Sri Lanka’s total external debt exceeds USD 50 billion, with a significant portion, roughly ten per cent, owed to China….reports Asian Lite News
Debt relief for low income countries should be a part of the green transition, said Sri Lankan President Ranil Wickremesinghe during a panel on greening the Belt and Road Initiative in Beijing on Wednesday.
Development banks such as the Asian Infrastructure Investment Bank should also make more funding available, he added.
Sri Lanka’s total external debt exceeds USD 50 billion, with a significant portion, roughly ten per cent, owed to China. This debt encompasses official loans and less visible commercial borrowings from Chinese commercial banks.
Notably, Sri Lanka owes USD 119 million to the China Development Bank Corporation, USD 232 million to the China Development Bank, and USD 232 million to the Export-Import Bank of China, according to Daily Mirror, a daily English-language newspaper published in Sri Lanka.
Despite China’s promises to assist in debt restructuring, tangible actions have been limited. Sri Lanka urgently requires a USD 3 billion bailout package from the International Monetary Fund (IMF), with the first instalment already received. The release of the crucial second tranche hinges on China and other bilateral lenders restructuring their debt terms with Sri Lanka.
According to Daily Mirror, China initially participated in discussions with other creditors, including India and Japan, offering a two-year moratorium on debt repayments and even exploring the possibility of providing new loans. However, China later altered its stance, creating roadblocks in Sri Lanka’s efforts to secure IMF aid.
Other leaders from Africa, Southeast Asia, Central Asia and the Mideast will attend the Belt and Road Forum in Beijing. Russian President Vladimir Putin is also expected to attend.
Macron arrived in Colombo on Friday following which he held talks with his Sri Lankan counterpart Ranil Wickremesinghe, reports Susitha Fernando
Emmanuel Macron, the first French President to visit Sri Lanka, has promised robust backing for the ongoing efforts of the island nation to restructure its debt, thereby aiding its recovery from the most severe economic downturn it has ever faced.
As part of his wider visit to the South Pacific Region, Macron arrived in Colombo on Friday following which he held talks with his Sri Lankan counterpart Ranil Wickremesinghe.
“President Macron reaffirmed France’s willingness and commitment to supporting Sri Lanka in its economic recovery. As the fourth-largest creditor to Sri Lanka, France pledged its assistance in the debt restructuring process, aiming for a positive outcome for the country,” the President’s Media Division (PMD) said in a statement.
In a Twitter post following the discussions, the French leader said: “Sri Lanka and France are two nations in Indian Ocean sharing the same goal: an open, inclusive and prosper indo-pacific. In Colombo we confirmed it: strong as in our 75 years of diplomatic relations, we would open a new era to our partnership,”.
During the discussion between the two leaders which lasted about an hour, Wickremesinghe expressed admiration for France’s significant role in global affairs, particularly in areas such as climate mitigation, global debt restructuring, and matters related to the Indo-Pacific region.
The discussions focused on strengthening cooperation in various sectors, including politics, economics, tourism, climate change, sustainable development, and maritime activities.
Marking the 75th anniversary of diplomatic relations between the two nations, several specific areas for further collaboration were identified which included the establishment of a school for maritime safety and security; opening of a permanent office for the French Agency for Development (AFD) in Sri Lanka; initiation of high-level diplomatic dialogues;cooperation in the education sector; and the enhancement of efforts to combat human trafficking in the maritime safety and security sector, the PMD added.
“Additionally, both leaders exchanged views on topics of regional and multilateral interest in the current global context. President Macron expressed keen interest in collaborating with Sri Lanka during its upcoming chairmanship of the Indian Ocean Rim Association (IORA), of which France is a member. In turn, President Wickremesinghe showed interest in the Indian Ocean Commission, where France actively participates,” it added.
In April, France together with the two other creditors of Sri Lanka — India and Japan — took the initiative to launch the debt restructuring negotiation process.
In May 17, countries, including the Paris Club Creditors, co-chaired by India, Japan and France, formed an official creditor committee which included the to discuss Sri Lanka’s request for a debt treatment.
The French delegation accompanying President Macron included the Minister for Europe and Foreign Affairs Catherine Colonna, Ambassador of France in Sri Lanka and Maldives Jean-Francoise Pactet and Head of Asia Department of the French Ministry of Foreign Affairs Benoit Guidee.
The President went on to say that the Chinese have been there for about 1,500 years and so far there has been no military base…reports Asian Lite News
Sri Lankan President Ranil Wickremesinghe reiterated that there was no military agreement with China and that he would not allow the island nation to be used as a base for any threat against India.
