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  • Lanka begins debt restructuring talks with China

    Lanka begins debt restructuring talks with China

    Sri Lanka plans to soon strike a deal with the creditor nations, including India, Japan and China, to facilitate debt restructuring….reports Susitha Fernando

    Sri Lanka President Ranil Wickremesinghe informed the Parliament on Thursday that the government has started initial debt restructuring discussions with China, which is an important step to revive the island nation that is facing its worst ever economic crisis.

    The President informed the Parliament that the discussions will continue after the National Congress of the Chinese Communist Party starting October 16.

    “I am sure that China would help us at this critical juncture,” Wickremesinghe told the Parliament, adding that Japan has agreed to intervene with regard to restructuring debts with China.

    Sri Lanka plans to soon strike a deal with the creditor nations, including India, Japan and China, to facilitate debt restructuring.

    The International Monetary Fund (IMF) has agreed to a conditional $2.9 billion bailout plan for the island nation, but Sri Lanka first has to strike deals on restructuring its debts with the creditor countries.

    China is a key factor on this count, but it has not yet committed to any debt restructuring plans. Instead, it has proposed more lending to pay Beijing’s past debts.

    During his address, Wickremesinghe also thanked Prime Minister Narendra Modi for India’s extensive support during the crisis faced by Sri Lanka.

    “We always received support from Prime Minister Modi. During the recent crisis, we received extensive support from India and I have extended my gratitude to them on several occasions,” the Sri Lanka President said.

    Wickremesinghe also told the Parliament that Sri Lanka would continue to get the support of India to come out of the ongoing crisis.

    “We have already received positive responses from India,” the President said, adding that he spoke to Prime Minister Modi when he met him in Japan recently.

    The other leading Asian creditor to Sri Lanka, Japan, has agreed to a credit reconciliation process and also to co-chair the debt restructuring talks with countries which had provided debts.

    Announcing the plans to come out of the crisis, Wickremesinghe said he hopes to reach a common agreement with the creditor nations, including Japan, China and India, adding that dialogues have commenced with envoys from other countries that provided debts.

    “Following discussions with countries that provided debts to Sri Lanka, we expect to discuss with private creditors such as London Club on debt restructuring,” Wickremesinghe said.

    Securing an IMF assurance, Sri Lanka plans to bridge finances with lenders like the World Bank and the ADB after reaching agreements with the creditor nations and private lenders.

    The President said he hopes to access around $1 billion through bridging financing while the ADB has already agreed to $500 million financial assistance.

    Wickremesinghe also said that inflation of food prices has rocketed to 95 per cent, a situation that was not experienced by the island nation even during World War II.

    However, the President said if everything works according to plans, the economy could improve by the middle of next year.

    ALSO READ: India abstains from UNHCR vote on China, Lanka

  • India abstains from UNHCR vote on China, Lanka

    India abstains from UNHCR vote on China, Lanka

    Since January this year, India has “provided unprecedented assistance” to the people of Sri Lanka to face the challenges of the recent economic crisis, he said…reports Asian Lite News

    India on Thursday abstained on a resolution at the United Nations Human Rights Council (UNHRC) promoting human rights in Sri Lanka but urged the government in Colombo to deliver on commitments towards the Tamil minority.

    India also abstained on a draft resolution at the UNHRC calling for a debate on the human rights situation in China’s Xinjiang region.

    While explaining India’s vote on the resolution on promoting reconciliation, accountability and human rights in Sri Lanka, Indra Mani Pandey, the country’s permanent representative in Geneva, said that the progress made so far by the Sri Lankan government to meet the aspirations of the Tamil minority “remains inadequate”.

    “In finding a lasting and effective solution for peace and reconciliation in Sri Lanka, India has always been guided by the two fundamental principles of support to the aspirations of the Tamils for equality, justice, dignity and peace and unity, territorial integrity and sovereignty of Sri Lanka,” Pandey said.

    “While we have taken note of the commitments by the government of Sri Lanka on issues of implementation of the commitments in the spirit of the 13th Constitutional Amendment, meaningful devolution and the early conduct of provincial elections, we believe that the progress towards the same remains inadequate,” he said.

    “Accordingly, we urge the government of Sri Lanka to work meaningfully towards early implementation of these commitments,” he added.

