Category: Sri Lanka

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India has to limit loan assistance due to recent global crises

India had to limit the loan assistance given to the crisis-hit island nation in the wake of the recent global crises…reports Asian Lite News

Sri Lankan Prime Minister Ranil Wickremesinghe said that India had to limit the loan assistance given to the crisis-hit island nation in the wake of the recent global crises, including the ongoing Ukraine-Russia war.

“Due to the recent global crises, this situation has become more acute and we, who were in the frying pan, have now fallen into the oven. Due to the Ukraine-Russia war, our problem has worsened. What has happened now is the addition of an international crises on top of our crisis,” Wickremesinghe said while addressing Parliament on Monday.

“This situation is not unique to us. This affects other countries as well. India and Indonesia are also affected by this global crisis. Therefore, India has had to limit the loan assistance that they have given to us,” he explained.

The premier went on to say that a donor-aid conference would be organised bringing together India, China and Japan, the friendly countries that have helped Sri Lanka in the wake of the worst economic crisis since it gained independence from the British in 1948.

The conference comes as the country is preparing a four-year comprehensive loan assistance programme after getting the approval of IMF Board of directors.

Wickremesinghe warned that unlike previous occasions where Sri Lanka held talks with the IMF as a developing country, now it is “in the negotiations as a bankrupt country”.

He said the country’s economy is presently shrinking and according to central bank statistics, the current economic growth rate is between negative four and negative five.

“According to IMF statistics, it is between negative six and negative seven. This is a serious situation. If we make a determined journey along this road map, we can achieve an economic growth rate of negative one by the end of 2023,” he said.

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“By 2025, our aim is to create a surplus in the primary budget. Our effort is to raise the economic growth rate to a stable level. Our expectation is to establish a stable economic base by 2026.”

According to the Prime Minister, Sri Lanka has to pay $3.4 billion between June and December this year, $5.8 billion in 2023, $4.9 billion in 2024, $6.2 billion in 2025, $4.0 billion in 2026 and $4.3 billion in 2027.

The total debt burden of the government at the end of 2021 was 17.5 trillion LKR and by March 2022, it increased to 21.6 trillion LKR, he added.

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-Top News Sri Lanka

With no fuel, SL declares holiday for schools

With the ongoing fuel crisis, the Indian Ocean island nation has come to a standstill with handful of vehicles on roads and many people opting to use bicycles as mode of transportation…reports Susitha Fernando

With no fuel for transportation, Sri Lanka on Sunday declared a week-long holiday for schools from Monday.

The Education Ministry decided that all government and government-approved private schools would be given holidays from July 4 to 8.

The decision to close schools was reached after a discussion among Ministry officials, Provincial Education Secretaries, and other officials, and after considering the poor attendance of school principals, teachers and students over the last two weeks, mainly due to lack of transport with non-availability of fuel for public transport and personal vehicles.

Sending home people who were queued up for days and weeks on last Monday (June
27), the government-run Ceylon Petroleum Corporation (CPC) stopped issuing fuel to any vehicle other than those involved in essential services like health, public transportation, law and order, food distribution and etc.

People were asked to work from home and urban schools were closed while others requested to teach online. All private vehicles had to depend on Indian Oil Company-run fuel stations around the country which issued limited fuel to different vehicles.

With the ongoing fuel crisis, the Indian Ocean island nation has come to a standstill with handful of vehicles on roads and many people opting to use bicycles as mode of transportation.

For fuel, Sri Lanka had been mainly depending on line of credit issued by India under its $3.5 billion financial assistance given from January this year and the supply ended with the final shipment of 40,000 metric tonnes of diesel received on June 16.

As Sri Lanka faced its worst-ever economic crisis, the United Nations World Food Programme had declared food inflation in Colombo at record high of 57.4 percent in May and around five million people, or 22 per cent of the population, are food insecure and in need of assistance.

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Lankan Prez to visit UAE to procure fuel

Sri Lankan President Gotabaya Rajapaksa

Amid the fuel shortage in the country, Sri Lankan President Gotabaya Rajapaksa is expected to visit the United Arab Emirates (UAE) in the coming weeks to procure the fuel…reports Asian Lite News

While addressing a news conference on Tuesday, Sri Lankan PM Mahindananda Aluthgamage said that the Russian Ambassador to Sri Lanka had initiated the discussion to facilitate the telephonic conversation between President Rajapaksa and Russian President Vladimir Putin to reach an agreement for the procurement of fuel.

