The president of Sri Lanka on Sunday asked China for the restructuring of its loans and access to preferential credit for imports of essential goods, as the island nation struggles in the throes of its worst economic crisis.
President Gotabaya Rajapaksa told visiting Chinese Foreign Minister Wang Yi that it would be "a great relief to the country if attention could be paid on restructuring the debt repayments as a solution to the economic crisis that has arisen in the face of the Covid-19 pandemic”, his office said.
Mr Rajapaksa asked Mr Wang for a concessionary credit facility for imports so that industries can run without disruption, the office said. He also requested assistance to enable Chinese tourists to travel to Sri Lanka within a secure bubble.
When you have your net external foreign assets have been in the red, that means you are technically bankrupt
Muttukrishna Sarvananthan,
principal researcher, Point Pedro Institute of Development
Mr Wang and Prime Minister Mahinda Rajapaksa, the president's brother, later visited Colombo’s Port City, a reclaimed island developed with Chinese investment, where they opened a promenade and inaugurated the sailing of 65 boats to commemorate the 65 years of diplomatic relations between the two countries.
In his speech at the Port City, Mr Wang said a persistent and unchecked pandemic has made economic recovery difficult and the two countries must take the anniversary of the diplomatic ties to work closer together.
He did not elaborate nor announce any relief measures.
Mr Wang arrived in Sri Lanka on Saturday from the Maldives on the last leg of a multinational trip that also took him to Eritrea, Kenya and the Comoros in East Africa.
Sri Lanka faces one of its worst economic crises, with foreign reserves down to about $1.6 billion, barely enough for a few weeks of imports. It also has foreign debt obligations exceeding $7bn in 2022, including repayment of bonds worth $500 million in January and $1bn in July.
The declining foreign reserves are partly blamed on infrastructure projects, which were built on loans and don’t provide adequate return on investments. China lent money to build a seaport and airport in the southern Hambantota district, in addition to a wide network of roads.
Central Bank figures show that current Chinese loans to Sri Lanka total around $3.38bn, not including loans to state-owned businesses, which are accounted for separately and thought to be substantial.
“Technically we can claim we are bankrupt now,” said Muttukrishna Sarvananthan, principal researcher at the Point Pedro Institute of Development. “When you have your net external foreign assets have been in the red, that means you are technically bankrupt.”
The situation has left households grappling with severe shortages. People wait in long lines to buy essential goods like milk powder, cooking gas and paraffin. Prices have increased sharply and the central bank says the inflation rate rose to 12.1 per cent by the end of December from 9.9 per cent in November. Food inflation increased to over 22 per cent in the same period.
Because of a currency shortage, importers are unable to clear their cargo containing essentials and manufactures are not able to buy raw materials from overseas.
Expatriate remittances have also fallen after the government ordered the mandatory conversion of foreign currency and exchange rate controls.
Ratings agency downgrades have resulted in Sri Lanka losing much of its borrowing power. In December, Fitch Ratings noted an increased probability of credit default.
The central bank has added a currency swap in Chinese currency worth $1.5bn to the reserves, but economists disagree whether it can be part of foreign reserves.
Mr Wang's visit has again highlighted the regional power struggle between China and India, Sri Lanka’s closest neighbour that considers the island part of its domain.
Before Mr Wang spoke with Sri Lankan leaders, the top Indian diplomat in the country on Sunday morning inaugurated a train service from a station near Colombo to the north using compartments provided through an Indian loan.
The Indian embassy quoted Vinod Jacob as saying “the priority placed by Indian Prime Minister Narendra Modi on ties with Sri Lanka in line with the ‘Neighbourhood First’ policy'”.
He said that a recent statement by India's External Affairs Minister S Jaishankar that India would support Sri Lanka in difficult times was an affirmation of that policy in the current context.
“We can see Sri Lanka being saddled between India and China for a potential bailout package,” said political analyst Ranga Kalansooriya.
Dhadak
Director: Shashank Khaitan
Starring: Janhvi Kapoor, Ishaan Khattar, Ashutosh Rana
Stars: 3
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
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Day 3 stumps
New Zealand 153 & 249
Pakistan 227 & 37-0 (target 176)
Pakistan require another 139 runs with 10 wickets remaining
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
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Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
Lexus LX700h specs
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Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
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TV:
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If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.
Greed
Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.
Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.
Fear
The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.
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Hope
While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.
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Frustration
Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.
Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.
Boredom
Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.
Tip: Open an online demo account and get your thrills without risking real money.
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4,872 matches
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76 nations
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Company profile
Name: Infinite8
Based: Dubai
Launch year: 2017
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Sector: Online gaming industry
Funding: $1.2m from a UAE angel investor
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
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Install an air filter in your home.
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Shower or bath after being outside.
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Stay indoors when conditions are particularly poor.
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Engine: Long-range single or dual motor with 200kW or 400kW battery
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Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
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Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
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