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Sri Lanka on the edge of collapse as debt burden mounts 

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Hit hard by the Covid-19 pandemic and economic crisis made by the Rajapksa regime , the cash strapped government is facing its most serious financial crisis in years, raising doubts about its ability to pay its creditors

Sri Lanka’s total external debt has increased in 2021 in a massive proportion,mainly with the unprecedented rise in the external debt of the Central Bank and deposit taking corporations, official data showed.  

The total external debt of the country increased to US$ 50.7 billion at end 2021 from $ 49.0 billion by end 2020. 

Although the total outstanding foreign loans of the Government recorded an increase during the year, mainly with the receipt of two foreign currency term financing facilities obtained from the CDB, the external debt stock of the Government, valued at the market price, declined from $ 28.2 billion at end 2020 to $ 27.3 billion at end 2021.

This was a result of the combined effect of the decline in market prices of Sri Lanka’s outstanding  ISBs and the repayment of an ISB that matured in  July 2021, several economic analysts said.  

A key reason for the reduction of the outstanding government external debt in 2021 was due to lack of new  borrowings from international markets, while repayment of some external debt obligations of the Government had to be met by utilising Central Bank’s reserves. 

Meanwhile, the  outstanding external debt of the Central Bank increased significantly by end 2021 in comparison to that of end 2020 due to the new bilateral currency swap arrangements with the Bangladesh Bank and the PBOC, although the international swap facility with the RBI obtained in 2020 was repaid during the year.

The outstanding external debt of deposit taking corporations also increased owing to the significant  increase in currency and deposits although the short term loans position declined markedly. 

Meanwhile, the outstanding external debt of the private sector  corporations and SOBEs declined in 2021 with the reduction in outstanding trade credit received by the private sector and with the repayment of foreign loans of SOBEs, despite the increase in foreign loans obtained by the private sector corporations. 

Further, intercompany borrowing of DIEs recorded  an increase during 2021, as a number of DIEs received intercompany loans and shareholder advances during the year.

The total outstanding external debt of the country as a percentage of GDP recorded a marginal decline during the year. 

The total outstanding external debt as a percentage of GDP stood at 60.0 per cent at end 2021, compared to  60.5 per cent  reported at end 2020, reflecting the increase in nominal GDP during 2021 compared to 2020. 

The  outstanding external debt position of the Government out of the total external debt position, declined to 53.9 per cent by end 2021 from 57.5 per cent recorded at end 2020. 

In terms of the debt maturity profile, debt with long term maturity declined marginally to 50.0 per cent of GDP by end 2021 compared to 50.4 per cent of GDP by end 2020.

Govt disburses Rs. 13.36 billion among families affected by the crisis

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In a desperate gesture at a time where the public protests are mounting against the Government, the present administration is set to provide Rs. 13.36 billion special three-month cash allowance to 3.34 million families affected by the current economic crisis.

The support scheme, funded by the World Bank, will provide an increase for the allowances for low-income families identified under Samurdhi, Elderly, Kidney and Disabilities from May to July 2022.

Elders , disabled and samurdhi beneficiaries will get an increase of Rs 200O to Rs 3000 for their monthly allowances under the World bank aided relief programme , Minister Shehan Semasinghe disclosed.

The go-ahead of the Cabinet of Ministers has been given to provide a special cash allowance for a period of three months to identified low-income families affected by the ongoing economic crisis.Relevant proposal was tabled by the Minister of Finance and Minister of Samurdhi.

As the low-income families entitled to Samurdhi, Elderly, Kidney and Disability allowances have been severely affected by the current economic crisis in the country, the government has identified the need for immediate relief to those families and their families on the waiting list.

Contingent Emergency Response Components in projects funded by the World Bank Group will provide the necessary funding for this, the Department of Government Information said in a statement.

The government has identified the need for immediate relief to these affected families and those others on the waiting list,” Semasinghe said in a statement.

As per the statement, amounts ranging between Rs 3,000 to Rs 7,500 under various categories like elders’ allowances, kidney patients allowances and disability allowances will be disbursed to low income families.

The world bank is facilitating financial and technical assistance to Sri Lanka the cash transfer will be done only through bank accounts. Any eligible person who doesn’t have an account will be informed to open one immediately by government officials concerned, the minister said in a tweet.

