The Sri Lankan government has said that cooperation from the island nation’s creditors would be key to gaining a much-needed bailout from the IMF for the bankrupt country.
It has also asked a US judge to dismiss the complaint filed by Hamilton Reserve Bank for bond default as it will become a stumbling block to the countries debt restructuring process.
On September 1, the International Monetary Fund (IMF) announced that it will provide Sri Lanka with a loan of about USD 2.9 billion over a four-year period to help the island nation overcome the unprecedented economic turmoil.
The bailout package is expected to boost the country’s credit ratings and the confidence of international creditors and investors.
At an online engagement with the creditors, the government on Friday said that assurances from bilateral creditors are required as a prerequisite to the IMF board adoption of the programme. It is expected to materialise by mid-December.
The IMF does not lend to countries whose debt is deemed unsustainable, requiring Sri Lanka to undertake an upfront comprehensive debt treatment.
“In practice, this requires financing assurances to be given by the bilateral creditors, resulting in a sufficient level of comfort to the IMF that bilateral creditors will support Sri Lanka’s efforts to restore public debt sustainability,’’ the government said.
The Sri Lankan government has asked a US judge to dismiss the complaint filed by Hamilton Reserve Bank for bond default, Bloomberg reported.
The government has asked for the case in New York over the country’s debt default to be dismissed, claiming that the litigation initiated by one bank is a “apparent attempt to gain leverage over a nation in crisis and jump ahead of other international creditors.”
Hamilton Reserve Bank, situated in the Caribbean islands of St. Kitts and Nevis, launched legal action in response to the country’s failure to repay a $1 billion sovereign bond.
The 5.875% International Sovereign Bonds were due for payment on July 25, 2022, which was two months ago.
When contacted by News 1st, the Finance Ministry verified that arguments about the relevant issue had been submitted.
According to court records obtained by News 1st, Hamilton Reserve Bank has charged Sri Lanka with owing it a total of US$257,539,331.25 under the conditions of the Bonds. The principal is $250,190,000, and the interest is $7,349,331.25.
The Hamilton Reserve Bank earlier said that Sri Lanka’s default was engineered by people at the highest echelons of the country’s government, and that the Rajapaksa family was to blame.
The government added that bilateral financing assurances are a commitment from official bilateral creditors to grant Sri Lanka a debt treatment compatible with the macroeconomic framework and debt sustainability to underpin the contemplated IMF programme.
Explaining it further the government held that private financing assurances are considered as obtained by the IMF once Sri Lanka is making a “good faith” effort to reach a collaborative agreement with its private creditors – Giving creditors the early opportunity to provide input in the framework underpinning the debt restructuring.
The severe economic downturn, weak Sri Lanka revenues, rising health expenditure and energy needs led to a worsening of the fiscal situation.
While the decline in growth partly led to shrinking revenues, Sri Lanka had to increase spending to safeguard its population from a double-pronged health and energy crisis, primary balance, revenues and expenditures.
In mid-April, Sri Lanka declared its international debt default due to the forex crisis. The country owes US$ 51 billion in foreign debt, of which $ 28 billion must be paid by 2027.
It was said that international bondholders have formed a creditor committee comprising close to 100 members. The group represents more than 55 per cent of the international bondholders.
A group of local private banks holding International Sovereign Bonds have also formed a group.
The presentation said the effective way to obtain financing assurances quickly is the creation of a bilateral creditor coordination platform.
This would enable them to deliver financing assurances and validate the IMF programme through a fast-track solution, allowing Sri Lanka’s economy to recover.
SL requests US court dismiss Hamilton Reserve Bank’s default case
Sri Lanka Original Narrative Summary: 26/09
- President and Finance Minister Ranil Wickremesinghe to chair the ADB for 2 years: leaves for Manila, Philippines to attend ADB meeting: will also attend former Japanese PM Shinzu Abe’s funeral in Tokyo.
- Power and Energy Ministry says Central Bank has agreed to release just USD 6mn out of USD 100mn needed by Lanka Coal Company for the immediate purchase of coal for the Norochcholai Coal Power Plant: power plant able to operate up to 26th October due to Central Bank releasing over USD 300mn, prior to 31st March 22.
- Foreign Minister Mohamed Ali Sabry says challenges faced by Sri Lanka provides opportunity to implement political, social and economic reforms leading to prosperity: Sri Lanka’s debt default was announced while Sabry served as Finance Minister: Sri Lanka now categorised as a “bankrupt” country.
- Chinese Embassy in Colombo says China and Sri Lanka will accelerate negotiation process to conclude a Free Trade Agreement early: also says FTA will boost confidence and foster economic and trade cooperation.
