16 May, 2022

Blog

The Government Cannot Go On This Way!

By Harsha de Silva –

Dr. Harsha de Silva MP

Currently, Sri Lanka is in the midst of a crisis of confidence. Public confidence, as well as international investor confidence in this government has completely fallen, and as a result markets have frozen. Basic economic theory states that the main factor determining the efficiency of a market is confidence and with this in mind this government is clearly unable to manage the economy any further. We appeal to the government to present the IMF letter, as it will regain some lost investor confidence by displaying willingness to work with the IMF and in implementing a sustainable plan.

There are a few changes that the government ought to implement immediately. Beginning with the complete overhaul of the monetary board of the Central Bank of Sri Lanka (CBSL), as confidence in the current board is destroyed. We are facing this current crisis, as a result of ill decisions made by the monetary board. The manner in which they floated the rupee was completely wrong. The Finance Minister, Basil Rajapaksa stated that they were a hold of the final IMF Article IV report, however, they seem to have missed the second page. One of the main suggestions on the second page states that the devaluing of the rupee should happen gradually. Thereafter, “transition should be carefully sequenced and implemented as part of a comprehensive macro-economic adjustment package”.

The CBSL’s forced conversion of remittances is completely regressive and needs to be scrapped. They floated the rupee while the forced conversion rate was at 25%, however, when they witnessed remittances flowing through the banking system again, they further increased the rate to 50%. As a result of these unsustainable conversions, banks now have insufficient forex to conduct their business. The banks pay our import bills, whether it is for fuel, medicine, potatoes or LPG, not the CBSL. Therefore, it is crucial that the banks have sufficient dollars to purchase goods, as well as prevent further depreciation of the rupee. We can neither comprehend these absurd policies, nor will we stand for them, and the government needs to immediately withdraw this gazette.

Furthermore, the Article IV report highlights the importance of observing the economy as one coherent system, in which we have to look at all variables when implementing reforms, as opposed to just one variable. It is of utmost importance that we further increase the policy interest rates, as an increase from 6.5 % to 7.5% is wholly insufficient! Take for example, yesterday at the treasury bond auction, the government did not approve any of the bids submitted by the market, thus they had to print the equivalent for funding. The Central Bank states the reluctance to approve any bids is a result of all bids being made for an interest rate above 15.5%. However, what the CBSL fails to understand is that no one wants a negative interest on their investment. Thus, when inflation is at 17.5 %, who in their right mind would invest in anything for an interest rate below 17.5%? All investors strive to

achieve an interest rate above the inflation rate so that they can reap a good return on their investment. This is why we urge the government to increase the policy interest rates in line with the rate of inflation and completely abandon the excessive printing of money.

Additionally, the process of debt-restructuring needs to start as soon as possible. Our creditors have already hired top law firms such as White & Case LLP to advise them on debt negotiations and plan to take us to courts. However, we are yet to hire a law firm to represent us. We urgently need to hire appropriate lawyers, although I urge the government not to see this as an opportunity to steal more. In the recent past, we witnessed the current Governor of the Central Bank engage in shady deals, with characters such as Imaad Zuberi, amounting to $6.5 million. Since then Zuberi has been convicted and sentenced to imprisonment on multiple counts of financial fraud in the United States. It was also later revealed that over $5.6 million of our taxpayers’ money went to the benefit of Zuberi and his spouse. Moreover, it is critical that we temporarily halt interest payments on International Sovereign Bonds (ISB), as a first step in the process of debt-restructuring.

Yesterday, I met a group of fund managers representing various bondholders. It was inconceivable to me when one fund manager revealed that he met with President Gotabaya Rajapaksa. It is completely improper that the President would allocate time for fund managers. Instead, we need to be represented by a team of experts on sovereign-debt restructuring and not the President of Sri Lanka. The President neither has the necessary capacity nor the capability to restructure bonds, which is why we urge the government to hand over the sovereign-debt restructuring negotiations to professionals.

