‘People are going to die’: crisis-hit Sri Lanka runs out of medicine

Chandrapala Weerasuriya can’t remember when he last took his medication. The 67-year-old retired businessman, living in Sri Lanka’s Gampaha district, has always relied on a drug to keep at bay his hereditary nervous condition, which makes him dizzy and unable to walk.

But since his prescription recently ran out, he cannot get another supply. The drug is simply not available in Sri Lanka any more.

“I am afraid that I might become paralysed because there is no one to care for us,” he said fretfully. “My wife and I do everything alone. We split the household chores and manage it between ourselves. My wife has a knee problem and she can barely walk.”

Sri Lanka’s financial crisis, its worst since independence, is swiftly becoming an alarming health crisis. The government’s coffers have fallen to their lowest levels on record and last week the country was forced to default on its international loans for the first time in its history. Without crucial foreign currency, Sri Lanka has been unable to import the essentials: food, fuel – and medicine.

Sri Lanka imports more than 80% of its medical supplies. Now almost 200 medical items are in shortage, including 76 essential, life-saving drugs, from blood-thinners for heart attack and stroke patients to antibiotics, rabies vaccines and cancer chemotherapy drugs. Essential surgical equipment and anaesthesia is running out so fast that the decision was made this week for only emergency surgeries, mostly heart and cancer patients, to go ahead. All routine surgeries – anything from hernias to swollen appendixes – have been put on hold. Some government hospitals have been instructed to only admit emergency patients.

“Ultimately, people are definitely going to die,” said a doctor in Colombo who had been told not to speak to the media.

She described how the hospital was so low on certain drugs they had to instruct families of patients to go out to pharmacies and try to buy it themselves. “There have been incidents where the family members have gone around looking for drugs and by the time they’ve come back with the drug, it’s been too late and the patient has died,” she said.

The doctor said the shortages were getting worse. “I’m worried about pregnant mothers because soon I don’t know whether we will have enough drugs to perform cesarian sections,” she said.

Cancer drugs, which are notoriously expensive to import, have been particularly badly hit by shortages in recent weeks, and the responsibility to source them has fallen on the heads of oncologists themselves. They have been putting out global appeals for donations, and writing letters to private supporters, organisations and governments, to ensure cancer treatments are not delayed.

Dr Buddhika Somawardana, an oncologist at Colombo’s largest cancer hospital, described the “great stress” he and other doctors were under as essential cancer drugs began to run out over a month ago or stopped being available at all.

“One of the drugs we give patients undergoing chemotherapy, which boosts their blood count so they aren’t liable to serious infections, is not available any more,” he said. “So far, we managed to get donation of 80,000 vials. But that will not last very long.”

He added: “Somehow, thanks to donations, we have mostly been managing without any huge issues. But we had to postpone some chemotherapy, which may have detrimental effects on the cancer outcome.”

Somawardana said the crisis was placing a huge “financial and psychological burden” on cancer patients, who were having to source and pay vast sums for their own medicines to continue their treatment, previously free and easily accessibly in hospitals under Sri Lanka’s lauded universal healthcare system.

Cancer doctors too were feeling the pressure of having to be the ones both to appeal for global drug donations, as well as treat their patients. “I didn’t know how long we will be able to go on like this,” he said.

Ruvaiz Haniffa, a doctor in Colombo, expressed his frustration that doctors had “seen this coming as early as January” but little had been done by authorities to set up backup plans to ensure no medicines ran short, even as the country’s foreign reserves began to deplete to worryingly low levels.

“We are facing great ethical dilemmas as doctors,” said Haniffa. “We used to have a very efficient health system. But at the moment, it has become ineffective. More people will die, which is not acceptable.”

He said his patients were being forced to find their own drugs and pay prices over 40% higher, if they could find them at all. Haniffa said many of his patients were having to choose between medicine or paying for the school tuition for their children or fuel to take them to work.

Haniffa said he feared for the long-term impacts on the life expectancy of Sri Lankans. “With the kidney disease and the diabetes and the hypertension we are not treating now, it causes long term damage,” he said. “So in five years, we will see strokes go up, heart attacks go up, neurological problems go up, cancers go up.”

With the newly appointed prime minister, Ranil Wickremesinghe, warning recently that the situation would “only get worse” and that Sri Lankans are facing tough months ahead, those without medicines said they faced an uncertain future. On Sunday, India delivered 25 tonnes of medical supplies to the country while France donated some essential equipment, but most working in the healthcare system say Sri Lanka can not rely on donations for ever.

