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SL to receive first tranche of new IMF facility soon
Under targeted reforms Sri Lanka will be first country in Asia to undergo governance diagnostic exercise.
Sri Lanka will receive the first tranche of the IMF Extended Fund Facility (EFF) within the next two days, IMF Senior Mission Chief for Sri Lanka,Peter Breuer told a press conference yesterday.
He said that Sri Lanka would immediately receive an initial disbursement of about 330 million dollars from the EFF arrangement, which is expected to catalyze new external financing including from the Asian Development Bank and the World Bank.
Given below is his statement in full: “The reform programme supported under the EFF arrangement is built on strong policy measures and prioritises: (i) an ambitious revenue-based fiscal consolidation, accompanied by stronger social safety nets, fiscal institutional reforms, and cost-recovery based energy pricing to ensure the state’s ability to support all its essential expenditures; (ii) restoration of public debt sustainability, including through a debt restructuring to ensure stable financing of the government’s operations; (iii) a multi-pronged strategy to restore price stability and rebuild reserves under greater exchange rate flexibility in order to alleviate the burden of inflation, particularly on the poor, to foster an environment of investment and growth, and to ensure Sri Lanka’s ability to purchase essential goods from abroad; (iv) policies to safeguard financial sector stability to ensure that the financial sector can play its key role in supporting economic growth; and (v) structural reforms to address corruption vulnerabilities and enhance growth.
“Commendably, Sri Lanka has already started implementing these challenging policy actions. It is now essential to continue the reform momentum under strong ownership by the authorities and the Sri Lankan people more broadly.
“The economic impact of the reforms on the poor and vulnerable needs to be mitigated with appropriate measures. In this regard, we welcome the authorities’ firm commitment to strengthen social safety nets, including through a minimum spending floor, well-targeted spending through a new Social Registry, and establishment of objective eligibility criteria. Tax reforms under the programme are designed to be progressive, that is, ensuring greater contributions from high-income earners. Efforts to increase tax revenues should be pursued in a growth-friendly manner while protecting the poor and most vulnerable.
“Sri Lanka’s public debt, at 128 percent of GDP as of end-2022, is unsustainable. The country is in arrears to all its external creditors. IMF Board approval of assistance to Sri Lanka required assurances from 2 official bilateral creditors that they will provide debt relief and/or financing to restore debt sustainability consistent with the program, as well as an assessment that the authorities are making good faith efforts to reach a collaborative agreement with private creditors.1 These requirements were met ahead of the Board meeting.
“It is now important for the Sri Lankan authorities and creditors to closely coordinate and make swift progress towards a debt treatment that restores debt sustainability under the EFF-supported programme. The President’s recent open letter to official bilateral creditors includes commitments to transparency and comparability of treatment for all external creditors, which should help facilitate this process. IMF staff will continue to assist the authorities with creditor coordination in line with the IMF’s policies.
Finally, we emphasise the importance of anti-corruption and governance reforms as a central pillar of the EFF-supported programme —they are indispensable to ensure the hard-won gains from the reforms benefit the Sri Lankan people.
The authorities have committed to fundamentally improve public financial management and strengthen the anti-corruption legal framework in line with the United Nations Convention against Corruption. In addition, the IMF is conducting an in-depth governance diagnostic exercise, which will assess corruption and governance vulnerabilities in Sri Lanka and provide prioritized and sequenced recommendations. Sri Lanka will be the first country in Asia to undergo a governance diagnostic exercise by the IMF. We look forward to further engagement and collaboration with stakeholders and civil society organisations on this critical reform area.”
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SC finds Keheliya, others, guilty of violating FRs of public through corrupt drug procurement deal
The Supreme Court yesterday held former Health Minister Keheliya Rambukwella and several senior health officials liable for violating the fundamental rights of the public over a controversial drug procurement carried out under the 2022 Indian Credit Line.
