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Sri Lanka seeks USD 3,950 million in foreign inflows to meet debt obligations

Posted on June 29, 2021 | by TELO Admin | Leave a Comment

Despite the government’s claim that it has made it a priority to attract investments instead of borrowing from foreign nations, Sri Lanka is seeking foreign inflows of around USD 3.95 billion by the end of August to manage the country’s debt service obligations mainly through SWAP facilities, it is learnt.

Responding to concerns raised by various individuals and media about a shortage of foreign currency liquidity in the domestic market, Central Bank Governor Prof. W.D. Lakshman in a statement yesterday (28) said that adequate financing strategies have been lined up to maintain reserves at sufficient levels, through inflows to the country, especially through SWAP facilities.

Sri Lanka’s Gross Official Reserves remain at USD 4 billion, without considering the standby SWAP agreement of approximately USD 1.5 billion with the People’s Bank of China.

In addition, Sri Lanka expects a SWAP facility of USD 250 million from the Bangladesh Bank in July 2021 while USD 400 million is expected from the SAARC Finance SWAP facility from the Reserve Bank of India in August 2021.

CBSL also said that the special SWAP facility of USD 1,000 million is being negotiated with its Indian counterpart.

Sri Lanka is expected to receive around USD 800 million under the International Monetary Fund’s (IMF) SDR allocation in August 2021.

Meanwhile, Executive Director of Verité Research Dr. Nishan de Mel pointed out recently that the public is kept in the dark regarding the high interest rates paid on loans obtained by the government, adding that Sri Lanka’s commercial debt remains high.

Government has no plan to meet debt commitments – UNP

The United National Party (UNP) said that the government has no plan on how to increase the reserves and deal with the pending loan repayments.

Noting that the President’s remarks about the state of the economy during the period of 2015-2019 were inaccurate, the UNP said that the country had USD 7.6 billion in foreign reserves when it left office.

“As of today, the foreign reserves have fallen to less than USD 4billion. Under the UNP government, the country enjoyed a primary surplus for the first time in 60 years in 2017 and 2018. As the government was earning more than it was spending, the UNP was able to take loans for development projects without the concern of being unable to repay them. The reversal by the President of the UNP’s economic policies have now meant that repaying these loans will be difficult,” the Party’s Central Media Unit said in a statement on Sunday.

India successfully test fires nuclear-capable Agni-Prime missile

Posted on June 28, 2021 | by TELO Admin | Leave a Comment

India on Monday successfully carried out the test-firing of a new missile of the Agni series known as Agni-Prime at 10.55 am, off the coast of Odisha. It was test-fired successfully from launchpad No-4 of Chandipur.

The new nuclear-capable missile is fully made up of composite material and it was a textbook launch, government sources said.

Various telemetry and radar stations positioned along the eastern coast tracked and monitored the missile. It has followed textbook trajectory, meeting all mission objectives with a high level of accuracy, DRDO officials said.

Agni-Prime is a short-range ballistic missile. It is a new generation advanced variant of the Agni class of missiles. It is a canisterised missile with a range capability between 1,000 and 2,000 km.

The surface to a surface missile can carry a payload of around 1,000 kg or a nuclear warhead. The double stage missile is lighter and much sleeker than its predecessor Agni-1.

Daily coronavirus case count moves to 1,850

Posted on June 28, 2021 | by TELO Admin | Leave a Comment

The Health Ministry says 640 more people have tested positive for COVID-19 today (June 28) increasing the daily count of positive cases to 1,850.

Earlier this evening the ministry confirmed 1,210 more positive cases of novel coronavirus.

The new development brings Sri Lanka’s confirmed coronavirus cases tally to 255,508.

According to official data, as many as 221,249 patients who were infected with the virus have regained health so far. Meanwhile, the death toll now stands at 2,985.

More than 31,315 active cases are currently under medical care at designated hospitals and treatment centres.

Possible GSP+ loss: Sri Lanka could lose its apparel markets: JAAF

Posted on June 28, 2021 | by TELO Admin | Leave a Comment

Amidst possibilities of Sri Lanka getting suspended from the Generalised Scheme of Preferences (GSP) Plus provided by the European Union, Sri Lankan apparel exporters are concerned over losing international apparel markets to regional apparel players such as India and Bangladesh whose cost of production is far more lower than that of Sri Lanka, The Morning Business learnt.

