Author: TELO Admin

Sri Lanka’s economy shrank 11.8 per cent in the July-September quarter from a year ago, government data showed on Thursday, the second-worst quarterly contraction ever for the country going through a severe financial crisis.

Economic mismanagement and the impact of the COVID-19 pandemic have left Sri Lanka short of dollars for essential imports including food, fuel, fertilisers and medicine.

The state-run Census and Statistics Department said that agriculture sector shrank 8.7 per cent in the third quarter and industries 21.2 per cent, while services dropped 2.6 per cent, from a year earlier.

“This is the second-worst contraction Sri Lanka has experienced in a quarter after a 16.4 per cent contraction in the second quarter of 2020,” said Dimantha Mathew, head of research at First Capital.

“Our projection was that it would be much worse – possibly a contraction of about 20 per cent but now overall contraction for the year could be about 9 per cent.”

Sri Lanka’s central bank estimates the economy will contract by about 8 per cent in 2022.

The government said several factors including high inflation, power cuts, high interest rates, import shortages and fuel and fertiliser shortages impacted growth in the last quarter.

“A decrease in the demand of essential and non-essential goods and services due to the reduction of the real income of the people have directed the economy towards this decline,” it said.

Economic hardships earlier this year had sparked widespread protests, which led former President Gotabaya Rajapaksa to flee the country and then resign as thousands of protesters occupied his office and official residence.

The economy had contracted 8.4 per cent year-on-year in the second quarter, one of the worst performances in the island of 22 million people. It contracted 1.6 per cent year-on-year in the first quarter.

President Ranil Wickremesinghe, elected by a parliamentary vote to replace Rajapaksa in July, has pledged to restore the economy but has warned tough reforms are needed.

In September, Sri Lanka reached a staff-level agreement for a $2.9 billion bailout with the International Monetary Fund (IMF), but it has to restructure its debt with private bondholders and bilateral creditors before getting disbursements.

The island is expecting as much as $5 billion in loans next year from multilateral agencies besides the IMF deal, while the government is aiming to raise up to $3 billion via restructuring of state assets, Foreign Minister Ali Sabry told Reuters on Wednesday.

Source: Reuters

Sri Lanka is expecting as much as $5 billion in loans next year from multilateral agencies besides an IMF deal, while the government is aiming to raise up to $3 billion via restructuring of state assets, its foreign minister told Reuters on Wednesday.

The island nation’s worst economic crisis in more than seven decades has resulted in widespread unrest due to shortages of food and fuel. Its then-president Gotabaya Rajapaksa was ousted in July.

Additional funds are critical for the country that is already saddled with a public external debt of $40.6 billion, of which it owes 22% to Chinese creditors.

In September, the country of 22 million reached an agreement with the IMF for a loan of $2.9 billion, which could be approved for disbursal next year.

“Apart from what we get from the IMF, we are looking at all others, the multilaterals put together another $4-$5 billion …,” Ali Sabry said in an interview.

“The president is interested in restructuring some of the (state) institutions, so through that if we can raise $2-$3 billion, our treasury and reserves become strengthened.”

Sri Lanka was expecting to seek IMF board approval for the loan in December but that has likely been pushed to January, the minister said, as the government works to lock in financing assurances from countries including China, Japan and India, as well as private creditors.

Sabry said Sri Lanka was still waiting for “letters of assurance” for debt restructuring from its largest bilateral creditor China, as well as India.

The two countries have backed the restructuring efforts and Sri Lanka has shared documents and data with them, he said.

“We have made it very clear to the IMF, to our multilateral partners and to our bilateral friends that patience is running out and it is urgent for the sake of Sri Lankans and the good health of the world economy,” Sabry said.

Overall, Sri Lanka’s economy has improved with essential imports such as fuel and food becoming regular, Sabry said.

Inflation, which edged above 70% earlier this year, eased to 61% at the end of November but the economy is expected to contract by about 8.7% this year.

