The case filed against Basil Rajapaksa and Thirukumar Nadesan under the Prevention of Money Laundering Act in connection with the construction of a huge house in Malwana was taken up in the Gampaha High Court today (07).
The main government witness in the case, Muditha Jayakody, the architect who built the house, was cross-examined today. He had earlier told the court that everything he had said before the FCID, as well as the lower court, was untrue.
President’s Counsel Saliya Peiris, appearing for the accused Thirukumar Nadesan today, cross-examined Muditha Jayakody and asked him about the documents he had applied for to recover the income tax he had paid. He was speechless there, unable to answer.
Legal experts are of the opinion that there is a tendency in this case to release the accused without calling the next hearing, which is likely to be January 21.
President Gotabhaya Rajapaksa states that the concept of organic fertilizer was introduced with the aim of preventing the spread of kidney disease and cancer to the next generation. The President states that organic fertilizer is not the only fertilizer produced using plant parts, however, due to various reasons, it was not possible to transmit adequate knowledge about it to the farming community.
He was speaking at the inauguration of a program to transform 1,000 schools across the country into national schools.
As the first school in this program, Siyambalanduwa Maha Vidyalaya was developed as a national school and handed over to the students.
The President further stated that during his two year tenure he has not borrowed a single penny from foreign countries. The President also says that it can be expressed with great pride.
Commenting on the ministers, Rajapaksa said that some ministers were criticizing the government. He also says that one minister had to be removed due to this. The President also says that although all government MPs want cabinet portfolios, many ministers have failed to act collectively.
Chinese Foreign Minister Wang Yi is scheduled to pay an official visit to Sri Lanka tomorrow (08).
Political analysts say this will be a crucial visit to Sri Lanka as the Chinese Foreign Minister will visit Sri Lanka following the signing of an agreement with India on the Trincomalee oil tank complex.
Both India and China are concerned about each country’s involvement of with Sri Lanka. The Chinese Ambassador to Sri Lanka visited the Northern Province last month and during his visit also launched several projects to provide infrastructure facilities to the people.
The FT on Wednesday had a very insightful editorial titled “Time for the IMF”. The editorial noted that the “Government’s announcement of the Rs. 229 billion relief package fits right into this Government’s now preferred mode of operation – firefighting, as opposed to planning and pre-empting.
Further the editorial said, “The funds for the relief package, Finance Minister Basil Rajapaksa has assured, will be sourced from within the budget, without any new taxes being implemented. How this can be done from within a budget that already had a vast amount of question marks surrounding its viability, is anyone’s guess”.
Further the editorial noted that the “Country’s economy is in as dire a state as it has ever been, and now is not the time to protect one’s political standing, while it’s hard to imagine that the conditions imposed by the IMF could be any worse than the predicament facing the public at present. The goal of the Government right now is to eliminate the country’s macroeconomic imbalances, resolve the debt crisis, and boost investor confidence. As unpalatable as it may seem in some quarters, the IMF might just be the best way to achieve those goals.”
Central Bank Governor Nivard Cabraal
Treasury Secretary S.R. Attygalle
Cause of the crisis
The economic crisis in Sri Lanka was largely driven by the pandemic fallout and the massive drop in tourism income – the No. 2 foreign exchange earner for the country. But unlike Sri Lanka, those countries with similar income streams have managed their finances much better than Sri Lanka and are now on the path of recovery. The tax cuts, high public spending, and large debt payments have pushed the country to near bankruptcy in 2022. Rising inflation and shortages has impacted those lower middle-class families that were reasonably well off prior to the pandemic. According to the World Bank nearly 500,000 additional people have now fallen below the poverty line post-pandemic.
Options
The Government to ease the burden of the public due to the ever-increasing COL could continue to print more money to provide relief, to prevent a massive pushback from the public, while the Government buys some time as they seek debt relief from their various lenders and get budget support from friendly countries like India and China. The $ 500 million ISB that is due in January will certainly be paid on time. Some of it is held by local banks. In the next 12 months around $ 7 billion has to be found to pay off all the loans falling due and others. This is no easy task given the re-emergence of a new COVID variant – Omicron.
Tourism income is set to improve, but would be 23/24 before Sri Lanka sees a full recovery in that sector. So, Sri Lanka’s financial position is not what the country wants. Whilst the country looks to India and China for debt relief, joining an IMF’s COVID relief program may be the best option for the country according to several economists. Successive governments have blamed each other for piling up current debt. This debt situation is clearly not sustainable. Some governments had even piled up large amounts of government debt via the state-owned enterprises which is all off the books of the treasury.
Various solutions to the debt crisis have been proposed by the opposition and experts, such as swaps, selling SOEs, going to the IMF and bilateral loans. All these are temporary fixes. We must have a program to drive up exports and attract FDI. The banks must wake up and play a special role in this effort.
Going to the IMF
Whether the IMF is willing to provide Sri Lanka with a bail out in the form of a loan, in addition to the traditional policy advice and technical assistance is not certain and will certainly come with conditions attached as pointed out by Basil Rajapaksa. In the early days of the crisis according to World Bank sources – debt service suspension initiative and low interest loans were made available under a framework. Many of these concessions have now expired. Like Sri Lanka, several low-income countries are still finding it increasingly difficult to service their sovereignty debt as these countries are forced to make a choice between servicing their debt and protecting the livelihoods of its people.
