Colombo (LNW): Sri Lanka’s small and medium businesses are in more trouble with the increase of bank interest to 36 percent from over 7 percent loans taken during a time when interest rates were kept down by authorities, than recent tax hikes, SME associations complained.
The Central Bank which has printed money for over seven decades to create forex shortages and balance of payments crises went overboard more than usual in 2020-2022 to suppress rates and try to boost growth or bridge an ‘output gap.’
SME’s were now in a ‘debt trap due to banks charging interest on interest for their loans as the moratorium is not applicable at present, a leading member of the SME association said.
Most of the SMEs have taken loans when the interest rates were at 7 percent without realizing that some of those are also variable interest rates, he added.
And now they can’t manage the debt they are in. That is actually a bigger problem for them than the tax.
The central bank printed money to enforce artificially low interest rates, and directed that loans be given at 7 percent to boost economic output.
Sri Lanka has been grappling with output gap targeting since\the International Monetary Fund gave technical assistance to the central bank to calculate ‘potential output’, giving the perfect opportunity for the country’s trigger-happy economic bureaucrats to print money.
Separately, taxes were also cut to boost potential output on the claim that there was a ‘persistent output gap’ after two currency crises in the wake of flexible inflation targeting cum output gap targeting up to 2019, triggered growth shocks.
Small and Medium Enterprises (SMEs) are now faced with a double blow of the Central Bank’s interest rate hike of around 30-36 per cent imposed by banks in their debt recovery action and the interest on interest levied by them under re -payment plans, SME associations alleged.
SME’s and some hotels were among those badly affected by the bank’s repayment plans with compound interest at a time when the tourism industry is regaining momentum, a top official of Sri Lanka tourism pointed out.
The Central Bank has implemented several schemes of debt moratoria and concessions to assist the affected borrowers specially the SMEs.
The last phase of the moratoria granted to affected borrowers of the banking sector ended on 30.06.2022.
However the Central Bank has recently issued guidelines to provide concessions to all licensed banks to grant necessary concessions for SME creditors and individuals by considering their appeals on a case-by-case basis, consequent to an objective assessment, on the future repayment capacity/viability of the business.
But banks and financial institutions have already activated all types of recovery actions, including parate execution and forced repossession of leased assets, they pointed out.
Colombo (LNW): President Ranil Wickremesinghe met with Mr. Bharat Lal, Director General of the Indian Institute of Good Governance, at the President’s Official Residence in Paget Road Colombo Yesterday (01).
Mr. Bharat Lal visited Sri Lanka to discuss potential ways to enhance the country’s civil service and improve government institution performance by implementing effective monitoring measures.
During the meeting, Mr. Lal shared India’s success in incorporating information technology into public service delivery, which resulted in significant progress and cost savings.
During the discussion, the President made a request to Mr. Lal for his assistance in establishing a University of Governance and Public Policy in Sri Lanka. Also present at the meeting were Secretary to the President Mr. Saman Ekanayake and the Indian High Commissioner HE Gopal Baglay.
Colombo (LNW): The Bar Association of Sri Lanka (BASL) has reportedly appointed a committee consisting of senior attorneys to probe the controversial ‘Anti-Terrorism Bill’, one that has been introduced as replacement to the Prevention of Terrorism Act (PTA).
Should the new BASL committee find any problem with the new bill, the BASL will go before the Supreme Court against it, according to Chairperson Kaushalya Navaratne.
Since introduction, the new Anti-Terrorism Bill has been subject to controversy due to its purported provisions repressing all sorts of anti-government movements, in what critics described as a direct blow in the head against democracy.
Justice Minister Wijedasa Rajapaksa who strongly advocates for the bill said it was prepared in accordance with international standards.
Colombo (LNW): Deprose Muchena, Senior Director of the global human rights watchdog Amnesty International, emphasised that the bailout package offered by the International Monetary Fund (IMF) must meet the minimum human rights standards, concluding his visit to Sri Lanka to attend the regional launching of the Amnesty Annual Report.
Full statement:
At a time when many actors including some in the international community have chosen to turn a blind eye to the urgent human rights challenges in Sri Lanka, my visit to the country was an opportunity to listen to affected communities, understand their concerns and have their lived experience guide our work to protect and strengthen human rights in the country.
We stand in solidarity with victims of human rights violations from across the island, many of whom I met and heard concerns from over the past few days. Amnesty International will continue to work to uphold and protect their right to freedom of peaceful assembly and freedom of expression. The victims of human rights violations in the context of the civil war and its aftermath as well as organizations working on enforced disappearances, must also urgently and genuinely be engaged by the government to hear their long-standing demands for truth, justice and reparation.
