News
Discussions with China underway to resolve economic crisis
USD 2.5 bn funding:
Amb Zhenhong silent on IMF intervention
By Shamindra Ferdinando
The cash-strapped Sri Lankan government is negotiating with China for funds amounting to USD 2.5 bn in addition to USD 2.8 bn obtained since the global epidemic Covid-19 eruption in early 2020.
Chinese Ambassador Qi Zhenhong disclosed Sri Lanka’s request at the onset of a media briefing held at the Kingsbury Hotel in Colombo yesterday (21).
The disclosure was made close on the heels of the finalisation of USD 1 bn loan facility provided by India and President Gotabaya Rajapaksa’s declaration of his readiness to seek IMF assistance. Amb. Zhenhong declined to comment on Sri Lanka’s decision to resume negotiations with the IMF.
Sri Lanka announced plans for talks with the IMF in the wake of an increase in prices of all essential items and services following the floating of the Rupee in the first week of March.
Amb. Zhenhong said that China recently received requests for USD 1 billion financing facility and USD 1.5 bn buyer’s credit. The Chinese envoy declared: “We understand the urgency in Sri Lanka’s need. Relevant authorities are studying the request.”
In spite of repeated questions, Amb Zhenhong refrained from going into details, including Sri Lanka’s specific needs while reiterating their commitment to help a friendly country.
Zhenhong presented his credentials to President Gotabaya Rajapaksa in mid Nov 2020 at the height of the first Covid-19 wave.
At the commencement of the briefing attended by local and Colombo based international media, Amb. Zhenhong said a range of events and activities conducted so far this year to mark 65th anniversary of China-Sri Lanka diplomatic relations and the 70th anniversary of the Rubber-Rice pact.
Responding to a query raised by Reuters, Amb Zhenhong said that USD 1 bn term financing facility had been provided on March 18, 2020 and April 12, 2020 (USD 500 mn each) with maturity period of 10 years. That was followed by CNY 2 bn (approximately USD 300 mn) term financing facility provided on Aug. 17, 2021, Amb Zhenhong said, adding CNY 10 bn (approximately USD1.5 bn) bilateral currency SWAP agreement was finalized in March 2021.
The Chinese envoy sidestepped a specific query on President Gotabaya Rajapaksa’s request to restructure debt repayments to overcome the financial crisis.
President Rajapaksa made the request during a meeting with Chinese Foreign Minister Wang Yi in early January this year.
New requests for USD 2.5 bn (USD 1 bn financing facility and USD 1.5 bn buyer’s credit) are believed to have been made following the Chinese Foreign Minister’s high profile visit.
Asked whether India has overtaken China in providing assistance and investments here, Amb Zhenhong listed Chinese loans and investments while asserting consistency, scale and comprehensiveness in their role. The Chinese envoy didn’t respond to the query on Finance Minister Basil Rajapaksa being too close to India and pursuing an agenda at the expense of Beijing.
Amb Zhenhong dismissed assertions that the failure on the part of the Colombo Port City to attract investments and concerns over proposed Free Trade Agreement (FTA) between China and Sri Lanka. Amb Zhenhong assured: “We’ll never take advantage of FTA with Sri Lanka.” The Chinese envoy said so when the media queried the absence of a draft of FTA and serious concerns over its content against the backdrop of the previous Sri Lanka administration finalizing FTA with Singapore under controversial circumstances.
Amb Zhenhong said that the experts of both sides could handle the issues at hand.
Amb Zhenhong said that in spite of Covid-19 eruption China sustained its projects here with over 11,000 locals hired. Referring to major Chinese projects underway here namely Colombo Port City, Colombo International Container Terminals (CICT) and Hambantota International Port (HIP), Amb Zhenhong emphasized their ventures were on track.
The envoy questioned the unexplained suspension of ADB funded power projects in the North while declining to respond to questions regarding the status of them. The Chinese envoy advised that such an attitude on Sri Lanka’s part would be inimical to ongoing efforts to attract foreign investment.
The Chinese envoy avoided responding to queries regarding growing Indian presence in the Northern and Eastern Provinces of Sri Lanka and instances of India objecting to Chinese taking up projects. However, Amb Zhenhong explained the projects undertaken by China in Tamil dominated region, investments and grants made in support of the civilian community there.
… successive governments sat on PCoI report handed over in Feb. 2021
His Eminence Malcolm Cardinal Ranjith yesterday (21) alleged that those who were in power from 2019 to September 2024 sabotaged investigations into the Easter Sunday carnage (2019).
Addressing the Seventh Year Commemoration of the Easter Sunday suicide attacks, at St. Anthony’s Church Kochchikade, Colombo, the Archbishop of Colombo said that unlike the present leaders of the country, almost all the power holders, since the 2019 April attacks, including former Presidents, Heads of the Police and the AG’s department officials, instead of sincerely finding out as to who and what was behind the horrific crime, tried their best to confuse the public, muddle up the investigations and appointing all kinds of committees, with highly suspect investigators, in order to come out with conclusions crafted by them, and tried to sabotage the truth from emerging.
In spite of the change of government, in September 2024, certain officials of the “deep state” were seeking to obstruct the smooth flow of ongoing investigations.
Regardless of the Presidential Commission of Inquiry (PCOI) giving clear directives to the Attorney General and to that department to take clear legal and disciplinary actions against some of the political figures, officials of the security establishment and organisations for criminal neglect of duty, very little has so far been done on this matter by them.
The PCoI handed over its report to President Gotabaya Rajapaksa in February 2021.
The Catholic leader emphasised the need to investigate possible links between the Easter Sunday massacre and attacks, targeting the Muslim community, on the night of 5th May and, once again, on 11th, 12th and 13th May, starting from the Nattandiya-Madampe area, through Kotaramulla to Minuwangoda. The Cardinal said: “This may have a link to the main attacks on 21st April 2019. One must also verify as to whether anyone in the security establishment prevented those responsible from controlling these attacks as and when they began.”
The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) has directed the Secretary General of Parliament Kushani Rohanadeera to cancel an internal transfer of a senior official.
Sources said that the CIABOC intervened as the female official to be transferred is a key witness in the ongoing investigation into the conduct of suspended Deputy Secretary General of Parliament Chaminda Kularatne. The CIABOC has asked the Secretary General to delay the transfer until the conclusion of its investigation.
CIABOC initiated the investigation following a complaint against Kularatne, who himself complained against Speaker Dr. Jagath Wickremaratne over corruption and irregularities.
The female official’s transfer was to take effect on 20 April.
The United Nations has urged Sri Lanka to deliver concrete results after long-running investigations into the 2019 Easter Sunday suicide bombings that killed 279 people, including 45 foreigners.
The UN’s top envoy to the country, Marc-Andre Franche, said survivors and families of victims were still waiting for answers, despite multiple probes and renewed political pledges following the formation of a new government in September 2024.
“Public commitments by the government to pursue justice are important and must be welcomed,” he said, as the nation marked seven years since the bombings on Tuesday.
“But what matters now is results,” he said at a remembrance service in Colombo.
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