News
SL expects IMF bailout by end of next month
By Sanath Nanayakkare
A staff-level agreement with the International Monetary Fund (IMF) and a programme for a bailout package for Sri Lanka would be finalised by the end of July 2022, Prime Minister Ranil Wickramasinghe told Parliament yesterday.
“The only safe option before us now is to hold talks with the IMF and, in fact, it’s our only option. We must take this path,” he said, delivering a special statement in Parliament.
From November 2019, Sri Lanka maintained a consistent hard line against seeking assistance from the IMF, causing historical damage to its economy.
Later, following a request by Sri Lanka for the IMF to intervene, the first in-person talks with the global lender for a bailout package commenced in Colombo on 20 June, they will continue over 10 days.
According to the Prime Minister, Sri Lanka has concluded the initial discussions with the IMF delegation and exchanged ideas on various sectors such as public finance, debt sustainability, stability of the banking sector, social security network, etc.
Referring to debt restructuring and honouring sovereign debt repayments consequent to a preemptive default by the country, Wickremesinghe said the framework for this will also be finalised by the end of July following consultations with financial and legal advisory firms Lazard Ltd. and Clifford Chance LLP.
“Representatives of Lazard and Clifford Chance are now in Sri Lanka to assist us in our debt restructuring. The formulation of this framework which is a key requirement of the IMF is now underway,” he said.
Sri Lanka hired the two firms in May 2022 to serve as financial and legal advisors on debt restructuring as the country sought a bailout from the IMF.
“Three high-ranking officials of the Indian government are scheduled to arrive in Sri Lanka today for discussions regarding the loans offered to the country in the future. We have sought more loans from India, but India cannot continue to lend us. We have to formulate a system to repay our loans,” he said.
“A team of representatives from the U.S. Department of the Treasury is also expected to arrive in Sri Lanka on Monday. We arranged for the arrival of these three teams in Sri Lanka so that we can conduct parallel discussions with them in an effective manner. It will intensify our efforts in expediting the recovery programme,” he said.
Referring to ongoing fuel crisis, the PM said “No country or organisation in the world is willing to provide fuel to Sri Lanka due to the country risk as the Ceylon Petroleum Corporation (CPC) has an outstanding debt of USD 700 million. Some suppliers are even reluctant to provide fuel for cash.”
“Sri Lanka is currently in need of USD 550 million to meet its monthly fuel needs. In the face of foreign exchange crisis, we are experiencing difficulties in securing required funds for this purpose. So, we will be importing maximum possible fuel stocks based on our dollar income. Resolving the fuel shortages, therefore, will take more time. I urge everyone to sparingly use fuel and reduce consumption until our reserves are at healthy levels.”
“The government has taken steps to import 100,000 MT of LP gas utilising a World Bank loan of USD 70 million and USD 20 million of the country’s own reserves. We will be able to eliminate the gas shortage once we have received these LPG stocks,” he said.
The PM also mentioned about the government’s plans to organise a financial aid conference led by India, Japan and China – the main lending countries of Sri Lanka – to seek their support at this critical hour.
“Through this conference, we hope to arrive at a general consensus on lending and repayment processes because these countries have different methodologies in this regard. If we receive the IMF seal of approval, the world will once again begin to trust Sri Lanka. An approval from the IMF will help us secure low-interest loans from other countries as well. We are currently holding discussions with the World Bank, Asian Development Bank, the United States, other friendly nations and several heads of state to secure interim short-term loans until we receive funding from the IMF. We will be able to lay the foundation to ensure economic stability following the successful completion of these undertakings. However, these by no means will be the end of our recovery effort. In fact, it will be the beginning of our journey which would firmly require us to build a more export-oriented economy with fiscal discipline in place,” he said.
News
PSTA worse than PTA: FSP
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.
News
Shiranthi R remanded until 13 Oct.
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.
News
Former NSB Chairman Kariyawasam granted bail
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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