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Sri Lanka president reiterates commitment to devolution within unitary state

ECONOMYNEXT – President Ranil Wickremesinghe reiterated his commitment to devolution of power within a unitary state as a solution to Sri Lanka’s ethnic issue even as Buddhist monks intensified protests against the full implementation of the 13th amendment to the constitution.

Addressing parliament on Wednesday February 08, President Wickremesinghe said, however, that there will be no division of the country, contrary to fears expressed by sections of the Buddhist clergy.

Wickremesinghe said that both he and Tamil National Alliance (TNA) leader R Sampanthan were elected to parliament in 1977 and both have long dreamed of a sustainable solution to the ethnic problem during their tenure in parliament.

“Ever since, we have been discussing that dream and have been making efforts towards its achievement. All previous attempts have failed, but we wish to succeed this time. We expect your support to this end,” said Wickremesinghe.

TNA MPs were among the only opposition legislators to remain in the House during the president’s “throne speech” on Wednesday’s opening of the new parliamentary session after MPs representing the main opposition Samagi Jana Balawegaya and the National People’s Power (NPP) staged a walkout.

However, TNA MP M A Sumanthiran has expressed his disappointment with ongoing talks with the government.

“The conflict in the North and East affected the entire nation and many areas were severely damaged. The Northern Province entirely and several areas in the Eastern and North Central Provinces suffered immensely from the war. We are taking steps to put more weight on the development of these areas. A general plan is being implemented in this regard,” said Wickremesinghe.

“We know that there are still unresolved issues related to land in the North. In the Jaffna district, there are 3,300 acres of state land including security camps. The extent of 100 acres that had been taken over for the Palali Camp were recently released. A decision has to be made regarding more land to be released for which discussions are being held with the Army and other parties. Discussions have also been initiated regarding the lands around other security camps,” he said.

Devolving land and police powers to the provinces under the 13th amendment has been controversial, with monks and other nationalist quarters expressing strong opposition.

Wickremesinghe has repeatedly stated that he plans a full implementation of the amendment.

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 will see land and police powers devolved to the provinces, a development that is not likely to garner support from Sri Lanka’s more nationalist-oriented parties including sections of the ruling Sri Lanka Podujana Peramuna (SLPP).

The main opposition SJB’s position on this is also unclear. The party boycotted a recent all-party conference (APC) on the ethnic issue and said it supports devolution of power, but the party has yet to articulate its position on the amendment’s full implementation.

Related:

Sri Lanka’s SJB supports devolution but position on full 13A still unclear

President Wickremesinghe in his parliamentary address on Wednesday said the government is streamlining and expediting the process of tracing missing persons. The mechanism of the Office on Missing Persons will be strengthened, he said.

“Our attention has also been focused on the people who have been imprisoned for being involved in terrorist activities. They have been imprisoned for many years without trial. We are taking measures to systematically release these prisoners,” he added.

Drafts are being prepared to establish a National Land Council and a National Land Policy, said the president.

“It is alleged that due to certain practices of the Central Government, the powers of the Provincial Councils have been reduced in the fields of education and health. Therefore, we envision bringing new laws regarding the implementation of powers of the Provincial Councils in these fields.

“Amendment will be introduced to the following Acts in order to regularize and streamline the delegation process. The Transfer of Powers (Divisional Secretaries) Act, No. 58 of 1992, the Provincial Councils (Consequential Provisions) Act, No. 12 of 1989 and Provincial Councils (Amendment) Act No. 28 of 1990.”

The government also expects to establish a modern system for the District Development Councils to streamline the coordination functions between the Provincial Councils and the Central Government, said Wickremesinghe.

“We will present all these Ordinances and Bills to the National Council of the Parliament. The responsibility of making the final decision is assigned to the National Council.”

DIG divisional boundaries are currently not based on provincial boundaries, due to which a number of practical difficulties have arisen and the government plans to determine the boundaries of DIG divisions according to the provinces, the president said.

“There is no change in police powers,” he said.

