G7 Backs Debt Relief Efforts for Sri Lanka – Draft Communique

Written by reuters

The Group of Seven economic powers support efforts to provide debt relief for Sri Lanka, G7 finance chiefs said on Thursday in a draft communique from a meeting in Germany after the country defaulted on its sovereign debt.

The once-booming island country has suspended debt payments as it grapples with its worst economic crisis since it won independence in 1948, facing shortages of essential goods that have triggered social unrest.

G7 countries said in their statement they were committed to finding long-term solutions for the Indian Ocean nation and urged it to “negotiate constructively” with the International Monetary Fund on a potential loan programme.

“The G7 stands ready to support the Paris Club’s efforts, in line with its principles, to address the need for a debt treatment for Sri Lanka,” they said, referring to the group of mostly rich creditor nations.

The draft statement, which is to be finalised before the end the G7 finance ministers’ meeting on Friday, also called on other big creditor nations not in the Paris Club to coordinate with the group and urged them to provide debt relief on comparable terms.

G7 finance chiefs also singled out China, which has become a major creditor to low-income countries, to actively contribute to debt relief for such countries.

Chad, Ethiopia and Zambia have so far sought debt relief under a new G20 common framework, but progress has so far been slow with some officials accusing China of dragging its feet.

Sri Lanka slips into default, central bank head agrees to stay on – Aljazeera

Sri Lanka’s central bank governor says he will stay in his position given an improvement in political stability in the midst of an economic crisis, and he would not step down as he had earlier warned.

Governor P Nandalal Weerasinghe also said on Thursday that the Central Bank of Sri Lanka had nearly finalised plans to restructure the country’s debt and proposals would be submitted to the cabinet soon, possibly by Friday.

The development comes as Sri Lanka fell into default, for the first time in its history, as the government struggles to halt its economic meltdown.

The nation of 22 million people is battling a devastating economic crisis as tax cuts by President Gotabaya Rajapaksa drained government coffers, COVID-19 hit the important tourism industry and rising oil prices emptied foreign exchange reserves.

On May 11 Weerasinghe had told reporters he would resign in two weeks in the absence of political stability as any steps the bank took to address the economic crisis would not be successful amid political turmoil.

Speaking to reporters after his bank announced it was holding its key lending and borrowing rates steady on Thursday, Weerasinghe said there had been positive political developments.

“Earlier, there was no prime minister and no cabinet. Comparatively, there has been significant improvement,” he said.

“We now have fresh appointments. We have also seen that our measures are working well. I would like to see a finance minister appointed. Now we are seeing improvement, so I think on that basis I intend to continue,” he said.

Opposition parliamentarian Ranil Wickremesinghe was named prime minister last week and he has made four cabinet appointments. However, he has yet to name a finance minister.

‘We cannot repay’
As a 30-day so-called grace period to make some already-overdue bond interest payments expired on Wednesday, Sri Lanka fell into default, the government acknowledged.

“We are in preemptive default. There can be technical definitions … From their side, they can consider it a default. Our position is very clear, until there is a debt restructure, we cannot repay,” Weerasinghe told reporters.

The coupon payments, originally due April 18, were worth $78m combined on notes maturing 2023 and 2028.

The central bank held rates steady following a massive 7 percentage point increase at its previous meeting and reiterated the need for more fiscal measures and political stability in the crisis-hit economy.

Weerasinghe said proposals on debt were nearly ready and could be sent to the Cabinet by Friday for approval.

He also said inflation could rise to 40 percent in the next couple of months but it was being driven largely by supply-side pressures and measures by the bank and government were already reining in demand-side inflation.

Inflation hit 29.8 percent in April with food prices expanding by 46.6 percent year on year.

US investment bank JPMorgan backed Sri Lanka’s crisis-hit government bonds on Wednesday, saying recent political changes should gradually improve its strains and help its talks with the International Monetary Fund.

