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President urged to deep-six Ranil’s debt restructuring plan
On 19 Sept., 2024, just two days before Sri Lanka’s much-awaited presidential election and after the traditional moratorium on campaigning came into effect, the Finance Ministry proclaimed that the government had reached an Agreement in Principle for debt restructuring with its commercial creditors, says an independent research forum that goes by the name YUKTHI.
YUKTHI has said that this debt restructuring process is based on a flawed Debt Sustainability Analysis (DSA) formulated by the International Monetary Fund (IMF).
The DSA sets the target of 4.5% of GDP in external debt servicing – consisting of principal and interest repayments – by 2027. This is equivalent to 30% of projected revenues at the cost of public spending. Furthermore, the DSA seeks to facilitate Sri Lanka’s return to the capital market by the end of the IMF programme. Sri Lanka is expected to float 1.8% of GDP in International Sovereign Bonds (ISB) every year, which is USD 1.5 billion in 2027. Floating 1.8% of GDP in ISBs at very high interest rates is meant to service external debt of 4.5% of GDP. The IMF DSA is thus setting up a further debt trap for Sri Lanka.
YUKTHI has said in a media statement: “This bond deal also provides for macro-linked bonds, which are premised on higher interest and principal payments tied to the level of Sri Lanka’s dollar-GDP growth between 2025 and 2027. Since the DSA avoids repayment of any debt to the bilateral and commercial creditors during this period, the rupee is likely to appreciate leading to an increase in the country’s dollar GDP. Furthermore, the foreign earnings necessary for external debt servicing are also likely to decline due to the appreciated rupee.
“This trend means that the debt relief from the bondholders is low, and Sri Lanka is likely to default on its debt when it must begin such high levels of debt servicing. This is a bad deal for Sri Lanka. The IMF is complicit with the bondholders, enabling them to extract as much wealth as possible.
The bond deal also sets a bad precedent for future debt restructuring by developing countries of sovereign debt contracts. Bondholders do not want the existing laws to affect the amount of value that they can recover. Accordingly, they are introducing a mechanism where they can request change of jurisdiction to English or Delaware law. This provides leeway for bondholders to ensure recovery of their loans even by changing the underlying laws, thereby constraining Sri Lanka and compelling the state to overlook the best interests of its citizens.
“President Anura Kumara Dissanayake is under tremendous pressure from powerful international actors to accept this bond deal. Claims that exports will grow and tourist earnings will increase do not hold water. The global economic downturn has created a race to the bottom for countries attempting export-led growth, while the tourism sector has proven to be fickle and susceptible to external shocks.”
YUKTHI has called on President Dissanayake to reject this debt restructuring deal with bondholders. Sri Lanka should avoid extractive high interest ISBs in the future, as that was the cause of the debt crisis in the first place. It should renegotiate the IMF programme and ensure a new and sustainable DSA. Debt restructuring should ensure much higher haircuts so that public spending on social welfare to address the needs of the crisis-ridden people can be achieved.
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Advisory for low pressure area in the Southwest Bay of Bengal to the south-east of Sri Lanka
Advisory for low pressure area in the Southwest Bay of Bengal to the south-east of Sri Lanka.
Issued by the Natural Hazards Early Warning Centre of the Department of Meteorology at 03.00 pm on 18 February 2026
Multiday boats fishermen and naval community are warned that the low-pressure area still persists over the Southwest Bay of Bengal to the south-east of Sri Lanka. Under the influence of this system, heavy showers or thundershowers, Strong winds about (50-60) kmph, and rough or very rough seas can be expected in these sea areas.
The Meteorological Department is constantly monitoring the behavior of the system.
The naval and fishing communities are requested to be attentive to the future forecasts and bulletins issued by the Department of Meteorology in this regard.
News
Canada concerned about delay in holding PC polls
Canada, said to be the home to the largest Tamil Diaspora community, has expressed concern over the delay in holding Provincial Council (PC) elections. Canadian High Commissioner Isabelle Martin, on Monday (16), took up the issue with Public Administration, Provincial Councils and Local Government Minister Professor Chandana Abayaratne.
