Colombo (LNW): The Ceylon Electricity Board (CEB) has approached the Public Utilities Commission of Sri Lanka (PUCSL) for an upward revision in electricity rates, according to reports.
This proposed increase stems from the financial strain the board faced due to the dominance of thermal power generation, which became necessary because of the dry spells affecting the country.
Eng. Dr. Narendra De Silva, CEB’s General Manager, highlighted that while the tariff revision was initially slated for January, the board is now keen on having it implemented by October.
A shortfall in hydro-power generation is at the heart of this move, and the CEB had projected 4,500 GWh of hydropower for the year, but only 3,750 GWh was realised, Dr. De Silva pointed out.
This gap forced the CEB to rely on an additional 750 GWh of electricity from thermal sources, incurring more costs.
Manjula Fernando, the chairman of PUCSL, confirmed receiving the CEB’s request on Wednesday (Sept. 28) and emphasised that the commission would thoroughly review the proposal.
The media is full of new reported on the IMF’s 1st review of the US$ 3 bn IMF programme held in September 14 to 27, 2023. All IMF friends and well wishers eagerly waited for the release of the 2nd tranche of US$ 330 mn immediately after this review. High expectations were based on significant national policy changes implemented by the authorities sitting at the IMF table in a short period of time from the receipt of the first tranche of US$ 333 mn immediately after the approval of the IMF programme on 20 March 2023. Under this 48-months long programme, US$ 663 mn is scheduled to receive in 2023.
Some media quoting the IMF press briefing held on 27 September reported that IMF did not reach a staff-level agreement with Sri Lanka due to a potential shortfall in government revenue generation and, therefore, 2nd tranche of about US$330m would only be released after the IMF reaches a staff-level agreement, and there was no fixed timeline for receiving it.
However, the Central Bank or Ministry of Finance was not interested in communicating any news on the outcome of the IMF review to the public although some spokesperson before commencing the review expressed positive attitudes towards receiving the second tranche.
The IMF press release dated 20 September provided some information regarding the outcome of the 1st review.
Accordingly, the purpose of this short article is to provide 10 highlights of the IMF 1st review press release and 12 traits missing expectations of the IMF programme as revealed from the press release on the stabilization and recovery of Sri Lankan economy from its historic crisis.
The target group of this article is the professionals who are familiar with macroeconomic management policies and IMF programmes.
10 highlights of the IMF 1st review press release
1. The remarkable resilience shown by people in the face of enormous challenges.
2. The commendable progress in implementing difficult but much-needed reforms and the economy showing tentative signs of stabilization.
3. Inflation down from a peak of 70 percent in September 2022 to below 2 percent in September 2023, gross international reserves increased by $1.5 billion during March-June this year, and shortages of essentials eased.
4. Despite early signs of stabilization, full economic recovery is not yet assured. Growth momentum remains subdued, with real GDP in the second quarter contracting by 3.1 percent on a year-on-year basis and high-frequency economic indicators continuing to provide mixed signals. Reserve accumulation has slowed in recent months.
5. Sustaining the reform momentum for lasting recovery and stable and inclusive economic growth.
6. Government revenue mobilization to fall short of initial projections by nearly 15 percent by year end undermining the path to debt sustainability.
Importance to strengthen tax administration, remove tax exemptions and actively eliminate tax evasion and to rebuild external buffers by strong reserves accumulation.
7. The IMF Governance Diagnostic report to be published.
8. Steps taken on conducting bank diagnostics, developing a roadmap for addressing banking system capital and liquidity shortfalls and improving the bank resolution framework to ensure financial stability.
9. The headway made on regaining debt sustainability through the execution of the domestic debt restructuring and advancing discussions with external creditors.
10. IMF 1st review decision – financial assurances on completion of debt restructuring and a new staff level agreement to be reached
Executive Board approval of the 1st review requires the completion of financing assurances reviews as Sri Lanka is restructuring its public debt which is in arrears.
These financing assurances reviews will focus on whether adequate progress has been made with debt restructuring to give confidence that it will be concluded in a timely manner and in line with the program’s debt targets.
The team will continue its discussions in the context of the 1st review with the goal of reaching a staff-level agreement in the near term.