The report of the Presidential Commission headed by A H M D Nawaz, Supreme Court Judge to investigate the violation of human rights, serious violations of international human rights laws, has now been received. According to Wickremesignhe, its recommendations are currently being studied.

“A separate plan is being implemented for the development of the North, which was the most damaged due to the conflict. Malwatu Oya development project will be commenced. Necessary measures will be taken for the river and water management in the Eastern Province, restoration of Vadamarachchi lake and lagoon, and accordingly, which will provide water for drinking and agricultural purposes.

“The electricity requirement in these areas is expected to be generated through renewable energy. Solar and green hydrogen power are also used for this purpose. More opportunities will be created in the tourism sector. Investment zones will be established. The required technology and facilities will be provided for the modernisation of agriculture.

“The Kankasanthurai Port is being modernised and expanded. Trincomalee is being developed as a modern international city. A special development plan is also being launched for the Eastern and North-Central provinces that have suffered economic and social setbacks during the conflict,” he said.

The president also spoke of plans to resolve issues pertaining to the upcountry Tamil community, adding that plans were underway to develop the plantation industry.

“Soumyamurthy Thondaman, who rendered yeoman service towards the plantation sector and I were in the Cabinet of Ministers together. Both of us worked together for the welfare of the plantation community. We have already granted all their legal rights. However, many problems related to economic and social rights still remain. To solve these problems, we expect to discuss with the MPs representing the plantation sector and take necessary measures. The Plantation community, which has been struggling to feed the Sri Lankan economy for two centuries, should be integrated as a whole in the Sri Lankan community,” he said.

On issues faced by the Muslim community, Wickremesinghe: “When I was elected to the Parliament, my Cabinet Minister was A C S Hamid who made me aware of the unique situations faced by Sri Lankan Muslims. We know that the Muslim community faces various problems from time to time and they have our full support.”

“The Sinhalese community is also facing issues of their own which require open discussion. We expect to recognize the communities that are marginalized in society especially due to caste discrimination.

“Considering all the facts, we expect to devolve power within a Unitary State. However, I wish to reiterate a fact that has been emphasised on many occasions. There will be no division of the country,” he said.

“I will implement all these proposals through the National Assembly of the Parliament. In addition, we regulate the Jana Sabha Act for the function of representing public opinion,” he added. (Colombo/Feb08/2023)

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Sri Lanka to find investors by ‘competitive system’ after revoking plantations privatizations

ECONOMYNEXT – Sri Lanka will revoke the privatization of plantation companies that do not pay government dictated wages, by cancelling land leases and find new investors under a ‘competitive system’, State Minister for Finance Ranjith Siyambalapitiya has said.

Sri Lanka privatized the ownership of 22 plantations companies in the 1990s through long term leases after initially giving only management to private firms.

Management companies that made profits (mostly those with more rubber) were given the firms under a valuation and those that made losses (mostly ones with more tea) were sold on the stock market.

The privatized firms then made annual lease payments and paid taxes when profits were made.

In 2024 the government decreed a wage hike announced a mandated wage after President Ranil Wickremesinghe made the announcement in the presence of several politicians representing plantations workers.

The land leases of privatized plantations, which do not pay the mandated wages would be cancelled, Minister Siyambalapitiya was quoted as saying at a ceremony in Deraniyagala.

The re-expropriated plantations would be given to new investors through “special transparency”

The new ‘privatization’ will be done in a ‘competitive process’ taking into account export orientation, worker welfare, infrastructure, new technology, Minister Siyambalapitiya said.

It is not clear whether paying government-dictated wages was a clause in the privatization agreement.

Then President J R Jayewardene put constitutional guarantee against expropriation as the original nationalization of foreign and domestic owned companies were blamed for Sri Lanka becoming a backward nation after getting independence with indicators ‘only behind Japan’ according to many commentators.

However, in 2011 a series of companies were expropriation without recourse to judicial review, again delivering a blow to the country’s investment framework.

Ironically plantations that were privatized in the 1990s were in the original wave of nationalizations.

Minister Bandula Gunawardana said the cabinet approval had been given to set up a committee to examine wage and cancel the leases of plantations that were unable to pay the dictated wages.

