• Basil ensures $ 1 b sovereign bond repayment; continues courting diplomats 
• Proposed Finance Bill to enable money laundering; SC verdict to Speaker 
• Opposition mounts against KNDU Bill as Govt. moves to push it through on the 6th
• President placates SLFP leaders as SLPP Gen. Sec. lashes out at alliance partner 
• US concerns continue over loopholes in Colombo Port City laws 
• Foreign Secretary gets tough with the UK; urges recognition on SL’s progress 

Amidst mounting pressure on the Government led by President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa on all key sectors in the country, the Government last week ensured repayment of an International Sovereign Bond (ISB) amounting to $ 1 billion that matured last Tuesday (27 July).  Although the Government managed to overcome the threat faced by Sri Lanka of being downgraded by international rating agencies, the country is still not out of the woods in terms of the growing economic challenges.  The Government last week said the country is expected to receive close to $ 2,650 million in foreign exchange over the next three months.  It is in this backdrop that Finance Minister Basil Rajapaksa, who is spearheading the task of overcoming the country’s economic challenges, continued to push forward with inclusive development partnerships. Soon after assuming office, Rajapaksa met with a host of heads of missions representing western nations in the country.   The main aim was to reinvigorate the country’s non-aligned foreign policies and to ensure that Sri Lanka was open to discuss business with all key foreign nations as opposed to the belief that the island was tilted mainly towards China.  It is in this same spirit that the Finance Minister last week met with representatives of Middle Eastern countries in Sri Lanka. The discussions were focused on further strengthening bilateral and trade ties.  While the Finance Minister was engaged in wooing foreign investments to the country, State Minister of Money and Capital Market and State Enterprise Reforms Ajith Nivard Cabraal had assured that Sri Lanka’s cashflows have been carefully lined up to ensure that the country will always be in a position to meet its liabilities.   Cabraal made this observation during an interview with Al Jazeera. He had also noted that the Government had never defaulted on even a single payment.  On the subject of positive economic indicators which showcase stability, Cabraal stated that there are several.  “Our rupee has been stable for the past three months; the same is true for interest rates. Growth is back; people are getting about their business. The stock exchange is having an increase almost every day. Turnovers are very good. What more do you need to have as indicators?” the State Minister had asked.  Addressing the recent downgrading of Sri Lanka by several rating agencies, Cabraal had explained that serious investors do not only look at such ratings, as they are concerned about the fundamentals of how the country is being handled.  “Overall, if you look at the way the economy has been handled, it is only a matter of time until the rating agency statements are refuted by business confidence itself,” Cabraal had added.  Meanwhile, Co-Cabinet Spokesman Minister Ramesh Pathirana, last week, referring to the Government’s move to resolve the ongoing strike action by teachers and principals demanding solutions to their long-standing salary anomalies, said that although the need to eliminate the teacher-principal salary anomalies has been acknowledged, the Government did not have the sufficient financial strength to make the necessary changes.  Addressing the weekly cabinet news briefing, the Minister noted that it was decided at the cabinet meeting last Monday (26 July) to appoint a subcommittee headed by the Prime Minister to eliminate the salary anomalies faced by teachers and principals.  “At present, the Government is not able to make immediate changes to the current financial situation in the country. In this regard, the Cabinet has decided to submit proposals to the forthcoming budget regarding the teacher-principal salary revision,” Pathirana had said. Displeased with the Government’s response to the demands by teachers and principals, the education sector trade unions last week further intensified their trade union action by organising mass protests islandwide. The strike action by teachers and principals has now completed three weeks and there are no signs of the protests abating until their long-standing grievances receive tangible solutions.  Their response to the Government’s claim of lack of funds and economic hardships at present is that the Government needs to stop unwanted spending and wastage in order to grant financial relief to the people.  However, the President is to meet with the education sector trade unions this week after a meeting scheduled last week was postponed. After a failed discussion with the Prime Minister last week, Premier Rajapaksa, it is learnt, is working on a fresh cabinet paper to address the teachers’ and principals’ grievances.  The education sector strike action is in addition to protests being carried out by farmers and other trade unions over other demands ranging from fertiliser to the burdens of the rising cost of living.  Tax amnesty in or out?  