Sri Lanka is facing the worst economic crisis in its post-independence history. Widespread food and fuel shortages are crippling the lives of people. Such a situation that has already lasted several weeks is now resulting in widespread protests which are being repressed violently. We anticipate escalating violence in the context of the spread of peaceful protests by average citizens to express democratic dissent against this unjust situation. On the whole, we are witnessing the unfolding of a humanitarian crisis. These conditions will contribute to more people falling into poverty and increasing inequalities, setting the country back by several years. Women are at the forefront of dealing with this crisis in gas queues, queues for essential food items and in protests.

There is now a monumental political crisis even as the economic crisis remains immediate and primary for ordinary people. The urgent need in order to perform those duties is for a civil, democratic governance system that can restore the confidence of the people. In spite of the imminent collapse of the existing government, the state mechanisms should perform their fundamental duties of ensuring the rights and welfare of the people. All measures demanded below is based on the premise that the government must prioritize the basic needs of the people. We recognize that people feel a deep frustration with the political class and emphasize the urgent need for the citizens of Sri Lanka to have governance systems that can restore the confidence of the people. In this context, urgently launching a humanitarian operation, with a focus on preventing national level starvation and chaos is imperative. The government in all its negotiations within and outside the country, to emerge from this crisis, MUST address these needs by allocating and reallocating resources accordingly.

While the impact of the economic crisis is felt across all corners of the island, it is daily-wage earners, those dependent on micro, small and medium enterprises, the urban working poor and other communities living in poverty along with communities already marginalised for their ethnic, religious, caste, gender and sexual identities that are the worst affected by this deepening crisis. There are people facing homelessness and destitution. For those who were living on subsistence wages, even before this crisis, the rising prices of essential items have depleted monies in hand. Communities affected by repeated tragedies – the long-drawn-out war, tsunami, Easter bombings and the Covid-19 pandemic- are yet again facing a blow to their efforts to rebuild their lives. This while life consuming quests for truth and justice are ongoing every day.

The burden of a flailing economy invariably falls on women as economic risks are pushed into the home sphere. Women face the double burden of earning an income while performing unpaid care work at home. Women struggle to ensure the wellbeing of their children due to obstacles to education, domestic violence, and inefficient and unjust systems of maintenance payments to single mothers. Frustrations and fears of uncertainty, hunger and the lack of basic comforts often translate into violence directed at women and children at home. The limited existing services to address such violence are further stunted due to the pandemic and now the economic crisis.
Deliberate choices made by consecutive governments in Sri Lanka has placed us in this calamity. This country has been overwhelmingly dependent on women’s labour, including for the country’s foreign exchange, through the plantation, garment and migrant labour sectors. Simultaneously, Sri Lanka’s economic policy has impacted women’s labour and every sphere of women’s lives – their material conditions, mobility, aspirations, and social status. It is the wealth gathered by exploiting women’s labour that has been squandered. No one is held accountable for this loss. Instead, yet again, women are forced to bear the brunt of an economic crisis.

The Government’s responses so far are limited to obtaining loans to address the debt situation and approaching the International Monetary Fund (IMF) for assistance. We are concerned that actors such as the IMF and others may enforce fiscal consolidation by way of austerity policies. They have often assumed this to be a viable strategy to make debt sustainable. However, regressive tax policies such as the increase of direct tax via VAT, and cuts in public expenditure will only undermine improvements in productivity and deter inclusive economic growth along with a robust social infrastructure. Investment in health, education and care services are imperative to improve human productivity and wellbeing. Analyses of this economic crisis are dominated by neoliberal economists and mainstream macroeconomic narratives. These have largely dehumanised the crisis thus yielding responses that do not address the pressing concerns of women, working people and marginalised communities. We are seriously concerned about the long-standing causes for the crisis, such as corruption in public enterprises and failure to introduce progressive tax policies. While these remain unaddressed, we anticipate attempts to privatise public services which will, again transfer economic burden on to the people.

