The Asian Human Rights Commission (AHRC) has urged President Anura Kumara Dissanayake to implement urgent legal reforms to restore the rule of law: In a written appeal, the AHRC emphasised the need to address judicial delays, introduce anti-corruption legislation, and reform the Attorney General’s Department for improved independence, efficiency, and transparency in governance.
The Democratic People’s Front (DPF) appointed Barath Arulsamy as its new Vice President during a politburo meeting led by Party Leader Mano Ganesan in Colombo: The meeting focused on reviewing the party’s progress, discussing strategies for upcoming Local Government elections, and strengthening its organisational structure: Ganesan emphasised enhancing the party’s political and international engagement while reaffirming its commitment to advocating for Tamil and minority rights.
Former State Minister of Finance Shehan Semasinghe praised the former government’s efforts in steering Sri Lanka from crisis to growth, citing the Fitch Ratings upgrade of the country’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘CCC+’ from ‘Restricted Default’: He highlighted this milestone as a success of debt restructuring, strengthening both local and global confidence in Sri Lanka’s economic recovery.
The Election Commission will provide the Police with a list of candidates who have failed to submit their income and expenditure reports since contesting the general election: The Police will take legal action against these candidates: Meanwhile, the names of those who have submitted their reports are displayed at district secretariats and election offices.
The Education Ministry has instructed all government schools to avoid organising programmes on Sundays to prevent conflicts with Sunday school activities: A letter from the Additional Secretary, P.R. Kariyawasam, noted a request from the Buddhasasana, Religious and Cultural Affairs Ministry to allow children to participate in Sunday school: Schools were advised to schedule any necessary programs outside Sunday school hours.
The Central Bank (CBSL) has announced relief measures for SMEs affected by the Easter Sunday attacks, the COVID-19 pandemic, and recent economic conditions: These measures include rescheduling non-performing loans based on the borrower’s ability to repay and a revival plan, with final agreements due by June 15, 2025: SMEs may also receive interest waivers, and new loan applications should not be rejected solely based on adverse CRIB records: SMEs must engage with their bank’s Business Revival Units by March 31, 2025, to qualify for relief.
The Police will launch a nationwide special traffic operation starting today (23) focusing on passenger buses and other vehicles to reduce road accidents: The operation, continuing through the festive season, will prioritise inspections for alcohol or substance-impaired driving, reckless driving, and technical defects in buses: Traffic officers will conduct 24-hour surveillance, and the public can report violations via hotlines, police stations, or WhatsApp.
A gazette notification issued on December 20, 2024, extends the compulsory retirement age for various government medical officers to 63 years: This includes Medical Specialists, Grade Medical Officers, Dental Officers, Medical Administrative Grade officers, and Dental Specialists: The new provisions, effective from January 1, 2023, were announced by the Ministry of Public Administration, Provincial Councils, and Local Government.
An extraordinary gazette signed by President Anura Kumara Dissanayake has delegated the authority to borrow and issue debt securities, both domestically and internationally, to the Secretary of the Treasury on behalf of the Government of Sri Lanka: The Treasury Secretary is also authorised to sign agreements for foreign loans and government guarantees for state corporations or public enterprises seeking foreign loans, as well as any related contracts, bonds, or promissory notes.
The 13th Defence Services Taekwondo Championship 2024/2025 was successfully held at the SLAF Base Katunayake Gymnasium from December 17-20, 2024: The Sri Lanka Air Force Women’s Team claimed the Women’s Championship with five Gold, two Silver, and nine Bronze medals: The SLAF Men’s Team secured second place with four Gold, one Silver, and one Bronze: Aircraftman Prabashwara DPGAM was named ‘Best Player’: The awards ceremony was attended by Air Vice Marshal Chaminda Wickramaratne and senior officers from the tri-services.
December 22, Colombo (LNW): Sri Lanka has begun establishing a Public Debt Management Office (PDMO) to centralize and streamline the management of government borrowings and obligations of state enterprises and sub-national bodies. Officially launched on December 2, 2024, the PDMO is set to be fully operational by January 2026, replacing functions previously handled by multiple agencies, including the Central Bank, the Department of External Resources, and the Department of Treasury Operations.
The PDMO’s primary objectives are to enhance public debt transparency, improve accountability, and ensure sustainable borrowing practices. Its responsibilities include managing government debt, issuing loan guarantees, overseeing on-lending operations, and maintaining comprehensive records of public debt.