Speaking to us, Tuli Cooray, the Secretary General of Joint Apparel Association Forum Sri Lanka (JAAFSL) said that the loss of GSP Plus would considerably affect the apparel sector amidst the prevailing pandemic.

He explained: “The cost of operation in Sri Lanka is far higher than the one in Bangladesh, India, Indonesia, Cambodia.” Thus, countries such as Bangladesh, India (while being the largest fabric supplier in the global market) and Indonesia, in fact, would be benefitted unlike Sri Lanka due to the fact that the cost of operation is lower than the one in Sri Lanka as well as the countries who receive GSP facility among the mentioned, would apparently be benefitted.

As a result of the market shift that is taking place with the unstable presence of apparel of Sri Lanka, there is a possibility of losing $ 500 million of trade per annum which is clearly not a bearable burden for the sector, the Secretary General added.

“It is a 500 to 600 million US Dollar worth of trade that will be exported on zero duty basis when the UK is excluded, on apparel alone,” he said implying the magnanimity of the loss that might erupt if the GSP Plus is discontinued.

State Minister of Finance, Capital Markets and State Enterprise Reforms Ajith Nivard Cabraal said: “We have to be prepared to face the situation if the GSP Plus facility is withdrawn. We have started a risk assessment to see how we can face any outcome. While steps are underway to deal with this on the diplomatic front, we also have to be prepared to deal with it on the economic front,” during the parliament session that took place on Wednesday (23).

Further elaborating on the impact due to the disconnection of the said financial facility that is provided by the EU, Cooray said “an established company may share the burden, but most of the companies (apparel) will not be able to bear the burden.”

“A single quantity of goods which costs approximately 500 mn USD is being exported by a large number of people to the EU and among those exported goods, almost 90% of them are exported on the GSP Plus basis,” Cooray emphasised. Therefore, this diversion agenda could result in a total disaster in terms of export income.

Certain giant industries might be able to cope up with the drastic change, however, he questions the status of the rest of the companies who engage in this sector of the industry.

Former Prime Minister and the leader of the United National Party (UNP) Ranil Wickremesinghe on 13 June, pointed out that generate foreign currency to the country are at risk and said, “this facility (GSP Plus) provides Sri Lanka with permission to export goods to Europe without taxation, which led to a boom in the garment and fishing industries,” explaining the necessity of the aforesaid EU provided facility.

Sri Lanka bans passengers arriving from eight African countries

Posted on June 28, 2021 | by TELO Admin | Leave a Comment

Sri Lanka has banned passengers arriving from eight African countries, the Civil Aviation Authority of Sri Lanka said.

Captain Themiya Abeywickrama, Director General of the Civil Aviation and Chief Executive Officer of the Civil Aviation Authority of Sri Lanka said that all online and offline airlines have been directed that passengers with a travel history (including transit) in the past 14 days to Angola, Botswana, Lesotho, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe will not be permitted to disembark in Sri Lanka.

The restriction will come into effect from 0001hrs on 1st July 2021 (Local Time in Sri Lanka) and is applicable until 2359hrs on 31st of July 2021.

Abeywickrama said that the decision has been taken in accordance with instructions received from the Ministry of Health, due to the Covid-19 pandemic situation.

Switzerland hands over humanitarian assistance to Sri Lanka

Posted on June 28, 2021 | by TELO Admin | Leave a Comment

Switzerland today handed over medical supplies to Sri Lanka to help fight the coronavirus pandemic

The Ambassador of Switzerland to Sri Lanka Dominik Furgler called on Prime Minister Mahinda Rajapaksa this morning at Temple Trees to hand over medical supplies donated by the Government of Switzerland to Sri Lanka.

Commenting on the Swiss relief provided to South Asian countries to help fight the pandemic, including this donation to Sri Lanka, Swiss Foreign Minister Ignazio Cassis earlier had said, “We can only end this pandemic together – international support is essential.”

Prime Minister Rajapaksa thanked the People of Switzerland for the generous donation and stressed the importance of continuing the already strong cooperation between the two countries.

