Prime Minister Ranil Wickremesinghe, making a special statement on the economic situation of the country last Tuesday (7), requested the public to use fuel and gas as carefully as possible and warned that the next three weeks will be a tough time for the country when it comes to fuel supply.
“The country spends D500 million per month on fuel. Some estimate that global oil prices will rise by as much as 40 per cent by the end of this year. In this context, the idea of introducing a coupon system for fuel cannot be ruled out. Somehow we have to find USD 3.3 billion worth of fuel for the next six months. It costs USD 40 million a month to import gas. We are currently using multilateral assistance, local currency and Indian loans to import gas. We will require USD 250 million over the next six months for gas,” he said.
“In terms of rice, the country’s annual rice requirement is 2.5 million metric tons. But we have only 1.6 million metric tons of rice in stock. We need to import food items to meet our daily requirements. It costs about USD 150 million a month,” he added.
Saying that chemical fertiliser was needed to boost local agriculture, the PM said it costs USD 600 million a year to import fertiliser for paddy, vegetables, fruits, other major crops as well as for tea, rubber, coconut and export crops. The country is losing its export market owing to this, he warned.
However, Sri Lanka does not need large amounts of foreign exchange for health for the next six months as those groups and countries have provided substantial support for the health system.
“In this context, we need D5 billion to ensure our daily lives are not disrupted for the next six months. We need to strengthen the rupee in line with the daily requirements of the citizens. Another USD 1 billion is needed to strengthen the rupee. That means we need to find D6 billion to keep the country afloat for the next six months.”
According to the Central Bank, the average GDP growth in 2022 will be -3.5. According to the International Monetary Fund, the situation is even worse. According to them, its growth will be -6.5 per cent, he said and added, “The Government has lost between Rs 600 –
Rs 800 billion in revenue with the abolition of the tax system we implemented in 2019. That was the beginning of the decline of our economy. Therefore, we must immediately return to the 2019 tax system. It is a fact that we all know that money has been printed indefinitely in recent times. Rs 2.5 billion has been released from 2020 to 20 May 2022.”
“Many Government agencies do not have proper financial management. The Road Development Authority is one such example. Although they had the funds, they failed to manage those funds in accordance with Treasury regulations. In the current situation, the Government is unable to provide funds to cover the losses of any State-owned enterprises. That debt burden can no longer be borne by the State or State-owned banks.
We are currently in talks with the International Monetary Fund. Our discussions are based on our future economic plan. Accordingly, 2023 will see us face all the challenges. We need to achieve economic stability by the end of this year. Then by 2024, we will have the opportunity to create economic stimulus through financial stimulus. By 2025, our goal is to balance our budgets or create a primary surplus,” the PM added.
“We call on the IMF to hold a conference to help unite our lending partners. Holding such a conference under the leadership of India, China and Japan will be a great strength to our country. China and Japan have different credit approaches. It is our hope that some consensus on lending approaches can be reached through such a conference.
Alongside the economic hubs of Singapore and Dubai, we too, have the potential to grow into another economic hub. Vietnam is a great example of having undertaken such a task successfully. Our ultimate goal is to create a new economy for Sri Lanka. The goal is to transform Sri Lanka into a developed country by 2048, the centenary of Independence,” he said.
Wickremesinghe said, the Government is focusing on six key areas to overcome the crisis situation. They are: Taking maximum action to ensure food safety, increase in grant limit, writing off farmer loans one hundred per cent, free ownership of lands by residents, granting ownership of urban flats to occupants on a concessional basis and opening of flats built by China for the public.
“While the economy is in turmoil, people are facing various hardships. We will take action to alleviate their suffering as much as possible. The current annual expenditure on providing various reliefs to the economically backward is USD 350 million. This amount is expected to increase to USD 550 million.
At a request, when I was previously the Prime Minister, China donated 1,888 apartments to our country. One hundred and eight of these houses are reserved for artistes. We will take steps to provide all these houses to the deserving without any political influence. My hope is to set up a programme to provide those 1,888 homes for free,” Wickremesinghe said.
Meanwhile, Prime Minister Wickremesinghe continued to give interviews to foreign media in a bid to give an idea to the international community about the real situation in Sri Lanka and to get the support needed to come out of the economic crisis.
Last was such an interview with a journalist of the NDTV of India on Saturday evening. During the interview Wickremesinghe referred to himself as the ‘PM of Crisis’.
