Crisis-hit Sri Lanka slashed fuel prices yesterday, the second cut in as many weeks, after the World Bank warned that the economy will shrink an unprecedented 9.2% this year. The energy ministry said the price of petrol will be reduced by 40 rupees to 370 rupees ($1.02) a litre after a similar 10% reduction earlier this month. But the price of regular petrol is still twice the amount before the start of the crisis last year while diesel is three-and-a-half times more than what it was in December 2021. Earlier this year motorists spent weeks to get fuel, contributing to weeks of protests that forced president Gotabaya Rajapaksa to flee the country in July and quit. The wait at the pumps has reduced to a few hours in recent weeks, but fuel is still strictly rationed because of an enduring shortage of dollars needed to pay for essential imports. Public transport also ground to a halt due to a lack of diesel but now services are almost back to normal, although many fares – in common with soaring prices for other services and goods – have doubled. Official annual inflation rates are running at close to 70%. The latest lowering of petrol and diesel came after the World Bank warned that the economic contraction will be worse than the 8.7% forecast by the Central Bank of Sri Lanka. The World Bank in its latest country update published last week said the economy will continue to shrink next year too. It expects a 4.2% contraction next year. In addition to the Covid-19 pandemic and the Ukraine war, Sri Lanka’s worst crisis since independence is also partly blamed on the sharp tax cuts announced by Rajapaksa after he came to power in November 2019. The crisis forced the government to default on its $51bn foreign debt in April.
Deposed Sri Lankan president Gotabaya Rajapaksa faced calls for his arrest yesterday after returning home from self-imposed exile under the protection of his successor’s government. Rajapaksa fled the island nation under military escort in July after a huge crowd stormed his official residence following months of demonstrations sparked by an unprecedented economic crisis. The 73-year-old announced his resignation from Singapore and spent weeks under virtual house arrest at a Bangkok hotel before his return late on Friday. Leaders of the protest campaign that toppled his government said Rajapaksa, who lost his presidential immunity after leaving office, should now be brought to justice. “Gotabaya returned because no country is willing to accept him, he has no place to hide,” Joseph Stalin, the leader of a teachers’ trade union that helped mobilise demonstrators, told AFP. “He should be arrested immediately for causing such misery for the 22mn people of Sri Lanka,” he added. “He can’t live freely as if nothing has happened.” Rajapaksa’s government was accused of chaotic mismanagement as the Sri Lankan economy spiralled into a blistering downturn. The crisis saw acute shortages of food, lengthy blackouts and long queues at gas stations for scarce fuel supplies after the country ran out of foreign currency to pay for vital imports. Sri Lanka’s main opposition alliance, the Samagi Jana Balawegaya (SJB), has yet to comment on Rajapaksa’s return, but a former minister from the bloc said the ousted leader needed to be prosecuted. “Gotabaya must be held to account for his crimes before and during his presidency,” Ajith Perera told reporters in Colombo. Rajapaksa was garlanded with flowers by ministers and senior politicians after disembarking from his flight in Colombo. He was driven in a security convoy to a new official residence in the capital provided to him by the government of President Ranil Wickremesinghe, his successor. Wickremesinghe depends on Rajapaksa’s Sri Lanka Podujana Peramuna (SLPP) party to govern and on Friday passed an austerity budget — a precondition for an International Monetary Fund bailout — with the grouping’s support. “Gotabaya’s return demonstrates that the SLPP is still powerful despite the humiliation they suffered,” Hasith Kandaudahewa, a senior lecturer on international relations at the University of Colombo, told AFP. Rajapaksa began receiving guests at his new home yesterday with his elder brother — former president Mahinda Rajapaksa — one of the first to call on him, witnesses said. Mahinda was serving as premier in his brother’s administration when he too was chased from his home by a mob who were responding to an attack on protesters by government loyalists. Asia Society Policy Institute director Akhil Bery said the powerful family, which has dominated Sri Lankan politics for much of the past two decades, could be plotting a comeback. Their allies “might be betting that the unpopular decisions Ranil has had to take will lay the groundwork for the Rajapaksas’ return”, the analyst told AFP. Wickremesinghe’s government has drastically increased the cost of fuel and electricity to help repair the nation’s finances at a time when household budgets are under pressure from runaway inflation. Rights activists have vowed to press for Gotabaya’s prosecution on a litany of charges, including his alleged role in the 2009 assassination of prominent newspaper editor Lasantha Wickrematunge. “We welcome his decision to return so that we can bring him to justice for the crimes he has committed,” Tharindu Jayawardhana, a spokesman for the Sri Lanka Young Journalists’ Association, said Friday. Several corruption cases lodged against Rajapaksa stalled after he was elected president. Rajapaksa also faces charges in a US court over Wickrematunge’s murder and the torture of Tamil prisoners at the end of the island’s traumatic civil war in 2009. Rajapaksa won a landslide election in 2019 after promising “vistas of prosperity and splendour” but saw his popularity nosedive as the country’s crisis worsened. His government was accused of introducing unsustainable tax cuts that drove up government debt and exacerbated the country’s economic problems on top of the Covid-19 pandemic. Wickremesinghe was elected by parliament to see out the remainder of Rajapaksa’s term. He has since cracked down on street protests and arrested leading activists. The government defaulted on its $51bn foreign debt in April and the central bank forecasts a record eight percent GDP contraction this year. After months of negotiations, the International Monetary Fund agreed on Thursday to a conditional $2.9bn bailout package to repair Sri Lanka’s battered finances.
