Jaffna – Chennai flights to resume from July 16

During the “Transcending Borders – Transforming Lives” programme organized by the Indian Tourism Federation at the Bandaranaike International Memorial Conference Hall in Colombo yesterday, President Ranil Wickremesinghe expressed his belief that the tourism industry would significantly contribute to the country’s foreign exchange earnings in the coming decade.

The President highlighted that comprehensive plans had already been formulated to enhance Sri Lanka’s appeal as a tourist destination and stressed that promoting tourism could lead to an increase in per capita income.

President Ranil Wickremesinghe also emphasized the importance of collaborative efforts among all the BIMSTEC countries to develop the BIMSTEC region into a thriving tourism hub, transcending national borders.

Addressing the event, Indian High Commissioner Gopal Bagle announced the expansion of flights between Chennai and Jaffna, which now operates only four times a week, to begin operations on a daily basis starting from July 16. He further mentioned ongoing efforts to resume the long-discontinued ferry service between the two nations, which had remained inactive for several decades.

Probe into Mullaitivu ‘mass grave’ begins

The Mullaitivu Magistrate and the Police conducted a visit to the suspected mass grave site in the Kokkuthoduvai village, Mullaitivu yesterday (6). This visit marked the resumption of an investigation into the human skeletons discovered on 29 June 2023, during the digging of the ground to install a pipeline for a drinking water project.

The area was tightly secured, preventing access to the public, as the Magistrate conducted an inquiry into the mass grave.

When news of the detection of human skeletons broke on 29 June, villagers quickly gathered at the site. The excavation work was immediately halted and the matter was reported to the Magistrate’s Court by the Police.

The Mullaitivu Magistrate yesterday (6), in the presence of a Judicial Medical Officer (JOM), Police, lawyers, officials from the forensic department, water supply board, department of archaeology, telecom, and the Ceylon Electricity Board, visited the area. The main road in the Mullaitivu-Jaffna Route was closed off for excavation, as the site was located by the Main Road.

Several NGOs have recently raised concerns that approximately 20 identified mass graves have been left unattended.

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President-toppling Sri Lanka activist girds for new revolt

Student leader Wasantha Mudalige remains lionised by many for channelling public anger at an unprecedented economic crisis into a movement that shook the foundations of Sri Lanka’s political system.

At the height of last summer’s unrest, he helped spearhead a siege of government buildings in Colombo that saw once-loved premier Gotabaya Rajapaksa chased into a humiliating exile.

The 29-year-old, whose cherubic face belies his history of fierce confrontations with riot police, spent months behind bars on terror charges for his efforts.

“We had a very warm welcome,” Mudalige told AFP outside a court appearance in June, while recounting his arrival at jail alongside two confederates.

“Even the prison guards were very supportive. They saw us as the heroes who got rid of Gota.”

Mudalige said his incarceration was a necessary “sacrifice” in the unfinished battle to reform Sri Lanka’s political system.

Now free on bail, he said lingering economic woes have left Sri Lanka bristling with discontent, frustrated with its new president — and ready for another revolt.

“Although we got rid of Gota, we have not been able to win the ‘system change’ that we demanded,” Mudalige said.

“We don’t think the government can go on for long,” he added. “When you analyse the situation, there is no way the government can continue.”

‘They had no alternative’
As head of the Inter-University Students’ Federation (IUSF) at the time, Mudalige stood at the forefront of last year’s street protests.

Alongside him was a broad coalition of saffron-robed Buddhist monks, minority activists and ordinary citizens outraged by government corruption and mismanagement of the island’s worsening economic tailspin.

“They had no alternative but to take to the streets because they had no fuel, no food, no electricity… people were dying in petrol queues,” Mudalige said.

In July the IUSF and its allies laid siege to the Presidential Palace in Colombo.

Rajapaksa, once lauded by the island’s Sinhalese majority for helping crush a decades-long Tamil separatist insurgency, was forced to evacuate the residence through a secret backdoor and temporarily fled the country.

Protesters streamed through the compound, gaping at its opulent furnishings and frolicked in its pool in the revelry that followed.

Rajapaksa’s successor, Ranil Wickremesinghe, quickly sought to restore order by directing police to arrest the movement’s leaders.

Mudalige was caught in the dragnet the following month when police snatched him off the street as he left a demonstration against the crackdown.

He spent 167 days in custody, the longest stretch of detention of all those who participated in last year’s revolt.

The most serious charges against him were eventually dropped after Amnesty International and other rights groups condemned his jailing.

‘Anarchist political forces’
Wickremesinghe has sought to restore Sri Lanka’s ruined finances with an International Monetary Fund bailout that commits his administration to an austerity programme.

