Friday Dawns with a Ray of Hope for Sri Lanka!
Exposed: ‘So-Called Economists’ Entangled in Explosive Coconut Oil and Vehicle Tax Scam
Sajith Marches with ‘Sugger’ Farmers in Fiery Protest!
Sumanthiran Sounds the Alarm: UNHRC Sanctions on Sri Lanka Imminent
Hidden Costs Haunt Sri Lanka Under 20% Tariff Concession Scheme!
Friday – good news
Friday morning dawned with the good news that entire country was expecting for some time. This was the decision that the Trump administration’s 20% tariff on Sri Lanka imports and which is a 10% deduction from the 30% imposed earlier. This is a slide from the first imposed 44% and success achieved by Sri Lankan authority after few rounds of talks with United States trade agencies.
Sri Lanka had a very glimmer hope of tax reduction from 30% until 31st July. With all hopes shattered the expectation was gloomy and 30% would not change. This was further confirmed that Industry Minister Sunil Handunnetti, who spoke to the media on Wednesday, said that there are messages that the negotiations with the Trump administration on tariffs are unsuccessful.
In fact, the negotiations on tariffs were held in a disadvantageous situation for Sri Lanka until the last moment. Even with two hours left to the end of the negotiations, Washington said that it would be difficult to reduce the 30% tax rate. However, Sri Lanka managed to completely change this situation within 2 hours to announcing the final tariff rates. Sri Lanka had taken steps to do everything possible on their side during this two-hour operation.
Crusial last two hours
Donald Trump imposed large tax rates on all countries in the world with two main plans in mind. The first was to boost the US economy and investment. The second was to commercially sabotage China, which has now achieved decisive economic growth and has become a powerful country in the world.
With the imposition of the tax, all countries of the world began negotiations with the US, and as a result, the Trump government had taken steps to reduce the tax rates of countries such as Indonesia, Vietnam, Cambodia, Bangladesh, and Pakistan, which compete with Sri Lanka in the Asian region, to 20%.
The reason for this was that all these countries were to provide 100% tariff relief on goods imported from the US to their countries. However, Sri Lanka had not agreed to such tariff relief even at the last moment. However, it is said that the last-minute agreement by Sri Lanka to exempt nearly 2,100 items from duty is the most likely reason for the tariff reduction to 20%. It is also reported that Sri Lanka has agreed to impose a very low tariff rate on other items. In addition, it is also known that it has agreed to provide complete tax relief to about 300 categories of goods.
Requests from US
In addition, it is reported that several other proposals or requests have been made by the United States at the last moment of the negotiations. It is a proposal that the United States has generally presented to every country when reducing tariff rates. That is, the proposal that if raw materials are obtained from China, Sri Lanka should also impose the same tax rate on Chinese raw materials as the United States has imposed on Chinese goods.
Sri Lankan businessmen and exporters obtain about 40% of the raw materials for their products from China. This is because the prices of Chinese raw materials are very low. US have proposed that its government should impose the same rate of tax imposed on Chinese raw materials as it has imposed on China. This is one of the trump cards that the Trump administration is pursuing to destroy the Chinese economy. It is known that the US has also imposed the same condition on Vietnam, Bangladesh and Cambodia. However, there is no official information yet on whether Sri Lanka has agreed to it or not.
However, the US has only announced its final tariff rates to each country verbally. Each country had 3 months to implement it and enter into an agreement. For example, during these 3-months, any country has the possibility of not implementing the conditions agreed with the US. For example, some countries may not implement the condition imposed by the US that an additional tax should be imposed when importing raw materials from China. The United States will make the final decision on this tax after seeing whether each country implements the terms agreed upon with it within this three-month period.
Future Challenges
On the other hand, the proposals to reduce the large trade deficit between the Sri Lankan government and the US should also be implemented by the Sri Lankan side within these three months. The government had proposed that it would purchase crude oil and gas from the US for this purpose.
We had previously revealed this information to the country for the first time through ‘inside politics’. However, there is a serious problem regarding whether the government can purchase crude oil and gas from the US in large quantities to fulfill this promise in the next three months.
On the other hand, there is a risk that our other major importers, China, India and the European Commission, will demand the same concession due to the large amount of tax concessions granted to the US.
However, how did the government manage to reduce the tariff rate, which was 30% until the last moment, to 20% within the last two hours? As we said before, the messages that the government was receiving from Washington until the last moment stated that it is very difficult to reduce the 30% rate, and that if it was to be reduced to any extent, the President should immediately intervene directly in these negotiations.
Steps were taken to send the document containing the demands expected by the United States from Washington to the President. The final discussion was scheduled to be held online on Wednesday afternoon, and the President received this proposal on Wednesday morning.