Among those riddled with anxiety was Sushantha Weerasuriya, 42, who has struggled to get hold of his epilepsy medicine, travelling long distances to track a few pills down. Even when he manages to find the medicines, they have become almost impossible for him to afford, totalling 10,000 rupees (£22) in May.

But as soon as he stops taking the medication, he begins to have regular seizures, which cause him to lose consciousness and being unable to work.

“If I am without it for five days, then the condition will return and continue non-stop, which I really fear,” he said. “I am the primary breadwinner of my family and I have to support my wife and four-year-old daughter. But when the condition comes, I cannot work. If the medication completely stops then my family’s livelihood is in danger,” he said.

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21A will not abolish Executive Presidency -FSP

The Frontline Socialist Party charges that the draft 21st Amendment to the Constitution will not abolish the Executive Presidency.

Education Secretary Pubudu Jagoda speaking during a media briefing yesterday said requests for ‘Gota to go home’ will not be fulfilled as a result.

He said the 21st Amendment is a mere effort to secure power for those already in power, and is a deal between each other that will undermine the power of the people.

Jagoda said the people are calling for the individual they elected to power, to be sent home without having to wait for five years.

He charged that people have no faith in Parliament, and the political and party system claiming the people believe that there is no true public representation in these bodies.

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Five-point assistance from China to overcome crisis

Chinese Ambassador Qi Zhenhong highlighted a five–point assistance from China to Sri Lanka in view of the economic crisis, fast-track ongoing projects and more FDI (Foreign Direct Investment) and Trade, bilateral debt settlement, support to Sri Lanka in its talks with the International Monetary Fund (IMF) and regarding International Sovereign Bonds and tourism after Covid, a statement from the Embassy said.

He, along with his spouse Jin Qian started their three-days visit to the Eastern Province of Sri Lanka on May 24 from Trincomalee. They are grateful to receive a warm welcome by Governor Anuradha Yahampath and children from different backgrounds.

Ambassador Qi and Ms. Yahampath co-chaired a business forum with the Chinese Business Chamber representatives. China encourages more investment to Sri Lanka including EP to overcome current difficulties.

After the meeting, Ambassador Qi Zhenhong took a boat visit to the Trincomalee Harbour and China Bay.

The Sri Lankan Ports Authority and the Eastern Province invite Chinese investment to the port-related industries and tourism.

To support low-income families to overcome difficulties, Ambassador Qi handed over food packs (Rs. 5200 each) donated by the people of Yunnan Province of China to Trincomalee, Batticaloa and Ampara Districts.

In total, 10,400 underprivileged families in the Eastern Province of Sri Lanka have received the support from the people of Yunnan.

Ambassador Qi Zhenhong and Madam Jin Qian also donated a batch of sports equipment supporting local youth in Kalmunai.

On May 26, Ambassador Qi visited the Kayakerni archaeological site where the China sherd of the China Song Dynasty (960–1279), the glass from ancient Europe and the stone bridge uncovered show that Sri Lanka’s eastern coast has always been an important global trade hub on the Maritime Silk Road.

During his visit, Ambassador Qi visited the Kuchchaveli Pichchamal Viharaya.

Cabinet approves supplementary budget of Rs. 695 Bn

Sri Lanka’s Cabinet of Minister approved the proposal to to submit a supplementary estimate to the Parliament for the provision of Rs. 695 billion under the “Budget Assistance Services and Emergency Responsibilities” project of the National Budget Department.

The proposal was made by the Prime Minister in his capacity as Minister of Finance, Economic Stabilization, and National Policies, said the Department of Government Information.

“The government has introduced a assistance package for Samurdhi Beneficiaries, Estate Communities, Pensioners and Government Servants at the beginning of 2022 to reduce the hardships faced by the public due to the adverse economic conditions,” said the Department in a statement.

The Department of Government Information noted that it was decided to submit a supplementary estimate to Parliament to cover the cost and secure the necessary funds to maintain the essential public services without hindrance.

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Sri Lankan YouTuber and anti-government protestor Ratta arrested and granted bail

Social activist and Sri Lankan YouTuber Rathidu Suramya Senaratne, popularly known as “Ratta”, has been granted bail by the Fort Magistrate’s Court.

He was released on bail after being produced before the court, a short while ago.

