Category: News

The International Monetary Fund (IMF) said Sri Lanka should kick off debt restructuring talks with its bilateral lender China, while the island state’s government seeks a financing loan from the Washington-based fund.

“China is a big creditor, and Sri Lanka has to engage proactively with it on a debt restructuring,” Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, told Reuters in an interview on Tuesday.

The island of 22 million is currently engulfed by its most severe economic and political crisis in recent history.

Six-time prime minister Ranil Wickremesinghe was recently appointed as president after a popular uprising ousted his predecessor following months of severe shortages of fuel, food and medicines.

The government recently decided to restrict fuel imports for 12 months.

The country owes Beijing some $6.5 billion in financing including development bank loans and a central bank swap, according to data from the Institute of International Finance (IFF).

The world’s second-largest economy has invested in projects such as highways, a port, an airport and a coal power plant. Japan and India are also bilateral creditors to Sri Lanka.

“Sri Lanka has to engage with its creditors, both private and official bilateral, on a debt workout to ensure debt sustainability is restored,” Srinivasan said, as he pointed out that technical talks on a new IMF program are ongoing with both officials from the finance ministry and the central bank.

Sri Lanka’s foreign ministry and central bank did not immediately respond to a request for comment. China’s embassy in Sri Lanka did not immediately respond.

The South Asian nation has requested an IMF rescue plan to overcome its worst economic crisis since independence in 1948. The country defaulted on a bond payment debt earlier this year on its $12 billion overseas debt with private creditors, as it struggles to pay for imports of basic goods.

“There are some areas where we need to make further progress,” Srinivasan added, but declined to specify the top reforms Sri Lanka should address in other to reach an agreement.

An Extended Fund Facility (EFF) programme from the IMF, which would be the fund’s 17th plan for the nation, requires countries to make structural economic reforms.

Maldives and Laos are other examples of countries in the region that are facing onerous debt situations.

Srinivasan said the fund is advising countries to “spend more in alleviating the impact on the poor and vulnerable but keeping budget neutral by reducing expenditures elsewhere or raising revenues where feasible.”

“It’s not just public debt, but also corporate debt and household debt – and that has implications for policymaking,” he said. “The debt issue is very significant.”

Source: Reuters

Today we mark 39 th years from the horrors of the anti-Tamil pogrom of 1983, when Tamils were killed by Sinhala mobs backed by the then UNP government and state forces.

Sinhala rioters halt a minibus searching for Tamils Armed with electoral rolls, Sinhala mobs targeted Tamil homes and businesses looting and ransacking property. Driven from their homes, particularly in Colombo, over 3000 Tamils were massacred, whilst thousands more were effectively deported by the state to the North-East.

Eye witness reports described mobs chasing Tamils down the street with knives and setting them alight alive. Many hundreds of women were raped. Tamil political prisoners locked up in Welikada jail, deep within the island’s south, were also targeted as prison guards allowed Sinhala inmates to slaughter them.

We look back at events through international press coverage at the time:

“Selvaraja Yogachandran (TELO), popularly known as Kuttmuni, a nominated member of the Sri Lankan parliament who was one of the 52 prisoners killed in the maximum security Wellikade prison in Colombo two weeks ago, was forced to kneel in his cell, (where he was under solitary confinement), by his assailants and ordered to pray to them. When he refused, his tormentors taunted him about his last wish, when he was sentenced to death. (He had willed that his eyes be donated to someone so that at least that person would see an independent Tamil Eelam.) The assailants then gouged his eyes. He was then stabbed to death and his testicles were wrenched from his body. That was confirmed by one of the doctors who had conducted the post-mortem on the first group of 35 prisoners. According to S.A David,[iii] the thirty-five Tamils were then heaped in front of the statue of Gautama Buddha in the yard of the Welikade prison and when some yet alive raised their heads they were clubbed to death.The second round of killings on July 27 was lead by Sepala Ekanaike, undergoing life imprisonment for the hijacking of an Alitalia plane on its flight from Delhi to Bangkok a year previously. Sinhalese prisoners convicted of murder, rape and burglary charges were handpicked by the warders, who after plying them with liquor, let them loose on the remaining Tamil political prisoners. Seventeen prisoners were killed on this occasion.

