Some of the world’s most powerful hedge funds and other investors are holding up vital help for crisis-hit Sri Lanka by their hardline stance in debt-relief negotiations after the Asian country’s US $51 billion default last year, according to 182 economists and development experts from around the world.
In a statement released on Sunday 08 , the group said extensive debt restructuring was needed to give the economy a chance of recovery and that Sri Lanka would be a test case of the willingness of the international community to tackle a looming global debt crisis.
The group – including the Indian economist Jayati Ghosh, Thomas Piketty, the author of the bestselling book Capital, and Greece’s former finance minister Yannis Varoufakis – said private sector creditors such as investment companies and hedge funds were preventing a deal.
Private companies who lent at high interest rates are holding up vital debt relief for Sri Lanka, a group consisting of global economists and development experts said.
Debt Justice said that these private companies, who lent to corrupt politicians, must face consequences from their risky lending by cancelling Sri Lanka’s debt.
The experts say that private companies who lent at high interest rates to corrupt politicians must face consequences from their risky lending by cancelling debt.
Debt restructuring negotiations for Sri Lanka are now at a crucial stage. Much of the focus has been on the role of China in the debt talks, but 50 percent of Sri Lanka’s external debt payments are to private lenders, whereas only 14 percent are to China.
In the statement the experts say private creditors own almost 40 percent of Sri Lanka’s external debt stock, mostly in the form of International Sovereign Bonds, but higher interest rates mean that they receive over 50percent of external debt payments.
“Such lenders charged a premium to lend to Sri Lanka to cover their risks, which accrued them massive profits and contributed to Sri Lanka’s first ever default in April 2022. Lenders who benefited from higher returns because of the “risk premium” must be willing to take the consequences of that risk.”
The statement notes that debt negotiations in Sri Lanka are now at a crucial stage and all lenders—bilateral, multilateral, and private — must share the burden of restructuring.
However, the statement notes that Sri Lanka on its own cannot ensure this and it requires much greater international support.
“The Sri Lankan case will provide an important indicator of whether the world—and the international financial system in particular—is equipped to deal with the increasingly urgent questions of sovereign debt relief and sustainability; and to ensure a modicum of justice in international debt negotiations” the statement pointed out..
“It is therefore crucial not only for the people of Sri Lanka, but to restore any faith in a multilateral system that is already under fire for its lack of legitimacy and basic viability, it added.”
Sri Lanka is one of several countries which have defaulted on external debt, or are seeking a debt restructuring, since the Covid pandemic began.
Ghana suspended many of its external debt payments in December 2022, following Lebanon, Suriname, Ukraine and Zambia.
With global interest rates increasing and widespread recessions expected in 2023, many more countries could follow.
Debt Justice research has found that, for two-thirds of lower income countries with International Sovereign Bonds, interest rates are so high that they are probably unable to take out new loans from external private lenders, increasing the chance they will need to default on their existing debts.
Hedge funds holding up vital debt relief for crisis-hit Sri Lanka
VitalHub Innovations Lab celebrates 15 years of unwavering commitment in making the world a better place
VitalHub Innovations Lab, the software development hub of Canadian-based VitalHub Corp., a leader in providing cutting edge technology solutions for healthcare organizations across Canada, USA, UK, Australia, New Zealand, Middle East and Europe, recently celebrated 15 years of enduring success, growth and
resilience in Sri Lanka with a glamorous event held at Cinnamon Grand, Colombo.
The event saw the participation of Dan Matlow, President and CEO of VitalHub Corp. and Vijit Coomara, EVP Product Development as chief guests including Daniel Bood, Acting High Commissioner/Counselor – Political and Trade and Abdul Majeed, Senior Trade Officer from the High Commission of Canada to Sri Lanka, and SLASSCOM Chairman Ashique Ali.
