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Friday February 23rd, 2024

Sri Lanka parliament must decide on its authority on finance: Namal

FILE PHOTO – President Gotabaya Rajapaksa with nephew Namal at the opening of the last part of the Southern Expressway/PMD

ECONOMYNEXT – Sri Lanka parliament must take a call on whether its authority on public finance ought to be devolved to another entity, ruling party MP Namal Rajapaksa said, claiming that all 225 legislators must be held responsible for the 2019 tax reduction.

Addressing parliament during the ongoing 2024 budget debate, Rajapaksa said much of the debate’s time has been taken up for a scandal involving Sri Lanka Cricket, the conduct of the chairman of the Committee on Public Enterprises (COPE) and a “certain court verdict”.

The MP was ostensibly referring to a recent Supreme Court verdict holding his father and former president Mahinda Rajapaksa, two of  President Rajapaksa’s brothers and officials affiliated with their administration responsible for Sri Lanka’s financial crisis. Among the decisions mentioned in the verdict were an ill-advised tax cut, paying off a 500 million dollar bond, and a refusal to approach the International Monetary Fund (IMF).

According to MP Rajapaksa, some of these decisions including the tax cut was endorsed unanimously by parliament, while others were policy decisions by the then government.

“We have to question whether a government policy can be challenged in court,” said the younger Rajapaksa.

“On the one hand, this was a policy approved by the cabinet and presented to this house, and passed in parliament upon debate. The next day, about the VAT percentage, it was once again presented to parliament and that too was passed by vote.

“None of these political parties in parliament did opposed the reduction in taxes at the time. The parties that talk about it loudly today, I have to ask you if you’re opposed to reducing the tax burden on the people. You supported it the, but today what is being discussed is how that’s wrong,” said Rajapaksa.

If these decisions were to be attributed to an individual or group of people, the MP said, it must be noted that they were policy decisions by the government.

“All 225 who unanimously endorsed it are responsible. This is the truth,” he added.

Rajapaksa said if it was wrong to pay off the 500 million dollars in debt, then it can apply to the public too.

“If a person cannot pay off a bankloan without banrupting himself, does he have the right to not pay?”

Thirdly, on going to the IMF, Rajapaksa said it was a political matter.

“The IMF may be good for some people, but for others the it may not be so. So how do we determine if at this particular time should we go to the IMF or not? That cannot be done.”

“Lastly, and mainly, the country is being pushed to a place where no government can take a decision. Those who reduce taxes can be wrong, and one day those who raised it can be wrong too.

“This house must decide then do we uphold Sectoin 29 of the constitution? Or do we devolve that to another party? If so then let’s pass an act in parliament about that and give that to the relevant institutions.

“That responsibility lies with parliament,” the MP said, insisting that his party respects court verdicts. (Colombo/Nov20/2023)

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Sri Lankans may need to wait for Monetary Board meeting minutes despite new Act

ECONOMYNEXT – Sri Lankans may have to wait more time to read the meeting minutes of the Central Bank’s Monetary Board, a top official said, despite a new act that has made the central bank to be more transparent and accountable for its decisions.

Many central banks including the United States’ Federal Reserve, India’s Reserve Bank, and Bank of Mexico release the minutes of their monetary policy meeting to ensure transparency.

The new Central Bank Act passed by the Parliament in line with the guidance by the International Monetary Fund (IMF) includes measures for Sri Lanka’s central bank to be more transparent and accountable.

These measures include releasing the Monetary Policy Report every six months and the first such report was released on February 15.

However, the central bank has not taken a decision to release the minutes of the Monetary Board meetings on the monetary policy.

“Going forward, one day this could happen,” Chandranath Amarasekara, Assistant Governor at the Central Bank told reporters on Wednesday (21) at a media briefing.

“Right now, we have just started working on the new Central Bank Act. We are not there yet. There is no such decision on releasing minutes yet.”

The central bank in the past printed billions of rupees to keep the market interest rates artificially low and provide cheap funding for successive governments to propel a debt-driven economy.

It’s decision, however, led Sri Lanka into an unprecedented economic crisis in 2022 with sovereign debt default.

It also propped up the rupee currency artificially in the past to maintain a stable exchange rate at the expense of billions of US dollars. The move also contributed for the economic crisis and later the central bank was forced to allow over 60 percent depreciation in the rupee in March 2022.

However, none of the top central bank officials was held responsible for wrong decisions to hold interest rates artificially low with money printing and propping up the rupee. (Colombo/Feb 23/2024)

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Amid mass migration, Sri Lanka to recruit volunteers as English teachers

ECONOMYNEXT- Sri Lanka is planning to appoint foreign and expatriate volunteers to teach English for Sri Lanka students, the Ministry of Higher Education said, amid thousand of teachers migrating to other countries after the island nation’s unprecedented economic crisis.

Over five thousand teachers have left the country with the Education Ministry permission using the government’s circular of temporarily leaving state jobs while tens of thousands of teachers have left the country without informing the relevant authorities, Education Ministry officials say.

That had led to an acute teacher shortage in the country.

Suren Raghavan, the State Minister for Higher Education said the shortage has aggravated because most of the graduates who have an English degree become writers and join the private sector due to higher salary.

“They do not join government schools. This is a problem all over the country which is why we need to have an online system,” Raghavan told EconomyNext.

Separately he said on Thursday at a press conference that he had spoken to Canadian and Australian High Commissions to get the assistance of where their English teachers who have experience in teaching English as a second language in South Asia.

He also said that there is a number of teachers in the Unite Kingdom have shown interest in teaching English and they have experience in teaching in other Asian countries such as Burma and India while the teaching would be done free of charge.

The new move also comes at a time when the country’s English literacy rate is on the decline, according to the Minister.

President Ranil Wickramasinghe announced the English-for-all initiative three months ago with plans to improve English literacy at school and university level. (Colombo/Feb 23/2024)

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Sri Lanka tea production up 1.4-pct in Jan 2024, exports up 6.8-pct

ECONOMYNEXT – Sri Lanka’s tea production was up 1.4 percent to 18.73 million kilograms in January 2024, with high growns falling and low and mid growns rising, industry data shows.

High grown tea in January 2024 was 3.56 million kilograms, down from 3.36 million, medium growns were 2.6, up from 2.5 million kilograms and low growns were 12.56 million, up from 12.32 million kilograms last year.

Exports, including re-exports were up 6.88 percent to 18.76 million kilograms, industry data published by Ceylon Tea Brokers show.

Export earnings were reported at 102 million US dollars, up from 99.5 million dollars last year. The average FOB price was 5.45 US dollars a kilo down from 5.67 dollars last year.

Tea in bulk was 8.5 million kilograms valued at 12.79 billion rupees, tea in packets was 7.8 million kilograms valued at 13.1 billion rupees and tea in bags was 1.8 million kilos, valued at 5.06 billion rupees.

The top buyer was Iraq with 2.5 million kilos, up from 2.1 million last year followed by the UAE with 1.99 kilos, up from 1.86 million last year.

Russia bought 1.98 million kilos, down from 2.0 last year, Turkey bought 1.72 million kilos, from 2.3 million last year, while Iran bought 1.32 million, up from 614 million last year. (Colombo/Feb23/2024)

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