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Q+A – Sri Lanka’s new deal on constitutional changes

[Reuters, Wednesday, 14 July 2010 10:14 No Comment]

Sri Lanka’s president and opposition leader have struck a broad deal on constitutional changes, chief of which is a plan to return the Indian Ocean island nation to leadership by an executive prime minister.

Here are some questions and answers about the agreement:

IS THIS A FINAL AGREEMENT?

Not at all. It’s a broad agreement in principle. President Mahinda Rajapaksa enjoys sweeping and largely unchecked powers, but has long promised to reduce them.

With a big parliamentary majority, he needs only six opposition votes to change the constitution, and there are fears Rajapaksa will act in his own interest and not the country’s.

It’s worth noting that a similar deal failed in 2000 when the main opposition, headed then as it is now by United National Party leader Ranil Wickremesinghe, pulled out.

HAS RAJAPAKSA GIVEN UP PLANS FOR A THIRD TERM IN OFFICE?

Yes and no. If the deal goes through, he will serve only two terms as president, the maximum now allowed.

But there is unlikely to be any prohibition on him running for the post of prime minister, which would give him a third crack at leading the nation if his present popularity holds. He’s said publicly he would consider that option.

WHAT OTHER CHANGES ARE CONTEMPLATED?

Broadly, more changes to take power out of presidential hands. The two sides agreed to work on the never-implemented 17th amendment, designed to put a check on the president’s power to appoint the judiciary, the attorney-general, police, the election and financial commissions and other state bodies.

Bringing independence to those institutions would go a long way toward boosting confidence that the government is not operating solely at the whim of a single politician.

WHAT DOES THE AGREEMENT MEAN FOR INVESTORS?

The Colombo Stock Exchange rose on Tuesday, with traders attributing some of the optimism to the fact that another potential political tussle appears to have been averted.

Sri Lanka’s politics can get unruly, and although opposition parties are woefully fragmented, they could re-align against Rajapaksa as they did during the presidential campaign that turned bloody before the Jan. 26 vote.

That, and uncertainty ahead of the ensuing April parliamentary election, held back portfolio and foreign direct investment.

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