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IMF loan depends on decisions of India & China?

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It is reported that the International Monetary Fund (IMF) has already informed Sri Lanka that it cannot release the $2.9 billion loan to Sri Lanka without restructuring previous debt with China and India, two of Sri Lanka’s main creditors.

In the meantime, it is reported that China and India have called to sign two Free Trade Agreements (FTAs) with Sri Lanka before restructuring the debts.

Sources say that during an initial exchange of views with China, Sri Lanka has been informed that a FTA should be signed before restructuring the debt. Noting that a similar agreement has been signed with India in 1998, China is of the opinion that an equal opportunity is only fair.

Meanwhile, sources add that India has also informed Sri Lanka that the Economic and Technology Cooperation Agreement (ETCA) agreement, which would ensure Indian investments and service supply ventures being exempted from taxes, should be finalized before the debt restructuring talks.

It is learnt that neither China or India will participate in debt restructuring talks until these two pacts are finalized, which will in return, lead to a delay in the IMF loans.

Fabrication

Upon contacting the Chinese embassy in this regard, an embassy spokesman rejected the report as “a mere fabrication.”

Speaking to ‘Sri Lanka Mirror’, he said that “the ministries of Finance from China and Sri Lanka as well as the relevant financial institutes have been maintaining good communication.”

“Very recently, President Ranil Wickremesinghe, in his capacity as Financial Minister, had a virtual meeting with Chinese Minister of Finance Liu Kun. According to the PMD, the President had expressed his appreciation towards China and was optimistic on the process,” he further said.

Mutually beneficial

Meanwhile, informed official sources stated to ‘Sri Lanka Mirror’ that the ETCA, which paves way for stronger economic partnership between India and Sri Lanka, has been a matter under discussion between the two countries for several years now. 11 rounds of negotiations took place between the two countries till 2018 and clearly ETCA is not something that really popped up just now.

“The existing FTA benefits  60% – 65% of Sri Lanka’s exporters to India as opposed to around 5% of India’s exporters to Sri Lanka. But just as the country’s economies are different and asymmetrical, some asymmetries may exist and this was already factored in when the FTA was signed. Similarly for ETCA, the two sides could sit together and work out the finer details for ensuring a mutually beneficial agreement,” the source added.

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ADB approves USD 100 mn. for Sri Lanka’s water sector reforms

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The Water Supply and Estate Infrastructure Development Ministry welcomed the approval of a USD 100 million policy-based loan from the Asian Development Bank (ADB) to support transformative reforms in Sri Lanka’s water supply and sanitation sector.

This programme aims to enhance the sector’s sustainability, climate resilience and efficiency, building on the Ministry’s efforts to ensure equitable access to clean water and improved infrastructure in response to climate change.

The ADB’s Water Supply and Sanitation Reform Programme includes two sub-programmes, designed to establish policies and strategies at the national level and to ensure the effective implementation of these reforms through the National Water Supply and Drainage Board (NWSDB).

These reforms target critical issues such as fragmented water resources management, inadequate climate adaptation and governance challenges.

The reforms introduced under this programme include the adoption of a Climate Change Resilience Roadmap, climate-resilient project appraisal frameworks, business efficiency action plans, a private sector participation framework, an investment framework and water safety plans.

The project will enhance the performance of the NWSDB and ensure equitable water allocation, gender-sensitive service delivery and long-term sustainability.

(dailymirror.lk)

(This story, originally published by dailymirror.lk has not been edited by SLM staff)

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No change in decision to support Sajith – Sumanthiran

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President’s Counsel M. A. Sumanthiran, representing the Ilangai Tamil Arasu Party (ITAK), has confirmed that the party’s decision to support Sajith Premadasa remains unchanged.

This statement comes amid calls from Mavei Senadhiraja and M. Sreedharan to reconsider the party’s stance.

Sumanthiran emphasized that the decision was made following proper procedures and has now been accepted by all party members.

“Mavei Senadhiraja and Sreedharan had stated that we should reconsider the decision taken by the party. But we have stated that there is no need to reconsider it. It is a decision taken by our party according to the proper method. Now both of them have accepted that. Therefore, they have accepted that the future work should be discussed again with Sajith Premadasa,” he said.

Regarding the possibility of dealing with Anura Kumara Dissanayake if he becomes president, Sumanthiran expressed readiness.

“Yes. We are ready for it. We worked together in the good governance government. Even if we are in the opposition when they come to power, there are many things to deal with them. Especially against fraud and corruption,” he stated.

(newsfirst.lk)

(Except for the headline, this story, originally published by newsfirst.lk has not been edited by SLM staff)

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Price of essential food items tripled since 2022 – Dr. Chandrasiri

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Director of Socio- Economics and Planning at the Department of Agriculture, Dr. Chamila Chandrasiri said there has been a threefold hike in prices of essential food items since 2022.

The Consumer Affairs Authority (CAA) released new price ranges of selected food items yesterday, impacting a wide array of products from staples like rice and sugar to vegetables and dairy products. The price of white sugar has almost doubled since 2021, increasing from 115 LKR/kg to 230-269 LKR/kg. Further, the price of white rice has climbed sharply from 175 LKR/kg to 184-210 LKR/kg.

According to the Department of Census and Statistics, cost of food in Sri Lanka increased 0.80 percent in August 2024 over the same month in the previous year, and food inflation has averaged 10.58 percent from 2009 until 2024.

Dr. Chandrasiri told the Daily Mirror that the surge in output prices is due to a rise in machinery and labor costs. “The Department of Agriculture has implemented long term programs to double rice and maize production and introduced technical packages for paddy cultivation to improve overall yields. We also believe in reducing rice imports and paving the road to self- sufficiency,” she said.

She explained that the stark increase in food prices comes in response to inflationary pressures, and the CAA has since stepped in to regulate price hikes on essential commodities such as rice. “It was only a few months ago that the price of carrots grew to 2000 Rupees, price stabilization in the market should be of utmost concern,” she said.

(dailymirror.lk)

(This story, originally published by dailymirror.lk has not been edited by SLM staff)

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