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Thursday December 8th, 2022

Sumanthiran says Minister Weerasekara is responsible if he is harmed

TNA MP M A Sumanthiran/Facebook

ECONOMYNEXT- Tamil National Alliance Parliamentarian M.A. Sumanthiran says if any harm comes to him Public Security Minister Sarath Weerasekara should be held personally responsible as there are multiple threats to his life and his STF guards have been withdrawn.

Sumanthiran’s statement came after Opposition Leader Sajith Premadasa raised the issue in Parliament requesting Speaker Mahinda Yapa Abeywardene to intervene in the matter of the withdrawal of Special Task Force security personnel for the TNA MP.

The STF guards were pulled out last week after Sumanthiran attended a rally in Polikandy on the Northern Peninsula at the end of the P2P march by Tamil and Muslim Civil Society activists staged a rally there.

Replying to the Opposition Leader Weerasekara said that he removed the STF personnel from Sumanthiran’s security as he participated in a rally disobeying police and Court orders explicitly not to do so.

“When a person participates in a rally disobeying the police orders, police security cannot be given to such person and if he has such threats to his life he shouldn’t have gone to a place where 2000-2500 people are around,” he added.

Moreover, he said that If nothing happened to him even after going to such a place that means there is no such threat to him.

“That’s why the STF was removed, as previously I have privately informed him that there are threats to his life and he should act to look after his security,” Weerasekara said.

He said that it is a joke to give security to a person who goes to places disobeying police and court orders

However, Premadasa said that Sri Lanka is not a country governed by an authoritarian regime and there is parliamentary democracy and freedom of expression to gather and go to rallies.

“When we also tried to demonstrate in a silent protest in Tanamalwila, a court order was issued, what kind shameful act is that,” he asked.

He also added that not only Sumanthiran but every citizen in Sri Lanka has the freedom to go on a peaceful protest because that is their democratic right.

Moreover, he said that it is another matter to take legal action against Sumanthiran if he has broken some law but it is wrong to remove his security based on what was said by the Minister.

Weerasekara said that the STF officers were not removed from the MP as a revengeful act.

“ I am not ready to make the police, army and the STF under me a cowardly force as long as I’m their head,” Weerasekara said.

He said that Sumanthiran a few months ago commemorated a terrorist killed by the army, in a room while the STF was outside providing him security.

“At that moment we thought of removing the STF, then I personally informed him that we will keep his security as he has threats to his life,” he added.

Also, joining the debate Field Marshall Sarath Fonseka said that the court order was issued against the P2P rally based on the quarantine regulations.

“So it does not balance out removing the security of an MP because he violated quarantine regulations,” he added.

He also said that the government is providing security to Karuna Amman and Pillayan, who murdered police and army officers.

“You have given security to terrorists, it is a shame for the army personnel to provide security to them, Sumanthiran always spoke against terrorists and stood against them so we don’t believe that you removed his security based on one incident,” Fonseka said.

Sumanthiran responding to Minister Weerasekara said that no court order issued against the protest had mentioned his name.

“There is no court order against me, therefore I have not violated any single court order,” he said

But he added that even if he did have a court order against him, it is not a reason to remove the special security accorded to me on the account of threat assessment done by the state.

Further, he said that about a month ago, Minister Weerasekara met me at the Parliament lobby and informed him that threats against him still exist and to be careful.

He said that based on that his security was increased and an additional contingent of STF was provided to him.

Moreover, he said that there three to four cases pending in courts about attempts on his life and in one case under the Prevention of Terrorism Act (PTA) four were indicted for attempting on his life.

He also said that more than 30 people are in remand for attempts on my life, “I didn’t know that I was that important. But this is what the state has done I have not made a single complaint,” he added.

“What is there to give pardon? I don’t need to be given a pardon by anybody, I have not done anything wrong, if there is a threat to my life and you yourself have said, then it is incumbent on the state to provide that special security which you deemed necessary. How I behave is of no relevance to the matter of granting of security to me. If anything is to happen to me Sarath Weerasekara should be held personally responsible,” Sumanthiran said.


Reported by Imesh Ranasinghe

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Sri Lanka in deep talent drain in latest currency crisis

ECONOMYNEXT – Sri Lanka businesses are facing a drain of talent, top business executives said as the country suffers the worst flexible exchange rate crisis in the history of its intermediate regime central bank and people lose hope.

“We are seeing a trend towards migrating,” Krishan Balendra, Chairman of Sri Lanka’s John Keells Holdings told an economic policy forum organized by the Ceylon Chamber of Commerce.

“We have seen an impact mainly on the tourist hotels side, quite an exodus of staff (migrating) to countries we have not seen in the past. 

“We have seen people go to Scotland, Ireland. It has usually been the Middle East and Maldives. Australia seems like a red hot labor market at the moment.”

Sri Lanka’s rupee collapsed from 200 to 360 to the US dollar after macro-economists printed money to suppress rates.

Sri Lanka operates a ‘flexible exchange rate’ where errors in targeting interest rates are compensated by currency depreciation especially after the 1980s.

Classical economists and analysts have called for the power to mis-target rates and operate dual anchor conflicting monetary regimes should be taken away to prevent future crisis.

Currency crises are problems associated with flexible exchange rate central banks which are absent in hard pegs and clean floats.

“Something new we are seeing is that older people, even those in their 50s, which was a surprise, are looking at migrating,” Balendra said.

Businesses are trying to retain talent as real wages collapse.

Balendra said as businesses they see some stability returning and based on past experience growth is likely to resume, and they were communicating with the workers.

“We have a degree of conviction that the economy should get better, its the stability phase now and it will get better going forward so without the way our businesses are placed we should see good growth,” Balendra said.

