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Lanka Seeks Debt Moratorium Till 2027 Amid Crisis

The President claimed that the South Asian island nation faces a significant burden of debt….writes Susitha Fernando

Financially-broke Sri Lanka seeks a debt default till 2027 from both local and international lenders to ease the debt burden on the country’s GDP.

Sri Lanka President Ranil Wickremesinghe announced in Parliament that by 2022, the country was slated to repay nearly $6 billion in foreign debt annually, amounting to about 9.5 per cent of the GDP, a considerable strain for any nation.

The President claimed that the South Asian island nation faces a significant burden of debt.

“Currently, we are actively engaged in discussions regarding the restructuring of all loans, including domestic and foreign loans. We are optimistic that these negotiations will reach a successful resolution soon. Our goal is to obtain temporary relief from debt defaults from 2023 to 2027,” Wickremesinghe said presenting its plans to repaying the loans in the period from 2027 to 2042.

“Through successful negotiations for debt restructuring, we aim to alleviate this burden by reducing the annual foreign debt payments to 4.5 per cent of the GDP, a substantial halving of the previous percentage,” President Wickremesinghe said in a special statement in the Parliament on Wednesday.

Going through a severe economic crisis and a dollar crunch, Sri Lanka defaulted on its foreign debt in May 2022 and declared that the country was bankrupt.

At the end of September, Sri Lanka’s overall debt was at $91 billion.

To help temper sky-rocketing inflation and increase foreign exchange reserves, Sri Lanka struck a $2.9 billion bailout package with the International Monetary Fund in March last year.

In April 2023, India together with Japan and France came to help debt-ridden Sri Lanka initiating a common platform for talks among bilateral creditors to coordinate restructuring Sri Lanka’s debt.

However, China, Sri Lanka’s biggest single bilateral lender, accounting for around 10 per cent of total foreign debt stayed away from the joint effort.

As of June 2023 China held 52 per cent of Sri Lanka’s bilateral debt while Japan, the second largest creditor held 20 per cent, followed by India at 12 per cent and France at three per cent.

ALSO READ: India Powers Isolated Sri Lankan Islands

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India Powers Isolated Sri Lankan Islands

The hybrid project, which is aimed at addressing energy needs of the people of the three islands combines various forms of energy including both solar and wind…reports Asian Lite News

India on Friday inked a pact with Sri Lanka to provide renewable energy to three islands Delft, Nainativu and Analaitivu off Jaffna which are completely cut off from the national grid.

On behalf of Sri Lankan government, Sri Lanka Sustainable Energy Authority and M/s. U Solar Clean Energy Solutions Pvt. Ltd from India signed the contract for the implementation of Hybrid Renewable Energy Systems as a grant assistance from Government of India (GOI).

The agreement was signed in the presence of High Commissioner of India to Sri Lanka Santosh Jha and Sri Lanka State Minister for Power and Energy Indika Anuruddha.

The hybrid project, which is aimed at addressing energy needs of the people of the three islands combines various forms of energy including both solar and wind, towards optimising capacities, the Indian High Commission said.

“GOI’s assistance to the project for the people of the three islands, which are not connected to the national grid, underscores the significance attached by country to bilateral energy partnership as well as the human-centric nature of development partnership,” the High Commission said.

The energy sector was identified as a priority area in the India-Sri Lanka Economic Partnership Vision document which was adopted during the visit of Sri Lankan President Ranil Wickremesinghe to India in July, 2023.

“Several landmark initiatives such as the power grid connectivity, multi product two-way oil pipeline are currently under discussion between India and Sri Lanka in the energy sphere,” it added.

“GOI’s overall development partnership portfolio stands at USD 5 billion with almost USD 600 million being in grants alone. While several flagship grant projects such as 1990 Suwaseriya Emergency Ambulance have already been completed, others such as the third and fourth phases of Indian Housing Project and Sri Lanka Unique Digital Identity Project are under different stages of implementation, the High Commission said.

ALSO READ: India’s Housing Initiative Empowers Lankan Plantation Workers

ALSO READ: Lanka Welcomes Indian Coast Guard for Joint Training

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Sri Lanka Faces High Electricity Production Costs

The CEB spokesman said earlier that they are generating more than 60 per cent of the electricity using thermal power…report Asian Lite News

Sri Lanka’s state-owned electricity producer and distributor, the Ceylon Electricity Board (CEB), has urged people to use electricity sparingly as demand for power has grown due to the dry weather, a senior official told the media.

CEB spokesman Noel Priyantha told the media on Sunday that electricity demand has increased by between three and four gigawatt hours in the past month, Xinhua news agency reported.

Usually, electricity consumption increases during dry periods in Sri Lanka as people use electric fans and air conditioning to keep cool, energy experts say.