“Some stability is taking place. Then growth can return,” Sabry said. “So that should start in the next quarter of next year with the IMF loan coming in, other multilateral agencies coming in. But for growth to take place, it is going to be 2024.”

Reuters (Source)

It is hilarious that the same people who worked to postpone the Provincial Council (PC) elections are talking about a 13th Amendment to the Constitution today, Parliamentarian Namal Rajapaksa said.

Addressing the media, he stated that the PC election had been postponed for many years.

“If this meant people were interested in the 13th Amendment and the PC elections, they would have taken that action two years ago,” he said.

“The economic stability of the country is a priority. A long discussion about the road ahead should be developed, and the decisions taken from it should be implemented. As a party, we need to reorganize.

“We might have made mistakes, and we should take corrective action. We have to move forward with the party members, and we should not think about getting positions. We should prioritize the political stability of the country,” Rajapaksa said.

“When it comes to the election, we will have lengthy discussions to determine who we will support and who we will not support. We are now separated from those from whom we never thought we would be separated for life and that is what usually happens in politics,” he said.

“We must stand by the people and pave the way for a stable Government.” We know that the President is also working to establish a stable Government, stabilize the country’s economy, and consolidate democracy. We will see how we align politically in the future,” Rajapaksa added.

Claiming that it was an extremely erroneous course of action for the Election Commission (EC) to seek the opinion of the Attorney General (AG) regarding the holding of the Local Government (LG) election, Sri Lanka Podujana Peramuna Chairman and Opposition MP Prof. G.L. Peiris said that the AG has no authority to make a decision regarding the said election.

Speaking to The Morning, he said: “The EC had recently sought the opinion of AG President’s Counsel Sanjay Rajaratnam, regarding the holding of the LG election. There is no need to seek the AG’s opinion in this matter, and it is very wrong for the EC to do so. The AG’s opinion is merely an opinion and not compellable. He has no authority to make a decision with regard to the elections, and there are many instances where the Supreme Court (SC) has ruled out the AG’s opinions.”

He also pointed out that the Government’s attention has been suddenly focused on reducing the number of LG representatives from 8,000 to 4,000, adding that although this is a progressive proposal, this will not be allowed to result in the postponement of the LG elections. Noting that there were 8,000 representatives in LG bodies since 2018, he said that it is problematic that the Government’s attention is focused on reducing that number suddenly when the LG election is due.

“The Government is using various tactics such as appointing select committees to postpone the LG election. There is absolutely no need for the consent of Parliament to hold elections. The necessary provisions are clearly mentioned in the Constitution and the relevant laws. If Parliament can postpone such elections, the Parliamentary Election can also be postponed as per their wishes. That’s why we filed a petition in the SC. We will continue to take every possible step in Parliament, among the people, in the judicial process, and at the international level to defeat this Government’s attempt to postpone the elections,” added Prof. Peiris.

Speaking further, he said that the people of this country had not forgiven any government that postponed, or attempted to postpone elections, and that all such governments were defeated in subsequent elections. In 1970, he said that then-Prime Minister Sirimavo Bandaranaike’s Government, which came into power for a period of five years, introduced the new Constitution in 1972, which included provisions for it to remain in power for another two years, but that in the General Election held in 1977, that government suffered a defeat to the extent it could not even secure the leadership of the Opposition.

The EC recently stated that it had sought the opinion of the AG regarding the holding of the LG election. EC Chairman Attorney Nimal Punchihewa had however told The Morning last week that the EC was unable to reveal the opinion given by the AG. Meanwhile, a group of Opposition MPs including Prof. Peiris had filed two writ applications in the SC on Monday (12) seeking an order directing the EC to immediately hold the LG election.

South African human rights lawyer and activist, Yasmin Sooka has won a case against Jayaraj Palihawadana, a UK based Sri Lankan lawyer.

