China has given debt-ridden Sri Lanka the financing assurances required by the IMF to unlock a US $2.9 billion bailout package for the country, days after India strongly backed the island nation’s efforts to secure the loan from the global lender to recover from its worst-ever economic crisis.
The Chinese response came close on the heels of India stepping in first to issue the necessary assurances last week.
India’s ministry of finance last week issued a letter to the IMF to confirm its support to Sri Lanka on the issue of debt restructuring, ahead of the visit by the external affairs minister S. Jaishankar to Colombo which concluded on Friday.
Mr. Jaishankar during his visit also announced that India has given the required assurances to Sri Lanka for the bailout package.
Sri Lankan officials said that China had agreed to a short-term suspension of what Sri Lanka owed and expects Sri Lankan creditors to get together to work out the medium and long-term commitments.
China’s Export-Import Bank of China (EXIM) has provided Sri Lanka with a debt extension, China’s foreign ministry said on Thursday.
EXIM offered Sri Lanka a two-year moratorium on its debt and said it would support the country’s efforts to secure a $2.9 billion loan from the International Monetary Fund, according to a letter reviewed by Reuters.
Regional rivals China and India are the biggest bilateral lenders to Sri Lanka, a country of 22 million people that is facing its worst economic crisis in seven decades.
“China feels for Sri Lanka as it faces difficulties and challenges and has been helping with Sri Lanka’s socio-economic development as best as we can,” the foreign ministry said in comments to Reuters.
India wrote to the IMF earlier this month, saying it would commit to supporting Sri Lanka with financing and debt relief, but the island nation also needs the backing of China in order to reach a final agreement with the global lender.
At the end of 2020, China EXIM loaned Sri Lanka $2.83 billion which is 3.5% of the island’s debt, according to an IMF report released in March last year EXIM is a policy bank tasked by Beijing with lending to governments and key industries globally.
Commitments made to 100 developing nations by EXIM and the China Development Bank (CDB), the country’s two main policy lenders, fell to a 13-year low of $3.7 billion in 2021 due to Beijing curtailing funding for large-scale oil projects, a study from Boston University Global Development Policy Center showed.
China gives financing assurances to SL for IMF bailout loan after India’s move
China takes over Colombo South Port development project
Colombo South Port is to be developed by China Merchant Port Company, its existing venture CICT and SLPA as a Public-Private-Partnership project with an investment of US $ 150 million.
Sri Lanka is all set to roll out the first phase of the proposed Colombo South Port development project as a Public-Private-Partnership (PPP) with the approval of the cabinet.
“Based on the recommendations of the Cabinet Appointed Negotiation Committee, the Government has decided to implement the Colombo International Container Terminals (CICT) proposal evaluated by a Cabinet Appointed Negotiation Committee,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing on Tuesday 24.
As per the evaluation by a Cabinet Appointed Negotiation Committee, Battenberg and Bloemendhal service delivery areas belonging to Colombo South Port were identified as areas that can be developed under PPP.
With the Government looking at transforming the Colombo Port into a service supply hub in South Asia, the proposal to this effect submitted by the Ports, Shipping and Aviation Minister Nimal Siripala de Silva was approved Cabinet of Ministers at its meeting on Monday.
The Port of Colombo is the largest commercial port in Sri Lanka as well as a key hub port in the South Asian region. One of the primary strategic objectives of the Port Authority’s National Port Master Plan is to turn Colombo Port into a service supply hub.
The Colombo West Container Terminal is being developed by India’s Adani Group in joint venture with John Keells Holdings which also operates the South Asia Gateway Terminal with several other partners.
The Government of Sri Lanka has requested the Asian Development Bank (ADB) to provide a loan to fund the Government’s project to expand the Port of Colombo by developing the Colombo South Harbour (CSH).
The proposed Expansion of the Colombo South Harbour Project (the project) has been included in ADB’s pipeline as a firm project for approval in 2006.
The Sri Lanka Ports Authority (SLPA) is the Executing Agency for the project.. The project will build breakwaters, terminals, and channels—all within SLPA port limits.
