The Government is grappling to save the country’s economy from a possible US$10 billion contraction amidst an impending recessionary period, according to econometric models and provisional data of the Finance Ministry.

Due to rising inflation and lower growth, the Sri Lankan economy is approaching stagflation. Growth expectations for the country have nosedived after the sovereign default with the economy projected to decline by -7.8 per cent in 2022 and -3.7 per cent in 2023.

The International Monetary Fund (IMF) this week forecasted a lower contraction of the Sri Lankan economy than the World Bank.

In its World Economic Outlook (WEO) released this week IMF estimated Lankan economy to contract by 8.7% this year and by 3% next year. However, the World Bank in its forecast released last week estimated a contraction of 9.2% this year and 4.2% in 2023.

The rising prices have compelled the Central Bank to increase the interest rates to face the country’s impending recession with 85 per cent probability, official sources revealed.

The World Bank estimated that over 500,000 people in Sri Lanka had fallen below the poverty line. The country was experiencing food, medicine and fuel shortages as well as daily blackouts and an economy in freefall, a senior Finance Ministry official divulged.

The Government’s move to increase taxes would intensify the rate of economic shrinking and places the whole economic system and other connected financial institutions including banks at a great risk, Head of the Department of Business Studies at the University of Sri Jayewardenepura Prof. Janak Kumarasinghe warned.

The shock caused by the increasing of interest rates up to over 25 per cent and taxes would exert an impact on business enterprises big or small as well as MSMES depriving them of obtaining loans from banks and financial institutions to tackle their liquidity issues, he pointed out.

While a fiscal stimulus package is not possible at present, the government has to meet the needs of the most vulnerable groups in providing emergency subsidies, as rising inflation and job losses have led to lower standards of living, State Minister of Finance Ranjith Siyambalapitiya disclosed.

Due to financial constraints, Sri Lanka will have to look for further bilateral and multilateral aid in securing funding for short-term, targeted “in-kind” transfers such as food stamps for the poorest of the poor.

It is also important to look at bridge financing arrangements to import essential commodities like fuel so that supply shortages reduce. This should help in keeping productivity intact and inflationary pressure in check, he added.

As of August 31, 2022, the total income of the country was recorded as Rs. 1.23 trillion, while the total expenditure of the country was Rs. 3.54 trillion, the minister said, adding that government revenue this year should reach Rs.2.47 trillion.

He also stressed that the relevant austerity procedures should not cause any additional pressure on the low-income families of the country.

According to the draft Appropriation Bill, the estimated total expenditure is Rs.7.92 trillion in the budget 2023 to be presented in Parliament under the theme of ‘making a transformative change via minimum inputs’ in line with the 2023-2025 medium-term fiscal policy framework

The water supply will be cut off for 12 hours in a number of places in Colombo, announced the National Water Supply and Drainage Board (NWSDB).

Accordingly, the water supply will be cut in Colombo 02 – 10 areas for 12 hours starting from 10 pm tonight (15).

The move is due to a repair at the General Colombo Water and Wastewater Management System, according to the NWSDB.

MIAP

The low-level atmospheric disturbance still persists in the vicinity of the island and therefore, the cloudy sky is expected in most parts of the island, the Department of Meteorology said in a statement

Showers or thundershowers will occur at times in Western, Sabaragamuwa, Central and North-Western provinces and in Galle and Matara districts.

Heavy showers above 100 mm can be expected at some places in Western, Sabaragamuwa, and Centralprovinces and in Galle and Matara districts.

Showers or thundershowers will occur elsewhere over the Island during the afternoon or night. Fairly heavy showers above 75 mm can be expected at some places.

General public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

Marine Weather

1. IMF states Sri Lanka will record the lowest growth rate among 30 Asian ‘Emerging Markets and Developing Economies’ in 2022: forecasts contraction by 8.7% in 2022: contraction of 3% in 2023: no forecast from 2024 to 2026: forecasts growth of 3.1% in 2027.
   
2. IMF Chief Kristalina Georgieva says the IMF wants equal treatment to all creditors: says the Agency is also pressing for an effective debt resolution mechanism: seeks ways to expand donor coordination to middle-income countries like Sri Lanka.
   
3. “Paris Club” reaches out to China and India to coordinate Sri Lanka’s debt talks: but, say they have still not received a reply from either country.
   
4. UNP Chairman & MP Vajira Abeywardene says elections will be held only after national policy framework to stabilize the nation is formulated: rules out an election soon: also says it is essential to reduce number of local government members to 4000 from 8000, and abolish the preferential voting system.
   
5. President’s Chief-of-Staff Sagala Ratnayake says discussions with regards the insurance claim for MV X-Press Pearl disaster amounting to millions of dollars have been successful.
   
6. Specialist doctor complains to CID that Thilini Priyamali, who has allegedly misappropriated large sums of money, had “taken” Rs.750 mn from him: another multi millionaire woman also complains that Priyamali “took” Rs.45 mn from her.
   
