ECONOMYNEXT – Sri Lanka’s bondholder group has called for sharing terms of agreements-in-principle made with China and Paris Club led creditors, and said that no “substantive” negotiations have taken place so far.

“The Group finds it regrettable that there remains such a significant lack of transparency on the part of official sector creditors despite the Group’s efforts so far to act as a constructive counterparty,” the representative group of bondholder said in a statement.

“The Group has expressed support for Sri Lanka’s efforts since February 2023, has been forthcoming and transparent with official stakeholders at every stage of the process, and has repeatedly made efforts to engage with the Sri Lankan authorities and its advisors in good faith.

“Transparency between creditors is critical for the private sector to reach an agreement compliant with the parameters of Sri Lanka’s IMF programme’s first review, and one that provides fair and equitable debt treatment.

“Unfortunately, no substantive engagement has taken place between Sri Lanka and its private creditors to date.”

Some official sources indicate that the focus was on getting over the official creditor hurdle.

Sri Lanka rejected an initial proposal by bondholders for restructured bonds linked to the performance of dollar gross domestic product.

The full statement is reproduced below:

Ad Hoc Group of Bondholders statement on progress in Sri Lanka’s debt restructuring

The Ad Hoc Group of Bondholders (the “Group”) of the Republic of Sri Lanka (“Sri Lanka”) notes the statements released by the Official Creditor Committee (“OCC”) and the Sri Lankan Ministry of Finance on November 29, 2023 on the agreement-inprinciple (“AiP”) reached between Sri Lanka and the OCC. The Group welcomes progress on the restructuring of official claims, as uncertainty around the treatment of these claims has hindered Sri Lanka’s recovery.

At this point, the terms of the AiP reached between the Sri Lankan authorities and the OCC on the one hand, and China Exim Bank, an official sector creditor, on the other hand on October 11, 2023, have not been shared. The Group finds it regrettable that there remains such a significant lack of transparency on the part of official sector creditors despite the Group’s efforts so far to act as a constructive counterparty.

Transparency between creditors is critical for the private sector to reach an agreement compliant with the parameters of Sri Lanka’s IMF programme’s first review, and one that provides fair and equitable debt treatment.

The Group has expressed support for Sri Lanka’s efforts since February 2023, has been forthcoming and transparent with official stakeholders at every stage of the process, and has repeatedly made efforts to engage with the Sri Lankan authorities and its advisors in good faith.

Unfortunately, no substantive engagement has taken place between Sri Lanka and its private creditors to date.

The Group remains committed to reaching an agreement with the Sri Lankan authorities as quickly as possible to find a sustainable solution to Sri Lanka’s debt challenges as they relate to the international bond debt.

The Group is advised by Rothschild & Co and White & Case LLP as financial and legal advisors, respectively.

ECONOMYNECT – Sri Lanka President Ranil Wickremesinghe strongly pushed for a Climate Justice Forum (CJF) and investments in Tropical Belt and criticised the slow action against climate change-led disasters at the 2023 United Nations Climate Change Conference (COP28) held in Dubai.

This year’s climate summit 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 speaking on Friday said Sri Lankans are already feeling the impact.

“Sri Lanka is experiencing a palpable rise in ambient temperature; continuous gray skies; heavy rains that are not seasonal; lightning and thunderstorms; and as a consequence, flooding of riverbanks and earth slips in the mountains,” he told the gathering.

“Let me reiterate, each year, the costs of mitigating these recurring calamities in terms of lives, livelihoods, displacement destruction, rebuilding is an additional burden on our thinly-stretched economies.”

“Remember, the developing countries are both disproportionately vulnerable and disproportionately impacted – due to their lower adaptive capacity when it comes to investments in Finance, Technology and Climate.”

Here is the full text of Sri Lanka President Wickremesinghe’s speech at the COP 28: 

Mr. President

Excellencies

Esteemed Delegates

At the outset let me congratulate the Government of the United Arab Emirates for hosting COP28 and extend to you my gratitude for your warm hospitality.

It was in 1972 the world first focused on the environment -The UN Conference on Human Environment which enunciated the goal of defending and improving the environment for present and future generations.

50 years later, the Stockholm+50 Report concluded that limiting global warming to 1.5 degrees Celsius requires rapid and large-scale reduction of carbon emissions.

The UNEP Report of 2023 “Broken Promises” warned that we are facing a 3 degree Celcius increase in global temperatures by the end of the century.

We are already feeling the impact. Sri Lanka is experiencing a palpable rise in ambient temperature; continuous gray skies; heavy rains that are not seasonal; lightning and thunderstorms; and as a consequence, flooding of riverbanks and earth slips in the mountains.

Let me reiterate, each year, the costs of mitigating these recurring calamities in terms of lives, livelihoods, displacement destruction, rebuilding is an additional burden on our thinly-stretched economies.

Remember, the developing countries are both disproportionately vulnerable and disproportionately impacted – due to their lower adaptive capacity when it comes to investments in Finance, Technology and Climate.

The Independent High-Level Expert Group Report on Climate Finance highlighted that at least a US$ Trillion per annum is required to combat climate change.