Indian High Commissioner in Sri Lanka Gopal Baglay paid a courtesy call to newly-elected Prime Minister of Sri Lanka Dinesh Gunawardena on Tuesday to strengthen the longstanding ties between both nations.

“High Commissioner paid a courtesy call on Hon’ble PM @DCRgunawardena. Conveyed greetings from the leadership, Government and people of #India,” tweeted the Indian Embassy in Sri Lanka.

The High Commissioner also thanked the PM for his guidance in various capacities to strengthen the close ties between India and Sri Lanka in all areas of engagement.

High Commissioner also thanked the PM for his whole-hearted appreciation for #India’s unprecedented support to the people of #SriLanka, while he conveyed working closely.

India has been at forefront of extending economic assistance to Sri Lanka as per what they require and we are one of the countries that have provided the maximum amount of assistance at the time of need.

Since the beginning of 2022, Sri Lanka has experienced an escalating economic crisis and the government has defaulted on its foreign loans. The United Nations warned that 5.7 million people “require immediate humanitarian assistance.”

With many Sri Lankans experiencing extreme shortages of essentials including food and fuel, peaceful protests began in March. The protests led then-Prime Minister Mahinda Rajapaksa to resign on May 9, and his brother, President Gotabaya Rajapaksa, to flee the country on July 13 and resign the following day.

Ranil Wickremesinghe became acting president, and parliament elected him as the new president on July 20 with the support of the Rajapaksas’ political party, the Sri Lanka Podujana Peramuna. He had previously described some protesters as “fascists” and declared a state of emergency on July 18.

On July 21, Wickremesinghe issued an order to “call out with effect from July 22, 2022, all the members of the Armed Forces . . . for the maintenance of public order.”
Under emergency powers, the president can override, amend, or suspend a provision of any law, except the Constitution. Emergency powers can be used to detain people while bypassing the ordinary process of the courts and have repeatedly been used in the past to enable human rights violations.

A Chinese scientific research vessel has set sail for Sri Lanka’s Hambantota port for a week-long stay. During this significant visit to the key Sri Lankan port, it could conduct satellite research in the northwestern part of the Indian Ocean region, prompting security concerns for India.

Hambantota port, located around 250 km from Colombo was built with high-interest Chinese loans. The Sri Lankan government struggled to repay the debt they had taken from China following which the port was handed over to the Chinese on a 99-year lease.

“The Chinese scientific research vessel ‘Yuan Wang 5’ will enter Hambantota port on August 11 for a week. It is expected to leave on August 17 after replenishment. It could conduct satellite control and research tracking in the northwestern part of the Indian Ocean region,” said Y Ranaraja, Director, Belt & Road Initiative Sri Lanka (BRISL).

“China’s Yuanwang-5 space-tracking vessel conducting a space-ground information exchange and specially provide significant data support to Zhongxing-2E satellite’s orbit determination and entry. Now the vessel is sailing pass Taiwan towards Hambantota in Sri Lanka,” Ranaraja said in another tweet.

Amid one of the worst economic crises in Sri Lanka, locals around the country’s Hambantota port blame the government for the situation the island nation is facing at present while saying that the leaders use the money they receive from China for their own benefit rather than for the area’s development.

The port area is under heavy security and people outside have no idea of what goes on inside the port. There were reports that a few months back the Sri Lankan government found a radioactive substance inside a ship that was en route to China.
Initially, the Chinese government had asked for 80 per cent of the portland share including the control of security, which was later changed to 70 per cent after pressure from the neighbouring countries including India.

“This government failed to get major investments from China. The government made lot of effort but they failed to get any investment from China. I think discussions are on regarding rescheduling of repayment of loans. They talked to the Chinese Govt. That’s all I know,” former Prime Minister of Sri Lanka Ranil Wickremesinghe told ANI in Colombo. (ANI)