12 traits of missed expectations in the IMF prgramme
Contents in the IMF press release are reflective of bothered dreams of those who bankrupted and trapped the country in the IMF in pursuit of macroeconomic stabilization with debt sustainability through the IMF intensive care unit.
It is now established that the country was pushed to the default of debt in order to resolve the so-called debt unsustainability through debt restructuring assisted and supervised by the IMF together with a supportive financial programme.
However, it now turns out to be a false premise that has misled the national leaders and activists. 12 traits of the IMF press release are given below to highlight how the IMF programme dream has now been shattered.
1. Failed debt restructuring
The IMF never guided or supervised debt restructuring. Instead, it imposed conditions requiring the authorities to do it and provide the IMF with financial assurances to that effect. The IMF programme was delayed for one year to get the financial assurances in the form of consent of external creditors to debt restructuring process. Further, the decision of the IMF 1st review is to withhold the second tranche of US$ 330 mn because of the non-availability of financial assurances in the form of the completion of debt restructuring as per IMF conditions. Therefore, debt restructuring seems to a failing concept.
2. Another IMF staff level agreement on the table
The decision of the IMF 1st review is to go for another staff level agreement depending on the progress of actual debt restructuring. It appears that the problem is the deadlock in the external debt restructuring although the authorities chaotically attended to domestic debt restructuring options in September to please the IMF.
Another level of staff agreement is a bizarre development in IMF programmes. The usual IMF procedure has been to decide the fate with the release or non-release of the tranches upon the periodical reviews of the progress of the fulfilments of the conditions laid-down in the initial staff level agreement approved by the IMF Board.
3. Tentative signs of stabilization and full economic recovery not yet assured
This is a strong blow at policymakers who frequently attempt to mislead the public by stating that the economy is now stabilized and recovered in a time of less than a year with the IMF programme and fiscal and monetary policies implemented within the IMF programme. However, the general economics knowledge is that it will take more than a decade to recover a country from an identified economic crisis.
4. Fiscal front lagging behind the IMF conditionalities
The progress of the reform on the fiscal front also falls short of the conditionalities although the authorities went pell-mell to raise tax despite lingering socio-economic consequences unfolding in front of their eyes. The failure of the IMF staff and their local agents to understand the inability to contract the government of a crisis-hit, significantly contracted economy by the monetary front is now established.
5. IMF Tax reforms not practical for Sri Lanka
IMF suggestions to strengthen tax administration, remove tax exemptions and actively eliminate tax evasion are the ones generally applicable even to developed countries including the US that annually runs deadlocks in debt ceiling and federal shutdowns. Therefore, such tax system reforms are only wastes of times to countries like Sri Lanka confronting and suffering contraction and bankruptcy in all corners.
The reported increase in the foreign currency reserve at the central bank is not a strong reserve accumulation source. Therefore, the reserve built-up story of the policymakers is an insider deals-based manipulation of the macroeconomic figures. As the new central bank does not have a publicly accountable duty to build a florigen reserve, strong reserve accumulation has become a fiscal function. This requires stimulation of real economic activities to generate a foreign surplus, not on hot money pursued by the central bank on Treasury bills sales to speculative foreign investors.
7. Banking instabilities smoking
The conduct of bank diagnostics and developing a roadmap for addressing banking system capital and liquidity shortfalls and improving the bank resolution framework sound alarms for financial system instabilities possible on banking problems. It is not disputed the links of foreign currency and debt crises to banking crisis in the second round, given the significant exposures of banks to foreign currency and debt.
Although central bank authorities affirm banking sector resilience and soundness indicators, the fact is the real banking vulnerabilities waiting to hit when the times comes. As the new central bank does not possess the conventional LOLR powers, crisis bank resolution has become a fiscal function.
8. Inflation control not credited to the super tight monetary bureaucracy
Although the IMF noted both historic inflation of 70% and historic disinflation to below 2%, it did not credit the tight monetary policy of nearly one and half years as the force behind the fall of inflation much below the monetary policy target. In contrast, the central bank governor received a high global rating for inflation control among other macroeconomic recovery aspects.
