Sri Lanka urges China to share debt terms to help other deals – Report

Sri Lanka is urging China to share with other creditors the terms of its recent $4.2 billion bilateral debt deal, a step needed to help the bankrupt nation speed up the process of restoring its finances more than a year after it defaulted.

Sharing the information would ensure transparency and assure other bilateral creditors that they’re getting a comparable deal, Nandalal Weerasinghe, the country’s central bank governor, said on a panel Friday.

The request from Sri Lanka comes as it seeks to finalize a deal with its official creditor committee, co-led by Japan, India and the Paris Club, an informal and influential group of Western lenders. The South Asia nation defaulted in May 2022 and owes more than $12 billion in overseas bonds, according to the government’s quarterly debt bulletin.

Sri Lanka’s debt restructuring is among a few test cases of the IMF-led efforts to develop new guidelines among rich and poor countries to manage defaults. That’s mainly driven by China’s limited experience restructuring distressed loans after its rise over the past decade to become the biggest bilateral lender to emerging markets, as well as a bigger role played by private creditors.

Sri Lanka is asking China to share the deal terms “with all other creditors” as soon as possible to “make it more transparent and ensure comparability so that we can make progress,” Weerasinghe said. “Because this is a bilateral agreement, obviously, we need to have a consensus from the other party to share that information.”

Private creditors are seeking a separate deal. An ad hoc group of bondholders, organized by advisers including Rothschild & Co., recently submitted a proposal to Sri Lanka that includes taking a 20% haircut and issuance of new debt, including a so-called macro-linked bond.

Incorporating China, along with other rising bilateral creditors such as India and Saudi Arabia, into the established order of the Paris Club has been a lengthy process and a main focus of the International Monetary Fund’s annual meetings this week in Morocco.

Beijing made an unexpected announcement earlier this week of a deal between Sri Lanka and the Export-Import Bank of China, which has increased confusion over the process. The IMF and other creditors also weren’t aware of the development, and Weeransinghe on Friday said that the announcement was “a bit of a surprise” to the Sri Lanka government as well.

The issue will likely be in focus next week when Sri Lanka’s President Ranil Wickremesinghe travels to China to participate in the Belt and Road Forum in Beijing. About 40% of its bilateral debt is owed to China and 16% to India, according to estimates from the IMF.

Separately, the IMF is assessing Sri Lanka’s progress toward meeting economic and reform targets under the nation’s $3 billion bailout package. A staff-level agreement is the first step needed in order for a second tranche of $334 million in loans.

Sri Lanka and the IMF are close to reaching such a staff-level agreement following talks in Morocco this week, according to people involved in the discussions, who asked not to be identified because the matter isn’t finalized yet. Only a few outstanding issues remain, one person said, declining to provide more detail.

Source – Bloomberg

EC in fresh bid to hold local council polls

The Election Commission, in a fresh effort to revive the conduct of the local council elections, has sent a revised schedule to the Treasury requesting money for the polls.
According to the revised schedule, the Commission has said that for the conduct of the polls, it will need only Rs 2.2 billion initially, and the rest could be released within three months.

Election Commissioner R.M.A.L. Ratnayake told the Sunday Times that the fresh initiative had been taken as another effort to ensure that the long-overdue local council elections were conducted soon.

He said they had also taken into consideration that the government’s financial position had improved now and that some of the court rulings related to the local council elections were due.

This is the first major effort by the newly appointed Election Commission to secure funding for the conduct of the elections, which have been postponed multiple times.

According to the breakdown provided to the Treasury by the Elections Commission, the EC has worked out that after the election day is announced, it will require Rs 1.1 billion for the conduct of the poll: Rs. 100 million in the first 15 days after calling for elections, another Rs. 500 million in the next 15 days, and Rs. 500 million in the next 20 days.

In addition, the police will require Rs. 400 million, the Government Printer Rs. 200 million, and the Postal Department Rs. 500 million before the polls are conducted.

Accordingly, only Rs 2.2 billion will be needed until the elections are held, the Commission has said. The remaining Rs 6.8 billion will be required after the elections.

The Commission has given a three-month time frame to pay the rest of the money. In the first month, Rs. 1.9 billion; in the second month, Rs. 1.5 billion; and in the third month, Rs. 1 billion.

In addition, the dues to be paid to the other departments after the elections are as follows: Rs. 1 billion for the police, Rs. 300 million for the Government Printer, Rs. 700 million for the Postal Department and Rs. 400 million for others.

