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Today is the International Labor Day…

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Today (01) is International Labor Day – when all indigenous working people fight for their rights.

May 1, 1886, is designated as International Labor Day to commemorate the struggle of workers in Hemaquat Square in Chicago, USA, in May 1886, demanding that the working day be limited to eight hours.

Also, the red flag of the working people is symbolized in red, commemorating the march in which the workers who were killed in the police firing picked up their blood-soaked shirts and marched.

No matter how advanced the technology is, no matter how rich the world is, the living standards of working people are still very low. May Day symbolizes their continued struggle for a better standard of living.

Given the current political situation in Sri Lanka, the ruling Sri Lanka People’s Front (SLPP) will not hold a May Day rally as a party this year, while only the Samagi Jana Balawega will hold a May Day rally in Colombo among the other major parties.

The Janatha Vimukthi Peramuna (JVP) and the United National Party (UNP) have selected areas outside Colombo for the May Day celebrations this year.

Meanwhile, groups protesting against the President and the government occupying the Galle Face Green are also scheduled to hold a May Day rally at the venue.

A ‘Sangha convention’ to be formed to support the proposal of the interim government?

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The Maha Sangha who held a Sangha convention in Colombo yesterday (30) has stated that if they do not take action to remove the Prime Minister and the Cabinet and form an interim government, they will announce a Sangha Convention and reject all politicians.

Ven. Agalakada Sirisumana Thera, Ven. Omalpe Sobhitha Thera and many other monks held this conference at the Independence Square in Colombo.

The formation of this interim government is a proposal made by the Sri Lanka Freedom Party, led by Maithripala Sirisena, who recently became independent in parliament from the current government, and former government ministers Wimal Weerawansa Udaya Gammanpila and Vasudeva Nanayakkara. Although the people of the country have taken to the streets demanding the resignation of President Gotabhaya Rajapaksa, the group of Wimal, Gammanpila, Vasu and others proposing this interim government are adamant that Gotabhaya Rajapaksa should not resign.

Accordingly, it seems that the people in the streets will not accept the proposal to remove Mahinda Rajapaksa, instead of Gotabhaya Rajapaksa and appoint a Prime Minister from the Sri Lanka People’s Front and give ministerial posts to several other parties in Parliament to form a government.

Prime Minister’s May Day Message

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I extend my heartfelt congratulations to the dear working people who are working day and night for the betterment of all citizens.

It is no secret that you, who have been facing various economic hardships in the face of the global epidemic for more than two years, have also been affected by this economic crisis faced by the country.

Even in the face of this unexpected economic crisis, the example you set for the country by working with great commitment and restraint is not insignificant.

I have come forward with you for the workers’ struggle and I have not neglected the duties and responsibilities that must be fulfilled for your rights every time I am held accountable.

However, in order to overcome this economic crisis faced by the country, we must all work together and overcome this challenge first.

The Government is currently taking all possible measures to manage the economic crisis and is seeking the necessary support at the local and international levels.

The ultimate goal of all these efforts is to create a better country. On this International Labour Day, I respectfully recall the immense sacrifices made by the working people in this regard.

Prime Minister
Mahinda Rajapaksa
Democratic Socialist Republic of Sri Lanka

Sri Lanka’s several top corporates affect by stressed environment:

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Some rated Sri Lankan corporates are more affected by the challenging macroeconomic environment stemming from the Sri Lanka sovereign’s distressed credit profile, Fitch Ratings announced.

Fitch in April downgraded Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘C’. The Long-Term Local-Currency IDR was affirmed at ‘CCC’. Sri Lankan corporates are grappling with rising costs and weakening disposable incomes.

The country’s weak foreign-currency reserves will continue to pressure imports, and the unprecedented spike in interest rates will raise borrowing costs and weaken financial flexibility.

Fitch downgraded the National Long-Term Rating on Singer (Sri Lanka) PLC to ‘A+(lka) and revised the Outlook on Abans PLC’s ‘AA-(lka)’ rating to Negative as the two consumer electronics retailers are most immediately affected by the developments.

Many other corporates face revenue and margin pressure from either their exposure to imported goods, discretionary demand, Government expenditure, or high short-term debt.

However, most rated corporates have adequate headroom in terms of low leverage, sufficient interest cover and liquidity to weather challenges in the next 12 months.

Despite the challenges in the last 12 months, Fitch estimates that the aggregate leverage of rated corporates in Sri Lanka remained steady at around 1.5x in the fiscal year ended 31 March 2022 (FY22).