The humanitarian assistance contained medical supplies amounting to more than US$ 4 million, including oxygen concentrators, ventilators and Antigen test kits, among other supplies, that would assist the Sri Lankan Government’s efforts in containing the COVID-19 pandemic.

The two delegations discussed the need to reactivate the Sri Lanka – Swiss Parliamentary Friendship Association (SLSPFA) and conduct programs between parliamentary members of both countries as has been successfully done in the past. Prime Minister Rajapaksa handed over that responsibility to the current SLSPFA Convener MP Premanath C. Dolawatta.

Ambassador Furgler also expressed to Prime Minister Rajapaksa his Government’s interest in assisting Sri Lanka enhance activities and services of the hospitality sector as the world hopes to revitalize tourism in the near future.

Farmers protests rage across Sri Lanka

Posted on June 28, 2021 | by TELO Admin | Leave a Comment

Farmers across many areas in Sri Lanka for the second consecutive week protested against the shortage of fertilizer in the country.

On Monday (27) protests took place in Diyathalawa, Sapugolla, Pahalakadurugama, Dambagolla, Bandarawela, and Nochchiyagama among other areas.

‘The farmer is now forced to protest in the streets because this government does not understand what the farmers are going through,’ said one farmer.

Over the past two weeks, farmers have been lining up at agrarian centers across Sri Lanka to obtain fertilizer and in many instances, they are forced to turn back empty-handed due to low stocks.

Farmers have claimed that if this situation continues, they will be forced to abandon their cultivations.

New Ministry to be formed for Basil – Sources

Posted on June 28, 2021 | by TELO Admin | Leave a Comment

While Prime Minister Mahinda Rajapaksa will continue to hold the post of Finance Minister, Basil Rajapaksa will be appointed a new Cabinet ministerial post which will be created by merging a number of institutions under the Finance Ministry, high level sources at the Finance Ministry told The Morning.

Despite reports that there are plans to give Basil Rajapaksa the post of Finance Minister, the sources within the Ministry claimed that Mahinda Rajapaksa will not be resigning from the post of Finance Minister.

“There may be some changes, but most likely the post of Finance Minister will be held by Mahinda Rajapaksa himself and a separate ministry such as the Ministry of Economic Revival will be established and handed over to Basil Rajapaksa,” the sources stated.

Most of the responsibilities of the Finance Ministry, according to said sources, are to be transferred to the new Ministry.

However, the sources said that no final decision had been taken thus far and that the final decision may change according to future developments. However, they claimed: “Basil Rajapaksa will definitely come to Parliament, but the arrival will take some time. What will happen can only be seen at the last moment.”

Meanwhile, backbenchers of the Sri Lanka Podujana Peramuna (SLPP) were scheduled to hand over a letter to Basil Rajapaksa yesterday (27) requesting the latter to enter Parliament on the SLPP national list. According to party sources, the letter was handed over during a discussion held at the SLPP office last evening.

Economic Revival and Poverty Eradication Presidential Task Force Head Basil Rajapaksa, returned to the country on 24 June, after he left the country on 12 May for the US. He was welcomed by a group including State Minister Nimal Lanza upon his arrival at the Bandaranaike International Airport (BIA) in Katunayake. Speaking to the reporters, Lanza said that Basil Rajapaksa would follow quarantine regulations.

Basil Rajapaksa was a member of Parliament from 2007 to 2015. During the period from 2005 to 2010 he served as a Presidential Senior Advisor for then President Mahinda Rajapaksa and was the Cabinet Minister of Economic Development from 2010 to 2015. Basil Rajapaksa has also held the citizenship of the US since 1997, and the laws barring dual citizens from entering Parliament, that was introduced through the 19th Amendment to the Constitution, were revoked through the 20th Amendment which was passed in October, 2020.

Meanwhile, in response to a question raised at a recent media briefing regarding reports that Basil Rajapaksa is to enter the Parliament, State Minister Dilum Amunugama said that in order for Basil Rajapaksa to enter Parliament, a Member of Parliament elected from the National List should resign. “Such a discussion is taking place. Accordingly, it will be decided in the future who will leave,” he said.

