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Saturday May 25th, 2024

Sri Lanka faces essential drug shortage; Experts warn of health crisis

ECONOMYNEXT- Sri Lanka’s state-run hospitals are running out of essential medicine and medical equipment while the shortage threatens a major health crisis due to possible medicine supply chain collapse, a health sector trade union said.

Sri Lanka imports 80 percent of its medicines, but severe shortage of dollars due to the ongoing economic crisis has led to shortage of essential drugs and importers are struggling to meet the demand in the country.

Ministry of Health is also facing difficulties in importing the necessary medicine creating a drug shortage in state-run hospitals and pharmacies, affecting forcing hospitals to limit the medications for only for immediate and essential cases.

Indika Rathanayaka , the North Western Convener of the Government Medical Officers Association (GMOA), a doctors’ trade union, told reporters on Wednesday (06) that the current stocks in most hospitals will last only two weeks.

“We saw this problem a month ago. Within another month time, if this does not get solved, we are going for health crisis in the country as well,” Rathanayaka said.

Due to the shortage of gas and fuel, the government has allocated the remaining dollars to obtain fuel, resulting in commercial banks to decline the requests of medicine importers to open Letters of Credit to import drugs.

India has granted a 1 billion US dollar credit line including 200 million US dollars for essential medicine from the Indian suppliers, Sri Lankan government officials have said.

Tenders have been called from the Indian suppliers by the State Pharmaceutical Corporation to obtain a list of essential medical supplies given by the Medical Supply Division of the
Ministry of Health, officials say.

According to the State Minister of Pharmaceutical Production, Supply and Regulation, Channa Jayasumana, Sri Lanka is currently in need of 1,500 medicines and 3,000 surgical/medical equipment
for the state-run hospitals.

Due to the lack of medicine supplies several hospitals are forced to postpone or limit number of surgeries.

The Indian credit line only allows the government to purchase medicine and leaves private medicine suppliers to struggle to imports essential drugs.

An industry representative told EconomyNext that private sector drug supply to the market has fallen more than 30 percent due to the dollar shortage.

“The situation is much worse now than when we explained it earlier this month,” the source told EconomyNext.

“The banks do not entertain any LC applications and ask for credit for up to 180 days for both LCs and documents against acceptance documents.”

“In the absence of any forward booking mechanism, who knows what the rupee will be against the USD in 180 days? How do you cost your shipments?”

Over 50 percent depreciation of the rupee also has weighed on the drug imports now as the drug prices have risen nearly 30 percent since the central bank allowed depreciation.

A health official said the Treasury released 65 billion rupees to buy medicine and medical equipment, but the government needs further 15 million rupees to manage the price escalation after rupee fall.

“The ministry has sent request to the World Health Organization and other international health organizations to support in obtaining essential drugs for the country,” Saman Rathnayaka, the Secretary to the State Minister of Pharmaceutical Production told privately owned Derena, (Colombo/April 6/2022)

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  1. Mohomed Azeez says:

    Mohomed Azeez,
    8900, Penquin Road,
    Richmond, VA 23229.
    fariqueazeez@gmail.com
    8046645203

    Mr. Albert Bourla,
    Chairman and Chief Executive Officer,
    235 East 42nd Street,
    New York 10017

    Dear Sir,

    I am writing this to you to bring to your attention about the current crisis that is going on in Sri Lanka. As a Sri Lankan American I am deeply concerned about the suffering and hardship Sri Lankans are going through now due to financial mismanagement of the country’s wealth by the ruling politicians.

    Sri Lanka’s economic crisis has deteriorated into a medical crisis, with the top medical union declaring a national health emergency over a life-threatening shortage of drugs. Due to the lack of medicine supplies several hospitals are forced to postpone or limit number of surgeries. Currently the government has sent request to the World Health Organization and other international health organizations to support in obtaining essential drugs for the country.

