May 16, Colombo (LNW): President Ranil Wickremesinghe is set to attend the 10th World Water Forum High-Level Meeting in Indonesia, following an invitation from his Indonesian counterpart, President Joko Widodo.

The Sri Lankan President will participate in the Forum from 18 to 20 May, according to the President’s Media Division (PMD).

On May 20, Wickremesinghe will deliver a statement at the High-Level Forum, themed “Water for Shared Prosperity.”

In addition to his participation in the Forum, the President will engage in several bilateral meetings, including a meeting with Indonesian President Joko Widodo.

May 16, Colombo (LNW): The U.S. Embassy in Colombo will host a satellite event of the Indo-Pacific Business Forum (IPBF) on May 21, themed “Driving Sustainable Development in the Ports Sector.”

This event will run concurrently with the Sixth Indo-Pacific Business Forum in Manila, Philippines, co-hosted by the U.S. Trade Development Agency and the Government of the Philippines, in partnership with the U.S. Department of State.

Businesses and stakeholders from across the Indo-Pacific region are invited to participate in this important event.

For those unable to attend in person, online registration is available through the main website: IPBF | Indo-Pacific Business Forum #IndoPacificBizForum.

The Sri Lanka Ports Authority, in collaboration with the Ministry of Ports, Shipping and Aviation, is committed to transforming the nation’s ports into efficient and sustainable facilities through a greening initiative.

This initiative aims to enhance energy efficiency, reduce waste and emissions, and promote environmentally responsible shipping and transportation practices.

Additionally, it seeks to develop renewable energy capabilities, including solar and wind energy production at the ports.

The private sector is expected to play a pivotal role in this transformation by providing services and equipment to support port operations and the greening initiative.

Aligned with these sustainability goals, the global shipping sector is adopting carbon emissions reduction strategies, including the use of advanced technologies such as green methanol-fuelled cargo ships and electric tugboats.

Moreover, electric gantry cranes, terminal tractors, and other container-moving equipment are set to replace high-emission diesel versions, thereby reducing the carbon footprint of port operations.

May 16, Colombo (LNW): President Ranil Wickremesinghe has condemned individuals spreading disinformation that adversely affects the stock market, noting that speculation about the dissolution of Parliament is causing significant market instability.

Certain individuals claim that discussions on economic transformation are failing, while others predict the dissolution of Parliament, and such statements lead to a downturn in the stock market the following day, allowing these individuals to buy shares at lower prices, Wickremesinghe explained.

When the government reassures the public that no such developments will occur, the market rebounds, and they sell their stocks at a profit, he went on, adding that this is not a political issue.

The President’s comments came during the opening of the new Court Complex in Theldeniya.

Sri Lanka’s economy is grappling with severe challenges, including a debilitating debt crisis, high inflation, and acute foreign exchange shortages.

The economic situation has been compounded by political instability and allegations of poor governance, resulting in widespread hardship amongst the population.

Critics argue that the government’s inability to implement effective economic policies and manage public resources has exacerbated the crisis.

Inflation rates have surged, eroding the purchasing power of ordinary citizens, whilst the potential depreciation of the Sri Lankan Rupee already predicted by economists has escalated the cost of imports, placing additional burdens on consumers.

The International Monetary Fund (IMF) has intervened with financial assistance, but structural reforms are imperative to stabilise the economy.

Many citizens are frustrated with the lack of tangible progress and transparency in the government’s efforts to address these economic issues.

President Wickremesinghe’s comments on market manipulation add another layer of concern, suggesting that certain individuals may be exploiting the current economic uncertainty for personal gain.

This situation, therefore, unveils the urgent need for robust regulatory measures to ensure market integrity and protect investors.

May 16, Colombo (LNW): Calls for Indian travellers to boycott the Maldives are “absolutely” benefiting Sri Lanka’s travel industry, CNBC reported citing comments from Tourism Minister Harin Fernando.

