Dipped Products PLC (DPL), a member of the Hayleys Group, recently commissioned an automated central warehouse facility at the Biyagama Export Processing Zone, to enhance its service delivery excellence to meet the critical global export demand.
The state-of-the-art new warehouse facility will enable DPL to consolidate storage facilities across its Hanwella, Kottawa and Biyagama factories, by streamlining operations, reducing transportation and logistics costs, and increasing visibility and control across DPL’s supply chain.
The extensively automated 23,000 cubic metre facility represents a new technological milestone for the company’s digitalization drive, and was commissioned by Hayleys Chairman and Chief Executive Mohan Pandithage
“Given the ongoing economic challenges, it is now more imperative than ever to strengthen Sri Lanka’s position as a vibrant export hub by developing local products to the highest global standards.
As a leading global player in the protective hand wear industry and a member of the Hayleys Group, we take pride in DPL’s continuing contributions to our nation’s development,” Dipped Products PLC Managing Director Pushpika Janadheera said.
“Our latest investments are part of our strategy to expand global reach, ensure supply chain resilience, and enhance service delivery to our key export markets. With our centralized warehousing facilities, we are also optimizing our service capacity, speed, and customer value to help secure our next wave of growth,” he added.
Equipped with a state-of-the-art US National Fire Protection Association (NFPA) compliant safety system which covers 4,200 pallet racks, the new facility provides DPL with an extensive storage capacity.
Combined with robust technologies including modern articulated truck technologies and product management systems, and an integrated data tracking system that streamlines DPL’s logistical operations, that enables systematic tracing of containers from the loading point to the pallet rack.
Moreover, the new central warehouse significantly reduces the need for internal transportation, reflecting a 30% decrease in inter-factory transport related Green House Gas (GHG) emissions.
Dipped Products Plc producing rubber gloves is seeking new export markets as demand from Western buyers falter, an official said while domestic costs are also rising after a fall in the currency Managing Director, Pushpika Janadheera said.
He said “We are in the process of expanding to the Middle East, Asia, Africa, and India. We have already started setting up the facility in the Middle East – a sales office.”
There was strong demand for exports from Asia as the US and other Western nations printed money, straining supply chains.
The supply chain delayed in turn made buyers run up inventory. The Fed and the ECB is now tightening monetary policy taking away excess demand after inflation soared and demand for many products are falling.
“The other reason is, they are releasing their excessive stocks, so the purchases are not for us,” Janadheera said.“Therefore, it has an impact whole glove industry and other industries as well.”
Sri Lanka’s export firms initially benefited as the rupee collapsed from 200 to 360 to the US dollar and wages and utility prices did not go up. However, eventually utility prices catch up. Wages also usually rise over time.
Dipped Products PLC opens automated central warehouse at Biyagama EPZ
SL Enterprise Restructuring Unit to commercialize seven SOEs soon
A State-Owned Enterprise Restructuring Unit (SRU) has been set up by the Government, under the Ministry of Finance, Economic Stabilization and National Policies, in an attempt to implement structural reforms to accelerate growth so that the country can emerge out of the current economic crisis.
The decision was taken in view of the fact that the State-Owned Enterprise (SOE) sector has been a severe burden on the country’s economy for several years.
Accordingly, the Cabinet of Ministers has approved, in principle, the divestiture of various companies, including SriLankan Airlines, SriLankan Catering, Sri Lanka Telecom (SLT), Sri Lanka Insurance Corporation (SLIC), Canwill Holdings (Grand Hyatt Colombo), Hotel Developers Lanka (Hilton Hotel Colombo), Litro Gas Lanka, Litro Gas Terminals and Lanka Hospitals.
The SRU will appoint reputed, qualified and experienced consultancy firms and development financial institutions to provide transaction advisory services to assist with the divestitures, while the process of selecting such transaction advisors is due to commence shortly.
The transaction advisors will, inter-alia, assist the SRU with sell-side due diligence, valuation, data room creation, transaction strategy and marketing of the entities to be divested.
The divestiture program will be carried out by the SRU in a transparent and credible manner and investor selection will commence with an EOI / RFP process to be published in the local and international press.
Issuing a statement in this regard, the Finance Ministry noted that these reforms are expected to contribute towards higher economic productivity by reducing market distortions, increasing organizational efficiency and improving the quality of service to the public.
