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Is debt cancellation the way forward for Lanka?

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(Al Jazeera) More than 180 prominent economists and development experts from around the world have made a global appeal to Sri Lanka’s financial lenders to forgive its debt, even as other experts are not convinced it is the best way forward for the island nation.

According to World Bank estimates, Sri Lanka has an external debt burden of more than $52bn as of December. Of that, nearly 40 percent is owed to private creditors, including financial institutions, while the rest is owed to bilateral creditors where China (52 percent), Japan (19 percent) and India (12 percent) are the largest ones.

Colombo defaulted on its debt repayments in April and negotiated a $2.9bn bailout with the International Monetary Fund (IMF).But the IMF will not release the cash until it feels that the island nation’s debt is sustainable.

Now several prominent academics and economists, including Thomas Piketty who wrote the bestseller Capital, Harvard University economist Dani Rodrik and Indian economist Jayati Ghosh have issued a statement calling for the cancellation of Sri Lanka’s debt by all external creditors and measures to stem the illicit outflow of capital from the country. The statement was put together by the “Debt Justice” campaign group, a global movement to “end unjust debt and the poverty and inequality it perpetuates”.

The private investors who lent at high interest rates to corrupt politicians must face the consequences of their risky lending by cancelling the debt, the academics said in the statement.

The academics have accused private creditors of contributing to Sri Lanka’s first-ever sovereign debt default as they accrued “a massive profit” by charging a premium to lend. Therefore, they said, the private lenders who benefitted from higher returns must be “willing to take the consequences” of their actions, meaning cancelling the debt and forfeiting the loans.

But not everyone agrees with this suggestion.

WA Wijewardene, a former deputy governor of the Central Bank of Sri Lanka, says that should the debt cancellation plan actually go through, it might lead to the collapse of the current global financial system.

Many of the academics who have signed the said statement are not economists, he told Al Jazeera.

“It is a galaxy of academics belonging to the social sciences field. As such, it needs to be critically appraised because, if accepted for Sri Lanka, it in fact provides a blueprint for a new world economic order.”

He added: “The present economic order is an interdependent, interconnected system. If you break this, the world will collapse. You don’t know what would happen thereafter.”

Wijewardene told Al Jazeera that he was surprised that Dani Rodrik, “who was a strong advocate for Washington Consensus, ie neo-liberal economic reform throughout the world” and Thomas Piketty, “who is from the opposite camp,” are on the same platform calling for debt cancellation.

Instead, he said, these academics and economists “should argue for the accountability to be established”.

“Money borrowed has been wasted or appropriated by rulers, leaving [out] people who haven’t benefitted from them. Those rulers should be made accountable for the losses and we should fight to establish a governance system in which they should be prosecuted for their crimes,” he said.

Wijewardene added that the cancellation of debt would not benefit the people but “the corrupt, despot” leaders.

“Corrupt despots have already benefitted from the money borrowed. When debt is cancelled, they don’t have to repay and can continue to borrow more and use that money for private gains. This is known as the moral hazard problem in economics; that when someone has taken responsibility for your liabilities, you have no incentive to take even the minimum precautions to minimise it,” he said.

For now, Nandalal Weerasinghe, the head of the Sri Lanka Central Bank, has urged China and India to come to an agreement over reducing the country’s debt.

“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,” Weerasinghe told the BBC recently.



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Washout against Afghanistan sends India into semi-finals

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India will meet the winner of the Nepal-Sri Lanka quarter-final (Cricinfo)

India are through to the semi-finals of the Asian Games men’s tournament, with persistent rain and a damp outfield in Nisshin forcing the abandonment of their quarter-final against Afghanistan 16 minutes before the scheduled toss. India’s higher seeding – determined by the ICC T20I team rankings – ensured they went through at Afghanistan’s expense.

India will next face the winners of Tuesday’s quarter-final between Nepal and Sri Lanka in Thursday’s second semi-final. As one of the four seeded teams – India, Pakistan and Bangladesh are the others – to qualify directly for the quarter-finals, Sri Lanka will progress to the semi-finals if their match against Nepal is washed out too.

Earlier on Monday, the first quarter-final between Hong Kong and Pakistan was also abandoned before a toss could take place.
Afghanistan have now ended a second successive Asian Games men’s tournament with a washout against India. They took the silver medal in Hangzhou in 2023 after their final against higher-seeded India was washed out after 18.2 overs of the first innings.
(Cricinfo)

 

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Sajith rejects Jt. Opp. protest sabotage claim; SJB TU chief demands remedial action  

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By Shamindra Ferdinando

Alleging that the Samagi Jana Balawegaya (SJB) had betrayed the joint protest campaign, planned on 24 Sept., at Polduwa junction, against the enactment of the 22nd Amendment without securing public approval at a referendum, SJB trade union leader Ananda Palitha emphasised that SJB and Opposition Leader Sajith Premadasa should take remedial measures to restore the alliance against the NPP government.