Central Bank Governor Nandalal Weerasinghe said that the World Bank has agreed to provide Sri Lanka with US$ 600 million in financial assistance to help meet payment requirements for essential imports.

The Government will use over US$ 300 million out of the US$ 600 million due from the World Bank to provide direct financial assistance for low-income families, Weerasinghe added.

Meanwhile, Prime Minister Mahinda Rajapaksa’s office has announced that China will grant 300 million Yuan to Sri Lanka to purchase medicine, food, fuel and other essentials.

The move comes after Rajapaksa’s telephonic conversation with Chinese premier Li Keqiang earlier last month.

Debt-ridden Sri Lanka’s overall inflation surged to nearly 30 per cent in April from 18.7 per cent recorded in March, according to the official figures, as the island nation grapples with its worst economic crisis in decades.

The crisis is caused in part by a lack of foreign currency, which has meant that the country cannot afford to pay for imports of staple foods and fuel, leading to acute shortages and very high prices.

Months of lengthy blackouts and acute shortages of food, fuel and pharmaceuticals have triggered widespread protests calling for the government’s resignation.

According to the data published by the government’s Census and Statistics Office, the overall inflation hit 29.8 per cent in April from 18.7 per cent recorded in March.

The food inflation increased from 30.21 per cent in March to 46.6 per cent in April. Most food items have recorded price increases.

Sri Lanka needs at least US$ 4 billion to tide over its mounting economic woes, and talks with international institutions such as the World Bank as well as countries like China and Japan for financial assistance have been going on.

India has agreed to extend an additional US$ 500 million credit line to help Sri Lanka import fuel.India has already agreed to defer US$ 1.5 billion in import payments that Sri Lanka needs to make to the Asian Clearing Union.

Another Grant of 300 Million Chinese Yuan from China to Sri Lanka

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Following the telephone conversation between Prime Minister Mahinda Rajapaksa and China’s Premier Li Keqiang in late April, China has decided to provide another grant of 300 million Chinese Yuan to Sri Lanka to help in the supply of medicine, food, fuel and other essentials.

During the earlier phone conversation, Premier Li said to Prime Minister Rajapaksa, “China feels for Sri Lanka for the difficulties and challenges you face, and we want to do our utmost to provide help to improve the peoples’ livelihoods in your country.”

Upon learning of this decision by the Chinese Government, Prime Minister Rajapaksa reiterated Sri Lanka’s gratitude to Premier Li and the Chinese Government for their continued support to Sri Lanka.

This latest grant will bring the total amount of China’s grant aid to 500 million Chinese Yuan (approximately $76 million).

Assistance by India continue to address diverse needs of Sri Lanka

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India’s economic assistance to Sri Lanka which stands at more than USD 3 billion in 2022 has been instrumental in addressing diverse needs of the Government and people of Sri Lanka.

2.     The USD 1 billion Credit Facility for purchase of food, medicines and other essential commodities is already operational and around 16,000 MT of rice supplied under it, ahead of Avurudu, is being distributed through various Sathosa outlets. Commodities to be supplied from India under this concessional credit line are finalized by the Government of Sri Lanka. Government of India facilitates these supplies strictly in accordance with the priorities of the Government of Sri Lanka. As on date, additional consignments of rice and other food supplies, medicines and industrial raw materials, among others, are envisaged under the credit line.

3.     A separate Line of Credit of USD 500 million for the purchase of petroleum products, such as diesel, petrol and aviation fuel, has paved way for the delivery of 9 consignments of different types of fuel. Petrol and diesel supplies have been distributed across the 1300 CEYPETCO fuel sheds, thereby serving people in all the 25 Districts of Sri Lanka.  Close to 400,000 MT of fuel have been delivered under this credit line till date and more consignments will arrive soon. 

4.     Deferment of dues of about USD 1 billion till March 2022, to be paid by the Central Bank of Sri Lanka to the Reserve Bank of India, under the Asian Clearing Union, will assist in strengthening the forex reserves of Sri Lanka. This has been complemented by the currency swap of USD 400 million, which was further extended by three months on 18 April 2022.

5.     Multiple forms of economic assistance is bolstered by other forms of support. A large consignment of drugs and medical supplies which was gifted by India was handed over by High Commissioner Gopal Baglay to Hon’ble Channa Jayasumana, Minister of Health in Colombo on 29 April 2022. This consignment has since then been delivered to Teaching Hospital, Peradeniya. Multi-pronged assistance provided by India testifies to the importance Government of India attaches to the welfare of the people of Sri Lanka and is guided by the twin principles of ‘Neighbourhood First’ and S.A.G.A.R (Security and Growth for All in the Region).

