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RW Govt.’s debt restructuring formula to bilateral creditors in Sept. amidst Chinese ship drama

RW Govt.’s debt restructuring formula to bilateral creditors in Sept. amidst Chinese ship drama

20 Aug 2023 | By Capt. Vasabha

  • Govt. to focus on finalising debt restructuring formula, says China’s need for name change later
  • China’s Shi Yan 6 seeks to visit Sri Lanka, conduct seismic surveys; Govt. yet to grant approval
  • RW proposes new mechanism for MPs to actively participate in LGs, mechanism in one month
  • Presidential Polls being looked at for end of next year; Govt. has no plan for polls soon, says GL
  • SJB starts talks with Dullas and Co. on joining an SJB-led alliance; Dullas group non-committal
  • Group of SJBers ready to support RW at polls if Sajith named PM; first endorse RW, says UNP
  • SLPPers split over support to RW Govt.; Basil takes charge, sends messages against dissidents
  • Three SLPP ministers supporting RW told by SLPP Headquarters to do the work or be replaced
  • UNP’s new constitution gives more decision-making powers to members, key verdicts by Ex-Co
  • Colombage’s image with Taliban members creates a stir; have not recognised Taliban, says Govt.

President Ranil Wickremesinghe is currently in the process of preparing the debt restructuring formula to be presented to bilateral creditors. The formula is being prepared in line with the discussions carried out with the consortium of Sri Lanka’s bilateral creditors led by the Paris Club.

It is learnt that the Government will be presenting the proposed debt restructuring formula to the bilateral creditors, including China, next month (September).

While there have been reports that China was not in agreement with the use of the word debt ‘restructuring’ as a key component of Sri Lanka’s economic recovery, messages communicated to the Sri Lankan Government from Prime Minister Dinesh Gunawardena during his visit to China last week have indicated that China is positive on its stance on assisting Sri Lanka overcome the current crisis.

Highly-placed Government sources said that the Government would proceed with the preparation of the proposed debt restructuring formula to be presented to bilateral creditors, including China, and would present it to them next month. “The name we call the mechanism is secondary; our main focus is to ensure that all creditors agree to the proposed formula,” the source added.

During Gunawardena’s visit to China, Communist Party of China (CPC) Central Committee Office of the Foreign Affairs Commission Director Wang Yi had vowed that China would help Sri Lanka effectively address the challenges of financial debt.

Wang, who is also a member of the Political Bureau of the CPC Central Committee, had made the remarks during a meeting with Gunawardena on the sidelines of the seventh China-South Asian Expo in Kunming, southwest China’s Yunnan Province on Wednesday (16).

Wang had vowed that China would help Sri Lanka improve its capacity for independent development, get rid of the “poverty trap” and the “trap of non-development,” and accelerate its industrialisation process and agricultural modernisation.

He had further expressed belief that Sri Lanka would overcome its temporary difficulties, find a development path in line with its national conditions, and realise revitalisation and prosperity.

Meanwhile, the Government is also preparing and laying the groundwork for the team from the International Monetary Fund (IMF) expected in the country next month to conduct the first review of the fund’s $ 2.9 billion Extended Fund Facility (EFF).

State Finance Minister Ranjith Siyambalapitiya has said the Government had to fulfil nine pre-conditions, which had been carried out successfully.

Meanwhile, State Finance Minister Shehan Semasinghe had noted that Sri Lanka was in a prime position to shift from stabilisation to growth from 2024 onwards, which would enable a disbursement of approximately $ 330 million.

“The funding will play a significant role in supporting the economic reforms and initiatives outlined in the EFF programme,” Semasinghe said.


Chinese vessel drama


Nevertheless, Sri Lanka is once again in the midst of another geopolitical drama over the impending visit to Sri Lanka by a Chinese geophysical and seismic survey ship – the Shi Yan 6 – in October.

This resulted in Sri Lanka’s port access becoming the subject of discussions amongst diplomatic circles this past week, with the pending visit by yet another Chinese vessel. 

The Chinese People’s Liberation Navy warship, Hai Yang 24 Hao, had docked at the Colombo Port recently. While concerns had been raised about the arrival, Government officials were quick to quash concerns. 

