President Ranil Wickremesinghe emphasized that a true leader is someone who can work effectively with any team. He criticized Sajith Premadasa, stating that despite the opposition leader talking about teamwork, he fails to take responsibility as a leader. Wickremesinghe also claimed that Sajith is currently fulfilling an agreement by supporting Anura Kumara Dissanayake.
Sajith Premadasa has accused President Ranil Wickremesinghe and National People’s Power (NPP) leader Anura Kumara Dissanayake of forming a secret political alliance to divide power. Speaking at an election rally in Eheliyagoda, Premadasa claimed that the two leaders are engaged in a corrupt deal aimed at securing the presidency and premiership for themselves, describing it as a betrayal of the public’s trust.
National People’s Power (NPP) presidential candidate Anura Kumara Dissanayake urged voters to unite for a common goal at a rally held at Kilinochchi. Dissanayake emphasized the need for solidarity between the North and South, saying NPP has already secured over 75%-80 support in postal votes.
Independent presidential candidate and former minister Roshan Ranasinghe announced that his manifesto will include plans to reduce vehicle costs by at least 80% from their current prices. During a media briefing, Ranasinghe criticized other candidates’ manifestos, calling them mere documents with no feasibility.
The United Arab Emirates (UAE) government has launched a two-month amnesty scheme starting from 01 September 2024, which provides an opportunity for individuals to correct their visa status or return to their home countries without incurring fines or facing entry bans.
The Criminal Investigations Department (CID) has reported facts to the Colombo Magistrate’s Court, pertaining to an investigation related to the information received of a possible attack on one of the candidates contesting the upcoming presidential election.
Deputy Postmaster General Rajitha Ranasinghe stated that the turnout for postal voting in the 2024 Presidential Election was high over the past two days. Speaking at a press conference, he said that more than 80% have cast their postal votes during the last two days. A total of 712,319 voters were eligible to use postal voting in relation to the 2024 presidential election.
Sri Lanka’s official reserve assets have recorded a significant increase to USD 5.95 billion in August 2024, according to the Central Bank of Sri Lanka (CBSL). This is an increase by 5.3% compared to USD 5.65 billion recorded in July 2024.
The Supreme Court has ordered that the petition of intervention filed seeking an order suspending the interim injunction issued preventing Deshabandu Tennakoon from functioning as the Inspector General of Police (IGP), to be taken up for consideration on September 13 for the clarification of facts.
Sri Lanka Customs announced that for the first time in the history of the Customs Department, it has achieved an annual custom revenue of Rs. 1 trillion so far this year.
September 07, Colombo (LNW): Several spells of showers will occur in Western, Sabaragamuwa and North-western provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts.
Showers or thundershowers may occur at a few places in Uva province and in Batticaloa and Ampara districts during the evening or night.
Strong winds about (35-45) kmph can be expected at times over Western slopes of the central hills, Northern, North-central and North-western provinces and in Hambantota and Trincomalee districts.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
September 06, Colombo (LNW): Prime Minister Dinesh Gunawardena emphasized the importance of preventing the country from falling victim to extremist experiments, as Sri Lanka works to strengthen its international relations after emerging from isolation. He made these remarks during the launch of the Podujana Eksath Nidahas Peramuna, the broadest political alliance in the country, at the Water’s Edge Hotel in Battaramulla yesterday.
Speaking at the event, Prime Minister Gunawardena, who chairs the new alliance, stated, “Let’s not victimize the country to extremist experiments since it has already become able to deal with the international community through friendship.” The alliance, themed “Combination of Courage for a Winning Country,” aims to chart a new direction for Sri Lankan politics.
The alliance’s Secretary General, Minister Ramesh Pathirana, joined Prime Minister Gunawardena in unveiling the alliance’s new logo, a “trophy.” Following the unveiling, agreements were signed with leaders of various political parties that joined the alliance, including representatives from the Sri Lanka Podujana Peramuna (SLPP), Mahajana Eksath Peramuna, United Peoples Party, Eelam People’s Democratic Party, Tamil Makkal Viduthalai Pulikal Party, National Congress, United People’s Party, National Unity Front, and Deshapremi Janatha Balawegaya.
