By Kumar David –
Prof. Kumar David
Moody’s Investor Service last week dropped Lanka’s sovereign rating from B2 to Caa1, a two-tier drop bypassing B3. rating on. Moody’s defines Caa as “speculative, of poor standing and subject to very high credit risk”. The corresponding Standard & Poor and Fitch rating is CCC, CC or C. Rating agencies have two-sided responsibility to investors and debtors but this double whammy is harsh. A one tier downgrade was unavoidable since long-term prospects for the economy are poor. Recent improvements (remittances rising to pre-COVID levels, sharp reduction in imports, fall in 2020 balance of payments deficit from a feared $8 billion to an expected $6 billion deficit, and enhanced activity in the domestic economy) though touted by the Finance Ministry seem to have been dismissed as short-term gains. Sadly, the medium-term outlook, especially the looming fiscal (budget) deficit and the employment picture remain bad. Not all Cabraal’s rantings could have deflected a one-tier downgrade to B3 but why a two-tier? [Late note: The outbreak of Community Transmitted Covid on a large scale in the last few days could devastate the economy but this cannot be discussed here today].
Three possible reasons are imputed. First, a Western foreign policy plot to pressure the government to distance itself from China. This we can discard; investment agencies don’t work like that. The second is fear that pending constitutional changes (20A etc) will destabilise the economy – rather than result in a strong regime that will rebuild it. On Sunday 3 Oct I floated the notion that Gota-Autocracy will be chaotic in decision making. I don’t know if Moody’s thinks likewise. Third, the most likely reason is that prospects for the economy are worse than even pessimists like I had anticipated. Let me explore one such item; inability to open for business with the world; failure to open Colombo airport is symbolic and a sign of deep trouble. Can you believe it the story now is about restarting tourism, not opening for business! Tourists will be quarantined for 14 days on arrival in groups of 10 to 50. It is intended to permit arrivals at Mattala only. “A tentative date for the opening of BIA cannot be given”, according to Chandrasiri, Airport Services Chairman. Visitors will be required to stay in designated hotels and movement permitted only as a group to limited destinations. Of course, there will be no takers but the worst is that imagined tourists, not professional and business travellers, have occupied the deranged minds of the planners.
Lanka spent $270 million to build the Mattala Rajapaksa Airport, which opened in 2013. Classified as the world’s emptiest airport and a vanity project, none of MR’s administrators, planners or engineers told the boss that he was going off the rails. Lankan officials are known unequivocal sycophants. The ghost airport is a shame which should make all who had a hand in it hang their heads. BIA Katunayake, the country’s only real airport is not be reopened, but fantasised post-Covid tourist traffic will be “attracted” to Mattala. Have the Health Authorities counselled that the salubrious air of Hambantota will shoo away the SARS-CoV-2 virus?
It is obnoxious and unwise that only Mattala is to be used and not Katunayake. Obnoxious since it is a desperate effort to save Mahinda’s face after a seven-year debacle. It is hoped that forced traffic at Mattala will make him look less foolish. That won’t work! The day BIA reopens nobody will use Mattala and the lie will be exposed. No tourist in his/her right mind wants to visit Sri Lanka for the sake of Hambantota. A few may seek the southern beaches and wildlife enthusiasts may spend two or three days in Yala, but the majority wish to visit the cultural triangle, Galle, the Upcountry and enjoy the beaches in the East Coast or between Hikkaduwa and Puttalam. Katunayake not Mattala is the gateway; the miserable traffic at Mattala in the last seven years is testimony to that. Arrive in Mattala, travel hundreds of miles to be quarantined and then do what! More important is that the frame of mind the authorities is screwed up. They have not even thought about reopening the country for businessmen and professionals. Rating agencies have surely sensed this dilettantism.
Decision makers in the three ministries are bumming the Prime Minister as their predecessors did in 2012-13. Concessions to be offered to airlines willing to fly to Mattala are: Full waiver of disembarkation and embarkation levy, discounts on ground handling, free-of-charge landing and take-off, fuel at discounted prices and discounts on air tickets for migrant workers who use Mattala. A sycophantic exertion by Ministry Secretaries to bum the boss. If is the calibre of our senior-most public servants and their bosses, why blame Moody’s?
leelagemalli / October 8, 2020
Moody s matters only to civilised folks, unfortunately srilanka is country where high criminals are in demand. They dont care much about any kind of international scales so long Rajapakshe biased Pachawahinis (Derana TV /Hitu TV ) telecast all blatant lies for the political survival s of criminals and their henchmen. The reason why COVID raised the head again in island nation is due to total ignorance and making every effort to score more by capitalising lower death rates in sl. They dont allow experts in the fields to improve the awareness of the danger of the viral infection. Self proclamations become headline news in main domain media within the country as was the case in Mugabe s Zimbabwe. Apita budu saranayi?????????????????????????
