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Harsha warns against potential risks of domestic debt restructuring
SJB MP Dr. Harsha de Silva has warned against the potential risks of domestic debt restructuring, stressing the need for extreme caution.
Addressing the media recently, Dr de Silva cautioned that if not managed carefully, domestic debt optimisation could become a burden rather than a relief for the economy.
Citing the net debt relief Laffer curve, de Silva stated that the more we increase the haircut on banks, the more likely we are to hit the curve’s negative impact zone, where debt restructuring becomes counterproductive, thus leading to a negative impact on the economy. Harsha provided another example of this phenomenon: taxes on wine and spirits. High taxation has resulted in a drop in consumption, which, in turn, has substantially reduced the expected revenue for the Excise Department. Therefore, de Silva emphasised that the risk of capital adequacy in banks could result from debt optimisation, which is when a bank’s capital falls below the recommended levels, raising questions about its stability.
Harsha emphasised the need for discussions on this complex issue to occur in the Committee on Public Finance. By summoning relevant officials and utilising data to work the numbers, the Committee could help avoid potential blame down the road.
Furthermore, Harsha proposed the establishment of a Financial Sector Support Fund to ensure macro-stability. He suggested that multilateral organisations, like the World Bank and ADB, would lend money to establish this fund, as over 1 billion dollars would be needed.
Another issue raised by Harsha concerns the Employees’ Provident Fund (EPF), where hard-earned people’s pension money lies. Harsha questioned whether the EPF, established to provide positive real interest rates, as envisioned by then Minister T.B. Illangaratne, when bringing in the Act, had fulfilled its mandate. Harsha believes that people ought to get a positive interest rate that has been adjusted for inflation, as opposed to a positive nominal interest rate. However, as per current statistics, this has not been the case. The real interest rate has been declining since 2015, with the rate being -47.2% in 2022. The EPF has already been subjected to a 32% haircut in US dollar terms, as the value of the fund in 2021 was $15.8 billion, and by the end of 2022, it was $9.5 billion due to the rupee crashing and the impact of inflation. Harsha proposed that if the interest rate given to the recipient is less than 2.5%, the Central Bank should be given a loan from the Treasury to give the recipients a minimum of 2.5% interest. Harsha hopes that this proposal would be discussed in Parliament and that necessary legislation would provide relief to the already suffering middle class.
Harsha reiterates support for the IMF programme but suggests tweaking it to make it more bearable for the people. Additionally, if Sri Lanka needs to undergo domestic debt restructuring, Harsha proposes extending a warrant, a domestic debt restructure warrant, in other words, a derivative or put option, to creditors subjected to domestic debt restructuring. Harsha suggests that since the government has promised the people stability and an increase in GDP growth to 3% by 2027, the people have agreed to tough measures, like high taxes and a reduction in subsidies. Therefore, if the economy grows beyond expectations, the extra growth should be extended to the people to honour their sacrifices. Harsha expressed support for establishing discussions on this topic. Finally, the SJB believes that the government ought to treat both foreign and domestic creditors equally and non-discriminately, with the primary goal being to stabilize the country’s debt, while minimizing its impact on the EPF and banks.
The U.S. Embassy in Colombo welcomed the U.S. Sports Envoys to Sri Lanka, former National Basketball Association (NBA) and Women’s National Basketball Association (WNBA) players Stephen Howard and Astou Ndiaye, from June 8 through 14.
The Public Diplomacy section of the U.S. Embassy said that it would launch a weeklong basketball program intended to harness the unifying power of sports, made possible through collaboration with Foundation of Goodness and IImpact Hoop Lab.
While in Sri Lanka, Howard and Ndiaye, both retired professional basketball players, will conduct a weeklong program, Hoops for Hope: Bridging Borders through Basketball. The Sports Envoys will lead basketball clinics and exhibition matches and engage in leadership sessions in Colombo and Southern Province for youth aged 14-18 from Northern, Uva, Eastern and Western Provinces, offering skills and leadership training both on and off the court. The U.S. Envoys will also share their expertise with the Sri Lanka Basketball Federation, national coaches, and players, furthering the development of basketball in the country. Beyond the clinics, they will collaborate with Sri Lankan schoolchildren to take part in a community service project in the Colombo area.