The elections scheduled for earlier this year were postponed on the grounds that Treasury funds were not available.

Petitions allowed against Gotabaya’s pardoning soldier guilty of Mirusuvil killings

The Supreme Court has granted leave to proceed with several petitions that challenge a presidential pardon given to a soldier convicted in the killing of eight Tamils 23 years ago.

The cases were filed in April 2020 by the Centre for Policy Alternatives, its executive director Paikiasothy Saravanamuttu, families of the victims and several other parties.

A three-judges SC panel on 12 October decided to take up on 17 May 2024 the petitions which allege a violation of clause 12 (1) of the constitution by Gotabaya Rajapaksa’s pardoning of Staff Sergeant Sunil Ratnayake.

The court gave both the respondents and the petitioners time to submit objections and counter-objections.

In April 2019, the SC upheld a High Court verdict that Ratnayake was guilty of the killings that occurred on 19 December 2000 in Mirusuvil, Jaffna.

Posted in Uncategorized

Another Tamil man dies without knowing fate of war-missing son

A 65-year-old Tamil man from Vavuniya has died without knowing the fate of his son who has been missing for 16 years.

This takes to 188 the number of parents whose deaths happened during a yet unfinished struggle for nearly 2,500 days to find justice for the war-missing.

Muttiah Arumugam, died on 12 October, was one of the participants of an indefinite Satyagraha in Vavuniya, as he searched for his son who was last known to have gone to the town in 2007.

Arumugam believed that his son had been abducted by the military.

In the meantime, the Office for Missing Persons has promised special facilities for kidney transplant surgeries for families of the missing persons.

Mahesh Katulanda, who heads the OMP that has failed to find a single missing person so far, has told the media that they would be given priority in the waiting list.

Protests began in 2017 in Vavuniya, Kilinochchi, Jaffna, Mullaitivu, Trincomalee and Ampara demanding to know the fate of those who surrendered to the military during the final stages of the war.

They are asking for an international mediation in their quest for justice.

In August, President Ranil Wickremesinghe told parliament that he wanted to reiterate the need to ensure justice for the war-affected Tamil people.

He said the OMP has completed investigations into 3,462 cases out of 21,374 complaints it has received.

Sri Lanka must dissolve parliament no sooner it abolishes presidency: JVP

If a motion is tabled in parliament to abolish the presidency, another motion to dissolve parliament must be tabled the same day, the opposition Janatha Vimukthi Peramuna (JVP) said amid intense speculation that Sri Lanka’s all-powerful executive presidency is to be finally abolished, albeit for reasons of political expediency.

Former JVP legislator Sunil Handunneththi told reporters Wednesday October 11 evening that President Ranil Wickremesinghe’s administration cannot be allowed to hold on to parliament power after dissolving the presidency.

“They can’t be allowed to abolish the presidency and hold on to parliament power. The day they bring in a motion to abolish the presidency, they must also bring a motion to dissolve parliament. Then we can start with a clean slate,” said Handunneththi.

The JVP, along with numerous other parties both government and opposition, has long advocated for the abolishment of the presidential system.

“The presidency must be abolished, but you can’t be holding parliamentary power under the guise of that,” the former MP said.

“Wickremesinghe doesn’t have [a mandate] anyway],” he added.

Former President Maithripala Sirisena, meanwhile, said he had heard something different.

“We have heard that there is a plan to hold a referendum to abolish the presidency and amend the constitution so that the president can be elected by parliament,” he said speaking to reporters.

These remarks come amid media reports that discussions have been held at the highest levels of government about the possibility of holding a referendum on abolishing the presidency. This is reportedly due to fears that no political party will be able to secure 50 percent of the vote at the presidential elections due October next year.

JVP leader Anura Kumara Dissanayake said speaking at a public event earlier this week that the incumbent president’s term expires in August 2024 but the current parliament’s term is valid till around October 2025.

“Ranil and Basil are thinking, with this they can continue on till 2025 instead of going home in August 2024,” said Dissanayake, possibly alluding to discussions reported to have taken place between President Wickremesinghe and chief organiser of the ruling Sri Lanka Podujana Peramuna (SLPP) Basil Rajapaksa.

At least one spokesperson for Wickremesinghe’s United National Party (UNP) have dismissed these reports, however.

Trade unionist Saman Ratnapriya who is affiliated with the UNP and is officially Director General of Trade Unions to the President, said the government has no plans to change elections and that opposition parties are making fanciful statements.