Lastly, we hear that the government is to amend the previous expenditure and revenue and present a new budget. If so, the government needs to clearly state how they will reduce expenditure while increasing revenue in order to regain some sort of market confidence. The public is in complete disarray today, as queues for fuel and gas extend over kilometers , and people continue to suffer from power cuts that last as long as 13 hours, putting both businesses and peoples’ livelihoods in jeopardy. We strongly urge the government to implement necessary changes and reforms so that we can carve a clear and sustainable path to get Sri Lanka out of this mess, which is largely due to bad governance. We will continue to provide constructive criticism and suggestions to the best of our abilities, as we need to salvage this country for future generations.

Print Friendly, PDF & Email

Latest comments

  • 30
    0

    I’ll begin my narration where Dr. Harsha de Silva MP ended, – ‘we need to salvage this country for future generations’.
    A noble objective.
    How certain is Harsha de Silva that a future generation will want to live in Sri Lanka.
    .
    Man shall not live by bread alone. Stability cannot be bought by economy alone. Why is there a war in Ukraine?
    .
    At the moment economy is the top priority. Granted. How did we reach this low ebb in our economy. The answer to this question requires equal interest.
    .
    We cannot simply say that the country was mismanaged. The country was misruled. Today, it is both misruled and mismanaged.
    .
    The best capital a country can wish for is the Human Capital. We had it in abundance at the time of our Independence. We wasted it. We destroyed it. Able, intelligent, and educated young men and women fled despite their love for the country.
    .
    They will not return till they regain their confidence to return. That will not happen just because our economic mismanagement gets remedied. That can happen only when they see that the era of misrule is over.

    • 4
      6

      Harsha: are you like US citizen and Minister for Economic Disaster in the Miracle of Modayas, Basil Rajapakse, a Washington Consensus MCC Economic Hit man?
      American citizen Basil works for the deepstate which wants to control the Indian Ocean Sea Lanes of Communication (SLOC) , by control of strategic Sri Lanka through Full Spectrum Dominance (FSD) and Over the Horizon (OTH) Cyber war and control of Lanka’s Energy and economic policy. They have made great headway in this OTH FSD project with Covid-19 masks and Digital colonialism the past 2 years when the economy and society was destroyed with Covid Lockdowns.
      Going to the IMF means that Sri Lanka cannot have an independent economic or ENERGY policy, or buy, oil, gas, or jet fuel and source its energy needs from Russia which is selling discount oil to India.
      Wake up and tell us when did America help Lanka, what have they built in this cournty – they only steal power plants like Yugadhanavie and promote fake human rights and democracy while backing dictators who use ethnic and religious masks like fig leafs..

      • 3
        0

        Let me start by saying USA is the main buyer of SL exports and the only major trading partner SL has a trade surplus with. And for decades, SL (mainly) left has these conspiracy theories that USA is going to control SL. Whether this is true or not the main blame lies with the sri lankans. For the populace in general for voting leaders who are either dumb, corrupt, dishonest or indecent. And for the educated who got their education free and for more than 100 years higher education existed they have contributed nothing to sri lanka economy in the form of establishing knowledge based economy. Worse they join the politicians in riding the system to steal from the very people (farmers, expatriate workers like housemaids etc )who financed their education. The educated in other countries like Singapore, South Korea and lately India have adopted technologies developed in the West to start their own knowledge based economies. They did not go around saying the West and specifically USA are out to get them.
        As for the reasons for present embarrassing economic situation where SL is going begging all over the place, the educated are partly responsible (in addition to failing to set up a knowledge based economy) .

