A press briefing on the economic stabilization process and the proposed relief packages for the public was held on Thursday (26) at the Presidential Media Center (PMC).

Minister of Labor and Deputy Minister of Economic Development, Dr. Anil Jayantha Fernando, along with Deputy Minister of Finance and Planning, Dr. Harshana Suriyapperuma, attended the briefing.

The media statement released during the press briefing is as follows:

Press Statement on the Economic Stabilization Process and Relief Packages to people.

1. Economic Stabilization
Economic stabilization is key to take the country out of abyss created by past regimes. At the time the government assumed office those who are responsible for the crisis had unilaterally suspended external debt servicing in April 2022, entered into IMF program for Extended fund facility (EFF) of approximately USD 3 billion over a period of 4 years to be received in 8 installments, and paddled through the IMF program and debt restructuring process in line with debt sustainability analysis connected to it. The delayed and complex nature of the debt restructuring process incurred additional costs to the country and created additional burden on the people. However after, considering both pros and cons of the context prevailed at that time in terms of social, political and economic perspective, the government proceeded with the options in the best interest of the people of the country.

Accordingly, it was possible to reach the staff-level agreement of the third review on 26th November 2024, in line with the program parameters, and government revenue measures with appropriate engagement, and timely facilitation. In the lead-up to the board approval from the IMF, the government is engaging with necessary stakeholders to obtain the next tranche of the EFF.

Debt Restructuring
It consists of both domestic and external restructuring. Domestic debt restructuring was completed in July 2023. External restructuring excludes multilateral creditors on various ground and arguments. The rest consists of official bilateral debt and private ISB holders.

Bilateral Debt
The bilateral debt is dealt with the Official Creditor Committee (OCC) co-chaired by France, India and Japan representing 17 countries, China Exim Bank, China Development bank, other official creditors (Kuwait, Saudi Arabia, Iran and Pakistan) and other commercial creditors.

OCC had agreed to the terms and conditions in June 2024 and the loans with China Exim bank had already been restructured in October 2023 within the agreed framework, ensuring comparability of treatment (CoT). Except the other official creditors (Kuwait, Saudi Arabia, Iran and Pakistan) accounting roughly USD 300 million representing about 1% total external debt subject restructuring , all other bilateral creditors have already agreed for restructuring within the agreed framework.

ISB Creditors
Much delayed ISB restructuring had passed several stages of negotiations with agreements, disagreements, changes to proposals, adjustments in line with DSA and IMF consents, had finally agreed in principle (AIP) on 19 September 2024 just two days prior to the presidential election. Ad Hoc Group (AHG) and Local banking consortium represent ISBs which account for USD 14.2 billion including a past due interest of USD 1.7 billion.

By prioritizing and facilitating actions in a timely manner, the new government has demonstrated a strong political commitment to steering the country toward economic stability. These efforts toward financial stability have been independently acknowledged by third parties, including rating agencies which have upgraded the ratings by several notches, which was only possible due to the correct prioritization and implementation of economic stabilization measures. Hence, the government continued with the restructuring process and facilitated it to ensure the successful completion of the issuance of new bonds for the exchange of existing ones on 20th December 2024 in order to achieve the critical objective of stabilizing the economy in pursue of navigating the country with the growth and development trajectory towards a thriving nation and beautiful life.

2. SME Sector Facilitation

2.a.1. Parate Extension
Instead of merely postponing the Parate execution date, the government engaged with stakeholder groups to ensure acceptable solutions was found for this long-standing issue. As a result, the Parate execution has now been extended until 31st March 2025.

2.a.2. Relief Package
The relief for businesses is not only in the form of an extension of time. Based on data provided by the Central Bank, 99% of borrowers with outstanding capital of less than 25 million rupees in restructured loans have been granted a 12-month extension to renegotiate with banks and agree on a settlement path. Borrowers with debts between 25,000,000 and 50,000,000 rupees have been granted a 9-month extension, while all other borrowers are entitled to a 6-month extension. This relief package, proposed by the government and to be implemented through the Central Bank, also includes several other important measures, such as easing the credit rating status, extending the repayment period, offering low interest rates for restructured debt, and providing a transparent mechanism to resolve valuation disputes.

This package aims to ensure that the SME sector can actively contribute to the economy.

2.b. School Stationery Assistance for School Children

2.b.1. Children in the Aswesuma Families
To ease the burden on parents from vulnerable groups in society, Rs. 6,000 per child has been allocated to purchase essential school books and stationery for the upcoming school term. Children from Aswesuma recipient families will begin receiving this benefit shortly.

2.b.2. Children Not Receiving Aswesuma
Children from families who are not currently receiving Aswesuma but are facing economic hardship will also be provided with this benefit, based on recommendations from the Ministry of Education. It is expected that the process will be finalized soon, and the disbursement scheme will start within a few days, ensuring that all deserving children facing economic hardship receive assistance.

[PMD]

There have been 28 incidents of shooting, out of which 16 were carried out by organised criminal groups during the past three months, Police Media Spokesman, SSP Buddhika Manathunga says.SSP Manathunga said that the police had solved 10 of those attacks carried out by the organised criminal groups and arrested 57 suspects, along with three firearms.

He added that underworld groups clashed with each other often, and the intensity of those clashes remained a concern.

“When one compares shooting incidents in 2023 and 2024, there is a slight decrease. There were 120 incidents of shooting in 2023, out of which 65 were carried out by organised gangs. In 2024, the number is 99 so far, criminal gangs were involved in 55 of these,” he said.

People talk about an increase in violent criminal activities during the past few years. This is mainly due to increased media coverage, he said.

“However, we must admit that the brutality of these crimes has intensified. Think of the killing of five people in Tangalle in early 2024 and the killing of a Buddhist monk in Malwathuhiripitiya a few days later,” he said.

There is a lot of violence between armed gangs because they compete against each other for territory and higher stakes in the drug business. “Whenever the police or security forces carry out large raids, criminal groups think that we are acting based on a tip-off by a rival group. In recent weeks we have uncovered a lot of drugs, and criminal groups believe that their drugs were detected because of tip-offs by rival gangs,” he said.

SSP Manathunga said they had secured 188 Interpol red notices on people who had skipped bail and fled the country. Out of these 63 are members of organised crime gangs, he said.

The SJB alleges that the government has launched a campaign to politicise the public service as never before, with a view to influencing the outcome of the upcoming elections.

SJB General Secretary and Member of Parliament Ranjith Madduma Bandara has, in a media statement, expressed serious concerns over the future of government servants.

“There are credible reports of a systematic plan to arbitrarily transfer public officials across various sectors without justifiable reasons. This includes key divisional-level positions such as Assistant Commissioners of Local Government bodies, Secretaries of Local Government institutions, and Assistant Cooperative Development Commissioners. These actions are disrupting both administrative efficiency and field operations,” Madduma Bandara has said.

“With the long-delayed local government elections and ongoing cooperative society elections, it is apparent that this sudden wave of politicisation is part of a calculated strategy to target these polls. These transfers are not only compromising the delivery of services but are also causing significant personal difficulties for the affected officials,” Madduma Bandara has added.

The SJB also announced the establishment of a special unit to investigate these incidents. Members of the public have been encouraged to provide information, either anonymously or otherwise, regarding such activities.

“While transfers within the public service can sometimes be necessary, they must be conducted transparently and on legitimate grounds. It is the duty of the opposition to challenge politically motivated actions. We call on the government and provincial authorities to immediately halt all arbitrary transfers and ensure that the public service remains free of political interference,” the statement concluded.