News

The Central Bank of Sri Lanka’s (CBSL’s) lending to the Government of Sri Lanka (GoSL), commonly known as money printing (MP), increased by 36.61 per cent (Rs 32,014 million) to Rs 119,463.60 million since Mahinda Rajapaksa assumed duties as the country’s new Prime Minister and Finance Minister, after markets closed last Friday (26), data showed.

In contrast, a year ago on Thursday, 2 November, 2017, MP was a mere Rs 33,822.04 million; a year-on-year (YoY) increase of 253.21 per cent (Rs 85,641.56 million) since.

In related developments, in the week ended Friday (2 November), week on week, GoSL’s MP borrowing costs (BCs) increased by 24.35 per cent (Rs 550.26 million) to Rs 2,809.66 million. However, a year ago, GoSL’s MPBCs were a mere Rs 805.87 million, a YoY increase of 248.65 per cent (Rs 2,003.79 million).

MP is CBSL’s holding of Treasury (T) Bills. CBSL prints money and lends to GoSL in the absence of adequate revenue.  But MP may cause inflationary pressure while increasing GoSL’s debt.

(Ceylon Today)

The Secretary-General of the United Nations António Guterres had a telephone conversation with President Maithripala Sirisena on Thursday and had informed him to allow the Parliament to vote as soon as possible. 

"The Secretary-General urged the President Sirisena to revert to Parliamentary procedures and allow the Parliament to vote as soon as possible. He encouraged the Government to uphold its earlier commitments to human rights, justice and reconciliation, in line with Human Rights Council resolutions."

Guterres had informed the President that he was following the latest developments in Sri Lanka with concern and offered assistance in facilitating a dialogue with all the parties to resolve the situation. He emphasized the Government’s responsibility to ensure peace, security and respect for the rule of law.

The International Monetary Fund (IMF) is monitoring the present economic and political situation in the country, the IMF said in statement. 
The IMF said that they are monitoring the recent political developments while constantly being in contact with their technical counterparts and added that it is premature to assess the implications of programmes supported by the IMF. 

Sri Lanka is yet to receive the sixth tranche of about SDR 177.77 or USD 250 million of the loan facility.

With the disbursement of the sixth tranche, total disbursements under the EFF arrangement will be equivalent to SDR 893 million (approximately USD 1,264 million).

Sri Lanka is also facing a risk of the US government suspending the Millennium Challenge Corporation’s (MCC) five year assistance package worth USD 480 million.

An agreement was signed recently between Sri Lanka and the MCC recently to provide an additional LKR 413 million (USD 2.6 million) grant to finalise compact development.  

This amount supplements the LKR 1.2 billion (USD 7.4 million) grant that MCC provided last July.

The EU delegation in Sri Lanka, in a statement, urged Sri Lankan parties to follow the due institutional process and respect freedom of media.

The EU expects Sri Lanka to pursue its positive path towards reconciliation and democracy for the full benefit of the Sri Lankan people
Meanwhile, the US State Department has said it expects the teh Sri Lankan Government to uphold its Geneva commitments to human rights, reform, accountability, justice, and reconciliation.

UK and Canada continued its push for Sri Lanka’s Parliament to be convened immediately to resolve the political crisis in the country.

The British Foreign and Commonwealth office said that it was concerned by ongoing political developments in Sri Lanka and was following the political developments closely.

The Canadian Foreign Ministry said that Canada remains deeply concerned by the political situation in Sri Lanka.

Canada also called upon the Government to ensure the safety and security of journalists, activists and human rights defenders, who play a vital role in defending democracy.

The European Union will consider stripping Sri Lanka of its duty-free access if it backs off commitments on rights, the EU ambassador said, amid worries stoked by the president's replacing of the elected premier by a wartime nationalist.

The European Union is worried the return of Mahinda Rajapaksa, as prime minister, could derail halting progress made towards national reconciliation following a war with ethnic  minority Tamil separatists that killed tens of thousands, many during the final stages under his watch as president.

"The government got GSP on the basis of certain commitments, if these commitments are not met, then we would consider withdrawal," EU ambassador to Sri Lanka, Tung-Lai Margue, told Reuters on Thursday.

Margue was referring to Generalised System of Preferences Plus status, under which Sri Lanka’s top exports of garments and fish get lucrative concessions in the world's largest single market.

Margue was among a group of diplomats who met President Maithripala Sirisena this week for a briefing on the crisis sparked by his sacking of the prime minister.

