Author: TELO Admin

The Chinese Embassy had handed over a donation of eight Kidney Dialysis Machines worth Rs. 20 million to hospitals in the Northern and Eastern Provinces.

The Chinese Embassy stated that the donation was done at the request of the Opposition Leader Sajith Premadasa.

Opposition Leader Premadasa had later expressed his gratitude to the Chinese envoys, stating that he is thankful for the Embassy’s support towards SJB’s vision of ensuring critical life saving equipment in all Sri Lankan hospitals.

The Chinese Ambassador, Qi Zhenhong stated that he had observed that the Opposition’s ‘Vipakshayen Husmak’ program was being carried out in a transparent and a efficient manner, and stated that the Chinese Government made a special diplomatic contribution to the program in appreciation of the Opposition’s program.

Accordingly, the Government of China today provided financial assistance of Rs. 11.9 million for the Kidney Dialysis Machine which is essential for testing for kidney related diseases.

The Chinese delegation said that the donation was not entirely a loan.

Subsequently, during the discussions with China regarding the assistance, the Leader of the Opposition Sajith Premadasa repeatedly urged China to make donations instead of loans.

Ambassador Qi Zhenhong today (22 Dec) handed over a donation of 8 lifesaving Kidney Dialysis Machines worth of Rs. 20 million to needy hospitals in the Northern and Eastern Provinces, upon a request by Hon. @sajithpremadasa Leader of the Opposition –@ParliamentLK #CNLK65 🇨🇳🇱🇰 pic.twitter.com/B9czP6XE91

— Chinese Embassy in Sri Lanka (@ChinaEmbSL) December 22, 2021

The Janatha Vimukthi Peramuna (JVP), which recently warned that they would rally the people against the Government’s unjust price hikes including those of fuel, has organised a series of protests today (23) and tomorrow (24) demanding that the Government immediately reduce the unjustly increased fuel prices.

The series of protests have been organised under the theme “Bring down the increased oil prices and provide immediate relief to the people. Reduce the prices of essential commodities immediately”.

Accordingly, protests have been organised in Maharagama, Kiribathgoda, Ratnapura, Kegalle, Sevanagala, Dambulla, Wilgamuwa, Walapane, Anuradhapura New Town, and Ginigathhena today. In addition, a series of protests will be held in Panadura, Galle, Akuressa, Badulla, Kurunegala, Chilaw, Rikillagaskada, Pundaluoya, Kaduruwela, and Trincomalee tomorrow.

The Ceylon Petroleum Corporation (CPC) announced that the fuel prices have been increased with effect from Tuesday (21). Accordingly, the price of a litre of 92 Octane petrol, which was Rs. 157 has been increased to Rs. 177 by Rs. 20, while the price of 95 Octane petrol has been increased by Rs. 23, from Rs. 184 to Rs. 207. The price of auto diesel has been increased by Rs. 10 per litre, bringing the new price from Rs. 111 to Rs. 121. The price of a litre of super diesel which was Rs. 144 has been increased by Rs. 15, making its new price Rs. 159. The price of kerosene has also been increased by Rs. 10, from Rs. 77 per litre to Rs. 87. In addition, the Lanka Indian Oil Corporation (Lanka IOC) has also increased fuel prices.

Against this backdrop, during a media briefing on Tuesday, JVP National Organiser Bimal Rathnayake said that the people should not accept the unjust increase in fuel prices by the Government. He also said that the JVP would take action to rally the public against the Government’s unjust price hikes seen in the recent past.

“Since the midnight of 20 December, the Government has raised fuel prices to an unprecedented level, thereby doubling the pressure on the public. Although there has been a slight increase in fuel prices in the world market in recent months, the imposition of travel restrictions in European countries due to the Omicron Covid-19 variant, has led to a slight decline in oil prices. There is an assumption that a barrel of crude oil has fallen below the $ 60 limit. Accordingly, the Government has increased the fuel prices at a time when the price of oil in the world market is declining,” he said.

Sri Lanka plans to settle a debt for past oil imports from Iran by paying it off in tea, a government minister said.

Ramesh Pathirana said his country hoped to send $5m (£3.8m) worth of tea to Iran each month to clear a $251m debt.

Sri Lanka is experiencing a severe debt and foreign exchange crisis, which has been made worse by the loss of tourist income during the coronavirus pandemic.