    Pandey also noted that India has “substantively contributed” to the relief, rehabilitation, re-settlement and reconstruction process in Sri Lanka since 2009. Since January this year, India has “provided unprecedented assistance” to the people of Sri Lanka to face the challenges of the recent economic crisis, he said.

    Achieving prosperity for all Sri Lankans and “realising the legitimate aspirations of Tamils of Sri Lanka for prosperity, dignity and peace are two sides of the same coin”, Pandey pointed out.

    Twenty members of the 47-strong UNHRC voted in favour of the resolution on Sri Lanka, while seven opposed it. Twenty members, including India, Japan, Indonesia and Malaysia, abstained.

    The Indian side didn’t offer an explanation on its decision to abstain on the draft resolution seeking a debate on the human rights situation in China’s Xinjiang region.

    The ultimate vote went in favour of China, with 19 members of the UNHRC opposing the resolution and 11 members, including India, Malaysia and Ukraine, abstaining.

    The resolution was supported by France, Germany, Japan and the Netherlands.

    People familiar with the matter said India has traditionally voted against of abstained on such country-specific resolutions at the UNHRC. It is understood that China’s presence within the UNHRC was a factor in the decision, since any backing for the Xinjiang issue by India could have led to similar moves by China on other issues.

    The draft resolution on the situation in Xinjiang was presented by a group comprising Canada, Denmark, Finland, Iceland, Norway, Sweden, the UK and the US, and was co-sponsored by other countries such as Turkey.

    The resolution was a follow-up to a recent report by former UN High Commissioner for Human Rights Michelle Bachelet that exposed a wide range of human rights violations in Xinjiang.

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  • Lanka pins hopes on revival of tourist influx

    Lanka pins hopes on revival of tourist influx

    Sri Lanka aims to attract at least 972,475 tourists by the end of 2022…reports Asian Lite news

    Sri Lanka hopes to attract over 900,000 tourists by the end of this year as the country works toward restoring normalcy following recent economic and political instability, the Sri Lanka Tourism Development Authority (SLTDA) said on Wednesday.

    SLTDA Chairperson Priantha Fernando said in a statement that Sri Lanka aims to attract at least 972,475 tourists by the end of 2022, Xinhua news agency reported.

    “We are not happy with the arrival figures over the last nine months. It is a gradual build-up, fighting against the negativity,” Fernando said.

    “However efforts are being taken to increase the influx of international visitors for the remaining months of the year,” he added.

    Sri Lanka’s tourist arrivals faced a drastic drop in September, when only 29,802 visitors entered the country despite the relaxation of travel restrictions imposed by key source markets.

    According to industry experts, the country is well behind its competitors in the region in its tourism sector recovery. Competing nations such as the Maldives have been welcoming well over 100,000 tourists on a monthly basis for the past several months, while tourist arrivals to Sri Lanka have been ranging from 30,000 to 60,000, official statistics have shown.

    Tourism, one of Sri Lanka’s leading foreign exchange earners, has suffered a setback due to the COVID-19 pandemic and its economic and political crises.

    ALSO READ: Sri Lanka cautious about FTA with China

  • Sri Lanka cautious about FTA with China

    Sri Lanka cautious about FTA with China

    The publication suggests that to make FTA work on the ground, Sri Lankan businessmen should be given practical and up-to-date information on trade opportunities in China by a government institution…reports Asian Lite news

    The ongoing economic crisis and challenges of penetrating the Chinese market are making Sri Lanka cautious about concluding a Free Trade Agreement (FTA) with China, despite pressure.

    Recently, Sri Lankan Foreign Minister Ali Sabry and his Chinese counterpart, Wang Yi held a meeting on the sidelines of the UN General Assembly session in New York. The Chinese Embassy said that the two sides had “agreed to speed up the negotiation process and strive for an early conclusion of a Free Trade Agreement (FTA), thereby boosting the confidence in and stabilizing the expectations for their economic and trade cooperation,” Daily Mirror reported.

    However, the Sri Lankan minister tweeted about their meeting but there was no trace of the discussion on FTA.

    While Sri Lanka has been prevaricating and dragging its feet on the FTA since talks on it began way back in 2015, China has been very keen on it, frequently reiterating it, and even making it a condition for continued financial investments in Sri Lanka.

