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An open letter to IMF office and IMF Mission in/to Sri Lanka

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We are members of a Sri Lankan debt justice collective that worked together with Debt Justice UK to campaign for meaningful debt relief for Sri Lanka. Using our relationships with the academic world, we mobilised a collective letter of 182 academic signatories from the disciplines of economics, international development, political economy and social sciences more broadly – as poverty, inequality and debt are multidimensional issues – to advocate for the immediate needs and long-term interests of Sri Lankan people. This letter garnered widespread international and local attention, leading to several public debates and various discussions on Sri Lanka’s debt crisis. In its wake, we have also communicated with the IMF mission to Sri Lanka on debt justice.

On 20 March 2023, the IMF Board approved a 48-month Extended Fund Facility (EFF) of US$ 2.9 billion, prescribing a plan to restructure Sri Lanka’s economic policies and reforms. This follows the staff level agreement reached between the Sri Lankan government and the IMF mission team to Sri Lanka led by Peter Breuer and Masahiro Nozaki in September 2022. It remains matter of concern that none of the IMF staff reports were available in Sinhala or Tamil, while the agreements itself was for long shielded from the public.

The Sri Lanka government and business elite have welcomed the approval of 17th IMF program and the opportunity to borrow dollars once again. Various political activists, critical journalists, trade unions and political parties continue to raise concerns about the latest IMF deal, however, considering the negative impact it is likely to have on the majority of working people of the country and the fundamentally unsustainable nature of the IMF solution.

There are many imperfections of the global economic order. Sri Lanka is not operating on a level playing field and the IMF involvement in the country seems not to help ordinary Sri Lankans. Sri Lanka needs a government with a clear mandate from its people to be able to fully, creatively and productively engage with the world while also protecting itself against the injustices global economic order.

Prior to the IMF agreement of March 2023 we posed a number of questions to the IMF mission to Sri Lanka around debt sustainability, the IMF mandate, corruption vulnerabilities and debt restructuring negotiations.

Hence, to hold the Sri Lankan government and the IMF accountable to all Sri Lankan citizens, we are publishing our concerns as an open letter so that Sri Lankans from all walks of life will continue to be conscious and vigilant of the critical issues at stake.

The continued lack of transparency is harming the people of Sri Lanka.

Statement by 182 academics on dealing with Sri Lankan debt, January 2023 https://debtjustice.org.uk/wp-content/uploads/2023/01/Sri-Lanka-debt-statement.pdf

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To: Peter Breuer; Masahiro Nozaki; Anne-Marie Gulde-Wolf; 5 March 2023

We do hope that this e-mail finds you and your colleagues well. Many thanks too for your prompt response back in January – and also for offering us the opportunity to clarify any follow-up questions we have.

We have been trying to assess the on-going situation in Sri Lanka with our colleagues in the country – and given recent changes from the IMF end, we would greatly appreciate a comprehensive reply to the following questions:

1) Debt Sustainability

1A: Debt Sustainability Analysis (DSA) of Sri Lanka

  • – Why isn’t the government of Sri Lanka required to publish their own DSA before any agreement is signed?
  • – Why is the IMF’s DSA for Sri Lanka not published for public scrutiny? If it is publicly available, please do share with us. (This is now published but was not open to public scrutiny prior to approval).

 

1B: Sustainable debt levels/UN Sustainable Development Goals (SDG)

  • – Why is the delivery of UN’s SDG not at the heart of the objectives of debt sustainability?
  • – Does the IMF’s prioritise the repayment of loans to creditors over the well-being of Sri Lanka’s people?

 

1C: Social safety net:

  • – Why is an insufficient social safety net (far below SDG standards) considered adequate for addressing debt sustainability?
  • – Why does the IMF tolerate social safety net levels that do not genuinely ensure the long-term well-being of people?

