(Nikkei Asia) Sri Lanka’s government appears increasingly upbeat about its chances of receiving International Monetary Fund (IMF) board approval for a USD 2.9 billion bailout by December, but the multilateral lender has cautioned that the time frame remains uncertain, and much depends on discussions with the heavily indebted country’s creditors.
Peter Breuer, senior mission chief for Sri Lanka, and Masahiro Nozaki, mission chief for Sri Lanka, in written comments to Nikkei Asia, said, “It is difficult to predict the timeline, as the process of debt relief discussions takes time. All parties who are involved in the process should move expeditiously, so that Sri Lanka can emerge from the crisis as quickly as possible.”
On Sept. 1, Sri Lanka reached a staff-level agreement with the IMF to obtain the $2.9 billion, a crucial lifeline for a country wrestling with the worst economic crisis in its history. The country’s year-on-year inflation topped 70% in August, and the public continues to face severe shortages of essentials.
Earlier this year, Sri Lanka defaulted on a foreign bond for the first time, after its foreign reserves dwindled to next to nothing. “We announced that we are not in a position to pay,” central bank Gov. Nandalal Weerasinghe said in May, confirming the “pre-emptive default.”
“Our position is very clear. Until [the lenders] come and restructure, we can’t pay,” Weerasinghe said.
Last Friday, Sri Lanka’s Finance Ministry held an online presentation for external creditors to explain the situation and discuss the next steps toward restructuring. A handout cited “some past policy mistakes” along with the COVID-19 pandemic and the resulting crisis as key factors that crippled the economy, depleted reserves and forced the country to stop debt repayments.
The day before, President Ranil Wickremesinghe chaired a meeting with ambassadors from 23 Paris Club and non-Paris Club countries, including Japan, France and India, to discuss related matters.Wickremesinghe appealed to all creditor countries to offer the “financing assurances” on debt sustainability the IMF has said are essential for the board to give the final green light.
The Indian High Commission in Sri Lanka, for its part, expressed support even before the creditor briefings. On Sept. 20 it said that it had started discussions on restructuring Sri Lanka’s official debt to India. A spokesman told Nikkei Asia that the “cordial atmosphere” of the talks reflected New Delhi’s support for an “early conclusion and approval of a suitable IMF program.”
Noting the need for other creditors to work on ensuring Sri Lanka’s debt is manageable, he added that India would remain “closely engaged” with relevant stakeholders.
During last Friday’s presentation, Weerasinghe and Mahinda Siriwardana, secretary to the Treasury and Ministry of Finance, noted that as of the end of June, Sri Lanka’s public debt stood at 122% of gross domestic product. A figure equivalent to 70% of GDP was denominated in foreign currency.According to the presentation by the Ministry of Finance and the central bank, China, Japan and India were the country’s top three bilateral creditors, with China accounting for 52% in total, followed by Japan at 19.5% and India at 12%.
The Sri Lankan officials also pushed for the formation of an ad-hoc coordination group to expedite the process of obtaining financing assurances from multiple creditors. They explained that such a group would allow official bilateral creditors to give such assurances to the IMF collectively, after discussing the matter among themselves.
The Japanese Embassy in Colombo agreed that it is essential for all creditors to come to the table for debt restructuring discussions to ensure that the process is transparent and fair. “If all the creditor countries will participate in a coordination platform proposed by President Wickremesinghe, the government of Japan is ready to contribute to the discussion in a constructive way,” the embassy told Nikkei Asia.
But all eyes are on top creditor China, known for its preference for refinancing loans or deferring repayments rather than restructuring and settling for loss-making “haircuts.”
On the sidelines of the United Nations General Assembly last week, Sri Lankan Foreign Minister Ali Sabry met his Chinese counterpart, Wang Yi, who pledged China’s support for a Sri Lankan economic recovery.A Chinese Foreign Ministry readout of the meeting said that Wang promised China “is ready to work with Sri Lanka to carry forward the traditional friendship, consolidate strategic mutual trust and deepen and expand pragmatic cooperation.” He also said that China would “continue to offer assistance within our capacity to help Sri Lanka overcome temporary difficulties.”
Still, a highly placed Sri Lankan diplomatic source said that although debt discussions have started with some countries, it is “impossible” to say how long they will take and when a final decision will be made.
Prez to unveil plan on 13 A
SJB, SLPP rebels to boycott opening of new parliamentary session
By Saman Indrajith
The main Opposition party, the SJB, and the dissident SLPP MPs have decided to boycott the ceremonial opening of the Fourth session of the Ninth Parliament by President Ranil Wickremessinghe today.
President Ranil Wickremesinghe declared, on January 26, that he would brief Parliament on his decision to implement the 13th Amendment to the Constitution fully.
MP Prof G.L. Peiris told the media that the FPC would boycott President Wickremesinghe’s speech, scheduled to take place today (08) when the Fourth session of the Parliament is ceremonially declared open.
Prof Peiris called the ceremonial opening of the new parliamentary session a mere show. “This is not acceptable. The people are fed up with policy statements. They need solutions instead,” he said.
Chief Opposition Whip and SJB Kandy District MP Lakshman Kiriella, addressing a press conference, at the Opposition Leader’s office in Colombo yesterday said that his party members too would boycott today’s ceremony.
Kiriella said that President Wickremesinghe was now speaking of economic development in 2048. “This he is promising to do while doing everything possible under the sun and the moon to deprive people of their democratic right to an election. Therefore, we have decided not to attend President’s ceremonial treading of the government policy statement which is another example of this makeshift government’s predilection for waste of money and time.”
All Ceylon Tamil Congress, led by Gajendrakumar Ponnambalam, too, has decided to boycott today’s sessions.
