• China’s latest assurance on SL debt restructuring brings IMF deal closer
• Govt.-India in agreement to extend $ 1 b credit line by a few months
• Treasury Secy.’s absence at EC meeting criticised, EC asked for fresh date
• Secy. Siriwardana outlines four issues regarding attending EC’s meeting
• EC informed by Treasury Secy. that letter on funds passed on to Minister
• Dolawatte raises privileges issue against SC, Speaker requested to inquire
• MR to kick-off SLPP campaign at Monaragala rally organised by Shasheendra
• SLPP MPs and affiliated organisations take to field in team-building move
• Acting Gen. Secy. appointment deepens SLFP rift, dissidents invited back
• Int’l community seeks clarity from Govt., pushes accountability, reforms

As Sri Lanka nears the one-year mark of last year’s Aragalaya people’s power protest campaign, the country’s economic revival seems to be finally on track with the appreciation of the Sri Lankan Rupee and economic activities showing positive signs following news of the proposed International Monetary Fund (IMF) deal likely to be finalised this month. 

However, the public’s agitation over the ongoing hardships seem far from over, with Opposition parties, civil society, trade unions, and university students taking to the streets over a plethora of demands. It would therefore be correct to say that the challenges faced by the Ranil Wickremesinghe Government are far from over.

Nevertheless, there was some respite for the Government with the receipt of the latest letter by the China Export-Import Bank on Monday (6), expressing commitment to Sri Lanka’s debt restructuring programme. The letter by the Export-Import Bank of China was signed by the Bank’s Vice President, Zhang Wencai.

“We hereby express our firm support to Sri Lanka through a debt treatment. This would be in line with the goal/objective of restoring public debt sustainability consistent with the envisaged IMF-supported programme and delivered through financial operations negotiated between our two sides. In view of the time needed for Sri Lanka to complete the debt treatment negotiation, in order to end your default status as soon as possible, and pave the way for the country’s economic recovery and debt sustainability restoring, the bank is going to provide an extension on the debt service due in 2022 and 2023 as an immediate contingency measure based on your request, which means you will not have to repay the principal and interest due of the bank’s loans during the above-mentioned period, so as to help relieve your short-term debt repayment pressure. 

“Meanwhile, we would like to expedite the negotiation process with your side regarding medium- and long-term debt treatment in this window period, with a view to finalising the specifics of a debt treatment in the coming months, based on the principle of active communication, friendly discussion, mutually-beneficial, and win-win cooperation. We will make our best efforts to contribute to the debt sustainability of Sri Lanka,” the letter has stated.

The letter has further stated: “The bank will support Sri Lanka in your application for the IMF Extended Fund Facility (EFF) to help relieve the liquidity strain. In the meantime, adequate contributions from all the creditors would be a critical condition for a speedy solution as desired by all the parties. We will continuously call on commercial creditors (including the international sovereign bondholders) to provide debt treatment in an equally comparable manner, and encourage multilateral creditors to do their utmost to make corresponding contributions, to help you better respond to the crisis and emerge from it.”

Following the latest assurance received by the Chinese, President Wickremesinghe informed Parliament that Sri Lanka was expecting IMF Board approval by the end of the month after its largest bilateral creditor gave written support for debt restructuring via the Export-Import Bank of China on Monday (6). He said the Government had received the letter of assurance from the Chinese Exim Bank the previous night and the letter of intent signed by the Central Bank Governor and the President had been sent to the IMF the same night.

Meanwhile, US Treasury Secretary Janet L. Yellen on Monday spoke with President Wickremesinghe and expressed support for Sri Lanka’s steps towards an IMF-supported programme to advance economic reform and achieve a strong and durable recovery.

According to the US State Department of Treasury, the Secretary welcomed Sri Lanka’s commitments to transparency and comparable treatment for all bilateral official and private creditors.

IMF Chief Kristalina Georgieva said on Twitter: “I welcome the progress made by Sri Lankan authorities in taking decisive policy actions and obtaining financing assurances from all their major creditors, incl. China, India and the Paris Club.” She added that she looked forward to presenting the IMF-supported programme to the Executive Board on 20 March.