In this context, urgently launching a humanitarian operation, with a focus on preventing national level starvation and chaos, in partnership with the government and civil society is imperative. All measures demanded below is based on the premise that the government must prioritize the basic needs of the citizenry. The government in all its negotiations within and outside the country, to emerge from this crisis, MUST address these needs by allocating and reallocating resources accordingly.

We urge the Government to take the following steps immediately to address the unfolding humanitarian crisis:

1. Plan and implement an island-wide food distribution system: A food distribution system to reach all households with basic essential ration packs – this should include rice, oil, sugar, tea, dhal and triposha. Existing systems of Sathosa, Samurdhi and Cooperatives should be strengthened to reach everyone. As the number of people living in precarious situations and falling into poverty is increasing, the food distribution system should be universal. Implementing ‘targeted’ programmes to ‘reach only the selected poor’ as recommended by certain advisors fails to respond to the reality and targeted actions in the midst of spiraling poverty will only delay relief and further harm people. Targeting will also deepen social divisions and fire tensions further in a context of already existing frustrations.

2. Prioritize nutrition and food sovereignty: Ensuring food security through controlling kerosene and gas prices; urgent support and subsidies to farmers; and relief for fisheries and other farming communities must be implemented immediately. The 2022 budget promises in relation to nutrition and food security, such as the nutrition basket for pregnant and lactating mothers, for 24 months must be implemented. Promises of a relief basket to alleviate the pressures of rising costs of living, ensuring school midday meals programme and household level relief for children must be activated.

3. A people-centered Samurdhi support system that upholds its original vision must be strengthened: Samurdhi benefits are being cut in many districts and different excuses given at community level. The government must respond to the reality that more families are falling below the poverty-line and expand Samurdhi benefits and increase monthly Samurdhi payment to match the rising cost of living.

4. Health sector must be supported by the State to secure and provide medicines, other essential medical equipment, health products and reproductive health services

5. Assistance programmes (referral, support and services) to address starvation, homelessness, destitution and domestic violence: The government must set up urgent support schemes to address issues of starvation, homelessness, destitution, and domestic violence. State officials must be directed to provide these services without discrimination, prejudice, and judgment. As the increase in sexual and gender-based violence becomes inevitable, state and non-state services should ensure support services including women and child centered shelters. Responses must be timely and have a survivor centered approach (protect rights, privacy, recovery of victim to build victim confidence, without any blaming or shaming or tolerance of retaliation).

6. Immediate measures to secure public revenues to implement above state programmes: We urge the government to implement progressive taxation to meet the country’s public revenue needs, including introducing appropriate wealth taxes. Such taxation must not add to the burden of the poor and working people of the country. The Government must ensure that public revenues are utilised to implement social security programmes that are responding to the crisis alongside measures to recover the economy.

7. Prioritise labour and land policies that protect people’s financial security: Successive governments have failed to address the need for a land policy that addresses people’s needs, aspirations, the climate crisis and the need for a people-focused labour policy. During this crisis, given the strong tendency to move towards exploitative measures, existing labour protections and land rights should not be undone. Distribute land to women smallholder agricultural farmers who are producing essential grains.

8. Consult women: Responding to this crisis requires consultation and participation of women. Given the dismal representation of women in decision making, it is crucial that advisory bodies, processes and responses have direct involvement of women, particularly representation of women workers’ and affected women.

Finally, we invite Women’s Groups, Trade Unions, Farmers’, and Fisher’ collectives, Cooperatives, Religious institutions, NGOs and progressive political movements to join in solidarity for urgent action to respond to the unfolding humanitarian emergency that is threatening to destroy our collective futures for generations to come.

