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SJB warns against counting foreign loans as part of forex reserves

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Dr. Harsha de Silva

The SJB has cautioned the Wickremesinghe-Rajapaksa government against counting loans received from the IMF, World Bank and ADB as external buffers as they have to be paid back.

SJB MP Dr. Harsha de Silva said loans secured from whatever sources weren’t earned reserves. The former UNP State Minister and economist said so when we sought his opinion on the government declaration that with the IMF second tranche amounting to USD 337 mn and WB’s USD 250 mn loan official reserves were expected to pass USD 4 bn by end of next week.

The President’s Media Division (PMD) said that this figure was much higher than expected. The PMD issued the statement hours after SLPP leader Mahinda Rajapaksa, in a statement issued to the media declared that USD 10,000 million in new ISBs borrowed between 2015 and 2019 broke the back of our economy. The former President found fault with the Sirisena-Wickremesinghe administration.

The SJB MP said: “Generally, the net international reserves refers to gross usable reserves less short term drains. Now this is where the lies of the Rajapaksa regime led to a false sense of security on usable reserves. Why did Foreign Minister Ali Sabry, PC, announce on 12 April 2023 that the government was unable to meet two external debt payments amounting to approximately USD 200m even though former CBSL Governor Ajith Nivard Cabraal had claimed we had some USD 1.6 b in reserves?

Truth is the government apparently had only USD 20 m of usable reserves and not USD 1.6b. The USD 1.5b Chinese currency swap was not usable due to restrictions on imports cover. So if usable reserves have now increased due to import cover restrictions being met and the Chinese money is available for then one can say we are in a better place in terms of buffers.”

Commenting on funds received from various sources, the MP questioned the continuing practice of counting loans, whether from World Bank and ADB as external buffers. That is not the ideal. Because these need to be paid back and not earned reserves. Fact is most countries count such long term loans as reserves.

But there again the Rajapaksa was misled that when they lost the election in Jan 2015, USD 2.2b were short-term swaps and another USD 3.5b consisted of ‘hot money’ meaning foreigners investing in Treasury paper having converted USD in to LKR which could be reversed immediately depending on interest rate movements.

So of the then USD 8.2b forex reserves almost USD 6b was not stable. That is why counting short-term swaps and hot money is misleading. In fact, converting these large unstable reserves into long term reserves amounting to close to USD 6b is a major reason beyond rolling over some USD 5 billion during the Yahapalana government that saw large-scale borrowings through ISBs.

At the time Gotabaya Rajapaksa came in reserves consisted of less than USD 1b in such unstable reserves, down from almost USD 6b. Also given 2020 was an election year the CBSL had borrowed an additional USD 2.9b in ISB preparing for any potential market risk. In fact, if not for this move of building external buffers Sri Lanka would have gone bankrupt much earlier after that the government made serious policy blunders. As we all now know, the government kept using the reserves to pay back foreign loans after the country was downgraded by the rating agencies and doors to the international capital market were closed.

On the other side of the equation is the amount in short term drains, meaning the total amount of USD debt that needs to be paid by the government in usually one year.

So, if the government is comfortable on both counts then it’s ok to be a little confident. I don’t have the numbers to make that call. Having said that I must reiterate that ultimately it’s earned dollars not borrowed dollars that really matter.” (SF)



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LG polls free and fair;Voter turnout low: Election monitors

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The countrywide Local Government (LG) election concluded at 4 pm yesterday (06) without serious incidents.

Voting began at 7 am at 13,759 polling centres. Over 17.1 mn people were eligible to vote at the third election since the presidential poll held last September

At the closing of voting, PAFFREL said that during the day they received 78 confirmed cases of polls-related offences including 38 cases of carrying out illegal propaganda and 25 complaints regarding influencing voters.

There had been altogether 38 unconfirmed cases, mostly of carrying out illegal propaganda and influencing voters, PAFFREL said.

The previous LG poll was held in February 2018 during the Yahapalana administration.

Voter turnout passed 50% in most districts with Kalutara recording – 61%, Colombo – 52%, Galle – 63%, Vavuniya – 60%, Digamadulla – 63%, Trincomalee – 67%, Nuwara-Eliya – 60%, Mullaitivu – 60%, Mannar – 70%, Badulla – 60%, Anuradhapura – 60%, Polonnaruwa – 64%, Moneragala – 61%, Kegalle – 58%, Matara – 58%, Matale- 62%, Rathnapura – 60%, Batticaloa – 61%, Kilinochchi – 60%, Puttalam – 55%

Having exercised her franchise at the polling booth at Samurdhi Building, Mirihana, Premier Dr. Harini Amarasuriya responded to allegations that at the final meeting at Moratuwa she influenced NPP supporters to campaign during the 72 hour ‘silence period.’

