An Echelon Media Company
Wednesday December 7th, 2022

Sri Lanka president calls meeting to discuss ethnic issue after Dec 11

ECONOMYNEXT — Sri Lanka President Ranil Wickremesinghe has reiterated his call for immediate bipartisan consensus on a permanent solution to the island nation’s decades-long ethnic problem, inviting opposition lawmakers for a round of talks after December 11.

Speaking in parliament on Wednesday November 23, Wickremesinghe once again invited all parties representing the parliament to discuss a lasting solution to the grievances of the country’s Tamil minority, most of whom reside in the formerly war-ravaged northern and eastern provinces of the island.

“There is nothing new to talk about. [We just have to] decide what is relevant. I think we can do it by next year. My aim is to do it by the 75th anniversary of independence. If you can’t do that, you may not have that [sp] Sri Lanka by 2048,” said Wickremesinghe.

Wickremesinghe had previously invited all Tamil political parties to a discussion on issues faced by the Tamil community with a view to resolving them with no foreign intervention by February 04 next year when Sri Lanka celebrates 75 years of independence from the British.

On November 10, Wickremesinghe asked parties that represent the Tamil community in parliament help “resolve these issues amicably without outside interference”.

The privately owned The Sunday Times reported on November 06 that a ministerial team was to be appointed to draw up the “broad outlines of what such a project should encompass”. This would later form the basis of discussions with all stakeholders, the English weekly reported.

Speaking in parliament on Wednesday, Wickremeisnghe asked Tamil National Alliance (TNA) legislator M A Sumanthiran if he is willing to come on board. He posed the same question to chief opposition whip and main opposition Samagi Jana Balavegaya (SJB) MP Lakshman Kiriella and MP Mano Gansean whose Democratic People’s Front (DPF) is part of an SJB-led alliance.

SJB and opposition leader Sajith Premadasa was absent at the time, and a party member was heard saying “We’ll ask our leader and get back to you”.

Kiriella responded that Wickremesinghe knew very well that Kirella had long supported devolution of power. The real question, he said, was whether Wickremesinghe’s new backers in the ruling Sri Lanka Podujana Peramuna (SLPP) would ever support meaningful devolution.

“We know what the SLPP really feels in their heart of hearts. They are opposed to devolution,” said Kiriella, challenging SLPP leader and former President Mahinda Rajapaksa to state his position on record.

Kiriella said it was the Kandyan Sinhalese who had first proposed devolution in the 1930s. One of the Kandyan leaders at the time, he said, was an ancestor of the incumbent president.

Said Wickremesinghe: “Will you ask your leader and tell us this evening, then?”

MP Ganesan said: “The SJB alliance is agreeable to devolution of power. That is why we’re here. We wouldn’t be, otherwise.”

Responding to Wickremesinghe, MP Sumanthiran said: “If you call for a meeting of all parties as soon as we conclude the budget session, we can finish it before December 31.”

Wickremesinghe agreed and said a meeting will be called in the week following December 11.

Kiriella, however, noted that when ousted former President Gotabaya Rajapakasa had invited the SJB for talks on a proposed new constitution, he had sent a missive to the party that they shouldn’t join if they wished to protect the 13th amendment to the constitution.

President Wickremesinghe assured Kirella that he would in fact protect the 13th amendment, which came in the wake of the 1987 Indo-Lanka Accord and saw the creation of the provincial councils.

“You’re one person. Are the others here in agreement? Are the MPs? We know very well about the honourable president. He was our leader for 20 years,” said Kiriella.

Prime Minister Dinesh Gunawardena, too, has historically opposed devolution, the MP said.

In a lighter vein, he quipped: “The prime minister said this morning that he’s also an American now. Maybe it’s the influence of the president. We applaud that.”

SLPP MP Gevindu Kumaratunga who now sits in the opposition cautioned that they can only support a proposal that will honour Sri Lanka’s unitary character.

“If you’re asking for a consensus within a unitary Sri Lanka, we’ll agree. Outside of that, I don’t think a majority of people will agree. There is a ground reality here. Our soldiers laid down their lives to protect the unitary state,” said Kumaratunga.