The State-Owned Enterprises Restructuring Unit will be assigned to study the methodology of restructuring the national carrier SriLankan Airlines and make recommendations to the Cabinet of Ministers.
This action has been taken following a revelation made by President Ranil Wickremasunghe that the Government was looking at raising $ 3-4 billion via sale of certain State-Owned Enterprises (SOEs) to boost foreign reserves.
The new unit has been assigned to study the methodology of restructuring the national carrier SriLankan Airlines and make recommendations to the Cabinet of Ministers, the government said.
The Cabinet of Ministers has decided to handover the responsibility of studying the methodology of restructuring SriLankan Airlines and making recommendations to the said unit.
It was proposed to re-activate the Statement of Corporate Intent (SCI) process for 50 key SOEs, excluding the Ceylon Electricity Board (CEB), the Ceylon Petroleum Corporation (CPC), and the national carrier— SriLankan Airlines, as they are under different efforts to restructure to closely monitor the set targets.
The objective of the new unit is to help to identify ways to reduce the financial burden on the Treasury and to provide necessary guidance and support in the restructuring process of the SOEs.
“The performance of State-owned commercial enterprises has not been satisfactory for a long time and some SOEs are incurring losses due to various reasons,” a statement of weekly Cabinet Decisions issued by the Government Information Department noted.
Prices of 10 essential food items slashed
By: Isuru Parakrama
Colombo (LNW): Lanka SATHOSA has slashed the prices of ten essential food items.
Below is the price list.
Central Bank continues its dollar buying spree amidst IMF deal
Sri Lanka’s Central Bank continues its unending aggressive” dollar buying spree has prevented sharp appreciation of the rupee, dealers say, as the rupee is under upward pressure amid negative credit and the lifting of a surrender rule.
The statement approving Sri Lanka’s Extended Fund Facility (EFF) by the IMF this week said the Central Bank aims to buy up to US $ 1.4 billion from the market and rebuild the external reserves to US $ 4.4 billion by the end of the year.
The spot rupee, which opened around 320 against the US dollar, fell further to 317 to 318 levels by mid day trading yesterday, a day later the International Monetary Fund (IMF) opened up the nearly US $ 3.0 billion life line to the crisis-hit country.
The rupee, which gained around 12 percent, lost some ground last week to end at around Rs.337 to a dollar.
But the news on the IMF deal approval and the optimism over further inflows from other bilateral and multilateral sources improved sentiments, sending the rupee higher against the US dollar by mid trade yesterday.
By the week ended on March 17, the rupee was up about 7 percent from the start of the year but by yesterday, it extended its gains to 12 percent again.
The currency traders and economic analysts expect the rupee to continue to gain and trade in a band between 280 and 300 to the US dollar.
The country also awaits a large decline in fuel prices in a few weeks, amid the sharp dip in global oil prices, which to an extent could alleviate the hardships faced by the public and small businesses.
The rupee is trading between 312-318 against the US dollar compared to 360 level a week ago, showing a near 15 percent rise.
“The rupee would have easily hit 275 rupees against the dollar if not for the central bank’s aggressive buying,” a currency dealer said asking not to be named.
“This is mainly due to exporters selling their dollar holdings to have cash inflows for the future without borrowing at a high cost after the central bank raised the interest rates.”
Other analysts said the central bank has bought more than $100 million from the market in the last three days.
“The current rupee also appreciation comes amid a fall in exports. In January 2023, exports fell to 978 million US dollars from 1,103 million US dollars. In 2022 when the country experienced severe forex shortages, exports went up.Related Sri Lanka exports rise 20-pct in June 2022 amid forex shortages
The rupee rise has led to a reduction in the price of several imported goods including wheat flour sugar and milk powder.
The Central Bank in February bought US $ 287.0 million in foreign currency and sold US $ 33.4 million, remaining a net purchaser of foreign currency so far this year. In January too, the Central Bank bought US $ 348.8 million and sold US $ 137.6 million.
Meanwhile, although no official data is available yet, the Central Bank has bought dollars to the tune of US $ 500 million since the surrender rule in place for the exporters was initially relaxed and done away a week later.
In the first week itself, since the rule was relaxed from 25 percent to 10 percent, the Central Bank had bought US $ 308 million, the most for any five-day period.
