Categories
-Top News Asia News Sri Lanka

Rajapaksas still hold trump card amid chaos

The Rajapaksa-backed candidate received votes from 148 out of 225 MPs while the opposition’s candidate received only 65 votes….reports SUSITHA FERNANDO

Amidst a month long public protests and ahead of Friday’s island wide “Hartal” to bring Sri Lanka to a standstill demanding the government to “go home”, the ruling Rajapaksas in a secret vote on Thursday to elect a new Deputy Speaker, proved that it still holds majority in the Parliament.

The Rajapaksa-backed candidate’s victory at the parliament was proved a precursor to the outcome of two no-trust motions filed by the main opposition to oust President Gotabaya Rajapaksa and PM Mahinda Rajapaksa.

However, the Rajapaksas’ victory has complicated the current political impasse where angry people, waiting at fuel and gas stations and supermarket without food and pharmacies without medicines, demand all Rajapaksas to step down and handover the government.

Former Deputy Speaker Ranjith Siyambalapitya, an MP from Sri Lanka Freedom Party (SLFP) of former President Maithripala Sirisena, last month announced his resignation from the post following 40 MPs of his party who had been elected to Parliament from the Rajapaksa lead Sri Lanka Podujana Peramuna (SLPP), decided to stay independent.

However last week on an invitation by President Rajapaksa to form an interim government, the SLFP and other 11 coalition political parties, which also threatened to be independent, sat with President and agreed to form an interim government dropping PM Mahinda Rajapaksa.

However, on Thursday, the Parliament decided replace the Deputy Speaker and the main opposition Samagi Jana Balawegaya (United People’s Power) proposed an MP from its party.

The Rajapaksa-backed candidate received votes from 148 out of 225 MPs while the opposition’s candidate received only 65 votes.

Opposition MPs alleged that the election for Deputy Speaker was a plot to prove the government’s majority when the entire country is demanding it to step down.

Tamil National Alliance (TNA) MP Shanakiyan Rasamanickam told parliament that when the

entire country demanding Rajapaksas to go, 149 MPs in the parliament still wanted to stay with Rajapaksas.

“There are only 65 MPs in the side of the people of this country,” he said.

Facing a worsening crisis, the government on Thursday announced restrictions on fuel for vehicles at Rs 2,000 for motor bicycles, Rs 3,000 for three wheelers, and Rs 8,000 for

cars, vans, and jeeps. For three days, fuel stations have been queued up with people.

With Sri Lanka going through its worst-ever economic crisis with dollar crunch and inflation, the government on Wednesday admitted that country’s dollar reserves had dropped to less than $50 million. Last month, the country announced defaulting of all foreign loans amounting to over $51 billion.

ALSO READ: Bangladesh extends a helping hand to Lanka

Categories
-Top News Asia News Sri Lanka

Lanka’s foreign reserves at record low

Finance Minister Ali Sabry warned that the current economic crisis could not be solved even within next two years, reports Susitha Fernando…reports Asian Lite News

Predicting a doomsday scenario for crisis-ridden Sri Lanka, the island nation’s Finance Minister Ali Sabry on Wednesday announced that total foreign reserves have dropped even below $50 million and warned that the current economic crisis could not be solved even within next two years.

Explaining the depth of the crisis the Indian Ocean island nation has fallen to, he doubted the country’s ability to provide food, fuel and other essentials and repay massive foreign debts.

“Within next two to three months, we might have to face a severe situation. We

are at a doorstep of a disaster. There would not be a country to do politics for us,” he Minister said.

However, citing India as an example, Sabry said that the crisis could be made into a blessing by acting like India did in 1990s overcame the economic crash. He said the island’s closest neighbour’s foreign reserves had dropped to $2 billion and gold was reserved in London Banks, but it and managed it properly and emerged as one of the most powerful countries.

“This crisis could be made into a blessing just like how India did in 1991 and 1992 or we would get into a wrong track and end like Venezuela or Lebanon and lead to a much worst situation from here,” he cautioned.