“Sri Lanka has now received financing assurances from all major bilateral creditors. This paves the way for consideration by the IMF’s Board on 20 March the approval of the Staff-Level Agreement reached on 1 September 2022 for financing under an Extended Fund Facility. Approval by the board would also catalyse financing from other creditors, including the World Bank and the Asian Development Bank. The arrangement will support the authorities’ programme of ambitious reforms that they have already embarked upon, which will help Sri Lanka emerge from its current crisis and set it on a trajectory of strong and inclusive growth,” the IMF stated on Tuesday (7).

Sri Lanka is making good progress towards unlocking the IMF bailout package but its Restricted Default (RD) status will only come off after the debt restructuring process reaches completion, rating agency Fitch had stated on Friday (10). “Sri Lanka’s post-default ratings would depend upon our assessment of its credit profile. If the key parameters for returning to debt sustainability under the IMF programme allow for a moderate and extended debt reduction process, this could facilitate debt restructuring talks but may weigh on the sovereign’s post-default credit rating,” Fitch said in a statement.

Meanwhile, Reuters last week reported that Sri Lanka was negotiating with India to extend a $ 1 billion credit line by a few months. The news report, quoting sources, has stated that the credit line is due to expire on 17 March, with Sri Lanka having used only about two-thirds of it, mainly for medicines and food.

A source at the Sri Lankan Finance Ministry has also been quoted as saying that the Government wanted to extend the credit line by 6-12 months because there was about $ 300 million of it left unused. By Thursday (9), an agreement had been reached on the extension.

LG Polls

 The Election Commission (EC) last week decided on 25 April as the new date to conduct the Local Government (LG) Polls, in keeping with the Supreme Court’s recent and related order following a meeting with Government Printer Gangani Liyanage, Inspector General of Police (IGP) Chandana D. Wickramaratne, and other relevant authorities, at which Secretary to the Treasury and Finance Ministry Mahinda Siriwardana was absent.

Election Commission Chairman Nimal G. Punchihewa has told the media last week: “We cannot wait until the Treasury releases funds. The Supreme Court order tells the Treasury to release funds. We have asked for funds and if they are not given, we can report it to the Supreme Court. Siriwardana didn’t attend last Tuesday (7). He has informed via a letter that he has to attend a security-related meeting. He has asked for another date to meet.”

He has further said that the new dates had been fixed in consideration of postal voting and the main voting which should be scheduled in a specific time period. The postal voting for the postponed Local Government Elections is likely to be held from 28-31 March. Punchihewa had said that steps were being taken to conduct the postal voting for the polls on the new date. 

Opposition legislators had also met members of the Election Commission on Tuesday, during which they had emphasised holding the Local Government Polls as soon as possible.

Meanwhile, Opposition Leader Sajith Premadasa had alleged in Parliament on Tuesday that the Government had purposely prevented the meeting with the Finance Ministry Secretary and the Election Commission scheduled for that morning to discuss the financial matters concerning the holding of Local Government Elections.

According to Premadasa, the Government had prevented the scheduled meeting claiming that there was a National Security Council (NSC) meeting. The Opposition Leader had questioned how a NSC meeting had been held when the President, the Prime Minister, and the Defence Minister were in the Chamber.

Prime Minister Dinesh Gunawardena had however refuted the allegation by saying that the President had come to Parliament after the NSC meeting as he [the Prime Minister] had informed the President he would not attend the meeting.

The letter

 Meanwhile, highly-placed sources disputed claims made in Parliament that the Finance Secretary did not attend a meeting with the Election Commission due to a NSC meeting.

Accordingly, it is learnt that a letter was sent to the Election Commission by the Secretary to the Ministry of Finance requesting a later date to meet. In the letter, the Treasury Secretary had highlighted four key points as to why he would be unable to attend the meeting.

1) The Treasury Secretary had not received the determination from the Supreme Court on Tuesday morning prior to the scheduled meeting. 

2) Upon receiving the determination from the Supreme Court, the Secretary had stated that he would need to discuss the determination with the Attorney General.