Popular Sri Lankan YouTuber Rathindu Suramya Senarathna, also known as Ratta, was arrested Monday (30) for allegedly obstructing the duties of police officers during a protest in front of the Fort Magistrate Court on Thursday (25), police said.

The protest had taken place demanding the arrest of suspects allegedly connected to the Black Monday violence by government supporters on peaceful protestors on May 09.

Ratta, who has 1.4 million subscribers on YouTube, was a prominent figure in Sri Lanka’s anti-government protests demanding the resignation of President Gotabaya Rajapaksa and his government over the country’s worsening economic crisis. While his usual content focused on comedy and satire, he has been using his platforms to share information regarding the protests since they began.

According to fellow protestor and civil activist Shehan Malaka, Ratta was summoned to courts a few days ago. “He went to give his statement today, and after he did, the police arrested him.”

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‘Govt. has to find another $ five billion immediately for everyday expenses’ By Hiran H.Senewiratne

The government has to find/borrow another US $ five billion immediately for day-to -day expenditure, to provide essential services to citizens this year, even with the complete restructuring of debt by other countries. This amount has to be generated through credit lines, currency swaps, a couple of investments into the country and selling of assets, which also give temporary relief to the country, Prof Sirimal Abeyratne said.

“We are now in the early stage of bankruptcy and I am not surprised at the position in which we are today because of our excessive spending. This resulted in a Balance of Payments problem for the country, Prof. Abeyratne, who is a senior economist attached to the University of Colombo and a former chairman of the Monetary Policy Consultative Committee of the Central Bank of Sri Lanka explained.

Abeyratne made these observations while addressing the Colombo South Rotary Club on the topic, “Sri Lanka’s Current Debt Crisis and Beyond”, last week at the Dutch Burgher Union Hall in Colombo.

Abeyratne added: ‘In 2007 Sri Lanka raised US $ 500 million through International Sovereign Bond issues. During the period 2009 to 2019, Sri Lanka issued US $ 17 billion in sovereign bonds with a 5 to 10 year maturity span. Therefore, we have to pay US$ 6 billion every year for those bonds but unfortunately the country does not have a financial buffer to arrest the situation.

‘Due to the Covid-19 pandemic situation the revenue that came from the tourism sector and inward worker remittances that came to the country from the Middle East, dramatically dropped.

‘This crisis was predicted two years ago but the relevant authorities never heeded the warning. When we were having budget deficits we spent beyond our capacity and in the internal financial area major tax cuts soon after the presidential election, which cost more than Rs 500 billion annually to government coffers, left us with insufficient finaces to pay our debts.

‘Amid these developments, young educated professionals who could contribute to the economy will leave the country and ultimately we will be left with a poor set of people. This happened in Venezuela, where more than five million young educated professionals left for other countries. This set of people could play an important role in economic development.

‘Since our country’s foreign reserves ran dry and due to major tax relief provided, we are facing a major rupee shortage in the country and are unable to pay salaries for government servants and for day- to- day operations.

‘At this moment we have to build trust in the eyes of the international community to attract direct foreign investments into the country. Foreign investors do not trust our politicians. If we could build trust we could attract direct foreign investments. Sri Lanka should take every possible step to drive exports, which is the most important task at this juncture.’

Fitch cuts SriLankan Airlines bond rating amid default fears

A debt moratorium announced by the Sri Lanka government has resulted in a credit downrating of state-owned SriLankan Airlines (UL, Colombo Int’l) by Fitch Ratings, which believes it has triggered the commencement of a default-like process for the airline.

The US-based rating agency has given SriLankan Airlines’ USD175 million government-guaranteed 7% unsecured bonds due on June 25, 2024, a “C” rating, which means Fitch believes “a default or default-like process has begun, or the issuer is in standstill […] or payment capacity is irrevocably impaired”.

In a statement, Fitch said this followed the May 19, 2022, downgrade of Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR) from “C” to “RD”, meaning, in Fitch’s opinion, the country has experienced an uncured payment default or distressed debt exchange on a bond, loan, or other material financial obligation.

Fitch has also downgraded Sri Lanka’s foreign-currency bonds issued in international markets from “C” to its lowest rating of “D”, indicating that, in Fitch’s opinion, the country has entered into de facto bankruptcy.

“SriLankan Airlines’s guaranteed US dollar bonds are part of the debt moratorium announced on April 12, 2022, by the Government of Sri Lanka, on several categories of sovereign- and public sector entities’ external debt. The moratorium has therefore triggered the commencement of a default-like process for SriLankan Airlines, in Fitch’s view,” the agency said in a statement on May 20.

