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Lanka declares China as its closest friend

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Sri Lanka and China could cooperate within the framework of the Belt and Road Initiative, turning the Colombo Port City and the Hambantota Port into two major engines to boost Sri Lanka’s economic development, pushing for the country’s industrialization, and enhancing the country’s capacity for independent development, Chinese State Councilor and Foreign Minister Wang Yi told Foreign Minister Dinesh Gunawardena on Wednesday, during a phone conversation.

The call was made on Gunawardena’s suggestion and Wang assured that the two countries are strategic cooperative partners of sincere mutual assistance and lasting friendship.

“Over the past year, the two countries joined hands to fight against the pandemic and supported each other, and their bilateral relations maintained a strong development momentum,” Minister Wang Yi said.

Noting that this year marked the 100th anniversary of the founding of the Communist Party of China (CPC), Wang said that China had won the victory in ending extreme poverty and achieved great results in building a moderately prosperous society in all respects, and would embark on a new journey toward fully building a modern socialist country.

“China’s development means a growing force for peace and the growth of developing countries, which will provide more development opportunities for developing countries, including Sri Lanka. We must make solid progress in cooperation within the framework of the Belt and Road Initiative, turning the Colombo Port City and the Hambantota Port into two major engines to boost Sri Lanka’s economic development, pushing for Sri Lanka’s industrialization, and enhancing the country’s capacity for independent development,” he said.

Minister Gunawardena said Sri Lanka regarded China as its closest friend and thanked China for its long-term assistance for Sri Lanka’s economic development, improvement of people’s livelihood, and dealing with internal and external challenges. The Sri Lankan FM highlighted that the Colombo Port City, Hambantota Port were key projects for Sri Lanka’s future development, and welcomed more Chinese investment, businessmen and tourists.

“Some Western countries, including the United States are using alleged human rights issues to intervene in the internal affairs of developing countries including Sri Lanka. They use the United Nations (UN) Human Rights Council as a platform to exert pressure on developing nations. I hope that China will continue to uphold justice and stand with developing countries,” Gunawardena said.

Wang said that some Western countries are used to pressuring developing countries on the pretext of human rights, adding that China firmly opposed it, and was willing to unswervingly support Sri Lanka to jointly safeguard the legitimate rights and interests of developing countries, the basic norms governing international relations, and the purposes and principles of the UN Charter including non-interference in other countries’ internal affairs.

Gunawardena warmly congratulated China on the 100th anniversary of the CPC’s founding and that China had under the leadership of the CPC, completely lifted itself out of poverty, made great development achievements, and significantly improved the livelihood of its people.

Gunawardena said China had also led other countries on the way towards common development, and made vital contribution to human civilization. Sri Lanka appreciated China’s fair stance on human rights issues and was willing to join hands with China to safeguard fairness and justice in regional and international affairs. “Those allegations about Xinjiang and Hong Kong are just baseless. We steadily support China on the Xinjiang, Hong Kong related issues and the One-China Policy”, he added.

 

 



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Pakistan’s ex-president, Pervez Musharraf dies aged 79

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(picture BBC)

BBC reported that Pakistan’s former president General Pervez Musharraf, who seized power in a coup in 1999, has died aged 79.

The former leader – who was president between 2001 and 2008 – died after a long illness, a statement from the country’s army said.

He had survived numerous assassination attempts, and found himself on the front line of the struggle between militant Islamists and the West.

He supported the US “war on terror” after 9/11 despite domestic opposition.

In 2008 he suffered defeat in the polls and left the country six months later.

When he returned in 2013 to try to contest the election, he was arrested and barred from standing. He was charged with high treason and was sentenced to death in absentia only for the decision to be overturned less than a month later.

He left Pakistan for Dubai in 2016 to seek medical treatment and had been living in exile in the country ever since.

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The 75th Anniversary of National Independence celebrated under the patronage of President, PM

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(picture Presidents Media)

The 75th National Independence Day celebration was held under the theme “Namo Namo Mata – A Step towards the Century”, under the patronage of President Ranil Wickremesinghe and Prime Minister Dinesh Gunawardena on Saturday morning (04) at Galle Face Green.