    Even, Qi Zhenhong, the Chinese Ambassador to Sri Lanka, had also discussed the FTA with the then Lankan Foreign Minister GL Peiris. In the press release. Sri Lanka said that China had signed over 26 FTAs, an FTA with Colombo. However, the economic crisis which intensified put paid to that.

    Daily Mirror citing EconomyNext, reported that the real opposition to FTA was from the entrenched Lankan monopolists. China also wanted zero tariffs on 90 per cent of the goods sold to each other as soon as the FTA was signed, while Sri Lanka wanted it to start with zero tariffs on only half of the products concerned and expand gradually over 20 years. Sri Lanka’s demands were reasonable from the point of view of a smaller and less-developed economy.

    However, if the Lankan government abandons or toes down its protectionist policy, and if the business community and the entrepreneurial class also stop clamouring for protection, an FTA with China could work to Sri Lanka’s advantage as indeed FTAs with other countries would also do.

    Earlier, Chinese Premier Li Keqiang told his Sri Lankan counterpart Mahinda Rajapaksa that China was keen on helping Colombo, however, Beijing, later on, responded differently from their previous statements. This has forced Sri Lanka to change its course to India and IMF.

    To China’s dismay, India quickly came up with a USD 4 billion aid package and strengthened its relations with Sri Lanka. China did announce a loan and buyer’s credit totalling USD 2.5 billion, but that was not implemented.

    The publication suggests that to make FTA work on the ground, Sri Lankan businessmen should be given practical and up-to-date information on trade opportunities in China by a government institution.

    Cultural differences and institutional practices often lead to misunderstandings and miscalculations, the IPS study points out, reported Daily Mirror.

    Currently, Sri Lanka is involved in managing the ongoing economic crisis and is unlikely to have the time or inclination to start discussing a complex and controversial issue like an FTA with China. And the same was indicated when Sri Lanka turned silent on the discussion in New York between Ali Sabry and Wang Yi. (ANI)

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  • Japan affirms support to Lanka’s debt restructuring talks

    Japan affirms support to Lanka’s debt restructuring talks

    Japan, one of the main creditors, is to help restructure about $30 billion of Sri Lanka’s foreign debt as a means to come out of the economic crisis…reports Asian Lite News

    Japan has assured to play a “constructive role” with other creditor countries, including India and China, to restructure Sri Lanka debts in the wake of the worst-ever financial crisis.

    Foreign Minister Yoshimasa Hayashi made the commitment during a meeting with Sri Lankan President Ranil Wickremesinghe, who is in Japan to attend the state funeral of late Prime Minister Shinzo Abe.

    “During the meeting, Foreign Minister Hayashi welcomed Sri Lanka’s progress with the IMF and expressed his country’s willingness to take a leading role in Sri Lanka’s creditor talks,” President Media Division said in a statement.

    Facing the dollar crunch and skyrocketing inflation, Sri Lanka is awaiting an International Monetary Fund (IMF) bailout around $2.9 billion, but the Indian Ocean Island first has to strike a deal with creditors to secure the package.

    Japan, one of the main creditors, is to help restructure about $30 billion of Sri Lanka’s foreign debt as a means to come out of the economic crisis.

    Sri Lanka owes Japan around $3.5 billion of total bilateral debt of about $10 billion.

    Japan said that it would stand by Sri Lanka in support of the debt restructuring negotiation process in order to reach the final agreement with the IMF.

    “Japan intends to play a constructive role with other creditor countries, including China and India,” Japanese Ambassador to Sri Lanka Hideaki Mizukoshi told the media.

    Referring to the cancellation and suspension of several Japanese Investment project, including a $1.5 billion Tokyo-funded light rail project for Colombo, President Wickremesinghe has expressed regret over the breakdown of ties between the two nations.

    Wickremesinghe stated that he was keen to restart those projects.

    “The President also indicated that the Government was interested in Japan investing in Sri Lanka’s renewable energy projects. Foreign Minister Hayashi explained that Japan had increased its commitment to renewable energy and would be willing to explore future investment opportunities in Sri Lanka,” the Media Division statement said.

    The President’s Office also stated that Wickremesinghe who met Singapore’s Prime Minister Lee Hsien Loong in Tokyo on Tuesday said that Colombo was ready to implement free trade agreement with Singapore.

    Prime Minister Lee Hsien Loong welcomed the news and stated that Singapore was looking forward to investing in Sri Lanka once again.