With government we raised alarm bells around the proposed anti-terrorism legislation that is intended to replace the overboard Prevention of Terrorism Act (PTA). We maintained our call that any counter-terrorism provisions must be compliant with international human rights law. With the International Monetary Fund (IMF) we reiterated our concerns that the bailout package must meet minimum international human rights standards and not result in cuts to vital public goods and services at a time when Sri Lankans continue to suffer the impacts of an economic crisis. Any agreements and terms and conditions linked to the bailout decision should be made transparent and available for public scrutiny.”
The delegation thanks the Sri Lankan government for their availability during the visit, including President Ranil Wickremesinghe and Minister of Foreign Affairs Ali Sabry. We also extend our thanks to the members of Parliament from the opposition who took out the time to meet us. The delegation is particularly grateful to the mothers of the disappeared from the north and the east, members of the strong and resilient Sri Lankan civil society and Aragalya protest groups, and members of the fishing community for their time and sharing their valuable insights on a gamut of issues including the economic crisis, the right to protest, and transitional justice among others.
Colombo (LNW): Sri Lanka’s wholesale and retail sale rebounded while transport of Goods, Warehousing and Passenger Services recorded up and down moderate growth in value added terms, the recent auditor general’s report revealed.
The wholesale and retail trade activities expanded by 1.3 percent in the first half of 2022, compared to 2.5 percent growth in the same period of 2021.
Sri Lanka’s wholesale businesses including supermarkets are bracing for the impact of higher taxes from the recent budget which are effective in January.
After the increase of a new 15 per cent Value Added Tax (VAT), supermarkets and wholesalers and retailers will eventually pass the cost to consumers, traders and industry sources said.
The wholesale trade is still awaiting further clarification on the taxes to measure the extent of the impact on profitability,
Several members of Wholesale Traders Association said that they have no alternative other than increasing the wholesale price of goods as they cannot avoid paying higher taxes.
The Sri Lanka Retailers’ Association (SLRA), the apex body of organised retail in Sri Lanka, has raised growing concern about the current standing of the local retail sector.
“The local retail sector accounts for more than 30% of the national GDP and 14% of direct employment in the workforce.
“The Social Security levy charged on basic essential items has increased the burden on consumers. SLRA recommends excluding the levy on basic essentials to provide relief to the consumers.
SLRA urges the government and authorities to set up a system to facilitate the continuation of the retail sector business through a planned set of actions.
A 100% robust framework based on monthly availability that could be considered to rejuvenate the retail sector would ensure imports and provide a means of managing the current uncertainty in the market. The SLRA also advocates transparency on how retailers should operate amidst the current crisis.
The transport sector posted a negative growth of 0.9 percent in the first half of 2022, compared to the 8.9 percent expansion in the first half of 2021, the report indicated.
The total number of new vehicle registrations dipped considerably by 34.6 percent to 16,690 in the first nine months of 2022 from 25,505 in the same period of 2021.
This was mainly due to the import restrictions of vehicles imposed by the government in order to manage the forex liquidity, the AG report observed.
The registration of motor cars declined by 60.7 percent in the first nine months of 2022, while registration of three wheelers, goods transport vehicles and land vehicles dropped by 98.5 percent, 48.7 percent and 43.9 percent,respectively during the period, Motor traffic department dat showed
However, registration of motorcycles, buses and dual purpose vehicles increased by 17.2 percent, 13.9 percent and 13.8 percent, respectively during the first nine months of 2022.
Total containers handled in the first nine months of 2022 decreased by 2.5 percent to 5.2 million Twenty-foot Equivalent Units (TEUs), compared to 5.4 million TEUs in the same period of 2021.
Containers handled for domestic, transshipment and re-stowing decreased by 11.0 percent, 0.8 percent and 0.4 percent, respectively in the first nine months of 2022.
The total number of cargo handled at the Colombo port also decreased by 4.7 percent to 78.4 million metric tons in the first nine months of 2022, compared to 82.2 million metric tons in the same period of 2021.
Colombo (LNW): Sports Minister Roshan Ranasinghe has appointed a five-member Technical Consultative Committee for Sri Lanka Cricket.
The Committee is chaired by ex Cricket Captain Sanath Jayasuriya, and comprises Farveez Maharoof, Charith Senanayake, Ashantha De Mel and Kapila Wijegunawardena as members.
A gazette has been issued by the Ministry in this regard as well.
Colombo (LNW): Showers or thundershowers will occur at several places over most parts of the country during the afternoon or night, and fairly heavy showers about 75mm are likely at some places in Central, Sabaragamuwa and Western provinces and in Galle and Matara districts, the Department of Meteorology said in a statement today (03).
General public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.
Marine Weather:
Condition of Rain:
Showers or thunder showers will occur at a few places in the sea areas off the coast extending from Mannar to Matara via Puttalam, Colombo and Galle and in the sea areas off the coast extending from Pottuvil to Trincomalee via Batticaloa.
