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Friday June 21st, 2024

Sri Lanka must either implement 13A or abolish provincial councils: president

ECONOMYNEXT – Sri Lanka must either retain its provincial councils (PCs) with powers adequately devolved as provided for by the 13th amendment to the constitution or abolish the PC system entirely, President Ranil Wickremesinghe said.

At an all-party conference (APC) called by Wickremesinghe on Wednesday July 26 to discuss the full implementation of the 13th amendment as a solution to Sri Lanka’s decades-long ethnic issue, he said as president he has no authority to pass laws and it is up to parliament to do so.

Citing common criticisms of the PC system, Wickremesinghe said provincial councils drain a lot of state funds as the central government, the PCs and even local government bodies are allocated vast amounts of money for essentially the same.

“It would be great if we can reduce this amount by 25 percent. There is a mix up here. We allocate funds to the government, to the PCs and to the local government bodies to dig ditches when it can be given to just one of them,” said Wickremesinghe.

“It has to be one of the two. We have to either keep the PCs or remove them. All political parties went into elections saying the system must be retained. So I can’t come here and say abolish it,” he said.
The president said when he proposed the full implementation of the 13th amendment, the matter of sharing police powers was raised. The fact of the matter, however, is new police legislation would need to be introduced before police powers are dissolved to the provinces, he said.

“The minister is now formulating that,” he said, presumably referring to either Public Security Minister Tiran Alles or Minister of Justice Wijeyadasa Rajapakshe.

If Sri Lanka is to continue the PC system, said Wickremesinghe, provincial councils must be maintained properly. Given the friction between the councils and the central government, he said, no adequate development activity has been carried out even in the Sinhalese-majority seven provinces either in 10 to 15 years.

“There was more work done when there were district development councils,” he said.

However, noting that provincial councils cannot be abolished just like that as the system is now well entrenched, President Wickremesinghe said he called the all party conference to discuss the full implementation of the India-backed 13th amendment, which resulted in the birth of the PC system in 1987.

“People say this is a white elephant. We must focus and give an answer. Everyone is trying to avoid this issue,” he said.

Chief ministers and opposition leaders in the seven PCs not including the northern and eastern provincial councils, said the president, has submitted a report indicating support for increased power sharing.

“If that’s not good, then they’re all traitors too who want to divide the country,” he said.

“Let’s not play this game, which we have been playing all this time,” he added.

“I have no mandate to bring these laws. It is the parliament that has the mandate to pass laws. All I can do is present them. Let’s speak the truth. Let’s decide whether we want to give this or not.

“If you don’t want this to be implemented, then remove the 13th amendment entirely. You can’t be in two minds about this saying you want this but not that,” he said, adding that the PC system is a “heavy burden” financially.

Another APC will likely be called in one month’s time, prior to which a decision must be reached, said Wickremesinghe.

“Or we’ll make draft bills and present them to parliament,” he said.

Another proposal made, according to the president, is to allow members of parliament to contest for PCs while retaining their parliamentary seat and vice versa.

“If the people want, opposition MPs can become CMs of PCs. They can come to parliament and sit in the opposition as CM. We can go for that too.”

“Like other countries, let’s devolve power to all nine provinces. The work is already done in the other seven. I can’t do this on my own. I have only one vote. You have the ultimate power,” he said.

A statement from the president’s office said on Thursday July 27 that Wickremesinghe had stressed the significance of discussing the 13th amendment with all parties, as it is a matter that affects the entire country, noting that a decision on this matter should involve input from all relevant parties.

The APC was organised to update parliament’s party leaders on the National Reconciliation Program and the North-East Development Plan, the statement said.

Shortcomings in PCs must be addressed, the president was quoted as saying, suggesting that the PCs be granted powers over subjects currently under the central government, including grassroots activities like agriculture and tourism.

The central government should formulate policies for the country, while provincial councils should provide the necessary facilities for the successful implementation of development activities in all fields. Collaboration between all parties and levels of government was crucial for progress and development, he said.

Sri Lanka’s main opposition party and a number of other parties joined the APC while a few smaller parties boycotted the event.

Related:

Sri Lanka opposition SJB to attend all-party talks on reconciliation; others to boycott

Sri Lanka Freedom Party (SLFP) general secretary Dayasiri Jayasekara, who attended the conference, told reporters on Thursday that MP Sagara Kariyawasam, general secretary of the ruling Sri Lanka Podujana Peramuna (SLPP), has said President Wickremesinghe does not have the mandate for devolution of power.

