News
Central Bank urges China and India to reduce Lanka’s debts
(BBC) Sri Lanka’s central bank has urged China and India to agree a write-down of their loans as soon as possible.The crisis-hit Indian Ocean state defaulted on its debt repayments and negotiated a $2.9bn (£2.4bn) bailout.
But the International Monetary Fund will not release the cash until China and India first agree to reduce Sri Lanka’s billions of dollars of debt.The governor of Sri Lanka’s central bank told BBC Newsnight it was in the interest of all parties to act quickly.
P. Nandalal Weerasinghe said: “The sooner they give us finance assurances that would be better for both [sides], as a creditor, as a debtor.”
“That will help us to start repaying their obligations,” he added.
“We don’t want to be in this kind of situation, not meeting the obligations, for too long. That is not good for the country and for us. That’s not good for investor confidence in Sri Lanka.”
Though inflation in the country has eased slightly since last year, food prices in Sri Lanka last month were still 65% higher than a year earlier.The World Food Programme estimates that 8 million Sri Lankans – more than a third of the population – are “food insecure”, with hunger especially concentrated in rural areas.
The economic turmoil sparked mass protests last year, which resulted in the former president fleeing the country in July.The World Bank estimates that Sri Lanka’s economy shrank by 9.2% in 2022 and that it will contract by a further 4.2% this year.
Beijing’s lending to Sri Lanka stands at around $7bn while India is owed around $1bn.The Sri Lankan government had initially hoped to agree a new payment plan with China and India by the end of 2022.Weerasinghe said it was possible an agreement could come later in January but added “this all depends on the other parties – our creditors really have to make that decision”.
He added that Sri Lanka had now provided them with all the information on the country’s borrowings they needed.Independent analysts say China is concerned about what a substantial Sri Lankan debt write down could mean for its extensive lending to other developing countries through its Belt and Road programme.
Meanwhile, India is said to be wary of getting inferior terms on debt restructuring to China, its regional rival.The US ambassador to Sri Lanka, Julie Chung, said the greater onus to move was on China, as the biggest bilateral lender.
“We hope that they do not delay because Sri Lanka does not have time to delay. They need these assurances immediately,” ambassador Chung told BBC Newsnight.
“For the sake of the Sri Lankan people, we certainly hope China is not a spoiler as they proceed to attain this IMF agreement.”
But if India and China do ultimately agree to write down their loans to Sri Lanka another potential problem looms in the form of private creditors, who account for 40% of the country’s external debt stock.
In the years after Argentina plunged into economic crisis and default in 2001, some American hedge funds, rather than accepting a restructuring of the sovereign bonds they had bought on the open market, demanded full repayment and took the country’s government to court in the US to achieve it.
A large group of international economists on 8 January called for Sri Lanka’s bonds, to be “cancelled”, writing: “All of Sri Lanka’s creditors must ensure debt cancellation sufficient to provide a way out of the current crisis.”
Asked about Sri Lanka’s private bondholders, Weerasinghe said: “We engage with private creditors in good faith negotiations. And what we are seeing is that they are very positive and they are willing to engage with us.”
The governor said he expected that once agreement from bilateral creditors has been agreed the IMF funds could be distributed to Sri Lanka within “four to six weeks”.
News
Ex-SriLankan CEO’s death: Controversy surrounds execution of bail bond
Prof. Prathibha Mahanamahewa has emphasised the need to examine the circumstances under which the court staff executed the bail bond, and the release process, in respect of the late Kapila Chandrasena, former Chief Executive Officer of SriLankan Airlines.
Chandrasena’s body was found in a house at Pedris Road, Colombo 03.
In case of any doubt regarding bail condition/s or any other matter (insufficient surety, identity issues, suspicious documents and unclear order), the Registrar had to get in touch with the relevant Magistrate, Mahanamahewa said.
Mahanamahewa was responding to The Island query regarding the acceptance of two Muslims as sureties. Had they followed the time-tested procedure, court registry/registrar staff would never have accepted sureties as blood relatives of Chandrasena, Mahanamahewa said, alleging a major defect in the execution of the bail bond.
They were arrested by police and remanded by the Colombo Magistrate’s court, till 13 May, pending further investigations.
