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Harsha accuses govt. of being secretive about debt negotiations with international commercial creditors

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Dr. Harsha de Silva

By Saman Indrajith

The Samagi Jana Balawegaya (SJB) is not at all satisfied with the furtive manner in which the government is conducting discussions with Sri Lanka’s commercial creditors to restructure 12 billion dollars of debt, SJB MP and Chairman of the Committee on Public Finance (COPF), Dr. Harsha de Silva said.

The SJB MP added that the country’s international commercial creditors account for a large portion of its domestic debt and they have formed a group, i.e. ‘The Ad Hoc Group of Bondholders’ that has procured the services of two powerful consulting firms.

The Group is advised by Rothschild & Co and White & Case LLP as financial and legal advisors, respectively, he said.

Sri Lanka has made some progress with bilateral creditors including China and India, he said.

“China for the first time since it started lending has agreed to accept the same conditions that the other creditors receive. This is a great victory. However, the stumbling block seems to be our dealings with the commercial creditors and I am not sure if we are doing all we can to get a speedy resolution.”

MP de Silva said that early in 2023, the Ad Hoc Group of Bondholders came up with a “Macro-Linked Bond” (MLB) as a way of restructuring the debt. MLB links payouts to the evolution of Sri Lanka’s gross domestic product. They proposed the government the issuance of 10 bonds linked with the country’s macroeconomic health that will mature between 2027 and 2036, he said.

“They have proposed a 20 percent haircut and an interest rate up to 9.5 percent to be paid in cash and in kind.” But if GDP growth is lower than the bondholders expect the interest rates will drop further. The Sri Lankan government said, in October, it was not too keen on this and I don’t blame them.”

In late 2023, White & Case LLP issued a statement on behalf of the Ad Hoc Group of Bondholders. In this statement they said they have repeatedly tried to engage with the Sri Lankan authorities and its advisors in good faith. They say no substantive engagement has taken place between Sri Lanka and its private creditors by December 2023, de Silva said.

“Now it’s mid- March and no one knows what is going on. We have achieved stability, but we have done so by drastically increasing poverty, significant job losses and the closure of small and medium enterprises. Moreover, Sri Lankan workers sacrificed a lot for the government to restructure domestic debt. So people have sacrificed greatly for stability and therefore they need to know what is going on. But the government is secretive and does not tell us anything that is happening with foreign debt restructuring.”

The SJB MP went on to say that Sri Lanka will be able to dispel the moniker of a bankrupt state when it is able to access international capital markets. For this Sri Lanka’s credit rating must improve.

“President Ranil Wickremesinghe says Sri Lanka will shed the moniker of a bankrupt state by April. I think a lot needs to be done before we reach that stage. We are at the bottom of the ratings, and we need to at least get to where the country was before the Gotabaya Rajapaksa administration.”

MP de Silva said that Sri Lanka needs to grow at double digits to escape the current stagnation and that the best way to do it is to explore how the country can benefit from the fast-growing Indian South.

“This will be the fastest growing area in the world in the coming decades. We need to see how we can link with them and benefit.”



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486 dead, 341 missing, 171,778 displaced as at 0600hrs today [05]

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The situation report issued by the Disaster Management Center at 0600hrs today [5th December] confirms that 486 persons have died and another 341 persons are missing after the devastating weather conditions in the past week.

171,778 persons have been displaced and have taken refuge at 1,231 safety centers established by the government.

 

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Media slams govt.’s bid to use Emergency to silence critics

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Sunil Watagala

Media organisations have denounced Deputy Minister of Public Security and Parliamentary Affairs Sunil Watagala after he urged law enforcement authorities to use emergency regulations to take action against those posting allegedly defamatory content about the President and senior ministers on social media.

The Sri Lanka Working Journalists Association (SLWJA) yesterday issued a strongly worded statement condemning Watagala’s remarks, warning that they posed a direct threat to freedom of expression and media rights, particularly at a time when the country is struggling through a national disaster.

Watagala made the controversial comments on 2 December during a meeting at the Malabe Divisional Secretariat attended by government officials and Deputy Media Minister Dr. Kaushalya Ariyarathna. During the discussion, the Deputy Minister claimed that a coordinated effort was underway to spread distorted or false information about the disaster situation through physical means, social media, and even AI-generated content. He also alleged that individuals based overseas were contributing to such activity.

According to the SLWJA, Watagala went further, directing police officers present at the meeting to treat those posting such content “not merely as suspects but as offenders” and to take action against them under emergency regulations currently in force.

The SLWJA accused the government of abandoning the democratic principles it once campaigned on, noting that individuals who publicly championed free speech in the past were now attempting to clamp down on it. The association said this was not an isolated incident but part of a pattern of growing state pressure on journalists and media platforms over the past year.

It warned that attempts to criminalise commentary through emergency powers especially during a disaster constituted a grave violation of constitutional rights. The union urged the government to respect democratic freedoms and refrain from using disaster-related powers to silence criticism.

In a separate statement, Internet Media Action (IMA) also expressed “strong objection” to Watagala’s comments, describing them as a “serious threat to freedom of expression”, which it said is a fundamental right guaranteed to all Sri Lankan citizens.

The IMA said Watagala’s assertion that “malicious character assassination attacks” were being carried out against the President and others through social media or other media channels, and that such acts should attract severe punishment under emergency law, represented “an abuse of power”. The organisation also criticised the Deputy Minister’s claim that false opinions or misrepresentations whether physical, online, or generated by AI could not be permitted.

Using emergency regulations imposed for disaster management to suppress political criticism amounted to “theft of fundamental rights”, the statement said, adding that the move was aimed at deliberately restricting dissent and instilling fear among social media users.

“Criticism is not a crime,” the IMA said, warning that such rhetoric could lead to widespread intimidation and self-censorship among digital activists and ordinary citizens.

The group demanded that Watagala withdraw his statement unconditionally and insisted that freedom of expression cannot be curtailed under emergency laws or any other legal framework. It also called on the government to clarify its stance on the protection of fundamental rights amid increasing concerns from civil society.

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Cardinal calls for compassionate Christmas amid crisis

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Archbishop of Colombo

Archbishop of Colombo, Cardinal Malcolm Ranjith, has called on Sri Lankans to observe this Christmas with compassion and restraint, as the nation continues to recover from one of its worst natural disasters in recent memory.

In his message, the Colombo Archbishop has highlighted the scale of the crisis, noting that more than 1.5 million people have been displaced, while an “uncounted number” remain buried under debris in the hill country following landslides and severe flooding.

“It is a most painful situation,”

he has written acknowledging the difficulty of celebrating a season traditionally associated with joy while thousands are mourning lost loved ones, living in refugee centres, or left with nothing but the clothes they were wearing.

The Cardinal has urged the faithful to temper excessive celebrations and extravagance, instead focusing on helping those affected. “Celebrate, by all means, yes, but make it a moment of spiritual happiness and concern for the needs of those who suffer,” he said. “Assist as much as possible those who lost their loved ones, their homes, and their belongings.”

He has called for a Christmas marked by love, sharing, and solidarity, describing it as an opportunity to make the season “a deeply spiritual and joyful experience.”

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