Prime Minister Gunawardena described the alliance’s creation as a historic moment, emphasizing the shared commitment of its members to overcome challenges and secure the future of Sri Lanka. He referred to the political and economic crisis that led to the resignation of former President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa, and the subsequent appointment of Ranil Wickremesinghe as President by a parliamentary majority.
Highlighting the alliance’s mission, he stated that unity and cooperation among national and progressive forces are crucial to developing the country through a new program based on parliamentary democracy and public trust. The Prime Minister emphasized the need to work toward achieving the goals of social and economic development expected by the younger generation and called for everyone’s support and contribution.
Alliance General Secretary Dr. Ramesh Pathirana criticized opposing groups for spreading misinformation and making false promises, reaffirming the alliance’s commitment to contesting future elections and urging people to set aside party differences to rebuild the country.
The newly formed Podujana Eksath Nidahas Peramuna is committed to winning the upcoming September 21 presidential election and future elections, working closely with all allied parties and forces.
September 06, Colombo (LNW): Ranil Wickremesinghe, who is running as an independent candidate for the upcoming presidential election, will receive the support of 36 out of 41 former members of the Sri Lanka Podujana Peramuna (SLPP) from the three Pradeshiya Sabhas in the Moneragala electorate area: Siyambalanduwa, Badalkumbura, and Moneragala. This development was announced during a press conference held yesterday (5).
The meeting was attended by former Pradeshiya Sabha chairmen R.M. Ratnaweera (Moneragala), Samarasinghe Abeysekera (Badalkumbura), Deputy Chairman Nishshanka Punchimahattaya (Siyambalanduwa), Pradeep Wijeratne (Moneragala), and other SLPP members from these Pradeshiya Sabhas.
Former Moneragala Pradeshiya Sabha Chairman R.M. Ratnaweera stated that during a period of anarchy and bankruptcy, the leaders of the SLPP, represented by the “Pohottuwa” symbol, vacated their positions. At that time, Ranil Wickremesinghe took over leadership, fully aware of the obstacles and challenges facing the country.
Ratnaweera highlighted that Wickremesinghe was instrumental in restoring normalcy by resolving gas, fuel, and food shortages. He also acknowledged Basil Rajapaksa’s crucial role in supporting Wickremesinghe’s presidency by rallying Members of Parliament to vote for him.
September 06, Colombo (LNW): Finance State Minister Ranjith Siyambalapitiya emphasized that President Ranil Wickremesinghe’s proposal to increase public sector salaries is not merely an election promise, as it has received approval from both the Treasury and the Cabinet. Speaking at a press conference held at President Wickremesinghe’s political office in Colombo, Minister Siyambalapitiya highlighted that, even during the peak of the economic crisis, the President firmly rejected suggestions to cut public servant salaries, insisting they should not be reduced under any circumstances.
Minister Siyambalapitiya further noted that despite the challenging economic environment, President Wickremesinghe managed to provide a Rs. 10,000 allowance to public servants. He recalled that when President Wickremesinghe took office as Finance Minister, the Government was struggling to pay salaries to its 1.38 million employees, with a total salary bill of Rs. 95 billion. Proposals to cut salaries were firmly rejected by the President, who instead opted for managing salaries by splitting payments.
In 2023, discussions with the Treasury led to the President emphasizing the need to increase public sector salaries, despite initial constraints. President Wickremesinghe later managed to raise public sector salaries by Rs. 10,000, a decision that increased monthly Treasury expenditure by over Rs. 12 billion.
To address salary and pension disparities and enhance productivity, President Wickremesinghe appointed a committee chaired by Udaya R. Seneviratne, which included members from both the public and private sectors. The committee’s interim report with 18 recommendations was presented to and approved by the Cabinet. Key recommendations for 2025 include raising the Cost of Living allowance to Rs. 25,000, increasing the minimum starting salary by 24% to 50%, setting the new minimum salary at Rs. 55,000, and introducing a comprehensive medical insurance plan for public sector employees and pensioners.
These measures, set to take effect on January 1, 2025, aim to significantly improve conditions for public servants. State Minister Siyambalapitiya dismissed claims that these initiatives are politically motivated, stating that the Government’s commitment to public servants has been evident even during challenging times.
The SJB has responded with a proposal to increase the minimum wage for Government employees to Rs. 57,000, while the NPP’s policy statement includes adjustments to the Cost of Living allowance every six months based on living expenses. Meanwhile, the Government continues to focus on enhancing efficiency in public services and streamlining the recruitment process, encouraging employees to take advantage of new professional development opportunities.