A Chinese research vessel 'Yuang Yang 5' entered Sri Lanka's Chinese-run southern port of Hambantota on Tuesday despite concerns from India and the United States about its activities. The Yuan Wang 5 entered the Hambantota deep sea port after securing permission to enter Sri Lankan waters on the condition it will not engage in any research, port officials said. The vessel was originally due to arrive last week, but Colombo asked Beijing to defer the visit following objections by India, which shares Western concerns about Chinese activities in the region. But on Saturday, after intense negotiations, Colombo announced a U-turn, saying permission had been granted for the ship to dock at Hambantota and remain for six days. Shipping analytics websites described the Yuan Wang 5 as a research and survey vessel, but according to Indian media, it is a dual-use spy ship. New Delhi is suspicious of Beijing's increasing presence in the Indian Ocean and influence in Sri Lanka, seeing both as firmly within its sphere of influence. A day before the arrival of the vessel, India gifted a Dornier 228 surveillance aircraft to Sri Lanka in a bid to bolster the island's maritime surveillance capabilities. The Chinese ship was allowed into port on the condition it keeps its Automatic Identification System (AIS) switched on while in Sri Lankan waters and is not allowed to carry out scientific research. The Hambantota port is run by China, which leased it for 99 years for $1.12 billion, less than the $1.4 billion Sri Lanka paid a Chinese company to build it. According to Indian reports, the Yuan Wang 5 could be employed for space and satellite tracking and has specific uses in intercontinental ballistic missile launches. The Indian government has expressed concern that the ship could spy on its activities, lodging a complaint with Colombo. The United States also expressed concern about the ship. Sri Lanka borrowed heavily from China between 2005 and 2015, and in 2017 gave Beijing its lease on the Hambantota port, which is located on major East-West shipping lanes, after falling behind on debt repayments. China remains Sri Lanka's biggest bilateral creditor, owning over 10 percent of the island's foreign debt. Beijing's support is essential for Colombo, currently suffering a dire economic crisis, to restructure its external borrowing to qualify for a bailout from the International Monetary Fund. On August 4, President Ranil Wickremesinghe "reiterated Sri Lanka's firm commitment to the one-China policy" after US House Speaker Nancy Pelosi visited Taiwan, warning against "non-interference in the internal affairs of countries".
Sri Lanka's government granted permission on Saturday for a controversial Chinese research vessel to visit the island despite neighbouring India's concerns that it could spy on New Delhi's military installations, officials said. The Yuan Wang 5 is described as a research and survey vessel by international shipping and analytics sites, but according to Indian media it is a dual-use spy ship. New Delhi is suspicious of Beijing's increasing presence in the Indian Ocean and influence in Sri Lanka, seeing both as being firmly within its sphere of influence. The Yuan Wang 5 was originally due to call at Sri Lanka's Chinese-run Hambantota port on August 11, only for Colombo to ask Beijing to indefinitely defer the visit following India's objections. But Sri Lanka's harbour master, Nirmal P Silva, said he had received foreign ministry clearance for the ship to call at Hambantota from August 16 to 22. "The diplomatic clearance was received by me today. We will work with the local agent appointed by the vessel to ensure logistics at the port," Silva told AFP. Foreign ministry sources confirmed that Colombo had renewed permission for the visit, which had initially been granted on July 12, a day before former president Gotabaya Rajapaksa fled following months of protests over the country's worst-ever economic crisis. Rajapaksa -- whose brother Mahinda borrowed heavily from China while president from 2005 to 2015 -- resigned after escaping to Singapore. Tens of thousands of protesters overran his palace and home in Colombo after accusing him of mismanagement in an economic crisis that has led to acute shortages of food, fuel and medicines. Port officials said the Chinese vessel was about 1,000 kilometres (620 miles) south-east of Sri Lanka on Friday night and was heading slowly towards the Hambantota deep sea port. Sri Lanka leased the port to China for 99 years for $1.12 billion, less than the $1.4 billion Sri Lanka paid a Chinese company to build it. According to Indian reports, the Yuan Wang 5 could be employed for space and satellite tracking, and has specific uses in intercontinental ballistic missile launches. The Indian government has expressed concern that the ship could spy on its activities, and had lodged a complaint with Colombo. New Delhi's foreign ministry has said it will closely monitor "any bearing on India's security and economic interests and takes all necessary measures to safeguard them".
Sri Lanka's state-run electricity monopoly will raise tariffs by a stinging 264 percent for people consuming the least, it announced Tuesday, while higher users will face a smaller increase. The loss-making Ceylon Electricity Board (CEB) said the regulator had allowed it to carry out the sharp increases, the first in nine years, from Wednesday to recoup part of its accumulated losses of $616 million. The CEB had asked for a bigger tariff increase of over 800 percent, but the regulator capped it at a maximum of 264 percent, officials said. Two-thirds of the 7.8 million households using less than 90 kilowatts a month will be affected by the highest increases, while bigger consumers will pay about 80 percent more, according to official records. The smallest consumers, currently charged 2.50 rupees a unit, will be charged 8.0 rupees. Bigger consumers, being charged 45 rupees a unit, will have to pay 75 rupees ($0.20). Sri Lanka is facing its worst economic crisis after running out of foreign exchange reserves to finance even its most essential imports such as food, fuel and medicine. The country is also facing hyperinflation and lengthy electricity blackouts after the CEB was unable to buy oil for its thermal generators. Unable to repay its $51 billion foreign debt, the government declared it was defaulting in April and is negotiating with the International Monetary Fund for a possible bailout.