The EU provides the trade concessions to developing countries, while it also monitors certain conditions including human rights.

Sri Lanka promised the EU in 2016 it would work toward reconciliation with Tamils, who mostly live in the north and east of the predominantly Buddhist nation, through greater political and economic autonomy.

Sri Lanka also pledged to provide justice and reparations to victims of human rights violations committed during the 26-year civil war, many of which were blamed on Rajapaksa and his brother, Gotabaya Rajapaksa, who was his defence secretary.

Both say the military only targeted insurgents, not civilians.

Margue said some progress had been made towards human rights by the administration of sacked prime minister Ranil Wickremesinghe, such as the establishment of a missing persons' office to trace the thousands of Tamils and minority Muslims who disappeared during the war.

But more needed to be done and there were questions about whether a government led by Rajapaksa would pursue justice for victims as vigorously.

"I don't know what his policy on reconciliation would be like. I have fears it won't be the one we agreed on," Margue said.

Rajapaksa was not available for comment, but his son Namal Rajapaksa, who is a member of parliament, defended the family's record and cautioned against pre-judging policies of the administration.

"Reconciliation has, and always will be, a focal area for us. If there is concern that GSP will need to be withdrawn, these concerns are unfounded and presupposed in error," he said.

Soon after he was appointed prime minister on Oct. 26 Rajapaksa also struck a conciliatory note, saying he would "eschew the politics of hate", protect human rights and the independence of the judiciary and establish law and order".

STRONGEST WARNING

Sirisena suspended parliament last week, after he sacked Wickremesinghe. Wickremesinghe has denounced his removal as illegal.

Both the United States and the EU have called for parliament to be convened at the earliest to let lawmakers decide who should be prime minister of the country of 21 million people.

On Friday, the speaker of parliament said Sirisena had agreed to summon a session on Wednesday next week.

The EU warning on trade is the strongest yet from Western powers which, along with India, the island's nearest neighbour, have urged Sirisena to abide by the constitution.

On the other hand, China, which invested billions of dollars during Rajapaksa's presidency, has called for non-interference and said Sri Lanka could tackle its own problems.

Diplomats said trade was key to Sri Lanka's US$87 billion economy and the EU is its biggest export market, accounting for nearly a third of exports in 2017.

Sri Lanka regained the GSP plus preferential treatment in 2017. Its exports to the EU have since jumped 18 percent, and the financial year was not yet over, Margue said.

Fish exports had jumped 100 percent, he said.

China, in contrast, has faced criticism for its big projects that have left Sri Lanka so much in debt it had to hand over control of a port to China.

"It's better to do trade than have friends, friends who give loans," said a Western diplomat referring to China's lending.

Sri Lanka's garment industry is its second-biggest hard currency earner, after remittances, worth about US$5 billion a year, with goods

supplied to top brands including Victoria’s Secret, Tommy Hilfiger, Nike and Marks & Spencer.

(Reuters)

In a compound secured by the Sri Lankan elite special task force that protects the island nation’s top leaders, beneath framed photos of himself in army uniform, the brother of the country’s newly installed prime minister Mahinda Rajapaksa is mulling a presidential run.

“I’m not interested in actually becoming a minister,” Gotabhaya Rajapaksa, who was appointed by his brother to be Sri Lanka’s defense secretary in 2005 just before the climax of a brutal 26-year civil war, said in an interview. “But a lot of people want me to contest for the presidency.”

Gotabaya Rajapaksa.Photographer: Tharaka Basnayaka/Bloomberg

In a country where it is common to appoint family members to run key ministries, the comments aren’t much of a surprise. But they suggest the Rajapaksa clan is preparing to once again dominate politics in a nation it controlled from 2005 and 2015, when the family lost power in an election shock.

Now they are back, nearly as unexpectedly as they fell. In a surprise move last Friday, President Maithripala Sirisena fired his former ally Ranil Wickremesinghe as prime minister and appointed the mustachioed former president as his replacement.

Read more: Holed Up in Colombo Mansion, Ousted Prime Minister Vows to Fight

The move stunned everyone from officials at international ratings agencies -- who fear the chaos threatens debt repayments -- to activists who worry the return of Sri Lanka’s strongman could erode improvements in civil liberties. There’s also renewed concerns the island nation will once again tilt toward China, which holds much of the enormous debt racked up during Rajapaksa’s previous rule, even if Colombo is not as enthusiastic as before.