Additionally, state-owned enterprises (SOEs), local authorities, and provincial councils are now required to report quarterly outstanding debt and obtain written approval for borrowings.
Key tasks of the PDMO will involve preparing a medium-term debt management strategy, negotiating domestic and foreign loans, and publishing government securities auction calendars. The agency will also assess credit risks, manage debt-related cash flows, and oversee liability management operations.
As part of ongoing economic reforms, Sri Lanka has successfully restructured its domestic and foreign debts. Local bondholders received eight tranches of floating-rate rupee bonds worth LKR 155.7 billion, maturing between 2023 and 2043.
These bonds, primarily held by banks, avoided principal reductions and offer a coupon rate 50 basis points above the Central Bank’s Standing Lending Facility Rate (SLFR). The rate is calculated as a six-month historical average before the payment date. Foreign bondholders were also provided options to convert holdings into local-currency bonds, subject to limits.
Internationally, Sri Lanka has restructured $12.5 billion in sovereign bonds, most of which were accumulated during repeated currency crises between 2015 and 2019. These crises were driven by expansionary monetary policies that led to forex shortages and unsustainable debt levels.
The government’s efforts aim to reduce the debt-to-GDP ratio to 90% by 2028, down from pre-default levels, while bringing the interest-to-revenue ratio to 42%, a significant improvement despite remaining above the average for similarly rated economies.
Despite these gains, analysts warn that inconsistent monetary policies, such as those involving soft pegs and flexible exchange rates, could trigger recurrent inflation and currency crises. They liken Sri Lanka’s challenges to the United Kingdom’s economic difficulties in the 1970s, underscoring the need for robust monetary policy frameworks to achieve sustainable economic stability.
While debt restructuring marks progress, Sri Lanka must address deeper structural issues, including fiscal discipline and growth-oriented reforms. Ensuring monetary stability and avoiding policy conflicts will be crucial for fostering long-term resilience and preventing future crises.
December 22, Colombo (LNW): The Sri Lankan Government has decided not to revise the Special Commodity Levy Act No. 48 of 2007, keeping the levy rates on essential goods unchanged until January 1, 2025. This decision was endorsed by the Cabinet of Ministers, following a proposal from President Anura Kumara Dissanayake, who serves as the Minister of Finance, Planning, and Economic Development.
The Special Commodity Levy Act was introduced to streamline the taxation system on 63 essential items, including staple foods, by consolidating various taxes into one levy. In March 2024, the Cabinet had approved a proposal to revise the Act and introduce additional taxes, such as Value Added Tax (VAT), on these goods. However, after considering concerns about the potential negative impact on local farmers and market prices, the Government decided to retain the current levy structure.
Cabinet Spokesman Dr. Nalinda Jayatissa explained that maintaining the existing levy was essential for balancing the needs of consumers and local producers. He emphasized that introducing VAT could harm local farmers by exposing them to unfair competition, and the resulting price hikes could further burden consumers. The decision to keep the levy intact aims to protect farmers while ensuring that essential goods remain affordable for the public.
Despite this, Sri Lanka is under an agreement with the International Monetary Fund (IMF) to phase out the Special Commodity Levy and replace it with VAT. The previous government had planned to replace the levy with more stable taxes as part of its commitment to IMF reforms. According to senior Ministry officials, the decision to reconsider the levy was influenced by concerns over the revenue losses that could result from abrupt policy changes.
The Special Commodity Levy is unique in that, when it applies, no other indirect taxes, such as VAT or excise duties, are levied on affected goods. However, it has faced criticism for its lack of stability, as the rates can be changed with the signature of the Finance Minister, sometimes with little notice. An example of this occurred in October 2020, when the levy on sugar was drastically reduced overnight, leading to significant revenue losses and windfall gains for certain importers. This move raised questions about the transparency and intent behind such policy shifts.
The IMF’s technical report also highlighted that the ease with which the levy can be altered could conflict with Sri Lanka’s constitution, which requires Parliament to have full control over public finances. Despite these challenges, the Government has chosen to preserve the current tax structure, at least until 2025, as it seeks to balance fiscal reforms with the protection of local agriculture and the welfare of consumers.
