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ADB in Sri Lanka’s Debt Crisis

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The following article is based on the speech by the author as a Government of Asian Development Bank and President of Sri Lanka in their 55th Annual Meeting

It is my privilege to address you today, as the chair of the 55th Annual Meeting of the Asian Development Bank. Today, members of ADB have gathered in-person, after three years, here, in this dynamic city of Manila for the Second Stage of the ADB Annual Meeting. First of all, let me express my sincere appreciation to the Asian Development Bank (ADB) and the Government of Philippines for organizing this prestigious event. Amidst an unprecedented economic crisis that Sri Lanka is currently undergoing, we missed the opportunity to host the second stage of the Annual Meeting in Colombo. However, we are eagerly looking forward to welcoming you all in Colombo in the near future.

The ADB has made a very positive impact, which is being profoundly felt across the entire region. In 2021, the ADB committed $22.8 billion to members, and has mobilized an additional $12.9 billion in cofinancing through partnerships with other sources. The ADB’s Strategy 2030 seeks to respond to global challenges, including climate change and natural disasters, food and energy insecurity, whilst also embracing opportunities in the digital economy, sustainable energy, and leveraging technology for inclusive education and healthcare. Thus, the ADB has a crucial role in helping to shape and finance policies that improve people’s lives and livelihoods across Asia and the Pacific.

The supply chain shocks created by the COVID-19 pandemic is compounded with the prices of global commodities mainly food, fuel and fertilizer skyrocketing due to the Ukraine war. Higher food and energy prices are leading to stuttering the growth of middle class and has resulted in further insecurity amongst the vulnerable communities in the Indian Ocean region.

As a result of these shocks, there has been a spike in sovereign debt distress across emerging markets. The growth targets, both in East Asia and South Asia, have been revised downward. If this is not promptly addressed, it risks creating contagion of debt distress that threatens growth and financial stability across all economies. Countries with pre-existing economic vulnerabilities, including Sri Lanka, are the most affected. Therefore, creditors and debtor nations must work collectively in an equitable manner to ensure economic and financial stability across the region and indeed the world.

The developments on the global stage have further aggravated the self-inflicted economic crisis in Sri Lanka resulting in a political outburst that led to a change in Government. Today, we have stabilized the economy and many countries and stakeholders are keenly monitoring how we resolve this crisis. Many nations are keenly watching developments in Sri Lanka to see how we work with all stakeholders to resolve this crisis. We are well aware that the evolution of Sri Lanka’s economic crisis includes both domestic policy elements as well as external shocks. It follows that the resolution of the crisis also requires both domestic efforts and the support of external partners. It is incumbent upon Sri Lanka and our creditors and partners to set an example of how collaborative and good faith action can result in sustainable and equitable solutions to sovereign debt issues.

Towards this end, we have already undertaken major macroeconomic policy reform measures. I am pleased to inform you that we have now reached a Staff Level Agreement with the International Monetary Fund on a four-year program supported by the Extended Fund Facility. The programme is aligned with the commitment of the Government to implement an ambitious and comprehensive package of reforms that will help restore the sustainability of our public finances, addressing external imbalances, and restarting our growth engine through structural reforms and improvements in governance. Amidst major economic stress, Sri Lanka is undertaking an unprecedented fiscal effort as part of our commitment to restoring the country’s debt sustainability. It is our hope and expectation that Sri Lanka’s creditors, and all stakeholders, will support us in these efforts to restore our debt sustainability and help put the country back on the path of inclusive and sustainable economic growth.

Whilst Sri Lanka undertakes these deep and often painful reforms, we are experiencing rising unemployment and reduction in purchasing power of consumers. The Government is cognisant of the adverse impacts on the most vulnerable members of society. Accordingly, every effort has been taken to allocate greater financing and resources towards targeted support for social protection.

