Category: News

Postal voting for the 2023 Local Government election will be held on 22, 23 and 24 February.

Gazette notices have been issued confirming the holding of Local Government (LG) elections in the respective local authorities on 9th March.

The Returning Officers in the respective districts have issued the notice stating that in terms of Sub-section 38(1)(c) of the Local Authorities Elections Ordinance, the elections will be contested in relation to the respective local authorities and the poll for those local authorities will be taken on March 09, 2023 from 7.00 a.m. to 4.00 p.m.

Members for Local Government Institutions need to be appointed by the 20th of March, and for that elections needs to take place before the 10th of March 2023.

The Government has already said that there will be difficulties in funding the elections owing to the economic crisis.

However, the National Election Commission has accepted nominations for the polls and is going ahead with the election, as scheduled.

Opposition Leader Sajith Premadasa has decided to boycott Sri Lanka’s 75th Independence anniversary celebrations, due to be held tomorrow (04 Feb.).

Accordingly, the Samagi Jana Balawegaya (SJB) party, as a whole, has decided to boycott tomorrow’s celebration upon a unanimous decision that they will refrain from engaging in such activities in which money is wasted at a time when Sri Lanka is facing one of its worst economic crises.

This decision was reached at a recent party meeting, SJB MP Tissa Attanayake stated.

The Inter-University Students Federation (IUSF) Convener Wasantha Mudalige alleged that the police had a plan to kill him while he was in police custody.

He told a news conference that he was taken to a secluded place, blindfolded with a cloth, by the river close to the Nawagamuwa Devalaya. He revealed that one of the officers said over the phone that “Sir, we came to the place. What should we do now?”

He said, having seen a police officer stationed for the security of the Devala, he was taken back in a vehicle.

He said , according to the script, they were not to be released in this manner and said the government wanted to either kill them or imprison them for many years.

Around 108.893 acres of land in North Valikamam in Jaffna, which was under the custody of security forces during the civil war, will be released and handed over to 197 families on February 03, 2023.

Prior to the 75th Independence Anniversary celebrations on February 4th the relevant land owners were identified through a transparent process for this land release program, which is being implemented under the full supervision of the Security Forces in fulfilment of President Ranil Wickremesinghe’s promise to release the lands in the North and hand them over to their rightful owners prior to the 75th Anniversary of Independence.

Accordingly, five plots occupied by the Sri Lanka Army and another plot occupied by the Sri Lanka Navy are to be handed over to the people.

Of these lands, 13.033 acres of government-owned land in the North Palali area will be distributed among 75 families who were displaced by the war and are still housed in 09 camps at Point Pedro.

Further, the Town Hall building located in the liberated area will be handed over to the Valikamam North Pradeshiya Sabha.

It is also noteworthy that President Ranil Wickramasinghe has instructed the Ministry of Urban Development and Housing which is in charge of the resettlement process to immediately provide resettlement assistance to 197 families to be resettled.

Sri Lanka is, in the words of its own president, “bankrupt”.

The Indian Ocean nation defaulted on its sovereign debt in May 2022, plunging the country into economic and political chaos.

The Colombo government secured a $2.9bn (£2.4bn) International Monetary Fund bailout in principle the following September.

But the cash will not be released to Sri Lanka until its sovereign creditors in China and India first agree to a restructuring of the billions of dollars of bilateral debt they are owed.

Despite optimism over the past month that such an agreement was imminent, a deal has still not materialised – and Sri Lanka’s economic agony, and the suffering of its population, continues.

Yet, even if the bailout cash does start to flow in the coming weeks or months, that will not mark the end of Sri Lanka’s economic rebuilding programme, but merely the beginning.

For it’s widely accepted that Sri Lanka’s economic model needs a fundamental overhaul.

In the years following the savage end of the government’s 25-year war against the separatist Tamil Tigers in 2009, Sri Lanka benefited from something of a financial “peace dividend”.

The government at the time successfully attracted large flows of foreign investment, not only from foreign governments like China, but also private international bondholders.

