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Mr Rajapaksa, a dual US citizen, was brought into Parliament through the National List and straight away given the finance ministry portfolio because his brother Prime Minister Mahinda Rajapaksa began shedding ministerial responsibilities and many in the Sri Lanka Podujana Peramuna (SLPP) Government had campaigned on his behalf, believing him to be their best chance of turning the country’s moribund economy around. They overruled objections by some SLPP coalition partners, who objected over the younger Rajapaksa’s dual nationality. The SLPP also ensured that a clause on prohibiting dual citizens from entering Parliament was not included in the draft 20th Amendment to the Constitution precisely with the aim of ensuring that Basil Rajapaksa could enter Parliament if the occasion arose.

So confident were they in his ability that in the days leading up to Budget 2022, several ministers made some outlandish predictions regarding what the people could expect. Lands Minister S.M. Chandrasena even likened it to “Aladdin’s magic lamp” in that it will be revolutionary in outlook and be accepted by all.

With the economic crisis going from bad to worse, the Finance Minister himself, though, seemed well aware of just how difficult a job he had. Mr Rajapaksa tried to lower public’s expectations in the days leading up to the Budget, telling journalists that it would likely be a budget where they had to take from the people rather than give.

In a sign of the times, the presentation of Budget 2022 was a scaled down affair. Only Colombo-based foreign diplomats and senior government officials were on hand to witness it from Parliament’s public gallery. All those arriving were subjected to Rapid Antigen Tests outside before being allowed entry. There was a minor scare when a Government Information Department official who was due to cover proceedings tested positive following one such test. He was promptly removed along with eight others who had arrived with him.

Finance Minister Basila Rajapaksa, the government’s point man to rescue the nation’s economy, arriving in Parliament on Friday to present his first and the SLPP Govt.’s second budget

A group of SLPP MPs met the Finance Minister when he arrived in Parliament, escorting him from the entrance reserved for MPs to the Parliamentary Chamber. Mr Rajapaksa arrived to a chorus of “Jaya Wewa!” from the Government ranks. President Gotabaya Rajapaksa too took his seat next to Prime Minister Mahinda Rajapaksa in the Parliamentary Chamber as the Finance Minister Basil Rajapaksa began his speech.

This was the 76th Budget presented by a government since Independence. It was the SLPP Government’s second Budget and was unique in that it also marked the first time that two siblings had presented the country’s Budget as Finance Ministers one after the other. Prime Minister Mahinda Rajapaksa, who held the Finance Ministry portfolio earlier, presented Budget 2021. The entire Rajapaksa clan represented in Parliament was on hand on Friday.

The Finance Minister was forthright regarding the challenges Sri Lanka faced, stating that he was presenting the Budget at a time when the world was grappling with five major issues. Social and economic disparities have increased while progress in achieving sustainable development goals has been slow. The third issue is increasing environmental catastrophes owing to climate change. The fourth issue is that assistance from bilateral and multilateral institutions are severely limited as was never before in history, he said. The fifth issue is the challenge of adapting to the “new normal” that has emerged post the COVID pandemic, the minister added.

“These conditions have had a varying impact on each country. The impact is worse on countries with trade-focused economies, such as ours, compared to those economies dominated by the manufacturing sector,” Mr Rajapaksa remarked.

Rs. 500 billion loss

He noted that the opportunity to provide such services both domestically and externally had been curtailed resulting in a loss of income. As a result, the loss of revenue to the country and the Treasury had been unlike any other year before. The minister said their estimates placed the loss to the Treasury at more than Rs. 500 billion.

Mr Rajapaksa proposed a range of measures to cut down on government spending. These include amendments to the Appropriation Bill preventing Supplementary Estimates for 2022 by all ministries, reducing the fuel allowance of government ministers and officials by five litres a month, cutting down the telephone expenses of government institutions by 25% and extending the period that enables a Member of Parliament to obtain a pension from five years to ten. Budget proposals presented by the Finance Minister appear in detail elsewhere in this newspaper.