Despite the strong old monetarism followed by the IMF, its staff may have recognized market instabilities caused by the extreme political uncertainty towards hyper inflation and subsequently resumed political stability that was instrumental in regaining the market stability and fall of inflation at a faster rate of speed than expected by the central bank.
9. Debt restructuring towards IMF debt sustainability targets suspected
The IMF requires new financial assurances to ensure that the debt stock will decline to the sustainability level of below 95% of GDP by 2032 (from present 128%) and government gross financing needs falls to 13% of GDP (from present 24.5%) during 2027-32 period. Therefore, these are just numbers fixed outside real ground factors and, therefore, debt restructuring towards the achievement of such presumptuous debt sustainability numbers is highly suspected.
10. Resilience of people mis-interpreted
In fact, people confront living somehow or lingering death in the economy bankrupted by macroeconomic policymakers and controlled by security forces. Therefore, the IMF term “resilience” to show positive attitudes of people towards the economic crisis and recovery is inappropriate. That itself shows the insufficient knowledge of the IMF staff and its local agents on ground realities of Sri Lankan economy and people at present. Some people migrate with enormous difficulties while many have to live in increased poverty, not because of their resilience to the economic crisis and policies but because of the only option to live somehow as law abiding civilians.
11. IMF governance diagnostic report not ready and convincing
The governance diagnostic study is a geopolitical request of Sri Lankan authorities as a means to fight corruption alleged as the prime source to the country’s bankruptcy. The IMF does not have any professional background for such governance diagnoses for macroeconomic management, given its working background in old demand management concept and monetarism irrespective of the country circumstances and contemporary shocks. Therefore, even if this report is released, it will not provide any inputs to the recovery of the economy as corruption is not a macroeconomic variable recognized in the IMF demand management model or macroeconomic management models.
12. IMF financial programme failure looming
The IMF itself recognized exceptionally high risks to the program implementation at the beginning although Sri Lankan authorities did not pay any attentions to such risks. Instead, they treated the IMF programme as the God-given salvation of the country from the bankruptcy despite the contrasting evidence already available in many countries.
Therefore, the 1st review deadlock is no doubt a firm early sign of implementation risks detected by the IMF at the beginning. The fact of the matter is the waste of time more than a year to understand real risks of the IMF programme.
Concluding Remarks
In this background, it is pathetic that our local creed of international economists have had to sit at the IMF table and do what ever few IMF staff members recommend without any regard to Sri Lankan ground realities or other country experiences. It is now clear that IMF programme is a part of geopolitics created akin to the foreign currency crisis. However, it has now gone beyond the limits of the country’s macroeconomic management that should be framed in national interest.
Meanwhile, some media reported the President saying that the IMF does not have a mechanism to help bankrupt countries where some IMF proposals will not ensure stability. He also is reported to have warned that there is a point beyond which people cannot be burdened and Sri Lanka is now going beyond that limit.
In addition, it is reported that the President at the Berlin Global Dialogue has expressed views akin to the IMF stated above. As reported the President has stated that the core of the global financial architecture today has been deigned almost eight years before whereas the world has seen many dramatic changes since then. However, international financial architecture has seen relatively mild reforms. The international financial architecture available makes the debt restructuring too complex.
Therefore, in view of the IMF 1st review press release and observations made above, it is necessary that relevant policymakers understand the failure of IMF’s demand control-based financial programmes in stabilizing and recovering the bankrupt economy of Sri Lanka and correct the macroeconomic policy mix to refix the economy without delay before hitting a full-scale banking/financial crisis sooner or later.
Here, the challenge is the choice over macroeconomic conceptual pack to suit the Sri Lankan circumstances. If policymakers continue to follow the conventional demand management concept deaf and blind without looking at root causes for the present bankruptcy, the failure is inevitable as already hinted by the President as above.
(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)
Secretary to the President Mr. Saman Ekanayake emphasized that the government is bound to protect Buddhism according to the constitution.
He further mentioned that according to the instructions of President Ranil Wickremesinghe, steps have already been taken to provide necessary facilities to the students studying history as well as to doctors and professors and to establish a centre to study Sri Lankan history.
