“Cut-off” interest rates on 3-month & 6-month T-Bills rise sharply by 25 & 115 bps respectively: rates for 12-month Bills dip marginally on a low subscription: analysts expect further increases in rates on the back of huge volumes of issues expected in the next 12 months, the CB’s inability to subscribe for T-Bills under the new CBSL Act, & the flight of foreign investment in T-Bills due the ratings downgrade of Local Debt to “Restricted Default” status.
Agriculture Minister Mahinda Amaraweera says his Ministry has warned of a severe drought situation in the 2024 Yala season & that farmers should therefore be prepared for such: requests farming community to commence the cultivation of paddy by using rainwater.
President Ranil Wickremesinghe says SL’s Anti-Corruption Commission is currently recruiting staff with formal training: asserts another year will be required to realize the outcomes of the anti-corruption law, making the timeline for achievement approximately 2 years.
Vavuniya Magistrate’s Court rejects request by Police for a restraining order preventing the 36-year death commemoration of LTTE cadre ‘Thileepan’, who “fasted unto death”.
Federation of Information Technology Chairman Indika de Soysa projects a contribution of USD 15.0 bn to SL’s GDP through the digital economy, by 2030: the digital economy currently contributes USD 3.7 bn to GDP.
President Ranil Wickremesinghe meets several leaders and VIPs on the sidelines of the UN General Assembly meetings and holds “cordial & fruitful discussions”: among them, South Korean President Yoon Suk Yeol, WB President Ajay Banga, Bangladesh PM Sheikh Hasina, USAID Administrator Samantha Power, META President Sir Nick Clegg, Commonwealth Secretary-General Patricia Scotland, IMF MD Kristalina Georgieva, Iranian President Dr Seyyed Ebrahim Raisi, and Nepal PM Pushpa Kamal Dahal.
State Minister of Investment Promotion Dilum Amunugama says the Govt is planning on re-branding “Colombo Port City” as “Colombo Financial City”: launch of the new name to be next week with former UK PM David Cameron leading the effort: the Port City spans 269 hectares of reclaimed land from the sea & legislation for the Port City Commission was passed on 20th May 2021.
Foreign Affairs Minister Ali Sabry deposits the Instrument of Accession to the Treaty on the Prohibition of Nuclear Weapons.at the UN premises: accordingly, Sri Lanka is now the 69th state party to the Treaty.
Young 15-member Cricket squad announced for the 2023 Asian Games: Sahan Arachchige set to lead: among those with international caps, are Ashen Bandara, Nuwanidu Fernando & Nuwan Thushara: majority of the others have appeared in the LPL.
Cricket sources confirm that there will be no change to the captaincy before the World Cup and Dasun Shanaka will captain the Sri Lanka squad in the ICC World Cup 2023.
Colombo (LNW): A special discussion will be held between Trade Minister Nalin Fernando and poultry producers today (21), to make a final decision on the price of chicken.
Currently, chicken is sold for Rs. 1,250 per kilo, and the price must drop by at least Rs. 200, the Minister noted.
He added that Sri Lanka will consider importing chicken if poultry producers do not agree to the price drop.
The monthly requirement of chicken in Sri Lanka stands at about 2.2 million kilograms.
In a fiery speech delivered in Parliament yesterday (20), MP Harsha de Silva, Chair of the Committee on Public Finance, passionately criticized the Sri Lankan government’s latest move—the introduction of the online safety bill. MP Harsha minced no words, calling it an “archaic and draconian piece of legislation” that violates fundamental principles and represents a significant overreach by the government. His critique underscores the potential damage this bill could inflict on both investment prospects and freedom of expression in Sri Lanka.
At the heart of MP Harsha’s criticism lies in the bill’s creation of a commission appointed by the President, which would be tasked with determining the veracity of online content. He rightfully questions the credibility of such a commission when the government itself has been accused of misleading the public, including misrepresenting its financial reserves to the tune of billions when they were merely in the millions. How can a government notorious for disseminating misinformation claim the moral high ground in discerning truth from falsehood?
