Oshadha Senanayake, Chairman of the Information and Communication Technology Agency of Sri Lanka (ICTA) has resigned.
It is said that he has resigned from his post this morning (03).
Oshadha Senanayake was a strong activist in the Wiyatmaga organization.
Sri Lanka’s continuation of extreme money printing since 2020 up to now has been exerting pressure on the exchange rate and inflation to a great extent and it is high time for the Central Bank (CB) to apply the brakes on this process, economic experts warned.
The CB has printed Rs.1.62 trillion during the period January 2020 to March 2022 and this was 23 times more than the money printed during the 62-year period of 1952 to 2020, CB data showed.
It has resorted to record money printing of Rs. 188.61 billion within 18 days during the period February 28, 2022 to March 18, 2022.
These figures clearly indicated the massive amount of money printed under the present regime, a senior economist said adding that if money is printed and released over and above the required amount, the result will be the increased demand for goods and services creating inflationary pressures in the economy.
Experts noted that reckless money printing may lead to a hyperinflationary situation where the people will have to face unbearable price increase in goods and services.
Under such a situation, a large amount of money is required to purchase goods and services and to meet other payment obligations, they said adding that “the Central Bank should print money only to match the value of overall transactions in the economy”.
University of Colombo Professor in Economics Sirimal Abeyratne told the Business Times that if the inflation goes above 50 per cent then the country will have to face a hyperinflationary situation.
Such situations are created not only by money printing but also the global economic situation, exchange rate pressure and supply chain disruptions, he explained.
The country is facing an essential commodity shortage and high prices, so it is opportune to control the money printing without allowing it to increase inflationary pressure, Prof. Abeyratne added.
Sri Lanka will have to increase investments and exports taking prudent policy decisions at this critical moment but resorting to money printing will definitely affect the economy, he warned.
Former Governor of Uva, Southern and Central Provinces Rajith Keerthi Tennakoon said that that the present economic crisis cannot be tackled by extreme money printing as it will lead to hyper-inflation.
One-time executive director of polls monitoring centre- CaFFE, Mr. Tennakoon said that Sri Lanka is now moving to a critical situation similar to Brazil and Argentina in 1980’s due to economic stagnation, low GDP growth, and high money printing and extreme inflation.
Sri Lanka is currently experiencing preliminary stages similar to that of Indonesia and Zimbabwe financial crisis.
The country’s food shortage is worse than the era of queues during the closed economy period of 1971-1977, he said adding that the present regime is very well aware of a further worsening of the economic situation due to disruption in supply chain and a severe food shortage ahead of the Sinhala and Tamil New Year.
The Police Media Unit stated that 664 persons have been arrested for violating the curfew in the Western Province last night (02).
They were arrested between 10.00 last night and 6.00 this morning.
The island wide curfew will be in effect until 6.00 am tomorrow (04).
It is reported that the Minister of Finance Basil Rajapaksa has announced the dates for resolving the issue of fuel shortages and power cuts in the country.
He has stated this at a meeting of the ruling party group of parliamentarians held on the 1st.
Accordingly, he has stated that the current fuel shortage will end by April 05.
Sources said that the current power cut will be significantly reduced by April 10, after that the power cut will be limited to two hours a day.
It is reported that Rajapaksa said that these problems have been resolved as the Indian loan assistance system is now operational and they have a continuous supply of fuel.
The Public Utilities Commission of Sri Lanka announced that the scheduled power cut duration has been reduced from 6 hours to 1 hour & 40 minutes for tomorrow (3rd April ) as CEB started receiving stocks of fuel.
Groups ABCDEFGHIJKLPQRSTUVW will experience power cuts for 1 hour and 40 minutes from 5.30pm to 10.30pm.
Sri Lanka’s inability to repay mounting foreign debt including a US$1 billion International Sovereign Bond in July and some Chinese Bank loans has become a burning issue amidst the government’s move to restructure debts in the wake of the forex crisis.
A new situation faced apart from the present woes by local banks was raised in Parliament on Thursday by opposition MP Dr. Harsha de Silva claiming that a state bank in the past conducted dollar swaps with negative premiums.
