by Chanaka Wickramasuriya
“Mahaweli mahaweli mahaweli”….. Virtuoso pandit Amaradeva’s classic resonates out there as the author traces this river; geographically, along the topographical contours of this varied land, and historically, along its intricate relationship with this island’s both ancient and contemporary civilizations.
The Mahaweli, or literally ‘the great sands’, is not just a river. And it is not just the island’s longest river (at 335km), or the one with the largest river basin (10,500 of the island’s total 65,000 sq km). The Mahaweli has a natural uniqueness to it that has resulted in a profound bearing on the formation and evolution of our cultural and political heritage. It will not be presumptuous to say that this river, analogous to its meandering trace, has carved the path for the history of this island’s peoples. Or even perhaps, been responsible for the sheer existence of a history itself. Amaradeva poetically alludes to this in his classical ballad.
One can say that the Mahaweli traces its headwaters to the Kotmale Oya and Hatton Oya. The former, having its source along the north western slopes of the Horton Plains plateau, while the latter traces its beginnings along the Watawala ridge. The significance of this will not be lost to even the amateur hydrologist. An overlay of the rainfall patters of Sri Lanka on her map shows that the country’s highest annual average rainfall takes place along this range, and notably, on account of it being fed by the more prolific South West Monsoon, at almost twice the precipitation of its North East counterpart.
This makes for a remarkable fact. The Mahaweli becomes, as far as this author can ascertain, the only Dry Zone river to be fed by the South West Monsoonal rains.
Having harnessed and coalesced these waters, the Mahaweli carves an idyllic path northward along the Gampola valley. The splendor of this valley discernible to even this author, as he once sat at a hermitage on the hills of Hindagala watching this river, dotted on either side by quaint hamlets and rice fields, the vestiges of an ancient kingdom that found refuge during trying times. And alas only to be told by his mentors that he was negating the benefits of his vipassana endeavors by pleasing his senses!
The river thus meanders its way up to Gannoruwa. And here, the providence of nature, or the hands of the formative deities of this land, depending on your preference, make a call. The river encounters a small hillock at Gannoruwa, and perhaps because of it, and unlike like all rivers originating on the western slopes that carve their way down toward the western seaboard, the Mahaweli makes an abrupt right turn.
At some point in pre-history these waters would have then encountered a formidable bridge of Charnockite rock in the escarpment between the central plateau and the southern edge of the Knuckles massif. Eons of hydrological erosion then forced these waters through the gorges of Randenigala and the breathtakingly narrow Rantambe, churning out what would have then been class four and five rapids. Legend has it that the master equestrian King Rajasinghe II would leap across the narrow 20-foot gap on his trusty steed, and that until more recently when the dams of the Mahaweli Development Program took shape, the sounds of these churning waters could have been heard over five km away. Like a giant hydrological serpent, the river breaks through this East-West divide to rear its head onto the eastern half of the island. And here too the seemingly inexplicable takes place.
Having garnered further waters from the Knuckles via the Hulu Ganga, from Pidurutalagala via the Ma Oya, from Horton Plains via the Uma Oya and from even as far as the Badulla and Passara hills via the Badulu Oya and Loggal Oya, instead of finding what would look to the layman as a path of least resistance directly toward the eastern seaboard, the Mahaweli decides to turn north.
The river then traverses this almost directly northern path, covering about half of its total distance, and a third of the island, to break into the ocean via a myriad of mangrove forested deltas at the island’s largest bay at Koddiyar in Trincomalee. Here too merging into yet another natural wonder of what is one of the world’s largest natural harbors, replete with underwater chasms and gorges of over 700m deep. But not until the river has harnessed even greater waters along the way through its largest tributary, the Amban Ganga, it too a creation of the western slopes of the Knuckles range, and the less plentiful Hasalaka Oya and Heen Ganga, which gather waters off the range’s eastern slopes. In this section the Mahaweli creates what is the country’s largest deposits of alluvial soil, spanning the entirety of its northern trajectory and breaking into vast areas of up to 10km wide on account of seasonal flood plains, as well as the largest seasonal sand banks from which the river derived its name.
