceiling yield on Treasury bill yields.

“Whatever Keynesian or post – Keynesian economists, have been taught at university, reality always hits eventually. Keynesian models are fine in theory, but they do not exist in the real world. The Hicks-Hansen model (IS-LM) was dismissed by Hicks himself later.

“The central bank itself is likely to be insolvent on its dollar liabilities before the end of the year unless money printing is halted.

“However any kind of half-hearted Treasury bill and bond auctions, partially failed bond or bill auctions with some volumes of printed money will lead to progressively higher interest rates but the reserve losses and currency depreciation will continue.

“Soft-peggers are not good at floating. Partial interventions (flexible exchange rate) will lead to even higher interest rates and more losses of confidence.

“In Argentina, short term rates went up to 60 percent due to the ‘flexible exchange rate’ (which is neither floating nor pegged) that had caused so much damage to Sri Lanka since 2015 coupled with an unsterilized disorderly market conditions (DMC) rule, which also lacks credibility.

“The high interest rates can kill many businesses.

“The high rates from partial floating can kill finance companies and banks. When dying banks are bailed out with printed money, it is generally even more difficult to control the exchange rate.

“Inflation and cash shortages will lead to a consumption collapse which will also destroy businesses. Low reserves will lead to a default on foreign debt as happened to the Weimar Republic.

Food Heroes

When a country defaults trade takes a big hit because foreign suppliers refused to accept Letters of Credit. But in Sri Lanka’s case this happened in incremental steps from around late 2020 when the country was downgraded to CCC.

First some suppliers stopped accepting LCs of local banks which were not counter signed by an international bank. Suppliers need LCs to get packing credit. Then banks in Japan and Western countries stopped counter signing them. For a while Indian banks did it at a high premium.

The Indian banks also stopped counter signing. They also stopped giving supplier credit against Sri Lanka LCs.

Then as the central bank tightened controls, surrender rules and so on, without halting money printing banks stopped giving LCs because they could not find dollars to settle them on time.

However Sri Lanka’s Pettah traders, like a mother hen feeding her chicks under the greatest challenges continued to import food using traditional relationships, sometimes running back several generations, with suppliers sending goods on open papers.

Farmers are also doing it despite the lack of fertilizer. Some fertilizer is smuggled from India to feed the people (boat urea).

Suppliers in South Asia and Dubai are familiar with Undiya/Hawala and are willing to trust personal relationships more than LCs. Their word is their bond.

Food importers will tell that banks only give small amounts of money. They have in fact cleared most of the containers in the port.

That is why there is food. Through the Undiyal/Hawala system they get priority. And they can get a dollar at 20 rupees higher and feed the nation while banks have to listen to various dictates of authorities and powerful suppliers including in building materials.

The Undiyal/Hawala system is not a threat to anyone. It does not create new money and drive up excess liquidity of the good banks, unlike the surrender rule of the ‘official channels’.

It does not reduce the rupee reserves of state banks in particular and lead to printed money borrowing from the SLF window unlike the ‘official channel’.

It is a harmless net settlement system where the currency floats without altering reserve money. It is feeding a nation using proceeds of remittances.

What should be done is not to force food importers to use LCs, but to fix the broken peg (rates have already been raised which will reduce domestic credit and investments and imports in a step in the right direction) or have a clean float so that imports can be done freely.

Forcing food importers to use LCs can create food shortages. Setting the CAA hounds after the food heroes will also create shortages.

The country’s economic problems can only be solved by ending the intermediate regime soft-peg (now called a flexible exchange rate) and going for a single anchor system which will bring stability by ending discretionary policy of the central bank to manipulate interest rates.

Stability may not be everything, as classical economists say, but without stability everything is nothing. (Colombo/Apr29/2022)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Widespread support for Sri Lanka debt workout, reform progress at IMF/WB meet: Minister

ECONOMYNEXT – There was widespread support for Sri Lanka’s debt restructuring and acknowledgement of progress made under an International Monetary Fund program, at meeting of the fund and World Bank, State Minister for Finance Shehan Semasinghe said.

“The strides made in our economic recovery and financial stability have been acknowledged as significant advancements towards our country’s prosperity by our stakeholders and international partners,” Minister Semasinghe said in an x.com (twitter) post after attending the meetings.

“Further, it was heartening to note the widespread appreciation and support for Sri Lanka’s debt restructuring process.

“We remain steadfast in our commitment to reaching the restructuring targets and confident of smooth progress in the continued good-faith engagements for a speedy debt resolution that will ensure debt sustainability and comparability of debt treatment.”

Sri Lanka ended a first round of talks with sovereign bondholders in March without striking a deal but some agreement on the basis for a deal.

An initial deal with bilateral creditors have been reached, but they may be awaiting a deal with private creditors to sign formal agreements.

