During a session at the Parliament Sectoral Oversight Committee on Increasing Export of Goods & Services, officials disclosed a surplus of ethanol, a by-product of sugar factories, prompting discussions on export strategies adhering to quality standards.
Highlighting the current benefit to sugar factories stemming from the ethanol import ban, officials proposed issuing alcohol production licenses to these factories, leveraging the surplus for alcohol production.
With the country’s sugar demand at 600,000 metric tons, and only 10% or 60,000 metric tons produced domestically, the committee urged officials to draft a plan for augmenting sugar production by 2024 within three months.
Addressing public awareness about sugar consumption, officials were tasked with devising an educational program due to the nation’s low knowledge levels.
While acknowledging foreign demand for Sri Lankan alcohol, including palmyra arrack, officials underscored the market’s limited growth due to standards-related shortcomings. Consequently, they stressed the importance of aligning export measures for alcohol products with international standards to expand market reach.
The Criminal Investigation Department (CID) has launched an investigation into a distressing child trafficking syndicate following a grave complaint lodged by the Controller General of Immigration and Emigration.
As outlined in a recent police statement, the CID’s Human Trafficking, Smuggling, and Maritime Crimes Division is conducting an extensive inquiry into the reported activities.
Preliminary findings suggest that the syndicate specifically targets Tamil children under the age of 18 residing in the North and East regions.
Allegedly, these minors are transported to Malaysia using legitimate passports, subsequently being ferried to countries like France, the UK, and others through the use of falsified travel documents.
Law enforcement authorities have revealed that a group of 13 children has already been dispatched to Malaysia as part of this trafficking operation. The police suspect the involvement of a broker facilitating these illicit activities.
In a recent address at the Presidential Media Centre (PMC), Defence State Minister Pramitha Bandara Tennakoon revealed intentions to amend the National Hydrology Act, intending to introduce Electronic Navigation Charts (ENCs). These charts could potentially yield a substantial annual revenue of around US$200 million from ships navigating near Sri Lankan waters.
Highlighting the significance of this amendment, Tennakoon emphasized the shift of responsibility for creating ENCs from the British Hydrographical Office, managed via an agreement with the NARA Institute, to the Sri Lankan Navy in the foreseeable future.
Acknowledging President’s initiatives in bolstering national security and economic improvements, Tennakoon stressed the vital role of the army in ensuring national safety, drawing lessons from past events like the Easter Sunday attack. He underscored the obligation of the armed forces to protect citizens irrespective of differences in race, religion, or caste.
The State Minister debunked misconceptions about the Defence Ministry’s budget allocation, clarifying that out of the Rs. 423 billion allocated, only Rs. 169 billion were specifically earmarked for the armed forces. The remaining funds supported various vital institutions under the Defence Ministry, including disaster management and educational establishments like the National Cadet Corps and Kotelawala Defence University.
Additionally, Tennakoon highlighted the diverse functions of these institutions, shedding light on their roles beyond defense, such as in disaster management and healthcare. Notable allocations included funds for tackling human trafficking, drug interception efforts by the Navy, and plans for modernizing the National Hydrological Office to capitalize on maritime traffic.
The impending transition from printed nautical charts to electronic navigation maps by 2026 was emphasized, urging the need for updated technology. Tennakoon proposed a bill to empower the hydrological office by amending legislation, transferring responsibility for creating electronic navigational maps to the Navy, with the anticipation of significant financial gains.
Moreover, Tennakoon outlined plans for modernizing the Department of Meteorology and legislating a Building Code through the National Building Research Institute by 2024, aiming to ensure precise weather forecasts and set construction standards, respectively, for bolstering the nation’s infrastructure and preparedness.
The monetary policy press release issued today ( Monetary Policy Press Release ) by the Economic Research Department planted a policy rate cut of 100 bps to 10%-11% as a great thing. Meanwhile, the design of the press release shows a drastic shift of the Monetary Policy Board (PMB) from previous fashion of macroeconomic performance talks to movements of Census and Statistics’ Consumer Price Index (CPI) to drive the monetary policy/policy interest rates.
The new policy rhetoric seems to display a sort of divine ability of the MPB to fix the y-o-y CPI change around 5% in the medium-term by magical power of policy interest rates adjustment. The new rhetoric is a result of zero knowledge of the MPB on policy rates in modern monetary systems and the macroeconomic role of the CB in present plight of Sri Lankan economy.