President Wickremesinghe pressed on, asking the House at large to agree to a meeting to discuss proposals.

“We have to build confidence with the Tamil community. But we also have to build confidence with those people in the Sinhalese community who have reasonable concerns as to where it will lead,” he said.

The president also said that Muslim youth who were arrested in connection with the 2019 Easter bombings against whom there is no evidence will also be released soon as discussed at the latest security council meeting. (Colombo/Nov23/2022)

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 *

Crisis-hit Sri Lanka sees recovery in cruise ship tourism from zero

ECONOMYNEXT – Seventeen cruise ships are scheduled to arrive in Sri Lanka next year with
Queen Mary 2, one of the largest and popular ships, Colombo’s harbor master said, as the island nation is looking for alternative avenues to boost its faltered tourism sector.

The rise is expected to bring thousands of high end tourists with higher spending capacity after two years. The island nation saw a record high 54 ships in 2019, rising from the previous year’s 42, Nimal Silva, Colombo Port Harbor Master said.

“The 2019 was one of the best years and in 2020 there were more than 60 scheduled vessels to
call but with COVID pandemic all hell broke loose,” Silva told EconomyNext.

Fourteen cruise ships are scheduled to call from January-May next year and another three are scheduled to arrive in Colombo in November, when the peak tourism season begins.

Cruise tourism cycle begins in Sri Lanka from October to May with a dip during the monsoon

Sri Lanka welcomed two cruise ships in November after almost two years.

Three ships are scheduled to arrive in December and Azamara Quest, carrying at least 722 tourists, arrived in Colombo on December 3 and is now heading to Hambantota.

On December 18, Le Champion carrying 264 will arrive in Colombo and depart to Mumbai and the third vessel, Silver Spirit will arrive in Colombo on December 23 carrying up to 648 passengers.

There are two scheduled in January, one in February, and four in March next year, according to the harbormaster.

“Next year more ships could schedule, so far these are the confirmed ones now,” he said.

This also generates income for the port and the prices are charged according to the size of the

Silva said the first medium sized-cruise vessel, 229 meters long, generated about 14,000 dollars
for docking in the port for a day.

He said Queen Mary 2, a 325 meter long ship and one of the largest cruise ships in the world, is also
scheduled to call at Colombo in February. It can carry up to 3200 passengers.

Silva said almost all the ships that were scheduled have arrived on the island and therefore, he is
confident all the ships including Queen Mary 2 will arrive in Sri Lanka.

“Only one ship has been canceled thus far. There are no last minute cancellations if there were some they would have informed us by now,” Silva said. (Colombo/Dec07/2022)

Continue Reading

Sri Lanka President says 2015-2019 policy struggle was ‘warfare’

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe said his attempts to reverse the inward-looking protectionist policies and fix state finances during his last term as Prime Minister was opposed both by politicians and business interests.

“In the 4.5 years as prime minister it was an effort to take this economy out in a different direction,” President Wickremesinghe told an economic forum organized by Sri Lanka’s Ceylon Chamber of Commerce.

“We were able to get a surplus in the primary budget. But it was warfare.

“Politicians wanted to protect their power, businessmen wanted to protect their profits and many others wanted to see what the country would provide them free of charge.”

Wickremesinghe was unable to bring private investment to the port under apparent internal political opposition. Relations with President Maithripala Sirisena also soured and he appointed his own economic advisors.

Meanwhile Wickremesinghe’s free trade agenda was hit by monetary instability as the central bank printed money under flexible inflation targeting and triggered forex shortages which were followed by trade controls.


Sri Lanka controls imports in ‘Nixon-shock’ move to protect soft-pegged rupee

Sri Lanka President calls to expand Nixon shock as rupee falls

Wickremesinghe’s ‘Yahapalana’ administration also went on a spending spree called ‘100-day program’ in 2015 triggering a currency crisis in 2015/2016 as the central bank printed money to suppress rates.

The central bank however had already started injecting liquidity and losing reserves (by terminating term repo deals) from the fourth quarter of 2014 as domestic credit recovered from a 2012 currency crisis before his administration came to power.