International partners have appreciated reforms made under President Ranil Wickremesinghe, Minister Semasinghe said.

“It was great to engage in productive bilateral discussions with all of whom appreciated the recent economic developments, progress in debt restructuring, strengthening of tax administration, and ongoing governance reforms,” he said.

Sri Lanka’s rupee has been allowed to re-appreciate by the central bank amid deflationary monetary policy, bringing tangible benefits to people in the form of lower energy and food prices, unlike in past IMF programs.

Electricity prices were cut as a strengthening currency helped reduce the cost of coal imports.

Related Sri Lanka central bank mainly responsible for electricity price cut

The currency appreciation has also allowed losses to the Employment Provident Fund imposed to be partially recouped, helping old workers near retirement, as well as raising disposable incomes of current wage earners on fixed salaries.

Related Sri Lanka EPF gets US$1.85bn in value back as central bank strengthens rupee

The IMF, which was set up after World War II to end devaluations seen in the 1930s after the Fed’s policy rate infected other key central banks, started to actively encourage depreciation after a change to its founding articles in 1978 (the Second Amendment).

The usefulness of money as a store of value, or a denominator of current and future values then decline, leading to loss of real savings, real wages and increases in social unrest.

Before that, members who devalued more than 10 percent after printing money for growth or any other reason, faced the threat of suspension from the organization as punishment.

Sri Lanka’s rupee has appreciated to around 300 to the US dollar now from 370 after a surrender rule was lifted in March 2023.

But there is no transparency on the basis that economic bureaucrats are allowing the currency to gain against the US dollar (the intervention currency of the central bank).

The rupee is currently under pressure, despite broadly prudent monetary policy, due to an ‘oversold position’ in the market after recent appreciation made importers and banks to run negative open positions as the usefulness of the currency as a denominator of future value declined with sudden strenghtening. (Colombo/Apr21/2024)

Continue Reading

Sri Lanka choices recalled in Vietnam debate on monetary and fiscal options to target output

FIRST SIGNS: Fuel queues and shortages were developing in Vietnam in 2022 with a BOP deficit of $15.6bn in 3Q when rates were hiked to stop inflationary sterilization. Photo/Vietnamnet.vn

ECONOMYNEXT – Vietnam can grow 6.0 percent in 2024, with ‘policy support’ but there is a debate whether it should be done through fiscal (widening deficits/worsening debt or state spending) or monetary means, a top International Monetary Fund official said.

The IMF projects 6.0 percent growth for Vietnam in 2024 “as it rebounds from a challenging 2023,” Krishna Srinivasan, Director of the Asia and Pacific Department told reporters during the Spring Meetings in Washington.

Western Statism

“Now, in the case of Vietnam, I would say that there’s an issue about policy mix, whether you could get more support from the fiscal and rely less on monetary,” Srinivasan said.

“So there is an issue of policy mix which we’re talking, which we’ve been engaging the authorities with.

“I would say that policy support should be more favorable and that should, and along with external demand, help raise growth to 6 percent.”

Sri Lanka used both fiscal and monetary mix to boost growth from December 2019, triggering an external default two and a half years later.

Vietnam’s forex reserves fell below 3 months of imports in 2022 after the State Bank kept policy rates down by inflationary sterilization of forex market interventions.

The currency was then stabilized with rapid fire rate hikes and credit controls to dial back inflationary policy, just as long fuel ques started to form at petrol sheds, with angry riders already hit by rising prices due to Dong weakness. 
The return to market interest rates averted wider social unrest from being triggered by depreciation and further losses at state energy utility EVN, due to fixed prices amid soaring coal prices.

The State Bank of Vietnam later cut rates and relaxed credit controls as the BOP shifted to a surplus.

The government has since cut value added taxes. Public sector salaries are set to rise further this year, possibly as much as 30 percent, after earlier wage restraint. (Related Link: Public employee’s salaries to increase by 30 per cent from July 1: Minister)

State Driven Growth Options

The IMF also said in an Article IV consultation report released in October 2023, that fiscal metrics should be effectively undermined for ‘growth’ but more through income redistribution, and possible support for a fallout from a weak property sector.

Some Vietnamese property companies are reeling from expansion during earlier low rates and Covid-linked construction delays, which could also hit banks.

“Building on successful fiscal consolidation in recent years, there is fiscal space to provide further support,” an IMF Article IV consultation report released in October 2023 said.

“The government could scale up social safety nets that would boost growth and protect the most vulnerable households.

“Given the slowdown and the constraints faced by monetary policy, going forward, fiscal policy can take a leading role in supporting aggregate demand.

“For instance, the government could scale up social safety nets—and consider cash transfers to provide swift relief to poorer households.

“If the current turmoil proves more damaging to the economy and the financial sector, targeted support could be considered, including to help real estate developers restructure.”

