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Foreign debt manageable – CB Governor
by Sanath Nanayakkare
Doomsayers had predicted that the country’s debt burden would be unmanageable, but that was not the case when one took the alternative economic indicators into account, Central Bank Governor Prof. W.D Lakshman said yesterday at the inauguration session of Sri Lanka Economic Summit 2020, held on a virtual platform.
Prof. Lakshman said that he particularly felt obliged to touch upon the current controversies surrounding Sri Lanka’s fiscal deficits and the current level of its debt.
“There are arguments that Sri Lanka’s fiscal deficits have been excessive and the debt levels are at unmanageable levels, but let me attempt to expand on this aspect in terms of alternative thinking in economic theory,” he said.
“Several countries including Japan, Singapore, and the United States have debt levels far exceeding their GDP. Firstly, this shows that even such high levels of debt could be sustainable when domestic debt is the predominant component in the debt portfolio. It can be shown through alternative indicators that even foreign debt is more manageable than doomsayers indicate.
“The ratio of government’s foreign non-concessional debt to GDP is around 23%, and the remainder is either domestic debt that can be rolled over or dealt with upon long term concessional financing. The annual foreign debt service payments as a percentage of export earnings and remittances stand at around 12% in ‘business as usual’ years such as 2018.
“With the adoption of a fiscal consolidation path from 2021 and the increased emphasis on domestic debt when it comes to financing budget deficits, the aforementioned indicators will improve further. The fears surrounding debt sustainability, therefore, indeed appear unfounded.”
Referring to widespread concerns on import restrictions, foreign trade and foreign economic relations the Governor said: “Import restrictions on non-essential goods working along with low oil prices have provided the country with a saving of US$ 4 billion in import expenditure in 2020. This saving is almost equivalent to the foreign currency debt service payments we settled during the year.
“Import restrictions have also provided an opportunity for our local enterprises to gather steam within the domestic market and to evaluate possibilities of expansion abroad – a mechanism used in all successful growth stories of the world. Those who argue for so-called ‘debt restructuring or debt reprofiling’ must realise that this means reforms of austerity. In my view, Sri Lanka is already undergoing some austerity, but on our terms. This is evident when the ongoing programme of import compression is considered.
“Sri Lanka is introducing ground-breaking reforms to improve its domestic production economy, enhance exports and reduce foreign debt dependence. It is commendable that Sri Lanka is following this approach without being prompted by any foreign agency, while continuing to honour all its financial obligations.”
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Prime Minister attends 169th birth anniversary celebration of Lord Robert Baden-Powell
The 169th birth anniversary celebration of Lord Baden-Powell, the founder of the World Scouting Movement, and World Scout Thinking Day, was held on 22 February at the National Scout Headquarters, with the participation of Prime Minister Dr. Harini Amarasuriya.
Addressing the gathering, the Prime Minister emphasized that the Scouting Movement is not merely about holding positions, but a noble form of training that nurtures readiness to help others and to serve society while “being prepared.”
She further highlighted the importance of serving society as a disciplined and intelligent “smart” Scout who respects others while effectively using modern technology. The Prime Minister also called upon Scouts to contribute responsibly to safeguarding the nation’s future through environmentally friendly initiatives such as tree planting and the protection of water resources.
During the event, laptops were symbolically distributed to several districts under the Scout Digitalization Project, along with the provision of first-aid kits. Additionally, Chief Scout Commissioner Attorney-at-Law Manoj Nanayakkara presented the Prime Minister with a special Scout stamp collection and a commemorative cover.
The occasion was attended by the Secretary to the Prime Minister Pradeep Saputhanthri, officials of the Sri Lanka Scout Association, and a large number of Scouts from across the island.
(Prime Minister’s Media Division)
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Coal ash surge at N’cholai power plant raises fresh environmental concerns
Environmental groups have raised fresh concerns over increasing levels of coal ash generated at the Norochcholai Coal Power Plant, warning of serious environmental and public health risks if proper disposal mechanisms are not urgently implemented.