Highly-placed sources have indicated that the Sri Lankan authorities had placed several restrictions on the movement of the vessel while in Sri Lankan waters. 

However, concerns have been raised over the pending visit of Shi Yan 6, which has requested a call at port in the latter half of October. Requests, it is learnt, have also been made for the vessel to conduct some survey work during its visit to Sri Lanka.

Accordingly, no approval has yet been granted for this vessel. 

Highly-placed sources have indicated that discussions are still underway with relevant officials to determine whether or not permission will be granted.

News of the impending visit of the Shi Yan 6 and its request to conduct certain surveys are being closely monitored by neighbouring India. It is learnt that India has raised concerns over the impending visit of the Chinese vessel.

Be that as it may, the Wickremesinghe Government’s foreign policy will once again be put to the test at a crucial time since both India and China are playing a key role in finalising Sri Lanka’s bilateral debt restructuring programme.


Dullas and Sajith


While the Government continues to grapple with the country’s economic recovery programme and resolving geopolitical issues, the Opposition parties in Parliament seem to be engaged in a battle for supremacy of their own.

The battle now is to wrest control over the Opposition parties and initiate the formation of the next political alliance.

It is in such a backdrop that the Opposition in Parliament is currently facing a clash between Opposition and Samagi Jana Balawegaya (SJB) Leader Sajith Premadasa and Freedom People’s Council (FPC) Co-Leader Dullas Alahapperuma, with the latter having initiated a programme to hold discussions and form a common platform among Opposition political parties based on several key areas.

Alahapperuma’s move has undermined the joint Opposition coalition that was formed a few months back under Premadasa’s leadership.

However, the SJB had initiated a discussion with the FPC to explore the possibility of the group joining the broad political alliance being formed by the SJB under Premadasa’s leadership. The SJB Working Committee has already declared that Premadasa will be the party’s candidate at the next Presidential Election.

However, it is no secret that Alahapperuma, backed by his FPC, is also looking at leading a broad political coalition at the next Presidential Election.


Divided over RW


Meanwhile, the SJB is also facing an internal division over the path the party should take to prepare for the next key elections.

A group of SJBers, it is learnt, had initiated a discussion with Government members, including President Wickremesinghe, on their support for him at the next Presidential Election.

A group of SJB MPs had conveyed to President Wickremesinghe their willingness to support him at the polls under the condition that SJB Leader Premadasa would be appointed as the prime minister.

However, SJB MP Dr. Rajitha Senaratne had told the media last week that there was no need for a new agreement between Wickremesinghe and Premadasa as it was obvious that Wickremesinghe would appoint Premadasa as the prime minister if a General Election or a Presidential Election was held.

Also, SJB MP Rohini Kaviratne, when asked by a journalist recently to compare Premadasa with Wickremesinghe, had responded by saying that both leaders were like her two eyes.

Kaviratne had expressed the need for Premadasa and Wickremesinghe to unite as it was the wish of the people.

She had told the media on Tuesday (15) that all party leaders should unite at this moment under a national programme for the next 25 years. She had further noted that it was a national requirement for Wickremesinghe and Premadasa to unite and embark on a journey for the country’s future.


SLPP also divided


Meanwhile, the ruling Sri Lanka Podujana Peramuna (SLPP) continues to be divided over the party’s support for Wickremesinghe.

The issue, which has been erupting time and again even on public platforms, was last week made out to be a challenge by dissident SLPP MP Nimal Lanza. The MP has called the SLPP to reach a unanimous decision on the party’s candidate at the next Presidential Election.

He had also claimed that some party members were trying to mislead other party members by speaking of a presidential candidate with a three letter name when there was no consensus within the party to field such a candidate at the next Presidential Poll.

A group of young SLPPers in the Government and their supporters continue to express support to Wickremesinghe.


Onus on Sajith


However, the United National Party (UNP) has maintained that if Opposition and SJB Leader Premadasa wanted to take the premiership under President Wickremesinghe after a future Presidential Election, he (Premadasa) should support the President first to get elected as the president again with his team.