Thus, it is as if nature was the precursor to our island’s proud hydrological engineering heritage, and even its modern manifestation of the Mahaweli Development Program. For nature seems to have decided long ago to find a way to harness the bounty of water from the island’s salubrious western slopes and nourish its dry north-central and eastern plains. A feat of engineering even modern man would have found hard to, and is yet to, replicate.
But the story of the Mahaweli does not end there. Mankind soon pounces upon this natural marvel to both exploit and tinker with her resources for their benefit. It is akin to having been endowed with a mythical nature’s guitar, and then fine tuning its cords to seek the perfect tune. The resulting dance having spanned over two millennia yet continues. While this story could be arguably best narrated through time, this author will choose to deliver it, like the river itself, along the course of its journey.
The story begins in the upper reaches of the Kotmale Oya, the Agra Oya. Here, literally and metaphorically shrouded in the mists of the Thotupola hill and time, a little south of Pattipola, are the remnants of a little known 220m long tunnel and 11km long canal. Believed to have been constructed circa the 13-14th century, it is perhaps the earliest known subterranean trans basin canal. Considered an engineering marvel for its time, this canal used to divert the west bound waters east into the Uma Oya basin to irrigate the lush fields of the Uva.
Moving down the Kotmale Oya, further nourished by the Nanu Oya is the Upper Kotmale Reservoir and Hydro Power scheme. The third largest power generator of the Mahaweli Development Scheme originally conceived between 1965-69 under and FAO/UNDP funded master plan, this was one of the last to be completed in 2010 after a series of environmental controversies and re-engineering. The river is then joined by the waters of the Devon Oya, Pundal Oya and Ramboda Oya and flows into the famed and beautiful valley of Kotmale, once the sanctuary of the legendary King Dutugemunu during his youth. This valley was inundated by a rock-filled dam 87m high and 600m in length starting in 1978 under the Accelerated Mahaveli Development Program, becoming the second highest hydro electricity generator of the scheme. Its added function being controlling the flood waters of the Gampola valley and optimizing the diversion flow at the barrage at Polgolla.
As the Mahaweli, now as a fully-fledged river or ganga, meanders its way around the upper middle-class suburbs of Kandy, evoking visions of our checkered history with names like Primrose Gardens, Anniewatte and Mawilmada, we encounter the Polgolla Barrage. Polgolla was the first of the projects under the Mahaweli Development Program and was implemented in 1976. At 144m in length and 14.6m in height, a relatively innocuous looking structure compared to its gargantuan brethren, the Polgolla Barrage nevertheless, in this authors view, creates the most geographically impactful diversion of Mahaweli waters.
It starts with an eight km long underground penstock northward to Ukuwele power station. Ukuwele then releases these spent waters into the Dhun Oya, which in turn connects to the Sudu Ganga which then emerges further north as the Bowatenna Reservoir. Built in 1981, the picturesque Bowatenna’s primary purpose was retention and diversion of waters for irrigation. In a bizarre twist of engineering and geographical fate, the released waters of Bowatenna become the Amban Ganga, making the Mahaweli the only river to feed its own tributary.
Waters diverted from Bowatenna are channeled through a tunnel to Lenodara, and from there enter the Dambulu Oya. It is from here that modern man’s diversions of the Mahaweli start to enter the realm of the ancient kings, and their stupendous feats of hydrological engineering and civilization building.
The Dambulu Oya has a little known but unique history, as it is a conduit of Mahaweli waters from two separate modern and ancient diversions. The ancient system starting from Demada Oya, a tributary of the Amban where an anicut built by Dhatusena diverted waters to the Wilimiti Oya, a tributary of the Dambulu. The Dambulu Oya thus takes Mahaweli/Amban waters from both Dhatusena’s creation as well as the modern Bowatenna, via the Ibbankatuwa Tank, north into the gigantic Kala Wewa – Balalu wewa complex and the Kala oya basin. Dhatusena’s “only treasure” as he proclaimed, for which he earned his patricidal son Kassapa’s wrath, Kala Wewa is the largest tank complex of ancient Sri Lanka and was built in the fifth Century AD. Waters from the Kala Wewa are transferred via the famous Jaya Ganga, carved also during the same time with the intricate engineering precision of a gradient of one foot to one mile, 86km to Devanampiyatissa’s third Century BC Tissa Wewa in the ancient citadel of Anuradhapura. Waters also find their way to the more modern Rajanganaya further west via the Kala Oya itself. The excess waters of the Tissa wewa find their way into the Malwatu Oya, the islands second longest river, and off that via the Yoda Ela into the famed Giant’s Tank over 50km north west of Anuradhapura, it too a creation of the legendary Dhatusena, to irrigate the famous Rice Bowl of Mannar.