The MP said the government had formulated a comprehensive mechanism to ensure continuous fuel supply after July 10.

Aluthgamage said the President was constantly in contact with the Indian Prime Minister, Petroleum Resources Minister and Foreign Minister to procure fuel from India.

He said the President had a discussion with the seven fuel importers to Sri Lanka and took steps to resolve issues concerning fuel supply.

Meanwhile, Sri Lanka’s postal department decided to open post and sub ports offices three days a week considering transport and travelling difficulties.

Accordingly, the services by the main and sub-offices will be available on Tuesday, Wednesday, and Thursday, Daily Mirror Online reported.

Earlier, the Indian Oil subsidiary in Sri Lanka, Lanka IOC (Indian Oil Corporation) announced to restrict the sale of petrol to a maximum of Rs 7,000 for four-wheelers, with immediate effect.

“Lanka IOC with immediate effect restricts sales of Petrol as follows:: 2 Wheelers: Rs.1500/- 3 Wheelers: Rs.2500/- 4 Wheelers: Rs.7000/- Inconvenience caused is deeply regretted,” tweeted Lanka IOC PLC.

Lanka IOC is the only private oil company that operates retail petrol and diesel stations in Sri Lanka.

Considering the rapid decline in fuel supply, the Sri Lanka government restricted issuing fuel to private vehicles and announced providing fuel only for essential services with effect from Monday night, Daily Mirror reported.

Sri Lanka’s Cabinet spokesman Bandula Gunawardena said, “The fuel crisis in the country was discussed at length at the Cabinet meeting held yesterday and it was decided to issue fuel only for essential services. It was decided to provide fuel to essential series, such as ports, health sector, distribution of essential food items, and transportation of agricultural products, until July 10.”

He also assured that a mechanism to provide a continuous supply of LP gas and fuel would be in place after the 10th of July.

“Inter-provincial transport services will be halted due to limited stocks of fuel. Filling stations will not issue fuel to private vehicles during this period. The supply of fuel for essential services is done at SLTB depots and tri-forces manning filling stations,” Daily Mirror quoted the minister as saying.

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Notably, Sri Lanka has been facing the worst economic crisis since independence in 1948, leading to an acute shortage of essential items like food, medicine, cooking gas and fuel across the island nation.

The nearly-bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, had announced in April that it is suspending nearly USD 7 billion foreign debt repayment due for this year out of about USD 25 billion due through 2026. Sri Lanka’s total foreign debt.

The economic crisis has particularly impacted food security, agriculture, livelihoods, and access to health services. Food production in the last harvest season was 40 – 50 per cent lower than last year, and the current agricultural season is at risk, with seeds, fertilizers, fuel and credit shortages.

Sri Lanka is one of the few nations named by the Food and Agriculture Organization (FAO) which is expected to go without food due to the global food shortage expected this year. (ANI)

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TN police find two Lankan refugees at Rameswaram

Rameswaram is the closest Indian city to Sri Lanka. Rameswaram is the closest point from which to reach India from Sri Lanka….reports Asian Lite News

Amid the economic crisis in Sri Lanka, many citizens are fleeing the island nation. On Monday, two Sri Lankan refugees were found on Rameswaram island and they are investigated by the Tamil Nadu Police.

“Two Sri Lankan refugees who arrived at the Gothandaramar Temple beach in Rameswaram island, are being investigated by Q Branch police and Central State Intelligence,” reported Q Branch Police.

The Q Branch is one of the CID (Criminal Investigation Department) wings of the Tamil Nadu police.

Rameswaram is the closest Indian city to Sri Lanka. Rameswaram is the closest point from which to reach India from Sri Lanka.

The economic crisis in Sri Lanka has triggered an exodus. They are economic refugees, trying to escape a dire situation in Sri Lanka, which is reeling under a severe economic crisis.

Earlier in March, three Sri Lankan Tamils were booked under various sections of the Indian Passport Rule and the Foreigners Act and remanded in custody following a Rameshwaram court order.

Tamils who have no way to survive due to the shortage of food, and high inflation following the economic crisis in Sri Lanka are preparing to leave the island nation and enter India as refugees.

In this situation, the first group of six Sri Lankan Tamils, including three children from Kokkupidiyan and Mannar, next to the Sri Lankan Chilawathurai, came in a mysterious boat from Pesalai and got stuck in a sand dune islet near Dhanushkodi. They were rescued by the Indian Coast Guard.