Winds:
Winds will be south-easterly to south-westerly and wind speed will be (20-30) kmph.
Former CB Deputy Governor P Samarasiri says the LKR appreciation at the beginning of March was not supported by the CB’s foreign currency operations as reported: also says market conditions behind the change in the LKR value are highly deceptive: expresses astonishment at the CB comment that the collapse of the USD in Sri Lanka was prevented by the CB’s purchase of about USD 308 mn at the beginning of March.
GMOA states that over 700 doctors including some medical consultants have left SL and migrated overseas last year: also state that, at present, there are about 20,000 serving doctors and around 2,800 consultants in Sri Lanka.
National Water Supply and Drainage Board official says the NWSDB has cut off water supply for 87,000 consumers who have failed to pay their monthly bill after a tariff hike last year.
Group of Petroleum trade unionists meet former President Mahinda Rajapaksa to discuss their issues and the CPC’s move to send several employees and trade union members on compulsory leave for disrupting the fuel distribution process: say they are hopeful that the former Head of State would intervene to resolve the matter.
National Freedom Front leader Wimal Weerawansa says a gang of persons with links to a ruling party politician had carried out an attack on a garment factory at Halpe, Katana owned by an Omani company: demands that the politician concerned be arrested: Joint Apparel Association also demands action against those responsible for the attack.
PUC says Sri Lanka’s electricity consumption has reduced by 20% after the tariff hike on 15th February: claims the lower demand is likely to threaten Sri Lanka’s economic revival despite the approval of a USD 3 bn loan from the IMF: data reveals that total National electricity consumption in Feb’23 was considerably lower than that in Feb’22, when there were power cuts.
SEC Chairman Faizal Salieh calls on auditors to ensure improved accuracy of financial reports: says to enhance scope of audit to assess the robustness of the governance framework, policies & procedures in place to mitigate risk & non-compliance including insider dealing, market manipulation, price rigging, etc. by directors and staff.
President Ranil Wickremesinghe meets Indian Institute of Good Governance DG Bharat Lal: discusses ways to enhance the country’s civil service and improve government institution performance by implementing effective monitoring measures: requests assistance to establish a University of Governance and Public Policy in Sri Lanka.
Reports emerge that Sri Lanka Cricket has requested white ball Cricket captain Dasun Shanaka to resign from the ODI captaincy: if so, either Dhananjaya de Silva or Kusal Mendis to be made Captain: Wanindu Hasaranga tipped for the Captaincy in the T20 format.
Sri Lanka win the 1st T20 against New Zealand in a thrilling super over after scores were tied: SL 196/5, NZ 196/8: Super over: NZ- 8/2 and SL-11/0 in 3 balls.
Colombo (LNW): The National New Paddy Harvest Festival, known as the ‘Aluth Sahal Mangalya’, was held at the historic Jaya Sri Maha Bodhiya in Anuradhapura Yesterday (02), under the patronage of President Ranil Wickremesinghe. This festival is a longstanding tradition where the first harvested paddy of the Maha season is offered to the Jaya Sri Maha Bodhiya. The event was organized for the 56th time by the Ministry of Agriculture and the Department of Agrarian Services, under the guidance of the Chief Incumbent of the Atamasthana, Venerable Pallegema Hemarathana Thera.
Many farmers from different parts of the country attended the traditional ceremony with the hope of receiving blessings from nature and the Triple Gem. Their wish was for timely showers, bountiful harvests, and a prosperous economy for the country and the nation.
After the traditional ceremony, the President paid his respects to the sacred Sri Maha Bodhiya and received blessings. The procession followed the ancient traditions and began near the Anuradhapura Lion Pillar before entering the Sri Maha Bodhiya premises through the Walimaluwa.
It is a traditional custom for the Atamasthanadipati Ven. Pallegama Hemarathana Thera to fill the golden offertory bowl with fresh rice from various regions of the country, accompanied by the chanting of Seth Pirith by the Maha Sangha. During this year’s ceremony, President Ranil Wickremesinghe also participated in the filling of the golden bowl with rice.
That is an interesting and significant cultural practice for the offering of pure bee’s honey and ghee which is a way of showing respect and gratitude to the sacred Jaya Sri Maha Bodhiya, which is considered one of the most revered Buddhist relics in Sri Lanka. It also reflects the importance of nature and the traditional agricultural practices that are deeply ingrained in Sri Lankan culture.
Mr. Chinthana Wilegoda, Chairman of the Traditional Rice Farmers’ Protection Organization, presented President Wickremesinghe with a bundle of rice pods that corresponded to his age. The President then distributed region-specific seeds and rice varieties to farmers from all nine provinces. Additionally, the President received a digital copy of the 56th National ‘Aluth Sahal Mangalya’ commemorative edition.