‘VitalHub has been a long-standing and well-respected member of the IT&BPM industry in Sri Lanka and have been supportive of the industry growth more so on the talent development throughout the country,’
said Ashique. ‘I was impressed to witness the key role VitalHub Innovation Lab in Sri Lanka play supporting the rapid global growth of the parent company VitalHub by bringing innovation, integration, and services to the healthcare sector they serve in many countries.’ Daniel Bood said ‘I was proud to be part of celebrations marking the 15th anniversary of VitalHub’s operations in Sri Lanka. As an ethically managed Canadian company consisting of talented individuals who
produce high quality products that save lives, VitalHub is making the world a better place.’ Long-standing employees serving the company for 5, 10, and 15 years were facilitated with awards and recognitions, which speaks volumes for itself given the industry’s retention. ‘I couldn’t be prouder of what
our talented team have achieved in the last 15 years, contributing immensely to VitalHub’s achievements.
It’s been an incredible journey and we’re excited to take on the future,’ added Vijit Coomara – EVP Product Development.
The celebratory event also featured various colorful performances of music, dances and also crowning a king and queen, with full of surprises and competitions among colleagues. This joyful evening was filled with unforgettable memories to reminisce.
With over 300 employees engaged in engineering, product development, client support, acquisitions and mergers, operations, and business development, VitalHub Innovations Lab is only growing stronger, being.
constantly on the lookout for passionate individuals to be part of its fun, skilled and energetic workplace culture that champions creativity and support.
Employees here are often referred to as change makers, and the very fabric of bringing innovative solutions and exploring new possibilities to take on the world of healthcare technology. Some of the benefits include hybrid work culture, CAD pegged salaries, funding for renewal power, internet allowances, among various
others.
Being in Sri Lanka for 15 years, we strive to Digitize Innovative Healthcare Solutions across the healthcare continuum. Headquartered in Canada, VitalHub develops and deploys information technology solutions for North American healthcare organizations. Our software development team uses the latest tools and techniques to ensure that our SaaS web / cloud-based software releases are innovative.
04 th January 2022
Thanzyl Thajudeen
Canada provides humanitarian aid of US$ 3 Mn for vulnerable SL communities
Amidst Sri Lanka’s worst economic crisis since independence, the UN recently revised its joint Humanitarian Needs and Priorities (HNP) Plan, appealing for more life-saving assistance to aid 3.4 million people.
Canada has become the latest donor for UN humanitarian assistance for Sri Lanka poorest of the poor people countrywide.
It has provided US$ 3 million (approximately Rs 817 million) to help address the needs of the most vulnerable communities in Sri Lanka.
This contribution comes in response to the humanitarian appeals launched by the United Nations (UN) and the International Federation of Red Cross & Red Crescent Societies (IFRC).
It is expected to help address the needs of the most vulnerable communities in Sri Lanka, the Canadian High Commission in Colombo said in a press release.
It will be delivered through the UB and the IFRC, in collaboration with their local partners to support the provision of emergency food assistance, health and nutrition services, access to safe water and other essential services to those who need it the most.
In addition, Canada has provided ongoing international assistance projects to address immediate needs and help respond to the economic crisis in Sri Lanka, including the procurement of essential medical equipment and supplies.
The Canadian government has pledged to continue to stand with all Sri Lankans in these difficult times and to remain committed to supporting an inclusive, prosperous Sri Lanka.
Since June 2022, the UN team in Sri Lanka and NGOs have used the HNP to respond to the Government’s request for more support to alleviate the impact of the country’s debt and food crisis, and shortages of medicines.
Governments and donor agencies have helped the humanitarian community reach over one million of the country’s most vulnerable with cash, food, school meals, medicine, protection, and livelihood support.
“We are immensely appreciative of the solidarity the international community has shown with the people of Sri Lanka, including through their generous contributions to the HNP”, said UN Resident Coordinator in Sri Lanka, Hanaa Singer-Hamdy.
Aligned with appeals from other UN agencies, the HNP has raised $79 million for Sri Lanka through various countries and organizations).
The HNP revision, which extends the plan through 2022, requires $70 million in additional funds to reach a total of $149.7 million.
In response to the humanitarian community’s updated estimates on the number of people in need across all 25 of Sri Lanka’s districts, the extended appeal will improve nutrition for children, pregnant women, and breastfeeding mothers; secure safe drinking water; and protect vulnerable farming and fishing households.
Colombo Lotus Tower records revenue of Rs268 million in 3 months
Colombo Lotus Tower project incurs Sri Lanka US$113 million in maintenance reportedly huge and annual revenue is estimated at present at around $8.2 million.
