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Tuesday June 25th, 2024

Sri Lanka to vaccinate all by early 2022, facilitate growth: Army chief

Army Commander Gen Shavendra Silva speaking at the Invest Sri Lanka Forum on June 08, 2021

ECONOMYNEXT – Sri Lanka plans to successfully contain the third wave of COVID-19 and vaccinate its entire population by end 2021/early 2022 with a view to facilitating economic advancement, Chief of Defence Staff and Army Commander Gen Shavendra Silva said.

Silva told an investment forum organised by the Ceylon Chamber of Commerce, the Colombo Stock Exchange and the Board of Investment on June 07 that total vaccination of the population will allow Sri Lanka’s “workforce, its economic pillars, economic counterparts and general public to run the country for advancement”.

“We have effectively managed the first and second wave of the COVID 19, and we are so far in the process of controlling the third wave successfully,” he said.

Acknowledging that managing the pandemic, preserving the economy, and restoring complete normalcy is an enormous challenge, the army chief said in order to restore economic normality, livelihoods and social aspects amid COVID-19, it is essential to bring the country into a “certain condition in which socio-economic activities could be continued with the best practices under minimum regulations”.

“I would say that we are making all our efforts to have a very comprehensive and cohesive body to battle against COVID-19, guided by the country’s highest authorities,” he said.

The army commander also noted that Sri Lanka has “never neglected” tourists, foreign nationals and business partners living in Sri Lanka and has shown “special consideration” towards them from the beginning of the pandemic.

He further said that COVID-19 is not a mere health issue and managing the pandemic must be understood as essentially managing the economy and people’s livelihoods as well.

“The resilience in a pandemic is essentially the resilience in the economy too. The government has never underestimated the importance of local and international economic activities to run the country’s economy,” he said.

“Let me emphasise that despite having imposed travel restrictions to control the spreading of COVID-19, the country was never closed for economic and economic-related activities,” he said.

“Despite the restrictions due to COVID 19 pandemic, Sri Lanka has been committed to continuing the building of necessary infrastructure and service facilities for industrial and business advancement, which is a significant prerequisite for external and internal economic partnerships. Sri Lanka’s major development projects and infrastructure projects were not delayed due to the Pandemic, and also, the health and safety of the workers have never been compromised.”

Local and external investors must give significant thought to Sri Lanka’s ability to maintain higher potential to engage in economic activities during the pandemic, said Silva.

“Amidst the pandemic, we have emphasised on improving domestic products, achieving self-sufficiency in food and services, and increasing the exports and value-adding of goods and services. The government has encouraged and empowered the small, medium and major business counterparts with necessary financial, legal and technological assistance,” he said.

“I believe Sri Lanka is ready to explore and absorb industrial, agricultural and services based opportunities by now and to achieve such hallmarks for a country like us amidst pandemic, it should be a balanced approach between health and the economic sectors,” he added. (Colombo/June08/2021)

The full text of Gen Silva’s speech is as follows:

I consider it is a privilege to address this Investors Forum today, and I am thankful to the organisers for inviting me to deliver a speech, as the Chief of Defence Staff, Commander of the Army and Head of National Operation Centre for Prevention of COVID 19 in Sri Lanka, I wish to share my thoughts on ‘Managing the COVID 19 Pandemic, Protecting Life, Livelihood, and Economic Progress.

As we all know, the COVID 19 pandemic has disturbed the entire livelihood of the world, posing a substantial threat to the social and economic wellbeing of mankind. Despite the consequent economic retardation, this Pandemic has challenged the security of human lives as never before. In this extensively connected world, it is not possible to design the livelihood in isolation. It is necessary to maintain economic, diplomatic, and social relationships with the world. Thus it has to be understood that managing the Pandemic, preserving the economy, and restoring complete normalcy is an enormous challenge.

In order to reinstate the economic normalcy, usual livelihood and social aspects amidst COVID 19 pandemic, it is decisive to bring the country into a certain condition in which socio-economic activities could be continued with the best practices under minimum regulations.