At the last COP held in Egypt, we agreed to establish the “Loss and Damages Fund”.

However, the Transitional Committee on the Operationalisation of Funding Arrangements in its Report of 4th November 2023 only calls for voluntary contributions.  

The Report makes no mention of the funds needed or who the contributors are. It is silent on the issue of global debt relief.

Nevertheless, four days later, the Technical Dialogue of the First Global Stocktake highlighted the requirements of a minimum of US$ trillion per annum. To arrive at a consensus not to take up a contentious issue is not a solution. Who are we fooling?

We are denied climate justice. In this background, Sri Lanka will propose a resolution for a Climate Justice Forum which was agreed upon at the 5th Forum of the Ministers of Environmental Authorities of Asia Pacific to be moved at the UN Environment Assembly of 6thFebruary 2024.

The Climate Justice Forum will provide us a platform for constructive and proactive engagements.

Since 1972, the Brussels Group has been fighting a rearguard action on climate change mitigation. This forum will give us an opportunity to address their genuine concerns.

To address the issue   of ensuring that the tax payers monies are not wasted.

As the Secretary General of the UN said, “the era of global boiling has arrived”.

The enemy is at the gates. We are still procrastinating. We are still forming our battalions to take the fight to the enemy.

Therefore, this fortnight is critical.

It will determine whether we are capable of providing leadership to mitigate climate crisis or not. Sri Lanka is committed to the 1.5 degree Celcius limit.

We must act immediately to find effective solutions. We must think outside of the box. We must Invest in the Tropical Belt to tackle the Triple Planetary Crisis.

The Tropical Belt constitutes 134 countries covering 44% of earth’s surface, and will by 2030s be home to roughly 50% of world’s population.

Most of the world’s remaining primary forests are tropical, along with its coral reef systems.

The rich biodiversity of the Tropical Belt enhances biological carbon sequestration andcan shield the world from instabilities inweather.

Furthermore, the energy generation potential from solar, wind and biomass are significantly higher in the tropics than that of other areas on the earth.

Yet, anthropogenic activities  

human activities that cause

pollution – in the Tropical Belt can easily lead to an imbalance in the equilibrium of this region.

So much so that some scientists predict that the  Tropical Rain Belt could shift away from the Equator by the 22nd Century.

Large scale investments in Renewable Energy, Pollution Control and Nature-based Solutions. Eg. Protection, restoration and improved management of forests, wetlands, grasslands etc. will lead to significant transformative changes in the entire world by enhancing carbon sequestration.

Therefore, Sri Lanka and other concerned parties will convene a panel to report on the Tropical Belt Initiative.

A multi sector plan distributed not only among the whole tropical region but the whole world.

As the current Chair of the Indian Ocean Rim Association (IORA), Sri Lanka is focusing on the interdependence between the Indian Ocean and climate change.

A healthy ocean generates oxygen and absorbs the carbon and heat produced from global warming. Mangroves and seagrasses sink more carbon than land forests. However, rapid climate change is altering the marine environment with rising sea levels and temperatures, Ocean acidification, coral bleaching, habitat destruction and extreme weather patterns.

These phenomenon have a direct impact on human lives by disrupting ocean biodiversity, Ocean dependent food patterns, and coastal livelihoods.

Member states and partners of IORA will work towards ensuring a sustainable, inclusive and people-centered Blue Economy to secure the Indian Ocean for future generations.

The Tropical Belt and the Indian Ocean combined will form the largest global sink for carbon sequestration.

Addressing the climate change need, up to date scientific knowledge, and the effective use of these findings

Therefore, at COP27, I proposed to establish an International Climate Change University (ICCU) to  

concentrate on post graduate studies – The ICCU objectives are capacity building and advancing research – necessary to contribute to the crucial efforts to limiting global warming to 1.5 degrees Celsius.

The ICCU will also serve as a futuristic “Centre for Excellence” in policy dialogue and advocacy on climate change.

The ICCU is critical for generating knowledge on the trans-disciplinary issues that is crucial for Climate Change Mitigation. i.e. for the survival of our planet. (Colombo/Dec 1/2023)

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe has met with India Prime Minister Narendra Modi in Dubai on the sidelines of the COP-28 global climate summit.

Modi tweeted Friday December 01 afternoon that it was “wonderful to connect and discuss various issues” with Wickremesinghe.

The run-in occurred amid ongoing discussions between the two South Asian nations on separate agreements on investment and trade. Wickremesinghe told this week’s Sri Lanka Economic Summit in Colombo that an attempt to join the Regional Comprehensive Economic Partnership (RCEP) has been hit by a lack of rules to admit new members.

Sri Lanka was earlier attempting to have a Comprehensive Economic Partnership Agreement (CEPA) which was scuttled by economic nationalists during the previous Rajapaksa administration.

“We have recommenced the talks with India,” President Wickremesinghe said on Wednesday November 29 at the economic summit organised by the Ceylon Chamber of Commerce.

“Earlier it was to be one. It has told us … they want one separate one on investment, and one separate one on trade. The investment one I think will take off first,” he said.

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(Colombo/Dec01/2023)