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leelagemalli / October 9, 2020
Dear Sinhala Man,
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Hope you are keeping well. Our COVID spokesman – former old boy royalist Ms SCPasqual obviously dissapeared for some known reasons these days.
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His big mouth may be lost since COVID infectons returned to the island nation hitting thousands sofar.
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Scruplouus rulers may have thought, COVID infections would not come back to the country again.
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These men played with the lives of gawky majority as everyone knows it today.
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Anyways, hope not the innocient would get caught by the virus in the days to come.
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I did not have the luck to read your comments all these days because I had been travelling to northern europe and retruned home last night.
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Momentous20 / October 8, 2020
A well deserved lashing for the incorrigible student. A more severe fare awaits the tutorial on 20th A. For habitual lack lustre performance, no further sympathetic treatment.
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rj1952 / October 8, 2020
Rohan. J has hit the nail on the head once again.
Sad shitty sorry Lanka is one of the best leading bankrupted beggars in the colony of world renowned paupers.
A rajapuka creation a masterpiece of corruption and vice.
A.
Cabral is an clown who is close to mahindapuka thanks to his homely wares.
He is a Kabal case useless good for nothing bullshitter.
All that comes out of his pores are garbage trying to please his master’s the rajapukas.
He had a big hand in the bond scam scandal among others and thanks to his sister’s matrimonial connections with the UNP he was able to roam freely around the Kota uda county.
B.
With the impending passage of the 20th amendment the democratic decent countries and lender s will scoot away from the guiles and wile’s of the Master bullshitting beggars colony.
C
The economy has ground to a roaring halt there’s no local cash or foreign exchange available to meet up with the day to day ? needs of the starving suffering people.
All that the rajapukas are interested in is setting up a f…..d up dictatorship with the help of the conniving swabasha general s in the paradise of the war criminal s.
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Mallaiyuran / October 8, 2020
They closed the viable Palai International Airport. They are throwing additional tax payers money to substantiate their white elephant projects. They are not ready to let it go with the money they so far have wasted. The end of this Air Port too seems to be going to fall into the hands of China. Not just this, even Colombo Trinco, KKS all will be free for China.
After 20A AG, CJ and Auditor General will be Rapist Army captains. That is what GLP implying in his CT’s last essay. I doubt Old King or Younger Brother Prince will be getting the PM job. That too would be going to a Rapist Army Commanders. It is not Communist China messed up like this. It is India and America. All what we can do is wait and see.
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Ad / October 8, 2020
Moody’s downgrading is justified. Not because of covid only but because of unnecessary exploitation to plunder from expatriate’s employers. Thereby the opportunity for re employment is lost. After doing the damage now calling for employment opportunities. Foreign principals are not fools to pay these fraudsters as loss of income is throughout the world. Clowns portray themselves as pundits.
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GATAM / October 8, 2020
SL’s economy is totally junk. If not for ethanol, heroin, cannabis, brothels, tobacco, illegal weapons and black money, the economy would be near zero. Give the island a break. Amicably split the island into two nations so that at least Tamils will have a better country in part of the island ruled by Tamils. They don’t deserve this which was done by Sinhala politicians.
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Eagle Eye / October 8, 2020
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Rajash / October 8, 2020
here is the link to rating table
https://en.wikipedia.org/wiki/Bond_credit_rating
they are now considering adding a new rating specially for sri lanka
zzzzz – gota uda
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SarathP / October 8, 2020
Finally, firing from the hip, Kumar correctly calls the rating “junk”. Thanks.
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As for the Covid outbreak, LankaeNews says that some workers/supervisors from a Brandix factory in India were flown to SL. The reason: the Indian factory could not fulfill an order for Jockey underwear, perhaps due to their Covid outbreak, and the SL Brandix factories didn’t have the knowhow to meet the requirements. The Indians were rushed to the factories without quarantining. Who gave permission? Brandix owners were big time donors to Gota’s campaign.
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Expect an outbreak at the Brandix factory in Seeduwa. The Indians also went there.
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a14455 / October 8, 2020
wow look at how happy this b a s terd is !!!.
News for you retard . most countries are also in shit.
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leelagemalli / October 9, 2020
a14455
What happened Rajapakshe virologist MsSCP, is she under your bed? ???????????
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Ari / October 9, 2020
You may not like the message, but that is no excuse to sling mud at the messenger!