I recall serious concerns raised by Mr. A S Jayawardena in 2002 when CB leading economists with the advice of IMF/World Bank proposed to amend Monetary Law Act objects of the CB as the price stability. Instead, he advised to term it as economic and price stability in order to prevent the CB running the monetary policy statistically after a consumer price index. Now, with domestic price stability as the main objective of the CB in the new legislation insisted by IMF, the PMB seems to start playing with the CPI exactly as predicted by Mr. A S Jayawardena. Therefore, the press release has become another text of CPI press release incorporated with a policy rates story.
Given misconceptions behind the press release and policy rates, the public may question the purpose of the existence of the CB in the current context of the bankrupted economy. Therefore, this article is to shed light on some of those misconceptions. This blog contains a large number of articles with inside facts on monetary policy actions and misconceptions.
Questionable contents in the press release and monetary policy framework
I feel that even people who drafted and approved the press release have not understood the meaning and factual position of major texts. In this regard, following 7 text contents are presented with my comments.
1. Press Text – “The Board arrived the decision following a careful analysis of the current and expected developments in the domestic and global economy, with the aim of achieving and maintaining inflation at the targeted level of 5 per cent over the medium term, while enabling the economy to reach and stabilise at the potential level.”
My comment
MPB members must be of divine beings to know everything under the sun and to decide the policy interest rates accordingly.
2. Press Text – “The Board took note of possible upside risks to inflation projections in the near term due to supply-side factors stemming from the expected developments domestically and globally. However, the Board viewed that such near term risks would not materially change the medium-term inflation outlook, as inflation expectations of the public remain anchored and economic activity is projected to remain below par in the near to medium term.”
My comment
As no data are provided on supply-side factors, medium term inflation outlook, inflation expectations and par of economic activity referred to in the text, the public is not able to assess the credibility of the text. The inflation outlook given in the press release is the past CPI-based inflation projection/forecast chart which states that the forecast is neither a promise nor a commitment. Further, inflation prediction given in the chart varies between 20% and negative 10% up to the third quarter 2024.
3. Press Text – “A one-off upward movement in inflation is expected in the near term, driven mainly by the changes to the Value Added Tax (VAT) proposed by the Government effective January 2024. The spillover effects of tax measures and other developments are likely to be muted due to subdued underlying demand pressures; hence, this rise in inflation is expected to be transitory. Accordingly, headline inflation over the medium term is expected to converge towards the targeted level of 5 per cent, supported by appropriate policy measures.”
My comment
This is just a hypothetical text without any supporting research data. In the past, so many VAT changes have been implemented. Therefore, CB economists must know the exact outcome of VAT changes on inflation. The one-off upward movement in inflation as referred to in the text is incorrect because it may refer to the direct VAT impact on the CPI numbers.
However, there will be several rounds of impact on inflation through wage rises consequent to VAT-induced price increases. It is surprised that the inflationary impact of the significant wage increase approved in the budget 2024 is forgotten by the MPB although it considered everything under the sun. Further, the MPB considers subdued underlying demand pressure as a good factor despite severe macroeconomic contraction caused by it as the MPB is not concerned over living standards.
4. Press Text – “The Board viewed that, with this reduction of policy interest rates and based on the available information, further monetary policy easing will be paused in the near term, given the space for market interest rates to adjust downwards in line with the current and past monetary policy easing measures.”
My comment
As policy rates are highly arbitrary numbers, the MPB can pause or do anything it prefers by presenting a rhetoric on inflation in the medium to long term. However, the further space available for market interest rates to adjust downwards in line with monetary policy easing as referred to in the text is erroneous due to several reasons.
First, policy interest rates and SRR do not determine risks involved in bank credit where market interest rates are largely determined by credit risks. However, policy interest rates and SRR only influence short-term liquidity management connected with credit creation of banks.
Second, policy interest rates affect only a small portion of money market operations on central bank reserves connected with liquidity management. It is the overnight inter-bank that is targeted by policy rates. However, inter-bank volume is a trivial amount (less than Rs. 10 bn a day). If there is good credit demand from the economy, banks can create credit and deposits in book entries/digitally without borrowing from the CB at policy rates. In fact, as standing facilities at policy rates have been capped so far in 2023, policy rates are quite dormant rates. Further, central bank money or reserve also is a trivial fraction of total money in circulation (around 9%) where the hard currency is only 5% in the total money circulation.
