• CBSL Governor to hold debt restructuring discussions with creditors in Paris
• RW to address forum attended by IMF, WB heads, senior US, German officials
• SLPP asks RW for portfolios for few party seniors, RW says hard at present time
• Prasanna and Kanchana conveners of committee to organise Govt. side meetings
• National Operations Secretariat set up at GR’s former Malalasekara Mw. residence
• SLPP seniors boycott RW’s Monday meet; Douglas, Athaullah, Anura, Duminda attend
• Another meet convened with SLPP seniors on Wednesday; Basil says will support Govt.
• Premier Gunawardena gets a swipe from Basil while RW’s accessibility is commended
• Basil issues directive for SLPPers not to talk with other parties without telling leaders
• EC informs SLFP that party’s new Constitution stands null and void until court case ends
• Dayasiri informed that SLFP’s old Constitution and former officer bearers recognised
• SJB’s Marikkar meets with RW to solve issues related to electorate, attends meeting

President Ranil Wickremesinghe embarked on a tour of the UK and France this weekend and is expected to return to Sri Lanka on Saturday (24).

With the Paris Club members being the focus of attention as the country embarks on debt restructuring, the President seems to have engaged the services of Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe, who is expected to hold discussions with creditors during the tour of Paris.

It is learnt that Wickremesinghe will separately attend the Summit for a New Global Financial Pact. This event is being hosted by French President Emmanuel Macron, who had invited President Wickremesinghe to address the forum and discuss the situation in Sri Lanka. The event will also be attended by the Managing Director of the International Monetary Fund (IMF), the President of the World Bank (WB), and several world dignitaries, including the Chancellor of Germany and US Treasury Secretary Janet Yellen.

As Sri Lanka grapples with the debt restructuring, the trip to Paris by the President is expected to be an opportunity for him to present first-hand to the financial powerhouses and multilaterals that Sri Lanka has a comprehensive plan and willingness to see it through, according to a highly-placed Government source.

While visiting the UK, the President is expected to attend the International Democrat Union (IDU), a coalition of centre-right political parties from around the world, of which the United National Party (UNP) is a member. The President will address the gathering, this time focussing on the political developments in the country and the steps taken by both himself and the UNP to once again re-engage the youth in politics.

A senior UNP member noted that as the UNP continues to rebrand itself as a new 21st century political party, the Party Leader’s attendance at the IDU would be a welcome boost.

The Government meanwhile is expecting to fulfil all agreements reached with the IMF before September, according to State Minister of Finance Ranjith Siyambalapitiya last week.

Siyambalapitiya told the media last week that the Government would fulfil all agreements reached with the IMF before September.

“Certain parties are alleging that we have only fulfilled 25 out of 62 agreements reached with the IMF, but there is a committee appointed by the Central Bank of Sri Lanka in this regard. The action plan is going ahead with the recommendations of that committee.”

Meanwhile, he has also noted that the Finance Ministry had taken steps to ease import restrictions on 286 commodities with effect from 10 June. With the latest removal of import restrictions, restrictions were currently in effect on only 928 commodities, of which 306 were vehicles, he had added. 

Debt sustainability

 However, a global debt restructuring expert had recently stated that Sri Lanka would not be able to get much out of Domestic Debt Optimisation (DDO) towards achieving debt sustainability as per the Extended Fund Facility (EFF), as restructuring bonds held by local banks would not generate sustainability.

Speaking at a webinar held on 10 June by the Australian think tank Lowy Institute, Dr. Brad Setser, a Senior Fellow at the Washington-based Council on Foreign Relations, had said that even though in theory more debt relief from domestic creditors would allow more scope to pay a bigger yield to private creditors, in Sri Lanka’s case, it was not so. 

“I actually don’t think there’s that much more Sri Lanka can get out of its domestic creditors,” he had noted.

Setser had said although there had been suggestions for DDO, the ones that made sense were designed to reduce gross financing needs – which is the technical parameter in the IMF programme – probably by using floating rate bonds which did not have a big haircut and could be accommodated on the local bank’s balance sheet. 