In the Sri Lankan context, the necessity of this phenomenon was well felt by His Excellency, the President and the Government. Thus the response strategy is based on firstly, breaking the chain of spread; secondly, curbing the spread by separating the infected from uninfected and isolating the exposed and vulnerable population; thirdly, treatment of infected personnel minimising the loss of lives; fourthly, minimising citizen suffering from associated loss of earning, travel restrictions and difficulties to access medical and other necessities; fifthly, achieving the population immunity through vaccination which is the accepted best mean of defence against the virus; and finally, maintaining and progressing the economy and livelihood during and post-pandemic.

National Operation Centre for Prevention of the COVID 19, headed by me, is the forefront National body appointed by His Excellency the President for operationalising the battle against COVID 19 in Sri Lanka. It roofs authorities of health and medical, military, law enforcing agencies, economic think tanks, disaster management units, administrative and social bodies etc. In addition, His Excellency the President has appointed a presidential task force for Economic Revival and Poverty Eradication to ensure the economy and social wellbeing of the population.

In the National Operation Centre for Prevention of COVID 19, the recommendations regarding medical infrastructure, degree of restrictions, isolation of areas, facilitating the livelihood etc., are carefully taken considering real-time and up to date facts.

Thereafter, the decisions taken by His Excellency the President and Government are disseminated downwards for action on ground. Therefore, I would say that we are making all our efforts to have a very comprehensive and cohesive body to battle against COVID 19, guided by the country’s highest authorities.

This strategy is operationalised by distancing rules, encouraging best practices, contact tracing, isolation and quarantine process. Military and National intelligence are extensively utilised for contact tracing supported by the public health authorities for subsequent monitoring and evacuation. Military, assisted by health authorities, spearheads the isolation and quarantine process, where Security Forces build and maintain quarantine facilities and provide security and medical assistance to run the quarantine centres island-wide.

In curbing the spread by separating the infected from uninfected and isolating the exposed and vulnerable population, the military assists in establishing and managing the Intermediate Care Centres under the guidelines of the health care authorities. Also, it is important to note that we have never neglected the tourist, foreign nationals and business partners living in Sri Lanka. We have had special consideration of such personnel from the beginning of the Pandemic, and we have taken care of them and assured their wellbeing as Sri Lankan Citizens.

As of today, health care authorities make a tremendous effort to minimise the loss of lives. We have been able to manage all infected cases giving best possible treatments and facilities to save their lives.

Maintaining the new normalcy of life and minimising the human suffering due to the pandemic and economic drawbacks in Sri Lanka, the government administrative system has been empowered to collect, report and disseminate the information to authorities so that essentials are uninterruptedly supplied to the population through a well-established government mechanism supported by private partners.

The vaccination programme which has been the main focus of the Government is being carried out covering the entire island considering the spread and the prevalence of the virus, where the governments’ cordial diplomatic ties have facilitated to get down the vaccinations. Also, we are in the process of getting down adequate vaccines in future as well. Through this, we expect to shield the entire population from COVID 19 by the end of 2021 to early 2022, allowing the workforce, economic pillars, economic counterparts and general public to run the country for advancement. We have effectively managed the first and second wave of the COVID 19, and we are so far in the process of controlling the third wave successfully.

It has to be understood that COVID 19 is not merely a health issue. Managing the Pandemic is essentially managing the economy and livelihood as well. Also, the resilience in a pandemic is essentially the resilience in the economy too. Therefore, the Government has never underestimated the importance of local and international economic activities to run the country’s economy.

The government under the visionary leadership of His Excellency the President, initially identified economic indicators to keep the momentum of the economy whilst battling with the pandemic. The basis for this is ‘preserving the conducive environment for economic activities, scaling from daily wage earners to large scale factories specially the apparel sector that largely contributes to the country’s economy.’ Small country like us cannot lockdown for a longer period unless the country has a very strong economy.

I think, we have been so far able to maintain the higher potential to engage in economic activities during this pandemic. This is where the local and external investors must give a significant thought. Amidst the Pandemic, we have emphasised on improving domestic products, achieving self-sufficiency in food and services, and increasing the exports and value-adding of goods and services. The Government has encouraged and empowered the small, medium and major business counterparts with necessary financial, legal and technological assistance.

