At least seven investors have made offers to develop the Mattala International Airport into a profit-making venture, Minister of Aviation Nimal Siripala de Silva told Parliament today.
The Minister said there have been offers to start up assembling and repairing aircraft at Matala Airport.
“The losses of Mattala Airport have been reduced to Rs 1.5 billion and is the lowest losses since the airport started operations,” the Minister said.
About 100 rural hospitals are on the verge of closing down due to the lack of doctors, representatives of the Government Medical Officers had said in a meeting with Health Minister Ramesh Pathirana.
A committee under the Director General of Health with members of the GMOA was appointed to look into the matter, according to a statement from the state information office.
Most of the hospitals which were in danger of closing were in the Northern Province, Puttalam and Nuwara Eliya, the statement said.
The problem came from doctors going abroad, retiring, getting transfers or leaving the service.
Instructions were given by Minister Pathirana to immediately appoint doctors to the hospitals.
Steps would be taken to re-open about 40 hospitals that were closed, the statement said.
The Sri Lankan Catholic Church has deplored the appointment of Senior DIG Deshabandu Tennakoon as the Acting Inspector General of Police (IGP).
Addressing a media briefing today (Nov.29), Spokesperson of the Colombo Archdiocese Rev. Fr. Cyril Gamini said the Catholic Church deems this appointment ‘an insult’ to the victims of the 2019 Easter Sunday terror attacks.
“The appointment made by the President [Ranil Wickremesinghe] is condemned by His Eminence the Cardinal [Malcolm Ranjith]. At the same time, we vehemently oppose it. We consider this appointment a disgrace to the victims of the Easter Sunday attacks.”
When asked if the Catholic Church has any recommendations for the post of the police chief, Rev. Fr. Gamini responded, “We have no special name to nominate. It is the President who has to make a nomination to the Constitutional Council.”
Speaking further, he expressed doubts as to whether the police would be able to maintain their own discipline, let alone the discipline of the country, following the appointment of new Acting IGP Tennakoon.
Sri Lanka and the official creditor committee has agreed on a debt restructuring deal, the Paris Club Secretariat said.
“The OCC and Sri Lanka agreed on the main parameters of a debt treatment consistent with those of the Extended Fund Facility (EFF) arrangement between Sri Lanka and the IMF,” the statement said.
“This agreement will allow the IMF staff to present to the IMF Executive Board the first review of Sri Lanka’s EFF arrangement and open the way for approval of the second disbursement under the arrangement
“The OCC also expects that the Sri Lankan authorities will continue to engage with their private creditors to find as soon as possible an agreement on terms at least as favourable as the terms offered by the OCC”
AGREEMENT IN PRINCIPLE BETWEEN THE OFFICIAL CREDITOR COMMITTEE AND SRI LANKA ON A DEBT RESTRUCTURING
November 29, 2023
Following the launch event in April 2023, 17 countries formally formed, on May 9, an Official Creditor Committee (OCC) co-chaired by India, Japan and France (as chair of the Paris Club) to respond to the Sri Lankan authorities’ request for a debt treatment. The committee includes India and Hungary in addition to Paris Club creditors. Since then, the OCC has engaged extensively with the Sri Lankan authorities, the IMF, the World Bank as well as China, and Sri Lanka’s private creditors.
The OCC and Sri Lanka agreed on the main parameters of a debt treatment consistent with those of the Extended Fund Facility (EFF) arrangement between Sri Lanka and the IMF. This agreement will allow the IMF staff to present to the IMF Executive Board the first review of Sri Lanka’s EFF arrangement and open the way for approval of the second disbursement under the arrangement. The OCC commends the Sri Lankan authorities for their continuous efforts in implementing the reforms necessary for their country’s return to a sustainable path.
The OCC stands ready and looks forward to formalizing this agreement in the coming weeks in a Memorandum of Understanding with the Sri Lankan authorities. The OCC expects other bilateral creditors to consent to sharing, in a transparent manner, the information necessary for the OCC to evaluate comparability of treatment regarding their own bilateral agreement. The OCC also expects that the Sri Lankan authorities will continue to engage with their private creditors to find as soon as possible an agreement on terms at least as favourable as the terms offered by the OCC.
These engagements will ensure that the overall debt treatment granted to Sri Lanka is consistent with the IMF program parameters.
Background notes
1. The Paris Club was formed in 1956. It is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries. The members of the Paris Club which are part of the Official Creditor Committee are representatives of countries with eligible claims on Sri Lanka: Australia, Austria, Belgium, Canada, Denmark, France, Germany, Japan, Korea, the Netherlands, Russia, Spain, Sweden, the United Kingdom, the United States of America.