Priyantha said the percentage of electricity produced by hydropower has dropped to 21 per cent in recent days due to dry weather, and 4.5 per cent of electricity is generated from solar and five per cent from wind farms.

The CEB spokesman said earlier that they are generating more than 60 per cent of the electricity using thermal power.

The cost of generating electricity using thermal power is high and this is one of the main reasons why the cost of electricity production is among the highest in Asia, Narendra De Silva, general manager of CEB, has said

ALSO READ-Lanka Ups Tourism Efforts

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Lanka Ups Tourism Efforts

With the government’s new initiatives, there has been a significant surge in tourist arrivals…reports Asian Lite News

Sri Lanka has rolled out infrastructure development projects and innovative tourism promotion programmes in a bid to attract high-end tourists, the President’s Media Division (PMD) said.

The PMD said in a press statement that President Ranil Wickremesinghe conducted a tour of Tangalle and Galle areas on Saturday to assess tourism industry resurgence on the southern coast of the country, Xinhua news agency reported.

During the tour, the President visited several tourist hotels, talking with owners to understand their challenges first hand, the PMD added.

The PMD said the tourism sector in Sri Lanka faced a rapid downturn due to the Covid-19 pandemic and economic challenges.

With the government’s new initiatives, there has been a significant surge in tourist arrivals, said the PMD, adding that more than 1.4 million tourists visited Sri Lanka in 2023.

Building on this momentum, the government aims to surpass the peak of 2.5 million tourists in 2017, with plans underway to achieve this milestone by 2024, the PMD said.

ALSO READ: Lanka plans to amend controversial Online Safety Act

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Lanka plans to amend controversial Online Safety Act

The existing law holds social media companies accountable for objectionable content shared on their platforms as determined by Sri Lankan authorities….reports Asian Lite News

Sri Lanka announced plans on Tuesday to revise its stringent internet censorship law following backlash from major global tech firms, who faced potential legal repercussions for content shared on social media platforms. Information minister Bandula Gunawardana revealed that the cabinet had decided to amend the hastily passed Online Safety Law, acknowledging concerns raised by experts in the field.

The existing law holds social media companies accountable for objectionable content shared on their platforms as determined by Sri Lankan authorities. In response to opposition from an international coalition of tech companies, who deemed the legislation impractical, the government pledged to incorporate expert input into the proposed amendments.

Critics, including opposition lawmakers, condemned the law as an attempt to silence political dissent ahead of upcoming presidential elections. Social media played a pivotal role in mobilizing protests during Sri Lanka’s severe economic crisis in 2022, leading to widespread demonstrations and the resignation of then-president Gotabaya Rajapaksa.

The law imposes severe penalties, including up to 10 years in prison for social media executives failing to disclose user information linked to illicit content. It also criminalizes anonymous and parody social media accounts, extending jurisdiction to users posting from abroad. Public security minister Tiran Alles previously refuted claims that the law would suppress dissent.

UPI services in Sri Lanka

 India recently launched its Unified Payment Interface (UPI) services in Sri Lanka and Mauritius.

RuPay card services were also launched in Mauritius as part of this initiative.

Prime Minister Narendra Modi attended the inaugural event virtually alongside his Mauritian counterpart Pravind Jugnauth, and Sri Lankan President Ranil Wickremesinghe.

Indians visiting the two nations will be able to utilise UPI services to make payments, and Mauritians travelling to India will be able to do the same. Additionally, Mauritian banks will be able to issue RuPay cards and use them for transactions in both India and Mauritius.

The launch of the Indian services comes amid growing bilateral economic ties with Sri Lanka and Mauritius.

UPI services, developed by the National Payments Corporation of India (NPCI), enable immediate real-time bank transactions using mobile phones.

RuPay is an Indian-based card payment network that is widely accepted at retail locations, ATMs, and online platforms globally.

Prior to this, NPCI International Payments Limited (NIPL) worked with Lyra, a well-known French expert in e-commerce and proximity payments, to introduce UPI services to France.

ALSO READ: Lanka Gears Up for 2025 Election Battle

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Lanka Gears Up for 2025 Election Battle

Last week, the cabinet of ministers approved a proposal to allocate 10 billion rupees for elections to be held in 2024…reports Asian Lite News

Sri Lanka’s general election will be held in 2025 and the presidential election will be held within mandated period, the President’s Media Division (PMD) said on Tuesday.

The Election Commission is responsible for holding elections and the government will be communicating with the commission as and when required, the PMD said in a statement, Xinhua news agency reported.

Last week, the cabinet of ministers approved a proposal to allocate 10 billion rupees for elections to be held in 2024, the government’s information department said in a statement.

According to the country’s constitution, the forthcoming presidential election should be held before October 17, 2024.

