Red Cross raising funds to aid vulnerable communities in Sri Lanka
= 96% of more than 2,900 households surveyed have been affected by the current crisis in some way
=Launches urgent call for humanitarian financing until core economic issues are addressed by government
= Says humanitarian assistance for a certain period of time can mitigate risks of negative coping mechanisms
=Effort not seen easy as donors prioritize among other crises in the world
By Sanath Nanayakkare
A survey report produced by the International Federation of Red Cross and Red Crescent Societies provides first-hand evidence of how the most vulnerable people, who are already under the poverty line, are being driven further towards despair.The report gravely warns that without immediate humanitarian interventions, the impact on communities is likely to be long-lasting and cumulative.To meet the country’s spiralling needs, the IFRC has launched an Emergency Appeal for urgent humanitarian assistance for 28 million Swiss francs in support of Sri Lanka Red Cross. The Island learned that 15% of the target amount of donations has already been received from donors in the U.K., Canada, Japan and a number of other nations that are empathetic towards Sri Lanka.
The needs assessment conducted by Red Cross in 11 of the country’s 25 districts has found that 96% of more than 2,900 households surveyed have been affected by the current crisis in some way—with food insecurity, health, livelihoods, and nutrition among the top concerns. Deteriorating physical safety and security, as well as violence against women and children stood out in the report.It uncovered worryingly high problem of access to food, either because of high cost, income stress or lack of availability. Runaway inflation and loss of livelihoods have doubly impacted people’s ability to cope with the record cost of living. Income loss is causing significant food insecurity, while inflation is driving up the cost of medicine and fuel costs are preventing access to essential healthcare.
Alexander Matheou, Regional Director, Asia Pacific of the International Federation of the Red Cross and Red Crescent Societies who was on a visit to Colombo to meet with affected communities, government authorities and the diplomatic community said:
“The deepening economic crisis is forcing people to make heartbreaking choices between going hungry, buying life-saving medicine, or finding the money to send children to school. Our survey is not exhausted, so we cannot say it’s a final statement, but it indicated that vulnerability is being experienced evenly across the country and some groups are more affected than others.”
“I think that a survey like this one is going to help because it’s evidence-based. Our argument is widely accepted that in an economic crisis like this vulnerable communities’ income is affected, and so, the coping mechanisms tend to be negative. They sell their assets. Children may drop out of school, girls may get married early; these are all negative coping mechanisms from which it is very difficult to recover. Our argument is that humanitarian assistance for a certain period of time can mitigate the risks of some of those negative coping mechanisms. This is not a permanent solution. So we are always in favour of development financing, World Bank loans, ADB loans, debt restructuring and assurances from bilateral partners because ultimately the solution has to be found out at governmental level. We hope that friends of Sri Lanka will recognise that humanitarian support should be part of how they are trying to work with this country throughout this crisis; not the core issues, but the humanitarian aspects of it. We hope we will be successful in persuading donors. I understand that donors will have to prioritize among other crises in the world. So I don’t think it will be easy. But I think the argument is strong and this survey will help us make this argument in a more compelling way.”
“Hopefully this economic crisis won’t last forever. So we think if we can intervene for a year two for the most vulnerable people and can mitigate the risks of those negative coping mechanisms being adopted, that will be a good intervention.”
“The ideal intervention will be with cash distribution because cash allows people to make those choices. Should I eat? Should I take medicine? Do I fix my roof? What is posing the greatest pain and risk in my life? Sometimes you have to provide nutritional support for pregnant mothers and breast-feeding mothers. That will be one of the interventions we make. We may look at an agreement with the government for school feeding programmes which is a very good way to keep children in school. If any ongoing school feeding programme is stopped, that’s another area we can intervene. We are also very keen to find ways to have feedback mechanisms and raise awareness on the risks of sexual and gender-based violence because the prevalence of these goes up when poverty increases. We are keeping an eye on that as well. Anything we can do to mitigate that we shall try.
“Humanitarian action is particularly important which is by nature neutral and impartial. Humanitarian financing can alleviate suffering of vulnerable people in a non-political way and when that financing is released, it will not be politicised.”
