• Govt. to face challenge of finalising debt restructuring after IMF deal
• CBSL Governor dismisses grim forecast by some on LKR fluctuations
• Terms of LG bodies to end today, powers to shift to commissioners
• EC and Govt. Printer clash over securing polls funds and ballot papers
• EC says Printer should get the cash, Printer says won’t attend EC meets
• Govt. Printer refuses to give printed postal ballots of 17 districts to EC
• MR returns to political platforms through Shasheendra’s Monaragala rally
• Namal and seniors say won’t accept positions or portfolios in Government
• FPA takes to the districts, holds rally in Rajapaksa heartland in Hambantota

The Ranil Wickremesinghe Government is all set to take a victory lap over securing the much-discussed financial facility from the International Monetary Fund (IMF) that is expected to be finalised by the fund’s Executive Board tomorrow (20). The official announcement is expected to take place on Tuesday (21).

The question in the mind of ordinary Sri Lankan citizens is whether the IMF facility will resolve the ongoing economic crisis and provide them with a desperately-needed respite. It is learnt that the challenges before the Wickremesinghe Government will not come to an end with the finalising of the agreement with the IMF. The Government has so far fulfilled 15 conditions laid down by the IMF, as stated by President Wickremesinghe, to consider Sri Lanka as a potential country to receive the Extended Fund Facility (EFF).

Once the agreement is finalised tomorrow at the IMF Executive Committee meeting and the first tranche is released, Sri Lanka will enter the second phase of the programme, which is to finalise the debt restructuring programme with creditors, especially bilateral creditors.

Sri Lanka’s bilateral creditors have so far informed the IMF of their willingness to participate in the country’s debt restructuring plan. In the matter of debt restructuring, China continues to remain the toughest bilateral creditor for Sri Lanka to deal with, since the country has stipulated a timeframe for its debt restructuring, which the other key bilateral creditors have not done.

It is in such a backdrop that Foreign Minister Ali Sabry has thanked India, China, the Paris Club, Saudi Arabia, Pakistan, Hungary, and Kuwait for standing with Sri Lanka during “these testing times and providing debt restructuring assurances to IMF,” adding that generations of Sri Lankans will cherish the friendship and support.

Meanwhile, in an open letter to Sri Lanka’s external creditors, President Wickremesinghe had made a strong commitment to maintaining full transparency to resolve the country’s debt crisis and get Sri Lanka’s economy back on track and encouraged both bilateral and private creditors to strengthen coordination between themselves and engage constructively with Sri Lanka for a swift resolution of the public debt situation.

All these are indications that Sri Lanka is still far from being able to enjoy the benefits of finalising the IMF deal and the economic recovery programme.

However, the strike actions being carried out by trade unions over the Government’s tax regime while the Opposition parties and civil society continue to push for the holding of Local Government (LG) Elections through various agitation programmes are also having a toll on Sri Lanka’s overall economy.

State Finance Minister Ranjith Siyambalapitiya last week stated that the economic impact from strikes was estimated at Rs. 46 billion a day. He had told the media that it was an estimate made by the annual GNP of Rs. 16,809 billion, while the damaging impact on education was immeasurable. This is in the backdrop of the fluctuation of the Sri Lankan Rupee, which is indicative of the ever-present vulnerabilities of the country’s economic factors.

Some members of the Opposition claim that the appreciation of the Sri Lankan Rupee against the US Dollar is a temporary one. Janatha Vimukthi Peramuna (JVP) and National People’s Power (NPP) Leader Anura Kumara Dissanayake claims that the rupee appreciated merely because the demand for the US Dollar has reduced due to the contraction of the economy and the ban on imports and not because the dollar supply has gone up.

However, Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe, while disputing the grim forecast of Sri Lanka’s exchange rate by Fitch Solutions by the year-end, had reportedly raised concerns on the basis of the forecast. He had noted that such long-term predictions on exchange rate were not prudent.

Fitch Solutions had recently maintained its forecast for the rupee to weaken to a record low of 390 per dollar by the year-end despite the positive prospects of the country securing the $ 2.9 billion IMF bailout package.

Weerasinghe had been quoted in the media as saying that annual debt service obligation to the tune of $ 6 billion until 2029 has been one of the assumptions of this forecast. However, he stressed that such a high figure of foreign debt servicing was unlikely given that the country was engaged in debt restructuring negotiations. 

He had also opined that such a long-term prediction on an exchange rate of a currency was not practical. “We have a small market, that’s why the exchange rate fluctuates a lot. That’s why the Central Bank is required to intervene in the market to a certain extent. However, the Central Bank will not act against the direction of market forces,” he had stated.

Nevertheless, with Sri Lanka’s efforts to get the economy back on track, foreign investors, especially Chinese investors, seem to be keen on exploring the growing opportunities in the country.

Two high-powered delegations from Fortune 500 industry giants Sinopec Group and China Merchants Group were currently in Sri Lanka to enhance cooperation and further investment on petroleum and chemicals, trade, port, and industrial park operations, the Chinese Embassy in Sri Lanka stated.