    ALSO READ: Lanka to hold debt restructuring talks with creditors

  • Lankan High Commissioner meets NSA Doval

    Lankan High Commissioner meets NSA Doval

    This was Lankan High Commissioner’s first interaction with a top Indian official after the recent controversy over Colombo allowing a Chinese Space and Satellite Tracking ship Yuan Wang 5 to dock at Hambantota…reports Asian Lite news

    Sri Lanka’s High Commissioner to India Milinda Moragoda called on National Security Advisor (NSA) Ajit Doval earlier this week to hold discussions that Colombo said were “centered on a comprehensive review of the status of the relations” between the two countries.

    The meeting which took place on Thursday was also attended by Deputy National Security Advisor Vikram Misri and Sri Lanka’s Deputy High Commissioner Niluka Kadurugamuwa.

    This was Lankan High Commissioner’s first interaction with a top Indian official after the recent controversy over Colombo allowing a Chinese Space and Satellite Tracking ship Yuan Wang 5 to dock at Hambantota.

    India, which has gone out of its way to help Sri Lanka during the current economic crisis with a more than $3.5 billion lifeline for buying food, fuel, and medicines, was quite upset as the Ranil Wickremesinghe government gave approval to the Chinese satellite tracker military ship to dock at Hambantota from August 11 to 17.

    The Lankan High Commission in New Delhi said that during Moragoda’s meeting with NSA Doval, which was part of the regular and ongoing dialogue between the two sides, “priority areas for future cooperation” were discussed.

    Earlier this month, during a discussion on the situation of human rights in Sri Lanka in the ongoing 51st session of the UN Human Rights Council in Geneva, India also expressed its concern over the lack of progress on a solution to the Tamil issue.

    “The Indian delegation notes with concern the lack of measurable progress by the Government of Sri Lanka on their commitments of a political solution to the ethnic issue – through full implementation of the 13th Amendment of the Constitution, delegation of powers to Provincial Councils, and holding of Provincial Council elections at the earliest,” India had said in a statement.

    ALSO READ: Lanka to hold debt restructuring talks with creditors

  • Lanka to hold debt restructuring talks with creditors

    Lanka to hold debt restructuring talks with creditors

    Faced with the severe financial crisis which led to the shortages of essentials like food, fuel, medicine, as well as long hours of power cuts, Sri Lanka defaulted its debts in April…reports SUSITHA FERNANDO

    Sri Lanka will on Friday present its economic woes, debt restructuring plans and a deal that it struck with the International Monetary Fund (IMF) to external creditors in an attempt to recover from the ongoing economic crisis, the worst since the island nation gained independence in 1948.

    Officials from the Central Bank of Sri Lanka, Finance Ministry higher-ups and its legal advisers Clifford Chance will make the virtual presentation to all creditors. including India and Japan which holds around $4.9 billion of Colombo’s debt.

    The presentation comes a day after 16 diplomats and six missions virtually joined from New Delhi assured Sri Lanka that support would be given for the country to overcome the grave financial crisis.

    “The foreign ambassadors assured President Ranil Wickremesinghe of their support to get IMF assistance for Sri Lanka to recover from the economic crisis,” the President’s Office announced after Ambassadors’ Forum on Debt Restructuring and IMF Program held on Thursday.

    The envoys, members and non-members of Paris Club, expressed confidence that Sri Lanka would be able to get out of the dire situation, the Office added.

    The Paris Club comprises a group of officials from major creditor countries which had welcomed the staff level agreement between Sri Lanka and the IMF for a 48-month plan under extended fund facility to restore macroeconomic stability and debt sustainability.

    Earlier this month, the President’s Office announced that the Paris Club also would coordinate with non-Paris Club bilateral creditors to ensure financial security for Sri Lanka.

    Also in September, Sri Lanka reached the preliminary deal with the IMF to get a $2.9 billion in loans over four years but the disbursement is subject to agreement of the country’s creditor on debt restructuring.

    India, Sri Lanka’s closest neighbour which has offered nearly $4 billion in financial assistance since January, has canvassed with other countries for the support of the island that had suffered three decades of war, the Easter Sunday attack in April 2019, Covid pandemic and political crisis which had blocked its main foreign income generators including tourism, foreign labour and exports.