Asia has still to overcome the present global economic crisis. Unlike the financial crisis of 2008, in this instance, the economic levers alone are insufficient to stimulate global economic recovery. The factors underlining the main crisis is not only of economic origin but are also the consequences of evolving geopolitics. The result being the absence of cooperation amongst the G20 unlike the earlier crisis.

The Ukraine war on one side and the United States-People’s Republic of China rivalry, spurred on by military, trade and political differences, on the other side, are key contributors to this breakdown in cooperation. Added to this geopolitical rivalry are the droughts, floods and pandemic which are still present in Asia. All these challenges are compounded by the absence of global leadership – a time when the global economy is stuttering. As this global rivalry intensifies into a new cold war, which will determine a new global power balance by 2050, the inability of the major countries to give leadership to the mitigation of the global climate change crisis is becoming more apparent.

A Case for “Soft Demonetisation” Now in India

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Prime Minister Modi launched massive demonetization measures in 2016, which was praised by the pledged admirers of Modi and criticized by the sworn critics of Modi. In any case, after a few years now, the overall view towards the demonetization strategy has changed, with the consensus view emerging that the objective of the demonetization measures was positive and well-intentioned, though the strategy for implementation could have been better fine-tuned.

The principal objectives claimed for the then demonetization measure was to eradicate corruption, eliminate black money circulation and identify and remove the fake currency.  Of course, it was even then said that the demonetization exercise was the first step to eradicate corruption and it would be followed by several other measures.

Now, after around six years of demonetization exercise, it appears that the situation is back to square one.

According to present data, notes in circulation in terms of volume rose to 13053.3 crore pieces from 9026.6 crore pieces between the end of March 2016 and March 2022.  Similarly, the value of the currency in circulation went up to Rs. 31.05 lakh crore from Rs.16.41 lakh crore.

Further, it is also reported that the counter currency seized in the country between 2016 and 2020 surged to over 8.35 lakh from 2.81 lakh.  The value of fake notes seized went up to Rs. 92.17 crores from Rs. 15.92 crores. Obviously, the benefits of the demonetization measure achieved in 2016 have been effectively undone now, by a huge increase in the volume and value of currency circulation in the country.

In recent times, there has been much-repeated news appearing in the media about the enforcement directorate and Income tax department seizing large value of currency notes during raids, which on several occasions exceeded more than rupees one crore in several such raids.

The huge money in circulation is directly contributing to the generation of black money in the country and consequent hoarding of goods and properties as well as evasion of tax.  The large circulation of currency is also one reason for enabling corruption at many levels in transactions.

During the demonetization discussions, the government said that rapid digitalization would eliminate cash transactions and curb corruption to a significant extent. While digitalization has taken place, it is still at an insignificant level compared to the overall transactions in the country today.  Perhaps, large currency in circulation has become a disincentive for digital transactions.

The huge currency in circulation could also be a contributor to the price rise and inflation in the country to some extent.

It seems that the government has indiscriminately printed currency notes in the country in the last few years in the post-demonetization period, to provide cash subsidies to the vulnerable section of society during the COVID period. This strategy appears to be short-sighted and counterproductive, as is evident from the consequences leading to the present fiscal situation in the country.

To curb corruption and black money and fake currency, what is urgently required is that the currency in circulation should be brought down steadily to the level achieved during the demonetization period in the year 2016.

Obviously, if the Government of India were to choose to reduce the currency in circulation, it would be scary to use the term demonetization, as the term demonetization has become controversial and much misunderstood now.

The government can still do it by resorting to what can be termed as “soft demonetization”, by slowly and silently reducing the high-value currency notes in circulation and not replacing the damaged ones and at the same time increasing the low-value currency notes such as Rs. 10, Rs. 20 and Rs. 50.

Of course, this would lead to complaints about a shortage of currency circulation in the market but this would force people and organizations to go for digital transactions in an increasing way.  Less currency in circulation will not and need not have an adverse impact, as digitalization which has already become a byword in the country will elegantly keep the economy moving in a much cleaner way than at present.