The project comprises a new outer basin enclosed by breakwater and served by navigation channels. The south, east, and west 1 terminals will be built, each with a quay length of 1,200 meters (m) and three or four berths.
The breakwater will provide sheltered water to allow ships to maneuver, berth, load, and unload safely. The total length of breakwater is about 5,000 m. The leeward side of the breakwater will be reclaimed to provide container storage areas with berths on the harbor side.
74th Republic Day of India
India celebrates its 74th Republic Day today, 26.01.2023.
In celebration of the day, India’s External Affairs Minister Dr. S. Jaishankar said he would like to underline that India is a reliable neighbour, a trustworthy partner, one who is prepared to go the extra mile when Sri Lanka feels the need.
Indian High Commissioner to Sri Lanka Gopal Baglay said: Over the past year, India rendered unprecedented financial assistance of around USD 4 billion for the people of Sri Lanka. This year, India became the first bilateral creditor of Sri Lanka to convey financing assurance to International Monetary Fund and support restructuring of Sri Lanka’s debt.
These steps have reinforced India’s commitment for the well-being of Sri Lanka in line with Prime Minister Narendra Modi’s Neighbourhood First policy.
The recent visit of External A airs Minister Dr. S. Jaishankar to Sri Lanka has opened avenues for further cooperation through investment in infrastructure, manufacturing and promoting connectivity. India was Sri Lanka’s largest trading partner in 2021. Sri Lanka’s exports to India have also grown. Use of Rupees for trade settlement is further helping Sri Lanka’s economy. These are concrete steps to help Sri Lanka’s economic recovery and growth.
Recent developments in India-Sri Lanka ties have strengthened the friendship between the two nations and all-round cooperation. At the same time, the two countries also remain vigilant to address common challenges, especially in maritime security domain.
Godahewa and two others acquitted over corruption case
Three persons including MP Nalaka Godahewa have been acquitted by the Colombo High Court over an alleged misappropriation of public funds.
Dr. Godahewa was acquitted from the case filed against him accusing him of misappropriating public funds amounting to Rs. 05 million belonging to the Securities Exchange Commission (SEC) during his tenure as the Commission Chief.
The other two, former SEC Deputy Director General Dhammika Perera and Sports Director of ‘Tharunyayata Hetak‘ movement Ronnie Ibrahim.
The acquittal was pronounced as the case was taken up before Colombo High Court Judge Amal Ranaraja, on the grounds that the evidence produced for the case cannot be substantiated.
MIAP
DMT to issue driving licence to mobile phone soon
Commissioner General of the Department of Motor Traffic Nishantha Weerasinghe revealed discussions are underway to introduce driver’s licence to mobile phones.
Accordingly, the introduction of a digital driver’s licence generated for mobile phones is currently under discussion, he told the media.
Revealing that there was a backlog of over four hundred thousand driver’s licences for which cards have to be printed and issued, Weerasinghe added that the introduction of a digital licence will ease the process and one will not simply have to require licence cards unless requested by the driver.
MIAP
EC member Charles tenders resignation – operations not hindered, says ex Chief Deshapriya
Elections Commission Member P S M Charles has reportedly tendered her resignation to President Wickremesinghe.
The announcement of her resignation comes in following endless speculations inbound of deep divisions within the Commission over several issues including the holding of the Local Government Election.
Despite the reported resignation, ex Commission Chief Mahinda Deshapriya leaving a social media remark claimed that it will not affect the operations of the Election Commission, stressing that the Local Government Election, therefore, can be held on March 09 as planned without an obstacle.
He added, however, that a court injunction, a bill passed in by the Legislature and approved by the Judiciary, or a decision taken by the Commission itself in compliance with the powers vested in it may contribute to any event of a postponement.
MIAP
Showers or thundershowers to continue in several areas
Showers or thundershowers will occur at several places in Western and Sabaragamuwa provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts during the afternoon or night, and several spells of light showers are likely in Eastern and Uva provinces and in Hambantota and Polonnaruwa districts, the Department of Meteorology said in a statement today (26).