I happened to see the attached press release on the title “Highlights of the Government Tax Policy and Expenditure Management Measures” issued by the Ministry of Finance on 30 August 2024 (Press here to read the press release) and found that its contents are not only inappropriate in economics but also misleads the public.
I prove it by commenting on its opening section reproduced below. The rest of the press release contains a set of budgetary numbers mostly in meaningless percentages of GDP which has no meaning on the overall economy or living standards affected by a triple crises, i.e., global pandemic, political violence and foreign currency, which the country had never experienced before.
Five contents selected for my comments
I focus on following five contents from the highlighted above.
Weak government revenue as one of the fundamental causes of the economic crisis.
The ill-timed tax reduction in 2019 as the major contributor to the country’s credit rating downgrade and subsequent sovereign debt default.
Inflationary monetary financing.
Urgent revenue measures to phase out monetary financing and bring inflation under control.
Fiscal consolidation as a key component of the overall macroeconomic reform programme including debt restructuring framework and primary budget surplus of 2.5% expected in 2025.
Therefore, all contents of the press release are based upon above misconceptions and misunderstanding.
My comments
Comments on the first bullet
The fundamental cause of the crisis was the inability of the Central Bank (CB) to maintain its foreign currency reserve at adequate or prudent levels over time to service foreign debt and balance of payments as provided for in the Monetary Law Act. The pandemic and political crisis-related factors also contributed to it.
The government never had adequate revenue to service debt or finance expenditure. Therefore, debt has been the key financing source. Therefore, the government did not confront any problem on domestic currency borrowing to pay for foreign currency required from the CB to service foreign debt. In fact, domestic interest rates also were very low in 2020 and 2021 to raise domestic borrowing at historic low cost. However, the CB had lost the foreign reserve causing the economic crisis whereas the govt revenue was not a contributary factor.
Comments on the second bullet
The main factor for the downgrade of credit rating was the erosion of the foreign reserve of the CB and collapse of the economy. As stated above, the debt default was a result of the collapse of the foreign reserve. Therefore, the reason given as the ill-timed tax reduction in 2019 is incorrect.
In fact, the tax revenue fell in all countries due to the collapse of supply chains and economies as a direct result of the pandemic. The political crisis also contributed to it in Sri Lanka.
The tax cut was an expansionary macroeconomic policy decision of new government in 2019 prior to the pandemic and political crisis. However, the pandemic impact had negative effects on the economy, averting the expected benefits of the tax cut policy. It is common to criticize both tax cut and tax hike. The Liz Truss Govt in UK in October 2022 was overthrown in 45 days on criticism on tax cut, energy subsidy and growth based interim budget.
Therefore, the tax cut is not the reason for the downgrade of credit rating and the sovereign default. Even if the tax had remained unchanged, the crisis was certain due to dire shortage of foreign currency.
Comments on the third and fourth bullets
Monetary financing was not new in many countries including Sri Lanka. In fact, the CB as the debt manager cum monetary authority did it to control the yield curve and market interest rates in the monetary policy. It is not a matter for the Treasury to select financing sources based on inflation expectorations. Further, whether the monetary financing is inflationary is not established on data. However, any deficit financing is inflationary in economic theory as it creates credit and money if the production capacity is unchanged.
Inflation control is a duty of the CB and not of the Treasury. Therefore, urgent revenue measures (i.e., tax hikes) to phase out monetary/inflationary financing as stated is an unacceptable reason. It is like the Treasury gets into the CB’s shoes and a conflict of independent duties between the Treasury and the CB.
Even tax increases also lead to new money printing as new taxes have to be paid by sovereign currency. Otherwise, tax will be evaded.
In fact, in all countries including developed countries, monetary financing was the major source to finance fiscal deficits at historic levels to deal with humanitarian crisis caused by the global pandemic. That was the fiscal responsibility.
High inflationary pressures in Sri Lanka were a transitory result of the disruption of supply chains caused by triple crises and not of the fiscal front at all. If it had been a fiscal matter, high inflation would have still been prevailing as the fiscal front is still the same without any fundamental improvement.