The Minister also reminded the assistance extended by India at time of worst ever crisis in its post-independent history. He said India has given $500 million to purchase fuel out of which $400 million has already spent and out of $1 billion, $200 million has been allocated for fuel supply.



Meanwhile, the Indian High Commission in Colombo, in a tweet, announced on Wednesday that 40,000 MT of petrol were delivered to Sri Lanka making the total petrol supply to around 440,000 MT and “More to follow!!!”

Since January India has assisted Sri Lanka with nearly $3 billion including financial

assistance, essential goods and currency swaps.

The Finance Minister blamed his own government for making “several mistakes” since it

came to power in December 2019. Reducing taxes at a time when it was much needed to

increase them, not going to the International Monetary Fund (IMF) earlier than this and artificially manipulating the dollar were historical mistakes that the government made, he regretted.

He noted that the foreign reserves, which were at $7 billion in 2019, had now being dropped to less than $50 million while total foreign loans hit $51 billion. Sabry said that an expert team, devoid of politics, would be appointed by next week to discuss with the IMF to restructure loans and insisted that a new budget has to be presented with increasing taxes.

Grappling with the worst economic crisis in the recent history and facing acute shortage of food, medicine and other essentials and days long queues to purchase fuel and cooking gas, Sri Lanka, on April 12, announced it was defaulting on its all foreign debts.

India supplies 40,000 MT petrol to SL

India on Wednesday supplied nearly 40,000 MT of petrol to Sri Lanka to help ease the fuel shortage in the country, which is reeling under a severe economic and energy crisis.

The High Commission of India in Sri Lanka took to its Twitter handle to make the announcement of the consignment.

“Delivering on #India’s commitment to the people of #SriLanka, close to 40,000 MT of petrol reached #Colombo today. With this has received around 440,000 MT of various types of fuel from More to follow!!!” tweeted India High Commission in Sri Lanka.

With this, India has so far delivered 440,000 MT of various types of fuels to the island country in several consignments.

Earlier, on Sunday, Ceylon Petroleum Private Bowser Owners Association (CPPBOA) warned of fresh fuel shortage from Monday due to the recent anti-government strikes in the country that had resulted in the suspension of fuel transport operations.

Presently, Sri Lanka is struggling with acute food and electricity shortages, forcing the country to seek help from its neighbours. The recession is attributed to foreign exchange shortages caused by a clampdown on tourism during the COVID-19 pandemic. The country is unable to buy sufficient fuel and gas, while the people are being deprived of basic amenities as well. (ANI)

ALSO READ: Impeachment, no-trust motions; Dramatic turns of events at Lanka

Categories
-Top News Asia News Sri Lanka

Impeachment, no-trust motions; Dramatic turns of events at Lanka

The Opposition also accused government for its arbitrary decision to ban chemical fertilizer and placing country’s food security in jeopardy, destroyed the economy…reports Asian Lite News

 Sri Lanka’s main Opposition has handed over an impeachment motion to oust beleaguered President Gotabaya Rajapaksa and a no confidence motion against government lead by his elder brother Mahinda Rajapaksa.

Sajith Premadasa Opposition leader and leader of the Samagi Jana Balawegaya or United People’s Force handed over two motions to the Speaker Mahinda Yapa Abeywardena who is to announce their future cause in Parliament on Wednesday.

No-faith motion is needed majority vote out of 225 MPs while the impeachment of President is a tougher battle 2/3 majority in Parliament followed by the Supreme Court approval is required.

Samagi Jana Balawegaya with nearly 50 MPs in the Parliament needs the support of other Opposition parties and a number of defections from the government.

In its no-faith motion against the government, the Opposition charged that the Prime Minister and the ministers had failed in their collective responsibility to update the Parliament on the financial situation. Making multiple charges, the opposition accused the government has failed to provide basic facilities like food, clothing and housing to its people and made Sri Lanka, the country that has the lowest economic development in South Asia.

“The citizens were subjected to an unbearable inflation by printing over Lkr 3 trillion and the government had never updated the Parliament on this,” the Opposition stated.