April 2022

1. Aalumai Women’s Group, Mullaithivu
2. Affected Women’s Forum, Akkaraipattu
3. Dabindu Collective, Kattunayake
4. Centre for Women and Development, Jaffna
5. Mannar Women’s Development Federation
6. Muslim women’s Development Trust, Puttalam
7. Nisha Development Group, Mulaitheevu
8. Progressive Women’s Collective
9. Revolutionary Existence for Human Development, Katunayake
10. Sisterhood initiative, Colombo
11. Stand Up Movement, Colombo
12. Suriya Women’s Development Center, Batticaloa
13. The Grassrooted Trust
14. Uwa Wellassa Women Organization, Monaragala
15. Vallamai-Movement for Social Change, Jaffna
16. Women and Media Collective, Colombo
17. Women’s Action Network
18. Women’s Coalition for Disaster Management, Eastern Province
19. Women’s Development Center Badulla
20. Women’s Resource Centre, Kurunegala
21. Women’s Education and Research Center, Colombo

1. A Mathura
2. Amali Wedagedara
3. Anuratha Rajaretnam
4. Arany Shanthiramohan
5. Dinesha Samararatne
6. Ermiza Tegal
7. Hasanah Cegu Isadeen
8. Hyshyama Hamin
9. Iromi Perera
10. Jansila Majeed
11. J. Jana
12. Jayanthi Kuru-Uthumpala
13. K. Hemalatha
14. K. Sathiyaseelan
15. K.Mahaluxmy
16. Kamala Vasuki
17. M.Nirmaladevi
18. Ms.Juwairiya Mohideen
19. N. Arththigan
20. N.M Pasmina
21. Nabeela Iqbal
22. Nafla
23. Nishadi
24. Niyanthini Kadirgamar
25. P.Arulseei
26. Paba Deshapriya
27. R. Saththiya
28. R.Kounthini
29. Rajany Rajeshwary
30. S. Easwary
31. S. Mariyarosalin
32. S.Kobika
33. S.Niththika
34. S.Thileepan
35. Sarala Emmanuel
36. Sachini Perera
37. Shreen Abdul Saroor
38. Subashini
39. Subathra Yogasingham
40. Suganya Kandeepan
41. Thanusiya Ponnampalam
42. Thilakaradnam Unista
43. Thushithra
44. V.Shamini
45. Yathursha Ulakentheran
46. Zainab Ibrahim
47. Zihla

The severe Shortages of several items have triggered the worst demonstrations in years in Sri Lanka, the protests that started with a chain of innocent candlelight vigils protesting against the widespread blackouts has turned out to be violent and often aggressive . The disunity of the opposition led by Sajith Premadasa has resulted in the public demanding a non-politico council as a replacement. The national emergency needs a unified response. Sadly the opposition today is only interested in their future .

The opposition leaders need to swallow their pride and get behind the people . Soon people will start protesting in front of the houses of opposition leaders asking them to go home . It can turn into #gohomesajith campaign . Sajith Premadasa wants the presidency abolished , JVP wants Rajapakses arrested, Sirisena wants the farmers given fertilizer. Weerawanse wants the government toppled . They all want different things. Ranil Wickremesinghe focused on the immediate crisis, going to the IMF which was shot down by Vasudewa Nanayakkara. The country urgently needs a responsible Opposition and a good leader. This is the need of the hour.

A leader who could guide the agitating masses to bring about the relief they need and the political change as desired by them in a democratic manner. However what the opposition party leaders want now is to be the next prime minister . Premadasa who claims to champion the poor moves around in a Black Benz S Class and a top end Toyata Jeep. His wife dines in the best restaurants. Equally, Ranil Wickremesinghe is no better. But he is not seen as pro poor, more as an international politician with strong overseas connections .

Anura Dissanayake truly represents the working class. Nothing much has changed for him. But he is certainly not the best man for the crisis. Despite his ever growing popularity with the youth. The opposition and government has no proper leader to get this country out of this economic crisis in the next 6 months. From the lot left who can offer a viable substitute to an unpopular, unskilled administration? From the current set of leaders it is only Ranil Wickremesinghe who has the ability to provide leadership in the short term to get Sri Lanka out of this USD Crisis, however unpopular some people may think he is? The other option is for the political parties to jointly appoint a council from outside parliament to run the country for six months and thereafter have elections . The future of the country is now well and truly screwed.

The opposition and the Rajapakse family should not screw the last bit that is left of mother LANKA. They and their families will be cursed by the people.