2. Representatives of the International Monetary Fund and the Word Bank as well as China attend the OCC meetings. Other observers include the Asian Development Bank, Saudi Arabia and Iran.
The government is facing an uphill task to rebuild the country which continues to be in a state of economic and moral decline which was evident in parliamentary proceedings last week. The initial hopes of a quick transition from the economic and moral decline that accompanied the pre-Aragalaya period ended with the accession of President Ranil Wickremesinghe to the presidency. The president made skillful use of the security forces in the first instance and the parliamentary majority thereafter to restore the old order, government rule and stabilize the economy, albeit at a much lower level of economic well being. But this won for him and the government the support of those sections of the population who could still live their regular lives and the international community who did not want Sri Lanka to fall prey to rival powers.
The Central Bank governor has expressed confidence that Sri Lanka will receive the second tranche of the IMF loan before the end of the year. He has made this prediction despite the failure of the government to meet the basic IMF conditions, which include reducing the gap between revenues and expenditures. The ability to access IMF funds despite not conforming with its conditions is indicative of favoured status. The budget prepared by the government shows a widening of the chasm that are mitigated by optimistic predictions of increased tax revenues. The government has signally failed to deliver on the IMF’s “governance diagnostic” which highlighted the need for much greater efforts to tackle corruption and to be transparent in the signing of new contracts.
If social media reports and personal anecdotes are to be believed, corruption is thriving at all levels. Agreements with international companies continue to be entered into with little being known of the terms and conditions, and even the debt restructuring agreement with China continues to be a secret.
But there continues to be a belief amongst sections of the Sri Lankan population and international community alike that the present unsatisfactory governance needs to be tolerated until the country makes the transition to self-sustaining economic growth. There is concern that any change of government at the present time would jeopardise the economic and political stability that the country has achieved despite the unconvincing evidence to the contrary. The general population is expressing its lack of confidence in the future by fleeing abroad and giving votes of no-confidence in every public opinion poll they can.
Not Trusted
Despite the government’s continued hold on undisputed power, and skillful use of its parliamentary majority and security forces to enforce governmental rule, it is not able to show that it has the backing of the majority of the general population. The government’s policies seem to have the support of the business and upper social classes whose position is that there is no better alternative at present, a view that is echoed in diplomatic circles. But this sentiment is not reflected in public opinion polls that equally consistently reveal that the government and its leadership get less than 20 percent of the support and even much less. This accounts for why the government has resolutely defied calls for the holding of local government and provincial council elections, the latter which are long overdue.
The president’s announcement that presidential and parliamentary elections will be held next year may be a recognition that the government has come to the realization that it cannot continue to justify holding on to power without obtaining a fresh people’s mandate. The proposed budget is an indication of the government’s preparation for those elections. There are efforts in it to provide benefits for different sections of the people, though whether these promises will materialize is another question due to paucity of resources. President Wickremesinghe has pledged to provide tens of thousands of farmer families with free hold title to the land they currently cultivate under state leases. The motivation to obtain the vote of people by providing them with economic benefits is one of the key features of the democratic process not only in Sri Lanka but worldwide.
However, the skillful use of state power to provide economic benefits, utilizing the parliamentary majority to come up with news laws and use of the security forces to enforce those laws are not the only ingredients for success in governance. The general population needs to trust those who are in power. This trust comes from consistency in word and deed. One of the features of the present government is that deeds do not follow words. The exemplary anti-corruption legislation is being used to catch those at the lower levels of the hierarchy but those at the higher levels continue to escape. The recent Supreme Court decision that apportions blame for the economic crisis that plunged vast numbers of people into poverty has not been acted upon and there is no indication at the present time that it will be acted upon.
Unresolved Problem
There are two other areas where the government needs to rebuild the trust of the people. First is to convince them that the burden of economic recovery will be apportioned justly and equitably. The restructuring of the EPF and ETF pension funds which affected the poorer sections of the people adversely while the sparing of the banking (and corporate) sector may have been motivated by the fear that the collapse of the banking sector was a real possibility. However, the evidence that is now coming out, as demonstrated in parliament by the opposition, that huge amounts of loans taken by companies have been absorbed by the banks is unconscionable. The government needs to promise that it will rectify this and other such inequities as soon as possible including the tax holidays to favoured companies. The recent parliamentary debates have provided the opportunity for the opposition to make presentations that highlight the need for consistency.