    Given the situation, I very respectfully request you to provide a medical aid package to Sri Lanka to help the suffering people get over the current situation. If need be, I am ready to coordinate this effort with the health authorities in Sri Lanka.

    This request is coming from the bottom of my heart without expectations of any personal gain, but with the welfare of the Sri Lankan population at heart. I hope this receives your positive attention and expect a response from you soon.

    Thank you,
    Mohomed Azeez
    04/08/2022

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Your email address will not be published. Required fields are marked *

  1. Mohomed Azeez says:

    Mohomed Azeez,
    8900, Penquin Road,
    Richmond, VA 23229.
    fariqueazeez@gmail.com
    8046645203

    Mr. Albert Bourla,
    Chairman and Chief Executive Officer,
    235 East 42nd Street,
    New York 10017

    Dear Sir,

    I am writing this to you to bring to your attention about the current crisis that is going on in Sri Lanka. As a Sri Lankan American I am deeply concerned about the suffering and hardship Sri Lankans are going through now due to financial mismanagement of the country’s wealth by the ruling politicians.

    Sri Lanka’s economic crisis has deteriorated into a medical crisis, with the top medical union declaring a national health emergency over a life-threatening shortage of drugs. Due to the lack of medicine supplies several hospitals are forced to postpone or limit number of surgeries. Currently the government has sent request to the World Health Organization and other international health organizations to support in obtaining essential drugs for the country.

    Given the situation, I very respectfully request you to provide a medical aid package to Sri Lanka to help the suffering people get over the current situation. If need be, I am ready to coordinate this effort with the health authorities in Sri Lanka.

    This request is coming from the bottom of my heart without expectations of any personal gain, but with the welfare of the Sri Lankan population at heart. I hope this receives your positive attention and expect a response from you soon.

    Thank you,
    Mohomed Azeez
    04/08/2022

Sri Lanka to find investors by ‘competitive system’ after revoking plantations privatizations

ECONOMYNEXT – Sri Lanka will revoke the privatization of plantation companies that do not pay government dictated wages, by cancelling land leases and find new investors under a ‘competitive system’, State Minister for Finance Ranjith Siyambalapitiya has said.

Sri Lanka privatized the ownership of 22 plantations companies in the 1990s through long term leases after initially giving only management to private firms.

Management companies that made profits (mostly those with more rubber) were given the firms under a valuation and those that made losses (mostly ones with more tea) were sold on the stock market.

The privatized firms then made annual lease payments and paid taxes when profits were made.

In 2024 the government decreed a wage hike announced a mandated wage after President Ranil Wickremesinghe made the announcement in the presence of several politicians representing plantations workers.

The land leases of privatized plantations, which do not pay the mandated wages would be cancelled, Minister Siyambalapitiya was quoted as saying at a ceremony in Deraniyagala.

The re-expropriated plantations would be given to new investors through “special transparency”

The new ‘privatization’ will be done in a ‘competitive process’ taking into account export orientation, worker welfare, infrastructure, new technology, Minister Siyambalapitiya said.

It is not clear whether paying government-dictated wages was a clause in the privatization agreement.

Then President J R Jayewardene put constitutional guarantee against expropriation as the original nationalization of foreign and domestic owned companies were blamed for Sri Lanka becoming a backward nation after getting independence with indicators ‘only behind Japan’ according to many commentators.

However, in 2011 a series of companies were expropriation without recourse to judicial review, again delivering a blow to the country’s investment framework.

Ironically plantations that were privatized in the 1990s were in the original wave of nationalizations.

Minister Bandula Gunawardana said the cabinet approval had been given to set up a committee to examine wage and cancel the leases of plantations that were unable to pay the dictated wages.

Related

Sri Lanka state interference in plantation wages escalates into land grab threat

From the time the firms were privatized unions and the companies had bargained through collective agreements, striking in some cases as macro-economists printed money and triggered high inflation.

Under President Gotabaya, mandating wages through gazettes began in January 2020, and the wage bargaining process was put aside.