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Colombo

03 May 2022

Screening documentary film in the Parliament: “CONTINUING CYCLES OF VIOLENCE AND GENOCIDE IN SRI LANKA”

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In order to show the international community how since independence in 1948, successive racist governments in Sri Lanka continued cycles of violence and genocide on Tamil people, a documentary was produced. The documentary was produced using photographs and video recordings from various sources. This documentary was screened in the UK Parliament on 27 April 2022. 

The numbers were restricted due to COVID and parliamentary regulations. Along with cross party MPs Human Rights Watch (HRW) and Tamil community leaders participated. Finally, the event concluded with a Question and Answer session.

A number of MPs from the three main political parties attended the event. The British MPs were watching with jaw-dropping surprise. Almost all in the audience moved to tears, not to mention the simultaneously watching worldwide audiences. 

The main objective of the documentary is to help decision making centres to be well informed of the plight of Tamil people and formulate their policies in relation to Sri Lanka. They could implement targeted economic sanctions and also sanction war criminals from Sri Lanka attempting to enter their countries.

Human rights defenders and organisations can use the documentary to highlight the genocide of Tamils.

Starting in 2008 as a photo exhibition in the British Parliament, the BTF brought to the attention of the cross party MPs, Lords and the public the tell tale evidence proving the presence of genocidal intent in all the pogroms the Sri Lankan State staged against Tamils ever since Britain gave independence in 1948.

Then in 2012, BTF moved the photo exhibition with added information and more photo evidence to inside the Parliament. 

Points discussed are as follows:

  • Demilitarisation in the Tamil Homeland and island wide Demobilisation of security forces.
  • Instead of the regime change, system change (restructure centralised unitary state institutions) is important. 
  • Reparation: Acknowledge North East of the island as the war torn region, establish a special interim authority to implement rehabilitation, resettlement, and reconstruction, in Tamil homeland of North-East to bring up the human and development indicators to the levels found in the rest of Sri Lanka.
  • An internationally arbitrated Political solution based on the right to self-determination & power sharing arrangements to ensure non recurrence of cycles of violence.
  • Apply all available leverages on Sri Lanka. Apply phased out calibrated sanctions and develop a time bound implementation plan, while carefully ensuring civilian population is not affected, preferably not affecting food, medical and other essential supplies to civilian population. 
  • Apply Global Human Rights Sanctions Regime Act against the perpetrators of war crimes, crimes against humanity and Genocide in Sri Lanka.
  • Stop Unethical trade with Sri Lanka
  • Imposing trade and diplomatic sanctions to compel Sri Lanka to adhere to human rights. 
  • Establish an international prosecution mechanism to establish justice and accountability in Sri Lanka as a step guaranteeing non recurrence of the past crimes.

The 20-minute documentary film will be released as youtube version to the public soon

Please find below the links for the event.

Parliamentary Screening: Continuing Cycles of Violence

Screening documentary film in the Parliament “CONTINUING CYCLES OF VIOLENCE AND GENOCIDE IN SRI LANKA” – British Tamils Forum

RSF’s 2022 World Press Freedom Index: a new era of polarisation

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The 20th World Press Freedom Index published by Reporters Without Borders (RSF) reveals a two-fold increase in polarisation amplified by information chaos – that is, media polarisation fuelling divisions within countries, as well as polarisation between countries at the international level.

The 2022 edition of the World Press Freedom Index, which assesses the state of journalism in 180 countries and territories, highlights the disastrous effects of news and information chaos – the effects of a globalised and unregulated online information space that encourages fake news and propaganda. 

Within democratic societies, divisions are growing as a result of the spread of opinion media following  the “Fox News model” and the spread of disinformation circuits that are amplified by the way social media functions. At the international level, democracies are being weakened by the asymmetry between open societies and despotic regimes that control their media and online platforms while waging propaganda wars against democracies. Polarisation on these two levels is fuelling increased tension.

