SRI LANKA NEWS –  (NOVEMBER  2019) –    Compiled by Victor Melder.

Sri Lanka’s top court on Tuesday effectively blocked a plan by the president to bring back hangings for the first time since 1976 before he leaves office this month. Maithripala Sirisena said in June that he had signed death warrants for four drug offenders — mirroring the Philippines’ no-holds-barred anti-narcotics drive — alarming rights groups and the international community. A three-judge bench of the Supreme Court extended on Tuesday a stay order until the hearing of 15 petitions filed against Sirisena’s bid. “The bench extended the stay order till December 9,” a lawyer representing civil society groups, who call hanging a “cruel and degrading”, said after a brief hearing. Sirisena is not seeking re-election and must leave office as soon as a winner is declared after the November 16 election, more than three weeks before the court resumes hearings. There has been a moratorium on capital punishment in Sri Lanka since 1976. Sirisena told reporters on June 26 that he had signed the four death warrants and that he expected them to be hanged within weeks, or by before he leaves office at the latest. Sri Lanka’s last hangman retired in 2014, but officials said they had selected two out of 26 candidates to succeed him. Their names are being kept secret for fear of attacks. Sirisena justified his decision by saying there were 200,000 drug addicts in the country, and 60 percent of the 24,000-strong prison population were drug offenders. The Sri Lankan leader has also snubbed UN Secretary General Antonio Guterres who urged him three months ago to reconsider. The death warrants that Sirisena says he signed will remain in force once leaves office, but his successor can withdraw them. The ruling party candidate in the election, Sajith Premadasa, has supported Sirisena’s call to resume hangings for drug offenders, but has stopped short of saying he will actually carry out executions.  His main rival Gotabhaya Rajapakse, brother of former strongman president Mahinda Rajapakse, has remained silent on the issue. (Sunday Island, 3.11.2019)

Sri Lanka government’s total debt has skyrocketed to unmanageable proportions by an increase of 71 per cent since the current administration came into power in 2015, Finance Ministry statistics showed. The present administration has to borrow money since 2016 to repay the massive loans taken by the previous regime, Treasury accounts revealed. The most significant borrowing in 2013 was the US$750 million obtained from international markets at the highest ever interest rate of 8.9 per cent at a time when the global benchmark rate for that type of loan was 1.3 per cent, a senior official said. According to Finance Ministry data, public debt has increased to over Rs. 8000 billion in 2015 from Rs.4000 billion in 2009. While the government went on a borrowing spree on international capital markets, government revenue nose-dived. In 2005, Sri Lanka’s tax-to-GDP ratio was 13.7 per cent. By 2014, it was 10.1 per cent, one of the lowest in the world. As a result, expenditure necessary for long-run growth such as health and education suffered. And Sri Lanka needed to borrow more just to repay the loans of the previous regime.  in 2014 interest payments amounted to Rs. 436 billion, 24 per cent of government expenditure. Sri Lanka’s public debt has continued to escalate placing  huge pressure on the Government budget as well, Treasury sources said. Interest payments on public debt had consumed a large part of Government revenue representing a large portion of Government expenditure. Therefore the Treasury had to finance budget deficits through more borrowings, thereby increasing the amount of public debt, sources revealed.  At this decisive moment it is essential to take prompt action towards improving the revenue base and efficient collection of taxes and implementing expenditure control at Treasury level, the official said. In addition to in-house Treasury reforms, a policy plan of public sector enterprise reforms for reducing losses, malpractices, mismanagement of resources and waste would be the only way to reduce the prevailing fiscal deficit, he added. (Sunday Times, 3.11.2019)

The International Monetary Fund (IMF) on Friday completed the sixth review of Sri Lanka’s economic performance under the Extended Fund Facility (EFF) and approved the release of $ 164 million, bringing the total support so far to $ 1.31 billion.   This is following the IMF the granting of a waiver of non‑observance for the end‑June 2019 performance criterion on the primary balance Sri Lanka’s extended arrangement was approved on June 3, 2016, in the amount of about SDR 1.1 billion ($ 1.5 billion, or 185% of quota in the IMF at that time of approval of the arrangement. On 13 May, the Executive Board approved an extension of the arrangement by one additional year, until 2 June 2020, with rephasing of remaining disbursements.Following the Executive Board’s discussion of the review, IMF Deputy Managing Director and Acting Chair Mitsuhiro Furusawa said: “The Sri Lankan economy is gradually recovering from the impact of the Easter Sunday terrorist attacks. Growth is projected to strengthen to 3.5% in 2020, from 2.7% in 2019, as tourist arrivals and related activities gradually recover.”
“Sustaining fiscal policy discipline remains critical to strengthen resilience and support growth, as important downside risks remain, amid heightened external and domestic uncertainty,” he added. (Daily Financial Times, 4.11.2019)