“But really hitting on bonds held by the local banking system never generates, in my view, gains to debt sustainability,” he had added.

According to him, the IMF programme parameters provide the backdrop for all the different debt restructurings Sri Lanka has to complete such as the bilateral, commercial, and domestic debt restructurings.

He had pointed out that because the overall debt constraint was set at a fairly high level, less was being asked of all creditors which should facilitate an agreement.

“But because Sri Lanka is not a low-income country, the way the parameters have been written leaves more room for flexibility and interpretation, which in some sense creates more opportunity to put different groups of creditors against each other,” he had observed.

Meanwhile, US Treasury Secretary Janet Yellen last week stated that India’s proactive actions had been critical in supporting Sri Lanka’s reform efforts. Yellen had noted that when India and the US worked together, they could add significant momentum to important efforts.

“During the past six months, we have made progress across a number of areas. Debt distress in the developing world continues to pose a risk to macroeconomic growth and stability. Much more needs to be done to provide timely and comprehensive debt treatments. But we have taken steps forward on urgent cases like Sri Lanka – where India’s proactive actions have been critical to supporting the authorities’ reform efforts. We are continuing to push for urgent action in other cases as well.”

Yellen had made these remarks at the annual India Ideas Summit of the US-India Business Council.

No portfolios

 Meanwhile, on the country’s complex political front, the ruling Sri Lanka Podujana Peramuna (SLPP), it is learnt, has been informed by the President of the inability to appoint more members to the Cabinet at the present time.

The message has reportedly been conveyed to the respective SLPP MPs whose names were included in a list submitted by the SLPP to the President as the party’s nominees to be appointed as new cabinet ministers.

A group of SLPP MPs had been asked to visit the Presidential Secretariat to inform of the difficulties faced by the Government as well as the inability to increase the number of Cabinet ministers at present. However, this group had been informed that steps would be taken to facilitate their political work through assistance from the Government offices. The bottom line of the message conveyed to the SLPP MPs was that “there won’t be ministerial appointments, but responsibilities will be assigned to the seniors”.

However, it is learnt that SLPP National Organiser Basil Rajapaksa, who had previously given a list of names of SLPP MPs to be appointed to the Cabinet, had last week asked the President if at least several senior SLPPers could be given Cabinet portfolios if the entire list could not be accommodated. The President, it is learnt, had not given any commitment, saying that he would look into the matter after concluding his visit to the UK and France.

Boycotting meeting

 Meanwhile, a meeting was convened on Monday (12) by President Wickremesinghe with SLPP leaders, ministers, and state ministers, including district leaders.

However, a group of senior SLPPers had prevented most district leaders of the party from attending the President’s meeting that was convened at 5.30 p.m. at the President’s Office on Monday. This has resulted in an open clash between the President and a group of SLPP seniors.

The telephone calls to coordinate the meeting and invite the SLPP district leaders for the President’s meeting were carried out by Chief Government Whip Prasanna Ranatunga and Nimal Lanza. According to some media reports, Ranatunga and Lanza had made the telephone calls from a residence on Malalasekara Mawatha in Colombo that was earlier allocated to former President Gotabaya Rajapaksa (GR).

It is also learnt that the President had formed a committee to handle the Government’s policy formulation as well as national-level propaganda work. The conveners of the committee are Ranatunga and Minister Kanchana Wijesekera.

The ‘Black Box’ last week reported that officials from the President’s Office had contacted SLPP MP Namal Rajapaksa asking him to coordinate the meeting. However, Namal had responded saying that while the President could convene a meeting of Cabinet and State ministers, he would have to inform the SLPP leaders to convene a meeting of SLPPers. 

The officials had then reached out to SLPP General Secretary Sagara Kariyawasam about the President’s intention to meet with SLPP seniors including district leaders. However, Kariyawasam had already expressed his displeasure to the President over the manner in which the previous meeting between Wickremesinghe and SLPP seniors had been convened.