“We forecast the aggregate revenue of rated corporates to fall by around 5% in FY23 and EBITDAR margins to narrow by around 200bp due to weakening demand and rising costs. We expect leverage to rise to around 2.0x as a result, with EBITDAR coverage of interest and rent falling to around 4.0x from 6.5x,” Fitch said.

It said corporates with exposure to discretionary demand, imported finished goods or Government expenditure should see revenue fall by a sharper 15%-20% on average

Fitch noted that “ the expectations compare with an estimated 10% increase in revenue and 100bp squeeze in EBITDAR margins in FY22.

The performance in FY22 was supported by some issuers’ exposure to defensive demand or exports, while others operate in sectors that benefitted from a scarcity of imports and were better able to access local banks than smaller counterparts to support that demand.”

It also said many companies also cut costs and rationalised capex to preserve cash and maintain balance-sheet quality, although their ability to continue to do so may prove challenging beyond the near term.

A continued sharp decline in demand and cost inflation beyond that timeframe could exert further pressure on corporate ratings.

CB to  gradually relax forced conversion rule of export proceeds

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Sri Lanka plans to remove a forced conversion rule of services exports as part of plans to gradually relax controls imposed on earnings of exports  in recent months, Central Bank Governor Nandalal Weerasinghe revealed .

The Central Bank imposed a series of controls on forcing exporters of goods and services to convert dollars by force and also imposed outward exchange controls.

This was an attempt to reduce the the impact of money printing  to keep rates down over the past two years driving up credit and excess demand creating forex exchange shortages.

“In the case of services exports like IT and tourism, we will remove the mandatory conversion requirement,” the Central Bank Governor said.

“Goods imports are made through customs. We have no way to track these services. We have been told that some person are not bringing these money in at all because of the forced conversion rule,”he said adding that“We want to progressively remove this also.”

The Central Bank was also planning to relax a rule that required tourists to pay hotels in dollars only.

Governor Weerasinghe immediately slashed a surrender requirement which made banks transfer 50 percent of export and remittances to the central bank for new money, to 25 percent.

Analysts and economists have pointed out that the steep depreciation of the rupee during an attempted float (suspension of convertibility) was due to the surrender requirement .

When a third world intermediate regime central bank prints money, the controls imposed rapidly worsen the crisis. Analysts had pointed at the time that the conversion rules were similar to those imposed by Zimbabwe which was printing excess RTG dollars.

“We want to progressively remove control step by step,” Governor Weerasinghe said. “For the time being these have been done to stabilize the foreign exchange rate market.”

Governor Weerasinghe said the exchange rate was not being controlled and expatriate workers and other were getting a fair rate now.

Under Governor Weerasinghe policy rates were raised to 14.50 percent from 7.50 in a bid to end the fundamental cause of the currency crisis which is money printed to keep interest rates artificially low.

Treasuries yields have also been allowed to go up, which will drive private savings to the budget deficit instead of to areas like construction and capital goods imports, creating forex shortages for items like medicines.

There have been no major food shortage due to the use of Undiyal payments through open account imports.

Newly appointed Treasury Secretary has also ordered a temporary halt in capital expenditure which will also reduce the deficit, the need for money printing and high rates and construction related imports.

PM’s May Day Message

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I extend my heartfelt congratulations to the dear working people who are working day and night for the betterment of all citizens.

It is no secret that you, who have been facing various economic hardships in the face of the global epidemic for more than two years, have also been affected by this economic crisis faced by the country.

Even in the face of this unexpected economic crisis, the example you set for the country by working with great commitment and restraint is not insignificant.

I have come forward with you for the workers’ struggle and I have not neglected the duties and responsibilities that must be fulfilled for your rights every time I am held accountable.
However, in order to overcome this economic crisis faced by the country, we must all work together and overcome this challenge first.

The Government is currently taking all possible measures to manage the economic crisis and is seeking the necessary support at the local and international levels.

The ultimate goal of all these efforts is to create a better country. On this International Labour Day, I respectfully recall the immense sacrifices made by the working people in this regard.