Third, monetary policy is implemented on the old concept of the central bank ability to control money/credit in the money multiplier model where credit creation is dependent on central bank money (reserve money) and money multiplier in a fractional reserve system. This is the accounting or statistical version behind the monetary policy of policy interest rates and SRR. However, in modern banking, credit creation is a book entry to loans and deposits, like central banks print money. Therefore, banks will borrow reserve money by a tiny fraction only if they are unable to manage fractional reserves within the banking system. That also happens after granting credit to borrowers in the event of mismatch between financial outflow and inflow. Further, the level of printing or reserve money depends on demand for it from the government and private sector and, therefore, central banks cannot control this demand by changing policy interest rates. Therefore, in reality both monetary control and monetary space through monetary policy are misconceptions presented due to lack of knowledge on modern banking.
5. Press Text – “The Monetary Policy Board will continue to assess risks to inflation projections, among others, and stand ready to take appropriate measures to maintain domestic price stability in the period ahead while supporting the economy to reach its potential.”
My comment
This text is meaningless on several grounds.
First, MPB is to assess risks to its statistical inflation projections and not risks to price stability.
Second, domestic price stability is not interpreted. It appears that inflation target of 5% in the medium term is a deferent concept.
Third, economic potential is not interpreted and measured in terms of real GDP to be supported by the MPB through the domestic price stability. How the earlier cited word of economic activity of par and the economy at potential are interpreted in the monetary policy is not indicated.
6. Press Text – “Headline inflation over the medium term is expected to converge towards the targeted level of 5 per cent, supported by appropriate policy measures.”
My comment
This is the key belief of central banks that they can control actual inflation at preferred target through the monetary policy, mainly by policy rates, in market mechanism. This is a baseless belief in modern macroeconomics.
First, old monetarists believe that money has no real sector (supply side) effects as its role is valuation and exchange of value as an intermediary like a broker. Therefore, money only affects prices and inflation through demand. It is in this context that the old monetarists interpret inflation always and everywhere as a monetary phenomenon and propose monetary policy to control inflation. However, in modern monetary and supply side economics, money has real side effects where demand and supply sides operate in integration through bank credit creation as a real world factor of production. Accordingly, inflation or aggregate price level is a market phenomenon (goods, services, factors, etc.) which is not controllable by monetary policy alone in the manner it presents.
Second, the story of the monetary policy transmission from policy rates to inflation is not established in modern economic research.
Third, the inflation used in monetary policy is the year to year (YoY) percentage of consumer price index which is only a statistical outcome. The inflation target such as 2% or 5% is set on this statistics. Accordingly, the conduct of monetary policy is only a math. The base effect is the well-known error in this inflation measure. If same consumer price index is used for annual average change or change over a period of time, the rate of inflation is vastly different. Therefore, monetary policy in present version is not connected with the control of prices or cost of living in the economy. For instance, the inflation in Sri Lanka has now fallen unexpectedly from 69.8% in September 2022 to 1.5% in October 2023. However, CPI continues without any fall where inflation level from CPI December 2019 has risen close to 90%. In this context, CB’s rosy story of inflation control and macroeconomic stabilization by the monetary policy is meaningless in any macroeconomics concerning living standards. The technical questionability of monetary policy on inflation control is shown by following charts (CPI, 2021=100, is statistically combined to CPI, 2013=100, for consistent analysis).
Inflation figures are diverse.
Policy rates do not accord with inflation where
YoY inflation over-shooted and under-shooted.
YoY inflation is just base effect, not an economic factor.
Cost of living remains high and continues to rise.
Fourth, as highlighted above, credit control ability in modern banking and monetary systems rests with banks and not on central banks. Therefore, the monetary policy that the CB is actually engaged in is only printing of few billions of money on daily basis to facilitate wholesale money trades of some dealers/banks. This does not represent any macroeconomic stabilization or inflation control story as presented by the MPB ( see monetary operations).
7. Press Text – “The Monetary Policy Board underscored the need for a swift and full passthrough of monetary easing measures to market interest rates, particularly lending rates, by the financial institutions, thereby accelerating the normalisation of market interest rates in the period ahead.”
My comment
Nobody knows what are the normal level of market interest rates as market interest rates from time to time depend on various macroeconomic and financial market factors including central bank monetary policy actions.
Concluding Remarks
The constitutional legality of the present monetary policy framework adopted by the MPB is questionable in view of the following.
Violation of key provisions of the new CB Act
The conduct of the policy without the monetary policy framework agreement (agreement not published yet).
Non-registration of other relevant financial institutions such as specialized banks, registered finance companies and registered leasing companies for account operations, credit operations, open market operations and statutory reserves.
Continuation of trade of government securities and non-listing of private securities in open market operations.
