1. Supreme Court finds several officials as having violated the Fundamental Rights of several petitioners by failing to take action to prevent the Easter Sunday attacks despite receiving sufficient intelligence information: orders those persons to pay compensation as follows: Rs.100 mn by former President Sirisena: Rs.75 mn each by former IGP & former SIS Director: Rs.50 mn by former Defence Secretary & Rs.10 mn by National Intelligence Director.
2. Fitch Ratings downgrades the National Long-Term Ratings of 10 Sri Lankan banks following the sovereign downgrade and recalibration of the agency’s Sri Lankan national rating scale.
3. CEB Chairman Nalinda Ilangakoon says the Kelanitissa Power Station might shut down today as the CEB does not have funds to purchase naphtha from the CPC: CEB General Manager Engineer Rohan Seneviratne says the CEB has put the owners of renewable energy power plants into difficult situations with banks by failing to pay them about Rs. 40 bn.
4. Public Administration Ministry Secretary Neel Hapuhinna says he had written to District Secretaries asking them not to accept deposits for the election earlier this week following a decision taken by the Cabinet.
5. Bangladesh’s Central Bank grants 6 more months to the Central Bank of Sri Lanka to repay the USD 200 million SWAP after receiving a request to extend the repayment period due to its prolonged economic crisis.
6. Elections Commission Chairman Nimal Punchihewa says the EC would hold the Local Govt election before 19th March unless a Court order prevents it: denies rumours that the EC is divided on the question of conducting the poll.
7. World Bank cuts Sri Lanka’s growth prospects to a negative 4.2% for 2023, sharper than IMF’s forecast: also cuts last year’s growth to negative 9.2%: warns that more than one-third of the island’s population is food insecure.
8. Head of the National Construction Association Susantha Liyanaarachchi says many small industries will collapse due to the Govt’s decision to increase electricity tariffs: warns the construction industry is already on the verge of collapse, and the next tariff hike will be the last nail in its coffin.
9. Govt allows Qatar Charity Fund to open a country office after the QCF pledged USD 11 mn in aid: 2 years ago, the Govt had banned the charity by referring to an alleged role of the QCF in the 2019 Easter Sunday bombing.
10. India wins the 2nd Cricket ODI by 4 wickets in Kolkata: SL 215 (39.4 overs): IND 216/6 (43.2 overs): India leads the 3-match series 2-0 with one match remaining.

• Many religious and cultural programs planned throughout the country on the instructions of the President

The government has decided to celebrate the 75th National Independence Day with pride together with the new reformist program for the next 25 years.

During this celebration held with pride under the theme “Namo Namo Matha – A Step towards a Century”, the government will announce its new reformist course for the next 25 years for the implementation of a stable government policy right until the 100th Independence Day celebrations in 2048.

The main ceremony of the National Independence Day Celebrations will be held on the 04th of February at 8.30 am at Galle Face Green under the patronage of President Ranil Wickremesinghe and Prime Minister Dinesh Gunawardena.

The festivities are scheduled to begin after the offering of floral tributes at the statue of Mahamanya D.S. Senanayake at Independence Square and the statue of the war heroes at the Presidential Secretariat. 

It is also of significance that many cultural and religious programs have been organized throughout the country in conjunction with the 75th National Independence Festival.

Accordingly, the Buddhist religious rites will be performed on the evening of February 02 at Sri Dalada Maligawa, and on the same night, the Dhamma sermon will begin at Victoria Dam at 9:00 PM. The following morning, an alms giving has also been planned.

The Catholic religious services will be held at Maradana Fatima Church on February 04 at 6.30 am, while Christian religious services will be held at the same time at Galle Face Christian Church. Hindu religious rituals will be held on the morning of February 03 at Trincomalee Dakshina Kailash or Koneswaram Temple. Arrangements have been made to hold Muslim religious services on February 4th at 10.00 am at the Colombo Grand Mosque.

Meanwhile, Buddhist and Hindu religious programs have also been organized in Colombo, and accordingly, on February 04 at 6.30 a.m., a Buddhist religious program has been organized at Dharmakirtyarama Temple, Polwatta, Colombo 03, and Hindu religious programs have also been organized at New Kadireshan Temple, Colombo 04.

A Sri Dalada exhibition is to be held at the historic Temple of the Tooth Relic premises in March, exhibition of Kapila Vastu Buddhist Relics to be held in Colombo in May, the sacred Buddhist relics from China exposition and exhibition to be held in Anuradhapura in June, exhibition of the sacred Buddhist relics from Pakistan is scheduled to be held in the Southern Province in July.

In addition, the special cultural arts festival “LankaraLanka” organized in conjunction with the 75th Independence Day will be held on February 03 at 7.30 pm at Independence Square in Colombo with the participation of 750 artists from the public and private sectors.

