Author: TELO Admin

In a significant development aimed at fostering collaboration and cooperation in the field of journalism, the Sri Lanka-China Journalists Forum and the All-Pakistan Journalists Association came together to sign a Memorandum of Understanding (MOU).

The signing ceremony took place at the Communication University of China during the Global Journalists Salon organized by the All China Journalists Association.

The MOU signing was a momentous occasion attended by journalists from more than 15 countries and witnessed by Mr. Tao, the Director of the International Department of the All China Journalists Association.

The key provisions of the MOU include:

Journalist Training Programs: Both parties commit to encouraging the development of and participation in journalist training programs, strengthening the skills and knowledge of journalists from Sri Lanka and Pakistan.

Support for Journalism Schools: The MOU seeks to promote cooperation between journalism schools in Sri Lanka and Pakistan, enhancing the educational landscape for aspiring journalists.

News Awards: The two parties will offer support for and participate in activities related to news awards, including the selection of winners, recognizing journalistic excellence.

Collaboration on Delegations: They will prepare letters of invitation for each other’s journalist delegations and assist with procedures such as visa applications, facilitating easier exchange of ideas and experiences.

Business Activities and Itineraries: The MOU envisions cooperation in planning business activities, suggesting itineraries, and finding translators for delegations, ensuring productive interactions.Consultation on Themes and Visits: The parties will decide through consultation the theme and itinerary of a given visit, tailoring their interactions to mutual interests.

Expenses: Both parties will hold consultations regarding expenses for food, accommodation, travel, and translating services, ensuring transparency and fair arrangements.

Both parties jointly will initiate to establish the South Asia Journalists Network of the Belt and Road Journalists Network (BRJN) in future.

The MOU takes effect upon signing by both parties and is effective for a period of five years. It includes a provision for automatic renewal, unless either party provides a minimum of six months formal notice to terminate the agreement at the end of its current term.

The MOU was signed by Zaheer Alam, President of All-Pakistan Journalists Association and Sudewa Hettiarachchi, who is the treasurer of Sri Lanka-China Journalists Forum, on the behalf of two organizations.

Sri Lanka’s financial advisor for its debt restructuring has assured the island nation’s authorities that China’s debt restructuring plan “is comparable” on the treatment, State Finance Minister Shehan Semasinghe said.

Exim Bank of China has agreed on “key principles and indicative terms” to restructure $4.2 billion in bilateral debt, Sri Lanka said after China’s foreign ministry spokesman said a “tentative” agreement had been reached.

The international Monetary Fund and other creditors are still waiting to see full details.

“We will need some time to handle it,” Semasinghe told EconomyNext when asked if China has given the detailed debt restructuring plan to Sri Lankan authorities.

“But the only thing is Lazard has assured that it is comparable in treatment. That is what the IMF also wants. The treatment to be shared with the other creditors.”

Lazard is the financial advisor for Sri Lanka’s external debt restructuring plan.

When asked if comparability means the equal treatment with the other creditors, Semasinghe said: “The equal treatment and comparability. That is what Lazard has informed us. It is our financial advisors. I cannot speak anything beyond that.”

In addition to Exim Bank loans classified as bilateral debt China Development Bank has also given a 2.0 billion dollar term loan to Sri Lanka and there is another 535 million dollars in loans from the same lender which have been classified as ‘commercial’.

Commercial creditors are usually expected to take haircuts in return for faster payback, while bilateral creditors take long grace periods, extend repayment terms and take coupon cuts to give a net present value to help distressed creditors.

NO HAIRCUT?
Two sources who have the knowledge of the discussions between China and Sri Lanka on restructuring commercial loans have told EconomyNext that Beijing authorities have rejected haircuts. Chinese officials have not commented on a haircut.

“I can’t say anything on that. But the only thing what we can say is that the principle of comparability will be assured by us,” Semasinghe told when asked if China has refused haircuts similar to other commercial creditors including sovereign bondholders.

