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IMF asks Sri Lanka to restore debt sustainability to gain a loan

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The International Monetary Fund said discussions with Sri Lanka on a potential IMF loan program are at an early stage and any deal would require “adequate assurances” that the island country’s debts can be put on a sustainable path.

IMF Sri Lanka Mission Chief Masahiro Nozaki said that IMF Managing Director Kristalina Georgieva discussed lending options and policy plans with a Sri Lankan delegation on Tuesday.

The Finance Ministry said that negotiations between a delegation led by Finance Minister Ali Sabry and the IMF started in Washington on a positive note yesterday (Monday).

The IMF has noted the recent steps taken to increase the interest rates and calling for RfP’s for the appointment of international financial/legal advisors as good first steps towards a possible restructuring programme.

The Finance Minister had made a request for a Rapid Financing Instrument (RFI) to mitigate the current supply chain issues.

However, initially the IMF was of the view that it doesn’t meet their criteria.

The Finance Ministry said that India subsequently made representations on an RFI for Sri Lanka as well and the IMF may consider this request due to the unique circumstances.

The IMF also appears to be positive towards granting an Extended Fund Facility (EFF), the Finance Ministry said, adding that this can help stabilize things in the short term till long-term solutions kick in.

“An IMF-supported program should be designed to resolve Sri Lanka’s acute balance of payments problems and put the economy back on a sustainable growth path as early as possible,” Nozaki said.

The statement came after protests in response to shortages of fuel and other essentials turned deadly on Tuesday and Sri Lanka’s Finance Minister formally asked the Fund for a Rapid Financing Instrument loan for countries needing urgent balance-of-payments support.

Nozaki said the IMF is “very concerned about the current economic crisis in Sri Lanka and hardships suffered by the people, especially the poor and vulnerable.”

But he noted that IMF staff had determined last month in an annual economic review that Sri Lanka’s public debt was unsustainable, and the country needs to take steps to restore debt sustainability prior to any IMF lending, including the emergency Rapid Financing Instrument (RFI).

Such restoration of debt sustainability typically requires a restructuring or reprofiling of public debts, which in Sri Lanka’s case would require cooperation from China, one of its largest bilateral creditors.

The IMF used the low-conditionality RFI loans extensively to assist countries during the COVID-19 pandemic and has provided such loans to ease balance of payments problems after natural disasters, conflicts and commodity price shocks.

“These considerations would need to be examined for a potential RFI for Sri Lanka, once adequate assurances are obtained that debt sustainability will be resolved,” Nozaki said.

He added that the specific design of a Sri Lanka IMF loan, including program targets and conditionality, would be agreed through extensive discussions between the government and IMF staff.“The discussions are still at an early stage,” Nozaki said.

Public protests intensify after  fuel price hike to offset CPC losses     

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A shortage of fuel in crisis-hit Sri lanka  ignited massive protests across the country as tens of thousands of angry motorists burned tyres and blocked a major roads leading into capital Colombo

Protests have engulfed the island nation over the past weeks after the government ran out of dollars to finance vital imports like food, medicine and fuel.

The government has raised fuel prises in unbearable proportions  to offset  massive daily loss of Ceylon Petroleum Corporation(CPC) which intensified  e public protests countrywide.

In one of the  incident  reported on Tuesday 19 at least 24 injured people injured and one person died in  the Rambukkana protest when the Police opened fire after using minimum power of manhandling , teragasing and batoning , eye witnesses said.

Police curfew has been declared within the limits of Rambukkana police area with immediate effect.

The fuel price hike  triggered widespread public protests with people taking to  several main roads,with the Colombo-Kandy road and Colombo-Chilaw road have been blocked by protesters 

Trains on the main line were delayed as the protesters were blocking the railway line in the Rambukkana area.

Several protests have been witnessed in Kandy, Galle, Gampola, Mathugama, Baddegama, Avissawella, Kegalle, Hingurakgoda, and Madampe this morning.

Moreover, buses are unable to proceed with their journeys on the Chilaw-Colombo main road as protestors throng the road.

 ylon Petroleum Corporation (CPC) was still making a daily loss of Rs. 327 million from the sale of fuel even after the increase of the prices on Monday night, Power and Energy Minister Kanchana Wijesekara said.

He told Parliament that the CPC was making a daily loss of Rs. 1.6 billion by Monday night.

The Minister said they had to increase fuel prices to ensure continuous procurement of fuel required for power generation.

“We have to procure fuel shipments regularly to maintain electricity supply with minimum interruptions. We had to increase fuel prices to find money for that purpose,” he said.

