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Monday June 3rd, 2024

Japan to resume stalled projects in Sri Lanka, emphasizes on free, open Indo-Pacific

ECONOMYNEXT – Japan will resume stalled yen loan projects in Sri Lanka after the island nation formally enters a deal with its bilateral lenders while Tokyo will Colombo government to ensure a free and open Indo-Pacific, Japanese Foreign Minister Yoko Kamalkawa said.

Kamalkawa made the comments after meeting her Sri Lankan counterpart Ali Sabry in Colombo.

“The restoration of stability and economic development in Sri Lanka, which is at a strategic location in the Indian Ocean, is essential for the stability and prosperity of the entire Indo-Pacific region,” Kamalkawa told reporters in Colombo.

Kamalkawa said she had conveyed Japan’s expectation for the early signing of the MOUs between the Officials Creditor Committee (OCC) and Sri Lanka. Japan co-chairs the OCC.

“This stressed the importance of reaching a debt restructuring agreement with all the creditors in a transparent and comparable manner,” she said.

“I also conveyed Japan’s intention to further support Sri Lanka’s development by swiftly resuming existing yen loan projects once the MOU on debt restructuring is signed and the Sri Lankan government’s intention to swiftly conclude a bilateral agreement is confirmed.”

Diplomatic ties between Japan and Sri Lanka hit low after former president Gotabaya Rajapaksa unilaterally cancelled a $1.5 billion railway project.

Sri Lanka President Ranil Wickremesinghe when visited Japan in May last year apologized to the Japanese government for the unilateral cancellation of a Japan-funded $1.5 billion light rail transit (LRT) project.

LRT CANCELLATION 

The cancellation of the Japan International Cooperation Agency (JICA)-funded project was controversial in Sri Lanka after the government under then President Gotabaya Rajapaksa, which was closer to Beijing, unilaterally suspended the project as well as another $500 million tripartite deal to develop the Colombo Port’s Eastern Container Terminal (ETC) together with India.

Japan halted all its yen loan funded projects after Sri Lanka defaulted, as its lending agency is barred from increasing loans to a country in debt distress.

Japan has given grants to help over the crisis and facilitated discussions to speed up bilateral debt restructuring.

Japanese Foreign Minister did not say if the LRT project is also included in the raft of projects intended to be resumed soon after signing the MOU.

Sri Lanka defaulted on its external debt in April 2022, after printing money to cut rates and target ‘potential output’ (macro-economic policy) after the end of a civil war under a ‘flexible’ inflation targeting regime triggering serial currency crisis and a steady spike in foreign debt.

Gotabaya Rajapaksa’s 2020 tax cuts were added to record money printing to cut rates, in yet another attempt to push up growth after what state macro-economists claimed was a ‘persistent output gap’.

Wickremesinghe who is seen as a pro-Japanese leader has helped to rebuild the diplomatic ties with Japan in the last two years.

Foreign Minister Kamalkawa said emphasized the importance of various reforms undertaken by Sri Lanka for the re-normalization of the Sri Lankan economy.

“Furthermore, Japan and Sri Lanka are both island nations surrounded by sea. Japan intends to further strengthen cooperation with Sri Lanka in the maritime domain in order to realize a “Free and Open Indo-Pacific”, she said.

Japan plays a crucial role in the Quad, which is a quadrilateral Security Dialogue and a strategic forum involving the United States, Japan, Australia, and India amid concerns over Chinese breaches in the Indian Ocean.

Japan also plays a crucial role in the broader Indo-Pacific region due to its strategic location, economic power, and commitment to maintaining a free, open, and rules-based international order.

Kamalkawa said Japan will offer a vessel to Sri Lanka in the request from Sri Lanka equipped with sonar to be used for compiling data and charts. (Colombo/May 4/2024)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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