The opening of the Colombo Lotus Tower, South Asia’s tallest structure, to the public on September 152022, has revived focus on the nature of Chinese lending practices in Sri Lanka.
The mega scale project has generated a revenue of Rs. 268 million since September 15 2022, an official said.
Built at an estimated cost of $113 million, the Lotus Tower project was constructed on an $88 million loan from the EXIM Bank of China, with the Sri Lankan government bearing the balance costs.
Often portrayed as a symbol of the unproductive excessive spending of the Mahinda Rajapaksa regime, the tower project underscores the importance of transparency in development finance.
Work on the project commenced in 2012 and was plagued by delays. The Rajapaksa administration said that the purpose of the project was to improve Sri Lanka’s telecommunications infrastructure and provide leisure activities for the public.
In the first fortnight of its opening to the public, over 100,000 people visited the tower. The average daily income from ticket sales has been around $5,500 and the expected annual revenue is about $8.2 million.
The CEO of the newly-formed Colombo Lotus Tower Management Company Maj. General (retired) Prasad Samarasinghe said that the bulk of this revenue would come from entertainment ventures.
A Singaporean company called Go Bungy, which will be initiated in the second quarter of 2023 and it is expected that 130 jumps will take place per day. Around 17,000 tourists are expected this year for bungee jumping alone
The tower which is still not fully opened attracted half a million visitors within the first three months of its opening, the official said, adding that a plaque and a gift voucher were presented to the milestone visitor who had travelled from Matara.
The tower is now open to small boutiques by the Lake Edge. Selected bidders are currently being signed on for the retail and restaurant outlets, the official added.
The controversial telecommunication tower has attracted a bungee jumping offer, with a, the official said.
‘Among the 500,000 visitors to the Tower, there had been 4,083 foreign tourists, according to official data.
The main activities for now are the observation deck and a revolving restaurant, for which bids are still underway. Facilities were to be opened in the next two to three months, based on the tenders expected to be offered to shops and retailers, out of which many are still in the tendering procedure.
A statement from the President’s Media Division (PMD) said that the Colombo Lotus Tower Private Company is engaged in negotiations with 58 investment companies and has expressed interest in entering into agreements with 22 of them.
The tower, said to the tallest in South Asia, triggered controversy when Indian government raised concerns over its purpose as China was behind the construction amid concerns over spying, Sri Lanka government officials claimed.
The contract to build the $104.3 million tower – 80 percent of which was funded by Exim Bank of China – had been awarded in 2012 to China National Electronics Importers and Exporters Corporation (CEIEC) and Aerospace Long March International Trade Co. Ltd, (ALIT) by the Cabinet of ministers.
Former president Maithripalaa Sirisena after inaugurating the tower in 2019 alleged that ALIT had been misappropriating some Rs. 2 billion ($11 million) deposited with it by Sri Lanka’s state-run Telecommunication Regulatory Commission (TRC).
Government calls for tenders to import eggs to tackle steep price rice
The Government has taken difficult but essential action to import eggs calling tenders from today (Monday 09) to bring down a steep rise in the price unbearable for low and middle income consumers amidst divergent views and bickering of producers and suppliers to the local market.
The international tenders for the importation of eggs will be called from Monday (Jan 09), the Sri Lanka State Trading (General) Corporation has assured.
Accordingly, the invitation for the tenders, the quantity of eggs due to be imported and the selection of suitable importers will be decided upon by next week, Chairman of the Corporation Asiri Walisundara stated.
The responsibility of the importation of eggs and all related activities have been assigned to the Sri Lanka State Trading (General) Corporation by Trade Minister Nalin Fernando, Walisundara added.
He further noted that subsequent to the importation of eggs, it is expected for eggs to be sold at a price of Rs. 45, or less.
On 02 January, Minister Nalin Fernando explained the need to import eggs owing to the burden caused to consumers following the rapid increase in the price of eggs after the relevant Gazette notice was suspended.
Thus, it was then agreed upon by the Cabinet that Sri Lanka will begin importing eggs, in an attempt to resolve the matter of concern.
Meanwhile, the All Ceylon Egg Producers’ Association has announced that eggs will be supplied to all economic centers in Colombo at Rs. 53.