“We have now bought around US $ 500 million,” told Central Bank Economic Research Director Dr. P.K.G. Harischandra, joining in a television talk show a couple of weeks ago.
Happy Birthday Mr. President!
Below is an article marking the 74th birthday of Mr. Ranil Wickremesinghe, the incumbent President of Sri Lanka.
LNW has been writing annual birthday memos to Mr. Wickremesinghe since 2009, the year we arrived as an online news aggregator. During this period of 14 years, our birthday wishes may have been conveyed to Mr. Wickremesinghe under various titles before his initials, Leader of the Opposition Wickremesinghe, Prime Minister Wickremesinghe, Leader of the United National Party Wickremesinghe, and even Member of Parliament Wickremesinghe, but this will notably be the first time one is written to a ‘President Wickremesinghe.’
Wickremesinghe arrived in Parliament in 1977 and has been an active politician in various capacities till 2020, only to meet a certain defeat and remain unvocal for a brief period of time. He returned to Parliament on June 23, 2021 as the sole Member of Parliament of the United National Party securing the only national seat gained by the country’s oldest political party in the 2020 General Election, preventing its collateral damage. Being sworn in as a Member of Parliament that day, Mr. Wickremesinghe may have never thought that he will end being the 9th Executive President of Sri Lanka.
Eleven months passed since his 2021 swearing in before the Speaker, and on May 12, 2022 Mr. Wickremesinghe became the Prime Minister of Sri Lanka, and then the acting President on July 15, 2022 and the Executive President on July 21, 2022.
The “Ranil Can’t Do Anything” campaign engineered by his political opponents made its first grand appearance in 2001 – 2003, and after two decades he became the 9th Executive President of Sri Lanka. Being the first citizen and the Head of State, Mr. Wickremesinghe who grappled against the worst economic crisis befallen Sri Lanka since independence and its official status of being a ‘bankrupt’ nation amidst the debt repayment failure for the last nine months is making positive efforts to restore the country, and thus the International Monetary Fund (IMF) officially approved a $ 2.9 billion bailout package within his leadership.
To lay down an example as to how political criticism against Mr. Wickremesinghe turned a boomerang back to those who had created it, ex-President Maithripala Sirisena, who was elected as the 7th Executive President under Wickremesinghe’s blessings and put every effort to stamp out Wickremesinghe in return, has now been almost rejected by mainstream politics, while Wickremesinghe wears the crown.
It is an undeniable fact that many people are deliberately forgetting the situation that existed within the country a year ago. Endless queues waiting for their quota of fuel and gas were evident of people falling into their deaths by either stroke or conflict ended up in murder, and island wide blackouts were very common on a daily basis. A customer was allowed to purchase only up to five kilograms of rice and 500 grams of lentils, needless to mention in a queue. Hospitals and even pharmacies across the country suffered from a severe shortage of medicines. Sri Lanka was recognised as a country where protesting day and night was the norm and employment and children’s education were a joke. Many countries around the world issued travel advisory warning their citizens not to visit the island nation due to its then ongoing unsettlement. Sri Lanka was blacklisted from international fiscal agencies making it a ‘bankrupt’ nation. In laymen’s terms, no politician was capable of even imagining the recovery of this tangled yarn.
Should anyone continue to believe that Mr. Wickremesinghe ought not to be thanked for the change we experience now, they are but those who stabbed themselves in the conscience for the hailing of a mere political symbol.
More than four decades passed since the ‘Open Economy’ was introduced to Sri Lanka, and we still have to take steps to restore the basics of it from the scratch. Anyone questioning the benefits of an open economy can find the answer on the question itself. That is, we have no implemented an open economy in full force for four decades. Any attempt to implement the Open Economy had severely been hindered throughout the decades, and Mr. Wickremesinghe, who was in Parliament when the concept was first introduced, is now shouldering the responsibility of bringing it to fruition as the Head of State.
The truth, as harsh as it may sound, is that the future of Sri Lanka lies at the hands of Mr. Wickremesinghe in this moment. Therefore, up to which extent will the people of this country support Mr. Wickremesinghe will decide the lengths into which Sri Lanka can move away from this economic hassle. Needless to mention that this support should also be proportionate to the extent of which Mr. Wickremesinghe is ready to listen to the people.
