President Ranil Wickremesinghe has been able to attract the attention of the countries world wide when he urged the Secretary-General of the UN and Egypt, as the head of the COP27, to summon a meeting of all Ministers of Agriculture of all the countries to assess the food requirements of 2023 and 2024 and submit a report on the food situation.

The President also emphasized the need on working closely with the multilaterals, sources of funding and the need to formulate a sustainable debt relief plan immediately to ensure the global food security.

Sri Lankan President also met British Prime Minister Rishi Sunak, a short while ago, on the sidelines of COP27 in Egypt and exchanged views on bilateral relations of both countries and he has also held discussions with Special Presidential Envoy for Climate and Environment, Head of the delegation from the Republic of Korea, Na Kyung-Won at COP27 the President’s Media Division reported

The President left the island for Egypt on Monday (06) to attend the 2022 United Nations Climate Change Conference (COP 27) being held in Sharm el-Sheikh.

However in an unexpected development, Maldives Parliament speaker Mohamed Nasheed has come under fire for representing Sri Lanka at COP27, the UN’s climate change summit which kicked off Sunday in the Egyptian resort town of Sharm El Sheikh.

Nasheed left the Maldives on Friday morning for the COP27 summit. Regarding his visit, the parliament issued a statement the same day stating that he will attend COP27 as a representative of the Sri Lankan national delegation.

He came under severe critisim of Maldives parliamentarians and interested parties in that country. However his participation at the summit as member of Sri Lankan delegation came as surprise for Sri Lankans.

One of the first to criticise Nasheed was former Attorney General Dr Mohamed Munawwar. He questioned Nasheed’s representation of another country while being paid by the people of Maldives as speaker.“Where’s the country? What about being loyal to the state?,” Munawwar said in a tweet.

Munawwar’s comments were echoed by former president Maumoon Abdul Gayoom on Twitter. Former Attorney General Diyana Saeed also defended the tweet and said Munawwar’s remarks were not personal.

“It’s a matter with legal burden, it’s actually a legit issue,” said Diyana, the first attorney general of Nasheed’s government. As justification, she cited Articles 73 and 75 of the Constitution.

“In view of what these two articles say, the question is whether this is permissible (the Speaker of the parliament representing another country),” Diyana said in a statement.

Addu Maradhoo MP Mohamed Shareef also said that the constitution states that citizens of another country cannot be a member of the Maldives’ parliament for certain reasons.

One of the reasons, he said, was to reduce the space for the interests of another country to take precedence over the interests of Maldives. Shareef believes that Nasheed’s conduct is against the spirit of the constitution.

Some also questioned whether the state had spent any money on Nasheed’s visit. Those who expressed their views said it needed to be cleared, and that they did not approve of any budgetary expenditure on Nasheed’s visit to represent another country.

Parliament’s Communications Director Hassan Ziyau said that all expenses of Nasheed’s trip are taken care of by the Climate Vulnerable Forum (CVF), a group of countries most affected by climate change.

Responding to the criticism, Nasheed’s supporters said that environmental issues are related to humanity as a whole and it is not a problem for Nasheed to represent and advocate for another country in such a humanitarian matter. Those who expressed such views said the Maldives and Sri Lanka share the same policy on climate issues.

Sri Lanka held a productive meeting with its bilateral creditors, which include India and China, on Thursday as the country looks to restructure its debt and carve a path out of its worst financial crisis in decades.

As at end-June 2022, Sri Lanka’s total public debt was US$ equiv. 79.9bn including arrears. The end-June 2022 foreign and local currency stock (including arrears) of Central Government debt, guaranteed SOEs loans and CBSL debt, amounted to $ 70.1bn, $ 6.6bn and $ 3.2bn, respectively.

It also reported that the country’s total debt was US $ 36 billion at the end of 2021. Of this, Sri Lanka owes $ 7.1 billion to China, which is 20% percent of its debt.

The total public debt, which was 115.3% of the gross domestic product (GDP) at the end of December 2021, has now gone up to 143.7% of GDP by end-June 2022. Of this, the bilateral debt has climbed from 12.7% of GDP to 20.4% of GDP.

Sri Lanka held a “productive” second round of crucial talks with its bilateral creditors, the finance ministry said on Thursday, as the crisis-hit island nation attempts to get assurances on debt restructuring from them to close a deal with the IMF.