The chronic food and fuel shortages that inflamed public anger last year have since ended as the government reined in public spending.

But steep tax hikes, and the end of generous subsidies on electricity and fuel, have been deeply unpopular.

Wickremesinghe says the reforms are necessary to bring Sri Lanka out of bankruptcy and restore economic growth.

He pledged in February to press ahead “regardless of the obstacles that anarchist political forces seek to create”.

His administration has maintained a tough line against protests, with periodic demonstrations quickly dispersed by tear gas and water cannon trucks.

Mudalige said his detention and that of other protest leaders was an effort by the government to forestall a repeat of last year’s unrest.

But he warned the public’s frustrations over the spiralling cost of living would inevitably bring people back to the streets, unbowed by the threat of violence.

“The government is using the police and the military to suppress any dissent. It is like pressing down a rubber ball in a basin of water,” he said.

“You can’t do it for long. It will inevitably bounce to the top.”

Source:France24.com

Sri Lanka drops to 107th from 90th in the Global Peace Index

Sri Lanka has been ranked 107th in world based on the 2023 Global Peace Index published by the Institute for Economics and Peace.

Sri Lanka was ranked 90th in the 2022 Index and due to a number of factors, the country has dropped down in the rankings.

Published by the Institute for Economics and Peace, the international study measures the safety and peacefulness of a country using an index of 23 qualitative and quantitative factors.

These include the country’s crime rate, levels of violence and demonstrations, access to weapons, political stability, military expenditure, relationship with neighboring countries, and more.

Iceland has remained the most peaceful country in the world since the study was first released in 2008.

It also ranks as the third happiest country in the world, after Finland and Denmark.

More than 60% of the country’s population lives in the capital city of Reykjavik, according to National Geographic.

In Iceland, school is free for all Icelanders through college, and every student is taught to speak Danish and English.

Meanwhile, Denmark has been ranked the second most peaceful country in the world.

Denmark’s capital, Copenhagen, is home to institutions such as the Copenhagen Stock Exchange and serves as a hub connecting Northern Europe with the rest of the world, according to U.S. News and World Report.

Although people living in Denmark pay some of the world’s highest taxes, up to half of their income, it is for a reason.

Due to the high taxes, Denmark can offer its citizens most healthcare options with no fee, university students pay no tuition and receive a grant to help cover expenses while studying, childcare is subsidized, and the elderly receive pensions and are provided with care helpers who visit them at home, according to the country’s website.

Ireland rounds out the top three. Ireland is known for its lush, green fields hence its nickname, Emerald Isle, according to National Geographic.

Ireland’s population has increased by 10 percent in the last decade, according to a report released by the Central Statistics Office.

According to the index, Bhutan is the most peaceful country in the South Asian region.

Sri Lanka’s neighbor India is ranked 126th while Pakistan is in 146th on the list.

Afghanistan is the least peaceful nation according to the index.

Ukraine and Russia are ranked 157th and 158th respectively on the 2023 Global Peace Index published by the Institute for Economics and Peace.

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Bandula confident of resuming suspended projects in September

Cabinet Spokesman Minister Bandula Gunawardena says he is hopeful that a large number of projects that are suspended at present will resume in September.

Speaking during the weekly Cabinet media briefing at the Department of Government Information this morning, Minister Gunawardena said all foreign funding was suspended after Sri Lanka declared bankruptcy last year.

He said that resulted in the suspension of projects in various sectors.

The Minister noted that with the implementation of the programme initiated by the President and the government, the economy is gradually stabilizing.

He said discussions with the International Monetary Board were also successful which resulted in the government securing a USD 2.9 billion deal, despite skepticism from the opposition.

Minister Bandula Gunawardena said the government has unveiled the domestic debt optimization plan and is in the process of discussing the comprehensive debt restructuring programme with local and international partners.

He said they are hopeful that an agreement can be reached on the debt restructuring programme by September which will take Sri Lanka out of bankruptcy and open doors for massive eternal funding.

He said once external funding starts flowing in addition to budgetary support from multilateral organizations, the suspended projects can resume.

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Colombo High Court grants bail to Nathasha Edirisooriya

The Colombo High Court today granted bail to stand-up comedian Nathasha Edirisooriya.

However, the Colombo Fort Magistrate’s Court had earlier today ordered that she be remanded further until 12 July.

Edirisooriya was arrested in May for allegedly making comments disrespectful to Buddhism.

The Criminal Investigations Department (CID) had received a complaint against Nathasha Edirisooriya, accusing her of insulting Buddhism, and Christianity during a stand-up comedy show.

