Category: Breaking News

The economic crisis is bearing on people with as many as 60.5 percent of households finding their monthly average incomes reduced while 91.0 percent of households experiencing an increase in their monthly expenditure levels, according to a survey by the Department of Census and Statistics.

The Department traced back the origin of the crisis to the 2019 Easter Sunday attack, said it was exacerbated by the pandemic.

The survey says households not only adapted their food consumption habits but also employed diverse livelihood-based coping strategies to address the challenges of inadequate food access and availability. Some of these strategies may have adverse effects on their income generation and ability to respond to future shocks. The survey revealed that 21.9 percent of the households nationwide had implemented crisis strategy to address the scarcity of food or financial constraints. This was followed by stress strategies, and it is about 19.2 percent. Notably, in the rural sector, this crisis strategy used proportion rose to 22.8%percent of households.

During the survey, numerous households cited various reasons that led to the drop in their average monthly income. The most frequently reported cause, accounting for 48.7 percent of respondents, was less working hours signifying a significant impact on household income. People have found salaries, allowances and commissions reduced as the least reported reason among households for the decline in income levels.

As a result of the crisis, households have employed various coping strategies to mitigate its impact such as turning to a secondary job or an additional source of income.”

“Conversely, the least reported coping strategy among these households was loans, mortgages, or seeking food or money from others.” It’s noteworthy that a substantial majority, comprising 73.6 percent of households facing reduced income, did not adopt any specific coping strategy during this period,” the Department says.

The survey which dealt with the impact on the people’s health says individuals facing unemployment or reduced incomes often encounter challenges in accessing necessary medical treatments and preventive care, leading to delays or unavoidable gaps in healthcare.

Financial barriers may exacerbate pre-existing health conditions by limiting access to essential medications and treatments. This survey collected information aims to provide a comprehensive understanding of how people’s health is affected during economic crisis, supporting policymakers in formulating strategies to address healthcare challenges arising from financial hardships.

The survey findings reported that approximately 29 percent of individuals have experienced some form of illness. Among these individuals, seven percent of patients have changed their treatment procedures as a direct result of the ongoing economic crisis.

Among the patients who altered their treatment procedures due to the economic crisis, 35.1 percent have changed their treatment location and 33.9 percent resorted to using drugs only when their illness reached a critical stage.

The International Debt Report 2023 of the World Bank has put Sri Lanka’s external debt in 2022 at US$ 58.7 billion. Bondholders and private creditors accounted for 72% of the external debt.

The break-up is as follows: Bondholders (32%); Other Commercial Creditors (8%); Private Creditors (40%); Multilateral Creditors (29%); Bilateral Creditors (31%); World Bank and International Development Agency (8%); Asian Development Bank (15%); China (16%); Japan (7%); India (5%); Other Bilateral Creditors (3%).

History of External Debt Stocks

I Total External Debt Stocks:

2010-US$ 21.6 billion; 2018-US$ 52.9 billion; 2019-US$ 56.1 billion; 2020-US$ 56.8 billion; 2021-US$ 58.7 billion; 2022-US$ 58.7 billion.

II Long-Term External Debt Stocks:

2010-US$ 17.3 billion; 2018-US$ 43.1 billion; 2019-US$ 45.8 billion; 2020-US$ 46.5 billion; 2021-US$ 47.5 billion; 2022-US$ 47.7 billion.

III Short-Term External Debt Stocks:

2010-US$ 2.4 billion; 2018-US$ 8.1 billion; 2019-US$ 8.4 billion; 2020-US$ 8.3 billion; 2022-US$ 8.5 billion.

IV Principal Repayment Long Term:

2010-US$ 727 million; 2018-US$ 5.5 billion; 2019-US$ 4.4 billion; 2020-US$ 3.3 billion; 2021-US$ 3.0 billion; 2022-US$ 2.0 billion.

V Interest Payments Long Term:

2010-US$ 616 million; 2018-US$ 1.5 billion; 2019-US$ 1.5 billion; 2020-US$ 1.5 billion; 2021-US$ 1.5 billion; 2022-US$ 780 million.

VI Use of IMF Credit and SDR Allocations:

2010-US% 1.9 billion; 2018-US$ 1.5 billion; 2019-US$ 1.8 billion; 2020-1.9 billion; 2021-US$ 2.5 billion; 2022-US$ 2.3 billion.

Glossary

External Debt Stocks comprise public and publicly guaranteed long-term external debt, private nonguaranteed long-term external debt, use of International Monetary Fund credit and special drawing rights allocation, and short-term external debt.

Gross National Income is the sum of value added by all resident producers, plus any prod[1]uct taxes (less subsidies) not included in the valuation of output, plus net receipts of primary income compensation of employees and property income from abroad. Yearly average exchange rates are used to convert gross national income from local currency to US dollars.

