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As the country continues to reel from the COVID-19 pandemic, the Opposition this week attacked the Government’s claims that it was the COVID-19 pandemic that had plunged the country into the current economic crisis, arguing that the Government’s wrong economic policies and corruption also played a part.

Whilst it is undeniable that the COVID-19 pandemic seriously affected the country’s economy, the Opposition argued on Friday, during the debate on the Mid-Year Fiscal Position Report for the year 2021, that the economy was in crisis even before the pandemic hit due to poor planning and decisions taken by the Government.

This week’s sittings also came against the backdrop of Sunday’s explosive revelations by the International Consortium of Investigative Journalists (ICIJ) about offshore accounts of dozens of political leaders, public officials, businessmen and celebrities around the world. Opposition Leader Sajith Premadasa was among those who called on the Government to ensure an independent investigation into revelations made through the “Pandora Papers” leaks and investigations that named Sri Lankan businessman Thirukumar Nadesan and his wife, former State Minister Nirupama Rajapaksa as holding millions of dollars in offshore trusts and shell companies.

Opening the adjournment debate on the Mid-Year Fiscal Position Report for the year 2021 on behalf of the Opposition, National People’s Power (NPP) Leader Anura Kumara Dissanayake said the prevailing crisis had worsened to such proportions that no amount of gazettes or laws have been enough to stem the rot.

Anura Kumara Dissanayake:"No amount of gazettes or laws can stem the rot"

He pointed out that the Government was forced to lift price controls on rice. The very next day, rice mill owners announced new prices. This raises suspicions whether the Government had reached some sort of agreement with the mill owners, the NPP Leader said. He noted that this was followed by the Cabinet decision to lift price controls on milk powder, gas, wheat flour and cement this week. “All this shows that our country is currently engulfed by an economic crisis that cannot be controlled by data, reports and gazettes.”

Mr Dissanayake said that large scale corruption was also tied to the prevailing economic crisis. “We know that some large scale development projects are launched solely with the aim of obtaining commissions. As a result, it is not only the fraud linked to that project that affects the country, but the project itself becomes a long-term economic burden.” He pointed to the likes of Lotus Tower, Mattala International Airport and the Suriyawewa Cricket Stadium as examples of such projects that have become long-term burdens and a drain on the country’s economy while offering little or no benefit.

Mr Dissanayake said it was undeniable that large scale corruption was also a critical factor that contributed to the economic crisis. He pointed to some infamous recent incidents including the corrupt “Airbus Deal” of SriLankan Airlines where it was revealed that Airbus had agreed to a bribe amounting to USD 16 million for the deal; USD 2 million of which was allegedly transferred to an account in Brunei held by the wife of former SriLankan Airlines Chief Executive Officer (CEO) Kapila Chandrasena. “In the end, the Yahapalana Government decided to cancel the airbus deal, resulting in them having to pay USD 108 million as compensation. We didn’t get the planes and lost USD 108 million.”

He also reminded that in 2012-2013, the Central Bank had paid USD 6.5 to US based lobbyist Imaad Zuberi to promote the country’s image abroad. Zuberi was recently sentenced to 12 years in prison in the US. “The amount paid to him is roughly Rs 1300 million. But US authorities found that Zuberi had spent only USD 850, 000 of the money he received from Sri Lanka for the purposes of promoting the country’s image. He used USD 5.65 million of the money for his personal benefit.”

He pointed out that the Central Bank Governor at the time was Ajith Nivard Cabraal. “You should have at least questioned him (Cabraal) regarding the transaction involving Zuberi before making him Central Bank Governor again. Perhaps you think you can develop this country through bribes, commissions and corrupt deals,” he told the Government.

Mr Dissanayake also claimed that Thirukumar Nadesan, named in the “Pandora Papers,” was connected to the purchase of the land in Malwana where a house that was subsequently built is now subject to a court case where Finance Minister Basil Rajapaksa is also a respondent. At this stage, Leader of the House Dinesh Gunawardena objected to the MP bringing up a matter that was currently pending before courts.

“Our tax revenue in 2020 was Rs 1216 billion. We spent Rs 1050 billion on salaries and pensions for Government employees alone. I have not seen any other country that spends 86% of its tax revenue on salaries and pensions,” Trade Minister Bandula Gunawardana said. He added the stark truth was that whichever Government is in power will have to manage the difficulty posed by having to pay off installments on loans and also carry out development projects with what was left after paying those salaries and pensions.

Whatever the difficulties, the debt during the 10-year rule of former President Mahinda Rajapaksa had increased by only Rs. 5 trillion. This was a time where a considerable period was affected by the war but the Government was still able to launch and complete a large number of development projects, the minister claimed.

In contrast, during the Yahapalana Government, though it did not have a war or a pandemic to contend with and though it did not undertake any large scale development projects, the debt burden still increased by Rs. 6 trillion in just five years, he emphasised. “They even created a record towards the end of their term in 2019 by issuing sovereign bonds that will be payable in 10 years. Whoever is the Finance Minister in 2029 will have to pay off those debts at once. We are facing this crisis because the Yahapalana Government burned off precious dollars despite having a very favourable economic environment at the time.”

The Government also presented its Appropriation Bill for 2022 to Parliament this week. Finance Minister Basil Rajapaksa will present his first Budget to the House on November 12. The Committee on Parliamentary Business has decided to hold the Debate on the Appropriation Bill for the year 2022 from November 12th to December 10th.