Ten members of crisis-hit Sri Lanka's Commonwealth Games contingent in Birmingham have disappeared in a suspected attempt to remain in Britain, a top sports official told AFP on Sunday. The nine athletes and a manager vanished after completing their events, the Sri Lankan official said, requesting anonymity. Three of them -- Judoka Chamila Dilani, her manager Asela de Silva, and wrestler Shanith Chathuranga -- had disappeared last week. That prompted a police complaint by the Sri Lankan officials. "Since then, another seven have vanished," the official said, without identifying them. "We suspect they want to remain in the UK, possibly to get employment." The 160-strong Sri Lankan contingent's management possessed the passports of all members to ensure they returned home. That failed to deter some from leaving. British police located the first three that disappeared, but as they had not violated local laws and held visas valid for six months, no action was taken, the Sri Lankan official told AFP. "In fact, the police got us to return the passports that we were holding as a deterrent against defections," the official said. "The police have not told us about their whereabouts." Britain's West Midlands police force, which covers Birmingham, said it was looking into reports of six Sri Lankans going missing from the Games, and said "enquiries continue to ensure they are safe and well". The force declined to comment further, including on the claim of there being 10 missing people in total, and the UK interior ministry also refused to comment. Sri Lanka had won one silver and three bronze medals at the Games as of Sunday evening. Sri Lankan athletes have been reported missing from international events in the past. In October last year, Sri Lanka's wrestling manager abandoned his team and disappeared in Oslo during a world championship tournament. During the 2014 Asian Games in South Korea, two Sri Lankan athletes made a run for it and were not found. And in 2004, when Sri Lanka did not even have a national handball team, a 23-member group pretending to represent the country conned their way to a tournament in Germany and disappeared.
Sri Lanka has asked China to defer the planned visit of a Chinese survey ship to the island country after an objection from India, a government source told Reuters on Sunday. The Chinese research and survey vessel, Yuan Wang 5, was still on its way to Sri Lanka's Hambantota port. It is scheduled to arrive there on Aug. 11, according to shipping data from Refinitiv. India worries that the Chinese-built and leased port of Hambantota will be used by China as a military base in India's backyard. The $1.5 billion port is near the main shipping route from Asia to Europe. China's foreign ministry did not immediately respond to a request for comment on Sunday. Last week, a spokesperson for the Sri Lankan government said the ship was only stopping at Hambantota for refuelling. China is one of Sri Lanka's biggest lenders and has also financed airports, roads and railways, unsettling India. As Sri Lanka battles its worst economic crisis in seven decades, India this year alone has provided it nearly $4 billion in support. Diplomatic relations between India and China have been strained since clashes in 2020 between troops along a remote Himalayan border. At least 20 Indian and four Chinese soldiers were killed in the fighting, which led to a massive build-up of troops on both sides. Foreign security analysts describe the Yuan Wang 5 as one of China's latest space-tracking ships, used to monitor satellite, rocket and intercontinental ballistic missile launches.
Taiwan struck a defiant tone yesterday as it hosted US House Speaker Nancy Pelosi, with a furious China gearing up for military exercises dangerously close to the island’s shores in retaliation for the visit. Pelosi landed in Taiwan late Tuesday despite a series of increasingly stark threats from Beijing, which views the island as its territory and warned it would consider the visit a major provocation. China responded swiftly, announcing what it said were “necessary and just” military drills in the seas just off Taiwan’s coast — some of the world’s busiest waterways. “In the current struggle surrounding Pelosi’s Taiwan visit, the US are the provocateurs, China is the victim,” Beijing’s foreign ministry said. But Taiwanese President Tsai Ing-wen said the island of 23mn would not be cowed. “Facing deliberately heightened military threats, Taiwan will not back down. We will...continue to hold the line of defence for democracy,” Tsai said at an event with Pelosi in Taipei. She also thanked the 82-year-old US lawmaker for “taking concrete actions to show your staunch support for Taiwan at this critical moment”. China tries to keep Taiwan isolated on the world stage and opposes countries having official exchanges with Taipei. Pelosi, second in line to the presidency, is the highest-profile elected US official to visit Taiwan in 25 years. “Today, our delegation... came to Taiwan to make unequivocally clear we will not abandon our commitment to Taiwan,” she said at the event with Tsai. She added her group had come “in peace to the region”. Before leaving Taiwan, Pelosi also met with several dissidents who have previously been in the crosshairs of China’s wrath – including Tiananmen protest student leader Wu’er Kaixi. “We are in high agreement that Taiwan is in the frontline (of democracy),” Wu’er said. “Both the US and Taiwan governments need to...conduct more in defending human rights.” Pelosi’s delegation left Taiwan yesterday evening en route to South Korea, her next stop in an Asia tour that has included stops in Singapore and Malaysia. She will wrap up her trip in Japan. After her departure, Taiwan’s defence ministry announced late yesterday that 27 Chinese warplanes had entered the island’s air defence identification zone (ADIZ). Over the last two years, Beijing has ramped up military incursions into Taiwan’s ADIZ – which is not the same as the island’s territorial airspace, but includes a far greater area. The ministry published a map that showed 16 Su-30s and 6 J-11s had crossed the so-called “median line” of the Taiwan Strait – an unofficial boundary in the narrow waterway, which separates the island from the mainland and straddles vital shipping lanes. Chinese jets also crossed over the so-called “median line” during two high-level visits by US officials in 2020 during Donald Trump’s presidency. Nevertheless, that is still a relatively rare occurrence. President Joe Biden’s administration said in the run-up to Pelosi’s visit that US policy towards Taiwan remained unchanged. This means support for its government while diplomatically recognising Beijing over Taipei, and opposing a formal independence declaration by Taiwan or a forceful takeover by China. Beijing summoned US ambassador Nicholas Burns over Pelosi’s visit, while the Chinese military declared it was on “high alert” and would “launch a series of targeted military actions in response” to the visit.
