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How to destroy a country?

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The government did the worst thing possible by allowing the Rupee to free float without any limits. Sri Lanka just lost 30% of their wealth . Now wait for inflation to push the prices to record levels and GDP to reduce by 30% and Debt to be revalued .  This must surely be the worst depreciation in the history of Sri Lanka. A massive depreciation of 30% overnight increases the cost of imports so there will be an increase in cost-push inflation. A 

depreciation makes exports more competitive – without any effort. But given the low gdp contribution of exports, in the long-term, this does not increase exports as expected and could lead to declining productivity and rising prices. The price spikes have been seen across every key commodity already , where we consumers spend our money. This depreciation will make it more acute . Fixed income earners like pensioners will lose money to inflation as they’re holding these cash and bonds and they think that cash is safe.

Sri Lanka runs large deficits and this means the Central Bank will have to sell a lot of debt, also that means that the central bank will be forced to push interest rates up to make up that supply-demand gap, rates would rise a lot and shut things down, or they have to make up the gap do more printing of money. Sri Lanka will have to face a massive increase in fuel and gas prices. PB Jayasundara and his team have to take responsibility for depleting the foreign reserves by reducing taxes and allowing a free flow of imports. When history is written it will be said this government had the Worst incompetent economic team in the history of economic management . Central Bank, Basil Rajapakse, SR Attygalle, Gotabaya Rajapakse and PB Jayasundara will have to take responsibility and must be held accountable . At least now get a proper team or have an all party government to save Sri Lanka, this country does not belong to the Rajapakse family or to the SLPP. Sri Lankans now get ready for the worst, which is yet come. What is the opposition doing in all this? Like PB Jasaundara was quoted saying some time ago – only god can save Sri Lanka . This is very true, the 30% depreciation will make Sri Lanka “hell on earth” for the average Sri Lankan.  

Adolf 

Will China offer Russia financial help?

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If you believe China’s diplomats, relations with Russia are “rock solid” and the friendship between Xi Jinping and Vlad imir Putin has “no limits”. Western sanctions are about to put those warm words to the test. Russia needs an economic and financial lifeline. It would like to use China as a conduit through which to continue trading with the rest of the world. China, however, must strike a delicate balance between helping Mr Putin stand up to their joint rival, America, and retaining its own access to the global financial system. No doubt to Mr Putin’s regret, its financial aid to Russia is likely to be qualified at best.

Although China abstained in un votes condemning Russia for invading Ukraine, its rhetorical support has been more fulsome. On March 7th, as civilian casualties mounted, Wang Yi, the foreign minister, called Russia his country’s “most important strategic partner”. It is just a month since Mr Xi and Mr Putin heralded a new era for their countries. As well as preserving relations, China probably wants to undermine the legitimacy of sanctions as a tool of Western policy, given they have been used against it over Hong Kong and Xinjiang. Chinese firms may spot an opening in Russia as Western ones, such as McDonald’s and Shell, close their doors. Bloomberg news says that some are eyeing cheap energy assets.

Yet this embargo-busting brotherhood faces several problems. China’s technical abilities are no substitute for the West’s. cips, its payments network, has a small global footprint and low volumes and relies on sending messages through swift, a European body from which some Russian banks are now barred. Another difficulty is that Chinese multinationals with a legal presence in Western-allied countries may fall foul of the existing sanctions regime. China’s international banks are wary. Volvo (based in Sweden but owned by a Chinese firm) and TikTok (run from Singapore but Chinese-owned) have suspended some operations in Russia. Even Chinese firms without a legal presence in the West could be hit by “secondary sanctions”, which take aim at third countries that help the subject of primary ones. America has not yet used this weapon over Russia, but it might. Chinese banks that dealt with Iran and North Korea were penalised by America.

