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Sri Lanka parliamentary elections start amid Coronavirus rules and economic downturn

ECONOMYNEXT – Sri Lanka is going to the polls to elect a new parliament with Coronavirus health rules with the authorities saying the epidemic is largely contained but the economy under a trade lockdown after an unprecedented fiscal and monetary stimulus de-stabilized a currency peg.

President Gotabaya Rajapaksa’s Sri Lanka Podujana Party (SLPP) is highlighting the success so far in containing the spread of the Coronavirus in the country which began in January 2020 with measures against Chinese visitors and nationals returning from China when the World Health Organization was advising against travel restrictions.

Coronavirus Control

Sri Lanka has seen some 2,800 confirmed Coronavirus cases with 950 in a cluster involving the Sri Lanka Navy and 600 so far involving a rehabilitation centre run by an agency of the justice ministry headed by a retired military officer.

There have only been 11 deaths so far. The two clusters have also been contained with Public Health Inspectors quickly rounding up military officers and rehabilitation workers, which also involved some military officers being rounded up and put in quarantined.

On August 4, five new cases were confirmed. New confirmations in recent days mostly involve foreign returnees. Health authorities have said they are ramping up community testing.

The polling is taking place with social sdista

The SLPP which is widely expected to get the most seats is asking for a two thirds majority to contain extremism chairman G L Pieris has said.

Under Sri Lanka’s proportional representation system assembly has 225 members of which 196 are elected and the balance appointed through a national list based on the total votes.

President Rajapaksa has called for a majority to implement his Presidential manifesto.





The SLPP plans change the constitutions including an amendment that strengthened the judiciary and some parts of the public service and slashed the absolute powers of the President which is seen to have harmed people’s freedoms in the past.

The 19th amendment was the result of a long struggle by activists to strengthen the independence of the judiciary and the public service and cut the absolute powers of the President.

But Pieris blamed ther personality clashes between ex-Prime Minister Ranil Wickremesinghe and President Maithripala Sirisena which had been beset by disagreements as a reason for constitutional change.

“During the Yahapalana regime, nothing could be accomplished because of the conflict between the different component elements of the government,” he said.

“Eventually, it’s the public of the country that had to pay the price of the dissension, disagreements and internal tension of the Yahapalana administration.”

“So there is a paramount obligation in the part of the incoming government to ensure such a calamity does not take place in the future and for that as well a strong majority in the parliament is required,” he said.

Government wants two-thirds majority in Parliament to fight extremism – G L Peiris

Political analysts however have warned against undoing the changes which was the result of decades old calls dating back to the original enactment of the current constitution that had warned against authoritarian rule.

Civil society organizations have also warned against militarization of society Civil Society organisations say the COVID 19 crisis should not be an excuse for militarization and the state agencies.

President Rajapaksa came to power in part due to economic instability, price controls and weak growth which had hit the business community and the public.

The economy under the Sirisena-Wickremesinghe administration started and ended with balance of payments crises. The rupee which was at 131 to the US dollar had fallen to 182 by the time the administration left office.

Pro-cyclical liquidity injections which started which started shortly before the administration came to power in January 2020, led to the currency collapse from August 2015 and foreign reserve losses and an International Monetary Fund program to stabilize the economy.

Though radical tax reforms were carried out, another bout of pro-cyclical rate cuts and liquidity injections hit the economy in 2018 leading to another balance of payments crisis involving a bigger currency collapse, which killed growth and led to a rise in bad loans as consumption, fell.

Wickremesinghe’s United National Party, which he had led for nearly three decades amid criticism of its own constitution, is split with most of the last parliamentary group going to polls under the banner of Samagi Jana Balawegaya.

Political analysts are watching how Wickremesinghe’s UNP will do at the elections.

Most expect the SJB to get more seats.

The SJB led by Sajith Premadasa the defeated Presidential candidate has been calling for more stimulus as well as subsidies to help out the people who lost incomes during Coronavirus crisis.

However the economy is now moving back towards pre-crisis levels with though an unprecedented stimulus before and after the Coronavirus crises has led to credit downgrades and fears of sovereign default.

The monetary stimulus which made the rupee fall from around 182 to 200 had also triggered unprecedented import controls which are hitting many businesses.

By March 2020, just as the Covid-19 crisis started pre-crisis fiscal stimulus of at least 1 percent of GDP was seen in just three months as current spending rose by one percent of gross domestic product to 1.9 percent in just three months.

Tax cuts for the full year had been estimated at around 500 billion rupees or 3.8 percent of GDP.

From March unprecedented volume of money was printed or released as reserve ratio cuts amounting to at over 400 billion rupees or about 2.7 percent of GDP, which drove the rupee down to 200 to the US dollar and brought a credit downgrade in April.

In the North and East, the Tamil National Alliance and the Sri Lanka Muslim Congress is expected to dominate.

The National Peoples Power, led by the Marxist Janatha Vimukthi Peramuna has been calling for more democractic reforms as well as a better economic conditions.

Democratic rights, economic concerns will decide this election: NPP candidate Dr Nihal Abeysinghe

“I think the economy is the main factor. For the middle class, I think it’s democratic rights,” Nihal Abeysinghe who is contesting the election on the National People’s Power said.

“The lower income group is perhaps not very much concerned about democratic rights. But the middle class certainly are worried about their democratic rights. Both are very important in this election.”

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