Will Mahinda be arrested over financial misadministration? Will Mahinda be arrested over financial misadministration?
Sep 01, 2017

Legal action against Mahinda over debt crisis! Featured

A group of UNP legal experts is looking into the possibility of taking ex-president Mahinda Rajapaksa to court on the charge of trapping Sri Lanka on an immense debt crisis, reliable sources told Sri Lanka Mirror.

The previous constitution gave immunity to presidents against prosecution, but the 19th amendment allows legal action against a president for wrongdoing during his tenure, according to the legal experts.

They will hand over a related report and discuss the matter with justice minister Thalatha Athukorale next week, after which they will raise it with senior officials of the Attorney General’s Department, the sources say.

Rs. 1,900 b needed in 2018 for loan repayment

For the year 2018, the state’s projected revenue through tax amendments and all other avenues will not exceed Rs. 2,200 billion.

A sum of Rs. 1,900 billion is needed in that year to pay back the loans obtained during the Rajapaksa regime plus the attached interest.

A further Rs. 1,400 billion goes to pay salaries and overtime payments of state employees, while capital expenditure amounts to Rs. 700 billion.

Out of that, road development alone will consume Rs. 385 billion.

Therefore, Finance Ministry reports say Rs. 1,800 billion will have to be borrowed to cover the projected expenditure for 2018.

As the borrowings mature in 2019, a bigger borrowing is due in that year, risking the country’s falling into a serious economic crisis, economists warn.

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How debt burden rose

Commissions through borrowings

When Mahinda Rajapaksa was the head of state during 2005-2015, the total borrowings rose by 84 per cent, and external debt increased by 233 pc in the past five years.

Normally, the interest rate in credit matters between two governments or a government and a private entity, does not exceed one pc, and mostly stands at a decimal figure.

However, as the president and finance minister, Rajapaksa had obtained loans from Chinese banks at interests of more than six pc.

Economists say that if legal action is not against him over that financial misadministration, other countries will be displeased by the financial administration of the present regime too.

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State revenue and loan repayment

What happened to foreign leaders

They note that India and most other countries in the region were firm on their financial laws to achieve middle income status.

Former president of Costa Rica Miguel Angel was sentenced to five years in prison for taking a bribe to implement a telecommunication project, while a former minister of that country was jailed for nine months after he accepted a bribe in a deal with Finland.

However, Sri Lanka lacks stringent laws to ensure financial stability, legal experts and economists say, adding that strong legal action should be taken against the authoritarian financial administration of the former president.