A bifurcation at Dambulu Oya built in 1976 also takes Mahaweli waters into the ancient and touristically popular Kandalama tank, the origin of which is little known, as well as to the Hurulu Wewa a further 25 km north. Built by Mahasen in the first Century AD, the Hurulu is the primary repository source of Sri Lanka’s fifth longest river, the Yan Oya, where a new reservoir was constructed in 2017 about 50km further north east. Sporting what is Sri Lanka’s longest main and saddle dams totaling a staggering six km in length, the Yan Oya project infuses water into the ancient Padaviya Tank. Originally built to trap the waters of the Ma Oya, the actual origins of this very ancient tank are yet debated but speculated to having been built by Saddhatissa (137-119 BC). 165km from its original diversion at Polgolla, this will be the furthest point north yet traversed by the Mahaweli’s waters.
But Bowatenne is not done yet in her generous dispersions of Mahaweli’s bounty. Rather coincidentally and poignantly perhaps, situated at what is considered the center of the island, the reservoir stands where the iconic Nalanda Gedige temple stood. Since relocated to the banks of the lake, this temple represents a unique fusion of Hindu and Mahayana Buddhist Tantric architecture and is thought to have been built around the 13th Century. Waters thus blessed flow beyond Bowatenna as the mighty Amban, the Mahaweli’s largest tributary, which has an ancient and contemporary history worthy of her own story.
To be continued next week
Singarasa Case should guide GoSL’s Geneva policy
BY Dharshan Weerasekera
In 2005, the Sri Lankan Supreme Court ruled in the seminal case Singarasa v. Attorney General (SC/SPLA/182/99) that the U.N. Human Rights Commission (the predecessor of today’s U.N. Human Rights Council) did not have jurisdiction, within Sri Lanka, to make recommendations on behalf of the petitioner. In doing so, the court decided that Sri Lanka’s accession to the optional protocol to the International Covenant on Civil and Political Rights (ICCPR) in 1997 had been done in a manner contrary to the Constitution, and hence illegal.
This case has invaluable lessons to teach in regard to the present government’s ‘Geneva Policy.’ By ‘Geneva Policy,’ I mean the government’s stance to the UNHRC’s follow-up resolutions to Sri Lanka’s unilateral withdrawal, in March 2020, from the co-sponsorship of Resolution 30/1 of October 2015. In response, the Council adopted Resolution Resolution than 30/1. Among other things, it establishes an evidence-gathering mechanism to collect evidence of war crimes and other crimes against Sri Lankans.
Meanwhile, in September 2022, the High Commissioner released a report on Sri Lanka’s progress in implementing the recommendations of Resolution 46/1. The government has officially rejected both, Resolution 46/1 and the High Commissioner’s report, on grounds that they were done without Sri Lanka’s consent and, therefore, contrary to the founding principles of the Council. (See A/HRC/51/G/1, paras 1.1, 1.2). However, the Foreign Ministry, in its response, lists various things that the government is doing to comply with Resolution 46/1.
I argue that the government, continuing to comply with the Resolution while, at the same time, rejecting it in principle, without first obtaining a definitive interpretation of the relevant legal position, from an international forum, or even the Sri Lankan Supreme Court, creates a dangerous precedent. Given the fact that state practice is one of the sources of customary international law, the government’s conduct has the potential to do irreparable harm to the long-term interests of the country.
Unfortunately, there is little, or no, discussion of these issues in local newspapers, and academic journals, and it is in the public interest to start one. In this article, I shall discuss: i) the facts and reasoning of the Singarasa judgment, ii) the High Commissioner’s report and the government’s reply, iii) assess of the government’s position, and draw the relevant conclusions.