Given all this, China’s help to Russia is likely to be half-hearted. It may stick to its existing Russian trade arrangements, hoping that America will tolerate them. Chief among these is energy. China received 32% of all Russian crude exports in 2020 and 17% of its exports of liquefied natural gas. China may also conduct trade and financial transactions through smaller banks that do not have a legal presence in the West, using roubles and yuan rather than the dollar. It may also grant Russia’s central bank access to its yuan holdings. Last, China will probably try to limit the overall scale of trade volumes and payment flows so as to avoid provoking a direct confrontation with America.

Chinese officials must juggle several priorities. China wants to see Russia survive these sanctions, to teach America and allies that they are not a magic weapon, but is anxious to limit collateral damage to Chinese interests. In the process, it plans to learn from Russia’s mistakes. If it comes to blows with America, China wants its financial system to be shielded. Its aims will include improving its payments system and diversifying its $3.2trn of reserve holdings out of Western currencies and accounts by, for example, investing in commodities. It could get foreign firms and governments to issue more securities in China’s own capital markets, creating a new pool of assets for China to buy. Russia may hope for a Chinese bail-out; China’s priority will be to learn from a case study of failure. 

THE ECONOMIST

The price of a loaf of bread will be increased by 30 rupees

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The All Ceylon Bakery Owners’ Association states that the price of a 450 gram loaf of bread will be increased by 30 rupees with effect from midnight today (11).

Its chairman NK Jayawardena said prices of other bakery products would also increase by as much as 10 rupees.

India agrees to provide a loan of US $ 500 million to temporary solve the fuel crisis in SL

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India has reached a final agreement to provide a loan of US $ 500 million to resolve the dollar crisis facing Sri Lanka. It is reported that the loan has been approved by the Reserve Bank of India.

The value of this loan will be able to get fuel from India and accordingly will receive fuel from India from April.

This will provide a temporary solution to the massive fuel crisis currently facing Sri Lanka from April.

Sri Lanka needs more than US $ 300 million a month to meet its fuel demand and the monthly cost is likely to rise further as crude oil prices rise in the world market. Accordingly, the $ 500 million loan from India will not even be enough to meet the two-month fuel requirement.

Air ticket prices hike up by 27%

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The price of air tickets has been increased. It has been decided to increase those prices by 27%.

It is reported that this price revision will be effective from today.

Opposition MP tables private MP bill to ban Conversion Therapy!

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For the first time in Sri Lanka, a private MP bill has been tabled in Parliament to ban Conversion Therapy, an alternative psychiatric practice perceived among believers of pseudoscience to be ‘correcting’ a person’s sexual orientation or gender identity, following the dialogue raised on the harmful practice due to a controversial police seminar held in Kandy Police Auditorium last year.

The private MP bill has been tabled by Samagi Jana Balawegaya (SJB) MP Rohini Kaviratne demanding that this most unscientific and harmful practice against the LGBTIQ community in Sri Lanka be outlawed.

The bill, which seeks to protect the mental health rights of all, including the LGBTIQ community in Sri Lanka, also outlines legal action to be taken against individuals who malpractice psychology.

The social dialogue on Conversion Therapy came to light with a police seminar held last year at the Kandy Police Auditorium where a self-crowned psychological counsellor delivered very malicious and misleading facts about homosexuality. In a prompt response, the Sri Lanka College of Psychiatrists (SLCP) the highest government-led body on psychiatry issued a press statement debunking her claims.

Court proceedings are also being carried out against the person who conducted this seminar.

MP Kaviratne has been an active voice against conversion therapy and for the rights of the LGBTIQ community in Sri Lanka. Her private MP bill is due to be taken up in Parliament at 1 – 2 pm today (11).

Editor (LGBTIQ)

Basil speaks about the float of the rupee to the media for the first time

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Basil Rajapaksa, Minister of Finance has stated that despite international issues such as the covid epidemic, rising fuel prices and the Ukraine-Russia war, every effort is being made to provide relief to the people of the country.

Q. Minister, tell us when these reliefs will be given to the people?

“Relief is still being given. The 5000 rupee allowance is being provided already, we will continue that ”

Q: Fuel prices increase yesterday?

“IOC increased the prices. Others may increase so too.”

