Colombo (LNW): Due to the reduced water releases for hydropower generation and lack of fuel availability for thermal power generation, it has been decided to resume two hour power cut since there is no adequate generation to cater energy and capacity deficit.
However, demand management measures may be excluded according to the inflow conditions of hydro catchment areas.
Colombo (LNW): President Ranil Wickremesinghe instructed officials to ensure no one in need is overlooked in providing rice to low-income families.
In addition, the President directed the officers to purchase adequate rice to feed 2.85 million (28,50,000) families subject to a maximum of Rs. 20 billion.
President Ranil Wickremesinghe made these remarks today (14) while attending a discussion related to the purchase of paddy at the Ministry of Defence.
The President further instructed that the paddy be purchased, milled and the rice be distributed among low-income earners through a transparent mechanism.
Previously, it was decided to allocate Rs. 10,000 million to purchase 61,600 metric tons of paddy under the program of providing 2 million low-income families with 10 kg of rice each per month over a period of two months, free of charge.
However, it was revealed during this discussion that 2.85 million families have been identified as being in need of this assistance.
Accordingly, President Ranil Wickremesinghe directed the officials to implement the program for all those people.
President Wickremesinghe further stated,
“The Government is set to purchase rice worth Rs. 20 billion to distribute to 2,850,000 low-income families as part of its food security program. The government will protect the rice price by providing a guaranteed price. District and Divisional Secretaries have been delegated the task of purchasing paddy stocks. The government will not sell rice, and a full-time team will be deployed to take this program forward.
A formal mechanism for distributing rice to eligible people in all 25 districts will be developed. The government is taking measures to prevent large-scale paddy mill owners from exerting unnecessary influence in purchasing paddy. The government aims to label the grant given to low-income families as “relief rice” to prevent its resale. Members of Parliament are being consulted, and discussions are on-going with the District Secretaries.
However, this necessitates the deployment of a full-time team. The agreement was expressed during the discussion with the security forces to release a group of officials from Ministry of Defence for this purpose.
Obtaining accurate data is crucial for the program’s progress. If government officials are uncooperative at the village level, a contracted team should be recruited to expedite data collection. They should receive priority for future vacancies, and retired officials may also provide assistance. All activities must be completed within a designated timeframe.”
Senior Advisor to the President on National Security and President’s Chief of Staff Mr. Sagala Ratnayake
“We are currently in the process of establishing a social welfare safety net with support from the International Monetary Fund and the World Bank. However, we are not satisfied with the progress of our data collection efforts thus far. As such, we plan to meet with the District Secretaries to discuss this matter and move forward with the necessary work.”
President’s Secretary Mr. Saman Ekanayake
“The establishment of the social welfare safety net must not be sabotaged. The completion of these activities should be achieved by March 31.”
Agriculture Minister Mahinda Amaraweera, Trade Minister Nalin Fernando, State Ministers Ranjith Siambalapitiya, Anupa Pasqual and Ashoka Priyantha, Prime Minister’s Secretary Anura Dissanayake, Defence Secretary General Kamal Gunaratne (Rtd), Senior Presidential Adviser on Food Security Dr. Suren Batagoda, Chief of Defence Staff General Shavendra Silva, and several others participated in this discussion while many District Secretaries joined in through zoom technology.
Colombo (LNW): The Treasury has released a circular on the government’s program for purchasing and distribution of paddy. The circular has been issued under the signature of the Treasury Secretary, K.M. Mahinda Siriwardena, on the direction of President Ranil Wickremesinghe, as the Minister of Finance, Economic Stabilization and National Policy.
The objective of the paddy purchase and disbursement program is to offer farmers a fair price for their paddy harvest in the 2022/2023 Maha season, procure any surplus paddy, and provide aid to low-income households affected by the ongoing economic challenges.
District Secretaries have been instructed to purchase only “Nadu” paddy from small and medium-scale paddy owners and cooperative societies through the 2022/2023 season paddy purchase program.
Under the program, the cost of one kilogram of good quality paddy with a maximum moisture content of 14% and a maximum spoil paddy content of 9% will be Rs. 100, while one kilogram of paddy with a moisture content over 14% and a maximum spoil paddy content of 22% or lower will cost Rs. 88.
District and Divisional Secretaries are in charge of inventory management, storage, upkeep, and documentation related to the paddy procurement process.
As the acquired paddy stock will be milled and distributed in March and April 2023, the program will consider the milling capacity of small and medium-scale rice mill owners and cooperative societies, and allocate funds accordingly. Mill owners and cooperative societies will be given preference.
Under the program, a maximum of 2,000 kg of paddy can be purchased from a single farmer with up to one acre of land, 4,000 kg for 1-2 acres, and 5,000 kg for over 2 acres.