Long-Term External Debt is debt that has an original or extended maturity of more than one year and that is owed to non-residents by residents of an economy and is repayable in currency, goods, or services.

Short-Term External Debt has an original maturity of one year or less. Available data permit no distinctions among public, publicly guaranteed, and private nonguaranteed short-term external debt

SDR Allocations are reserve-related liabilities, distributed to member countries in proportion to their quota shares at the International Monetary Fund. The SDR (Special Drawing Rights) allocations are included in the gross external debt position and classified as long-term, special drawing right.

The outgoing High Commissioner of New Zealand to Sri Lanka, Michael Appleton, on Wednesday morning (27 Dec.), met with former Tamil National Alliance (TNA) leader R. Sampanthan.

Taking to ‘X’ (formerly Twitter), Appleton revealed that several matters of concern were discussed at the meeting, including political developments in the North and East.

Meanwhile, the duo also discussed the approaches adopted by both New Zealand and Sri Lanka toward social cohesion and constitutional arrangements, and the scope for enhanced cooperation between the two countries.

Appleton’s visit comes amidst a series of such meetings with several parties including other Ministers and the Governor of the Central Bank of Sri Lanka (CBSL), two weeks ahead of the conclusion of his posting in Sri Lanka.

Appleton is scheduled to conclude his tenure as the High Commissioner of New Zealand to Sri Lanka in the first week of January. Following this, he and his family will return to New Zealand, where he is expected to assume the position of Senior Foreign Affairs Adviser to New Zealand’s Minister of Foreign Affairs, Winston Peters.

In a significant announcement at the centenary celebration of Badulla Guruthalawa Muslim Central College this morning (27 Dec.), President Ranil Wickremesinghe highlighted two critical challenges facing the nation, building a stable economy and addressing the ethnic problem.

The President extended an open invitation to all political parties again, urging them to join hands in achieving these goals, irrespective of party affiliations.

President Wickremesinghe emphasized his commitment to safeguarding the rights of all citizens and expressed a desire to swiftly resolve lingering issues related to reconciliation. He revealed plans to make a special statement on these matters in March.

During his visit to Guruthalawa Muslim Central College, the sole Muslim National School located in the Uva Province, the President received a warm welcome from the students. As part of the centenary celebrations, he inaugurated the college’s new website.

The Principal, A. Sammun, presented the commemorative issue to the President, marking the centenary of the College.

President Wickremesinghe took the opportunity to award medals to students who excelled in the GCE Ordinary Level and GCE Advanced Level exams. Congratulating the college on its centenary, he left a note in the commemorative book and posed for a group photo with the teaching staff.

The President further commented:

“To secure a prosperous future for the children of our nation, it is imperative that the government’s initiatives are robustly advanced.

We have garnered support from nations around the world to ensure the success of these programs, which, if implemented effectively, will undoubtedly contribute to the establishment of a stable economy and the resolution of various challenges facing our country.

In pursuit of these goals, I earnestly appealed to all, irrespective of political affiliations, to rally behind us in our efforts to fortify the nation’s economy. Regrettably, the response fell short of our expectations.

There are two paramount issues that demand immediate attention in our country. Regardless of political allegiance, I once again implore all to collaborate in addressing these challenges.

Firstly, the imperative is to build a stable and resilient economy. Secondly, we must seek solutions to the ethnic issues plaguing the nation. A thriving country necessitates both a robust economy and a unified community, with a confirmed Sri Lankan identity.

All individuals, irrespective of their ethnicity be it Sinhalese, Tamil or Muslim, are Sri Lankans. While the Sinhalese constitute the majority, our commitment is to progress while safeguarding the Sinhala identity, religion, and culture.

It is crucial to avoid any form of discrimination against other races or religions, ensuring the protection of the rights of all citizens. The path to a prosperous nation lies in collective progress as Sri Lankans.

We have addressed various challenges faced by the Sinhalese people and are actively working on solutions for other issues. Additionally, the government is addressing concerns of other segments of the population.

Despite the conclusion of the war, unresolved matters persist before the Human Rights Commission in Geneva and we have taken necessary steps to address these issues.

Efforts are underway to rectify the displacement of some individuals by allowing settlement based on the 1985 map. Land rights are being granted to those affected in the northern and eastern provinces, comprising Tamil, Muslim, and Sinhalese communities.

The government is also focusing on addressing missing persons, providing compensation and resolving outstanding issues.

Furthermore, we are committed to developing the economies of the northern and eastern provinces. A robust economy is essential to prevent the recurrence of underlying issues even after their resolution.