China has become the key factor in deciding the timing of the completion of Sri Lanka’s external debt restructuring.

The IMF concluded its Staff Level Agreement with Sri Lankan authorities on Thursday, a key step in completing a review and keeping the program on track.

“Sri Lanka and the Export-Import Bank of China and look forward to analyzing the details when we receive them,” an IMF statement said.

“We urge all official creditors to move forward and agree on an appropriate debt treatment in line with the financing assurances they provided.”

“Delays risk worsening the economic outlook for Sri Lanka, widening its financing gaps, hindering its return to sustainable growth, and thereby reducing its capacity to repay.”

The Chinese Finance Minister Liu Kun on Thursday has assured a commitment to “a medium-term and long-term program that is mutually beneficial to both parties and aimed at optimizing Sri Lanka’s debt,” during a meeting with President Ranil Wickremesinghe in Beijing, a statement from his media office said.

State Minister Diana Gamage has been admitted to the Sri Jayewardenepura Hospital following her claims about being assaulted by a male parliamentarian representing the main opposition.

She also filed a complaint with Welikada Police prior to getting hospitalized.

Earlier today, during the parliamentary session, Damage accused Samagi Jana Balawegaya (SJB) MP Sujith Sanjaya Perera of assaulting her outside the Chamber and called for a comprehensive investigation into the matter.

This prompted the temporary adjournment of the session by Deputy Speaker Ajith Rajapakse, at the request of PM Dinesh Gunawardena.

After the session resumed, Chief Opposition Whip SJB MP Lakshman Kiriella said the opposition MPs had met up with Speaker Mahinda Yapa Abeywardena and showed him video footage of Diana Gamage using foul language at an opposition MP and behaving in an unruly manner.

Defending his actions, MP Sujith Perera said he had witnessed Diana Gamage becoming embroiled in a heated argument with his fellow MP Rohana Bandara, and when asked to give it a rest, the state minister had attacked him. The SJB parliamentarian said he only acted in self-defense. “You will be able to see what really happened and how MP Gamage behaved if you check the CCTV footage,” he added.

MP Perera also urged the Deputy Speaker to conduct an impartial investigation into the matter.

Meanwhile, MP Rohana Bandara accused State Minister Gamage of following him and verbally attacking him near the elevator. “We, men, also need to defend ourselves when we are insulted and attacked.”

Following the conclusion of the parliamentary session, the three parliamentarians were involved in an intense war of words, which was videoed by MP Perera on his mobile phone.

The International Monetary Fund (IMF) has reached Staff Level Agreement with the Sri Lankan authorities on economic policies to conclude the first review of the 48-month Extended Fund Facility-supported program, the global lender said.

The conclusion of the review would allow Sri Lanka to access to about US$330 million worth second tranche of the $3 billion deal in financing once the review is approved by IMF Management and IMF Executive Board.

The IMF did not give any detail on the schedule date for the IMF Executive Board meeting to consider the approval.

“Macroeconomic policy reforms are starting to bear fruit and the economy is showing tentative signs of stabilization,” the IMF said in its statement after reaching the Staff Level Agreement.

“Sustaining the reform momentum and addressing governance weaknesses and corruption vulnerabilities are critical to put the economy on a path towards lasting recovery and stable and inclusive growth,” it said.

The global lender also said the completion of the review by the IMF’s Executive Board requires the implementation by the authorities of all prior actions and the completion of financing assurances reviews.

Here is the IMF press release on reaching the staff level agreement:

Washington DC: After constructive discussions with the authorities in Colombo and during the Annual Meetings in Marrakech, IMF Senior Mission Chief for Sri Lanka Mr. Peter Breuer and Deputy Mission Chief Ms. Katsiaryna Svirydzenka issued the following statement:

“The IMF team reached a staff-level agreement with the Sri Lankan authorities on the first review under an economic reform program supported by a 48-month Extended Fund Facility (EFF) arrangement . The arrangement was approved by the IMF Executive Board for a total amount of SDR 2.3 billion (about US$3 billion) on March 20, 2023.

