CBSL Governor gives economic lessons to MPs


President Ranil Wickremesinghe stayed in Colombo last weekend as he had been out of Colombo the previous two weekends. Even though the President took a break, there was no rest for his phone because he coordinated many things with regard to the Interim Budget 2022.

The President held frequent telephone discussions with the officials of the International Monetary Fund (IMF) as well as with the heads of the Central Bank and the Ministry of Finance. On Sunday too, the President was busy with preparing the Interim Budget speech which was to be delivered in Parliament on Tuesday (30).

President’s Chief of Staff, Sagala Ratnayake, Secretary to the President Saman Ekanayake, Finance Ministry Secretary Mahinda Siriwardena and CBSL Governor Dr. Nandalal Weerasinghe held discussions on the Interim Budget as well.

“We have to provide a collective answer as the Government regarding the decision to increase VAT as well as reducing the retirement age of Government and Semi-Government employees to 60 years,” Sagala Ratnayake said.

“VAT was reduced by the previous administration not to give relief to the public. It was reduced to relieve some business friends. Nothing else happened except that State income decreased,” the President noted and everyone agreed.

The Cabinet met on Tuesday (30) morning to approve the Interim Budget. After getting the approval, the President arrived in Parliament to present Interim Budget.

The tea party in Parliament, that is held as a tradition, after presenting a budget, was not held this time.

Parliament officials had asked the President’s office if a tea party would be held this time. The matter was referred to President’s Secretary Saman Ekanayake and he informed the President about it.

“We are presenting this Interim Budget to take a new journey. On the other hand this is an Interim Budget. Therefore, there is no need for a tea party. After the country is put on the right track, we can hold a tea party,” the President said with a smile.

After presenting the Interim Budget, the President joined the meeting of the ruling party MPs’ group for a few minutes and instructed Prime Minister Dinesh Gunawardena to head the meeting.

He then participated in another discussion with the International Monetary Fund (IMF) delegation.

Wickremesinghe, who met the IMF officials, also gave an explanation regarding the Interim Budget.

Satisfied with that, the IMF officials concluded the discussion by saying that they will make their official notification about the progress of the discussion on the next day.

The President was in the Parliament complex on both Wednesday (31) and Thursday (1) when the Interim Budget was debated. He stayed for a long time at the lobby on the Opposition’s side.

This was welcomed by the Opposition MPs as the President held light discussions with them. They recalled many past stories.

“Normally, Presidents are not coming to this lobby and talking to us. It was very rare,” the MPs said.

“But President J.R. Jayewardene was not like that. He always kept in touch with Parliament. He often visited the Parliament premises as well,” said the President.

“The President is right. The reason as to why the Presidents and the Parliament had such distant relationship in the past, was the Presidents rarely visited the House,” UNP MP Wajira Abeywardena, who joined the President, said.

When the President went back to his office in Parliament, MP Rauff Hakeem was severely criticising him in the Chamber. The President, who watched the speech with a big smile, was told in a few moments by a staff member that MP Rauff Hakeem had come to meet him.

On Thursday (1 September), the President went to Parliament after concluding the discussion with the IMF officials in the morning. The IMF agreed to provide Sri Lanka with a comprehensive credit facility of USD 2.9 billion and it was possible to reach a staff agreement as well. .

President Ranil Wickremesinghe came to Parliament with that special message and he told Prime Minister Dinesh Gunawardena to announce the good news to Parliament.

After that, the President again went to the lobby where the MPs were and engaged in a light discussion with them.

“The President seems happy today,” an Opposition MP said.

“This is really a big victory. We were branded as a bankrupt State. Because of this progress we can go forward. Sagala Ratnayake, Saman Ekanayake, Dr. Samaratunga, Finance Secretary Siriwardena and the CBSL Governor worked very hard to come to this situation,” the President said with a smile.

“Will the country be stable after this?” a ruling party MP asked.

“We can take a start from this to move the country forward. We can talk about new borrowings with the countries and as well as with private institutions now.  No country gives loans without IMF guarantee. If there was no crisis in the country in July, we would have come to this agreement by the first week of August,” said the President.

