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Monday June 3rd, 2024

Sri Lanka’s LG polls may derail President’s reform agenda, delay IMF loan – analysts

ECONOMYNEXT – Sri Lanka’s local government (LG) polls may derail President Ranil Wickremesinghe’s economic reforms aimed at moving out of an unprecedented economic crisis and delay a crucial International Monetary Fund loan, analysts say.

Wickeremesighe, who was elected as the president by the 225-member parliament in July last year, has proposed some tough and politically unpopulour reforms including higher personal and corporate taxes, downsizing the public sector to reduce wages and pension bills, and maintaining fiscal discipline with IMF loan.

Many state-sector trade unions have threatened to start protests against tax hike amid demand for more relief and concessions.

However, Wickremesinghe’s government does not have the luxury to keep the public sector happy, because it cannot borrow money externally as the island nation had already declared sovereign debt default.

And the country’s Election Commission (EC) has called for nominations for the Local Government (LG) Elections from January 18 to 21 and the election date to be announced after the nomination.

The earliest the LG Elections can be held is the last week of February, and the latest is by the second week of March, EC officials have said. The term of the present LG bodies would end on March 19, 2023, regardless of an election.

“Reforms will go for six”

“If the government loses the election badly, all its policies including reforms will go for a six. If that happens, the legitimacy and the mandate of President Wickremesinghe will be further questioned,” an analyst who is an economic expert told EconomyNext, asking not to be named.

“It will be worse than what happened in 2018.”

When the last LG polls were held in 2018, former prime minister Mahinda Rajapaksa-led ultra nationalist Sri Lanka Podujana Peramuna (SLPP) recorded a landslide victory, challenging the government of then president Maithripala Sirisena and then prime minister Wickremesinghe.

Later, the Sirisena-Wickremesinghe government was not allowed to pass any major bills in the parliament as its legislative power was restricted following the defeat.

Rajapaksa’s younger brother Gotabaya Rajapaksa was later elected as the president in 2019, but both Rajapaksas were forced to resign in the face of street protests by the public following wrong economic policies which later turned into a political crisis.

Wickremesinghe, the leader of center-right United National Party was mainly elected by SLPP lawmakers and now is backed by the same people.

“A defeat in the local government poll will be a signal to the ruling party that the public are not with them,” another analyst said.

“The President is a single party member. The ruling party is not fully in charge and morally everybody is bankrupt after last year’s political crisis. So an election defeat at the local government poll will be a huge drawback for the president.”

Growing political risk?

However, some political analysts say SLPP could still win in rural areas where people’s needs and lifestyle are completely different from people in urban areas, who predominantly brought down the Rajapaksa regime.

“Because there is no other alternative in rural areas. Some voters could be frustrated with Rajapaksas and SLPP, but others might vote for the same party though very less in numbers,” Kusal Perera, a political analyst said.

“The dynamics of local government polls are different from parliamentary elections. The SLPP can easily pick the winning horse. It has created a corrupt political constituency all over the country and that could help them.”

But the uncertainty of the election outcome could also delay the proposed $2.9 billion IMF loan which will be approved once Sri Lanka agrees with all its bilateral creditors over debt restructuring.

Political stability is the key for sustaining Wickremesinghe’s reform agenda for the next two years.

Growing political risks or any hiccups in the stability of his unlikely coalition government could derail the reform agenda, delay the debt restructuring and IMF loan as well as the time to move away from the current economic crisis.

“Given Sri Lanka’s past history, nobody is willing to put their penny without looking at political stability,” another analyst who has associated with a key opposition political party said.

“Even if it is a local government poll, it is a must to see if the president’s policies have acceptance among the public. If he and his government face a strong defeat, the opposition parties will take to the streets demanding a general election.” (Colombo/Jan09/2023)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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