The President, carefully observed the demands contained therein one by one, took steps to directly express his opposition to certain proposals contained therein. At that time, the President informed the senior officials present that the demand could not be fulfilled at all. It is also reported that the President had said at that time that it was difficult to fulfill certain demands.
However, by then, the President was also under great pressure due to these tariff negotiations. The reason for this was that Sri Lanka’s major exporters had exerted great pressure on the President by demanding a reduction in these tariffs. Some businessmen had informed the President that if the tariff rates could not be reduced, they would have to close their factories or move them to India, which has lower tariff rates. For this reason, the President had also informed the team that was holding talks with the US that if these tariff rates could not be reduced in any way, the government would have to face number of serious problems.
Will China agree?
Also, the next biggest challenge that Sri Lanka will face after reducing the tariffs is whether it is possible to impose the same tax on raw materials imported from China as the US has said.
The next major problem that Sri Lanka will face is how China will respond if Sri Lanka takes such a step. Although Sri Lanka has reduced the US tariff, the challenges that will arise through it are not insignificant.
The next three months are very crucial for Sri Lanka. It is very crucial in the context that the government has already initiated a new round of negotiations with China to restart the Chinese projects that have been stopped. In these negotiations, China has already stated that it can support the construction of the remaining part of the Mirigama-Kadawata expressway and the construction of the Central Expressway.
These negotiations have not yet seen an end because it has not been possible to reach a final agreement on the compensation and delay fees to be paid. Although China has agreed to reduce the compensation to some extent, a final decision has not yet been announced. The government is trying to somehow reactivate these two projects that have been stopped without paying any compensation or delay fees or by minimizing the compensation.
China is also aiming to obtain an agreement to open Sri Lankan waters to Chinese research vessels by showing them all these projects. They have continued to say that it is a matter of pride for their country. Therefore, since these negotiations have gone far and are on the verge of reaching an end, it is impossible to say at this time how successful the imposition of a new tax on Chinese raw materials, as the United States says, will be.
However, despite all the obstacles, it must be said that the reduction of the US tariff from 30% to 20% is undoubtedly a great achievement. It is true that the government has managed to temporarily avoid many of the challenges that Sri Lanka was supposed to face through this. However, it must be noted that the new challenges that have emerged through this are not the same. The government has to go a long way to overcome those challenges.
Chandrika leave
A few hours after the President returned to Sri Lanka after completing his visit to the Maldives, an extraordinary gazette notification was issued by the government. It stated that a large number of privileges granted to former presidents had been decided to be reduced.
Although the government issued this gazette notification on Thursday, the former presidents had received information that such a gazette notification was to be issued a few days earlier. Former presidents Chandrika and Mahinda had held several rounds of discussions with their close friends over the past few days regarding the responses to be given to it.
Chandrika had decided to leave the official government residence provided to her and move to another house belonging to her family. Chandrika’s first choice was the mansion in Rosemead Place, Colombo, where her mother, Mrs. Sirimavo, lived. The house is currently owned by Chandrika’s sister Sunethra. She has now converted the mansion in Rosmead into a famous hotel, known as ‘Tintagel’. Although Chandrika presented her proposal to Sunethra, Sunethra was not very interested in it. Accordingly, Chandrika finally decided to move to Bandaranaike Walawwa in Horagolla. Chandrika had removed her belongings from the house where she was staying by last week.
Mahinda’s decision
Although Chandrika has decided to quietly leave the government’s official residence, Mahinda is prepared to give a slightly different response to it. With the information that a gazette notification will be issued stating that the official residence will be taken over by the government, many of Mahinda’s friends had told him to find a safe house in Colombo and that they pay the rent for it.
But Mahinda is said to be reluctant to do so. Also, sources close to him say that although Mahinda has decided to leave his official residence, Mahinda is not prepared to leave secretly like Chandrika did. Instead, Mahinda has decided to stay at the Wijerama official residence until the last moment when he is told to leave the house and leave the house with his party members.
Even after losing the 2015 presidential election, Mahinda had to leave Temple Trees in the same way. Then too, a large group of Mahinda’s friends and party members gathered at Temple Trees. Even in the midst of defeat, Mahinda smiled and waved to everyone and left the Temple Trees amidst the cheers of that large group of party members.
Mahinda went to his hometown, Medamulana, Carlton Walawwa, accompanied by thousands of party members. Many have not forgotten how Mahinda addressed his party members through the window of his main residence. it is said that Mahinda is preparing to go out of his official residence in Wijerama with thousands of party members and go to the Tangalle main residence in the same manner.