With the present Aadhar linkage in bank transactions and a greater amount of digital transactions, there would be a positive impact on reducing corruption in the country as well as black money generation and fake currency circulation.

 In effect, the difference between the 2016 demonetization and the soft demonetization suggested now is that all currency would continue to be legal tender and with much less currency in circulation, leaving no scope for “political controversy”.

Sri Lankan Airlines Official Twitter Account Hacked – Seems like nobody wants to fix it

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One of the major AirLines in Sri Lanka well known as “Sri Lankan Airlines” – its official Twitter account has been hacked by a cryptocurrency organization. Currently, AirLine’s official verified account is being used to Tweet things related to Cryptocurrency. The official Twitter account of Sri Lankan Airlines has over 117 800 followers and has published over 9000 Tweets on its official account. Ever since the account’s vulnerability it has been losing followers lately, and more than 20 tweets have been published on AirLine’s official Twitter handle regarding info related to Crypto.

The researcher found this vulnerability on 28, September and had warned the relevant authorities regarding the risk which the account is facing. Eventually, the researcher managed to find direct contact with the Airlines IT Department.

“I reached out to them via the official email address of the Airline’s IT Department on Thursday 29, September. After informing the relevant section about the risk the account is facing, the IT department replied saying that, “The matter will be looked at closely”. However, on being aware of the incident no actions have been taken to recover the account back to normal” – the researcher said.

Crypto scammers are determined to gain access to Twitter accounts with a large scale of followers. To be verified on Twitter the account must be notable and active and the verification is mostly given to government sector accounts, news organizations and companies. When an account passes the verification process the account is tagged as an “Authentic Account” and a verification badge is given (Blue Tick). Crypto Hackers hijack verified social media handles to publish tweets related to Crypto-coins, Crypto membership programmes, Non Fungible Tokens (NFT’s) and more. When people get to see these Tweets from verified accounts they tend to purchase/invest and signup on Crypto platforms. This hijacking process will work as an investment for the Organization.

Twitter has the rights to remove the verification badge from an account and also the account to be terminated under following scenarios, in accordance with its “Twitter Terms of Services”.

  1. If the account name is changed – (Airline’s username changed)
  2. If the account is no longer in the position initially it got verified for – (Verified under government sector)
  3. If any misleading content is published on the account. – (Info related to Crypto has been published on Airline’s account)

Airline’s, official Twitter handle falls under all of the above scenarios and In accordance to Twitter’s “Terms of services”, the Airline’s official Twitter handle is on verge of being banned. However, if necessary and quick actions are taken, there is a high possibility to secure the account.

Letter to Editor

UK Pound Sinks, Heading to IMF Bailout

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Newly elected Prime Minister of the UK,  Liz Truss’s plan for growth, melding the biggest tax giveaway in half a century with Thatcherite deregulation, is a straight-up gamble with Britain’s future, and even before her chancellor of the exchequer had finished delivering it on Friday the bet was starting to sour, the Bloomberg has reported.

“The market’s verdict on the £220 billion policy blitz set out by Kwasi Kwarteng was swift and devastating. Sterling crashed below $1.11 for the first time since 1985, taking its slump for the year to date to 19%. Five-year gilts posted their biggest ever daily decline,” the report added.

Meanwhile, according to the reports in British media, Liz Truss’s 45bn pound tax cutting spree has set Britain on course for a bailout from the International Monetary Fund

“Nouriel Roubini, an economist who famously predicted the financial crisis, has warned that British investments are trading “like an emerging market” as he drew parallels with the economic chaos of the 1970s,” the Telegraph has reported.

“Mr Roubini said on Twitter that Britain is heading “back to the 1970s” and “eventually the need to go and beg for an IMF bailout” following huge tax cuts unveiled by Kwasi Kwarteng in his mini-Budget,” the report added.