UNP General Secretary Palitha Range Bandara had claimed that all the doors of the UNP were open for anyone who was willing to support the ‘unstoppable victory’ of Wickremesinghe, but not for political opportunists. 

He had also said that even though there was a party called the SJB, almost all its members were UNPers and that, therefore, he did not see a problem in working together for the victory of the UNP in an election. 

However, Bandara had noted that if anyone wanted to be the prime minister under a Wickremesinghe government, he/she should endorse him (Wickremesinghe) in a Presidential Election. 

He had further claimed that the SJB had refused several invitations made by the President asking them to support him, but that most of its parliamentarians would support the President in the future. 

According to the UNP General Secretary, even if Wickremesinghe were to become the president again, it was necessary that either the incumbent Cabinet should resign or the Parliament should be dissolved in order to appoint a new premier. 


UNP’s new constitution


Meanwhile, the UNP Working Committee met last week for the second time in two weeks. 

The party, which was decimated at the last election, has seen a scurry of activity with the electorate Balamandalas being organised all over the country. With over 140 Balamandalas having been convened, the UNP is now preparing for its annual convention.

On this occasion it is expected that the party will adopt a new constitution, which will see greater decision-making powers handed to the members. 

One key proposal that was presented at last week’s Working Committee meeting was that the nomination of the party leader and other key positions including presidential candidates be decided by the Executive Committee. 

This committee will be an enlarged decision-making body, including the Working Committee, sitting MPs, and representatives of the Provincial Councils and Local Government Councils, along with trade unions of the party. Previously these decisions were taken by the Working Committee and approved at the National Convention.

While on the topic of party leader, President Wickremesinghe, who was chairing the meeting in his capacity as Leader of the UNP, had remarked that the party could propose a new leader for the party. The suggestion had been turned down by the members, with several stating that the current leader saw the party re-emerge from a single seat in Parliament to now holding the presidency of the country. However, it does appear the UNP is preparing to expand the decision-making within the party, with the members being given a greater role in decision-making.

It has also emerged in the last few weeks that the UNP will be using its convention, which will be held on 10 September, to launch the second phase of the party’s resurgence campaign. Accordingly, work programmes are being devised for the electorates with an eye on a potential General Election next year, following the Presidential Election.

While the UNP senior members have made it clear that Wickremesinghe will be their presidential candidate in 2024, it remains to be seen whether he will contest under the elephant symbol or a common symbol. Several UNPers have intimated that they are prepared to see him contest under a common symbol, but the UNP must play a key role in his re-election campaign. A victory for a UNP-led Wickremesinghe presidency bid will certainly go a long way in seeing a return of the UNP to parliamentary politics. 

The President has also indicated to members of his inner circle that several senior UNPers in the Presidential Secretariat will have to have their daily tasks reduced to allow for a greater focus to be given to the upcoming election year. 


Dayasiri’s prediction


Meanwhile, with continued talks on impending elections, Sri Lanka Freedom Party (SLFP) General Secretary Dayasiri Jayasekara has predicted political crossovers in the coming months.

According to Jayasekara, a number of political crossovers are very likely in the event of an election taking place.

He has further cast doubts on whether the country had honest politics and said he was saddened by the situation.

Jayasekara has added that a lot has to be done for the SLFP and not for gaining ministerial portfolios.


Basil takes charge


As Jayasekara made predictions about political crossovers, the brewing crisis within the ruling SLPP following moves by a group of dissident SLPP parliamentarians to form a separate political alliance continues to be a sore point for senior SLPPers, especially SLPP National Organiser Basil Rajapaksa.

The actions of dissident MP Lanza to form an alternative political alliance with more breakaways from the SLPP have irked Basil. Although Basil had remained calm when a group of dissident SLPPers had opened a political office in Rajagiriya, the ability of this group to muster the support of more SLPP MPs has troubled Basil.

It is learnt that Basil has now commenced a campaign to send messages to the SLPPers approached by the dissident group, asking them not to be misled by the likes of Lanza. The SLPP’s Piyankara Jayaratne had received once such message through a third party that he would be vested with more responsibilities in the party and that he should not join Lanza’s alliance. 