He said anyone who would take over the ministry would have to increase fuel prices and said he was ready to hand over the ministry to anyone if they could reduce fuel prices.

The Minister said they had discussions with the Lanka Indian Oil Company (LIOC) and reached an agreement to adopt a formular to increase fuel prices of the two institutions in same amounts in the future.

Sri Lanka’s dairy industry grapples to survive in current  forex crisis

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Sri Lanka’s dairy industry is  grappling to survive owing to the present foreign exchange crisis along with  rising costs, scarcity of feed, vitamins, fuel and fertilizer, and the difficulty in importation of maize.

 These shortcomings resulted in  a complete destabilization of the industry not only diminishing  supply of milk but  also mass unemployment as well,

The All Island Dairy Association (AIDA) has called on the government authorities to devise  integrated strategies to revitalize the  dairy industry and introduce  a cohesive and sustainable Dairy Development Plan for Sri Lanka.

Many dairy plants will be compelled to stop production altogether unless they are able to import spare parts within the next few weeks. If urgent steps are not taken to remedy the situation, the entire dairy industry will come to a halt.”

Binesh Pananwala, President of AIDA, noted that the dairy industry is in dire need of revival, as its deterioration will have a great impact on a plethora of industries and consumers alike. It is imperative that those measures are put in place to prioritize imports of raw materials for feed, which would lead to high levels of production and sustainability.

Mr Pananwalasaid that  it is imperative that feed such as maize and silage is readily available as it would greatly assist in sustaining the industry. However, the dependency on importing these commodities, and the restrictions placed on imports due to the forex crisis is crippling the industry.”

Veterinary professionals have continuously expressed their growing concern for the wellbeing of these animals due to the shortage of feed and medicines such as antibiotics and anaesthetics required for operations.

Mr. A.C.H Munaweera, Consultant and General Manager of AIDA,  discloaed that the Government of Sri Lanka has provided permits for the importation of maize on a case-by-case basis; however, fodder importers and dairy companies have struggled to sustain imports due to the forex shortage. 

The shortage of foreign exchange makes it difficult for banks to honour Letters of Credit (LCs) for importers to bring in the necessary raw materials needed to sustain the industry.

Mr. Nishantha Jayasooriya, immediate Past President of AIDA, also shared his thoughts on the crisis. “The entire industry has felt the tremendous impact of the forex crisis. 

The livestock farmers, producers, input suppliers and distributors alike have all been affected by rising costs and lack of resources. 

If conscious decisions and changes to fiscal and monitory policy are not made, the industry will suffer even further as it will be unable to meet the demand for both fresh milk and milk powder.”

The local production of milk is drastically falling due to the lack of quality feed, and the supply of imported milk is reducing due to the rising prices.

Currently, locally manufactured feed is used to maintain the livestock, however, due to the lack of fertilizers and various other concerns, the supply of feed is diminishing. As a result of this, the dairy industry will struggle further to meet the demand for both powdered and fresh milk going forward.

If the feed does not meet the required nutritional standard, the consequences would be severe as it would affect the health of approximately 900,000 animals.

Mr. Gamini Rajapaksha, Treasurer of AIDA, also commented. “Processing and value addition are integral and vital parts of the dairy industry. Dearth of foreign exchange and consequential scarcity of fuel, electricity etc. have adversely affected the processors. 

Some of the leading dairies are unable to operate their plants due to the lack of power, which forces them to reject the milk from the farmers. This has directly affected the livelihood of rural dairy farmer.

 Chilling tanks at milk collection centres cannot be operated, causing large volumes of milk to be discarded. Another aspect is the importation of equipment and spare parts for the dairy processing plants. 

Colombo Plan scholars visit Sri Lanka High Commission in Canberra

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An event was held at the Sri Lanka High Commission, Canberra on 14th April, 2022 to welcome Colombo Plan scholars who will pursue studies in Sri Lanka under New Colombo Plan Programme

The New Colombo Plan Programme annually provides around 10,000 undergraduates the opportunity to study and undertake internships in 40 countries across Asia and Pacific regions.

Addressing the gathering, the Acting High Commissioner thanked the Colombo Plan scholars for choosing Sri Lanka for their study programme. Highlighting the longstanding bilateral relations between Sri Lanka and Australia, she said Sri Lanka has maintained close relations with Australia since independence and both countires took initiatives to set up Colombo Plan. In 1951, the then Finance Minister of Sri Lanka, J.R. Jayawardena and Australia’s Foreign Minister, Sir Percy Spender initiated the suggestion for a regional organization for economic developments.