The second group of 10 Sri Lankan Tamils arrived at the bridge near Dhanushkodi in a private plastic boat from Vavuniya last night. A group of two men including three women, and 5 children were taken to the Marine Police Station by the Dhanushkodi Coastal security wing Police.

They were interrogated by the Immigration Department, Intelligence, Indian Coast Guard and Q-Branch police.

Notably, Sri Lanka has been facing the worst economic crisis since independence in 1948, leading to an acute shortage of essential items like food, medicine, cooking gas and fuel across the island nation.

The nearly-bankrupt country, with an acute foreign currency crisis that resulted in foreign debt default, had announced in April that it is suspending nearly USD 7 billion foreign debt repayment due for this year out of about USD 25 billion due through 2026. Sri Lanka’s total foreign debt.

The economic crisis has particularly impacted food security, agriculture, livelihoods, and access to health services. Food production in the last harvest season was 40 – 50 per cent lower than last year, and the current agricultural season is at risk, with seeds, fertilizers, fuel and credit shortages.

Sri Lanka is one of the few nations named by the Food and Agriculture Organization (FAO) which is expected to go without food due to the global food shortage expected this year. (ANI)

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No fuel: Only essential services in Lanka till July 10

All schools in capital and other main cities are to be closed until July 10 while long distances bus services are also to be cancelled from midnight…writes Susitha Fernando

With no fuel to run the crisis-stricken country, Sri Lanka’s government announced it had decided to operate only essential services from Monday midnight to July 10.

Minister and Cabinet spokesman Bandula Gunawardena told reporters that the government decided to limit fuel distribution to essential services like ports, airports, health, food distribution, and agriculture.

“This decision was taken to protect the limited reserves of fuel in the country and that they be used only for the essential services,” he said.

Requesting all others to work from home, the minister urged people to support attempts to limit the consumption of fuel in the country

All schools in capital and other main cities are to be closed until July 10 while long distances bus services are also to be cancelled from midnight.

Meanwhile, Sri Lankan High Commissioner to India, Milinda Moragoda met India’s
Petroleum and Natural Gas and Housing and Urban Affairs Minister, Hardeep Singh Puri to discuss urgent issues relating to bilateral energy cooperation.

Moragoda had detailed the current crisis Sri Lanka and its people are facing due to lack of fuel and had urged for a possibility of securing petrol and diesel supplies that are
required by Sri Lanka at present on an urgent basis.

Meanwhile, opposition parties had demanded the government resign forthwith in light of the worsening fuel crisis.

Opposition leader Sajith Premadasa demanded that the government that had failed to provide basic needs of the people should resign while Marxist party leader Anura Kumara Dissanayake claimed that country’s governing system “had exploded with careless and
negligence”.

The bankrupted south Asian island nation, with hardly any dollar reserves, was depending on India’s $500 million line of credit to purchase petroleum products since February and the final shipment with 40,000 MT of diesel arrived in Colombo on June 16.

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Top US delegation due in crisis-hit Sri Lanka

The delegation includes Deputy Assistant Secretary of Treasury for Asia Robert Kaproth and Deputy Assistant Secretary of State for South and Central Asia Kelly Keiderling, reports Susitha Fernando

In an effort to help avert the ongoing economic crisis in Sri Lanka, a top delegation from the US comprising officials from the Departments of State and Treasury will embark on a three-day visit to the island nation on Sunday.

The delegation, which includes Deputy Assistant Secretary of Treasury for Asia Robert Kaproth and Deputy Assistant Secretary of State for South and Central Asia Kelly Keiderling, will meet political representatives, economists and international organisations during their stay.

“In all their meetings, they will explore the most effective ways for the US to support Sri Lankans in need, Sri Lankans working to resolve the current economic crisis, and Sri Lankans planning for a sustainable and inclusive economy for the future,” the US Embassy in Colombo said in a statement.

“This visit underscores our ongoing commitment to the security and prosperity of the Sri Lankan people,” said US Ambassador to Sri Lanka, Julie Chung.

“As Sri Lankans endure some of the greatest economic challenges in their history, our efforts to support economic growth and strengthen democratic institutions have never been more critical,” she added.

Over the past two weeks, the US has announced $120 million in new financing for Sri Lankan small and medium-sized businesses, a $27 million contribution to the island nation’s dairy industry and $5.75 million in humanitarian assistance to help those hit hardest by the worst-ever economic crisis.