Special attention is being given to the concerns of Hill Country Tamil people, with dedicated programs focusing on their rights, including land and education development.

Additionally, efforts are ongoing to address the issues faced by the Muslim community, including a thorough review of burial practices and the removal of Post – Easter Sunday attack restrictions.

We are actively working on these matters, including the preparation of a draft law to regulate Madrasa schools. Expression of opinions, not related to terrorism or attempts to incite revolution, should be protected under the law and steps are being taken to ensure this.

Reports are being sought from relevant ministries and officials and I expect to make a comprehensive statement by February or March. Prior to that, consultations with religious and political leaders will take place and I trust that we will receive collective support in addressing these challenges.”

State Minister of Higher Education Aravinda Kumar;

“The President noted that arrangements are underway to provide an auditorium for this school, and we extend our gratitude to him for this initiative.

Throughout its 100 years of history, this school has achieved numerous milestones in education. Despite being located in a province facing considerable challenges, a substantial number of students from this institution have seized the opportunity for higher education.

It is crucial to uphold this standard of quality. I extend my heartfelt best wishes for the school’s future endeavors and the continued educational success of its students”.

Member of Parliament and Senior Advisor to the President Mr. Vadivel Suresh;

“We take great pride in the visit of President Ranil Wickremesinghe to Guruthalawa Muslim Central College. His dedication to educational initiatives extends beyond this locality, encompassing the entire country.

Guruthalawa Muslim Central College stands as the sole Muslim national school in the area. We commend the notable talents displayed by the students of this Central College and are committed to addressing any existing deficiencies within the school. Our gratitude extends to the principal and the entire teaching staff for their efforts in imparting quality education to students, both at the GCE Ordinary level and the Advanced level.”

This commemorative event witnessed the presence of notable dignitaries including Muslim religious leaders, State Minister of Education Aravinda Kumar, Governor of the Uva Province A. J. M. Muzammil, Uva Provincial Director of Education Rohitha Amaradasa, other provincial education officials, teachers, parents, students and well wishes.

Sri Lanka’s relationship with Israel has been unique. In the past 75 years as an independent nation, Sri Lanka has recognized, derecognized and again recognised Israel, guided by ever-changing ideological, geopolitical and domestic factors.

But in contrast to Sri Lanka, Israel has been consistent: It has always wanted good relations with Sri Lanka and has helped Sri Lanka whenever its help was sought, irrespective of the official status of the relationship.

Interestingly, war has been one of the determining factors in the relationship. War has brought Sri Lanka and Israel closer, despite the existence of ideological and political factors militating against it.

Although part of the Western alliance, Israel defied the Western nations’ informal ban on arms sales to Sri Lanka during its war with the Tamil militants from the 1980s to 2009 and supplied it with military aircraft and vessels. Without Israeli weaponry the Sri Lankan armed forces could not have defeated the formidable Liberation Tigers of Tamil Eelam (LTTE).

And now, because of the Gaza war, Israel has sought and got Sri Lankan agricultural and construction workers to fill positions vacated by the Palestinian Arabs and other foreign nationalities. While many Arabs fled, Israel itself deported 82,000 Palestinian workers doubting their loyalty.

The Sunday Observer reported that Israel turned to Sri Lanka (and also India) to urgently fill around 30,000 vacancies in its construction industry. The Israel Builders’ Association (IBA) said that its representatives would be in India and Sri Lanka within days to screen applicants for various roles such as plastering, ceramic tiling, building work and iron bending. The US$ 71 billion Israeli building industry is currently operating at just 15% of its pre-war capacity. The Israeli construction industry needs an estimated 100,000 workers to return to its pre-war capacity.

Sri Lankan workers will be going to work in the agricultural sector also. In November, Sri Lanka had agreed to immediately send 10,000 farm workers. Some 100 of them have already arrived in Israel. Currently, about 8,000 Sri Lankans are working in Israel, mostly as caregivers. Two Sri Lankan caregivers perished in the brutal Hamas attacks, the Times of Israel reported.

All this is happening even when Israel has no embassy in Colombo. While Sri Lanka has a regular embassy in Tel Aviv, Israel operates from its embassy in New Delhi.

Just as Israel desperately needs Sri Lankan and other foreign workers, Sri Lanka badly needs foreign remittances as the foreign exchange draught continues despite the recent inflow of US$ 4 billion. Sri Lanka is still burdened with a total foreign debt of US$ 52 billion on which it defaulted in April 2022.

Because of the pandemic and the subsequent economic crisis, local unemployment has increased. Youth unemployment is particularly worrying as it stands at 28%. Lankan youth from the poorer classes as well-educated professionals are leaving the country in droves. The government itself has encouraged its employees to go out of the country for employment by giving them leave of absence without pay.