The Opposition also accused government for its arbitrary decision to ban chemical fertilizer and placing country’s food security in jeopardy, destroyed the economy by failing to provide fuel and cooking gas and by importing substandard gas and killing eight people due to gas explosions. The government also has severely inconvenienced people by failing to provide power and essential medicines and other equipment’s to run the hospitals. During the Covid-19 pandemic the government “failed” to follow advices given by the medical experts and thereby allowed the death of over 10,000.

In its impeachment motion the Opposition charged that President Gotabaya Rajapaksa misused his powers on April 1 by imposing state of emergency and ban on social media to prevent protest against him. The Opposition accused Rajapaksa government over the killing of a protestor during a public protest demanding fuel.

The Opposition also accused President Rajapaksa’s immediate ban on chemical fertilizers and in delaying to seek the International Monetary Fund (IMF) assistance to face the financial crisis. President has admitted both decisions as ‘mistakes’ and they had adverse impact on the economy, the Opposition said.

The island nation is going through its worst economic crisis with no essential food, fuel, cooking gas and medicine available in stocks and long hours of daily power cuts due to lack fuel for power generation. For more than a month, people have been protesting on streets and Sri Lankans around the world demanding that President Gotabaya and the government be resigned. Protestors have blocked President’s Office and Prime Minister’s official resident Temple Trees.

Trade unions which held a one-day token strike last week is planning to have an island wide ‘Hartal’ on Friday demanding the government to quit.

ALSO READ: Lanka: Breather for low-income families

Categories
-Top News India News Sri Lanka

Stalin to send rice, medicines to Lanka

He also appealed to the people to donate on humanitarian basis so that necessary items can be bought and sent to the island nation….reports Asian Lite News

Tamil Nadu Chief Minister M.K.Stalin on Tuesday said the government will send rice, milk power and life saving drugs to Sri Lanka in the first phase.

He also appealed to the people to contribute money for the purpose.

Stalin said with the permission of the BJP-led central government, the state will soon send 40,000 ton of rice, 500 ton of milk powder and life saving drugs to Sri Lanka caught in a severe economic crisis.

He also appealed to the people to donate on humanitarian basis so that necessary items can be bought and sent to the island nation.

Earlier, Stalin had requested the Centre to allow the state to ship the essentials, including food grains, vegetables and medicines, from the Thoothukudi port to the Tamils living in Northern and Eastern Parts of Sri Lanka and Colombo, as well as those working in the plantations who are reeling under the severe crisis.

ALSO READ: Sirisena calls for fresh polls in Lanka

Categories
-Top News Asia News Sri Lanka

SL to ease regulations over foreign earnings conversion

The Central Bank is also planning to give relaxation to tourists who were made to pay the hotels in dollars….reports Asian Lite News

Sri Lanka’s Central Bank has announced that they will remove the regulations that made the exporters convert their foreign currency earnings into rupees in the coming future.

In recent months the central bank has imposed various regulations that forced the exporters to convert their US dollars within a period of time to support the island nation’s foreign reserves, Xinhua News Agency reported.

Addressing a press conference, Central Bank Governor Nandalal Weerasinghe on Friday said, “For services exports like IT and tourism, we will remove the mandatory conversion requirement.”

“We have no way to track these services. Apparently, some exporters are not bringing in foreign currency they make because of the mandatory conversion rule,” he added.

He added that the central bank is also planning to give relaxation to tourists who were made to pay the hotels in dollars, reported Xinhua.

Earlier in the day, Sri Lanka’s central bank governor said domestic debt in the form of government securities and development bonds will not be restructured as restructuring external debt is a top priority for the island nation.

Central bank governor Nandalal Weerasinghe also provided an update on the progress made during the recent discussions with the International Monetary Fund (IMF) and World Bank.

Addressing a meeting of the Committee of the Ceylon Chamber of Commerce, he said progress has been made towards establishing a macro-fiscal policy framework and initiating structural reforms.

The central bank governor also expressed confidence that a staff-level agreement with the IMF is likely to be reached within the next two months.

Weerasinghe announced that additional measures will be implemented to address urgent economic concerns, reported Xinhua.