 

2) The IMF Mandate

2A: Medium Income Countries (MIC):

  • – Why was Sri Lanka categorised as a MIC when poverty is rampant in the country and inequality was increasing?
  • – Why is the per capita income level set so low to qualify for concessionary loans, when the level of inequality is growing, minimum wages are falling below subsistence levels and nearly 67% of the population are daily wage earners?
  • – Why then are these countries pushed towards commercial money markets and excluded from accessing essential concessionary loans from multi-laterals?

 

2B: Funding of Multi-Lateral Organisations:

  • – Why didn’t the funding levels for multi-lateral organisations move up in proportion to the massive fiscal programs embarked on by countries in the Global North?
  • – Why are countries in the Global South then pushed towards commercial money markets to absorb the trillions of dollars gained by countries of the Global North as a result of unprecedented fiscal stimulus programs coupled with massive quantitative easing by central banks?
  • – Has the IMF published a report highlighting the impact of such fiscal stimulus programs on the Global South at a time when multi-laterals are not funded adequately to help nations in distress?

3) Corruption Vulnerabilities

3A: Transparency and measurement:

  • – What is precisely meant by the term “reduce corruption vulnerabilities” stated in the staff level agreement? (An outline has now been published—but not meaningfully elaborated or quantified).
  • – How is the reduction going to be measured and monitored in an effective and comprehensive manner?

 

3B: Stolen Assets and Illicit Cash Outflows:

  • – As part of “reducing corruption vulnerability” what are IMF’s targets for Sri Lanka to recover stolen assets and stop illicit capital outflows, including by the corporate sector?
  • – Does the IMF assist governments of the Global South by campaigning for more transparency in the global banking system, especially private banking and off-shore accounts?

 

4) Deb Restructuring Negotiations

4A: Private Creditors:

  • – Does IMF require a country to restructure “odious debt” from private creditors?
  • – Should profit seeking commercial money markets lend to sovereign governments when legislation governing these lands do not have a mechanism for bankruptcy?

4B: Lending into Arrears:

  • – Why can the IMF not lend into arrears even if Sri Lanka does not come to a debt restructuring agreement with private creditors?

4C: IMF Neutrality:

  • – How can the IMF claim to be neutral while at the same time pressuring countries to negotiate with private creditors and continuing to impose conditions on national economic policy that have historically failed (since 1965 in the case of Sri Lanka) to produce sustainable economic development?

We hope that these questions are taken in the spirit intended. Our intention is to ensure that Sri Lankan people secure a just and sustainable settlement concerning the debt crisis and the fundamentally unequal political-economic structures, both local and global, that precipitated it. By the same token, we oppose all attempts to place the burden of the risks taken by predatory financial interests peddling “odious debt” on the ordinary people of Sri Lanka.

We look forward to hearing from you on the concerns raised above.

Best wishes,

  • Charith, Kanchana, Kanishka
  • Charith Gunawardena, MPhil, MBA (London)
  • Ex-Elected Local Councillor, London Borough of Enfield, UNITED KINGDOM
  • Kanchana N Ruwanpura, PhD (Cantab)
  • Professor – Development Geography, University of Gothenburg, SWEDEN
  • Fellow – Centre for South Asian Studies, University of Edinburgh, SCOTLAND
  • Kanishka Goonewardena, PhD (Cornell)
  • Professor – Geography and Planning, University of Toronto, CANADA)

 



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Features

Acid test emerges for US-EU ties

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European Commission President Ursula von der Leyen

European Commission President Ursula von der Leyen addressing the World Economic Forum in Davos, Switzerland on Tuesday put forward the EU’s viewpoint on current questions in international politics with a clarity, coherence and eloquence that was noteworthy. Essentially, she aimed to leave no one in doubt that a ‘new form of European independence’ had emerged and that European solidarity was at a peak.

These comments emerge against the backdrop of speculation in some international quarters that the Post-World War Two global political and economic order is unraveling. For example, if there was a general tacit presumption that US- Western European ties in particular were more or less rock-solid, that proposition apparently could no longer be taken for granted.