Meanwhile, Basil had also got the party to inform three SLPP ministers in the Government, who are seen as loyalists of President Wickremesinghe, to immediately complete the party’s reforms programme being carried out at electoral levels in the districts.

It is learnt that these three ministers had not been able to complete the electoral meetings scheduled in their respective districts due to their work in the Government. The SLPP Headquarters had informed these three ministers that the party would hand over the duties in the districts currently vested with them to others if they failed to complete the electoral meetings as soon as possible. 

The three ministers had reportedly met with Basil separately and expressed their loyalty to the party and commitment to conducting the party’s reforms process.


SLPP objections


Meanwhile, a group of SLPPers are currently on the warpath with President Wickremesinghe over the Government’s latest social welfare scheme – Aswesuma.

SLPP Parliamentarian Jagath Kumara, who has been at the forefront of the objections being raised against the Aswesuma scheme, has claimed that the Government had promoted the scheme with much vigour, but the results of the proposed scheme had fallen far short of expectations.

The legislator had told the media last week that there was still much confusion over the Aswesuma scheme. He had also warned that the new Aswesuma scheme had also placed the Samurdhi scheme at risk.

Jagath Kumara and a group of SLPP MPs had recently signed and handed over a letter to President Wickremesinghe outlining the issues in the Aswesuma scheme and urging the President to intervene to resolve the issues. While the President has not responded to the contents of the letter yet, the SLPP MPs have said they are still waiting for clarity on the proposed solutions.


RW meets SLPP


Meanwhile, President Wickremesinghe on Friday (18) met with former Local Government members of the SLPP. The meeting was also attended by SLPPers who had handed in nominations to contest at the delayed Local Government Elections.

SLPP General Secretary Sagara Kariyawasam has said that the meeting was aimed at discussing the issues faced by the party’s Local Government members and those who had handed in nominations due to the delay in holding polls.

The SLPP has been pushing for the holding of Local Government Elections as part of the political strategy drawn out by Basil. It is Basil’s belief that holding the Local Government Elections first will help the people let out their anger and frustrations with the SLPP and the party can thereafter commence its proper party rebuilding programme.


MPs for LGs


Prior to meeting with the SLPP Local Government members, the President on Thursday (17) held a meeting with provincial governors and district secretaries at the Presidential Secretariat. 

During the discussion, the President had proposed a new mechanism that would include parliamentarians in the operations of the currently-defunct Local Government bodies. Wickremesinghe had pointed out that since the current Parliament would be functional until the end of next year, a mechanism should be put in place where legislators could actively get involved in the operations of the defunct Local Government bodies.

The President had further noted that a special consultative committee could be appointed to ensure the smooth cooperation between provincial governors and parliamentarians. He had added that even Opposition parliamentarians could be part of the mechanism.

The President had directed the governors and the district secretaries to discuss and formulate a working mechanism within a month and present it to him.


Delaying polls


Meanwhile, the holding of two delayed elections – Local Government and Provincial Council Elections – and the next Presidential Election continues to dominate the discourse within Opposition political parties.

While discussions are underway on the likely date of a Presidential Election, all signs point towards one being held in the latter half of 2024. 

Sources within the Presidential Secretariat have also indicated that a resolution in Parliament calling for an early Presidential Election may be required.

However, dissident SLPP MP and FPC Co-Leader G.L. Peiris has said that the Presidential Election was unlikely to take place on time, while Government politicians insist on holding the Local Government Polls before the implementation of the 13th Amendment to the Constitution.

He had told the media on Monday (14) that the President’s most recent speech in Parliament indicated a plan to put off holding elections. He had noted that the people were in abject poverty as there were several governments within the present administration.


SLPP on 13A


Last week also marked the deadline given by President Wickremesinghe for political parties represented in Parliament to submit their proposals on the implementation of the 13th Amendment to the Constitution.

The SLPP has maintained that it is not the right time to fully implement the 13th Amendment. SLPP General Secretary Kariyawasam has said that the Government should not look at implementing the controversial piece of legislation at the present time.

