Sri Lankan PM quits to end political deadlock

In this Nov. 3, 2018 file photo, Sri Lanka's then appointed prime minister Mahinda Rajapaksa speaks to members loyal to him at his office in Colombo, Sri Lanka. (AP)
Updated 16 December 2018

Sri Lankan PM quits to end political deadlock

  • Sri Lanka has had no functioning government for nearly two weeks
  • The country runs the risk of being unable to use state funds from Jan. 1 if there is no government to approve the budget

COLOMBO: Embattled Sri Lankan Prime Minister Mahinda Rajapaksa resigned on Saturday after calling for general elections to end the political deadlock that has left the country without a functioning government.
Rajapaksa signed his resignation letter surrounded by party supporters at his home in Colombo 7. Clergy from the island’s three major religions chanted verses to bless Rajapaksa following his decision to step down.
“I will resign from the position of prime minister and make way for the president to form a new government,” Rajapaksa said.
Sri Lanka has been in political crisis since October when President Maithripala Sirisena sacked then Prime Minister Ranil Wickremesinghe and named Rajapaksa as his replacement. The country’s Parliament has twice rejected the appointment.
Rajapaksa, a former president, is considered a war hero by some for defeating the Tamil Tiger rebels in 2009 after a long civil war. He lost a 2015 re-election bid after facing allegations of wartime atrocities and corruption.
Rajapaksa’s resignation comes a day after the Supreme Court extended a lower court’s suspension of the prime minister and his Cabinet.
Sri Lanka has had no functioning government for almost two weeks and faces the prospect of being unable to pass a budget for next year.
According to Akila Viraj Kariyawasam, general secretary of the ruling United National Party, former premier Wickremesinghe will return to be sworn in as prime minister on Sunday and form a new Cabinet.
In a speech to party supporters, Rajapaksa said that he had no intention of remaining in power unless a general election was held.
“We are now in direct confrontation with a group of political parties that has engaged in various subterfuges to avoid facing elections,” he said.
“What we are confronted with is an attempt to rule the country without holding any kind of election. We cannot implement any of the measures we had planned to prevent this country from becoming another Greece.”
The UNP government has taken out $20.7 billion in foreign currency loans over the past four years, but the political deadlock leaves questions about how the borrowing will be repaid.
Rajapaksa said that Sri Lanka’s people would one day “definitely get the change they desire.”
Seyed Ali Zahir Moulana, a legislator and former diplomat in the US, welcomed Rajapaksa’s resignation. “It proves that democracy is still alive in Sri Lanka,” he said.
Rajapaksa’s appointment had plunged the country into chaos, he said.
“Violence was seen erupting in the temple of democracy, the Parliament of Sri Lanka, and its members were seen stooping to the lowest levels of conduct ... to disrupt and agitate,” the analyst said.
However, despite a barrage of attacks on the constitutional principles of the state, the judiciary and legislature had stayed resilient and independent. “If there was anything deserving of praise in the past seven weeks, it is the harmonious functioning of these institutions,” he said.
Azath Salley, a political commentator and leader of the National Unity Alliance, said that Rajapaksa’s resignation had ended the “ordeal of the people.”


‘Clear risks’ for stability in China’s Pacific lending, Australian think tank warns

Updated 25 min 23 sec ago

‘Clear risks’ for stability in China’s Pacific lending, Australian think tank warns

SYDNEY: China’s financial largesse in the Pacific carries “clear risks” for stability if left unchecked, a Sydney think tank warned, while saying allegations of “debt-trap” diplomacy are so far overblown.
In a study released Monday, the influential Lowy Institute warned that fragile Pacific nations risked borrowing too much and leaving themselves exposed to demands from Beijing.
China has repeatedly been accused of offering lucrative but unserviceable loans to gain leverage or snap up strategically vital assets like ports, airports, or electricity providers.
While Lowy said allegations that China was engaged in “debt-trap” diplomacy in the Pacific were overblown, the trend was not positive and countries like Papua New Guinea and Vanuatu were dangerously exposed.
Between 2011 and 2018, China committed loans to the region worth $6 billion — around 21 percent of regional GDP.
A majority of that money, $4.1 billion, was earmarked for Papua New Guinea.
Only a fraction, less than $1 billion, has so far been dispersed but China is still the single largest creditor in Tonga, Samoa, and Vanuatu.
“The sheer scale of Chinese lending and the lack of strong institutional mechanisms to protect the debt sustainability of borrowing countries mean a continuation of business as usual would pose clear risks,” the report said.
The South Pacific has become a forum for intense competition for influence between China, the United States, and Australia in recent years.
The island nations sit on a vital shipping crossroad, contain vast reserves of fish stocks, and provide a potential base for leading militaries to project power well beyond their borders.
Beijing has stepped up engagement in the region through a series of high profile visits and no-conditions lending via its Belt and Road Initiative.
The Solomon Islands and Kiribati recently announced they would switch diplomatic recognition from Taiwan to Beijing after a long courtship by the country’s Communist leaders.
Six Pacific governments are currently debtors to Beijing — the Cook Islands, Fiji, Papua New Guinea, Samoa, Tonga, and Vanuatu.
Lowy said many of China’s loans carry a modest two percent annual interest rate.
But it warned that China would need to adopt formal lending rules if loans were to be made sustainable as natural disasters like earthquakes, cyclones and tsunamis can quickly upend countries’ ability to pay back loans.
“Three small Pacific economies — Tonga, Samoa, and Vanuatu — also appear to be among those most heavily indebted to China anywhere in the world,” it said.