In the final analysis, 2022 will continue to be a challenging year for all low-income countries that need concessionary debt treatment, therefore a new framework led by the muscle of the G20 and supported by private sector creditors will be critical to unlock IMF financing for debt-ridden countries. Therefore, multilateral action is urgently needed for sustainable debt support until the pandemic starts winding down.
The Colombo District Court has rejected a request made by former President Maithripala Sirisena to be released from Easter charges. Colombo Additional District Judge Chathurika de Silva today rejected the request.
A case has been filed in the Colombo District Court seeking an order to pay compensation to the victims of the Easter attack and the former President has been named as one of the respondents in this case.
On November 29, the former president had asked the court to release him from the charges in the case. He had requested that the charges be dismissed at the first instance without a hearing.
The Ministry of Health states that there are between 05 and 06 lakhs who have not taken any of the covid immunization vaccine doses. Dr. Anwar Hamdani, covid Coordinator of the Ministry says that the majority of these people are young people.
Hamdani further points out that the entire society is at risk due to these irresponsible people who refuse the covid vaccine and those who have not been vaccinated have a strong potential to spread the covid virus.
The Colombo Municipal Council Health Division points out that there are more than 20,000 people in the Colombo city limits who have not received a single dose of the vaccine.
The number of daily infections in the country has exceeded 5,000 and the number of deaths has risen to 228. However, by now the number of daily infections has been reduced to 600 and the number of daily deaths to less than 20. Hamdani states that the successful implementation of the vaccine in the country was a strong reason for this.
However, Anwar Hamdani urges the people who have been fully vaccinated to take immediate steps to be vaccinated as the lives of those who have not been fully vaccinated are at risk.
The Leader of the Communist Party of Sri Lanka Dew Gunasekera says that the Minister of Finance’s relief package includes the payment of an allowance of Rs. 5,000 to public servants seems to be a political decision rather than an economic action.
He said that Rs. 229 billion was needed to provide the relief package and that inflation would inevitably rise further if the money was raised through printing. Gunasekera points out that if the relief package had been incorporated into the manufacturing process of the country, inflation would not have increased in any way.
Gunasekera points out that Sri Lanka has never had to face such a dollar crisis in its history and that if money is to be printed, it must be done in a way that does not increase inflation. He also emphasized that if inflation rises, the currency notes printed will have no value.
Health Minister Keheliya Rambukwella says that all local government bodies in the country will be converted into vaccination centers to expedite the provision of the booster vaccine. The Regional Health Medical Officers’ Offices have also instructed the Regional Directors of Health Services and the District Directors of Health Services to expedite the provision of booster vaccinations and to add several centers in each division for this purpose.
This will enable the booster vaccine to be given to the target population in the next few weeks, the Minister said.
He was speaking at a special discussion with the Sri Lanka Broadcasters’ Forum at the Ministry of Health today (06). Health Secretary Major General Dr. Sanjeewa Munasinghe and Secretary to the Ministry of Mass Media and Information Anusha Pelpita were also present.
At present 28% of the target population in the country has received the booster vaccine. The Minister of Health stated that the aim is to provide the vaccine to a very high percentage by the end of this month. The Minister said that the 29th of this month marks one year since the commencement of the vaccination program in the country and about 45 million vaccines have been imported to Sri Lanka during that period.
The Minister said that the vaccination card with the QR code and the application (App) will be issued soon and the booster vaccine will be included in the full vaccination for that card. Therefore, obtaining the booster vaccine will be mandatory for the vaccination card and it will be essential when entering public places, he said.
The Minister said that President Gotabhaya Rajapaksa had implemented this vaccination program in Sri Lanka in an exemplary manner to the world and it has been highly appreciated by world leaders and diplomats.
It is reported that a sum of US $ 6.7 million is to be paid today (07) for the Chinese organic fertilizer ship in question.
People’s Bank says that the money will be paid to the Chinese company due to the removal of the enjoining order imposed by the Colombo Commercial High Court.
The Ministry of Agriculture Mahindananda Aluthgamage has stated that this amount will be paid as per an agreement reached between the Ministry of Agriculture and the relevant Chinese organic fertilizer company and that the company has agreed to supply quality fertilizer.
Payments for the fertilizer ship had been suspended due to a sample test conducted by the Plant Quarantine Service in Sri Lanka. However, later tests in a foreign laboratory revealed that it did not contain harmful bacteria.
The Sri Lanka Freedom Party (SLFP) will contest any forthcoming election in a new alliance, said the party’s senior vice president, Prof. Rohana Lakshman Piyadasa.
“They would not have won this presidential election without our 1.7 – 1.8 million votes. Even so, this government has not yet begun a broad dialogue with the fraternal parties for more than two years. When those dialogues broke down, the life span of the government began to decline. We say that our past experience is the same and that our present experience is going in the same direction.
The fraternal parties are even going to a separate court as they have not received justice. There is a political complexity in the country.
In this situation, the SLFP is practically organizing the people at the village level and at the grassroots level. Whatever the forthcoming election, we are working to get the SLFP to come forward through a new alliance. ”
Prof. Rohana Lakshman Piyadasa stated this addressing a media briefing held in Kandy yesterday (06).