Sri Lanka still rated ‘Ca’ by Moody’s after default, signaling recovery rate of 35-65-pct

Sri Lanka is still rated ‘Ca/stable’ after defaulting on a sovereign bond coupon, Moody’s Investors Service, a rating agency said after a 30 day grace period passed on May 18.

The Ca rating is typically associated with a recovery rate of 35 to 65 percent.

“For Sri Lanka, our weak recovery assumptions are driven by thesovereign’s very low foreign exchange reserve adequacy and the government’s very weak debt affordability,” the rating agency said.

“For Sri Lanka, our weak recovery assumptions are driven by the sovereign’s very low foreign exchange reserve adequacy and the government’s very weak debt affordability.”

Though gross reserves with a restricted use Chinese swap was 1.8 billion US dollars, Sri Lanka’s central bank is in debt and its net reserves are negative.

“Extensive delays to the implementation of fiscal adjustments and reforms, and the inability to secure a large, credible and secure external financing envelope from multilateral development partners may result in even lower recoveries than implied by the Ca rating,” Moody’s said.

“By contrast, any agreement with multilateral development partners that unlocks significant external financing – or prospects of such agreements – may gradually restore foreign investor confidence and crowd in private sector investment.”

With negative reserves, the central bank has been bankrolled by Asian Clearing Union payments due to the Reserve Bank of India, but monetary stability is yet to be restored with a float still to take hold.

The full Moody’s comment is reproduced below:

Government of Sri Lanka

Sovereign defaults due to missed payments on international bonds after expiry of the grace period

On 18 May, Sri Lanka (Ca stable) defaulted on its international bonds for the first time, after failing to make its coupon payments that were due on 18 April within the 30-day grace period. We expected the default given that the government had announced that it would suspend external debt-service payments as of 5pm local time on 12 April and pursue comprehensive external public debt restructuring in coordination with a potential International Monetary Fund (IMF) programme.

The current Ca rating is typically associated with a recovery rate of 35%-65%.

Our recovery rate assumptions are in line with a relatively wide range of precedents by defaulting sovereigns (see “Sovereigns – Global: Sovereign default and recovery rates, 1983-2021”, 14 April 2022). For Sri Lanka, our weak recovery assumptions are driven by the sovereign’s very low foreign exchange reserve adequacy and the government’s very weak debt affordability.

Sri Lanka’s foreign exchange reserves excluding gold and special drawing rights stood at $1.6 billion at the end of April 2022, sufficient to cover less than a one month of imports and far below the government’s external debt repayments of $4.0-$6.5 billion per year (excluding foreign-currency repayments on Sri Lanka Development Bonds and to Foreign Currency Banking Units) through at least 2025.

Without a large external financing envelope from development partners including the IMF, and in the context of a widening current account deficit because of higher global energy and food prices, Sri Lanka’s external position will remain very precarious even with the suspension of external public debt servicing.

Likewise, the government’s interest payments absorbed more than 70% of revenue in 2021, and we expect Sri Lanka’s debt affordability to remain weakest across rated sovereigns by some distance and for some time in the absence of fiscal reforms, even without the repayment of external debt. This is because revenue amounted to less than 9% of GDP, and domestic debt – which is not in scope of the government’s debt servicing suspension policy accounts for around 70% of interest payments.

We assume that Sri Lanka will eventually reach an agreement with the IMF for a funded programme. However, finalising the programme will likely take several months given the need for staff level agreement on both sides, followed by parliamentary approval in Sri Lanka and approval by the IMF’s executive board. The ongoing political and social unrest in Sri Lanka may slow the pace of negotiations, given the potential for changes in the political leadership or government. Any reluctance to implement politically difficult reforms, such as a significant and durable expansion of the government’s revenue base, which we think may be a possible programme requirement, could also delay an agreement.

Extensive delays to the implementation of fiscal adjustments and reforms, and the inability to secure a large, credible and secure external financing envelope from multilateral development partners may result in even lower recoveries than implied by the Ca rating.