Amidst the burgeoning economic issues in the country and the Government’s attempts to get much-needed dollars to its shores, the Supreme Court last Tuesday took up the petitions filed against the proposed Finance Bill that grants a tax amnesty. The court on Tuesday, re-fixed for Wednesday (28 July), the hearing of several special determination (SD) petitions filed challenging the constitutionality of the Finance Bill.  The petitions were heard before a three-judge bench comprising Justices Priyantha Jayawardena, Kumuduni Wickramasinghe, and Shiran Gooneratne.  Ten petitions were reportedly filed against the proposed Finance Bill which was placed on the order paper of Parliament on 29 July. The petitioners are Samagi Jana Balawegaya (SJB) General Secretary Ranjith Madduma Bandara, SJB parliamentarian Eran Wickramaratne, Janatha Vimukthi Peramuna (JVP) former parliamentarian Sunil Handunneththi, former Ceylon Bank Employees Union (CBEU) Deputy Secretary Ekeshwara Kottegoda Vithana, former United National Party (UNP) parliamentarian Saman Rathnapriya, Nagananda Kodituwakku, the Centre for Policy Alternatives (CPA), and three others.  The petitioners had sought a declaration that the Bill, in whole or in part, required the approval of the people at a referendum as well as a two-thirds majority in Parliament.  The petitioners had alleged that the purpose of the said Bill is to grant immunity to the persons who have defrauded different kinds of taxes due under the revenue laws.  M.A. Sumanthiran PC, Srinath Perera PC, Senior Counsel Viran Corea, Counsel Dharshana Weraduwage, Suren Fernando, Eraj de Silva, and Shantha Jayawardena had appeared for the petitioners.  Attorney-at-Law Eraj de Silva, appearing for the UNP, made submissions before the Supreme Court on Wednesday on the proposed Tax Amnesty Bill.   De Silva had stated that the proposed Tax Amnesty Bill was akin to an invitation for money launderers and drug dealers alike to seek protection under the proposed Amnesty Regime.  He had submitted that laws like the Prevention of Money Laundering Act, No. 5 of 2006; Convention on the Suppression of Terrorist Financing Act, No. 25 of 2005; Bribery Act (Chapter 26); and Conventions Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, No. 1 of 2008 are vital safeguards existing in law against such offences.  However, he had noted that provisions proposing absolute secrecy in respect of a declaration made seeking amnesty, coupled with other provisions of the proposed legislation, dangerously allow circumvention of these laws.  Making further submissions, he had said that while on the face of the Bill, it appears that these laws are not excluded from operation, the ambiguity in the provisions providing immunity together with secrecy provisions, allow money launderers and drug dealers to seek protection from such laws using the proposed Tax Amnesty Scheme.  De Silva had argued that this “absolute secrecy” provision could potentially preclude and/or prevent legitimate investigations, in terms of the law, and the obtaining of information in relation to the funds declared and that the fact the declarant has declared such funds.  He had further argued that, among other things, this “absolute secrecy” provision is unconstitutional.  Secondly, de Silva had noted that the proposed bill only disqualified the following persons: those who are under investigations or “pending” investigation (i.e., money laundering, etc.); those who are convicted of such offences.  It was also argued that the proposed bill did not disqualify those who had amassed money in contravention of such laws (money laundering, terrorist financing, and/or corruption), but who did not have “pending investigation” and/or “conviction”. In other words, the proposed bill did not disqualify those “under the radar”.   The third point noted by de Silva was the corresponding declaration; that the declarant has to fill it in order to obtain the proposed amnesty, only relates to whether investigations are “pending” and/or whether such an individual is “convicted”. The declarant does not have to declare that the monies declared have not been obtained in contravention of the law.   It was pointed out that it was a serious omission in the proposed bill and one which was against the stated spirit and policy of the proposed bill. Therefore, it was submitted that the declaration also should require the declarant to state that the monies have not been earned/obtained in contradiction of the law.   De Silva took up several arguments primarily aimed at the fact that the bill, in the guise of a tax amnesty, should not provide a platform to launder ill-gotten wealth.  Whilst associating himself with the submissions of other counsel, de Silva had made it clear that the UNP does not intend to scuttle the bill, but only wants to ensure that Sri Lanka does not become a destination for converting black money into white.  Meanwhile, Senior State Counsel Nirmalan Wigneswaran, appearing on behalf of the Attorney General, had conceded that the word “absolute” would be struck off and that the same provisions in Section 100 of the Inland Revenue Act will be applicable.    The Attorney General had further conceded that any sums declared under the Act would not be immune from any other law (apart from the tax amnesty) (Clause 6 of the bill also amended to reflect this position).  