“Rajapaksa learned hard lessons from his last experience dealing with China on Belt and Road investments,” said Andrew Small, a senior fellow with the German Marshall Fund’s Asia program. “Although Beijing will be happy to see his return -- and was expecting it in the next round of elections anyway -- it is unlikely that the dynamic will be the same as the last time he was in power.”

Strong SupportRajapaksa could cement his return to power later this month when Sirisena reconvenes parliament, even as Wickremesinghe contests his removal as “blatantly illegal”. He’s already taken on additional duties as finance minister, and late Thursday issued a slew of populist economic measures. He cut fuel prices, slashed taxes on agricultural commodities, implemented a guaranteed price scheme for certain crops and pledged to waive interest on farmers’ loans. Rajapaksa also exempted remittances -- a key source of foreign exchange -- from income tax and cut levies on telecommunications services.

Across Colombo, freshly plastered-up posters show a smiling Rajapaksa, who had triumphed against Wickremesinghe’s administration in local elections earlier this year. Despite the controversial way in which he reclaimed power, the leader still enjoys strong domestic support for his role in ending the war, particularly among Sri Lanka’s Sinhala majority.

Motorcyclists ride past a poster of Mahinda Rajapaksa in Colombo. Photographer: Lakruwan Wanniarachchi/AFP via Getty Images

Unlike Wickremesinghe, who wears western suits and seems more comfortable in Colombo’s halls of power and foreign capitals, Rajapaksa is from the country’s rural, southern Hambantota district. He dresses in traditional Sri Lankan robes, speaks in a folksy stream-of-consciousness manner and is very superstitious, wearing rings and bracelets he believes ward off misfortune. 

As his government launched a final assault on the Tamil Tigers in 2009, his administration was condemned by human rights groups for extrajudicial killings, forced disappearances and detaining journalists and activists

There are fears that “a Rajapaksa administration will continue human rights violations in the guise of nationalism and security,” says Meenakshi Ganguly, South Asia director at Human Rights Watch.

First FamilyAt his residence on the outskirts of the capital Colombo, Gotabhaya Rajapaksa told Bloomberg many international observers don’t fully appreciate Sri Lanka’s conflict had turned Colombo and other parts of the country into a war zone, with daily car bombs and suicide attacks. Their Tamil Tiger opponents, he said, had full control over large tracts of territory and had similar weaponry to the armed forces.

“Whether it is in Sri Lanka or another country, war is not a good thing,” he said. “It’s an ugly thing. But we didn’t create the war. Mahinda Rajapaksa didn’t create the war. We ended the war.”

Read more: Inside China’s $1 Billion Port Where Ships Don’t Want to Stop

Rajapaksa’s brother denied the new government would once again lean on China to provide loans.

“We did not favor any particular country,” he said. “We want to work with anybody who wants to work with Sri Lanka, whether it’s west or east or whatever. And also we want to work with international organizations, but they have to be fair.”

‘Financial Crisis’Wickremesinghe, meanwhile, continues to fight.

He told Bloomberg he has the numbers to triumph over his rival in a vote when the suspended parliament reconvenes.

He said Rajapaksa’s administration racked up debts it couldn’t repay, and the unity government of Sirisena and Wickremesinghe had to "take the burden." Now, he added, the political crisis threatens Sri Lanka’s looming debt payments.

“Without legitimacy, how can you deal with debt?” Wickremesinghe asked. “A constitutional crisis is enough to create a financial crisis.”

‘Political Turbulence’At an intersection on the outskirts of Colombo, a billboard of the entire Rajapaksa family looms down. Mahinda and Gotabhaya are there, as is the other brother and former lawmaker Basil, and son Namal, a current lawmaker.

The sign sends “good wishes to the new prime minister,” but has an ominous message for the old one. “Keep your self respect and leave,” it warns. “Otherwise we know how to get rid of you. This battle is not over. We are alert!”

Some western diplomats are not yet engaging with any of the government’s newly-appointed cabinet ministers while Rajapaksa’s appointment is still being contested.

Namal Rajapaksa Photographer: Tharaka Basnayaka/Bloomberg

Still, Namal Rajapaksa insisted Sri Lanka would continue to pay its debts, and that his father’s Chinese-funded infrastructure projects had brought value to the country. He said their move to oust Wickremesinghe was constitutionally valid.