By contrast, any agreement with multilateral development partners that unlocks significant external financing – or prospects of such agreements – may gradually restore foreign investor confidence and crowd in private sector investment. Combined with Sri Lanka’s tourism potential, a broadening of foreign exchange inflows may raise recovery prospects for private sector creditors.

Lankan envoy seeks Indian NSA’s help to get international economic aid

Sri Lanka’s High Commissioner to India Milinda Moragoda met the National Security Advisor of India Ajit Kumar Doval, at the latter’s office in New Delhi on Thrusday.

During the discussion a comprehensive review of the status of the bilateral relationship was carried out and priority areas for future cooperation were deliberated on.

The discussion particularly focused on the present economic crisis in Sri Lanka. The High Commissioner thanked the National Security Advisor for the support that is extended by the Government of India to Sri Lanka to manage the situation.

In this context, High Commissioner Moragoda requested India’s assistance in garnering international support for the economic recovery of Sri Lanka, to which the National Security Advisor responded positively.

Deputy National Security Advisor of India Ambassador Vikram Misri and the Deputy High Commissioner of Sri Lanka in New Delhi Niluka Kadurugamuwa participated in the meeting.

MR should have retired from politics after second term as Prez: Chamal

Former Prime Minister Mahinda Rajapaksa should have retired from politics when his second term as the executive President ended, MP Chamal Rajapaksa told Parliament today. “One should be prepared to give up positions,” the MP said. “Rajapaksas who have been in Sri Lankan politics for 90 years have mortgaged many of their properties. We are still to release some properties,” he added. Refering to the incident on May 9 the MP said the IGP and Defence Secretary had failed to stop those who attacked the protesters at Gallle Face and in front of Temple Trees. These people were provoked suddenly. One wonders what the IGP and Defence Secretary were doing without stopping the attackers. The common notion today is that the IGP has become PIG” he said. Also he alleged that the JVP and Frontline Socialist Party were behind the attacks on government politicians. “JVP activists were clearly present during attacks in Hambantota,” he said.

Debt advisors delayed by lack of Cabinet

Sri Lanka is facing delays in its debt restructuring process, as the debt advisors required for this purpose are yet to be appointed by the Government due to the absence of a full Cabinet of Ministers, according to Former Minister of Finance and incumbent MP M.U.M. Ali Sabry (PC).

During a parliament session yesterday (18), MP Sabry stated that even though the country has finalised its Request For Proposals (RFPs) for the appointment of debt restructuring advisors to aid the ailing economy after a recent default, the final approval lies with the Cabinet of Ministers’ approval to finalise an appointment.

“The RFPs are finalised. A Steering Committee and a Technical Committee are appointed. However, the authority that appoints debt advisors is the Cabinet. But we still do not have a complete Cabinet, and therefore, the Cabinet was not able to hold a meeting,” he stated.

Sabry made this statement in response to a question raised by Samagi Jana Balawegaya MP Dr. Harsha de Silva on the status of the said appointment of debt advisors.

Sabry further stated that the Central Bank Governor and the Treasury Secretary had also noted that their recommendations on the appointment of debt advisors had been finalised, although this, too, needed Cabinet approval.

“Following Cabinet approval, we should be able to appoint the advisors. As soon as that happens, we will be able to negotiate with the bond holders and others,” clarified Sabry.

Dr. de Silva stated that Sri Lanka is facing a “hard” default for the first time in its history, with it being unable to repay its upcoming debt obligations, adding that Sri Lanka’s 30-day grace period for its first defaulted payment ended yesterday.

According to Business Standard, Sri Lanka has already said it is unable to make the coupon payments in this regard, and its 30-day grace period came to an end yesterday.

“When one debt is defaulted, it affects the repayment of the rest of the debt, creating a domino effect. In the coming 12 months, approximately, $ 5.5 billion needs to be paid,” Dr. de Silva stated.

Sabry noted that it is “extremely” difficult to settle the upcoming International Sovereign Bond (ISB) payment of $ 1 billion, as the country is dealing with national issues, both economic and political, that require immediate solutions.