In fact, monetary and financial system of Sri Lanka was saved by such monetary financing as the monetary base tended to contract severely due to the fast erosion of the foreign reserve which largely determined the Sri Lankan monetary base. If not for the monetary financing, the monetary system would have been collapsed due to shortages of domestic currency.
Comments on the fifth bullet
Fiscal consolidation and reform programme are just IMF prescriptions to deal with the foreign currency-related crisis which is not a fiscal problem but a monetary policy problem.
Foreign debt restructuring is still not concluded even after two years of default. The State Minister recently stated at the Parliament that it was a never-ending work requiring continuation of services of international consultants.
Primary budget surplus is only a sub account which does not represent overall position of budgetary outcomes for the economy. Further, 2.5% is only a statistical hypothesis which is not guaranteed in 2025.
Overall Comment
The press release is a statement of a Treasury account clerk who does not understand macroeconomic management aspects of the budgetary structure and operations as well as the background of the Sri Lankan economic crisis.
Therefore, it tarnishes the image of great economists who have served in the Treasury in the past who have been instrumental in the safeguard and development of the economy and living standards of the country through fiscal front since its independence.
Therefore, the press release is evident for the poor quality of the present Treasury management who lies to the public to coverup its inability to manage the Treasury in the public interest.
It is a blunt lie if the Treasury states that such budgetary measures can recover the economy and living standards for the next phase of development.
This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures. All are personal views of the author based on his research in the subject of Economics which have no intension to personally or maliciously discredit characters of any individuals.)
P Samarasiri
Former Deputy Governor, Central Bank of Sri Lanka
(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 12 Economics and Banking Books and a large number of articles published.
September 06, Colombo (LNW): Indian movie star Gagan Malik, famous for his role as Prince Siddhartha in the film “Sri Siddhartha Gautama,” initiated a pilgrimage of Indian Buddhists to Sri Lanka. The actor and Buddhist activist, accompanied by 65 Buddhist pilgrims from Maharashtra, Madhya Pradesh, and Telangana, called on Prime Minister Dinesh Gunawardena at Temple Trees in Colombo on Wednesday, September 4.
Welcoming the group, Prime Minister Gunawardena highlighted that this was the largest Buddhist pilgrimage group to visit Sri Lanka in recent years. He emphasized the deep cultural and religious ties between India and Sri Lanka, stating, “Buddhism is the strongest bond which binds India and Sri Lanka together, and we are eternally grateful to Indian Emperor Ashoka and his son, Arahant Mahinda, for giving us the greatest gift of the teaching of The Buddha.”
Actor Gagan Malik expressed his commitment to promoting Buddhism and enhancing Sri Lanka’s image in India and globally. “I brought this large group of pilgrims to Sri Lanka to help promote the island’s rich Buddhist heritage,” he said, adding that there is significant potential for Buddhist pilgrim tours, given the millions of Buddhists in India.
One of the pilgrims, Anita Pramod from Maharashtra, shared her joy at fulfilling her desire to worship the sacred Buddha relic at the Dalada Maligawa in Kandy. “We visited the temple in the beautiful hill capital of Kandy, and it was a memorable experience,” she said. “I brought my two small children, and they are so happy to see this beautiful country.”
Shashikant Wankhade from Indore, Madhya Pradesh, spoke about his experience in Anuradhapura, where the group visited the majestic Chaithiyas and worshiped the Sacred Sri Mahabodhi. He expressed his intention to encourage friends and family to visit these sacred sites.
The event was also attended by MP Yadamini Gunawardena and Navin Gunaratne, the producer of the film “Sri Siddhartha Gautama.”
September 06, Colombo (LNW):The Election Commission has released guidelines detailing leave entitlements for employees in both public and private sectors during the 2024 presidential election, which is set to take place on S eptember 21. The guidelines are designed to enable employees to vote without losing pay or affecting their personal leave balances.
Leave Entitlements Based on Distance:
40 kilometers or less: Half a day’s leave
40-100 kilometers: One day’s leave
100-150 kilometers: One and a half days’ leave
Exceeding 150 kilometers: Two days’ leave
For cases where voters need three days to travel to and from their polling stations, employers have been advised to provide a three-day leave.
The Election Commission also emphasized that employees must submit a written request to apply for this special leave. Employers are required to maintain a record of these leave requests, clearly displaying the duration of leave granted to ensure transparency at the workplace.
