PA provincial councils in balance
By Shane Seneviratne in Kandy
The revolt in the national parliament is causing turmoil in Provincial
councils also with the PA deciding yesterday to sack the Central Province's
Chief Minister Sarath Ekanayake and Minister Saliya Dissanayake in the
wake of crossovers to the opposition.
Sarath Ekanayake is the brother of former Cabinet minister Nandimitra
Ekanayake who was dropped from the cabinet last month and has resigned
from the SLFP prior to a crossover. Saliya Dissanayake is the brother of
SLFP rebel group leader S. B. Dissanayake. Saliya Dissanayake is also likely
to contest the upcoming general elections on the UNP ticket.
The PA appointed former deputy minister Janaka Bandara Tennakoon as
Chief Minister of the Central Province while R.M. Ratnayake replaced Saliya
Dissanayake as minister, though the council itself has been shut down for
two months after a major dispute on Thursday on a resolution against the
The confusion is likely to become more chaotic if and when Sarath Ekanayake
and Saliya Dissanayake go to courts challenging their expulsion from the
With CWC leader Arumugam Thondaman resigning from the Kumaratunga cabinet
and the party likely to join an opposition alliance at the national level,
the fate of the Central Provincial Council is hanging in the balance. In
the 58 member council the PA has 26 members and maintains a majority with
the support of the six CWC members, while the UNP has 23. If the CWC withdraws
support the PA regime in the council will fall.
In the Uva Provincial Council also the PA has a slim majority with the
support of the CWC and a switch could cause that council also to fall the
The Sabaragamuwa Provincial Council is also delicately balanced and
could fall if there is a switch by the CWC or a revolt within the PA.
The PA -controlled Western, Southern and other Provincial Councils are
also delicately balanced and a crossover similar to what happened in the
national Parliament might bring those councils also down.
CWC leader Arumugam Thondaman told The Sunday Times that though he had
quit the PA cabinet his party would not take any action immediately to
disturb the balance of power in the Provincial Councils. But he did not
rule out the possibility.
Mystery over JVP's joint account
A joint current bank account existing in the People's Bank Nugegoda branch
under the names of the chief JVP spokesman Wimal Weerawansa and Minister
Mangala Samaraweera's Co-ordinating Secretary Ruwan Ferdinandez has sparked
off a fresh political controversy about funding of the JVP.
The JVP last night admitted that such an account existed, but claimed
that it was due to an 'error' that Mr. Ferdinandez's name had not been
taken off the joint account.
Mr. Ferdinandez, had earlier been a finance Secretary of the JVP and
left the party in 1994 to become the co-ordinating secretary of Minister
A JVP spokesman told The Sunday Times that Mr. Ferdinandez after leaving
the party had requested the party to replace his name with that of party
General Secretary Tilvn Silva, but the name had not been replaced.
However he said that he could not explain as to why the name had not
been removed despite informing the bank about five years back. Mr. Ferdinandez
when contacted by The Sunday Times said he did not wish to comment about
The Sunday Times learns that the monthly statements have been addressed
to Mr. Weerawansa and Ferdinandez.
The JVP spokesman said he could not also comment about reports that
the particular account had received large sums of money during the past
However he confirmed that it was a JVP account being held at the Nugegoda
Mr. Weerawansa was not available for comment.
The 'Ravaya' newspaper this week has published details of the transactions
of this particular account of which the number is 01741650068569.
In march this year the opening balance was Rs. 562,055 and during that
month 25 cheques amounting to Rs. one million had been credited. The opening
account in June was Rs. 1.4 million and 18 cheques amounting to over Rs.
five lakhs had been credited to the account while Rs. 1. 5 million had
In July the opening balance had been Rs. 477,983 and while over Rs.
five lakhs had been credited. In September the opening balance was over
Rs. one million and Rs. 647.699 had been credited.
Experts fear economic turmoil
By Feizal Samath and Chandani Kirinde
Sri Lanka's economy, already reeling under a combination of factors, will
suffer serious setbacks on the long-term after the latest move by the government
to increase salaries in the public sector and control prices of essential
The new measures would seriously jeopardise the April 2001 pact between
the IMF and the government by sending the budget off target but provide
some temporary relief to sections of Sri Lanka's population.
The government, with an eye on the December 5 general elections, on
Friday announced a series of apparent vote-catching measures including
an interim allowance of Rs 1,200 a month for the one million-strong public
service, Rs 750 a month for pensioners, subsidizing gas and wheat flour
prices, abolishing the diesel tax, reducing the national defence levy by
one percent and trimming turnover tax on bank loans by one percent.