Therefore, I believe Sri Lanka is ready to explore and absorb industrial, agricultural and services based opportunities by now and to achieve such hallmarks for a country like us amidst pandemic, it should be a balanced approach between health and the economic sectors.

Preserving the National Economy has been a decisive factor for Sri Lanka before the Pandemic, during the Pandemic and will be in post-pandemic too. We have given equal emphasis to external and internal aspects of the National Economy. Let me emphasise that despite having imposed travel restrictions to control the spreading of COVID 19, the country was never closed for economic and economic-related activities.

Our pandemic management strategy includes the uninterrupted running of industries, factories, export agencies and international businesses, where the employees have been assured to work amidst the Pandemic with all necessary healthcare precautions and associated facilities. This has been the strength of Sri Lanka so far.

We have emphasised on safe tourism, giving the guarantee to long-and short-term tourists that Sri Lanka is a safe destination. We are in the process of developing and improving the ‘Bio Secure Bubble’ in tourism, sports, and diplomatic visits. Sri Lanka has proven its competencies in providing a bio secure environment from the port of landing back to the departure. In this aspect, we have readjusted infrastructure, transport, food and beverage and health facilities to provide cutting edge and quality service.

Also, by now, we are focusing on enhancing Sri Lanka’s potential in facilitating MICE (Meetings, Incentives, Conferences and Exhibitions) tourism. Considering the situation in and around the world, we expect the relatively safer situation in Sri Lanka will give a boost to this market in time to come.

Despite the restrictions due to COVID 19 pandemic, Sri Lanka has been committed to continuing the building of necessary infrastructure and service facilities for industrial and business advancement, which is a significant prerequisite for external and internal economic partnerships. Sri Lanka’s major development projects and infrastructure projects were not delayed due to the Pandemic, and also, the health and safety of the workers have never been compromised.

To maintain the economic momentum, the Sri Lankan strategy has given due focus to preserve the Sri Lankan identity in the international market where plantation and agricultural sectors are functioning under strict health guidelines despite the Pandemic. In this regard, Sri Lanka has special consideration for identical Sri Lankan agricultural products such as tea and spices.

Sri Lanka being a centrally situated country in the Indian Ocean understands the value of sea transportation, back-loading operations and re-exports. Also, we value the expectations of the friendly foreign countries worldwide and their necessity of providing uninterrupted sea transportation of goods and supplies in which Sri Lanka plays a vital role. This aspect was widely considered from the beginning of the battle against the COVID 19. With the valuable inputs of all economic stakeholders’ seaports were continuously in operation amidst the Pandemic. Accordingly, the health safety precautions of the employees at the ports were designed, and we have been very successfully functioning the port operations by now.

Talking about the way forward, I would like to highlight two aspects. First, what makes Sri Lanka Special in this pandemic situation, and second what lays ahead of us in the post-pandemic transition period. As I said earlier, first, we understand that Sri Lanka is located in a blessed and important position in the World Map, making it a centralised, focussed and strategic land piece in the Indian Ocean. Second, we understand the entire world is disturbed by the COVID 19 pandemic, and the world is eying for new strategic, business, industrial and service partners to ensure the resilience of their economy, taking a lesson from COVID 19 pandemic.

If we superimpose the strategic location of Sri Lanka, it is possible to identify the opportunities that can reap mutual benefits to Sri Lanka and partners around the world. I believe, Sri Lanka is unique and land of opportunities for economic partnerships as of today. Thus, what lays ahead of us in time to come is the building of fruitful and mutually benefitting relationships with commercial partners around the globe.

As I said before, I wish to reemphasise that Sri Lanka is a land of opportunities and invite this forum for improved connectivity, trusted cooperation, and strategic economic partnership reaping mutual benefits.

Last but not the least, let me thank all the participants and for having me invited to share my thoughts today. I wish you all the very best in all future endeavours.

Have a good day…

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Sri Lanka to sign Paris Club debt deals as fresh ISB talks to also start

ECONOMYNEXT – Sri Lanka will sign agreements on restructured debt with Paris Club creditors Wednesday, Cabinet spokesman Minister Bandula Gunawardana said as sources said talks with private creditors are also due to start later in the week.

The relevant senior officials and State Minister Shehan Semasinghe has already left the country to sign the agreements, Minister Gunawardana said.