“Our main priorities remain meeting humanitarian needs at its worst. Unless this is done effectively and quickly, people who are struggling now will find themselves on a demeaning pathway to destitution from which there is no escape. The time to act is now.” Swiss franc to US dollar exchange rate: 1.001 USD equals 1 Swiss franc.
IMF Executive Board approves US$3 Billion under the Extended Fund Facility arrangement for Sri Lanka
• The IMF Board approved a 48-month extended arrangement under the Extended Fund Facility
(EFF) of SDR 2.286 billion (about US$3 billion) to support Sri Lanka’s economic policies and reforms.
• The objectives of the EFF-supported program are to restore macroeconomic stability and debt sustainability, safeguarding financial stability, and stepping up structural reforms to unlock Sri Lanka’s growth potential. All program measures are mindful of the need to protect the most vulnerable and improving governance.
• Close collaboration between Sri Lanka and all its creditors will be critical to expedite a debt treatment that will restore debt sustainability consistent with program parameters.
The Executive Board of the International Monetary Fund (IMF) approved a 48-month extended arrangement under the Extended Fund Facility (EFF) with an amount of SDR 2.286 billion (395 percent of quota or about US$3 billion).
Sri Lanka has been hit hard by a catastrophic economic and humanitarian crisis. The economy is facing significant challenges stemming from pre-existing vulnerabilities and policy missteps in the lead up to the crisis, further aggravated by a series of external shocks.
The EFF-supported program aims to restore Sri Lanka’s macroeconomic stability and debt sustainability, mitigate the economic impact on the poor and vulnerable, safeguard financial sector stability, and strengthen governance and growth potential. The Executive Board’s decision will enable an immediate disbursement equivalent to SDR 254 million (about US$333 million) and catalyze financial support from other development partners.
Following the Executive Board discussion on Sri Lanka, Ms. Kristalina Georgieva, Managing Director, issued the following statement:
“Sri Lanka has been facing tremendous economic and social challenges with a severe recession amid high inflation, depleted reserves, an unsustainable public debt, and heightened financial sector vulnerabilities. Institutions and governance frameworks require deep reforms. For Sri Lanka to overcome the crisis, swift and timely implementation of the EFF-supported program with strong ownership for the reforms is critical.
“Ambitious revenue-based fiscal consolidation is necessary for restoring fiscal and debt sustainability while protecting the poor and vulnerable. In this regard, the momentum of ongoing progressive tax reforms should be maintained, and social safety nets should be strengthened and better targeted to the poor. For the fiscal adjustments to be successful, sustained fiscal institutional reforms on tax administration, public financial and expenditure management, and energy pricing are critical.
“Having obtained specific and credible financing assurances from major official bilateral creditors, it is now important for the authorities and creditors to make swift progress towards restoring debt sustainability consistent with the IMF-supported program. The authorities’ commitments to transparently achieve a debt resolution, consistent with the program parameters and equitable burden sharing among creditors in a timely fashion, are welcome.
“Sri Lanka should stay committed to the multi-pronged disinflation strategy to safeguard the credibility of its inflation targeting regime. As the market regains confidence, the authorities’ recent introduction of greater exchange rate flexibility will help to rebuild the reserve buffer.
“Maintaining a sound and adequately capitalized banking system is important. Implementing a bank recapitalization plan and strengthening financial supervision and crisis management framework are crucial to ensure financial sector stability.
“The ongoing efforts to tackle corruption should continue, including revamping anti-corruption legislation. A more comprehensive anti-corruption reform agenda should be guided by the ongoing IMF governance diagnostic mission that conducts an assessment of Sri Lanka’s anticorruption and governance framework. The authorities should step up growth-enhancing structural reforms with technical assistance support from development partners.”
SLT and Lanka Hospitals share prices in sharp appreciation following divestment approval
By Hiran H. Senewiratne
Sri Lanka Telecom and Lanka Hospitals PLC were attracting investors yesterday as a disclosure was put out stating that the Cabinet of Ministers had approved the divestment of the stake held by the Secretary to the Treasury in SLT, stock market sources said.