The 13th amendment to Sri Lanka’s constitution emerged from the controversial Indo-Lanka Accord of 1987 as a purported solution to the worsening ethnic conflict, four years after war broke out. Provincial councils came in the wake of this amendment, though land and police powers have yet to be devolved to the provinces as originally envisioned. Both Sinhalese and

Tamil nationalists have historically opposed the amendment, the former claiming it devolved too much, the latter complaining it didn’t devolve enough.

A full implementation of the amendment would see land and police powers devolved to the provinces, a development that is not likely to garner support from Sri Lanka’s more hardline parties. In February, sections of the Buddhist clergy took to the streets against the proposed full implementation of the constitutional amendment. (Colombo/Jul27/2023)

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Indian FM meets Sri Lanka political leaders; focuses on committed deals

ECONOMYNEXT – Indian External Affairs Minister (EAM) S. Jaishankar met President Ranil Wickremesinghe and a range of political leaders during his visit to Sri Lanka, focusing on commitments made by Sri Lanka to India, including land and energy pipeline connectivity.

Sri Lanka has committed to renewable energy deals for the Indian Adani group, Trincomalee port development, an investment zone around the port, a bridge between the island nation’s Northern Mannar and South India’s Rameshwaram, a power grid, and an oil and gas pipeline between the two nations.

Though most of the committed projects have been discussed and some already signed, they face delays amid public protests, court cases on environmental concerns, anti-Indian sentiments triggered by high prices of renewable projects, local politicians as well as perceived Chinese influence, analysts say.

India has been pushing Sri Lanka to fast-track these deals under Prime Minister Narendra Modi.Jaishankar’s visit also comes ahead of Sri Lanka’s presidential polls later this year.

Jaishankar met President Wickremesinghe in a one-on-one meeting, Prime Minister Dinesh Gunawardena, and Foreign Minister Ali Sabry before delegation-level talks with Ports, Shipping and Aviation Minister Nimal Siripala de Silva, Agriculture and Plantation Industries Minister Mahinda Amaraweera, and Power and Energy Minister Kanchana Wijesekera.

“Appreciated the progress made on various bilateral projects and initiatives. Under President Ranil Wickremesinghe’s guidance, we discussed the way forward for India-Sri Lanka cooperation, especially in power, energy, connectivity, port infrastructure, aviation, digital, health, food security, education, and tourism sectors,” Jaishankar said on his official Twitter platform.

He also met former President Mahinda Rajapaksa, opposition leader Sajith Premadasa, and leaders of various political parties from the North, East, and the upcountry region.

“Interaction of EAM with the leadership of the Government of Sri Lanka provided an opportunity to review and accelerate progress in the multifaceted India-Sri Lanka partnership,” the Indian External Affairs Ministry said in a statement.

One of the key focus areas of discussion was the Vision Document adopted by President Wickremesinghe and Prime Minister Modi during the Sri Lankan leader’s visit to India in July 2023.

“Discussions added momentum to the ongoing projects as well as initiatives for promoting connectivity in all its dimensions, particularly in domains of energy, physical infrastructure as well as economic and people-to-people ties.”

Jaishankar also met leaders of Sri Lanka’s upcountry Tamils, who originally came from India as plantation workers. He discussed development and devolution of power with an eight-member delegation of Tamil leaders from the Northern and Eastern provinces, including Shanakiyan Rasamanikkam and M. A. Sumanthiran.

India helped Sri Lanka with financial and humanitarian aid when the island nation faced an unprecedented economic crisis amid delays by the International Monetary Fund loan to rescue Sri Lanka.

“Following Sri Lanka’s economic recovery and stabilization, forging deeper long-term economic cooperation was underlined as a priority for sustainable and equitable growth of Sri Lanka, and mutual prosperity in the Indian Ocean Region,” the Indian External Affairs Ministry said.

Though the Sri Lankan government has claimed that Jaishankar’s visit was a precursor to Indian Prime Minister’s visit, the Indian External Affairs Ministry did not mention anything about a possible Modi visit.

This visit is Jaishankar’s first bilateral visit after the formation of the new government.

The Adani wind power project in the Northern district of Mannar has seen some public protests over environmental concerns after some experts said the project has failed to conduct a proper Environmental Impact Assessment (EIA). Critics also protest against its transparency.

