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Wednesday June 19th, 2024

Hundreds of Sri Lankans hospitalised in Russia-Ukraine war; legislator seeks special envoy

ECONOMYNEXT – Sri Lanka should make greater efforts to bring back citizens in mercenary companies who injured in a war between Russia and Ukraine, including sending a special presidential envoy, legislator Dayasiri Jayasekera said.

At the moment there is no Sri Lanka ambassador in Russia.

“If we can, send a special envoy from the President to Russia, and discuss with the Defence Secretary at least to bring back the injured in Russian hospitals,” Jayasekera who was one of the first legislators to bring attention to the growing recruitment of Sri Lankan ex-soldiers for Russia’s war.

“There are many injured Sri Lankans in Russia. Some have lost their fingers, in others legs have been cut (kakul kaperla).

“Then we can secondly bring back the people in the camps. There is a diplomatic intervention that is needed. We need some plan to bring back the 600 or so people who are there.”

One Sri Lanka ex-soldier estimated that 200 to 300 Sri Lankans may be treated in Russian hospitals at the moment and about 200 may have died. Up to 800 or more Sri Lankans – mainly ex-soldiers – may have left the country to fight for Russia, he said.

Related Over 200 Sri Lanka ex-soldiers dead in Russia-Ukraine frontline as drone fodder, escapee says

How Many?

Authorities are still trying to find out how many left for Russia and Ukraine.

Assistant Superintend Harendrda Janakantha of the Human Trafficking and Maritime Crimes unit of Sri Lanka’s Criminal Investigation Department told Derana Television last week that they confirmed that 60 Sri Lankans have left for Russia and 54 tried to leave for Ukraine, and 23 made it.

“People can say that there are 800 to 1,000,” Janakantha said. “May be that is also possible. But so far these are numbers we have confirmed through our investigations.

So far only three are confirmed to have returned, he said.

“There is information that that about 700 to 800 have left,” Senior Superintended Nihal Thalduwa said.

“But we cannot say that. We are still investigating. We have only recently started the investigation.

“Large numbers (visharler sankyawak) are injured and large numbers have died.”

A retired Major General who was involved in an recruitment drive has already been arrested.

Shadowy PMCs

Several Private Military Companies (PMCs) including Wagner, at one time headed by Yevgeny Prigozhin, who who was killed in a plane crash shortly after a mutiny against Russian President Vladimir Putin are recruiting convicts and foreigners to fight the war against Ukraine.

All Wagner fighters who are willing to continue to fight for Russia were given new contracts, reports said at the time.

Several other shadowy PMCs including Redut, believed to be under Russian intelligence agency GRU, are recruiting mercenaries, according to western media reports.

Ukrainian researchers who interviewed captured mercenaries and seized documents left behind in regained territories found that mercenaries were promised a salary of 200,000 roubles (about 653,000 rupees at current exchange rates), 25,000 dollar for grave injury and 60,000 compensation for death.

Sri Lanka returnee have said salaries of 700,000 rupees Sri Lanka a month or more but the promised amount has not been given.

The mercenary firms are financed by the Russian defence ministry and according to Western reports, and are set up to provide veneer of distance and deniability.

After his mutiny Wagner fighters were given a chance to sign fresh contracts with the Russian Defence Ministry, reports said at the time.

When Prigozhin was alive, Wagner was said be recruiting mercenaries including convicts on 6-month contracts, after which they were set free.

But Sri Lankans who have now come back to the country say they have been recruited on 12-month contracts.

A BBC report said half of prisoners recruited when Prigozhin lived at least 4 months before dying in combat. However half of those recruited by the Russian Defence Ministry died within three months.

Prigozhin went public had he had lost 22,000 fighters in taking back Bakmut from Ukraine.

Suicide Missions

An escaped soldier who was interviewed on Sri Lanka’s Derana television said there was no medivac process to recover injured foreign mercenaries and they had to crawl back to Russian position on their own as drones rained fire on them as soon as they moved.

If they got back, they were taken to hospital, given a one-month break and send back to the front, one escaped soldier said.

One soldier described the operations as ‘suicide missions’ done under drone fire with little outside support.

The escaped fighter was serving in the Donetsk region which has Russian speakers, which declared independence and was is operating as a separate republic loosely annexed to Russia.

Several teams were recruiting people from Sri Lanka charging between 350,000 to 1.6 million rupees according to what returnees say.

State Minister for Defence Pramith Tennakoon said Jayasekera and Gamini Valeboda, another legislator who had helped bring national attention to the plight of the Sri Lankan took part in a National Security Council meeting at the invitation of President Ranil Wickremesinghe.

“Instructions were given immediately to the forces to take action,” Tennakoon said. “As a result several arrests were made.”

Sri Lanka has already arrested a retired Major-General and a Sergeant Major several who who are suspected to have recruited Sri Lankan ex-soldiers.

Sri Lankan retired soldiers are made various false promises including Russian citizenship, a piece of land in St Petersberg as well as high salaries and sign up bonuses of 2.0 million rupees, he said. (Colombo/May14/2024)

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Central banks expect to increase gold reserves after buying 1,037 tonnes in 2023: Survey

ECONOMYNEXT – About 29 percent of central banks in the world intended to increase their gold reserves in 2023, up from 24 percent in 2023 and just 8 percent in 2019, a survey by the World Gold Council showed.

“The planned purchases are chiefly motivated by a desire to rebalance to a more preferred strategic level of gold holdings, domestic gold production, and financial market concerns including higher crisis risks and rising inflation,” the WGC said.