The Senior State Counsel had also informed the Court on Wednesday that seven further amendments were to be made to the Government’s proposed Financial Amendment Bill when the petitions challenging the bill were heard.  The Attorney General had presented in court a list of amendments to be moved at the committee stage of Parliament.  Senior State Counsel Wigneswaran had informed the Court that certain amendments will be brought to Clauses 4, 5, 6, 12, 13, 14, and 17 at the committee stage in Parliament.  In his submissions, Wigneswaran had further stated that granting a tax amnesty would intend to bring people into the tax net and that the bill does not help at all for money laundering.   Following the conclusion of hearings on the proposed bill on Thursday (29 July), the Court had announced that its decision will be conveyed to the Speaker of Parliament, Mahinda Yapa Abeywardena.  Controversial KNDU Bill  Meanwhile, the governing Sri Lanka Podujana Peramuna (SLPP) parliamentary group is to attend a workshop tomorrow (2) on the controversial Kotelawala National Defence University (KNDU) Bill that is to be taken up in Parliament on Friday (6).  SJB and Opposition Leader Sajith Premadasa had already stated that the SJB would not support the bill in the House.  He had called on the Government to allow the KNDU to be permitted to continue as it is at present.  According to Premadasa, the proposed KNDU Bill was a serious attack by the Government on free education and the SJB would work to defeat the piece of legislation.  The Opposition against the KNDU Bill last week resulted in the Federation of University Teachers’ Associations (FUTA) withdrawing from conducting online classes last Tuesday.  FUTA Chairman Prof. Shama Banneheka had said that the decision was taken to protest the KNDU Bill.  Coalition of National Organisations Organiser Dr. Wasantha Bandara had also stated last week that the KNDU Bill should be amended or prevented.  Meanwhile, a gazette notification issued by the Government on 20 July stated that Section 23 of the Universities Act, No. 16 of 1978, was amended to allow the Education Minister, in consultation with the University Grants Commission (UGC), to “establish a university for a specific purpose”.  However, many education sector organisations and Opposition political parties raised objections to the proposed amendment. They include the FUTA, the Inter University Students Federation (IUSF), the National People’s Power (NPP) led by the JVP, and the Frontline Socialist Party (FSP).  Also, several governing SLPP alliance partners have also expressed opposition to the proposed bill, saying they will not support it in Parliament in its present form.  During the last meeting of the SLPP parliamentary group, several members expressed concerns and objections over some of the clauses in the proposed bill.  However, President Rajapaksa requested the governing party members who expressed concerns to present their alternative proposals at the workshop on the 2nd to incorporate them in the bill.  The President added that the bill was a necessity and needed to be passed in Parliament and implemented with required amendments. He reiterated that the Government did not have any intention of obstructing the country’s free education system.   Resolving issues  Amidst the ongoing chaos in the country, the governing SLPP’s key coalition partner, the Sri Lanka Freedom Party (SLFP), last week took several key steps in addressing the growing dissention within the rank and file of the party over the sidelining of party members by the governing SLPP.  The SLFP seniors are facing pressure from its membership at the local government level.  A group of party organisers have started a campaign to gather support from the grassroots level membership to demand the party leadership to permit the SLFP to contest separately at the next local government elections.  The growing dissention among party members is witnessed by the SLFP seniors during meetings convened with the party’s local government organisers at district level.  The recent meeting of the Gampaha District organisers resulted in a heated debate with several electoral organisers complaining about the failure of the party seniors to address the issues faced by the organisers due to the mistreatment by governing SLPP members.  GR meets SLFP It is in this backdrop that President Rajapaksa last week met with senior SLFP leaders. The meeting took place after being postponed on two earlier occasions.  The meeting last Monday was attended by SLFP Leader Maithripala Sirisena, General Secretary Dayasiri Jayasekara, National Organiser Duminda Dissanayake, Treasurer Lasantha Alagiyawanna, Nimal Siripala de Silva, Mahinda Amaraweera, and Deputy Speaker Ranjith Siyambalapitiya.  The President was accompanied by Senior Advisor Lalith Weeratunga.  The meeting that was initially marked for one hour had continued for nearly two.  There were six key topics that were taken up for discussion. They were: getting SLFP electoral and district organisers, local government members, electoral representatives as well as members of affiliated organisations involved in the development programmes carried out by the Government; issues faced by the trade unions; the proposed new constitution and electoral reforms; issue of salary anomalies of teachers and principals; education reforms programme; and issues that have arisen over fertiliser distribution in the country and the organic fertiliser policy.  