Continuation of branches (Supreme Court declined to branching powers).
Significant variability in inflation projection that indicates the breach of domestic price stability as required in the legislation and inappropriate announcement of pause of policy interest rates.
The rationale of charging 11% interest on overnight lending through money printing to open market participants against collateral of government securities and of paying 10% interest through further money printing for acceptance of earlier printed moneys deposited by them with the CB on overnight basis in the present bankrupted and considerably contracted economy.
It is mostly observed that MPB members/experts have no option but to stay looking at magical staff presentation of charts and statistics at the board meeting, given their complications and conceptualities. The press release is simple evidence for it.
(This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures.)
P Samarasiri
Former Deputy Governor, Central Bank of Sri Lanka
(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 12 Economics and Banking Books and a large number of articles published.
The author holds BA Hons in Economics from University of Colombo, MA in Economics from University of Kansas, USA, and international training exposures in economic management and financial system regulation)
Sri Lanka’s Rights Abuses Flout EU Trade Benefits RequirementsColombo Fails to Meet Obligations Linked to GSP+ Scheme
By Claudio Francavilla
Sri Lanka’s economy has contracted every year since 2019, but exports to the European Union have increased, providing vital income in desperate economic times. This has largely been due to the EU’s Generalised Scheme of Preferences Plus (GSP+), which grants Sri Lanka tariff-free access to the EU market so long as it complies with core human rights and labor rights treaties.
But, as the EU noted in a new report, the Sri Lankan government is falling well short of the mark.
The report identifies two bright spots for human rights in Sri Lanka: the “resilience” of civil society; and the 2022 Aragalaya (“struggle” in Sinhala) movement in which thousands protested for good governance “in the spirit of democracy and freedom of expression and assembly.”
Yet the report makes clear that civil society’s “resilience” is necessary in the face of government “harassment and intimidation.” Since President Ranil Wickremesinghe took office in July 2022, the government has adopted a “repressive response” to protests, arresting the movement’s leaders and employing “disproportionate use of force.”
This challenges the EU’s policy to assist Sri Lanka’s recovery from its economic, governance and human rights crises. As the report states, “The process of reform will be more sustainable and robust if Sri Lankan civil society is part of it and if the approach is truly inclusive.”
Notably, the government has yet to repeal the abusive Prevention of Terrorism Act – a key commitment to the EU – and even broke a moratorium on its use. As the International Monetary Fund noted in September, civil society’s “oversight and monitoring” of government actions is “restricted … by broad application of counter-terrorism rules.”
Instead, the government has proposed new counterterrorism legislation that does not meet rights standards, and an Online Safety Bill that the EU says “could lead to censorship.” Other rights concerns the EU highlighted include the “treatment of minorities … hate crimes … allegations of torture … decriminalising same sex relations … domestic violence and child abuse … [and] harassment and threats against human rights defenders, lawyers and journalists.”
These and other developments are incompatible with the GSP+ human rights requirements, and yet Sri Lanka’s government continues to benefit from the program. For conditionality to be credible, the GSP regulation needs to be reformed to require clear, public, and timebound benchmarks for compliance. This is what EU lawmakers should focus on: making GSP more effective in fostering human rights progress in beneficiary countries.
Showers or thundershowers will occur at a few places in Sabaragamuwa, Central and Western provinces and in Puttalam, Galle and Matara districts after 2.00 p.m.
A few showers may occur in Northern province and in Trincomalee district.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
Sri Lanka’s Supreme Court issued a symbolic ruling that the powerful Rajapaksa brothers – including two ex-presidents – were guilty of triggering the worst economic crisis by mishandling the economy. At least they must be given the credit that they brought Ranil Wickremesinghe to fix the problem. In a majority verdict on multiple petitions filed by academics and civil rights activists, a five-judge bench of the Supreme Court ruled that the respondents, who all later resigned or were sacked, had violated public trust. The biggest disaster for Gotabaya Rajapaksa was the appointment of Dr PB Jayasundara as the Secretary to the President. He single handedly destroyed the entire economy . His side kicks still continue in HNB , DFCC Bank and Lanka Clear as government representatives. The GR team that wrought havoc must be clinically removed by the current government . The public deserve this . That is the bare minimum people want.
