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Monday December 5th, 2022

Sri Lanka’s Wickremesinghe likely to go for presidential poll first – sources

  • Wickremesinghe is leading crisis-hit Sri Lanka’s painful economic reforms
  • His close allies say local govt, parliamentary polls could reverse reforms
  • “Election is not his priority right now”, says official at presidential secretariat

ECONOMYNEXT – Sri Lanka leader Ranil Wickremesinghe is likely to hold presidential election before any other polls after November 16 2023, three sources close to him said, as he seeks a $2.9 billion IMF loan to consolidate the economy which is on a slow recovery path from a crisis.

Wickremesinghe was elected as the president in the 225-member parliament on July 19, days after former president Gotabaya Rajapaksa fled the country fearing for his life following tens of thousands of protesters stormed into the presidential palace, demanding his resignation after his failed economic policies. He quit after reaching Singapore.

Sri Lanka’s opposition parties and many protestors who led the ousting of Rajapaksa are now demanding both local government and parliamentary polls citing that the current government has no mandate to be in power as its failed economic policies have forced the people to oust them.

Presidency of Wickremesinghe, a six-time prime minister, has been criticized by the opposition and protestors as he was not elected by the public.

Wickremesinghe became the president when he entered the parliament through a national list after his center-right United National Party (UNP) failed to win a single parliament seat in the 2020 parliamentary polls.

“The president is considering the presidential poll first and it will give him a legitimate mandate to push for reforms that are now formulated,” a source close to Wickremesinghe told EconomyNext.

“He can be the president for two more years. But the reforms need more time to see the country economically recovered and is on a strong foot.”

Another source close to Wickremesinghe said there could be division among the current parliament composition if he goes for any other elections other than presidential.

“We see a slight recovery though the worst is yet to come after the implementation of tax policies and IMF reforms. Doing party politics in the next one year will reverse all the reforms,” the second source said.

Focus is on crisis

The President’s office did not comment on a possible presidential poll before both local government and parliamentary elections. However, an official at the president’s office said Wickremesinghe has not been focusing on “any election” now.

“Election is not his priority right now. He has never said anything in any election so far. He is busy with the economic policies to get the country out of the current mess,” the source, a senior official at the presidential secretariat told EconomyNext.

“He has categorically told internal officials that the country’s private sector, civil society organizations, all political parties, and the people should get together to face the current crisis and if we don’t unite, there won’t be a country to do politics after one year.”

The island nation’s political parties are now gearing up for an election. The former ruling center-left nationalist Sri Lanka Podujana Peramuna (SLPP), main opposition Samagi Jana Balawegaya (SJB), and Marxist opposition Janatha Vimukthi Peremuna have already started campaigns at village level.

The parliament election should be held after August 5, 2025, five years after it was held. But President Wickremesinghe can dissolve the parliament and call for an early election after February 2023,

The tenure of the current presidency ends in November 2024. However, the incumbent president can call for an early election if the leader wants. This means Wickremesinghe can call for early election after November 16, 2023.  (Colombo/Nov18/2022)

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Sri Lanka proposed power tariff not to recover past losses: Minister

ECONOMYNEXT – The government has not proposed a power tariff increase to recover past losses, Minister of Power and Energy Kanchana Wijesekera in response to a statement attributed the head of the power regulator commission.

“The proposal that was presented was for an automatic cost reflective tariff mechanism to be implemented to supply uninterrupted power & to recover the current cost of power supply,” Minister Wijesekera said in message.

“Govt has not proposed to recover past loses of CEB from a tariff revision…”

The cabinet of ministers had given the nod tariff revisions twice a year to prevent large losses from building up as in the past.

The Public Utilities Commission has disputed costs protected for the power utility saying the petroleum utility was keeping large margins in selling fuel.

The government in a budget for 2022 also proposed to tax surcharge to recover losses.

The regulator also disputed power demand forecasts.

Also read; Sri Lanka regulator disputes CEB costs, demand projections for 2023

The PUCSL cannot increase tariffs to recover past losses, Chairman Janaka Ratnayake said. (Colombo/Dec05/2022)

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Sri Lanka’s shares gain in mid market trade

ECONOMYNEXT – Sri Lanka’s shares edged up in mid day trade on Monday (05), continuing the positive run for seven straight sessions on news over a possible debt restructuring from Paris Club, analysts said.

All Share Price Index gained by 0.69% or 60.10 points to 8,829, while the most liquid shares gained by 0.96% or 26.59 points to 2,801.

“The market was pushed up over the news of a potential 10 year debt moratorium,” analysts said.

The Paris Club group of creditor nations has proposed a 10-year debt moratorium on Sri Lankan debt and 15 years of debt restructuring as a formula to resolve the island nation’s prevailing currency crisis. 

Related – Paris Club proposes 10-year moratorium in 15-year Sri Lanka debt re-structure: report

The market generated a revenue of 2.1 billion rupees.

Top gainers during 1130 hours were Expolanka, Browns Investment and LOLC.  (Colombo/Dec05/2022)


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Sri Lanka bond yields slightly down

ECONOMYNEXT – Sri Lanka’s bond yields were slightly down at open on Monday while t- bills were inactive, dealers said.

The Central Bank’s guidance peg for interbank transactions was at 363.18 rupees against the US dollar, appreciated from 363.19 rupees on Friday.

“Only one bond is being quoted today, and the rest remaining unquoted” a dealer said.

A bond maturing on 15.05.2026 quoted at 29.30/30.00 percent down from 29.50/75 percent at Friday’s close.(Colombo/ Dec 03/2022)

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