In 2021, the Sinopec Group had joined the Hambantota International Port (HIP) to launch the wholesale supply of marine bunker fuels, together with its subsidiary Sinopec Fuel Oil Lanka Ltd. (SFOL). It was reported that Sinopec is one of three foreign companies shortlisted to enter the Sri Lankan energy market, following the Government calling for Expressions of Interest.

The Sinopec Group and the China Merchants Group rank fifth and 152nd respectively in the Fortune Global 500 list of 2022.

Shifting powers

While the Wickremesinghe Government seems to have diverted all its attention to finalising the IMF deal, the local political stage continues to be focused on the holding of Local Government Elections and demanding that the Government hold the polls.

Local Government Ministry sources had last week noted that commissioners and secretaries of Local Government bodies would be vested with the task of operating the Local Government bodies once their term ended today (19).

However, an online news report stated last week that it was a contravention of the law according to a Supreme Court ruling given five years ago. The related verdict SC/FR35/2016 was reportedly delivered on 15 December 2017 over a Fundamental Rights (FR) petition filed by a group of former Local Government members in Matara.

It had declared that the petitioners’ fundamental rights were infringed by permitting the secretaries of the urban councils and pradeshiya sabhas to exercise, perform, and discharge rights, privileges, powers, duties, and functions of chairmen and deputy chairmen of urban councils and pradeshiya sabhas.

Loggerheads

However, amidst the uncertainty over holding the Local Government Elections, there appears to be a brewing clash between the Election Commission (EC) and the Government Printer’s Department.

The Election Commission had noted that it should receive the postal ballot papers by Tuesday (21) in order to hold the postal voting related to the Local Government Elections on the scheduled dates (from 28 to 31 March). The Government Printing Department has however stated that they cannot be printed by the said date even if the relevant financial allocations were received within the course of last week.

Election Commission Chairman Nimal G. Punchihewa has told the media that the commission should receive the postal ballot papers by Tuesday (21) to hold the postal voting on the scheduled dates during end-March.

“We summoned Government Printer Gangani Liyanage and the Police and had a discussion. We asked them to sort out the finance issue with the Treasury. When we asked her [Liyanage] when she would be able to print the ballot papers, she said that postal ballot papers could be printed within five days and 25 to 26 days would be needed to print the other ballot papers,” he had said.

In response to a question about the Treasury not having released the required funds to the Government Printing Department to commence the related work, he had reportedly noted that it was Liyanage’s responsibility to discuss with the Treasury and obtain the relevant funds and inform the Election Commission if there was an issue. “Even though she has told the media that she has not received funds, she has not made any official notification to us.”

Liyanage meanwhile had stated that printing ballot papers was merely one task among thousands of others of the department and pointed out that it was the Election Commission’s responsibility to discuss with the Treasury and release the required funds to the department. 

“During the meeting with the Election Commission on 7 March, they asked me to send a letter to the Treasury asking for funds. I did it on 8 March and there was no response from the Treasury. Even that is something that the Election Commission should have done. The Local Government Elections was called by the Election Commission. It is they who have all powers regarding elections. What I can do is print the ballot papers when I receive funds. This is just one task among thousands of others for the department.”

Afterwards, on Tuesday (14), Liyanage had informed the Election Commission in writing that the Treasury was yet to provide the necessary financial allocation for the printing of ballot papers for the Local Government Polls. “After the discussion with the Election Commission last week, I submitted a written request to Finance and Treasury Secretary Mahinda Siriwardana requesting that the necessary funds be released, but I have received nothing so far. If there is no response, I hope to inform the Election Commission on Tuesday (14) in writing in this regard.”

Accordingly, the Government Printer on Tuesday had sent another letter to the Department of Treasury Operations under the Ministry of Finance, reminding of the earlier request to release the required funds. The Government Printing Department had rejected a request of the Election Commission to provide it with the postal ballot papers for 17 districts for the Local Government Elections that had been printed as of now.

According to Liyanage, the commission had been requesting that the Government Printer release the postal ballot papers for 17 districts that have already been printed. “But I cannot release them just because the printing work is done. They should be checked and the relevant payments should be made by the Finance Ministry and the Treasury to us. What if the department does not receive the payments once I release the ballot papers to the Election Commission?”

According to the Government Printer, there cannot even be a tiny mark on the ballot papers after being printed.

Meanwhile, questions were also raised in political circles on whether the release of ballot papers for only 17 districts would help the Election Commission hold the polls as the ballot papers for the other districts would also be required to hold the elections.

Meanwhile, the Government Printer had also sent a letter to the Inspector General of Police (IGP) seeking Police protection to print ballot papers. Liyanage had noted that in response to the letter sent to IGP, the Police had informed her to advise on the number of Police officers needed for the relevant security arrangements to be made three or four days prior to the commencement of the printing of the ballot papers.

She had also noted that delays in the release of the funds required by the Police would cause a problematic situation regarding the provision of security. “The Treasury is required to release funds to the Police for election-related duties. If there is a delay in the release of the relevant funds, the Police may say that it is not able to provide security until the relevant payments are received. If such a situation arises, the printing work will be delayed even if the Government Printing Department receives the necessary funds,” she had further told the media.