Sri Lanka faces a “great danger” with fuel shortages sparked by its unprecedented economic crisis set to continue at least till the year’s end, President Ranil Wickremesinghe warned yesterday. The 73-year-old, who was propelled to power last month after his predecessor Gotabaya Rajapaksa was forced to flee the country and resign after months of protests, said the financial meltdown had turned into a serious political crisis. “Today we are facing an unprecedented situation that our country had never faced in recent history,” he said while opening a new session of parliament. “We are in great danger.” Tens of thousands of people overran Rajapaksa’s official residence last month over acute shortages of food, fuel and medicines endured by Sri Lanka’s 22mn people since late last year. Wickremesinghe said the only way to escape the crisis was “if we all face this challenge together as one people,” and asked all parties in parliament to join his initiative for a “unity government”. Sri Lanka was considered a prosperous middle-income country before defaulting for the first time on its foreign debt of $51bn in mid-April. The country has run out of foreign exchange to finance imports with officials estimating the country urgently needs at least $4bn to bring in essential goods and address current shortages. Wickremesinghe has been leading talks with the International Monetary Fund to secure a four-year bailout programme. He told parliament the negotiations were progressing but did not provide a timeline for when a deal would be finalised. Motorists spend days waiting to buy rationed fuel while the country faces lengthy electricity blackouts. Inflation has crossed 60%. Wickremesinghe thanked India for granting credit lines to import petrol and diesel, but said Colombo must be able to pay with its own foreign exchange earnings and that rationing would continue at least till the end of this year. He also criticised Rajapaksa for rejecting two major infrastructure investments from Japan which could have brought in $3bn. The cancellation of a light rail transit (LRT) and a deep-sea terminal at the Colombo port also damaged the ties between Japan and Sri Lanka, Wickremesinghe said. However, the pro-West Wickremesinghe did not refer to China which owns over 10% of Sri Lanka’s bilateral loans. Beijing’s agreement is crucial for any debt restructuring deal. Meanwhile a top Sri Lankan trade union leader in the forefront of protests which led to the ousting of Rajapaksa from the presidency was arrested yesterday, witnesses and officials said. Joseph Stalin, the secretary of the Sri Lanka Teachers’ Union, becomes the senior most activist to be arrested in a crackdown against protesters forced Rajapaksa to flee last month.
Sri Lanka yesterday brushed aside Indian concerns over a scheduled visit by a Chinese ship, saying it was coming only to refuel and replenish supplies. The research and survey ship Yuan Wang 5 is due to dock in the Chinese-run Hambantota Port in southern Sri Lanka on August 11, according to analytics website MarineTraffic. Indian media reports said that New Delhi was worried the vessel would be used to spy on its activities and that it had lodged a complaint with Colombo. It is a dual-use spy vessel, employed for space and satellite tracking and with specific usage in intercontinental ballistic missile launches, according to Indian broadcaster CNN-News18. Sri Lankan government spokesman Bandula Gunawardena said that the Cabinet discussed the ship’s visit on Monday and that it would still be allowed to dock. “Both India and China are helping us at this very crucial time when we are facing an unprecedented economic crisis,” Gunawardena said. “The President (Ranil Wickremesinghe) informed the Cabinet that this matter will be diplomatically resolved by talking to all sides. Both are important friends.” The vessel is to spend about a week at Hambantota taking in fuel and other supplies and will not undertake any work while in Sri Lankan waters, Gunawardena said. Another minister, Manusha Nanayakkara, told the same press conference that 18 previous such port visits to Sri Lanka had been made by Chinese research vessels and that the Yuan Wang 5 was stopping “only for bunkering”. There was no immediate comment from the Indian High Commission in Colombo. However, New Delhi last week made it clear that it will closely monitor “any bearing on India’s security and economic interests and takes all necessary measures to safeguard them”. India remains suspicious of China’s growing influence in its southern neighbour Sri Lanka, which owes large amounts of money to Beijing for infrastructure projects, including the $1.4bn Hambantota Port. Two Chinese submarines berthed in Sri Lanka in 2014 despite Indian objections. Since then, there have been no such Chinese submarine visits to Sri Lankan ports. Sri Lanka gave a Chinese company a 99-year lease on the port, located along the main East-West international shipping lanes, in 2017 after being unable to keep up with debt repayments on the facility. Sri Lanka defaulted on its $51bn in foreign debts in April and has since opened bailout talks with the International Monetary Fund. The country’s 22mn people have been enduring severe shortages of food, fuel and medicines since late last year when the government ran out of foreign exchange to finance most imports.