A stock of 800,000 eggs is due to be brought to Colombo today for this purpose, Chairman of the Association S. Ratnayake stated.
Moreover, Ratnayake added that free eggs are being distributed to the Lady Ridgeway Children’s Hospital in Colombo commencing from Sunday o8.
The Sri Lankan government gave the green light last week to import eggs amid a shortage as poultry farmers have abandoned farms after a price control regime.
Official spokesperson Minister Bandula Gunawardena said the government discussed the shortage and soaring prices with stakeholders before allowing the egg import.
The government in August capped the maximum price of a white egg at 43 Sri Lankan rupees and 45 rupees for a brown egg.The government removed the cap last month.
The price control regime forced several poultry farmers to give up the trade, causing a dire shortage that experts say would take at least two years to normalize.The market is facing an estimated 40 percent shortage of eggs.
The price of an egg in December 2022 was around 60 rupees, which is more than double the price in the same month in 2021 when it cost 25 rupees.
SLFP MPs meet with former President CBK on Party Founder’s birthday
Members of the Sri Lanka Freedom Party (SLFP) and the group of SLFP MPs who joined the government held a special discussion with former President Chandrika Bandaranaike Kumaratunga at her official residence yesterday (08).
The group held the discussion paying attention on a number of thematic areas, including the current political situation in the country and future measures to be taken, after attending the ceremony organised to celebrate the 124th birthday of Party Founder and former Prime Minister late S.W.R.D Bandaranaike. The event was held by the ‘Bandaranaike Gunasamaru Foundation’ near the Bandaranaike Statue in Galleface yesterday.
Ministers Nimal Siripala de Silva and Mahinda Amaraweera, State Ministers Lasantha Alagiyawanna and Jagath Pushpakumara, MP Duminda Dissanayake and other SLFP members are said to have joined the occasion.
MIAP
Proposal on electricity tariff hike to meet Cabinet today
The proposal on the most argued electricity tariff hike is set to be presented at the Cabinet of Ministers today (09).
The proposed tariff hike, which has already met with a severe backlash from a number of parties, including civil movements, political parties in the Opposition and those of the Electricity Field, was presented to the Cabinet last week, and it was concluded that a final decision be made in this regard a week after, hence the tabling today.
Accordingly, it is believed that a final decision be made in this regard today.
The proposed electricity tariff hike demonstrates an increase in the amount of money charged per power unit and the fixed tariff.
MIAP
Sri Lanka Original Narrative Summary: 09/01
- Global group of 182 economists and experts warn that some of the world’s most powerful hedge funds and other investors are holding up vital help for Sri Lanka by their “hardline” stance in debt-relief negotiations.
- Elections Commission requests Attorney General to appear for it when the Supreme Court takes up 2 petitions calling for LG elections in March’23: elections hang in the balance with divisions within the EC re. decision to call nominations.
- Sri Lanka State Trading (General) Corporation says international tenders will be called to import eggs: quantity and selection of suitable importers to be decided this week.
- Delegations from SLPP and UNP discuss “fast-tracking economic recovery and uplifting lives of people”: SLPP group – Basil Rajapaksa, Sagara Kariyawasam, Rohitha Abeygunawardena, Mahindananda Aluthgamage, Johnston Fernando & Sanjeeva Edirimanna: UNP group – Wajira Abeywardana, Sagala Ratnayake, Range Bandara, Akila Viraj, Ravi Karunanayake & Ruwan Wijewardene.
- Sri Lanka & Thailand FTA negotiations (3rd round) to commence today under 7 themes: namely, Trade in Goods, Trade in Services, Investments, Rules of Origin, Custom Cooperation, Trade Facilitation & Economic Cooperation.
- President Ranil Wickremasinghe says a new holding company will be set up this month to hold shares of SOEs that are to be reformed/privatised: also says a key concern of those providing “financial assistance” to Sri Lanka is that funds provided to the country should not be used to fund losses.
- Central Bank says from 16th January, the Central Bank’s Standing Deposit Facility (SDF) – the overnight deposit facility that allows Banks to park excess liquidity with the Central Bank and earn interest – will be limited to 5 times per calendar month.