MP Harsha de Silva’s critique is grounded in the potential ramifications of this bill. He points out that global tech giants such as Google, TikTok, Meta (formerly Facebook), and others are unlikely to comply with laws that impose restrictions on their operations and force them to police content based on arbitrary judgments. This begs the question: can a financially troubled country with an authoritarian regime realistically dictate terms to some of the world’s largest tech companies?
The online safety bill, according to MP Harsha, “imposes unfair obligations on platforms to police content over and above what is necessary” and lacks foresight in considering future technological advancements, such as AI and its role in verifying authenticity. He raises a valid concern that these restrictive laws could drive these major tech players away from Sri Lanka, thereby contradicting the government’s apparent desire to attract foreign investment.
As MP Harsha articulates, “On one hand, you want them to come and invest, and on the other, you’re bringing legislation to curb their operations. This is a major contradiction.” It is a contradiction that could have far-reaching implications for Sri Lanka’s economic growth and technological progress.
MP Harsha’s feedback on the speech highlights the fundamental importance of the right to express views freely—a cornerstone of any democratic society. The government committee’s power to determine the veracity of content and force platforms to remove it is an affront to this fundamental freedom. It is essential to recognize that a government-appointed committee cannot effectively discern truth from falsehood in an era where information flows across borders at the speed of light.
Furthermore, MP Harsha’s astute observation about the regressive nature of the bill rings true. In an age where technology continues to advance rapidly, the future of communication and content moderation will heavily rely on artificial intelligence and sophisticated algorithms. Imposing archaic legislation that doesn’t account for these advancements is not only backward-looking but also hinders Sri Lanka’s potential to adapt to the evolving digital landscape.
It’s worth noting that tech companies already have their own community guidelines in place and are vigilant in ensuring their platforms are free from hate speech, harassment, and other forms of harmful content. Therefore, the government’s heavy-handed intervention seems unnecessary and counterproductive.
In conclusion, MP Harsha de Silva’s scathing critique of the online safety bill highlights the significant concerns surrounding this proposed legislation. It not only threatens to deter foreign investment but also jeopardizes freedom of expression and the country’s ability to embrace future technological advancements. Sri Lanka must carefully reconsider the consequences of such an overreaching law and seek a balanced approach that respects both the rights of its citizens and the needs of its digital economy. In an increasingly interconnected world, it is vital to navigate these challenges with wisdom and foresight, rather than resorting to draconian measures that stifle progress and liberty.
Colombo (LNW): Becoming the 69th state to join hands with the international community against nuclear weaponry, Sri Lanka has officially endorsed the Treaty on the Prohibition of Nuclear Weapons (TPNW).
The island nation was not just a passive observer but actively contributed to discussions leading up to the United Nations-led Nuclear Weapons Prohibition Treaty, which was ratified on July 7, 2017, in New York.
Notably, Sri Lanka was one of the 122 nations that voiced their support through a positive vote.
In a significant ceremony linked to the 78th World Assembly session in New York, Sri Lanka’s Foreign Minister Ali Sabry formally submitted the necessary paperwork for this crucial agreement.
This Treaty aims to ban any activities associated with the creation, testing, storage, or possession of nuclear arms or related explosive devices.
Colombo (LNW): As per the reports handed over by the Presidential Commission of Inquiry to probe the 2019 Easter Sunday genocide, no Police personnel have been charged in connection with the bombings thus far, asserted Public Security Minister Tiran Alles, responding to the Opposition in Parliament yesterday (20).
Police personnel have only been under observation, and therefore, it would be wrong to name certain individuals, as if they are already charged, until they are rightfully prosecuted, Alles said in response to Samagi Jana Balawegaya (SJB) MP Hector Appuhamy.
The Minister made these observations as a response to the allegation that several state officials are connected with the 2019 bombing which took away more than 260 lives.
He added that the relevant names of the personnel were handed over to the Attorney General’s Department for further proceedings, but they cannot be cited as suspects yet.
Colombo (LNW): Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF) has held a meeting with Sri Lankan President Ranil Wickremesinghe, too address the ongoing economic issues in the island nation.