In a time the elimination of waste and corruption, cutting costs, and cutting Parliament Members’ salaries and pensions carry extreme propaganda value, it should also be noted that Mr. Wickremesinghe in his capacity as a parliamentarian, a prime minister, a minister and now the President has never consumed his paycheque for personal interests since 1977, but credited for the welfare of the people. Only he never bragged about it.
Our closing remark should make it clear that the IMF bailout is not the solution to everything, but the step one of economic recovery as a country. As there is still a very long way to go, the path can only be led by a leader who puts the interests of the country above his personal political ambitions.
So, Mr. President, we congratulate you!
*Adapted from original Sinhala Article, “ජනපති රනිල්ට සුබ උපන් දිනයක් !” published on 24.03.2023
Showers, thundershowers likely to appear in several provinces during afternoon or night
By: Isuru Parakrama
Colombo (LNW): Showers or thundershowers will occur at several places in Sabaragamuwa, Central, Uva, Southern, North-Western and North-Central provinces during the afternoon or night, the Department of Meteorology said in a statement today (24).
Showers or thundershowers may occur at a few places elsewhere during the afternoon or night, and the 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 a few places in the sea areas off the coast extending from Kankasanthurai to Galle via Mannar, Puttalam and Colombo during the night. |
| Winds: |
| Winds will be south-easterly to south-westerly and wind speed will be (20-30) kmph. |
| State of Sea: |
| The sea areas around the island will be slight. Temporarily strong gusty winds and very rough seas can be expected during thundershowers. |
Sri Lanka Original Narrative Summary: 24/03
- President’s Secretary Saman Ekanayake says this year’s Vesak festival is set to be celebrated on a grand scale, both nationally and locally, as per President Ranil Wickremesinghe’s instructions.
- According to a Barclays report, holders of SL’s Int’l Sovereign Bonds face a 20% principal haircut in the country’s debt restructuring as well as maturity extensions and a reduction in coupons: Investors’ focus now shifts to the restructuring of SL’s $13.4 bn sovereign dollar bonds (capital+interest) after the final sign off on the USD 3 bn IMF programme.
- State Minister of Finance Ranjith Siyamabalapitiya says interest of 4% per annum and additional surcharges will have to be paid on the IMF loan.
- President Ranil Wickremesinghe says the Parliament is required to approve the IMF report by the 3rd-week of April: also says if anyone has any issue regarding the IMF report, they could talk it over with the IMF when they come back to Sri Lanka: asserts he can’t go and continue the 2nd round of negotiations without such approval.
- State Minister of Finance Ranjith Siyambalapitiya says the first tranche of USD 330 mn of the IMF Facility was received.
- Milk Powder Importers Association spokesperson Ashoka Bandara says the price of imported milk powder will be reduced with effect from April 1: also says the decision was taken due to the decrease in prices in the world market.
- Navy conducts special operation to chase poaching trawlers from SL waters: operation leads to seizure of 2 trawlers with 12 Indian nationals poaching in SL waters off Analaitivu and Kovilan, Jaffna.
- Central Bank Economic Research Director Dr P K G Harischandra says the CB continues to be a net buyer of forex from the domestic forex market following the debt standstill and severe import restrictions: also says the CB has
bought about a billion dollars of forex so far this year: thousands of SMEs lament that their businesses have closed due to the ban in imports. - Cabinet approves the divestment of shares in SL Airlines, SL Catering, SL Telecom, SL Insurance, Canwill Holdings (Grand Hyatt Hotel), Hotel Developers (Hilton Hotel), Litro Gas, Litro Gas Terminals and Lanka Hospital: process to select consultants to provide transaction advisory services to the above entities, to start soon.
- President Ranil Wickremesinghe says the Govt intends on passing the best Anti-Corruption Act in South Asia in Parliament soon.
President says steps will be taken to pass the ‘best anti-corruption law’ in South Asia in Parliament this year
Colombo (LNW): President Ranil Wickremesinghe said that the necessary steps will be taken to pass the best anti-Corruption Act in South Asia in Parliament soon.
The President revealed that the cabinet approval for the Bill has already been granted and said that he will discuss it with the Opposition representatives in the future and present it to the Parliament.
President Ranil Wickremesinghe said this during a discussion held at the Presidential Secretariat today (23) with the heads of media organizations.
