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Lanka eyes December bailout, IMF says timing hard to predict

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(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.



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Easter Sunday: “Accept guilt with contrite hearts,” says Kurunegala Bishop

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by Norman Palihawadane

If those responsible for the Easter Sunday terror attacks do not accept their guilt with contrite hearts, then nature will follow suit, says President of the Catholic Bishops Conference of Sri Lanka and the Bishop of Kurunegala Catholic Diocese, Rt Rev Dr Harold Anthony Perera.

While delivering his homily at the Holy Mass offered on behalf of the children who received Sacrament of Confirmation at the Church dedicated to Our Lady of Lourdes at Yakadapatha, Bishop Perera said that justice has not yet been meted out to the Easter Sunday victims.

“Nature will surely stand against those responsible. Nature will ruthlessly follow them at every step they take and their conscience will not keep them at rest. This is what I believe,” he said.

He said that Colombo Archbishop Malcolm Cardinal Ranjith had stated that those responsible for the terror attacks on Easter Sunday must come forward and accept their guilt. “If those who masterminded this crime fail to do so, I strongly believe that Nature will follow suit,” Bishop Perera said.

“Perusing the pages of history we know well that kings and state rulers had been elevated to positions of power by many means. Also we know for certain that none of them ruled for eternity. None will rule forever.”

He said that if the present day rulers while hiding the truth of the Easter Sunday bomb attacks, do nothing to mete justice to the victims and their families, they will suffer immensely.

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TNA accepts president’s overture, MP suggests party ready to talk federal

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ECONOMYNEXT —Tamil National Alliance (TNA) will engage constructively in sincere attempts at resolving the ethnic issue, legislator M A Sumanthiran said responding to President Ranil Wickremesinghe’s overtures to the opposition, while also suggesting that the TNA was open to a federal solution.

“We will engage constructively in every sincere attempt as we have always done but will not allow any farcical process,” Sumanthiran tweeted Thursday November 24 afternoon.In a speech made in parliament the previous day, the Jaffna district MP said there can be no reconciliation by sweeping the truth under the carpet.

“It is only by the ascertainment of the truth that there can be true reconciliation,” he said.

“Your actions must be louder than words. All we have are words, words and words. As I speak, more lands are being acquired,” he added, highlighting an example that prompted a response from President Wickremesinghe that he would look into the matter.

Wickremesinghe on Wednesday re-extended an open invitation to opposition parties to a discussion on a permanent solution to Sri Lanka’s decades-long ethnic problem. Talks would begin after December 11, he said, with a view to agreeing on a solution by February 04 2023 when the island nation celebrates 75 years of independence from the British.

“We welcome the president’s initiative. He said everyone must agree on the solution. We want all the people of this country to be content and be satisfied and feel secure that this is their country,” said Sumanthiran.The MP said there is broad consensus already on the issue and that only a few things need to be ironed out.

“That can be done in a day’s sitting. You don’t require three months,” he said.

President Wickremesinghe agreed in his speech that there is nothing new left to talk about.If the president is looking at the South African example, said Sumanthiran, it must be noted that that country underwent a political transformation “before they could look at accountability issues”.

“That fundamental change must happen and must precede other measures,” he said.

Among the issues that Sri Lanka is confronted with with regard to reconciliation between communities is the matter of alleged human rights abuses, particularly during the final phase of the 26-year armed conflict. Missing persons, militarisation and alleged land grabs have also figured prominently in various international fora where Sri Lanka’s human rights record has come up for discussion.

“Of course you need to do many confidence-building exercises because there is a serious lack of trust because of the long history and what happened,” said Sumanthiran.

The MP said it is crucial that the core, root issues are settled first before considering issues of justice and accountability, which he said would provide the people a different outlook on resolving those issues.He also paid what has lately been a rare compliment to President Wickremesinghe from the TNA.

“We recognise that perhaps you are the only person in this House today — although you’re not a member of this house — who’s had the longest experience in this matter. You were part of the government negotiation team that negotiated with the TULF from the middle to the end of 1986, which ended with the Indo-Lanka accord, and the 13th amendment which we did not accept as a meaningful scheme of devolution,” he said.

The 13th amendment to Sri Lanka’s constitution emerged out of the controversial Indo-Lanka Accord of 1987 as a purported solution to the worsening ethnic conflict. Provincial councils came in the wake of this amendment, but land and police powers have yet to be devolved to the provinces as originally envisioned. Both Sinhalese and Tamil nationalists have opposed the 13th amendment, the former claiming it devolved too much, the latter complaining it didn’t devolve enough.

Wickremesinghe knows “everything that is to know about the resolution of this”, said Sumanthiran. He also acknowledged the All Party Representative Committee (APRC) appointed by former President Mahinda Rajapaksa.

“Though we did not participate in the APRC, that’s a good report. Many members in the front row today in the government were members of the cabinet in August 2000 when President Chandrika Bandaranaike Kumaratunga brought a constitution bill to parliament. The UNP at that time led by President Wickremesinghe opposed it only because of a transitional provision with regard to executive presidency, not because of the devolution arrangements in that,” he said.

