Everyone knows the importance of the International, Monetary Fund’s US$2.9 bail out package and the economic reform program for Sri Lanka to overcome the economic crisis and its continuation for four years for the country’s economic stability.
But most of them including leftist and opposing political parties are playing hide and seek misleading the people by stating that they will re-negotiate the IMF program.
The million dollar question is how can the Marxist JVP and right wing SJP renegotiate a deal with IMF after the implantation of most of the commitments by the present government?
Why it matters: Addressing a crisis of this depth requires commitment and strong collective efforts by everyone including all political parties. An essential part of this effort is restoring government revenue to sustainable levels and to restart economic growth by bringing down inflation and interest rates.
Zoom in:. The International Monetary Fund (IMF) has commenced its second review of the Extended Fund Facility (EFF) program for Sri Lanka with an opening meeting with President Ranil WickremesingHe
During the meeting Peter Breuer, the Senior Mission Chief for Sri Lanka, emphasized that the IMF program is exhibiting promising signs of efficacy, translating into tangible outcomes.
In nea significant move President Wickremesinghe has convened a meeting on Monday (March 11) with the leaders of accepted opposition parties in parliament and the visiting high-level delegation of the International Monetary Fund (IMF).
During the meeting, the opposition party leaders will be offered the chance to discuss the IMF’s proposals with the delegates. Cat will come out the bag afterwards.
Bringing unprecedented benefits for Women in Sri Lanka President Ranil Wickremesinghe on Friday (March 08) unveiled plans to introduce two significant bills aimed at advancing gender equality and women empowerment, with both slated for presentation to Parliament in May.
Big Picture
Central Bank employees once in every third year pay adjustment by outrageous proportions of 27 – 70 percent despite the fiscal authority directive to tighten belts of the public sector has aroused anger of the people hit by cost-of-living shock.
However Prime Minister Dinesh Gunawardena told parliament this week has corrected above 27- 70 percent salary hike widely propagated by local media stating that this steep salary hike was 29-89 percent.
The move was heavily criticized by parliamentarians of both the ruling party and the opposition, following which the CBSL officials were summoned before the Cabinet, party leaders’ meeting and the Committee on Public Finance (COPF).
But when steep salary hikes are given when inflation rises, the act insulates the staff of the agency from its own policy errors and makes the very people who de-stabilized the nation, to be rewarded for their actions, they claimed.
The CBSL Act explicitly states that salary for the Governor and staff should not be based on the bank’s profits or revenues.
Therefore, Parliament must exercise oversight over staff salary to ensure alignment with the primary mission of price stability for the Bank.
Although competitive salaries are important for retaining skilled personnel, the recent decision to award significant salary increases at the Central Bank of Sri Lanka raises valid economic concerns.
Chairman of the Committee on Public Finance Dr. Harsha de Silva on Tuesday (05) said what was at issue was the sheer size of salary increase granted to Central Bank (CB) employees
Dr. De Silva pointed out that the House Committee had raised the issue over the size of the latest Central Bank salary increase and not the salary increase itself.
Janakantha Silva, Director Administration and Acting Director Communication, disclosed that during the party leaders’ meeting with the Central Bank team it transpired that as a result of the latest increase their monthly salary bill would go up by Rs 232 million
According to Governor Dr. Nandalal Weerasinghe, this controversy is a deliberate attempt to undermine the institution’s autonomy.
He cautioned that exaggerating the salary increases to undermine the financial sector regulator’s independence could severely impact the economy, potentially regressing it to its troubled state just a few years ago.
The salary issue we can talk temperately if it is immoral or unethical. That we can discuss separately. But using this issue to oppose the Central Bank or compromise the independence by changing law is a major risk,” he added.
Weerasighe is now defending exorbitant salary hike of CEB employees who were responsible and accountable for the country’s economic debacle mainly due to monetary policies and tools used by them to curtail inflation which were back fired during previous governors, Arjuna Mahendra, Professor WD Lakshman and Ajith Nivard CabraaL
While this is not the first time the Central Bank has reviewed salaries,. Weerasinghe pointed out that it is the first time that the institution has gone public with the revision.
These so called experts of the CB including NandalaLWeerasinghe have no rights get salary hike spending tax payers’ money as they were offenders of mishandling the Sri Lanka public money.
The dangerous game of playing with public money started during WD Lakshman’s time who kept Nandalal Weerasinghe as his second in command.
Most of the present CB high officials with Nandadal as their second in command were handling affairs of monetary authority since 2019-2021 misguided policy period up to now.
Sri Lanka central bank adopted a policy based on modern monetary theory and two years since the monetary expansion began, the country’s inflation rate has topped 50% and continued to rise.
By engaging in third world central banking and borrowing through swaps and the Asian Clearing Union to intervene in forex markets and print money to maintain its policy rate, the central bank made large losses on its forex operations in the current rate crises.
During former Governor WD Lakshman’s tenure, the Central Bank became a virtual printing press expanding the money stock by Rs. 2.8 trillion or 35% in the guise of following an alternative economic policy stance. At the last lap of his Governorship, he has delivered a final shock to the forex market
At that time Weerasinghe was the mouth piece of Lakshman at monthly monetary policy review media briefings. So is there any moral or ethical right for him to get salary hike for him and his subordinates the so called economic experts of CB who are the only skilled persons eligible to handle the monetary affairs. .