“The Maldives issue is … helping us,” Fernando told CNBC, referring to a social media dispute in January that led to a significant drop in Indian visitors to the Maldives this year.

India was the Maldives’ largest source market in 2023 but has now fallen to sixth place, behind China, Russia, the United Kingdom, Italy, and Germany, according to Sri Lanka’s Ministry of Tourism.

In contrast, nearly 34,400 Indian travellers visited Sri Lanka in January, more than double the 13,759 who visited in January last year, according to the Sri Lanka Tourism Development Authority.

Arrivals in the first quarter of 2024 surpassed the same period in 2023, despite a temporary visa price increase in April.

Fernando also highlighted the strong relationship between Sri Lanka and India in both business and tourism.

“Sri Lanka is a significant market for Indian travellers,” he said, adding that his country offers more value when it comes to India.

He mentioned the country’s beaches, casinos, shopping, and the Ramayana Trail, a series of sites referenced in the ancient Hindu epic.

Additionally, the two countries are well connected, Fernando explained, further elaborating that the connectivity between the two nations is the trigger factor.

Previously, Fernando fell under public’s scrutiny for commenting at a conference that Sri Lanka is ‘a part of India’.

May 16, Colombo (LNW): President Ranil Wickremesinghe has mandated the immediate construction of the “Ashraf Memorial Museum” in Kalmunai, in honour of the late M.H.M. Ashraf, founder of the Sri Lanka Muslim Congress (SLMC) and former Minister.

M.H.M. Ashraf, a distinguished politician celebrated for his dedicated service to the Muslim community, will be memorialised through this museum.

This initiative arises from a request made by H.M.M. Haris, Digamadulla District Member of Parliament, alongside the local Muslim community, marking the 24th anniversary of Mr. Ashraf’s death.

The President has allocated Rs. 25 million for the project and has instructed officials to begin construction without delay, the President’s Media Division (PMD) said.

Ashraf, remembered as an eloquent lawyer and legislator, significantly contributed to the welfare of the Muslim population in the Eastern Province.

He garnered respect across various ethnic communities, including Sinhala, Tamil, and Muslim groups in the country.

May 16, Colombo (LNW): Sri Lanka is in the process of establishing a small arms ammunition manufacturing unit within the country, Defence State Minister Premitha Bandara Tennakoon announced.

The announcement was made yesterday (16), addressing reporters at the President’s Media Centre (PMC), where the Minister revealed that discussions are ongoing with India to set up a small arms manufacturing unit.

The Indian defence manufacturing sector has seen significant growth over the last two decades, Tennakoon explained, adding that it is a model Sri Lanka can learn from, and there is nothing wrong with adopting their practices.

He expressed confidence that it is time for Sri Lanka to enter the manufacturing sector as well.

When queried about whether Sri Lanka intends to purchase military equipment from India, the Minister clarified that the government is not trying to procure anything at the moment.

The connectivity between the two nations’ military forces is excellent, and Indian and Sri Lankan military-to-military relations are very strong, and Sri Lanka, therefore, aim to maintain the ties, he explained.

However, this does not imply that Sri Lanka is planning on purchasing military equipment from anyone, Tennakoon concluded.

May 16, Colombo (LNW): The Sri Lankan Rupee (LKR) is anticipated to depreciate to a range of Rs. 310 – 320 against the US Dollar by the end of the year, driven by increased import demand and the resumption of foreign loan repayments following the completion of the External Debt Restructuring (EDR), First Capital Research (FCR) disclosed.

In the first half of the year, the LKR is expected to appreciate to around Rs. 295, as higher taxes dampen rising consumer demand in the short term amidst escalating living costs.

The USD/LKR spot exchange rate was Rs. 300.83 as of yesterday.

Reduced consumer demand may lead to a decrease in imports, whilst the peak tourism season in the first quarter of 2024 and increased worker remittances could further strengthen the LKR, and subsequently, some stabilisation is anticipated as consumer demand improves and tourism income moderates,” according to a FCR report.

