1. President Ranil Wickremesinghe instructed officials to provide immediate relief to those affected by the recent inclement weather and to continue these efforts until the situation improves, the PMD reported. According to the Disaster Management Centre (DMC), eight deaths have been reported across the island as of 27th. Seven people died in accidents caused by strong winds, and one person died in a boat capsizing incident.
2. The ongoing private creditor debt restructuring negotiations process were expected to be complete without much delay and the Executive Board approval of the IMF programme second review followed by the third tranche was expected on schedule in June, Dr. Nandalal Weerasinghe told the post monetary policy review press conference held in Colombo.
3. Labour and Foreign Employment Minister Manusha Nanayakkara announced that the Cabinet has approved a proposal to provide social security benefits to all workers aged 55 and above across various industries.This initiative includes the preparation of necessary legal provisions, which will be developed alongside the “Garusaru” program, he said.
4. Parliamentarian Namal Rajapaksa says that postponing elections is not healthy for any democracy. The Sri Lanka Podujana Peramuna (SLPP) National Organiser stated that extending the terms of the President and the Parliament undermines the fundamental principles of a democratic society.
5. Safeguarding the safety of school children through ensuring a safe school environment especially during prevalent weather-related emergency situations is a top priority in government’s disaster management programme, said State Minister of Defence Premitha Bandara Tennakoon.
6. A group of civil activists gathered in front of the Sri Lanka Podujana Peramuna office at Nelum Mawatha, Battaramulla for a protest. Their protest centered around the contention that the Sri Lanka Podujana Peramuna lacks the mandate to endorse bills affecting the country.
7. The Colombo District Court today issued another restraining order preventing Justice Minister Wijeyadasa Rajapakse from functioning as the Chairman and a member of the Sri Lanka Freedom Party (SLFP). The court order has been issued on 28th after considering a complaint filed by State Minister Lasantha Alagiyawanna.
8. Dr. Sarath Amunugama, a prominent figure within the Mawbima Janatha Party, has tendered his resignation. Amunugama confirmed that he formally communicated his decision to the party’s leader, Dilith Jayaweera
9. The exchange of information between Sri Lanka and India has commenced concerning the Sri Lankans arrested in India, allegedly associated with ISIS. This collaborative effort involves both the Sri Lanka Army Intelligence Division and the Police Terrorist Investigations Division. Security forces are uncovering details about individuals within Sri Lanka who may have had connections with the arrested suspects.
10. Sri Lankan sprinter Aruna Darshana clinched the gold medal in the men’s 400m event at the second Belt and Road Athletics Invitation Meet in Chongqing, China. The 25-year-old athlete completed the 400m final in 45.48 seconds.

May 29, Colombo (LNW): A train delay has been reported along the main railway line, according to Railway Traffic Superintendent M.J. Indipolage. The delay occurred because of a technical fault on a train near the Gampaha railway station.

The affected train was traveling from Mirigama to Colombo Fort. Repair teams have been dispatched to address the issue and restore normal service as soon as possible.

I felt shamed when I saw the attached video (Watch video here) on the meeting of the COPF, Parliament, on 22 May 2024, held for examination of the proposed public debt management law for Sri Lanka.At the beginning of the meeting, it was stated that 

• Work on this law had been in progress since 2016 although it was delayed due to various reasons and 

• The work has now recommenced as a condition of the IMF programme due to the current debt unsustainability situation.

I felt shamed due to two facts.

• First, the proposed new debt law is now presented after 8 years of delay only after the bankruptcy of the government. This work seriously started in early 2016 as the danger of debt management by the central bank (CB) since 1950 was foreseen at that time.

• Second, some of professionals who disrupted the work on reform initiatives on debt management inclusive of consolidated public debt law in 2016 attended the COPF as brand new professionals. The monetary policy team of the CB was dead against such reforms for debt market development with transparency due to various hidden agendas. At that time, their fondly debt market structure was the private placement desks to control the interest rates/yield curve for the monetary policy against the global principle of competitive and transparent debt markets.

Therefore, this article is to highlight the debt management reform agenda pursued in 2015-17. Since I also was actively involved in driving the work, I have the recollection on many events.

The purpose of reform was to allow for a simple economic principle to work in the debt market, i.e., a transparent and competitive market with modern technology that would improve the price discovery, liquidity and discipline of both debt issuer and investors.

It was the new policy of the then government and the CB as they foresaw grave risks of debt unsustainability despite the fact that the most part of debt management and market had been handled by the CB under the Monetary Law Act, Local Treasury Bill Ordinance and Registered Stocks and Securities Ordinance as amended from time to time.

 A short list of historic reforms – 2015-2017

1. Full scale of competitive auctions of local government securities (Treasury bills and bonds) was introduced in place of 90%-95% private placement system.

2. Bloomberg electronic trading platform was introduced free of charge and required dealers to trade through the platform and to report trade details of large value customer transactions. This platform was arranged by the Bloomberg free of charge.