December 22, Colombo (LNW): Fitch Ratings recently upgraded Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating to ‘CCC+’ from ‘Restricted Default’ (RD), reflecting the country’s significant progress in resolving its debt crisis.
This follows the approval of a $12.55 billion debt restructuring plan and the acceptance by 98% of bondholders to exchange defaulted bonds for new securities issued on December 20. The move marks Sri Lanka’s exit from default status and improves its credibility in international financial markets.
The debt restructuring initiative is projected to save approximately $9.5 billion in debt servicing over four years, alleviating fiscal pressures. The freed-up funds can now be redirected to critical sectors, such as social services and infrastructure development.
Additionally, the introduction of governance-linked bonds (GLBs) and macro-linked bonds (MLBs) ties debt obligations to governance reforms and economic performance. Achieving specific targets under these instruments could lower interest payments, encouraging better fiscal management.
The credit upgrade is expected to boost investor confidence, potentially attracting foreign investment and fostering economic growth. Fitch emphasized the importance of continuing economic and governance reforms to sustain and further improve Sri Lanka’s credit ratings.
In its announcement, Fitch highlighted Sri Lanka’s success in normalizing relations with creditors, stating, “The upgrade reflects Fitch’s assessment that Sri Lanka has normalized relations with a majority of creditors after the final results of the invitation to exchange outstanding international sovereign bonds.”
However, one bond series, governed by older collective action clauses, failed to meet the 75% acceptance threshold due to opposition from Hamilton Reserve, which held approximately 25% of the series. Despite this, 96% of the total commercial external debt was successfully restructured.
Sri Lanka’s progress has been supported by its adherence to an International Monetary Fund (IMF) program. Since September 2022, broadly deflationary monetary policies implemented by the central bank have started yielding positive results in the balance of payments.
However, analysts caution that recent shifts toward mid-corridor policy rates could lead to inflationary pressures similar to those experienced during previous episodes of monetary instability.
The country’s government debt-to-GDP ratio is projected to decline to 90% by 2028, down from its pre-default level of 67%. While interest-to-revenue coverage is expected to improve, it will remain above the average for ‘CCC’-rated nations.
Sri Lanka’s experience highlights the challenges faced by countries with inconsistent monetary regimes, such as soft pegs or flexible exchange rates.
These frameworks often result in high inflation, repeated stabilization crises, and elevated nominal interest rates. Analysts drew parallels with the UK’s economic turmoil in the late 1970s when aggressive macroeconomic policies led to interest rates on long-term bonds nearing 20%.
December 22, Colombo (LNW): The Government of Sri Lanka has requested the US District Court for the Southern District of New York to extend its stay of proceedings in a lawsuit filed by Hamilton Reserve Bank (HRB). The case revolves around HRB’s claim for $250 million in principal and interest on International Sovereign Bonds (ISBs). The Government has pledged to update the court by 6 January 2025, by which time it anticipates concluding its ongoing debt restructuring efforts.
Sri Lanka’s legal team argues that an extension is vital to ensure the success of its restructuring program, a core component of the country’s economic recovery plan under the IMF-supported framework. The Government reports significant progress, with over 95% of bondholders across most series participating in its debt exchange offer launched on 25 November. However, HRB, which holds 25% of the 2022 Bonds, has refused to participate, maintaining its legal claims and filing a partial opposition to the Government’s motion.
In its submission, Sri Lanka highlighted that previous court stays have been instrumental in facilitating negotiations with creditors and aligning agreements with IMF requirements. The country’s restructuring efforts earlier in 2024, which involved bilateral and private creditors, laid the groundwork for the current debt exchange. The Government contends that continuing the stay would prevent disruptions and ensure an equitable resolution for all stakeholders.
HRB, however, argues that an extension is unwarranted after the 12 December 2024 debt exchange deadline, as most bondholders have already made their decisions. The bank asserts that post-deadline procedures, such as announcing results and issuing new bonds, are unrelated to the litigation. HRB further emphasizes that its holdings of the 2022 Bonds remain unaffected by the restructuring, and the Government has acknowledged that their terms remain unchanged. As a result, HRB insists that its claim for $250 million should proceed without further delay.
Sri Lanka’s legal team counters that premature litigation could derail the broader restructuring process and deter other creditors, creating legal uncertainty. They argue that HRB will not suffer harm from a delay, as accrued interest will compensate the bank for the wait.