The meeting on Monday had been convened to discuss the Government’s future course of action at length – the distribution of the benefits reaped by the IMF programme, action to be taken to address the growing opposition against the privatisation of Sri Lanka Telecom (SLT) and other State entities, and other growing issues in the country.

Nevertheless, SLPP seniors like Party Leader Mahinda Rajapaksa (MR), General Secretary Kariyawasam, and MPs Namal, Johnston Fernando, Rohitha Abeygunawardena, Sanath Nishantha, and S.M. Chandrasena had not attended the meeting.

One of the main reasons for boycotting the meeting had been the failure to grant ministerial appointments to the list of SLPP MPs given by MR and SLPP National Organiser Basil.

According to SLPP sources, the party seniors had prevented district leaders from attending the President’s meeting as a mark of protest over Wickremesinghe’s failure to heed the request by MR and Basil as well as the manner in which the meeting with the SLPPers had been convened.

Namal’s stance

 It is in such a backdrop that MP Namal has stated that he was not willing to accept a ministerial post in the incumbent Government since he did not approve of certain policy decisions taken by it. He had made this observation during an interview with a Sinhala media outlet.

Namal had further stated that the SLPP would announce whom it would support at the next Presidential Election once an election has been called. 

He had also observed that anything was possible in politics in the future, while pointing out that Wickremesinghe’s appointment as Prime Minister and eventually as President last year were unexpected scenarios by many.

The SLPP MP had further ridiculed those who had failed to get any parliamentarian from the main Opposition Samagi Jana Balawegaya (SJB) to join the Government. “Not a single SJB MP has crossed over despite claims to the effect being made for more than a year that they (the Government) had the support of up to 40 MPs of that party,” Namal had said in reference to a social media report that the SJB was prepared to join the President.

“Now they are saying the SJB wants to work together with the President, but that it is not doing so because of the SLPP,” he had noted.

However, Namal had said that he would give his fullest blessings if the SJB joined the Government.

Meanwhile, one-time Rajapaksa loyalist SLPP MP Nimal Lanza, while recently ruling out any need to prematurely dissolve Parliament, had claimed that the Government would not collapse even if the pro-Rajapaksa MPs left the Government.

Lanza had made this comment to a news website over a recent report of the possibility of holding a snap election soon.

The SLPP MP had also recalled how Wickremesinghe had responded to a question by SLPP MPs in the run-up to the vote on the President in Parliament last year when asked by the SLPPers whether he would dissolve Parliament. Lanza had observed that the President had responded at the time saying that he would not, but that Parliament could be dissolved at the request of parliamentarians in line with the Constitution.

According to Lanza, Namal has the support of only around 25 MPs and Parliament does not need to be dissolved over their demand for Cabinet portfolios.

Sagara’s swipe

 Meanwhile, SLPP General Secretary Kariyawasam last week took a swipe at President Wickremesinghe, saying that the President had so far managed to bring in only the first tranche of the IMF facility.

He had said during a media interview that the country was still functioning on the Indian credit lines secured by former Finance Minister Basil during his tenure as minister while Wickremesinghe had only brought in $ 300 million to the country so far.

According to Kariyawasam, although Wickremesinghe had assumed office as the President with the support of the SLPP, a majority of the SLPPers did not politically like him. Therefore, he had noted that the SLPP was hopeful of fielding its own candidate at the next Presidential Election.

Kariyawasam had added that the base of the 6.9 million votes of the SLPP had been formed by the party’s district leaders and the request by the SLPP seniors from the President to get them ministerial portfolios was still valid. “But as a party, we are not willing to beg for positions,” he had said.

Setting up the secretariat

Interestingly, several MPs who are not members of the SLPP – Duminda Dissanayake, A.L.M. Athaullah, and Douglas Devananda – had also attended the meeting convened by the President on Monday. SLPP dissident Anura Priyadharshana Yapa had also attended the meeting.

It is learnt that the meeting had focussed mostly on the work carried out by the Government and the need to create public awareness about them.

