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SL’s merchandise exports continues consecutive slump for the 4th YoY

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By: Staff Writer

Colombo (LNW):Sri Lanka export growth is likely to remain weak in 2023 as global growth slows, high inflation erodes the country’s competitiveness, and skilled workers emigrate, leaving for greener pastures due to skyrocketing cost of living, finance ministry sources said.

Sri Lanka’s merchandise exports decreased by 16.15 % to US$ 814.1 Million in April 2023 compared to April 2022. Moreover, it is a 0.5 % decrease when compared to April 2021.

Declining trend in merchandise exports continues due to the negative trends shown in major export products. i.e., Apparel & Textiles, Rubber & Rubber based products and Coconut & Coconut based products.

Export earnings from tea which made up 12% of merchandise exports, increased by 16.1 % y-o-y to US$ 93.39 Mn in April 2023 compared to April 2022. Earnings from export of Tea packets increased by 29.1 % to US$ 47.82 Mn.

In addition, export earnings from the Electrical & Electronics Components increased by 16.14 % y-o-y to US$ 40.01 Mn in April 2023 with strong performance in exports of Insulated wire (30.43%) and Other Electrical & Electronic Products (18.74 %).

Export earnings from Seafood increased by 17.1 % to US$ 24.76 Mn in April 2023 compared to April 2022. This increase was mainly due to the strong performance in export of Frozen fish (21.04 %), Fresh fish (47.9 %) and Shrimps (0.34%).

Moreover, export earnings from Ornamental fish increased by 105.83 % to US$ 2.12 Mn in April 2023 compared to April 2022.

Despite the decrease recorded in the Spices & Concentrates sector, earnings from export of Cinnamon increased by 8.41 % in April 2023 in comparison to April 2022.

The value of ICT exports is estimated to increase by 34.95 % to US$ 529 Mn in April 2023 compared to April 2022. In addition, the value of Construction and Financial services exports are estimated to increase by 15.71 % and 3.75 % respectively in April 2023 compared with April 2022.

Export earnings from Apparel & Textile have decreased by 23.1 % y-o-y to US$ 342.81 Million in April 2023 compared to April 2022.

In addition, Export earnings from Rubber and Rubber Finished products have decreased by 22.28 % y-o-y to US$ 55.4 Mn in April 2023, with poor performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (22.09 %) and Industrial & surgical gloves decreased by (24.32 %).

On monthly analysis, export earnings of kernel products ( -31.71 %), fiber products ( -16.18 %) and shell products ( -30.4 %) categorized under the Coconut based products decreased in April 2023 compared to April 2022 due to the poor performance in export of Liquid Coconut Milk (-22.53 %), Coconut Oil (-36.98 %), Desiccated Coconut (-47.17 %), Coco Peat, Fiber Pith & Moulded products (-14.30 % ) and Activated Carbon (- 29.18 % ).

Export earnings from Spices and Essential Oils decreased by 2.04 % to US$ 21.08 Mn in the month of April 2023 compared to the month of April 2022. Export earnings from pepper decreased by 41.65% to US$ 2.41 Mn in April 2023 compared to April 2022.

The value of Transport & Logistics exports is estimated to decrease by 9.17 % to US$ 40.25 Mn in April 2023 compared to April 2022.

BOI goes all out for a few dollars more from a cannabis pilot project

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By: Staff Writer

Colombo (LNW): Marijuana or cannabis cultivation for exports is a multibillion-dollar industry, and across the United States and now Sri Lanka about to join the bandwagon , legal markets are popping up like weeds as more states seek out the tax revenue and jobs the cash crop brings, official sources said.

Medical and recreational marijuana sales are projected to reach US $33.6 billion by the end of the year, a trend largely driven by the opening of new adult-use markets,

The implementation of the proposal of cannabis cultivation for the sole purpose of exportation can attract investments amounting to$ 2 billion a drop of the vast see like foreign cannabis market within 2023 alone several senior state officials said.

President Ranil Wickremesinghe during his 2023 Budget Speech revealed that a committee of specialists will be appointed to investigate the possibility of cultivating cannabis for the sole purpose of exports.

Under this set up , the Board of Investment of Sri Lanka has received the approval from an expert committee to embark on a pilot project to cultivate cannabis within a BOI zone.