Jayaraj Palihawadana, until recently the UK representative of the political party of former Sri Lankan President, Gotabaya Rajapaksa, has apologised unreservedly in court to Sooka for making false statements against her.

Sooka initiated a data protection claim in the UK under the Data Protection Act 2018, challenging the publication of inaccurate personal information detrimental to her reputation.

Jayaraj Palihawadana published a report which he sent it to 47 diplomatic missions in Geneva in 2021 falsely claiming that Sooka was biased in favour of a proscribed terrorist group.

In her witness statement to the High Court King’s Bench Division, Sooka said: “Naturally these allegations are completely false and appear to be a calculated attempt to discredit me in my work as a human rights defender in Sri Lanka. The Court will probably be aware that it is well-worn tactic of repressive regimes around the world to denounce human rights defenders as terrorists, or supporters of terrorists, smearing them by association.”

A solicitor himself, Palihawadana failed to delete all the offending remarks or apologise at the outset, and instead attempted to file a counterclaim against Sooka, which the court dismissed.

Eventually he agreed not only to pay substantial legal costs and compensation to Sooka but also agreed to retract his comments and publish an apology online in English and Sinhala.

Additionally, as the defendant, Palihawadana agreed to make a Statement in Open Court today which said: “The Defendant unconditionally retracts and apologises unreservedly for the aforementioned untrue allegations made against the Claimant in the Reports.To indicate the sincerity of this apology, the Defendant has agreed to pay the Claimant a substantial sum to compensate her for distress and harm to her reputation arising from the Reports. The Defendant has also agreed to bear the Claimant’s reasonable costs.”

Under the terms of the judgement, Palihawadana agreed to publish on his website a full apology.

Sooka’s legal team also established an important precedent by gaining permission for the first time from the UK High Court to make a Statement in Open Court in a Data Protection case.

“This brings to an end a long-running debate among practitioners about whether Statements in Open Court are available for other causes of action than libel, slander, malicious falsehood and misuse of private or confidential information,” said Sooka’s counsel, Guy Vassall-Adams KC.

While the precedent will have implications for future data protection cases, the legal team hope the wider value will be to support human rights activists against repeated onslaughts.

“We are delighted to have upheld the reputation of our client against these sort of slanders that so many human rights activists around the world have thrown at them, attempting to silence them and prevent them from speaking the truth. It’s important that this court process acts as a deterrent and that’s why the financial penalties help drive home the point,” said Daniel Machover of Hickman and Rose, the solicitors for Sooka.

Yasmin Sooka says she is in discussions about establishing a scholarship fund for the children of political prisoners and families of the disappeared in Sri Lanka with her compensation money when she receives it.

The United Kingdom on Monday (12) issued an updated travel advisory to its citizens visiting Sri Lanka, announcing that travellers are no longer required to produce COVID-19 vaccination certificates on arrival in Sri Lanka.

“In December 2022, the Government of Sri Lanka announced that travellers are no longer required to produce COVID-19 vaccination certificates on arrival in Sri Lanka. Pre-departure COVID-19 tests are also no longer required before arrival,” the UK said in its latest advisory.

In a previous advisory, the UK said that Sri Lanka is experiencing a severe economic crisis which has led to shortages of basic necessities including medicines, cooking gas, fuel and food.

“The major shortage of fuel (diesel and petrol) is affecting transport, businesses and emergency services. Hospitals and other medical services such as ambulances may be affected by shortages. There are daily power cuts due to electricity rationing. It is more important than ever to get appropriate travel insurance and check it provides sufficient cover.”

“Protests about the economic situation have led to violence against peaceful protesters in recent months, resulting in injuries and loss of life. Tear gas and water cannons have been used to disperse protesters. Protests, demonstrations, roadblocks and violent unrest could occur at short notice. Curfews and emergency regulations may also be imposed. You should be vigilant, avoid large gatherings and keep up to date with developments via this travel advice and local media,” it added.