The setting up of a National Operations Secretariat at the former residence allocated to GR on Malalasekara Mawatha in Colombo 7 had also been discussed.

A separate media committee had also been appointed to ensure that the Government’s work was properly communicated to the public. This committee is headed by MP Mahindananda Aluthgamage and it is to operate from the National Operations Secretariat.

Several MPs at the meeting had complained that the State media was also not promoting the good work carried out by the Government.

RW’s response

 It seems that Wickremesinghe had also responded to Kariyawasam’s swipe about the funds brought into the country by President Wickremesinghe.

The President had said that despite the belief that former Finance Minister Basil Rajapaksa was the one to bring in funds to the country through Indian assistance, Wickremesinghe had brought in close to $ 3 billion to the country, including the IMF programme, since assuming office as the President. It is also learnt that the President had given a breakdown to all those gathered about the funds that he had managed to bring into the country.

Another meeting

 Meanwhile, another meeting was convened by the President with leaders of the SLPP on Wednesday (14).

During the meeting, the SLPP seniors had expressed concerns to President Wickremesinghe over a meeting convened with some SLPPers on Monday. The seniors had pointed out that the party leaders had not been informed of such a move and that the party needed to be consulted first if the President wished to convene a meeting of SLPPers. It was then evident that the SLPP seniors had directed the party’s district leaders not to attend the meeting with the President as a result.

Accordingly, SLPP leaders and Wickremesinghe had reached a consensus that the party’s leadership would be informed beforehand when SLPP MPs were summoned for discussions regarding the Government’s action plan.

Afterwards, when the discussion had commenced, Basil had noted that as the main party in the Government, the SLPP would continue to support President Wickremesinghe’s programme to build the nation. He had also noted that alliance partners of the SLPP were also in agreement with this.

Basil had also pointed out to the President that some alliance members and trade unions were opposed to certain policies of the Government. However, he had further noted that objections raised by them were not as serious to prevent the SLPP from supporting the Government.

Basil had noted that any issues should be resolved through a direct dialogue and proposed that such a discussion should be held with the President at least once a month.

SLPP General Secretary Kariyawasam had also said there was no change in the SLPP’s decision to support the President’s programme.

Interestingly, Basil had also commended Wickremesinghe’s staff, especially Chief of Staff Sagala Ratnayaka and President’s Secretary Saman Ekanayake, for being attentive and efficient. “Working with them is very easy. They are prepared to talk and prepared to listen at any time. Most who are in such positions would usually not answer the phone. However, these two officials don’t have that weakness and should be commended for that.”

Basil had however taken a swipe at Prime Minister Dinesh Gunawardena, saying that it was very difficult to even connect with him over the telephone. “However, our Prime Minister seems to be a bit busy. It is difficult to speak to him over the phone. The President is not like that. He responds immediately despite his busy schedule.”

The meeting was attended by Premier Gunawardena and Ministers Tiran Alles, Douglas Devananda, and Jeevan Thondaman and MPs Vajira Abeywardena and A.L.M. Athaullah.

Basil’s directive

 The SLPP leadership met with former heads of Local Government bodies from that party later on Thursday (15). The discussion at the Nelum Mawatha Headquarters on the party’s plans for the future had been chaired by National Organiser Basil.

However, following the meeting with President Wickremesinghe, Basil had also issued a directive to the SLPP members that no SLPP member should engage in any form of discussion with any persons/parties outside the party without the knowledge of the party seniors. He had made this observation during a meeting with the SLPP district leaders held on Thursday at the party headquarters.

It is learnt that Basil had noted this directive was important to maintain discipline with party members while also carrying out the party’s future political plans.

Apart from this, Basil had also discussed the party’s preparedness to face an election.

Seeking justice

 A group of SLPP MPs had reiterated the need for justice for the party members whose houses had been set ablaze during the 9 May mayhem last year. These MPs had raised their grievance with President Wickremesinghe during a recent meeting.

They had noted that they were disappointed over the authorities’ inaction against those responsible for the attacks. They had also noted that a court case related to the incident had been withdrawn without their knowledge.