The Jaffna Cultural Center will be opened on February 11th morning under the patronage of the President, and the cultural procession will commence opposite the Jaffna Cultural Center and will travel through the streets of Jaffna culminating near the Jaffna Fort (the old bus station site). A cultural concert will also be held there and a special music concert is also planned to be held at the same venue that night.

On the 19th of February, the Republican Rally is scheduled to parade the streets of Kandy under the full sponsorship of the Sri Dalada Maligawa (Temple of the Tooth Relic) representing all dance traditions of the country. 

It is also planned to air a 30-minute short film on Sri Lanka’s freedom at all cinemas and performing theatres while a Design competition including short dramas, patriotic songs, and art competitions has also been planned to target the youth on the theme of “freedom” in May.

A massive art competition and exhibition showcasing the pride of the country has also been organized by veteran artist H.S. Sarath. 

The exhibition of artifacts reflecting the history of the country, organized by the Ministry of Buddhasasana Religious and Cultural Affairs, the National Museum Department, the Central Cultural Fund, and the Department of Archaeology, is also scheduled to be held from February 4th to the 10th.

A book containing newspaper reports and other articles about independence is also expected to be launched at the Independence Day National Festival and a special stamp with the image of the first Prime Minister of independent Sri Lanka Mahamanya D.S. Senanayake is also scheduled including a special commemorative stamp of a rare type which includes portraits of Mr. Jawaharlal Nehru, the first Prime Minister of independent India and Mohammad Ali Jinnah, the first Prime Minister of independent Pakistan. In addition, a Rs. 1000 special commemorative coin is also expected to be released.  

The concept of “Urban Forests” will be implemented from January 1st throughout the island, and the Independence Day celebration bicycle ride from Point Pedro to Dondra Point sponsored by Sri Lanka Telecom will also be held from January 28th to February 1st.

In addition, arrangements have been made to hold Independence Day commemorations at the provincial and district level and public parks, National Parks owned by the National Zoology Department National Parks owned by the Department of Wildlife and Forest Conservation and National Parks owned by the National Botanical Gardens Department will be opened to the public free of charge on National Independence Day.

A program to provide rice for 02 million low-income families at the rate of 10 kilos per family per month for 02 months is to be implemented and the related program will be implemented by the District Secretaries and Divisional Secretaries.

It is the aim of President Ranil Wickremesinghe to make the government’s new reformist journey commencing with the celebration of the 75th Independence Day in 2023 a stable state policy until the 100th Independence Day in 2048 and the plan for the next 25 years will also be implemented in conjunction with this year’s National Independence Day.

Accordingly, several new institutions and laws are planned to be introduced and an Institute of History, an Institute of Economics and Trade, and an Institute of Women and Gender will be established for the study and research of the history of Sri Lanka.

Government and Public Policy University, Agricultural Research University, Climate Change University, and Sports University are also expected to be established.

The National Commission on Women’s Act, Gender Equality Act, Women’s Empowerment Act, Child Care Act, Climate Change Act, Social Justice Commission Act, Reforestation and Tree Cover Act are also to be introduced.

In addition, for the safety and security of natural resources including the Mahaweli river, Sinharajaya, Sripada Site (Zero Peak), Horton Plains, Knuckles, and Adam’s Bridge, the Living Entity Act is to be introduced. New laws for the exploration and management of marine resources as well as an Act for the conservation of Muthurajawela are also scheduled to be introduced.

The Independence Day activities also include a project of 75 urban forests and a project of 1996 houses for low-income families in Colombo and many projects and programs on the National Youth Platform.

President’s Media Division (PMD

A former provincial chief minister and governor, Reginald Cooray has passed away.

He was 74 years old when he died.

It is said that he died after suffering a sudden heart attack during a discussion about the upcoming local government elections.

• Standard Chartered Bank says with IMF Executive Board approval for $ 2.9 b EFF slated to 2Q, negotiations with commercial creditors likely to be pushed back to 2H and resolution to be by end-2023
• Warns achieving IMF’s qualitative and quantitative targets including timely restructuring of commercial debt could pose challenges, potentially disrupting EFF program
• Opines risks remain in 2023 even after IMF board approval; politics and policy execution delays are key risks

President Ranil Wickremesinghe

Central Bank Governor Dr. Nandalal Weerasinghe

Treasury Secretary Mahinda Siriwardena

Standard Chartered Bank this week said that Sri Lanka’s critical debt restructuring is facing further delays posing fresh setbacks and estimates that a resolution to the entire exercise to be reached only by end 2023. 

The assessment by Standard Chartered Global Research is via its latest credit alert series. 

“We think debt restructuring could be pushed back to end-2023 due to delays in the IMF program,” it said. 