“We are so proud to welcome Stephen and Astou as our Sports Envoys to Sri Lanka, to build on the strong people-to-people connections between the United States and Sri Lanka,” said U.S. Ambassador Julie Chung. “The lessons that will be shared by our Sports Envoys – communication, teamwork, resilience, inclusion, and conflict resolution – are essential for leadership development, community building, equality, and peace. The U.S. Sports Envoy program is a testament to our belief that sports can be a powerful tool in promoting peace and unity.”
SJB Colombo District MP Mujibur Rahuman in parliament demanded to know from the government the reasons for CEB suspending the leave of all its employees until further notice from Thursday.
MP Rahuman said that the CEB has got an acting General Manager anew and the latter yesterday morning issued a circular suspending leave of all CEB employees with immediate effect until further notice.
“We demand that Minister Kanchana Wijesekera should explain this to the House. This circular was issued while this debate on the new Electricity Amendment Bill was pending. There are many who oppose this Bill. The Minister must tell parliament the reason for the urge to cancel the leave of CEB employees,” the MP said.However, Speaker Mahinda Yapa Abeywardena prevented Minister Wijesekera responding to the query and said that the matter raised by MP Rahuman was not relevant.
The Chartered Institute of Personnel Management (CIPM) successfully concluded the 8th Annual CIPM Symposium, which took place on 31st May 2024. Themed “Nurturing the Human Element—Redefining HRM in a Rapidly Changing World,” the symposium underscored the pivotal role of human resource management (HRM) in today’s dynamic global landscape. Since its inception in 1959, CIPM has been dedicated to advancing the HR profession through education, professional development, and advocacy, solidifying its position as Sri Lanka’s leading professional body for HRM.
Ken Vijayakumar, the President of the CIPM, graced the occasion as the chief guest. The symposium commenced with the welcome address by the Chairperson, Prof. Arosha Adikaram, followed by the Web Launch of the Symposium Proceedings and Abstract Book by the CIPM President. The event featured distinguished addresses, including a speech by Chief Guest Ken Vijayakumar, President of CIPM, and an address by Guest of Honor Shakthi Ranatunga, Chief Operating Officer of MAS Holdings Pvt. Ltd., Sri Lanka.
The symposium also featured an inspiring keynote address by Prof. Mario Fernando, Professor of Management and Director of the Centre for Cross Cultural Management (CCCM) at the University of Wollongong, Australia.
Vote of Thanks of the inauguration session was delivered by Dr. Dillanjani Weeratunga, Symposium Co-chair.
The symposium served as a comprehensive platform for researchers to present their findings across a wide range of critical topics in HRM. These included Cultural Diversity and Inclusion, Talent Development and Retention, Ethical Leadership and Corporate Social Responsibility, Adapting to Technological Advancements, Mental Health and Well-being at Work, Global Workforce Challenges, Employee Empowerment, and Reskilling and Upskilling.
The plenary session was led by Prof. Wasantha Rajapakse. Certificates were awarded to the best paper presenters during the valedictory session, followed by a vote of thanks delivered by Kamani Perera, Manager of Research and Development.
The annual symposium of CIPM was a truly inclusive event, attracting a diverse audience that spanned undergraduates, graduates, working professionals, research scholars and lecturers. This widespread interest highlights the symposium’s significance in the field of HRM, offering a unique opportunity for everyone to network and learn from scholarly brains.The CIPM International Research Symposium was sponsored by Hambantota International Port, Sri Lanka Institute of Information Technology (SLIIT), E B Creasy & Co. PLC, and Print Xcel Company.
US sports envoys to Lanka to champion youth development
Rahuman questions sudden cancellation of leave of CEB employees