The Finance Minister evidently seemed tired during his speech. At one point, he made the unusual step of sitting down halfway through his speech, sipping water and continuing to make it while seated. Even this did not seem to fully help as upon his request, Speaker Mahinda Yapa Abeywardena briefly halted proceedings for more than 10 minutes. Perhaps the strain of those long nights spent working on a difficult Budget had finally got to him. After the break, however, Minister Rajapaksa appeared to have recovered himself, got his breath back and continued his speech while standing.

As was usual in the aftermath of Budget presentations, Government MPs heaped praise on the Finance Minister and his Budget proposals whereas many Opposition MPs were distinctly unimpressed. Making a special statement at his office, Opposition Leader Sajith Premadasa called it an empty document lacking any vision. “Simply put, this Budget will turn us into Somalia,” he claimed.

Meanwhile, some MPs from the Samagi Jana Balawegaya (SJB) openly mocked the claim made earlier about the Government presenting “Aladdin’s magic lamp” to the people. Yet, in signs that the party continues to be divided on presenting a unified front, some SJB backbenchers chose to boycott the traditional post-Budget tea party held at the Parliamentary premises for attendees stating that it would be inappropriate given how the people were suffering, though many senior SJB figures including General Secretary Ranjith Maddumabandara chose to attend.

Teachers get what they want

One last minute addition to the Budget 2022 was the Rs 30 billion allocation made by the Government to settle the salary anomaly issue affecting teachers and principals. The issue had resulted in trade unions representing teachers and principals launch protest action that dragged on for nearly four months. The bitter dispute appears to have finally been resolved after Finance Minister Basil Rajapaksa agreed this week during a meeting with trade unions to affect their salary increase as a single payment.

The Government had initially offered to pay the increase in four instalments. After this was rejected by trade unions, the Government offered to pay it in three instalments over two years, with one instalment through the 2022 Budget and two further instalments at once in the 2023 Budget. This proposal, made during a meeting chaired by Prime Minister Mahinda Rajapaksa was also rejected.

Unions representing the Teachers-Principals Trade Union Alliance met Minister Rajapaksa in Parliament on Wednesday (10) where he gave the assurance. Unions that had launched the TU action, however, were unhappy at the way the meeting was conducted, with some saying that it served as a form of “theatre” for government attempts to portray the decision to pay the salary increase as a single payment as something it intended to do all along.

Ceylon Teachers’ Service Union (CTSU) General Secretary Mahinda Jayasinghe told the Sunday Times that during the meeting, the Sri Lanka Podujana Education Services Union (SLPESU), the teacher union affiliated to the SLPP, presented a proposal to give the salary increase as a single payment and the Finance Minister promptly agreed, saying Rs 30 billion had been set aside for this purpose. “You would recall that SLPESU President Wasantha Hadapangoda ridiculed our struggle, fully supported the Government’s earlier position on breaking up the increase into instalments and even told teachers who were on strike to find other jobs if they believed they weren’t being paid enough. Yet, this union suddenly makes the same proposal we have been making all along and the Government then says it has already allocated money for that. So, this was obviously a little theatre for them to save face,” Mr Jayasinghe claimed.

The trade union collective were planning to hold a victory rally at Viharamahadevi Park on Friday but this was temporarily suspended. It came after the Health Ministry issued a gazette notification amending regulations under the Quarantine Ordinance, declaring that no public gatherings could be held without obtaining prior permission.

Mr Jayasinghe, however, said rather than the gazette, their rally was temporarily called off on account of representations made by teachers and principals who wanted to first listen to what the Finance Minister had to say regarding their issue during his Budget speech.

SJB to hold protest despite no-gathering ban

The same gazette has also impacted plans by the SJB to hold a protest march starting from Hyde Park in Colombo next Tuesday (16). The Public Health Department of the Colombo Municipal Council (CMC) has now revoked the approval given earlier for the party to hold a limited gathering under strict COVID prevention guidelines. The department had stated approval has been revoked due to the rise in the number of COVID-19 patients in Colombo and the new gazette.