Sri Lanka has held detailed negotiations with bilateral creditors ever since a sovereign default in 2022 and President Ranil Wickremesinghe has personally met leaders of friendly countries to expedite the restructuring, he said.

The finalizing of the restructure was a ‘great victory’ for Sri Lanka he said.

Details will be revealed to parliament by President Wickremesinghe and an address to the nation on Wednesday he said.

Discussion with private bondholders are also taking place separately, he said.

Face to face talks with bond holders are likely to start Thursday, sources said.

Investors in a steering committee representing key bondholders have halted trading and are in a ‘restricted’ period Bloomberg Newswires reported.

Sri Lanka is attempting to restructure 12.5 billion dollars of sovereign bonds and about 1.7 billion dollars of past due interest following the declaration of an external default in 2022.

Private investors are seeking some so-called macro-linked bonds whose final haircut is linked to dollar GDP as well as some standard or ‘plain vanilla’ bonds with an upfront haircut.

The style of bonds have not been used in sovereign restructurings before. In the latest round of talks more plain vanilla bonds may be discussed, sources aware of the thinking of some bond investors said.

The ISB holders have proposed a 28 percent haircut and a 1.8 percent consent fee. The macro-linked bonds would have principle re-stated up to 92 percent of the original depending on the evolution of gross domestic product.

Sri Lanka is restructuring debt using an IMF debt sustainability model applied to middle income countries with market access as opposed to debt sustainability model used in countries like Ghana applicable to low income countries requiring deeper haircuts on both domestic and foreign debt.

Hair cuts may also depend on the maturity of bonds and the coupon interest.

Ghana has higher levels of commercial debt having started to access capital markets from around 2007.

Ghana also has a bad central bank like Sri Lanka and has gone to the International Monetary Fund 18 times.

The country is also operating flexible inflation targeting (inflation targeting without a clean float), which critics say is the latest spurious monetary regime peddled to hapless unstable countries without a doctrinal foundation in sound money.

Having done broad domestic debt restructuring as well as continued currency volatility both interest rates and inflation remains above 20 percent.

Ghana’s central bank has a worse monetary anchor (8 percent inflation plus 2 percent) compared to 5 percent plus two in Sri Lanka and runs into currency trouble despite being an oil producer like Iran, Venezuela and neighboring Nigeria.

Nigeria has an inflation target of 6-9 percent but ends up with around 20 plus inflation and currency trouble.

Sri Lanka has undershot its inflation target since reaching monetary stability in September 2022 and has appreciated the currency, amid deflationary policy giving a strong foundation for economic activity to resume. (Colombo/June26/2024)

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Sri Lanka to seek investors for 200MW BOOT power plant

EONOMYNEXT – Sri Lanka’s cabinet has given approval to seek investors for a 200 MegaWatt independent power plant on a build-own-operate-and-transfer (BOOT) basis, a government statement said.

The internal combustion power plant will be capable of running on natural gas and is part of the Long-Term Generation Expansion of state-run Ceylon Electricity Board.

The investor will get as 20-year power purchase agreement.

Land next to the ‘Sobhadanavi’ combined cycle plant will be made available for the developer.

According to the generation plan, the 200MW IC plant is expected to come on stream by 2026.

In 2026, a 115 MW gas turbine, a CEB owned diesel plants of 68 MW and 72 MW are due to be retired. (Colombo/June25/2026)

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Sri Lanka rupee closes steady at 305.25/35 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed fairly flat at 305.25/35 to the US dollar on Tuesday, down from 305.20/30 to the US dollar on Monday, dealers said, while bond yields up.

A bond maturing on 01.06.2026 closed at 10.75/11.05 percent.

A bond maturing on 15.12.2026 closed at 10.65/11.05 percent, up from 10.45/85 percent.

A bond maturing on 15.10.2027 closed at 10.65/11.10 percent.

A bond maturing on 15.03.2028 closed at 11.20/11.50 percent.

A bond maturing on 15.09.2029 closed at 12.10/15 percent, up from 12.05/17 percent.

A bond maturing on 01.12.2031 closed at 12.10/20 percent, up from 12.08/15 percent.
(Colombo/Jun25/2024)

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