Official sources said these measures were expected to cost about Rs
4 billion to the government. Government revenues would fall with the abolition
of the diesel tax on vehicles, which brought in Rs 5 billion annually to
government coffers, the Save the Nation contribution tax and a reduction
in the NSL. The NSL reduction would lower state revenue by Rs 2 billion
in the next three months alone. Government or IMF officials were not immediately
available for comment.
"Spending is rising but there is no increase in revenue," said Dushni
Weerakoon, a senior economist at the Institute of Policy Studies (IPS),
noting that it was unclear how the government would fund these new measures.
Indrajith Aponsu, an economist at the Colombo university, said the government
was likely to shift funds set aside for public investment to these new
needs, and delay public and capital investment projects.
Former Deputy Finance Minister G. L. Peiris, declined to comment on
whether the government had enough money for this, but noted these steps
were repeatedly suggested in the past but the president steadfastly opposed
them. "On her instructions, Treasury Secretary P. B. Jayasundara gave us
lectures on why it should not be done."
Prof. Peiris said he opposed any increase in the National Defence Levy
but she didn't listen. "By doing it now there is a question of credibility."
Urban Development minister Mangala Samaraweera, when asked about the
implications on the country's economy by this move, said all modalities
on how the relief package would be implemented had been worked out and
would be announced next week.
The economy, hit by a world recession, the war and the US crisis, has
been sliding and grew by only 0.9 percent in the first half of the year.
"With the second half being affected by the Katunayake airport attacks
and the US crisis, growth this year would be less than one percent or inch
towards that," noted Ms. Weerakoon. Government estimates put growth between
one and two percent.
Ms. Weerakoon said the new spending spree would seriously jeopardize
the IMF agreement. "Where is the money coming for this? There may be some
shifts in spending - from capital to social - but it would still seriously
affect government-IMF targets."
An IMF team was in the country some weeks ago and returned without reaching
agreement with the government on budget targets, putting on hold the second
tranche of US$ 30 million.
Conditions under the IMF deal were however tight like trimming the budget
deficit to 8.5 percent this year, ending subsidies and allowing prices
of consumer goods to fluctuate with world prices. All these conditions
would be violated under the new set of measures being implemented by the
government, Ms. Weerakoon said adding that the budget deficit was likely
to be 10 percent or over this year.
Other economists said the government would find cash through the money
markets, which in such a situation is unlikely to raise interest rates.
"Since the market is awash with funds, trading of treasury bills by the
state would not raise rates."
Mr. Aponsu believes that the government may have convinced the IMF to
put budget deficit targets on hold.
Ranil to meet Anura
leader Ranil Wickremesinghe and former Speaker Anura Bandaranaike will
have a crucial meeting today where Mr. Bandaranaike may decide about his
political future programme.
The meeting comes amidst intense speculation that Mr. Bandaranaike was
to cross over to the PA, following differences with some of the UNP members.
UNP sources said there was a possibility of Mr. Bandaranaike reversing
his decision after the meeting.
Secret talks on national Govt. before dissolution
By Our Political Editor
Hours before the motion of no-confidence was to be taken up last Thursday,
a frantic effort to once again bring about a national government, failed.
This time it was the Muslim Congress leader Rauf Hakeem who was instrumental
in the move. The initiative was aimed at reviving the stalled UNP-PA talks
of last month; installing UNP leader Ranil Wickremesinghe as Prime Minister;
ditching the PA-JVP memorandum of understanding; forming a national reconciliation
government of 30 cabinet ministers, and possibly taking up a common stand
on the national question viz-a-viz the LTTE, among other issues.
Talks were held between the UNP, the PA and the SLMC upto Tuesday, October
9 forty eight hours before the censure vote against the government. The
stumbling block was once again the UNP's steadfast refusal to give incumbent
Prime Minister Ratnasiri Wickremanayake a ceremonial vice-president post.
The Government for its part was reluctant to abandon the MOU with the JVP.
President Chandrika Kumaratunga also refused the UNP demand that PA defectors
S.B. Dissanayake and G.L. Peiris be accommodated as cabinet ministers.
One of the significant changes from the previous UNP-PA talks was that
not only will President Kumaratunga be disentitled to hold ministerial
posts, but neither will Prime Minister Ranil Wickremesinghe hold ministerial
The thorny issue of whether cabinet ministers will be appointed by the
President with the "concurrence" (UNP) or the "consultation" (PA) of the
Prime Minister, was to be loosely worded to something like "in agreement
with" to get over the problem.
Eventually, however, time ran out and the UNP leadership indicated that
they would rather proceed with the no-confidence motion against the government,
while the PA opted to go for snap elections.