- Minister Mahinda Amaraweera says the 2nd phase of the Hambantota Ridiyagama Safari Park will open on 4th October.
- Sri Lankan companies set up units and branches abroad to mitigate risks of operating in Sri Lanka: risks cited include restrictions in imports, power cuts, debt default issues, food & other shortages, bank & forex delays, and soaring prices: substantial flight of capital suspected to be taking place.
- Fruit prices sky-rocket to levels beyond the reach of people: apples – 300 each, grapes – 300 per 100 grams, oranges – 500 each, pineapples – 800 to 1000 each, Alphonso mangoes – 2000 per kg, pomegranate – 900 each: very high transport costs and restrictions in imports cited as reasons.
- Beauticians’ Association Secretary Jeyalukshmi Purushothman warns the
beauty industry of Sri Lanka will soon collapse: says business has shrunk by 50% and customers are losing interest in visiting salons. - Government gathers Rs.120bn from new one-time Surcharge Tax: incurs additional Rs.398bn as interest costs in just 5 months.
- Ministry of Public Administration to issue a new circular on public servants’ attire taking the present economic crisis into account: many relaxations expected: pant trousers likely to be allowed for women.
Audit report on nano-nitrogen imports submitted to Agriculture Ministry
A report following the special investigation into the controversial import of liquid nano-nitrogen fertiliser launched by the Auditor General’s Office as demanded by many parties including the Opposition has now been submitted to the Ministry of Agriculture.
The nano-nitrogen stock being imported from India under the regime of ex President Gotabaya Rajapaksa following the ban he had imposed on the importation of chemical fertiliser was subject to a storm of criticism, where the farming community had confronted that the substance does not fill the requirement of commercial farming at all, and the Opposition had alleged that a massive financial fraud was committed during the process.
The Auditor General’s report on the probe into the alleged fraud has been submitted to the Ministry of Agriculture and the Ministry is expected to provide facts from their perspective, after which the report will be referred to Parliament for further action, revealed Auditor General W.P.C. Wickramarathne.
Under Rajapaksa’s regime, nearly 2.1 million litres of liquid nano-nitrogen fertiliser were imported from the ‘Indian Farmers Cooperatives’ of Gujarat, India, at a price of US $ 12.45 per bottle of 500 millilitres, a value staggeringly four times greater than that of a same bottle sold through the internet for just US $ 3.23, critics pointed out.
The Foreign Exchange rates at the time impelled Sri Lanka to pay Rs. 1867 more per bottle of 500 millilitres, considered of which a hypothetical value of Rs. 7841 million may have been swindled, had the stock been purchased for US $ 12.45 per bottle.
MIAP
President’s Fund offers scholarships to those who passed OLs
President Ranil Wickremesinghe has decided to allocate funds through the President’s Fund to offer scholarships to students who have passed their G.C.E. Ordinary Level Examination and are eligible for the G.C.E. Advanced Level Examination.
Accordingly, 30 students will be selected from one education zone for the scholarship programme and 2970 students total from all 99 education zones will be eligible.
Those eligible for the scholarship will be granted a monthly allowance of Rs. 5000 for their Advanced Level studies for two years.
Eligible students will be selected through newspaper advertisements immediately after the results of this year’s OLs Examination.
Saman Ekanayake the President’s Secretary has instructed the Secretary of the Ministry of Education to inform the Provincial Education Directors, Regional Education Directors and School Principals regarding the programme.
MIAP
SYU National Organiser Eranga Gunasekara reminds President ‘Aragalaya’ not over!
Following the forceful disbandment of the demonstration organised by the Socialist Youth Union (SYU) against President Ranil Wickremesinghe’s recent decree on designating high security zones around Colombo and the arrest of 84 protesters near the Lipton Circle yesterday (24), 42 persons were produced to the Colombo Judicial Medical Officer.
The event was dissolved by the Police by launching tear gas and water canon attacks and even baton attacks.
During the event, National Organiser of the SYU Eranga Gunasekara told media that the people’s struggle the ‘Aragalaya’ has recommenced in another round and President Wickremesinghe is mistaken should he believe that the Aragalaya has ended, for it has merely been on temporary hold.
The people’s struggle will not end until Wickremesinghe is sent home too, he added.
MIAP
Food prices surged at Parliament cafeteria
The food prices at the Parliament cafeteria have been increased, based on an understanding reached with the House Committee of Parliament due to the economic situation of the country.
Accordingly, the price of a meal provided to a MP has increased by Rs. 100. Previously, a meal provided to parliament members cost Rs. 200.