    “We continue to be supportive of Sri Lanka in all possible ways, in particular by promoting long-term investments from India in key economic sectors in Sri Lanka for its early economic recovery and growth,” the Indian High Commission stated on Tuesday.

    “India has also advocated to other bilateral and multilateral partners supporting Sri Lanka expeditiously in its current economic difficulties. We have also noted the conclusion of a Staff Level Agreement between IMF and Government of Sri Lanka. Its further approval within IMF is contingent upon, inter alia, on Sri Lanka’s debt sustainability.”

    Faced with the severe financial crisis which led to the shortages of essentials like food, fuel, medicine, as well as long hours of power cuts, Sri Lanka defaulted its debts in April.

    In protest, people from all walks of life took to the streets, triggering the resignation of the former Prime Minister Mahinda Rajapaksa-led cabinet in July.

    Former President Gotabaya Rajapaksa had also fled the country.

    ALSO READ: Lankan inflation hit 70.2 in August

  • 12 more Lankan refugees arrive at Rameswaram

    12 more Lankan refugees arrive at Rameswaram

    They were taken to Rameswaram police station and after necessary medical checkups and proper verification of identities, all 12 were shifted to Mandapam refugee camp…reports Asian Lite News

    As the financial situation in Sri Lanka remains uncertain, 12 more refugees from the island nation arrived in Rameswaram, Tamil Nadu on Tuesday.

    The 12 were rescued by the Hovercraft of the Indian Coast Guard from the 4th islet in Dhanushkodi police station limits. Those arriving on Tuesday included 3 men, 3 women, and 6 children. Dhanushkodi police told IANS that the 12 belong to three different families and have paid their lifetime savings for the fishing boat to drop them at the 4th islet.

    They were taken to Rameswaram police station and after necessary medical checkups and proper verification of identities, all 12 were shifted to Mandapam refugee camp.

    Since the commencement of the domestic crisis in Sri Lanka, 170 people have arrived on the Tamil Nadu coast.

    A 71-year-old woman Sri Lankan refugee Parameswari who had landed at the Dhanushkodi mound along with her husband, Periyannan (80) died in the Government Rajaji Medical College, Hospital at Madurai on July 2. The woman had arrived at Rameswaram along with her husband on June 27 and was rescued by the Indian Coast Guard and Coastal Security Group after they had waded through neck-deep water into Dhanushokodi shores. The woman and her husband were immediately taken to the hospital for dehydration, where Parameswari passed away. This was the only incidence of a refugee dying after reaching Indian shores since the commencement of the refugee movement into India.

    ALSO READ: India denies reports of stoppage of aid to Sri Lanka

  • India denies reports of stoppage of aid to Sri Lanka

    India denies reports of stoppage of aid to Sri Lanka

    India stated that it has extended around USD 4 billion in bilateral assistance this year for the people of Sri Lanka…reports Asian Lite News

    India on Tuesday responded to a media query regarding reports on “no further financial support from New Delhi to Colombo”, stating that it has extended around USD 4 billion in bilateral assistance this year for the people of Sri Lanka.

    Responding to a media query, the spokesperson of the High Commission of India in Colombo also advocated other bilateral and multilateral partners supporting Sri Lanka expeditiously in its current economic difficulties.

    “We have seen the relevant media reports. We would like to emphasise that India has extended unprecedented bilateral assistance amounting close to USD 4 billion this year for ameliorating the difficulties faced by the people of Sri Lanka. India has also advocated to other bilateral and multilateral partners supporting Sri Lanka expeditiously in its current economic difficulties,” India in Sri Lanka said in a tweet.

    In a bid to sustain it from debt, India also extended its continuous support to Sri Lanka in all possible ways, particularly by promoting long-term investments from New Delhi in key economic sectors in Colombo for its early economic recovery and growth.

    “We have also noted the conclusion of a Staff Level Agreement between IMF and Government of Sri Lanka. Its further approval within IMF is contingent upon, inter alia, on Sri Lanka’s debt sustainability. We continue to be supportive of Sri Lanka in all possible ways, in particular by promoting long-term investments from India in key economic sectors in Sri Lanka for its early economic recovery and growth,” the spokesperson of the High Commission also said.

    On August 22, India handed over 21,000 tonnes of fertilizer to its crisis-ridden neighbour.