The TNA has decided to support New Democratic Party (NDF) presidential candidate Sajith Premadasa. The decision was announced by TNA MP and spokesman M.A. Sumanthiran in Vavuniya yesterday. Sumanthiran said the TNA had made the decision not on the basis of Premadasa’s response to the demands made by the TNA but in view of the fact that Tamil people would be able to get more from Premadasa than any other candidate in the fray. The TNA members met at a private hotel in Vavuniya yesterday to take a final decision and held a press conference there to announce it. Members of the TNA allied parties namely ITAK, TELO, PLOTE, TMK party of former Northern Province Chief Minister CV Wigneswaran and EPRLF of Suresh Premachandran were present. The TNA earlier forwarded a letter containing 13 demands for the benefit of people living in the Northern and Eastern Provinces to the presidential candidates from main parties. None of the presidential candidates responded directly to the TNA’s demands, and TNA Leader R Sampanthan said that they would wait until NDF candidate Premadasa made his manifesto public so that they could study the promises the latter might make for the benefit of people in the North and the East. MP Sampanthan then also promised that his party would discuss the content of the manifesto with other Northern political party leaders and make a final decision. Accordingly, the Northern Tamil parties discussed the NDF candidate’s manifesto at a full day meeting and made it public yesterday. (Daily Island, 4.11.2019)

With Colombo city turning into a business hub more than a residential area, recent studies of LankaPropertyWeb (LPW) show that apartment developers are now exploring the suburbs to cater to the growing interest for vertical living amongst the locals. The numerous developments taking place in the main city resulting in diminishing space amongst houses for rent in Colombo and reducing demand for houses for sale in Colombo has in fact contributed to this interest largely. The rising population in the country and the changing lifestyles of people has also further influenced the number of apartments for rent and condominium construction taking place in the city. However, over the years such constructions taking place within the inner city of Colombo (i.e. Colombo 1-15), has continued to decrease in number. According to the data gathered by the Condominium Management Authority (CMA), from 2014 to 2016 there is an increase in condominiums in Colombo. But from 2017 onwards an obvious reduction is seen. Apartment constructions in the other districts are following a downward slope as well. However, in the greater Colombo areas like Sri Jayawardena Pura Kotte, Mount Lavinia, Rajagiriya, etc. that exclude Colombo 1-15, a continuous rise in complex constructions has been witnessed. Commenting on this Daham Gunaratna, Managing Director of LankaPropertyWeb says “The main reason developers are moving out of Colombo could be the cost of construction in Colombo (mainly driven by high land value) and thus the price of apartments going up.” (Daily Island, 4.11.2019)

Sri Lanka Podujana Permauna (SLPP) Presidential Candidate Gotabhaya Rajapaksa was declared as the winner of the presidential election by the Election Commission (EC) today (Nov 17). Mr Rajapaksa received 6,924,255 votes at the presidential election, outnumbering his opponent Sajith Premadasa who received 5,564,239 votes.Thirty-five candidates contested this year’s presidential election, which saw a voter turnout of 83.72 percent, EC Chairman Mahinda Deshapriya said during a meeting with the candidates. The polls chief observed that the poll had been conducted in a peaceful manner, despite having shortcomings due to the conduct of certain state media outlets, and some religious leaders. The SLPP in a statement said Rajapaksa will take oaths as Sri Lanka’s Seventh Executive President at the Ruwanweliseya Buddhist Shrine in Anuradhapura tomorrow.  He will address the nation after being sworn in as President.  (Times Online, 17.11.2019)