Mr. Saman Ekanayake conveyed these thoughts while attending the presentation ceremony of scroll memorandums related to the areas declared by the National Physical Planning Department through the Gazette as “Pujabhumi” yesterday morning (27) at the Presidential Secretariat.
Secretary to the President Mr. Saman Ekanayake presented the “Puja Bhumi” scroll memorandums for 05 temples and a Devalaya with archaeological, historical as well as sacred significance.
He also requested the venerable Maha Sangha to respect the right to practice other religions freely and not to fall prey to the efforts of some to create religious conflicts in the country.
The scroll memorandum for declaring the Welgama Rajamaha Vihara as a “sacred site” was presented to the Chief Incumbent Ven. Ampitiye Seelawansa Tissa Nayaka Thero, and the scroll memorandum for declaring the Meegammana Rajamaha Viharaya which is located in the Meegammana village of Pathadumbara valley, as a “sacred site” was presented to the chief incumbent of the temple Ven. Maninggamuwe Wimala Keerthi Sri Sumanajothi Piyarathana Nayaka Thero.
Also, the scroll memorandum of declaring the Gangodawila Sri Vijayarama Rajamaha Viharaya in Kolomthota Gangodawila village as a “sacred site” was presented to the Saddharma Keerthi Sri Ven. Amunumulle Jinarathana Thero, while the Papiliyana Sunethra Mahadevi Piriwen Rajamaha Viharaya was presented with the scroll memorandum to declare it as “sacred site” to the Chief Incumbent Venerable Prof. Medagoda Abhayatissa Nayaka Thero.
Also, scroll memorandum declaring Minneriya Mahasen Rajamaha Viharaya as a “sacred site” was presented to Ven. Matale Udugama Saddhananda Thero, the Chief Incumbent of the temple and the scroll memorandum declaring the Medagoda Sri Siddha Sath Pattini Devlaya in Ruwanwella as a “sacred site” was handed over to the guardian of the Devalaya Ajith Shanta Bandara.
This event was graced by the presence of the Maha Sanga led by Former Vice-Chancellor of the Pali and Buddhist University, Vice-Chief Sanghanayaka of Southern Sri Lankan sector of the Malwathu Chapter Ven. Prof. Ittademaliye Indrasara Nayaka Thero, Ven. Attangane Rathanasara Thero Chief Registrar of the Sri Lanka Ramagngna Chapter, Chief Prelate to Russia Ven. Prof. Pallekande Rathanasara thero Former Chief Registrar of the Amarapura Chapter and the acting Mahanayaka of the Wajirawansha sector of the Amarapura Chapter,
Minister of Buddha Sasana, Religious and Cultural Affairs Vidura Wickremenayake, Secretary to the Ministry of Buddha Sasana, Religious and Cultural Affairs Mr. Somarathna Vidanapathirana, Secretary to the Ministry of Urban Development and Housing Mr. S. Sathyananda and other government officials.
Mrs. Diana Gamage, the Minister of State for Tourism announced plans to launch promotional campaigns aimed at attracting 1.5 million foreign tourists to Sri Lanka by the year’s end. She emphasized the government’s commitment to ensuring the safety of tourists and mentioned initiatives such as establishing taxi associations to enhance the visitor experience.
Speaking at a press conference themed ‘Collective path to a stable country’ at the Presidential Media Centre (27), Minister Diana Gamage also highlighted the transformation of high-tourist-traffic cities into vibrant, non-stop destinations.
Mrs. Diana Gamage who further commented said:
Today, we celebrate International Tourism Day and the Ministry of Tourism has orchestrated a graceful commemoration of this occasion. In conjunction with this special day, we have proudly introduced the ‘Jaya Sri Lanka’ award, which recognizes the exceptional culinary expertise of Dr. Pabilis Silva, a journey that took him from humble beginnings to the prestigious position of head chef at the Mount Lavinia Hotel. This award holds great significance, underscoring the importance of acknowledging the often-overlooked profession of chefs in our nation.
In comparison to the previous year, we have witnessed a remarkable surge in tourist arrivals during the first nine months of this year, with approximately one million foreign visitors gracing our shores. We hold high expectations that this number will soar to 1.5 million by year-end, and accordingly, we have charted out plans for special promotional events to attract even more tourists.