    Highlighting India-Sri Lanka’s close and longstanding relationship, the High Commission noted that the people of Sri Lanka continue to avail of scholarships for higher education and skills training in premier Indian institutions.

    “In addition our bilateral development cooperation projects in Sri Lanka, which cumulatively total about USD 3.5 bn, are ongoing. Sri Lankans also continue to avail of scholarships for higher education and skills training in premier Indian institutions. These aspects of our close and longstanding cooperation with Sri Lanka also contribute to the efforts for addressing Sri Lanka’s current economic difficulties,” it added.

    India under its ‘Neighbourhood First’ policy, has always come forward to help the debt-ridden island country. India has extended 8 Lines of Credit (LOCs) to Sri Lanka amounting to USD 1,850.64 million in the past 10 years.

    India has been at forefront of extending economic assistance to Sri Lanka as per their requirements and is one of the countries that have provided the maximum amount of assistance in time of need.

    Since the beginning of 2022, Sri Lanka has experienced an escalating economic crisis and the government has defaulted on its foreign loans. Sri Lanka is battling a severe economic crisis with food and fuel scarcity affecting a large number of the people in the island nation. The economy has been in free fall since the onset of the COVID-19 pandemic.

    Sri Lanka is also facing a foreign exchange shortage, which has, incidentally, affected its capacity to import food and fuel, leading to power cuts in the country. The shortage of essential goods forced Sri Lanka to seek assistance from friendly countries. (ANI)

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  • India emerges largest lender of Sri Lanka overtaking China

    India emerges largest lender of Sri Lanka overtaking China

    India has disbursed USD 377 million and ADB has disbursed USD 360 million, which account for 76 per cent of the total disbursements in the first four months of 2022…reports Asian Lite News

    With a total of USD 968 million in loans in four months of 2022, India has emerged as Sri Lanka’s largest bilateral lender, overtaking China in the process, a media report said.

    In the past five years from 2017-2021, China has been the largest bilateral lender to Sri Lanka as China disbursed USD 947 million, out of which USD 809 million was obtained as market borrowings from the China Development Bank, Daily Financial Times (FT) reported citing public finance.lk.

    It said the Asian Development Bank (ADB) has been the largest multilateral lender in the past five years and disbursed funds amounting to USD 610 million in 2021.

    India has disbursed USD 377 million and ADB has disbursed USD 360 million, which account for 76 per cent of the total disbursements in the first four months of 2022, according to Daily FT.

    Meanwhile, at a UNGA Annual Joint Debate on the Reports of Peacebuilding Commission (PBC) and Peacebuilding Fund (PBF), India’s Permanent Representative to the UN, Ruchira Kamboj said that India had provided nearly USD 4 billion in food and financial assistance to Sri Lanka.

    “In our immediate neighbourhood, we are continuing to help our good friend and neighbour Sri Lanka to ensure food security by providing nearly USD 4 billion in food and financial assistance during the past few months,” Kamboj said.

    On August 22, India handed over 21,000 tonnes of fertilizer to the crisis-ridden neighbour Sri Lanka.

    “Adding to the fragrance of friendship and cooperation. High Commissioner formally handed over 21,000 tonnes of fertilizer supplied under India’s special support to the people of Sri Lanka,” tweeted the High Commission of India in Colombo, Sri Lanka.

    “This follows 44,000 tonnes supplied last month under Indian support totalling about USD 4 billion in 2022. The fertilizer will contribute to food security and support the farmers of Sri Lanka. It demonstrates benefits to the people from close ties with #India and mutual trust and goodwill between #India and #Sri Lanka,” added the High Commission of India.

    India has been at forefront of extending economic assistance to Sri Lanka as per their requirements and is one of the countries that have provided the maximum amount of assistance in time of need.

    Since the beginning of 2022, Sri Lanka has experienced an escalating economic crisis and the government has defaulted on its foreign loans.

    Sri Lanka is battling a severe economic crisis with food and fuel scarcity affecting a large number of the people in the island nation. The economy has been in a free-fall since the onset of the COVID-19 pandemic.

    Sri Lanka is also facing a foreign exchange shortage, which has, incidentally, affected its capacity to import food and fuel, leading to power cuts in the country. The shortage of essential goods forced Sri Lanka to seek assistance from friendly countries. (ANI)

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