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Cabraal says debt restructuring underway without IMF assistance

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By Sanath Nanayakkare

Sri Lanka will not seek IMF assistance to restructure its debt, Central Bank Governor Ajith Nivard Cabraal has said, adding that debt restructuring is an ongoing process which the country has already undertaken.

“There are many instances where people ask us whether Sri Lanka needs to restructure its debt repayments. And I tell them, we have to manage our debt without using the word restructuring in a frivolous manner, the Central Bank Governor said on Saturday.

The Central Bank Governor made these comments addressing a virtual meeting hosted by the Centre for Banking Studies to discuss the implications of the National Budget 2022 which was presented in parliament on 12 Nov.

“Every debt situation needs restructuring on an ongoing basis. For example, if you have one debt where the interest rate is 7-8% and if you can find another source from which you can borrow at a cheaper rate, then you would be technically restructuring your debt. This is something that people sometimes don’t realize. In the same manner, you could have a debt which is of a shorter duration and if you’re able to increase the period of the debt and also ensure that your repayments are staggered even more, that is a way of restructuring your debt. If you can change the mix of your debt, from foreign currency, to local currency or between foreign currencies, that again is a type of restructuring of your debt portfolio which is to your advantage. That process is underway” he said.

“Sri Lanka has also understood that its reliance on International Sovereign Bonds (ISB) has been quite sharp and in the last few years, there has been a fairly extensive reliance on ISBs. Now this has to be re-shifted in some way so that we would have a greater control, within a long period of time. That’s why the government, very rightly, with the Central Bank is now examining the option of having government to government loan situations, central bank to central bank swaps, the examining of the possibilities of securitising remittances as well as other inflows. These are all new options the government is considering, together with the raising of non-debt creating inflows, monetisation of certain assets, increasing the value of exports and remittances. These are all natural options the Central Bank and the government are examining to ensure the debt profile is a lot more sustainable. Several of these ideas have already been put into action. We have spoken about it in the Central Bank’s Road Map as well. In the next few months, you will see a large number of these being implemented to position Sri Lanka on a debt sustainable path,” he said.

“When the proposals of the National Budget 2022 and the contents of the Central Bank’s Road Map are diligently implemented, Sri Lanka’s macro-fundamentals would look much better than now, and the country would be well on course for a 6% plus growth with stability.

“We are looking at 5% growth this year, of course on a much lower base of last year’s negative growth of 3.6%. But given the circumstances, that’s a reasonable number for this year. If the Year 2022 turns out to be a good year and Sri Lanka Tourism inflows also recover to about one-fourth of what it used to be prior to 2019, I think Sri Lanka would record an economic growth of more than 6% in 2022,” he said.

“The Central Bank will ensure that financial system stability is maintained, while growth is achieved in order to support the government to attract investments. Already there are several areas of investments planned, particularly in the Port City. The Port City Commission Bill has already been passed which gives massive opportunities for those who are looking to do business there. A study by a leading accounting firm has said that the Port City project would add 13.8 billion U.S. dollars to the country’s economy. That is a substantial number. If we can get that going, along with the organic growth of our own economy, we will have extremely useful economic indicators that would show the true potential of our economy whereby the private sector should be able to very keenly deliver on the promise of its full capacity”.



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SL defenceless, warn experts

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New COVID variants

By Rathindra Kuruwita

Due to the lax testing at the Bandaranaike International Airport (BIA), there is a strong possibility that any new variant of COVID-19 entering the country, College of Medical Laboratory Science (CMLS) President, Ravi Kumudesh told The Island yesterday commenting on the detection of a new coronavirus variant spreading in South Africa.

Even a travel ban would be useless unless the country enhances its testing and surveillance capacities, Kumudesh said.

Kumudesh said that PCR tests were not conducted on passengers on arrival and that it was likely that even those not fully vaccinated were entering the country. “Gene sequencing in respect of those infected with COVID inside the country was at a minimal level, and therefore, there is no way we can find out whether a new variant has entered the country until it is too late.

“There are two state-of-the-art labs in the BIA but no tests are done there. We are not ready, at all. Several nations are imposing travel bans on travellers from South Africa and the region. Perhaps, we should follow suit. However, the fact that we don’t test those coming in means that even a travel ban might be useless,” he said.

Kumudesh added that the number of PCR tests conducted had dropped to such a low level that reagents used in some labs for PCR testing are now nearing the expiry dates. The attitude of health officials at the airport is such that everyone operates on the basis that testing of passengers is not important.

Executive Director of the Institute for Health Policy (IHP), Dr. Ravi Rannan-Eliya yesterday said the detection of the new South African variant was potentially very bad news for all countries, and certainly for Sri Lanka.

“We still don’t have sufficient data on this, but I am very worried. It was only discovered a few days ago, but the scanty evidence strongly indicates that this new variant is driving a rapid increase in infections in S Africa. Only 100 cases have been confirmed officially, but reports indicate it may be 90% of new cases since Wed in Johannusburg,” he said.

Dr. Rannan-Eliya said that his best guess was that three out of four South Africans had been infected by COVID during the pandemic. Thus, a large number of them had acquired natural immunity. Moreover, 25% of others have been vaccinated.

