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The government has extended the tenure of the Truth and Reconciliation Commission (TRC) and the Commission for Investigation of Enforced Disappeared Persons (CIEDP) by three months.

A Cabinet meeting held on Friday decided to extend the tenure of these two commissions, a minister said.

The government had formed these two commissions in 2014 to understand the situation of conflict victims.

These commissions have been investigating the conflict era cases on the basis of the complaints filed by the conflict victims.

Sri Lanka’s unprecedented economic crisis has spiraled into a full-scale political upheaval. President Gotabaya Rajapaksa’s house was stormed and the president chased away while Prime Minister Ranil Wickremesinghe’s residence was also set on fire. As Sri Lanka stares at an uncertain future, anxiety has also shifted to other South Asian countries like Nepal. Kamal Dev Bhattarai of ApEx speaks to Nisha Arunatilake, senior economist and director of research at the Institute of Policy Studies of Sri Lanka.  

What in your view is the root cause of Sri Lanka’s economic crisis? 

It’s difficult to put a finger on the root cause. This crisis manifested through many irregularities in the system. Most importantly, extreme politicization of institutions resulted in improper appointments in leadership positions, improper overall recruitment of people, mismanagement, corruption, lack of transparency and accountability. 

All of these resulted in unsustainable budget deficits and weak institutions, unplanned development projects with low returns, and insufficient investments in sustainable development projects. Constant changes to the organization of the institutions and reorganization of ministries, and changing the number of ministries to suit individuals reduced the efficiency of government processes. Such a weak system could not withstand the shock of the Covid-19 pandemic.

It is said populist and hasty decisions of political leadership led to the crisis. Is it true? 

Yes, very true. Take Sri Lanka’s public service. Successive governments have recruited people to the public sector without adhering to proper procedures. In the estimated budget for 2022, the government needed more than 40 percent of government revenues just to pay the wages and salaries of public workers. This was unsustainable, especially as the government also had to foot about 50 percent of the revenue for interest payments. This left very little funds for social spending and development. 

Another example was development planning. This was not done according to the needs of the country, but based on individual needs of political leaders. Many such projects have resulted in increasing government debt without contributing much to development or job-creation. One such example is the Hambantota port, which costs a lot to operate but has very little return. 

What are the takeaways from this economic crisis? Are Chinese loans responsible? 

The constitution of Sri Lanka has undergone many changes in recent times. Not all those changes were done in the country’s best interest. These need to be rectified. 

The main lesson from the crisis is the importance of strengthening public institutions and ensuring that qualified and experienced individuals are chosen to run them. Also, it is important to implement procedures to ensure the transparency and accountability of institutions. 

I wouldn’t say Chinese loans are directly responsible for this crisis. The main problem is that those loans were invested in projects that were unsustainable. There should have been systems in place to make sure that the returns from the investments made using the loans were higher than the costs of the loans. This was not the case for many of the loans. 

How long will it take for Sri Lanka to recover from this crisis?

This is not an easy question to answer. My guess is it will take several years. The country needs to first bring in macro-stability. For that, we need to improve tax collections and widen the tax-base. Given the current economic conditions, this cannot be done in a hurry. 

We also need to reduce public spending. We have too large a public service and it is not possible to reduce its size overnight and without triggering social unrest. This needs to be done gradually. Also, changing the system requires improving the capacity of public servants. Many are used to operating in a different system and in a different culture. It will take time to bring in changes. 

Additionally, Sri Lanka must increase and diversify the sources of foreign exchange earnings. We will need to attract foreign direct investment (FDI). This is also not easy given the current uncertain political and economic environment. 

What are the lessons for other South Asian countries here?

The main lesson is not to wait until you are in a crisis to fight for change. The costs of bringing about change will be much more if you wait too late to demand change. Any course correction needs to happen early, to minimize the economic and social costs of change. 

Prime Minister Ranil Wickremesinghe was sworn in as Sri Lanka’s interim president Friday until Parliament elects a successor to Gotabaya Rajapaksa, who resigned after mass protests over the country’s economic collapse forced him from office, Associated Press reported.