District secretaries are required to inform the Development Finance Department of the General Treasury to obtain the necessary funds for the government’s paddy purchase program, which will be executed via small and medium-scale paddy mill owners and cooperative societies. Upon receiving notification, the Development Finance Department will direct district secretaries to the National Budget Department to assign treasury funds, and to the Treasury Operations Department to release the funds.
The National Budget Department will allocate budget funds directly to the respective District Secretaries, and the Treasury Operations Department will release liquid cash to them for the purchase of paddy.
Funds for the paddy purchase program will be released by the Treasury periodically as required.
All District Secretaries should ensure that paddy is purchased only from farmers in their district and that the Bank of Ceylon issues a payment certificate in the name of the concerned farmer. When submitted to the appropriate People’s Bank or Regional Development Bank branch, the required amount is immediately credited to the farmer’s bank account.
To provide relief to the identified low-income families, 10 kg of paddy per month per family will be distributed for a two-month period, and instructions regarding this will be issued by the Ministry of Women, Child Affairs and Social Empowerment.
The district secretaries have been instructed on the necessary steps to ensure the success of the paddy purchase program, including the deployment of Civil Security Department (CSD) officers to ensure the security of the paddy stocks in the warehouses, as well as the appointment of a staff officer in each district to oversee the implementation of the program. It is expected that the entire public service will be dedicated and work exemplarily during the harvest period, in order to reduce government expenses. Other operational costs of the paddy purchase program will be subject to financial regulations, circulars, and other necessary government approvals.
The massive earthquake that struck an area over 110,000 square kilometers of the Southern Türkiye on 6 February 2023, causing loss of life of many thousands of persons from many countries and a huge devastation of properties, also resulted in an unfortunate loss of life of a Sri Lankan.
The south eastern region of Türkiye, following the destructive earthquake, has been experiencing many aftershocks and tremors, numbering over 2000 and the death toll has risen to 29,605 and caused injuries to 80,278 persons. President Ranil Wickremesinghe spoke to President Recep Tayyip Erdoğan of Türkiye and informed that Sri Lanka has been ready to extend all possible assistance to the people of Türkiye at this hour of their insurmountable grief.
The Embassy of Sri Lanka in Ankara had been working to ascertain the welfare of the sixteen Sri Lankans who were living in the area affected by the earthquake and tremors, in coordination with the Türkiye authorities. It has been confirmed that 15 of them, contacted by the Embassy are safe, while a Sri Lankan female who was living in Hatay/Antakya Province in Türkiye, was reported missing. The Embassy was able to confirm the fate of the Sri Lankan concerned and regrets to inform of the unfortunate death of the missing Sri Lankan. The identity of the deceased Sri Lankan is withheld at the request of the family. Burial of the human remains of the deceased already took place in Hatay/Antakya, in line with regulations imposed by the health authorities.
The Ministry of Foreign Affairs extends its deepest condolences to the bereaved daughter and other family members of the deceased.
The Ministry of Foreign Affairs
Colombo
14 February 2023
SriLankan Airlines has defaulted on its US $175 million bond, having failed to amend the terms of the debt amid the worst economic crisis to engulf the country in its independent history.
The airline failed to make a coupon payment due on Dec. 25 2022, the board said in a statement this week, adding this constituted a default event under the terms of the debt. Executives would be in touch with holders of the bonds, which are backed by the government.
For the carrier, the drop in business due to the pandemic has been compounded by the country’s economic woes. Bankrupt Sri Lanka is looking to secure an International Monetary Fund loan after massive street protests last year toppled the ruling Rajapaksa family and a drop in foreign-exchange reserves made it impossible to import goods ranging from medicine to coal.
The airline’s pile of debt totaled $826 million, including the US-currency bond and $352 million owed to state banks, according to a presentation dated Jan. 12. The amount of overdue and future payments owed to lessors and suppliers was $771 million.
The company had sought to amend the terms of the dollar bond, including deferring a total of $12.25 million worth interest payments due in December 2022 and June 2023 to Dec.25.2023.
As of the end of last year, liquidity equivalent to 3% of annual revenues was on hand, while interest charges were seen amounting to 9% of yearly revenue in 2023-2024, the presentation said.
The country of 22 million itself defaulted on loans last year and is seeking $2.9 billion urgently from the International Monetary Fund to tide over a severe shortage of dollars to buy essentials.
“We will follow treasury guidelines on this. We are also engaging with bondholders,” SriLankan Airlines Chairperson Ashok Pathirage said.
The government-guaranteed unsecured notes are due in 2024.President Ranil Wickremesinghe told parliament on Wednesday that Sri Lanka’s economy was expected to grow again from the end of this year and hoped the country would emerge from the economic crisis by 2024
Out of a total foreign debt of some $ 61 billion, the Government has been planning to restructure only the commercial debt of the central government and what had been borrowed from the bilateral sources.