Dong on thin ice

In 2023, Vietnam’s balance of payments was only marginally in surplus by 1 to 3 billion dollars a quarter, indicating that credit was still resilient after a successful ‘soft-landing’, and any further shocks from macro-economists can destabilize the external sector easily.

In the fourth quarter of 2024, Vietnam’s BOP was only 2.4 billion dollars in surplus.

Any extra spending or tax cuts which boosts the deficit due to attempts to engage in ‘macro-economic policy’ and expand government borrowings would lead to money printing under a fixed policy rate, reversing gains made by the State Bank over 2023, and pushing the Dong down, analysts say.

Western macro-economists believe that expanding government action (through the Treasury or central banks) to tinker with ‘aggregate demand’ can boost growth numbers instead of giving a chance for people and businesses to engage in real production of goods and services by providing monetary stability.

Collapsing currencies and external imbalances are then blamed on ‘current account deficits’ and ‘structural deficiencies’.

Such Keynesian and post-Keynesian beliefs have worsened since quantitative easing was normalized in the US after the Great Recession and ‘stimulus’ re-captured Western media attention despite the hard lessons of the 1960s and 1970s, critics say.

In Sri Lanka, the IMF taught a central bank that had already busted the currency from 4.70 to 131 to the dollar to calculate ‘potential output’ just as the country was barely recovering from a 30-year civil war.

Sri Lanka defaulted within 7 years of ‘data driven monetary policy’ (flexible inflation targeting with output gap targeting) and three currency crises later in peacetime amid increasingly aggressive macro-economic policy as consecutive stabilization programs reduced growth numbers.

Aggressive Macro-economic Policy

After using higher deficits and inflationary rate cuts in 2015 amid low inflation, inflationary rate cuts despite tax hikes in 2018 (fiscal policy is tight therefore monetary has to be loose mantra), macro-economists took a proverbial Keynesian bull by the horns and cut both taxes and rates from December 2019 saying there was a ‘persistent output gap’.

Related Sri Lanka fiscal stimulus to close output gap

Analysts say there is no real choice between monetary or fiscal deterioration to achieve macroeconomic policy desires of interventionists, in a country with a bureaucratic interest rate.

A policy rate, unless hiked, will automatically result in inflationary monetary operations as domestic credit picks up, irrespective of whether it is driven by private or state credit.

Any so-called ‘fiscal support’ can only be given without harming the exchange rate in a country that has a reserve collecting central bank with a policy rate, by liquidating any sovereign wealth funds or borrowing abroad and pushing up net external debt, analysts say.

By worsening external net debt levels, desires of macro-economists can be satisfied without harming monetary stability and the living standards of the population in general or nutrition of the children of the poorest sections of society by so-called exchange rate flexibility or debasement.

In Sri Lanka, potential output is now written into a brand new IMF-backed monetary law even before the first default workout is complete. Potential output is mentioned in every monetary policy statement, not stability. (Colombo/Apr20/2024)

Continue Reading

Sri Lanka’s Easter Bombings: A Preventable Tragedy

ECONOMYNEXT – Five years on, Sri Lanka’s Easter Sunday bombings has left us with more questions than answers.

Both the Gotabaya Rajapaksa government and now the Ranil Wickremesinghe tenure has been shown up poorly in terms of ensuring the masterminds and those who failed to prevent the bombings are bought to book.

As one sifts through various reports and discussions on the Easter Sunday bombings which took the lives of 315 and injured at least 600, one must, as Sunanda Deshapriya, activist and investigative journalist told a webinar recently, ask whether that tragedy was preventable.

If it was, then why was it not?

The webinar was organised by the Solidarity Movement for Justice and Truth (SMJT).

One interesting fact that investigators discovered, Deshapriya said, was that a phone number used by one of the bombers, was amongst a series used by the infamous ‘Tripoli Brigade’ that is alleged to be behind the Lasantha Wickrematunga murder.

This brings up the question whether the Easter bombers were connected to these covert groups within the Armed Forces which some observers have blamed for a number of violent incidents.

There were other questionable events. In an interview with TNL in 2023 former CID Head, Ravi Seneviratne claimed that though the visit to Vanathavilluwa by his officers investigating the destruction of Buddhist statues in Mawanella, was not public knowledge, the military intelligence had turned up there.
Deshapriya says, “We have to ask who ordered the MI to go there.”

In his interview, Seneviratne also said that Zaharan, the leader of the Thowheed Jamat that carried out the Easter bombings, first came to their attention in January 2019. They received tips of Zaharan’s whereabouts from civilians he said, and those were always that he had been sighted in various locations in the East.

However, following the Easter attacks the CID had realised that while they were looking for Zaharan in the East, he had been moving around in Wattala, Negombo, Mount Lavinia and Panadura. He alleged that while Zaharan seemed to have been secure in these areas, the CID had had no inkling of it.