Related

Sri Lanka state interference in plantation wages escalates into land grab threat

From the time the firms were privatized unions and the companies had bargained through collective agreements, striking in some cases as macro-economists printed money and triggered high inflation.

Under President Gotabaya, mandating wages through gazettes began in January 2020, and the wage bargaining process was put aside.

Sri Lanka’s macro-economists advising President Rajapaksa the printed money and triggered a collapse of the rupee from 184 to 370 to the US dollar from 2020 to 2020 in the course of targeting ‘potential output’ which was taught by the International Monetary Fund.

In 2024, the current central bank governor had allowed the exchange rate to appreciate to 300 to the US dollar, amid deflationary policy, recouping some of the lost wages of plantations workers.

The plantations have not given an official increase to account for what macro-economists did to the unit of account of their wages. With salaries under ‘wages boards’ from the 2020 through gazettes, neither employees not workers have engaged in the traditional wage negotiations.

The threat to re-exproriate plantations is coming as the government is trying to privatize several state enterprises, including SriLankan Airlines.

It is not clear now the impending reversal of plantations privatization will affect the prices of bids by investors for upcoming privatizations.

The firms were privatized to stop monthly transfers from the Treasury to pay salaries under state ownership. (Colombo/May25/2024)

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300 out of 1,200 Sri Lanka central bank staff works on EPF: CB Governor

ECONOMYNEXT – About 300 central bank staff out of 1,200 are employed in the Employees Provident Fund and related work, Governor Nandalal Weerasinghe said, with the function due to be transferred to a separate agency after a revamp of its governing law.

“When it comes to the EPF there is an obvious conflict of interest. We are very happy to take that function out,” Governor Weerasinghe told a forum organized by Colombo-based Advocata Institute.

“We have about 300 staff out of 1,200 including contract staff, almost 150 of permanent staff is employed to run this huge operation. I don’t think the central bank should be doing this business,”

The EPF had come under fire in the past over questionable investments in stocks and also bonds.

In addition, the central bank also faced a conflict of interest because it had another agency function to sell bonds for the Treasury at the lowest possible price, not to mention its monetary policy functions.

“There has been a lot of allegations on the management of this fund. This is the biggest fund of the private sector; about 2.6 million active, I think about 10 million accounts.

“When it comes to EPF, obviously there’s another thing. We obviously have, in terms of resources, on the Central Bank, that has a clear conflict because we are responsible for the members.

“We have to give them a, as a custodian of the fund, we have to give them a maximum return for the members.

“For us to get the maximum return, on one hand, we determine the interest rates as multi-policy. On the other hand, we are managing public debt as a, raising funds for the government.

“And on the third hand, this EPF is investing 90 percent in government securities. And also, interest rates we determine, and they want to get the maximum interest. That’s a clear conflict, obviously, there’s no question.”

A separate agency is to be set up, he said.

“It’s up to the government or the members to determine to establish a new institution that has a trust and credibility and confidence of the members that this institution will be able to manage and secure an interest and give them a reasonable return, good return for their lifetime savings,” Governor Weerasinghe said.

“The question is that how whether we have whether we can develop that institution, whether we have the strong institution with accountability and the proper governance for this thing.

“I don’t think it should be given completely to a private sector business to run that. Because one is that here we have no regulatory institution. Pension funds are not a regulated business.

“First one is we need to establish, government should establish a regulatory agency to regulate not only the EPF business fund, there are several other similar funds are not properly regulated.

“Once we have proper regulations like we regulate banks, then we can have a can ensure proper practices are basically adopted by all these institutions.

“Then you can develop an institution that we who can run this and can be taken back by the Labour Department. I’m not sure Labour Department has the capacity to do all these things.”

While some EPF managers had come under scrutiny during the bondscam and for questionable stock investments, in recent years, it had earned better returns under the central bank management than some private funds that underwent debt restructuring according to capital market analysts with knowledge of he matter. (Colombo/May24/2024)

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Desperate Sri Lankans seek risky foreign jobs amid tough IMF reforms

ECONOMYNEXT – After working 11 years in Saudi Arabia as a driver, Sanath returned to Sri Lanka with dreams of starting a transport service company, buoyed by Gotabaya Rajapaksa’s 2019 presidential victory.