The Singarasa case
In 1991, the High Court of Colombo convicted Singarasa of five charges, under the Prevention of Terrorism Act. The charges dealt with alleged attempts by Singarasa, and others, to attack the Army camps,in Jaffna and its suburbs. Singarasa appealed against the conviction to the Court of Appeal and then the Supreme Court. He also complained to the U.N. Human Rights Commission. The HRC could entertain petitions under the Optional Protocol to ICCPR. Sri Lanka had ratified the ICCPR, in 1980, and acceded to the protocol, in 1997. The HRC said that, Sri Lanka was under obligation to release Singarasa.
The main issue, in this case, is whether Sri Lanka’s accession to the ICCPR, and the related protocol, gives a right to an international body to intervene in the domestic sphere to determine Singarasa’s fate. The court answers ‘no,’ because of the following reasons. The court starts with the premise that the authority for the President to enter into international agreements comes from Article 33(f) of the Constitution. Article 33(f) states: “To do all such acts as, not being inconsistent with the provisions of the Constitution…he is required or authorized to do.” It follows that the President cannot agree to anything inconsistent with the Constitution.
The court then assesses the signing of the ICCPR, in 1980, and the subsequent accession to the optional protocol, in 1997, separately. The court points out that the ICCPR requires that the respective signatories adopt domestic legislation to implement the provisions of the covenant. This does not conflict with our Constitution and hence is lawful.
However, when acceding to the optional protocol, the government had issued a declaration that envisioned that the rights of Sri Lankan citizens could be adjudicated in tribunals, and forums, outside this country. The court points out that the institutions, through which Sri Lankans can vindicate their rights, within this country, are exhaustively set out in Article 105 of the Constitution, and the HRC is not one of them. Therefore, the court deems the accession to the optional protocol illegal. The court states:
“Where the President enters into a treaty or accedes to a covenant the content of which is inconsistent with the provisions of the Constitution or written law it would be a transgression of the limitation in Article 33 (f) and ultra vires—such acts of the President would not bind the Republic qua State.” (p. 11)
The High Commissioner’s report and the Government’s reply
The most disturbing aspect of the High Commissioner’s report is its description of the progress made by the impugned evidence-gathering mechanism. It states: “OHCHR continues to develop the information and evidence repository using an e-discovery platform….OHCHR commenced identifying material held by other actors and engaging with information providers. To date, the databases of two organisations have been migrated into the repository, and negotiations with other information providers are ongoing.” ((A/HRC/51/5, 4th October 2022, para 54.)
The report also details what the OHCHR plans to do with this information. It says: “To develop possible strategies for future accountability processes, the project team started mapping potential accountability process at international level, including through consultations with relevant stakeholders, in particular national authorities, victims and civil society organisations.” (para 56.)
In sum, it is clear that a vast operation is underway, not just to collect evidence against Sri Lanka but to set the groundwork to help prosecute Sri Lankans before various national and international forums. To the best of my knowledge, the founding statutes of the UNHRC, as well as the OHCHR, do not give enforcement capabilities to these institutions to prosecute or assist in the prosecution of people for violations of human rights and other offences.
Their respective mandates to protect and promote human rights are to be carried out with the consent of all nations concerned and in a spirit of “cooperation and constructive international dialogue.” Therefore, through the impugned mechanism the OHCHR has now arguably expanded its mandate to include an enforcement component, seemingly without any debate or discussion of the matter before the Council.
To turn to the government’s response, in the introductory paragraphs of the said document, the government rejects both resolution 46/1 as well as the High Commissioner’s report on grounds that they violate the UN’s founding principles. However, for much of the remainder of the report (which runs to 16 pages) the government enumerates the various things it has been doing to implement various provisions of the resolutions. For instance, the government discusses the work being done under the Office on Missing Persons, Office for Reparations, and so on.