He added that except for multilateral lending facilities, including ISBs, Sri Lanka had decided on 12 April 2022 to not to pay any of its debts.

“The reason behind the decision was that there is no option left. It is because by 18 April, we were due to pay $ 78 million, and another $ 105 million was due to be paid to a Chinese bank. After informing the President, the Opposition party, the Prime Minister, and even international experts, we thought it would be better to announce the default instead of making a hard default,” Sabry added.

Adding to these statements, Prime Minister Ranil Wickremesinghe stated that whether debt payments amounted to $ 1 billion or $ 10 billion, not even $ 1 million is available with the Treasury to furnish these payments.

Tainting its unblemished track record of timely servicing its external financing obligations since Independence, the Sri Lankan Government on 12 April announced that it would be suspending the debt servicing of selected debts, amidst what is considered the worst economic crisis the country has ever endured.

In the defaulting statement, the Ministry of Finance stated that it would opt for an orderly and consensual restructuring of these debt obligations in a manner consistent with an economic adjustment programme supported by the International Monetary Fund (IMF).

At London vigil, UK Tamils seek justice for civil war victims

Tamils who resettled in Britain after fleeing the Sri Lankan civil war held a vigil in London on Wednesday, with some likening the island nation’s current economic crisis to the conditions they faced during the decades-long conflict.

The gathering of Tamils seeking justice for those from their community who were killed in the South Asian country during the war, coincided with Sri Lanka’s worst economic crisis since its independence in 1948 that has forced out its prime minister.

“The current crisis in Colombo reminds me of our struggles during the war. Shortage of fuel, food, medicine – the Tamil-dominated parts of Sri Lanka faced the same issues then as what the entire nation is facing today,” Thanikai, 42, who came to Britain eight years ago, told Reuters.

He is amongst the hundreds of thousands of Tamils who fled the conflict, which ended in May 2009 with the Sri Lankan government defeating the Tamil Tiger rebels.

Human rights groups have since accused the country’s military of killing civilians towards the end of the war, in which the rebels fought for a separate state for the Tamil minority.

“We need justice for all the people who were killed,” Thanikai said.

The United Nations has accused both sides of war crimes and has been given a mandate to collect evidence.

The U.N. has also warned the failure of Sri Lanka to address past violations has significantly heightened the risk of human rights violations being repeated.

“My parents and friends are still in Sri Lanka but I have been too scared to go back,” said Elilarasi Manoharan, who attended the peaceful demonstration in Trafalgar Square to mark the 13th anniversary of the end of the war.

“But now with the economic crisis and the changes we are seeing, maybe if the Sri Lankan system changes it will open up doors for us to be able to visit our loved ones.”

Sri Lanka misses payment to Asian Development Bank: Prime Minister

Sri Lanka has missed a payment to Manila-based Asian Development Bank blocking fresh funds Prime Minister Ranil Wickremesinghe said amid warnings that the currency crisis-hit country could be locked out of multilateral funding in a new blow.

The Asian Development Bank and the World Bank also continued to fund Sri Lanka by re-purposing loans after the country was cut off from capital markets when it was downgraded to CCC.

The ADB and World Bank had just promised around 160 million each to Sri Lanka, Wickremesinghe said but the loan from the Manila-based lender was blocked.

“But because we could not repay three million US dollars last month it is stuck,” Wickremesinghe said.

“We are finding money for that.”

Multilateral Warning

Sri Lanka is facing the prospect of being locked out of financial assistance from multilateral organisations if its repayments are not maintained.

“If we do not pay the IMF (International Monetary Fund) and World Bank, that money will also not come,” ex-Finance Minister Ali Sabry said.

“That is the problem. As the Prime Minister said there are some payments due to ADB. It is a very big problem.”

Sri Lanka has already suspended repayments for international sovereign bonds, commercial bank loans, Exim bank loans and bilateral loans.