President Gotabaya Rajapaksa appointed a 16-member Cabinet yesterday, establishing an interim government focused on carrying out the manifesto which he presented to the public before the Presidential Election. President Rajapaksa stated that the interim government will hold office till the General Elections, expected early next year. “That’s why we appointed a Cabinet of 15 Ministers,” he said, pointing out that the manifesto indicated a reduced Government if he is elected. There were no Muslim Parliamentarians appointed to the Cabinet. 
The President recalled that the public had placed their trust in them and asked the new Cabinet to work towards a new political culture. “In the lead up to the Election, the public rejected the old political culture. I expect you all to work together for change,” he added. President Rajapaksa, addressing the Cabinet and other Parliamentarians, urged them to work with the State Ministers, who will be appointed next week. The President stated that heads and director boards of State institutions and enterprises will be appointed by a selection committee, and instructed newly appointed Ministers to make recommendations on suitable individuals to hold such posts to the committee. . President Gotabaya Rajapaksa made history this week when he appointed his brother, Opposition Leader Mahinda Rajapaksa, as the Prime Minister. Yesterday, he entrusted the Prime Minister with multiple portfolios. They include Minister of Finance, Economic Affairs, Policy Development, Buddha Sasana, Cultural, Water Supply and Urban Development, and Housing Facilities.The other Cabinet appointments were Nimal Siripala de Silva as Minister of Justice, Human Rights and Legal Reforms, Arumugam Thondaman as Minister of Community Empowerment and Estate Infrastructure, Dinesh Gunawardena as Minister of Foreign Affairs, Skills Development, Employment and Labour Relations, Douglas Devananda as Minister of Fisheries and Aquatic Resources, Pavithra Wanniarachchi as Minister of Women and Child Affairs, Social Security, Health and Indigenous Medicine, Bandula Gunawardene as Minister of Information and Communications Technology, Higher Education, Technology and Innovations, Janaka Bandara Tennakoon as Minister of Public Administration, Home Affairs, Provincial Councils and Local Government, Chamal Rajapaksa as Minister of Mahaweli Development, Agriculture and Trade, Dullas Alahapperuma as Minister of Education, Sports and Youth Affairs, Johnston Fernando as Minister of Roads and Highways, Ports and Shipping, Wimal Weerawansa as Minister of Small Medium Enterprises (SME) and Enterprise Development, Industries and Supply Management, Mahinda Amaraweera as Minister of Passenger Transport, Power and Energy, S.M. Chandrasena as Minister of Environment, Wildlife, Land and Land Development, Ramesh Pathirana as Minister of Plantations and Export Agriculture, and Prasanna Ranatunga as Minister of Industrial Exports and Investment Promotions, Tourism and Aviation. (Daily Financial Times, 22.11.2019)

President Gotabaya Rajapaksa is expected to lead an eight-member delegation to India next week in his first-ever overseas visit since assuming office. Among members of the Sri Lankan delegation are Secretary to the President Dr. P.B. Jayasundera, Foreign Secretary Ravinatha Aryasinha, and former Secretary to the President Lalith Weeratunga, who was yesterday granted approval for travel temporarily by the Court. President Gotabaya will visit New Delhi from 29 November to 1 December, following an invitation from Indian Prime Minister Narendra Modi. .It was learnt that President Gotabaya is likely to visit China next. (Daily Financial Times, 23.11.2019)

Headline inflation as measured by the year-on-year change in the National Consumer Price Index (NCPI, 2013=100)* increased to 5.6 per cent in October 2019 from 5.0 per cent in September 2019. The monthly increases of prices of items in the Food category contributed to this increase. Accordingly, Food inflation (Y-o-Y) increased to 7.3 per cent in October 2019 from 4.9 per cent in September 2019. However, Non-food inflation (Y-o-Y) recorded 4.3 per cent, continuing its decreasing trend observed since May 2019. The change in the NCPI measured on an annual average basis increased to 2.8 per cent in October 2019 from 2.3 per cent in September 2019. Monthly change of NCPI recorded 1.0 per cent in October 2019 and it was solely due to the price increases observed in the items of Food category. Within the Food category, prices of big onions, rice and vegetables recorded increases. Meanwhile, prices of items in the Non-Food category declined during the month owing to price decreases of the items in Housing, Water, Electricity, Gas and other Fuels; Transport; and Health sub-categories.The core inflation, which reflects the underlying inflation in the economy, remained unchanged at 5.6 per cent in October 2019 on year-on-year basis. However, annual average core inflation increased to 5.4 per cent in October 2019 from 5.2 per cent in September 2019. (Sunday Observer, 24.11.2019)