“Anyway, in the end, we will always be debtors,” Opposition MP noted.

We have made a plan to borrow as well as repay the loan, the President replied.

Announcing the news to Parliament, PM Dinesh Gunawardena said, “in the future, we will have to make great sacrifices to find solutions to this economic crisis.

“For decades we have had a higher consumption comparative to what we had saved. As a result, our debt has increased greatly. The income of the country has decreased to a very low level due to various reasons. Because of this, we have not been able to invest more in important sectors like health, education and public transport. We have been consuming utilities such as petroleum and electricity at low prices in the country for a long time. As a result, a large trade deficit was created and exchange rates weakened. Public sector has been mismanaged for decades. As a result, those institutions suffered huge losses. It also created a huge tax burden on the public.”

Various weaknesses and wrong policy decisions ultimately led to debt default and plunged the country into a deep economic crisis. To recover from this crisis, similar deep and comprehensive economic reforms have to be carried out. No matter who is in power, these reforms are necessary. Only then can sustainable and broad-based economic growth is achieved, the PM said.

Solving fuel queues

The President started receiving phone calls and complaints that fuel queues are forming again. He informed the President’s Chief of Staff Sagala Ratnayake to look into this immediately.

Accordingly, Sagala Ratnayake immediately started to inquire about this from the representatives of the Ceylon Petroleum Corporation (CPC) and the Finance Ministry officials.

“Even though there are enough fuel stocks in the country, how come fuel queues are forming again?” he queried.

“There have been small queues because of opening of schools and public sector workers returning to offices,” the CPC officials said, but Ratnayake was not satisfied with that answer.

He informed the Ministry of Finance to give him a detailed report on these matters early next week.

UNP Anniversary

UNP Deputy Leader Ruwan Wijewardene met the President on Wednesday (31) last week to inform him of the progress on party’s 76th anniversary celebration on 6 September.

This anniversary will be an important occasion for the party, as it is going to be held under the patronage of a UNP President after 28 years. Therefore, Wijewardene held several rounds of discussions in the past week with regard to the celebration.

The theme of the celebration is ‘Ekwa Godanagamu’ (Build Together).

“Everyone is asking about the All-Party Government. What will happen in the future?” Wijewardene asked.

“We are still hoping that the Opposition will join the APG. In any case, I am thinking of appointing State Ministers next week,” the President said.

The 76th Anniversary celebration of UNP will be held on 6 September at 3.00 p.m. at Sugathadasa Indoor Stadium.

“Can’t play lip-service anymore”

Not only rising up from the bankruptcy crisis and the debt moratorium, it is also key to ensure that our social sectors are protected and both our economic and social aspect of our lifestyle will certainly not have any further setbacks.”

The President made this statement having reached a staff-level agreement between the Sri Lanka Government and the IMF.

Accordingly, President Wickremesinghe noted that he considers this to be the beginning of a new economic era, where the country is committed to a very competitive export oriented industry, while maintaining and improving social standards as well as looking after the vulnerable groups.

“The beginning will be difficult, but we know as we go on that we can make more progress. Our commitment is what matters now and we should not only fulfill the targets here, but we must get ahead of them,” the President said, adding, “I appeal to the country, let us reorient ourselves to an export oriented economy which will also make it easier for us to sustain our social services.”

He also said that it also should be a beginning for the fact that Sri Lanka should reduce its debts and if possible, even eliminate its debts.

On a personal note, the President said, “I would like to say that when I was born, Sri Lanka had no debt and we had sufficient reserves to lend to the UK which was recovering from war times. We had made enough out of our rubber, and our tea and we built our first reservoir out of our own initiative. Now that was the government of D.S. Senanayake. And he believed in one principle that a nation and a person should be debt free. He was the Chairman of the Lay Organization of the Buddhist sects in this country and like all others, was committed to follow the doctrine that people should not get into debt and there should not be insolvency.”

Therefore, the President noted that if the country is to uphold Article 09 of the Constitution, it must follow that path. “You can’t pay lip-service only. And let this be the beginning and the way forward because on the 75th anniversary of our independence this is the best commitment we can make for the next 25 years.”