It has now engaged with all its official bilateral creditors as well as International Financing Institutions (IFIs) with a view to obtain financing assurances for debt restructuring, Finance Ministry sources revealed.

In practice, financing assurances from official bilateral creditors are obtained once each bilateral creditor (or all official bilateral creditors collectively) officially confirms its (or their) commitment to grant Sri Lanka a debt treatment compatible with the macroeconomic and debt sustainability frameworks supporting the IMF programme.

In order obtain these creditors consent and assurances as soon as possible the Finance Ministry has made a virtual investor Presentation on October 23 2022 with 637 registered attendees and it enabled the Sri Lankan Authorities (the “Authorities” or “we”) to provide an update on the ongoing process and the next steps related to the engagement with the IMF and the creditors.

Continuing this process Sri Lankan authorities held a virtual meeting with Sri Lanka’s official creditors on Thursday (3). The meeting was chaired by the Secretary to the Treasury and the Ministry of Finance, K M Mahinda Siriwardana, and the Governor of the Central Bank P. Nandalal Weerasinghe.

Addressing the meeting State Finance Minister Shehan Semasinghe said that Sri Lanka is at a critical stage, and we are seeking IMF program approval as soon as possible to restore macroeconomic stability.

Since the IMF Staff Level Agreement (“SLA”) is still pending, the government authorities have intensified their efforts to complete the prior actions agreed with IMF staff and to obtain bilateral creditors’ financing assurances, to ensure that Sri Lanka’s IMF program can be formally adopted by the IMF Board in the targeted timeframe before mid-December 2022.

However Sri Lanka is likely to miss the December deadline for securing an IMF loan, as the main bilateral debtor, China, was involved in the 20th Chinese Communist Party (CCP) National Congress, and had little time for holding debt restructuring talks with Sri Lanka government.

The next meeting of the IMF Executive Board is in March 2023 and therefore the consent of the Board is expected in that meeting.

The IMF programme and economic reform agenda will reconstitute Sri Lanka’s financial buffers, Central Bank Governor Nandalal Weerasinghe.said adding that the official creditors have been given an opportunity to discuss Sri Lanka’s current financial position and progress on reforms.

Regarding prior actions, the Authorities are working hand in hand with IMF staff to ensure that all prior actions are satisfied as soon as possible.

Sri Lanka is currently on track to complete all prior actions before yearend. Prior actions included parliament approval of a revised 2022 budget, revenue measures to support fiscal consolidation and annual budget for 2023 in line with the IMF programme

Promotion of Sri Lanka’s tourism industry commenced at the World Travel Market (WTM) today (07), and its debut event was held at EXCEL London, London, UK.

Organised by the Sri Lanka Tourism Board, the SL tourism promotion event was attended by many people around the world and it was noteworthy that the Princess of the Royal Family of Thailand also attended the event.

LNW Media Coverage for SL Tourism Promotion at EXCEL LONDON below;

MIAP

The Government will be accelerating the implementation of a trade adjustment program for local industrialists to match the competitiveness of international trade by setting policy priorities in relation to international trade.

The aim is to expedite free trade agreement negotiations with foreign countries specially FTA’S with China and India to facilitate the country’s debt restructuring initiative.

Accordingly, while further penetrating into the main export markets of USA and Europe, the government is currently engaged in an effort to establish comprehensive free trade agreements targeting large and emerging economies in order increase exports.

For this purpose, the government has taken steps to establish a National Trade Negotiation Committee (NTNC) .

The main task of this committee is to revive the negotiations of free trade agreements with strategic importance to India, China and Thailand markets where large foreign direct investment and export potential is prevalent and local industries affected by the economic crisis can obtain capital inputs, raw materials and intermediate goods at a lower cost.

President Ranil Wickremesinghe has instructed the implementation of a trade adjustment program for local industrialists to match the competitiveness of international trade by setting policy priorities in relation to international trade, the President’s Media Division reported.

The President emphasized on the need to gradually liberalize the service sector to attract Foreign Direct Investment into the country and to take steps to gain membership in the Regional Comprehensive Economic Partnership (RCEP).

President Ranil Wickremesinghe made these remarks during his meeting with the officers of the National Trade Negotiations Committee at the Presidential Secretariat on Friday (04).