The measures include introducing regulations to encourage the U.S. dollar flows currently transacting in the informal market to be channelled through the formal banking system.

As a result of policy measures already introduced by the central bank and the government, he is of the view that expenditure on imports will be declining further to more sustainable levels.

Sri Lanka is going through an economic crisis brought about by foreign currency shortages and it halted external debt repayment on April 12.

pharma industry

Drug price hikes

Adding more burden to the staggering economy of the island nation, the Health Minister of the country Channa Jayasumana issued a special gazette order on Thursday stating a dramatic price hike in the pharmaceutical drugs, yet again shooting up the prices of 60 drugs up by 40 to 60 per cent, reported local media.

This decision will impact the most commonly used medicines as their rates are expected to spike.

Further, the Health Minister has instructed all the medical professionals to adhere to the gazette notification, maintaining the price, as reported by Colombo Page.

“Every trader, distributor, pharmacist, medical practitioner, dentist, veterinary surgeon, medical institution including a private medical institution, pharmacy or person who or which is in possession of the Scheduled Medicines for the purpose of sale shall maintain the price of the Scheduled Medicines at the maximum retail price or revised retail price whichever is less,” states the gazette notification issued by Jayasumana.

Presently, Sri Lanka is facing one of the worst economic woes since gaining independence in 1948. It is grappling with food and electricity shortages, affecting many people, forcing the country to seek help from its neighbours. The recession is attributed to foreign exchange shortages caused by a clampdown on tourism during the COVID-19 pandemic. It has left the country unable to buy enough fuel, with people facing an acute scarcity of food and basic necessities, heating fuel, and gas. (ANI)

ALSO READ: Lankan trade unions ask govt to quit

Categories
Asia News India News Sri Lanka

Indian envoy renews support

Earlier, the Indian High Commissioner of Sri Lanka met Former Sri Lanka cricketer Sanath Jayasuriya and hailed his many achievements for the sport and Sri Lanka….reports Asian Lite News

Indian High Commissioner of Sri Lanka Gopal Baglay received a group of Parliamentarians and reiterated India’s continued commitment to support the island nation.

“High Commissioner (HC) received a group of parliamentarians and reiterated India’s continued commitment to support Sri Lanka. The Parliamentarians thanked the people of India for standing with people of Sri Lanka. They shared with HC their perspective on the current economic and political situation in Sri Lanka,” India in Sri Lanka tweeted on Friday.

Earlier, the Indian High Commissioner of Sri Lanka met Former Sri Lanka cricketer Sanath Jayasuriya and hailed his many achievements for the sport and Sri Lanka.

“High Commissioner met cricket legend @Sanath07 and hailed his many achievements for the sport and #SriLanka. The ace cricketer appreciated India’s support in the form of essential supplies, including medicines,” India in Sri Lanka wrote in a tweet.

Earlier this month, the former cricketer had lauded “big brother” India and Prime Minister Narendra Modi for sending help to the island nation as it battles the worst economic crisis since independence.

Sri Lanka is facing one of its worst economic crises resulting in widespread protests against the Rajapaksa family leaders, including President Gotabaya Rajapaksa and PM Mahinda Rajapaksa.

The recession is attributed to foreign exchange shortages caused by a fall in tourism during the COVID-19 pandemic, as well as reckless economic policies, which have resulted in the country being unable to buy enough fuel, and people facing an acute scarcity of food and basic necessities, fuel, and gas.

The World Bank this week agreed to provide Sri Lanka with USD 600m in financial assistance to help meet payment requirements for essential imports.”

The World Bank has agreed to provide USD 600 million in financial assistance to address the current economic crisis,” the Sri Lankan president’s media division had said in a statement on Tuesday. (ANI)

ALSO READ: War of words over Modi’s remarks on fuel prices

Categories
-Top News Asia News Sri Lanka

Lankan trade unions ask govt to quit

Trade unions, representing banks, railways, education, harbour, electricity, postal, apparel industry and tea estate workers joined the protests while doctors and medical sector too joined the trade union action while on duty….reports SUSITHA FERNANDO

Troubled Sri Lanka came to a near standstill on Thursday with over 1,000 government and private sector trade unions, representing almost all sectors from transportation to banking, striking work to demand that the government quit.