The US has also committed $6 million in new grants to provide livelihood assistance to vulnerable populations, and technical assistance on financial reform that will help stabilize the economy.

In the coming months, Washington will continue to support Sri Lankans as they revive their economy, combat food insecurity, and promote public health and education, the Embassay reiterated.

Servicemen are seen on duty on a street in Colombo, Sri Lanka, on May 10, 2022. (Photo by Ajith Perera/Xinhua/IANS)

The US also strongly supports Sri Lanka’s decision to seek assistance from the International Monetary Fund, which can provide the most durable resolution to the present crisis, it added.

The upcoming trip by the US officials comes on the heels of a one-day trip by an Indian delegation led by Foreign Secretary of India Vinay Kwatra on Thursday.

The delegation met President Gotabaya Rajapaksa, Prime Minister Ranil Wickremesinghe and other senior officials and discussed ways how India could provide bilateral assistance in the current crisis.

In the wake of the ongoing crisis, the worst since Sri Lanka gained independence in 1948, Colombo has sought support from various quarters, including neighbouring countries, as well as the US, Europe and the IMF.

An IMF team is currently in the island nation to conduct a week-long study to form relevant policies in detail to reach a staff-level agreement.

Visiting Colombo through June 30, the IMF delegation which has already met the President, Prime Minister and officials from the Finance Ministry and Central Bank of Sri Lanka has assured to assist the country.

Faced with severe forex shortage, Sri Lanka suspended payment on $12 billion debt in April and last week the UN warned that country’s “unprecedented economic crisis could develop into a dire humanitarian crisis, with millions already in need of aid”.

The world body and its partners have appealed for $47 million to address the immediate needs of the 1.7 million of the most vulnerable people and those critically affected by the crisis.

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Australia donates $15 mn to World Food Programme for Sri Lanka

The Australian funding will help WFP provide critical assistance to the most at-risk Sri Lankans, including pregnant and breastfeeding women and school children….reports Asian Lite News

A week after the United Nations World Food Programme (WFP) launched a $60 million emergency food and nutrition assistance for three million of the most at-risk Sri Lankan nationals, Australia came forward with 22 million Australian dollar aid (equivalent to $15 million) on Wednesday.

The Australian funding will help WFP provide critical assistance to the most at-risk Sri Lankans, including pregnant and breastfeeding women and school children.

“To boost existing social safety net programmes, WFP is working to assist one million children through the national school meal programme, while one million people are participating in the Thriposha programme, which provides fortified food to mothers and children,” WFP said in a statement.

The WFP had on June 16 launched its $60 million emergency food and nutrition assistance for three million of the most at-risk Sri Lankans who are facing food insecurity in the face of a record high food inflation, skyrocketing fuel prices and widespread shortage of key commodities.

Monthly food vouchers are being distributed to pregnant women from some of the poorest neighbourhoods, delivered alongside antenatal care provided by the local government in Sri Lanka.

Welcoming the aid by Australia, WFP said, “At a time when millions of people are struggling to meet their most basic food needs, and while families’ coping capacities are being stretched to the limit, we can avert a worsening humanitarian crisis by stepping up our response now.”

John Aylieff, WFP Regional Director for Asia and the Pacific, said that nearly five million people — or 22 per cent of the Sri Lankan population — are food insecure and in need of assistance.

Nutritious foods, such as vegetables, fruits and protein-rich products, are now out of the reach of many low-income families.

WFP’s recent surveys indicated that 86 per cent of the families are resorting to at least one coping mechanism, including eating less, eating less nutritious food and even skipping meals altogether.

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Australia supports Sri Lanka with $50 million development assistance

The island nation’s worst economic crisis in seven decades led to a shortage of foreign exchange that stalled imports of essential items such as fuel and medicine and fertiliser….reports Asian Lite News

Australia will provide USD 50 million in Official Development Assistance to support Sri Lanka meet urgent food and healthcare needs, the Australian foreign ministry announced on Monday.

Sri Lanka currently faces its worst economic crisis in seventy years, leading to shortages of food, medicine and fuel. The island nation’s worst economic crisis in seven decades led to a shortage of foreign exchange that stalled imports of essential items such as fuel and medicine and fertiliser.