While the rally at Hyde Park has been cancelled, the party will still go ahead with its protest, SJB Vice Chairman Harin Fernando told the Sunday Times. “Our original intention was to gather at Hyde Park and then hold a protest march to the Presidential Secretariat. While we will no longer be gathering at Hyde Park, we intend to gather elsewhere and go ahead with our protest,” Mr Fernando said.

Mr Fernando also stressed that the SJB was hoping to file legal action over the decision to prevent their meeting at Hyde Park. “Going by this gazette, students cannot gather at school either but schools are now open. We see this fresh gazette as a means that the Government is trying to use to stifle public protests. We are seeing massive farmer protests currently taking place in India that is challenging its Government. Perhaps the President believes that such a situation will happen here as well.”

Protests by farmers are indeed still continuing in various parts of the country over the Government’s self-inflicted fertiliser crisis. During Friday’s special Cabinet meeting held at the Presidential Secretariat to approve the Budget, some ministers also raised concerns on the matter. Lands Minister S.M. Chandrasena had earlier proposed that the Government resume importing urea fertiliser given the continued protests by farmers. Mr Chandrasena represents the Anuradhapura District, one of the country’s main rice growing regions, and has been among those facing increasing ire from farmers due to the fertiliser crisis. At Friday’s Cabinet meeting, though, it was decided to import more stocks of nano nitrogen liquid fertiliser from India and to issue stocks of organic fertiliser to farmers free of charge.

The Government continues to be on the back-foot regarding the fertiliser crisis, with the decision to reject a stock of organic fertiliser from China continuing to cause it a diplomatic headache as well as a potentially ugly legal dispute. Chinese company Qingdao Seawin Biotech Group Co., Ltd. has now sent a letter of demand seeking USD 8 million in damages from Sri Lanka’s National Plant Quarantine Service (NPQS) for loss of reputation. This was after the Government rejected the fertiliser stock following the NPQS statement that tests conducted on samples of the fertiliser had found harmful bacteria in them.

This week, the company claimed that tests carried out by a third party laboratory had cleared samples of its fertiliser, contrary to findings made by the NPQS. An order issued by the Colombo District Court preventing state-owned People’s Bank from making any payments to the company on the Letter of Credit opened in relation to the transaction continues to be in effect as the dispute is proceeding.

Meanwhile, the ‘Hippo Spirit’ the bulk carrier with the rejected stocks of fertiliser, was still anchored off the Sri Lankan coast near Kalutara yesterday, refusing to leave Sri Lankan waters. The Sunday Times Business section today has an interesting story saying the Chinese company wants the local Fertiliser Company to issue a joint statement with it and have it published as a full page advert in the newspapers.

Task Force redefined

President Rajapaksa on Tuesday also reversed course on the mandate given to the Presidential Task Force (PTF) on “One Country, One Law” under the chairmanship of Ven. Galagoda-aththe Gnanasara Thera. The appointment of the firebrand monk, who is the General Secretary of the Bodu Bala Sena (BBS) as the head of the Task Force has drawn critical comments from both here and abroad. Even some ministers and MPs of the Government have been vocal in their criticism regarding the appointment.

The appointment of the PTF, its chairman and the mandate was a total embarrassment to Justice Minister Ali Sabry, who went public with his displeasure, revealing that he was not consulted over the matter and saying he was “not happy about it.” Mr. Sabry was considered a close confidant of the President having been his personal lawyer in many cases that were filed against the former Defence Secretary but to have appointed it without even asking Sabry must surely have been a thorough let down to the minister.

The reasons for Sabry’s disappointment were obvious. Aside from the numerous accusations against Ven. Gnanasara Thera for inciting anti-Muslim violence, most notably over the Aluthgama riots in 2014, he is also someone who was sentenced to prison after being found guilty for contempt of court. The thera already has a number of other cases pending against him. The other issue is the PTF’s mandate, which was originally given two key tasks. One was to “make a study of the implementation of the concept; One Country, One Law within Sri Lanka and prepare a draft Act for the said purpose,” while the other was to “study the draft Acts and amendments that have already been prepared by the Ministry of Justice in relation to this subject and their appropriateness and if there are suitable amendments to submit proposal for the purpose and include them in such relevant draft as is deemed appropriate.”