September 06, Colombo (LNW): The Renewable Energy Protectors’ Association (REPA) has called on the authorities to clarify their plans for addressing the challenges faced by the renewable energy sector.
This comes in light of the recent decision by the Power and Energy Minister to lower the tariff rate for solar energy projects to Rs. 27 per unit. REPA has also encouraged the public, particularly investors in solar and other renewable energy projects, to support candidates who present the most viable solutions to these challenges.
The General Manager of the Ceylon Electricity Board (CEB), acting against a Cabinet decision and directives from the Public Utilities Commission, instructed officials to reduce the tariff rate for solar energy projects.
REPA President Darshana Liyanasekara criticized this move, stating that it discourages local investment in renewable energy, undermines the sector’s progress, and threatens the goal of sustainable economic growth through renewable energy initiatives.
In response, the Public Utilities Commission of Sri Lanka (PUCSL) made a decisive move to keep payments for rooftop solar power plants unchanged.
This decision, communicated through a circular issued by CEB General Manager Dr. Narendra Silva, confirmed that the Rs. 37 per unit tariff for solar electricity, established in 2022, will remain in effect.
The circular, dated 29 July, also amended the effective date of the Rooftop Solar PV (RTSPV) schemes to 25 October 2022, while maintaining all other terms.
This development comes amid growing concerns raised by REPA over the Government’s decision to reduce tariff rates for new rooftop solar and renewable energy projects, effective 1 July 2024.
The new tariffs, announced by Power and Energy Minister Kanchana Wijesekera, are based on a 2022 formula that considers the USD exchange rate, interest rates, and other economic factors.
In a statement on X, Minister Wijesekera explained that the revised rates are intended to promote the development of rooftop solar projects and other renewable energy initiatives under 10 MW, following extensive stakeholder consultations and a detailed report from the tariff committee.
REPA expressed concern over the country’s continued reliance on diesel-based power generation, which results in the loss of billions of dollars in foreign exchange.
While the Minister has reduced tariffs for solar energy projects, no efforts have been made to lower the prices paid for diesel-based power. Currently, the Government pays between Rs. 70 and Rs. 100 per unit for electricity generated from diesel. REPA argues that by investing in solar energy, the country could retain that money domestically rather than losing it as dollar outflow.
September 06, Colombo (LNW): The Ministry of Foreign Affairs has announced the introduction of an online system for authenticating birth, marriage, and death certificates.
This initiative, launched on September 2, 2024, in collaboration with the Registrar General’s Department, marks a significant step towards digitalizing public services in Sri Lanka.
The new online process allows Sri Lankan citizens to apply for the authentication of these vital documents through the Consular Affairs Division’s online platform.
Once authenticated, the documents will be emailed directly to the applicant, eliminating the need for physical visits to government offices for application or collection.
Foreign Minister Ali Sabry, speaking at the launch event, emphasized the importance of digitizing document authentication services to improve public efficiency.
He noted that the Ministry’s digital journey began with the online verification of GCE O/L and A/L certificates, in partnership with the Department of Examinations, which was a major milestone in their digital transition efforts.
The Minister highlighted that the online authentication of birth, marriage, and death certificates issued by the Registrar General’s Department represents a further advancement in this digital transformation.
He pointed out that these documents, along with educational certificates, account for about 55 percent of the daily authentications carried out by the Consular Affairs Division.
The Ministry of Foreign Affairs also stated that the Consular Affairs Division has enhanced its online document authentication services by integrating its Electronic Document Authentication System (e-DAS) with several key government entities.
These include local universities, the Sri Lanka Medical Council, the Sri Lanka Police, the Department of Motor Traffic, the TVEC, the Department of the Registrar of Companies, the British Council, and various trade chambers.
This integration aims to make document authentication more accessible and effective for the public.
The online authentication process is straightforward. Applicants are required to visit the official website of the Ministry of Foreign Affairs and submit an online application through the provided portal. Once the application details are submitted, a payment link is sent to the applicant.
The required fees for certificate generation and authentication can be paid online. After the transaction is completed, the authenticated document is emailed to the applicant. The customer copy of the authenticated document can then be submitted to relevant foreign missions as needed.
This new online system is expected to streamline the process of obtaining authenticated birth, marriage, and death certificates, making it more convenient for Sri Lankan citizens both at home and abroad.