Environmental scientist and Centre for Environmental Justice (CEJ) Chairman Hemantha Withanage, in a strongly-worded comment yesterday, said the growing volume of ash was being treated as a “blessing” by authorities, while, in reality, it posed a major ecological threat.
He told The Island: “More coal and more ash are being celebrated as a blessing. People around Norochcholai should get ready to apply it on their foreheads — and this will affect everyone, regardless of political affiliation.”
Norochcholai, Sri Lanka’s largest coal-fired power station, produces thousands of tonnes of fly ash and bottom ash annually. Environmentalists say a significant portion of this waste is either inadequately stored or disposed of without proper environmental safeguards.
Withanage said coal ash contains toxic heavy metals, such as mercury, arsenic, cadmium and lead, which can contaminate soil, groundwater and nearby marine ecosystems.
“Coal ash is not ordinary waste. It is a hazardous industrial material. If it leaks into the environment, it can enter food chains and drinking water sources,” he said.
He warned that communities living around Norochcholai were already exposed to air pollution from ash particles, especially during windy conditions, leading to respiratory problems and long-term health risks.
CEJ has repeatedly called for a transparent national policy on coal ash management, including safe storage facilities, independent monitoring, and exploring environmentally responsible reuse options under strict regulation.
Withanage stressed that while some countries recycle coal ash in construction materials, Sri Lanka lacks the regulatory framework and technical safeguards to do so safely.
“Without proper standards, recycling can become another pathway for toxic exposure,” he cautioned.
Environmentalists are also urging the government to accelerate the transition away from coal towards renewable energy, arguing that continued dependence on coal will only multiply waste and health burdens in the coming years.
Norochcholai supplies nearly one-third of the country’s base-load electricity, but has remained controversial, since its commissioning, due to repeated technical failures, marine pollution concerns and its long-term environmental footprint.
“With climate change and public health risks, coal is a problem we should be reducing, not normalising,” Withanage said. “Otherwise, the ash will eventually come back to all of us.”
by Ifham Nizam
News
Akuregoda double murder: Suspected gunman in custody a duly discharged ex-soldier
The police have arrested one of the two gunmen involved in the killing of Attorney-at-Law Buddhika Mallawarachchi and his wife, at Akuregoda, on 13 February. The suspect has been identified as a legally discharged soldier.
A team of the Homagama Divisional Crime Investigation Bureau personnel apprehended the ex-soldier at Delduwa, Ambalangoda, on Saturday, around 6.20 p.m. Sources said that the suspect, identified as drug addict, had admitted that he was the one who fired the T-56 assault rifle in the attack. The other attacker used a pistol. He is still at large.
Police identified the suspect in custody as a 46-year-old resident of Baddegama. He made use of a general amnesty offered to deserters, after the conclusion of the war, to secure legal discharge. He was with a friend at Delduwa, Ambalangoda, and worked on a nearby cinnamon estate.
The suspect has been detained under PTA and the police given the power to hold him for 90 days.
The police recovered his mobile phone.
The killers arrived at Akuregoda, in a car, and fled the area after killing the couple. The ex-soldier had got off the car, near Kottawa, and then took a bus to Dehiwala, from where he proceeded to Ambalangoda.
Under interrogation, the suspect has revealed that he carried out the hit on a contract given by Karandeniye Sudda, a notorious underworld figure, who paid him Rs 1 mn and provided a quantity of heroin.
The ex-soldier is among nine persons taken into custody in connection with the ongoing investigations into the Akuregoda double murder.
Among those taken into custody are two brothers from Athurugiriya who allegedly transported one of the firearms used in the killing and provided information about the lawyer’s vehicle. Another person, identified as “Polgasowita Dila,” believed to have coordinated the Akuregoda hit, was also taken into custody during preliminary investigations.
The Police Special Task Force’s Southern Province Special Operations Unit arrested six more suspects over the weekend at Ethkandura, Kahaduwa, for aiding and abetting the double murder
Investigations have further revealed that the individual, who moved the gunman to a hotel in Pannipitiya, had fled to Thailand, via the Bandaranaike International Airport (BIA).
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