Sri Lanka will need about US $3 billion in external assistance in the next six months to help restore supplies of essential items including fuel and medicine, Finance Minister Ali Sabry told Reuters on Saturday.
“It’s a Herculean task,” Finance Minister Ali Sabry said in his first interview since taking office this week, referring to finding $3 billion in bridge financing as the country readies for negotiations with the International Monetary Fund (IMF) this month.
The country will look to restructure international sovereign bonds and seek a moratorium on payments, and is confident it can negotiate with bondholders over a $1 billion payment due in July.
“The entire effort is not to go for a hard default,” Sabry said. “We understand the consequences of a hard default,” he told Reuters.
J.P. Morgan analysts estimated this week that Sri Lanka’s gross debt servicing would amount to $7 billion this year, with a current account deficit of around $3 billion.
The country has $12.55 billion in outstanding international sovereign bonds, central bank data showed, and foreign reserves of $1.93 billion at the end of March.
“The first priority is to see that we get back to the normal supply channel in terms of fuel, gas, drugs and thereby electricity so that the people’s uprising can be addressed,” Sabry said.
Anti-government protests have raged across the island for days, with at least one turning violent in the commercial capital of Colombo, in a threat to the country’s lucrative tourism industry.
“We respect your right to protest, but no violence, because it is counterproductive,” Sabry said.
“Our tourism, which was beautifully coming back in February with 140,000 tourists coming in, has been severely affected ever since the demonstrations.”
Sabry said he would lead a delegation of Sri Lankan officials to Washington to start talks with the IMF on April 18 and that financial and legal advisers would be selected within 21 days to help the government restructure its international debt.
“Once we go to them, first thing is there is a sense of confidence in the entire international monetary community that we are serious,” he said. “We are transparent, we are willing to engage.”
On Friday, the new central bank governor raised interest rates by an unprecedented 700 basis points in a bid to tame rocketing inflation and stabilise the economy.
Sri Lankan authorities will also reach out to rating agencies, Sabry said, as the country looks to regain access to international financial markets after being locked out due to multiple ratings downgrades since 2020.
Sabry said the government will raise taxes and fuel prices within six months and seek to reform loss-making state-owned enterprises.
These measures were among key recommendations in an IMF review of Sri Lanka’s economy released in early March.
“These are very unpopular measures, but these are things we need to do for the country to come out of this,” Sabry said. “The choice is do you do that or do you go down the drain permanently?”
Sri Lanka will seek another $500 million credit line from India for fuel, which would suffice for about five weeks, according to Reuters.
The government would also look for support from the Asian Development Bank, the World Bank and bilateral partners including China, the United States, Britain and countries in the Middle East.
“We know where we are, and the only thing is to fight back,” Sabry said.
Discussions are ongoing with China on a $1.5 billion credit line, a syndicated loan of up to $1 billion and a request from Sri Lanka’s President in January to restructure some debt.
“Hopefully we will be able to get some relief which would help until larger infusions come in,” Sabry told Reuters.
Private Tutoring Amidst Sri Lanka’s Economic Crisis: Issues Faced by Students
By Usha Perera
Sri Lanka’s education sector, still reeling from the effects of the COVID-19 pandemic, now faces acute challenges due to the current political and economic crises. The sudden imposition of curfews and the lack of transportation have resulted in school closures and students being deprived of structured and systematic in-school education. In Sri Lanka, closing schools for just one day causes a loss of 25 million learning hours and 1.4 million teaching hours. Alongside this, private tutoring has gained greater importance. This blog discusses the issues faced mainly by Ordinary Level (O/L) and Advanced Level (A/L) students in attending tuition classes based on an IPS study. The study findings are derived from a sample of about 340 students, and 16 teachers and tutors across Sri Lanka.
Affordability of Private Tuition Classes
The surge in the cost of living with wages failing to keep pace with inflation and loss of income generation channels have been unbearable for parents of school-going children. The IPS study found that students who belonged to family income levels below LKR 30,000 spend approximately LKR 3,000-Rs. 7,000 per month while students whose family income was above LKR 200,000 spend approximately LKR 18,000- LKR 20,000 per month on private tuition depending on the grade of the student. This scenario is illustrated in Figure 1.