The rupee fell from 131 to 152 and stabilization policies led to an output shock. The International Monetary Fund then taught the agency which had already depreciated the currency from 4.70 to 152 to the dollars seeking bailouts 16 times, how to calculate an output target.

Under Finance Minister Mangala Samaraweera taxes were raised and budget were fixed in 2018 to bring deficits back to pre-2015 levels, though state spending went up from 17 to around 20 percent of GDP under the spendthrift ‘revenue based fiscal consolidation’ where cost cutting was dropped.

The central bank then printed money by purchasing bonds from banks to target the yield curve, jettisoning a bills only policy established by ex-Central Bank Governor A S Jayewardena, through term reverse repo and overnight injections taking the rupee from 151 to 162 to the US dollar.

The central bank also created money by entering into a swap with the Treasury in 2018, a type of strategy used by speculators to bring down East Asian pegs putting, further pressure on the currency from around July 2018 onwards.


What went wrong; Sri Lanka’s illiberal economics and unsound money : Bellwether

Stabilization policies then led to another output shock. As forex shortages came Sri Lanka resorted to heavy external borrowing as it was unable to settle maturing loans with domestic borrowings.

After two currency crises and output shocks, macro-economists of the new administration cut taxes saying there was a ‘persistent output gap’ and printed even more money for stimulus (close the output gap). (Colombo/Dec07/2022)

Continue Reading

China calls for joint effort to ease Sri Lanka’s debt burden, no mention of restructure

ECONOMYNEXT — A top Chinese official has expressed hope that countries and multilaterals like the International Monetary Fund (IMF) work with Beijing to play a constructive role in easing Sri Lanka’s debt burden, stopping short of an assurance on debt restructuring.

Chinese Foreign Ministry spokesperson Mao Ning was quoted by international media as saying on Monday December 05 that China attaches high importance to Sri Lanka’s difficulties and challenges.

She was responding to a question on media reports that an IMF team will be in China this week to discuss faster progress on debt restructuring for countries including Sri Lanka, which is negotiating for an IMF bailout.

“On Sri Lanka’s debt issue, I’d like to stress that we support the financial institutions in working out ways with Sri Lanka to properly solve the issue,” said Ning.

“We also hope relevant countries and international financial institutions will work with China and continue to play a constructive role in helping Sri Lanka overcome the current difficulties, ease its debt burden and realise sustainable development,” she added.

She said China has long-standing sound cooperation with the IMF and other international economic and financial institutions.

The spokesperson avoided any mention of debt restructuring, a prerequisite for the IMF extended fund facility (EFF).

Nearly a fifth of Sri Lanka’s public external debt is held by China, according to one calculation. The emerging superpower has been generous in Sri Lanka’s time of need, extending much needed assistance in the form of rice, medicine and other commodities.

The latest arrival in the Colombo port from China was 2 billion Sri Lankan rupees worth of essential medicines and medical supplies, delivered on Tuesday.

However, critics say China is doing everything but what Sri Lanka really needs: agreeing to restructure its outstanding debt.

At least one Sri Lankan opposition MP has demanded that China agree to a restructure.


Sri Lanka debt restructuring: opposition MP warns of “China go home” protests

Tamil National Alliance (TNA) legislator Shanakiyan Rasamanickam, who had been on the warpath with Beijing over an apparent lethargy in helping the crisis-hit island nation restructure its debt, recently warned of a “China, go home” protest campaign similar to the “Gota, go home” protests that unseated the country’s powerful former president in July.

The MP told parliament last Friday December 02 that Sri Lanka owes 7.4 billion dollars to China, a nearly 20-trillion dollar economy, and if the latter was was a true friend, it would agree to either write off this debt or at least help restructure it.

Colombo has been vague at best on the status of ongoing restructure talks with Sri Lanka’s creditors, and opposition lawmakers and others have expressed concern over what seems to be a worrying delay. Rasamanickam and others have claimed that China, Sri Lanka’s largest bilateral creditor, is the reason for the apparent standstill. (Colombo/Dec06/2022)

Continue Reading