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 thunder showers will occur at several places in the sea areas off the coast extending from Hambantota to Trincomalee via Pottuvil during the afternoon or night. |
| Winds: |
| Winds will be north-easterly and wind speed will be (20-30) kmph. Wind speed may increase up to 40 kmph at times over the sea areas off the cost extending from Colombo to Kankasanthurai via Puttalam and Mannar, and from Pottuvil to Matara via Hambanthota. |
| State of Sea: |
| Sea areas off the coast extending from Colombo to Kankasanthurai via Puttalam and Mannar, and from Pottuvil to Matara via Hambanthota will be fairly rough at times. The other sea areas around the island will be slight. Temporarily strong gusty winds and very rough seas can be expected during thundershowers. |
MIAP
Italy willing to supply helicopters to SL to combat human trafficking
The Republic of Italy has expressed its willingness to help Sri Lanka by supplying helicopters for anti-human trafficking measures taken by the Government of Sri Lanka.
Her Excellency the Italian Ambassador Rita Giuliana Mannella revealed this during a meeting with President Wickremesinghe January (25) at the Presidential Secretariat.
The duo discussed the strengthening of the partnership between Italy and Sri Lanka and special attention was paid to cultural exchanges, tourism enhancement, possible investments, defence aspects, and on how Italy can help Sri Lanka during these challenging times.
PMD
CoPF strongly reiterates its commitment to providing bipartisan support to reforms put forward by IMF
The Committee on Public Finance (CoPF) chaired by MP (Dr.) Harsha De Silva, three days ago (23) stressed that the aim of the committee regardless of allegiances will be to stand by the reforms promulgated by the International Monetary Fund (IMF) and being executed by the Central Bank of Sri Lanka (CBSL).
This comes in the wake of a CBSL confirmation that they are confident of having an actual IMF first tranche disbursement within the 1 st Quarter of 2023. CoPF queried the severe social implications of such steep mechanisms to adhere to IMF conditions.
The CBSL responded by confirming that the IMF are wary about the social impact to vulnerable communities and has invoked certain safeguards such as expenditure ceilings to negate those effects.
When queried as to the adverse effects of market contraction due to the stifling interest rates, the CBSL acknowledged that those measures have been taken to limit growth in order to prevent the need for greater foreign exchange given the dwindling amount currently in the country. They went on to reiterate that with a cash infusion via the Extended Fund Facility (EFF) from IMF, interest rates can once again be relaxed, and the market will once again have an opportunity to expand. When the question of alternatives to an IMF bailout were reached, the CB stressed that no other international financing/funding institute is willing to partner with Sri Lanka on its debt management unless they see an IMF partnership materialise first. With the ostensible debt treatment measures that an IMF program accompanies, it reassures international agencies of Sri Lanka’s credibility to once more partner with the country for future ventures including debt management. This is why the CBSL stresses that it is imperative for Sri Lanka to lock in the bailout.
State Minister Suren Raghavan, MPs Anura Priyadarshana Yapa, Rauf Hakeem, Chandima Weerakkodi, Harshana Rajakaruna, Vijitha Herath, Mayantha Dissanayake and Madhura Withanage were present at this committee meeting.
President calls in All-Party Conference
An All-Party Conference is scheduled to be held today (26) at 4.00 pm at the Presidential Secretariat with the participation of all party leaders representing the Parliament, under the patronage of Hon President Ranil Wickremesinghe. The purpose of this conference is to come to a consensus and strengthen national harmony.
The Speaker, the Prime Minister, the Leader of the Opposition, as well as former Presidents Mahinda Rajapaksa and Maithripala Sirisena, Tamil National Alliance Leader R. Sampanthan, National People’s Force Leader Anura Kumara Dissanayake, and all party leaders representing Parliament, have been invited.
Following Hon. President Ranil Wickremesinghe’s appointment as President, a meeting of party leaders was called on December 13, where the program to improve national harmony was discussed. During this meeting of party leaders, it is expected to discuss these issues further and reach an agreement among them.
PMD