With the onset of winter in Europe just two months away, we anticipate a substantial influx of tourists during the final months of the year. Our aim is to draw a significant number of visitors from European countries, including England. Furthermore, we are actively working on enticing tourists from Middle Eastern nations, with an expected influx as early as next month. Our ministry is diligently planning tailored promotional campaigns to engage these markets effectively.
Ensuring the convenience and satisfaction of tourists is paramount. Particularly in popular destinations like Ella, Nuwara Eliya, Galle and Colombo, we are committed to providing essential night-time facilities to cater to their needs. We also aspire to transform tourist-centric cities into vibrant, 24/7 hubs by revising certain regulations to facilitate tourist spending. Our goal is to create an environment where tourists are encouraged to contribute to our nation’s economic growth.
Moreover, our responsibility extends to the safety of tourists. To address this, stringent legal actions will be taken against local businesses engaging in unfair and illegal pricing practices targeting tourists. We encourage foreign visitors to act as if they plan to return to our country, fostering a positive and respectful atmosphere.
Additionally, we are in the process of establishing taxi associations to enhance the convenience and safety of tourists, thus curbing illegal activities. The Ministry of Tourism is fully dedicated to this cause and has placed it under its special attention.
The cabinet has granted approval for the hemp cultivation proposal, aimed at bolstering the country’s foreign exchange reserves.
Consequently, it is anticipated that the corresponding official gazette notification will be issued within the next two weeks.
This initiative is not merely intended to generate revenue in rupees but rather to establish a framework that generates income in dollars. To achieve this goal, the establishment of an authoritative body is envisaged, operating within investment promotion zones under a comprehensive regulatory framework.
Colombo (LNW): The Colombo Port City Economic Commission has unveiled its Comprehensive Progress Report covering the period from January to August 2023, showcasing significant strides in the development of the Colombo Port City and the finalization of legal frameworks for the Colombo Port City Special Economic Zone (SEZ).
These advancements underscore the project’s standing as a premier investment destination and a burgeoning “Gateway to South Asia.”
Functioning as the Single Window Investment Facilitator, the Commission has been steadfastly dedicated to simplifying procedures and nurturing a conducive business environment for investors, enterprises and residents alike.
It highlights that throughout the first eight months of the year, the Commission has achieved pivotal legal milestones, cementing its commitment to constructing a resilient business ecosystem within the Colombo Port City.
The Asiri Port City Hospital Lease Agreement was signed with Asiri Port City Hospital Ltd., paving the way for the execution of the Indenture of Lease and Investor Agreement, pending specific conditions, to establish a state-of-the-art hospital within the SEZ.
The Colombo Port City (Duty-Free Operations) Rules, No. 01 of 2023, were also officially published in the Gazette on 22 May, under reference number 2333/14.
Meanwhile, a strategic partnership was also forged between the Commission and the Ceylon Chamber of Commerce (CCC)-Institute for the Development of Commercial Law and Practice (ICLP) International ADR Centre (Guarantee) Ltd. (IADRC).
This collaboration designates IADRC to provide Alternate Dispute Resolution Services within the jurisdiction of Colombo Port City, accompanied by an agreement with the Ministry of Justice to establish a world-class Arbitration Centre.
The Colombo Port City Development Control Regulations (DCR) were also updated and published in the Extraordinary Gazette No. 2334/47 on 2 June.
Most notably, the Parliament of Sri Lanka approved a special incentives program, designed in consultation with the Minister of Investment Promotion, to support businesses categorized as Businesses of Strategic Importance (BSI). This program was published in Extraordinary Gazette No. 2343/60, on 4 August.
Highlighting the fast-paced progress within Colombo Port City, a number of achievements with regard to commercial development have been made.
A Cabinet Memorandum facilitated duty-free operations and designated duty-free mall operators and retailers as businesses of strategic importance.
Government Notification No. 2333/14 established Duty-Free Rules, outlining eligibility criteria for shoppers, permissible purchases, and applicable limits under the Port City Duty-Free regime. Key players, including Port City Duty-Free Ltd. and Duty-Free Retail operator One World Duty-Free (ODF) Ltd., were officially inducted as Authorized Persons.