President Wickremesinghe, opposition leader Premadasa, and Marxist Janatha Vimukthi Peramuna (JVP) leader Anura Kumara Dissanayaka are expected to contest in the election to choose the island nation’s 8th leader.

Sri Lankan leaders have been under pressure from India in the past two decades amid increasing Chinese influence in the island nation, seen as a security threat to India, analysts say.

The docking of a Chinese nuclear submarine in 2014 led to a dramatic government change in the 2015 presidential poll with the ousting of former leader Mahinda Rajapaksa, who later accused India of orchestrating his defeat.

Rajapaksa’s brother Gotabaya in 2021 unilaterally canceled a key port terminal project given to India’s Adani group after promising Jaishankar to sign the deal.

Gotabaya Rajapaksa was later forced to flee the country in 2022 after mass protests due to his economic policies. (Colombo/June 21/2024)

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Sri Lanka car permit tax losses Rs14bn in two years of partial disclosure

ECONOMYNEXT – Sri Lanka has lost 14.3 billion rupees in taxes from car permits given to public servants, including doctors, military officers, central bankers, finance ministry and tax officials, in 2019 and 2020 information disclosed by the finance ministry shows.

Inclusive of some 2021 tax losses when imports were banned for the rest of the year, 14.4 billion rupees of foregone revenue from a waived luxury tax is shown.

The list only shows waivers of a so-called ‘luxury tax’ imposed on larger vehicles above a certain value and size.

The list does not show other vehicles imported under car permits such as double cabs or cars below a certain size.

The list also does not seem to include tax free cars imported by politicians.

In 2019, Sri Lanka has lost 8.3 billion rupees from the luxury tax on car permits and in 2019 the loss 5.92 billion rupees.

In 2021 when car imports were stopped as the central bank started printing money to cut rates and target ‘potential output’ only 85.6 million rupees were lost.

Among the biggest tax waivers of over 10 million rupees went to some doctors and military officers. Doctors were among the biggest users of tax slashed car permits in the list.

Sri Lanka at one time did not allow cars imported by state workers to be transferred for many years.

But reportedly after Customs raided a finance company involving a fleet of vehicles, the rule was relaxed by the then President.

Among the largest tax waivers listed were given to Rolls Royce and Maclaren assigned to Melwire Rolling (Pvt) Ltd.

The 45.6 million rupee Rolls Royce was given a 42.1 million rupee tax waiver.

The 41.46 million McLaren was given a 37.9 million tax waiver.

There were also a large number of Audi A5 and Q2 vehicles listed at prices over 80 million rupee. It is not clear whether the disclosure is an error. The market value of the A5 and Q2 are much lower.

Up to end 2023, 138 cars imported under a migrant worker remittance scheme was listed to lose 436 million rupees in luxury taxes.
The total for the three years was listed at 14.86 billion rupees, involving 2,034 cars in 2019 and 1,470 cars in 2020.

It is not known how much the total tax losses or total vehicle imported through ‘car permits’ is. (Colombo/June20/2024)

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Construction of Sampur solar power plant to begin mid-July

ECONOMYNEXT – Joint energy projects between India and Sri Lanka, including the Sampur solar power plant due to begin next month, took centre stage during bilateral discussions between president Ranil Wickremesinghe and visiting Indian External Affairs Minister S Jaishankar on Thursday.

Wickremesinghe and Jaishankar discussed initiatives aimed at enhancing energy connectivity and developing the renewable energy sector, a statement by his media division said.

“Significant attention was given to plans for an LNG supply, a proposed petroleum pipeline linking the two countries, and advancing oil and gas exploration projects. Additionally, it was announced that construction of the Sampur Solar Power Plant is set to commence in July 2024.”

The visit comes amid delays in key Indian projects including land, oil and gas pipe, and grid connectivity deals, Adani’s wind power plant deals which are facing a legal battle, and port and investment zone projects in the Eastern port district of Trincomalee.

Indian supported projects for developing Trincomalee and expanding the Kankasanthurai port, the ongoing development of Jaffna Airport and Colombo Airport, and the expediting the unique digital identity card project were discussed.

The efficiency of projects supported by the Indian government aimed at bolstering Sri Lanka’s liquid milk industry and fertilizer production, were also examined.

Sri Lankan leaders have been under pressure from India in the past two decades amid increasing Chinese influence in the island nation as the move is seen as a security threat to India, analysts say. (Colombo/Jun20/2024)

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