The discussion between the two focused on the ongoing reforms in the financial sector and the significant advancements in debt restructuring efforts, a statement by the President’s Media Division said.
The domestic debt restructuring (DDR) process which has already been met with a severe backlash from a number of parties including the Opposition, civil activities and other concerned parties is kept being lauded by the IMF and the Sri Lankan government’s efforts to continue with the DDR process regardless is backed by economic austerity which has already been put on the shoulders of the public.
Colombo (LNW): The private University in Batticaloa which was acquired by the Sri Lanka Military following controversial reports influenced by the 2019 Easter Sunday attacks has been handed over to its owner, former Governor of the Eastern Province M.L.A.M. Hizbullah.
The university has been handed over on the directive of President Ranil Wickremesinghe in consideration of the request made by Hizbullah, according to reports.
The private University in Batticaloa was taken over by the military four years ago over its alleged ties to the Easter Sunday genocide that took away more than 260 lives, but was released as the investigations had proven that no such links exist.
Batticaloa Campus Returned to its Founder and Former Governer Dr.MLAM.hizbullah by Sri Lankan Army today pic.twitter.com/wYfmx0JhT5
PMD: Addressing the SDG Summit 2023, President Ranil Wickremesinghe delivered a stark assessment of the global progress towards achieving the Sustainable Development Goals. He emphasised that the current state of SDG advancement is globally unsatisfactory, with only 12% of the targets on track while no progress has been made in 30% of the other critical targets.
President Wickremesinghe drew attention to the backdrop of the 2030 Agenda for Sustainable Development, encompassing the 17 SDGs, which was adopted by United Nations Member States in 2015. During the same year, the Paris Agreement, a landmark pact adopted by 196 countries at COP21, emerged as another progressive global initiative. However, the President noted that despite these ambitious endeavours, there has been a severe scarcity of resources dedicated to their successful implementation.
The global pandemic that unfolded in 2020 dealt a devastating blow to these programmes. Economic growth stagnated and numerous sectors witnessed a complete absence of economic activity. This exacerbated the already existing global debt crisis, pushing many nations, including Sri Lanka, to the brink of bankruptcy. The looming question now is whether the SDGs remain achievable in the current, resource-constrained scenario.
Taking Sri Lanka as an example, President Wickremesinghe revealed that prior estimates in 2019 indicated that approximately 9% of the country’s GDP would need to be invested to attain these ambitious targets. However, the economic fallout from the pandemic and the ensuing crisis have made this goal increasingly unrealistic. The President underscored the fact that Sri Lanka’s climate prosperity plan alone requires a substantial investment of US $26.5 billion before 2030, a sum that is increasingly challenging to secure.
The dire financial situation extends beyond Sri Lanka, impacting many regions of Asia and Africa. Even countries that have managed to avoid bankruptcy are grappling with the consequences of the ongoing crisis. The G20 summit recently reaffirmed that developing nations require a staggering $5.9 trillion in financing by 2030 to fulfill their nationally determined contributions. Additionally, an annual investment of $4 trillion is essential for the adoption of clean energy technologies to achieve net-zero emissions by 2050.
President Wickremesinghe called for a critical examination of whether these figures are feasible in the face of the unprecedented financial calamity affecting many nations. He stressed that the Paris Summit for New Global Financing Act holds promise in addressing financial challenges. However, he concluded by emphasising the urgent need to determine concrete actions to navigate this complex and daunting landscape of global financing.
Colombo (LNW): Several spells of showers will occur in Western, Sabaragamuwa, Southern and North-western provinces and in Kandy and Nuwara-Eliya districts, and showers or thundershowers will occur at several places in Uva and Eastern provinces and in Polonnaruwa and Mullaitivu districts during the evening or night, said the Department of Meteorology in its daily weather forecast today (21).
General public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.
Marine Weather:
Condition Of Rain:
Showers or thundershowers will occur at several places in the sea areas off the coast extending from Puttalam to Hambantota via Colombo, Galle and Matara.