3) Prior to attending the meeting, the Secretary to the Treasury had stated that he would have to discuss the matter with the Minister in Charge. 

4) It was also mentioned that a previously scheduled Security Council meeting was to be held at the same time as the meeting called for by the Election Commission.

Therefore, it seems that the Finance/Treasury Secretary had outlined four issues regarding attending the meeting, and had requested a fresh date.

This issue had given way once again for concerns as to how the Election Commission hopes to hold the Local Government Elections on the new date without having first consulted the Treasury Secretary.

Meanwhile, Government Printer Gangani Liyanage stated that she had written to the Treasury on Wednesday (8) to release the remaining funds of more than Rs. 300 million to recommence the activities of ballot paper printing for the upcoming Local Government Polls and had forwarded a written request to IGP Wickramaratne requesting the provision of adequate security for the same.

Letter to RW

 Finance/Treasury Secretary Siriwardana has also informed the Election Commission that the letter sent to him by the commission requesting the allocation of funds to hold the Local Government Elections has been forwarded to the Finance Minister.

Siriwardana has made this observation in a written response to the Election Commission following the letter sent by the commission to the Treasury Secretary last Tuesday. It is learnt that the Treasury Secretary has informed the Election Commission that his (Siriwardana’s) approval alone would not be sufficient to allocate funds for polls given the current situation in the country. Hence, the Election Commission’s letter seeking funds to hold the polls is now with President Wickremesinghe, who is also the Finance Minister.

Controversy over Judiciary

However, the drama over the holding of Local Government Elections last week resulted in a governing party legislator alleging that the Supreme Court had violated parliamentary privileges through a recent directive given in relation to a case on the holding of the much-discussed Local Government Elections.

SLPP MP Premnath C. Dolawatte had said that Parliament was empowered to act in instances of violation of its powers and privileges as per Article 4 (c) of the Constitution. He had told the House on Tuesday (7) that a point of privilege had arisen from the injunction SC (FC) No. 69/2023 issued on 3 March.

Quoting from the Constitution, Dolawatte had noted in detail that Parliament had financial control of the State. An injunction issued by a panel of Supreme Court judges had attempted to nullify the non-violable powers vested in Parliament and in breach of a principle of natural justice, the MP had noted.

According to Dolawatte, the matter of the Local Government Elections is an affair of Parliament with a proposal already in the agenda to form a select committee, and the judges have disregarded that despite it being noted by the Attorney General. He had further observed that the court had disregarded an affidavit submitted by the Finance Secretary about a lack of funding, which was a violation of traditions that would lead to anarchy of the Judiciary.

Dolawatte had said the Minister in Charge of the subject of Finance was responsible to Parliament, which controls public finance, and that the Interim Order by the Supreme Court attempted to prevent the implementation of these laws and made the control of public finance by Parliament a nullity.

He had also stated that the interim order sought to give effect to the Activity Budget Estimates for 2023, which was not a law nor a legal document, but a summary of the Appropriation Bill for 2023 to assist Parliament during the debate.

However, State Minister of Finance Shehan Semasinghe had also stated last week that the Speaker had agreed to an inquiry into the violation of parliamentary privileges due to the interim order issued by the Supreme Court pertaining to the Local Government Elections.

Semasinghe had said on Friday (10) that the matter had been accepted by the Speaker and had been presented to the Parliamentary Committee on Ethics and Privileges. “It is a serious offence to implement the interim order by the Supreme Court before hearing the said matter and taking a decision,” he had said.

The State Minister had further said that by tabling the letter by the Chairman of the National Election Commission on the matter, he had requested the Deputy Speaker to refer the matter to the Parliamentary Committee on Ethics and Privileges to conduct an inquiry. Semasinghe had also requested the Deputy Speaker to advise all relevant authorities not to take action on the said matter until the Parliamentary Committee on Ethics and Privileges concluded its inquiry on the said matter.

A heated argument had then broken out between the ruling party MPs and the Opposition over Semasinghe’s statement. 

Opposition Leader Premadasa had also accused the Government of attempting to postpone the Local Government Elections by pressurising the Judiciary, which had given a clear verdict to conduct the election.