7. Central Bank T-Bond borrowings interest rates rise further to astronomical heights: 3-year Bonds @ 31.93% : 7 year Bonds @ 30.85% : analysts say this week’s auction alone cost the government an additional Rs.22.5 bn, when compared with rates prevailing at end-March 22.
   
8. Bangladesh Bank Governor Abdur Rouf Talukder meets CB Governor Nandalal Weerasinghe in Washington: says Bangladesh is hoping Sri Lanka will repay USD 200 mn owed to Bangladesh by March 2023.
   
9. Department for Registration of Persons increases fees for issuing National Identity Cards: first time NIC Rs. 200: duplicate copies Rs.1,000.
   
10. State Finance Minister Ranjith Siyambalapitiya warns legal action against people who come from abroad wearing gold jewellery exceeding limits: says country loses about USD 30 mn monthly due to smuggling of gold.

Involvement of the public and private sector in the development of the country’s economy has been further strengthened to boost exports .

It is not possible to achieve any sector development by focusing interventions solely on the private or public sector. In fact, many of the challenges faced by the private sector can be overcome only in partnership with the public sector, official sources said.

Foreign Affairs Minister Ali Sabry recently met with private sector to discuss and to expound the opportunities and potential for exporters as well as the challenges that they confront in exporting goods and services of Sri Lanka, amongst others.

Foreign Secretary Ambassador Aruni Wijewardane and other senior officials participated in the discussion at the meeting with Minister Sabry.

Presidents, Secretaries General, senior officials and business leaders representing a large number of export oriented organisations and chambers of commerce attended the meeting.

This meeting with the private sector corporates and chambers was hosted by the Ministry of Foreign Affairs in order to obtain views, ideas and propositions on the most efficacious courses of action that the Ministry could assist and facilitate the business community to develop their business endeavors and boost exports.

Addressing the gathering, the Foreign Affairs Minister stated that the Ministry is committed to cooperate with the private sector, chambers and to support their business endeavors, thus accruing much needed economic advancement and provide assistance to the export sector of the country.

He assured that all Missions which are under the purview of the Ministry, would assist and facilitate the private and corporate sector in realizing their economic and trade objectives and continue to engage professionally with the private sector in connecting them to openings overseas.

Participating organisations and chambers who expressed their views added that the successful conclusion of free trade agreements (FTAs) with key countries should be considered as a priority of the Foreign Ministry at this juncture in order to aggrandize and boost exports.

They also expressed that the Government should adopt a well-structured mechanism to address issues arising from negative media coverage, thus enhancing the image and profile of the country.

The meeting was attended by over 20 leading chambers of commerce and export oriented organisations including the Ceylon Chamber of Commerce, National Chamber of Commerce, Federation of Chamber of Commerce and Industry, Sri Lanka Exporter’s Association, Tea Trader’s Association, Sri Lanka Apparel Exports Association and Joint Apparel Association Forum, amongst others.

Geo-politics Prevails the Humanity

Unquestionably the whole world knows that the Mullivaikkal genocidal intended Tamil massacre in Sri Lanka is the first and the worst in this 21^st century. Despite the awareness of well-substantiated documents pertaining to Tamil massacre, the international community not only assisted Sri Lankan state to execute its purpose but continue to disregard Tamil peoples’ call for justice for the atrocity crimes inflicted on them by the Sri Lankan state.

Had the international community been considerate on humanities, rather than paying their geo-politics, many Tamil peoples’ lives could have been saved. It is not only the loss of lives, but several people have been maimed, lost their limbs, eyes, widowed, orphaned and have been living into destitute situation due to the destruction of their properties and belongings and also due to the occupation of concentrated Sri Lankan military in their lands. 

Had the world-leaders proactively set an example by intervening with the Sri Lankan government and stopped the massacre of Tamil people, that precedence could have saved many peoples’ lives in other countries too. A good recent example is Ukraine – Russian war.

Nevertheless, there are 1000s of well documented evidence are available the UN Member states continue to fail to acknowledge merits to establish an international criminal justice mechanism due to lack of political will and geopolitical interests. Had there been a drive, international community should have ensured the (a) reporting of these crimes to other UN mechanisms and (b) referring to the General assembly for an international criminal justice mechanism.

The Core Cause for Sri Lanka’s Economic Crisis

Majority of the countries were sympathetic with Sri Lanka’s pretence that imposition of stringent resolution against it, while it undergoes economic upheaval, is unfair without knowing the true cause for its current dilemma.  

These countries must understand and acknowledge that there is a disconnection between the current economic crisis and the seven decades of Sinhala Buddhist exclusivity, impunity, cycles of violence, conflict driven political agenda and highly centralised state institutions, 

We met the diplomats of several countries and internationally reputed NGOs to comprehensively explain them with facts and figures in convincing them that the root cause for Sri Lanka’s current economic problem has been its racial hegemony of Sinhala-Buddhist chauvinism since Sri Lanka became independence in 1948. 