Sri Lanka's Supreme Court has extended a travel ban imposed on former president Mahinda Rajapaksa and his brother, ex-minister Basil Rajapaksa, until Aug. 4 as they were named respondents in a case filed over the economic crisis, Ada Derana news website reported on Monday. On July 27, the court had extended the ban until Aug. 2.
Sri Lanka's new president Ranil Wickremesinghe has formally invited MPs to join an all-party unity government to revive the bankrupt economy by undertaking painful reforms, his office said Sunday. Wickremesinghe took office earlier this month after public anger over the island nation's worst economic crisis forced his predecessor Gotabaya Rajapaksa to flee the country and quit. In a meeting Saturday with the influential monks of the Temple of the Tooth in Kandy, one of Buddhism's most sacred shrines, Wickremesinghe outlined his plans. "As the president, I wish to start a new journey," Wickremesinghe was quoted as telling the monks in his first meeting with the powerful Buddhist clergy since taking office. "I would like to get all the parties together and go on that journey as well as to form an all-party government." He has written to all lawmakers asking them to join a unity government. A former opposition MP, Wickremesinghe, 73, took up the premiership for the sixth time in May after Rajapaksa's elder brother Mahinda resigned and there were no other takers for the job. Wickremesinghe went onto become the president after Gotabaya escaped on July 9 when tens of thousands of protesters angry at the economic crisis stormed the presidential palace. He fled to Singapore from where he resigned five days later and Wickremesinghe became interim president and later won a vote in parliament confirming his ascension. Sri Lanka's 22 million people have endured months of lengthy blackouts, record inflation and shortages of food, fuel and medicines. Since late last year, the country has run out of foreign exchange to finance even the most essential imports. In April, Sri Lanka defaulted on its $51 billion foreign debt and opened bailout talks with the International Monetary Fund. Wickremesinghe told monks that the economy would decline further this year with a contraction of 7.0 percent, but expected a recovery next year. "I am working to re-stabilise this economy and build the economy in such a way that the country can be developed by 2023, 2024. "It is a difficult task. But if you don't do it now, it will be more difficult. We should think about whether we should try to cure the patient by giving medicine or let the patient die without giving medicine," he added. He said inflation currently running at 60.8 percent could go up further. After his election as president, Wickremesinghe, while ordering security forces to clear protest sites, has appointed an interim cabinet leaving the door open for others to join. He has called a new session of parliament from Wednesday and is expected to expand the 18-member cabinet to accommodate members from opposition parties.
Police said Saturday they arrested a Sri Lankan trade union leader who allegedly took two official flags from the deposed president Gotabaya Rajapaksa's palace and used them as a bedsheet and a sarong. Tens of thousands of people, incensed by the island nation's economic crisis, stormed Rajapaksa's residence and seafront office earlier this month, forcing the leader to flee the country and later resign. The man's arrest on Friday night comes after a social media post showed him using one of the official presidential flags as a bedsheet and the other as a sarong, a police officer told AFP, on condition of anonymity. "We identified him from the videos filmed and posted by his son," the officer said. "He told investigators that he burnt one flag and we have recovered the one he used as a sarong." The man was remanded in custody for two weeks pending further investigations, the officer added. Sri Lanka's 22 million people have endured months of lengthy blackouts, record inflation and shortages of food, fuel and petrol. Rajapaksa had been blamed by protesters for mismanaging the nation's finances and public anger had simmered for months before the mass demonstrations that forced his ouster. Soon after protesters overran the Presidential Palace, there were social media posts of them frolicking in the presidential pool and bouncing on four-poster beds inside the sprawling compound. The nearby Temple Trees compound, the official prime minister's residence, was also overrun on the same day and protesters had removed televisions and other valuables. Police said an inventory was being taken at the colonial-era buildings which are repositories of valuable art and antiquities. But protesters also turned over to authorities around 17.5 million rupees ($46,000) in crisp banknotes that had been found in one of the presidential palace's rooms. Rajapaksa's successor, Ranil Wickremesinghe, has vowed a tough line on "trouble-makers" and police have arrested several protest leaders in recent days. Parliament extended a state of emergency this week, giving the military sweeping powers to maintain order and detain suspects for long periods. The military last week demolished a protest camp outside the president's office that had campaigned for Rajapaksa's ouster -- a move that drew international condemnation accusing troops of using excessive force on unarmed demonstrators.
The World Bank said Friday it would not offer new funding to Sri Lanka unless the bankrupt island nation carried out "deep structural reforms" to stabilise its crashing economy. Sri Lanka has suffered an unprecedented downturn with its 22 million people enduring months of food and fuel shortages, rolling blackouts and rampant inflation. The South Asian nation defaulted on its $51-billion foreign debt in April and huge protests earlier this month forced then president Gotabaya Rajapaksa to flee the country and resign. The World Bank said it was concerned about the impact of the crisis on Sri Lanka's people but was not ready to give funds until the government had bedded down necessary reforms. "Until an adequate macroeconomic policy framework is in place, the World Bank does not plan to offer new financing to Sri Lanka," the lender said in a statement. "This requires deep structural reforms that focus on economic stabilisation, and also on addressing the root structural causes that created this crisis." The World Bank said it had already diverted $160 million from existing loans to finance urgently needed medicines, cooking gas and school meals. Sri Lanka is currently in bailout talks with the International Monetary Fund but officials say the process could take months. The island nation has run out of foreign exchange to finance even the most essential imports, and chronic shortages have inflamed public anger. Motorists stay in long queues for days to get rationed petrol and government officials have been told to work from home to reduce commuting and save fuel. Inflation rose to 60.8 percent in July for a tenth consecutive monthly record, according to data from the Colombo Consumer Price Index (CCPI) released Friday, while the Sri Lankan rupee has lost more than half its value against the US dollar this year. The UN World Food Programme estimates five out of every six Sri Lankan families have been forced to buy lower-quality food, eat less or in some cases skip meals altogether. The crisis came to a head on July 9, when tens of thousands of protesters stormed Rajapaksa's residence, forcing the president to flee to Singapore and resign. His successor, Ranil Wickremesinghe, has declared a state of emergency and vowed a tough line against "trouble-makers", with several activists who helped lead the mass demonstrations arrested this week.