The President instructed the officers at length about free trade negotiations as well as the future outlook of international trade and on aligning policy priorities in this regard.

He further stated that in parallel to the expansion of international trade activities, the government will implement a Trade Adjustment Program to support the local industries to further adjust with competition.

Access to regional and global supply chains and re-engagement with the global economy to enhance export and export-oriented foreign direct investment is an element of the government’s economic reform program to revitalize the domestic economy.

The Secretary to the President and the Secretary of the Ministry of Trade, Commerce and Food Security as well as officials from the Ministry of Foreign Affairs, the Attorney General’s Department, the Treasury, and the Department of Commerce and senior officials from the line Ministries and several others attended this meeting.

The European Union (EU) says it stands with Sri Lanka in its efforts to ensure everyone has access to justice.

Lars Bredal, Deputy Head of Delegation of the European Union to Sri Lanka and the Maldives stated that “The EU stands with Sri Lanka in its efforts to ensure everyone has access to justice.

As digitalization plays an increasingly important role in all facets of modern society, it is relevant to the functioning of the justice system, as it allows for improved access and delivery of justice services.

He expressed the hope that the provision of this equipment will be instrumental in facilitating and strengthening the work of the officers of the Mediation Boards Commission (MBC).

He was speaking at the event of enhancing the administrative functions of the Development Officers (Mediation) across the island.

The EU funded ‘Supporting Effective Dispute Resolution (SEDR)’, project amplified its support to the Mediation Boards Commission (MBC) through the provision of 70 laptops to enhance the administrative functions of the Development Officers (Mediation) across the island.

The event was graced by several dignitaries – Dr. Wijeyadasa Rajapakshe, Minister of Justice, Priyanath Perera, Secretary Mediation Boards Commission, Justice Yapa, Chairperson Mediation Boards Commission, Commissioners of the Mediation Boards Commission, Lars Bredal, Deputy Head of Delegation of the European Union to Sri Lanka and the Maldives, and Maarya Rehman, Country Director British Council Sri Lanka.

SEDR is a four-year access to justice project implemented by the British Council, in partnership with The Asia Foundation (TAF), and funded by the European Union (EU). The EUR 7 million project is part of the EU’s overarching STRIDE (Strengthening Transformation, Reconciliation and Inclusive Democratic Engagement) Programme in Sri Lanka.

SEDR’s Result Area 4 includes an activity to support the administrative functioning of mediation boards through the provision of IT equipment. This is with the objective of supporting newly appointed Development Officers collate data.

Under SEDR’s Result Area 1, significant work has already been done on enhancing the MBC’s website and building a mediation database to help the MBC function more seamlessly and to be able to monitor progress.

The website will help with public awareness and will increase much needed access to mediation, which is more cost efficient and sustainable when compared with litigation.

An ICT Needs Assessment survey of 235 MBC staff, including the new cadre of Development Officers (Dos) – Mediation – was completed in the second half of 2021, and a training needs analysis was also done prior by a consultant hired by SEDR. The scope and focus of the ICT equipment to be procured was made with agreement between the MBC, Ministry of Justice (MOJ) and SEDR joint committee being that the best option was the provision of 70 laptops.

The British Council IT team completed the task of installing software (Windows10) onto these laptops, which also all come with SEDR-branding and carrier bags.

As part of the distribution process of these laptops, SEDR will work in close liaison with the MBC and MOJ to design and present an online basic orientation training session, to ensure the 70 new users are enabled to obtain maximum benefit from both the new ICT hard and software. SEDR will furthermore support an additional online training session for new users, specifically focussing on how best to use the new equipment as part of the MBC’s new online mediation database/platform.

The Sri Lanka government has been continuing its spending spree during the first four months this year surpassing the revenue by 83 per cent resulting in a budget deficit of Rs.524.1 billion, 0.7 per cent higher than the Rs.520.5 billion budget deficit in the same period of 2021, the Finance Ministry fiscal position report revealed.

Total expenditure amounted to Rs. 1.15 trillion reflecting a 15.2 per cent increase in the first four months of 2022 compared to Rs. 1 trillion in the same period of 2021.

The total debt increased to Rs. 2.33 trillion by the end of April 2022 from Rs. 1.76 trillion at the beginning of January 2022, Ministry data showed.