“These are statements without truth. By making these statements, leaders of opposition parties are just trying to get a kick. The government has no plans to change elections,” he said.

Posted in Uncategorized

IMF does not support providing subsidies to everyone in Sri Lanka

The International Monetary Fund (IMF) does not support providing subsidies to everyone in Sri Lanka.

Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department said that there needs to be targeted support to the poor and vulnerable in Sri Lanka.

“We fully sympathize and understand the hardship faced by people in terms of falling wages, cost of living increases, and so on, and we’re fully sympathetic to that. But again, the program, we do have, , prices reflecting cost recovery. And why is that important? It’s important because otherwise the electricity sector faces losses and that becomes a public problem down the road. So, you have to have cost recovery. I think that’s important. You also don’t want to provide, subsidies to everyone. It should be more progressive. And here we believe the targeted support to the poor and vulnerable is the way to go,” Srinivasan told reporters.

He also said that efficiency in the energy sector and the electricity sector could be increased through structural reforms.

“And, in general, SOE reforms are important in Sri Lanka. And that’s part of the program we have where the IMF working at the World Bank is pushing ahead with reforms to SOEs, including in the electricity sector,” he added.

Krishna Srinivasan also said that as part of the IMF review on Sri Lanka, what will be required will be financing assurances.

“In that context we will look to see how much progress has been made on debt restructuring efforts and if there are any agreements, then how do they square with the debt targets and so on? So, it’s part of the process of the second review,” he said.

Srinivasan said that the financial sector review will look at what restructuring is taking place within other creditors, including private creditors.

Posted in Uncategorized

Sri Lanka – India passenger ferry service resumed after 40 years

Nearly four decades after India and Sri Lanka stopped a passenger ferry service, a high-speed passenger ferry service was launched on Saturday (14 Oct.), once again connecting the two neighbouring countries.

Accordingly, the Cheriyapani ferry service links Nagapattinam, Tamil Nadu with Kankesanthurai in the northern province of Sri Lanka.

At 08:15 a.m. on Saturday, Cheriyapani departed Nagapattinam port towards Kankesanthurai with 50 passengers and 12 crew members under Captain Biju George.

The ferry reached Kankesanthurai at 12:30 p.m. this afternoon, and headed back to Nagapattinam at 02:00 p.m.

Indian Prime Minister Narendra Modi expressed gratitude after the passenger ferry service was resumed. In a video address, he said, “We are embarking on a new chapter in the diplomatic and economic relations between India and Sri Lanka. The launch of a ferry service between Nagapattinam and Kankesanturai is an important milestone in strengthening our relations.”

The ferry service initially planned to commence on 10 October, underwent some administrative issues and had to be rescheduled for 12 October and later 14 October.

The project, under the India-Sri Lanka Joint Committee, is aimed at revitalising regional trade and tourism and fostering stronger people-to-people relations. The initiative renews historical sea ties that existed between the two countries since the early 1900s.

Decades ago, the Indo-Ceylon Express that operated between the port city of Thoothukudi and Colombo through Chennai stopped operating after the Sri Lankan civil war in 1982.

The reintroduction of ferry services comes two years after the two countries signed a passenger transportation Memorandum of Understanding (MoU).

Posted in Uncategorized

Sri Lanka considers India’s request on Chinese ship -Hindustan Times

Sri Lankan President Ranil Wickremesinghe is considering India’s request to not allow Chinese Survey and Research Vessel Shi Yan 6 to undertake a joint military scientific research with the island nation’s National Aquatic Resources Research and Development Agency (NARA) in Sri Lanka’s Exclusive Economic Zone between late October and November this year, people familiar with the matter said.

President Wickremesinghe’s response to the issue, raised by external affairs minister S Jaishankar during his meeting with the Sri Lankan head of state in Colombo on October 11, was non-committal, the people added, asking not to be named. Sri Lankan Foreign Minister Mohammed Ali Sabry was quoted by Sri Lanka’s The Island newspaper on October 9 saying that his country had given permission to the Chinese ship for docking at Colombo deep seaport in November. The same report quoted him as saying that Sri Lanka does not want “to get involved” with “big power rivalry going on” between “China, India and the US”.

Interestingly, a US navy ship, USNS Brunswick, docked in Colombo on Wednesday, and no dates have yet been announced for the visit of Shin Yan 6, the Chinese vessel.

