By: Staff Writer

Colombo (LNW):President Ranil Wickremesinghe revealed that Sri Lanka’s intention to join the Regional Comprehensive Economic Partnership (RCEP) is poised to materialize following the conclusion of credit optimization initiatives.

Additionally, the President announced plans to initiate negotiations for the establishment of free trade agreements with corresponding ASEAN member countries, the President’s Media Division (PMD) reported.

President Wickremesinghe’s statement underscores the country’s determination to bolster its economic connectivity within the broader Asian region.

The President affirmed his alignment with the future vision of ASEAN for the Indo-Pacific area, pledging full support for the advancement of this strategic perspective, it said.

President Ranil Wickremesinghe made these remarks while addressing the 56th anniversary of the Association of South East Asian Nations (ASEAN), Tuesday (08) at the Embassy of the Republic of Indonesia, Colombo, according to the PMD.

He acknowledged the efforts of former President J. R. Jayawardena, his father and other influential figures who advocated for opening up the economy and joining ASEAN during its founding years as well as the Shenoy reforms for liberalization of the economy and to ensure the welfare program stayed within the needs.

The President remarked that turning down the opportunity to join ASEAN led to a period of socialist economic policies and limited capital formations, hindering the country’s growth potential.

The President further explained the circumstance that converted a source of profound regret. He said subsequently, over a span of three years, Sri Lanka transitioned into a socialist economic model, leading to the fragmentation of the capital formations, and has continued to progress in this trajectory.

The President also expressed regret that Sri Lanka had declined an invitation to join ASEAN in its early years, citing missed opportunities for economic prosperity. However, he highlighted a new policy approach to collaborate closely with ASEAN to enhance Sri Lanka’s position in the global arena.

In light of Sri Lanka’s recent financial challenges and the need for rejuvenation, President Wickremesinghe expressed a renewed commitment to pursue closer ties with ASEAN.

Amid the looming threat of bankruptcy, Sri Lanka has embraced the challenge head-on, aiming to move forward with inspiration drawn from proactive problem-solving approaches.

This involves looking at the accomplishments of the ASEAN and enhancing collaboration with the organization.

This strategic approach is firmly rooted in the government’s policies. This approach, championed by the current administration, is expected to resonate with other governments as well.

Meanwhile, the Indonesian Ambassador, Dewi Gustina Tobing, highlighted the significance of the ASEAN viewing Sri Lanka as a vital partner for regional cooperation. With a collective population exceeding 670 million, roughly 8.8% of the global populace, ASEAN represents the world’s third-largest market.

The Ambassador emphasized the importance of fostering stronger ties between ASEAN and Sri Lanka. The aim is to promote people-to-people connections and create a closer link between the two regions, the PMD mentioned.

In a significant legal decision, the Supreme Court has rendered a verdict disqualifying a lawyer who was found guilty of violating the Notaries Ordinance through the act of forging a deed.

The ruling was pronounced by a panel of judges from the Supreme Court, including Chief Justice Jayantha Jayasuriya, Justice S. Thurairaja, and Mahinda Samayawardena.

This judgment follows a hearing initiated by the Supreme Court in response to a complaint lodged by the Central Province High Court registrar regarding the lawyer’s actions.

The charges brought against the lawyer pertained to the creation of a fraudulent deed on February 5, 1999, which was considered an offense under the Notaries Ordinance.

After thorough proceedings, the Supreme Court bench reached a conclusive decision. Due to the substantial evidence presented, which proved the accusations against the lawyer beyond a reasonable doubt, the Court ordered the removal of the accused lawyer’s name from the lawyers directory.

This verdict underscores the commitment of the judiciary to uphold the principles of legality and integrity within the legal profession, reaffirming the importance of ethical conduct in the legal system.

In a reassuring development for currency markets, the Sri Lankan Rupee has maintained its stability against the US Dollar at various commercial banks in Sri Lanka today, August 11th, as compared to the previous day.

At Peoples Bank, the exchange rates for the US Dollar remain consistent, with buying and selling rates holding steady at Rs. 311.42 and Rs. 326.74, respectively.

Commercial Bank reports a similar trend, with the buying rate for the US Dollar remaining unchanged at Rs. 309.78. The selling rate also remains steady at Rs. 325.