Sri Lanka’s macro-economists advising President Rajapaksa the printed money and triggered a collapse of the rupee from 184 to 370 to the US dollar from 2020 to 2020 in the course of targeting ‘potential output’ which was taught by the International Monetary Fund.

In 2024, the current central bank governor had allowed the exchange rate to appreciate to 300 to the US dollar, amid deflationary policy, recouping some of the lost wages of plantations workers.

The plantations have not given an official increase to account for what macro-economists did to the unit of account of their wages. With salaries under ‘wages boards’ from the 2020 through gazettes, neither employees not workers have engaged in the traditional wage negotiations.

The threat to re-exproriate plantations is coming as the government is trying to privatize several state enterprises, including SriLankan Airlines.

It is not clear now the impending reversal of plantations privatization will affect the prices of bids by investors for upcoming privatizations.

The firms were privatized to stop monthly transfers from the Treasury to pay salaries under state ownership. (Colombo/May25/2024)

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300 out of 1,200 Sri Lanka central bank staff works on EPF: CB Governor

ECONOMYNEXT – About 300 central bank staff out of 1,200 are employed in the Employees Provident Fund and related work, Governor Nandalal Weerasinghe said, with the function due to be transferred to a separate agency after a revamp of its governing law.

“When it comes to the EPF there is an obvious conflict of interest. We are very happy to take that function out,” Governor Weerasinghe told a forum organized by Colombo-based Advocata Institute.

“We have about 300 staff out of 1,200 including contract staff, almost 150 of permanent staff is employed to run this huge operation. I don’t think the central bank should be doing this business,”

The EPF had come under fire in the past over questionable investments in stocks and also bonds.

In addition, the central bank also faced a conflict of interest because it had another agency function to sell bonds for the Treasury at the lowest possible price, not to mention its monetary policy functions.

“There has been a lot of allegations on the management of this fund. This is the biggest fund of the private sector; about 2.6 million active, I think about 10 million accounts.

“When it comes to EPF, obviously there’s another thing. We obviously have, in terms of resources, on the Central Bank, that has a clear conflict because we are responsible for the members.

“We have to give them a, as a custodian of the fund, we have to give them a maximum return for the members.

“For us to get the maximum return, on one hand, we determine the interest rates as multi-policy. On the other hand, we are managing public debt as a, raising funds for the government.

“And on the third hand, this EPF is investing 90 percent in government securities. And also, interest rates we determine, and they want to get the maximum interest. That’s a clear conflict, obviously, there’s no question.”

A separate agency is to be set up, he said.

“It’s up to the government or the members to determine to establish a new institution that has a trust and credibility and confidence of the members that this institution will be able to manage and secure an interest and give them a reasonable return, good return for their lifetime savings,” Governor Weerasinghe said.

“The question is that how whether we have whether we can develop that institution, whether we have the strong institution with accountability and the proper governance for this thing.

“I don’t think it should be given completely to a private sector business to run that. Because one is that here we have no regulatory institution. Pension funds are not a regulated business.

“First one is we need to establish, government should establish a regulatory agency to regulate not only the EPF business fund, there are several other similar funds are not properly regulated.

“Once we have proper regulations like we regulate banks, then we can have a can ensure proper practices are basically adopted by all these institutions.

“Then you can develop an institution that we who can run this and can be taken back by the Labour Department. I’m not sure Labour Department has the capacity to do all these things.”

While some EPF managers had come under scrutiny during the bondscam and for questionable stock investments, in recent years, it had earned better returns under the central bank management than some private funds that underwent debt restructuring according to capital market analysts with knowledge of he matter. (Colombo/May24/2024)

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Desperate Sri Lankans seek risky foreign jobs amid tough IMF reforms

ECONOMYNEXT – After working 11 years in Saudi Arabia as a driver, Sanath returned to Sri Lanka with dreams of starting a transport service company, buoyed by Gotabaya Rajapaksa’s 2019 presidential victory.