The speaker of Sri Lanka’s Parliament said Rajapaksa resigned as president effective Thursday and lawmakers will convene Saturday to choose a new leader. Their choice would serve out the remainder of Rajapaksa’s term ending in 2024, said Speaker Mahinda Yapa Abeywardana. He expects the process to be done in seven days.

That person could potentially appoint a new prime minister, who would then have to be approved by Parliament. With Rajapaksa done, pressure on Wickremesinghe was rising.

Wickremesinghe in a televised statement said that in his short term, he will initiate steps to change the constitution to clip presidential powers and strengthen Parliament. He also said he will restore law and order and take legal action against “insurgents.”

Referring to clashes near Parliament on Wednesday night when many soldiers were reportedly injured, Wickremesinghe said true protesters will not get involved in such actions.

“There is a big difference between protesters and insurgents. We will take legal action against insurgents,” he said.

Opponents had viewed Wickremesinghe’s appointment as prime minister in May as alleviating pressure on Rajapaksa to resign. He became the acting president when Rajapaksa fled Sri Lanka on Wednesday, according to Associated Press.

Rajapaksa arrived in Singapore on Thursday and his resignation became official on that date. The prime minister’s office said Wickremesinghe was sworn in Friday as interim president before Chief Justice Jayantha Jayasuriya.

Sri Lanka has run short of money to pay for imports of basic necessities such as food, fertilizer, medicine and fuel, to the despair of its 22 million people. Its rapid economic decline has been all the more shocking because, before this crisis, the economy had been expanding, with a growing, comfortable middle class.

Protesters cooked and distributed milk rice — a food Sri Lankans enjoy to celebrate victories — after Rajapaksa’s resignation. At the main protest site in front of the president’s office in Colombo, people welcomed his resignation but insisted Wickremesinghe also should step aside.

“I am happy that Gotabaya has finally left. He should have resigned earlier, without causing much problems,” Velayuthan Pillai, 73, a retired bank employee, said as patriotic songs were blaring from loudspeakers.

But he added that “Ranil is a supporter of Gotabaya and other Rajapaksas. He was helping them. He also must go.”

Protesters who had occupied government buildings retreated Thursday, restoring a tenuous calm in the capital, Colombo. But with the political opposition in Parliament fractured, a solution to Sri Lanka’s many woes seemed no closer, Associated Press reported.

The nation is seeking help from the International Monetary Fund and other creditors, but its finances are so poor that even obtaining a bailout has proven difficult, Wickremesinghe recently said.

The country remains a powder keg, and the military warned Thursday that it had powers to respond in case of chaos — a message some found concerning.

Abeywardana promised a swift and transparent process for electing a new president.

“I request the honorable and loving citizens of this country to create a peaceful atmosphere in order to implement the proper Parliamentary democratic process and enable all members of Parliament to participate in the meetings and function freely and conscientiously,” he said Friday.

The protesters accuse Rajapaksa and his powerful political family of siphoning money from government coffers for years and of hastening the country’s collapse by mismanaging the economy. The family has denied the corruption allegations, but Rajapaksa acknowledged that some of his policies contributed to Sri Lanka’s meltdown.

Maduka Iroshan, 26, a university student and protester, said he was “thrilled” that Rajapaksa had quit, because he “ruined the dreams of the young generation.”

Months of protests reached a frenzied peak over the weekend when demonstrators stormed the president’s home and office and Wickremesinghe’s official residence. On Wednesday, they seized his office.

Images of protesters inside the buildings — lounging on elegant sofas and beds, posing at officials’ desks and touring the opulent settings — captured the world’s attention.

The demonstrators initially vowed to stay until a new government was in place, but they shifted tactics Thursday, apparently concerned that an escalation in violence could undermine their message following clashes outside the Parliament that left dozens injured, according to Associated Press.

“The fear was that there could be a crack in the trust they held for the struggle,” said Nuzly, a protest leader who goes by one name. “We’ve shown what power of the people can do, but it doesn’t mean we have to occupy these places.”

CPN (Maoist Centre) Chairman Pushpa Kamal Dahal left for a three-day visit to India on Friday.

He was accompanied by his personal secretary Ramesh Malla and daughter Ganga Dahal.

Speaking at a press conference organized at the Tribhuvan International Airport before leaving for New Delhi, he said that his visit would be focused on strengthening bilateral ties between the two countries.