Q. But it’s very difficult for people. Is there any quick solution to this for you?

” We are making every effort to provide relief ”

Q. People are quite confident in you that you will provide them relief?

“With that belief, we will soon try to get all our ministers, the Prime Minister and the President to do it.”

Q. What do you do about the price of the dollar? What do you think about this float of the rupee?

“This is not something done by us. We tried our best to manage this. But it became so intense that it could not be stopped ”

Q: Will the dollar’s inflows increase soon?

“Yes, That is what some people say. The Opposition said so, so we should listen to it too ”

Q. Are you listening to the Opposition now?

“No, so a lot of economists commented on it.”

Q. How long will it take to solve this?

That’s the problem, the epidemic came, then the price of fuel went up, then came the Ukraine-Russia war. These are all external factors. None of these are happening in our country. We do not have much power internationally. But the local ones will definitely be resolved ”

Q: Isn’t it a problem to repay the debt in this dollar crisis?

“It is a problem. But it will be done somehow ”

Basil Rajapaksa said this while answering several questions raised by journalists in Gampaha today (11).

Shashi Weerawansa’s passport case verdict postponed

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The Colombo Magistrate’s Court today (11) announced that the verdict in the case filed against MP Wimal Weerawansa’s wife Ranasinghe Randunu Mudiyansela’s Sirsha Udayanthi alias Shashi Weerawansa for obtaining an illegal diplomatic passport by submitting false information will be announced on May 06.

The verdict in the case was due to be announced today.

Shashi Weerawansa’s ordinary passport stated that her date of birth was 1967, but the CID has filed a case against her for obtaining a diplomatic passport by submitting forged documents stating that her date of birth was 1971.

It was revealed at the trial that she had prepared two national identity cards and a fake birth certificate for both the birthdays and that the then Minister Wimal Weerawansa had telephoned the then Controller of Immigration and Emigration to press for the immediate issuance of this diplomatic passport.

The price of wheat flour increased

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Serendib has increased the price of wheat flour by Rs. 35 per kilogram with effect from today (11).

Meanwhile, Prima has increased the price to Rs. 40.

Accordingly, the prices of wheat flour based products will also increase in the future.

IOC fuel prices have also gone up since last night, with the price of a liter of petrol rising from Rs 204 to Rs 254 and the price of a liter of diesel from Rs 139 to Rs 214.

The Stalinisation of Russia

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When vladimir putin ordered the invasion of Ukraine, he dreamed of restoring the glory of the Russian empire. He has ended up restoring the terror of Josef Stalin. That is not only because he has unleashed the most violent act of unprovoked aggression in Europe since 1939, but also because, as a result, he is turning himself into a dictator at home—a 21st-century Stalin, resorting as never before to lies, violence and paranoia.

To understand the scale of Mr Putin’s lies, consider how the war was planned. Russia’s president thought Ukraine would rapidly collapse, so he did not prepare his people for the invasion or his soldiers for their mission—indeed, he assured the elites that it would not happen. After two terrible weeks on the battlefield, he is still denying that he is waging what may become Europe’s biggest war since 1945. To sustain this all-encompassing lie, he has shut down almost the entire independent media, threatened journalists with up to 15 years in jail if they do not parrot official falsehoods, and had anti-war protesters arrested in their thousands. By insisting that his military “operation” is de-Nazifying Ukraine, state television is re-Stalinising Russia.

To grasp Mr Putin’s appetite for violence, look at how the war is being fought. Having failed to win a quick victory, Russia is trying to sow panic by starving Ukrainian cities and pounding them blindly. On March 9th it hit a maternity hospital in Mariupol. If Mr Putin is committing war crimes against the fellow Slavs he eulogised in his writings, he is ready to inflict slaughter at home.

And to gauge Mr Putin’s paranoia, imagine how the war ends. Russia has more firepower than Ukraine. It is still making progress, especially in the south. It may yet capture the capital, Kyiv. And yet, even if the war drags on for months, it is hard to see Mr Putin as the victor.