Issuing a 7-day ultimatum to the government, members of the Collective of trade unions, including foreign invested apparel sector, stayed away from work and took to streets demanding the government’s resignation. Transportation came to complete halt with no trains running and private bus owners keeping their vehicles off the road.

Trade union members, who started protest in front of their working places, then marched to President’s Office where a 20-day-long continuous protest is being held.

Trade unions, representing banks, railways, education, harbour, electricity, postal, apparel industry and tea estate workers joined the protests while doctors and medical sector too joined the trade union action while on duty.

“We have given the government till May 6 to resign and if the government does not listen to the people, we will have to have a hartal on May 6,” Ravi Kumudesh of the Collective of Trade Unions and Mass Organisations said.

“If the government is not willing to leave, we will have to kick them out. People are asking the Rajapaksas to go home and they don’t have a mandate anymore,” said Joseph Stalin, General Secretary, Ceylon Teachers’ Union. Trade unions have demanded that trade union action would be expanded if the government decides not to leave.

As the island nation faces its worst-ever economic crisis in the post-independence history, with major price hikes of essential items due to dollar crunch and inflation, people have taken to streets demanding the Rajapaksa government to step down.

Pressured by public protests, economic crisis and demand by religious leaders, President Gotabaya Rajapaksa has agree to form an all-party government after cancelling the cabinet headed by his elder brother Mahinda Rajapaksa. On Wednesday, he invited all political parties to meet him on Friday to start discussion on an all-party government but he is yet receive positive response.

However, Mahinda Rajapaksa is insistent on continuing in power and has said that he would be the head of any new government to be formed.

ALSO READ: India steps up aid to Lanka as China stays silent

Categories
-Top News Asia News Sri Lanka

Lankan president ready to form all party govt

Gotabaya Rajapaksa said that the structure, the tenure and the portfolios of this all-party government have to be agreed upon after discussions…reports Asian Lite News

Sri Lankan President Gotabaya Rajapaksa on Wednesday said that he in principle is willing to form an all-party government with the political parties represented in Parliament.

He conveyed this message to the leaders of political parties aligned with the Sri Lankan government.

Gotabaya Rajapaksa said that the structure, the tenure and the portfolios of this all-party government have to be agreed upon after discussions, Xinhua News Agency reported.

Rajapaksa said the proposed all-party government is to be established after the resignation of the Prime Minister and the Cabinet.

Sri Lankan Prime Minister Mahinda Rajapaksa

He has invited the leaders of political parties of the ruling coalition for a meeting on Friday.

Sri Lanka has been gripped by an economic crisis with foreign debt estimated at USD 51 billion. The country appears to be on the edge of a “humanitarian crisis”, according to the United Nations Development Programme, as its financial troubles grow, with rising food prices, and the country’s coffers have run dry.

Several political parties of the ruling coalition and religious leaders have urged the Sri Lankan president to establish an all-party government to find a way out of the economic and political crisis. (ANI)

ALSO READ: Debt refinancing: Lanka pins hopes on China

Categories
-Top News Asia News Sri Lanka

Is fall of Rajapaksa Family imminent?

The Rajapaksa family exercised almost all the critical roles of governance, indirectly controlling more than 70 per cent of the Sri Lankan budget, writes Dhananjay Tripathi

The domestic political landscape of South Asia is fascinating. One can find strong political dynasties in most of South Asian democracies. The Bhuttos and Sharifs are well known dynastic icons in Pakistan, the Koiralas have frequently dominated the political landscape in Nepal, Hasina and Zia families have ruled the roost in Bangladesh, while the Gandhi family’s extended innings in India is common knowledge.

Similarly, the mention of Sri Lankan politics is incomplete without a discussion on the Rajapaksa family. In the last few months, Sri Lanka has occupied headlines in every South Asian country, precisely for its unprecedented economic crisis. This happened when the Rajapaksa family was completely dominating the Sri Lankan government.