      • 3
        0

        The reason I say the educated are also partly responsible for the current economic debacle is recent governments disproportionately increased the salaries and benefits for these non contributing (to economy) professionals They together with politicians and city people flushed with rupees are leading high middle income country life styles which require lot of dollars. But the meager dollars are earned by blue collar workers like housemaids (who ironically does not need much dollars in their life styles). So the living above the means has caught up. The situation is further aggravated by mega corruption ( in which professionals are also involved) and recent big white collar projects that do not bring in any income to the country

    • 3
      6

      “How certain is Harsha de Silva that a future generation will want to live in Sri Lanka.”
      Not everybody wants to leave and not everybody who wants to leave has the means to leave.
      *
      “Able, intelligent, and educated young men and women fled despite their love for the country.”
      Many of them left because they loved more the money they can earn.
      They will not return once they are addicted to a way of life that this country cannot provide and need not provide.
      We have to do with what we have, and let us work on tat material

      • 6
        1

        “Sour Grapes” the difference between absolute stupidity and 75 years of pseudo patriotism. The ones who are right now fleeing by boats to India must be in love with money , they can earn.

        • 2
          4

          Chiv,
          “…75 years of pseudo patriotism.”

          No! Three decades of Tamil terrorism and one day Muslim terrorism.

          • 0
            0

            I will let that go because it was not at all addressed to you.

    • 6
      1

      Nathan

      Harsha types:
      “We will continue to provide constructive criticism and suggestions to the best of our abilities, as we need to salvage this country for future generations.”

      Harsha is not only an opportunists but a racist too.
      He jumped ship from UNP to Samagi Jana Balawegaya (SJB).
      I want to know why he switched sides amid many uncertainties.
      Why did he chose SJB which is being lead by Mummy’s boy Sajith?

      Racist because he made the following statement just before the 2015 General elections:
      Excerpts:
      “Sri Lanka’s main opposition United National Party (UNP) asserted today that it will not allow anyone to take any Sri Lankan leader to the international court on war crime charges.
      UNP MP Dr. Harsha De Silva told Parliament today that his party is fully committed to protect the security forces who freed the country from terrorism and the political leaders.
      “I am telling to the world. We (UNP and myself), will not allow anybody to take President Rajapaksa or any other leader to International court about War Crimes, We will not allow the President whether he won or lose to be tried before war crime tribunals,” Dr. de Silva stressed.
      “I am a proud Southerner and a Sinhala Buddhist. I have no desire whatsoever to align with the Tigers and betray my country,” the MP stressed responding to the accusation against him from the government Minister.”

      • 4
        0

        Nathan

        If politicians want to lead this island and salvage it from destruction the leaders must stop parroting like a racist and a stupid. If found he or she being a stupid racist then of course voters have the right to defeat them.

        With such politicians this island will never get rid of corruption, nepotism and protect the people from saffron-istas, rapists, murderers, war criminals, racists, ….. starvation, … disease, …

  • 5
    0

    They gambled the money of the hardworking-suffering-Lankan-Masses, on that alternate monetary network. They are now crossing their fingers, anxiously waiting for Russia to trump in its global expansion. Doing the intricate and boring economic stuff they brush aside, as they find it too complicated. They prefer to remain intoxicated, as they are on this high-roll with Russia. They will hang on with brute force, till their alternate universe comes to fruition (if ever). Megalomania and madness has been brought on by sycophants and fellow-investors of country money, sitting up with them in parliament and country representation.

  • 7
    1

    Once again, addressing problems superficially won’t change anything on long term. Until these stupids realize the core problems are elsewhere, you never see the light

  • 7
    0

    “At the moment economy is the top priority.”

    That carrot wont horse anymore.

    The top priority is to get the stolen loot back. …….. If you look aside and pretend you don’t see, you don’t know …….. and let the crooks escape like many times before ……… the country will never prosper.

    Only AKD and Fonseka have even talked about catching the crooks ……… not a hmm from Sajith …….. he is just trying to paint a word-laden alternate picture ……… to sugar-coat and come to power by stealth/default.

    More words = more bullshit

    Just say your plan with the fewest words 1, 2, 3, ……… for catching the crooks …….. I’m sure Sajith wont!

    Sajith’s only claim to leadership is, he is Premadasa’s son …….. what a legacy! …….. Premadasa was the first president to murder while sitting in the president’s chair.