But multilateral lenders, as senior creditors are excluded.

“We decided on April 12, that we would not pay ISBs and everyone else except multilateral,” Sabry said.

“We did that because we had no option. By the 18th (of April) we had to pay 78 million dollars and we had to pay 105 million US dollars to a Chinese bank. We announced and defaulted.”

Sri Lanka is now negotiating a loan with the IMF. By April 2022, Sri Lanka had to pay 106.34 million US dollars and 12.4 million US dollars had been paid so far.

“Whether the payment is a billion or 10 billion we do not have a million to pay,” Wickremesinghe said promising to provide statistics to the parliament soon.

Sri Lanka had to repay 7,139 million US dollars in the year from March 2022. In April Sri Lanka had to pay 250 million US dollars made up of 145 million US dollars of principle and 106 million in interest.

Opposition legislator Harsha de Silva said from now on there were about 5.5 billion dollars to be paid in the coming 12 months, and 2.5 billion was suspended, leaving about 3.0 billion to be repaid.

Sri Lanka’s central bank is also deep in debt, owing money to the IMF, Reserve Bank of India and swap counterparties.

Sri Lanka was hit with chronic monetary instability from 2015 to 2022 as money was printed to keep interest rates down under ‘flexible inflation targeting’ and ‘output gap targeting’ triggering three currency crises, excessive foreign borrowings and eventual default.

Sri Lanka is now facing the worst currency crisis created by its 72-year-old soft-pegged central bank.

An attempt to shift to a floating exchange rate has so far not succeeded due to a surrender rule though interest rates have been raised to slow domestic credit and halt or reduce money printing.

With monetary stability yet to be restored authorities are now chasing after 3-4 billion US dollars of ‘bridging finance’.

Money will have to be printed to pay the salaries of state workers, Prime Minister Wickremesinghe said which will likely trigger more forex shortages.

Sri Lanka war anniversary: Tamil victims remembered in Colombo

Scores of people on Wednesday gathered in Mullivaikkal village, in Sri Lanka’s northern Mullaitivu district, to remember the tens of thousands of Tamil civilians who were brutally killed in the final stages of the civil war in May 2009, when the armed forces crushed the LTTE.

Simultaneously, dozens came together expressing solidarity in a rare public remembrance event in capital Colombo, at Galle Face, the ocean front where citizens’ groups are protesting for 40 days now, asking President Gotabaya Rajapaksa to quit over the economic crisis stifling the country.

Although small, the commemoration in Colombo assumed significance, amid sharp divisions in how the Sinhala-majority south and Tamil majority north perceive the civil war’s end.

While the UN has recorded at least 40,000 civilian deaths in the final stages of the war, many in the island’s south are yet to confront hard questions about the Sri Lankan military’s alleged human rights abuses at the time, that too targeting civilians reportedly directed to a ‘No fire zone’. Their popular narrative conflates the LTTE with Tamil civilians, hails soldiers as “heroes” for crushing the outfit, and celebrates the end of the war as the military’s “victory”.

The divide has starkly manifested in the war anniversaries observed since 2009 – with some citizens reliving the enormous pain of losing their loved ones, and others cheering Sri Lankan troops marching down the very same Galle Face promenade in “victory day” parades.

Today, the stretch in the international spotlight is for other reasons. Citizens, mainly Sinhalese, are mounting unprecedented resistance against the Rajapaksas, who they blame for the economic meltdown. The ruling clan, once revered for “defeating” the LTTE in war, is now widely detested. But President Gotabaya Rajapaksa seems determined to stay in office, despite other resignations including that of his brother Mahinda Rajapaksa, who stepped down as Prime Minister on May 9.

In a ‘War heroes’ day message on Wednesday, President Gotabaya said there is “no doubt that various local, foreign groups and individuals are trying to use” the economic and political crisis “as a pretext to influence” national security. “We must defeat it together. Only then will the courageous war hero’s commitment to the country be preserved,” he said in a statement.