However, at Sampath Bank, slight fluctuations are noted. The buying rate for the US Dollar has increased from Rs. 314 to Rs. 315, while the selling rate has risen from Rs. 326 to Rs. 327.

These steady or marginally adjusted exchange rates suggest a degree of stability in the currency markets, providing a sense of confidence to traders and investors alike.

Dr. Lionel Bopage

Neo-liberalism

Neo-liberalism is not a solution, but the principal cause of the problem. I would like to offer some personal insights here from my working life with regard to the manner a non performing entity can be made more efficient and responsive, without resorting to the sort of tactics the neo-liberals are obsessed with. Neo-liberal tactics of austerity make the working people more oppressed at the expense of tackling key structural issues the country is faced with, which are at their heart political and economic. One of the best early examples in this regard was the top down approach used in 1970, after the dictatorial coup in Chile, which rammed home an austerity program without the consent of the people and the disastrous consequences its citizenry had to endure as a result.

This article describes the ideological frameworks underpinning the IMF’s approach to a country’s debt crisis. Its economic statements about fiscal responsibility and debt repayment pay little attention to the socio-economic and political causes that this debt crisis allows to emerge from time to time in a country like Sri Lanka or Ghana.

Neo-liberalism is not the solution!

When neo-liberal economy was introduced in 1977, successive leaders of Lanka told people that their future was going to be free, successful and marvelous. However, the future that materialized did not accord with what they predicted. Instead, we have a society where social and economic inequality and bad governance prevail and people’s freedoms are being taken away. This is the same situation in other countries where neo-liberal economics have been imposed on.

Neoliberalism focuses on economic regulation rather than economic planning. It promotes competition and protects market orientation against any controls. Neo-liberals encourage people to embrace entrepreneurship with the belief that at the micro level it creates wealth for the individual and at the macro level they need to accept socioeconomic inequalities deriving from such behaviors.

Instead of human rights, rule of law, civil liberties, freedom from prejudice and prosperity, what we have is a system that promotes authoritarianism, which gradually erodes our rights and freedoms over the years and justified in the name of a strident mono-cultural nationalism. The language and logic we hear are about democracies, but in reality, what we have are economic dictatorships; under the rhetorical guise of growth and productivity. Meanwhile the economic fruits have increasingly flown into the hands of the top echelons of society.

Skewed economy a trap

If this untenable and unfair economic system is not modified, the economic and political elite will continue to pay less tax for the riches they have acquired from the productivity gains made through labour and other inputs. The political elite who benefits from this inequitable system have no desire to make them pay their fair share of tax; instead, the regime offers them tax cuts on the erroneous premise that it is good for generating more employment opportunities and humane working conditions.

Instead, people are trapped in working long hours just to put food on the table for themselves and their families. They do not have much time for socializing or relaxation, having forced many of them to endure poor working conditions with no security. So, they do not have the luxury to quit the job looking for alternatives.

The prevailing system and its supporters have blunted our ability to choose what our prosperity will look like, or how to live our lives. We have lost the right to pursue our freedoms in our own ways without depriving or impeding the freedom of others. Enjoying that right is restricted to those who can afford to purchase that freedom to love, leave, leisure, and creation. This is not only unfair but is also irrational.

Running a business and governing a country

Governing a country is not like running a business entity or managing a home, though there are situations where similar strategies can be used. Financially insolvent situations can be considered as one. Let me start with my own business experience so as to reinforce the point of a collaborative approach to addressing the crisis. In 1987 I took over several business units of the largest non-governmental organisation in Sri Lanka, that were running at a loss, with the responsibility of transforming those into viable, profitable units. I was able to show results within a year, but also expanded those units and the workforce, and paid them better wages. This transformation was achieved during an extremely tough socio-economic and political environment in Sri Lanka.

This was not a unique situation as many face similar daunting tasks of turning around failing business entities under the influence of many factors both internal and external, such as project or market failure, diminishing sales and market share, shrinking profit margins, lack of timely and correct information, a disheartened workforce, lack of financial control, and inept management. I believe that most of the time, such business failures are self-perpetrated.

Dealing with an insolvent situation

If a business is not solvent, its senior personnel in collaboration with their staff need to come up with a plan on how to improve their economic survival. The best way to do this, would be to openly discuss what has gone wrong so far and what everyone, including the leaders could suggest making the economic prospects better.