Expressing his views further, President Wickremesinghe said,
Firstly, let me thank everyone of the media for your presence here today. As you know I have requested all of you to be present here to tell you about the IMF agreement.
We became a bankrupt country a year ago. This is the first time we have had to restructure our debt with the support of the IMF and our creditors.
And this is the first occasion we’ve had to restructure our debt with the support of IMF and our creditors. This is only the beginning. Once we’ve got the support, the financial assurances, it means that we are no longer considered a bankrupt state. We have to go to the next stage, which is to negotiate with all our creditors with the multilateral creditors, with the bilateral creditors and the most difficult of all, the private creditors.
Now that stage only once we concluded it that we will be in a position to go ahead without having to look back and with confidence. So this is not the end. This is, in a sense, only the beginning. Next is the negotiations with the creditors. And just as much as you are negotiating the creditors, we also have a four year programme. This is why I’ve asked Parliament to give me approval to approve this agreement. I don’t require it by law, but to have parliament voting for us for this agreement will strengthen us. The country has already voted for it. I think that from the reactions I have and, I would like to get the assistance of parliament.
It’s also necessary to show the creditors that the country has accepted the principle which is included in this IMF agreement.
So firstly, it’s a restructuring of the debt but is not limited to restructuring of the debt it’s restructuring of our economy.
Firstly, we have financial stability. Once we go through this process, we are increasing our revenues.
This is the most difficult era and we will stabilise government spending as they will explain the character of government spending and the income we have. But this will ensure that we have a surplus in the primary budget and increase revenues.
We are aiming at much better control of the government budget. And it’s not only that goal we are going to achieve, if we put our finances in a better condition.
But also we have to remember that the structural reforms we do will enable us to have a growth enhancing economy. We will liberalise further. There are those who think liberalisation is not a good word, and we will open it out for foreign investments. We are also looking at different areas of investment additional foreign investment in manufacturing. But it means we have to go up to the higher, end.
Responding to a question raised by a media person about how long it will take to pay off this debt for the country to move to a middle-income country in 10 years, the President stated that the first task is to approve this agreement and then proceed to restructuring the debt and the method of paying off the debt will be known only then.
Secondly, modernising agriculture and fisheries. Thirdly, making Sri Lanka a Regional Logistic Centre, certainly upgrading and expanding, tourist, digitalized economy, the green economy. So we are moving towards the new Sri Lanka.
My aim is, though most of us won’t be there by then, when we are in 2048 when 25 years have passed that we will be a high middle income country.
We can’t go on with economic stagnation, we can’t go on with low growth. We must remember that all the upheavals we had in the country relates back to this issue. We have had one in 1971, which related to unemployment and 1983 was not merely one of language but that the Tamil youth had no employment. The same in 1989. So we have had too much the, economic situation. The absence of growth has resulted in instability and bloodshed.
Now we have the opportunity of starting out a new, so it’s a historic process. What I’d like you is to, support us in this venture, the officials will be available to speak to any media personnel at any time to discuss what’s happening. But the future of Sri Lanka rests on whether we go ahead with this agreement or not, whether we implement this agreement or not.
If we don’t do it, we will be cursed by the future generations.
Let us first approve this agreement as the first task and then move on to restructuring the debt. Only then will we know how to repay the debts. We have not completed out programmes. Why have we not completed it? Because it came under political influence. If not, it came under public influence. It was the media that created public opinion. This time I urge the media to assist us in making this programme a success.
Not just that, when the MCC was presented they alleged that the country was to be divided. When the IMF was introduced, they said we were going to be dominated by the West. So it is difficult for us to do all this. That is why the media organizations were asked to join in making the 17th International Monetary Fund program a success.
This process is very difficult. We all feel it. This is a four-year process. It will end in 2026. Those who were with me over a long period and supported these policies are now speaking against me. So is it a big thing for those who were against me to support me? We must remember one thing. We are in a difficult place now. We can’t play the old games again. If we do that, we will fall again. Let’s forget the old games and the past and move forward.
We all made mistakes. At least now agree with this and support us. This money we received will be used to pay the salaries this month. It’s not stealing. These were lost because of the allegations of theft. Don’t spread such stories. These people who point fingers steal more than this. My salary is lower than those of you here. We need to change attitudes.
