An Echelon Media Company
Wednesday December 7th, 2022

Sri Lanka’s 21st amendment to constitution an eyewash: opposition TNA legislator

TNA MP M A Sumanthiran/Facebook

ECONOMYNEXT – Sri Lanka’s 21st amendment to the constitution is an eyewash that has not stripped the office of the executive president of any of its powers as promised, opposition Tamil National Alliance (TNA) legislator M A Sumanthiran said.

Speaking in parliament during the second reading of the 2023 budget on Tuesday November 22, Sumanthiran said the 21st amendment allows the president to hold any number of ministerial portfolios, contrary to assurances made that it would serve as a check on the excesses of Sri Lanka’s all powerful executive presidency.

“This amendment was just an eyewash. It really did not make anything independent in this country. Nor did it strip the presidency of any executive powers,” said the MP.

The Jaffna district opposition lawmaker said that, since 2010, he has opposed the president – who is not an MP – holding the finance portfolio.

“When a person who is not a member of this house presents the budget, it seriously curtails this house’s ability to be in total control of public finance as the constitution stipulates in article 148,” he said.

Article 148 of Sri Lanka’s constitution reads: “Parliament shall have full control over public finance. No tax, rate or any other levy shall be imposed by any local authority or any other public authority, except by or under the authority of a law passed by parliament or of any existing law.”

President Ranil Wickremesinghe’s holding the finance portfolio, said Sumanthiran, exposes the lie that the 21st amendment would be doing away with the 20th amendment and would be a return to the 19th amendment.

The 21st amendment, passed with 179 votes in a 225-member assembly, largely sought to do away with the previous major constitutional amendment, the controversial 20th amendment brought by the two-thirds majority government of Sri Lanka’s ousted ex-President Gotabaya Rajapaksa. The 20th had removed many of the checks and balances established by the 19th amendment, widely regarded to be one of Sri Lanka’s most progressive attempts at reform. President Wickremesinghe was then prime minister under then President Maithripala Sirisena, whose Yahapalana Government fulfilled an election pledge by introducing the 19th amendment aimed at curtailing the powers of the office of the president.

“Under the 19th amendment, the president could not hold any ministry, not even the ministry of defence. For the tenure of that president at that time – personal to him, to Hon Maithripala Sirisena, three named ministries were permitted in the transitional provision. Thereafter the president could not hold any ministries. But now the president can hold any number of ministries. In fact, he can hold all the ministries,” said Sumanthiran.

“This is another occasion in which we can expose that lie to the country, that some reform was made, that executive powers curtailed through the 21st amendment. No, no such thing was done,” he added.

Sumanthiran voted against the 21st amendment bill, despite the main opposition Samagi Jana Balawegaya (SJB) deciding to vote for the bill.

“Even the one positive thing that is being touted is the reestablishment of the constitutional council. That too we pointed out is a political body. It’s not the council of the 17th amendment. More members are from this house, which makes it political. And that body is tasked with appointing, amongst others, independent commissions,” the MP said.

Sumanthiran referred to a fresh controversy regarding a widely questioned move by the chairman of the police commission who had allegedly welcomed former Finance Minister Basil Rajapaksa when he returned to Sri Lanka after a private visit to the US. Opposition lawmakers and others have accused Basil Rajapaksa of being responsible for Sri Lanka’s present economic woes, and thousands of people took to the streets demanding his resignation along with that of his brother President Gotabaya Rajapaksa.

“The last couple of days we found how this supposed independent commission chairman has behaved. We saw the national police commission chairman going to the VIP lounge to receive a person who was chased out of this country for fraud, for large scale corruption. And who else but the chairman of the national police commission is there bowing to and welcoming him back,” said Sumanthiran.

“A few days before that, we heard the chairman of the office of missing persons saying that only a few people went missing and that all of them are missing abroad. That very office was established to investigate missing persons. And the government commissions – there are many – all of them have reported that over 20,000 have gone missing. That’s a conservative number. The chairman of the office appointed to this supposedly independent office says nobody has gone missing,” said the MP.

Justice Minister Wijeyadasa Rajapakshe, said Sumanthiran, had explained the commission chairman’s remark as him not understanding the government’s prioritisation of reconciliation efforts.

“That creates another problem. Why should an independent commission chairman know what the government’s priorities are if he’s independent? Why should he comply with what the government wants to do? The government may not want to do that tomorrow. The government changes its mind day to day. But if this is an independent office, he has been tasked by law to investigate these tens of thousands of disappearances in the country and this is what he says. (Colombo/Nov22/2022)

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