How China shackled Sri Lanka

Posted on June 27, 2021 | by TELO Admin | Leave a Comment

In early June, US President Joe Biden, under an executive order, essentially blacklisted Chinese firms by prohibiting US investments in certain Chinese firms that “undermine the security or democratic values of the United States and our allies”.

The port city developers, China Harbour Engineering Company (CHEC), and the mother company, China Communications Construction Company (CCCC), were on this list.

On its China policy, the US stands firm with its bipartisan consensus. This would raise concerns in nations like Sri Lanka, which has a large Chinese infrastructure portfolio constantly growing in the country.

Regional powers and their periphery

Such Chinese firms are barely exclusive to Sri Lanka. In fact, they operate in the US’s own backyard along the 82-kilometre Panama Canal. The Panama Canal was built for the strategic expansion of the US, connecting the Atlantic–Pacific Ocean route, and is today surrounded by Chinese infrastructure projects.

Chinese firms such as CHEC and CCCC are also involved in infrastructure development in Panama. In 2017, Panama ended its diplomatic relationship with Taiwan and embraced Chinese BRI assistance amounting in billions of dollars toward infrastructure. China is involved in a bridge project over the Canal for $1.4 billion and a $4 billion rail project.

It is also involved in the power sector, mining, and a Chinese telecom infrastructure project with Huawei, including a digital free trade zone in San Miguelito. Panama’s shifting to Beijing had a domino effect, with 15 Latin American nations welcoming China’s BRI.

However, the present Panamanian regime has managed to rebalance and scale back its Chinese infrastructure including the bridge, considering the Chinese ‘debt trap’ and the US geopolitical security concern.

In a similar manner, in the backyard of the regional power India, Sri Lanka has invited the Chinese BRI with several projects that are of concern to India. Colombo has fallen into the premeditated scheme of a Chinese debt trap, paying off its loans in varied ways, from leasing its strategic assets through debt-equity swaps to creating extra-jurisdictional Special Economic Zones.

Like in Panama, the Sri Lankan government would need to backtrack its China ‘bandwagoning’ foreign policy and bring a ‘balance’, and develop a considered perspective on the geopolitical and regional security concerns its close relationship with China brings.

The interwoven regional geographical alignments, such as India-Sri Lanka and the US with its immediate periphery in Panama, cannot be outweighed by the strategic interest drawn by an extra-regional power, China. The same ‘Monroe Doctrine’ is applicable in China’s periphery.

China’s port city victoryin Colombo

Speaker of the Sri Lankan house, Mahinda Yapa Abeywardena, inked the Colombo Port City Economic Commission Bill on May 27 after it received approval from two-thirds of the government. Sri Lanka’s Supreme Court observed several clauses of the bill to be unconstitutional.

The praetorian regime, with its majoritarian power, passed the Port City Bill in a hurry, ignoring and threatening the nation’s sovereignty.

Justifying the passing of the bill during the pandemic and lockdown, the Speaker of the house explained, “There were precedents that Parliament sittings have been conducted without any hindrance even during World War II and also when the Sri Lankan Parliament came under a bomb attack.”

(Asanga Abeyagoonasekera is a geopolitical analyst and author of ‘Conundrum of an Island [2021]’. This commentary was initially published by ORF New Delhi)

Circular issued with new quarantine regulations

Posted on June 27, 2021 | by TELO Admin | Leave a Comment

The Director General of Health Services has issued a circular including new quarantine regulations for persons travelling to Sri Lanka from overseas.

Accordingly, it is mandatory that Sri Lankan citizens produce a negative PCR test 96 hours prior to arriving in the island or a Rapid Antigen Test taken 48 hours before arrival.

Foreigners and dual citizens must produce a negative PCR test result 96 hours prior to landing in the country.

The card holding information pertaining to COVID-19 vaccinations received by the individual, should be produced only in the English language.

Persons arriving from overseas will be required to undergo a PCR test on the first day of arrival while they will be subjected to a 14-day quarantine period at a hotel or quarantine centre.

Diplomats will be allowed to spend their quarantine period in the accommodation provided by the respective Embassy.

The new circular issued by the Director General of Health Services stated fully vaccinated Sri Lankans or dual citizens travelling from overseas who have also completed the 14-day quarantine period, should notify health services on the matter.