The divestment is to be implemented by the State Owned Enterprises Restructuring Unit under the Ministry of Finance, Economic Stabilization and National Policies. Following the statement, share prices of both companies appreciated significantly. Sri Lanka Telecom shares appreciated by Rs 10.70 or 13 per cent. Its share price shot up to Rs 95.30 from Rs 84.60 and Lanka Hospitals shares appreciated by Rs 8.50 or eight per cent; its share price shot up to Rs 120 from Rs 111.50.
Amid these developments the CSE started on a positive note. Later it indicated a negative trend following marginal profit- takings and also mainly due to the IMF statement on tax reforms that created a panic situation among the corporate sector and investors, stock market analysts said .
“The market is down and dull, because as expected Sri Lanka got the IMF bailout and now investors are pushing to sell off their shares and attempting to make a profit, stock market analysts added.
The All- Share Price Index was down 95.53 points, while the most liquid S&P SL20 was down 57.82 points. Turnover stood at Rs 1.47 billion sans any crossings. In the retail market top seven companies that mainly contributed to the turnover were; SLT Rs 236 million (2.5 million shares traded), Browns Investments Rs 123 million (17.9 million shares traded), Expolanka Holdings Rs 119 million (868,000 shares traded), Distilleries Rs 77.3 million (3.6 million shares traded), Hayleys Rs 54.9 million (674,000 shares traded), Softlogic Capital Rs 51.7 million (4.2 million shares traded) and Capital Alliance Rs 47.8 million (1.5 million shares traded). During the day 78.9 million share volumes changed hands in 22000 transactions.
It is said that high net worth and institutional investor participation was noted in Hemas Holdings, Hayleys and JKH. Mixed interest was observed in Access Engineering, Expolanka Holdings and Sri Lanka Telecom, while retail interest was noted in Browns Investments, LOLC Finance and Union Bank.
The Capital Goods sector was the top contributor to the market turnover (due to Hemas Holdings, JKH, Hayleys and Access Engineering), while the sector index edged up by 0.08 per cent. The share price of Hemas Holdings decreased by Rs. 2.60 to Rs. 65.40. The share price of JKH moved up by one rupee to Rs. 145. The share price of Hayleys closed flat at Rs. 81. The share price of Access Engineering appreciated by 90 cents (6 per cent) to Rs. 15.90.
The Food, Beverage & Tobacco sector was the second highest contributor to the market turnover (due to Browns Investments), while the sector index increased by 1.83 per cent. The share price of Browns Investments gained 50 cents (7.81per cent) to Rs. 6.90.
According to analysts, with the IMF agreement being finalized, market analysts expect inflation to get on to a path of deflation, balance of payments to be stabilized and interest rates to be pushed downwards.
Yesterday, the Central Bank’s US dollar buying rate was Rs 316.84 and the selling rate Rs 334.93.
‘Sew Desatama Dialog’ initiative commissions new tower in Gonapathirawa, Anuradhapura
Dialog Axiata PLC, Sri Lanka’s widest network, recently commissioned the Gonapathirawa tower in the Anuradhapura district, as part of its commitment to expanding connectivity to villages and deep rural communities across the country via its “Sew Desatama Dialog” initiative.
The commissioning of towers under Sew Desatama Dialog has improved overall connectivity in the country and as a result it facilitates better communication, accessible educational resources while improving the quality of lives in Sri Lanka. In addition to the Gonapathirawa tower, additional towers were also built in Sangattewa and Labunoruwa in the Anuradhapura district along with towers in Habarana Galoya, Habarana Minneriya, and Magulpokuna in the Polonnaruwa district.
Dialog has connected over 180 Grama Niladhari divisions and surpassed 4,700 mobile 4G sites in its network by the end of 2022, the highest ever tower count recorded in Sri Lanka, as a result of its ongoing efforts to expand coverage and support customers during these unprecedented times. Dialog has also achieved 95% 4G Data population coverage, using Green Field towers to rapidly expand its coverage to deep rural communities and Lamp Pole solutions to meet urgent capacity requirements in dense areas.
Dialog’s dedication to expanding its coverage footprint has been recognized by global network testing leaders, coveting the titles of ‘Best 4G coverage experience’ and ‘Fastest upload and download Speed experience’ from Open Signal.
Representatives of Dialog at the site of the newly commissioned tower under the ‘Sew Desatama Dialog’ initiative in Gonapathirawa, Anuradhapura
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