In addition, the price of a meal provided to journalists visiting Parliament for coverage, which was sold for Rs. 100, has increased up to Rs. 150.
The food prices of the parliamentary employees were revised earlier, and will continue to remain in effect.
Meanwhile, the House Committee has also agreed to limit the types of food provided to MPs and other groups from the parliamentary dining hall.
The amount spent on food provided by the Parliament of Sri Lanka is said to be nearly Rs. 150 million per year.
MIAP
Japan extends helping hand for Sri Lanka debt restructure
Crisis-hit Sri Lanka began on Friday the tricky task of debt renegotiation with a raft of private and bilateral creditors, including China, India and Japan, to restructure and repay nearly $30 billion that it owes.
Japan, one of Sri Lanka’s main creditors, will back the South Asian nation as it seeks to restructure about $30 billion of its foreign debt and find a way out of a crippling economic crisis, Tokyo’s envoy to the country said on Friday.
Reaching an agreement with creditors is key to Sri Lanka securing a $2.9 billion bailout package from the International Monetary Fund (IMF).
“Japan stands by Sri Lanka in support of the debt restructuring negotiation process so that Sri Lanka can reach the final agreement with the IMF,” Ambassador Hideaki Mizukoshi said in an interview.
Japan holds around $3.5 billion of Sri Lanka’s total bilateral debt of about $10 billion, amounting to 4.4% of the island’s GDP, according to government and IMF data.
Japan is also a major trading partner.”Japan intends to play a constructive role with other creditor countries, including China and India,” Mizukoshi said.
Sri Lanka is facing its worst economic crisis in decades, with severely depleted foreign exchanges reserves leading to prolonged shortages of essentials, including fuel and food.
The financial turmoil is the result of economic mismanagement and the impact of the COVID-19 pandemic that upended Sri Lanka’s lucrative tourism industry.
Although Japan will support the debt negotiation process, Mizukoshi said that talks on large infrastructure projects will only be resumed after Sri Lanka’s economy recovers.
“In the future, when this economic crisis is over and the economic conditions are in good shape, we can restart that kind of discussions,” he said.
Sri Lanka suspended a $1.5 billion Japanese-funded light rail project for the commercial capital Colombo in 2020, citing financial problems.
Regional rival China has built ports, highways and power stations on the island as part of its Belt and Road Initiative, drawing concern from Sri Lanka’s northern neighbour India.
Japanese firms have been investing in Sri Lanka since the 1970s, including in the electronics, ceramics and engineering sectors.
But investments have been hamstrung because of inconsistent economic policies and procedural obstacles, Mizukoshi said.
“I hope that those things will be improved,” he said. “We hope that the environment for investment to Sri Lanka will improve,” he said.
Four health-conscious cities putting pedestrians first
Inspired by Covid-19’s long lockdowns and safety concerns, cities are implementing pedestrian-friendly initiatives and pushing for more car-free spaces.
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When the initial wave of Covid prevented indoor gatherings in most countries around the world, many cities responded by quickly reimagining what life could look like outside. Some introduced pedestrian-only streets, turned parking spots into pop-up restaurants and added more bike lanes – transforming once car-filled areas into walking- and cycling-friendly spots.
The changes paid dividends, not just in increased economic activity, but studies also showed the virus may spread less quickly in highly walkable neighbourhoods. And while many places have now rolled back these initiatives as life returns to the new normal, some cities have held fast to their pedestrian improvements and have been pushing for even more car-free spaces.
We’re profiling four cities around the world that made some of the boldest and fastest pedestrian-friendly changes during the pandemic – and are keeping many of those initiatives to encourage residents and visitors to get around on foot.
Paris residents are increasingly enjoying car-free spaces (Credit: Spooh/Getty Images)
Paris, France
Even before the pandemic, Paris had a head start in becoming more pedestrian-friendly. As part of a city-wide effort to reduce the number of cars, the lower quays that run along the Seine river were fully pedestrianised in late 2016, a move that was made permanent in 2018. In 2020, Mayor Anne Hidalgo was re-elected in part due to her support of the “15-minute city”: a new urban planning concept that allows residents to complete all their daily tasks – from shopping to schooling to work – within the distance of a 15-minute walk or bike ride.
I’ve lived in Paris for 14 years, and I can confidently say that I’ve never seen a greater, city-wide transformation than the one that’s happened most recently to encourage cyclists
The pandemic, paired with numerous public-transportation strikes prior to lockdown, only strengthened the popularity of these human-centric and environmentally sustainable initiatives. “The beauty of getting around by foot in Paris is highlighted more since Covid,” said Kathleen Peddicord, founder of Live and Invest Overseas. “Public transportation was a no-go for a long time and was also more uncomfortable having to wear masks. So, more people started using their feet.”
