The head of Sri Lanka ‘s utilities regulator was removed from office Wednesday after blocking a further increase in electricity prices in line with International Monetary Fund(IMF) demands. Parliament voted to remove Janaka Ratnayake from office with immediate effect, the first time a head of the utility regulator has been removed from office in the country.
At issue: his opposition to a second electricity rate increase of 275% in February, after a 264% increase six months earlier, at the height of the economic crisis. The government rejected Mr. Ratnayake’s objections and proceeded with the February increase, saying it was essential to reduce the losses of Sri Lanka’s state-owned power company.
Last April, Sri Lanka defaulted on a $46 billion foreign debt, forcing it to seek IMF assistance. Efforts to balance the books of public enterprises were considered essential by the Fund before it released a $2.9 billion bailout package in March. President Ranil Wickremesinghe has raised taxes and ended generous fuel and electricity subsidies to increase government revenues.
These measures were a precondition for the rescue package. With this dismissal, the country’s political opposition accused the government of undermining the independence of the regulators. “You are sending the wrong message to the international community,” said MP Lakshman Kiriella. “The government is telling the world that it will not allow independent commissions to operate independently.”
Last July, former President Gotabaya Rajapaksa was blamed for the worst economic crisis in the country’s history before being ousted from power by an exasperated population after months of food, fuel, electricity and medicine shortages.