Domestically, the successful completion of the debt restructuring is critical for Sri Lanka’s economic recovery. It aims to stabilize public finances, create fiscal space for development, and restore confidence among both domestic and international stakeholders. However, critics have raised concerns about inefficiency and corruption within state institutions, questioning the Government’s ability to deliver on its promises.
Analysts note that the court’s decision will have far-reaching implications. A ruling in Sri Lanka’s favor could enable the Government to complete its restructuring process and set a precedent for handling sovereign debt disputes. Conversely, denying the stay could accelerate HRB’s litigation, potentially complicating Sri Lanka’s recovery efforts.
The Government’s proposed update on 6 January 2025 is expected to confirm the restructuring’s completion, marking a significant milestone in Sri Lanka’s economic recovery. Analysts suggest the outcome of this case could shape future approaches to sovereign debt disputes, balancing individual creditor claims with broader economic stability goals.
December 22, Colombo (LNW): The Sri Lankan calcium carbonate market has witnessed a significant transformation over the past few years. The Herfindahl-Hirschman Index (HHI), a measure of market competitiveness, increased from 1807 in 2017 to 2384 in 2023, indicating a shift toward a moderately competitive market. A higher HHI suggests fewer players or exporting countries in the market, while a lower value represents a more diverse landscape.
Amid these market dynamics, Macksons Minerals and Polymers Ltd., a subsidiary of the Macksons Holdings Group, has made a strategic move by signing a $17 million agreement with the Board of Investment (BOI) of Sri Lanka. This agreement marks the launch of an ambitious project to establish a cutting-edge processing facility aimed at maximizing the value of locally sourced minerals.
Located on a 15-acre site in Milleniya, Paragasthota, the proposed plant will feature three production lines dedicated to manufacturing ultra-fine ground calcium carbonate (GCC), dolomite powders, solvent-based resins, and water-based binders.
These materials will cater to industries such as coatings, ceramics, construction, and allied sectors. The facility will serve both the local market and the indirect export sector, reducing the country’s dependency on imports and curbing foreign exchange outflows.
This initiative aligns with the BOI’s goals of fostering sustainable industrial growth and supporting Sri Lanka’s journey toward industrial self-reliance. Macksons Minerals and Polymers aims to elevate local industry standards, promote economic development, and contribute to the country’s industrialization efforts.
Calcium carbonate, a versatile mineral abundant in nature, plays a critical role across various industries. It is widely used as a coating agent for paper and cardboard, an additive in food, pharmaceuticals, and cosmetics, a soil fertilizer, a water remineralizer, and in flue gas desulfurization. Its applications in plastics date back to the 1950s, with its integration into polyvinyl chloride (PVC) formulations.
The mineral has since become integral to products such as wires, cables, pipes, and profiles, with polyolefins accounting for a significant share of its use. It is also utilized in thermoforming sheets, injection-molded articles, and shopping bags. In films, calcium carbonate enhances performance by reducing density and boosting opacity, as seen in BOPP (biaxially oriented polypropylene) films.
Recent innovations have further advanced calcium carbonate applications in polymers. By increasing its content to 40%-60%, manufacturers can create breathable films for hygiene products like diapers, with membranes offering high water-vapor transmission rates. These developments demand customized calcium carbonate solutions tailored to specific industrial requirements.
In fiber applications, particularly polypropylene (PP) spunmelt and dry-laid fibers, advancements have led to the creation of highly refined calcium carbonate grades. These products feature superior particle size and dispersion properties, enhancing processability and compatibility with polymer matrices.
Macksons Minerals and Polymers’ investment signals a pivotal moment for Sri Lanka’s industrial sector, leveraging local resources to meet the evolving demands of global markets. This initiative not only boosts the domestic economy but also strengthens the country’s position as a competitive player in the calcium carbonate market.
December 22, Colombo (LNW): The Election Commission of Sri Lanka has announced plans to hand over a list of candidates who have failed to submit their required income and expenditure reports following the general election to the Police.
This move comes as part of the Commission’s efforts to ensure compliance with electoral transparency regulations and hold accountable those who neglect their legal obligations.
According to the Chairman of the Election Commission, the Police will be tasked with taking appropriate legal action against the errant candidates.
The submission of income and expenditure reports is a critical part of the electoral process, designed to ensure transparency in the funding of political campaigns.