This was revealed by Investment Promotion State Minister Dilum Amunugama during a media briefing at the BOI headquarters.

The pilot project is to kick-off soon in the Katunayake zone and discussions are underway with investors and experts to finalize the pilot project.

“We have been authorized as the experts committee report is out. It’s a ‘Yes’. We have got the instructions to go ahead with the pilot project,” said Dilum Amunugama.

“The investors who are interested in the project will have to grow the cannabis and manufacture a product out of it, which will be the income for the country,” he stated.

The State Minister proceeded to say that the Cabinet would have to be briefed as to how the project is to be implemented.

Further Sri Lanka has drawn up laws to grow cannabis for medicinal purposes which will be presented for Cabinet approval soon, Minister for Indigenous medicine Sirira Jayakody said.

“Canabis comes under the Ayurveda (Indigenous Medicine) Act,” Minister Jayakody told reporters. “It is a subject coming under the Department of Ayurveda.

Cannabis was widely used in South Asia for centuries, though it caused concern among British civil servants in the Caribbean who had little knowledge of the plant, when Indian workers started working in plantations.

Cannabis was included in 1925 Geneva International Convention on Narcotics Control and India at the time opposed it being included saying it was used since time immemorial and questioned the practicality of a prohibition being enforced.

However the British delegate signed the convention which was mostly concerns with opium. Geneva conventions were partly due US pressure. US had one time prohibited alcohol triggering the birth of massive criminal mafias (bootleggers).

In 1893, the Indian Hemp and Drugs Commission had already gone into the issue at the behest of UK activist and recommended that it be taxed rather than banned. But many European countries have since legalized cannabis including for recreational use.

Proposal for Removal of MP Ali Sabri Raheem Circulated Following Arrest for Undeclared Gold and Smartphones

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In a recent development, a proposal to remove Puttalam district MP Ali Sabri Raheem from his position has emerged after his arrest on charges of possessing undeclared gold and smartphones. The proposal was reportedly tabled during a party leader’s meeting held yesterday (25 May).

Initially presented by Tamil National Alliance (TNA) MP M. A. Sumanthiran, the proposal gained affirmation from Opposition MP Lakshman Kiriella. Notably, representatives of the ruling party also expressed their agreement with the proposition.

The party leaders reached a consensus that MP Raheem, who has been embroiled in controversy, should be urged to resign from his post through a proposal endorsed by all Members of Parliament.

Raheem’s arrest took place at the Bandaranaike International Airport (BIA) in Katunayake on 23 May. Customs officials discovered approximately 3.5kg of undeclared gold and 91 mobile phones in his possession upon his return to the island from overseas.

Following the discovery, Raheem was subjected to a fine of Rs. 7.5 million, which he promptly paid. He was subsequently released, while the undeclared gold and mobile phones were confiscated by the authorities.

The proposal for Raheem’s removal from his parliamentary role reflects the growing concern surrounding his alleged involvement in the possession of undisclosed items. As the matter gains momentum, the call for accountability resonates across party lines, with politicians from both the opposition and the ruling party supporting his resignation.

The future of MP Ali Sabri Raheem now hinges on the outcome of this proposal, which serves as a critical juncture in his political career. Should the majority of Members of Parliament support his removal, it would mark a significant shift in the dynamics of the Puttalam district’s political representation. The subsequent events are sure to shape the trajectory of Raheem’s standing within the political landscape of Sri Lanka.

WEATHER FORECAST FOR 27 May 2023

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Several spells of showers will occur in Western and Sabaragamuwa provinces and in Galle and Matara districts.

A few showers may occur in Central and North-Western provinces.

Showers or thundershowers may occur at a few places in Eastern, Uva and North-Central provinces during the evening or night.

The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.

Dubai Multi Commodities Centre (DMCC) organizes a webinar “Made for Trade Live – Sri Lanka in Focus”

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Ambassador of Sri Lanka to the United Arab Emirates, Udaya Indrarathna  delivered the Keynote speech on 23 May 2023 on game changing strategically important trade relations between Sri Lanka and UAE at the webinar “Made for Trade Live – Sri Lanka in Focus” organized by the Dubai Multi Commodities Centre (DMCC).