“The staff-level agreement is subject to the approval by IMF management and the IMF Executive Board in the period ahead, contingent on: (i) the implementation by the authorities of all prior actions; (ii) the completion of financing assurances reviews, which will include confirming whether adequate progress has been made with debt restructuring to give confidence that the restructuring will be concluded in a timely manner and in line with the program’s debt targets.

“Upon approval by the IMF Executive Board, Sri Lanka would have access to SDR 254 million (about US$330 million), bringing the total IMF financial support disbursed under the arrangement to SDR 508 million (about US$660 million).

“The authorities remain committed to the ambitious reform agenda under the EFF and their reform efforts have been commendable, including rapid disinflation and a significant fiscal adjustment expected by the end of this year. Program performance at end-June was satisfactory, with all quantitative performance criteria for end-June met, except the one on expenditure arrears. All indicative targets were also met except the one on tax revenues. Most structural benchmarks were either met or implemented with delay by end-September 2023. Notably, the authorities published on time the Governance Diagnostic Report . Sri Lanka is the first country in Asia that has undergone the IMF Governance Diagnostic exercise. Progress is still ongoing on the revenue measures to support the fiscal consolidation during 2024 in line with program parameters.

“The economy is showing tentative signs of stabilization. Inflation is down from a peak of 70 percent in September 2022 to 1.3 percent in September 2023, gross international reserves increased by $1.5 billion during March-June this year, and shortages of essentials have eased. Despite these early signs of stabilization, full economic recovery is not yet assured. Growth momentum remains subdued, with real GDP in the second quarter contracting by 3.1 percent on a year-on-year basis and high-frequency economic indicators continuing to provide mixed signals. Sri Lanka’s external position has weakened as a result of prolonged debt restructuring discussions, and reserve accumulation has slowed in recent months. Agreeing on debt treatments consistent with restoring debt sustainability quickly will be key to resolving uncertainty that is constraining Sri Lankan businesses and external financing.

“Sustaining the reform momentum is of paramount importance in steering the economy towards a sustained recovery and fostering stable, inclusive economic growth. We welcome the authorities’ commitment to increase revenues and signal better governance by adopting needed tax measures, strengthening tax administration, and actively eliminating tax evasion. Maintaining cost recovery in fuel and electricity pricing helps mitigate fiscal risks arising from state-owned enterprises. Further strengthening the social safety net remains critical to protect the poor and the vulnerable. While inflation has decelerated faster than expected, continued monitoring is warranted to help anchor inflationary expectations and support macroeconomic stability. Against continued external uncertainty, it remains important to rebuild external buffers through strong reserves accumulation.

“Following the authorities’ domestic debt operation, the critical next step is to secure an agreement with official creditors on a debt treatment consistent with the IMF Executive Board-approved program parameters and debt targets. We have taken note of a tentative agreement between Sri Lanka and the Export-Import Bank of China and look forward to analyzing the details when we receive them. We urge all official creditors to move forward and agree on an appropriate debt treatment in line with the financing assurances they provided. We understand negotiations between commercial creditors and Sri Lanka are ongoing and emphasize the need to restore debt sustainability in a robust manner. Delays risk worsening the economic outlook for Sri Lanka, widening its financing gaps, hindering its return to sustainable growth, and thereby reducing its capacity to repay.

“The authorities’ commitment to implement key recommendations of the recently published Governance Diagnostic Report is a welcome step. Concrete steps towards addressing corruption risks and strengthening accountability will be essential for rebuilding economic confidence and making growth more robust and inclusive.

“The IMF team held meetings with President and Finance Minister Ranil Wickremesinghe, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, State Minister Shehan Semasinghe, Secretary to the Treasury K M Mahinda Siriwardana, and other senior government and CBSL officials. The IMF team also met with Parliamentarians, representatives from the private sector, civil society organizations, and development partners.

“The team would like to thank the authorities for the excellent collaboration and constructive discussions.”