The owner of the YouTube channel SL VLOG, Bruno Divakara, was also arrested and remanded in May for publishing and promoting a video by Nathasha Edirisooriya.

Police Spokesman Nihal Thalduwa said that Bruno Divakara was arrested for aiding and abetting an illegal act committed by Edirisooriya.

Divakara was however granted bail last month.

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Sri Lanka to resume diplomatic talks with Japan on cancelled LRT project

Sri Lanka’s cabinet of ministers approved a proposal to commence a diplomatic dialogue with Japan on a light rail transit (LRT) project that Colombo had unilaterally and controversially cancelled in 2020.

A statement from the Government information Department on Wednesday June 05 said the cabinet had greenlit a proposal made by President Ranil Wickremesinghe to prepare an “appropriate time frame for entering into the agreement applicable activating the discussions with the Japanese diplomatic mission in Colombo once again”.

Sri Lanka’s auditor general said in late June that the government has agreed to pay about 3.4 million US dollars (about billion rupees) to a consultancy led by Japanese firms after the project’s cancellation.

Former President Gotabaya Rajapaksa suddenly cancelled the project which was to be financed through a low-interest loan from the Japan International Co-operation Agency (JAICA), damaging relations between the two countries.

Then Secretary to the President P B Jayasundara said in an official communication that the project is “very costly and not the appropriate cost effective transport solution for the urban Colombo transportation infrastructure.”

“A suitable transport solution could be worked out in consultation with the Ministry of Urban Development and Housing and the Department of National Planning of the Ministry of Finance,” Jayasundara wrote, adding that the president had also ordered the immediate closure of the project office.

Rajapaksa’s successor Wickremesinghe has been keen to repair the damaged relations.

This is, in fact, the second time this year that the cabinet has approved a proposal by President Wickremesinghe to discuss resuming the project.

During an official visit to Tokyo in late May, Wickremesinghe extended an apology for the cancellation of the LRT project and discussed legislation to make sure that large-scale bilateral projects cannot be cancelled without mutual agreement.

He also called for bilateral collaboration highlighting emerging opportunities in Sri Lanka that Japanese businesses could leverage as the island nation restores stability.

Ex-president Rajapaksa’s surprise decision in 2020 along with another 500-million US dollar tripartite deal to develop the Colombo Port’s Eastern Container Terminal (ETC) together with India proved controversial. Relations soured between Sri Lanka and Japan as a result. The east Asian nation has long been considered a friend of Sri Lanka with mutually beneficial diplomatic ties going back decades.

Since his appointment as prime minister in the wake of widespread protests in Sri Lanka after its currency crashed in early 2022, Wickremesinghe has shown renewed interest in repairing ties between the two countries.

Blaming poor foreign policy on the country’s international “marginalisation”, Prime Minister Wickremesinghe in June 2022 said: “Japan is our long time friend; a nation that has helped our country greatly. But they are now unhappy with us due to the unfortunate events of the past.”

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Court order to commence excavations at Mullaitivu grave site

A court order has been issued for the commencement of excavations on July 06 at a site believed to be a mass grave in Mullaitivu.

Magistrate T. Saravanaraja visited the location at Kokkutuduvai on June 30 and recorded having observed skeletal remains.

A court order has also gone to the JMO, forensics experts and bomb disposal units to be present at the commencement of the excavations.

Water supply workers stumbled upon the site while digging the earth to lay pipelines.

That happened less than a week after the ITJP, JDS, CHRD and FoD released a report of recommendations in Colombo on June 22 seeking a resumption of excavations at mass grave sites.

Colombo Port City development regulations gazetted

The Development Control Regulations (DCR), which will regulate all construction activities within the area of authority of Colombo Port City, was published in the extraordinary gazette No 2334/47 on June 02nd, 2023.

This updated version represents an enhanced version of the initial publication in April 2022.

As a result, the Colombo Port City Economic Commission is now open to receiving development proposals for evaluation and the issuance of Planning Clearance, Development Permits, and Certificates of Conformity, aligned with the approved Master Plan – Spanning a buildable area of 6.3 million square meters, that will offer a world-class environment for various amenities, including a Marina Facility, Luxury Villas, Apartments an Integrated Resort, Convention Centre, International School and University, a Hospital and a Financial Centre etc. These said and all developments of Colombo Port City will be subjected to the regulation of the newly published DCR 2023.