- CB Governor Dr Nandalal Weerasinghe says the only refinery in the country is operated with Iranian oil and that Sri Lanka had to stop operations following US sanctions on Iran: also says the country pays high prices for fuel due to the inability to make direct purchases from Russia.
- Kurunegala District Secretary R M R Ratnayake says those behind the “fake” Dalada Maligawa under construction at Pothuhera have not obtained a letter of recommendation from the District Secretariat to get it registered under the Buddha Sasana Ministry.
- Public Utilities Commission Chairman Janaka Ratnayake says Sri Lanka will successfully avoid 10-hour powercuts in 2023 after securing a continuous supply of coal: asserts it is now a favourable situation as around 25 coal shipments for this year have been secured.
Several provinces to meet showers or thundershowers
Several spells of showers will occur in North-Central, Eastern and Uva provinces and in Matale district, and showers or thundershowers will occur at several places in Western and Sabaragamuwa provinces and in Galle, Matara, Kandy and Nuwara-Eliya districts during the afternoon or night, the Department of Meteorology said in a statement today (09).
Fairly heavy showers above 50mm can be expected at some places in Sabaragamuwa province and in Kaluthra and Galle districts.
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 Kankasanthurai to Pottuvil via Trincomalee and Batticaloa. Showers or thundershowers will occur at several places in the other sea areas around the Island during the afternoon or night. |
| Winds: |
| Winds will be north-easterly and wind speed will be (25-35) kmph. It may increase up to (45-55) kmph at times over the sea areas off the coast extending from Trincomalee to Colombo via Kankasanthurai, Mannar and Puttalam and the sea areas off the coast extending from Hambantota to Pottuvil. |
| State of Sea: |
| Sea areas off the coast extending from Trincomalee to Colombo via Kankasanthurai, Mannar and Puttalam and the sea areas off the coast extending from Hambantota to Pottuvil will be rough at times. The other sea areas around the island will be moderate. Temporarily strong gusty winds and very rough seas can be expected during thundershowers. |
MIAP
Third Round of Sri Lanka – Thailand FTA negotiations scheduled to commence today
The third round of negotiations between Sri Lanka and Thailand on the proposed Free Trade Agreement (FTA) will be held on January 9 and 10th, 2023, in Colombo, with the participation of 26 official delegates from Thailand headed by Ms. Auramon Supthaweethum, Director General of the Department of Trade Negotiations, advancing the government’s agenda of expanding the market access for Sri Lankan exports. Seven theme areas – trade in goods, trade in services, investments, rules of origin, custom cooperation, trade facilitation, and economic cooperation will be the focus of the negotiations.
The start of the negotiations will take place against the backdrop of a significant trade imbalance in Thailand’s favor. In 2021, Sri Lanka imported goods from Thailand worth USD 355 million, but only sent USD 59 million to Thailand. Thus, from the perspective of Sri Lanka, the negotiations will be aimed at enhancing access to our exports not only in the Thai market but also in markets in other ASEAN (Association of Southeast Asian Nations) countries through Thailand’s gateway and lowering current non-tariff trade obstacles to trade. According to market potential assessments, Sri Lankan exports of precious stones, black tea, and other goods have a lot of promise. Sri Lanka is hopeful that via successful discussions, doors can be created to offer opportunities in both the new industries and for the two nations’ current trade frameworks.
The National Trade Negotiating Committee (NTNC), whose members primarily represent the Ministries of Foreign Affairs, Trade, Commerce, and Food Security, the Department of Trade & Investment Policy of the Treasury, and the Department of Commerce, will participate in the negotiations on behalf of Sri Lanka under the leadership of Mr. K.J. Weerasinghe, Chief Negotiator, and the Presidential Secretariat. In the first quarter of 2024, the government plans to put this agreement into operation. The NTNC will give the specific requests made by the regional business associations/chambers considerable consideration during the negotiations.
The government’s objective of entering the Regional Comprehensive Economic Partnership, which represents 30% of the global population and economy, will be advanced by this agreement. Since trade is a growth tool that is relevant to both countries, the government of Sri Lanka is eager to strengthen the bilateral relationship with Thailand. Thailand and Sri Lanka have formal diplomatic relations that date back 68 years, and Thailand’s economy was especially boosted by the rapid growth of manufactured exports.
PMD