Anura – Namal Discussion
President Anura Kumara Dissanayake left for the Maldives last Tuesday at the special invitation of the country’s President. President, boarded the business class of the Sri Lankan Airlines flight UL 101, was able to see another special guest on the same plane. It was Namal Rajapaksa.
However, they were not in two adjacent seats, but in two different rows. Use of A.I. technology, some people were able to see photos of the President and Namal sitting next to each other and chatting and which were circulated in social media. When we received this report on Tuesday morning, we immediately exposed it on our website.
Although the media later questioned Namal about this incident, he did not give a direct answer, but the information we received indicates that a cordial discussion had taken place between the President and Namal during this trip. Despite being in two political camps, acting as political enemies, and attacking each other on political platforms, both of them forgot all that and were seen talking very amicably there.
However, there was no political discussion or serious political issues between the two. Instead, everyone could see the two of them talking normally, joking and laughing.
However, as soon as Namal got off at Male airport, a message was received by him stating that a warrant had been issued for his arrest by the Hambantota court. The message also stated that a case was being filed in the Hambantota court due to a protest on the sale of the Hambantota port during the Yahapalana era, and the warrant had been issued for his failure to appear. Accordingly, Namal immediately informed his lawyers to inform the court that he would be returning to Sri Lanka the next day.
Meanwhile, rumors were spreading in the political arena by Tuesday that Namal would be arrested in Katunayake when he return to Sri Lanka due to the warrants being issued. At the same time, people who spoke to Namal from Colombo said that if necessary, he could come to Katunayake with a large group of party members.
However, Namal rejected the proposal and said that he should not do so and that he would leave for Hambantota as soon as he arrive at Katunayake. As promised, Namal disembarked from Katunayake and left for Hambantota, and he was not arrested there.
Economic experts
Throughout the past period, we have repeatedly revealed the activities of certain economic ‘Ostars’ in the opposition through the ‘Inside Politics’ column. We reported information with evidence on how these economic ‘Ostars’ aligned with previous governments by falsely claiming to represent the opposition and how they have misled the people by claiming to represent them.
We reveal another ugly political game that these economic ‘Ostars’ are playing while sitting in the opposition. Although they claim to represent the people, these economic ‘Ostars’ are shamelessly representing big companies. During election seasons, they receive crores and crores of rupees from these companies for their election campaigns. Accordingly, we are ready to show the country that these so called experts, even if they are wearing tie coats or white clothes, are doing politics with two-faces.
During the Ranil Wickremesinghe government, these economists who were in the opposition went to Ranil’s shop shamelessly. Even when the country was bankrupt, these economists did not protest not even a word uttered against when Ranil imposed taxes on the people. Instead, they cleaned Ranil up. They praised Ranil’s economic policy. They said that taxes should be imposed to rebuild the country. They said that more taxes should be imposed according to the conditions of the IMF.
The media reported three major companies in the country had not paid six billion in taxes when importing unrefined coconut oil into the country, and that this non-payment of taxes, which began during the Ranil Wickremesinghe regime, is continuing during the current President’s time.
MP S.M. Marikkar also presented the facts in Parliament. Marikkar’s questioning made the government remain without answering. But till today, these economic tycoons have not said a word about the alleged multi-billion fraud committed in the import of unrefined coconut oil. According to the information we have, these economic tycoons did not say a word about it because during the election period, crores of rupees were pumped into their election campaigns from the companies accused of tax fraud.
Crores of rupees
Some time ago, the opposition waged a big fight over the advantageous price reduction of a beer company, but these economic tycoons did not say a word about it. Although the beer company in question gained crores of rupees from that price reduction, it was also alleged that they did not say a word about it because the relevant companies were pumping money into the election campaigns of these economic tycoons.
Also, in the past, when the Rajapaksas brought casinos to the country, these economic giants led a massive protest. They shouted against it from the bottom of their lungs. As a result, James Packer, who was supposed to come to the country, withdrew his investment and left.
Subsequently, during the Yahapalana government, a cabinet paper was presented to open a casino in a major hotel in Colombo. However, in the face of strong opposition from the society, then President Maithripala Sirisena suspended the cabinet paper and passed a new cabinet paper that banned casino to be opened in that premises.
Despite this, after Ranil became the President, steps were taken to grant permission through the Board of Investment to open a casino in that location. There is a serious question as to whether the cabinet paper presented by Maithripala was annulled and a new cabinet paper was presented and permission was granted. Also, a serious question has arisen as to whether the law requiring 45% of the profits of casino establishments to be taxed will also affect this casino. In a context where steps have now been taken to open this casino, it has surprised many that the economic tycoons who shouted from the rooftops when these casinos were opened have not spoken a word today.
