Author: TELO Admin

Progressive forces in Sri Lanka need to unite to create a campaign to counterbalance anti-China propaganda by imperialist forces, Lanka Sama Samaja Party (LSSP) leader Prof. Tissa Vitharana said during a recent discussion on the Belt and Road Initiative (BRI).

Speaking at the event organised by the Asia Progress Forum, a think-tank affiliated with the Communist Party of Sri Lanka (CPSL), Prof. Vithanara said China had become a superpower without resorting to imperialism.

“However, there is a lot of propaganda against China. Despite local and international scholars proving that there is no such thing as a ‘Chinese debt trap,’ those loyal to the west peddle this lie in Sri Lanka. The progressive forces in the country must unite to counter these lies. The government must also take steps to counterbalance these claims,” he said.

Meanwhile, Prof. Samitha Hettige who also addressed the meeting, said Sri Lanka has been irresponsible with loans it has taken from all parties, and given that Sri Lanka has borrowed a lot of money from private lenders, the country must spend such funds on productive endeavours.

“The BRI has opened doors for a lot of investments. We have to take advantage of this transparently,” he said.

Meanwhile, engineer and former chairman of the Ceylon German Technical Training Institute, Vinod Moonesingha said that Free Trade Agreements (FTA) with China and India could attract investors from both countries to Sri Lanka.

“Hambantota can be built as an industrial centre with FTAs with these two major economic superpowers. Chinese will come to Sri Lanka and produce things for the Indian market, and vice versa,” he said.

Justice minister Wijedasa Rajapakshe has denied media reports that he has submitted a paper to the cabinet for the abolition of the executive presidency.

What he had presented was an amendment to the election system, to elect 160 MPs at electoral level and 65 others under proportional representation, he has told ‘Anidda’ newspaper.

Rajapakshe said his proposal is similar to the one previously made by a parliamentary committee headed by premier Dinesh Gunawardena to introduce such a mixed electoral system.

The minister added that he would discuss his proposal with party leaders shortly.

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

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.

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.

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.