Additional bike lanes have also been introduced to alleviate car traffic. In fact, the city plans to add an additional 180km of bike lanes and 180,000 bike parking spots by 2026.
“I’ve lived in Paris for 14 years, and I can confidently say that I’ve never seen a greater, city-wide transformation than the one that’s happened most recently to encourage cyclists,” said Sadie Sumner, who runs the Paris branch of bike touring company Fat Tire Tours.
Major throughways like the Rue de Rivoli in central Paris have been reduced to one lane, while cyclist paths have been expanded to the width of three car lanes.
The city also plans to plant 170,000 trees by 2026, with the intention of cooling Paris to make it more comfortable and enjoyable for pedestrians. In anticipation of the city’s hosting of the 2024 Olympics, the bridge between the Eiffel Tower and Trocadero will be fully pedestrianised, too.
Overall, residents have appreciated the widespread changes, and look forward to even more. “The locals really like it, there are less cars and people seem to be a bit more relaxed,” said Paris native Roobens Fils, who blogs at Been Around the Globe. He had suggestions for walking-minded travellers: the Parc Rives de Seine, a 7km-long stretch by the river; rue Montorgueuil in the heart of Paris for its cheese, wine and flower shops; rue Saint Rustique in Montmartre for its ancient cobblestones (this is the oldest street in Paris); and Cour Saint Emilion for its boutiques, cafes and restaurants.
Bogotá was one of the first cities to add “pop-up” cycle lanes during the pandemic (Credit: Pablo Arturo Rojas/Getty Images)
Bogotá, Colombia
While Bogotá (and Colombia in general) has always had a strong bicycling culture, with cycling as the country’s national sport, the pandemic accelerated many car-free changes. In 2020, Mayor Claudia Lopez designated an additional 84km of temporary bike lanes to the city’s existing 550km Ciclorruta bike path network – already one of the largest in the world – and they have since become permanent.
Bogotá was among the first cities globally to add “pop-up” cycle lanes during the pandemic, and residents have noticed the permanent changes have been for the better. “The city has really started to develop a noticeable Amsterdam and Copenhagen vibe over the last few years,” said Alex Gillard, founder of Nomad Nature Travel blog and who lived in Bogotá on and off during the pandemic. “There are so many bikes on the streets at all hours of the day, it is quite inspiring.”
On Sundays and public holidays, cars are completely banned from certain routes in a programme known as the Ciclovia, attracting more than 1.5 million cyclists, pedestrians and joggers each week.
The city’s new SITP buses, which run on electricity and gas, have also improved the public transportation system significantly, according to locals. “The vibe of Bogotá has changed. It’s much easier, calmer and safer to move around in the city now,” said resident Josephine Remo, who writes an eponymous travel blog.
She recommends travellers check out the historical neighbourhood of La Candelaria where the city was born more than 400 years ago; they’ll find plenty of museums about the city’s rich history, as well as restaurants housed in centuries-old buildings. She also suggests Usaquén Park for its weekend open-air market, where visitors can check out local Colombian food, crafts and music events.
Milan’s new CityLife district is one of the largest car-free zones in Europe (Credit: M M Photographer/Getty Images)
Milan, Italy
Italy was one of the countries hit hardest initially in the pandemic, and its cities had to adapt quickly to provide alternatives to densely populated public transportation. In summer 2020, Milan embarked on an ambitious plan to widen pavements and expand cycling lanes along 35km of roads previously centred on car traffic. The changes have transformed the city, bringing with it more outdoor dining, open-air markets and urban gardens.
“It’s not the Milan I remember from 10 years ago during my college days,” said resident Luisa Favaretto, founder of living abroad site Strategistico. “I love the concept of the 15-minute city [a plan Milan has also explored] and was drawn by the city’s evolving infrastructure that prioritises people over cars.” She’s seen a growth in what she calls an “old world” sense of community, as there are more reasons to be outdoors and to meet in communal spaces.
The new CityLife district is not only Milan’s largest car-free area but one of the largest car-free zones in Europe. “It is filled with public green spaces along with tons of bike lanes, and offers a glimpse into the future of a sustainable Milan,” said Favaretto. She also recommends strolling the canals of Navigli and enjoying the neighbourhood’s outdoor dining options and nightlife. The north neighbourhood of Isola has been transformed from an industrial district to a walkable and bikeable area full of hip cafes, galleries and boutiques.
