Category: News

Several discussions were held on Saturday (16) under the auspices of President Gotabaya Rajapaksa regarding the current situation in the country.

The President’s Media Division (PMD) said the first discussion was between Finance Minister Ali Sabri, PC, Central Bank Governor Dr. Nandalal Weerasinghe, Secretary to the President Gamini Senerath, Presidential Advisor Lalith Weeratunga, and Secretary to the Ministry of Finance K.S. M. M. Siriwardena.

The President held another discussion with the participation of officials from the Ministries of Finance, Energy, and Health, said the PMD.

Fitch Ratings has downgraded the rating on state-run SriLankan Airlines Limited’s USD 175 million government-guaranteed bonds, due in June 2024, to ‘C’ from ‘CC’.

The move comes after the Sri Lankan government suspended foreign debt payments.

The rating action on the bonds follows the downgrade of Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating to ‘C’ from ‘CC’, and the downgrade of its foreign-currency bonds issued on international markets to ‘C’ from ‘CC’, the rating agency said.

Fitch said the national carrier’s bonds are rated at the same level as its parent, the state of Sri Lanka, due to the unconditional and irrevocable guarantee provided by the state.

SriLankan Airlines largely operates as a regional airline with a few long-haul flights. As of December 2021, the company has a fleet consisting of wide- and narrow-bodied aircraft in the Airbus A330 and A320 family respectively.

In 2019, SriLankan Airlines issued a USD 175 million bond to roll over a similar-sized issue that matured in June 2019.

The issue was fully guaranteed by the government and Fitch Ratings gave the bond a given provisional rating of ‘B(EXP)’ in line with the sovereign rating.

-Agencies

SriLankan Airlines on Thursday (14) said it received an air cargo order to transport about 102 tons of printed material from Colombo to Entebbe International Airport in Uganda in February 2021.

The consignment was purely commercial in nature and brought in much-needed foreign revenue to the airline and country at the time. SriLankan wishes to emphasize that this cargo order was undertaken for commercial reasons only, it added.

The details of the cargo consignment were withheld due to contractual obligations as per air cargo industry standards said the statement.

However, in response to concerns raised following the statement the national carrier tweeted to say that the Ugandan government ordered Ugandan currency notes from a global security printer who operates several factories worldwide, including one in Sri Lanka, exporting to global markets.

It went on to note that SriLankan aircraft which were underutilised at this time (2021) during the pandemic were chartered by a UK based freight forwarder.

A tweet by the Airline Pilot’s Guild of Sri Lanka on the 23rd of February 2021, revealed that SriLankan Airlines operated three consecutive cargo flights to Entebbe in Uganda.

Sri Lankan Airlines said what is now being misunderstood is the Airline Pilots Guild proud announcement of this achievement of using unutilized pax aircraft.

HOWEVER…….

Multiple events between Uganda and Sri Lanka in recent times sparked serious concerns among Sri Lanka’s social circles.

The most recent of these events was when Sri Lankan Prime Minister Mahinda Rajapaksa travelled to Tirupati, India on pilgrimage, in a private jet.

This particular jet was leased for a very high price, and it arrived at the Ratmalana Airport for the Prime Minister to travel to India, from the Entebbe International Airport in Uganda.

Startling details of this particular jet were revealed by the Frontline Socialists Party in late 2021.

The Frontline Socialists Party on the 28th of December 2021 said that the private jet used by the Prime Minister to travel to India on pilgrimage had a flight history that is a cause for concern.

“The T7 – JSG has a very interesting flight history,” said Pubudu Jagoda, the Academic Secretary of the FSP, and the flight path detailed by him is as follows.

10th December 2021 : Arrives at the Katunayake Airport from India.

10th December 2021 : Flies to Jomo Kenyatta International from Katunayake Airport.

14th December 2021 : Travels to multiple locations in Kenya

14th December 2021 : Flies to Bukoba Airport, Tanzania

15th December 2021 : Flies to Kampala Airport (Entebbe International Airport) from Tanzania

16th December 2021 : Arrives at Colombo International Airport, Ratmalana.

