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Sri Lanka economy managed in ‘alternative’ way: CB Governor
ECONOMYNEXT – Sri Lanka’s economy is managed through new policies in an ‘alternative way’ but critics are using the downturn seen in the second quarter of 2020 to make, doom and gloom predictions for 2021, Central Bank Governor W D Lakshman said on Friday.
The alternative policy now being deployed seemed to be criticized based on a political or ideological basis in his view, he said.
It was important to have a positive view he said. A pick-up in business confidence has been seen in the purchasing managers’ index.
Alternative Policy
“It is important to note the government’s determination to move away from the, so far, heavy dependence on imports for foodstuffs,” he said. “That is indeed a really significant long term policy approach despite in the short run there is an adverse impact in the prices.”
Sri Lanka was already growing enough turmeric he said. Sri Lanka banned the import of turmeric and as prices shot up to 200 rupees for 50 grams (about 4,000 rupees a kilogram) smuggling commenced.
But now nobody is talking about turmeric, he said.
The Navy was deployed to stop smuggling. Sri Lanka had seen similar smuggling in the 1970s.
Most negative analysis and critiques were based on the performance of the economy in the second quarter of 2020, but conditions for 2021 were different, he said.
The country was now using limited closures of areas instead of national lockdowns and business activity was picking up with people starting to move around.
Tourism, which was the most badly hit was also now starting to unlike in 2020, he said.
The government was moving towards a mass vaccination campaign which would also help.
The International Monetary Fund has forecast global economic growth to pick up to around 5.5 percent in 2021.
Pick Up
Gross domestic growth of 5.5 to 6.0 percent in 2021 was expected, recovering from a 3.9 percent contraction in 2019. The low base will also help the recovery number, Governor Lakshman said.
Per capita GDP is expected to be 4,000 dollars.
Inflation of 4-6 percent is targeted in 2020. Private credit is expected to grow by 850 billion rupees.
There were challenges in the fiscal side and external sector. But we will repay debt and maintain our unblemished record of debt repayment.
Year end gross official reserves were targeted at 5.5 billion US dollars. Negotiations were underway with multilateral lenders, and foreign central banks as well as commercial banks for credit and swaps, details of which would be announced as they are finalized, he said.
It was not correct to simply add debt repayments and compare against foreign reserves. The foreign share of central government debt was expected to fall to 35 percent in 2021 according to Central Bank projections. In 2020, foreign loans were repaid partly by using foreign reserves and selling Treasury bills to the Central Bank. Despite stronger private credit a 500 million dollar surplus in the current account is also forecast.
Inflows in 2021
Exports are targeted tat 13 billion US dollars, with apparel at 6.0 billion USD, tea 1.5 billion dollars, gem and jewelry 1 billion dollars. Imports are expected to be 17 billion USD. Among services, IT/BPO is expected to be 1.75 billion USD and tourist earnings 1.75 billion USD.
Worker remittances would be around 7.5 billion US dollars and foreign direct investments would be about 2.0 billion US dollars. Port City lease sales would bring in an additional billion US dollars.
Sri Lanka had recorded a surplus in the current account for part of 2020 for the first time in decades.
In 2020 up to October the government had repaid foreign debt on a net basis. Up to August 2020, private credit was negative, and the second quarter GDP was negative, which will also help create a current account surplus, analysts say.
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PCoI on Easter Sunday attacks:
By Shamindra Ferdinando
Attorney General Dappula de Livera, PC is not bound by recommendations made by the Presidential Commission of Inquiry (P CoI) into the 2019 Easter Sunday carnage, or presidential directives in that regard, according to authoritative sources.
They said that the AG couldn’t under any circumstances initiate legal proceedings until he had received the full PCoI report.
President Gotabaya Rajapaksa received the PCoI report on Feb 1. The President’s Office delivered a set of PCoI reports to Speaker Mahinda Yapa Abeywardena on Feb 23, a day after the report was presented to the cabinet of ministers. The Island raised the matter with relevant authorities in the wake of a section of the media reporting the PCoI recommending punitive measures against former President Maithripala Sirisena, Defence Secretary Hemasiri Fernando, IGP Pujitha Jayasundera, Chief of State Intelligence Senior DIG Nilantha Jayawardena, Chief of National Intelligence retired DIG Sisira Mendis and All Ceylon Makkal Congress (ACMC) leader and Samagi Jana Balavegaya MP Rishad Bathiudeen et al over the Easter Sunday carnage.
Sources pointed out that due to the inordinate delay in sharing the PCoI report with the AG, the department hadn’t been able to take preliminary measures required to initiate the proceedings. Sources said that a team of officers would take at least six weeks or more to examine the report before tangible measures could be taken.