MPs Gamini Lokuge, Kariyawasam, and D.B. Herath were among the SLPPers who had raised this issue.

In touch with SJBers

 SJB MPs have always maintained close contact with President Wickremesinghe, even prior to him taking office. Despite having split from the UNP back in 2020 due to the assumption that they needed a change in leadership, however, the reliance on the experience of Wickremesinghe has meant many of the former UNPers continue to maintain close contact with him.

This past week yet another former UNPer, S.M. Marikkar, took the opportunity to meet his old Party Leader for assistance in his electorate.

The SJB MP attended a meeting which had been convened at the Presidential Secretariat to discuss the renovation of the Orugodawatta-Ambatale Road, which falls within Marikkar’s electorate. 

The meeting saw the participation of the Ministers of Highways and Water Supply and Estate Infrastructure (Bandula Gunawardena and Jeevan Thondaman), along with a large contingent of officials. Marikkar, despite being a member of the Opposition ranks, took a leading role in the meeting, focusing on the issues faced by the residents of the area over the delay in roadwork. 

With rumours swirling over political uncertainty on all sides of the aisle, the close engagement of Opposition MPs with the President will certainly put both the Government and Opposition members on notice. For the President, this seems to play into his continued narrative of wanting to work with all parties represented in Parliament.

New alliance

 Meanwhile, the main Opposition SJB is currently engaged in a discussion with the Freedom People’s Council, led by SLPP dissidents Dullas Alahapperuma and G.L. Peiris, to look at forming a political alliance.

“Our intention is to give priority to build a bridge for all Opposition parties to fulfil the common goal of defeating the incumbent Government. Therefore, our approach is to build a common agreement among the Opposition parties. All should be committed to a common programme rather than thinking of their party and their personal ambitions,” Alahapperuma had said.

Meanwhile, the Government has reportedly abandoned plans to hold a snap Presidential Poll, with statements being made to the effect that a Presidential Election will be called only after August 2024.

It is in such a backdrop that SLPP Leader, former Prime Minister MR has stated that the SLPP is ready to face any election at any point, even a Presidential Election.

He had stated this to the media following a meeting at the Party Headquarters.

SLFP back to the old

 Meanwhile, the chaos within the Sri Lanka Freedom Party (SLFP) took a new twist last week, with a letter issued by the Election Commission (EC) stating that the commission would not recognise the party’s new Constitution and would follow the old Constitution until the impending court case challenging the new party Constitution was heard.

The commission in a letter to SLFP General Secretary Dayasiri Jayasekara has informed that the decision to recognise the party’s old Constitution had been made following an enjoining order issued by the Colombo District Court in an ongoing case.

The commission has also informed that it would therefore not recognise the new party Constitution that was adopted on 22 September 2022 along with the new office bearers appointed with it. Instead, the commission is to recognise the old party Constitution and the former office bearers until the case is concluded.

Accordingly, the appointments of Senior Vice Presidents Shan Vijayalal de Silva and Angajan Ramanathan and Treasurer Sarathi Dushmantha will become null and void while Ministers Nimal Siripala de Silva and Mahinda Amaraweera will once again be recognised Senior Vice Presidents of the party while State Minister Lasantha Alagiyawanna once again becomes the party’s Treasurer.

Proposal for annulment

 Meanwhile, a proposal has been forwarded by the SLFP calling for the annulment of the nominations for the Local Government Polls. This has been confirmed by State Minister of Local Government Janaka Wakkumbura.

The proposal had been made during a recent meeting of the Parliamentary Committee on the Ministry of Public Administration, Provincial Councils, and Local Government chaired by Prime Minister Dinesh Gunawardena, who is the subject minister.

SLFP’s Jayasekara had proposed that fresh nominations be called for the Local Government Polls under the new electoral system.

State Minister Alagiyawanna had seconded the proposal. All MPs at the meeting had expressed their agreement to the proposal. However, Wakkumbura had said that no final decision had been taken yet on the annulment of nominations.