Colombo Chief Magistrate Asanga S. Bodharagama, on 5 May, granted to Chandrasena cash bail of Rs. 500,000 and three surety bails of Rs. 10 million each. But soon after Chandrasena received bail, the court was told that two of the Rs. 10 million sureties had been produced, after payment of Rs. 15,000 each, were made to those two individuals to act as guarantors.
The bail application had been submitted by Rienzie Arsecularatne, PC, appearing on behalf of Kapila Chandrasena, when the case was earlier taken up, on 28 April.
Police also arrested an elderly person who arranged for the two persons who hadn’t even seen Chandrasena, even once, to offer themselves as sureties.
As soon as the police revealed the fraudulent manner Chandrasena obtained bail, Chief Magistrate Bodharagama issued an order to arrest and produce him before the court. This order was issued consequent to a request made by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), on the grounds that the defendant had violated bail conditions. The CIABOC wanted Chandrasena held pending the conclusion of the case.
Sources familiar with the execution of bail bond said that the moment the suspects had submitted their National Identity Cards and letters from Grama Sevakas, the court registry/registrar staff should have rejected them. In a such high-profile case, the failure on the part of the lawyers, representing Chandrasena, to check the gsureties’ relationship with Chandrasena, was another glaring shortcoming, sources said, pointing out that after having submitted bail application on 28 April, the defence team should have come prepared to put forward genuine guarantors.
The Island contacted the Bar Association of Sri Lanka for comment on the manner in which the court staff had handled bail for Chandrasena, but there was no response.
Sri Lanka’s former Ambassador to Moscow, accredited to Kiev, Udayanga Weeratunga, said that a thorough investigation should be conducted to ascertain facts about the execution of the bail bond. Asked whether he had been in touch with Chandrasena, Weeratunga said that he spent his first day at Welikada with Chandrasena and Ranjan Ramanayake in one cell. “That happened on 14 February, 2020. I was arrested when I returned to the country, from the UAE, and produced before the then Magistrate Ranga Dissanayake, the incumbent Director General of CIABOC,” Weeratunga said.
Weeratunga said that a couple of months after the change of government in 2024, the US State Department imposed a travel ban on him and Chandrasena and their families over what the US termed as significant corruption.
Weeratunga said that altogether the US designated 14 persons and, of them, two were Sri Lankan, who happened to be him and Chandrasena, accused of corruption in respect of acquisition of MiG 27s from Ukraine and the Airbus deal, during President Mahinda Rajapaksa’s tenure as the President.
SLPP sources said that Chandrasena’s demise shouldn’t prevent proper investigation on his affidavit that claimed pressure brought on him to name Mahinda Rajapaksa as a recipient of the Airbus bribe.
By Shamindra Ferdinando
News
Law applies to all, regardless of power or influence – Prez
President Anura Kumara Dissanayake emphasised yesterday (12) that the law would be enforced equally and no one was allowed to be above the law.
Addressing the Matale District Coordinating Committee meeting, at the Matale District Secretariat, President Dissanayake said, “Do not be afraid to work, but be afraid to engage in irregularities. Everyone must first be subject to the law and secondly, must fear the law. This applies to everyone, from the President down to the Grama Niladhari.”
“If we are to usher in a new era, we must submit to the rule of law. No one can be above it, he said, adding that previous Presidents had even violated the Constitution with impunity.
The President said that if there were any instances of selective law enforcement, they should be brought to his attention for action. Everyone was required to cooperate, if called upon to make statements in an investigation, he said.
By S.K. Samaranayake
News
Sri Lanka and Belarus to sign several MoUs
Minister of Foreign Affairs, Foreign Employment and Tourism, Vijitha Herath, is on an official visit to Belarus, from yesterday to Friday (15), on the invitation of the Foreign Minister of the Republic of Belarus, Maxim Ryzhenkov.
The text of the Foreign Ministry release: “This visit will mark a milestone in the bilateral partnership as the two countries commemorated the 25th Anniversary of the establishment of Diplomatic Relations last year.
During his visit to Minsk, Minister Herath will call on Belarus President Alexander Lukashenko and will hold bilateral discussions with the Minister of Foreign Affairs of Belarus. Minister Herath is also scheduled to meet the Belarus Ministers of Education and Health. Several MoUs and agreements across sectors are envisaged to be signed with the Republic of Belarus during the visit.
In Minsk, Minister Herath will address a business and tourism roundtable, organised by the National Export Centre of Belarus. He is also scheduled to meet Sri Lankan students studying in Belarus.”
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