They accused me of coming to protect thieves. But we are bringing the best anti-corruption bill in South Asia in consultation with the IMF.
The opposition’s shouting did not bring anything. The Minister of Justice is also discussing this with the opposition.
We presented this to Parliament to get the support of all parties. No one can oppose this. Some new laws have also been introduced. We have taken several new steps.
We do not want to suppress the media. I hear the most criticism from the media. I also lost the media. I am the one who removed the criminal law imposed on the media. I was the one who gave the right to know the information. Independent commissions were brought to Parliament three times. So how do I suppress the media?
They ask to solve the Tamil problem. But while I was doing those things, they said that I was trying to get rid of the other problems together with Mr. Sumanthiran. No one in the media said that the accusation was not good. I have said before that we are working to solve the national problem. No media objected to it.
Everyone agreed to that in the parliament. Don’t create racism under the guise of it. One media organization is running a racist programme. The same thing was aired for four days. What would happen if someone attacked one Tamil person during that time?
It is okay to show protests against the government, but the protests should be shown as protests. And it should be shown that there is another side to it.
Not all people got onto the streets for the protest. There are instances where the same team went around the country. That is why I say, report both sides in a protest. I didn’t say don’t report on protests or post only those that praise me.
Why is the government in business? It is not the government’s job. During Mr. D.S. Senanayake’s time, nothing of this sort happened. But the country had money. Back then, the country had money to lend to England and build the Galoya project.
Now we are asking for money from China to build Moragahakanda. Which country has a law saying that government institutions should engage in business? We are aiming to develop rapidly as a normal country. Only we as a country say that the state should engage in business.
The government exists to maintain law and order and solve the problems of the people. Today, do we have a good education system? We have paid more to the petroleum corporation than for education last year. The electricity board has been paid more than for education. During Mr. D.S. Senanayake’s Premiership, none of these happened. When the private sector does business, the government collects taxes. Who owns the telecom in England? The private sector. It is the same in France and America. We should develop in the same way, or we could fall like North Korea. You tell me which one you prefer.
Expressing his views Minister Bandula Gunawardena said;
This is considered to be the first step taken to recover from the situation that the country has been in for a while, by reaching a basic agreement with the International Monetary Fund. We had ships coming with oil in the past, but we did not have dollars to pay for it. There was also a power cut. Even though the gas ships came, there were no dollars to buy the gas. Due to lack of fuel, people had to stand in queues for two or three days. This difficulty arose because of the long-term budget deficit in our country and the lack of sufficient government revenue to meet the expenditure. There was an unaffordable budget gap like never before experienced in the history of Sri Lanka. We have borne all the expenses under two methods under the budget gap.
We borrowed domestically and internationally. Money was printed as the loans obtained was insufficient. No matter who came to power, each of these governments continued to borrow. Finally, in order to obtain foreign loans, they had to go to the open market and borrow at higher interest rates by issuing sovereign bonds, away from concessional channels such as the International Monetary Fund, the World Bank, and the Asian Development Bank. Eventually, it turned into a bankrupt country that could not pay its foreign debt installments and was unable to meet the huge payments.
Organizations like Fitch Rating and Moody’s, which guide the settlement of international transactions, had cast our country to a very low level. As we had hit rock bottom, we became unable to issue letters of credit to import the goods we needed. Therefore, especially in a situation where the import of fuel is increasing by US$ 5 billion or more per year, the necessary suppliers stopped supplying us with goods.
A letter of credit by Sri Lanka required a third party guarantee. Because of that, the banks of other countries had to pay additional fees for providing guarantee certificates to the importers of our country.
If for some reason this agreement could not be signed, no matter which government would come to power, we will not be able to issue a letter of credit and import fuel, fertilizer, gas or fuel that the country needs.
According to the agreement program we prepared, we have been able to change this situation and restore international credibility. The biggest problem now is that we have not restructured the debt pile of more than 50 billion US dollars. As the Opposition says, it is difficult for us to provide that money.
The country received 1.4 billion US dollars from the Port City project. Hambantota Port was sold for 1.4 billion US dollars. If we take these two main projects, only 2.8 billion US dollars have been received. We can’t bridge that gap when we have to pay more than 50 billion dollars. Together with the Central Bank and the Ministry of Finance, the Government decided to get expert knowledge to restructure the debt from France’s Lazard Company and the Clifford Chance Company is handling the litigation because the debt cannot be paid. The country is in such severe national danger. We need to find an answer to the real economic situation in this country. Scholars in the country should explain this. This is now the last chance.