On the OMP, the report states inter alia: “The OMP conducted panels of inquiries as part of the verification process. More than 89% of persons (1207 of 1370 applicants invited for inquiries) met with members of the panel and their testimonials were recorded.” (A/HRC/51/G/1, 9th September 2022, para 46)
Meanwhile, on the Office for Reparations, the report says, “The office processed 5964 claims for payment, by the end of 2021, and paid a sum of Rs. 399.8 million in settlement, out of the allocated sum of Rs. 800 million….Upto the end of 2022, the OR received Rs. 226 million to pay compensation and 2097 claims were settled utilizing Rs. 153 million.” (para 56)
In sum, even though the government has nominally rejected resolution 46/1 and by extension resolution 30/1 as well, the government is expending great energy, including enormous sums of money, to comply with various provisions of those resolutions.
Assessment of the policy
The Singarasa case establishes that the President, when conducting foreign policy, is exercising the power conferred under Article 33 (f) of the Constitution. One cannot suppose that it is consistent with the Constitution to comply with the provisions of a resolution that the Government itself considers to be in violation of the founding principles of the UNHRC.
Admittedly, a resolution of the UNHRC does not rise to the level of a treaty or covenant. However, there should now be a serious debate in this country about whether the reasoning above should apply to such resolutions which continue to target Sri Lanka on the world stage.
Furthermore, if, as I have suggested, the OHCHR has expanded its mandate by exploiting the provisions of Resolution 46/1 to acquire capabilities that were never envisioned in the relevant founding statutes, permitting such conduct to continue has the potential to set precedents in customary international law, with grave consequences for Sri Lanka, as well as other nations.
Therefore, Sri Lankan citizens are entitled to know the legal basis for the government’s continued compliance with provisions of Resolution 46/1, while nominally rejecting the Resolution. The only institution that can provide a legal opinion binding on the government is the Supreme Court. The President has the capacity, under Article 129 of the Constitution, to request an advisory opinion of the Supreme Court on any matter of public importance.
In these circumstances, it is incumbent on the government to seek an advisory opinion as to whether it is lawful for the government to continue complying with provisions of Resolution 46/1 unless and until the UNHRC clarifies its position in regard to the impugned mechanism.
It is in the interest of all Sri Lankans to keep a close eye on what the government is presently doing in Geneva. There is a famous legal maxim that says, “The laws assist the vigilant, not the sleepy.” Ultimately, it is the Sri Lankan people who will pay the price for any mistakes or missteps that successive governments make in regard to their “Geneva Policy.’
(The writer is an Attorney-at-Law)
Human Papillomavirus vaccine: one that can prevent a cancer
This article has been written as a fervent plea to the parents of little girls of the eligible age group. Please make sure that your precious daughters get this vaccine. It will be an investment for their happiness in the future.
By Dr B. J. C. Perera
All vaccines by definition are substances that are used to stimulate immunity against a particular infectious disease or a specific causative organism. Such vaccines are used to prevent the occurrence of the said diseases in humans and animals. Several vaccines have been introduced to combat such infectious diseases over the last few decades. In some countries, the use of some of these vaccines has led to the elimination of dreaded diseases like Diphtheria, Tetanus, Whooping Cough or Pertussis, Polio, Measles, German Measles or Rubella, just to name a few.
Sri Lanka has a very efficient and inherently equitable system that looks after the Expanded Programme of Immunisation (EPI) for children and young people. In general, we have been extremely successful in this programme and can boast of over 90 per cent coverage for the vaccination of all children. We have successfully eliminated polio, the last case being confirmed as far back as 1993, and we are free of diphtheria, tetanus, measles and German measles or rubella. The success of the EPI is due to many factors that include government commitment, the unstinted dedication of parents, the promotion of the programme through all media channels and the dedicated work of all grades of healthcare personnel. The very high literacy rate of the populace of our country enables all information regarding vaccination to be most conveniently conveyed to the population. Sri Lanka has been hailed as a country that has achieved so much in this field, but with so few resources. It has been cited as a model to the entire Asian region as well as even the world.
In addition to their undoubted effectiveness in protecting against infective microorganisms, some of these vaccines have other bonus effects. At least two of the vaccines in use today have telling effects in preventing certain cancers. One is the Hepatitis B vaccine. It provides protection against liver cancer. The other is the more recent Human Papillomavirus vaccine (HPV vaccine) which protects females against cancer of the neck of the womb, which is also referred to as the cervix of the womb. That disease is generally referred to as Cervical Cancer.