Demanding polls

 In the run-up to last week’s episode on pushing for Local Government Polls, Opposition parties – the Samagi Jana Balawegaya (SJB), National People’s Power (NPP), Tamil National Alliance (TNA), Sri Lanka Muslim Congress (SLMC), All Ceylon Makkal Congress (ACMC), Tamil Progressive Alliance (TPA), and breakaway factions of the Sri Lanka Podujana Peramuna (SLPP) – had jointly written to the Election Commission on Sunday (5), demanding that the Local Government Elections be held on or before 19 March, fulfilling the undertaking given to the Supreme Court by the Election Commission.

The letter sent by the Opposition parties addressed to Commission Chairman Punchihewa and its members stated: “Now that the SC has removed the only impediment to holding the election according to law, it is your imperative duty to conduct the said election on or before 19 March 2023. We do not see any reason why you should consult the Secretary to the Treasury or anyone else, now that they are bound to comply with the interim order issued by the SC as aforesaid. We, therefore, request you to re-fix the date of the LG Elections to a date before 20 March 2023 as required by law or the earliest possible date without any further delay. You should not prevaricate on the pretext of consultation with anyone.”

The letter further noted: “We write consequent to the order of the SC made on 3 March 2023, in SC FR 69/2023 restraining the Minister of Finance, the Secretary to the Treasury, and others from withholding necessary funds for the conduct of the LG Elections that was scheduled to be held on 9 March 2023. The court has also made a further order to the Government Printer with respect to the printing of ballot papers. You gave an undertaking in SC Writ 6/2023 and SC Writ 7/2023 that you will hold the said elections according to law. You are aware that according to law, the said elections should be held on or before 19 March 2023. When the Secretary to the Treasury and the Government Printer did not cooperate with you, you filed a motion in the aforesaid two cases seeking the court’s direction on them.”

The NPP meanwhile has requested the Election Commission to take necessary measures immediately with regard to the Local Government Elections based on the Supreme Court verdict and fix an early date for the election.

NPP Secretary Dr. Nihal Abeysinghe in a letter to the Election Commission has stated that the Supreme Court in its verdict has observed that conducting the LG Polls is a fundamental human right considering the importance of the said election.

SLFP crisis comes out

 Amidst the chaos over the holding of Local Government Elections, the internal crisis within the Sri Lanka Freedom party (SLFP) took a new twist last week.

The appointment of a former Governor, Sarath Ekanayake, as the Acting General Secretary of the SLFP by Party Leader and former President Maithripala Sirisena led to controversy, resulting in a clear split within the party’s rank and file. The move also brought to light what seems like a conflict between Sirisena and SLFP General Secretary Dayasiri Jayasekara. Sirisena and his loyalists in the SLFP have however denied any conflict with Jayasekara.

Ekanayake was appointed by Sirisena as the SLFP Acting General Secretary on Monday (6). It was reported that Sirisena had made the decision to appoint Ekanayake as the Acting General Secretary after he came to know about an alleged plan by Jayasekara to appoint those who are loyal to him to the SLFP Central Committee in an alleged attempt to take over the party leadership.

However, when questioned about such reports, Sirisena had said: “Who says that there is a conflict? There is nothing as such. The Party’s General Secretary is Jayasekara yesterday, today, and tomorrow as well. Ekanayake was appointed as the Acting General Secretary only until Jayasekara’s return to the country.”

However, the SLFP had issued a statement on the incident later that evening, which read: “The reports published in some mainstream media and social media that Jayasekara has been removed from the post of the General Secretary of the SLFP and has been replaced by Ekanayake as the Acting General Secretary are completely false and baseless and the SLFP rejects all such reports.”

Jayasekara left for the UK last Sunday on a personal visit and is scheduled to return to the country on 20 March. The SLFPP maintains that Ekanayake has been appointed as the Party’s Acting General Secretary only to oversee Jayasekara’s work until his return.

Meanwhile, the SLFP has invited all its deserters back into the party in order to take up the responsibility of the country’s future. The party’s National Organiser Duminda Dissanayake extended this invitation during a meeting with SLFPers in Anuradhapura last week.