Today, Sri Lanka-Israel relations are cordial, despite the Gaza crisis in which Sri Lanka has sided with the Global South and has voted with the latter in the United Nations.

But relationship has seen great ups and downs in the past. According to Sri Lankan scholar in international affairs, Dr. Punsara Amarasinghe, the Jews’ relationship with Sri Lanka has a long history that dates back to the biblical epoch. Galle is said to be the city of Tarshish, to which King Solomon sent merchant ships.

Amarasinghe further says that the Jewish presence in the island nation thrived under British rule with many European Jews holding prominent positions in the colonial administration in the island that was known as Ceylon till 1972.

After its independence in 1948, Ceylon established relations with Israel unlike most of the neighbours in South Asia, which were markedly pro-Palestine and anti-Israel. Under Sri Lanka’s first Prime Minister D. S. Senanayake, Ceylon began buying weapons from Israel, including the naval vessel HMCyS Gajabahu. On the economic front, Israel assisted in the digging of tube wells in the dry zone of northern Sri Lanka.

But when the leftist S. W. R. D. Bandaranaike became Prime Minister and was followed by the even more leftist Sirimavo Bandaranaike, Ceylon (which became Sri Lanka in May 1972) became hostile to Israel, preferring to establish ties with the Palestine Liberation Organization (PLO) instead. Sirimavo Bandaranaike closed down the Israeli embassy in Colombo.

But Colombo’s attitude to the pro-Western Jewish State changed radically with the coming into power of the pro-West J.R.Jayewardene in 1976. His Minister of Internal Security, Lalith Athulathmudali (who had been a law lecturer at Hebrew University in Jerusalem), and Ravi Jayewardene, founder of the Special Task Force, believed that Sri Lanka should turn to Israel to combat the Sri Lankan Tamil militants. President J.R.Jayewardene allowed an Israeli mission (not an embassy though) opened in Colombo in 1984.

Minister Gamini Dissanayake got Israeli advice to accelerate the Mahaweli development project to settle Sinhalese farmers in the island’s dry zones.

Punsara Amarasinghe quotes Victor Ostrovky and Claire Hoy the authors of By Way of Deception: A Devastating Insider’s Portrait of the Mossad to show how the Sri Lankan government was aided by the Mossad in the early 1980s.

“The book reveals that it was a Mossad operative, Amy Yar, who advised Jayewardene’s government to accelerate the country’s ambitious Mahaweli development project as a quick remedy for the energy crisis and, more importantly, as the best strategy to settle Sinhalese farmers in the island’s dry zones.”

“Two Israeli academics provided a broad analysis of the project that crucially helped the Sri Lankan government convince the World Bank to invest $250 million. A large portion of the Mahaweli contract was given to Israeli construction company Solel Bonah and Israeli architect Ulrik Plesner, who planned six new towns for the Mahaweli settlements.” Amarasinghe says.

However, the revived Israeli presence in Sri Lanka in the early 1980s and the opening of the Israeli embassy in Colombo in 1984 alarmed the country’s Muslim ethnic minority which was also politically influential. In 1987 India too wanted the Israeli interest section to be closed because at that time, New Delhi was both anti-Israel and anti-US.

In 1992, Sri Lanka-Israel ties were suspended by President R. Premadasa, who is believed to have told the American Ambassador that Sri Lanka had no Jews but it had a politically significant Muslim minority which he could not alienate.

Come 2000, ties with Israel were restored, though without an embassy in Colombo. Israel became a key source of weapons and training for the Sri Lanka Armed Forces during the intensified war against the LTTE. Israel sold IAI Kfir fighter jets, Super Dvora Mk III-class patrol boats, Saar 4 class missile boats and Gabriel missiles, according to Amarasinghe.

In 2017, the governments of Israel and Sri Lanka signed an agreement to bring foreign nursing aides to Israel. Sri Lankan nurses have acquitted themselves creditably in Israel and so more are likely to be recruited. In February 2020, Israel offered Sri Lanka technology in agriculture, education, transportation and IT sectors, which was openly welcomed by Sri Lankan President Gotabaya Rajapaksa.

In September 2021, the Sri Lankan government signed an agreement with Israel to upgrade Israeli-made Kfir fighter jets of the Sri Lanka Air Force.

And importantly, opposition from the Sri Lankan Muslim community to any dealings with Israel had disappeared upon the advent of the Rajapaksas in Sri Lankan politics in 2005. Relations with Israel are clearly improving even though Sri Lanka’s Foreign Minister Ali Sabry is a Muslim. If Israel does become a major employer of Sri Lankans, (the number currently envisaged is 100,000), the establishment of an Israeli embassy in Colombo cannot be ruled out.