The CID has informants everywhere, so why were they not aware that Zaharan was living in the Western Province, he asks.

SSP Shani Abeysekara is on the record as saying that the Intelligence operatives had “deliberately mislead the CID.”

Evidence indicates that former head of State Intelligence, DIG Nilantha Jayawardena, had wiped out his phone and laptop prior to handing them over the investigators.

“Why did he do that? When did he do that? What did it contain? There are many secrets about the Easter Sunday attacks that are yet to be revealed,” Deshapriya said.

He also states that “there are also many holes in Azad Maulana’s story on Channel 4.”

Despite these discrepancies, Deshapriya says that the volume of information about Zaharan available to the Security Forces, particularly the intelligence arm was quite substantial.

The bombings and the aftermath, the hysteria around the need to save the country and future generations, the demonization of the Muslim community all pointed to one goal; a regime change. Those fighting these past five years to bring the masterminds to book must also now, determine whether that heinous deed was intentional.

The Parliamentary Select Committee (PSC) and the Commission of Inquiry (COI), both appointed to examine the events leading to the Easter attacks, concluded that if the Indian intelligence reports had been acted on, the bombings on April 21, 2019, could have been avoided, the report noted.

On April 19, the Centre for Society and Religion (CSR) released a report titled, ‘5 Years Since Easter Sunday Attacks: Still Awaiting Justice,” where it says that “various committees were appointed to collect evidence and provide a report of the findings.

‘A Presidential commission, a Presidential committee, and a Parliamentary Select Committee were appointed to investigate the Easter Sunday Attacks. The report produced by the Presidential Committee was not published while the Parliamentary Select Committee’s report was fully published, and the Presidential Commission report was partly published.

On 26th January 2023, the Right to Information Commission directed the Presidential Secretariat to make the presidential committee report public before 9th February 2023 after hearing an appeal filed by CSR. However, none of the major recommendations in the published reports have been implemented to deliver justice for the victims.”

“The reports reveal that authorities had sufficient time and enough intelligence to act on the suspicions and prevent the incident. SIS Director received intelligence reports from India on the 4th and 5th of April 2019 and again two reports on the 20th of April describing the possibility of the attack, naming the suspects, and the urgency of the terror attack.

Additionally, there was a dry run conducted five days before the bombings where a motorcycle was blown up using a remote-controlled device in Zaharan’s home base, and although the SIS learnt of the incident the next day, even after intelligence reports stated that Zaharan was planning a terror attack, proper investigations into this matter did not take place.

The amount of information that was received prior to the attack and the lack of action, investigation, and implementation of safety measures inevitably raised questions as to who was actually behind the attacks” CSR said.

“A less dysfunctional government might have still failed to connect incoming intelligence with the information on Zaharan in Sri Lankan police files, but it would have tried much harder,” it added.
The report goes on to note the lapses made by the Sri Lanka government’s leaders.

“Regardless of the number of intelligence reports both by the U.S and India, that had warned about imminent attacks targeting churches and hotels in Sri Lanka, President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe both acted out of gross ignorance. Even, at the time the unfortunate incident has happened, the executive president Mr. Sirisena was out of the country and returned a considerable time after the incident.”

Fr. De Silva also asks as to how the Police would conduct an impartial inquiry into the role of the various personnel who were holding powerful positions at the time and still continue to do so.

Gen Salley remains as head of Intelligence. The DIG in charge of the area where the Katuwapitiya church is situated in that period was Deshabandu Tennekoon, who is now the Inspector General of Police. DIG Nilantha Jayawardene who was the Intelligence chief is now Senior DIG Administration, a post second only to the IGP.

“In seeking justice how can we engage with these leaders in power who are themselves accused of complicity in these incidents,” asks Fr. De Silva. “We are doubtful we can get justice without a change in the people holding office.”

As election fever hots up, the main opposition political parties are jostling with each other promising to bring the masterminds of the Easter attacks to book, under their regimes. Both the SJB and the JVP led NPP have put out official statements on the course of action they would take if elected to power.

Speaking at a zoom discussion organised by the Australia Sri Lanka Forum for Justice for Easter Victims on April 17, SJB’s Eran Wickremaratne said his party would introduce amendments to existing structures, to create an Independent Public Prosecutors Office to handle such cases.

The SJB plans to establish a permanent office with members of Scotland Yard and the FBI to work alongside local investigators to bring closure to the Easter tragedy, he said.

Meanwhile, the JVP led NPP presented a 7 point plan which would address the inaction of the authorities, and take legal action against all those directly and indirectly involved in the Easter Sunday bombings.
Both political parties have presented their proposals to Malcolm Cardinal Ranjith. Let’s hope they are not mere election promises!

The Easter Sunday victims have been political pawns these past five years, just as the many others who lost family members in the various conflicts the country has been through.
They too, are still awaiting justice.

Continue Reading