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Sunday December 3rd, 2023

Sri Lanka can avoid possible repeated default – State FinMin

ECONOMYNEXT – Sri Lanka’s State Finance Minister Ranjith Siyambalapitiya expects the island nation to avoid any possibility of repeated default once the foreign debt repayment starts due to a practical debt restructuring process.

President Ranil Wickremesinghe’s government has boasted of an economic recovery with easing interest rates, built up reserves, sharply fallen inflation, increased government revenue, and pick up in economic activities.

The island nation, however, has not started repaying foreign loans and still in the process of negotiation. The government has said most foreign loans under debt restructuring will have longer a grace period.

Studies by the International Monetary Fund have shown that Emerging countries that have defaulted on their debt repayment obligations in the past are more likely to default again in the future than are non-defaulters even with the same external debt-to-GDP ratio and they have repeated defaults or restructurings in short periods.

However, Siyambalapitiya expects that will not happen to Sri Lanka.

“We are in the process of a practical debt restructuring,” he told reporters at a media briefing on Thursday (21) when asked if there could be repeated default when foreign repayments are resumed.

“Domestically, we are trying to delay a $9 billion worth loan repayments. We have only stopped foreign loan repayments. We have been continuing with domestic debt repayment,” he said.

Sri Lanka has already started foreign debt restructuring process, but it is yet to conclude before starting repayment.

Siyambalapitiya said the government has considered the concerned over possible repeated default.

“Our understanding with the IMF on the foreign debt repayment is to partially go for a haircut, partially postpone, partially reduce the interest rate, and partially delay the repayment of $17 billion debt out of a total $41 billion total. This is really a practical process,” he said.

“We are doing the restructuring process in a way to withstand, and we can repay the debts. So, we would not face the challenge (of repeated default).” (Colombo/September 23/2023)

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Sri Lanka UGC wants to boost number of IT-related degrees

ECONOMYNEXT – Sri Lanka’s University Grants Commission is of the view to boost the number of Information Technology (IT) related degrees in state universities with an aim to pave the way for a digital economy.

Sri Lanka’shigher education system has been producing more graduates in Arts stream while the degrees in highly demanded IT and other engineering services are being looked at only now.

“We do have a high demand for engineering, science, AI, computer and electronical engineering

studies,” Chairman of University Grants Commission, Sampath Amaratunga, told reporters at aa media briefing on Friday

“However, while avoiding neglecting the humanities, we should develop new IT skills.”

Amaratunga confirmed that a student who studied in any stream could obtain an IT degree, including students who studied in the arts stream.

The UGC data show that out of 18,490 engineering technology stream students who sat for their Advanced Levels (A/L) in 2022, 10634 were eligible for university.

“Even streams like agriculture should be encouraged to use technology,” Amaratunga said. (Colombo/Dec 2/2023)

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Sri Lanka leader inaugurates Climate Justice Forum at COP28 in Dubai

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe launched Climate Justice Forum (CJF) at the ongoing 2023 United Nations Climate Change Conference (COP28) held in Dubai in a move to gather support for vulnerable nations hit by climate-change led disasters.

This year’s climate summit held in Dubai’s EXPO2020 features a raft of issues for countries working to find common ground in tackling climate change, including whether to phase out fossil fuels and how to finance the energy transition in developing countries.

Wickremesinghe inaugurated the Climate Justice Forum at COP28 on Saturday and emphasized the critical importance of addressing climate issues with a sense of justice and equity.

The President had been in talks with many nations vulnerable to climate change disasters including African and South American countries to get their support for the CJF.

The move is to compel advanced and developed countries to look into the poor nations hit by the climate changes and help them to get over economic and debt burdens by either investing more in green energy initiatives or writing off debts to ease financial pressure.

Sri Lanka, which is now facing an unprecedented economic crisis, has seen increasing losses and damages, both human lives and physical properties due to climate change-led disasters like floods, drought, and earth slips.

In his speech at the COP28 forum, Wickremesinghe on Friday said the Climate Justice Forum will provide a platform for constructive and proactive engagements. (Dubai/Dec 2/2023)

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Sri Lanka IMF review goes to executive board on December 12

ECONOMYNEXT – The first review of Sri Lanka’s International Monetary Fund program is scheduled to go the lender’s Executive Board for consideration on December 12.

Sri Lanka officials were expecting the review to be completed in December as soon as official creditors gave their assurances.

According to the notice Sri Lanka had missed one performance criterion and has requested modifications.

Sri Lanka has outperformed on a number of quantity targets including inflation. In addition to quantity PCs there was also one non-accumulation of arrears.

There would also be re-phasing of access. The review was originally expected around September with another review based on December data, leading to September and March disbursements.

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