Kariyawasam had observed that it was the stance of the SLPP as well as the party’s Leader, former President Mahinda Rajapaksa (MR). 

The SLPP has further expressed disappointment in the President for not holding the delayed Provincial Council Elections. According to Kariyawasam, Wickremesinghe talks very enthusiastically about the full implementation of the 13th Amendment, but does not express any opinion about holding the Provincial Council Elections.

The SLPP General Secretary had told the media that there had been a lot of talk about the implementation of land and Police powers in the 13th Amendment to the Constitution, but there were currently no public representatives in the Provincial Councils, which was a basic feature introduced through the same amendment.

“The Provincial Councils have not been abolished, but the system of electing people’s representatives for them has been abolished. Therefore, the Provincial Councils are currently governed by governors appointed by the President. In such a situation, the objectives of establishing the Provincial Councils will not be fulfilled. What is the use of the Provincial Councils established for power sharing if they are directly or indirectly governed by the President?” Kariyawasam had queried.


SLPP’s double standards


Meanwhile, dissident SLPP MP Lanza has called out the double standards held by the party on the issue of power devolution under the 13th Amendment.

Lanza stated last week that the SLPP did not have an ethical right to oppose power devolution since Party Leader MR had expressed willingness to go beyond the 13th Amendment.

Therefore, Lanza has claimed that SLPP General Secretary Kariyawasam has adopted a double standard by opposing the devolution of power.


SJB urges PC Polls


The main Opposition SJB meanwhile has claimed that despite other current issues requiring more attention, President Wickremesinghe and his Government are prioritising the implementation of the 13th Amendment with the underhanded purpose of obtaining the votes of minority communities in an upcoming election.

SJB National Organiser and Parliamentarian Tissa Attanayake had claimed that the Government was neglecting the responsibility of stabilising the country’s economy and was working to implement the 13th Amendment and thereby attempting to mislead the people at the upcoming elections. 

He had said that before implementing the 13th Amendment, the Provincial Council Elections, which had been suspended when the current President was the Prime Minister, should be held, and that until that was done, neither he (Wickremesinghe) nor the current Government had the moral right to talk about the devolution of power to the Northern and Eastern Provinces.

“We, the SJB, are not against the implementation of the 13th Amendment. But, we say that this is not a matter that should be given priority to be completed urgently. If the Government has a real desire to devolve power, it should make the Provincial Councils functional. This interim Government was appointed to recover the fallen economy. That is the main task of the Government. The Government is now going to forget what it was appointed for and is implementing the political agenda targeting the elections.”

Meanwhile, Premadasa has said last week that he agrees to the devolution of power within a unitary Sri Lanka. He had made this observation during a speech at a meeting of Buddhist monks in Galle.

Premadasa had said his stand with regard to the 13th Amendment had always remained unchanged. He had said his expectation was its implementation to devolve power within a unitary country.

Hopes for a unitary, sovereign country whose territorial integrity and political freedom are guaranteed are threatened today, the Opposition Leader had said.

He had added that unity, harmony, and integration of the nation were important for a unitary and sovereign country.

Premadasa had pledged to ensure equality of all citizens to live with dignity and to uphold the foremost place given to Buddhism by the Constitution while protecting other religions and communities.


Controversial image


Meanwhile, the Government last week faced another issue over images of the recent meeting between Sri Lanka’s Ambassador to Indonesia Adm. J. Colombage and representatives of the Taliban.

When this issue was raised with the Foreign Ministry, it was learnt that the meeting had been accepted without approval from the ministry. 

Highly-placed sources have indicated that the Government has assured several diplomats that the Government has in fact not chosen to recognise the Taliban and had no plans to alter its policy.


Briefing diplomats


The ministry had meanwhile on Wednesday (16) briefed the diplomatic corps on the reconciliation efforts of the Government.

Foreign Minister Ali Sabry and Foreign Secretary Aruni Wijewardane briefed the diplomats at the Foreign Ministry. The Foreign Ministry said that the diplomats were briefed on the current developments in the country.

Heads of domestic institutions dealing with reconciliation had also attended the discussion and briefed the diplomats on their ongoing work.



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