There, China, a major lender, had been uncooperative with the rest of the creditors. After long negotiations, it had offered only a loan moratorium of two years which would indeed increase Sri Lanka’s foreign debt obligations.
Hence, the bailout is now notorious for getting postponed every month. Bangladesh which does not have this debt sustainability problem was able to secure the loan within two months.
With the non-delivery of the IMF bailout in time, Sri Lanka’s foreign exchange issue has now become more catastrophic.
The International Labour Organisation (ILO) has come forward in supporting 3,725 vulnerable women and men in the Mannar, Kilinochchi, Vavuniya and Mullaitivu districts to earn an income as well as sustain their livelihood through several short-term relief mechanisms.
These include temporary employment in infrastructure developments related to improving irrigation for farming, clearing farm access paths, and renovating fisheries landing sites, alongside providing agriculture inputs ranging from subsidized seeds to equipment, financial assistance towards labour and land preparation, as well as strengthening market access via private sector.
As Sri Lanka experiences its worst economic crisis, close to 30% of its population are facing food insecurity, while the rising poverty rate continues to push more families below the poverty line.
“People with existing vulnerabilities are among the most impacted in any crisis. The present situation has meant that vulnerable and marginalized groups in the Northern Province; a region already burdened with higher than national average unemployment and poverty, are forced to grapple with further exacerbated challenges in carrying on their day-to-day lives.
“Especially for those engaged in the agriculture and fisheries sector, their livelihoods have been severely disrupted from all fronts,” says ILO Sri Lanka Chief Technical Advisor Dr. Thomas Kring.
The interventions; a part of ILO’s Local Empowerment through Economic Development and Reconciliation (LEED+) Project, are being implemented in collaboration with the Department of Agrarian Development, Department of Agriculture, District Secretariats, and Cooperatives.
Vinayagapuram Farmers’ Co-Op General Manger Murugesapillai Muralitharan, remarks about its gains: “With reduced farming activities, farmers, farmhands, daily wage earners, we’ve all lost our income. From the earnings through this initiative, individuals are able to manage household expenses, send their children to school, take care of medical needs, start a home garden, and purchase seeds as well as other requirements to continue farming.
“The maintenance work we have completed in this area will benefit our fields for the next 4-5 years; collectively working on these has also created a strong sense of community and ownership.”
Through the infrastructure development intervention two-small scale tanks were repaired, in addition to irrigation channels being deepened and cleared. Accessibility of farm paths was improved for 2028 acres of paddy field. Furthermore, four fisheries landing sites and over 40 kms of sea access pathways were also cleared.
“The impact of this cash-for-work based approach by ILO is many fold – due to the restricted Government spending in 2022, the routine maintenance undertaken by the Department was stalled.
The intervention provided a direct means of income for the most in need, including persons with disabilities and women heads of households, and simultaneously created a mechanism to complete these necessary infrastructure developments.
Even in the aftermath of Covid -19 infections in China, Sri Lanka is yet to prepare for possible arrival of tourists from Beijing, which relaxed Covid-19 travel measures last month, officials said.
China opened its borders for outbound travel last month almost after three-years of its zero-Covid policy and the infections in the 1.4 billion nation have hit staggering levels filling up crematoriums, foreign media reports have suggested.
Many Asian countries have imposed mandatory tests for Chinese tourists while tourist operators in others are preparing packages such as hotspot buffets to cash in on the expected spike in travel.
“From our side the plans are going on, but nothing has been implemented yet,” Priyantha Fernando, the Chairman of Sri Lanka Tourism Development Authority said.
The Consul General of Sri Lanka in Shanghai Anura Fernando claims that although Sri Lanka is included in the pilot program of China partially lifting the ban on international group travel, Chinese tourists haven’t shown much interest in Sri Lanka, since most of them haven’t traveled out of the country in three years.
“So far, not much. We are expecting them to return soon. Their particular interest has been to other countries, which are closer to China, since most Chinese haven’t traveled for three years out of the country.”
“So, they are taking a look at closer destinations. But I think Sri Lanka should be attractive to most Chinese travelers, because of Buddhism. Many Buddhist sites are located there. And there’s the tea that is grown there, as well as jewellery and beaches”, he said.
Joining an interview on the CGTN television network in China, the Sri Lankan Consul General in Shanghai also highlighted that the Chinese are very familiar with the country, since the country has attracted large investments in Sri Lanka.
“We are expecting them to return soon”, he said. Furthermore, Mr. Fernando expressed that the tourist numbers in Sri Lanka will increase to around one million this year.
Commenting on the bilateral trade ties between China and Sri Lanka, Mr. Fernando stated that Sri Lanka hopes to sign the free trade agreement with China this year, which will open up more trade between the two countries.
In response to a question raised regarding the current progress of Colombo Port City, a development with large investments from China, Mr. Fernando pointed out that its operations will commence in one to two years, since the construction of the buildings has already been re-commenced.