Joshua Gulli from Deakin University who will attend the University of Peradeniya, stated that this would be his first visit to Sri Lanka and that he was excited to visit the small but diverse island. “Besides its natural resources, the island can show evidence of 25 centuries of continuous civilization and culture” he added.  Harine Somasundaram whose parents are from Jaffna, shared pleasant memories in Sri Lanka and said it was an honour for her to be part of the event at the High Commission especially on the Sinhala and Tamil New Year day.

The programme included Power Point presentation on Sri Lanka, screening of a video on touristic attractions in the country and welcoming the Sinhala & Tamil New Year with tasting a new year meal.  The participants enjoyed traditional new year food and sweets prepared by the staff of the High Commission.

The Colombo Plan has been supporting member countries to enhance social economic development through educational programmes for over 70 years.

Sri Lanka High Commission

Canberra

20 April, 2022

Business contacts and orders for Sri Lankan companies at ANUFOOD Brazil exhibition

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Four Sri Lankan tea exporters namely, M/S. Imperial Tea (Pvt) Ltd, M/S Maltras International (Pvt) Ltd, M/S Basilure Teas (Pvt) Ltd and M/S Tea Talk (Pvt) Ltd participated at the ANUFOOD Brazil 2022 exhibition held in Sao Paulo from 12th to 14th April 2022 under the patronage of the Sri Lanka Tea Board and the Embassy of Sri Lanka in Brazil.

ANUFOOD Brazil exhibition is one of the leading food and beverage exhibitions held in Brazil annually. Sri Lanka was among 19 countries that participated at the ANUFOOD 2022 which showcased over 900 Brazilian and international brands. Wholesalers and distributors, supermarkets, convenience stores and representatives from the food and beverage industry visited the exhibition.

The Sri Lankan companies received satisfactory orders and B2B meetings. Sri Lanka’s participation was facilitated by the Embassy of Sri Lanka under the guidance of Minister Councellor (Commercial)  Seevali Wijewantha. 

Embassy of Sri Lanka 

Brasilia

20 April, 2022

New Cabinet line-up a game of political musical chairs, Opposition Leader tells CNBC

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The new Cabinet line-up having the President and Prime Minister Rajapaksas intact is a game of political chairs that deceives the people, said Leader of the Opposition Sajith Premadasa, speaking exclusively to CNBC.

The no-confidence motion is being carried out against the government and the requisite numbers are expected to be achieved, Premadasa revealed clarifying the Opposition’s response to the mis-governance in the country.

Responding to the query on whether the political instability and the political crisis within the country could put the International Monetary Fund (IMF) negotiations for a bailout package at risk, the Opposition Leader clarified that irrespective of political ideology, what is of greatest importance is the country’s national interest, which gains supremacy over everything else and stands for the country’s ability to obtain financial arrangement with institutions in terms of debt standstill, debt moratorium and a scheme to achieve greater rankings in terms of international grading institutions. The ability to enter the international capital market to obtain refinancing loans, which would solve some of the problems, and bridge financing with multilateral partners are required at this point, hence the national interest, he emphasised.

MIAP

Terror at Rambukkana: Court denies Police report. On-site probe continues (PHOTOS)

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The Police report submitted to the Kegalle Magistrate Court on the shooting at Rambukkana yesterday (19) to disperse a public protest has strongly been opposed.

Accordingly, the Magistrate was conducting an on-site probe with the relevant officers from around 2 pm today until the evening. Reports said that the residents of the area have shown blood stains on road about half a kilometre away from the place in which the terror had occurred.

Accusations are being levelled against the Police that the blood stains near the shooting location have been washed away.

The Police were also said to be embarrassed as they were unable to produce a firm statement before the Court, especially in terms of corroborating the story with what the Police Media Spokesperson, the Senior Police Spokesperson, the Inspector General of Police and the Minister in Charge of the Police had produced to the media.

Many legal counsels attended the Court proceeding.

Meanwhile, Attorney at Law Udul Premaratne made a Social Media remark in this regard and published photographic evidence matching the residents’ version of the story.

MIAP

May be an image of 5 people, people standing, outdoors and text that says 'M mcr C PXUCE XIC: NCI'
May be an image of 4 people, people standing and outdoors
May be an image of 5 people, people standing and outdoors
May be an image of 5 people, people standing and outdoors

Cardinal condemns Rambukkana shooting, urges government to immediately stop repression (VIDEO)

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Archbishop of Colombo His Eminence Malcolm Cardinal Ranjith speaking to media in Colombo today (20) condemned the shooting at Rambukkana and urged the government to call in an independent probe and penalise those responsible.