Winds:
Winds will be south-westerly and speed will be (25-35) kmph. Wind speed can increase up to (40-50) kmph at times in the sea areas off the coast extending from Puttalam to Kankasanthurai via Mannar and from Hambantota to Pottuvil.
State of Sea:
The sea areas off the coast extending from Puttalam to Kankasanthurai via Mannar and from Hambantota to Pottuvil may be fairly rough at times. Temporarily strong gusty winds and very rough seas can be expected during thundershowers.
In the recent annals of Sri Lanka’s economic history, the Central Bank’s policies have left an indelible mark—one that is far from flattering. It is time to confront the devastating consequences of these policies, hold the Central Bank accountable, and demand a course correction.
SLDB Conversion Debacle: Draining the Nation’s Vitality
As of March 31, 2022, Sri Lanka faced a startling transformation: outstanding USD 1,797 million in Sri Lanka Development Bonds (SLDBs) dwindled to a mere USD 46 million by September 2023. This staggering USD 1,751 million was converted into LKR bonds at a rate of 325.00 LKR per USD, amassing a crippling 570 billion LKR. Shockingly, the Central Bank of Sri Lanka (CBSL) permitted banks to offset their USD exposure from export earnings and remittances.
The consequences were catastrophic:
– Market liquidity was drained to the tune of 570 billion LKR.
– Sri Lanka’s official reserves plummeted by a jaw-dropping USD 1,750 million.
– Borrowing costs spiraled, with an average surge of 7%-20%.
– The Sri Lankan Rupee depreciated from Rs. 290 to Rs. 330 against the US Dollar.
A Missed Opportunity for Recovery
The remedy was evident: CBSL could have extended the maturity of these bonds to 5-10 years on a staggered basis, preventing the liquidity crisis and curbing interest rates, ultimately reducing the government’s interest burden on its citizens.
High-Yield Long-Term Bonds
Sri Lanka found itself grappling with a mammoth issue—a total of 1700 billion LKR in high-yield long-term bonds, yielding a crushing 20% to 30%. Among these, the CBSL’s outstanding issuance, maturing beyond 2027, stood at an exorbitant Rs. 805 billion. This policy choice directly contributed to escalating borrowing costs, a burden that will loom for the next 10 years.
Failing the Nation’s Economic Future
A sensible alternative was available: CBSL could have issued short-term debt bonds, a choice that would have lightened the economic burden and provided flexibility to borrowers.
Ineffective Open Market Operations
Despite the CBSL’s policy rates being pegged at 12%, 3-month Treasury bill rates have stubbornly clung between 18% and 19%, all due to ineffective Open Market Operations (OMO) that indulge in overnight reverse repos. This has inevitably led to soaring AWPLR and bank lending rates, strangling economic growth.
Undermining Economic Prosperity
A prudent strategy could have alleviated this crisis: CBSL should have understood the market dynamics and offered long-term reverse repos, possibly up to 3 months, revitalizing market liquidity and aligning lending rates with policy rates.
Crazy Interest Policy:
Let us not underestimate the impact of the CBSL’s interest policies. The Government of Sri Lanka’s interest costs are slated to remain high for a daunting 30-year stretch. The ensuing fallout will entail higher taxes, slashed capital expenditure for crucial infrastructure development, and diminished resources for vital social safety nets. Sri Lanka may find itself increasingly dependent on overseas grants and Foreign Direct Investments (FDIs) to stimulate GDP and reserves. Inflation might subside momentarily, but elevated price levels will persist, squeezing the middle class and stifling SMEs for a harrowing 25-year duration, at least.
In conclusion, the Central Bank’s policies have charted a treacherous course for Sri Lanka’s economy. It is no longer acceptable to stand idly by as the nation grapples with the repercussions of these actions. Accountability is not a choice; it is an imperative. The time has come for the Central Bank to rectify its mistakes, reassess its policies, and work toward restoring the nation’s economic prosperity and the livelihoods of its people. The future of Sri Lanka is challenging , and it is our collective responsibility to demand a brighter tomorrow.