Global asset managers including Fidelity Investments and T. Rowe Price Group could be staring down the risk of default in Sri Lanka in the face of a deepening economic crisis.

Fidelity Investments’ parent FMR LLC, Lord Abbett & Co. and T. Rowe Price Group were among the largest overseas holders of the island nation’s $12.6 billion in foreign debt, according to holdings most recently disclosed by investors in data compiled by Bloomberg. FMR held $114.3 million of the debt, Lord Abbett had about $78 million and T. Rowe owned $32.6 million, followed by Payden & Rygel and SEI Investments, the data show. 

Sri Lanka’s investors are growing concerned about whether the country will be able to keep up on its foreign debt obligations as inflation and protests hit the family that’s ruled the nation with an iron fist for most of the last 15 years. Anger over hours-long power cuts and food and fuel shortages has spilled unto the streets, leading President Gotabaya Rajapaksa to replace his cabinet and appoint a new central bank head this week. The nation is also struggling with a cash crunch that’s triggered capital controls and import curbs. 

Such global investors owned nearly 4% of the nation’s outstanding sovereign dollar debt, according to the latest available data via filings disclosed at different points in time. For Fidelity, for example, one of the most recent sources of data available is for an exchange-traded fund as of April 4, while some of the firm’s other funds last disclosed holdings on Feb. 28 or earlier.

Sri Lanka Default Seen ‘Inevitable’ as Bond Losses Deepen

“Recent unrest and political uncertainty mean any investor now is attempting to catch a falling knife,” said Charlie Robertson, global chief economist at Renaissance Capital Ltd. “We think most investors will wait on more political clarity and evidence of an IMF deal, which does improve recovery values, before taking the plunge into local assets.”

A spokesperson for Fidelity declined to comment on specific holdings, as did a spokesman for SEI. A spokesman at T. Rowe said Sri Lankan holdings accounted for 1% of its Emerging Market Bond Fund as of the end of 2021. Spokespeople for Lord Abbett and Payden & Rygel did not respond to requests for comment. 

Sri Lanka Bondholders

Source: Holdings disclosed by investors, compiled by Bloomberg

Note: Data is as-of latest filings, which range in date

The next key test for Sri Lanka’s bondholders will be on April 18, when the government must pay $36 million in interest on a bond maturing in 2023 and $42.2 million on a 2028 note, according to Bloomberg data. The government also has to pay $1.03 billion in principal and interest on a maturing note on July 25.

Sri Lankan debt slumped over the past years as cities were shuttered and tourism — the nation’s main industry — skidded to a halt. Dollar bonds due in July 2022 were indicated 2 cents on the dollar lower at 55.5 cents Wednesday morning. 

The extra yield investors demand to hold Sri Lanka’s sovereign debt, on average, over U.S. Treasuries have widened to 29.99 percentage points, according to JPMorgan Chase & Co. data, well above the 10-percentage point threshold for distressed debt.

Bloomberg’s search for top holders includes holdings of passive funds, such as ETFs, which have little choice in what they buy or sell. It’s also worth noting that Bloomberg’s data doesn’t necessarily include holdings by investors that aren’t required to disclose their debt transactions.

Bloomberg

The UK, US, and Australia will begin co-operating on research into hypersonic weapons and how to defend against them, the government has said. 

The programme will be part of the AUKUS partnership, a security pact announced by the three countries last year. 

It follows the development of hypersonic missiles by China and Russia and their purported use by Russia in Ukraine last month. 

Hypersonic weapons are those that exceed five times the speed of sound.

They are harder to defend against because of their speed as well as the fact they fly at low altitudes – beyond the line of sight of ground-based radars – and can manoeuvre mid-flight.

The UK does not currently possess hypersonic missiles.The US and Australia have an existing joint programme to develop the weapons but the UK government stressed the focus of the new venture would be on defence.

It said there were no plans for the UK to develop its own hypersonic weapons but the new programme would help it assess whether it would need to develop them in future. 

It added the latest announcement was not related to Russia’s use of the weapons in Ukraine but said the fact other nations were investing in them meant the UK had to think about how to defend against them. 