He added that the party was keeping its doors open for all in order for the country to be taken on the correct path.

Reforming SLPP

 The SLPP on Tuesday (7) met under the patronage of SLPP Leader, former Prime Minister Mahinda Rajapaksa to discuss several key issues related to the party.

The discussion that was organised at MR’s residence had included SLPP district leaders and several mayors of Local Government bodies as well as several Government MPs and ministers. It is learnt that MP Mahindananda Aluthgamage had been one of the key organisers of the meeting.

Aluthgamage and several mayors had proposed that the SLPP commence preparations to hold a grand May Day rally this year in order to dispel all talk of further divisions within the party as well as a growing leadership crisis.

However, SLPP National Organiser and theoretician Basil Rajapaksa had disagreed with the proposal, saying that it would not bode well with the public given the economic hardships faced by the country at present. Instead, Basil had proposed that several electoral level meetings be organised as they could also serve as the party’s campaign for Local Government Polls.

It was then proposed that several key rallies be organised at district level and that they be held under MR’s patronage. Three districts were proposed to hold the rallies – Monaragala, Kegalle, and Polonnaruwa.

MR to Monaragala

 Amidst speculation about MR being re-appointed to the post of prime minister in the coming months, MR loyalists are focused on once again promoting the image of the SLPP leadership.

Although Prime Minister Gunawardena had stated that there was no move to make changes to the premiership, a group of SLPPers including some members of the Rajapaksa family are pushing for MR’s re-appointment as prime minister. A discussion during a recent dinner that was held at one of the Rajapaksa sister’s residences had also focused on MR once again being appointed to a top Government position.

It is in such a backdrop that MR is expected to attend a district rally of the SLPP that is to be held today (12) in Monaragala. The rally has been organised by MP Shasheendra Rajapaksa. The Monaragala rally is also among the key district rallies that have been planned by the SLPP.

Team building

 Meanwhile, the SLPP last week also organised a cricket tournament at the Buddhadasa Ground in Kaduwela, with the participation of seven teams of organisations affiliated to the party, including one representing SLPP MPs.

MPs Namal Rajapaksa, Mahindananda Aluthgamage, Sanath Nishantha, Janaka Wakkumbura, Sanjeewa Edirimanna, and several others played for the SLPP MPs’ team. Following the match, Namal stated that the SLPP was prepared to face any election and would face them based on policies. Edirimanna noted that the cricket tournament was aimed at taking the party’s campaign to the next level with new vigour.

Clashes continue

 However, with the SLPP’s decision to remove dissident MP Prof. G.L. Peiris from his post as the SLPP Chairman, another SLPP dissident MP, Dullas Alahapperuma, has claimed that the SLPP is planning to abolish the parliamentary positions of the group, including his own, and assured that they would never betray the programme against the current Government to protect their positions.

He has told the media: “The SLPP will remove Prof. Peiris from the Chairmanship; they will also abolish our [the group of MPs who recently left the SLPP and since function as Opposition MPs] parliamentary seats. They will take decisions against anyone who opposes their dictatorial course. However, it is a blessing and strength for us. It is not a reason to lose strength. The people will admit that we have fought a principled battle against injustice. Therefore, we will not become traitors by giving up our programme just to preserve our positions as MPs and to stay in Parliament for two more years.”

He has further stated: “There are political parties in many other countries such as India, the UK, and the US, but SLPP is totally different. It is not a party which has a constitution, an executive committee, an all-Ceylon committee, and a central committee. We were under the impression that that particular person is the SLPP National Organiser. However, it was only during some court proceedings that we came to know that there is no such national organiser. Let alone deceiving the country, the party has misled its members.”

Meanwhile, Peiris has said last week that he had not been informed of the SLPP’s decision to oust him from the party chairmanship.

Peiris has told the media: “I don’t know anything about it. I see it in the newspapers and on television. However, the issue is that I haven’t received any notification about such a removal. If I am being removed, I should be informed of it first, but what has happened is that everyone knows about the removal except for me, when I am the first person who must know about it. This reflects the SLPP’s programme. Let alone a political party, even a tea boutique cannot be run like this. When a notification is received, I will decide my next course of action.”