Pubudu Jagoda said that after reaching Sri Lanka on the 16th of December, the private jet had flown to Cochin and Chennai in India on two separate occassions, before reaching the country once again.

23rd December 2021 : Flies to Thirupathi

24th December 2021 : Returns to Sri Lanka

27th December 2021 : Flies to New Delhi India.

Jagoda pointed out that the around Rs. 32 Million was spent for this priate jet, and raised concerns as to why the Prime Minister of Sri Lanka would resort to using a private jet, when he could have easily used a passenger plane.

UGANDA TO BE BLACKLISTED

Uganda’s financial industry risks being blacklisted by international systems for failure to put in place measures that can effectively prevent financial crimes like money laundering.

This is a requirement by the Financial Action Task Force (FATF), a global inter-governmental organisation on the initiative of the G7countries to develop policies to combat money laundering and terrorism financing.

Uganda was put on the ‘Grey List’, a list that shows the performance of countries regarding the safety or level of risk of their financial systems.

This came after the FATF declined to adopt Uganda’s Money Laundering and Terror financing risk assessment report done by the Ministry of Finance, the Financial Intelligence Authority (FIA) and some NGOs in 2018.

This was what the European Union based on to blacklist Uganda’s financial sector.

To avoid being downgraded to the “Blacklist”, Uganda must submit a revised report by May 2022, showing improvements responding to the gaps that were cited in the current report.

CONCERNS MOUNT IN SRI LANKA

Former Parliamentarian Hirunika Premachandra, the National Organizer of the Samamgi Vanitha Balavegaya told reporters on Friday (15) that rumour has it that all the money looted from the people were moved to Uganda.

She said based on the calculations of the weight of the currency that was supposedly airlifted by SriLankan Airlines Cargo, approximately 10 Million US Dollars have been moved out.

The Former MP also said that from 1986 to 2021 the Foreign Reserves of Uganda were around 1.5 Billion US Dollars, however in 2021 that figure has moved upto over 4.4 Billion US Dollars.

Concerns are mounting in the country over the transactions taking place between Sri Lanka and Uganda, an African country with so many issues concerning finances and monetary security.

Over the past few years, the U.S. has accused China of using “debt diplomacy” to make developing nations across the world more dependent on Beijing.

Yet the cases of Sri Lanka and Pakistan — both friends of China facing dire financial situations as inflation soars — show that President Xi Jinping’s government is becoming more reluctant to pull out the checkbook. China still hasn’t made good on a pledge to re-issue loans totaling $4 billion that Pakistan repaid in late March, and it hasn’t responded to Sri Lanka’s pleas for $2.5 billion in credit support.

While China has pledged to help both countries, the more cautious approach reflects both a refining of Xi’s signature Belt and Road Initiative as well as a hesitancy to be seen interfering in messy domestic political situations. Pakistan got a new prime minister on Monday after parliament booted out former cricket star Imran Khan, and Sri Lanka’s leader is facing pressure from protesters to step down.

“Beijing has for the past couple of years been rethinking its external lending because their banks realized they were carrying a lot of debt with countries whose prospects of paying back were quite limited,” said Raffaello Pantucci, a senior fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University. “This came on top of a tightening economic situation at home which also required a lot of spending, so there was less appetite to just throw money around wantonly.”

China is currently facing its own economic troubles, with lockdowns to contain the country’s worst Covid outbreak since early 2020 shutting down the technology and financial hubs of Shanghai and Shenzhen. Premier Li Keqiang on Monday told local authorities they should “add a sense of urgency” when implementing policies as analysts warn the official growth target of a 5.5% is now in jeopardy.

China has become the world’s largest government creditor over the past decade, with its state-owned policy banks lending more to developing countries than the International Monetary Fund or the World Bank in some recent years. The opacity around the terms and scale of some of that lending has been criticized, especially as the pandemic exacerbates debt problems in poorer countries.

Sri Lanka was downgraded deeper into junk by Fitch Ratings, which said on Wednesday the nation’s decision to suspend payments on its foreign debt has kicked off a sovereign default process. S&P said Sri Lanka’s next interest payments are due on April 18 and the failure to cover them will likely result in default, as would an outright debt restructuring.