Premier Amarasuriya said that if her comments were deemed to have violated election laws she would accept any action taken by the Election

Commission. The law must be applied equally – whether to a citizen or the Prime Minister,” Dr. Amarasuriya said.

At the onset of the campaign President Anura Kumara Dissanayake caused controversy when he declared that government funds would be made available only to local authorities won by the NPP. Commissioner General of Elections Saman Sri Rathnayake is on record as having said that the Election Commission wrote to President Dissanayake regarding his statement.

Polls monitors said that the LG election, like the presidential and parliamentary polls, was peaceful. Political parties and polls monitors said that contrary to earlier assertions, the mini polls attracted a significant number of voters. The northern vote is comparatively higher than the rest of the country, they said.

The ruling NPP, the main Opposition SJB, the SLPP and UNP were the main contestants.

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Local government polls 2025

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Having voted at Abeysinharamaya, Panchikawatte, President Anura Kumara Dissanayake declared that the NPP would comfortably win Tuesday’s local government polls. The President voted soon after returning from a two-day state visit to Vietnam. (Pic by Nishan S. Priyantha)

Premier Dr. Harini Aparasuriya, who is under fire for urging NPP supporters to campaign during the official moratorium on campaigning in the run-up to May 09 Local Government polls is leaving ‘Sanasa’ polling booth in Mirihana yesterday after casting her vote.

(Pic by Thushara Atapattu)

Former President and UNP leader Ranil Wickremesinghe casting his ballot at the College House polling booth in Cinnamon Gardens.

(Pic by Nishan S. Priyantha)

Women and Child Affairs MInister Saroja Savithri Paulraj arrives at Aththudava Maha Vidyalaya, Matara to cast her vote.

(Pic by Priyan de Silva)

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Saudi Ambassador urges graduates not to think graduation as the end of academic chapter, but beginning of lifelong journey of growth and innovation

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Saudi Ambassador Khalid Al Khatami (left) and Acting Register M. I. Nawfer (C) with Acting Vice Chancellor Dr. U. L. A. Majeed

Saudi Arabian Ambassador Khalid bin Hamoud Al Kahtani said that graduation is not just the conclusion of academic chapter but the beginning of great responsibility and a new sense of hope and a life long journey of growth and innovation.

Delivering convocation address at South Eastern University recently, he said:Today is a special day in our life when we come together to celebrate years of hard work, dedication and learning as well as to acknowledge and appreciate the successful students and wish them a future filled with success and joy. Graduation is not just conclusion of our academic chapter but the beginning of great responsibility and a new sense of hope and a life long journey of growth and innovation.

This shining moment is the resolve to feel the hard work, the support of family and the commitment of lecturers. Saudi Arabia’s national road map for future place a strong emphasis on education and development of human capital. We strongly believe that most valuable investment is in minds and human capitalism for the foundation of a new successful, sustainable future. Today you are honoured with the crown of knowledge, so rise to meet the responsibility it preaches, uphold the value of integrity, loyalty and responsibility. You are an ambassador of knowledge – great in your field, and a source of pride to your family and community. The road is on your way of innovation and your country looks forward to your contribution.

I would like to take this opportunity to extend my heartfelt thanks and appreciation to the administration of South Eastern University, its team and lecturers for their academic guidance and moral support to their students as well as for their outstanding role in advancing education. I would also like to express my heartfelt congratulations to the parents here to have supported their children towards this remarkable achievement. They are true parents! We look forward to greater educational cooperation between Saudi Arabia and Sri Lanka in the future.”

dereliction of duty on the part of the relevant institution, and these authorities must be held accountable for the same.

The BASL is deeply concerned on the inadequate implementation of the provisions of the `Prohibition of Ragging and Other Forms of Violence in Educational Institutions Act No. 20 of 1998’, by Law Enforcement Authorities, against perpetrators of ragging and violence in these Institutions. The BASL is also mindful of the applicability of the provisions of the ‘Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment Act No. 22 of 1994’ and the relevant provisions of the Penal Code.

The BASL urges all responsible authorities in Universities and other High Educational Institutions to take necessary preemptive action and incorporate a zero-tolerance policy on unlawful ragging.

The BASL will closely monitor the case filed by the Samanalawewa Police in the Magistrate’s Court of Balangoda and urges the authorities to take all necessary legal measures to ensure the rule of law and the due enforcement of the law. The BASL is also considering seeking intervention of the Courts of Law to ensure better implementation and enforcement of the applicable Law.”

Meanwhile Sabaragamuwa VC M. Sunil Shantha has appointed a committee consisting of Senior Prof. A.A.Y. Amarasinghe (Chairman) Prof. Kapila Rathnayaka and Attorney-at-Law Y.S. Chandrasekara to investigate the incident.

From M.A. Kaleel, Kalmunai Corr.

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