After a lengthy discussion on the six key issues on the agenda, the President had decided to organise a meeting with the participation of all provincial governors and SLFP representatives to discuss the involvement of SLFP local government leaders in the Government’s programme.  It was also decided to formulate a programme through the Government to include electoral and district organisers, local government members, electoral representatives, as well as members of affiliated organisations.  The President had noted that a date and time will be allocated for a separate discussion with the trade union leaders to discuss issues faced by them.  The SLFP delegation had also explained issues faced by the trade unions including the teachers and principals, as well as the urgent need for education sector reforms. Emphasis was also placed on practical issues faced in the programme to promote the use of compost fertiliser as well as the impact of Covid-19 on the tourism industry among others, and the difficulties faced by the people.  Speaking to the media after the discussion, Jayasekara said that the discussion with the President was extremely successful. He added that, in particular, the issues faced by local government representatives of the SLFP and the involvement of the SLFP in aspects of governance were discussed at length.  “In addition, we discussed with the President the drafting of a new constitution, educational reforms, the fertiliser crisis, and the issues faced by trade unions. Talks were held on the current political situation as well,” he added further.  Noting that the lack of opportunity for the SLFP to be involved in governance was clearly explained to the President, Jayasekara pointed out that the discussion was focused on formulating a programme to obtain the active participation of all those representing the SLFP for the present Government’s programmes.  Secretaries at loggerheads Meanwhile, in response to a question posed by the media as to whether there was a discussion on a reshuffle of the Cabinet of Ministers, Jayasekara said that no such discussion had taken place. Rather than gaining positions, our hope is to further strengthen the SLFP, he added. When queried as to whether there are any plans for the SLFP to step down from the current Government, he explained that there were no such plans. Instead, he added further that his party would help rectify certain shortcomings and strengthen the current Government’s programme.  SLFP Leader Maithripala Sirisena too reiterated that the party has no intention of leaving the Government, while adding that steps have been taken to reorganise the party throughout Sri Lanka.  These statements were made in response to questions from the media following the conclusion of the SLFP’s Galle District Convention which was held on Thursday.  However, even while the SLFP was engaged in a dialogue with the President to iron out differences, the governing SLPP hit out at the SLFP.  SLPP General Secretary MP Sagara Kariyawasam, speaking at a media briefing held last Monday morning, claimed that certain members of the SLFP are still of the view that the SLFP is the main political party of the current ruling political alliance, the Sri Lanka Freedom People’s Alliance (SLFPA).  “Some members of the SLFP think that they are the main party in this alliance since the main party in previous alliances such as the United People’s Freedom Alliance (UPFA) was the SLFP. They had a lot of power in those alliances. However, at present, the SLFP is not the main party in the SLFPA, whereas the main political party of it is the SLPP,” he noted.  Furthermore, he added that the aforesaid situation had been understood by those with political maturity in the SLFP while others, on the other hand, were making various statements regarding such without understanding the actual situation. However, he added that they hope to resolve all these issues and move forward in a positive manner.  Meanwhile, the SLFP, last week, launched a campaign headed by Party Leader Sirisena to go to the grassroots.  Following the meeting with the President and the decisions reached following the meeting, the SLFP seniors decided to take the message to the grassroots by organising a series of meetings islandwide as part of the reforms process.  Under the programme, several meetings of electoral committees were organised in several districts.  Karu’s movement broadens  Meanwhile, the National Movement for Social Justice (NMSJ), currently headed by former Speaker Karu Jayasuriya, that is engaged in bringing all Opposition political parties on to one platform, is further expanding its movement.  Several civil society organisations including trade unions have last week held discussions with the NMSJ and expressed support. The meeting was held last Monday at Jayasuriya’s residence.  Representatives of the organisations who had attended the meeting had commended the move by the NMSJ to stand for social justice while raising a voice for the purpose, and since the need was for a united stand against any threat to freedom and democracy, the organisations have expressed their keenness to join the cause.  