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Thursday August 18th, 2022

The state of the race: A sprint to a close finish ahead

The race appears to be closer this week with the principle candidates sprinting to the finish. Gotabaya Rajapaksa is said to be ahead and the younger challenger, Sajith Premadasa closing in fast.

Team Gota had, for a few days, decided to go into a holding pattern as they felt they were comfortably ahead and did not want to push the campaign or their candidate to the fore lest they make mistakes.  

With what they thought was a “stagnant” Gota campaign, Sajith’s cohorts went for broke.

Nine days before the day of the Presidential election Premadasa took a leap in the dark by making an “address to the nation” which was broadcast on his Facebook page.

In eleven minutes, the 52-year old Premadasa promised an electorate disgusted with the current political culture, that he would bring in sweeping changes.

He promised a Prime Minister who will be a “first-timer,” and a Cabinet full of vibrant young, qualified men and women who have not been touched by corruption that will “maintain a gender and generational balance.”

Pro Sajith Premadasa crowd at his inaugural rally/Amitha Tennekoon RepublicNext

He says he was moved to make the promise because on the campaign trail he was asked the question how he would transform the current corrupt political culture of the country.

He said “it became clear to me that there is only one way Sri Lanka’s problems can be fixed and that will be to clean up politics in this country while not sacrificing our cherished democracy and individual freedoms.”

In that, he has said a mouthful and set himself a gargantuan task, and possibly set off a civil war inside the UNP just days before the poll.

This is because at the culmination of his bruising battle inside the UNP to wrest the candidacy from Ranil Wickremesinghe, Premadasa had agreed that the Party Leader will stay in place as the Executive Prime Minister even if and when he is elected President according to sources in Temple Trees.

Constitutionally, as President Maithripala Sirisena learnt, it is not possible to remove the PM easily. So that means to fulfil this promise to the nation Premadasa will have to dissolve Parliament at the earliest opportunity, which is in mid-March, and also build enough backing from the party to handpick the nominees who will contest the poll from the UNP.

The question here is will his promise to take away the trappings of MP-ship, the Duty Free Luxury vehicle, the houses, the ability to give jobs to friends and family pose a challenge in build support around him.

But with trends and polls showing that he is catching up with his rival Gotabaya, he needs a final push to climb the steep hill that will take him over the 50 percent mark.

That is why, while taking the risk of angering some UNPers, he pitched this line aiming at the voters going to Anura Kumara Dissanayake and the outlier candidates such as Gen Mahesh Senanayake, Ajantha Perera. Voters supporting these candidates are mostly disgusted with the people and practices of current politics.

State Minister for Foreign Affairs Wasantha Senanayake accepts a sheaf of Lotus Buds as he joins Gotabaya Rajapaksa on the stage in Polonnaruwa/SLPP Media

In response, Gotabaya, went on a punishing round of rallies, flying from the plains of Polonnaruwa to the hill country and into the South.

At Polonnaruwa, the serial party crossover artist, State Minister of Foreign Affairs Vasantha Senanayake joined Gotabaya on stage. The candidate appeared a bit miffed that the noisy entrance of Senanayake was made in the midst of his speech, but later smiled as the descendant of the father of the nation D S Senanayake took off his Green cap and put on the Maroon headgear of the SLPP.

At all the rallies, Gotabaya and his brother, Leader of the Opposition Mahinda Rajapaksa kept on offering more goodies to voters. These are pro-poor items that did not appear in detail on the manifesto, which includes free housing which also goes against what he has been expounding at the Viyath Maga discussions that preceded his formal candidateship.

“We will ensure every poor family receives, free of charge, a bag of nutritious food stuff as well as a government job for one member of the family,” he told the crowds.

Gotabaya has also offered free fertilizer for paddy farmers and vegetable growers amid a number of other concessions.

Mahinda also raked up an old controversy that the UNP was cutting deals with the Tamil parties by agreeing to greater devolution than the current Constitution would allow. It was a clear gambit to shore up his core Sinhala-Buddhist Nationalist Base vote.