The pound has hit an all-time low against the dollar after the bonanza of tax cuts and spending measures in Kwasi Kwarteng’s mini-budget threatened to undermine confidence in the UK.

The pound plunged nearly 5% at one point to $1.0327; it’s lowest since Britain went decimal in 1971, as belief in the UK’s economic management and assets evaporated.

Can The Metaverse Lead To Smart Flight Decks And Smart Airports?

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The metaverse is best understood as the shift of computing and interaction from a device in your pocket into a virtual simulation.” ~ Matthew Ball

The word “metaverse” has been with us for decades, first introduced as a platform of dystopia in a 1992 science fiction novel titled “Snow Crash” by Neal Stephenson. Yet, it eludes definition or full comprehension in many of us.  Some have gone to the extent of calling the Metaverse a “3D Internet”. At most, the Metaverse can be described as “ a virtual-reality space in which users can interact with a computer-generated environment and other users”.  When this definition is expanded it becomes “ a hypothetical iteration of the Internet as a single, universal and immersive virtual world that is facilitated by the use of virtual reality and augmented reality”. 

This new platform has already shown compelling results  in the world of surgery where successful surgery was performed in 2021 in the Johns Hopkins Hospital by neurosurgeons in augmented reality during live surgery

Virtual reality and augmented reality are terms that we are already familiar with. The difference between augmented reality and virtual reality (AR and VR)  is that, while AR takes digital information and transforms it to a 3D physical reality, obviating the burden of the cognitive load and is used in various commercial enterprises, VR takes physical reality into an environment that is computer generated and driven, thus making it an ideal application for entertainment purposes. The difference between the two is intrinsic in that AR gives us physical reality while VR gives us virtual reality. This is what makes AR valuable for the aviation industry. Porter and Heppelman go on to say: “At Boeing, AR training has had a dramatic impact on the productivity and quality of complex aircraft manufacturing procedures. In one Boeing study, AR was used to guide trainees through the 50 steps required to assemble an aircraft wing section involving 30 parts. With the help of AR, trainees completed the work in 35% less time than trainees using traditional 2-D drawings and documentation. And the number of trainees with little or no experience who could perform the operation correctly the first time increased by 90%”.

The combination of AR and VR would be significant to both the air transport and airport industries.  We could envision a combination of AR and VR being used to simulate weather patterns; cloud formation; and turbulence in a flight path which could alert the flight crew prior to taking off. The authors of System for synthetic vision and augmented reality in future flight decks (June 2000 Proceedings of SPIE – The International Society for Optical Engineering) say: “Rockwell Science Center is investigating novel human-computer interface techniques for enhancing the situational awareness in future flight decks. One aspect is to provide intuitive displays which provide vital information and spatial awareness by augmenting the real world with an overlay of relevant information registered to the real world. Such Augmented Reality (AR) techniques can be employed during bad weather scenarios to permit flying in Visual Flight Rules (VFR) in conditions which would normally require Instrumental Flight Rules (IFR). These systems could easily be implemented on heads-up displays (HUD)”. The new vision of the flight deck includes AR in weather information, surrounding air traffic and information on terrain.

In the airport industry, this has already become a reality.  In the airport world, this platform is called “The Digital Twin”.  As an example, Hong Kong International Airport can be cited which has its own Digital Twin, where airport staff use a live 3D simulation to plan and determine where passengers, gates and planes should be located and directed. The Digital Twin is also being used at Schiphol in Amsterdam, San Francisco International and Vancouver Airport.

The Digital Twin is a virtual replica of every aspect of airport operations and performance “to maximise efficiency and increase capacity in a more timely and cost-effective way”, as an article in the magazine Passenger Terminal World reports.  Its most effective purpose is to alert airports to anticipated problems on a 24-hour basis and flag operations staff at the airport so that they can obviate the threat and operational difficulty that could ensue. It also points to problem areas that could inconvenience and delay passenger flows, thus avoiding congestion.