It is in such a backdrop that Liyanage had stated last week that since there was no point in participating in discussions with the Election Commission in a context where the latter was not intervening enough to obtain the necessary funds for the printing of the ballot papers for the Local Government Elections, even if the commission were to call her in the future, she would not attend any such meeting.

LG Polls

However, the Election Commission is yet to decide on the steps to be taken if the Finance Ministry and the Treasury do not release the necessary funds for the holding of the Local Government Elections.

The Commission Chairman had said: “There have been no discussions about this matter. We are still hoping that we will receive the funds, but we will have to meet and have discussions if we do not receive them.”

When asked how long the commission would wait for the Treasury to release the funds, he had reportedly said: “We have to make a decision by the end of this week [last week]. We will see if the Treasury will release funds before then. If the Treasury does not, we will decide on the next course of action.”

Even if the Treasury releases the necessary funds to the Government Printing Department for the printing of ballot papers for the LG Polls, there is a risk that the printing of ballot papers will be delayed if the necessary funds are not released by the Treasury to the Police

The NPP meanwhile on Tuesday (14) filed a FR petition in the Supreme Court seeking an order directing the authorities to hold free and fair Local Government Elections.

NPP Parliamentarian Dr. Harini Amarasuriya, former MP Sunil Handunnetti, and Dr. Nihal Jayasinghe had filed this petition naming Treasury Secretary Mahinda Siriwardana, the Attorney General, the Election Commission, and several others as respondents.

However, the Election Commission has also decided to hold a discussion at 10 a.m. on Thursday (23) with the secretaries of registered political parties contesting the 2023 Local Government Polls. The commission is expected to reach a decision on whether it will have to postpone the elections again, following this discussion.

Court directives

The Supreme Court meanwhile on Thursday (16) issued an interim order preventing the holding of Local Government Elections for the Kalutara Pradeshiya Sabha. The order was issued after taking up for consideration a petition filed by the New Lanka Freedom Party challenging the rejection of its nomination submitted for the Kalutara Pradeshiya Sabha.

The Court has directed that Local Government Elections for the Kalutara Pradeshiya Sabha not be held until a verdict is issued on the petition. The case has been fixed for 12 May 2023. 

Meanwhile, the Supreme Court had also granted leave to proceed with the FR petitions filed challenging the postponement of the Local Government Polls by the Centre for Monitoring Election Violence (CMEV) and the Centre for Policy Alternatives Sri Lanka.

The Supreme Court had granted leave to proceed with the petitions on alleged violation of Articles 10, 12(1), and 14(1)(a) of the Constitution.

MR’s return

While the local political circles continue to focus on the holding of Local Government Elections, political parties also continue to focus on their reforms programmes.

Former Prime Minister Mahinda Rajapaksa (MR), who is also the Leader of the ruling Sri Lanka Podujana Peramuna (SLPP), last week made an appearance at a political rally after some time. The rally in Monaragala that was organised by MP Shasheendra Rajapaksa was touted as part of the SLPP’s revival programme. However, the rally and MR’s attendance was also witnessed by some as an attempt to get MR re-appointed to the post of prime minister. This claim has been denied by incumbent Prime Minister Dinesh Gunawardena.

However, MR’s eldest son, MP Namal Rajapaksa was a notable absentee at the Monaragala rally. The rally was planned during a recent meeting of SLPP members that was chaired by MR and included the party’s National Organiser Basil Rajapaksa.

Addressing the rally, MR said that the SLPP was not afraid to face an election and that other political parties had failed to understand the sentiments of the grassroots. “Some groups behaved as if they had already won during the last few days. It was like an air-filled ball going up. Now they are once again going down. When these two groups that are shouting themselves hoarse were asked to take over the country (during the crisis), they did not do that. They know exactly what they are capable of,” MR said during the rally.

“It is these people who ask us if we are afraid of elections. We have no such fear. We are the party that has done a lot for the villages. You cannot win elections on the TV or the newspaper and expect to win in the village. If they are not afraid of elections, then why do they always instigate people? These are the people who are holding schoolchildren and patients hostage to win their demands. Winning labour rights is not a fault, but holding people hostage is an issue,” he added.

Meanwhile, Namal and several other senior SLPPers have also gone on record saying they are focused on reviving the party and engaging in politics without taking over any positions or portfolios in the Government.

Helicopter meetings

The Freedom People’s Alliance (FPA), consisting of SLPP dissidents, led by MPs Dullas Alahapperuma and Prof. G.L. Peiris, are currently holding a series of rallies islandwide. Two such rallies were held in Monaragala and Hambantota.

After holding the rally in Monaragala, the FPA MPs had found lodging in the area before proceeding to the next rally in Hambantota. Wimal Weerawansa had stayed the night in Tangalle while Vasudeva Nanayakkara had stayed over at Hungama and Dilan Perera in Kataragama.

The Hambantota rally was organised by Upul Galappaththi and once the rally concluded, Alahapperuma had commended him for organising a successful meeting, especially in the Rajapaksa fort.

The FPA MPs had also discussed the recent rally of the SLPP that was attended by MR. It was the view of a majority of the FPA members that it was just a show put on for media mileage.