Further, most O/L and A/L level students spend more than LKR 2,000 per month on data packages for both school and tuition online classes, while most students who spend more than LKR 2,000 per month are concentrated among the higher family income categories. If LKR 2,000 is spent on monthly data packages, it would approximately account for 1% of whose family income is above LKR 200,000, and more than 7% of whose family income is below LKR 30,000. All this highlights the perceived importance of private education, especially among O/L and A/L grades, and the financial burden it imposes on a family’s household income.
These affordability concerns were partly offset by the introduction of free online classes during the pandemic, which has provided considerable relief for financially vulnerable students according to students interviewed for the IPS study. Affordability concerns were further allayed by reduced class fees by some tutors. The fees reductions were made accounting for the structural changes of administrative and operating costs of an online setting applicable based on the scale and intensity of operations of tutors. Financial issues faced by the families experiencing household income losses during the pandemic were also considered in fees reduction.
Accessibility to Online Classes
Online platforms were the sole medium for conducting classes during the pandemic while it becomes an option in the current context considering the social unrest, curfews and travel constraints due to fuel shortages. However, many students faced accessibility issues in joining online classes. The issues faced were poor signal coverage, high data costs, lack of necessary devices, and affordability concerns in the context of lost household income during the pandemic. Most of the students who belonged to a family income level above LKR 200,000 used a laptop/tablet while most of the students who belonged to a family income level of below LKR 30,000 relied on a smartphone. Smartphones were found to be less user friendly for academic use. In addition to the above issues, the ongoing power outages also present impediments to online education.The accessibility issues are mainly experienced by students from families with comparatively lower income levels, and those who had to rely on a smartphone for academic purposes. This implies a close positive relationship between household income and the quality of the education received; financial strength being the primary determinant of accessibility.
However, these accessibility issues were partly offset by the divergent opportunities experienced by students, especially in the context of online platforms. These prospects included the ability to join online classes conducted in distant locations that would otherwise have been restricted due to travel constraints and increased time available due to school closures. As a result, they increased the duration of tuition classes using the saved travel time.
While private tutoring became a way of bridging the gaps in the education system during the crisis, learning losses for the most vulnerable groups have further widened with accessibility and affordability issues. Since these issues were mainly observed among O/L and A/L student groups, there is a higher risk that vulnerable student groups would be highly challenged during their most decisive years leading to higher education and career development. Thus, it is necessary to address the affordability issues, focusing more on the vulnerable student groups. Financial assistance could be provided in terms of a certain number of free hours of teaching for selected financially vulnerable students and allocating a selected proportion of students to be taught at a concessionary rate.
To address the accessibility issues, recording the lessons and distributing the notes on different platforms will help to a certain extent. Providing digital equipment and networks for selected tuition centres and schools could also be considered since the lack of facilities and resources was identified as major accessibility issue for distance education. These would require collaborative efforts among the government, tutors, parents, non-government organisations and any other well-wishers.
Allianz Divitharana: A new take on Life and Health Insurance
The world’s number one insurance brand Allianz has announced the launch of its new Divitharana Insurance product, which provides comprehensive life and health insurance for policyholders and their loved ones, at an easily accessible and affordable price. The product, which has been designed for the mass market, a segment that is highly price sensitive, comes with a host of benefits and features, making it a truly comprehensive insurance product, that covers all of life’s important bases, protecting life’s most precious things.Tailored for the mass market, which includes farmers, fisherfolk, technicians, teachers, executives and other members of the general public, Divitharana Insurance provides life insurance at a flexible and economic price point, with the option for policyholders to settle the premium in monthly, quarterly, biannual or annual instalments, while also providing the convenience of increasing the cover provided during the policy period, without having to go for a new policy. These are particularly important features amidst the present economic challenges the nation is facing, as it allows everyone to have access to good and reliable insurance, regardless of their income level and style.