The invasion of Ukraine (106th) by Russia (155th) at the end of February reflects this process, as the physical conflict was preceded by a propaganda war. China (175th), one of the world’s most repressive autocratic regimes, uses its legislative arsenal to confine its population and cut it off from the rest of the world, especially the population of Hong Kong (148th), which has plummeted in the Index. Confrontation between “blocs” is growing, as seen between nationalist Narendra Modi’s India (150th) and Pakistan (157th). The lack of press freedom in the Middle East continues to impact the conflict between Israel (86th), Palestine (170th) and the Arab states.

Media polarisation is feeding and reinforcing internal social divisions in democratic societies such as the United States (42nd), despite president Joe Biden’s election. The increase in social and political tension is being fuelled by social media and new opinion media, especially in France (26th). The suppression of independent media is contributing to a sharp polarisation in “illiberal democracies” such as Poland (66th), where the authorities have consolidated their control over public broadcasting and their strategy of “re-Polonising” the privately-owned media.

The trio of Nordic countries at the top of the Index – Norway, Denmark and Sweden – continues to serve as a democratic model where freedom of expression flourishes, while Moldova (40th) and Bulgaria (91st) stand out this year thanks to a government change and the hope it has brought for improvement in the situation for journalists even if oligarchs still own or control the media.

The situation is classified as “very bad” in a record number of 28 countries in this year’s Index, while 12 countries, including Belarus (153rd) and Russia (155th), are on the Index’s red list (indicating “very bad” press freedom situations) on the map. The world’s 10 worst countries for press freedom include Myanmar (176th), where the February 2021 coup d’état set press freedom back by 10 years, as well as China, Turkmenistan (177th), Iran (178th), Eritrea (179th) and North Korea (180th).

RSF Secretary-General Christophe Deloire said: “Margarita Simonyan, the Editor in Chief of RT (the former Russia Today), revealed what she really thinks in a Russia One TV broadcast when she said, ‘no great nation can exist without control over information.’ The creation of media weaponry in authoritarian countries eliminates their citizens’ right to information but is also linked to the rise in international tension, which can lead to the worst kind of wars. Domestically, the ‘Fox News-isation’ of the media poses a fatal danger for democracies because it undermines the basis of civil harmony and tolerant public debate. Urgent decisions are needed in response to these issues, promoting a New Deal for Journalism, as proposed by the Forum on Information and Democracy, and adopting an appropriate legal framework, with a system to protect democratic online information spaces.

New way of compiling the Index

Working with a committee of seven experts* from the academic and media sectors, RSF developed a new methodology to compile the 20th World Press Freedom Index. 

The new methodology defines press freedom as “the effective possibility for journalists, as individuals and as groups, to select, produce and disseminate news and information in the public interest, independently from political, economic, legal and social interference, and without threats to their physical and mental safety.” In order to reflect press freedom’s complexity, five new indicators are now used to compile the Index: the political context, legal framework, economic context, sociocultural context, and security.

In the 180 countries and territories ranked by RSF, indicators are assessed on the basis of a quantitative survey of press freedom violations and abuses against journalists and media, and a qualitative study based on the responses of hundreds of press freedom experts selected by RSF (journalists, academics and human rights defenders) to a questionnaire with 123 questions. The questionnaire has been updated to take better account of new challenges, including those linked to media digitalisation.

In light of this new methodology, care should be taken when comparing the 2022 rankings and scores with those from 2021. Data-gathering for this year’s Index stopped at the end of January 2022, but updates for January to March 2022 were carried out for countries where the situation had changed dramatically (Russia, Ukraine and Mali).

Reporters Without Borders (RSF)

US$ 6.5 million paid to Zuberi on official written instructions of the Government: Cabraal

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The payments made to a ‘US CIA agent’ named Imaad Zuberi were proceeded on the official written instructions of the Government and not on the wishes of a single person, said former Governor of the Central Bank of Sri Lanka Ajith Nivard Cabraal, responding to the allegations levelled by Leader of the Janatha Vimukthi Peramuna (JVP) MP Anura Kumara Dissanayake at a special press conference at the Sri Lanka Foundations Institute today (03).

Claiming that such payments included those made to the said Imaad Zuberi and his organisations that were engaged by the Government in respect of communication programmes in the USA, Cabraal added that all payment on behalf of the Government had been made based on the official written instructions and approval of the relevant government authorities and that the respective payment protocols and procedures had been followed by the CBSL in the normal course of business when making these payments.