A member of the country’s tea board said it was the first time tea had been bartered to settle foreign debt.

Mr Pathirana said the method of payment would not violate United Nations or American sanctions, because tea was categorised as a food item on humanitarian grounds, and no black-listed Iranian banks would be involved.

“We hope to send $5m worth of tea each month to repay Iran for oil purchases pending since the last four years,” he told Reuters

The Plantation Ministry said: “The recommended scheme will save Sri Lanka much-needed foreign currency since the settlement to Iran would be made in Sri Lankan rupees through the sale of Ceylon Tea.”

But a spokesperson for the Planters’ Association of Ceylon, which includes all the major plantation companies in Sri Lanka, said this mode of transaction was a “[sticking] plaster solution by the government”.

“It doesn’t necessarily benefit exporters as we will be paid in rupees, circumventing the free market, and provides no real value to us,” added Roshan Rajadurai.

Sri Lanka is reported to have to meet about $4.5bn in debt repayments next year, starting with a $500m international sovereign bond repayment in January.

However, the country’s foreign reserves dwindled to $1.6bn at the end of November, latest data from the central bank showed.

Central Bank Governor Ajith Nivard Cabraal said earlier this month that Sri Lanka is confident of being able to “seamlessly” repay all sovereign debt that comes due in 2022.

Sri Lanka produces about 340m kg of tea annually. Last year it exported 265.5 million kg, with earnings of $1.24bn in 2020.

Almost 5% of the population of Sri Lanka work in the billion-dollar industry, picking leaves on the mountain slopes and processing the tea in plantation factories.

Headstrong and misguided leadership have brought Sri Lanka to a sorry pass. The Fitch Rating agency has downgraded Sri Lanka to a rank of CC. This reflects its view of an increased probability of a default event in coming months in light of Sri Lanka’s worsening external liquidity position and drop in foreign exchange reserves.

The government has responded by finding fault with the ratings agency for being biased and not looking at the entirety of the country’s financial situation and likely sources of foreign exchange inflows. The governor of the Central Bank had stated that the fast-depleting foreign reserves will receive a boost before the end of the year.

On the other hand, the grim reality is that with every passing month the country’s foreign reserves have been shrinking and positive predictions to the contrary have not materialised. A similar situation obtained for over six months in the case of the ban on chemical fertiliser. The government stubbornly stuck to the position of a total ban on the import of chemical fertiliser for use in agriculture and its replacement by organic fertiliser.

The fact that there is no country in the world that relies solely on organic fertiliser for farming was disregarded. Instead, the government-held to the ideal that organic agriculture was the best practice, from both a health perspective and in terms of protecting the environment. There was no instant solution. In practical terms, this meant a drastic reduction in the country’s agricultural production as hybrid crops that respond best to chemical fertilisers did not receive adequate quantities of nutrients.

A similar phenomenon can be seen in the bid to keep the price of dollars low by artificially restricting demand for them. A basic feature of economic theory is that if the price of a commodity is kept artificially low by means of price control, its supply will shrink.

On the other hand, if the price of a commodity is allowed to rise, based on the demand for it, the supply of that commodity in the market will also increase. This is an economic reality that applies in the case of dollars as much as it will apply in the cases of any other commodity traded in the market. Due to the price control imposed on dollars, there is a shortage of dollars in the market.

We are nearing the parameters of a failed state, when the state is unable to restrain companies from selling gas cylinders that explode, killing and maiming dozens, and ships are berthed in the harbour awaiting payment to be made in dollars for the goods they have transported. Today the prices of fruits, vegetables and grain are at an all-time high due to short supply. Adding to the woes of citizens is the shortage of essential commodities such as milk powder and kerosene oil. There is a need for rational thinking at the present time.

The government demonstrated rational thinking when it ended the ban on chemical fertilisers in the face of farmer protests and expert agricultural advice emanating from Sri Lanka’s academia and practitioners. It reaffirmed that its longer-term policy was one of pursuing organic fertiliser but agreed that the ending of the ban on chemical fertilisers was the rational thing to do in the prevailing circumstances.

In a similar manner, the government needs to deal with the foreign exchange crisis. Instead of denying the fact that a serious problem exists and hoping that hoped for future flows of foreign exchange would ease the situation, the government needs to take concrete steps to rectify the situation immediately. In a rationally argued position paper, the Pathfinder Foundation has recommended that the government goes to the IMF to secure financial
assistance.