Responding to The Island queries, the trade union activist said that he spoke on behalf of the vast majority of the SJBers who felt betrayed by the sudden declaration made by Colombo District SJB lawmaker S.M. Marikkar that they didn’t expect Opposition political parties’ participation, except that of the UNP.

Pointing out that at the behest of Premadasa, MP Marikkar belittled those who had pledged on 17 Sept. to join the SJB-led protest, Palitha emphasised the Opposition leader should be held responsible for restoring the shattered alliance. Palitha warned that the NPP, which was rapidly moving on a dictatorial path, would be the beneficiary of such treacherous actions.

When The Island raised the allegations pertaining to the 24 Sept. protest, Colombo District MP Premadasa said there was no basis for such claims. MP Premadasa called the accusations directed at him ‘rubbish.’

Palitha said that the pathetic failure on the part of the Opposition to genuinely challenge the authoritarian NPP should be examined, taking into consideration the government following an agenda almost 100 percent against the election pledges. Except the much touted anti-corruption campaign, the NPP reneged on all its election promises.

Recalling massive rice imports after having promised to stop the same in the run up to the national elections in 2024, Palitha alleged that the utterly corrupt NPP created an artificial shortage to enable import of large stocks of salt for their benefit. Massive earnings were made through commissions, Palitha said, urging the SJB to reiterate its commitment to the 17 Sept. pledge. According to him, the SJB’s irresponsible action sabotaged the joint Opposition agreement reached on the eve of President Anura Kumara Dissanayake completing two years in Office.

Palitha said that the disruption of a genuinely joint protest, at the last moment, caused irreparable harm to the Opposition. The unexpected eleventh hour declaration made by the SJB upset their efforts to organise a large scale two-day protest on 24 and 25 Sept. Palitha emphasised the responsibility on the part of the SJB leadership and its top management to spearhead an all-out campaign against the government. The former petroleum sector employee said that a strong and transparent campaign could undermine the NPP within as a section of its parliamentary group was deeply dismayed by the current policies and strategies.

Palitha, in his capacity as the trade union leader, invited the Bar Association of Sri Lanka (BASL) to join the trade unions’ protest on 25 Sept. to intensify pressure on the government. BASL President Rajeev Amarasuriya told The Island that they didn’t accept that invitation.

Former SLPP Kalutara District MP Sanjeewa Edirimanna said that the SJB was far more keen to organise a large-scale protest to counter the SLPP’s highly successful Anuradhapura rally held on 12 September than a genuine joint protest against the 22nd Amendment or the government. Edirimanna said that they realised that the SJB would probably join a joint protest campaign only after organising a gathering to counter the SLPP. According to him, the SJB hadn’t been honestly interested in a joint protest campaign. Instead, it sought to resist possible challenges from rival political parties, he said.

An aide to UNP leader and former President Ranil Wickremesinghe said that though the SJB announced they were welcome to join the 24 Sept. protest, the party never received an invitation. The official said that some UNPers joined the protest on their own though the party neither directed supporters to join or boycott the event. As the Janathawadi Joint Opposition decided against participating for want of formal invitations, the UNP, as part of that group, decided not to join the 24 Sept. protest.

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Police remove Thileepan statue in Jaffna

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Pictures grabbed from video footage show policemen removing the Thileepan statue in Nallur yesterday

By Norman Palihawadane

Police have removed a memorial statue of former LTTE member Rasaiah Parthipan, alias Thileepan, from the Thileepan Memorial Square in Nallur, Jaffna, following the conclusion of commemorative events, marking the 39th anniversary of his death.

The statue was removed in the early hours of yesterday (27), a day after the final day of the commemoration was held at the site.

CCTV footage from the memorial reportedly shows police officers removing the statue and taking it away in a vehicle.

Tamil National People’s Front (TNPF) Secretary and MP Selvarasa Gajendran alleged that more than 15 police officers arrived at the site, without prior notice, entered the premises wearing footwear, and forcibly removed the statue.

The reason for the removal and the legal basis for the police action had not been officially announced as of yesterday.

Thileepan, a former political wing leader of the LTTE, died in September 1987, after undertaking a hunger strike in Nallur, while making several demands of the Indian Government.

The memorial events, marking the 39th anniversary of his death, were held at the site on Saturday (26). A statue had been erected at the location in connection with the commemoration.

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