These financial flows pumped up domestic economic growth, but at the cost of ballooning imbalances.

The domestic economy grew steadily less internationally competitive in these years. And while exports continued to rise from 2000 to 2018, from $6.5bn to $19.4bn, over the same time period they slumped as a share of the economy, from 39% to 23%.

Even before the pandemic hit in 2020, tearing the heart out of the island’s lucrative tourism industry, the Sri Lankan trade deficit – the gap between its imports and exports – was already running at more than 6% of GDP.

That imbalance is one of the reasons the default hit Sri Lanka so hard – it suddenly found itself without the means to generate the foreign currency needed to import vital supplies of food and fuel.

Ranil Wickremesinghe, who took over the presidency after the discredited and reviled Gotabaya Rajapaksa fled the country in July 2022, has been clear that Sri Lanka’s road to recovery will have to involve addressing the imbalance at source, and, in particular, driving up exports.

“We have to transform into a highly competitive export-oriented economy,” he told local business leaders last year.

“There is no other way out. We are a country with 22 million people. We have to find markets outside.”

So the big economic question looming over Sri Lanka is: can this be done? Can the country trade its way back to prosperity?

Traditionally, Sri Lanka’s big exports have been agricultural, starting with cinnamon, which attracted European colonisers in the 16th Century. Today tea is still the biggest export commodity.

But the tea sector is still reeling from a disastrous 2021 ban on imports of fertiliser by the previous government, which cut yields by a fifth.

Looking to the future, increasing agricultural productivity is an obvious avenue for policymakers to explore.

Yet many firms in the tea sector style themselves as “artisan” producers, with leaves still plucked by hand as they were two centuries ago when the plantations were started by the British Empire. And many estates are still using archaic processing equipment.

On top of this, Roshan Rajadurai, the general manager of the Pedro estate in Nuwara Eliya, says that its workers are resistant to new, more efficient methods of picking.

He wants to move to a model in which pickers and their families are given individual sections of plantation to harvest themselves – with them setting their own hours – rather than working in large traditional work teams for fixed daily hours.

It’s a reform Mr Rajadurai says has been proven to increase yields where it has been adopted, but he says the pickers are resisting.

Sri Lanka’s tea farmers struggling to survive
“If we don’t do it I think with the rising cost, and the static prices that we get in the world markets for our product, I don’t think we can be sustainable in the long term,” he warns.

Textiles – manufacturing garments for Western brands – are another major source of exports for Sri Lanka.

But this, even more than tea, relies heavily on imported raw materials and fuel, which have shot up in price in the wake of the pandemic and the Russian invasion of Ukraine.

Those prices should come down this year, yet the reality is that tea and textiles, though they will probably always be important, are unlikely to push Sri Lanka very far up the global export value chain.

So what else could Sri Lanka export?

What’s striking is that speaking to policymakers and analysts in Sri Lanka, as Newsnight did in January, is that there is very little sense of a grand plan.

Unlike other Asian nations such as Malaysia or Vietnam, which saw a major state-led push into electronic manufacturing, there’s no strong sense that one hears of a particular sector where the country can and should gain an advantage.

The closest area to a prospective national champion is probably port services.

The governor of the county’s central bank, Nandalal Weerasinghe, says Sri Lanka’s geographical location, in the centre of Indian Ocean shipping lanes, offers an opportunity to be a major “trans-shipment” hub.

“Ports and logistics are where there is the potential for us to promote exports,” he says.

It is estimated that a third of the world’s bulk cargo, and two-thirds of its oil, is transported across the Indian Ocean.

But perhaps the absence of a clear national plan doesn’t matter as much as getting the economic policymaking basics right.

In the grip of the crisis last year, the government removed a peg on the currency, which resulted in a halving of the value of the rupee against the US dollar. Some think keeping a floating exchange rate will ultimately help boost exports.

“[In the past] we didn’t allow it to depreciate or to adjust according to market forces, which has basically discouraged exports,” says Roshan Perera of the Advocata think tank, and a former central bank director.