BYD Tax scandal
The company that started this casino is now importing BYD cars to Sri Lanka, and a major revelation was made in Parliament last week that there is a change in taxes. This was with a revelation made by Mr. Mujibur Rahman. After this revelation by Mujibur, a huge controversy arose, and the President, as the Minister of Finance, had ordered an immediate investigation into the matter from the Maldives.
Customs had taken steps to suspend the release of the relevant BYD vehicles, and an investigation has also been initiated into the 1000 vehicles that have already been imported. But it is a special incident that these economic experts in the opposition have not said a word about this. Instead of calling the relevant responsible companies and questioning them, these economic experts have fallen to the point of cleaning up those companies.
Also, last week, Mr. Udaya Gammanpila, who is not even an MP, made another big revelation and said that just as the government released 323 containers without inspection in the past; have released 6 more containers last week due to container congestion at the port.
Gammanpila also revealed that the six containers were six salt containers belonging to Dr. Ravi Liyanage, the Chairman of Raigam Company, a businessman who is friendly with the government. But even so, these economic experts in the opposition did not open their mouths or say a word about it. They did not take steps to summon those companies and question them.
Moreover, these economists are currently playing another new game. That is, an operation to activate huge projects that are currently inactive. We are saying this because two weeks ago, these economic osthars met at a certain place and secretly discussed the matter.
During Gota’s rule, Basil Rajapaksa signed an agreement with the US-based New Fortress Energy Company to start an LNG project, but steps were taken to abandon it in the face of social opposition.
However, it was learned that two weeks ago, these economic tycoons had held a special discussion with the relevant parties regarding the start of this project, which had been abandoned. it has now been confirmed that these economic tycoons are not standing for the general public or the opposition, but for large-scale giant companies. many allege that such economic tycoons who do not stand for the people have been a major reason for the opposition’s defeats.
The leaders of the opposition should immediately take a strong decision regarding these economic tycoons. They have also suggested that a new economic theory should be presented to the people instead of the economic theory that the people do not understand of these economic tycoons who stand for companies, not for the people.
Guidance from Pelawatte
Usually, when there is a conflict of opinion within the government or among government ministers, it is a common occurrence for the President to intervene and resolve them. Even in previous governments, when public disagreements arose between powerful ministers of the government, both in the cabinet and outside it, there are many examples of how the respective Presidents intervened and called them to resolve those issues. However, a big question has arisen among many people as to whether such a thing is happening under the current President Anura Kumara Dissanayake.
In the past, the government was greatly embarrassed due to the opinions expressed by certain ministers within the government. Once, again the government was embarrassed due to the opinions expressed by Lalkantha and Dudley regarding the Araliya Hotel. The government was embarrassed due to the opinions expressed by Sunil Handunnetti on certain occasions. Recently, the government was embarrassed due to the opinions expressed by Nalin Hewage. But at no time was it reported that the President summoned these ministers and resolved the conflict or gave them instructions.
However, it is reported in this column that these ministers have received some instructions from Pelawatte. Accordingly, many people say that instead of the President, these ministers are now being controlled from Pelawatte.
Sajith to Pelawatte
Opposition Leader Sajith Premadasa embarked on two special activities last week. These were based on two topics that are currently being discussed at the top of the political agenda. The first of these was the discussion held with youth groups at the Opposition Leader’s office.
The reason for this was that there had been major allegations that the government was taking steps to seize positions in youth associations. In a context where no previous government had taken steps to politicize youth associations, Sajith had taken steps to convene youth groups to discuss the matter and take action against it, in a context where even the current government’s MPs and Ministers were involved in youth council meeting.
In addition, last week, Sajith suddenly made a special visit to Pelwatte. This was to give strength to the massive protest that the sugarcane farmers and suppliers in Pelwatte and Sewanagala have started these days, claiming that they are not even being paid their due salaries. At that time, Sajith said that since the President is boasting that a trillion rupees have been accumulated in the treasury, he should immediately use that money to end the problem of these sugarcane farmers.
Sumanthiran’s message
This column has reported previously about a serious resolution against Sri Lanka is set to be passed at the UN Human Rights Council, which is scheduled to begin in Geneva, Switzerland, next September. There, we said that there is a risk of a serious resolution being passed against Sri Lanka based on the allegations of human rights violations in the past.
The information we said has now been confirmed with the media reporting that Great Britain is preparing to bring a new resolution against Sri Lanka. This resolution is scheduled to be brought with the support of Canada, Malawi, Montenegro, and North Macedonia, and it is also reported that Volker Turk, the Secretary General of the Geneva Human Rights Council, has informed the Secretary General of the Tamil Alliance, M.A. Sumanthiran, in a special notice in this regard.