Remembering victims
“Let us remember our Tamil brothers and sisters who died, or were forcibly disappeared on this day in Mullivaikkal,” said Fr. Jeewantha Peiris at the remembrance event at Galle Face, where participants drank kanji or porridge in coconut shells, as many Tamils did while living precariously amidst indiscriminate shelling. Participants made speeches in English, Tamil, and Sinhala, as they expressed solidarity with the victims and their families.

“This is a very significant moment, as some Sinhalese have also joined this event in solidarity with Tamil families in Mullivaikkal remembering those killed during the war. Conversations about how we address our troubled past, how we confront questions of justice and accountability are just beginning,” said lawyer Swasthika Arulingam.

Tamil lawmaker from Batticaloa Rasamanickam Shanakiyan termed the commemorative event in Colombo “a great leap” in reconciliation efforts.

“The memorial held at #GGG [Gota go gama or village] to commemorate the lives lost & families affected in #Mullivaikkal 13 yrs ago today is a great leap in the reconciliation efforts as it acknowledges the pain Tamils in Sri Lanka went through during the war.

We are hopeful about an equal and just future,” he said in a tweet on Wednesday.

Meanwhile, Tamil families commemorated their loved ones in Mullivaikkal, offering flowers and lighting lamps in their memory. In the 13 years since the war ended, Tamils have frequently raised concerns over heightened surveillance and intimidation around memorial events. Last year, a plaque erected in Mullaitivu was found vandalised, while authorities bulldozed a memorial on the University of Jaffna campus.

Mullaivayakal and the Meaning of Justice, 12 Bitter Years On

The first five months of 2009 brought immense and unprecedented pain to the people of northern Sri Lanka, and to their many Tamil relatives outside the country who looked on and received daily reports of death and injury and misery. Their efforts, and the efforts of concerned people in the rest of Sri Lanka and the world to bring a humanitarian pause to the war to limit the loss of life, ultimately failed. They failed due to the determination of the Sri Lankan government to destroy the Liberation Tigers of Tamil Eelam and their civilian support base once and for all, regardless of the human cost. And they failed thanks to the support the government’s military strategy received from key regional and global powers with only tentative resistance towards the end.

I remember well the feeling of helplessness and horror I felt in Colombo those months, as the warnings of a humanitarian catastrophe made by my organisation and others, including parts of the UN – warnings made possible by reporting by Tamil health and humanitarian workers trapped in the fighting – fell largely on deaf ears.

The numbers of those killed in the four months leading up to the official end of the war on 18 May 2009, and in the days that immediately followed, still remain disputed. Estimates range from government’s unlikely claims of fewer than 10,000, to the UN’s two estimates of as many as 40,000, or even 70,000, to those that point to as many as 147,000 people unaccounted for based on figures from district-level government officials at the time. With the Sri Lankan government allowing no independent investigation to take place in Sri Lanka, all estimates have remained disputed and highly politicised. What is more clear are the crimes committed in those final months: by the military, which indiscriminately shelled and bombed areas densely packed with civilians, attacked hospitals and makeshift medical centres, and executed surrendering LTTE fighters, political wing leaders and their families; and by the LTTE, who forcibly recruited civilians to fill their depleted ranks and who shot many civilians who attempted to flee from the scenes of battle into government controlled territory.

The circles of trauma and pain extend much wider, throughout the communities of the north and east and through the global Tamil diaspora and those who work with them or who have reported on or covered the events and their aftermath. While the stories and evidence of terrible suffering and crimes of war are readily available outside Sri Lanka, the voices and experiences of victims and survivors are still well-hidden outside the north and east and in the Sinhala language media in Sri Lanka. The injustice of the crimes themselves have been compounded by the security forces, under successive governments, actively obstructing attempts by families to find the truth of what happened to their loved ones, tens of thousands of whom remain disappeared to this day, and were often last seen in the custody of the military or police.

