June 1, 2022
Read this article in English | සිංහල | தமிழ்
Research by Umesh Moramudali Edited by Aisha Nazim Translated by Mohammed Fairooz & Nishadi Gunatilake
Yes. The Sri Lankan government suspended foreign debt repayments, except the repayments to multilateral agencies such as The World Bank, ADB, and IMF, on 12 April 2022. This is the first debt suspension by Sri Lankan government in the post-independent period and is commonly referred as country’s first sovereign default.
Sri Lanka’s default made global and local headlines again over the last week or two, as the country failed to make interest payment (often referred as coupon payment) for one of the International Sovereign Bonds (ISB) by its due date. The grace period for debt repayment ended on 18 May. As a standard practice, Fitch Ratings downgraded Sri Lanka’s ratings to Restrictive Default (RD) to reflect Sri Lanka’s failure to make the coupon payment.
Concurrent to these events, some media reported that Sri Lanka defaulted for the first time in its history in May. However, Sri Lanka announced its default in April. Failure to make ISB coupon payment did not have a significant impact, as Sri Lanka had already announced its sovereign default.
Some media interpreted this as Sri Lanka succumbing to a ‘hard default’ on 18 May. While the definition of the term ‘hard default’ is subjective, literature on economics refers to a hard default in instances where the debtor refuses to negotiate with creditors in good faith.
In Sri Lanka’s case, the country had clearly indicated its intention to negotiate with the creditors and restructure debt. Sri Lanka also selected financial and legal advisors for debt restructuring which is one of the initial steps of the debt restructuring process.
Therefore, Sri Lanka’s sovereign default cannot be categorized as a ‘hard default’
The right to protest is enshrined in the Sri Lankan constitution as one of the Fundamental Rights. Although the constitution does not make an explicit reference, Article 14 of the Constitution formulates the basis for the right to protest. According Article 14 (a),(b), and (c) of the Constitution, every citizen is entitled to enjoy the (a) freedom of speech and expression including publication; (b) freedom of peaceful assembly; and (c) freedom of association.
However, these rights are subjected to some restrictions in the interest of national security, public order, protection of public health, national economy, racial and religious harmony, incitement to an offense, defamation, contempt of court and so on (A. 15 of the Constitution).
If a protest incites violence or causes disturbance to public peace, the police have the power to use reasonable force to disperse such gathering and if required, make arrests.
Furthermore, during the course of the protest/demonstration, if public property is damaged, that amounts to a separate offense under the Public Property Act, No. 12 of 1982 as well. While the police have the power to arrest those who, in their opinion, engage in an unlawful assembly and/or are damaging public property, the arrested parties should be produced before a magistrate within 24 hours of being arrested (however, there are exceptions).