The second area that needs to be addressed is the ethnic conflict in the country. This is a problem that has receded into the background of the national discourse, due to the overwhelming nature of the economic crisis. The wrong that was done to the Tamils of recent Indian origin at Independence has still not been rectified. They continue to be the poorest and most neglected community in the country. An issue that is scarring the Tamil and Muslim people at the present time is the takeover of grazing lands in the east by people from outside the area. One of the root causes of the country’s economic crisis is that huge amounts of resources were devoted to fighting a war that need not have taken place if there had been policies that promoted inter-ethnic justice and equity. The security forces continue to extract a large part of the budget.
There is a need to convince the ethnic and religious minorities that they are a part and parcel of the polity and treated as equal citizens. The provincial council elections cannot be postponed for another two years. There was no democratic basis for the president stating that local government and provincial council elections will be held in 2025, the year following the presidential and parliamentary elections. In fact, this would be a violation of the election laws as both these elections are long overdue. Sri Lanka is not a unique country when it comes to having different ethnic and religious communities. Other countries have them too, but most of those countries, especially those that are economically successful, have found ways to resolve their differences through dialogue and power sharing that benefits the entire society. Provincial council elections have not been held for over five years. The residents of those areas have no government to protect them. This is not the way to build trust that will unify the people with the government to uplift the economy.
The People’s Action for Free and Fair Elections said that it is disappointing to note that Sri Lankan authorities have not taken action to call for the Local Government Elections which have been delayed for over eight months, with no justifiable reason.
They had expressed their concerns over the matter in a letter to Prime Minister Dinesh Gunawardena.
The People’s Action for Free and Fair Elections notes that of the Rs. 10 Billion that was requested by the Election Commission to conduct the Local Government Election, a sum of Rs. 1 Billion had already been spent for the preliminary efforts of the said election.
It added that if the election for which nominations were also called is not held for whatever reason, it can be considered a waste of Rs. 1 Billion in public funds.
In the letter to the Prime Minister, PAFFREL questions whether it is justifiable to waste public funds in such a manner, at a time when the country is going through a very serious economic crisis.
PAFFREL pointed out that it is disappointing that the priority given to welfare and development activities is not given to elections so that the mandate guaranteed by the constitution can be executed.
Pointing out that only 3.7% of the money allocated in the budget will be spent on conducting a fair and free election, PAFFREL noted that indefinitely delaying the opportunity given to the people to exercise their franchise, sets a negative precedent.
Therefore, they request that the Prime Minister to take the necessary measures to release money to the Election Commission and hold the local government polls as planned, in order to secure the people’s franchise.
Japanese Ambassador to Sri Lanka Mizukoshi Hideaki signed the grant contracts of two demining projects under the scheme of “Grant Assistance for Grassroots Human Security Projects.”
The agreements were signed with Mines Advisory Group and HALO Trust.
The Government of Japan has provided a total sum of US$ 729,925 (approx. Rs. 238 million) for these two projects with MAG and the HALO Trust to extend its support for humanitarian demining activities in the Northern and Eastern provinces of Sri Lanka.
Japan has been a major donor in demining activities in Sri Lanka since 2002, and the total amount of assistance exceeds US$ 44 million.
It is expected that these projects by MAG and HALO will together contribute to resettlement and livelihood support for a total of 10,977 IDPs (internally displaced people) in the Northern and Eastern provinces.
The development of the conflict-affected areas is one of the priority areas of Japan’s official development assistance policy to Sri Lanka.
Ambassador Mizukoshi strongly reiterated that the Government of Japan has been committing its role as a leading donor in demining activities and will continue to provide the necessary support to achieve “Mine-Impact-Free Sri Lanka”
Sri Lanka leftist leader Anura Kumara Dissanayake has crossed a seemingly elusive 50-percent hurdle in a voting intent poll conducted among 567 interviewees for October, though his net favourability rating remained negative at minus 9 indicating continued unpopularity.
A Sri Lanka Opinion Tracker Survey (SLOTS) by the Institute for Health Policy (IHP) showed that Dissanayake, who leads the leftist National People’s Power (NPP) gained support to half of likely voters (51 percent) in October, followed by opposition leader Sajith Premadasa with a third (30 percent), and President Ranil Wickremesinghe on 13%.
A “generic” candidate for the ruling Sri Lanka Podujana Peramuna (SLPP) was on 6 percent with little change from September.