“We will contribute an immediate USD 22 million to the World Food Programme for emergency food assistance to help three million people in Sri Lanka meet their daily nutritional needs. Australia will also provide USD 23 million in development assistance to Sri Lanka in 2022-23,” the ministry said in a statement.

The Australian foreign ministry said it has a close and long-standing relationship with Sri Lanka. “Not only do we want to help the people of Sri Lanka in its time of need, there are also deeper consequences for the region if this crisis continues,” the statement said.

This will support health services, and economic recovery, with a strong emphasis on protecting those at risk, especially women and girls.

This assistance was announced as Australian Home Affairs Minister Clare O’Neil visited the country on Monday. This visit coincides with the 75th anniversary of diplomatic relations between the two countries.

The Daily Mirror reported that the trip also follows the interception of multiple asylum seeker boats travelling to Australia from the nation in recent weeks.

The Australian Border Force has reportedly intercepted three asylum seeker boats since the election on 21 May, prompting renewed concerns over the issue.

O’Neil met with Sri Lankan President Gotabaya Rajapaksa to discuss how Australia can assist Sri Lanka through its economic struggles and engagement in combating people smuggling.

The newly elected Prime Minister Anthony Albanese said his government wanted to use the trip to send a message that “people who arrive by boat” would not be settled in Australia.

“We understand that there are issues in Sri Lanka and that the wrong messages are being given by people smugglers – our message will be very clear,” he said. (ANI)

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Lanka PM asks China to restructure debts

Facing crisis with no dollars to import food, fuel, medicine and cooking gas, Sri Lanka had in April suspended its debt payment of around $7 billion for 2022….writes SUSITHA FERNANDO

Sri Lanka Prime Minister Ranil Wickremesinghe said on Tuesday that the crisis-ridden nation is looking forward to discussions on debt restructuring with China.

Wickremesinghe said this after a discussion with China’s Deputy Ambassador Hu Wei in Colombo.

In January, President Gotabaya Rajapasa had urged Beijing to restructure its debt repayments as the country was going through its worst economic crisis. Rajapaksa made this request when he met Chinese Foreign Minister Wang Yi.

Over the last 10 years, China has given over $5 billion loans for projects including building highways, ports and airports, but political analysts have claimed that most of the projects were white elephants with no returns to the island nation.

China accounts for 10 per cent of Sri Lanka’s total loans and it is the third biggest lender after Japan and the Asian Development Bank.

Facing crisis with no dollars to import food, fuel, medicine and cooking gas, Sri Lanka had in April suspended its debt payment of around $7 billion for 2022.

During the discussion, Wickremesinghe also reiterated Sri Lanka’s adherence to the ‘One China Policy’.

“The Chinese Deputy Ambassador inquired about Sri Lanka’s food security programmes and re-assured the Prime Minister that China would be donating rice to Sri Lanka to help ease the food crisis,” the PM office stated.

Amid the oncoming food crisis in Sri Lanka, China has offered a grant of 10,000 metric tonnes of rice amounting to around $74 million and the two out of six shipments are to reach Colombo between June 25 and 30.

Last week, Wickremesinghe had announced plans to import 50,000 metric tonnes of rice under the Indian credit line to curb the food crisis in Sri Lanka. India has offered over $3.5 billion financial assistance Sri Lanka to get food, fuel, medicine and other essentials.

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Lanka pins hopes on Russian crude oil

Wijesekera said that they are trying to obtain Russian crude oil on credit to keep the country’s only oil refinery running…reports Asian Lite News

 Sri Lanka’s Minister of Power and Energy Kanchana Wijesekera said on Sunday that they have reached out to several Russian crude oil suppliers in an effort to solve the island nation’s energy crisis.

Wijesekera said that they are trying to obtain Russian crude oil on credit to keep the country’s only oil refinery running, reports Xinhua news agency.

The Minister said that Sri Lanka’s oil bill has risen to $550 million a month by June 2022.

He added that Sri Lanka now owes oil firms $730 million for oil imported on credit, and these companies will now only supply fuel after upfront payments or deposits.

Sri Lanka has suffered crippling fuel shortages since February as a foreign exchange crisis worsened in the South Asian country.

The country’s state-owned fuel distributor Ceylon Petroleum Corporation said it only has 5,000 metric tonnes of petrol and thus only 500 metric tonnes will be released to gas stations each day.

The country currently needs at least $5 billion over the next six months to pay for basic essential items such as food, fuel and fertiliser.

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