For instance, while US President Donald Trump is on record that he would bring Greenland under US administrative control even by using force against any opposition, if necessary, the EU Commission President was forthright that the EU stood for Greenland’s continued sovereignty and independence.

In fact at the time of writing, small military contingents from France, Germany, Sweden, Norway and the Netherlands are reportedly already in Greenland’s capital of Nook for what are described as limited reconnaissance operations. Such moves acquire added importance in view of a further comment by von der Leyen to the effect that the EU would be acting ‘in full solidarity with Greenland and Denmark’; the latter being the current governing entity of Greenland.

It is also of note that the EU Commission President went on to say that the ‘EU has an unwavering commitment to UK’s independence.’ The immediate backdrop to this observation was a UK decision to hand over administrative control over the strategically important Indian Ocean island of Diego Garcia to Mauritius in the face of opposition by the Trump administration. That is, European unity in the face of present controversial moves by the US with regard to Greenland and other matters of contention is an unshakable ‘given’.

It is probably the fact that some prominent EU members, who also hold membership of NATO, are firmly behind the EU in its current stand-offs with the US that is prompting the view that the Post-World War Two order is beginning to unravel. This is, however, a matter for the future. It will be in the interests of the contending quarters concerned and probably the world to ensure that the present tensions do not degenerate into an armed confrontation which would have implications for world peace.

However, it is quite some time since the Post-World War Two order began to face challenges. Observers need to take their minds back to the Balkan crisis and the subsequent US invasions of Afghanistan and Iraq in the immediate Post-Cold War years, for example, to trace the basic historic contours of how the challenges emerged. In the above developments the seeds of global ‘disorder’ were sown.

Such ‘disorder’ was further aggravated by the Russian invasion of Ukraine four years ago. Now it may seem that the world is reaping the proverbial whirlwind. It is relevant to also note that the EU Commission President was on record as pledging to extend material and financial support to Ukraine in its travails.

Currently, the international law and order situation is such that sections of the world cannot be faulted for seeing the Post World War Two international order as relentlessly unraveling, as it were. It will be in the interests of all concerned for negotiated solutions to be found to these global tangles. In fact von der Leyen has committed the EU to finding diplomatic solutions to the issues at hand, including the US-inspired tariff-related squabbles.

Given the apparent helplessness of the UN system, a pre-World War Two situation seems to be unfolding, with those states wielding the most armed might trying to mould international power relations in their favour. In the lead-up to the Second World War, the Hitlerian regime in Germany invaded unopposed one Eastern European country after another as the League of Nations stood idly by. World War Two was the result of the Allied Powers finally jerking themselves out of their complacency and taking on Germany and its allies in a full-blown world war.

However, unlike in the late thirties of the last century, the seeming number one aggressor, which is the US this time around, is not going unchallenged. The EU which has within its fold the foremost of Western democracies has done well to indicate to the US that its power games in Europe are not going unmonitored and unchecked. If the US’ designs to take control of Greenland and Denmark, for instance, are not defeated the world could very well be having on its hands, sooner rather than later, a pre-World War Two type situation.

Ironically, it is the ‘World’s Mightiest Democracy’ which is today allowing itself to be seen as the prime aggressor in the present round of global tensions. In the current confrontations, democratic opinion the world over is obliged to back the EU, since it has emerged as the principal opponent of the US, which is allowing itself to be seen as a fascist power.

Hopefully sane counsel would prevail among the chief antagonists in the present standoff growing, once again, out of uncontainable territorial ambitions. The EU is obliged to lead from the front in resolving the current crisis by diplomatic means since a region-wide armed conflict, for instance, could lead to unbearable ill-consequences for the world.

It does not follow that the UN has no role to play currently. Given the existing power realities within the UN Security Council, the UN cannot be faulted for coming to be seen as helpless in the face of the present tensions. However, it will need to continue with and build on its worldwide development activities since the global South in particular needs them very badly.