“It hasn’t brought instability into the country, it’s just political turbulence,” Rajapaksa said. “Our main objective in this entire process is to make sure that economic, political and social stability is brought back to the country.”

At a cafe near his father’s residence, a family presses in to get a selfie with the son of the new prime minister. Sharon Fernandes, 22, said her family are supporters of the Rajapaksa clan.

“A lot of people respect them because they actually stopped the war,” she said. “The current government hasn’t really done much -- they promised a lot, but haven’t really done anything.”

(Bloomberg)

Sri Lanka’s trade deficit widened further as the growth in import expenditure outpaced the rise in earnings from exports, although earnings from services exports, including tourism, and workers’ remittances helped cushion the external current account deficit to some extent, Central Bank claimed.  

Amidst the widened trade and current account deficits, which were partly due to the increased expenditure on fuel imports and imports of motor vehicles and gold, the balance of payments (BOP) also experienced pressure from the emerging market selloff caused by tightening global financial conditions and the strengthening of the US dollar.

These developments resulted in a sharp depreciation of the Sri Lankan rupee, and the Central Bank intervened in the market at times to prevent disorderly adjustment of the exchange rate while allowing demand and supply conditions to determine its direction, Central Bank announced.

In the meantime, a senior official of the bank noted that the performance was mixed on the fiscal front, with the overall budget balance and the primary balance improving during the first eight months of the year, while the current account balance deteriorated marginally.

Nevertheless, the lower than expected revenue collection is likely to challenge the achievement of the targeted budget deficit for 2018, despite the slowdown observed in expenditure, he added.

A recording of a telephone conversation between Parliamentarian S.B. Dissanayake and State Minister Palitha Range Bandara, urging the latter to defect before the parliament session and join the Maithri-Mahinda government was released to media.

This was disclosed during a special press conference held at the Temple Trees today (03).

State Minister Range Bandara revealed a number of phone recordings which clearly showed how the illegal government, that was formed by the Maithri-Mahinda faction, was trying to lure Parliamentarians with promises of Cabinet portfolios and large monetary incentives of as much as LKR 500 million.

Range Bandara played a recording of a conversation between him and a person by the name of Nalin who happened to be a coordinator of S.B. Dissanayake.

A number of telephone conversations between the State Minister and a person known as Dinusha, who claimed to be a representative of Yoshitha Rajapaksa (the son of Mahinda Rajapaksa), was also played during the press conference.
 
On another occasion, Dinusha, the representative of Yoshitha Rajapaksa, had informed Range Bandara that he could provide a staggering LKR 500 million (USD 2.8 million) through Professor Ranjith Banadara if he were to crossover.

Furthermore, S.B. Dissanayake had called State Minister Bandara numerous times asking him to join the new government.

It is evident that the new government is trying to get Parliamentarians to crossover by offering huge bribes of up to millions of US dollars.
Furthermore, the State Minister intimated that he owns a few more phone recordings of VVIPs that had called him.

The Minister added that even though his life was now in grave danger due to the disclosure of these recordings, he had an obligation to come forward and tell the truth the country.

He said that all the MPs that did crossover during the past few days as well as the ones who are planning to crossover in the future are all doing it for the love of money and ministerial portfolios and not for the love of the country.

UNP Leader Ranil Wickremesinghe wife, Prof. Maithree Wickramasinghe, has intervened last night to cancel a dinner organized for the UNP Parliamentary group at Temple Trees by insisting that all MPs eat the same 'Buth packets’ distributed to 5,000-odd supporters gathered at the Temple Trees premises.

A UNP Parliamentarian had sponsored the dinner in support of all MPs gathered at the official residence of the Prime Minister in support of Ranil Wickremesinghe. 

Prof. Wickramasinghe had intervened to cancel the dinner stating no Parliamentarian should get better meals than the ordinary supporters protecting the party leader. 

Asian Mirror learns that Prof. Wickremasinghe walked into a meeting of a UNP MP group to ensure the cancellation of the dinner. 

It is also learnt that the  UNP MPs had commended Prof. Wickramasinghe's effort and complied with her request. She was also seen at the forefront of the protest organized by the UNP supporters, earlier this week, outside Temple Trees. 

Source : Asian Mirror

The Party Leaders’ meeting of the constituent parties of the Tamil National Alliance (TNA) took place yesterday (02). THe TNA and its constituent parties have agreed to vote in support of the No Confidence Motion to be brought against the Government headed by Mahinda Rajapaksa, who has been unconstitutionally and illegally appointed as Prime Minister.