Leadership needs to seriously consider and analyse the existing circumstances, decide on certain lines of action that are fair by the owners, managers, and employees, both consultatively and inclusively. They may seek advice of professionals with demonstrated business experience. Then those decisions need to be implemented proactively with contingency plans in hand in case of failure.

This is tough, though not an impossible task. Otherwise, the alternative is to resort to immoral and illegal ways through political patronage, corruption and black money etc. By doing the right thing, many businesses bounce back, even performing better and stronger. For the success is dependent on the leadership of the organisation; whether they take advice on board, evaluate the advice, and make tough but necessary decisions. Thus, they successfully implement the turnaround plan, without creating bitter and hostile environments.

Addressing an insolvency

According to my experience, businesses can continue to focus on producing and selling what they have been selling well already. At the same time, they need to develop new products/services to compete and survive in the market place. Here the focus should be on what customers need and if what the entity provides can satisfy their needs.

To regain trust, existing products/services may need to be improved, or new products/services, less expensive and of better quality can be provided in the market place. Branding may also need to change and new marketing strategies followed. Pricing needs to be competitive, but needs to generate reasonable profits to ensure the financial viability of the entity.

Additionally, human resources need be allocated to appropriate positions, so that skills of each employee and their contributions are better utilised. The business should have an adequate cash-flow to settle its bills in a timely manner, including the payments on monies borrowed. The business must manage its finances well. Also, the business should be accountable and transparent, and its transactions should be traceable. Bad financial reporting practices can lead to bankruptcy and closure of the business. Such practices should be stopped immediately. Hence, maintaining better financial reporting becomes crucial.

The next part of this article will point out that the economic panacea in the form of austerity is not only unfair but also has a detrimental effect on the unity of state as it does not address the underlying structural causes of the crisis.

To be continued

Link to part 1 : https://lankanewsweb.net/archives/39435/debt-restructuring-austerity-and-the-imf-a-panacea-or-an-exacerbation-part-1/

In a significant breakthrough, the Police Central Anti-Corruption Task Force located in Walana, Panadura, has identified a suspect involved in a sprawling vehicle fraud scheme. The suspect, who was employed in the record room of the Motor Traffic Department (MTD), is alleged to have amassed illegal profits in the millions of rupees by manipulating vehicle data within the department’s computer system.

The investigation revealed a sophisticated operation, with approximately 250 phone calls exchanged between the main suspect and an officer within the Motor Traffic Department. The suspect’s web of deceit extended to even the registration of a high-value jeep worth around Rs. 20 million, which was found to be fraudulently registered. Police have seized the vehicle as evidence.

The apprehended individual is believed to be the mastermind behind an organized criminal gang engaged in a large-scale racket involving document forgery for assembled vehicles. Authorities suspect that as many as 400 assembled vehicles may have been illicitly registered within the Motor Traffic Department.

A search of the suspect’s residence resulted in the discovery of a trove of incriminating evidence, including letterheads, rubber stamps, forged documents related to the Motor Traffic Department, counterfeit registration certificates from both public and private institutions, revenue licenses, falsified documents certifying the sale of condemned vehicles, and a plethora of other fraudulent materials. Notably, various blank forms and forged rubber seals from insurance companies and motor vehicle inspectors were also seized.

This recent revelation has prompted police to widen their investigation to determine whether additional personnel within the Motor Traffic Department are implicated in this far-reaching scheme. The Central Anti-Corruption Task Force in Walana, Panadura, remains at the helm of the ongoing investigation, determined to uncover the extent of this complex vehicle fraud operation.

Sri Lanka Railways has announced a temporary suspension of train operations along the Kandy-Matale railway line from August 18th to August 21st. The suspension is attributed to essential maintenance work that will be conducted on the railway track between Kandy and Katugastota.

During this period, train services connecting Matale and Kandy will be halted from midnight on August 18th until 4:00 a.m. on August 21st. This maintenance initiative aims to ensure the continued safety and efficiency of the railway infrastructure, contributing to the overall reliability of train services in the region.