The Rupee’s appreciation is also supported by improving tourism earnings and higher remittance inflows.

FCR projects a 46.3 per cent year-on-year increase in tourism earnings to US $3 billion this year.

Similarly, worker remittance inflows are projected to rise to US $6.6 billion, up from US $6 billion last year.

The notable reduction in consumer-driven imports in the first quarter, due to front-loading of imports at the end of last year, also contributed to the Rupee’s appreciation.

Additionally, the efforts by the Central Bank of Sri Lanka (CBSL) to bolster foreign reserves through US Dollar purchases have played a significant role in the Rupee’s appreciation this year.

FCR expects Sri Lanka to conclude the year with US $6.3 billion in foreign reserves.

However, reserve accumulation is expected to moderate later this year as the government resumes loan repayments post-EDR.

Although bilateral and multilateral inflows are expected immediately after EDR completion, complemented by a potential sovereign credit upgrade, FCR noted that anticipated import relaxations and the resumption of loan repayments might partially offset the currency’s appreciation in the fourth quarter.

“We anticipate that the GDP turnaround, coupled with the relaxation of import restrictions, may slow the currency’s appreciation trend,” FCR remarked.

Sri Lanka faces an annual external debt repayment obligation of nearly US $6-7 billion until 2029, potentially declining to US $3-4 billion post-EDR.

Therefore, the CBSL is likely to build up its foreign reserve buffer in the coming months, which may exert downward pressure on the exchange rate.

In May, the CBSL relaxed cash margin deposit requirements on specific imports.

Continuing this initiative, the government is expected to gradually remove existing import restrictions, including those on vehicle imports, which may further impact the Rupee exchange rate.

May 16, Colombo (LNW): The Joint Apparel Association Forum (JAAF) has highlighted that the official minimum wage for garment workers does not accurately reflect their total earnings.

Responding to a recent article published on Just-Style, JAAF General Secretary Yohan Lawrence explained that the current two-tiered wage system includes a fixed basic wage supplemented by productivity-based payments and various non-cash benefits.

The Clean Clothes Campaign, an international alliance of labour unions and non-governmental organisations, has criticised Sri Lanka’s garment industry minimum wage, claiming it fails to meet workers’ family needs due to high inflation.

In March this year, the government increased the national living wage by 40 per cent, from Rs. 12,500 (US $42) to Rs. 17,500 (US $59) per month, along with a Rs. 3,500 budgetary relief allowance, bringing the total minimum monthly pay to Rs. 21,000 (US $70).

The apparel sector’s industry-agreed minimum wage, including the government allowance, stands at approximately Rs. 24,000 (US $80).

According to Lawrence, the article refers to the national minimum wage, which covers the fixed monthly component of employee earnings (the employee’s basic wage).

Whilst the national minimum wage was increased after a couple of years, companies will review the basic wage every year and, depending on their ability to pay, increase this basic wage annually, he clarified.

He pointed out that the article fails to mention the variable components of total earnings, which are paid in cash, or the non-cash benefits provided to employees.

Cash benefits include production bonuses, attendance allowances, annual bonuses, skill-based payments, and overtime.

The two-tiered system of a fixed basic wage, complemented by productivity-based payments, is standard in all manufacturing industries, both locally and globally, Lawrence emphasised.

In addition to cash payments, the industry provides non-cash benefits such as subsidised meals and transport.

Several companies also offer subsidised or free dry rations, a practice that began during the economic crisis and continues today, to help alleviate the cost of living for employees.

Lawrence argued that it is unfair to assess employees’ actual earnings based solely on the basic wage.

He also noted that inflation has decreased to single digits since early 2023, reducing its impact on real wages.

Despite these challenges, JAAF remains confident in achieving US $4.5 billion in apparel export earnings this year.