Alongside this, interior work on the Duty-Free Mall has progressed rapidly, with site handovers to retail operators expected in December 2023.
Meanwhile, preliminary approval from the Civil Aviation Authority was secured for a check-in facility for departing passengers at the Duty-Free Mall premises itself.
Acting Finance Minister Shehan Semasinghe announced that negotiations to secure the second tranche of funding from the International Monetary Fund (IMF) are progressing positively. He emphasized that the government’s economic reform efforts are currently under evaluation by the IMF.
Furthermore, Minister Semasinghe noted that discussions to finalize the staff level agreement required for receiving the second instalment are anticipated to take place after President Ranil Wickremesinghe’s official visit to Germany.
Minister Semasinghe made these statements during a press conference held at the Presidential Media Centre yesterday (28), under the theme ‘Collective Path towards a Stable Country.
The Minister further said :
President Ranil Wickremesinghe recently held crucial discussions with the IMF team currently in Sri Lanka, during which they conducted a special assessment of the country’s economic situation. The IMF team expressed appreciation for the economic reforms undertaken thus far.
“It is expected that negotiations to secure the staff level agreement will take place after President Ranil Wickremesinghe returns to the country following his official visit to Germany. Further negotiations are scheduled under the President’s chairmanship.
The IMF team has provided a positive review of Sri Lanka’s current financial situation. We believe that, after reaching a staff level agreement, future work will proceed robustly.”
“Comparing to the previous year, the government revenue has seen a remarkable growth of 43%. The process of tax collection plays a pivotal role in bolstering government revenue. In addition to those already within the existing tax net, we are also focusing on individuals who are obligated to pay taxes. The IMF has also directed its attention towards government tax revenue.
Furthermore, the IMF has praised the efforts of the country’s citizens in implementing new economic reforms. The local debt optimization program is nearing its completion and discussions regarding foreign loans are already in progress with all creditors.”
“While some groups have claimed that Sri Lanka has been isolated in foreign debt optimization discussions, it’s important to note that no country has declared its unwillingness to support us under the foreign debt optimization program. These countries are actively engaged in discussions with us. We are confident that after completing the domestic debt optimization work, progress on foreign debt optimization will also be swift.”
“Everyone should maintain a positive outlook on this.
This year, our economic situation has significantly improved compared to a year ago. Inflation, which stood at 70% then, has now decreased to 1.3%, providing a substantial boost to our country’s economy.
Last year, the interest rate on treasury bills in the domestic market was as high as 30%. Today, it has reduced to 13%. This reduction is a significant advantage for our treasury.
Furthermore, our foreign reserves have increased and we are witnessing an upturn in tourism. Additionally, remittances from Sri Lankans abroad have resumed their normal flow. With the on-going economic development, we have laid out plans to continue our economic growth roadmap for the upcoming year without any hindrances.”
“As a nation, our path forward should prioritize sustainable economic growth and a positive mind-set is crucial. Economic reforms, which should have been initiated two decades ago, are now in progress. History has shown that many small countries achieved significant development through such reforms.
It’s important to acknowledge that we are currently navigating challenging times as a nation. If the President’s economic reform program continues on this trajectory, Sri Lanka can evolve into a nation with a robust economy in the future. Strengthening the economy may not align with the interests of groups pursuing narrow political gains, but with the anticipated second instalment from the International Monetary Fund, we can steer our country toward a positive economic outlook by 2024.”
Colombo (LNW):SriLankan Airlines has entered into a first-ever interline partnership with Virgin Australia that will strengthen the airline’s network in Australia and offer customers extensive connections across the land down under and beyond.
The new partnership reaffirms SriLankan’s commitment to Australia and will present customers the convenience of adding select Virgin Australia domestic or international connections to their SriLankan Airlines booking and managing a multi-airline itinerary under a single ticket, the SriLankan Airlines disclosed.
Dimuthu Tennakoon, Head of Worldwide Sales & Distribution of SriLankan Airlines commented on the partnership by stating, “Australia has one of the largest Sri Lankan diasporic communities, which makes Australian routes incredibly popular all year around and particularly with people travelling to visit friends and relatives or in pursuit of higher education.