We have signed 16 agreements with the IMF previously. It has not been possible to finalize anything that was agreed upon. Now after completing all the activities, this relief was obtained. The President personally intervened in this to a large extent. Government decisions may not be popular. The President has always told the Cabinet that unless difficult decisions are taken, there is no country or future. All these agreements were presented to the Parliament without hiding anything. If there is any other option other than this, then someone should present it to the parliament. It also saves the government a lot of money. In that case, we won’t have to pay the French company Lazard. If there is someone who can give us a better option to get out of this debt, then we can implement it. This is a more complex problem than we think. So, help us to publicize this issue in a fair manner.
Central Bank Governor Dr. Nandalal Weerasinghe also expressed his views;
If the debt was not restructured, we would have had a foreign debt burden of 06 billion dollars per year for many years. Because it is difficult to pay, the debt payment is temporarily suspended and this process is used to restructure the debt. We are unable to pay under the current terms, so we are asking the commercial institutions and private sectors and the respective governments that have granted us loans, to give us a relief period.
The first step in that process is the assurance given by the bilateral countries. The International Monetary Fund has set targets for debt sustainability. In order to reach that sustainable level, each country has given an assurance that they will support us.
The next step is to negotiate according to that guarantee and request that we cannot pay the debt at the rate of 06 billion per year at this moment, but to give us a long term payment plan with a relief period.
We have a responsibility to repay the loans we borrow, otherwise lenders may refuse to lend to us in the future. It’s important to note that we are currently facing difficulty in paying off our debt, and as a result, we have been given an opportunity to repay in a more flexible and concessional manner rather than defaulting on the payment.
As an example, suppose we currently have a debt of 50 billion that we are supposed to repay in 10 years. In this situation, we may request a longer repayment period of 20, 30, or more years to make it easier for us to pay off the debt.
The current discussion centers around the fact that we cannot allocate more than 4.5% of our GDP per year towards debt repayment.
Therefore, it is being proposed to reduce the debt repayment amount to meet this target, and to extend the repayment period over a longer timeframe. The ultimate goal is to make the debt repayment manageable and sustainable for our financial resources.
It should be noted that there is a possibility of taking new loans in the current situation. In particular, one of the loans being considered is from the International Monetary Fund (IMF). However, it is important to highlight that this proposed loan would be a long-term, concessional loan with a low interest rate, provided by organizations such as the World Bank or the Asian Development Bank, rather than a short-term loan from the market. Such loans have a different nature than commercial loans and would not necessarily affect the sustainability of our existing debt. As such, there would be no obstacle to taking such a loan if deemed appropriate.
Minister of State for Finance Ranjith Siyambalapitiya, Minister of State Dilum Amunugama, Senior Adviser to the President on National Security and Chief of Presidential Staff Sagala Ratnayake, Secretary to the President Saman Ekanayake, Secretary to the Ministry of Finance Mahinda Siriwardena, Secretary of the Ministry of Media Anusha Palpita, Governor of the Central Bank Dr. Nandalal Weerasinghe, Director General of Presidential Media Dhanushka Ramanayake, Director General of the Government Information Dinith Chinthaka Karunaratne and heads of media organizations were present on this occasion.
Postal voting of LG Polls further dragged in!
By: Isuru Parakrama
Colombo (LNW): The postal voting for the Local Authorities Election will not be held as declared earlier, the Election Commission said, following a lengthy discussion with the secretaries of all political parties this (23) afternoon.
Accordingly, the postal voting for the LG polls will not be held on March 28, 30, 31 and April 03, 2023 as declared earlier.
President says lists of names of those gained vehicle permits and tax intervals will be publicised
By: Isuru Parakrama
Colombo (LNW): The lists of names of the persons who had obtained licences for the import of duty free vehicles and the companies which had obtained tax intervals or tax reliefs under the Board of Investment (BOI) will be publicised, President Ranil Wickremesinghe said during his special speech in Parliament yesterday (22) on the recently approved Extended Fund Facility by the International Monetary Fund (IMF).
The President added that details about contracts owing to large scale constructions undertaken by the government will also be publicised.