    Premadasa was the original land-grabber even before the shameless Rajapakses. ………. Ask how they robbed our 61 perches in Duplication Road for his buddy Premasiri’s liquor store ……….

    Old crooks can’t replace new crooks!

    Unuth ekai, Munuth ekai – And he is in jail for that. ……… Galileo spent most of his life in jail/house-arrest for saying the earth revolves around the sun: nothing has changed since!

    • 9
      0

      The comment was too long, this would’ve got truncated.

      Old crooks can’t replace new crooks!

      Unuth ekai, Munuth ekai – And he is in jail for that. ……… Galileo spent most of his life in jail/house-arrest for saying the earth revolves around the sun: nothing has changed since!

      Harsha, find yourself a worthy leader …….. if you look around it’s not difficult.

      Or carry the struggle without a leader …….. a worthy leader will emerge.

      Anyway, Harsha you are doing a great job in the country’s hour of greatest need. Good luck!

      • 4
        0

        nimal fernando

        Don’t bet on Harsha.
        He is also just another politician who is willing to wear his racism on his sleeves openly acknowledge his preference for impunity for armed forces over justice.

  • 3
    5

    Also, South Asia’s “Arab Spring” Moment is here. There is a CIA and Pakistan Military backed regime change operation against Prime Minister Imran Khan while in Sri Lanka the crisis is staged to get us into the Washington Consensus with the US citizens Rajapaksas help– also against Russia and China.
    Have you heard of the CIA’s Arab Spring Harsha? Democrat Hillary Clinton said of Libya’s President, Ghadaffi “We came, we saw, he died, ha, ha, ha”. Libya was wreaked and Gaddaffi kill by the Americans because he challenged the hegemony of the US Petrodollar which is crashing now as the US has printed 9 trillion in the past 2 years of Covid Bailouts to debt trap and asset strip with Black Rock Hedge funds around the world. USA is the most indebted country on the planet so it is time to dump the dollar, the IMF and Washington Consensus and de-dollarize.. Look east and to Russia for help, man!

    • 2
      0

      Dinuk,

      Nothing to do with the common man in Sri Lanka suffering scarcity of food, medicine, deisel for common man transportation, medicines, education, heat index especially in cramped conditions in the Western province, no jobs, starving children, no future.

  • 2
    0

    (Part!)
    Harsha,
    “The Finance Minister, Basil Rajapaksa stated that they were a hold of the final IMF Article IV report, however, they SEEM TO HAVE MISSED THE SECOND PAGE. One of the MAIN SUGGESTIONS ON THE SECOND PAGE states that the DEVALUING OF THE RUPEE SHOULD HAPPEN GRADUALLY. Thereafter, “transition should be carefully sequenced and implemented as PART OF A COMPREHENSIVE MACRO-ECONOMIC ADJUSTMENT PACKAGE”
    Good point, well done!
    Thank your ex-PM and ex-Leader, for having the B__ls to request at APC!!
    You are trying to be polite, gentlemanly and light on them!!
    Very good too to reach consensus! Some in todays’ political milieu do not get it!!!
    They see something which they have not heard before or denounced by themselves as not in harmony with their political aspirations (not interested in that of the people at large) unless “MILLED THRUOUGH” and dragged through the “mud grovelling all the way” in Pigs’ Sty!!
    Quick to respond and no patience tp concentrate and study the issue in detail or the prognosis!!!
    1. How many G.C.E ‘O’ Level examination participants fail to patiently study, comprehend consummately, then analyse and come up with the comprehensive solution to the problem???