The Human Papillomavirus (HPV) is sexually transmitted and most people become infected sometime during their lifetime. In the majority, it is soon after becoming sexually active. Most infections are asymptomatic and usually clear up spontaneously, accounting for remission in 90% within two years. Only 10% of persistent HPV infections with certain genotypes of HPV can persist and progress to changes in the cervix. If infection from cancer-causing HPV types persists over 10-15 years, women can go on to develop precancerous lesions that, if left untreated, develop into cervical cancer. This process takes an average of 20-30 years from infection to the development of cervical cancer.
In 1995, Dr Anne Szarewski, a renowned researcher from the United Kingdom, led a team who outlined the role of human papillomavirus in uterine cervical cancer detection and screening. Then the researchers began work on an HPV vaccine. Szarewski was also a chief investigator, principal investigator and author of key HPV vaccine trials and publications, who helped to develop the bivalent HPV vaccine. The word bivalent is used to indicate that it contains two strains of HPV. HPV infections are very common, often with minimal symptoms, but high-risk HPV strains can go on to cause other medical conditions, particularly cervical cancer.
In 2006, the first vaccine for Human Papillomavirus (HPV) to be used globally was approved. HPV vaccination has now gone on to become a key part of the effort to eliminate cervical cancer. According to the available research results, HPV vaccination could reduce the lifetime risk of cervical cancer by 35–80%; the rather wide range being due to several studies with different methods. The vaccine was initially promptly snapped up in the West, especially in the Scandinavian countries. In Sweden, the coverage of the vaccine is over 80 per cent. However, according to the data put out by the World Health Organization (WHO) in November 2022, the human papillomavirus vaccine against cervical cancer has been introduced in just 41 per cent of low-income countries, even though they represent much of the disease burden, compared to 83% of high-income countries. We have a set of 10-year data on the benefits of the vaccine and in certain Western countries, a significant drop in the morbidity and mortality rates of cervical cancer is already evident.
In Sri Lanka, the National Vaccine Summit in January 2015 recommended the usage of the HPV vaccine and the government introduced it in 2017 for girls within the age range of 10 to 13 years. That age group was decided on the premise that to get the best results, we need to introduce the vaccine before sexual activity starts. The vaccine was to be administered to the selected age groups in the schools free of charge and in the fee-levying private sector. To date, the vaccine is not available through the Immunisation Clinics of the Provinces and the MOH Clinics.
NOW HERE IS THE REAL CRUX OF THE MATTER. For a variety of reasons, the coverage of the HPV vaccine in the entire cohort of eligible girls in Sri Lanka is somewhere between 30 and 40 per cent. This is woefully inadequate coverage to get the best possible results, especially when looked upon in the light of over 90 per cent coverage of the other vaccines in the National Expanded Programme of Immunisation. Cervical cancer ranks among the five commonest cancers in women in Sri Lanka. HPV vaccine is just one of two vaccines that can prevent cancers. All children have had the Hepatitis B vaccine which protects against liver cancer, as it is given through the National Programme of Immunisation. But, and this is a BIG BUT, the only other vaccine, the HPV vaccine that can prevent cervical cancer, shows a rather low uptake.
We do need to escalate the uptake rate of the HPV vaccine to at least around 80 per cent to get reasonable benefits in the reduction of the morbidity and mortality that is currently seen in cervical cancer. I think we have to admit that due to very many reasons, the message has not gone through to the general population in the country. When inquiries are made from the mothers of eligible girls, the vast majority of them are not even aware of the existence of this vaccine and more importantly, the future beneficial potential of this endeavour. The age group selected is a rather tricky cohort. They get upset at the drop of a hat. The last thing they want is an injection. They will run away, as fast as possible, to avoid it. Some are so frightened that it is not uncommon to see them faint even at the sight of the syringe and the needle. One way of getting the cooperation of these little girls is to allow either the mother or the father to be present to hold her hand most reassuringly when the vaccine is administered. An additional initiative would be to make it widely available through the Immunisation Clinics for it to be administered to all those who have missed it when it was given in the school. This is particularly important as the vaccine is quite expensive when administered in the private sector.