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sonali / October 8, 2020
Global tourism, and its dependent subsidiary, global aviation, particularly discounted air travel, will take at least a decade to get back to pre Covid19 levels. Most developed and developing countries are now promoting internal tourism, giving monetary incentives and significant discounts to get their local tourism sectors going, as precursor to stimulate their local economies. For instance, this is the strategy in Australia, besides a number of western countries. In such a climate, expecting foreign tourist to come to Sri Lanka is expecting the cow to jump over the moon. Tourists will not risk foreign travel in such uncertain times, nor is the aviation industry eager to put planes in the air if they will be making a loss. Sri Lanka should look to restructure its economy and create jobs for the thousands who have lost them in tourism and other sectors. Returning Sri Lankans from the Middle East and elsewhere must swell jobless numbers. Coming colors no good, as we are prone to say. Looking to Mattala and tourism to pull the country out of the morass is a fantasy.
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Lasantha Pethiyagoda / October 8, 2020
Most cattle voters don’t know what Fitch or Moody’s are. So they can swig their cheap arrack and eat biryani until the bottom falls out from under their slippered feet..they will enjoy the shenanigans of performing clowns each evening on public TV and give their hurrahs until the crooks find another scapegoat like covid-19 or Easter bombers or Fallopian tube tying monsters..
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chiv / October 8, 2020
It was and it is (officially), JUNK now. To avoid embarrassment and crisis, govt used other funds to service immediate debt, and claimed it was done in advance. From now, Lanka will be running on a PONZI scheme, that is to “get debt to settle debt “, where politicians will get their bonuses in millions (from each transactions), until we reach bankruptcy. Voters were promised of splendor and prosperity, Good Luck. Keep waiting for your turn.
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Rajash / October 8, 2020
when the rating agencies heard that Cabraal is back ……they have no option but to down grade
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Good Sense / October 9, 2020
It is incorrect for me to speculate but I get the feeling that Sri Lanka now wishes to practise the 1970 – 1977 policies in the 21st Century style. Will it be done sensibly so that the economy and the living standards of the people be uplifted? A Million Dollar Question. Will it be another North Korea? We start wondering. But I have to tell in no uncertain terms that had SRP got elected instead of NGR as the President and a set of Telephonists holding the majority in Parliament the situation would be more or less the same. The only marked difference could have been that the deaths arising out of the first COVID wave could have been much higher under SRP than with NGR. As a nation we suffer the penalty of not having politicians who do not believe in Integrity, Excellence and Service
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Dinuk / October 9, 2020
Kumar: The landing strip at Colombo Airport Katunayake was up-graded for US bombers and war machine supplies to land a couple of year ago, after the MCC and SOFA was signed to supply Trincomallee port where US aircraft carriers would be stationed in the on going Hybrid Cold War on China and Asia in the Indian Ocean region (IOR).
As this did no happen as Lankan’s resisted the MCC and SOFA, the Easter Sunday carnage was organized by American Special Operations Forces (SOF) so that US marines could set up an IS Caliphate in the Eastern Province to Protect Christians and Trincomalee Harbour from Muslims!
Later, the US navy brought Covid-19 to the Lankan Navy which had the biggest infection cluster from Theodore Roosevelt aircraft carrier stationed in Guam at the time… So still the airport is closed.. This is the Back Story of Sri Lanka’s fake debt trap narrative.
Covid 19 is the BIG LIE that covers the Euro-American hybrid Cold War attack on Chin’s BRI and and the rise of Asia as the Economic Center of the World.
Covid-19 is a flu virus with HIV spliced in but pretty mild for populations with BCG vaccinations).
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Dinuk / October 9, 2020
However Covid 19 is a fear psychosis BIG LIE propaganda narrative also to boost Big Pharma (check out the Celebes who got Covid – Hollywoods Tom Hanks, Prince Charles, Trump, Amita and Ash Bachans in Bollywood – what a bloody fairy tale!!) that justifies closing all trade, transport and migration routes, to keep Euro-America as white as possible – too many coloured migrants comming from South America and Africa. US and EU are morally, intellectually and economically bankrupt and have trillions of dollars in debt. So lets cut to the chase and identify the global financial system as a fiat paper money castle with IMF, WB, ADB and rating agencies as the high-priests of FRAUD!
Lanka is a Wealth country, endowed with huge resources and anyone who fails to see this and buys the Euro-American narrative is intellectually challenged!
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sonali / October 10, 2020
Eminent global medical professionals, with years of study, experience, experiment and peer-reviewed published results, tell us there is a pandemic called Covid-19. Then we have people without O’ Levels telling us there is no Covid-19. Not too difficult to know who we must believe. There are commentators who should get a life.
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chiv / October 9, 2020
Prof, when govt claimed number one position, the rating agency placed Lanka in 6th from the bottom, in Covid control and safety for travel. The current out break explains why we were placed in the bottom. Our economy has contracted more than 6% this year, which places us only above India and Maldives,among SA countries. Where as Bangladesh and Bhutan are + 7%, Even Pakistan and Afghan are above us and in the positive side. To make things worse, world bank estimated 19% contraction in workers foreign remittance where as only 1.5 % was recorded up to now. Given the global economic climate, foreign employment is bound to get worse and things are looking much bleaker from now. Singapore has already started sending workers back in thousands. Where as Gulf countries are unable to do so due to travel restrictions. Same with South Korea and Japan. U.S has brought extreme restrictions in getting H1 visas from now on. Once the Covid recovery is in horizon is when the real economic burden will be felt.