“So this rapid spread despite a lot of immunity is very disturbing. This really points to this new variant—B1.1.529—being both more infectious and also significantly immune resistant. Something that also matches with its particular mutations,” he said.

Dr. Rannan-Eliya said he was not surprised at the emergence of the new variant because contrary to many experts who drink the kool-aid, there is no scientific basis to think SARS-CoV-2 had matured in its evolution. It might still have a lot of potential to evolve greater immune evasion and virulence, and that we should act on that basis.

“Second, because most of the world is following the misguided strategy of just accepting the virus (hey you – USA, UK, Sri Lanka…), the virus has plenty of chances to keep on mutating more because the truth is more of the virus is circulating than ever before. Third, despite a lot of nonsense about how T-cell immunity is going to protect us, there’s really no evidence that either infection or current vaccines and boosters will ever give us long-lasting immunity. We simply don’t know.”

Countries like South Africa, Peru, etc., who had such high levels of infection that much of their population was infected more than once, still continue to suffer new waves of infection.

“So this is bad news for all of us humans on planet earth, but very definitely for us in Sri Lanka. Why? Because based on how our medical establishment and govt authorities think, we will be slow or refuse to put the necessary border controls in to prevent this entering. And when it does enter-which is inevitable if this variant spreads globally–we will be slow to detect its entry, we will refuse to sound the alarm, and we will do everything but actually attempt to stop it. That’s been our track record, so why would it change? Worth noting that if this starts a new wave in Southern Africa, it’s just three to four months after their third wave. So just as immunity starts waning appreciably from natural infection (or vaccines). That gives us a strong hint of what our future holds unless we end this pandemic.”

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Navy deploys lagoon craft at Kurinchankerny until construction of new bridge

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Residents waiting for the boat

Sri Lanka Navy began providing transport facilities at the Kurinchankerny lagoon following the recent tragedy that claimed several lives. This service will continue until the construction of a new bridge at Kurinchankerny, Kinniya in Trincomalee is completed.

This initiative was set in motion following the directives of Commander of the Navy, Vice Admiral Nishantha Ulugetenne. The Navy deployed a Lagoon Craft, capable of carrying 25 passengers safely at a time from Thursday (25) under the supervision of the Eastern Naval Command. The lagoon craft will be in service from 7.00 a.m. to 8.00 a.m. and from 12.00 noon to 2.00 p.m. each day. Further, the Navy erected a temporary jetty to allow passengers to board the vessel safely.

A schoolgirl on her way to the ferry
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UN Assistant Secretary General during talks with President pledges to work closely with Sri Lanka

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The United Nations will always work closely with Sri Lanka, said Khaled Khiari, UN Assistant Secretary General for Political, Peacebuilding and Peace Operations. Khiari made these remarks when he met President Gotabaya Rajapaksa at the Presidential Secretariat, on Thursday (25).

UN Assistant Secretary General Khiari is visiting Sri Lanka as a follow-up to the bilateral meeting with the President and the UN Secretary- General Antonio Guterres held in September this year on the sidelines of the 76th Session of the UN General Assembly. Khiari conveyed the best wishes of UN Secretary-General Guterres to President Rajapaksa and said that the UN is willing to engage in a constructive and positive engagement with Sri Lanka.

Expressing satisfaction over the President’s affection and interest in the environment, the Assistant Secretary General appreciated Sri Lanka’s commitment to achieving the Millennium Development Goals. The President explained that steps are being taken to plant 100,000 mangroves with the assistance of the Navy and actions are being taken to prevent climate change through environmental conservation programmes.

President Rajapaksa expressed gratitude to the UN agencies and donors that have assisted Sri Lanka through the COVAX facility to make the vaccination drive successful and in facing other challenges in the face of the COVID-19 epidemic.

The President pointed out that the government’s development programme implemented in the North and East after the end of the war in 2009 had brought about rapid development. The President recalled his invitation made while participating in the UN General Assembly to the diaspora to work together with all communities after visiting Sri Lanka. The President said that he hoped that the invitation would be met with positive initiatives.

The two sides exchanged views on unity and relations between communities. An environment where all communities can live freely has been made available in Sri Lanka. The President pointed out that the Minister of Justice is from the Muslim community, the Attorney General is from the Tamil community and many of those holding other key posts are of different communities. President Rajapaksa said the government has undertaken a great task in building unity among the communities and therefore, no one should have any doubt in this regard.

Both sides were of the view that education was fundamental to unity among the communities. President Rajapaksa said that the process by which South Africa has been able to end apartheid and move forward will be studied and the lessons that can be learned from it and what can be implemented will be looked into. The President also expressed hope that the United Nations will provide assistance in this regard.

Secretary to the President Dr. P.B. Jayasundera and Principal Advisor to the President Lalith Weeratunga, Resident Coordinator of the United Nations in Sri Lanka Hanaa Singer-Hamdy, and Political Officer at the UN Peace Operations Department’s Political and Peacebuilding Affairs Department Chiaki Ota were also present.

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