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The State of Emergency imposed by President Gotabaya Rajapaksa earlier this month, has lapsed with effect from last night.

The President’s Office said that the State of Emergency lapsed last night (20th May).

President Gotabaya Rajapaksa had declared a State of Emergency on 6th May.

The State of Emergency gave the security forces sweeping powers to maintain law and order.

Issuing a gazette notice on 6th May, the President said that he is of the opinion that by reason of a public emergency in Sri Lanka, it is expedient, so to do, in the interests of public security, the protection of public order and the maintenance of supplies and services essential to the life of the community.

The gazette says the President, by virtue of the powers vested in him by Section 2 of the Public Security Ordinance (Chapter 40), as amended by Act, No. 8 of 1959, Law No. 6 of 1978 and Act, No. 28 of 1988, do by the proclamation declare that the provisions of Part II of that Ordinance, shall come into operation throughout Sri Lanka with effect from 06th May, Two Thousand and Twenty Two.

Counterterrorism and protecting human rights has been a long standing dichotomy on a global scale. The same fate was experienced in the Sri Lankan context with the civil war and internal insurrections. Among all counterterrorism measures, the Prevention of Terrorism Act (Temporary Provisions) (PTA) of No. 48 of 1979 has been the most debated. The PTA was enacted on July 15, 1979 as a temporary urgent bill. It was presented to the Parliament by President J.R. Jayewardene, debated and passed within one day. Although President Jayewardene presented the Bill to deal with terrorism in North, ironically first to be detained under the Act were two Sinhalese activists of the opposition. Thus since its enactment the PTA has had ulterior motives. All in all the PTA is yet another embodiment of horrors of undemocratic and unfettered executive powers. Despite several attempts to amend or repeal this draconian piece of legislation it has existed, causing grave human right violations in the country, particularly targeting minorities, political opponents, activists and journalists. Beyond such egregious and inhumane violations, the research has shown its larger impact on socio-economic conditions as well. The most recent attempt in answering constant international and domestic aversion to the Act has been the PTA Amendment Bill of 2022.

President Gotabaya Rajapaksa appointed a committee in June 2021 to make recommendations to the cabinet sub-committee to review the PTA. In the process of the committee deciding whether to amend the existing law or to draft a new legislation, they also looked at the Counter Terrorism Bill formulated under the previous government. Meanwhile in August 2021, the president appointed an Advisory board on the PTA to make recommendations and advise him. The first report of the committee was handed over to the president in November 2021 without taking measures to publicise it. The Bill was tabled in Parliament on February 10, 2022 amid heavy criticism of minority MPs and civil society activists. Furthemore it is evident that the government is attempting to pass a pretense legislation in haste to rescue GSP+ granted by the European Union (EU) and face UN Human Rights Council However, (un)fortunately after the bill was tabled the EU noted its concern over leaving out crucial amendments. The Human Rights Commission of Sri Lanka, despite stripping off its independence under the 20th Amendment, advocated for the repeal of the Act with the tabling of the Bill.

In analysing the provisions of the Bill it is apparent that many controversial and undemocratic provisions of the Act that led to serious human right violations have been left out and ignored. Firstly the Bill has completely refrained from addressing key provisions that outright violate the freedom from arbitrary arrest, detention and punishments and the right to a fair and due process. Under S. 16 of the PTA confessions and statements by suspects are made admissible in contrary to the requisites of the Evidence Ordinance. For example under the Evidence Ordinance confessions made to a police officer or while in police custody are inadmissible, however the PTA allows them. The Act further puts the burden of proof on the suspect to prove that a statement is obtained under inducement, threat or promise.

The Bill has not amended the initial period of 72 hours after arrest and before producing a suspect before a magistrate whereas under the general law, the maximum period in custody before being produced is 24 hours. However, the Bill has amended the S.9 of the PTA where the period of 18 months of detention without bail is now 12 months, has imposed a duty on Magistrate to visit the suspect and has made it a requisite to inform HRCSL on such detentions. While the latter amendments are commendable yet there is much space to progress such as making it mandatory for the Magistrate to direct the suspect to judicial medical officer and IGP if he or she is subjected to torture. Furthermore under the Bill the Minister can still decide the detention place of the suspect. The case studies have consistently shown how the freedom from torture has been inhumanely violated to obtain confessions while detaining suspects for longer periods of time, yet these provisions have not been answered adequately by the Bill.

There is no provision in the PTA to inform the suspects about their charges, causes and rights at the time of arrest. Although it is required under the general law the PTA has remained exceptional, and still remains so under the Bill. This is a violation of Article 13(1) of the Constitution and Sri Lanka’s international obligation under Article 9(2) of the ICCPR, where any person arrested has to be informed of the reason for arrest. Another leeway for torture under the PTA is the unfettered powers granted to investigating officers under S.6 including to take suspects from place to place, seizure and search. While these powers should be exercised while ensuring human rights and international standards, many case studies reveal the contrary. However the Bill has not addressed this section at all.

It is noted that many extravagant additions in the Bill such as right to be represented by lawyer and right to challenge the decision in the Supreme Court by way of Writ have always existed. And when everything boils down to ground realities the situation can be entirely different. For example there are many case studies on how lawyers rejected certain detainees due to outside pressure. Therefore the PTA is not an answer on paper. The PTA does not only violate freedom from torture or even freedom from arbitrary arrest but it also has a ripple effect on freedom of expression, right to privacy, freedom of movement and freedom of assembly. Therefore the government should take the amendments seriously without attempting to fool the crowd.

Source:Ground Views

The technical discussions between Sri Lanka and the International Monetary Fund (IMF) on a potential loan programme will come to a close on May 24, IMF Spokesman Gerry Rice said.

Rice, addressing a virtual IMF briefing on Thursday (20), said that the agency is closely monitoring the events that are unfolding in the crisis-hit island nation.

Rice affirmed that the IMF remains committed to help Sri Lanka in line with the policies of the agency and that it would engage with the stakeholders in support of a timely resolution of the crisis that is being faced.

Commenting on the status of the economy, Rice said the IMF is concerned about the current economic crisis.

“We are concerned…especially, the hardships being endured by the people of Sri Lanka and especially many of those people poor and vulnerable. So, we are clearly monitoring the political and economic developments very closely,” Rice said.

Further, Rice said an IMF team has been engaged in technical discussions on the authorities’ request for an IMF-supported programme and the IMF has asked for the programme.

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 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.