3. Active Liability Management Act was passed to facilitate restructuring of the debt profile for better management of debt composition and service risks.

4. The US Treasury Department offered technical assistance through a resident consultant to reform debt issuance and management system. It offered services through several consultants arranged by the resident consultant. Drafting a consolidated debt law was one of the assignments. The CB provided secretariat facilities to US consultants. The programme was arranged by the Ministry of Finance through the US Embassy.

5. Expression of interests were called for establishment of a dedicated electronic trading platform for government securities. Cabinet appointed Tender Board and Technical Evaluation Committee commenced the work. The CB allocated funds for the cost of the platform and the US Treasury provided technical assistance.

6. Upon a national budget proposal, the work commenced to set up a debt office at the Treasury to implement the reform agenda. It was initially expected to amend the existing laws to replace the CB’s debt functions with the debt office and to assign exiting debt infrastructure of the CB with the debt office.

Performance on reform initiatives

1. Private placements reintroduced.

2. US Treasury assistance discontinued without deliverables agreed.

3. No news about electronic trading platform and Bloomberg platform.

4. No news about the implementation of the Active Liability Management, except the CB raised additional debt under the limit of the Act.

5. The CB’s  aggressive continuity in the use of debt to fix yield rates/interest rates for driving the monetary policy rather than market-based debt management.

6. Foreign debt in defaulted for the past two years since 12 April 2022.

7. De-facto default of domestic debt by forced restructuring of debt held by EPF and CB.

8.  Bankruptcy of the government and foreign currency crash confronted by the economy and public.

9. Foreign consultants employed during the past two years for the management of debt for the sustainability.

10. The official managers awarded with promotions and brand new independence from the government.

Public concerns

• The government brings new debt management laws in association with those who mismanaged and defaulted debt without any inquiry over the mismanagement and default.

• Reform agenda highlighted above in 2015-17 would have prevented the present catastrophic bankruptcy of the government if it had been implemented orderly. Nobody seems to worry why they were not implemented.

• New laws will help only a new line of debt/government bureaucracy unless the debt market is developed for the transparency and competition with new technology that will promote the price duscovery, liquidity and debt discipline. Nobody seems to worry about conflicts between laws and markets in economics when laws after laws are passed to recover the economy from the crash in 2022.

This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures. All are personal views of the author based on his research in the subject of Economics which have no intension to personally or maliciously discredit characters of any individuals.)

P Samarasiri

Former Deputy Governor, Central Bank of Sri Lanka

(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 12 Economics and Banking Books and a large number of articles published. 

economyforward.blogspot.com

May 29, Colombo (LNW): State Minister of Defence Premitha Bandara Tennakoon emphasized that safeguarding the safety of school children, especially during weather-related emergencies, is a top priority in the government’s disaster management program. He made these remarks during a meeting at the Disaster Management Centre in Colombo on May 28, after discussions with senior state officials, including District and Divisional Secretaries, Education Ministry authorities, Environment Ministry officials, and INGO representatives.

Tennakoon highlighted the importance of updating and activating district committees to conduct risk assessments and inform the Disaster Management Centre, enabling the preparation of effective contingency plans.

He underscored the significance of the ‘Surakimu’ program, aimed at ensuring the safety of students in the country’s 10,126 schools. Tennakoon proposed the formation of Special School Committees under respective Principals, involving past pupils’ associations and parent-teacher associations to enhance school safety.

To improve disaster preparedness at the school level, plans include training at least two teachers from each school in basic first aid and ensuring the availability of properly equipped first aid kits.

During a discussion with INGO representatives, Tennakoon detailed the progress of active programs, including the ‘Surakimu’ program, and proposed new initiatives to benefit students during emergencies, seeking their assistance in these efforts.

Tennakoon also mentioned plans for consultations with various ministries to address legal barriers encountered during emergency disaster management activities. The meeting was attended by heads of the Disaster Management Centre and National Building Research Organization, along with several senior state officials.

May 29, Colombo (LNW): Investment Promotions State Minister Dilum Amunugama highlighted Sri Lanka’s significant potential for medical tourism, citing the country’s renowned hospitality, at the launch of the International Patient Care Connect Platform (IPCCP) by Rajagiri Hospital and Medicare Global Connections in Colombo.

Rajagiri Hospital, Cochin, India, which was established in 2014, has partnered with local company Medicare Global Connections to introduce its international patient connect platform in Sri Lanka.

Amunugama emphasized that the expanding tourism industry has created a promising foundation for medical tourism, which could greatly benefit Sri Lanka’s economy. He urged new investors to explore opportunities in this sector, leveraging the country’s hospitable reputation to foster rapid development in medical tourism.

The State Minister assured that the government, through the Ministry of Investment Promotion, will support new investors in this field, facilitating their entry and operations. He also expressed strong support for the IPCCP, which will provide Sri Lankan patients access to advanced medical treatments.

