Politics

Top ministers trade places in Sri Lanka’s snap cabinet reshuffle

The previous cabinet that was sworn in on August 12, 2020

Monday August 16, 2021 12:45 pm

ECONOMYNEXT – Sri Lanka President Gotabaya Rajapaksa on Monday (16) reshuffled the cabinet of ministers with seven key portfolios including health, education, power and transport swapped between senior members of the government.

According to president’s spokesman Kingsly Rathnayaka, former education minister Prof G L Peiris and foreign minister Dinesh Gunawardena have traded places.

An ongoing teachers’ strike over salary anomalies, now into its second month, under the watch of Peiris as education minister has crippled online education in the country amid constant school closures due to the pandemic.

Gunawardena will inherit the teachers’ crisis and related issues along with a raging controversy over a defence university bill, while Prof Peiris will have the task of clearing Sri Lanka’s name in the eyes of the international community with regard to its human rights record. In June this year, the island nation was on the receiving end of criticism by the Human Rights Watch over problematic provisions in the Prevention of Terrorism Act (PTA) following the release of murder-convict former MP Duminda Silva. The HRW statement came close on the heels of a resolution adopted by the European Parliament that proposed a temporary withdrawal of Sri Lanka’s access to the Generalised Scheme of Preferences Plus (GSP+) concession, also over the PTA and other concerns.

Pavithra Wanniarachchi, who held the health ministry till Monday, has been appointed the new minister of transport, with former media minister Keheliya Rambukwella taking her place as the new health minister.

Wanniarachchi, who has been seeing the health ministry through the COVID-19 crisis, has been out of the limelight in recent weeks, with opposition members calling for the appointment of State Minister for COVID Control Dr Sudarshini Fernandopulle as health minister instead. COVID-19 in Sri Lanka has taken a turn for the worse in recent months, with daily deaths and case numbers surging as hospitals run out of capacity.

Rambukwella just last week defended a government move to introduce legislation that will target websites that post content deemed “defamatory” and have no visible ownership. He also went on record saying last week that the government will continue to fulfill its responsibility in vaccinating the population against COVID-19 and that the rest is “in God’s hands”.

Gamini Lokuge, who held the transport portfolio, is the new power minister, while his predecessor Dullas Alahapperuma replaces Rambukwella as media minister.

Prime Minister Mahinda Rajapaksa’s son Namal Rajapaksa, meanwhile, will take on a new role as minister of development coordination and supervision, in addition to his existing portfolio of sports and youth affairs. (Colombo/Aug16/2021)

FILED UNDER: cabinet,cabinet reshuffle,dallas alahapperuma,Dinesh Gunawardena,education,Gamini Lokuge,Government,health,Keheliya Rambukwella,Namal Rajapaksa,Pavithra Wanniarachchi,politics,power,president goatabaya rajapaksa,Sri Lanka,transport

Cancel reply

1 Sri Lanka to lend US$2.5bn to US and top-rated borrowers in 2023 under IMF deal: analysis

2 Sri Lanka may have to pay up to 4-pct interest, extra surcharges, on IMF loan: Minister

3 Sri Lanka shares dive to two-week low on local debt restructuring fears

4 Sri Lanka president says state need not do business; seven SOEs to be divested

5 Sri Lanka sees tourism upturn from last minute bookings

Economy

Sri Lanka seeks to settle India ACU debt, credit lines over 5-years

Sunday March 26, 2023 9:22 am

ECONOMYNEXT – Sri Lanka has requested India to settle payments due to the country under the Asian Clearing Union mechanism and credit lines given in 2022 over 5 years, Indrajit Coomaraswamy, an advisor the island’s government said.

Sri Lanka is negotiating with India to settle the money over a 5-year period, Coomaraswamy, a former central bank governor told an online forum hosted by the Central Bank.

“Our request from the Indians is to settle it over five years,” he said. “That I think is still in the early stages of negotiation. The same with the one billion line of credit.”

Sri Lanka’s central bank owed the ACU 2.0 billion US dollars to the Asian Clearing Union according to a year end debt statement, issued by the Finance Ministry.

Sri Lanka owned India, 1,621 million dollars according to ACU data by year end, excluding interest.

India has given a 1 billion US dollar credit line to Sri Lanka as well a credit line for petroleum.

Sri Lanka in March 2024 has paid 121 million US dollar out of a 331 million US dollar IMF tranche to settle an Indian credit line.

Indian credits were given after the country defaulted in April 2022 as budget support/import when most other bilateral lenders halted giving money. (Colombo/Mar26/2023)

Bonds & Forex

Sri Lanka coconut auction prices up 1.16-pct

Sunday March 26, 2023 7:26 am

ECONOMYNEXT- Sri Lanka’s coconut auction prices went up by 1.16 percent from a week ago at an auction on Thursday, data showed.

The average price for 1,000 nuts grew to 83,219.45 from 82,260.58 a week earlier at the weekly auction conducted by Sri Lanka’s Coconut Development Authority on March 23.

The highest price was 92,500 rupees for 1,000 nuts up from the previous week’s 90,600 rupees, while the lowest was 76,500 also up from 70,000 rupees.

The auction offered 900,010 coconuts and 583,291 nuts were sold. (Colombo/Mar 26/2023)

Economy

Sri Lanka in talks for billion dollar equivalent Indian rupee swap

Saturday March 25, 2023 6:44 am

ECONOMYNEXT – Sri Lanka is in talks with India for a billion US dollar equivalent Indian rupee central bank swap, to facilitate trade, Indrajit Coomaraswamy, ad advisor to the government said.

“The amount is still uncertain it could be up to the equivalent of a billion US dollars,” Coomaraswamy told an online forum hosted by Sri Lanka’s central bank.

The money will be used to facilate India Sri Lanka trade, he said.

India has been trying to popularize the use of Indian rupees for external trade and also encouraged Sri Lanka banks to set up Indian rupee VOSTRO accounts.

However the first step in popularizing a currency for external trade is to get domestic agents, especially exporters, to accept their own currency for trade, like in the case of the US or EU, analysts say.

India’s billion US dollar credit to Sri Lanka given during the 2022 crisis is settled in Indian rupees (transaction need).

However the Indian government itself has chosen to denominate it in US currency for debt purposes (future value).

In most South Asian nations, receivers of remittances are willing to accept domestic currencies, leading to active VOSTRO account transactions.

Sri Lanka is expected to repay a 400 million US dollar swap with the Reserve Bank of India next year under an International Monetary Fund backed program for external stability and debt re-structuring.

Central bank swap proceeds sold to banks, which are then sterilized with inflationary open market operations, can trigger forex shortages and currency crises, analysts warn.

Sri Lanka went to the International Monetary Fund after two years of inflationary monetary operations by the central bank’s issue department (money printed to suppress interest rates) triggered the biggest currency crisis in its history and external sovereign default.

Sri Lanka had gone to the IMF 16 times with similar external troubles except for the April 2003 extended fund facility under Central Bank Governor A S Jayewardene which was a purely reform-oriented program with the World Bank (PRGF/PRSP) program at a time when he was collecting reserves with deflationary monetary policy and perhaps the lowest inflation since the Bretton Woods collapsed. (Colombo/Mar26/2023)