The Edinburgh University of the United Kingdom will return a set of nine human skulls to their homeland of Sri Lanka in a repatriation ceremony today.The skulls will be presented to the Chieftain of the Vedda community Uruwarige Wanniyalaththo, after anatomy researchers at the University agreed to the Vedda’s claim as the earliest inhabitants of Sri Lanka, Edinburgh Evening News reported.Vedda Chief will attend the presentation at the University’s Playfair Library in Vedda dress of a knee-length sarong and holding a traditional axe.
The skulls, thought to be over 200 years old, were taken from their place of origin more than a century ago. The Vedda plan to display the skulls in a collection that will showcase their history as traditional hunter-gatherers and forest-dwellers. Chief Uruwarige said the dead are very important in Vedda society.“Every year we hold a special ceremony to honour those who are no longer with us. Even though these remains have been in Edinburgh for many years, their spirits have remained with us in Sri Lanka.“This reuniting of spirits and physical remains – for which I thank the University – is a very special moment for my people.”University of Edinburgh Chair of Anatomy Professor Tom Gillingwater said: “We are delighted to welcome the Vedda tribes-people to Edinburgh and mark the return of their ancestral remains.”“Our vast and diverse collection is often used in research breakthroughs and teaching. We are pleased to be able to return these culturally-important artefacts to help ensure the Vedda’s legacy endures for generations to come.”The ceremony marks the end of a study by Anatomy researchers at Edinburgh University and researchers at the Max Planck Institute for Science of Human History in Germany, which confirmed the Vedda as Sri Lanka’s earliest inhabitants.(Daily Financial Times, 23.11.2019)

SriLankan Airlines has incurred a loss of over Rs. 44 billion in the financial year that ended on March 31, 2019, Auditor General, W. P.C. Wickramaratne says in his report on the state venture. The accumulated loss of the company was Rs. 230 billion. The Company’s current liabilities exceeded its current assets by Rs. 186 billion and total liabilities exceeded its total assets by Rs. 177 billion. Further, the Group (Company and its subsidiaries) incurred a loss of Rs. 41 billion during the same time with an accumulated loss of Rs. 223 billion and, as at that date, the Group’s current liabilities exceeded its current assets by Rs. 177 billion and total liabilities exceeded its total assets by Rs. 168 billion. The Auditor General has said: “These events and conditions, along with other matters as set forth in another part of the report, indicate a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern.” Wickramaratne added that his opinion of the company’s situation had not changed despite mitigatory factors such as Cabinet approval on 27 August 2019 and the letter issued by the Secretary to the Treasury on 16 September 2019 confirming the support of the Government of Sri Lanka (GOSL) to the Company to continue its operations. Commenting on the decision to re-fleet with 14 aircraft and Termination of lease Agreements on 04 A350-900 aircraft, Wickramaratne said that: “Company had not adhered to Government Procurement Guidelines in obtaining consultative services for the entire process, selecting companies for purchasing six A 330-300 aircraft and four A350-900 aircraft, leasing another four A350-900 aircraft and sell and lease back of above six A 330-300 aircraft, within 08 years from the year 2013.” The decision for purchasing aircraft had been taken by the Board of Directors of the Company without obtaining approval of the Cabinet of Ministers and without making a proper cost benefit analysis. A sum of Rs. 17,058.1 million had paid as compensation in the process of revocation of lease agreements for obtaining four A350-900 aircraft on lease which was scheduled to be delivered in the year 2016/2017. “The Company is in negotiation with Airbus SAS Company to amend the purchase agreement of four A350-900 aircraft which are to be delivered in 2020 and 2021 to replace with A321 NEOs and/or A330 NEOs and as at the reporting date amounting to Rs. 2,528.12 million ( USD 19.21 Mn) had been paid to Airbus as pre-delivery payment. However, no final decision had been taken until the date of this report.” (Daily Island, 27.11.2019).