Prior to the recent cabinet reshuffle, more than six family members occupied cabinet posts. A few others were well ensconced in the state ministerial position. The family exercised almost all the critical roles of governance, indirectly controlling more than 70 per cent of the Sri Lankan budget.

Just take a look at some of the important portfolios taken over by the family after 2019. These included President (Gotabaya Rajapaksa), Prime Minister (Mahinda Rajapaksa), Minister of Finance (Basil Rajapaksa), Minister of irrigation (Chamal Rajapaksa), Minister of Youth and Sports (Namal Rajapaksa), and State Minister of Paddy and Grains, Organic Food, Vegetables, Fruits, Chillies, Onion and Potato, Cultivation Promotion, Seed Production and Advanced Technology Agriculture (Shasheendra Kumara Rajapaksa). This is not new for the Rajapaksa family, which had almost 40 members occupying various government posts when Mahinda Rajapaksa was the President from 2010 to 2015.

Why So Popular?

While today one can see street protests against the family in almost every corner of Sri Lanka, it is also true that the Rajapaksas have enjoyed substantial support from the public in the past. Riding on the Sinhala-Buddhist Nationalist sentiment, this family maintained a strict position against the Tamil and Muslim minorities. They also kept siding with China on foreign policy issues. Their party glorifies Mahinda and Gotabaya Rajapaksa for crushing the Tamil separatist movement in 2009.

Mahinda Rajapaksa had won the 2005 Presidential elections. He later called his brother Gotabaya Rajapaksa-a retired military official who had shifted to the US to Sri Lanka. Gotabaya returned to this island nation and joined his President and brother as the Defence Secretary. After that, the duo inflicted severe injury on Tamil separatists and defeated them convincingly. There are several allegations of human rights violations against the two brothers for their highhandedness and inhuman approach to the civil war. But for the Sinhalese nationalists, these two brothers were like “terminators,” despite accusations that they were running “death squads”.

The victory of the Sri Lankan State in the Civil War under the political leadership of the Rajapaksa brothers earned them enough accolades to establish their supremacy. In the 2010 Presidential election, Mahinda Rajapaksa secured some 57.88 per cent of the votes and won the race for the President post for the second consecutive term with a comfortable margin. Although Mahinda Rajapaksa lost by a slight margin in 2015 due to several complaints of corruption, in 2019 his brother Gotabaya captured the Presidential position, defeating his nearest rival by a healthy margin of 11 per cent.

The island nation, recovering from the civil war again witnessed the large-scale terror attack. It was 21st April 2019 when militants belonging to the National Tawahujja Jama’ath (NTJ) carried out what is termed as �Easter bombings’ that had killed more than 260 people, including some 40 foreign nationals. This Easter terror attack again brought the Rajapaksa family to the limelight, already known for winning the Civil War. Thus, all these disturbances implicitly helped the Rajapaksa family in its political careers, as they were seen as tough and strong leaders. As a result, in the last 17 years, the family has remained in power for almost 13 years.

The Family Background

The Rajapaksa family is from the land-owning class that belonged to the Giruwapattuwa village. While the family gained prominence in Sri Lankan politics in the last two decades, it was always considered a heavyweight in the Southern district of Hambantota. In electoral politics, the family history goes back to 1936 when D. M Rajapaksa was elected to represent the Hambantota district in the state Council. After that, family members remained in politics and were in high profile political positions. Although, their ascendancy and domination in national politics have been witnessed in the last couple of decades.

The China Inclination

Facing their most demanding challenges in the political arena, the Rajapaksa brothers had decided to continue in office with some changes in the cabinet. This family had shown no hesitation in aligning with China. Some big projects like Magampura Mahinda Rajapaksa Port (Hambantota International Port) and Colombo Port City were awarded to Chinese infrastructure companies. Critics have raised valid questions such as the economic rationale and utility capacity of such big projects for a small nation. Nevertheless, Mahinda Rajapaksa remained firm and backed China. One good example is the Mattala Rajapaksa International Airport (MRIA). Due to less traffic, this airport was also tagged as the ‘world’s emptiest airport’. This airport was constructed by taking a Chinese high-interest loan. Due to heavy losses in MRIA, Ranil Wickremesinghe’s government in 2018 entered into a negotiation with India to jointly operate this airport. Albeit, after the election of G. Rajapaksa in 2019, things changed. Gotabaya Rajapaksa was not in favour of India jointly operating MRIA, and he ended negotiations with India.