Nonetheless, in and out of Sri Lanka, the suffering of those final months of the war, and the crimes committed, have been too great to ignore. If there is to be any chance of repairing the damage done to Tamil communities in Sri Lanka by the trauma and injustice of the war, and if the promise of democracy and the rule of law in Sri Lanka is ever to be made real for all Sri Lankans, justice is needed. And yet the gravity and breadth of the crimes pose real challenges for any attempts to bring justice.

The challenge begins with the deep resistance to facing the truth from within Sinhala society. With the media censored, and/or strongly nationalist, many Sinhalese have never heard the real story of suffering of their Tamil co-citizens in the north. In part as a result, many feel their own pain and suffering from the war – from the loss of loved ones fighting with the government or killed in LTTE bombings – has been ignored. There is also a deep resistance among many to acknowledge the crimes committed in their name and thereby to relinquish the symbolic and material benefits of their collective victory over what they have been taught to see as merely a “ruthless terrorist group”.

These sentiments have been encouraged and exploited politically by past governments and most vigorously by the current government, now headed by one of the proud architects of the victorious military campaign and featuring, in senior positions, many of the generals and commanders who fought the final battles – some of them implicated by UN reports in some of the worst alleged crimes of the war. Justice for crimes by state agents has never been easy to achieve in modern Sri Lanka, but for the foreseeable future, justice will be virtually impossible for the crimes of the war, especially during its final horrific months.

However, a small spark of hope for survivors of the final battles and for justice arrived recently in Geneva when the United Nations’ Human Rights Council for the first time clearly acknowledged that the justice system in Sri Lanka is too weak and politically biased to provide justice for the events of the war, and that it is the responsibility of the UN and its member states to pursue justice through their own mechanisms.

In its key paragraph, the Council resolved “to strengthen .. the capacity of the Office of the High Commissioner to collect, consolidate, analyse and preserve information and evidence and to develop possible strategies for future accountability processes for gross violations of human rights or serious violations of international humanitarian law in Sri Lanka, to advocate for victims and survivors, and to support relevant judicial and other proceedings, including in Member States, with competent
jurisdiction.”

Following the council’s adoption of its most critical resolution to date on Sri Lanka, there are growing calls for the US, the UK and the EU to use their recently adopted “Magnitsky” laws to apply targeted sanctions against key figures in the Sri Lankan government for their alleged involvement in some of the worst crimes of the war.

The slow wheels of international justice have thus started to turn – but they will provide no quick solutions or easy answers. However necessary, initial steps will likely be slow, incomplete and frustrating. Despite more than a decade of calls for Sri Lanka’s case to be taken to the International Criminal Court in the Hague, it has long been known that the politics of the UN Security Council mean there is no chance of this happening. With regard to more recent calls by activists for a state party to present a case of genocide against Sri Lanka at the International Court of Justice, experienced international lawyers have indicated there is very little chance of this being taken up. Foreign governments, in turn, are likely to remain reluctant to pursue cases in their own courts, given the extensive resources needed to produce a strong case.

This reluctance is compounded by worries about the effects within Sri Lanka of foreign sanctions and potential prosecutions within Sri Lanka. Many worry, and not without reason, that trials and sanctions outside the island could further harden attitudes of some Sinhalese and be used by the government to rebuild its flagging public support.

To date, unfortunately but not surprisingly, demands for justice for war crimes and genocide have often been articulated – and rejected – as part of Sri Lanka’s long-running battle of competing communal identities. This is in part the effect of the refusal of the Sri Lankan state and Sinhalese leaders to acknowledge the crimes committed by the forces they commanded. But it is also an effect of the fact that demands for war time justice are for many Tamils a continuation of the Tamil nationalist liberation struggle. The events of 2009 are seen by many Tamils, and not without some significant evidence, as a key stage in an ongoing campaign of structural genocide by the Sri Lankan state, a campaign that makes living amongst Sinhalese in a single state unsafe and unjust. The call for international justice, in this version, is effectively part of the larger call for liberation from oppression and foreign occupation.