The DMCC staged its flagship international roadshow specifically targeting Sri Lanka under the theme “Sri Lanka in Focus”.

This game changing initiative would benefit a large number of Sri Lanka exporters, SME’s and entrepreneurs in establishing business in UAE as well as to take their products global by adding value at DMCC facility in Dubai.

DMCC, is the eight-time award winner of the “Global Free zone of the Year” by Financial Times and has 22,000 + registered companies, 8000 employees and representations at 180 countries. The DMCC gold and diamond trade alone stands at USD 157.5 billion.

The DMCC Tea Centre handles 33.9 Mn kilos of tea and 400 Mn tea bags per year, which reflects the importance and its capacity to provide significant opportunities for Sri Lanka particularly in tea, cinnamon, spices, gems, and other commodities. 

As a way forward, the Sri Lanka Embassy in Abu Dhabi and the Consulate General of Sri Lanka in Dubai will work collaboratively in assisting and supporting Sri Lanka businesses taking them to the next level.

The Sri Lanka Embassy in UAE very much hope that “Sri Lanka in Focus” initiative would be a significant step forward in enhancing the bilateral trade relations between Sri Lanka and the United Arab Emirates.

State Minister of Foreign Affairs leads Sri Lanka delegation to the First Session of the Sri Lanka – Saudi Joint Commission

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The First Session of the Sri Lanka – Saudi Joint Commission which was formed under the framework agreement that the two countries signed in 2003 was held in Riyadh, Saudi Arabia from 21 to 23 May 2023. 

The State Minister of Foreign Affairs Tharaka Balasuriya along with the Vice Minister of Human Resources of the Kingdom of Saudi Arabia Dr. Abdullah bin Nasser Abu Thunain co-chaired the Joint Commission. 

The Joint Commission during its two-day proceedings deliberated vital areas of cooperation, ranging from trade, economics, environment, investment, foreign employment, energy, finance, transport, communications, agriculture, education, sports, humanitarian work, culture, judicial matters, and security. At the conclusion, the two ministers signed the outcome document which detailed the follow-up action in the agreed points of discussion. 

Delivering the opening remarks at the Joint Commission, State Minister Balasuriya mentioned that the bilateral relations will be further strengthened based on the successful deliberations of the Joint Commission. 

Expressing the hope that the outcome would open new vistas for investment and diversification of economic and employment prospects, the State Minister thanked Saudi Arabia for the generous hospitality accorded to the delegation and the constructive discussions held.

During the visit, the State Minister Balasuriya and Saudi Arabia’s Vice Minister of Foreign Affairs Waleed Al Elkheriji signed the MoU on Political Consultations between the Ministries of Foreign Affairs. The MoU provides a platform for both countries to discuss matters of mutual interest regularly. The two ministers also recalled the excellent cooperation between the two countries in the international arena. 

The State Minister further commended the leadership and the humanitarian assistance provided by the Kingdom of Saudi Arabia to evacuate nationals of many countries, including 32 stranded Sri Lankans from the Republic of the Sudan recently.

 The State Minister also delivered a keynote address at the business meeting organized by the Sri Lanka Professional Association (QS Chapter) with a view to exploring opportunities for the Sri Lankan construction sector in development projects in the Kingdom. The B2B meetings organized by the Riyadh Chamber of Commerce provided opportunities for the visiting Sri Lankan business delegation to find potential business partners. 

The delegation for The First Session of the Sri Lanka – Saudi Joint Commission comprised senior officials of the Ministry of Foreign Affairs, Ministry of Health, Ministry of Labour and Foreign Employment, Ministry of Defence, Ministry of Education, Ministry of Investment Promotion, Ministry of Technology and the Colombo Port City Economic Commission and was assisted by the Ambassador of Sri Lanka to Saudi Arabia P. M. Amza and the Mission officials.