This partnership will help us make further inroads in the Australian market through improved connectivity and a range of other benefits for our valued customers.”
SriLankan Airlines currently operates daily from Colombo to Melbourne and from Colombo to Sydney on a thrice-weekly basis.
The partnership will enable passengers flying SriLankan to Melbourne or Sydney to connect to the Australian cities of Adelaide, Brisbane, Canberra, Cairns, Darwin, Hobart, Hamilton Island, Launceston, Gold Coast and Perth with Virgin Australia. Passengers will also have the option of flying beyond Australia to New Zealand, Samoa and Fiji.
It is a win for Sri Lankan and Indian Australians living in these cities too as they can now fly out from their local city to Sri Lanka or India with a single SriLankan Airlines’ booking. What’s more, passengers can enjoy a seamless journey with a single check-in, including for baggage, at the departure airport and beat transit check-in queues.
The introduction of domestic and international interline flights options with Virgin Australia would improve the accessibility to Sri Lanka for Australian outbound tourists as well. An important customer group for SriLankan, the partnership will unquestionably help develop Australian leisure travel to Sri Lanka.
It will also provide easy connections for SriLankan Airlines’ passengers flying to Australia via Colombo from the Maldives, India, Nepal, Pakistan and Bangladesh, the statement added.
Since relaunching flights to Melbourne in October 2017 and Sydney in June 2020, close to a million passengers have travelled with SriLankan Airlines to Australia.
The new partnership will enhance SriLankan Airlines’ service to Australia as the airline prepares to cruise to new altitudes above the land down under, according to the SriLankan Airlines.
Colombo (LNW): The construction industry continued to perform at a subdued level in August 2023, yet reaching towards the neutral threshold, Central Bank report revealed.
Construction firms tend to undercut prices to secure the limited available projects in a highly competitive tender bidding process, CB report claimed.
The lack of new projects continued to have a severe adverse impact on the industry as reflected by the continuous decline in New Orders.
Many Industry stalwarts highlighted that the limited availability of local and foreign funded construction projects is still a major concern in the industry.
In this background, firms laid off contract based employees to scale down operations as reflected by the continuous decline in Employment.
Further, Quantity of Purchases continued to decline, yet at a slower rate during the month. In the meantime, Suppliers’ DeliveryTime shortened during the month mainly due to reduced pressure on supplier capacity.
The sentiment amongst the firms towards the next three months remained positive as they experience an improvement in availability of projects from September mainly due to the expected recovery in the economy
Spiraling prices of building materials specially cement and steels in recent times have stalled the building work resulting 23.1 percent contraction in the construction sector causing a loss of 75 percent of around 1 million workforce, industry stakeholders complained.
Sri Lanka’s building construction work, has had a steep fall of 23.1 percent in the second quarter of 2023 against the same quarter last year, Census and Statistics Department confirmed this week.
The price of a 50 kg bag of Cement is being sold at the local market at an exorbitant price of Rs.2150 but it can be sold at a price of Rs.1850, a trade ministry report revealed.
The cement companies are earning an undue profit after tax of Rs 300-400 by selling 50 kg bag of cement, a senior member of the committee on public finance COPF said adding that the tax component was around Rs 850 he said adding that he has compared landed price and retail price including taxes and profits.
According to the trade ministry report presented to the committee on public finance a metric ton of Steel QT Bars could be sold at a price of Rs 290,000 including taxes of Rs49,000 and dealers margin.
But the local market price is Rs. 360,000 and therefore the companies are earning a massive profit of Rs 70,000 per mt, he pointed out adding that this price could be reduced by lowering taxes.
Colombo (LNW): The Government has appointed 10 Public Expenditure Review Committees (PERC) comprising five or six members each with the aim of rationalizing state expenses through a systematic review to strengthen the country’s fiscal consolidation and economic recovery process, the Finance Ministry announced.
The Cabinet of Ministers at its meeting held on February 6, 2023 decided to appoint these committees with the participation of public and private sector experts to rationalize the government expenses of 10 key Ministries using the Zero-Based Budgeting Approach (ZBB).