The UNP government notoriously burnt the draft bill in parliament when the Kumaratunga government presented it. Analysts have revisited that event as a possible misstep in Sri Lanka’s path to a lasting peace, though others disagree.Sumanthiran said consensus is already there and all that is required is for decisions to be made.

“That is what has been entrusted to the president now,” he said.

The president’s call for a permanent resolution by the 75th Independence Day celebrations is a good ideal to work towards, but there isn’t much time, the MP warned.

“So we are willing to work with you constructively to achieve the objective you have enunciated. We’re willing to achieve the reasonable and legitimate aspirations of our people and indeed all the people that live in this country,” he said.In his speech, Sumanthiran was emphatic that his party does not wish to do anything behind the back of the majority.

“Everyone must feel secure. That is our desire as well. That the majority of this country must accept it.”

The MP then said that more than 40 percent of the world’s population live in federal countries. (There are 25 countries with a federal form of government).

“Those are the strongest countries in the world,” the MP claimed.

“You have others who are quasi federal, who sometimes call themselves unitary, like Great Britain, where the extent of devolution is far more than even in a federal form of government.

“We don’t ask for something that is not found anywhere in the world. We’re asking for something that is reasonable and is practised all around the globe. That will ensure that all our people will live with dignity and self respect in this country. We want the majority people to accept and understand that. You are, after all, a preponderant majority. No one can shift that. It was Prime Minister S W R D Bandaranaike who in 1926  introduced the idea of federalism to this country, not the Tamil leaders,” he said.Sumanthiran recalled that it was in fact the Kandyan chiefs who had asked for a federal form of government on two separate occasions in the early 20th century.

“So it can’t be bad for the Sinhala people, it was the Sinhala people who asked for it,” he said, noting that over time wrong messages have been communicated to the country.

“There are suspicions those must be allayed. We must resolve this in a just way, so that we can all can then stand up as the president envisages by Feb 04 2023 as the children of one mother,” Sumanthiran said.

Federalism has been a highly controversial and politically inflammable idea in Sri Lanka over the years, with many nationalist or even some moderate parties in the south vehemently opposing the very suggestion of it. It is unclear whether this stance has softened over the 13 years since the end of the war, but to date no Sinhalese-dominated party has come out in support for it.

Sri Lanka Podujana Peramuna (SLPP) MP Gevindu Kumaratunga who now sits in the opposition responding to Wickremesinghe’s invitation on Wednesday cautioned that they can only support a proposal that will honour Sri Lanka’s unitary character.

“If you’re asking for a consensus within a unitary Sri Lanka, we’ll agree. Outside of that, I don’t think a majority of people will agree. There is a ground reality here. Our soldiers laid down their lives to protect the unitary state,” said Kumaratunga.

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Women MPs to wear orange on Dec 1 to protest gender based violence

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Women MPs will attend parliament on Dec. 1 in line with slogan ‘Let’s unite to end gender based violence’ of the UN-led global campaign – 16 Days of Activism against Gender-Based Violence (GBV).Women Parliamentarians’ Caucus (WPC) Chairperson, Dr. Sudarshini Fernandopulle said that a wristband with the message “Let’s Unite to end Gender Based Violence” will also be worn as a solidarity measure with the global campaign against GBV.

She said: “The global theme of the campaign 2022 is ‘UNITE! Activism to end violence against women and girls.’ It emphasizes that without unity, GBV cannot be fought. It calls on governments, development partners, youth, media and all other stakeholders to come together to fight against GBV.

“Therefore, the 16 days of activism against GBV is an important advocacy period for our goal to advocate for and ensure equal grounds for women in Sri Lanka,” Fernandopulle said.

She said that a recent survey on Women’s Well-being by the Department of Census and Statistics had reported that during their lifetime, 20 percent of the ever-partnered women have faced physical and/or sexual violence by an intimate partner and that 25 percent of women have experienced physical or sexual violence by a partner or a non-partner after 15 years of age.

Eighteen percent expressed that they were subjected to economic abuse by a partner in their lifetime while 21 percent of the women who experienced violence by a partner had never expressed it to anyone before the interviews.

WPC’s Deputy Chairperson, Matale District MP Rohini Kaviratne said that GBV was nothing new to women in Sri Lanka. “We as women have had to face it always. As women parliamentarians we always face verbal abuse based on our gender,” she said.

Kaviratne said that during elections, and whenever someone needs to disgrace the female candidates, the most common weapon used is their gender roles. “The stereotypical thinking stigmatizes our roles in the public sphere and stepping out of the house to be a leader in politics as a female parliamentarian. We should fight this. We should fight any form of GBV.”

JVP-led NPP MP Dr Harini Amarasuriya said that the WPC was in the process of supporting the drafting of a Women’s Bill to be presented to parliament.  “However, we are conscious that laws alone do not effect change. There is a lot of work that needs to be done both institutionally and politically to ensure that the Bill when passed will make a meaningful difference in the lives of Lankan women.”

Tourism State Minister Diana Gamage said: We urge all Lankans to have zero tolerance for any kind of violence or sexual harassment committed against any human being. We should act, not be silent and passive observers.”

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