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G20 considers quick relief to Lanka debt crisis

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The G20 group, under India’s Presidency, has decided to provide relief to countries burdened with debt crisis, including Sri Lanka, said a report published by the Indian Express yesterday.The decision has been taken at the First G20 Finance Ministers and Central Bank Governors (FMCBG) Meeting held in Bengaluru, February 24-25, 2023, and it is reported that the group has decided to focus on the areas where relief can be given to the respective countries.

The FMCBG meeting, concluded on Sunday, has focused on subjects ranging from global debt crisis, MDB reforms, climate finance, global approach on cryptos, digital public infrastructure, financial inclusion, financing cities of tomorrow, and taxation.

The Chair in a Summary and Outcome Document, following the conclusion of the meeting, recognizing the urgency to address debt vulnerabilities in low and middle-income countries, including Sri Lanka, said the group looks forward to a quick resolution for Sri Lanka’s situation.

“Further, we look forward to a swift resolution to Sri Lanka’s debt situation,” the G20 FMCBG said.

The group added that strengthening multilateral coordination by official bilateral and private creditors is needed to address the deteriorating debt situation and facilitate coordinated debt treatment for debt-distressed countries.

IMF Managing Director, Kristalina Georgieva, making a statement yesteray at the first meeting of the G20 Finance Ministers and Central Bank Governors urged the G20 Leadership to strengthen the debt architecture and improve the speed and effectiveness of debt resolution in light of rising debt vulnerabilities in many countries.

She said more predictable, timely, and orderly processes are needed both for countries under the Common Framework (CF) for debt resolution and for those not covered by it, including Sri Lanka and Suriname.

On the sidelines, the International Monetary Fund held a meeting on Saturday with the World Bank, China, India, Saudi Arabia and the G7 on restructuring debt for distressed economies.

However, IMF Managing Director Kristalina Georgieva has noted that there were disagreements among members, according to a Reuters report.

While pressure has been building on China, the world’s largest bilateral creditor, and other nations to take a large haircut in loans given to struggling developing nations, China has reiterated that the World Bank and other multilateral development banks participate in debt relief by taking haircuts alongside bilateral creditors.

US Treasury Secretary Janet Yellen has also said before the debt meeting that she would press all bilateral creditors, including China, to participate in meaningful discussions, adding that debt treatment for Zambia and financing assurances for Sri Lanka were “most urgent”.

Sri Lanka owed Chinese lenders $7.4 billion — or nearly a fifth of public external debt — by the end of 2022, Reuters reported.President Ranil Wickremesinghe recently said the prospects for relieving the debt burden of low-income countries, such as Sri Lanka, will become clearer at the G20 FMCBG meeting, concluded today.

“By the end of this week, we will get to hear the outcome of these talks. Then we will know with greater clarity as to how they intend to cooperate on debt relief for Sri Lanka, and how we should go forward,” he said.



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COPE discovers fake documents covering drug imports in 2022/23

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The Parliamentary watchdog Committee on Public Enterprises (COPE) has found that there were fake documents regarding the importing of medicines under the emergency procurement system in 2022 and 2023.

This was revealed during a COPE meeting held at Parliament probing the transactions of the National Medicine Regulatory Authority (NMRA).

NMRA CEO Saveen Semage told the committee that several fake documents have been found due to the lack of registration of medicines.

Stating that six such fake documents were found last year alone, Semage said he had recorded statements regarding each of the documents with the Financial Crimes Investigation Division.

He revealed that, however, no investigations have been conducted yet into the incidents.

“We have documents with confessions from a woman accepting that fake documents had been made. However, a statement has not even been recorded from that woman yet,” he said.

Meanwhile, COPE member MP Asitha Niroshana Egoda Vithana also revealed that the highest number of waive-off registrations (WOR) for medicines had been obtained in 2022 and 2023.

He said 656 such WORs had been obtained in 2022 and 261 in 2023, adding that this proves that discrepancies have taken place during the emergency procurement of medicines during these periods.

Furthermore, Deputy Director General of the Medical Supplies Division of the Health Ministry, Dr. G. Wijesuriya said discussions are underway on allowing the State Pharmaceutical Corporation (SPC) to directly import essential medicines.He pointed out that it was essential to take a policy decision in this regard as a solution to mitigate such discrepancies.

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Batalanda report tabled in parliament, forwarded to AG

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Bimal Ratnayake

The Batalanda Commission report was tabled in Parliament on Friday by the Leader of the House and Transport Minister, Bimal Ratnayake.

Minister Ratnayake announced that the government has decided to forward the report to the Attorney General for legal advice. Additionally, a Presidential Committee will be appointed to provide guidance and recommendations on how to proceed with the findings of the report.

Ratnayake said that the Cabinet of Ministers, along with President Anura Kumara Dissanayake, has made a policy decision to take necessary action in response to the report. He reassured the public that steps are being taken to ensure that such a dark chapter in the country’s history is never repeated.

Minister Ratnayake said that a two-day debate on the Batalanda Commission report will be scheduled in Parliament at an appropriate time, allowing for a detailed discussion on the report’s findings and recommendations.

The report, which will be printed in all three official languages—Sinhala, Tamil, and English—will be made available to the public in the near future. Ratnayake confirmed that printed copies would be provided to members of Parliament as well as the general public for their review.

The Leader of the House further revealed that there are 28 evidence volumes associated with the commission’s work, which will be submitted to Parliament at a later date for further scrutiny.

Ratnayake said that as entire country concerned of the Batalanda Commission’s findings, the government’s commitment to addressing the issues raised and preventing future atrocities stands clear. The next steps, including legal action and policy recommendations, will be shaped by expert advice and informed parliamentary discussions, he said.

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CB Governor stresses need to assist crisis-hit construction industry

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Governor of the Central Bank Dr. Nandalal Weerasinghe on Friday (14) emphasized the importance of promoting a sustainable and cost-effective construction industry in the country, highlighting key challenges and opportunities in the sector.

Speaking at ‘Construction Expo 2025’, Dr. Weerasinghe underscored the need for Sri Lanka to align with global trends in sustainable construction, integrating cost-effective energy solutions and eco-friendly building practices.

“I must say my views here are not necessarily as Governor of the Central Bank of Sri Lanka, but as a person looking at this construction industry and how this can be developed and what the issues are. Sustainability in construction is essential, not just for new projects but also for existing buildings,” he noted.

Dr. Weerasinghe acknowledged that the construction sector has been one of the hardest-hit industries due to multiple economic pressures in recent years including the decline in public investments, high material costs and the industry being dependent on government projects.

The CBSL Governor, who acknowledged that the government faced fiscal constraints, limiting infrastructure spending and delaying payments to contractors, said that however, the outstanding arrears had now been settled.

“Government did not have space to spend money for public investment, especially construction that had a significant impact on the industry in the last couple of years, plus the government inability to pay the arrears for a long period. That was an issue we all recognize that has been one of the adverse impacts the industry had in the past”, he expressed.

“Also the cost of materials went up significantly, partly because of foreign exchange shortages. As a result, the shortage had shot up the prices of construction materials, as well as depreciation of the currency, high interest rates, finance costs, and other factors. We all recognize that it had an adverse impact on the industry. It’s one of the worst affected industries because of all these factors.”

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