Making Sri Lanka bankrupt
When Nivard Cabraal was reappointed Governor CBSl after Dr Lakshman was sacked, despite Cabraal’s political immaturity many business people had big hopes that he would stabilize the economy. Unfortunately he clashed with Ali Sabry and Basil Rajapaksha on policy and especially the exchange policy. The final result, Cabraal freezed the Rupee at 203 to 1 USD without capital controls allowing people thru black channels to move their LKR money to other countries causing a forex crisis in the country . Few weeks later Cabbral forced by Basil Rajapaksa allowed the LKR to float causing economic mayhem . The rest is history. Gotabaya Rajapaksa in desperation appointed a Presidential Advisory Group. Dr Indrajit Coomaraswamy, former governor of the Central Bank of Sri Lanka, Dr Shanta Devarajan, Professor of the Practice of Development, Georgetown University and Dr Sharmini Cooray a director of the Institute of Capacity Development of the IMF . Non of them had no real market experience other than teaching in prestigious institutions . What they did and what they accomplished, we the public is still not aware. Did they advice Gotabaya to default? Dr Coomaraswamy is being accused for borrowing over $15 Billion USD at market rates form the market whilst as governor ? Sri Lanka is still struggling to reschedule this massive commercial debt ? President Sirisena rewarded him with a Deshamanaya. Gotabaya Rajapaksa after sacking Attigale the discredited treasury secretary and Governor Cabbral Brought back Nandalal Weerasinghe who was admonished by him for failing to respond with proper strategies to resuscitate the economy during COVID
The first thing Weerasinghe did was a cowboy act . He decided to default on the debt repayment without asking for more time from the creditors or rescheduling the loans. He called it a soft default. To date no financial text book has come up with a definition for a soft default. Then he raised interest rates overnight by 100% . The final impact of this decision, done to bring inflation down to below 5 % . Has resulted in destroying 25% of the private sector , the tourism sector (who will never be able to repay their loans) . Also Pushed up interest service payments of the government to record levels . Resulting in government being forced to push electricity prices and taxes to unbearable levels to the poor . The biggest beneficiary of this stupidity were the bond traders . The government failed to tax the extraordinary gains. Instead the government heaped more burdens on the tax payers and the poor. The public must hold the top treasury officials and the Governor accountable too for mismanagement . This should be the next case the public must file? The questions to be asked? A) was the so called soft default done with the approval of the cabinet and parliament?B) What were the other options ? C) What was the impact of the irresponsible interest rate policy of the Central Bank.
Conclusion
Sri Lanka’s economic woes are far from over. Whilst the CBSL toasts their victory for bringing inflation down to 5% . This has hardly had any impact on the real economy. Instead, 1. Economy is Contracting with no growth. 2. 25% of the private sector pushed out of business 3) over 500,000 people pushed below the poverty line 4) Unbearable debt in the tourism sector which can never be repaid. 5.) pushed government debt and interest repayment to new highs with unsustainable interest payments. So whilst we blame Gotabaya Rajapaksa and his brothers totally for destroying the economy . Pause a minute; what about the so called economic and treasury experts who hide behind the politicians and happily heap all the garbage on the politicians and the public. History is repeating it self . Unfortunately our current politicians are lost in their own garbage and noise to see through this destruction.
Writer’s Comments
The comments and thoughts are reflections of people opinions. People see no positives in good governance or leadership from the opposition . Bureaucracy riddled with Rogues and protected. Cricket crooks protected. The monthly interest and salary for most people after paying all bills left with no money to buy even a good bottle of arrack without thinking of other commitments . Middle class is being eliminated. No positives for the common man .
November 22 marked a significant milestone in Japan-Sri Lanka relations as the Exchange of Notes for Japanese grant aid was formalized by Japanese Ambassador Mizukoshi Hideaki and K.M.M. Siriwardana, Secretary of the Ministry of Finance, Economic Stabilization, and National Policies.
The two projects, backed by Japanese grants, signify a commitment to vital sectors in Sri Lanka. The first grant, totaling JPY 200 million (about Rs. 435 million), focuses on bolstering the infrastructure of the North-East Fisheries. Meanwhile, the second grant, amounting to JPY 160 million (about Rs. 335 million), is dedicated to establishing a Doppler Weather Radar Network.
The signing ceremony witnessed the presence of Fisheries Minister Douglas Devananda and State Minister of Finance Shehan Semasinghe, highlighting the significance of these projects to Sri Lanka’s development.
The investment in the North-East Fisheries will empower various agencies, including the Ceylon Fisheries Harbour Corporation, National Aquaculture Development Authority, and Fisheries and Aquatic Resources Department. This support aims to equip these entities with state-of-the-art equipment, from ice production machines and digital scales to advanced fishing gear and deep freezers. Ultimately, these advancements seek to elevate fisheries production value and enhance the livelihoods of fishing communities in the Northern and Eastern Provinces.