The Cardinal also urged the government to immediately stop the repression of innocent people who are engaged in protests due to the unbearable economic hardship by illegal means.

He also reminded that protests should be carried out in a dignified and just manner without being deceived by forces who use tactics to weaken them from within.

MIAP

Former CBSL Chief clarifies background of decision to provide greater flexibility in Exchange Rate

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Statement by Ajith Nivard Cabraal on 20th April 2022

This statement is made by me to clarify the background of the decision to provide greater flexibility in the exchange rate as announced by the Central Bank on the 7th March 2022.

In that regard, it is to be noted that the Monetary Board decided on 7th March 2022 to “allow the market to have a greater flexibility in the exchange rate with immediate effect and communicate that the Central Bank is of the view that forex transactions would take place at levels which are not more than Rs. 230 per US dollar”. On the same day, an announcement was made to the media in line with the above decision. Refer: https://www.cbsl.gov.lk/sites/default/files/cbslweb_documents/press/pr/press_20220307_policy_package_to_support_greater_macroeconomic_stability_e.pdf

From the above it will be clear that, while the Monetary Board had, as a market guidance, expressed its “view” as to the level at which forex transactions would take place, a clear decision had been taken to allow for the flexibility of the Sri Lankan Rupee in the Forex market. It would also be noted that from 8th April 2022 onwards, the Monetary Board under the new Governor and new Secretary, Treasury have continued with the above exchange rate policy, without fixing a specified exchange rate, as was the case immediately prior to 7th March 2022.    

Julian Assange’s extradition to the US moves a step closer after court order

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Assange is wanted in the US over an alleged conspiracy to disclose national defence information after WikiLeaks published hundreds of thousands of leaked documents relating to the Afghanistan and Iraq wars.

Julian Assange’s extradition to the US has moved a step closer after a court order.

Westminster Magistrates’ Court has formally issued an order to extradite the WikiLeaks founder after years of legal toing and froing.

Home Secretary Priti Patel will need to approve the order, although defence lawyers may yet appeal to the High Court.

A supporter of Wikileaks founder Julian Assange protests outside Westminster Magistrates' Court in London, ahead of his continuing extradition hearing. Picture date: Wednesday April 20, 2022.
Image: Supporters protested the decision outside Westminster Magistrates’ Court on Wednesday

An extradition order was issued by chief magistrate Paul Goldspring during a seven-minute hearing at Westminster Magistrates’ Court on Wednesday.

Mr Goldspring said: “In layman’s terms, I am duty bound to send your case to the secretary of state for a decision.”

The extradition of Assange may yet be further delayed by an appeal.

The 50-year-old was not present in court physically and instead watched the administrative proceedings by video link from Belmarsh Prison.

At one point during the brief hearing he appeared to make a heart shape with his hands.

Former Labour party leader Jeremy Corbyn joins supporters of Wikileaks founder Julian Assange protest outside Westminster Magistrates' Court in London, during his continuing extradition hearing. Picture date: Wednesday April 20, 2022.
Image: Former Labour party leader Jeremy Corbyn joins supporters of Wikileaks founder Julian Assange protest outside Westminster Magistrates’ Court

Corbyn: ‘We will carry on campaigning’

Outside the court, scores of supporters gathered carrying placards reading “don’t extradite Assange”.

Among them was former Labour leader Jeremy Corbyn, who told those assembled: “He’s done absolutely no more than telling the truth to the world.

“We will carry on campaigning.”

Assange is wanted in the US over an alleged conspiracy to obtain and disclose national defence information after WikiLeaks published hundreds of thousands of leaked documents relating to the Afghanistan and Iraq wars.

He has always denied any wrongdoing.

Supporters of Wikileaks founder Julian Assange protest outside Westminster Magistrates' Court in London, during his continuing extradition hearing. Picture date: Wednesday April 20, 2022.
Image: Outside the court, scores of supporters gathered carrying placards reading “Don’t extradite Assange”.

Assange’s legal team has claimed the publication of classified documents exposed US wrongdoing and was in the public interest.

They said the prosecution was politically motivated and that he faces up to 175 years in jail.

Assange, who married his fiancée Stella Moris behind bars last month, has been held in Belmarsh prison for three years since being dragged out of the Ecuadorian embassy in London, where he took refuge in 2012 to avoid extradition to Sweden on a rape allegation he denied.

Sky News