China said on Friday it hoped "relevant parties" would refrain from interfering with its legitimate maritime activities, after New Delhi voiced concern over a Chinese military ship's planned visit to a port in India's southern neighbour Sri Lanka. India worries that the Chinese-built and leased port of Hambantota will be used by China as a military base in India's backyard. The $1.5 billion port is near the main shipping route from Asia to Europe. Shipping data from Refinitiv Eikon showed Chinese research and survey vessel Yuan Wang 5 was en route to Hambantota and due to arrive on Aug. 11, at a time when Sri Lanka is facing its worst economic crisis in seven decades. India has provided Sri Lanka with nearly $4 billion in support this year alone. During a weekly briefing late on Thursday, an Indian foreign ministry spokesman said the government was monitoring the planned visit of the Chinese ship, adding that New Delhi would protect its security and economic interests. India has already lodged a verbal protest with the Sri Lankan government against the ship's visit, Reuters reported on Thursday. In response to questions from Reuters, China's foreign ministry said Beijing had always exercised freedom of the high seas lawfully. "China hopes that the relevant parties will view and report on China's marine scientific research activities correctly and refrain from interfering with normal and legitimate maritime activities," the ministry said in a statement. Relations between India and China have been strained since armed clashes on their border two years ago killed at least 20 Indian and four Chinese soldiers and led to a massive build-up of troops on both sides. Foreign security analysts describe the Yuan Wang 5 as one of China’s latest generation space-tracking ships, used to monitor satellite, rocket and intercontinental ballistic missile launches. The Pentagon’s annual report on China’s military modernisation says the Yuan Wang ships are operated by the Strategic Support Force of the People’s Liberation Army (PLA). A Sri Lankan consulting firm, the Belt & Road Initiative Sri Lanka, said on its website that the Yuan Wang 5 would be in Hambantota for a week and "conduct space tracking, satellite control and research tracking in the northwestern part of the Indian Ocean region through August and September". Sri Lanka formally handed over commercial activities at its main southern port to a Chinese company in 2017 on a 99-year lease after struggling to repay its debt. China is one of Sri Lanka's biggest lenders and has also funded airports, roads and railways, unnerving India, which is now trying to claw back lost ground. Sri Lanka angered India in 2014 when it allowed a Chinese submarine and a warship to dock in Colombo.
Two activists who helped lead mass demonstrations that toppled Sri Lanka’s president were arrested yesterday, police said, as parliament extended tough emergency laws imposed to restore order. Gotabaya Rajapaksa was forced to flee when tens of thousands of protesters, incensed by the island nation’s unprecedented economic crisis, stormed his residence in the capital Colombo. He later flew to Singapore and tendered his resignation while his successor Ranil Wickremesinghe declared a state of emergency and vowed a tough line against “trouble-makers”. Police said in separate statements yesterday that they had arrested activists Kusal Sandaruwan and Weranga Pushpika on unlawful assembly charges. After Rajapaksa fled, Sandaruwan was seen in social media footage counting a large cache of banknotes found in the president’s home. Police have also released photographs of 14 suspects wanted in connection with an arson attack on Wickremesinghe’s home on the same day the president’s office and residence were overrun. The arrests of the two activists come a day after student leader Dhaniz Ali was nabbed when he boarded a Dubai-bound flight at the country’s main airport in the evening. Police said there was a warrant for his arrest in connection with a magistrate’s court case, without giving further details. Lawmakers also voted yesterday to formalise the state of emergency imposed by Wickremesinghe until mid-August. The emergency ordinance, which empowers troops to arrest and detain suspects for long periods, would have lapsed yesterday if it had not been ratified by parliament. Police last week demolished the capital’s main anti-government protest camp in a pre-dawn assault that raised alarm among foreign diplomats and rights groups. Public anger simmered for months in Sri Lanka before the huge demonstration on July 9 that brought an end to Rajapaksa’s rule. He had been blamed for mismanaging the nation’s finances and steering the economy into a tailspin after the country ran out of foreign currency needed to import vital goods. Sri Lanka’s 22mn people have endured months of lengthy blackouts, record inflation and shortages of food, fuel and petrol. Protesters had also demanded the resignation of Wickremesinghe and accused him of protecting the Rajapaksa clan, who have dominated Sri Lankan politics for much of the last two decades.