With the AG scheduled to retire on May 24, 2021, even if the AG Department received the P CoI it would be quite a tough task to initiate proceedings ahead of retirement, sources said. However, in terms of the 20th Amendment to the Constitution enacted in last October, both the AG and the IGP could receive extensions beyond 60 at the President’s discretion.
Dappula de Livera received an Acting appointment as the AG a week after the Easter Sunday carnage whereas his predecessor Jayantha Jayasuriya, PC, was elevated to Chief Justice.
Responding to another query, sources said that the Attorney General two weeks ago requested Secretary to the President for a copy of the P CoI. However, the AG was yet to receive one, sources said. In spite of the AG not receiving a P CoI copy, the AG had instructed the IGP to obtain a copy of the report when he requested the police to complete investigations into the Easter Sunday carnage. The AG issued specific instructions after having examined police files pertaining to the investigations.
The IGP, too, hadn’t received a copy so far though some sections of the report were in the public domain.
Agriculture Minister Mahindananda Aluthgamage displayed at a live political programme on Derana a copy of the P CoI report he received at the cabinet meeting earlier in the day.
Sources said that the Attorney General’s Department couldn’t decide on a course of action in respect of the Easter carnage on the basis of a section of the report. In terms of the Commission of Inquiry Act (Section 24), the AG enjoyed significant powers/authority in respect of investigations; sources said adding that the Department urgently required both the P CoI report and police investigations report. The Attorney General’s Department has raised the delay in receiving a P CoI report amidst the Catholic Church attacking the government over the same issue.
Sources said that ministerial committee appointed to study the P CoI report couldn’t decide on how to proceed with the recommendations and the matter was entirely in the hands of the AG. Sources pointed out that the delay on the part of the government to release the report had received the attention of sections of the international media, including the New York Times. Public Security Minister retired Rear Admiral Sarath Weerasekera having met Malcolm Cardinal Ranjith at the Bishop’s House on Dec 8, 2020 said that the AG would get a copy of the P CoI report once the President received it. Minister Weerasekera said that the CID had handed over the relevant files after having completed investigations into eight blasts. Referring to the Parliamentary Select Committee (PSC) report on the Easter Sunday carnage, the former Navy Chief of Staff said that all such documents would have to be brought to one place and considered before initiating legal proceedings. Acknowledging that there could be delays, lawmaker Weerasekera said that on the instructions of the Attorney General a 12-member team of lawyers was working on the case. The minister vowed to expose the mastermind behind the Easter Sunday attacks. Investigations continued while some of those wanted were overseas, the minister said.
The minister acknowledged that the Attorney General couldn’t proceed without the P CoI report. Minister Weerasekera reiterated that once the President received the P CoI report, it would be sent to the Attorney General. The minister said that there were documents two to three feet high that needed scrutiny. The minister assured comprehensive investigation. The minister said that investigations pertaining to eight blasts had been completed and the reports handed over to the AG. However, the Attorney General had found shortcomings in those investigations.
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By Saman Indrajith
The Presidential Commission of Inquiry on the Easter Sunday bombings had failed to identify the mastermind of , the JVP said yesterday.
Addressing the media at the party headquarters in Pelawatte, JVP Propaganda Secretary MP Vijitha Herath said that the PCoI report had levelled accusations against former President Maithripala Sirisena, former IGP and head of intelligence for their dereliction of duty, shirking of responsibilities and not taking action to prevent the attacks and negligence. There were reference to the causes of the terror attacks and actions to be taken to avoid such attacks and the influence of extremist organisations. “However, there is no mention of the mastermind of the attacks, the handlers of the attackers and those whose interests the carnage served. It is also not mentioned whether there has been any foreign or local organisation behind those attacks. As per the PCoI report the attack took place as a result of culmination of extremism.
“According to the PCoI the extremist activities were a result of the prevailing political situation then. The entire nation was waiting to see who was responsible and who masterminded those attacks. The PCoI has failed to identify the true culprits responsible for the terror attacks. The report says that the leader of the suicide cadres killed himself in the attacks and it was a puzzle. That means those who are actually responsible for the attacks are still at large. The report does not provide exact details of the sources of the attacks. The PCoI had sittings for one year and five months. It summoned various persons and got their statements but it has failed to shed any light on the terror attacks. Everybody knows that the top leaders of the government and heads of security and intelligence establishments failed in their duties. Ranil Wickremesinghe was the second in command and he too is bound by the responsibility but the PCoI report fails to identify him as one of the persons against whom legal action should be instituted. The PCoI has treated Wickremesinghe and former President Maithripala Sirisena differently. We are not telling that this report is a total failure but we cannot accept this as a complete report. The PCoI handed over its report to the President on Feb 1. After 23 days it was sent to Parliament. Now, a copy of the report is there in the parliamentary library for the perusal of MPs.”
Herath said that the PCoI did not have powers to take punitive action. “It only has powers to name those responsible and recommend action to be taken against those named.
