In a devastating move against the island nation, China has resolutely held back its assistance to avert the man-made economic crisis , despite being Sri Lanka’s single biggest bilateral investor and a consistent and unreserved supporter in the UN Human Rights Council.
China’s humanitarian aid of $76 million during the current crisis turns into insignificance in comparison with India’s humanitarian aid.
Sri Lanka urgently needs foreign exchange support and material aid, but China has been advising Sri Lanka to follow an “independent” foreign policy, by which it means that it should break off from India, the IMF and the West, and hitch its wagon to China.
The Chinese have also been insisting that Sri Lanka should set its economic house in order and make it more hospitable to Chinese investments.
Sri Lanka should also use the infrastructure built with Chinese loans and enter into a Free Trade Agreement with China.
. In March 2022, Chinese Ambassador Qi Zhenhong said that Beijing is considering a fresh loan of $1 billion and a credit line of $1.5 billion in lieu of rescheduling repayment of the existing loans.
However, the promised loan and buyers’ credit did not materialise . They are apparently tied to the signing of the FTA which has been pending since 2015. But FTAs have been anathema for Sri Lankan governments.
China has suspended this US$1.5 loan and credit line as the country’s foreign reserves has dropped to$1.92 billion which is very much less than 3 months of imports, one of the main conditions in the the loan agreement.
China has not given consent to Sri Lanka’s rerquest to change the loan condition.
Reflecting Wang Yi’s view, the Chinese Foreign Ministry spokesman, Zhao Lijiang, said on June 8 that Sri Lanka should “boost its own effort, protect the stability and credibility of the investment and financing partners and ensure the stability and credibility of the investment and financing partners and ensure the stability and credibility of its investment and financing environment.
But what Sri Lanka urgently needs is not advice on how to run the economy, but financial and material aid to meet the basic needs of the people. But this has not been forthcoming. President Gotabaya says China has lost interest in South Asia and is concentrating on South East Asia and Africa.
But Prime Minister Ranil Wickremesinghe differs and says that Beijing has significant stakes in Lanka and that efforts are being made to make China amend the conditions attached to its loans.
Meanwhile, the IMF is expecting Beijing to join in its efforts to get Lanka’s loan repayment schedule restructured because China is a major lender.
According to Finance Ministry statistics, China’s Public and Publicly Guaranteed loans to Sri Lanka at the end of 2021 constituted 19.9% of the total PPG loans. And the debt service on that debt stock was 20% of the total PPG debt service.
It has been observed that when Sri Lanka suspended the repayment of foreign loans totalling $26.4 billion on April 12 this year, the Chinese component amounted to $7.1 billion
China resolutely holds back loans and aid to Sri Lanka
Govt to slash fuel distribution amidst dwindling oil reserves
With the increase of Ceylon Petroleum Corporation (CPC) fuel prices, the government will be compelled to control fuel distribution as oil reserves are currently dwindling .
According to CPC sources only 10 or so filling stations might have fuel and there was only around 1,500 metric tons of Petrol in the country.
This 1,500 MT can only be distributed to 200 filling stations, he said.He further stated that even the Diesel stocks in the country has come down to 8,000 to 9,000 metric tons.
However , the CPC will gain a profit of Rs. 68.61 from a litre of Octane 95 petrol and Rs. 15.57 on Octane 92 and also it gains Rs. 20.27 from super diesel.
However, the CPC incurs a loss of Rs. 8.52 from a litre of auto diesel and Rs. 334 per litre of kerosene
Sri Lanka has decided to implement a token system dedicated for filling stations to supply fuel for motorists waiting in line to obtain Petrol & Diesel.
Minister of Power and Energy Kanchana Wijesekera said the program will come into effect from Monday (27) and the assistance of Sri Lanka Police and Sri Lanka Army, Navy, and Air Force will be obtained to ensure the process is carried out smoothly.
With the increase of Ceylon Petroleum Corporation (CPC) fuel prices from early this morning, the estimated cost of imported refined petroleum products was released by the Power and Energy Minister.
Accordingly, the Ceylon Petroleum Corparation (CPC) will gain a profit of Rs. 68.61 from a litre of Octane 95 petrol and Rs. 15.57 on Octane 92 and also it gains Rs. 20.27 from super diesel.
However, the CPC incurs a loss of Rs. 8.52 from a litre of auto diesel and Rs. 334 per litre of kerosene
Two ministers will fly to Russia on Monday (27) for discussion on fuel imports and related matters, said Minister Kanchana Wijesekera during the media briefing.
The Minister said that bunker suppliers have been granted permission to deliver fuel for industries that deal in US currency established in Sri Lanka.