In essence, the Task Force’s original mandate would have given it powers to monitor and supervise what Minister Sabry was doing in his ministry with the many committees he has appointed. The PTF also had powers to study the draft Acts prepared by Sabry’s ministry, some of which have already been passed by the Cabinet and presented to Parliament.

Behind the scenes, Sabry offered his resignation to President Rajapaksa over the issue, but it was turned down, the official version goes. The President had rolled back saying the gazette was poorly drafted and assured the minister that the proposals made by the PTF would be submitted to the Justice Ministry for consideration.

Accordingly, the President issued a fresh gazette on Tuesday night that severely limited the PTF’s terms of reference. Accordingly, its task now is restricted to “presenting proposals for formulating a conceptual framework ideally suited for Sri Lanka after making a study of the said concept taking into account the views and opinions held by various parties with regard to the implementation of the concept: “One Country, One Law”.” Whatever that meant, Sabry seemed happy to continue in his portfolio.

The President also announced the appointment of three Tamil members to the PTF. This was after several Tamil political parties allied with the Government raised concerns over the non-inclusion of any Tamils in the original Task Force. Accordingly, the new members will be Ramalingam Chakrawarthy Karunakaran, Yogeswari Patgunarajah and Iyyampillai Dayanandaraja. Meanwhile, it was also announced that two members of the original PTF, Prof. Dayananda Banda and Mohomad Inthikab, had stepped down from their positions in the PTF.

Minister Sabry told the Sunday Times that he was satisfied with the new gazette. “It (gazette) has limited the Task Force to collect proposals and submit it to the President. It (PTF) doesn’t directly affect the Justice Ministry’s work (now),” he said.

The Task Force under Ven. Gnanasara Thera has now started its work. On Friday, the Task Force stated that it would seek public opinion on the concept of “One Country, One Law.” Members of the public or organisations who are interested have been called to send their ideas or proposals via email or post before November 30. For all intent and purpose, there are two parallel groups studying Sri Lankan law, one under Ven. Gnanasara Thera, one by Minister Ali Sabry. This of course, is apart from the committee drafting a new Basic Law (Constitution) for the country under the chairmanship of another lawyer who appeared for the former Defence Secretary.

PTF Chairman Ven. Gnanasara Thera declined to answer questions on the change in their mandate. “We have begun our work and will accept proposals. I intend to issue a statement on it (PTF’s new mandate) next week.”

SLFP meets smaller parties

Whilst conflicts between the SLPP and coalition partners continue even in the midst of the Budget, the United People’s Freedom Alliance (UPFA), which includes the Sri Lanka Freedom Party (SLFP) this week initiated discussions with 31 political parties that are not represented in Parliament with the intention of forming a broad front.

A total of 27 parties attended Thursday’s discussion at the Sri Lanka Freedom Party (SLFP) head office on Darley Road. The discussions were held under the patronage of UPFA Chairman and former President Maithripala Sirisena. Four parties were unable to attend due to a number of reasons, including disruptions caused by the prevailing inclement weather.

UPFA General Secretary Mahinda Amaraweera claimed that the discussions were highly successful. He dismissed concerns that the SLPP would only become further infuriated by such moves. “Our intention is to build a strong alliance and that is what we are working on,” he said. Mr Amaraweera insisted that while such talks were taking place, the question of leaving the Government had not been discussed so far. “That issue (leaving the Government) does not arise at this stage as we have not discussed it.” Significantly, he did not rule it out either.

The debate on the second reading of the Budget began yesterday as the Government also grapples with severe damage caused by inclement weather. Some 26 persons had been confirmed dead due to the adverse weather conditions since October 27, mostly due to landslides. More than 230,000 people from some 65,000 families have been affected, with 41 homes being destroyed and a further 1509 suffering partial damage. The Government, too, is facing stormy weather both here and abroad.