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Lanka awaits statement from external creditors

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CBSL Governor Dr. Nandalal Weerasinghe

By Sanath Nanayakkare

Central Bank Governor Dr. Nandalal Weerasinghe said in Colombo on Tuesday that the country would be awaiting an ‘important statement’ from its external creditors following a presentation made to them on Friday, laying out the full extent of the country’s economic crisis and plans for debt restructuring in the run-up to an International Monetary Fund bailout.

Earlier, the Finance Ministry said in a statement that the online call arranged by legal firm Clifford Chance on 23 Sept. would be open to all of Sri Lanka’s external creditors and be ‘an interactive session’ in which participants can ask questions.

“We have to obtain financial assurances collectively from our bilateral and other creditors that they are willing to support Sri Lanka in its debt restructuring process for the IMF Executive Board to start disbursing funds to Sri Lanka,” the Central Bank Governor said.

“That assurance is the next crucial step for us to get from our international creditors, friends and partners for us to be able to demonstrate that they will be supporting Sri Lanka in its debt restructuring plans and its IMF programme,” he said.

“That is what we are going to do from Friday onwards and we will be seeking that important statement from them. All our friendly countries have been helping at this difficult time. However, we need to lay out the restructuring plan in an open and transparent manner so that everyone will clearly see what they and what others are offered in the process. Hopefully they will give us that assurance and the sooner we get it the better. That’s the time-frame. A lot of people ask me how long it would take. I have to say that it depends on our international partners; as soon as they give us necessary financial assurances, the IMF can start disbursing the four-year extended fund facility to Sri Lanka. Then there will be a lot of investors as well as other valued partners such as the World Bank to enhance their support to Sri Lanka from that point onwards.

That I hope will be a crucial turning point for us to stabilize the economy.”

The Governor also pointed out that the people would have to go through a difficult period as the economy has contracted.

“We have had to manage our imports within our export incomes, and we also have to manage through way too high interest rates and slowing down of economic activities. These have to be dealt with while protecting the most affected vulnerable sections of the society, and in this context, others will have to bear some of the pain. That’s why we have had to take some difficult measures while ensuring the pain would not be too substantial. Once we get the assurances from our creditors for the restructuring plan and subsequently the approval from the Executive Board, I am very confident that we can stabilise the economy and we all can gradually get back to normal economic and business activities as we used to do in the past.”

Meanwhile, India said on Tuesday it had started bilateral discussions with Sri Lanka on restructuring Sri Lanka’s debt. The first round was held on Sept. 16 in a cordial atmosphere that showed India’s support for an early conclusion and approval of an International Monetary Fund loan programme for Sri Lanka.

Meanwhile a news report in The Hindu on Sept. 20 titled ‘China keeps Pakistan, Sri Lanka waiting on loan deals’ said: “While Japan and India have been very supportive of the IMF process from the beginning, all eyes are on China as to how it would react to debt restructuring with Sri Lanka”.

However, Beijing in response to Sri Lanka’s IMF agreement had earlier made a statement favorable to Colombo as a ‘traditional friendly neighbour’ of Sri Lanka and a ‘major shareholder’ of the IMF. It said that China has always been encouraging the IMF and other international financial institutions to continue to play a positive role in supporting Sri Lanka’s response to its current difficulties and its efforts to ease debt burden and realise sustainable development.



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PSTA worse than PTA: FSP

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The Frontline Socialist Party (FSP) yesterday accused the government of seeking to use the proposed Protection of the State from Terrorism Act (PSTA) to suppress popular political activity, claiming that some of its provisions were more repressive than those of the Prevention of Terrorism Act (PTA).

FSP Education Secretary Pubudu Jayagoda told a media briefing, in Nugegoda, that the definition of terrorism in the Bill was so broad that it could be used to label almost any form of popular political activity as terrorism.

He said the Bill’s approach to defining terrorism was based largely on attempts to compel a government, or an international organisation, to do, or refrain from doing something, rather than on internationally recognised criteria, such as killings, causing serious bodily harm, kidnapping or acts intended to spread terror among the public.

Jayagoda also alleged that the Bill transferred substantial powers from the judiciary to the executive, while extending powers of arrest, investigation and detention to the armed forces, in addition to the police.

He claimed that the government had sought to portray the Bill as a replacement for the PTA while retaining or introducing provisions that could facilitate political victimisation and repression.

The FSP also questioned the government’s decision to proceed with the Bill, despite having previously sought public views on an earlier draft.

Jayagoda said a draft had been published earlier this year, with the period for public submissions ending on February 28, but the Bill subsequently gazetted was essentially the same draft with some provisions rearranged.

Jayagoda also referred to a letter reportedly sent by Attorney-at-Law Saliya Peiris, a member of a Committee, chaired by President’s Counsel Rienzie Arsecularatne, that had been appointed to draft the legislation. He said Peiris had stated, in the October 06 letter, that changes had been made to the draft prepared by the Committee.

“This means that even the Committee, appointed to prepare the Bill, was a deception,” Jayagoda alleged.

He said that the PSTA was fundamentally similar to the Anti-Terrorism Bill introduced by the previous government, in 2023, which the National People’s Power (NPP) opposed and challenged in court.

“If the NPP opposed that Bill then and is now bringing the same legislation before Parliament, the government must explain its position,” he said.

Jayagoda called on NPP MPs to oppose the PSTA in Parliament and urged trade unions and other groups to build a broad public movement against the legislation.

He challenged the government to an open debate on the Bill.

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Shiranthi R remanded until 13 Oct.

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Former First Lady Shiranthi Rajapaksa was yesterday remanded until 13 October after being produced before the Colombo Magistrate’s Court following her arrest by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).

Shiranthi, wife of former President Mahinda Rajapaksa, was arrested at her residence on Poorwarama Road, Kirulapone, after CIABOC officers recorded a statement from her for nearly two hours.

According to the CIABOC, the arrest was made over allegations that Rs. 10 million obtained from the National Savings Bank through the Siriliya Saviya organisation was misappropriated.

The money was allegedly obtained to provide a Computed Tomography (CT) scanner to the children’s hospital. Investigators allege that the scanner was not provided and that the funds were instead unlawfully used.

CIABOC is investigating alleged offences under the Public Property Act and corruption-related provisions in connection with the transaction and other financial activities involving Siriliya Saviya, which was headed by Rajapaksa.

Rajapaksa returned to Sri Lanka on Monday night on a flight from Malaysia after travelling overseas for medical treatment. She left for Singapore on 16 September after being admitted to a private hospital in Colombo on 15 September following an illness.

She had been due to appear before the Financial Crimes Investigation Division (FCID) on 13 October in connection with its investigation into the financial affairs of Siriliya Saviya.

Meanwhile, her lawyers filed an anticipatory bail application before the Maligakanda Magistrate’s Court on Monday, seeking an order preventing her arrest in connection with the FCID investigation.

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Former NSB Chairman Kariyawasam granted bail

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Former National Savings Bank (NSB) Chairman Pradeep Kariyawasam was yesterday granted bail by the Colombo Magistrate’s Court following his arrest by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).

Kariyawasam, husband of former Chief Justice Shirani Bandaranayake, was arrested in connection with the Bribery Commission’s investigation into the ‘Siriliya Saviya’ account linked to former First Lady Shiranthi Rajapaksa.

The investigation concerns financial activities involving the Siriliya Saviya initiative, which was headed by Rajapaksa, wife of former President Mahinda Rajapaksa.

CIABOC is continuing investigations into the alleged financial irregularities relating to the account.

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