Asela Sampath from the Consumer Rights Protection Organisation, S. Prashanthan and Chirantha Amarasinghe from the All-Island Motorcyclists Association, Nimesh Lanka from the Small Industrialists Association, Mahinda Kumara from the Lanka Self-employed Professionals’ National Three-Wheeler Federation, M.B.M. Nalina from the Mawbima Surekime Vyaparaya, and Shums Farook from the Mawbima Suraksha Ekamuthuwa had attended the meeting.  While Jayasuriya is working towards getting all Opposition parties on to one platform, including the UNP and SJB, SJB General Secretary Madduma Bandara last week announced that the party is working towards forming an alliance with Opposition political parties to contest the next general election.  “We are talking to our friends, Opposition parties, and like-minded groups to form a broad alliance to face the next general elections. By the next election, we believe that all Opposition parties will rally to this new alliance,” Madduma Bandara had said at a news conference last week.    Chinese visitor    While Sri Lanka’s political and economic fronts are a hive of activity, news of an impending visit of Chinese Prime Minister Li Keqiang to Sri Lanka in September was announced in some media outlets.  A Tamil national newspaper last week reported that Prime Minister Li Keqiang is to visit Sri Lanka on 10 September and is expected to undertake a two-day visit during which he will have talks with President Rajapaksa, Prime Minister Rajapaksa, and Finance Minister Rajapaksa.  According to the newspaper report, the Chinese Prime Minister will also visit the Colombo Port City and is expected to review the progress on the work.  However, officials at the Foreign Ministry were unaware of a visit by a Chinese VVIP in September.  Meanwhile, US Ambassador Alaina B. Teplitz last week expressed concerns over the new Act implemented on governing the Colombo Port City since there were loopholes for corrupt practices and money laundering.   Teplitz had made this observation during an online roundtable discussion with a select group of journalists.  The Ambassador had stated the US companies would be wary about it since they wanted to keep their balance sheets clean in conformity with international norms. The Foreign Corrupt Practices Act prohibits US citizens from paying bribes.  However, she had noted that the US would not prevent its companies from investing in the Colombo Port City.  “We are not preventing US companies from investing, but we have been raising concerns about the legal environment,” Teplitz had added.  However, the US believes that the Colombo Port City laws were yet incomplete since the imposition of new regulations under it was yet to be completed.    Getting tough with UK    Foreign Ministry Secretary Admiral (Retd.) Prof. Jayanath Colombage meanwhile, last week, said that it was time the UK recognised the steady, tangible progress being made by Sri Lanka with regard to human rights. As a founding member of the Commonwealth, Sri Lanka considered the UK to be an important partner and requested the UK to lend its support to Sri Lanka.  Prof. Colombage had made this observation during a virtual dialogue arranged by the Pathfinder Foundation (PF) and the UK-based International Institute for Strategic Studies (IISS) on the current status of Sri Lanka-UK relations.  He also noted that Sri Lanka followed what he called a foreign policy of neutrality whilst remaining non-aligned amidst strategic competition in the Indian Ocean, regardless of the global crisis caused by the raging Covid-19 pandemic.  The dialogue broadly looked at three focused areas. Session 1 on “Maritime Security Co-operation” was chaired by Dr. Rahul Roy Choudhury with Nick Childs and Rohan Gunaratna presenting on behalf of the UK and Sri Lanka, respectively. Session 2 on “China-Sri Lanka Economic Co-operation” included H.M.G.S. Palihakkara as the Chair and Ganeshan Wignaraja and Sir Hugo Swire as the speakers. Kshenuka Senewiratne chaired Session 3 on “The Way Ahead for UK-SL Relations”, whilst the speakers were Indrajit Coomaraswamy and Stephen Evans. The Keynote Session was chaired by IISS Associate Fellow and former UK Ministry of Defence Director General – International Policy Desmond Bowen. The keynote remarks were made by Prof. Colombage.   He observed that the economic relations between the two countries were of paramount importance to Sri Lanka at a time when the present pandemic had an adverse impact on the island’s economy.  Leading on to the post-Brexit phase, the Foreign Secretary mentioned that Sri Lanka was looking forward to enhancing its trade with the UK as one of its large export markets. In addition, tourism from the UK represented a large segment, which brought in much-needed foreign exchange, which has come to a standstill due to the adverse pandemic situation. However, he was positive of the success of the country’s inoculation programme against Covid-19, which he believed would result in a more conducive environment for trade and tourism.   With regard to the importance of a strategic dialogue, the Foreign Secretary highlighted the ongoing strategic competition in the Indian Ocean, which, despite Covid constraints, continued unabated.  Speaking of the ongoing global power struggle, he said Sri Lanka’s response was to continue to follow a foreign policy of neutrality whilst remaining non-aligned.