It said SriLankan Airlines’ bonds were rated “C”, factoring in Fitch’s view of average- to below-average recovery prospects following a default, in line with the agency’s Corporates Recovery Ratings and Instrument Ratings criteria and Country-Specific Treatment of Recovery Ratings criteria.

According to the agency, an upgrade of Sri Lanka’s sovereign rating and completion of a commercial debt restructuring that would normalise its relationship with the international financial community could lead to a Fitch ratings upgrade.

Historically a loss-making entity, SriLankan Airlines registered its first profitable fourth quarter since 2006 with a net profit of USD1.7 million for the quarter ended 31 March, 2022. This it attributed it to the scaling down of staff costs and overheads, the renegotiating of supplier contracts, an increase in cargo revenue, and capitalising on pent-up travel demand.

“We anticipate some headwinds in the first half of this financial year with high fuel prices and a short-term dip in demand to Sri Lanka,” SriLankan Airlines’ acting chief executive Richard Nuttall said. “We have factored in these challenges and are working towards minimising the impact with a strong business plan and a sound turnaround strategy to return to full-year profitability.

“Traffic is expected to recover fully by the end of the year as travel restrictions are eased off further. We will continue to support the tourism industry of Sri Lanka and be a catalyst for economic recovery.”

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Amended 21A draft to be tabled at Cabinet meeting

Minister of Justice Wijeyadasa Rajapakshe says the amended draft of the 21st Amendment to the Constitution will be presented at the Cabinet of Ministers meeting next Monday.

The Minister expressed his views when he called on the Chief Prelate of the Amarapura Sect Most Ven. Dodampahala Chandasiri thera today.

The Justice Minister said steps will be taken to introduce the 21st Amendment as political stability is essential to uplift the economy.

Minister Rajapakshe said empowering independent commissions, and re-establishing the Procurement Commission and the Audit Commission, have been proposed through the 21st Amendment adding that the political instability led to the downfall of the economy.

Minister Rajapakshe said another proposal includes preventing dual citizenship holders from being elected to Parliament.

The Minister noted the Chief Prelates, religious leaders, leaders of political parties, and representatives of civil organizations will be briefed on the draft Amendment.

He added the proposed 21st Amendment to the Constitution has been drafted in such a manner that a referendum will not be sought while the formulation of a new Constitution should be vested with a Parliamentary Oversight Committee.

A nation in default: Is the great Sri Lanka fire sale about to begin?

PM Wickremesinghe wasted no time in announcing the government would privatize Sri Lankan Airlines, which prior to the pandemic had flown to 126 destinations in more than 60 countries.

Sri Lanka has a habit of selling off its assets when times are tough. And it doesn’t get much tougher than this. The tiny island nation is in default and in desperate need of $4 billion to pay for food, fuel and fertilizer to stave off a deeper crisis.

The newly appointed prime minister, Ranil Wickremesinghe — his sixth time in the job — wasted no time in announcing the government would privatize Sri Lankan Airlines, which prior to the pandemic had flown to 126 destinations in more than 60 countries. The carrier struggled with a stretched balance sheet even before Covid-19 and may fail to make payments to aircraft lessors, Bloomberg Intelligence analysts wrote last month. It had lost $125 million in the year through March 2021 and will likely struggle to find a buyer willing to take it on.

But when a country has only one day’s stock of gasoline and not enough dollars to pay for the three ships carrying crude and furnace oil anchored off the coast, selling anything that isn’t nailed down starts to look like a worthy strategy. The problem is, Sri Lanka has already essentially given away some of its most strategic points to China, which until recently was working hard to expand its footprint there. Now, Beijing has offered loans of “a few hundred million dollars,” Wickremesinghe told the Financial Times, while his government is also seeking to renegotiate existing debts to China, amounting to around $3.5 billion.

Wickremesinghe is pushing to fast-track talks with the International Monetary Fund, but his negotiators haven’t yet reached a staff-level agreement with the multilateral lender. And until the loans start flowing, Sri Lanka is living day-to-day. Protesters have established a permanent presence in the capital, Colombo, and continue to demand the resignation of President Gotabaya Rajapaksa. “Give us back our stolen money,” one sign reads, as their fury at the government’s role in the economic crisis shows no sign of subsiding.