Sources quoted Prof. Abayaratne as having told the Canadian HC that the delay was not deliberate on the part of the government. The Minister blamed, what the sources called, certain legal, technical and delimitation issues for the delay.
India compelled Sri Lanka to enact the 13th Amendment to the country’s Constitution to enable the setting up of the Provincial Council system, in line with the Indo-Lanka Peace Accord, which Sri Lanka signed under duress in July 1987.
Prof. Abayaratne has assured the Canadian HC that President Anura Kumara Dissanayake, too, recognised the importance of strengthening the Provincial Council system as a solution to ethnic issues and that urgent steps would be taken in that regard.
During the discussion, matters relating to strengthening political, economic and social relations between the two countries were discussed.
In May 2020, Canada declared that Sri Lanka had perpetrated genocide during the war against the LTTE. Canada also sanctioned former Presidents Mahinda Rajapaksa and Gotabaya Rajapaksa in January 2023 over alleged war crimes.
The Canadian HC also explained her country’s ‘Indo-Pacific’ strategy and how Sri Lanka could benefit from it.
In particular, Canada’s “Pathways to Peace” project will support reconciliation between nations, and to improve communication by encouraging the learning of mutual languages as a second language, and it was also agreed to provide more opportunities for Sri Lankan students to pursue higher studies in Canada.
The Canadian delegation also expressed its willingness to provide the necessary technical assistance to solve the drinking water problems in Puttalam, Mannar and the North-Eastern provinces under technical cooperation, and to implement the relevant projects after a preliminary study.
by Shamindra Ferdinando
News
Sajith briefs visiting UK Deputy PM on constitutional issues
SJB and Opposition Leader Sajith Premadasa has briefed Deputy PM of the UK, David Lammy, on the dangers posed by the proposed Protection of the State from Terrorism Act (PSTA) and the Online Safety Act.
They met at the Office of the Leader of the Opposition, in Colombo, on Tuesday (17). Discussions focused on democratic governance, trade expansion, and bilateral humanitarian cooperation.
The British delegation included High Commissioner for Sri Lanka Andrew Patrick.
Head of the Deputy Prime Minister’s International Unit David Meyer, Special Advisor Ms. Fiona Meagher, and First Secretary (Political) Tom Soper,
According to a statement issued by the Opposition Leader’s Office, Premadasa has cautioned against what he called draconian applications of the law, specifically warning against broad definitions of terrorism that could criminalize political dissent and trade union activities. Premadasa reiterated that the judiciary, not the executive, must drive legal interpretations. Regarding online safety, while acknowledging the need to protect children, he stressed that regulations must align with UK standards and international norms without infringing on civil liberties.
The Opposition Leader welcomed the UK’s leadership as the President of the Group of States against Corruption (GRECO) and its global Anti-Kleptocracy Campaign. The SJBer highlighted the critical need for transparent institutions, noting that strengthening accountability mechanisms is central to rebuilding public trust and ensuring sustainable economic recovery in Sri Lanka.
Premadasa conveyed sincere appreciation for the UK’s “Sovereign Solidarity” following the devastation caused by Cyclone Ditwah in late 2025. He thanked the UK government for increasing its humanitarian aid package to £1 million (approx. $1.32 million) in December 2025. This funding, channelled through the Red Cross, UNOPS, and local partners, has provided: Emergency shelter and repairs for damaged homes; Clean water and sanitation facilities to prevent disease; and essential medicines and food supplies for the 1.8 million people affected.
Premadasa also proposed enhanced cooperation in protecting Sri Lanka’s wild elephant population and addressing the growing human–elephant conflict. He emphasised the need for sustainable conservation strategies, scientific land-use planning, community protection measures, and international technical support to safeguard biodiversity while ensuring the safety and livelihoods of rural communities affected by human–elephant interactions.
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