“We are a neutral country, but we also emphasise on the fact that we cannot allow Sri Lanka to be used as a base for any threat against India,” President Wickremsinghe said in an interview with French media.
When inquired about China’s presence in Sri Lanka, especially militarily, Wickremsinghe responded “We have no military agreement with China; there won’t be any military agreements, and I do not think China will enter into one,”
The President went on to say that the Chinese have been there for about 1,500 years and so far there has been no military base.
He said that there were speculations about the China-run Hambantota harbour which he admitted that it “has been given out to China Merchants, but its security is controlled by the Sri Lankan government”.
“The Southern Naval Command will be shifted to Hambantota,” he reassured.
“There has certainly been no issue of military use by the Chinese. The same company also runs a terminal in Colombo harbour, in the South Port. That’s where all the warships come from all the countries.
“No one is complaining about the terminal in Colombo, but they are only complaining about the Hambantota Port,” he added.
The Sri Lankan President made the remarks while addressing the Concluding Leaders’ session of a two-day Voice of Global South Summit hosted by India virtually…reports Susitha Fernando
Sri Lankan President Ranil Wickremesinghe stressed that India was in the best position to act as a bridge between the developing countries which are facing a debt crisis and the G20 in which Prime Minister Narendra Modi holds the current chairmanship.
The Sri Lankan President made the remarks while addressing the Concluding Leaders’ session of a two-day Voice of Global South Summit hosted by India virtually.
Addressing the Summit, Sri Lankan Finance Minister Shehan Semasinghe said that the delay in getting the debt assurance from bilateral creditors which has dragged the much-needed bailout by the International Monetary Fund (IMF) was taking a heavy toll on 22 million people in the island nation which is going through the harshest economic crisis since its 1948 independence.
“… we are confident of securing the approvals with the assistance of our partners. However, this uncertainty surrounding technical concerns and the delay in the vital approval is taking a heavy toll on the people of Sri Lanka,” Minister Semasinghe was quoted as saying at his address virtually from Colombo.
“The discussions are undergoing, and such technical issues and delays are taking a heavy toll on the lives of the country’s people. Therefore, we expect, through mutual understanding, the final step in this process would take place soon,” the State Minister urged.
The IMF has agreed a $2.9 billion conditional bailout package to Sri Lanka but the country has to convince the bilateral creditors including India, China and Japan, the major lenders to restructure the loans they have lent.
With 10 sessions in total, the Summit saw the participation of Leaders and Ministers from 125 countries of the Global South including Sri Lanka. Under the theme ‘Unity of Voice, Unity of Purpose’, this one of a kind Summit focused on priorities, perspectives and concerns of the developing world.
The Summit was particularly relevant as the world passes through a difficult period marked by challenges to health, food security, affordable access to energy, climate finance and technologies, and economic growth, Indian High Commission in Colombo stated.
President Ranil Wickremesinghe said Sri Lanka is working with India on renewable energy projects to make the eastern port city, Trincomalee, an energy hub, reports Susitha Fernando
Stressing the need to work with India on energy development projects, President Ranil Wickremesinghe said on Friday that Sri Lanka would not have faced an energy crisis, which lead to a political catastrophe expelling a President and a government, had Trincomalee oil tanks in the island’s eastern port city been handed over to the neighbouring country under the 2003 agreement.
Joining a special discussion on the Trincomalee District Development Plan, he said Sri Lanka is working with India on renewable energy projects to make the eastern port city, Trincomalee, an energy hub.
“Many objections were raised by the trade unions since 2003 against the provision of the oil tanks to India. Had the Trincomalee oil tank farm been given to India, we would have had fuel; we would have neither had to stay in queues nor to resort to riots. These problems arose because of the shortage of fuel. If we had given the oil tank farm to India back then, there would not have been any problems today,” Wickremesinghe contended, referring to the recent political crisis with street fights starting from March which toppled the last government leading to then President Gotabaya Rajapaksa quitting and fleeing the country.
The President recollected the objections raised when the Trincomalee oil tanks were to be handed over to India, adding that the country would not have faced a fuel crisis if the decision to provide the oil tanks had received the green light to be fully implemented.
In 2003, as the Prime Minister, Wickremesinghe worked on handing over 99 giant World War II-time tanks at Trincomalee Oil Tank Farm to Lanka Indian Oil Corporation (LIOC) PLC, an overseas venture of Indian Oil Corporation Ltd, on a 35-year lease for an annual payment of $100,000. However a section of the same Government lead by the then President Chandrika Kumaratunga was working against the decision to give all the tanks to India and protesting trade unions took to streets against Wickremesinghe’s decision.
President Wickremesinghe, who said that currently, India is discussing several energy projects with Sri Lanka, reiterated that they would not be stopped despite obstacles.