Latest position on debt restructuring process
By Jayampathy Molligoda
According to the announcement made by the Managing Director of the IMF Kristalina Georgieva, the IMF Executive board meeting will be held on 20 March to consider and hopefully approve the EFF arrangement for Sri Lanka. In the meantime, the Ministry of Finance and the Central Bank in consultation with IMF have finalised the latest position of Sri Lanka’s Public Debt as at end 2022 just prior to commencement of debt restructuring negotiations with creditors. Having perused the document uploaded to the Ministry of Finance (MOF website) recently, which is a comprehensive summary of debt stock as at end 2022, I have tabulated the summary of the main facts and figures (See Table). As can be seen, the total public debt stock has skyrocketed to US $ 83.6 billion, which includes total foreign debt of US$ 45.6 billion and the local debt of 38 billion in US $ equivalent. The total debt as a % of GDP as stated in the above MOF doc is 128%. The public debt is expected be reduced to 100% of GDP in order to ensure debt sustainability in line with IMF supported program parameters coupled with ‘comparability of treatment principle’ whilst ensuring equitable burden sharing for all restructured debt.
However, I have my doubts about GDP computation here. As per the MOF doc page 1, the Nominal GDP was stated as Rs. 23.7 trillion for the year 2022. The $ exchange rate used for conversion as Rs.363.10 clearly indicating that it is the year end figure, they have taken the year end Exchange rate of Rs 363.10 per US$. It is pertinent to ask the question as to why ‘year- end exchange rate’ figure to convert our annual GDP in rupee to US dollars? It should have been the ‘average exchange rate’ as in the past so many years computed by CBSL. As a result, the GDP (in US$ terms) works out to US$ 65.2 billion only. That’s why the total public debt stock of US$ 83.6 billion works out to 128% of GDP – my initial query is; why did they take year-end figure of Rs363.10 instead of taking the average exchange rate?
Besides, the real critical issue is how to reduce the debt stock to a level of 100% of GDP in the context of declining GDP (- 7.8% in 2022) and on the other hand, our debt stock is on the rise. More importantly, if we take the total ‘multilateral debt’ out, then the foreign debt is US $ 34 billion only, which includes ISBs and bilateral loans. Assuming a higher ‘haircut’ of 33% for foreign debt is agreed upon, it works out to 11 billion thus reducing the total public debt to 73 billion only.
In this regard, The President in his latest open letter dated 14 March ‘23 to Sri Lanka’s official Bilateral creditors has clearly indicated that there will be equitable treatment of burden sharing in respect of all creditors (except IMF/WB/ADB) Quote; ” ..we reiterate our commitment to a comparable treatment of all our external creditors with a view to ensuring all round equitable burden sharing for all restructured debt. To that end, we will not conclude debt treatment agreements with any official bilateral creditor or any commercial creditors or any group of such creditors on terms more favourable than those agreed. …To this end we also confirm that we have not and we will not make any side agreements with any creditor aimed at reducing the debt treatment impact on that creditor.”
In the circumstances, my own view is we are reluctantly compelled to restructure local debt i.e.; TBs and, it is inevitable that the local debt of USD equivalent of 38 billion would also need to be taken into consideration for debt restructuring – otherwise there is no way of reducing the total public debt stock to the level that is required as per IMF conditions. This would create a serious issue for our ‘finance system stability’ and all our commercial banks will be in trouble. Further the deposit holders including pension funds are badly affected. The temperature of social unrest is brought closer to the boiling point.
As stated in the global research article by Jonathan Manz recently, former Chief Economist and Senior Vice President of the World Bank, and Nobel Prize winner, Joseph Stiglitz, has slammed the IMF for unleashing riots on nations the IMF is dealing with; he has pointed out that the riots are written into the IMF plan to force nations to agree with the average 111 conditions laid down by the IMF and they destroy a country’s democracy and independence. He has been a critique of IMF causing great damage to countries through the economic policies it has prescribed countries to follow in order to qualify for IMF loans. However, neither Stiglitz nor any other eminent economist has yet to come out with a practical and alternative policy framework to overcome the most serious economic and financial crisis faced in the 75 years of Sri Lanka’s independence.
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