Clarifying his statement, he noted that according to forex market players a certain state bank was not able to meet dollar swaps to several banks at present.
This particular bank has entered into swaps several months ago on negative premiums he said explaining that they bought dollars at Rs. 200 when the Central Bank held it at Rs. 200 with the agreement to sell dollars at lower than Rs.200; 190, 185 etc.
“They didn’t have the dollars. So they wanted the swaps rolled over. But the request was refused”, he said adding that the original transaction was highly irresponsible and was never going to work.
In a statement on Thursday, the Ministry of Finance and the Central Bank assured the public and all other stake holders that the banking system is stable, and that the operations of the state Banks are being carried out smoothly, contrary to statements made otherwise.
Sri Lanka’s banking operations have been greatly affected b y fuel crisis and long hour (10-13 hour) power cuts, Ceylon Bank’s Employees Union(CBEU) warned.
Banking automated activities are to be be paralysed soon as the computer systems cannot be operated owing to lack of fuel to run generators during power cuts,Secretary of the CBEU , Ranjan Senanayake said.
The operation of ATM’s countrywide will also be affected under the present situation and this will in turn disrupt financial transactions of bank account holders numbering around 15 million.
These ATMS are being inactivated in the night to conserve fuel for power generators at present he said adding that banking operations of a large number of bank branches have already come to standstill .
Most of the banks Internet down causing interruptions to its services while broad band users facing a downtime or slow internet due to a downtime in Internet Structure, a senior telecom engineer said adding that the power cuts affected the work from home arrangements as well .
Sri Lankans faced 10-hour power cuts since Wednesday and warnings of longer blackouts soon , as a deepening economic crisis exerted pressure on public and private sector functions as more than a million government employees are being resorted to work from home to save fuel
In another development, two Chinese Banks have demanded the Treasury to repay loans installments which were due on March 21 as they are not ready to restructure debt.
These banks have given some time for the repayment following the assurance given by the Central Bank that it will make the payment soon after realising another foreign loan facility. On Monday, Chinese Ambassador to Sri Lanka Qi Zhenhong announced they were considering a $2.5 billion loan and credit line to Sri Lanka.
The country has to repay installments of $53.596 million to China Development Bank, $17 million to China Exim Bank and another sum of 386.19 million yuan by the Water Board of Sri Lanka to the Exim Bank.
Meanwhile former Prime Minister Ranil Wickremesinghe told the All-Party Conference on Wednesday that the rupee devaluation has exerted pressure on the banks.
He said private banks are currently holding vast sums of dollar loans, while state banks are carrying a large foreign debt of several state-owned enterprises.
There is a question over the balance sheets of the banks due to the conversion of dollar loans at the present exchange rate.
He noted that while the banking sector is on the verge of collapse, the Government must ensure that a safety net is enacted for the banks to prevent a collapse.Some customers of state banks panicked after Dr. de Silva’s statement
Ina desperate attempt to prevent protest campaigns and public uprising against the rising cost of living plus power cuts , cooking gas shortage fuel scarcity,rising food inflation, and many more burning issues in the country, the government has imposed a full day curfew today Sunday 03
In addition social media platform restrictions are reported to have been enforced by the Telecommunications Regulatory Commission.
The main aim of the barricading of social media platforms was to prevent calling unknown groups to gather the people in protest demonstrations country wide, official sources said.
There are several reports that social media users are facing difficulties in using platforms such as Facebook, Twitter, Instagram, WhatsApp and YouTube in Sri Lanka.
Meanwhile the Director General of the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) says that service providers have been advised to temporarily restrict access to social media websites, on the request of the Ministry of Defence.
NetBlocks, a watchdog organization that monitors cybersecurity and the governance of the Internet, had confirmed the restriction of multiple social media platforms including Facebook, Twitter, WhatsApp, Viber and YouTube in Sri Lanka after midnight on Saturday.
The watchdog reported that real-time network data collected from over 100 vantage points across Sri Lanka show the restrictions coming into effect across multiple providers from midnight.
Metrics corroborate user reports of service unavailability across the country, showing that all of Sri Lanka’s major network operators including Dialog, Sri Lanka Telecom, Mobitel, Hutch are covered by the measure.