Sri Lanka’s top diplomat in Beijing this week said he was “very confident” that China will come through with credit support, including $1 billion for the country to repay existing Chinese loans due in July. In an interview with Bloomberg, Ambassador Palitha Kohona said the process often takes months and he didn’t see any delay.

“Given the current circumstances, there aren’t that many countries that can step out to the pitch and do something,” he said. “China is one of those countries that can do something very quickly.”

Still, China’s role in helping to resolve ongoing crises in South Asia may be limited despite its status as a major creditor. A Shanghai-based scholar who researches China’s overseas lending said new credit lines are harder to approve as authorities emphasize risk management at financial institutions including policy banks. The scholar asked not to be named due to rules for speaking with the media.

Xi highlighted the importance of a more cautious approach at a high-level Belt and Road symposium in November. “It is necessary to implement risk prevention and control systems,” Xi said. He called on participants to make “small but beautiful” projects a priority for foreign cooperation and “avoid dangerous and chaotic places.”

Earlier this month, Jin Liqun, president of the China-backed Asian Infrastructure Investment Bank, encouraged Sri Lanka to turn to the IMF for help in a meeting with Kohona.

‘Unfairly Blamed’

The most “burdensome debt” in terms of maturity and rates is typically owed to international sovereign bonds, mostly private market participants, according to Meg Rithmire, an associate professor at Harvard Business School who specializes in comparative political development in Asia and China. Therefore many in China view Beijing as being “unfairly blamed” for the fiscal choices made by political leaders in other countries, she said.

“China is wary of its actions being misinterpreted or backfiring, and is, I think, waiting to see what efforts other actors, like the international financial institutions, can undertake before it jumps in to offer credit support,” Rithmire said.

China’s development banks are acting to preserve returns and it “would be difficult for them to easily accede to Sri Lanka’s requests for deferrals,” said Matthew Mingey, a senior analyst at Rhodium Group’s China Macro & Policy team who researches economic diplomacy.

“Credit conditions back in China aren’t making things any easier for them,” he added. “Ultimately, Sri Lanka needs the IMF.”

‘Sinking Ships’

Sri Lanka said Tuesday it would expedite talks with the IMF after it halted payments on foreign debt to preserve dollars for essential food and fuel imports. Pakistan’s new government also plans to work with the IMF to stabilize the economy, according to Miftah Ismail, a former finance minister and a senior ruling party leader.

China’s ability to assist either country with a balance-of-payments crisis is limited, particularly as Beijing’s financial assistance is almost always tied to specific projects, said Muttukrishna Sarvananthan, principle researcher at the Point Pedro Institute of Development in Sri Lanka. China’s policy of non-interference in internal affairs prevents it from offering the type of advice needed for countries to emerge out of a financial crisis, he added.

“Even the IMF appears to be moving very slowly — if not abandoning — the requests of both Pakistan and Sri Lanka for their assistance,” Sarvananthan said. “Which sane bilateral donor country or international financial institution would pour money into sinking ships in both Pakistan and Sri Lanka.”

Source: NDTV.com

The Human Rights Commission of Sri Lanka (HRCSL) emphasizes that the elected public representatives in Parliament have a responsibility to provide a speedy solution to the current crisis facing the country.

The commission said it was questionable whether MPs were advocating for the aspirations of the people they represent at a time like this.

The Human Rights Commission (HRC) said that due to this a clear distance is being created between the aspirations of the people and the actions of the rulers.

The Chairperson of the Human Rights Commission said that the Human Rights Commission has recommended to the Government to hold the Provincial Council Election and Local Government Elections expeditiously.

She further pointed out that postponing the Provincial Council Election and Local Government Elections is a violation of the rights of citizens.

Speaking to News 1st, the Chairperson of the Human Rights Commission, retired Supreme Court Judge Rohini Marasinghe, said that her commission does not have the power to recommend that parliamentary elections be held at this time.

She pointed out that the reason for this was that the term of office of Parliament had not yet ended.