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Thursday June 8th, 2023

Sri Lanka Human Rights Commission probing rehabilitation centre mass escape

ECONOMYNEXT – The Human Rights Commission of Sri Lanka (HRCSL) is investigating the escape of nearly 700 detainees at the Kandakauwa Drug Rehabilitation Center in Polonnaruwa, on Wednesday (29) June, an official said.

HRCSL Acting Director Sulari Liyanagama told EconomyNext on Friday July 01 that the investigation was launched on the day of the incident, and that the HRCSL officers and Regional Coordinator from Anuradhapura had visited the facility on Thursday June 31.

“We will give our recommendations based on our independent investigation,” said Liyanage.

The Police Media Division said around 600 escapees were arrested by Thursday (30) June. The rehabilitation centre  houses 998 detainees at the time, police sources confirmed.

The escape took place during an investigation by the Welikanda police regarding the suspicious death of one of the inmates.

The Centre is guarded by the Sri Lankan Army, a media release from the police stated.

Footage aired on  the privately owned NewsFirst network showed escapees begging not to be sent back to the Centre.

“We are suffering, send us to prison. If the family hadn’t called, they would have killed us,” an alleged victim featured in the footage said.

“We were sent here to be reformed. But they are not treating us. They are killing us,” another man was heard saying.

The video also showed a man claiming to have been assaulted at the centre and was then denied medical attention.

“They told me to go home and get medicine.”

The escape and the video footage regarding it has renewed conversation surrounding Sri Lanka’s handling of people with substance abuse issues, a marginalised community who activists say do not receive the support necessary to overcome their addictions and reintegrate into society.

Former Human Rights Commissioner Ambika Satkunanathan said in a tweet on Wednesday June 29 that the video validates her findings from a year ago.

“They beg to even be sent to prison but not back to Kandakadu. Imagine the conditions if they’re begging to be sent to prison,” she said.

The centre faces criticism from activists for its military involvement, alleged mistreatment of detainees and compulsory rehab concept, which is regarded as a Human Rights violation by organisations like the United Nations.

The UN called for closure of compulsory rehab centres as far back as 2012. Activists say that the “military style” treatment of the patients in such centres are not backed by medical evidence.

Rehabilitation Centres like Kandakadu fall under the purview of the Bureau of the Commissioner General of Rehabilitation in Sri Lanka. The top officials of the Bureau are all Army officials, and activists are calling for systemic demilitarisation of treatment institutions.

The International Standards for Drug Abuse Disorders published by the World Health Organisation and the United Nations Office on Drugs and Crime states that treatment for substance abuse disorders must be based on respect for human rights and dignity, avoiding “punitive, humiliating or degrading interventions.”

Satkunanathan tweeted that laws allowing compulsory rehabilitation should be repealed and any treatment should be voluntary, health, human rights and community based and also include post-treatment support.

“Another [example] of corrosive impact of militarisation that reiterates urgent need for demilitarisation,” she said.

Police Media said on Thursday that the postmortem of the deceased detainee had not yet been conducted.

According to a media release, Welikanda police are collaborating with the Sri Lanka Army to arrest the remaining escapees. (Colombo/Jun30/2022)

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Sri Lanka’s shares slip on profit taking and selling pressure

ECONOMYNEXT – Sri Lanka’s shares closed lower on Wednesday after four consecutive gains in previous sessions spiraled into selling interest and profit taking, an analyst said.

The main All Share Price Index was down 0.28 percent or 24.39 points to 8,722.06, this is the lowest the index has been since May 02, while the most liquid index S&P SL20 was down 0.40 percent or 9.92 points to 2,468.44.

“The market was gaining in the previous sessions and there is selling and profit taking present today, due to continuously being on green,” an analyst said.

In the previous sessions the market was seeing gains, due to lowered policy rates and low inflation stimulating buying interest and driving the sentiment up, an analyst said.

Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.

The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.

“There are gradual improvements in the market sentiment, with positive sentiments coming in from lowered policy rates and inflation,” an analyst said.

The market generated foreign inflows of 12 million rupees and received a net foreign inflow of 18 million rupees, due to low share prices and discounted shares followed by a dividend announcement.

The market generated a revenue of 554 million rupees, this is the lowest the turnover has been since May 10, while the daily turnover average was 1 billion rupees. From the total generated revenue, the banking sector contributed 120 million rupees, Diversified Banks contributed 115 million rupees and the Capital Goods Industry generated 78 million rupees.

Top losers during trade were Sampath Bank, Commercial Bank and Aitken Spence. (Colombo/June06/2023)

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Sri Lanka Treasuries yields plunge, 12-month down 318bp

ECONOMYNEXT – Sri Lanka’s Treasuries yields plunged across maturities at Wednesday’s auction with the 12-month yield falling 318 basis points, in one of the biggest one day falls, data from the state debt office showed.

The 3-month yield fell 244 basis points to 23.21 percent.

The 6-mont yield fell 339 basis points to 21.90 percent, along with the 12 months to 19.10 percent.

The short-term yield curve is inverted.

The central bank last week cut its policy rate 250 basis points in a signaling move but is not printing money to enforce the rate cut.

The debt office sold all 140 billion rupees of offered securities. (Colombo/June07/2023)

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Sri Lanka forex reserves rise US$722mn in May 2023

ECONOMYNEXT – Sri Lanka’s foreign reserves grew 722 million US dollars to 3,483 million US dollars in May 2023 from 2,761 million US dollars in April, official data showed as deflationary policy and weak credit reduced ‘above the line’ outflows.

Sri Lanka lost almost all its reserve in over two years as the central bank sold reserves and printed money to keep rates down (sterilized reserves sales) including borrowed dollars from India.

Gross official reserves fell to a low of 1,705 million US dollars in September 2022.

Sri Lanka’s central bank hiked rates in April 2022 to slow credit and also stopped printing money after it ran out of borrowed Asian Clearing Union dollars from India.

Sri Lanka’s gross official reserves are made up of both monetary reserves of the central bank and any balances of the Treasury account from loans or grants it gets.

The central bank’s net foreign reserves are still negative after busting up borrowed reserves to suppress rates. By April (before the collection of reserves in May) the central bank’s net reserves were negative by 3.7 billion US dollars.

In May alone 662 million US dollars were bought from the market, Central Bank Governor Nandalal Weerasinghe said.


No pre-determined level to stop Sri Lanka rupee appreciation: CB Governor

Borrowing dollars through swaps and busting them up, was invented by the US Federal Reserve as it was printing money and breaking the Bretton Woods system in the early 1970s.

Sri Lanka received a 350 million US dollar tranche from the Asian Development Bank and 331 million US dollars from the IMF to the Treasury for budget support.

The loans can be sold to the central bank by the government to generate rupees and spend. However, since credit is weak, not all the inflows go out of the country particularly as the central bank is conducting deflationary open market operations on a net basis.

By allowing the rupee to appreciate unlike in previous episodes of recovery in an IMF program, after a bout of money printing, the central bank is bringing down inflation – in some cases absolute prices – and restoring confidence and easing the ‘pain’ of ‘monetary policy’ or stimulus.


Why is Sri Lanka’s rupee appreciating?

Though exports are falling, tourism revenues are also picking up.

The budget support loans, tourism receipts less the reserve collected will widen the trade deficit. Building foreign reserves involves lending money to the US or other western nations and is similar to repaying foreign debt. (Colombo/June07/2023)

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