The Chinese vessel was earlier maintaining position 1,000 km east of the China-controlled Hambantota port in the Island nation, and is currently about 280 nautical miles (500 km) east of Chennai in the Bay of Bengal. Carrying nearly 2,000 tonnes of diesel, the ship has enough supplies to last for two more months. The ship entered the Indian Ocean Region on September 23.

In July, after a visit by the Sri Lankan President, Indian Prime Minister Narendra Modi said it was “necessary” the two countries worked “together, keeping in mind each other’s security interests”. The final decision on the ship, HT learns, may be taken by Wickremesinghe during his visit to Beijing to attend the BRI summit on October 17-18 at the invitation of Chinese President Xi Jinping.

Over the past five years, Chinese ships have been active in the Indian Ocean Region with the PLA Navy growing into a proper blue water navy.

The total number of vessels including warships, ballistic missile trackers, survey and research vessels recorded in 2019 were 29, grew to 39 in 2020, then 45 in 2021 and 43 in 2022. This year, till September 15, 28 Chinese ships have been recorded in the region.

Posted in Uncategorized

OHCHR concerned about Anti Terrorism Bill, Online Safety Bill

The Office of the UN High Commissioner for Human Rights (OHCHR) said it has serious concerns over two bills under consideration in the Sri Lankan Parliament – the revised Anti-Terrorism Bill and the Online Safety Bill – which give the authorities a range of expansive powers and can impose restrictions on human rights, not in line with international human rights law.

Spokesman for the UN High Commissioner for Human Rights Ravina Shamdasani said the Anti-Terrorism Bill is intended to replace the Prevention of Terrorism Act, which has long been of concern to the UN human rights mechanisms.

“While some positive revisions have been made in the draft, including the removal of the death penalty as a possible punishment, there are still major concerns about the scope and discriminatory effects of many provisions in the revised draft. Restrictions to the rights to freedom of expression and peaceful assembly are very likely to fail to meet requirements of necessity and proportionality,” she said, according to briefing notes circulated to the press.

“The Bill still includes an overly broad definition of terrorism and grants wide powers to the police – and to the military – to stop, question and search, and to arrest and detain people, with inadequate judicial oversight. Other issues remain over the imposition of curfews, restriction orders and the designation of prohibited places, all of which raise concerns about the scope of powers granted to the executive without sufficient checks and balances. With respect to the Online Safety Bill, we believe it will severely regulate and restrict online communication, including by the public, and will give authorities unfettered discretion to label and restrict expressions they disagree with as “false statements”.

Many sections of the Bill contain vaguely defined terms and definitions of offences which leave significant room for arbitrary and subjective interpretation, and could potentially criminalize nearly all forms of legitimate expression, creating an environment that has a chilling effect on freedom of expression. The UN Human Rights Office urges the Government to undertake further meaningful consultation with civil society and UN independent experts and to make substantial revisions of the draft laws in order to bring them into full compliance with Sri Lanka’s international human rights obligations,” she said.

President to Meet Chinese President Xi Jinping: Lankan President to Attend Belt and Road Initiative 10th Anniversary Conference in China

President Ranil Wickremesinghe of Sri Lanka is set to embark on an official visit to China on October 14, where he will participate in a conference in Beijing marking the 10th anniversary of the Belt and Road Initiative (BRI). This visit holds particular significance, given the recent crucial understanding reached between Sri Lanka and China regarding debt restructuring.

The Belt and Road Initiative, a colossal global infrastructure and economic development project launched by China, has been a focal point of international collaboration and investment. As the initiative celebrates its 10th anniversary, President Wickremesinghe’s presence at the conference underscores Sri Lanka’s commitment to fostering strong bilateral relations and participating in this monumental global initiative.

During his visit to Beijing, President Wickremesinghe is scheduled to meet with Chinese President Xi Jinping for discussions on a wide range of topics. This meeting is anticipated to further strengthen the diplomatic, economic, and strategic ties between the two nations. China is one of Sri Lanka’s most significant creditors, making cooperation and understanding vital for both parties.

The visit comes on the heels of a significant development in the Sri Lanka-China relationship, as the two countries recently reached an important understanding regarding debt restructuring. This understanding is expected to have a substantial impact on Sri Lanka’s economic stability and its ability to manage its debt burden effectively.

Sri Lanka has faced economic challenges, and the debt restructuring agreement with China signals a positive step towards addressing these issues. The debt agreement is expected to provide Sri Lanka with more favorable terms, reducing the burden on the nation’s economy.