Another useful purpose of the Digital Twin is that it can alleviate passenger stress.  An example cited is the airport and flight experience it offers before the actual experience, thus enabling passengers who are anxious to be more prepared when undergoing the actual experience.  One category that benefits from this platform is the autistic community.

The Digital Twin can also offer insights into the future.  For example, if an airport has an aspirational goal of net zero carbon emissions by 2030, it can model the aircraft and on-ground vehicle movements as well as other activities on the airfield.  These models can be applied to machine learning that can reflect the most efficient way an airport can be run.   Even in the planning process of an airport, the Digital Twin could offer the best iteration as Schiphol has done in the application of building information management software to generate a 3D digital version of physical and functional characteristics of an airport infrastructure.

Our physical world is three-dimensional. Even though we are far advanced in the digital age, most of our work is now being done on two-dimensional vision and application. Whether we look at a computer screen or smartphone we do not have the true picture until we translate the two-dimensional information we receive into three-dimensional practicality which is the real world. This process of translation imposes a load on our mental capacity requiring time to decipher practical reality. This demand on our brain is called “cognitive load”. AR greatly diminishes the demand on our cognitive load by converting the data obtained by two-dimensional methods images and animations that instantly gives us a picture of the real world. Michael Porter and James Heppelmann in their article Why Every Organization Needs an Augmented Reality Strategy published in the Harvard Business Review say: “[T]oday, most AR applications are delivered through mobile devices, but increasingly delivery will shift to hands-free wearables such as head-mounted displays or smart glasses”.

Sri Lanka: Trinco Port to Export Ilmenite after 30 years

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For the first time after 30 years, Sri Lanka will start exporting ilmenite from Trincomalee port. This ilmenite export to China will start today. Sri Lankan Ports Authority has announced that a ship loaded with Ilmenite will leave for China shortly.

“For the first time after thirty years, Trincomalee Port has worked to directly contribute to the country’s exports. This is a historic moment,” Saman Perera, Regional Manager of Port of Trincomalee which comes under the preview of Sri Lanka Ports Authority told the local media.

The following images were taken during the loading;

USA: Why Is the FR Collapsing the Economy?

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The Federal Reserve ( FR) has a long record of mistaken decisions.  Unless the Federal Reserve’s intent is to collapse the economy, the current policy of higher interest rates will go down as the most mistaken reading of the economy since the Great Depression.

Prices are rising sharply in Germany, UK, and Europe, but not because of an increase in money creation. They are rising because US Sanctions against Russia have reduced the supply of energy and disrupted transportation. Supply reductions have driven up prices of everything dependent on energy and transportation.

The US is not experiencing these problems to the same extent.  Energy prices have risen some because companies are taking advantage of the situation.

In the US higher prices are due to shortages resulting from the lockdowns that closed businesses and broke supply chains.  In America’s global world, problems abroad restrict supply here.  The point is that inflation is not monetary inflation. Therefore, the Federal Reserve’s policy of raising interest rates is nonsensical. Higher interest rates just add to costs, shrink supply, and mean higher prices.

If the Federal Reserve actually knows what it is doing, it is intentionally trying to cause an economic collapse, which makes me wonder if the Federal Reserve is in league with Klaus Schwab’s WEA plan to cause crises that can be used to establish a heavy-handed rule.

The latest news in the US, if not fabricated, is that consumer demand is collapsing.  Federal Express reports that its business is hurting because orders are declining. Merchants report that consumer traffic is off. The real estate market has been brought to a halt. It is mindless for the Federal Reserve to raise interest rates in the face of collapsing consumer demand.

So the real question is: what is the Federal Reserve really up to?

USAID signs new five-year agreement with Sri Lanka 

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Building on the USAID Administrator Samantha Powers’s recent visit, US Ambassador to Sri Lanka Julie Chung announced today that the United States, through USAID, will provide an additional estimated $65 million (more than 23 billion Sri Lankan rupees) in assistance to Sri Lanka over a five-year period. The assistance falls under the Development Objectives Assistance Agreement (DOAG) signed by Mr. Gabriel Grau, Mission Director for USAID Sri Lanka and Maldives and Mr. Mahinda Siriwardena, Secretary, Ministry of Finance, Economic Stabilization and National Policies.