TNA spokesman, Jaffna District MP MA Sumanthiran, said that his party would attend Parliament sessions today.
Political party sources said that TNA, JVP, Sri Lanka Muslim Congress and All Ceylon Makkal Congress, in the Opposition ranks, however, would attend Parliament today.
Following the ceremonial opening of the day’s session, the President is scheduled to present the Statement of Government Policy in Parliament, at 10 am, according to the powers vested in him, under Article 33 of the Constitution.
A rehearsal for the ceremonial opening was held Monday at the Parliament premises where many, including students of Presidents’ Girls College, Kotte, were present.
MSC America belonging to largest shipping line calls at ECT
MSC America, the first container vessel under the business promotions programme to attract new lines to the Port of Colombo (POC), called at the East Container Terminal (ECT), owned by the Sri Lanka Ports Authority yesterday (07).
The latest programme to attract new shipping lines to the POC has been planned and implemented in collaboration with the Ministry of Ports and Shipping, Sri Lanka Ports Authority (SLPA), Colombo International Container Terminals (CICT), South Asia Gateway Terminals (SAGT), Ceylon Association of Shipping Agents (CASA) and Sri Lanka Association of Vessel Owners (SLAVO) to effectively address strategic business promotions as a fruitful mean to overcome the prevailing economic crisis. Attracting more new lines to the POC, increasing operational efficiency, expediting naval services, efficiency in logistics and warehouse management and container and cargo transportation are among the objectives.
MSC America that called at the ECT, owned by the POC, will hereafter operate a weekly call to Colombo.
On the first call, yesterday, the vessel carried 2300TEUs to Colombo and is expected to carry 2500TEUs on a weekly basis. The vessel, with a length of 334m and a 7.5m draft, sails under the flag of Panama. The port rotation includes Singapore and South Africa.
MSC is the largest global shipping line, with a fleet of more than 775 TEU vessels for container transportation around the world. The shipping line that maintains long term operations with the POC has a collaborative business relationship of more than 10 years with SLPA. Since 2015, it is the prime shipping line of the POC with an annual operational capacity of 2.0m TEUs. It performs about 900 calls per annum at the POC.
The deep draft vessels, owned by MSC, call at the CICT of the POC, whilst calling the SLPA controlled JCT and ECT with more than 1.0m TEUS per annum, becoming the main customer of the SLPA.
According to MSC Lanka (Pvt.) Ltd., the local agents for MSC shipping lines, another new three shipping lines, under INGWE West Bound service, East Africa Express service and East Med Service, will be calling this month at the POC.
To mark MSC America’s first call at the POC, a special plaque exchange was held at the ECT of the SLPA between Minister of Ports, Shipping and Aviation Nimal Siripala de Silva, and the Master of the vessel, Capt. Matlin Alexander. Chairman of SLPA, Keith D Bernard, and several representatives of MSC Lanka (Pvt.) Ltd., also attended the occasion.
Expressing views at the occasion Minister de Silva said:
“With the deep draft of the East Container Terminal, there is ample potential for mega vessels to call at the port. The remaining development process of the terminal is expedited with an investment of Rs.5.9 billion. Today, a mega vessel of the MSC has contributed for container operations via the Port of Colombo. Similarly four new services will be added to increase the capacity of the POC. That will increase our revenue. This has further strengthened the credibility placed by the international shipping community on the Port of Colombo.”
Remembering Upali Wijewardene, the founder of Upali Group
The Upali Group of Companies, its employees, and sales agents countrywide, have made arrangements to invoke blessings on its founder, Upali Wijewardene, who disappeared in his Learjet, 40 years ago. Bodhi Pooja, Pahan Pooja and an alms-giving will be held, in his memory, on Feb. 13 (Monday).
A special Bodhi Pooja will be held at the Kelani Raja Maha Viharaya, at 6 p.m. on February 13 with the blessings of Prof. Ven. Kollupitiye Mahinda Sangarakkhitha Thera, the Chief Incumbent of Kelaniya Raja Maha Viharaya.
Arrangements have been made to offer alms to the Maha Sangha at the Kelaniya Raja Maha Viharaya, and scholarships to 10 needy children, from the Helena Wijewardene Maha Vidyalaya, Kelaniya.
Alms-giving to the inmates of the Home for the Elders at Mulgampola, Kandy, Bodhi Pooja Pinkama and Kavi Bana Pinkama, from 4.30 p.m. onwards, at the Ceylon Chocolates factory premises.
Bodhipooja, Pahan Pooja and Kavibana deshana will be held at Vidya Niketha Piriven Viharaya, Sapugoda Kamburupitiya.
The employees of Upali Consumer Products have arranged an alms-giving lunch at the ‘Children’s Home’ at Ja-Ela.
Founder’s Day Programme on February 13, 2023.
9.00 a.m. – Holy Mass at Mattakkuliya Church.
10.00 a.m. – Offering of Buddhapooja at the ‘Dhathumandiriya’.
10.30 a.m. – Scholarships to 10 needy children from Helena Wijewardene Maha Vidyalaya, Kelaniya.
11.30 a.m. – Alms-giving for the Maha Sangha at Kelaniya Rajamaha Viharaya.
12 noon – Providing lunch for the Children’s Home, Ja-Ela, organized by the employees of Upali Trading Co. Ltd.
5.15 p.m. – Offering Gilanpasapooja (permissible drinks) for Dhathumandiraya.
6.00 p.m. – Bodhi Pooja and Pahan Pooja at Kelaniya Rajamaha Viharaya.
All these pinkamas (meritorious acts) are organized by Upali Group employees and newspaper, Kandos/Delta and soap agents.
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