The TNA in a press release stated that according to the Constitution, the President does not possess the authority to remove a Prime Minister who is in office. They pointed out that such authority that was vested in the President previously was specifically repealed by the 19th Amendment to the Constitution. 

"In these circumstances the Gazette notification declaring that the Prime Minister had been removed and another Prime Minister appointed are unconstitutional and illegal", the TNA said.

They reiterated that remaining “neutral” in such a situation, would "pave the way for achieving an undemocratic end by force."

They further said that the TNA considers the President’s decision to prorogue Parliament made following the above actions as undemocratic and in violation of Parliamentary Supremacy. 

The TNA in the statement also condemned S. Viyalendran's crossover and said that the party will take immediate action.

"After having declared as Prime Minister a Member who does not command the confidence of Parliament, this had been done in order to create delay and prevent such Member from having to prove a majority in Parliament. The Tamil National Alliance strongly condemns and opposes the undemocratic efforts to use such delay to bribe Members of Parliament with both money and Ministerial posts to induce them to cross over in order to fraudulently obtain a majority in Parliament. We strongly oppose and condemn Tamil National Alliance Member of Parliament S. Viyalendran being a part of this conspiracy. Necessary action will be taken against him immediately."

Due to the recent political conspiracy by President Sirisena and Former President Rajapaksa the government is said to be at the risk of losing the funds for the Light Railway System project amounting to USD 1.4 from Japan. 

Minister of Megapolis and Western Development, Patali Champika Ranawaka was informed of this when he visited the Ministry today (02). 

According to sources, the Japanese government providing funds had decided to halt the funds due to the political instability in the country at the moment. However, the Minister had instructed all officials to continue with the development work unhindered. 

The Minister had also said the conspiracy government does not have the required numbers and it was proven at the party leader meeting today. The Minister also declared all decisions being made by the new government are illegal and adding that once issues are normalized the necessary action will be taken against them.

The date was finalised for the presentation of Budget 2019 when President Sirisena suddenly decided to remove Prime Minister Ranil Wickremesinghe and appoint Mahinda Rajapaksa to the post.

Deputy Secretary to the Treasury (the Ministry of Finance), S.R. Attygalle was tasked with the responsibility of heading Finance Minister Mangala Samaraweera’s budget for the year 2019. When the constitutional coup and the resulting political crisis took place, it is reported that the budget was already finalised.

After Mahinda Rajapaksa assumed office as Prime Minister, Artygalle’s support was extended to the new premier and as a result, he was appointed as the new Secretary to the Ministry of Finance.

The secret behind Artygalle’s sudden appointment has been revealed according to sources from the Ministry of Finance.

Although top officials of the Ministry of Finance had warned Samaraweera of Artygalle’s allegiance to Mahinda Rajapaksa, he had dismissed those claims as Artygalle had managed to gain the trust of the Finance Minister.

However, internal sources say that Attygalle had deceived Mangala Samaraweera and had convinced the Minister that he is not a pro-Rajapaksa official.

Samaraweera only realised who the real Artygalle was only after his appointment as the Secretary to the Treasury by Mahinda Rajapaksa.

It was revealed that Artygalle had given the same budget proposals that were prepared by Mangala Samaraweera to Mahinda Rajapaksa.

Reliable sources from the Treasury stated that when Mahinda Rajapaksa had first seen Samaraweera’s budget, Rajapaksa had shaken his head and stated that he was fortunate to assume office now as it would have been impossible to win the 2020 elections if Samaraweera’s budget was presented to Parliament on the 05th of November.

Rajapaksa is hoping to present a vote of account instead and had stated to Al Jazeera that it was also a reason postpone the convening of Parliament.

It is reported that Rajapaksa is trying to present Samaraweera’s budget through this vote of account.

Sources close to Prime Minister Wickremesinghe said that he appreciated the exchange of views with the former Secretary to the Ministry of Defence, Gotabaya Rajapaksa. 

It was revealed that both Wickremesinghe and Rajapaksa have agreed on the need to avoid violence in the country when Gotabaya visited Temple Trees yesterday.

Wickremesinghe had stressed that the only way to resolve this matter is through parliament and called for it to be convened immediately.

He further said that he commands the support of the people to safeguard parliamentary democracy and is prepared  to go beyond parliament, if necessary, to prove it.