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Sunday May 19th, 2024

Sri Lanka IMF program could be 400-pct plus quota EFF: CB Governor

ECONOMYNEXT – Sri Lanka may qualify for a 400 percent of quota Extended Fund Facility from the International Monetary Fund though the exact program size will have to be decided once a financial gap is assessed, Central Bank Governor Nandalal Weerasinghe said.

“It is too early to say,” Governor Weerasinghe said in response to a question about whether Sri Lanka could quality for 535 percent of quota exceptional access at peak program from the IMF.

“They have to assess the external financing gap. In 2009 we got 400-pct of quota. I do not see why we cannot get at least that amount.

“Now the financial gap is much, much higher than what we had at that time.”

A 400 percent of quota program would put Sri Lanka’s next program at around 3.0 billion US dollars.

Governor Weerasinghe said an EFF may be the “most relevant” given the structural reforms needed.

Sri Lanka is to begin formal talks with the IMF from April 18 when a delegation visits Washington to take part in annual IMF-World Bank meetings.

Finance Minister Ali Sabry has said a billion dollars each may be disbursed over three years under Sri Lanka’s next IMF program.

By 2025 Sri Lanka’s IMF loans would fall to around 60 percent of quota, allowing a drawdown of around 470 percent of quota at the peak, in a 535 percent access program.

A recent program for Argentina, the archetypal soft-pegged defaulter, got 1200 percent quota access.

Analysts have speculated that a front-loaded Stand-by or an EFF may be assigned to Sri Lanka and have suggested that given the monetary instability that had come from flexible-inflation-targeting-with-a-peg in the past a reserve money program should be followed.

Related

What Sri Lanka’s IMF program should look like

Under a reserve money program, complementary targets such as a floor on the central bank’s Treasury bills stock and foreign reserves can be programmed, and the rupee easily stabilized, provided interest rates are not rigidly enforced with open market operations.

Concerns have been raised that a monetary policy consultation clause in the last program compatible with FIT-with-a-peg had led to external instability and missed reserve targets and excessive foreign borrowing once forex shortages emerged as in 2018.

However, Governor Weerasinghe said Sri Lanka will stick with the (flexible) inflation targeting arrangement that has been used in the recent past. (Colombo/Apr15/2022)

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Sri Lanka seeks to draw youth into agri-entrepreneurship with 1.6bn funding

ECONOMYNEXT – Sri Lanka’s Ministry of Agriculture and Plantation Industries has earmarked 1.6 billion rupees for the establishment of 160 model farms across the island, that are to be owned and operated by youth agri-entrepreneurs.

“The Ministry of Agriculture and Plantation Industries has taken steps to allocate 1,600 million rupees to establish 160 villages in 25 districts with 6 youth agri entrepreneurship villages in each district,” Minister Mahinda Amaraweera was quoted in a statement.

“Arrangements have been made to provide an amount of one million rupees to each village under the first phase.”

The Minister said the aim of the program is to attract youth to agriculture and to introduce them to new agricultural technology, so they could target local markets and exports.

Under the initiative vegetables, fruits, plantation crops, and fish are to be harvested, and livestock products are to be produced in the villages. (Colombo/May18/2024)

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Sri Lanka Navy nabs fishermen engaged in illegal fishing

ECONOMYNEXT – Sri Lanka’s Navy apprehended eight persons engaged in illegal fishing in the seas off Ambalanpokkanei, Mullaitivu, Poduwakattu, and Trincomalee, this week.

“The operations also led to the seizure of 3 dinghies and unauthorized fishing gear employed for these illegal acts,” it said in a statement.

“The Sri Lanka Navy remains vigilant and conducts operations to combat illegal fishing in its sea and coastal areas, with a view to supporting legal fishing activities.”

The fishermen were engaging in light-coarse fishing and using unauthorized fishing nets.

They were intercepted by the SLNS Gotabaya and SLNS Walagamba of the Eastern Naval Command.

The individuals were identified as residents of Mullaitivu, Kuchchaveli and Poduwakattu, aged between 21 to 53 years.

The fishermen, dinghies and unauthorized fishing gear were handed over to the Assistant Directorate of Fisheries – Mullaitivu, and the Fisheries Inspector of Trincomalee for legal action, the Navy said. (Colombo/May18/2024)

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Fifteen years after the end of the war, victims still await justice at Mullivaikkal: Amnesty

ECONOMYNEXT – Speaking at a commemoration marking the 15th anniversary of the end of Sri Lanka’s internal armed conflict on 18 May 2009, which culminated in the brutal Mullivaikkal offensive where countless civilian lives were lost, Secretary General at Amnesty International Agnès Callamard said:

“Today’s anniversary is a grim reminder of the collective failure of the Sri Lankan authorities and the international community to deliver justice to the many victims of Sri Lanka’s three-decade-long internal armed conflict.

It is sobering to stand in the same place where, 15 years ago, countless civilian lives were lost during the last days of the war.

Ahead of this event, we have witnessed clampdown on the memory initiatives, including arrests, arbitrary detentions and deliberately skewed interpretations of the Tamil community’s attempts to remember their people lost to the war. Authorities must respect the space for victims to grieve, memorialise their loved ones and respect their right to freedom of expression and peaceful assembly.

UN investigations have found credible evidence of crimes under international law and other violations of international human rights and humanitarian law committed by those on both sides of the conflict, yet there has been little in the way of an independent or impartial national inquiry into such serious crimes.

Meanwhile, the families of those who were forcibly disappeared during the conflict have been left to search desperately for their loved ones. It is truly heartbreaking to hear from victims how long they have been demanding justice in vain.

The Sri Lankan government is best placed to provide answers to the victims, however numerous domestic mechanisms to establish accountability in the last 15 years have been mere window dressing.

The report by the UN Office of the High Commissioner for Human Rights released earlier this week too reiterates the gaping deficits in Sri Lanka’s accountability initiatives that has contributed to impunity remaining deeply entrenched.

Tens of thousands of victims and their families continue to suffer in anguish as they await truth, justice, and reparations. We stand in solidarity with them here in Mullivaikkal today.”

Background:

During the internal armed conflict from 1983 to 2009, Sri Lankan government forces and their armed political affiliates committed extrajudicial killings, enforced disappearances and acts of torture against Tamils suspected of links to the Liberation Tigers of Tamil Eelam (LTTE).

The LTTE also launched indiscriminate suicide attacks on civilian targets like buses and railway stations, assassinated politicians and critics, and forcibly recruited children as fighters.

Violations of international human rights and humanitarian law peaked in the final months of the conflict, most notably in May 2009 when some 300,000 displaced civilians were trapped between the warring parties.

It was at Mullivaikkal, a small village in Mullaitivu district in the Northern Province of Sri Lanka, where the final offensive between the Sri Lankan forces and the LTTE took place, killing at least 40,000 civilians according to UN estimates.

Each year, on 18 May, a memorial event at Mullivaikkal brings together thousands of war-affected Tamils to commemorate those lost to the war and demand justice and accountability.

The Office of the High Commissioner for Human Rights (OHCHR) this week released a report on accountability for enforced disappearances in Sri Lanka.
(Colombo/May18/2024)

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