A key differentiator of Divitharana insurance is that each policyholder will be entitled to an individual investment account, on which an annual dividend will be declared and the proceeds credited to the policyholder’s account. On top of this, policyholders will also be entitled to an additional loyalty bonus of 20%, which will be added to the maturity value for continued on-time premium settlements. other than the life cover provided by Divitharana, policyholders can also opt to include additional covers such as Disability Benefit, Critical Illness and Hospitalisation cover, while also enjoying the flexibility of extending the insurance cover to include their spouse & children.
SLT-MOBITEL doubling the cloud with country’s first-ever VMware Cloud Foundation deployment
Understanding the importance of breaking new ground to reap the benefits of Enterprise premium cloud services, SLT-MOBITEL, the National ICT Solutions Provider, has become the country’s first-ever service provider to enable VMware Cloud Foundation (VCF) deployment in the island and importantly the first telco provider to have two clouds. Amidst the changing dynamics, the deployment milestones are supporting SLT-MOBITEL’s Cloud programme in accelerating digital transformation.SLT-MOBITEL Enterprise premium cloud was launched in 2018. Having a successful journey for over three years, the new mobilization now elevates and transforms the premium cloud through VMWare Cloud Foundation. Importantly, SLT-MOBITEL is the first local organisation to partner VMWare as a Business Continuity Certified Planner (BCCP) and initiate VMWare Cloud Foundation in Sri Lanka.
VMware Cloud Foundation is a suite of VMware products that provide building blocks necessary to implement an integrated software-defined data center platform. Its components combine to automate deployment and lifecycle management, helping to simplify IT operations and reduce administrative overheads for enterprises.With its Cloud Verified Status and as a VCF Enabled Partner, SLT-MOBITEL is now in the forefront as the only service provider in the country offering a range of new differentiated services such as automate infrastructure and application delivery with self service capabilities to help organizations plan, manage and scale their data center operations especially dramatically reduce provisioning times and cut operational costs.
The SLT-MOBITEL VMware VCF deployment ensures customers transition to the industry’s most advanced cloud platform with a complete set of software-defined services for compute, storage, networking, security and cloud management to run enterprise apps in private or public environments.By doubling the cloud SLT-MOBITEL establishes customers have both production and disaster recovery sites with different scales, located at two different Data centres with required ROP and RTO. The Disaster recovery site can be deployed at any scale with respect to production sites according to the enterprise customer’s requirement. SLT-MOBITEL also provides migration as a service with the features from NSX –T.
Through VCF, SLT-MOBITEL is offering customers the benefit of real disaster recovering services, a Software-defined Data Center (SDDC) and monitoring services, latest networking enablers with NSX – T up-to-date versions of VMware software vSphere, vSAN and intelligent, advanced VMware capabilities including ESXI and VSAN and efficient and effective migration services. SLT-MOBITEL also provides IaaS services, Virtual Machines, and Virtual Data Centers along with a range of other support facilities such as Disaster avoidance with Stretch Cluster (RPO 5 minutes), Disaster Recovery as a Service, and Backup as a service.Above VCF deployment is directly done by Vmware Professional Service team to ensure the highest quality deployment .
Lanka on the brink of economic collapse: Prez seeks international help to overcome crisis
Yupun continues record-breaking spree
Running, hunting and flying trapeze
‘Dates have the highest sugar content to fight Coronavirus’
U.S. Congress to probe assets fleecing by US citizens of Sri Lankan origin
Sunday Island 27 December – Headlines
News2 days ago
Economic crisis: MR, ministers, CBSL Governor, Dr.PBJ ignored IMF warnings
News3 days ago
Lanka’s Amb. in Tokyo quits amidst bid to secure USD loan
Sports3 days ago
Kamil Mishara expelled from Dhaka after having ‘visitor’ in hotel room
News5 days ago
MR had not decided to resign on 09 May, says Weerasekra
News6 days ago
Two views on Gota going, food crisis threat by August: Ranil
News4 days ago
More Opp. members switch allegiance as six more ministers are sworn in
Features6 days ago
Ranil-Rajapaksa Interim Government and Cabinet are a betrayal of the People
News5 days ago
Speaker proposes how to steer SL out of crisis