Singapore has permitted former Sri Lankan president Gotabaya Rajapaksa to stay in the island republic for an additional 14 days, two sources familiar with the matter told Reuters on Wednesday. A short-term visit pass issued when Rajapaksa arrived on a private visit two weeks ago has been extended, two separate sources in Colombo and Singapore, both with knowledge of the matter, told Reuters. Rajapaksa is now able to stay in Singapore until Aug. 11. The Immigration and Checkpoints Authority in Singapore did not respond to a request for confirmation on the extension of stay. Rajapaksa landed in Singapore on July 14, a day after fleeing his crisis-ridden country via Maldives and following a popular uprising that forced him to resign as president. At the time, the Singapore government said he had not been granted asylum, and was in the country on a private visit. "It is my belief he may eventually consider returning to Sri Lanka but there is no definite political or other stance on this," Sri Lankan government spokesperson Bandula Gunwardena said on Tuesday. If Rajapaksa returned to the country, the former leader would not be protected under law if any charges were filed against him, legal experts said. "His immunity was only for the duration of his time in office as president. He can be prosecuted for criminal conduct, including bribery and corruption," lawyer Luwie Niranjan Ganeshanathan said. Six-time prime minister Ranil Wickremesinghe took over as president following a victory in a parliamentary vote after Rajapaksa fled the country and resigned. The country of 22 million people has been crippled by an economic crisis, with shortages of fuel, food and other necessities as foreign exchange reserves needed for essential imports dropped to record lows. Sri Lanka might not be the last country where the government had fallen because of economic distress, the head of the main U.S. organization for humanitarian assistance said in the Indian capital of New Delhi on Wednesday, while being critical of China for financing opaque loans to the island country and funding infrastructure that was not essential. "The calls to provide more significant relief have so far gone unanswered. And the biggest question of all is whether Bejing will restructure debt to the same extent as other bilateral creditors," Samanatha Power, who heads the US Agency for International Development (USAID), said in a speech. China is Sri Lanka's third biggest lender, behind international financial markets and the Asian Development Bank (ADB). Japan is also a major lender to Sri Lanka. Over the last decade and a half China has lent Sri Lanka over $5 billion for projects including highways, a port, an airport and a coal power plant. But critics charge the funds were used for white elephant projects with low returns, which China has denied. Sri Lanka is in talks with China for up to $4 billion in assistance to help navigate its current financial crisis. New President Wickremesinghe has outlined plans to have a donor conference involving India, China and Japan after the country secures a rescue line from the Interenational Monetary Fund (IMF). He said on July 18 that negotations with the IMF were nearing a conclusion.
Entire wards are dark and nearly empty in Sri Lanka’s largest hospital, its few remaining patients leaving untreated and still in pain, and doctors prevented from even arriving for their shifts. An unprecedented economic crisis has dealt a body blow to a free and universal healthcare system that just months earlier was the envy of the country’s South Asian neighbours. Suffering from diabetes and high blood pressure that inflamed her joints, Theresa Mary travelled to the capital Colombo for treatment at the National Hospital of Sri Lanka. Unable to find a ride for the last leg of her journey, she had to limp the last five kilometres on foot. She was discharged four days later, still finding it difficult to stand on her feet, because the dispensary had run out of subsidised painkillers. “Doctors asked me to buy medicines from a private pharmacy, but I don’t have money,” said Mary, 70. “My knees are still swollen. I don’t have a home in Colombo. I don’t know how long I have to walk.” The National Hospital normally caters to people all over the island nation in need of specialist treatment, but it now runs on reduced staff and many of its 3,400 beds are lying unused. Supplies of surgery equipment and life-saving drugs have been almost exhausted, while chronic petrol shortages have left both patients and doctors unable to travel for treatment. “Patients scheduled for surgeries are not reporting,” Dr Vasan Ratnasingham, a member of a government medical officers’ association, said. “Some medical staff work double shifts because others cannot report for duty. They have cars but no fuel.” Sri Lanka imports 85% of its medicines and medical equipment, along with raw materials to manufacture the remaining share of its needs. But the country is now bankrupt and a lack of foreign currency has left it unable to source enough petrol to keep the economy moving — and enough pharmaceuticals to treat its sick. “Normal painkillers, antibiotics and paediatric medicines are in extremely short supply. Other medicines have become up to four times expensive in the last three months,” said pharmacy owner K Mathiyalagan. Mathiyalagan said his colleagues had to reject three out of every 10 prescriptions because they lacked the means to fill them. “A lot of basic medicines are completely out of stock,” he added. “Doctors prescribe without knowing what is available in the pharmacies.” Health ministry officials declined to give details about the present state of Sri Lanka’s public health services, on which 90% of the population depends. But doctors working in government hospitals say they have been forced to curtail routine surgeries to prioritise life-threatening emergencies, and use less effective substitute medicines. “Sri Lanka’s once-strong healthcare system is now in jeopardy,” UN Resident Co-ordinator Hanaa Singer-Hamdy said in a statement. “The most vulnerable are facing the greatest impact.” The World Bank recently redirected development funds to help Sri Lanka pay for urgently needed medications, including anti-rabies vaccines. India, Bangladesh, Japan and other countries have helped with donations for the healthcare sector, while Sri Lankans living abroad have pitched in by sending home pharmaceuticals and medical equipment. But new President Ranil Wickremesinghe has warned that the country’s economic crisis was likely to continue to the end of next year, and Sri Lanka is staring at the prospect of an even worse public health crisis to come. Hyperinflation has driven food prices so high that many households are struggling to keep themselves fed. According to the World Food Programme, nearly 5mn people — 22% of the population — need food aid, with more than five out of every six families either skipping meals, eating less or buying lower-quality food. If the crisis drags on, “More infants will die, and malnutrition will be rampant in Sri Lanka,” Dr Vasan of the medical officers’ association said. “It will bring our healthcare system to the verge of collapse.”