Rejecting resolution

 The Sri Lankan Government, while once again rejecting the Resolution 51/1 on Sri Lanka that was adopted by the United Nations Human Rights Council (UNHRC) last October, has stated that Sri Lanka will remain open to discussion with the council.

“A series of unhelpful resolutions have been adopted by the HRC, the latest being Resolution 51/1, without our consent as the country concerned. I reiterate Sri Lanka’s position, which was stated by the Minister of Foreign Affairs last October, that we reject this resolution, which will extend and reinforce the so-called external evidence gathering mechanism on Sri Lanka established by the OHCHR in line with its own interpretation of Resolution 46/1,” Permanent Representative of Sri Lanka to the UN in Geneva Himalee Arunatilaka has said, while addressing the 52nd Regular Session of the UNHRC recently.

She has noted: “These resolutions are unhelpful to the people of my country, will polarise Sri Lankan society, and do not serve the objective of promoting reconciliation in Sri Lanka. We are of the view that this is an unproductive drain on the scarce resources of UN Member States which can be productively deployed elsewhere.”

“Despite our opposition to country specific resolutions, as explained to this council before, we remain open to discussion with the council, special procedures, and treaty bodies, and continue to believe in the value of constructive engagement.”

“It is in this constructive spirit that Sri Lanka participated in the UPR process last month, despite the difficult circumstances in the country. We consider the UPR to be an extremely important tool, enabling countries to mutually assess the progress of each other’s human rights situation through engagement with peers in an atmosphere that is constructive and mutually respectful. Sri Lanka also looks forward to a meaningful dialogue when our sixth Periodic Report under the ICCPR is taken up for review later this month.”

Meanwhile, Sri Lanka’s sixth Periodic Review under the International Covenant on Civil and Political Rights (ICCPR) was held on 8 and 9 March in Geneva. The sixth report was submitted to the UNHRC on 22 February 2019.

Push for reforms

 The Core Group on Sri Lanka on Tuesday had expressed concern over ‘heavy-handed’ responses to peaceful protests in Sri Lanka and also reiterated that the Sri Lankan Government must safeguard rights to freedom of peaceful assembly and freedom of expression.

“We call for accountability for any protest-related violence. Civil society has an important part to play in encouraging the protection of human rights and we underline the importance of protecting space for civil society’s important work, including through any future legislation,” the Sri Lanka Core Group – comprising Canada, Malawi, Montenegro, North Macedonia, the UK, and the US – said in Geneva.

While welcoming the recent commitments with respect to the protection of human rights in Sri Lanka, including those of persons from all religious and ethnic groups, the Core Group stated: “Together with recent efforts at constitutional reform, and initiatives aimed at fostering political inclusion, these provide a basis upon which to build.

“We urge the Sri Lankan authorities to address long-standing impunity and corruption. We also underline the need for good governance, which together with sound economic policies, should better support the prosperity of all Sri Lankans.”

UN High Commissioner for Human Rights Volker Türk had also told the UNHRC that debilitating debt and the economic crisis have sharply restricted people’s access to fundamental economic and social rights in Sri Lanka. 

He had said that recovery policies would need to redress inequalities and invest in social protections and other levers of economic resilience. “They should also tackle underlying issues of corruption, transparency, and accountability in governance, as well as entrenched impunity,” he had noted.

Türk had further added that the reliance on draconian security laws, as well as the harassment and surveillance of civil society and victims, must end.

Meanwhile, the European Union (EU), while welcoming the progress made on debt restructuring, had said that reforms are essential to come out of the crisis stronger.

“As the EU states gave early financing assurances to the Sri Lankan Government, the Delegation of the European Union to Sri Lanka welcomes the progress made on debt restructuring. Reforms are essential to come out of the crisis stronger. The EU will continue supporting Sri Lankans, including through renewed efforts on social protection,” the EU in Sri Lanka tweeted on Wednesday (8).