“We have to continue with the work on the Sampur Power Plant. If there are objections to it, we will have no choice but to take them directly under the government and continue with the work,” he said.
He said with the development of renewable energy with India, there would be value additions such as green hydrogen and green ammonia. “
Therefore, we need a port to export green hydrogen. As such the potential in Trincomalee should be taken into consideration.
“When considering the North, North Central and Eastern provinces the Trincomalee port should be the central hub. Perhaps, in the future, this would pave a route to Singapore. There is immense potential for such improvement,” the President noted.
He said working with India, Trincomalee should be transformed into a strategic deep water port.
“It is important that we work together with India when we plan these activities because India is located much closer to us.
“It will take another 10-15 years to achieve that development. Thailand’s development has yet to reach the western Bay of Bengal region. It is yet to kick off in Myanmar. This development has just started in Bangladesh; accordingly, work is being done in Java and Sumatra. It will become a significant port only in the next 10-15 years. Our endeavour is to make Sri Lanka a strategic port,” President Wickremesinghe said.
He also said that India has agreed to develop industries in Trincomalee region. “We should create an industrial zone. I have proposed a joint mechanism between India and Sri Lanka towards this endeavour. Then, the port will also be connected to it and we are planning to establish a joint task force for this purpose,” he said.
Speaker Mahinda Yapa Abeywardena will take over as President until all-party govt is formed, reports Asian Lite News
Sri Lanka Prime Minister Ranil Wickremesinghe has announced that he will resign from his post in order to ensure the continuation of the government and the safety of all the citizens.
Taking to Twitter, Wickremesinghe said, “To ensure the continuation of the Government including the safety of all citizens I accept the best recommendation of the Party Leaders today, to make way for an All-Party Government. To facilitate this I will resign as Prime Minister.”
To ensure the continuation of the Government including the safety of all citizens I accept the best recommendation of the Party Leaders today, to make way for an All-Party Government.
To facilitate this I will resign as Prime Minister.
Earlier, Sri Lankan Prime Minister said in a statement that he took this decision in view of the fact that island-wide fuel distribution is due to recommence this week, the World Food Program Director is due to visit the country this week and the Debt Sustainability report for the IMF is due to be finalised shortly.”
“So as to ensure the safety of the citizens, he is agreeable to this recommendation by the Opposition Party Leaders,” the statement reads.
Meanwhile, Sri Lankan MP Harsha de Silva said that the majority of party leaders had agreed on President and Prime Minister’s resignation and the Speaker to act as President for a maximum of 30 days. He further said that the leaders also agreed on the election of MP as President for the remaining term will be elected by the parliament.
“All party interim government to be appointed in the next few days,” he added.
Earlier, Prime Minister Ranil Wickremesinghe summoned an emergency Party Leaders meeting to discuss the situation and come to a swift resolution.
The Prime Minister is also requesting the Speaker to summon Parliament.
Lankan local publication Daily Mirror reported that several gunshots were heard being fired in the air and police unsuccessfully used tear gas to ward off protestors who surrounded the presidential residence. Two people have reportedly been injured.
Protestors have entered the President’s House, tweeted the Daily Mirror.
Sri Lanka’s police imposed a curfew in several police divisions in Western Province with effect from 9 pm local time Friday until further notice ahead of a planned protest today demanding the resignation of President Gotabaya Rajapaksa.
Strict action will be taken on those violating the curfew, the police said. The Sri Lankan publication said travelling through the areas where police curfew is in effect is completely prohibited and police had advised people to use other alternative routes.
The worsening economic situation in the country has led to increasing tensions and over the last few weeks, there were reports of several confrontations between individuals and members of the police force and the armed forces at fuel stations where thousands of desperate members of the public have queued for hours and sometimes days. Police have used tear gas and water cannon at times in an unnecessary and disproportionate manner. On occasions, armed forces have also fired live ammunition.
Former captain Sanath Jayasuriya on Saturday joined thousands of protesters in Sri Lanka’s commercial capital and demanded the resignation of President Gotabaya Rajapaksa amid the worst economic crisis in the island nation.
Sri Lanka is suffering its worst economic crisis since gaining independence in 1948, which comes on the heels of successive waves of COVID-19, threatening to undo years of development progress and severely undermining the country’s ability to achieve the Sustainable Development Goals (SDGs).
The oil supply shortage has forced schools and government offices to close until further notice. Reduced domestic agricultural production, a lack of foreign exchange reserves, and local currency depreciation have fuelled the shortages. The economic crisis will push families into hunger and poverty – some for the first time – adding to the half a million people who the World Bank estimates have fallen below the poverty line because of the pandemic. (ANI)