As a tumultuous week ended, one-time Mahinda confidante former MP Sajin Vaas Gunewardena entered the fray, accusing the former President of threatening his family and showering allegations of corruption against the Rajapaksa family. They ranged from bribing Velupillai Prabhakaran to block votes to the UNP in the Presidential elections of 2005 to siphoning off commissions from the sale of the Army land in Galle Face to the Chinese to build the Shangri La Hotel and Mall. He alleged that the Rajapaksa’s had bought hotels in Tangalle with the money.

Gotabaya Rajapaksa’s purported document proving he has renounced US citizenship

The constant thorns in Gotabaya’s side Ministers Harin Fernando and Mangala Samaraweera went on Twitter over the weekend to resuscitate the question of whether Gotabaya has renounced his American citizenship. This was prompted by the fact that Gotabaya’s name did not appear in the list of persons who have given up US citizenship published by the US government this week in the Federal Registry. This has been a controversy that has dogged the former Secretary to the Ministry of Defense for years.

His nephew, MP Namal Rajapaksa and his lawyer President’s Counsel Mohamed Ali Sabri have stoutly defended Gotabaya with Ali Sabri pointing out that the National Elections Commission raised no objections when they accepted his nomination papers.

This has been a Presidential race that has pitted the old versus the new in a way totally unexpected just a few months ago. Many believed it would be a contest between Ranil from the United National Front versus a member of the Rajapaksa family, probably Gota. A fight between Gotabaya who carries the burdens of the authoritarian practices, the corruption and misdeeds of 10 years of Rajapaksa rule versus the unpopular Ranil who squandered the mandate to bring in Good Governance and punish the wrongdoers would have been dull and wearying. We would have been wallowing in the same cesspool, where these opponents have, over the decades covered up for each other.

But the advent of Premadasa and in some way the JVP’s Anura Kumara has added spice and some excitement to the race. New ideas have been discussed, and all of them, except for Gotabaya have been open to the Media and appeared at debates. Perhaps there is hope for our nation  after all.

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Sri Lanka stocks end steady after CB held policy rates steady; turnover slumps to over 2-wk low

ECONOMYNEXT – Sri Lanka stocks closed steady on Thursday (18) with turnover slumping to more than two-week low after the central bank held the key policy rates steady, dealers said.

The main All Share Price Index (ASPI) edged up 0.04% or 3.22 points to 8,910.57. On Tuesday, it fell from its highest
close since March 30.

“We saw the market stabilizing after slipping for the last two days on profit taking,” a top analyst said.

“But overall there was continued buying interest on the energy sector and in addition, we saw buying coming into the plantation-related stocks and their holding companies.”

There had been selling pressure on the banking sector, he said.

At the monthly policy review meeting held today, the central banks kept the rates unchanged.

Market analysts said investors have been looking for profit taking after the index gained nearly 2,000 points in the 12 consecutive sessions through Monday.

Investors, however, have been shifting from top liquid shares to energy and plantation sectors now, analysts said.

The market generated 2.72 billion rupees in turnover, its lowest since August 3 and less than this year’s average daily turnover of 3.13 billion rupees. This is also the lowest turnover in last nine sessions.

Sri Lanka has already declared sovereign debt default on April 12 this year and failed to pay its first sovereign debt in May amid a deepening economic crisis which later turned into a political crisis and led to a change in the president, cabinet, and government.

The more liquid S&P SL20 index ended 0.52% or 15.33 points up at 2,962.33.

Sri Lanka is facing its worst fuel and economic crisis in its post-independence era and the economy is
expected to contract 7 percent this year.

The main ASPI gained 15.2 percent in August so far after gaining 5.3 percent in July. It lost 9.3 percent in
June, 23 percent in April, and 14.5 percent in March.

The market index has lost 27.1 percent so far this year after being one of the world’s best stock markets
with an 80 percent return last year when large volumes of money were printed.