At the end of the interview, the Indian journalist came and extended her best wishes to the PM saying; “May the Prime Minister of the crisis become the Prime Minister who ended the crisis.”
Later that evening, the Prime Minister met Sri Lanka’s leading exporters. Many of them demanded that the tax burden be eased. Exporters were pleased with the Prime Minister’s request for some time to do so and said they would support the Prime Minister’s economic programme.
Arriving at the Prime Minister’s Office on Monday morning, the Prime Minister made the necessary plans to resolve the economic crisis and set aside more time to prepare his speech to be made in Parliament the next day. Former Secretary to the Ministry of Finance S. Samaratunga joined the PM to assist in drafting this speech.
The Cabinet meeting was held on the same day and the Prime Minister had earlier met the Attorney General and officials of the Attorney General’s Department as well as Justice Minister Wijeyadasa Rajapakshe to discuss the 21st Amendment.
PM: What is the status of the 21st Amendment which was presented in Parliament as a Private Members’ Bill by the Opposition?”
Legal officer: It is still pending before the Supreme Court. Once the decision is made, we can proceed with the Bill presented by the Government.
PM: Please, do enlighten me about the ruling once the Supreme Court delivers it.
The Prime Minister directed the Minister of Justice to submit the draft of the 21st Amendment to the Cabinet. He said that it could be taken for discussion at the next Cabinet Meeting after studying the draft. Accordingly, a copy of the 21st Amendment and a supplementary estimate of Rs 695 billion were submitted to the Cabinet and approved by them.
The Cabinet also approved a memorandum by Minister Harin Fernando seeking relief for bank loans obtained by businessmen in the tourism industry that were affected due to Covid-19 and later due to the economic crisis. The ministers also unanimously accepted the proposal made by the Prime Minister to allow Ministers to work without pay for one year.
The next day in Parliament he spoke about the economic situation and many members of the House met the Prime Minister to inquire about Vincent Churchill’s statement at the end of his speech. The Prime Minister was delighted to share his knowledge with the MPs.
In the Parliament lobby, members of the Opposition met the PM and began to inquire about the economic situation from Prime Minister.
“The economic situation is getting worse and worse. What is the solution?” was what was frequently asked by many members of the Opposition.
“We are trying. We are making plans. It will be difficult until January. With the support of the International Monetary Fund, we can move forward.” The Prime Minister made the same speech before the Opposition MPs.
Meanwhile, the Prime Minister met former Speaker Karu Jayasuriya to discuss the appointment of members to the Standing Committees to be established by the 21st Amendment. Rohan Samarajeewa and other officials of the Movement for a Just Society were also present at the discussion. It was agreed to hold discussions with civil society activists and get back to the Prime Minister again.
PM meets Media owners
Prime Minister Ranil Wickremesinghe, on Thursday evening (9), met the owners of the media organisations in Sri Lanka. During the discussion the Prime Minister’s senior economic adviser, Dr. Samaratunga, briefed the participants on the economic situation in the country.
The Prime Minister informed the media owners that the IMF would be visiting the country on the 20 June and that he was hopeful of reaching a staff-level agreement by the end of the month.
The Premier revealed that the IMF emphasised on the need of having a proper fiscal discipline and achieving primary surplus of 1%-2% by 2024.
“We informed them that this is unrealistic given the current situation. However, we assure them to reach a breakeven position where the primary budget deficit is reduced,” he added.
He also explained that due to the pending food shortages, he was launching a food security programme in the country. Wickremesinghe added that he was hopeful that through the food security programme the Government would be able to provide food free of charge to 10% of the population who would be unable to afford three meals a day.
He made an appeal to the media owners to assist the Government in presenting the true picture of the situation. While insisting that the media must hold the Government accountable when necessary, he however requested that responsible reporting be followed.
When questioned on the Government’s initiatives, the Prime Minister explained that due to the damage caused to the economy the country would have to suffer the consequences. However, he added that the Government is making maximum effort to reduce the impact through providing financial and logistical support. A Rs 200 billion financial safety net is being raised for social sector support.
He went on to explain that discussions were underway with Japan to regain their confidence and secure their support. The Prime Minister said that countries were stepping forward with assistance in food and medical supplies, however, no country would step forward with providing fuel free of charge.
The Prime Minister stated that he was reliant on the support of the media organisations to help the country see through these upcoming months.
Former Finance Minister Basil Rajapaksa, after handing over his letter of resignation to Parliament Secretary General Dhammika Dassanayake came to SLPP headquarters at Nelum Mawatha, Battaramulla to address the media.