Travellers also don’t have to worry about finding a bike to enjoy the cycling lanes. The city’s bike sharing service, BikeMI, has 300 stations across the city and offers both regular and e-bikes.
The Embarcadero was originally a freeway until a 1989 earthquake rendered it unusable (Credit: Christopher Chan/Getty Images)
San Francisco, US
This northern California city moved quickly during the early pandemic to launch Slow Streets – a programme that used signage and barriers to limit car traffic and speeds on 30 corridors in an effort to make them more pedestrian- and cyclist-friendly. According to data collected by the city, the programme saw a 50% reduction in vehicle traffic, a 17% increase in weekday pedestrian traffic and a 65% jump in weekday cyclist traffic.
It is lovely for pedestrians and bikers to be able to share the streets
Though many of the streets have since been returned to pre-pandemic status, residents pushed to make four sections permanent, including those on Golden Gate Avenue, Lake Street, Sanchez Street and Shotwell Street. In September, a vote will be held on the future of the other corridors.
“It is lovely for pedestrians and bikers to be able to share the streets,” said resident Leith Steel on the roads that are still closed. “You see families out walking, kids playing – it is a much different experience.”
She also notes that the city has put money and effort into building better bike routes throughout the city, and they are more clearly marked than previously. She recommends really exploring each neighbourhood in San Francisco, since they each have their own feel and character. She likes the tree-lined Hayes Valley for its upscale and modern vibes; Outer Sunset for its laid-back surfer vibe and 3.5-mile stretch of white sand beach; and North Beach for its lively street cafes (and the 4th most walkable neighbourhood in the city).
Though there’s still much to be done to change San Francisco into a truly pedestrian-friendly city, history shows it can be done. One of the city’s most walkable areas – the Embarcadero along the waterfront – was once a freeway until a 1989 earthquake rendered it unusable for vehicles.
UK provides lifesaving aid worth £3 million for the most vulnerable in Sri Lanka
The UK is providing urgent food and farming support to Sri Lankans hit hardest by the economic crisis, Lord Ahmad announced today (Friday 23 September).
More than one third of people are struggling to eat and are suffering shortages of fuel, power, and medicines. Sri Lanka has the fifth largest food price inflation in the world, up 93.7% last month, with rice costing 150% more than this time last year.
In a meeting with Sri Lankan Foreign Minister Ali Sabry at the UN General Assembly, Lord Ahmad has announced the UK’s package of £3 million lifesaving support.
The funding will be delivered through Red Cross and UN partners. It will provide access to food, seeds, and tools to help grow crops as well as mental health care, including for survivors of sexual and gender-based violence.
UK Minister of State for the Middle East, South Asia, and the UN, Lord Tariq Ahmad of Wimbledon said:
The UK stands by the people of Sri Lanka who are facing such a challenging time. The ongoing crisis is deeply concerning with so many in dire need of help.
We are providing £3 million of lifesaving support to the most vulnerable and will continue to work with international partners to help Sri Lanka.
This new funding is just part of the UK’s ongoing support to Sri Lanka. The UK is already providing support through the UN Central Emergency Response Fund , the World Bank and the Asian Development Bank.
The UK is the largest donor to the CERF, contributing more than $1.7 billion to the fund since its inception in 2006 and it has already provided $5 million to Sri Lanka.
The Asian Development Bank and World Bank are providing emergency assistance under a joint action plan to help reduce the impact of economic crisis on the people of Sri Lanka.
This new package is in addition to the UK’s £11.3 million Conflict, Stability and Security Fund (CSSF) programme (2022 to 2025) for Sri Lanka which focuses on addressing the legacy of conflict in the country.
The people of the UK and Sri Lanka share close ties, with a large diaspora community in the UK, and 65,000 British visitors to the island since January 2022
Taking to twitter, Minister Ali Sabry mentioned that during the meeting held on the sidelines of the UN General Assembly, Lord Tariq Ahmad set out the UK’s package of £3 million assistance to Sri Lanka.
While extending gratitude for the assistance, Minister Ali Sabry also briefed Lord Tariq Ahmad on steps being taken towards reconciliation and accountability in Sri Lanka.
The funding will be delivered through Red Cross and UN partners. It will provide access to food, seeds, and tools to help grow crops as well as mental health care, including for survivors of sexual and gender-based violence.
“The UK stands by the people of Sri Lanka who are facing such a challenging time. The ongoing crisis is deeply concerning with so many in dire need of help. We are providing £3 million of lifesaving support to the most vulnerable and will continue to work with international partners to help Sri Lanka,” Lord Tariq added.