* Sri Lankan ambassador: China should invest, import more * China one of Sri Lanka's two largest foreign creditors * Sri Lanka asking China for $4 billion financial aid Sri Lanka has asked China to help with trade, investment and tourism to help it grow sustainably, Colombo's envoy to Beijing said on Monday as it negotiates for an emergency $4 billion package to help it emerge from an economic meltdown. The island nation of 22 million people is suffering its worst economic crisis since independence in 1948 after running out of foreign reserves. Protesters angry about the shortages of fuel, food and medicine toppled the Rajapaksa ruling family. Ambassador Palitha Kohona's emphasis on China as a key to Sri Lanka's economic recovery reflects Beijing's status as one of Sri Lanka's two largest foreign creditors, along with Japan. China also holds some 10% of Sri Lanka's external debt, In an interview with Reuters at Sri Lanka's Beijing embassy, Kohona said Colombo wants China to ask its companies to buy more Sri Lankan black tea, sapphire, spices and garments and to make Chinese import rules more transparent and easier to navigate. He said Beijing could also help by pouring further investment into vast China-backed port projects in Colombo and Hambantota. Major Chinese investment plans had not materialised because of the Covid-19 pandemic, Kohona said. In addition, Sri Lanka would like to see more Chinese tourists, whose numbers fell from 265,000 in 2018 to almost zero after the 2019 suicide attacks and the pandemic. Kohona said new Sri Lankan President Ranil Wickremesinghe has plans to visit China to discuss cooperation on matters including trade, investment and tourism. Wickremesinghe is no stranger to China. A photo of him shaking hands with Chinese President Xi Jinping when he visited Beijing in 2016 as prime minister hangs in the hallway of the embassy where Reuters interviews Kohona. Kohona said he expects no fundamental change in the new government's policy towards China. He said he understands China is finding it hard to act quickly to help Sri Lanka now because as a major global creditor it is also financially exposed to many other countries in financial difficulty. "Maybe if it was only Sri Lanka, then the decision-making would’ve been much easier." For several months Sri Lanka had been in talks in China for a $4 billion aid package, consisting of a loan of $1 billion to repay a roughly equivalent amount of Chinese debt due this year. It is also asking for a $1.5 billion credit line to pay for Chinese imports. Kohona said these imports are mainly inputs needed by his country's lucrative garment industry such as buttons and zippers. Sri Lanka also hopes to persuade China to activate a $1.5 billion bilateral currency swap. Kohona said discussions on financial aid with China are still underway but no date for the next meeting has been set. The Chinese foreign ministry said this month that Beijing is willing to work with other countries and international financial institutions to "play a positive role" to help Sri Lanka. Beyond financial aid, Sri Lanka also hopes China can help it buy fuel, fertilizer and other urgently needed supplies. China pledged 500 million yuan ($74.09 million) of emergency support for Sri Lanka in April and May. "We need a lot more," Kohona said.
Sri Lanka's besieged presidential office will reopen on Monday, police said, days after anti-government demonstrators were flushed out in a military crackdown that triggered international condemnation. Widespread public anger over the island's unprecedented economic crisis saw protesters storm and occupy the colonial-era building earlier this month. Soldiers were forced to rescue then-president Gotabaya Rajapaksa from his nearby residence on the same day, with the leader fleeing to Singapore and resigning days later. Troops armed with batons and automatic weapons cleared the 92-year-old presidential secretariat in a pre-dawn raid Friday on the orders of Rajapaksa's successor, Ranil Wickremesinghe. At least 48 people were wounded and nine arrested in the operation, during which security forces tore down tents set up by protesters outside the complex since April. "The office is ready for reopening from Monday," said a police official Sunday, who declined to be named as he was not authorised to speak to the media. "The siege of the secretariat, which lasted since May 9, has now been lifted." Police said forensic experts had been called in to check damage to the Presidential Secretariat and gather evidence. Western governments, the UN and human rights groups have condemned Wickremesinghe for using violence against unarmed protesters who had announced their intention to vacate the site later on Friday. Wickremesinghe defended the crackdown and said he had told Colombo-based diplomats on Friday that blocking government buildings was unacceptable. Police spokesman Nihal Talduwa said protesters were free to continue their demonstrations at a designated site near the presidential office. "They can remain at the official protest site. The government may even open a few more places for demonstrators in the city," Talduwa said Sunday. The military operation to clear the secretariat building and its immediate surroundings came less than 24 hours after Wickremesinghe was sworn in and just before a new cabinet was appointed. - Burning fuel crisis - Sri Lanka's 22 million people have also endured months of lengthy blackouts, record inflation and shortages of food, fuel and petrol. Its government is officially bankrupt, having defaulted on its $51 billion foreign debt, and is currently in bailout talks with the International Monetary Fund. The economic crisis which fuelled the protest campaign shows no sign of easing, but the government announced Sunday it would reopen schools which had remained shut for the better part of a month. The education ministry said students and teachers will be asked to return to school only for three days each week as transport is still hampered by a national fuel shortage. Miles-long queues of motorists waiting to fill up were seen across the country Sunday despite the government introducing a rationing system. New president Wickremesinghe has said he will unveil a fresh budget for the rest of the year in August as previous revenue and expenditure estimates were unrealistic.