Delivering the judgment, a three-judge bench, headed by Chief Justice Preethi Padman Surasena, and comprising Justice Kumudini Wickremasinghe and Justice Janak de Silva, found that the procurement of medical supplies from an unregistered company, in breach of established procedures, had resulted in a serious infringement of public rights.
The Court ruled that the granting of a Waiver of Registration by the authorities was “wrongful, arbitrary and capricious,” and held that the direct procurement carried out on an unsolicited basis was unlawful. The transaction was accordingly declared null and void.
In a significant order, the Court directed Rambukwella to pay Rs. 75 million in compensation to the State from his personal funds.
The then Health Ministry Secretary Janaka Chandragupta and former Chairman of the National Medicines Regulatory Authority (NMRA), Prof. S. D. Jayaratne, were each ordered to pay Rs. 50 million.
The Court further directed NMRA Chief Executive Officer Dr. Wijith Gunasekara and former Director of the Medical Supplies Division Dr. Thusitha Sudarshana to pay Rs. 50 million each as compensation.
The ruling followed the hearing of a fundamental rights petition filed by Transparency International Sri Lanka and two other parties.
The Court also instructed the Commission to Investigate Allegations of Bribery or Corruption to initiate appropriate action under the Anti-Corruption Act against those found responsible.
Senior Counsel Senany Dayaratne, with Nishadi Wickramasinghe, Lasanthika Hettiarachchi, Janani Abeywickrema and Maheshika Bandara, appeared for the petitioners.
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Sajith nudges govt. to follow India’s example in giving relief to consumers by slashing taxes on fuel
Opposition and SJB Leader Sajith Premadasa yesterday urged President Anura Kumara Dissanayake to reduce taxes on fuel, just as the Indian government has done.
He said in a post on X that “Modi government has decided to reduce the Special Additional Excise Duty on petrol and completely remove it for diesel in order to cushion the hardship on the Indian consumer. High time for Anura Kumara Dissanayake to keep up to his election promise and follow suit.”
Meanwhile foreign media reported that India has slashed excise duties on petrol and diesel to protect consumers and rein in a potential spike in inflation, while imposing windfall taxes on aviation fuel and diesel exports, amid volatile global oil markets, as a result of the Iran war.
Global oil prices have surged past $100 per barrel after the near closure of the Strait of Hormuz, which serves as a conduit for 40% of India’s crude oil imports, since the US and Israel first struck Iran on February 28.
In a government order, released late on Thursday, India’s Finance Ministry reduced the special excise duty on petrol to three Indian rupees ($0.0318) per litre from 13 Indian rupees earlier. It also cut the duty on diesel to zero from INR 10 rupees per litre.
The government did not say how much the duty cuts would cost. The move comes ahead of elections next month in four Indian states and one federal territory, with Indian voters known to be extremely sensitive to higher prices.
“Government has taken a huge hit on its taxation revenues to ensure very high losses of oil companies, approximately 24 rupees a litre for petrol and 30 rupees a litre for diesel, at this time of sky high international prices, are reduced,” Indian Oil Minister Hardeep Singh Puri said in a post on X.
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Expect hot weather until end of May
The Met Dept. advises public to avoid outdoors between 11am and 4pm
Sri Lanka is set to experience continued hot weather conditions until May, the Department of Meteorology warned yesterday.
Additional Director General of Meteorology Ajith Wijemanna said the current heatwave is expected to ease only slightly once the southwest monsoon sets in toward the latter part of May.
Wijemanna explained that the country is currently in the first inter-monsoon period, characterised by low wind speeds and shifting wind directions, which contribute to rising temperatures. Reduced cloud cover and the sun’s direct position over the country are causing increased heating of land and sea, generating heat waves and warmer atmospheric conditions.
He cautioned that the hottest period of the day will be between 11:00 a.m. and 4:00 p.m., urging the public to limit outdoor activities during these hours.
Authorities also advised drinking plenty of water, wearing light-colored clothing, and avoiding prolonged exposure to direct sunlight, particularly for children and the elderly.The Meteorology Department further noted that rainfall may remain limited in the coming months, with drier conditions possible due to climate variability.
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