  • 2
    0

    (Part II)
    2. This comes as a natural process, individuals who do a Degree, specialise thereafter on a particular subject and do a thesis for a PhD, Doctorate or post graduate degree??
    3. Furthermore, one should have the capacity, eligibility and knowledge the language in which it is written!!! English!!!! Not Sinhala, the official Language, should have requested translation to ensure faultless resolution, scrupulously following instructions!!!!
    If for any reason they are delinquent in any one of the above 3, then you are sure to FAIL in your attempt, resolving problem as contemplated by those giving you the advice!!! In this instance IMF!
    This would have never come out, if not for the APC and Ranil W., insisting that this document kept securely hidden by the FM, Draft or not to be submitted. The IMF must have – intelligent, knowledgeable and educated they are comprehended and published the recommendations!!!!
    What a sordid outcome???
    The USD which was unofficially trading at 240-245 rupees per dollar has dipped to 300+ rupees in commercial banks.
    Given the greed, which is only human may take it to 400+ in the near future. Who doesn’t aspire for more?
    Is it not almost 100% depreciation?

  • 2
    0

    (PartIII)
    Without any other “checks and balances” in place along with a stand-by IMF supported SDR as in 1977 under Ronnie De Mel and JRJ’s watch???
    The outstanding loans looms large in the horizon, to scare any investor – Needs assurance of convertibility of the dollar – in an eventuality
    You are absolutely right on replacing the Governor, Monetary Board and any other delinquents in the system, without which you will never achieve your aspirations; Stability in exchange rate.
    Disciplining the Money Changer business is important, but question the issue, is it that important right now, when your dire need is US dollars to keep the “wolf away”.
    Before attempt, ‘cutting down’ that ‘supply chain’, question yourself, why and where are we in this crisis of the Dollar Issue; Unrealistic ‘pegging’ of the dollar by fixing a rate 12.5 less, which hurt the immigrant workers getting realistic ‘Bang for their Buck’. Hard earned money, none will compromise.
    Market and remitters lost trust!! Why, because of the mismanagement of the “Bullish” CBSL Governor and all, exhibiting their ignorance of Central banking Knowledge!!!
    Fully agree that to regain the trust of investors, tourist and remitters, we MUST accelerated change!

  • 5
    0

    Yes the government cannot go on this way it needs to get out and be gone! Just what in the world do you think you are doing advising these scoundrels? Get that BUFFOON LEADER of yours to set about a plan to kick the bastards out!! If you do not the pubic will do it for you with a lot of blood shed and you Lot will be most likely end up being dragged thru the streets yourselves along with the family henchmen for your stupidity.

  • 6
    1

    I know you are an economists but also remember we have a power crisis. While your advice goes way above the heads of the stupid family and has absolutely no chance of being adopted we are just approaching a total power shut down. What then. Put the pen down and get out on the streets.

  • 5
    0

    Dear Nathan.
    And…..
    Murderers are not pardoned willy nilly, (Some given responsible appointments in govt or commissions), political crooks like Basil and Weeratunga and Pelpita and Gamini Senerath are not in the category of “Nidhos kota nidhahas.”
    We have the same set of crooks prior 2015 in jockey positions.
    Yes, in other words “The Rule of Law” should prevail for our emigres to come back.

    • 1
      3

      MyView,
      “Yes, in other words “The Rule of Law” should prevail for our emigres to come back.”

      Why? Getting tired of toy let cleaning?

  • 2
    0

    https://www.youtube.com/watch?v=ZiBg20VJup8

    In appreciation of the 6.9 m

  • 10
    3

    Harsha de Silva
    First and foremost you are a wimp.
    You are in the opposition, you are in the parliament and you are an economist, and all this time you have only been making noise without any action.
    You keep respecting that family of looters by bowing your head to a bunch of traitors.
    Why didn’t you and your party take action in whatever form possible to steer the country out of the kamikaze trajectory.
    For example, a person like Nagananda Kodituwakku has been wrestling the government head-on. He had his powers taken away, yet he kept fighting. That is what all of you should have been doing, instead of climbing on stages and blabbering to the people.
    You the representatives of the people should have stood on behalf of the citizens and prevented this disaster.
    As far as I know, the people of Sri Lanka will not forgive any of the 225, except SF and Ranjan. The rest are dead to us.

    • 2
      3

      Human Touch,
      Harsh is a guy who ‘talks the talk but doesn’t walk the walk’.