IHP executive director and SLOTS project director Ravi Rannan-Eliya said in a statement: “Although polling is a hazardous exercise and our MRP estimates are subject to quite a lot of uncertainties, it does appear that Dissanayake would have likely won a Presidential Election in October even against a joint SJB-UNP ticket. I suspect this is less voters buying the NPP/JVP policy platform and more most voters rejecting the political establishment and business as usual. Establishment parties wanting to compete with the NPP probably need to be doing some serious soul-searching,” he said.
In October, Premadasa’s net favourability rating dropped 13 points to a new low of -66 and President Ranil Wickremesinghe’s dropped 8 points to -65 while leftist leader Anura Kumara Dissanayake’s rating improved by 10 points to -9, a poll showed.
A net favourability rating of less than zero means that the individual or institution is unpopular. Only positive scores where net favourability is more than zero mean that the individual or institution is popular on average.
According to the IHP, SLOTS combines interviews from a national sample of adults (ages 18 and over) reached by random digit dialling of mobile numbers, and others coming from a national panel of respondents who were previously recruited through random selection. IHP estimates voting intent using an adaptation of Multilevel Regression and Post-Stratification (MRP), with multiple imputation to account for uncertainties in its modelling, exploiting data from all SLOTS interviews to estimate voting in a particular month.
The October 2023 MRP estimates are based on 567 interviews conducted in October 2023, and 13,935 interviews conducted overall from 1 October 2021–12 November 2023, with a margin of error assessed as 3–4% for Dissanayake, Premadasa and 1–2% for Wickremesinghe and the other potential candidate. All estimates are adjusted to ensure the sample matches the national population with respect to age, sex, ethnicity, socioeconomic status, education, geographical location, and voting in the 2019 Presidential and 2020 General Elections, the IHP said.
IHP is an independent, non-partisan research centre based in Colombo, Sri Lanka.
The Government is prepared to hold the delayed Provincial Council elections if the Opposition agrees on the electoral system, Prime Minister Dinsesh Gunawardene told Parliament today.
“Opposition MPs are making a different proposal on the system under which the Provincial Council elections are to be held. We can hold the elections if they agree on the system under which the Provincial Council elections are to be held,” the Prime Minister said.
“Some Opposition members say the Provincial Council elections should be held under the old system and others under the new system. A constituency system is also important. No party has come to an agreement at the select committee on the Provincial Council elections,” he said.
“Those who call for the holding of Provincial Council elections are the ones who approved the amendment to the Provincial Council Elections Ordinance which pushed the holding of election into a deadlock,” he added.
Chief Opposition Whip Lakshman Kiriella and Samagi Jana Balawegaya (SJB) MP J.C. Alawathuwela said their party is for holding the Provincial Council elections under the old system.
“We will support it if an amendment is introduced to hold the Provincial Council elections under the old system,” Kiriella said.
The apparel exports from Sri Lanka continued their downward trend, with October exports declining 20 percent year-on-year (YoY) to US $ 330.95 million, the data compiled by industry body Joint Apparel Association Forum (JAAF) showed.
Since September 2022, apparel export earnings have been on a downward trend on a YoY basis, primarily due to the economic slowdown in major Western markets.
According to the JAAF data, exports to all major markets fell during October, amid the slowdown in orders. Exports to Sri Lanka’s biggest apparel market, the United States, fell 16.81 percent YoY to US $ 128.22 million while exports to the EU, excluding the UK, declined 24.79 percent YoY to US $ 110 million.
Exports to the UK experienced a YoY decline of 14.56 percent, amounting to US $ 43.66 million, whereas exports to other markets saw a more significant decrease of 21.69 percent, totalling US $ 49.07 million. The cumulative exports for the January-October 2023 period fell 20.5 percent YoY to US $ 3,748.72 million.
Apparel is Sri Lanka’s largest industrial export and earned US $ 5.95 billion in 2022. The country’s apparel sector has about 300,000 employees, most of whom are women.
The JAAF anticipates a decrease of approximately one billion dollars in this year’s apparel and textile export earnings compared to last year.
Amid the rising inflation and interest rates, consumer demand in Sri Lanka’s key apparel export markets has faltered. In addition, Sri Lanka has become expensive for apparel sourcing, due to the higher production cost, stemming from the sharp rise in electricity tariffs and other input costs.
Sri Lanka’s apparel industry has called for government support to expand the country’s apparel export markets, through bilateral and other types of trade agreements.
Particularly, the apparel manufacturers have called to fast-track the efforts to improve the market access to India,
specifically by increasing the duty-free quota on garments. Negotiations in this regard are currently underway, under the India-Sri Lanka Free Trade Agreement. .