This funding is in addition to over $60 million (21 billion Sri Lankan rupees) of new humanitarian and fertilizer assistance that Administrator Power announced last week in response to the current economic and political crises in Sri Lanka

In celebration of the start of this new bilateral agreement, Ambassador Julie Chung remarked, “The United States and the American people are proud of our enduring and robust partnership with the people and government of Sri Lanka. We remain fully committed to supporting locally led initiatives to advance a stable, prosperous, and peaceful Sri Lanka – critical to promote a free and open Indo-Pacific in which all nations are connected, prosperous, resilient, and secure,”

The U.S., through the U.S. Agency for International Development (USAID), is committed to supporting Sri Lanka to advance market-driven growth, environmental sustainability and resilience, and good governance. All USAID funding for Sri Lanka is provided as gifts or grants and is implemented by local and international organizations that adhere to strict monitoring standards.

The U.S. has provided more than $2 billion (approximately 720 billion Sri Lankan rupees) in development assistance to Sri Lanka since 1956.

Inhuman Electric Shock

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The price of electricity has risen astronomically in Europe over the last two years: by four times over the previous year and 10 times over the last two years. The European Union (EU) has claimed that this rise in prices is due to the increase in the price of gas in the international market and Russia not supplying enough gas. This raises the critical question: Why should, for example, the German electricity price rise four times when natural gas contributes around one-seventh of its electricity production? Why does the UK, which generates 40 percent of its electricity from renewables and nuclear plants, and produces half the natural gas it consumes, also see a steep rise in the price of electricity? All this talk of blaming Russia for the recent increase in gas prices masks the reality that the electricity generators are actually making astronomical windfall profits. The poorer consumers, already pushed to the wall by the pandemic, face a cruel dilemma: With electricity bills likely to make up 20-30 percent of their household budget during winter, should they buy food or keep their houses warm?

This steep rise in electricity prices is the other side of the story of the so-called market reforms in the electricity sector that have taken place over the last 30 years. The cost of electricity is pegged to the costliest supply to the grid in the daily and hourly auctions. Currently, this is natural gas, and that is why electricity prices are rising sharply even if gas is not the main source of electricity supply to the grid. This is market fundamentalism, or what the neoclassical economists call marginal utility theory. This was part of Augusto Pinochet’s electricity sector reformsthat he introduced in Chile during his military dictatorship there from 1973 to 1990. The guru of these Pinochet reforms was Milton Friedman, who was assisted by his Chicago Boys. The principle that electricity price should be based on its “marginal price” even became a part of Pinochet’s 1980 constitution in Chile. The Chilean reforms led to the privatization of the country’s electricity sector, which was the objective of initiating these reforms.

It was the Chilean model that Margaret Thatcher copied in the UK, which then the EU copied. The UK dismantled its Central Electricity Generating Board (CEGB) that ran its entire electricity infrastructure: generation, transmission, and bulk distribution. This move also helped the UK shift away from domestic coal for its thermal power plants, breaking the powerful coal miners’ union. These were also the Enron market ‘reforms’ in California, leading to the summer meltdown of its grid in 2000-2001.

The European Union banked heavily on natural gas as its preferred fuel to bring down its greenhouse gas emissions; it also ramped up renewables—solar and wind power—and phased out lignite and coal. The EU has imposed a series of sanctions on Russia, made public its plans to impose further sanctions on the country, and seized about 300 billion euros of Russia’s reserves lying in EU banks. The EU has also said that it will cut down on Russia’s oil and gas supplies. Not surprisingly, Russia has sharply reduced its gas supplies to the EU. If the West thought it could weaponize its financial power, why did it think that Russia would not retaliate by doing the same with its gas supplies to the EU?