The Minister said that overseas fuel companies based in countries that produce fuel will be invited to set up business in Sri Lanka, and CPC filling stations will be provided as the CPC alone cannot undertake the burden of importing fuel to Sri Lanka.
He said the CPC will become a more service-provider based institution, to facilitate fuel imports.
If there is no foreseeable date for a ship carrying fuel to arrive in the country, in order to sustain the transport sector, fuel can only be provided to about ten filling stations from tomorrow (27) at most, trade union leader Annada Palitha mentioned.
These filling stations may receive this limited fuel if they make deals with close friends and relatives in power, who will undoubtedly make use of this fuel. Palitha said that crude oil for refineries are missing as well.
Commenting on power outages, the TU member mentioned that Kelanitissa alone needs 1,500 metric tons to function.“If we continue to give 1,500 MT fuel to power stations, the country will stop functioning in two days,” he added.
All hospitals in Galle District to operate only essential services from tomorrow due to fuel crisis: GMOA
Due to fuel not being provided to the health sector including the medical staff and the doctors as promised by the government, all hospitals and health institutions in the Galle District including the Karapitiya Hospital will operate only the essential services from Tuesday (28) and other services will not be able to continue, the Government Medical Officers’ Association (GMOA) said in a statement.
The four stations declared for fuel supply in the Galle District on Friday (24) issued fuel not only to health workers but also other vehicles in general, the GMOA revealed, adding that the health staff including medical officers, therefore, had to wait in queues for 12 – 14 hours, in what the Union alleged to be poor and unorganised programmes of the District Secretary and the Health Administration.
As a result, not even 20 per cent of the health staff was able to collect fuel that day, the GMOA pointed out.
In the backdrop, the health staff is unable to continue normal operations, it added.
MIAP
SLTDA takes every possible step to revive hospitality industry
Sri Lanka Tourism Development Authority is taking “everything possible”step while exploring all avenues to pull the tourism sector towards the positive growth trajectory, an effort that is becoming increasingly challenging as economic conditions worsen in the country.
The locals are faced with the worst possible living conditions experienced in history. However, tourism sector stakeholders are stretching themselves to ensure the experiences are not witnessed by the few international tourists coming into the island nation, said Sri Lanka Tourism Development Authority (SLTDA) Chairman Priantha Fernando.
“The tourists are not inconvenienced in any way due to the economic crisis that is taking place at present. The sector stakeholders, across all levels are doing the maximum to ensure the few international travellers coming in are cushioned from the crisis.
“We want to make sure they go back with a positive message, and they go back with a memorable experience despite the ongoing issues in the country. That is our priority at present,” Mr Fernando said .
The SLTDA chief stressed that it is critical for Sri Lanka to not lose its credibility and image on the international stage, for which the reality of the country should not be hidden.
“The message we need to deliver to source markets is that despite the difficulties faced, destination Sri Lanka continues to cater to its visitors, ensuring they have a positive experience. We need to speak the truth and get the facts right,” he stressed.
The ongoing ODI series between Australia and Sri Lanka is a definite positive for Sri Lanka Tourism, Fernando said, as it provides the opportunity for the sector stakeholders to showcase their potential during the crisis.
Further, while acknowledging that the government has no room to extend support to the struggling tourism sector, the SLTDA head said the industry should also not be forgotten for support measures that could be rolled out going forward.
Reason being, the industry is a foreign income earner to the country and is currently in need of assistance to sustain.
SriLanka debt restructuring delays amidst legal tangles
Sri Lanka is running out of time in commencing debt restructuring process with the delay in granting government approval to cabinet approved financial and legal advisers Lazard and Clifford Chance for the difficult task of renegotiating its debt of US$51 billion as the Attorney General’s Department is still to clear legal documents pertaining to the appointment, finance ministry sources said.
Representatives of the international financial and legal advisers have left the island after the conclusion of their preliminary observations on how to restructure Sri Lanka’s debt including the $6.4 billion of foreign debt outstanding, of which $ 1 billion International Sovereign bond was due on July15 or 16.
Inter national Monetary Fund (IMF) will have to bailout of debts to the tune of US$ 6.4 billion over the next three years, amidst an economic disaster in the country.
The COVID-19 pandemic caused supply chain disruptions, compounding the economic challenges across the region. The Ukraine-Russia conflict have further worsened the situation, as Western sanctions on Russia have caused devastating economic fallouts.
Cash strapped government must urgently seek funds from multilateral lenders and aim to restructure a debt payment due in July with political stabilityis essential amid the country’s worst economic crisis in decades, finance ministry said.
