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Sunday June 16th, 2024

Sri Lanka opp. leader wants death penalty for terrorists, drug traffickers

ECONOMYNEXT – Sri Lanka’s opposition leader Sajith Premadasa wants the death penalty imposed on charges pertaining to terrorism and drug-trafficking, à la Singapore.

“Singapore gives the best penalties for terrorism and drug trafficking. We will not deviate from that position, but the judicial process must be transparent, fair and free of influence,” Premadasa said Wednesday (28) morning.

He was speaking to reporters outside the Criminal Investigation Department (CID) headquarters in Colombo where main opposition Samagi Jana Balavegaya (SJB) MP Harin Fernando was being questioned over a speech Fernando had made on the 2019 Easter bombings.

Related: Sri Lanka opposition MP Harin Fernando summoned to CID over Easter attack speech

Rather than punishing proven terrorists, said Premadasa, the government wants to pay for their upkeep with taxpayer money.

“Is this the solution our country has for those proven to have carried out terrorist activities?” he said.

Sri Lanka has an ongoing de facto moratorium on capital punishment that goes back 45 years, with the last execution carried out in 1976.

Hundreds have been sentenced to death since then, though the punishment has not been carried out.

Plans by former President Maithriapala Sirisena to reinstate capital punishment in June 2019 were met with widespread criticism both locally and internationally.

“Sri Lanka’s plan to resume use of the death penalty is a major setback for human rights,” said Brad Adams, Asia director of the Human Rights Watch in June 30 2019.

“Sri Lanka has been a bulwark against capital punishment in Asia for more than four decades, yet now the Sirisena government wants to throw in its lot with less rights-respecting regimes,” he said.

President Sirisena ordered the execution of four convicted drug traffickers, but the Supreme Court in October 2019 extended a previous interim order on the death penalty, effectively preventing the then president’s attempt.

Premadasa, who was a prominent minister in Sirisena’s Yahapalana government though of the then rival United National Party (UNP), publicly expressed his support for the reinstatement of capital punishment in Sri Lanka.

As recently as October 2020, the SJB leader called it an “urgent need” of the hour.

An Amnesty International factsheet on capital punishment notes that evidence from around the world has shown that the death penalty has no unique deterrent effect on crime. Citing studies in the USA and Candada, Amnesty International said there is no evidence to support the claim that abolishing the death penalty leads to higher crime rates.

“In 2004 in the USA, the average murder rate for states that used the death penalty was 5.71 per 100,000 of the population as against 4.02 per 100,000 in states that did not use it. In 2003 in Canada, 27 years after the country abolished the death penalty the murder rate had fallen by 44 per cent since 1975, when capital punishment was still enforced. Far from making society safer, the death penalty has been shown to have a brutalizing effect on society. State sanctioned killing only serves to endorse the use of force and to continue the cycle of violence,” the report said. (Colombo/Jul28/2021)

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Sri Lanka state airport agency swimming in cash after sovereign default

ECONOMYNEXT – State-run Airport and Aviation Services (Sri Lanka) Ltd is swimming in cash after a sovereign default halted debt repayments allowing it to post a profit of 29.7 billion rupees with 10.4 billion rupees in interest income, official data showed.

In April 2022 Sri Lanka declared a sovereign default after printing large volumes of money over more than two years to enforce rate cuts and blowing the biggest hole in the balance of payments in the history of the island’s money printing central bank.

Interest earnings of Airport and Aviation Services also shot up to 10.4 billion rupees in 2023 from 6.1 billion in 2022 and 3.3 billion rupees in 2021 before the sovereign default.

Under the terms of the default or ‘debt suspension’, state agencies like the Airport and Aviation Services, and Sri Lanka Port Authority were also not required to service loans, even if they had the cash to repay loans.

AASL’s finance income shot up in 2023 “mainly because the company has invested surplus cash saved by not servicing the foreign loans obtained by the company due to the temporary debt moratorium policy of the country,” the Finance Ministry said in a report.

Sri Lanka’s rupee and foreign currency interest rates also shot up in 2022 and 2023 as rate cuts enforced by money printing were lifted to clear anchor conflicts.

After inflationary rate cuts kill confidence in a currency triggering capital flight and parallel exchange rates, excessively high rates are needed to kill domestic credit and stabilize the currency.

Countries with such flawed operating frameworks in central banks tend to have chronic high nominal interest rates in any case.