“We can’t chase compensation that’s just not practical and we are not trying to do that especially if people are looking to immigrate but what we can do is show the career opportunities in the backdrop of the situation that people would rather stay here because its home.” 

Sri Lanka unit of Heineken says it is also trying to convince workers not to leave, with more success.

“We are all facing the effects of brain drain and it’s not just the lower levels… What we are doing is a balance of daring and caring,” Maud Meijboom-van Wel – Managing Director / CEO, Heineken Lanka Ltd told the forum.

“Why I say daring is, you have to be clear in what you can promise people, when you make promises you have to walk the talk. So with the key talents and everyone you need to have the career and talent conversations.

“I am a bit lucky because I am running a multinational company so my career path goes beyond Sri Lanka so I can say if you acquire certain skills here, then you can move out of here and then come back too, that is a bit easier for me but it starts with having a real open conversation with walking the talk – dare and care.” (Colombo/Dec7/2022)


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Despite losses, Sri Lanka to resume “park & ride” transport after complaints  

ECONOMYNEXT –  Sri Lanka’s state-run Transport Board will resume its loss-making City Bus service from January 15, 2022 Cabinet Spokesman Bandula Gunawardena said, after the service abruptly discontinued with the state-run firm’s director board citing losses.

The City Bus service was introduced in 2021, under the government of former President Gotabaya Rajapaksa, from Makubura to Pettah and Bambalapitiya.

The service was started to reduce the number of automobiles travelling to and from Colombo and suburbs by providing a comfortable, convenient and safe public bus transportation for passengers and riders who use cars and motorcycles as their means of transportation.

During the time period in which the service was initiated, there were 800 hundred vehicles that would be parked and would use the system, Gunawardena, who is also the Transport Minister, said.

The service was later collapsed due to inconsistencies in scheduling and it was completely stopped after

“Without informing the Secretary or the Minister of the relevant Ministry, the Board of Directors have come to a conclusion that this is loss making route and must be halted,” Gunawardena said.

“The users of the City Bus service brought to our notice and therefore I gave the Secretary to the Ministry of Transport the approval to start the City Bus service from January 15.”

“If we stop all loss making transport services then massive inconveniences will occur to the people in far parts of the island.”

The chairman of the state run Ceylon Transport Board has been asked to handover the resignation letter by the Minister Gunawardana citing that the head has failed to implement a policy decision approved by the government. (Colombo/ Dec 06/2022)

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Sri Lanka may see rates falling next year: President

ECONOMYNEXT – Sri Lanka’s interest rates are high and hurting small businesses in particular but interest rates are required to maintain stability, President Ranil Wickremesinghe said.

“One is, all of you want to know what’s going to happen to the interest rates?,” President Wickremesinghe told an economic policy forum organized by the Ceylon Chamber of Commerce.

“I wish I know. The governor has told me that the inflation has peaked. It’s coming down. You all understandably want some relief with the interest rates to carry business on.”

“I understand that and appreciate the viewpoint. It’s not easy to carry business on with such high interest rates. On the other hand, the Central Bank also has to handle the economy. So maybe sometimes early next year we will have a meeting of minds of both these propositions.”

Sri Lanka’s interest rates are currently at around 30 percent but not because the central bank is keeping it up. The central bank’s overnight policy rate is only 15.5 percent but the requirement to finance the budget deficit and roll over debt is keeping rates up.

Rates are also high due to a flaw in the International Monetary Fund’s debt workout framework where there is no early clarity on a whether or not domestic debt will be re-structured.

After previous currency crises, rates come down after an IMF deal is approved and foreign loans resume and confidence in the currency is re-stabilished following a float.

This time however there has been no clear float, though the external sector is largely stable and foreign funding is delayed until a debt re-structure deal is made.

Sri Lanka’s external troubles usually come because the bureaucrats do not believe market rates are correct when credit demand picks up and mis-uses monetary tools given in 1950 by the parliament to suppress rates, blowing the balance of payments apart.

The result of suppressed rates by the central bank are steep spikes in rates to stop the resulting currency crisis.

A reserve collecting central bank has little or no leeway to control interest rates (monetary policy independence) without creating external troubles, which is generally expressed as the ‘impossible trinity of monetary policy objectives’.

However, it has not prevented officials from trying repeatedly to suppress rates, perhaps expecting different results.

After suppressed rates – supposedly to help businesses – trigger currency crises, the normalization combined with a currency collapse leads to impoverishment of the population.

The impoverishment through depreciation leads to a consumption shock, which also leads to revenue losses in businesses.

The suppressed rates then lead to bad loans.

In the 2020/2022 currency crisis the sovereign default has also led to more problems at banks. Several state enterprises also cannot pay back loans.

“…[T]he bad debt that is being carried by the banks is mainly from the private sector or the government sector,” President Wickremesinghe said.

“Keep the government sector aside. We’re dealing with it. How do you handle it? Look, one of our major areas of are the small and medium industries. You can’t allow them to collapse, but they’re in a bad way.”

Classical economists and analysts have called for new laws to block the ability to central bank to suppress rates in the first place so that currency crises and depreciation does not take place in the first place.

Then politicians like Wickremesinghe do not have to take drastic and unpopular measures to fix crises and there will be stability like in East Asia.

Sri Lanka had stability until 1950 when the central bank was created by abolishing an East Asia style currency board. The currency board kept the country relatively stable through two World Wars and a Great Depression.

In 1948 after the war (WWII) was over “we stood second to Japan” Wickremesinghe said.

“But we started destroying it from the sixties and the seventies,” he said. :We started rebuilding an economy, which was affected by a (civil) war, and thereafter the way we went, is best not described here.”

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