Saying that his visit to India will be a goodwill visit, Dahal urged not link it with the recent visit of Chinese Communist Party leaders to Nepal.

He left for India at the invitation of Bharatiya Janata Party (BJP) President JP Nadda.

According to Dahal’s Secretariat, he will be welcomed at the BJP headquarters in New Delhi-based Deen Dayal Upadhyay Marg. He will hold a meeting with BJP President JP Nadda there.

It has been learnt that Vijay Chauthaiwale, the chief of the Foreign Affairs Department of the Indian ruling Bharatiya Janata Party, among other senior leaders will be present in the meeting.

On the occasion, Dahal will also hold a meeting with Ajit Doval, National Security Advisor to Indian Prime Minister Narendra Modi.

He is also scheduled to meet Minister for External Affairs S. Jaishankar and Foreign Secretary Binay Mohan Kwatra.

The meeting with Indian Prime Minister Modi has not been fixed yet.

He will return home on July 17.

The RECOFTC Nepal has expressed its solidarity with the Unity for Sustainability campaign launched by Annapurna Media Network to lead the climate dialogue.

The RECOFTC Nepal, a leading organization working in the sector of forest for the past three decades, signed a Memorandum of Understanding (MoU) on Thursday to take the climate change dialogue ahead through the campaign of Annapurna Media Network.

Though global warming is having a negative impact on climate change on all countries, developing and semi-developed countries are the most affected ones.

Small countries like Nepal should work hard to reduce the effects of climate change.

Sambhu Prasad Dangal, Director of RECOFTC Nepal, said that this campaign would help raise and hold discussions on the important issues of climate change.

As it is not possible to combat the effects of climate change with single effort, a joint effort is needed, he said.

Dangal further said that they are happy to announce themselves and RECOFTC as the green partners.

On the occasion, program manager of the Annapurna Media Network Chiranjibi Neupane said that the campaign would cooperate with all the concerned organizations to raise awareness about climate change.

The price of gold has dropped by Rs 800 in the domestic market on Friday.

According to the Federation of Nepal Gold and Silver Dealers' Association, the yellow bullion is being traded at Rs 93, 800 per tola today.

Meanwhile, tejabi gold is being traded at Rs 93, 300 per tola.

The yellow metal was traded at Rs 94, 600 per tola Thursday.

Similarly, the price of silver has dropped by Rs 35 and is being traded at Rs 1,145 per tola today.

The Janata Samajbadi Party (JSP) has decided to give continuity to the five-party alliance till the federal and provincial elections.

The Central Executive Committee and Central Committee meeting of the JSP that concluded in Birgunj on Thursday decided to give continuity to the coalition in the forthcoming elections.

Making public the decisions by organizing a press conference in Birgunj on Friday, Chairman Upendra Yadav said that the party will give continuity to the alliance till the elections.

He said that the meeting made this decision as the coalition, which was formed to defeat the regression after the then Prime Minister KP Sharma Oli dissolved the House two times, took the country towards political stability by safeguarding the democracy and defeating the regression.

“However, the party has some bitter experiences in the local level elections as well. But we have thought that the coalition is still necessary for the country,” he said, adding, “That is why, we will move ahead by forging an alliance in the elections.”

He also said that the meeting has decided to remove federal council Chairman Baburam Bhattarai from the party.

Along with Bhattarai, the meeting has also decided to relieve eight other central executive members of their duties, Yadav said.

Similarly, the meeting has unanimously elected senior leader Ashok Rai as the chairman of the federal council.

On a different note, Chairman Yadav said that the Citizenship Bill presented in the Parliament will be endorsed through fast track.

Three persons of a family died when the power house of the Bhitri Khola Hydropower Project at Acharyalihi in Hima Rural Municipality-1 of Jumla caved in, in the wee hours of Friday.

The deceased have been identified as Bimala Raut (30), her nine-year-old son Bharat and eight-year-old son Surya Raut. Bimala is the wife of Gorakh Bahadur Raut, security guard of the power house.

According to rural municipality Chairman Laxman Bahadur Shahi, the incident occurred at around 1 am today.

All of them were sleeping when the tragedy occurred.

Further investigation into the incident is underway.