Recent history suggests, however, for better or worse, that the future of the island currently known as Sri Lanka is one that must be shared by all its distinct communities. This sharing is currently not an equal one, nor a secure one for many, and especially not for its numerically minority peoples, Tamils and Muslims.

This poses a fundamental challenge: is it possible to rethink – and refashion – justice as a process of liberating all the peoples of Lanka from the now half-century of political violence and political marginalisation that has wounded all communities and degraded its democratic institutions? Can the process of justice be shifted from being part of a battle between communities to being a process of liberation from the cycle of violence and discrimination that can bring lasting peace to the island and a safe and secure and rights-respecting future to all its peoples? Can the fight for justice become a vehicle to ensure that all people on the island are secure and equal, with their specific traditions, languages, religions and identities recognised and protected?

To achieve this ambitious – but if Sri Lanka is to achieve lasting peace, essential – goal, will require addressing the continuing conflict and the mistrust on all sides. This will, crucially, require winning acknowledgement by much larger numbers of Sinhalese of the injustices and crimes committed in their name and in many cases, with their complicity. Meeting this challenge – and it is an enormous challenge – is largely the responsibility of Sinhalese political, religious, community and business leaders. As the majority community, Sinhalese leaders have the greater moral burden to take up the task. But as the majority, they also have a smaller incentive to do so.

For the process of justice to be liberating – for the Tamil people most urgently, but for all people on and from the island – some part of this challenge must also be taken up by Tamil leaders. Just as there has been resistance from many Sinhalese to acknowledge the injustice of what so many see as a just war against terrorism, so there is also resistance from many Tamils to accept the injustices and crimes that often accompanied their own national liberation struggle.

As we remember today the pain and suffering of victims of the final battles at Mullivayakal and elsewhere in the north, we must not forget that the silenced voices also included the many thousands – Tamil, Sinhala, Muslim, Burgher – who struggled in their different ways for a Sri Lanka that is equally shared by all people, and were killed for this radical idea – killed by government forces, killed by Sinhala mobs, but also killed by the LTTE and other Tamil militants.

This involved not only the crimes and acts of terror committed over the years against non-combatant Sinhalese, but also against other Tamils. More directly relevant to today’s commemoration, this includes the forced recruitment, including of teenagers, and murders of many who attempted to flee the LTTE’s final shrinking areas of control in April and May 2009. These crimes have been well- documented by UN and other reporting and are only part of the ways in which the Tamil Tigers’ own policies contributed in significant ways to the enormous suffering of Tamil civilians in 2009.

To acknowledge the LTTE’s contribution to the catastrophe of 2009 is not to assert a false equivalence between their actions and the government’s disregard of international humanitarian law or to lessen the moral gravity and need to reverse the Sri Lankan state’s years of deeply institutionalised discrimination. It offers, instead, a small but important opening for building bridges across the island’s ethnic and religious divides and ultimately for winning support from enough Sinhalese to create the political space for justice claims to be heard – and maybe eventually acted on – within Sri Lanka, which is where they will have the most useful and liberating effect. We have already seen a parallel example of the productive possibilities of cross-community bridge-building with this year’s Pothuvil-to-Polikandy, or P2P, march, which brought together the different and shared concerns of Tamils and Muslims and has begun to repair the deep damage done by the actions of the LTTE and Muslim armed groups and politicians during the war.

Forging new alliances with Sinhalese political forces will be no easy task, and will require major shifts among Sinhalese as much or more than among Tamils. Being optimistic about the political possibilities of this approach is admittedly difficult, especially in the wake of the failure of the coalition government of 2015, which was built on a cross-ethnic alliance. Learning from its mistakes, and the mistakes made by those in Sri Lankan civil society and at the international level who tried to support its positive initiatives, will, however, be essential if Sri Lanka is ever to emerge from its increasingly dark political abyss – and if the calls for justice from Tamils, Sinhalese and Muslims alike are ever to be answered.