Among the many things cited: 

·        the Sinhala-only Act followed by the premeditated deployment of more military camps in Tamil homeland from 1963 when the Tamil people were conducting nonviolent resistance, 

·        the prolongation of Prevention of Terrorism Act (PTA) as a temporary provision enacted in 1979 till to date, arbitrary arrest, detention, enforced disappearance, extra judicial killings, torture, sexual violence, vulnerability of the women & children and the effect of impunity, 

·        national budget spent for defence for 27 years, between 1983 and 2009 was $14 billion, whereas the post-war defence expenditure for the 10 years, from 2010 to 2019 has been $17 billion causing the frenzy borrowing led to $51 Billion foreign debt, and

·        the additional defence expenditure predominantly was to deploy 16 out of 19 military divisions in Tamil homeland with the increase of 318,000 military personnel in 2018 from 220,000 at the end of war in 2009.

Imposition of Leverages

The despotic nature of the Sinhala-Buddhist chauvinistic Sri Lankan state has proved over the past seven decades, by defying several negotiations & pacts for the devolution of powers to the Tamil people, that it is not going to fulfil the legitimate aspirations of Tamil people in the island for prospering through the process of peaceful coexistence. 

Undeniably, the international community is fully aware not only from the many cycles of violence staged against Tamil people, but also from disregarding the UNHRC Resolutions over the years, particularly A/HRC/RES/46/1 of March 2021 and A/HRC/51/L.1/Rev.1 of October 2022.

It is the time for the international community to take tangible actions, one of which is applying calibrated leverages against Sri Lanka avoiding the sufferings of innocent civilians. otherwise, it will continue its atrocities endlessly, leading the country further economic and political crisis. 

As Sri Lanka is totally depending on foreign aids and support such as the GSP+ privileges, applying leverages at this stage can bring significant changes to the political structure in the island. 

By using all the available leverages on Sri Lanka, when it is in weakest stage and fully dependant on the international community, particularly the USA, UK, India and EU should be able to prevail on the decision makers of Sri Lanka to arbitrate a power sharing arrangement based on the right to self-determination and the principles of federalism. Resolution 51/1 progressively included the political solution and devolution.

Implications of 51/1 UNHRC Resolution 

It is worth mentioning at this juncture that Sri Lanka, arrived with an arrogant attitude of defying the resolution as if the countries would extend their support on sympathy of its economic crisis and also demanding not to interfere with its sovereignty, severely lost with receiving only seven votes, which was four less than its position if 2021. India emphasised on the devolution of powers and the aspiration Tamil people for a lasting peace in Sri Lanka. 

Unlike Resolution 46/1 low allocation of budget, which was subsequently unduly curtailed by the friendly countries of Sri Lanka, Resolution 51/1 has allocated a moderate budget for the evidence collection, preservation and analysation of human rights violations and related crimes in Sri Lanka. 

Resolution 46/1 does not restrict the time limit for the evidence collection of atrocious deed inflicted on innocent victims. Thus, this permits us to collect evidence of all atrocity crimes including Genocide even up to the date Sri Lanka attained independence in 1948.

This implies that Tamil people, particularly the diaspora organisations, Victims & Witnesses and the human rights defending countries must work hard in providing and assisting the Sri Lanka Accountability Project, UNHRC with truthful and genuine evidence collections. 

Considering that “unity is strength” the Tamil diaspora organisations collectively must take responsibility to ensure the revelation of the unreported crimes especially the crime of Genocide in the future reports of the OHCHR. We call upon the like-minded Tamil organisations to join us to explore the avenues leading to international criminal justice mechanisms and mobilise the resources to establish such international mechanisms for Sri Lanka

Tamil political parties and civil society to work in unison towards finding a long-term political solution by involving India, the United States, The European Union, the United Kingdom and Canada to play as arbitrators of the devolution of power sharing mechanism. 

The Way Forward

Considering the foregoing, among the many other things stipulated in current resolution, 51/1, we must ensure to strengthen the Evidence Collection Mechanism by fully resourcing without further delay by enabling the team reach out to the victims and witnesses globally and to secure their evidence, prepare case files, share with relevant host countries and international justice mechanisms to initiate the judicial proceedings. More proactive we are, will result in strong reporting on the 53^rd session validating the elements of genocidal intent and other atrocity crimes. 

In the interim, we request the states to address the underlying causes of the crisis, including impunity for human rights violations and economic crimes by pursuing a number of options to advance accountability at the international level, by helping the victims seek justice, reconciliation and human rights; and requests UNHRC to pursue the prosecution of the available emblematic cases through appropriate mechanisms and  also requests the council to refer through the General Assembly to establish an International criminal justice mechanism for Sri Lanka.

We also request the International Community to work towards a negotiated political solution for the Tamil people through international arbitration and to undertake to implement it in Sri Lanka.