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Lanka sovereign bond holders write to the IMF

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ECONOMYNEXT –Sri Lanka’s bondholders have written to the International Monetary Fund expressing their willingness to engage in debt re-structuring talks but also raising matters related to the domestic debt re-structuring and economic assumptions and forecasts.

The group, styling itself as the “Ad Hoc Group of Sri Lanka Bondholders (the Bondholder Group) has written last week to the IMF Managing Director from New York said inter alia that the Bondholder Group through its Steering Committee stands ready to engage quickly and effectively with the Sri Lankan authorities to design and implement restructuring terms that would help Sri Lanka restore debt sustainability and allow the country to re-gain access to the international capital markets during the IMF Programme period.

The letter concluded with the paragraph: Recognizing the important commitments made by India in the India Letter, the Sri Lankan authorities will apply the principle of comparable treatment in respect of the debt relief requested and obtained from all their remaining official bilateral creditors.

Following is the text of the letter:

NEW YORK, Feb. 3, 2023

Dear Managing Director Georgieva,The Ad Hoc Group of Sri Lanka Bondholders (the “Bondholder Group”) acknowledges the Sri Lankan authorities’ engagement with their official creditors towards a resolution of the current crisis and restoration of debt sustainability.

The Bondholder Group further acknowledges that such engagement has recently resulted in the Government of India (in its letter to the IMF, dated January 16, 2023 (the “India Letter”)) delivering letters of financing assurances, committing to support Sri Lanka and contribute to its efforts to restore debt sustainability by providing debt relief and financing consistent with the IMF Extended Fund Facility Arrangement (the “IMF Programme”) and the IMF Programme targets indicated in the India Letter.

Similarly, the Bondholder Group through its Steering Committee stands ready to engage quickly and effectively with the Sri Lankan authorities to design and implement restructuring terms that would help Sri Lanka restore debt sustainability and allow the country to re-gain access to the international capital markets during the IMF Programme period.

Based on the limited information available to us at this time, including information contained in the India Letter, we understand that the IMF Programme’s debt sustainability targets are identified as

(i) reducing the ratio of public debt to GDP to 95% by 2032,

(ii) limiting the central government’s annual gross financing needs to GDP ratio to 13% in the period between 2027 and 2032, and central government annual foreign currency debt service at 4.5% of GDP in every year between 2027 and 2032 and

(iii) closing of the external financing gap.

The Bondholder Group hereby confirms it is prepared to engage, through its Steering Committee, with the Sri Lankan authorities in restructuring negotiations consistent with the parameters of an IMF Programme and the targets specified therein (the “IMF Programme Targets”), which the Bondholder Group understands to be the targets identified in the India Letter; it being recognized that these negotiations will necessarily be further informed by the receipt of the forthcoming DSA.

We would note that the finalization of an agreement will also be subject to the satisfaction of the following conditions:

The central government’s domestic debt – defined as debt governed by local law – is reorganized in a manner that both ensures debt sustainability and safeguards financial stability.

Assuming that annual gross financing needs should not exceed 13% of GDP in the period between 2027 and 2032, whilst allowing for central government annual foreign currency debt service to reach 4.5% of GDP in every year between 2027 and 2032, domestic gross financing should therefore be limited at 8.5% of GDP for the period 2027-2032.

While we recognize that the determination of the economic assumptions underpinning the IMF Programme Targets is ultimately the responsibility of the IMF and that the overall design of the IMF Programme is one that is negotiated between the IMF and Sri Lanka, it is nevertheless important that the Bondholder Group has the opportunity to express its views on both the economic assumptions underpinning these IMF Programme Targets and the adequacy and feasibility of the adjustment efforts contemplated under the IMF Programme.

When considering any restructuring proposal that is made to the Bondholder Group, it is the Bondholder Group’s intention to take into consideration the extent to which the economic assumptions and the adjustment efforts are consistent with these views.

Recognizing the important commitments made by India in the India Letter, the Sri Lankan authorities will apply the principle of comparable treatment in respect of the debt relief requested and obtained from all their remaining official bilateral creditors.

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