Another area for reform identified by the World Bank is, ironically, liberalising imports and dismantling tariffs. These duties make many imported goods and products more expensive, thereby benefiting domestic producers, such as those in the retail and construction sectors.

Global Trade

More from the BBC’s series taking an international perspective on trade.

Sri Lanka is reckoned to be one of the most protected economies in the world in terms of import duties on consumer goods.

The argument is that liberalisation could attract more foreign investment, which will help the country’s industries become more efficient and export more.

The question is whether, despite the change of president last year, there is enough political space for Mr Wickremesinghe to dismantle trade barriers, which will inevitably attract opposition from powerful local vested interests.

The optimistic case is that the shock of the last year will provide an impetus for such painful reforms, and give Sri Lanka at least a fighting chance of trading its way out of its worst ever economic crisis.

Watch BBC Newsnight’s reports from Sri Lanka here.

The Paris Club of creditor nations is ready to provide financing assurances to Sri Lanka, a key step needed to unlock a $2.9 billion bailout by the International Monetary Fund (IMF), two sources with direct knowledge of the matter told Reuters.

The informal group of bilateral lenders is set to “soon” announce its support to the crisis-hit nation on a debt overhaul, said one of the people, who asked not to be named because talks are private.

The Asian island nation, which is grappling with soaring inflation, a recession and currency depreciation, entered into a staff level agreement with the IMF last September.

But it needs financing assurances from key bilateral lenders before the fund’s executive board approves the programme.

Sri Lanka’s public debt stood at 122% of GDP, of which 70% is denominated in foreign currency, according to data in a country presentation to investors in November.

China and India, both non-Paris Club members, are the top bilateral lenders. “Paris Club assurance is not reliant on China,” said the source.

Another source said the informal group is currently reaching out to other non-Paris Club besides China on financing assurances, but did not provide any further details.

India previously committed to help ease the debt burden of neighbour Sri Lanka as part of the IMF programme, and China’s Eximbank offered a two-year moratorium in a letter sent to the island nation in January.

While the IMF has not yet provided any guidance on where the lender stands regarding China’s assurances to Sri Lanka, a U.S. official visiting Colombo said on Wednesday that Beijing has not done enough.

“What China has offered so far is not enough. We need to see credible and specific assurances that they will meet the IMF standard of debt relief,” U.S. Under Secretary of State for Political Affairs Victoria Nuland told reporters. The U.S. is the largest IMF member.

Source:Reuters

Leader of Tamil Progressive Party (TPA), MP Mano Ganesan and many other Tamil speaking political party leaders such as Rauff Hakeem, M.A. Sumanthiran, D. Sithadthan, Gajan Ponnambalam and Rishad Bathiudeen, who held talks with visiting US Under Secretary of State Victoria Nuland said they had a unanimous stand that President Ranil Wickremesinghe should demonstrate his credibility by matching his words with deeds and urged the US to assist Sri Lanka to secure the IMF bailout.

MP Ganesan elaborated that this is the President who has the benefit of the announced support of Opposition Leader Sajith Premadasa, Leader of prime ruling party Mahinda Rajapaksa, and the JVP Leader in implementing the 13A.

All Tamil speaking parties agreed that President Wickremesinghe should conduct separate discussions with parties representing North and East Tamils, Hill Country Tamils and Muslims and convene an All Party Conference thereafter, they told the visiting US Under Secretary of State.

He added that regarding addressing the issues, there shall be a step by step road map and US Under Secretary Nuland agreed to take these messages to President Wickremesinghe when discussing the economic crisis, ongoing US assistance to Sri Lankans, USD 240 million in new assistance last year alone, and the many ways both countries are working together toward an inclusive, prosperous and secure future for all Sri Lankans.

On the meeting held with the Tamil politicians, US Ambassador to Sri Lanka Julie Chung tweeted yesterday (1) that they held a positive meeting with parties on how the US can help Sri Lanka out of the economic crisis and to bring real-time reconciliation between communities with a genuine power-sharing agreement.