Susil ready to beg

Leader of the House Susil Premajayantha said he is ready to even beg if it can provide an extra meal for schoolchildren during the economic crisis in the country.

In response to MP Wimal Weerawasa’s statement that Premajayantha (as the Education Minister) was going around begging to collect aid from the international community, the Leader of the House said if he loses his ministerial portfolio he would go back to the Court as a lawyer.

“I have a place to go if I lose the ministerial portfolio. But those who criticise me do not have anywhere to go. I did not earn money by engaging in corruption and fraud. I did not build homes using public funds. But certain people even have pending Court cases as they were unable to prove how they earned their property,” he said.

“These people criticise me based on an assistance we got from the US Government. But Sri Lanka has obtained such assistance from international communities throughout its history,” he said.

“The yellow split lentils and canned fish donated by the US Department of agriculture will be provided to school children shortly. This programme will be monitored by the ‘Save the Children’ organization,” he added.

He recalled that Sri Lanka was donated a consignment of rice from China as well.

Premajayantha said the Opposition members should come forward to meet foreign diplomats and seek assistance for the nation.

CBSL Governor’s lesson to the MPs

CBSL Governor Dr. Nandalal Weerasinghe arrived in Parliament on Wednesday (31) to conduct a workshop for the MPs with regard ‘the Current Economic Status and the way forward.’

During the workshop Dr. Weerasinghe said in the event of an economic crisis, the low-income groups should be protected first and therefore money should be allocated for social security networks to protect them.

He pointed out that if the economic difficulties faced by low-income groups increase, such groups may take to the streets and because of this, riots may occur in the country. Therefore, he further pointed out that by dividing the economic burden between the high-income and low-income groups, the economy should be stabilised by controlling the discomfort caused to the low-income groups.

He also pointed out the need to increase government revenue by controlling borrowing. He also said that the current inflation should be controlled and the export income should be increased and further emphasised that it is important to manage the government income and expenditure.

Dr. Weerasinghe pointed out that by restricting imports, the cost of two billion last year was reduced to 1.3 billion this year and said that it was possible to buy essential items such as medicine, mineral oil and gas. He explained that especially the current State income is about 1.2 billion and if it is possible to control the State expenditure by restricting the import of non-essential items, it will be important for the State income.

The CBSL Governor further stated that solving this crisis is something that cannot be done in two months and he believes that it will be required to bear these inconveniences at least until December of this year. He also explained that to avoid this crisis, the State revenue should be increased to at least 14/15%.

The Governor stated this while addressing the dialogue held at the Parliament Complex on Wednesday (31) titled ‘the Current Economic Status and the way forward’.

This programme was organised by the Parliament Secretariat in order to ensure the active participation of the members of Parliament in parliamentary debates and to create an effective discourse on the current economic situation and the future economic path of the country.

Speaker Mahinda Yapa Abeywardana, Opposition Leader Sajith Premadasa, Chief Opposition Whip Lakshman Kiriella and many ministers and MPs participated in this workshop.

Furthermore, officials of Parliament, including Secretary General Dhammika Dasanayake, Chief of Staff and Deputy Secretary General Kushani Rohanadheera were also present at the event.

Conspiracy to remove CBSL Governor?

Opposition Leader Sajith Premadasa alleged on Friday (2) there is a conspiracy afoot to remove CBSL Governor Dr. Nandalal Weerasinghe.

Speaking in Parliament, the Opposition Leader stressed that when the CBSL Governor was invited to Parliament on Wednesday (31 August) to conduct a workshop for the MPs on ‘The Current Economic Status and the way forward’, several MPs threw questions that sounded like allegations at Dr. Weerasinghe.

“Not only that, some of their statements conveyed the feeling that they put the blame on Dr. Weerasinghe for the current plight of the country at the moment. This is not right. Dr. Weerasinghe returned to the country and took the post to take the country on the right track. Now, if someone tries to make the CBSL Governor resign and appoint their henchman to the post, it is nothing but a conspiracy,” Premadasa alleged.