Let us not forget that the international community criticised the Rajapaksa family for war atrocities, and they remained sceptical in assisting them. On the other hand, China was soft and even provided “sophisticated weaponry” to the Sri Lankan military during the civil war.

What Next?

The Sri Lankan economy has defaulted on debt; the country is negotiating with the IMF for a bailout package and approaching others countries like India for help. It is a new low in the political life of the Rajapaksa family. They always manage to ride on the national sentiment and project themselves as powerful leaders. These are the reasons why even corruption issues against some family members have not deterred them from occupying high power seats. This may undergo a change, and this time even China is not coming unconditionally to rescue the Rajapaksa clan. As of now, with international help, the Rajapaksa family may survive this Tsunami, but in the future, the image reconstruction for the Rajapaksas will remain a herculean task.

(Dhananjay Tripathi is an Associate Professor in the Department of International Relations at South Asian University, New Delhi. The views expressed are personal) (The content is being carried under an arrangement with indianarrative.com)

ALSO READ: Lanka PM sees no reason to step down

Categories
-Top News Asia News Sri Lanka

Debt refinancing: Lanka pins hopes on China

China is Sri Lanka’s biggest creditor having provided the Island nation with USD 3.5 billion of credit…reports Asian Lite News

After talks with International Monetary Fund (IMF) amid the ongoing economic crisis in the country, Sri Lanka’s Mass Media Minister Nalaka Godahewa on Tuesday said that the country is in talks with China as well for refinancing its debt.

“Now that IMF (International Monetary Fund) is ready to cooperate with Sri Lanka, other countries are aware that we have support. We were guaranteed the support of the World Bank and other (financial) agencies,” Godahewa said, adding that the negotiations with Beijing are at an early stage, Sputnik reported.

China is Sri Lanka’s biggest creditor having provided the Island nation with USD 3.5 billion of credit, the report said citing local media.

Last Tuesday, the Sri Lankan Finance Ministry said the IMF and India pledged assistance to mitigate the economic crisis that has gripped the country.

An IMF official on Tuesday advised Sri Lanka to tighten its monetary policy, raise taxes and adopt flexible exchange rates to overcome its debt crisis, according to media reports.

“We’ve had very good, fruitful, technical discussions on preparations for the negotiations with authorities over the past weekend and a couple of days before,” Xinhua quoted Anne-Marie Gulde-Wolf, acting director of the IMF’s Asia and Pacific Department, as saying during an online event.

“The requirement for fund lending will be progress toward debt sustainability. Monetary policy has to be tightened to keep inflation in check. We see a need for flexible exchange rates,” she added.

However, the IMF official refrained from commenting on the value of any IMF package, or an estimated time needed to come into an agreement with the island nation.

Sri Lanka is facing one of its worst economic crises resulting in widespread protests against the Rajapaksa family leaders, including President Gotabaya Rajapaksa and Prime Minister Mahinda Rajapaksa.

The recession is attributed to foreign exchange shortages caused by a fall in tourism during the COVID-19 pandemic, as well as reckless economic policies, which have resulted in the country being unable to buy enough fuel, and people facing an acute scarcity of food and basic necessities, heating fuel, and gas.

The island nation has been gripped by an economic crisis, considered the worst since the country gained independence in 1948. Due to energy shortages, some parts of Sri Lanka have rolling blackouts. Sri Lanka’s foreign debt is estimated at USD 51 billion.

Sri Lanka appears to be on the edge of a “humanitarian crisis”, according to the United Nations Development Programme, as its financial troubles grow, with rising food prices, and the country’s coffers have run dry.

According to World Bank estimates, five lakh people in Sri Lanka have fallen below the poverty line since the onset of the crisis. (ANI)

ALSO READ: Lanka PM sees no reason to step down