Fully or partially impacted social media and messaging platforms include Facebook, Twitter, YouTube, Instagram, TikTok, Snapchat, WhatsApp, Viber, Telegram, and Facebook Messenger.
The government of Sri Lank has declared a state of emergency and has imposed a 36-hour curfew island wide until Monday morning (04).
The President has also issued a Gazette Extraordinary, prohibiting people from being on any public road, park, recreation or other grounds, railways, seashores and other such public places during the curfew period.
The Ministry of Public Security said that investigations are underway to identify the members of the organized group that was involved in the Mirihana protest on Thursday (31) night.
Public Security Minister Rear Admiral (Retd) Dr. Sarath Weerasekara said that protesting is a democratic right of the people, however, that does not mean that one can set vehicles on fire and cause damage to property.
He said that those responsible for such incidents will be identified and will be brought before the law.
“We are aware that the people are facing a crisis with regard to gas, fuel, electricity etc. Such acts will not solve those crises,” he said, adding that it is disturbing to see people wait in line for days and weeks for those essentials.
Public Security Minister Rear Admiral (Retd) Dr. Sarath Weerasekara told News 1st that the unruly acts were committed by a group of extremists, and investigations are underway to determine if it involves religious extremism or terrorism
It is reported that access to several social media networks including Facebook, YouTube, WhatsApp and Twitter have been blocked in Sri Lanka.
Accordingly, users have not been able to access or send messages to this social media site since midnight yesterday (02).
A consignment of 40,000 MT of diesel under Indian assistance through Line of Credit of US$500 million was handed over by High Commissioner Gopal Baglay to the Energy Minister of Sri Lanka, Hon’ble Gamini Lokuge in Colombo today. This is the fourth consignment under the fuel Line of Credit, with previous deliveries on 16 March, 20 March and 23 March respectively. With today’s consignment, the total fuel delivered to the people of Sri Lanka over the last 50 days amounts to nearly 200,000 MT including a consignment of 40,000 MT by Indian Oil Corporation outside the line of credit facility in February 2022.
2. Speaking on the occasion, High Commissioner Gopal Baglay characterized the fuel deliveries as a concrete manifestation of India’s commitment to the people of Sri Lanka in the current circumstances in line with the Neighbourhood First Policy. Energy Minister Gamini Lokuge thanked the Government of India for the fuel consignments. Earlier, on 23 March, Sri Lankan Prime Minister Mahinda Rajapaksa thanked Prime Minister Narendra Modi for the recent Indian economic development assistance and credit facilities to Sri Lanka and said he expected the Indian Government would pay special attention to Sri Lanka’s development in the future as well.
3. It may be recalled that the Export Import Bank of India and the Government of Sri Lanka signed a US$ 500 million Line of Credit Agreement for purchase of petroleum products on 2 February 2022. The Agreement was signed by Treasury Secretary, Mr. S.R. Attygalle from the Sri Lankan side and Chief General Manager of EXIM Bank, Mr. Gaurav Bhandari from the Indian side.
4. Further, in response to a separate and urgent request from the Government of Sri Lanka, extension of a credit facility of USD 1 billion for supply of essential items including food and medicines has been finalized and the first shipments of rice under this facility is expected to reach Sri Lanka soon. Earlier in January this year, India had provided financial assistance to Sri Lanka that included a credit swap of US$ 400 million and deferment of an Asian Clearing Union payment of over US$ 515 million. In cumulative terms, Indian support to the people of Sri Lanka in the first quarter of 2022 is in excess of US$ 2.5 billion.
5. In view of the urgent nature of Sri Lanka’s requirement, India worked overtime to expeditiously finalise and start implementing both the lines of credit, within weeks.
6. The Government of India also continues to encourage efforts towards medium to long term capacity creation through enhanced Indian investment in Sri Lanka in key sectors that include ports, renewable energy, manufacturing, etc.
***
Colombo
2 April 2022
Mr. António Guterres
Secretary General of the United Nations
Office of the Spokesman for the Secretary-General
United Nations, S-233
New York
NY 10017
USA
A letter to inform about the possible catastrophic economic and social crises emerging in Sri Lanka and to seek the intervention of your office to bring about a solution to avoid the country falling into anarchy.