ALSO READ: UPI arrival spurs tourism, economic growth in Lanka, Mauritius

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UPI arrival spurs tourism, economic growth in Lanka, Mauritius

Prabhu Ram, Head, Industry Intelligence Group at CMR, told that UPI’s debut in Sri Lanka and Mauritius marks a series of ongoing pivotal steps in making digital payments more pervasive globally…reports Asian Lite News

The launch of Unified Payment Interface (UPI) services in Sri Lanka and Mauritius by Prime Minister Narendra Modi is a significant step in establishing India’s global leadership in fintech and payments innovation, the industry said on Monday.

PM Modi, along with Sri Lankan President Ranil Wickremesinghe and Mauritius Prime Minister Pravind Jugnauth, inaugurated the launch of UPI, and also RuPay card services in Mauritius, via video conferencing.

“UPI has truly revolutionised the way we pay every day in India. With this expansion, UPI will bring convenience and digital growth to these countries and open new opportunities for cross-border commerce and travel,” Upasana Taku, Co-founder and CFO, MobiKwik, told IANS.

PM Modi underlined that fintech connectivity will further strengthen cross-border transactions and connections.

“India’s UPI comes in a new role today — Uniting Partners with India,” he emphasised.

Prabhu Ram, Head, Industry Intelligence Group at CMR, told that UPI’s debut in Sri Lanka and Mauritius marks a series of ongoing pivotal steps in making digital payments more pervasive globally.

“UPI will facilitate commerce, foster great economic integration, boost cross-border travel, and simplify tourist experiences for Indian tourists,” he said.

Speaking about the convenience and speed of UPI transactions, PM Modi informed that more than 100 billion transactions took place via UPI last year, worth Rs 2 lakh crores or 8 trillion Sri Lankan rupees or 1 trillion Mauritius rupees.

The extension of RuPay card services in Mauritius will also enable Mauritian banks to issue cards based on RuPay mechanism in the country and facilitate usage of RuPay Card for settlements in India and Mauritius.

UPI has facilitated over 40 per cent of India’s digital transactions, highlighting the country’s potential for embracing fintech innovations. The rapid expansion of fintech in India has created a significant need for skilled professionals, particularly in IT, engineering and sales.

“Over 60 per cent of fintech firms seek proficient personnel to navigate this dynamic landscape. To meet these demands, apprenticeship programmes are vital in nurturing talent and bridging the skills gap,” said Dhriti Prasanna Mahanta, Vice President & Business Head, TeamLease Degree Apprenticeship.

ALSO READ-Modi, Wickremesinghe, Jugnauth to launch UPI services in Lanka, Mauritius

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Modi, Wickremesinghe, Jugnauth to launch UPI services in Lanka, Mauritius

The launch will enable the availability of UPI settlement services for Indian nationals travelling to Sri Lanka and Mauritius…reports Asian Lite News

Prime Minister Narendra Modi, President of Sri Lanka, Ranil Wickremesinghe and Prime Minister of Mauritius, Pravind Jugnauth will witness the launch of Unified Payment Interface (UPI) services in Sri Lanka and Mauritius, as well as, RuPay card services in Mauritius, on Monday 1 pm via video conferencing, the Ministry of External Affairs (MEA) said.

India has emerged as a leader in fintech innovation and digital public infrastructure. PM Modi has placed a strong emphasis on sharing our development experiences and innovation with partner countries.

Given India’s robust cultural and people-to-people linkages with Sri Lanka and Mauritius, the launch will benefit a wide cross-section of people through a faster and seamless digital transaction experience and enhance digital connectivity between the countries, the MEA release also said.

The launch will enable the availability of UPI settlement services for Indian nationals travelling to Sri Lanka and Mauritius, as well as, for Mauritian nationals travelling to India.

The extension of RuPay card services in Mauritius will enable Mauritian banks to issue cards based on the RuPay mechanism in Mauritius and facilitate the usage of RuPay cards for settlements both in India and Mauritius, it added.

Notably, during Wickremesinghe’s New Delhi visit in July 2023, India and Sri Lanka inked an agreement of UPI’s acceptance in the island country.

Earlier that year, in February, PhonePe, Indian digital payments and financial technology company, launched support for cross-border UPI payments, under UPI International, allowing the apps’ users to use their Indian bank accounts to pay at merchant outlets in the UAE, Singapore, Mauritius, Nepal and Bhutan, The Bhutan Live reported.

With this, PhonePe became the first in its category to integrate UPI International. UPI International, introduced by the cross-border arm of the National Payments Corporation of India (NPCI International Payments Limited), facilitates UPI transactions for the Indian diaspora abroad.

Rahul Chari, CTO and co-founder of PhonePe, as quoted by The Bhutan Live, said, “UPI International is the first major step in letting the rest of the world experience UPI too. I am sure this launch will prove to be a game-changer and will completely transform the way Indians travelling overseas pay at merchant outlets abroad.”

PhonePe is India’s largest UPI app by market size. The app raised USD 350 million in funding as part of its USD 1 billion fundraising ahead of an initial public offering (IPO).