It said that the IMF board approval for Sri Lanka’s $ 2.9 billion Extended Fund Facility (EFF) program has been delayed as negotiations with bilateral lenders take longer than expected. 

“We now expect board approval to happen in Q2-2023 (versus Q1 previously) given delays in securing financing assurances from bilateral creditors. This could further delay negotiations with commercial creditors, which we expect will be pushed back to H2. As a result, we expect a restructuring deal to be reached only by end-2023,” SCB said 

It also opined that achieving the IMF’s qualitative and quantitative targets, including the timely restructuring of commercial debt, could pose challenges, potentially disrupting the IMF program.

“Against this backdrop, we expect Sri Lanka’s economy to contract a further 1% in 2023, following an estimated 7% contraction in 2022,” SCB said. “This would make achieving a primary deficit target challenging.

We now expect a primary deficit of 2.2% of GDP in 2023, versus the 0.7% target set by the IMF; this pushes our 2023 fiscal deficit forecast to 11.0% from 9.0% previously,” it added. 

SCB was of the view that the suspension of external debt service and the suppression of imports have helped to balance the external accounts; a gradual recovery in remittances and tourism flows has also helped. “However, we are concerned about the liquidity and solvency of the banking sector given its exposure to a weak economy and sovereign debt,” it said. 

The SCB Credit Alert also noted that while Sri Lanka has announced ambitious fiscal consolidation plans for 2023, the feasibility of these plans is in doubt. “We think Sri Lanka needs to make more progress on both fiscal and structural reforms, including passage of a new Central Bank Law to promote an independent central bank. The new law has received cabinet endorsement but is still awaiting presentation in Parliament,” it added. 

SCV was of the view that since the Sri Lankan authorities announced a debt standstill in April 2022, progress on debt restructuring negotiations with bilateral creditors has been limited. While Paris Club lenders have affirmed their support for debt rescheduling, the proposal lacks details. 

Moreover, progress on negotiations with China – the biggest bilateral lender – has been limited. China’s Government appears to have designated China Exim Bank and China Development Bank as the lead negotiators on its behalf, but progress has been slow. Discussions with India are also still ongoing. These delays have prompted Sri Lanka’s President to further extend the target for IMF board approval to Q2-2023 from January.

SCB also flagged off that risks remain in 2023, even after IMF board approval. “While IMF board approval may ease initial external financing concerns, Sri Lanka still has a long way to go before achieving economic stability, which is unlikely before 2024, in our view,” it said. 

“We also see a risk of disruptions to the IMF program even after the first approval (which will pave the way for the first disbursement). The IMF will continue to review the program every three to six months, and subsequent board approvals will be contingent on meeting benchmarks for the disbursement of future tranches. 

“These benchmarks include a comprehensive debt restructuring to achieve medium-term debt sustainability. The Government will have to remain committed to urgently resolving the current crisis and staying on the track with the IMF program,” SCB Credit Alert said. 

It emphasised that building political consensus on tough reform measures will be challenging as fiscal consolidation further weakens a faltering economy. “A lack of strong support from Parliament further complicates the President’s task. The Opposition has called for the dissolution of Parliament (possibly after the current Parliament’s 2.5-year term ends in February 2023) and elections to generate fresh political momentum for the reform process. 

“However, the President and the Government have expressed their intention to focus on stabilising the economy first. Provincial elections are scheduled for March; while local media reports have suggested that they may be delayed further, the Opposition has indicated that it might seek judicial advice and attempt to block any delays. The Presidential office has said that the elections are on track to be held in March, but the risk of political unrest remains high in 2023.”

SCB does not expect a significant departure from current IMF policies, progress could be delayed if a new Government tries to negotiate its own policy mechanisms to achieve the IMF debt sustainability goals. The current IMF program will need strong legislative support, especially for the Central Bank Act.

It noted that financing assurances from official creditors would be sufficient to secure the first IMF board approval and disbursement. However, subsequent IMF approvals will be contingent on Sri Lanka agreeing with official and private creditors on a comprehensive debt restructuring. With a large haircut likely for Eurobond holders, the probability of holdout creditors is high.

A similar delay in financing assurances has plagued Suriname since mid-2022. As a result, the country was unable to finalise its external debt restructuring by the end-2022 deadline the IMF had set when the program was approved in December 2021.

DAILY FT

Opposition Leader Sajith Premadasa’s 56th birthday is today (12).

He was born on January 12, 1967. He entered the parliament for the first time in the 2000 general election and has worked as a deputy minister and cabinet minister. He currently serves as the leader of the Samagi Jana Balawegaya and the opposition leader in the parliament.

Team LNW would like to send our heartiest wishes to Sajith Premadasa on his birthday…