The Asian Human Rights Commission (AHRC) is a regional human rights organization associated with the UN human rights mechanisms for over 40 years and one which has worked very closely for the protection and promotion of human rights in Sri Lanka for the same period of time, we have the spirit and obligation to inform you and the relevant UN agencies about the rapidly developing, extremely critical situation, which if unaddressed, could lead to a serious collapse of the State and also the development of anarchy within the society at large.
As your good office will already know, Sri Lanka is now faced with the payment of debt related crisis may be the worst that it has ever experienced in its entire history. Many economists, bankers and people involved in businesses and enterprises as well as social organizations such as trade unions and other organizations associated with farmers and also all civil society organizations have been expressing their deepest fears about the developing situation in the country. As we write this, almost every day, massive demonstrations are taking place in Colombo, as well as in all other areas in the country, demanding an early solution to some of the pressing problems such as the problem of ever-increasing prices of essential goods, and the cutting down of the availability of power supplies, gas and almost every other basic essential of life. The acuteness of the problem could be reflected in the fact that the exams which were due to be held for school children were recently cancelled due to the inability of the authorities to provide papers for the students to write on during the exam. In every area of life, there is the reflection of a breakdown as the Government is unable to pay the prices for imports due to the scarcity of United States Dollars. All the predictions are that this crisis is going to continue unless there is some genuine and credible intervention to get support from the international community, including the International Monetary Fund (IMF) and other agencies, for the rescheduling of the payment of debts and at the same time, working out an extensive plan for bringing back stability to the country and to ensure a non-recurrence of the situation which caused this problem in the first place.
The present crisis comes as a result of a considerable period of neglect of the principles of good governance, as the result of which, the overview and supervision of financial institutions have also suffered very severely. In fact, the entirety of the State bureaucracy has been brought into an unprecedented crisis over several decades due to the centralization of power in the Presidential system, as the result of which, much of the governance related bureaucracy has been disempowered. Direct deregulation of almost every area of life has made it difficult to conduct any kind of rational management of the society. Among other things, this has also affected the administration of justice, the institutions of policing, prosecutorial institutions as well as the Judiciary itself. It is indeed a crisis of such magnitude already. The question that is commonly discussed by the Government, as well as the Opposition parties and also economists, all intellectual layers of society, as well as ordinary people is: what is the way out of this terrible debt trap?
Discussions are now focused on the way to seek the assistance of the IMF and also possibly other international agencies. However, the major problem that is thwarting the move towards this goal is the complete breakdown of the people’s faith in the political system as a whole. And this too is not just the product of a single act but is the result of a process that has developed over a long period of time. This loss of credibility in the political establishment as a whole has created a distrust on the one hand between the Government and all the Opposition parties, and on the other hand, the political establishment and the people as a whole.
It is at this juncture that an intervention by your Office and other UN agencies would help, for by playing a mediating role you could assist Sri Lanka to develop short-term and long-term plans for the recovery of the stability of the country and also to prevent the country falling into a situation of anarchy. If this opportunity is lost, what might happen in the immediate future is difficult to project.
A huge amount of information made available by many persons including persons who have played key roles in the past in the Central Bank of Sri Lanka, as well as in other financial institutions and the State bureaucracy and many others in the media and civil society are freely available now for anyone who would undertake a serious study into this tragic situation now faced by Sri Lanka. Under these circumstances, we urge you as the Head of the UN, which has played many good roles on behalf of Sri Lanka over a long period, to negotiate with the Sri Lankan Government as well as the Opposition parties and others to work out a sustainable plan to overcome this present situation and to ensure stability for this country.
As an important country situated in the Indian Ocean from the point of view of geopolitics, instability in Sri Lanka is also a matter of concern in international politics which gives further reasons as to justify a proactive role that could be played by the UN under these circumstances.
The AHRC is a nonpartisan organization not affiliated to any political body and has no other agenda except the protection and promotion of the rights of the people.
Thank you
Yours sincerely
Basil Fernando
Director for Policy and Programmes
Asian Human Rights Commission, Hong Kong