The UN needs to strive in the latter directions more than ever before since multi-billionaires are now in the seats of power in the principle state of the global North, the US. As the charity Oxfam has pointed out, such financially all-powerful persons and allied institutions are multiplying virtually incalculably. It follows from these realities that the poor of the world would suffer continuous neglect. The UN would need to redouble its efforts to help these needy sections before widespread poverty leads to hemispheric discontent.

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Features

Brighten up your skin …

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Hi! This week I’ve come up with tips to brighten up your skin.

* Turmeric and Yoghurt Face Pack:

You will need 01 teaspoon of turmeric powder and 02 tablespoons of fresh yoghurt.

Mix the turmeric and yoghurt into a smooth paste and apply evenly on clean skin. Leave it for 15–20 minutes and then rinse with lukewarm water

Benefits:

Reduces pigmentation, brightens dull skin and fights acne-causing bacteria.

* Lemon and Honey Glow Pack:

Mix 01teaspoon lemon juice and 01 tablespoon honey and apply it gently to the face. Leave for 10–15 minutes and then wash off with cool water.

Benefits:

Lightens dark spots, improves skin tone and deeply moisturises. By the way, use only 01–02 times a week and avoid sun exposure after use.

* Aloe Vera Gel Treatment:

All you need is fresh aloe vera gel which you can extract from an aloe leaf. Apply a thin layer, before bedtime, leave it overnight, and then wash face in the morning.

Benefits:

Repairs damaged skin, lightens pigmentation and adds natural glow.

* Rice Flour and Milk Scrub:

You will need 01 tablespoon rice flour and 02 tablespoons fresh milk.

Mix the rice flour and milk into a thick paste and then massage gently in circular motions. Leave for 10 minutes and then rinse with water.

Benefits:

Removes dead skin cells, improves complexion, and smoothens skin.

* Tomato Pulp Mask:

Apply the tomato pulp directly, leave for 15 minutes, and then rinse with cool water

Benefits:

Controls excess oil, reduces tan, and brightens skin naturally.

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Features

Shooting for the stars …

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That’s precisely what 25-year-old Hansana Balasuriya has in mind – shooting for the stars – when she was selected to represent Sri Lanka on the international stage at Miss Intercontinental 2025, in Sahl Hasheesh, Egypt.

The grand finale is next Thursday, 29th January, and Hansana is all geared up to make her presence felt in a big way.

Her journey is a testament to her fearless spirit and multifaceted talents … yes, her life is a whirlwind of passion, purpose, and pageantry.

Raised in a family of water babies (Director of The Deep End and Glory Swim Shop), Hansana’s love affair with swimming began in childhood and then she branched out to master the “art of 8 limbs” as a Muay Thai fighter, nailed Karate and Kickboxing (3-time black belt holder), and even threw herself into athletics (literally!), especially throwing events, and netball, as well.

A proud Bishop’s College alumna, Hansana’s leadership skills also shone bright as Senior Choir Leader.

She earned a BA (Hons) in Business Administration from Esoft Metropolitan University, and then the world became her playground.

Before long, modelling and pageantry also came into her scene.

She says she took to part-time modelling, as a hobby, and that led to pageants, grabbing 2nd Runner-up titles at Miss Nature Queen and Miss World Sri Lanka 2025.

When she’s not ruling the stage, or pool, Hansana’s belting tunes with Soul Sounds, Sri Lanka’s largest female ensemble.

What’s more, her artistry extends to drawing, and she loves hitting the open road for long drives, she says.

This water warrior is also on a mission – as Founder of Wave of Safety,

Hansana happens to be the youngest Executive Committee Member of the Sri Lanka Aquatic Sports Union (SLASU) and, as founder of Wave of Safety, she’s spreading water safety awareness and saving lives.

Today is Hansana’s ninth day in Egypt and the itinerary for today, says National Director for Sri Lanka, Brian Kerkoven, is ‘Jeep Safari and Sunset at the Desert.’

And … the all-important day at Miss Intercontinental 2025 is next Thursday, 29th January.

Well, good luck to Hansana.

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