Suppose that Russia manages to impose a new government. Ukrainians are now united against the invader. Mr Putin’s puppet could not rule without an occupation, but Russia does not have the money or the troops to garrison even half of Ukraine. American army doctrine says that to face down an insurgency—in this case, one backed by nato—occupiers need 20 to 25 soldiers per 1,000 people; Russia has a little over four.

If, as the Kremlin may have started to signal, Mr Putin will not impose a puppet government—because he cannot—then he will have to compromise with Ukraine in peace talks. Yet he will struggle to enforce any such agreement. After all, what will he do if post-war Ukraine resumes its Westward drift: invade?

The truth is sinking in that, by attacking Ukraine, Mr Putin has committed a catastrophic error. He has wrecked the reputation of Russia’s supposedly formidable armed forces, which have proved tactically inept against a smaller, worse-armed but motivated opponent. Russia has lost mountains of equipment and endured thousands of casualties, almost as many in two weeks as America has suffered in Iraq since it invaded in 2003.

Mr Putin has brought ruinous sanctions on his country. The central bank does not have access to the hard currency it needs to support the banking system and stabilise the rouble. Brands that stand for openness, including ikea and Coca-Cola, have closed their doors. Some goods are being rationed. Western exporters are withholding vital components, leading to factory stoppages. Sanctions on energy—for now, limited—threaten to crimp the foreign exchange Russia needs to pay for its imports.

And, as Stalin did, Mr Putin is destroying the bourgeoisie, the great motor of Russia’s modernisation. Instead of being sent to the gulag, they are fleeing to cities like Istanbul, in Turkey, and Yerevan, in Armenia. Those who choose to stay are being muzzled by restrictions on free speech and free association. They will be battered by high inflation and economic dislocation. In just two weeks, they have lost their country.

Stalin presided over a growing economy. However murderously, he drew on a real ideology. Even as he committed outrages, he consolidated the Soviet empire. After being attacked by Nazi Germany, he was saved by the unbelievable sacrifice of his country, which did more than any other to win the war.

Mr Putin has none of those advantages. Not only is he failing to win a war of choice while impoverishing his people: his regime lacks an ideological core. “Putinism”, such as it is, blends nationalism and orthodox religion for a television audience. Russia’s regions, stretched across 11 time zones, are already muttering about this being Moscow’s war.

As the scale of Mr Putin’s failure becomes clear, Russia will enter the most dangerous moment in this conflict. Factions in the regime will turn on each other in a spiral of blame. Mr Putin, fearful of a coup, will trust nobody and may have to fight for power. He may also try to change the course of the war by terrifying his Ukrainian foes and driving off their Western backers with chemical weapons, or even a nuclear strike.

As the world looks on, it should set out to limit the danger ahead. It must puncture Mr Putin’s lies by fostering the truth. Western tech firms are wrong to shut their operations in Russia, because they are handing the regime total control over the flow of information. Governments welcoming Ukrainian refugees should welcome Russian émigrés, too.

nato can help temper Mr Putin’s violence—in Ukraine, at least—by continuing to arm the government of Volodymyr Zelensky and supporting him if he decides that the time has come to enter serious negotiations. It can also increase pressure on Mr Putin by pushing ahead faster and deeper with energy sanctions, though at a cost to the world economy.

And the West can try to contain Mr Putin’s paranoia. nato should state that it will not shoot at Russian forces, so long as they do not attack first. It must not give Mr Putin a reason to draw Russia into a wider war by a declaring no-fly zone that would need enforcing militarily. However much the West would like a new regime in Moscow, it must state that it will not directly engineer one. Liberation is a task for the Russian people.

As Russia sinks, the contrast with the president next door is glaring. Mr Putin is isolated and morally dead; Mr Zelensky is a brave Everyman who has rallied his people and the world. He is Mr Putin’s antithesis—and perhaps his nemesis. Think what Russia might become once freed from its 21st-century Stalin. 

THE ECONOMIST