About 81 percent of 70 central banks that responded to the survey expected global central bank holdings of gold to go up, from 71 percent in 2023.

While in prior years, gold’s “historical position” was the top reason for central banks to hold gold, this factor dropped significantly to number five this year.

This year, the top reason for central banks to hold gold is “long-term store of value / inflation hedge” (88%), followed by “performance during times of crisis” (82%), “effective portfolio diversifier” (75%) and “no default risk” (72%).

Concerns about sanctions were listed as by 23 percent of emerging market central banks (0 advanced).

De-dollarization as a reason to hold gold gained ground, but was not among the main reasons.

About 13 percent of emerging market central banks listed de-dollarization as one of the reasons to buy gold up from 11 percent last year and 6 advanced nations said the same from zero last year.

Around 49 percent of central banks expected gold reserves to be moderately lower five year from now in the 2024 survey, against 49 percent in 2023 and 38 percent in 2022.

About 13 percent of central banks surveyed said US dollar reserves would be significantly lower in the 2024 survey, up from 5 percent in 2023 and 4 percent in 2022. (Colombo/June18/2024)

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Sri Lanka rupee closes weaker at 304.75/305.40 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed weaker at 304.75/305.40 to the US dollar Tuesday, down from 304.15 to the US dollar Friday, dealer said, while some bond yields edged up.

Sri Lanka’s rupee has weakened amid unsterilized excess liquidity from earlier dollar purchases.

Excess liquidity fell from as high as 200 billion rupees, helped by some sales of maturing bills and also allowing some term contracts to run out.

However the central bank has started to inject liquidity again below its policy rate to suppress interest rates.

On Tuesday 30 billion rupees was printed overnight at an average yield of only 8.73 percent.

Separately another 25 billion rupees was printed till June 25 at 8.09 percent to 9.05 percent, which was still below overnight the policy rate of 9.5 percent.

Nobody has so far taken the central bank to court for printing money beyond overnight at rates lower than the overnight rate.

Sri Lanka operates an ad hoc exchange rate regime called ‘flexible exchange rate’ which triggers panic among market participants, as the central bank stays away when spikes in credit either creates import demand or unsterilized credit is used up.

“If large volumes of unsterilized liquidity is left, the exchange rate has to be closely defended to prevent speculation involving early covering of import bills and late selling of exports proceeds,” EN’s economic columnist Bellwether says.

“Just as an appreciating or stable exchange rate leads to late covering of import bills, a falling rates leads to immediate covering of import bills.

“Keeping exchange rates stable is a relatively simple exercise but it is difficult to do so if short term rates are also closely targeted with printed money, as liquidity runs out, as if the country had a free float and no reserve target.”

“When there is a large volume of excess liquidity remaining (except those voluntary deposited for long periods by risk averse banks) the the interest rates structure is under-stated compared to the reported reserves.

“Interest rates would be a little higher than seen in the market if the liquidity was mopped up and domestic credit and imports were blocked to prevent the reserves from being used up.”

In East Asia there is greater knowledge of central bank operational frameworks, though International Monetary Fund driven flawed doctrine are also threatening the monetary stability of those countries, critics say.


Vietnam selling SBV bills to stabilize the Dong, as Sri Lanka rupee also weakens

Sri Lanka’s rupee started to collapse steeply after the IMF’s Second Amendment in 1978 along with many other countries as flawed operational frameworks gained ground without a credible anchor.

A bond maturing on 15.12.2026 closed at 10.10/30 percent up from 10.05/30 percent Friday.

A bond maturing on 15.10.2027 closed at 10.60/57 flat from 10.60/80 percent.

A bond maturing on 01.07.2028 closed at 11.15/35 percent, up from 11.05/20 percent.

A bond maturing on 15.09.2029 closed at 11.80/90 percent unchanged.

A bond maturing on 15.10.2030 closed at 11.90/12.00 percent.

A maturing on 10.12.2031 closed at 11.95/12.10 percent.

A bond maturing on 01.10.2032 closed at down at 11.95/12.10 percent, down from 12.00/10 percent. (Colombo/Jun14/2024)

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Sri Lanka’s Ceylon Chamber links up with Gujarat Chamber

ECONOMYNEXT – The Ceylon Chamber of Commerce has signed an agreement with the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to increase trade cooperation between India and Sri Lanka.

The MOU was signed by CCC CEO Buwanekabahu Perera, SGCCI President Ramesh Vaghasia, in the presence of Dr Valsan Vethody, Consul General for Sri Lanka in Mumbai, India.

“With the signing of the MoU, … the Ceylon Chamber of Commerce and SGCCI aim to facilitate trade between the two countries via initiatives such as trade fairs and delegations, business networking events, training programmes,” the Ceylon Chamber said in a statement.

“This partnership will open doors for Sri Lankan businesses to explore opportunities in Surat’s dynamic market and enable the sharing of expertise and resources between the two regions.”

Established in 1940, SGCCI engages with over 12,000 members and indirect ties with more than 2,00,000 members via 150 associations. It promotes trade, commerce, and industry in South Gujarat.

The region’s commercial and economic centre Surat has risen to prominence as the global epicenter for diamond cutting and as India’s textile hub, and is ranked the world’s 4th fastest growing city with a GDP growth rate of 11.5%

Surat’s economic landscape is vibrant and diverse. As India’s 8th largest and Gujarat’s 2nd largest city, it boasts the highest average annual household income in the country.

The nearby Hazira Industrial Area hosts major corporations like Reliance, ESSAR, SHELL, and L&T. (Colombo/Jun18/2024)

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