So far, the government has refused to go to the IMF on the grounds that it imposes its own conditions on the loans it grants which are costly to the people of the country. According to this analysis, an IMF programme could include strengthening the government’s revenue base (widening the tax base and improving tax administration); improving the primary balance in the budget (revenue-expenditure-interest payments)); proactive, data-driven and non-interventionist monetary policy and a flexible and realistic exchange rate policy to assist in building up external reserves.

The analysis also makes the point that other countries might be more willing to support Sri Lanka if they were confident that the country would come out of the economic doldrums. It says: “The package of assistance offered by India is an encouraging start and needs to be finalised as soon as possible. It has to be supplemented by financing from other friendly countries, like Japan. There is scope for India and Japan to work together to support Sri Lanka at this critical juncture. Their willingness to step forward is likely to be greater if it is known that Sri Lanka has taken a decision to approach the IMF.

While our development partners will be wary of having to make an open-ended commitment, they are likely to find bridging finance more palatable.” The appointment of Foreign Minister Prof G L Peiris as acting Finance Minister increases the possibility of rationality in the decision-making process. As Foreign Minister, he has been tasked with winning more international support for the government. This would include ensuring that foreign policy and human rights pressures on the government do not lead to an adverse outcome.

The international community, especially Western countries, are looking for signs that the government will pursue some reforms. Among the initiatives that Minister Peiris has been leading is the amendment of the Prevention of Terrorism Act. In recent weeks, as chairman of the ministerial subcommittee on amending the PTA, he has invited both sections of civil society and the Bar Association for discussions where the proposed amendments have been presented and responses to them obtained. Several PTA detainees, whose cases had received international visibility, have been released on bail.

There are other indications of rationality emerging in choices being made in different areas. One would be the reinstatement of Dr Shihabdeen Mohamed Shafi and pay his salary arrears after it was suspended in 2019. The surgeon was falsely accused of sterilising thousands of Sinhalese women without their knowledge in the operating theatre during a time of nationalist frenzy that had been whipped up for political reasons. This is not the time for nationalist politics.

The new appointments made to independent institutions that are expected to play a watchdog role are also likely to send a message that the government is getting serious about charting a new path. If the current changes are shown to be sustainable, the government will be able to generate greater confidence both locally and in the international community which is crucial for economic development.

While appreciating the moves by the graduates of the Colombo University at the recent graduation ceremony where they refused to receive the degree award certificates from the Chancellor Ven. Muruttettuwe Ananda Thera, former President Chandrika Bandaranaike Kumaratunge said today that it was the day when the democracy was upheld in the country.

Posting a video on social media, she said that the graduates had demonstrated their protest in a decent and polite manner without resorting to protest or violent manner.

“How those graduates acted that day was very polite. They demonstrated their protest politely and silently. Various people have expressed different opinions on the incident. I see this as the day when democracy was upheld in the country. They acted democratically to uphold the democratic values of all the people without taking weapons or using foul language,” she said.

Ms. Kumaratunge said people in a democratic country have a right to express their opinion if the government or the rulers were taking wrong decisions concerning the people without a proper social discussion.

“I appreciate their move. What they did was exactly right irrespective of what others say,” she said.

Sri Lanka has decided to sign the Treaty on the Prohibition of Nuclear Weapons, the first multilateral legally-binding instrument for nuclear disarmament.

Foreign Minister, Professor G.L Peiris proposed to the Cabinet that Sri Lanka sign the accord and initiate the applicable national legal formulation review with the objective of finalizing the ratification process as soon as possible.

The agreement on banning nuclear weapons globally was signed on the 07th July 2017 at the United Nations with the support of 122 countries.

The accord was effective since 26th January 2021. While 86 countries have ratified the accord 57 countries have disengaged. Sri Lanka had voted for the accord and supported the endeavour.

The treaty prohibits a full range of nuclear-weapon-related activities, such as undertaking to develop, test, produce, manufacture, acquire, possess or stockpile nuclear weapons or other nuclear explosive devices, as well as the use or threat of use of these weapons.

The Government says signing the accord is in accordance and stands with Sri Lanka’s nuclear disarmament policy.