President Gotabaya Rajapaksa yesterday said he would renegotiate the Hambantota Port lease agreement, terming it a “mistake” and calling on the Chinese company to be open to the move while assuring that he remained committed to strong relations with the global superpower. (Daily Financial Times, 27.11.2019) 

The cabinet has agreed to reduce Value Added Taxes (VAT) and Nation Building Taxes (NBT) imposed on imported goods from December 1. Cabinet spokesman Bandula Gunawardena said the cumulative value of VAT and NBT which stood at 17 percent will be reduced to eight percent.  He said Economic Service Charges, Capital Gain Taxes, Pay As You Earn (PAYE) taxes, VAT imposed on condomoniums, and Withholding Taxes on interest have also been scrapped. In addition, taxes imposed on export of tea, rubber and minor export crops has been lifted with effect from December 1, Minister Gunawardena said.  Meanwhile, the cabinet spokesman said that steps would be taken to reduce prices of rice following complaints that the rice prices had gone up . (Daily Financial Times, 27.11.2019)

Rajapaksa, giving his first interview since taking office, told Indian Journalist and Defence Analyst Nethin S. Gokhle that he remained committed to close ties with both China and India. 
In an hour-long interview aired on Gokhle’s Strategic News International (SNI) web platform and on the defence website Barthshakthi, President Rajapaksa stressed that Sri Lanka’s close relations with China during his brother’s 2005-2015 presidential tenure were misinterpreted by international analysts as a strategic military relationship, and claimed instead it was purely an economic partnership. “We don’t want to become a part of a big power rivalry,” Rajapaksa stressed, pointing out that Sri Lanka would not do anything that would negatively impact India’s national security.  Rajapaksa stated that he would seek to reassure India that Sri Lanka would not do anything to harm India’s security interests and would be seeking continued Indian investment to Sri Lanka during his upcoming visit to New Delhi.  “We were never to give control of the port [Hambantota] to China; that was a mistake,” Rajapaksa opined, pointing out that the decision was made by the previous administration.
“The previous Government gave it on a 99-year lease, and even though China is a good friend of ours and we need their assistance for development, I am not afraid to say that was a mistake.”
Rajapaksa stated that he would request the Chinese to renegotiate the joint venture. Rajapaksa highlighted that the public was unhappy with the deal and pointed out that while leasing land for commercial purposes or for property development was acceptable, giving control of a strategic “economic location like a port” was not. 
President Rajapaksa called regional and international powers such as Singapore, Japan, India and Australia to invest in Sri Lanka, acknowledging that the said countries viewed Chinese investment in Sri Lanka with suspicion. 
President Rajapaksa also claimed that there was an inaccurate perception of him as an authoritarian and racist individual. “I am a disciplined person, that doesn’t mean I am authoritarian,” he stated, pointing out that he had proved in action that he was not racist nor did he work for only one section of the population. 
“That is why I invited the Tamils, the Muslims and everybody to join me to develop the country and build it up,” he argued, pointing out that the Opposition could paint him out as a dictator but the public would see him for who he was through his actions. He called on the international media not to believe or propagate rumours, but to come speak to him and understand his ways. Rajapaksa argued that war crimes allegations against the Sri Lankan military and him were unfairly blown out of proportion while the actions of superpowers in conflicts were not highlighted. “I like the Tamil diaspora to forget about these things, nobody benefits from these things [allegations]. Work with the country to benefit all communities,” he suggested, pointing out that if minority communities acted in a manner that was suspicious, it would trigger a reaction from the majority. Rajapaksa claimed that even in so-called advanced societies, divisions existed. Nevertheless, he declared that all Sri Lankan citizens were equal. 
“There will always be differences between communities, but through understanding they can coexist and thrive,” he added. (Daily Financial Times, 27.11.2019)

India will lend Sri Lanka $ 400 million for infrastructure projects, Prime Minister Narendra Modi said on Friday after talks with the new President Gotabaya Rajapaksa aimed at improving bilateral ties. Sri Lanka, located off the southern tip of India, has become an arena of competing influence between New Delhi and China, which has built ports, power stations and highways as part of President Xi Jinping’s signature Belt and Road Initiative, designed to boost trade and transport links across Asia .But the terms of some of those projects have drawn criticism from politicians in Sri Lanka and opened the way for countries such as India, the United States and Japan to rebuild ties in the Indian Ocean country that lies near key shipping lanes. Rajapaksa, Sri Lanka’s former wartime Defence Chief, is on his first visit to India after a sweeping election victory earlier this month won on a platform promising to pull the country out of its deepest economic slump in more than 15 years. He told reporters he wanted to take bilateral ties with India to a “very high level”. Modi said India would provide Sri Lanka with $ 50 million for its security needs in addition to the $ 400 million for infrastructure. “India is fully committed to the development of Sri Lanka,” he said. (Daily Financial Times, 30.11.2019)