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Thiagarajah Venugopal / October 9, 2020
Look for answers in the Suthenthiran paper or please call FP/ITAK/TNA party head quarters for the required assistance for miracle cure and is instant.
Merge the North and East and give police /land powers + 13th ++++++++ and give the throne to the FP and make Hon Sampnathar as the king and Hon CJ as the Tamil crusader. Move all the Tamils including the Indian Tamils and Muslims to North and East and move all the Sinhalese to the vacated spaces down South.
Build a wall/barbed wires/electrical fencing and landmine the entire length. Few nuclear weapons/missiles/UN boys and girls to patrol the length.
Northern waters for the Western and Indian military bases and the down south for the whoever.
Does not matter separatism/devolution and liberation for the people the project will be accomplished. Equality/Fairness/Justice/Economical miracle just as TULF explained to people just like Israel/Geo political planning all be accomplished overnight. Hopefully India will build the bridge to Jaffna for ease of operation and overflowing population growth can then fill the spaces whatever left after Southern Tamils move North.
If you guys want any expert advise from the TNA please let us know will do so for a fee.
For the entire Tamil Diapora children please let me know for the enlisting for the training camps in India will organise tq.
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Thiagarajah Venugopal / October 9, 2020
Just to set example would all the Tamil and Muslim MP’s sell all their properties and banking etc move to North and East permanently to their respective electorate. A room rented in the south or ask the GOSL to provide accommodation a room will be adequate for the parliament sessions attendance as you will not be needing this very soon once administration is set up North and East. Basically you will not be allowed back beyond the boarders. Sailing to India is not a problem from Jaffna cause.
Once you set that example all the Tamils around the world will return to Jaffna to Nation build by ships.Economical miracle starts here setting example to the world how to build a kingdom even during a pandemic and after a 40 year war that savaged all human life and dignity.
TNA should not even bother with elections as they will be too busy making welcome food for the entire returning Tamils home landing in Jaffna and KKS. No point in having opposition anyway as they will be killed anyway. Not to bother.
JVP can learn few tricks from their brethren TNA in how to topple the GOSL thereafter and remove the GOSL and armed forces and make a kingdom for themselves overnight.
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chiv / October 9, 2020
Venugopal, you sure seems to have an axe to grind. Time and energy seems to be on your side. Keep it going bro, unless and until you are exhausted.
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Rajash / October 9, 2020
Chiv – the guy is nuts
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Thiagarajah Venugopal / October 10, 2020
Dear Chiv
If people like us had an axe to to grind we would have taken-up arms a long time ago. The good news for the killers we did not then. Because we do not believe in devils advocacy nor taking someones right to live doesn’t matter what their believes are….the highlight here is not the GOSL nor the pandemic for the current scenario is the children who were abused and misused by a Mafia still allowed into the Parliament?? All that is wrong with our Nation is this TNA Mafia using the parliament as a court room drama to date for 70years……….
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Easton Scott / October 9, 2020
Just a thought……. what does it take to change Caa1 to Cabraal?
It’s the word “bra” something that that scummy cunny bogus smiley bastard probably wears to work.
Caa1 + bra = Cabraal
He is now a high falutin’ senior advisor to MaRa.
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Thanga / October 10, 2020
Sri Lanka is a corrupt country where nothing moves without oiling the palms of MPs, Councillors, bureaucrats etc. Unfortunately, the rulers don’t set an example to others. They eat at the parliament cafeteria, a meal worth Rs,1,000 for one-fourth of the price. Though out of office, some of them still manage to keep their rent-free houses and vehicles. Gotabaya Rajapaksa when he was the Defence Secretary got the Sri Lanka Land Reclamation and Development Corporation (SLRDC) to construct ‘D A Rajapaksa Mausoleum and Museum at Medamulana. This is a glaring case of using/misusing public resources for private purposes. The original estimate was Rs. 33.9 million but during construction, the cost ballooned to Rs.81.2 million. Only Rs.33.9 settled so far leaving a balance of Rs. 47.9 million. Can someone politely remind the President of the debt owed to Treasury?
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SAM PANDITHA / October 10, 2020
The Moody downgrade refers to also GOVERNANCE Issues.
The 20th amendment removes all sense of Governance. No auditing of PM, President offices and around 30 Govt institutions.
We are telling the world- WE ARE GOING TO ROB
Which investor would have faith in such a country
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Ajay / October 10, 2020
When the long-awaited Hitler finally arrives to take the nation to its glory … … the Chinese unleash the damn Corona … … and derail the guy. This is a conspiracy or what?
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