AASL’s rupee revenues went up to 48.8 billion rupees in 2023 from 32.2 billion rupees in 2022 as passenger movements increased to 7.5 million from 5.5 million with a recovery in tourism and local traffic.

Sri Lanka’s currency crisis hit in 2022 just as the island was recovering from Coronavirus pandemic triggering fuel shortages and power cuts as money printing triggered forex shortages.

From 2022 March the rupee collapsed from 200 to 370 levels an attempt to float the rupee was failed by a surrender rule (a type of buy-side pegging which pushes the exchange rate down).

In 2023, after hiking rates to kill credit, the surrender rule was removed, leading to a currency appreciation.

The airport agency also made an exchange gain of 6.1 billion rupees in 2023 against an exchange loss of 10.5 billion rupees in 2022 the rupee appreciated. (Colombo/June16/2024)

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Sri Lanka car import relaxing roadmap given to IMF: State Minister

ECONOMYNEXT – Sri Lanka has submitted a roadmap on relaxing vehicle imports to the International Monetary Fund, State Minister of Finance Ranjith Siymabalapitiya said as the country recovers from the worst currency crises in the history of its central bank.

The import relaxation will allow vehicles for public transport, goods transport, then motor cycles and cars use by private individuals and after that, luxury cars, Minister Siyambalapitiya said.

Luxury cars however attract the highest taxes for each dollar spent on imports.

Economic analysts have characterized vehicle import controls as a ‘cascading policy error’ that follows inflationary rate cuts, which then deprive taxes to the state and triggers more money printing and more forex shortages, requiring even higher corrective interest rates and a contraction of economic activities to save the rupee.

According to the latest IMF report car import controls may have led to revenue losses of 0.7 to 0.9 percent of GDP.

Sri Lanka started controlling imports few years after a central bank was set up in 1950 and also tightened exchange controls progressively, so that macroeconomists using post-1920 spurious monetary doctrines taught at Anglophone universities could print money through various mechanisms to suppress rates.

Sri Lanka is working with the IMF as a guide on many issues and the roadmap was submitted to the agency on June 14, Minister Siyambalapitiya said.

The IMF in an economic report released last week the plan was expected to be submitted by June 15.

Whatever the IMF’s faults, which some wags have called ‘progressive Saltwaterism’, the agency does not advocate import controls as solution to balance of payments problems, despite a Mercantilist fixation with the current account deficit in countries with reserve collecting central banks, analysts say.

Import controls have the same effect as import substation on the balance of payments, which is none, classical economists have pointed out and is now mainly a problem associated with macro economists and economic bureaucrats of so-called basket case countries.

Any pressure on the currency or missed reserves targets in the IMF program has come in the past only if the central bank printed money to suppress rates as credit growth picked up from car imports.

Sri Lanka had 3,000 items under import controls when rates were suppressed with printed money from 2020 to 2022 but eventually ended up with the worst currency crisis triggered by macro economists in the history of the country and eventual external default.

A committee made up of the Department of Trade and Fiscal Policy of the Finance Ministry, the Department of Registration of Motor Vehicles, the Central Bank and two associations representing vehicle imports were appointed to come up with the roadmap, he said. (Colombo/June15/2024)

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Chitrasiri Committee presents draft constitution for Sri Lanka Cricket

ECONOMYNEXT – A draft constitution for Sri Lanka Cricket, the governing body for cricket in the island, prepared by a committee headed by retired Supreme Court judge K T Chitrasiri, was presented to President Ranil Wickremesinghe today (15).

The Sri Lanka team were ignominiously knocked out of the Men’s T20 World Cup tournament this week, sparking renewed criticism of the team and the governing body.

Last November, a cabinet sub-committee was appointed to address challenges faced by Sri Lanka Cricket and provide recommendations after consecutive losses became a hot topic in parliament.

After parliament decided to remove the administrators of the sport, the International Cricket Council (ICC) Board suspended Sri Lanka Cricket’s membership.

Based on the sub-committee’s recommendations in its report, the Cabinet then appointed an expert committee to draft a new constitution for Sri Lanka Cricket.

The committee headed by judge K T Chitrasiri includes President’s Counsel Harsha Amarasekara, Attorney-at-Law Dr Aritha Wickramanayake and Chairman of the Sri Lanka Chamber of Commerce Duminda Hulangamuwa.

Deputy Solicitor General Manohara Jayasinghe, and Shamila Krishanthi, Assistant Draftsman representing the Legal Draftsman’s Department, and Loshini Peiris, Additional Secretary to the President were also on the committee. (Colombo/Jun14/2024)

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