The Atamasthanadhipathi, Nuwara Kalaviya Chief Sanghanayake Ven. Pallegama Hemarathana Thera delivering a special exhortation said;
The farmers have expressed their grievances about the inadequate prices they are receiving for their crops. We are empathetic to the challenges faced by farmers.
A substantial amount of funding has been allocated by the government towards supporting the agriculture industry and farmers. It is imperative to address the issues faced by farmers in order to advance the country as a whole. Providing effective solutions to farmers’ problems has the potential to resolve many of the issues plaguing the nation.
There is a need to modernize agriculture and promote sustainable practices by equipping farmers with modern knowledge and techniques. The current president possesses the necessary leadership qualities to drive this initiative forward. This endeavour transcends politics and is a crucial step towards progress for the entire nation.
Minister of Agriculture Mahinda Amaraweera also expressed his views;
Upon assuming office, the President inherited a situation where farmers were protesting on the streets, indicating the gravity of the issues they faced. The President took charge in such circumstances. When the responsibility of the Ministry of Agriculture was entrusted to me by the President, he instructed to ensure the timely supply of fertilizer to farmers to enhance crop yield for both the Yala and Maha seasons.
President Ranil Wickremesinghe had forewarned about an impending global food crisis. Consequently, he held discussions with the Indian Government to secure the required fertilizer for the Maha season. It was only due to his personal intervention that we were able to obtain the necessary fertilizer from India.
As a result of his efforts, we were successful in providing the necessary urea fertilizer for the Maha season, and we even distributed the stock received from the Chinese Government to farmers, free of charge. This enabled us to achieve our target harvest during the Maha season, and we were able to produce 3.3 million metric tons of rice. In gratitude for this success, we offer our gratitude at the Sacred Sri Maha Bodhiya. Moreover, we have been advised by the President to reach out to farmers and provide them with relief instead of requiring them to come to our offices.
We are currently developing a QR code system for farmers to provide them with relevant allowances and subsidies seamlessly. Additionally, we have already discussed reducing the price of herbicides by 10% in the future. We are also exploring the possibility of introducing a third season for cultivation, in addition to the current Yala and Maha seasons. The third season has already commenced in the Hambantota district, where it is being cultivated as an alternative crop, rather than paddy. We encourage farmers from other districts to apply for this third season as well.
We are also planning to incorporate modern technology into agriculture. Our goal is to transition crops that traditionally required 2.5 acres to grow to a more modern, efficient system that can be achieved in just half an acre of land.
We have successfully promoted the cultivation of sour bananas as an export crop, and we are currently exporting one container of sour bananas every Saturday. We aim to increase this export volume to two containers by next month.
The President has allocated a total of 56,000 million rupees towards the development of the agriculture industry. This presents an opportunity to modernize the industry and introduce new technologies. In the past, we used to rely on credit to obtain fertilizer, but the President has taken steps to pay off this debt. With these efforts, we aim to establish agriculture as a major economic foundation for our country. We are all committed to achieving this goal.
Chancellor of the Rajarata University, Ruwanweli Chaityaramadhipathi Venerable Ethalavetunu Weve Gnanathilaka Thera, The Maha Sangha, including the Chief incumbent of the Lankarama Viharaya Venerable Ralapanawe Dhammajothi, Agriculture Minister Mahinda Amaraweera, Minister of Ports and Shipping Nimal Siripala de Silva, State Minister of Finance Shehan Semasinghe, Member of Parliament SM Chandrasena, Senior Advisor to the President on National Security and Chief of Staff to the President, Sagala Ratnayake, Governor of North Central Province Mahipala Herath and other officials attended this event.
Colombo (LNW): A major political switch is set to take place in Parliament on April 04, 2023, as six MPs of the Opposition have agreed to sit on the Ruling Party bench, and several Ruling Party MPs deprived of trust are to unplug themselves as ‘independent’, following weeks of speculation in the arena amidst the growing political turmoil stemmed by public opinion, sources said.
MPs prepping themselves for pacting with the Ruling Party are believed to be Dr. Rajitha Senaratne, Kumara Welgama, A.H.M. Fowzie and three others, and the Ruling Party MPs who wish to serve ‘independent’ are believed to be joining the Samagi Jana Balawegaya (SJB), the main Opposition Party, thereafter, according to political sources.
These Ruling Party MPs have decided to withdraw from the government due to their disillusion over not being granted ministerial posts, the sources added.
LNW earlier predicted the possibility of MPs Senaratne and Welgama pledging their allegiance to the Ruling Party, however, these claims could not be substantiated upon our efforts to contact them over the phone.
Fowzie, who entered the Chambers following the stepping down of Opposition MP Mujibur Rahuman, may not be subject to criticism for joining the Ruling Party at all, given that this will most likely be his last term in Parliament, political analysts opined.