Candidates who fail to comply with this requirement risk facing legal penalties.
In contrast, the Commission has made public the names of those candidates who have adhered to the law by submitting their financial reports.
These names have been displayed in prominent locations such as district secretariats and district election offices, making it easier for the public and relevant authorities to verify the transparency of electoral processes.
December 22, Colombo (LNW): Sri Lanka is in the process of establishing a dedicated Public Debt Management Office (PDMO), with plans for it to be fully operational by January 2026, according to an announcement from the Ministry of Finance.
This new office aims to overhaul the way the government manages its public debt and borrowing, ensuring greater accountability and transparency in the nation’s financial operations.
The PDMO officially began its activities on December 02, 2024, following the enactment of the Public Debt Management Act No. 33 of 2024, which came into effect on November 25.
The establishment of this independent office is a significant step towards centralising debt management functions that were previously spread across multiple government agencies, including the Central Bank, the Department of External Resources, and the Department of Treasury Operations.
The primary goal of the PDMO is to create a more structured and coordinated approach to managing Sri Lanka’s public debt, ensuring that borrowing is conducted in a transparent and sustainable manner.
It will be responsible for overseeing the government’s debt portfolio, which includes loan guarantees, on-lending activities, and comprehensive public debt reporting.
The office will also be tasked with formulating a medium-term debt management strategy, coordinating both domestic and international borrowings, and ensuring that debt obligations are met in a timely manner.
The new office will also play a crucial role in aligning borrowing plans from State-Owned Enterprises (SOEs) and other public entities with the national debt management strategy.
This shift ensures that all public sector borrowing will now be coordinated through the PDMO, as mandated by the new law.
By centralising these operations, the government aims to strengthen oversight and reduce the risk of excessive or mismanaged borrowing.
The PDMO will be headed by a Director-General, who will be appointed by the Cabinet and report directly to the Minister of Finance.
The establishment of this office marks a key development in Sri Lanka’s ongoing efforts to enhance fiscal discipline and ensure that its borrowing practices are aligned with international standards of transparency and accountability.
December 22, Colombo (LNW): An extraordinary gazette notification has been issued by the government, officially raising the compulsory retirement age for medical professionals across various sectors.
The new provision, published on 20 December 2024, dictates that the compulsory retirement age for Medical Specialists, Grade Medical Officers, Dental Officers, and other related personnel, including those in Medical Administrative Grades and Dental Specialists, will now be set at 63 years.
The Ministry of Public Administration, Provincial Councils and Local Government confirmed that this change will apply to registered Medical Practitioners as well.
The revised retirement age will come into effect from 1 January 2025, allowing existing and future medical personnel to continue serving for an extended period.
December 22, Colombo (LNW): The Ministry of Agriculture, Livestock, Lands, and Irrigation has reassured farmers across Sri Lanka regarding the quality of Muriate of Potash (MOP) fertiliser donated by a Russian state-owned company, following concerns raised by the agricultural community.
Farmers and farmer organisations had expressed doubts about the fertiliser, particularly its unusual colour, which led to queries about its suitability for use.
In response to these concerns, the Ministry issued an official statement confirming that the donated MOP fertiliser meets all required quality standards.
After thorough analysis of the composition and various other specifications of the fertiliser, it was found to be fully compliant with established agricultural guidelines.
The Ministry clarified that the colour variation in the fertiliser, which has raised questions, is entirely natural and does not impact its effectiveness. According to the Ministry, the colour is a result of the presence of iron oxide in the mineral salts found in the deposit.
Fertiliser containing iron oxide will appear red, while a lack of this element produces a white appearance. This variation in colour is a normal characteristic of MOP fertiliser and does not alter its core function of providing potassium to crops.
The explanation was supported by the findings of soil scientist Renuka de Silva, whose report confirmed that the fertiliser is both safe and effective for agricultural use.
According to de Silva’s analysis, the fertiliser will deliver the same benefits as any other MOP, ensuring that farmers can use it without any concerns about its performance or safety.
The Ministry’s statement aims to reassure the farming community that the quality of the donated fertiliser is in no way compromised.
It further urged farmers to continue using the MOP fertiliser as part of their routine agricultural practices, stressing that the colour difference is purely cosmetic and does not affect the product’s functionality.