Sri Lanka Original Narrative Summary: 27/05

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  1. State Minister of Investment Promotion Dilum Amunugama says Sri Lanka received USD 604 mn of foreign investments for 30 new projects during the 1st Quarter of 2023.
  2. Sri Lanka’s merchandise exports suffers major decrease of 16% to US$ 814 mn in April 2023 compared to April 2022: the decrease is 0.5%, when compared to April 2021 too: declining trend noted in major export products, Apparel & Textiles, Rubber & Rubber based products and Coconut & Coconut based products.
  3. Former Mayoress of Colombo Rosy Senanayake appointed as the Advisor to the President on Local Government Affairs: Local Government Elections have been postponed indefinitely on the grounds that the Ministry of Finance is unable to allocate Rs.10 bn for the conduct of the Poll.
  4. Energy Minister Kanchana Wijesekara says Fuel Quota currently allowed on the QR system will be increased from the next month’s fuel price revision: fuel consumption has shrunk significantly on the back of the massive contraction of the economy, leading to severe cash flow problems for the CPC.
  5. “Glorious Church” preacher and self-styled prophet Jerome Fernando files a Fundamental Rights petition with the Supreme Court seeking the issue of an order preventing his arrest by the CID.
  6. Health Service Committee of the Public Service Commission says the disciplinary proceedings against Dr. Shafi Shihabdeen who was alleged to have performed surgical procedures leading to infertility in women, have been concluded and he has been re-attached to the Kurunegala Teaching Hospital.
  7. State Minister of Investment Promotion, Dilum Amunugama says cannabis cultivation will be permitted as a pilot project with the involvement of an investor and the Board of Investment since the “Expert Committee” has approved the project.
  8. “Sak Surin”, a male elephant donated by Thailand to Sri Lanka 2 decades ago, is set to return to Thailand to receive medical treatment as he is ill and has poor living conditions: the jumbo is to travel on a chartered Russian aircraft on July 1: Former Thai MP Kanchana Silpaarcha says the cage to transport the elephant is ready.
  9. Sri Lanka Police says 23 people have been gunned down in Sri Lanka so far in 2023: 6 injured: former Senior DIG Priyantha Jayakody says homicides in 2022 had spiked to 523, and that 239 homicides have been reported in the first 146 days in 2023.
  10. Private Pharmacy Owners’ Assn President Chandika Gankanda says there is no shortage of drugs in private pharmacies although they are aware that Govt hospitals are facing an acute drug shortage.

Brandix Group Shuts Down 5 Factories; Investors Turn to Bangladesh for Investments

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It is reported that 05 garment factories of the Brandix group have been closed and the investors have invested them in Bangladesh, showing signs of a severe collapse in the garment industry sector in this country.

Accordingly, the main factory located in Katunayake, and the factories located in Welisara, Avissawella, Rakwana and Habaraduwa zones have been shut down.

Those factories have had to be closed due to the foreign exchange crisis in Sri Lanka and the fact that orders are not being received from them.

Another reason for this is the fact that Bangladesh has an easier business environment than Sri Lanka.

Accordingly, it is a serious problem that the people who worked in the factories in Sri Lanka have lost their jobs.

Due to the ability to procure workers from Bangladesh at a lower salary than the workers in Sri Lanka, the possibility of the employees of those institutions in this country to join the Bangladeshi factory has also been blocked.

It is said that the fact that the factory does not need to provide food to the Bangladeshi workers has also provided another reason for these investments to go to Bangladesh.

However, due to the economic crisis in the country, the industrial sector is collapsing day by day and yesterday the opposition leader Sajith Premadasa questioned the government in the Parliament.

It will also be difficult to address the socio-economic crisis, especially with the closure of garment factories and the unemployment of thousands.

Introduction of Contributory Pension Scheme for State Sector Employees announced

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State Minister of Social Empowerment, Anupa Pasqual, has revealed plans to introduce a new pension scheme in the future, aimed at reducing the burden on the country’s finances. The proposed scheme will be a contributory pension system for state sector employees, with both employers and employees making contributions.

Under the forthcoming pension scheme, the government intends to implement a funding model where employers contribute 12% of the employee’s salary, while employees themselves contribute 8%. This balanced approach aims to ensure that the financial responsibilities are shared, making the scheme sustainable in the long run.

Speaking to the media in Kalutara, State Minister Anupa Pasqual emphasized that the introduction of a contributory pension system has been successfully implemented by numerous countries around the world. The scheme has proven to be an effective solution for managing pension funds and ensuring the financial stability of retirees.