Moreover, the Japanese government’s ongoing support, dating back to June 30, 2017, for the Doppler Weather Radar Network takes on added significance amid Sri Lanka’s current economic crisis. The additional grant aid comes as a strategic response to mitigate the impact of meteorological disasters, offering enhanced short-term weather forecasting capabilities. With Sri Lanka facing escalating weather-related challenges like heavy rainfall and droughts, this aid is poised to significantly contribute to the network’s establishment, fortifying the nation’s resilience against meteorological disasters.
The Embassy of Japan in Sri Lanka reaffirms its dedication to nurturing bilateral collaboration and goodwill, emphasizing joint efforts in addressing common challenges and forging a resilient future for both nations.
Last week, Gostiny Dvor in Moscow was the hub for the annual Transport week, hosting the XVII International Forum and Exhibition ‘Transport of Russia’. This sprawling event covered conferences exploring the advancements in automobile, aviation, railway, sea, and river transport. Meanwhile, the exhibition showcased the latest innovations and milestones achieved by industry enterprises.
Among the distinguished attendees was Ambassador Prof. Janitha A. Liyanage, actively engaging in the International Plenary Session focused on enhancing the resilience and security of global transport connections.
Adding to the event’s prominence, Transport, Highways, and Mass Media Minister Dr. Bandula Gunawardhana emphasized the urgency for sustainable transportation solutions and technological advancements amid rising urbanization and environmental challenges, addressing a wide array of pressing issues faced globally.
Notably, the discussion drew the attention of high-ranking officials including the State Secretary of the Transport Ministry, representatives from Russia’s Economic Development and Agriculture Ministries, as well as Ministers from Mali and Cuba dedicated to Transport and Infrastructure matters.
Colombo (LNW): The Ceylon Italy Blue Economy Association (CIBEA) today unveiled its pioneering strategy to contribute to decarbonising maritime transport in the Indian Ocean, with a steadfast commitment to achieving net-zero emissions by 2050.
“Sri Lanka and Italy, both nations with rich maritime traditions, are uniquely positioned to lead the transition to a greener maritime future.
Our ultimate goal is to champion the development of a Hydrogen Value Chain in Sri Lanka, focusing on bunkering and transshipment of green fuels in the region and beyond, centred in Trincomalee Port, in collaboration with an Italian-led international consortium open to partnerships with local and global investors,” said CIBEA President and Hitechrome Ltd. Director Vittorio Coco.
Coco emphasized, “Sri Lanka’s strategic location along major shipping routes features the unparalleled deep-water natural port of Trincomalee, poised to become the central hub for green bunkering and the transshipment of green fuels across the entire Indian Ocean Rim.”
He added, “Italy, recognized as a global leader in clean energy technologies, has a rich history of successful industrial clusters, serving as a source of cutting-edge solutions in different sectors.
Italy’s expertise and innovation in EU-funded Hydrogen Valleys projects could be leveraged as a blueprint for similar initiatives in the field of hydrogen, methanol, and ammonia production in Sri Lanka.”
“In the face of the global climate crisis, the maritime industry has been identified as a significant contributor to carbon emissions from ships and ports.
Therefore, we envision the building of a Hydrogen Value Chain in Sri Lanka, mitigating GHGs (Greenhouse Gases) impact by developing the Port of Trincomalee as a Hub for Green Fuels Bunkering and Green Fuels Transshipment. Here is our suggested roadmap to the future developer of the project,” Coco explained.
CIBEA’s visionary approach to enlarge on a global scale this Road Map also involves the creation of a network of Green Corridors adopting Trincomalee Port as a vital node.
A Green Shipping Corridor is a dedicated and strategically planned route for maritime transportation, designed in collaboration with stakeholders such as shipping companies, port authorities, environmental organizations, certification organizations and governmental bodies.
This corridor prioritises the adoption of green technologies and practices, aiming to reduce the carbon footprint of shipping activities.
It serves as a platform for collective efforts to create a more sustainable and eco-conscious pathway in the shipping industry, aligning with the interests and commitments of diverse stakeholders.
According to Coco, the primary focus of CIBEA is on establishing a green corridor linking Genoa, Italy, to Singapore via Port of Neom (Saudi Arabia), Abu Dhabi (United Arab Emirates) and Trincomalee, potentially partnering with world-renowned groups such as Lloyd’s Register and Bureau Veritas.