The then administration has obtained debt more than the estimated expenditure in the 2022 budget and government reserves have not been increased accordingly during this period, two economic experts Prof. Wasantha Athukorala of the University of Peradeniya and Dr Nandasiri Keembiyahetti of the Ruhuna University pointed out in a recent economic review.

In the Interim Debt Policy, the Ministry of Finance has taken measures to settle certain amounts on Sri Lanka Development Bonds (SLDBs) (equivalent to US$96 million of principal and interest) were settled in rupees shortly after the implementation of this policy,

These limited amounts were consistent with the Central Bank’s monetary objectives at that time.

Investors have been informed that the majority of SLDBs debt service from mid-April to End-June has either been refinanced or suspended. The same applies to SLDBs debt service onwards, notably in Q3 and Q4 2022.

The authorities ultimately took the view that it was too difficult to pursue this option of making payments in rupees to holders of the affected debts (including ISBs), who wished to receive it due to the limitations in the relevant documentation of some debts (notably the ISBs) and the current economic conditions in Sri Lanka.

The then government’s much debated tax cuts as an attempt of encouraging industrialization, along the lines of the Southeast Asian economic miracle and other measures, such as fixing the dollar rate of the rupee and flattening interest rates were among the major reasons for the fiscal crisis, two economic experts said.

The economic situation has worsened owing to continuation of additional livelihood support for “Samurdhi” and other welfare recipients and payment of an additional Rs. 5,000 for public servants and pensioners together with the increase in expenditure on interest payments, subsidies and transfers, salaries, and pensions.

Sri Lanka has once again compelled to delay refining of crude oil to produce Petrol. Diesel Kerosene and Jet fuel locally due to the shutdown of Sapugaskanda oil refinery since October 07 as the unloading of crude oil shipment is still pending because there was no way of making a payment for it, Minister of Power and Energy Kanchana Wijesekara said.

“Order has been placed to get down three shipments of crude oil in the recent past and the government managed to make payments only for two of them. However, the funds are inadequate to pay for the third one. Therefore we have no option left, but to close the refinery temporarily,” the Minister said.

He noted that they have deposited the necessary rupees for that but have not received the forex for the payment. So we took a policy decision to close the refinery.” The minister said enough fuel stock is available with the state-run Ceylon Petroleum Corporation (CPC) and no fuel shortages will occur going forward. “

The Sapugaskanda refinery was closed since 2021 and resumed operations in March this year and was closed again in July until it was reopened in August. It was also shut down for a week in May this year due to a technical issue.

The shutting down and restarting the refinery will create mechanical faults in its operation which will require the replacement of spares at unbearable costs during the dollar crisis period, a senior engineer of the refinery said.

An oil tanker carrying 99,000 MT of Eastern Siberia Pacific Ocean (ESPO) crude oil remains off the west coast of Sri Lanka for more than a month awaiting payment and racking up millions of dollars in demurrage charges, officials said.

Several CPC trade unionists and various interested parties are making allegations against the crude oil order placed by the CPC following the proper procedure and once an order had been placed and the vessel had arrived, the Government could not refuse it, Minister Wijesekera said.

Meanwhile, it is reported that the imported fuel cargos are also scheduled to reach the island in the next few days.

The reason for the present lack of fuel at a few filling stations is due to them not completing their orders properly, the CPC claimed.

Responding to a question, top CPC official pointed out that State enterprises such as the Ceylon Electricity Board (CEB) and the loss-making National Carrier SriLankan Airlines owed the fuel supplier millions of dollars in arrears.

He noted that had the monies owed been paid, the CPC would have been able to provide the banks with the necessary rupee equivalent to the dollar price of shipments, thereby securing Letters of Credit (LCs) to import crude oil, which would allow them to refine fuel locally.

The tanker waiting offshore is carrying approximately Rs. 28 billion ($ 80 million) worth of crude oil.

Sri Lankan Airlines has $ 300 million in arrears to the CPC. The power sector, the CEB, and Independent Power Producers (IPPs) owe the CPC approximately Rs. 100 billion.

If these state institutions fulfill their financial obligations then the CPC could settle payment of the lineup crude oil shipments to keep the refinery going for months.

Once a refinery is operational, it should be kept running without disruption to get the best value for money in fuel to meet the part of country’s demand, he added.