Mahinda Rajapaksa
Prime Minister of the Democratic Socialist Republic of Sri Lanka

The present Economic and Political crisis in Sri Lanka at glance and our struggles

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The present Economic and Political crisis in Sri Lanka at glance and our struggles

The economic and political crisis of Sri Lanka between 2019 to 2022 has been a worldwide talking topic. The ongoing situation of Sri Lanka is largely attributed to the economic mismanagement of the incumbent government, leading to inflation which Sri Lanka had never experienced before, near depletion of foreign exchange reserves, shortage of major essentials, soaring domestic prices, and sinking banking sector. Throughout the decade, the Sri Lanka government has been borrowing vast sums of money which have caused a series of hammer blows to the economy. Also, the natural disasters weren’t favourable to the country – such as heavy monsoons, Easter Sunday attacks, COVID, and the ban on chemical fertilizers which affected the farmers’ harvests. By expecting to stimulate the economy, the present government slashed taxes in a doomed attempt which backfired and hit the revenue of Sri Lanka. Foreign reserves are severely depleted, estimated < 1 week of unstable reserves shrinking its reserves from $6.9 billion in 2018 to $2.2 billion this year. This impacted imports of fuel and other essentials, which sent prices soaring. The oil import bill has sharply increased. Shortages of fuel, cooking gas, medicines, medical supplies and food items made the Sri Lankan people get into the streets like never before. Consumer price inflation is now over 20% driven by both domestic shortages and import prices (LKR depreciation) and shortages (lack of forex) and severe USD liquidity shortages have directly left the Sri Lankan economy in the worst possible situation.

Sri Lankans were compelled to wait in endless queues and lines daily to consume their basic goods which even caused deaths and health crises with the heat and longevity of the lines. Unlike the other generations before, today’s younger generations are well aware of the government’s doings and this worsening economic crisis was the breaking point to bring all of them together and get into the streets to raise their voices and their struggle continues whole over the island especially in Galle Face for more than 3 weeks now demanding the immediate resignation of the President, Prime Minister, and the entire government is continuing despite inclement weather. Thousands of them are students and people from all over the country visit there and show their support. Thousands of Sri Lankan university students mobbed Prime Minister Mahinda Rajapaksa’s home on Sunday demanding his resignation over the island nation’s worsening economic crisis. Police also have been using brutality on the protesters which proved the killings of 04 persons by shooting them who were engaging in peaceful protest action in Rambukkana by the police officials as reported. This aggravated the situation even more among the nation island-wide. Especially the situation of garment sector workers, who have been in vulnerable conditions even before this crisis, now has compelled them to bear an immense weight on their shoulders and minds.

Sri Lankan trade unions including our union (FTZ&GSEU) have been writing, campaigning and predicting the situation to the government for years before which were totally ignored and now paying the price. Trade unions both in the Public and Private sectors are also carrying out joint campaigns but there is a vacuum of leadership to rally around all the protests with a clear program of action and proposals of solutions for the prevailing crisis. Our union FTZ & GSEU together with the unions at National Labour Advisory Councils have formulated the proposals of solutions for the current crises and submitted them for social dialogue. As a part of our process to show the opposition, Free Trade Zones & General Services Employees’ Union together with its members marched to the streets of Katunayake, Biyagama, Ekala and other places where individual factories are located under the slogan of “Let’s send Gota Home! Abolish the executive presidency”. The photos and videos are attached for your information. We will march with them once again on May 1st 2022, we will send you the updates soon. We all need your support and prayers in these hard times as always. 

SLPP-devotees to hold special May Day rally in Nugegoda. MR’s final decision tomorrow?

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Several trade unions devoted to the Sri Lanka Podujana Peramuna (SLPP) the Ruling Party are prepared to hold a special May Day rally in Nugegoda tomorrow (01), following weeks of anti-government protests being grown across the country.

The SLPP itself, nevertheless, plans no May Day celebration this year.

This special May Day rally will be held at the Ananda Samarakoon Outdoor Theatre in Nugegoda, where ‘Mahinda Sulanga’ movement was launched in 2015 following the January 08 Rajapaksa defeat in that year, sources closer to SLPP disclosed.

In the meantime, Mahinda Rajapaksa is preparing to take a final decision on whether he will continue to serve as the Prime Minister of Sri Lanka and the decision is likely to be announced tomorrow, sources added.

MIAP

Artists swarm across protest ground! (PHOTOS)

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Artists swarm across protest ground! (PHOTOS)

The ‘Jana Aragala Kalakaruwan’ artists collective today (30) organised a walk and a protest from the Independence Square, Colombo to the Galleface Ground demanding the stepping down of President Rajapaksa and the government.

Many artists of various fields joined the protest.

Click Here to view full photos.

‘Jana Aragala Kalakaruwo’ collective adds more shapes to public protests (VIDEO)

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The ‘Jana Aragala Kalakaruwo’ artists collective today (30) organised a walk from the Independence Square, Colombo to the Galleface Protest zone demanding the stepping down of President Rajapaksa and the government today.

The walk was attended by artists of various fields.

The protesters demanded that the current regime must be stepping down without further oppressing the people and the country.

MIAP