“I am not needed in Parliament anymore, I came to Parliament to take over the position of Minister of Finance and now that I have stepped down from the Ministerial portfolio, I do not belong in Parliament,” he said.
Rajapaksa also observed that he only returned to Sri Lanka due to the bribery and corruption cases filed against him and as several accusations were made against him over former Premier Mahinda Rajapaksa’s loss at the 2015 Presidential Election, due to which he wanted to ensure that the latter would be accepted by the public again, noting thereby, that his primary goals have been achieved.
He added he has no regrets about his work during the period in which he was in power, while noting that he is looking forward to an ultimate system change as opposed to a shuffle of heads.
“I am expecting someone suitable to enter Parliament through the National List made vacant by my resignation, SLPP is still ready for an election and the party is also confident of winning,” he said.
Being repeatedly pressed by journalist on his part in the ongoing calamity, Rajapaksa for a moment lost his thus far maintained ‘not-defeated mood’ while attempting to use humour to bounce questions about his responsibility. He in fact shifted the blame to those who had voted for his party.
“What is this you are repeatedly referring to as passing the buck? I’m not passing the buck to the people. But yes, they do hold some responsibility for electing us to power. If, as you say, we passed the buck, then those who gave us the buck in the first place are also responsible, (Mona bolayak genada kiyanne? Kawda bola pass kale? Mama bola pass kale naha ….mata bolayak aththeth naha…),” an agitated Rajapaksa retorted as he lost his cool.
“Kaputu kaak, kaak, kaak” followed by a chorus of “Basil, Basil, Basil, Basil” was the most famous yet annoying slogan in the past two months of ‘Aragalaya’.
Rajapaksa appeared oblivious to any negativity or insult attached to this particular slogan and in fact said: “I mean, it’s not a bad animal, really. I hold no grudge against any being. I do not seek vengeance. It’s my ringtone now. The phone goes ‘Basil Basil’ when it rings. The first bit is played back at a lower volume,” he added wittingly.
When questioned about the erosion of Rajapaksa popularity, he responded: “I think we can see that our family is better at politics than at governance.”
A Gazette Extraordinary was issued creating a new portfolio, titled Minister of Technology and Investment Promotion and Minister of Women, Child Affairs & Social Empowerment.
This was announced in a communiqué published by President Gotabaya Rajapaksa on 9 June night, amending a previous Gazette Notification issued by him on the 27 May, by virtue of the powers vested in him under paragraph (1) (a) of Article 44 of the Constitution.
Through the amended Gazette Notification, several duties, functions, departments, statutory institutions and public corporations have been transferred under the purview of the Minister of Defence.
Thereby, the Department of Immigration and Emigration, Telecommunication Regulatory Commission of Sri Lanka (TRCSL), Department of Registration of Persons and Board of Investment, which were listed under the Defence Ministry have now been assigned to the Ministry of Technology and Investment Promotion.
Departments and institutions gazetted under the purview of the Minister of Technology and Investment Promotion are listed below:
- Department of Registration of Persons
2. Department of Immigration and Emigration
3. Telecommunication Regulatory Commission of Sri Lanka and Allied Institutions
4. Information and Communication Technology Agency and Allied Institutions
5. Sri Lanka Computer Emergency Readiness Team
6. Sri Lanka Telecom and its Subsidiaries and Allied Institutions
7. Colombo Lotus Tower Management Company (Pvt) Limited
8. Techno Park Development Company (Pvt) Limited
9. Information Technology Parks (Jaffna & Mannar)
10. Industrial Technology Institute
11. Sri Lanka Institute of Nanotechnology (Pvt) Ltd.
12. Sri Lanka Standards Institute
13. Sri Lanka Institute of Biotechnology (Pvt) Ltd.
14. Board of Investment of Sri Lanka
15. Colombo Port City Economic Commission
Departments and institutions gazetted under the purview of the Minister of Women, Child and Social Empowerment are listed below:
- National Committee on Women
2. Sri Lanka Women’s Bureau
3. Department of Probation and Childcare Services
4. National Child Protection Authority
5. National Secretariat for Early Childhood Development
6. Department of Samurdhi Development
7. Saubhagya Development Bureau
8. National Institute of Social Development
9. Rural Development, Training and Research Institute
10 .Social Security Board
11. National Council for Persons with Disabilities
12. National Secretariat for Persons with Disabilities
13. Department of Social Services
14. National Council for Elders and National Secretariat for Elders
15. Kidney Fund