Net foreign inflow was 83 million rupees on Thursday, but the total net foreign outflow so far this year is 1.09 billion rupees.

Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.

LOLC pushed the index up, closing 3.4 percent firmer at 589.3 rupees a share.

Sri Lanka Telecom closed 24.9 percent up at 42.2 rupees a share, and Dipped Products slipped 5.5
percent to 44.3 rupees. (Colombo/Aug17/2022)

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Sri Lanka rupee, yields in govt securities slightly changed

ECONOMYNEXT – Sri Lanka Central Bank’s guidance peg for interbank transactions weakened on Thursday (18) and yields in Treasury bonds picked up slightly while in T-bill edged down in dull trade after the central bank kept key monetary policy rates steady, dealers said.

On Thursday, before the market opened, the central bank held its key policy rates steady at 15.50 percent, while data showed market interest rates are close to twice the rate of them while private credit and imports falling as a consequence.

The central bank is injecting 740 billion rupees of overnight money to banks at 15.50 percent, which were originally injected mostly after reserves were sold for imports (or debt repayments) to artificially keep down rates (sterilized interventions), effectively engaging in monetary financing of imports.

The injections (sterilizing outflows) prevent the credit system from adjusting to the outflows and encourage unsustainable credit without deposits, which is the core problem with soft-pegged central banks, triggering a high rate and an economic slowdown later.

A bond maturing on 01. 06. 2025 closed at 27.90/28.00 percent, slightly up from 27.75/90 percent on Wednesday.

The three-months bill closed at 28.30/29.25 percent, down from 29.25/30 percent on Wednesday.

Sri Lanka’s central bank announced a guidance peg for interbank transactions weakened by one cent to 360.97 rupees against the US dollar on Thursday from 360.96 rupees.

Data showed that commercial banks offered dollars for telegraphic transfers between 367.97 and 370.00 for small transactions.  (Colombo/ Aug 18/2022)

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Japan grants medical equipment worth 500-mn yen to Sri Lanka govt hospital

ECONOMYNEXT –  The  Japanese government has granted medical equipment worth 500 million Japanese yen to the Sri Jayawardenepura government hospital to improve the hospital’s treatment facilities under Japan’s Non-Project Grant Aid Programme.

A statement by the Department of External Resources said the grant was given in response to a request by Sri Lanka’s government.

Under the 500 million Japanese yen (approximately 1,265 million rupees) grant assistance, angio-CT machine, other radiology equipment, ophthalmic instruments, surgical instrument sets (stainless steel with satin finish), 15 dental units with accessories, liver transplant instrument sets, and a cardiac catheterization laboratory will be provided, a statement said on Thursday August 18.

Sri Lanka due to its worst economic crisis in its post-independence history is currently facing shortages of essential medicine, non-essential and lifesaving medicines pressuring the health sector to only attend to emergency cases to preserve available limited medicine stocks.

On Thursday at the policy rate announcement media briefing by the Central Bank of Sri Lanka (CBSL), Governor Nandalal Weerasinghe said, with the strict measures taken in the recent past, Sri Lanka is currently managing the limited forex income coming into the country to purchase essential goods such as fuel and medicine.

Sri Lanka has received various grants from several countries including China and India which gave a 200 million US dollar credit line to purchase medicine from India.

In June, Minister of Health Keheliya Rambukwella said there is no shortage of vital medicines in the country and all medicines will be restocked by August 2022. However, shortages of medicine aer still being reported in various hospitals islandwide.

“This improvement at the hospital will facilitate the enhancement of the quality of the care provided especially to the patients with non-communicable diseases while enabling high quality medical professional training to medical undergraduates and postgraduates from the National School of Nursing at the aculty of Medical Sciences of the University of Sri Jayawardenepura,” the External Resources Department statement said.

“This project will eventually assist the development of human resources of the health sector in Sri Lanka,” it said. (Colombo/Aug18/2022)

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