The primary objective of 2023 for Colombo Port City is to benefit developers, residents, investors, and all stakeholders, including the surrounding community. These regulations establish guidelines for development intensity, building height, and overall construction framework across all plots within Colombo Port City. They serve as a vital planning tool, ensuring logical and orderly development. By providing landowners and developers with a clear understanding of the permissible development on each of the 74 plots, the DCR 2023 fosters transparency and efficient decision-making. Furthermore, it encompasses a comprehensive framework covering building masses, land uses, solid void ratios, green and public spaces, local characteristics, utility networks and usage, sustainability measures, and more.

The published DCR 2023 marks another key goal post, for the Colombo Port City Economic Commission for the Investors to commence their journey, in the realization of Colombo Port City’s immense potential for economic growth and innovation through iconic Architecture which brings world-class buildings to this City. The Commission is committed to fostering a successful ecosystem that attracts global investment and drives sustainable development in Sri Lanka.

Development Control Regulations published by the Gazette Democratic Socialist Republic of Sri Lanka, Extraordinary No 2334/47, 2023.06.02.

Fitch warns of risks in Sri Lanka’s domestic debt restructuring plan

Fitch Ratings has warned of risks in Sri Lanka’s domestic debt restructuring plan but noted that it resolves uncertainties around its impact on the local banking sector.

The Sri Lankan Government’s proposal for treatment of domestic debt marks a significant step towards resolving uncertainties around the impact of the sovereign’s debt restructuring on the local banking sector, but complications may arise from a number of factors, Fitch Ratings said.

The proposal excludes banks’ holdings of Sri Lankan rupee-denominated treasury securities, which will alleviate some of the pressure on their already stressed capital positions from weakening loan quality and the rupee’s depreciation.

Fitch’s base case did not expect treasury bills held by banks to be subject to restructuring, but assumed banks’ treasury-bond holdings would be.

Bank holdings of Sri Lanka Development Bonds (SLDBs), which are foreign-currency denominated but governed by local law, will be affected, as anticipated, and an impact on international sovereign bonds (ISBs) as well is still expected.

However, these together account for only about 5.5% of banks’ combined assets, a much smaller share than treasury securities (26.4% for Fitch-rated domestic banks). The proposal also includes a restructuring of foreign-currency bank loans to the government (less than 1% of combined assets for Fitch-rated banks), though without detailed plans.

“The Government has outlined three treatment options for SLDBs. We expect banks will generally opt for the choice involving conversion of such debt into local currency-denominated instruments; banks have so far opted to convert maturing SLDBs to rupee-denominated treasury bonds since the announcement of suspension of foreign debt servicing in April 2022,” Fitch Ratings said.

Fitch said that provisioning should help to moderate the hit to bank capital from the debt treatment. Fitch-rated Sri Lankan banks have already made provisions of 35% or higher for ISBs, with SLDBs being subject to lower provisioning due to the possibility of obtaining rupee-denominated treasuries.

Nonetheless, worsening impaired loans (end-May 2023: 13.3% of system loans, from 1Q22: 8.4%) in line with the economic stress associated with the sovereign default and the unwinding of forbearance provided during the Covid-19 pandemic are already exerting pressure on banks’ thin capital buffers.

“We do not believe a restructuring of the sovereign’s local-currency obligations is likely to trigger a loss of depositor confidence in the banking system, based on the proposed plans. However, funding stress remains a negative sensitivity for bank ratings. Fitch-rated Sri Lankan banks’ national ratings remain on Rating Watch Negative (RWN) to reflect the potential for the banks’ creditworthiness relative to other entities on the Sri Lankan national ratings scale to deteriorate. This reflects heightened near-term downside risks to credit profiles from capital and funding stress,” Fitch Ratings said.

Fitch Ratings said that a downgrade of the sovereign’s ‘CC’ Long-Term Local-Currency Issuer Default Rating would not automatically drive a downgrade in Sri Lankan bank ratings.

“To resolve the RWN on these ratings, we will need to assess the impact to the banks’ capital once debt treatment terms are finalised, including the effects of any present value reductions from an exchange of bonds and those of any regulatory or accounting forbearance. We may resolve and affirm the banks’ ratings if we think risks from funding and capital stresses have abated, at both the individual bank and the sector level, to the extent that we believe the banks’ ability to service obligations in local and foreign currency is not hindered and/or banks are able to continue as a going concern and avoid failure,” Fitch Ratings said.

Fitch Ratings said that although the government’s domestic debt treatment announcements go some way towards resolving uncertainties over Sri Lankan bank ratings, many risks remain.

Fitch said that it is still unclear, for example, whether the Government’s proposals have received support from the sovereign’s key external creditors. If not, the risk of further domestic debt restructuring could linger, resulting in further instability for the banking sector.

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