1. SJB leader Sajith Premadasa asks for whose benefit the Govt was trying to implement the 13th Amendment: also says the Opposition is ready to consider the proposals made by the President re. the implementation of the 13th Amendment and extend its support only after a through scrutiny of the merits of those suggestions.
2. Committee on Public Finance says the Govt is to raise the gross borrowing limit and the expenditure limit for 2023 by Rs.9,000 bn to “facilitate the technical and accounting processes under the Domestic Debt Optimisation under the EFF of the IMF”: analysts puzzled as to why the debt ceiling is increased if the aim of the Debt Re-structuring exercise is to reduce the overall debt.
3. Fort Magistrate and Maligakanda Magistrate issue separate orders preventing IUSF activists from entering or marching in protest inconveniencing public or pedestrians at the Presidential Secretariat, President’s House, PM’s office, Galle Face area, Deans Road, Kularatna Mw, T B Jayah Mw, Technical Junction, etc: Police use water cannons to disperse protestors at Kirulapone, Viharamahadevi Park and Town Hall, and arrest 22 protestors.
4. Nine Iranian sailors imprisoned in SL released following consultations between the Iranian FM Hossein Amir-Abdollahian and SL FM Ali Sabry in Tehran.
5. Deputy Speaker says the Supreme Court has determined that certain clauses of the Ayurveda Amendment Bill are inconsistent with the Constitution & the Bill should be passed with a special majority & a referendum.
6. Sports Minister Roshan Ranasinghe suspends the registration of Sri Lanka Automobile Association: 7-member committee appointed to overlook its functions.
7. Ceylon Beverage Can Ltd, promoted by Cricket legend Muttiah Muralitharan to set up a full-fledged “aluminium cans and beverages filling plant” in Karnataka, India: the company had requested 26 acres of land with an investment of Rs.440 crore, and is expected to generate 500 jobs.
8. SJB leader Sajith Premadasa says the poor & elderly helplessly fall to their death in queues to get their membership of the “Aswesuma” welfare scheme that had gone awry, because the Govt has overlooked obtaining the services of the 5 main public sector officials in each Grama Niladhari Division.
9. As per Minister Nimal Siripala de Silva, the total damages caused to Galle Face, Colombo by the “Aragalaya” protests last year have been estimated at Rs.5.9 mn.
10. Ayomal Akalanka wins the Silver medal in the 400 metres Hurdles & Nilupul Pehesara wins the Bronze medal in the Men’s High Jump with a performance of 2.00 metres, at the Commonwealth Youth Games, Trinbago 2023.

Speaking at the 36th Annual Conference of the Organization of Professional Associations (OPA) in Colombo’s Kingsbury Hotel, President Ranil Wickremesinghe emphasized the critical importance of capital, both financial and human, as the driving force behind economic growth. He underscored the historical challenges faced by Sri Lanka in capital formation and stressed the need for reorganizing and restructuring the financial system to revitalize the nation’s economic prospects.

President Wickremesinghe acknowledged that Sri Lanka had accumulated capital up to 2019, but subsequent events such as the COVID-19 pandemic and economic downturn had eroded its financial strength. He drew parallels with other nations that had experienced significant growth due to capital influx and urged the country to focus on similar strategies.

Addressing the attendees, President Wickremesinghe commended the collective efforts of the nation in overcoming challenging circumstances, comparing the present to the previous year and expressing optimism for the future. He highlighted the importance of constructive solutions over political distractions and cautioned against the negative impact of agitation without viable remedies. He emphasized the need for consistent leadership to address pressing issues and praised those who stepped up to contribute to the country’s stability.

Turning to economic challenges, the President discussed the need for domestic debt optimization and the potential risks of failure. He warned of the severe consequences such failure could have on the banking sector and the economy as a whole.

President Wickremesinghe also addressed the issue of human capital, emphasizing the significance of education and training. He expressed concern over the departure of skilled professionals from the country and stressed the urgent need for vocational training centers and universities to bridge the skills gap and meet the demands of a competitive economy. He outlined plans to collaborate with the private sector to establish a robust framework for education and training.

Highlighting the importance of attracting foreign investment, President Wickremesinghe emphasized the need for a competitive economy. He underscored the role of foreign investments and the Colombo financial zone in securing necessary funds. He called for streamlined investment procedures and a more appealing investment environment to compete with neighboring countries.

The President also discussed proposed legislative changes, including devolution of powers to Provincial Councils and streamlined procedures for new universities. He highlighted plans to establish institutions to cater to evolving demands and stressed the importance of human resource development, especially in universities.

In conclusion, President Wickremesinghe emphasized the strategic management of financial and human capital as the key to Sri Lanka’s future success, highlighting their pivotal role in fostering a thriving and competitive economy for the nation’s development.