However, the COVID-19 pandemic in 2020 and an unprecedented economic crisis in 2022 shattered his dreams. Once an aspiring entrepreneur, he became a bank defaulter.

Facing hyperinflation, an unbearable cost of living, and his family’s daily struggles, Sanath sought greener pastures again—this time in the United Arab Emirates (UAE).

“I had to pay 900,000 rupees ($3,000) to secure a driving job here,” Sanath (45), a father of two, told EconomyNext while having a cup of tea and a parotta for dinner near Khalifa University in Abu Dhabi.

Working for a reputed taxi company in the UAE, Sanath’s modest meal cost only 3 UAE dirhams (243 Sri Lankan rupees). Despite a monthly salary of around 3,000 dirhams, he limits his spending to save as much as possible.

Sanath has been in Abu Dhabi for 13 months but had to wait six months before driving a taxi and receiving no salary.

TOUGH REALITIES

“I had to get my UAE driving license. I failed the first trial, and the company paid 6,500 dirhams on my behalf, agreeing to deduct 500 dirhams monthly from my salary,” he explained.

“So far, I have repaid only 3,000 dirhams.”

To raise the 900,000 rupees for the job, Sanath borrowed money from friends and pawned jewelry.

“I don’t know if I was cheated by the agent, but I must repay that money and also send money for my family’s expenses,” he said, glancing at a photograph of his family in a Colombo suburb.

Working night shifts in busy Abu Dhabi, Sanath said, “If I can secure 9,000 dirhams monthly through taxi driving, I will earn 3,000 dirhams in the month after deductions for the license fee and any traffic fines.”

Sanath came to Abu Dhabi with seven other Sri Lankan men through an employment agency in the Northwestern town of Kurunegala.

“Only two of us have withstood the tough traffic rules and payment deductions for offenses,” he said. Some of his colleagues are still job-hunting, while others have returned to Sri Lanka.

Sanath is one of around 700,000 Sri Lankans who have left the island in the last two years due to the economic crisis that forced the country to adopt difficult fiscal and monetary policies, including higher taxes and costly borrowing, exacerbating the cost of living.

FOREIGN EXCHANGE EARNERS

From January 2022 to the end of March 2024, at least 683,118 Sri Lankans migrated for foreign employment through legal channels, according to the Sri Lanka Foreign Employment Bureau.

They have sent $11.31 billion in remittances through official banking channels during the same period, central bank data shows.

Many Sri Lankans leave on visit visas, hoping to find jobs later, often guided by friends already working abroad. The economic crisis has pushed them to seek better opportunities abroad, despite the risks.

Sri Lankan authorities struggle to stop such risk-takers, who sometimes resort to illegal migration, despite warnings about human trafficking.

In Myanmar, 56 Sri Lankans caught in an IT job scam were detained earlier this year, and the government is still repatriating them.

At least 16 retired Sri Lankan military personnel have been killed in the Russia-Ukraine war after being misled by unscrupulous recruiters. Officials estimate that over 400 retired military officers may have left for similar reasons.

DISPERATE TO LEAVE

In March, Foreign Minister Ali Sabry warned against visiting any nation on open visas, urging Sri Lankans to emigrate only through registered agencies.

Despite the risks, many Sri Lankans are desperate to leave.

Abu Salim, a 32-year-old former rugby player, came to Dubai on a visit visa hoping for a banking job, which he never got.

Now freelancing in an insurance firm, he said, “I survive, and my relatives don’t see my struggle. It’s stressful, but still better than Sri Lanka right now.”

Suneth, a former top garment merchandiser, is also job-hunting in Sharjah after quitting his initial job in Sharjah.

“My worry is the visa. I must find a new job before it expires,” he said.

Many Sri Lankans in the UAE work multiple jobs, compromising their sleep and health to make ends meet. (Abu Dhabi/May 24/2024)

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