The government’s failure to obtain the second tranche of IMF support is a wakeup call regarding the precarious condition of the economy. The IMF has said that Sri Lanka’s economic recovery is still not assured. It has also said that the government has not met the economic targets set for it, particularly with regard to reducing the budget deficit due to a potential shortfall in government revenue generation. The IMF’s refusal to grant the second tranche of USD 330 million at this time will erode the confidence of prospective investors in the economy. The IMF has said the second tranche under its lending programme would only be released after it reaches a staff-level agreement, and there was no fixed timeline on when that would take place.

The failure of the government to fulfil many of the IMF’s transparency requirements, such as posting its contracts and procurements on the website, and explain its rationale for tax holidays and those who benefit, have contributed to the loss of confidence in the government’s commitment to the economic reform process. In view of the seriousness of the economic challenge to the country and its people we call on the government to address issues of governance in consultation with the opposition. The National Peace Council urges the government to invite the opposition parties and the latter to respond positively to discuss the IMF programme and find ways to amend and implement it as necessary in a bipartisan spirit keeping in mind the interests of vulnerable sections of the population.

The National Peace Council believes that the core issues the government needs to address if it is to get the economy on the correct track is that of governance, and its lack which has led to corruption and impunity. The mounting difficulties faced by people in coping with their economic circumstances can lead to protests and agitation campaigns. The logic of competitive electoral politics can also come into play with different political parties making their own promises to alleviate the economic hardships on the people even at the cost of the economic reform programme agreed with the IMF. We are concerned that the government’s efforts to silence public protest and criticism by means of the proposed Anti-Terrorist Act and the Online Safety Act which are to be placed before parliament next week will make a bad situation worse.

The draft Anti-Terrorist Act which seeks to replace the Prevention of Terrorism Act is wider in scope and gives the government the power to arrest persons who are engaging in public protest or trade union action. Those who are charged as “intimidating the public or a section of the public” can be arrested under this law. The Online Safety Act seeks, among others, to “protect persons against damage caused by false statements or threatening, alarming, or distressing statements.” It will establish a five-member commission appointed by the President which will be able to proscribe or suspend any social media account or online publication, and also recommend jail time for alleged offenses which can be highly subjective. We call on the government to withdraw these proposed anti-democratic legislations forthwith and instead deal with urgent economic issues, particularly concerns raised by the IMF.

Governing Council
The National Peace Council is an independent and non partisan organization that works towards a negotiated political solution to the ethnic conflict in Sri Lanka. It has a vision of a peaceful and prosperous Sri Lanka in which the freedom, human rights and democratic rights of all the communities are respected. The policy of the National Peace Council is determined by its Governing Council of who are drawn from diverse walks of life and belong to all the main ethnic and religious communities in the country.