Rajagiri Hospital has earned numerous accolades for its commitment to healthcare excellence, including accreditations from the Joint Commission International (JCI), National Accreditation Board for Hospitals and Healthcare Providers (NABH), National Accreditation Board for Testing and Calibration Laboratories (NABL), and NABH certification for Nursing Excellence, as noted by Executive Director and CEO Johnson Vazhappilly.

May 29, Colombo (LNW): Water Supply and Plantation Infrastructure Development Minister Jeevan Thondaman announced that the Cabinet has mandated Regional Plantation Companies (RPCs) to pay a minimum daily wage of Rs. 1,700 to plantation workers immediately, as per Gazette No. 2385/14 published on April 21, 2024. Non-compliant companies risk lease termination and potential transfer to better-managed firms.

Thondaman criticized the local plantation companies for their reluctance to negotiate with the government and trade unions, viewing it as an exploitation tactic. Despite given a 15-day deadline to submit acceptable proposals following the preliminary gazette on April 31, 2024, the companies failed to comply.

Thondaman pointed out that some small tea estate owners already pay above the mandated minimum wage, suggesting no valid excuse for the larger companies’ non-compliance. He urged the companies to enhance productivity and income through mechanization, value addition, and diversification.

Commending President Ranil Wickremesinghe’s leadership, Thondaman emphasized the government’s commitment to ensuring plantation workers receive a living wage and ending exploitative practices in the industry.

In contrast, the Planters’ Association proposed only a Rs. 200 increase, bringing the daily wage to Rs. 1,380, citing the industry’s financial struggles. They also offered a Rs. 5,000 monthly allowance during recent discussions with government authorities. Dr. Roshan Rajadurai from the association warned that the proposed wage hike could bankrupt the entire plantation sector. The association plans to consult their legal teams regarding potential government repossession of estates failing to meet the wage requirements.

May 29, Colombo (LNW): Cabinet Spokesman and Mass Media Minister Dr. Bandula Gunawardhana revealed that 52 percent of the Sri Lanka Transport Board (SLTB) buses are outdated and the institutions have deteriorated to the point where they can no longer secure credit facilities to purchase new buses. He shared this information at a press conference held yesterday at the Government Information Department to discuss the outcomes of the recent Cabinet meeting.

The Minister noted that 500 new buses have been acquired through the Indian loan scheme.

Additionally, Dr. Gunawardhana highlighted the dire state of the country’s railway service, emphasizing that rail tracks should be replaced every five years to ensure efficiency and effectiveness. He pointed out that funding for railway infrastructure has historically depended on foreign loans, with recent acquisitions, including 10,000 tracks, funded by the Asian Development Bank. The Northern Railway is currently undergoing repairs under the Indian loan scheme.

The government is negotiating with India to obtain 20 locomotives as a concession. However, until the debt restructuring process is complete, Sri Lanka will struggle to secure loans for purchasing locomotives.

Dr. Gunawardhana expressed gratitude to the railway engineers and staff for maintaining the service, despite the age of the equipment, some of which is 50 to 60 years old. He reiterated the challenge of replacing outdated buses and trains due to financial constraints but assured that efforts are underway to gain international cooperation and resume stalled projects once the debt restructuring is finalized.

“Although our economy is small, we are committed to fulfilling the necessary requirements for international collaboration. Once debt restructuring agreements are in place, we will be able to restart the stalled projects,” he concluded.

May 29, Colombo (LNW): Health Entomology Officer’s Association President Najith Sumanasena yesterday (28th) warned of a potential dengue epidemic as the Breteau index, which measures the density of dengue larvae, has surged to 25.

Sumanasena highlighted that the increased mosquito density could result in a dengue epidemic within the next six weeks, with some areas reporting Breteau indices as high as 30 to 40. According to the World Health Organization, the Breteau index should remain below 5 to prevent outbreaks.

He attributed the rise in the index to several factors, including the festival season, school examinations, and temple festivals, which have led to a lapse in dengue awareness and environmental cleanliness.

The recent rains have caused water accumulation, promoting mosquito breeding. Sumanasena emphasized that maintaining a clean environment to prevent water stagnation can significantly reduce the risk of dengue.

May 25, Colombo (LNW): The prevailing showery and windy conditions over the island are expected to persist, driven by the active Southwest Monsoonal conditions.

Rain showers are anticipated at times in the Western, Sabaragamuwa, Central, North-western, and Southern provinces.

Some areas in the Western and Sabaragamuwa provinces and the Nuwara-Eliya district are likely to experience heavy showers exceeding 100 mm.

Showers or thundershowers will occur in a few places in the Uva province and the Ampara and Batticaloa districts during the evening or night.

Strong winds, ranging from 50 to 60 kmph, can be expected at times over the western slopes of the central hills and in the Northern, North-central, Western, Southern, and North-western provinces, as well as in the Trincomalee and Monaragala districts.