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PMB hasn’t purchased Yala yield at all – State Minister

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‘Treasury helpless, solution not in sight’

By Shamindra Ferdinando

State Finance Minister Ranjith Siyambalapitiya yesterday (12) admitted that the Paddy Marketing Board (PMB) hadn’t purchased any paddy for want of funds.

The SLFPer said that the economic crisis was so acute the Finance Ministry couldn’t intervene though it realised the need to address the issue urgently.

The Kegalle District MP said so when The Island sought an explanation regarding the failure on the part of the government to step in to re-assure the farmers of its commitment for their welfare.

Siyambalapitiya said that in spite of a series of talks, involving President Ranil Wickremesinghe, Premier Dinesh Gunawardena, Bank of Ceylon, People’s Bank and the PMD over the past several weeks the issue at hand couldn’t be settled.

Responding to another query, MP Siyambalapitiya said that the whole setup was in turmoil.

The government lacked the wherewithal to intervene on behalf of the PMB, the State Minister said, adding that the Treasury was in the process of settling Rs 2 bn the government enterprise owed the Bank of Ceylon and the People’s Bank.

Agriculture Minister Mahinda Amaraweera was not available for comment.

The Island raised the issue with Dr. Suren Batagoda, senior presidential advisor on food security. When The Island pointed out that the PMB hadn’t bought paddy at all though the government repeatedly assured the public of food security and sufficient fertiliser and agro chemicals for the forthcoming Maha season, Dr. Batagoda said that they were aware of the situation.

Dr. Batagoda asserted that even if the PMB received sufficient financial backing, it couldn’t purchase at least 5% of the stocks available in the market. The presidential aide explained the need and the responsibility on the part of the government to create an environment for the private sector to manage the paddy purchasing scheme.

The PMB couldn’t intervene in the market in a decisive manner therefore it would be better to facilitate the private sector to meet the need, Dr. Batagoda said. The presidential aide emphasized all stakeholders should recognize the ground situation. “We have to be realistic. Better to educate the public and take tangible measures to properly supervise private sector-led initiative than funding the PMB,” Dr. Batagoda said. The former power sector official also questioned the efficiency of the PMB in comparison to the private sector.

President Ranil Wickremesinghe, on Sept. 13, established a special mechanism comprising four committees to ensure food security.

State Minister Siyambalapitiya also admitted that they hadn’t been able to solve the issue over Rs 1.2 bn PMB fixed deposit at the Bank of Ceylon. The PMB has declined to release its fixed deposit to finance purchasing of paddy.

Samagi Jana Balavegaya (SJB) MP Rohini Kaviratne told The Island that the government owed an explanation how it intended to ensure food security if the farmers’ produce were not purchased. In the absence of the state intervention, the private sector-dominated paddy market wouldn’t be sensitive to the difficulties experienced by hapless farmers.

Lawmaker Kaviratne asked whether the government was quietly planning to stop purchasing paddy. If that happened, what would be the fate of the PMB, the former UNP MP asked, urging the government to make its position clear on the issue at hand.

The Matale District MP said that those who expected a system change in the wake of Gotabaya Rajapaksa’s ouster in July must have been surprised by the way the Wickremesinghe-Rajapaksa administration handled the economy.

The top SJB spokesperson said that the government seemed to have allowed a group of politically influential private sector millers to take over the entire paddy purchasing scheme. The government inaction would discourage farmers, and those who speak of exceptional yield at the forthcoming Maha season had conveniently forgotten the farmers were struggling to sell their produce.

The MP alleged that the government was busy destroying the agriculture sector. The incumbent leadership obviously followed Gotabaya Rajapaksa’s destructive strategies, she said. The former President denied farmers fertiliser and agro chemicals and the present lot won’t purchase their produce as they were being exploited by large scale private millers, the SJB MP said.



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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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