However, the COVID-19 pandemic in 2020 and an unprecedented economic crisis in 2022 shattered his dreams. Once an aspiring entrepreneur, he became a bank defaulter.

Facing hyperinflation, an unbearable cost of living, and his family’s daily struggles, Sanath sought greener pastures again—this time in the United Arab Emirates (UAE).

“I had to pay 900,000 rupees ($3,000) to secure a driving job here,” Sanath (45), a father of two, told EconomyNext while having a cup of tea and a parotta for dinner near Khalifa University in Abu Dhabi.

Working for a reputed taxi company in the UAE, Sanath’s modest meal cost only 3 UAE dirhams (243 Sri Lankan rupees). Despite a monthly salary of around 3,000 dirhams, he limits his spending to save as much as possible.

Sanath has been in Abu Dhabi for 13 months but had to wait six months before driving a taxi and receiving no salary.

TOUGH REALITIES

“I had to get my UAE driving license. I failed the first trial, and the company paid 6,500 dirhams on my behalf, agreeing to deduct 500 dirhams monthly from my salary,” he explained.

“So far, I have repaid only 3,000 dirhams.”

To raise the 900,000 rupees for the job, Sanath borrowed money from friends and pawned jewelry.

“I don’t know if I was cheated by the agent, but I must repay that money and also send money for my family’s expenses,” he said, glancing at a photograph of his family in a Colombo suburb.

Working night shifts in busy Abu Dhabi, Sanath said, “If I can secure 9,000 dirhams monthly through taxi driving, I will earn 3,000 dirhams in the month after deductions for the license fee and any traffic fines.”

Sanath came to Abu Dhabi with seven other Sri Lankan men through an employment agency in the Northwestern town of Kurunegala.

“Only two of us have withstood the tough traffic rules and payment deductions for offenses,” he said. Some of his colleagues are still job-hunting, while others have returned to Sri Lanka.

Sanath is one of around 700,000 Sri Lankans who have left the island in the last two years due to the economic crisis that forced the country to adopt difficult fiscal and monetary policies, including higher taxes and costly borrowing, exacerbating the cost of living.

FOREIGN EXCHANGE EARNERS

From January 2022 to the end of March 2024, at least 683,118 Sri Lankans migrated for foreign employment through legal channels, according to the Sri Lanka Foreign Employment Bureau.

They have sent $11.31 billion in remittances through official banking channels during the same period, central bank data shows.

Many Sri Lankans leave on visit visas, hoping to find jobs later, often guided by friends already working abroad. The economic crisis has pushed them to seek better opportunities abroad, despite the risks.

Sri Lankan authorities struggle to stop such risk-takers, who sometimes resort to illegal migration, despite warnings about human trafficking.

In Myanmar, 56 Sri Lankans caught in an IT job scam were detained earlier this year, and the government is still repatriating them.

At least 16 retired Sri Lankan military personnel have been killed in the Russia-Ukraine war after being misled by unscrupulous recruiters. Officials estimate that over 400 retired military officers may have left for similar reasons.

DISPERATE TO LEAVE

In March, Foreign Minister Ali Sabry warned against visiting any nation on open visas, urging Sri Lankans to emigrate only through registered agencies.

Despite the risks, many Sri Lankans are desperate to leave.

Abu Salim, a 32-year-old former rugby player, came to Dubai on a visit visa hoping for a banking job, which he never got.

Now freelancing in an insurance firm, he said, “I survive, and my relatives don’t see my struggle. It’s stressful, but still better than Sri Lanka right now.”

Suneth, a former top garment merchandiser, is also job-hunting in Sharjah after quitting his initial job in Sharjah.

“My worry is the visa. I must find a new job before it expires,” he said.

Many Sri Lankans in the UAE work multiple jobs, compromising their sleep and health to make ends meet. (Abu Dhabi/May 24/2024)

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