He also highlighted that an international financial centre is being launched in Colombo Port City.
“Due to the pandemic, it slowed down. Most people working there returned home and they are coming back to the port city. We are launching an international financial centre. Now the construction of buildings has started, within the next year or two, it will start to operate.”
“There is a port called the Hambantota Port, which was built by the China Merchant state-owned Chinese company. It’s complete and in operation. And there are some land sites available in what we call the free trade zone and a few Chinese industries are operating there.”
China’s debt factor in Colombo files has now become crucial for Sri Lanka’s economic revival with the International Monetary Fund (IMF) US2.9 billion bail out loan hanging on the balance.
The IMF is keeping radio silence on its executive board’s approval deadline and the status of Sri Lanka creditors’ assurances on debt restructuring which was quite different from Central Bank Chief Nanadalal Weerasinghe S guessing and missing and silencing stance on central bank tools towards shrinking economy.
The current economic crisis was confirmed as a foreign exchange crisis that led to the depreciation of the rupee on one side and imposition of extreme import and exchange controls, on the other.
The Government sought an IMF bailout rather late but there were some preconditions which it had to fulfill.
According to the Central Bank most of these conditions which were not divulged by CB chief in radio silence have been met except the major one relating to the restructuring of the unsustained public debt.
However China, a major lender, had been non supportive with the other creditors. After long negotiations, it had offered only a loan moratorium of two years which increased Sri Lanka’s foreign debt obligations. Hence, the bailout deadline of Nadalal is now infamous for getting postponed every month.
In this latest development, the Ceylon Chamber of Commerce welcomed and appreciated the financial assurances provided by creditors thus far, towards achieving Board approval from the International Monetary Fund and called on China to do the same.
“The timely announcements by India, Paris Club members including members such as Japan, US and UK, and non-members such as Hungary, are highly encouraged and appreciated by the business community at this time,” the Chamber said in a statement.
“We are also encouraged by the assurances provided by the international bondholders to engage with Sri Lanka towards restoring debt sustainability.
We look forward to similar assurances from other commercial and bilateral creditors including China, in line with the IMF requirements that will result in a swift approval of the IMF program,” the Ceylon Chamber said.
The Chamber said it appreciates the support given by China in the economic development of Sri Lanka and requests to work with the IMF in order for Sri Lanka to receive its much needed funding as a key bilateral creditor.
The Ceylon Chamber said securing the IMF program will be a crucial first step in Sri Lanka’s debt restructuring efforts which will reduce the present economic uncertainty.
The Government has carried out an initial set of reforms and we expect more reforms to take place post IMF Board approval that will provide an impetus towards economic revival.
The Ceylon Chamber also urged the IMF to consider the assurances received thus far and initiate the approval process, as continual delays will place Sri Lanka in an extremely vulnerable social and economic position.
US, China and India top financial sector officials will sit together at the new debt round-table discussions on the settlement of debt issues of several cash crunch countries in India on February 17 , IMF sources said.
China’s finance minister and its central bank governor will attend a round table with other creditors and some borrowing countries in February 17 in India, IMF Managing Director Kristalina Georgieva said in a CBS’ 60 Minutes interview.”China has to change its policies because low income countries cannot pay,” she said.
Officials from China, India, and Saudi Arabia and Group of Seven nations will participate in a first virtual meeting of a new sovereign debt round table on Friday, the International Monetary Fund said on Monday.
The round table will also include officials from countries that have requested debt treatments under the Group of 20 common frameworks – Ethiopia, Zambia and Ghana – as well as middle-income countries such as Sri Lanka, Suriname and Ecuador, which have faced their own debt crises, three sources had earlier said.
The meeting will be co-chaired by the IMF, the World Bank and India, the current leader of the Group of 20, and comes a week before G20 finance officials are due to gather in Bengaluru, India, from Feb. 23-25.
An in-person meeting of the round table expected on Feb. 25 and a formal launch is planned at the IMF-World Bank spring meetings in April.Brazil, which will lead the G20 next year, is also taking part, one of the sources said.
An IMF spokesperson confirmed the first round table meeting would take place on Friday, and said more details would be released in the near future.
“The objective is to bring together key stakeholders involved in sovereign debt restructuring, from traditional creditors from advanced economies, to new creditors like China, Saudi Arabia, India, as well as the private sector and debt countries to address the current shortcomings,” they said.
The round table will include the Paris Club of official creditors and private sector participants – the Institute of International Finance (IIF), the International Capital Markets Association and two private-sector financial institutions that have asked not to be identified, one of the sources said.
Creation of the body comes amid growing frustration about the slow pace of discussions on debt relief for Zambia, which first requested help two years ago. Organizers say the round table could help resolve issues in principle and will not focus on Zambia or other individual cases.