Due to the Russian supplies of natural gas to Western Europe falling, the price of LNG has risen sharply in the international market. Worse, there is simply not enough LNG available in the market to replace the gas that Russia supplied to the EU through its pipelines.

With the price of gas rising by four to six times in the last few months, the price of electricity has also risen sharply. But as only a fraction of the electricity is powered by gas, all other sources of energy—wind, solar, nuclear, hydro, and even dirty coal-fired plants—are making a killing. It is only now that the EU and the UK are discussing how to address the burden of high electricity prices on consumers and the windfall profits made by the electricity generators during this period.

It is not only the EU and UK consumers who are badly hit. It is also the European and British industries. Stainless steel, fertilizer, glass making, aluminum, cement, and engineering industries are all sensitive to input costs. As a result, all these industries are at risk of shutting down in the EU and the UK.

Former Greek Finance Minister Yanis Varoufakis in his article “Time to Blow Up Electricity Markets” writes, “The European Union’s power sector is a good example of what market fundamentalism has done to electricity networks the world over… It’s time to wind down the simulated electricity markets.” The rest of the world would do well not to follow the EU’s example.

Why then is Indian Prime Minister Narendra Modi’s central government rushing into this abyss? Did it not learn from last year’s experience when, after a coal shortage, the prices in the electricity spot market went up to Rs 20 ($0.25) per unit before public outcry saw it capped at Rs 12 ($0.15)? So why push again for these bankrupt policies of market fundamentalism in the guise of electricity reforms? Who will benefit from these market reforms? Certainly, neither the consumers nor the Indian state governments, which bear the major burden of subsidizing electricity prices for their consumers.

This article was produced in partnership by Newsclick and Globetrotter.

Power Announces More Humanitarian Aids to Sri Lanka

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Today in Sri Lanka, Administrator Samantha Power announced an additional $20 million in humanitarian assistance to support Sri Lankans during the complex emergency that has resulted in a severe economic crisis leaving 5.7 million people in urgent need of food, agriculture, livelihood support, protection, and more, the United States Agency for International Development (USAID) said in a press communique.

“The United States is committed to getting the Sri Lankan people the critical humanitarian assistance they need to weather this crisis. We will continue to support the economy, which includes the resilience of small businesses, help strengthen institutions and civil society, and ensure that the most vulnerable have access to services,” it added.

The press communique further reads as follows;

The United States Agency for International Development (USAID) will invest the additional funds to provide emergency food and nutrition support to those most in need. This brings USAID’s total assistance to nearly $92 million since June to support the Sri Lankan people through this crisis. Our contributions provide meals for approximately 1.1 million school children for 60 days and ensure that impoverished lactating mothers receive the nutritious food they need, equip farmers with agricultural assistance and cash in order to increase food production in vulnerable communities, distribute cash assistance to enable hundreds of thousands of crisis-affected people to immediately meet their basic needs, and support public financial management reforms to facilitate Sri Lanka’s emergence from debt. Our humanitarian programming will also support disaster risk reduction, shelter, and agriculture and livelihood activities, including providing agricultural inputs to Sri Lankan farmers to strengthen the ability of vulnerable communities to prepare for and withstand impacts of the complex emergency and other potential new disaster shocks.

The two announcements made in Sri Lanka this weekend brings the total U.S. government assistance to Sri Lanka to nearly $240 million. On top of the USAID total contribution of $92 million, there is also $120 million from the U.S. Development Finance Corporation that will bolster the Sri Lankan economy, especially small and medium-sized enterprises and $27 million in grant technical assistance through the U.S. Department of Agriculture, which supports food security and economic growth by helping participating Sri Lankan dairy farmers double their milk production. This humanitarian and technical assistance is in addition to USAID’s ongoing development assistance in partnership with the government, the private sector, civil society, and the people of Sri Lanka.

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