      • 1
        0

        I don’t think he takes pleasure in walking with idiots.

  • 4
    3

    Another article beating around the bush.
    The economic collapse has little to do with all this confusing semantics, that these journalists keep giving us.
    The Rajapaksa freemasons have been given a script by the Rothschilds and are following it.
    Freemasons are attempting to destroy and wipe out a massive chunk of humanity, via a multi-pronged attack.
    Go and look up the Georgia guidestones in the USA, where they openly brag about ‘keeping the earths population under 500 million’.
    Mark Alan King found this gematria entry recently. Though it says ‘jews’, it refers to the tares and freemasons world wide:

    ‘If Shortages Of Food Occur Its Only Because The Jews Are Blockading Our Supplies And Need To Be Stopped With Force ………..6553………6432………..1072…………20’

    • 5
      0

      SS

      “If Shortages Of Food Occur Its Only Because The Jews Are Blockading Our Supplies”

      Are you by any chance :

      a religious nutter
      a paranoid conspiracy theorist
      a have nothing else to do lazy bum
      a member of Nazi SS-Totenkopfverbände
      an aspiring screenplay writer for future The Da Vinci Code film franchises

  • 9
    0

    Lanka is always in international news for all the wrong reasons. Yesterday’s is one such, now splashed all over the world. What foreign investement , $ are you’ll expecting after this ?? See the pictures of MR and Namal visiting Gotha’s residence today. You can see the fear and apprehension in MR’S eyes. Namal of course is fully surrendered by paid goons/ bouncers. Did they visit one soul who died standing in queues?? Did they go out and meet public to hear their miseries ?? All MR said was “I will not retire , I am too young (in today’s video MR needs assistance to walk, so obese he is mentally and physically unbalanced and stumbling) and I still have plenty time left, I am thinking of getting elected in next election. More than 50 protesters including journalist who were out there are arrested, Water canons, tear gas and if needed bullets are stocked, to meet coming protest. Looks like war heroes will turn there guns on starving public. Now lets wait for the respnse from 6.9 million retards.

    • 1
      3

      Chiv,
      “Lanka is always in international news for all the wrong reasons.”

      Sri Lanka was in international news for three decades when Tamil terrorist barbarians carried out suicide attacks and massacred civilians. Then in 2009, Sri Lanka was in international news as the country that eliminated Tamil terrorists who were branded as the deadliest terrorists in the world by FBI. Eliminating Tamil terrorists is not a ‘WRONG REASON’.

      • 3
        0

        What happened after 2009 ?? Government having frequent “blackouts” , just like you. Government needs to cut down on corruption and you, “booze”.

      • 4
        0

        Eagle Blind Eye

        “Eliminating Tamil terrorists is not a ‘WRONG REASON’.”

        Who said it was?
        However along with Tamil Terrorists, your war criminals also had finished off tens of thousands of innocent civilians, surrendered members of LTTE cadres, …. …

        If you can not see the differences I think you need to an Optician….

  • 1
    4

    “The Government Cannot Go On This Way!”

    Then which way the Government should go? Ranil’s way that ruined the economy deliberately following instructions from those who funded regime change from the day that he came to power. This guy who is trying to become an expert on managing the economy kept his eyes closed when Ranil ruined the country. This guy even put a footnote to clean Ranil’s sss.

  • 2
    0

    Yes Harsha, if you have any love for the country and want to serve the community, go find yourself a worthy leader; take Eran, Harsha and General Sarath Fonseka along with you.

  • 2
    0

    Sorry, I meant Harin and the young Jayawardana too. It is high time you took a real stand for Ranjan Ramanayaka too.
    Please let’s not unleash violence and destruction on public property, in whatever form. It’s the ordinary person who will have to bear the brunt of it. Also please stand by each other in protests and not betray each other on the altar of greed for power.
    The sufferings of the people have to be relieved. The queues in this extreme heat have to stop. Let’s be united for each other.

Leave A Comment

Comments should not exceed 200 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically disabled after 5 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.