The UPI payment system has become hugely popular for retail digital payments in India, and its adoption is increasing at a rapid pace. It is India’s mobile-based fast payment system, which facilitates customers to make round-the-clock payments instantly using a virtual payment address (VPA) created by the customer. (ANI)

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IIT’s third offshore campus likely to be set up in Lanka

The institute had last year announced the setting up of an offshore campus in Tanzania’s Zanzibar with Preeti Aghalyam being appointed the director-in-charge who also became the first woman IIT Director…reports Asian Lite News

The third offshore campus of the prestigious Indian Institute of Technology (IIT) is likely to be set up in Sri Lanka, according to sources.

The proposal for an IIT in Sri Lanka was announced last November in the 2024 Budget unveiled by Sri Lankan President Ranil Wickremesinghe, who also serves as the finance minister.

According to sources, the Sri Lankan government is in touch with IIT Madras for the ambitious project. “A high-level delegation had recently visited the Chennai campus to discuss the future roadmap. The talks are on and the campus is likely to come up in Kandy,” a source said.

“The delegation also visited the Research Park at the campus and interacted with officials about possible areas of engagement,” the source added.

The Indian government had announced that opportunities for admission to the IITs in India will be provided to meritorious Sri Lankan students from the 2017-18 academic sessions onwards. If the plan for the Sri Lanka campus comes through, it will be IIT Madras’ second international campus.

The institute had last year announced the setting up of an offshore campus in Tanzania’s Zanzibar with Preeti Aghalyam being appointed the director-in-charge who also became the first woman IIT Director.

An MoU, signed last July between India and Tanzania, was the final procedural step that paved the way for the opening of the campus. The institute began functioning in November last year from a temporary campus and is offering two full-time academic programmes — a four-year Bachelor of Science in Data Science and Artificial Intelligence and a two-year Master of Technology in Data Science and Artificial Intelligence.

IIT Delhi followed the league and signed a formal agreement with the UAE government to set up a campus in Abu Dhabi. The initial Master’s course at the IIT Delhi-Abu Dhabi campus will focus on energy transition and sustainability, reflecting a shared vision between India and the UAE to leverage knowledge for mutual prosperity and global well-being.

The UK is also keen on welcoming an Indian Institute of Technology (IIT) to set up an offshore campus in the country and some UK universities are already in talks with IITs to explore the possibility. Several IITs have been receiving requests from the Middle East and South Asian countries to set up their campuses.

The central government had created a 17-member committee to facilitate the process of opening IIT campuses in foreign locations where students from different nations can study technical education.

The committee headed by IIT Council standing committee chairperson Dr K Radhakrishnan had submitted its recommendations in 2022.

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Lanka Unveils Bold FTA Plans with India

President Wickremesinghe detailed his plans to forge FTAs with number of countries…reports Asian Lite News

Sri Lankan President Ranil Wickremesinghe on Wednesday announced that steps have been taken to enhance free trade agreement (FTA) with India.

He also announced that plans are underway to pursue FTAs with China, Indonesia and Bangladesh in the future.

Presenting the policy statement of the government during the Parliament session, President Wickremesinghe detailed his plans to forge FTAs with number of countries and establishing a new network of economic relationships that can help the debt-stricken island’s products’ entry into foreign markets.

“We will join the Regional Comprehensive Economic Partnership (RCEP). We will connect with the common system of trade variations in the European Union,” President Wickremesinghe said.

He said that with India’s support, Sri Lanka plans to transform the country’s Eastern port district Trincomalee to a multi-faceted regional hub which will in turn shift the 46 per cent of the country’s economy centered in the Western Province to other parts of the country.

Wickremesinghe’s announcement on FTAs with the regional countries follows Saturday’s major trade pact signed with Thailand Prime Minister Srettha Thavisin who was in Colombo as the chief guest on country’s 76th Independence Day celebration.

The FTA covering trade in goods, investment and custom procedures is expected to boost two-way trade from $352 million in 2022 up to $1.5 billion between Sri Lanka and Thailand.

President Wickremesinghe said in September, 2023, Sri Lanka’s total debt burden was $91 billion but the economy was recovering with inflation reducing to 6.4 per cent from 50.6 per cent compared to last year.

He said the foreign reserve that hit zero in 2022 has increased to $4.4 billion by the end of December, 2023.

Wickremesinghe took over presidency in July 2022 from his predecessor Gotabaya Rajapaksa who fled the country following public outrage over severe economic crisis.

The island nation with 21 million population declared bankruptcy in April, 2022.

India was the first nation to help crisis-hit country by providing more than $4billion financial assistance including much needed food, medicine and fuel. India also helped Sri Lanka to get the IMF’s $2.9 billion bailout out package in 2023.

ALSO READ: Lanka records over 200k tourist footfall in January