On 19 March, Russia claimed to have used a hypersonic missile to destroy an arms depot in western Ukraine, and US military intelligence has suggested Russian forces have used them repeatedly since.

The attacks would mark the first use of hypersonic missiles in combat.

Investigative journalists know that every administration has its deal-makers. And one of the mysteries of the Yahapalana govt is the #Hambantota Silver Park project. 

March 6, 2019: Cabinet approved Malik Samarawickrama’s memo to lease out 400 acres in Hambantota for a petroleum refinery as a joint venture between Silver Park International (Pvt) Ltd, Singapore, and the Ministry of Oil & Gas of Sultanate of Oman. 

It was said Accord and Omani Ministry signed the US$ 3.8bn deal to build a 200,000 barrel-per-day refinery in 44 months. Even Chinese investment into Port City stopped at US$ 1.4bn while China Merchants Port Holdings spent US$ 1.12bn to lease and manage the Hambantota port. 

The details were sketchy. And, on March 20, Oman’s Oil Ministry DENIED being part of the $3.85 billion plan, even after Sri Lanka announced its involvement. 

On March 21, Sri Lanka’s BOI admitted there was NO agreement with Oman’s Ministry of Oil and Gas. “However, we’re aware that Oman Oil Company has registered their firm intention to participate in equity up to 30%, subject to reaching agreement between the parties”. 

March 22: Meera Srinivasan broke the story that stakes in the deal’s Singapore-based company were held by a family member of former Union Minister of State, the DMK’s S Jagathrakshakan. 

The Indian address of the couple was 1, 1st Main Road, Kasturibai Nagar, Adyar, Chennai 600020, Tamil Nadu. This is where the Bharath Institute of Higher Education and Research, started by Mr Jagathrakshan, is located. 

Samarawickrama told Cabinet it’s our largest FDI to date. Even before Oman had agreed, he claimed: “The investment is from a Singapore registered company and the Ministry of Oil and Gas of the Sultanate of Oman is one of the equity participants with 30% equity.”

Cabinet papers pointed to 2 other prospective investors, including a Chinese party that had dropped out. The other, from Sugih Energy International, “is being pursued and will initiate upon allocation of initial plots of land, most probably in March 2019”.

So now there were TWO projects: Silver Park and Sugih International. Samarawickrama told Cabinet a joint memorandum seeking approval for incentives for both will be submitted in due course. 

March 25: Omani Oil and Gas Minister arrives for ground-breaking ceremony of the Hambantota refinery. Mohammed Hamal Al Rumhy also met Ranil Wickremesinghe, then PM. But a spox said it was a “courtesy call” and that the Minister had shown “general interest in Sri Lanka”. 

The spox also confirmed to @timesonline that the Omani Government had not invested any funds, nor agreed to invest any money so far on the project, but was awaiting the feasibility report to take a decision.

The project’s “main promoter” was interviewed saying discussions with the“$7bn assets-rich Accord Group Chief Jagathrakshakan “had begun as far back as October 2015”. 

Mohammed Riyas said had it not been for the delay in releasing the land, “the multiple benefits accruing exports-oriented project would have been commissioned by now”. 

On November 14, 2019—two days before the Presidential Election when it was prohibited to enter into such contracts—the BOI signed an agreement with Sugih International for a US$ 24bn oil refinery and petrochemical complex in Hambantota. 

The total investment of both: US$ 27.8bn. But there were no feasibility studies, no partners, no environmental impact assessments, no basis for the massive figures cited, no Omanis, just preliminary proposals and, in the case of Sugih, an “agreement”. 

Nothing came through.  When @timesonline filed a request in early 2020 under the Right to Information Act to determine the status of the project, the BOI issued a blanket refusal saying there was ongoing Criminal Investigation Department inquiry into the Silver Park project.

Mohammed Riyas, the promoter, told us that he has “no comment” on the project. Danny Lee, the Sugih International Director who signed the second agreement, was contacted via personal email (he appears to have changed workplaces) and did not reply.

Namini Wijedasa