China is Sri Lanka’s single largest bilateral creditor, and its white elephants — the Chinese-built Hambantota port and little-used airport near the ancestral village of the Rajapaksa family — have contributed to citizens’ rage against the political dynasty that includes both the president, and his brother Mahinda, who on May 9 resigned as prime minister following violence that left nine people dead and dozens wounded. Protesters set fire to the Rajapaksa family home in Hambantota and destroyed monuments to their parents in what was a culmination of months of growing civil unrest over their disastrous fertilizer ban that has led to ongoing food shortages, the failure to handle the foreign-currency crisis, and their inexplicable delays in seeking international aid.

There’s also the Colombo Port City, which was meant to position the capital as the next big Asian financial center. But its status as a special economic zone means the government sees little benefit for the scar that’s been created along the waterfront. It, like the port, is controlled by a Chinese-owned company, with a significant portion of it on a 99-year lease.

Of course, not only Beijing seeks to exert influence in Sri Lanka. India’s slice may be smaller, but it continues to hold significant sway simply via its political and economic sway in the region. New Delhi has provided more than $3.5 billion in assistance this year to help pay for fuel, food and medicine. The arrival of Indian shipments of diesel and petrol these past two weeks have caused chaos in Colombo as citizens flocked to fuel stations to try and fill their vehicles.

In September last year, one of India’s largest companies, the Adani Group, entered into a $700 million deal to develop a deep-water container terminal in Sri Lanka in what the Sydney-based Lowy Institute described as a “strategic game-changer” in the battle for influence between Beijing and New Delhi. It will sit next to the Chinese-run terminal at Colombo Port (China Merchant Ports Group Co. also runs Hambantota Port).

Then in January, the Indian Oil Corp. subsidiary Lanka IOC took a 49% stake in the joint development of the Trincomalee oil tank farm, with Ceylon Petroleum Corp. maintaining a 51% stake in the finalization of a deal that was struck in 1987, during Rajiv Gandhi’s tenure as India’s prime minister. Sri Lanka’s location along one of the world’s busiest shipping routes means it’s crucial for maintaining global supply chains.

So what else can the country privatize? It’s a question that’s worrying political economists like Ahilan Kadirgamar, who is concerned about the social impact of key assets leaving government hands. Kadirgamar, a senior lecturer at the University of Jaffna, said officials were most likely to consider the Ceylon Electricity Board and the Ceylon Petroleum Corp. He predicts there will be significant resistance to such a move.

The electricity board is one of the the nation’s social strengths, he said. “Few developing countries have the kind of electricity connectivity and services as Sri Lanka does. Even day-wage laboring families have access to electricity, which benefits their children’s education.” The IMF will be pressing the government to reduce the agency’s losses, Kadirgamar predicts, and the government may be tempted to fill its coffers via a sale rather than reforming the sector.

For now, the country appears to have no other option but to rely on India and China’s largesse. The World Bank said that until Colombo puts in place an “adequate macroeconomic policy framework” that restores stability and growth, it does not intend to offer new financing. If Sri Lanka can hold off on selling the silver, it may have a fighting chance to put the economy back together again.

World Bank denies Foreign Ministry’s claim of $700 million financing

The World Bank today refuted the Foreign Ministry’s claim that it has promised to disburse approximately USD 700 Million to Sri Lanka within the next few months.

Issuing a statement, the World Bank Country Director for Sri Lanka Faris H. Hadad-Zervos said that recent media reports have inaccurately stated that the World Bank is planning support for Sri Lanka in the form of a bridge loan or new loan commitments, among other incorrect assertions.

“The bank is concerned for the people of Sri Lanka and is working in coordination with the IMF and other development partners in advising on appropriate policies to restore economic stability and broad-based growth. Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka,” he said.

Faris H. Hadad-Zervos further said, “we are currently repurposing resources from previously approved projects to help the government with some essential medicines, temporary cash transfers for poor and vulnerable households, school meals for children of vulnerable families, and support for farmers and small businesses.”

The Foreign Ministry in Colombo released a statement over the weekend stating that the World Bank Country Manager said her office was working with other organizations such as ADB, Asian Infrastructure Investment Bank (AIIB), and UN office and encourages them for ‘re-purposing’ their already committed projects to help the people of Sri Lanka at this difficult time. The Foreign Ministry said she had also claimed that the World Bank will disburse approximately USD 700 Million to Sri Lanka within the next few months.