The aim is to strengthen the fiscal consolidation process and support the economic recovery process, a senior official of the Ministry told the Business Times. There are several drawbacks in the long-standing budgeting practices adopted in Sri Lanka. Over the years, this has resulted in finances being allocated for redundant activities, duplications and unproductive functions.
As a result, there are often insufficient funds for core activities and functions of key line ministries. The prevailing fiscal crisis has made it all the more important to allocate scarce resources in the most efficient and productive way possible, the ministry statement highlighted.
In most cases, the annual budget is prepared on the basis of incremental adjustments to the previous year’s budget, without a rigorous review of the rationale and efficacy of past resource allocations.
With this major public finance reform to introduce Zero Based Budgeting, it will become necessary for line ministries to provide justifications for resource allocations regardless of previous years’ budgeted allocations the Ministry revealed.
Accordingly, finances will only be allocated following a clear evaluation of needs, costs, and associated benefits of such spending.
PERC will review all programmes/projects of each line Ministry and ascertain whether the core activities are in accordance with the mandate of the Ministry.
Moreover, PERC will identify duplications, wastage, and redundant expenditures, and prioritize all activities as per their potential for achieving objectives of the Ministry as well as national policies.
In addition to that, they will introduce short, medium, and long-term reforms to be implemented by each Ministry, with a view to optimizing productivity and cost effectiveness in their service delivery.
These committees have been appointed to oversee accounting procedure and control public expenditure in the Ministry of Transport and Highways, Ministry of Urban Development and Housing, Ministry of Public Administration, Home Affairs, Provincial Councils and Local Government, Ministry of Defence Ministry, of Public Security, Ministry of Education, Ministry of Health, Ministry of Agriculture, Ministry of Plantation Industries and Ministry of Irrigation.
Ms. Aruni Wijewardane who was in retirement was brought back from retirement by the then President Gotabaya Rajapakse and appointed as the Foreign Secretary on the recommendation of a politician . She assumed duties as Secretary to the Ministry of Foreign Affairs on 22 May 2022. She was a career diplomat . So much was expected from her as Foreign Secretary .
But according to several retired and serving officers. She is frequently embarking on foreign trips ( In September alone- Cuba, US now Germany) whilst the foreign ministry is sinking . She does not share the travel opportunities with other officers. We don’t want to list out the trips she has undertaken so far and the cost to the tax payer at a time when the country needs to preserve the foreign exchange. They noted she loves travel, the media and likes to be pictured with the president overseas with world leaders. What value has her trips had for the government and the people of Sri Lanka? Talk of one grant she got for Sri Lanka? A parliamentarian suggested that a debate is required at the way the foreign ministry is currently run. The secretary has been out of the country for over weeks.
The work of the ministry, (leave alone the cost of her overseas travel) is in a mess they noted. Several missions have no heads . Further they note she travels with a huge contingent of protocol officers . Again we refrain publishing the numbers. They told LNW one person is assigned to make sure of her seating and arrival, rooms etc are in order. She is acting as though she is the Minister , given that the Minister is new to diplomacy. This was evident in his recent outburst with regard to Prime Minister Justin Trudeau of Canada . Bankrupt Sri Lanka does not need any disputes with any nation at this time. A kindergarten child would tell you this. The Administration in the foreign ministry when it comes to appointments is done at her whims and fancy. Moreover she is not a good at administration. Those not in favor with her are not given good postings. She is a law unto herself, some noted . The biggest drawback, there is very little economic diplomacy they noted .
She is focused on foreign visits and meeting foreign dignitaries. The foreign ministry needs according to some observers a high caliber young officer who understands global trends and technology . Someone who understands commerce and business given Sri Lanka’s sorry economic plight. President Wickramasinghe will do himself a big favor they noted if he focuses more on the efficiency of the ministry and the missions Sri Lanka has globally, that sucks up the millions of USD that our hard working house maids keep remitting for our half baked diplomats to sip wine in cocktail circles and ride in Mercedes and BMWs and educate their children overseas. The country badly needs demonstrable results and to prune costs as the IMF put it bluntly at a press conference this week.