Full statement:

Statement by Ajith Nivard Cabraal on 3rd May 2022 re. the false allegation made by JVP Leader Dissanayake that a payment of USD 6.5 million was made by Ajith Nivard Cabraal to a “US CIA agent” named Imaad Zuberi in 2014, without proper approvals:

As the banker to the government, the payments made the Central Bank on behalf of the government in 2014 have been made on the official written instructions of the government, and not on the wishes of a single person. Such payments included those made to the said Imaad Zuberi and his organizations that were engaged by the Government in respect of communication programmes in the USA.

In that regard, it must be stated that all payments on behalf of the Government had been made based on the official written instructions and approval of the relevant government authorities. Further, the respective payment protocols and procedures had been followed by the Central Bank in the normal course of business when making these payments. Therefore, it can be confirmed that there has been no procedural or other violation by the Central Bank in making the payments totaling USD 6.5 million to Zuberi and his organizations, on behalf of the government.

Nevertheless, as it is now observed, there are certain groups of politically motivated persons who had been alleging that these payments have been made by me personally in a fraudulent manner, thereby causing a loss to the country.

In that regard, it must be stated that these same groups had these transactions investigated in detail for 5 years from 2015 to 2019, and after doing so, it had not been possible to point out any lapses or violations of any law on my part. As a result, no action was instituted against me by any law enforcement authority during that period of 5 years.

Nevertheless, these politically motivated groups have once again begun to hurl false allegations against me in order to tarnish my reputation and provoke public hatred upon me. While vehemently denying those allegations, I must state that I will respond to these despicable actions through the legal process and also institute action against the perpetrators of these falsehoods at the appropriate time in order to hold them accountable for their abusive actions.

Youths of the Struggle urge Chief Prelates to deprive titles of Rajapaksa Family

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Youths of the GotaGoHome Public Struggle today (03) have paid homage to the Chief Prelates of the Malwathu – Asgiri Chapters and handed over a communique,’ urging them to dismiss the titles bestowed upon the Rajapaksa family and issue a Sangha Commandment.

They also asked the Maha Sangha not to even grace an alms giving organised by the Rajapaksa Family.

The group has also urged the Chief Prelates to expel all Buddhist monks loyal to the Rajapaksas who are acting against the Sangha Shasana.

MIAP

Ranawaka nominated to post of Finance Minister of proposed ‘National Consensus Government’?

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MP Patali Champika Ranawaka has been nominated to the post of Finance Minister of the proposed ‘National Consensus Government’ to be jointly formed by the independent MP group, the Sri Lanka Podujana Peramuna (SLPP) and a faction of the Samagi Jana Balawegaya (SJB) upon Prime Minister Mahinda Rajapaksa’s resignation, internal sources disclosed.

Ranawaka was elected to Parliament from the 2020 General Election via the SJB but did not take its membership. He instead left his old political party Jathika Hela Urumaya and formed a new political force, the 43rd Brigade (Hathalis Thun Weni Senankaya), stemming a risk of collapse in the SJB over the preceding two years.

His latest position in the political saga could be driving this internal crisis into its bottle neck, sources claimed.

In the backdrop where Leader of the Opposition Sajith Premadasa completely dismisses the belief that an interim government should be formed, activists loyal to the 43rd Brigade are of the view that an interim government should be formed to make the country politically stable and to battle the prevailing economic crisis. These activists have recently made this claim on their Social Media channels as well.

Some of the most powerful figures of the 43rd Brigade have recently been seen displaying tendency to publicly criticise Premadasa and make fun of him.

Contradictory to the mutually understood belief by the Janatha Vimukthi Peramuna (JVP) and the SJB that an election should be called in instead of an interim government, Ranawaka recently told media that the holding of an election at this moment should not be necessary in the event that it could distort the public’s opinion.

Ranawaka also did not attend the May Day Rally organised by the SJB and instead attended a separate May Day Rally organised by the 43rd Brigade.

SJB hands over two no-confidence motions to Speaker (VIDEO)

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The Samagi Jana Balawegaya (SJB) has handed over two no-confidence motions against the regime led by the President and the regime led by the Prime Minister to the Speaker.

Speaking to reporters, Leader of the Opposition Sajith Premadasa stated that the Speaker may act in holding a debate in regard to these two motions and calling in a vote immediately.

He noted that this event can be identified as a moment where one of the strong demands made by those who are engaged in the people’s struggle is met.

MIAP