Sri Lanka’s Balance of Trade (BOT)[b] has been registering a consistent deficit, with an approximately increasing trend in deficits over the years
Between December 2021 and March 2022, Sri Lanka’s trade deficit decreased from US$ (-)1085 to US$ (-)762, denoting a drastic reduction in imports due to FOREX exhaustion and indicating the onset of the crisis situation in the economy
Sri Lanka’s creditors face losing up to half of their investments in the country’s dollar bonds, after the government announced it would restructure $11 billion worth of debt, the first financial shake-up of its kind in its modern history.
Formal debt talks haven’t started but analysts are already crunching the numbers to estimate what kind of losses could be inflicted on bondholders.
Mired in economic crisis, Sri Lanka has halted all external debt payments and is prioritising its remaining hard currency reserves to buy food and fuel
Proposal on CEYPETCO filling stations being handed over to foreign companies to meet Cabinet today
A Cabinet paper proposing the handing over of 1690 filling stations belonging to the Ceylon Petroleum Corporation (CEYPETCO) to qualified foreign companies is due to be presented to the Cabinet this Monday (27) revealed Energy Minister Kanchana Wijesekara, speaking to a briefing yesterday (26).
The Cabinet paper has proposed to hand over CEYPETCO filling stations to foreign companies on the condition of importing fuel to Sri Lanka under a credit scheme for at least six months or a year, the Minister noted.
The Indian Oil Company (IOC) has requested permission from the Sri Lankan government to establish 50 new filling stations in the country, Wijesekara went on, adding that discussions are underway to hand over several CEYPETCO-owned filling stations to the IOC as well.
MIAP
All sick. Ranil the doctor. Country saved by November: Vajira
The country can be directed into a positive path by November this year, should everyone extend their support to save it, said Chairman of the United National Party (UNP) Vajira Abeywardena, speaking to a briefing yesterday (26).
The 23 million people of Sri Lanka have now become sick and if everyone blesses Ranil Wickremesinghe, who is the specialist doctor that came to take care of them, without cursing him the country can be ‘corrected,’ he noted.
The former MP further claimed that the country may have not fallen into this crisis, had the action points revealed in the manifesto released by the UNP during the 2019 Polls been implemented.
MIAP
Ready to take over Govt. Let us form Cabinet we like: AKD (VIDEO)
Leader of the Janatha Vimukthi Peramuna (JVP) MP Anura Kumara Dissanayake addressing a rally organised by the National People’s Power (NPP) in Anuradhapura yesterday (26) said they are ready to take over the government even tomorrow in order to solve the economic crisis befallen the country.
“The entire country is facing a huge crisis. The government does not seem to be having any plan or vision to solve this. Ranil Wickremesinghe is a numbed leader. He is a not a leader who feels for the pain of the people. If anyone thinks that the International Monetary Fund will come and save us, or the World Bank will come and save us, such a thing will not happen. When a country collapses, who should rebuild it? The people of that country!
We are ready to build this country. If Gotabaya and Ranil hand this over to us tomorrow, we are ready to take it over, we are ready to build this country. Keep in mind. We do not want anything else, just hand the government over to us. Let us form a Cabinet we like within Parliament. We can direct the country into an action that solves this problem. Therefore, we are ready to take it over,” he said.
MIAP
Fuel queues likely to exist for another year. Consumption must be slashed by 46 per cent: Subject Minister
The fuel consumption in Sri Lanka must be slashed from US $650 million to US $350 million, said Energy Minister Kanchana Wijesekara, speaking to a briefing yesterday (26).
“Now we are in a situation where no company is willing to provide us fuel without a prepaid facility. At a time when the country has to pay US $735 million, receiving more fuel from their companies has become a very difficult task. I believe that until at least one year from now when this financial management is done properly, we may not be able to resist the future occurrences of fuel queues. So we have to slash our consumption from US $650 million to US $350 million as a mandatory action. Reducing the consumption, we have to prioritise public transport, industries and essential special services,” he said.
MIAP
One dead, two injured in shooting at Kelaniya
One person was killed and a child and a woman was injured during a shooting at Pattiya Handiya, Kelaniya yesterday (26), Police said.
The injured were admitted to the hospital.
The victim who was killed during the shooting was a 31-year old resident in Minuwangoda. He was traveling on a motorcycle with his wife and two-year-old child when two men on another motorcycle came in and opened fire.
The child was admitted to the Lady Ridgeway Children’s Hospital, Borella and a bystander who was injured as she was walking nearby at the time of the shooting was admitted to the National Hospital, Colombo.
The Police revealed that the victim was a member of an organised crime gang and the reason for the assassination is yet to be revealed.
Further investigations are being conducted by the Peliyagoda Police.
MIAP