1. A special bus service will operate from April 08 to April 17 in consideration of the upcoming Sinhala and Tamil New Year season, the Sri Lanka Transport Board (SLTB) said: added that plans are in place to operate long-distance buses during the day and night; passengers commuting on long-distance journeys will also be able to reserve seats.
2. Christopher Hettlage, President of Bentlage, met with his counterpart at the Board of Investment of Sri Lanka (BOI) Dinesh Weerakkody: This was to discuss investment opportunities in the island: Bentlage is one of the world’s renowned labelling solution companies offering services from offset printing to in-mould labelling.
3. Former President Chandrika Bandaranaike Kumaratunga urged all citizens of Sri Lanka to unite to defeat the brand new ‘Anti-Terrosim Bill’ which she described as “frightening”: noted that Democracy will have no place and all will be arrested under the new bill.
4. Sri Lanka has fallen further in the index of countries with the highest inflation in the world prepared by Steve Hanke, professor of applied economics at John Hawking University in America: Sri Lanka has left the first page of the inflation index this time.Two weeks ago, Sri Lanka was ranked 18th on the index.
5. Sri Lanka is set to unveil a Master Plan and National Tourism Policy to attract more tourists in to the island nation while developing Sigiriya: with arrivals surpassing the 100,000 mark in the first 26 days of March, Sri Lanka’s tourism industry has welcomed over 300,000 visitors in the first quarter, starting 2023 on a positive note.
6. Sri Lanka is pushing Chinese, Indian and Singaporean authorities to expedite the negotiations process for the Free Trade Agreements (FTA) to be signed in 2023 or early 2024 while there are many issues to be resolved in the agreements: The Government is adopting an ambitious economic reforms program to revitalize the domestic economy.
7. Former Speaker Karu Jayasuriya, who is an old boy of Ananda College, Colombo, has been given the once-in-a-lifetime award ‘Anandabhimani Award’ for his tremendous contribution to the establishment of ethnic peace consisting of economic, religious, cultural and political excellence.
8. Energy Minister Kanchana Wijesekera has published a data chart of the profit received by the government from the sale of each type of fuel following the fuel price revision made on 29th: the profits are marked as 1.63 rupees per liter of octane 92 petrol and 1.15 rupees per liter of octane 95 petrol, 4 cents per liter of Lanka Auto Diesel, 2.26 rupees per liter of super diesel and 2.66 rupees per liter of kerosene.
9. A decision has not been made as yet about the revival of the Japan International Cooperation Agency (JICA)-funded Light Rail Transit (LRT) project, stretching from Colombo Fort to Malabe, said Japanese Ambassador to Sri Lanka Hideaki Mizukoshi; added that the decision about the project depends on the reforms of the Sri Lankan government and if Sri Lanka can regain the trust of the Japanese government and business community.
10. Foreign employment minister Manusha Nanayakkara says time period given for expatriates to import electric vehicles further extended until August this year: comments that amechanism will be prepared to give electric vehicle import licenses to other people who bring dollars to the country on a private basis.

Sri Lanka has fallen further in the index of countries with the highest inflation in the world prepared by Steve Hanke, professor of applied economics at John Hawking University in America.

Accordingly, Sri Lanka has left the first page of the inflation index this time.

Two weeks ago, Sri Lanka was ranked 18th on the index.

10 months ago, in May 2022, Sri Lanka was in the second position in the index. At that time, only Zimbabwe had higher inflation than Sri Lanka.

Energy Minister Kanchana Wijesekera has published a data chart of the profit received by the government from the sale of each type of fuel following the fuel price revision made on 29th.

According to the note, the profit is 1.63 rupees per liter of octane 92 petrol and 1.15 rupees per liter of octane 95 petrol, 4 cents per liter of Lanka Auto Diesel, 2.26 rupees per liter of super diesel and 2.66 rupees per liter of kerosene.

Below is the note which includes the amount of tax levied by the government on fuel.

High Commissioner Veluppillai Kananathan presented the Letter of Credence appointing him as the Ambassador of Sri Lanka to the Gabonese Republic with residence in Kenya to the President of Gabon Ali Bongo Ondimba at the State House in Libreville on 28 March 2023. During the private meeting that followed the official ceremony, the President and the High Commissioner exchanged views on the need to promote relations under the recently established diplomatic relations between the two countries in many areas of cooperation, especially in trade, investment, and other economic activities, to reach their true potential.

At the outset, President Ondimba requested the High Commissioner to convey his greetings to his Sri Lankan counterpart, President Ranil Wickremesinghe and said that he was looking forward to developing close ties with him to bring the two countries together for pragmatic cooperation for mutual benefit.

High Commissioner Kananathan explained to President Ondimba that the current government headed by Ranil Wickremesinghe attached significance to Sri Lanka’s relations with Africa and wanted to strengthen its cooperation individually with countries in the region and collectively through the African Union and other sub-regional organizations.

As members of the global south, the G77 and the Non-Aligned Movement (NAM), High Commissioner Kananathan highlighted that Sri Lanka and Gabon share common views on global issues and issues of mutual interest to the two countries at the multilateral forums such as the United Nations Organization and its agencies. He also said that Sri Lanka appreciated the support extended by the Gabonese Republic to Sri Lanka at the international forums and looked forward to consolidating such valuable support to strengthen bilateral relations. President Ondimba while affirming the High Commissioner’s views said that the ties between the two countries should go beyond bilateral relations to close cooperation in the multilateral forums on global issues such as peace and security, the protection of the environment, sustainable development, and the fight against climate change.

President Ondimba further said that there was huge potential to develop economic cooperation between the two countries in trade, investment, agriculture, economic and technical cooperation, and many other areas, to inject impetus into bilateral relations. The President added that he was resolutely engaged in diversifying the economy of the Gabonese Republic under an ambitious Transformation Acceleration Plan (PAT). He invited Sri Lankans to visit the Special Investment Zones as well as look at other opportunities to consider the prospects of investing in Gabon, especially in the mining industry, particularly mining of deposits of manganese and iron ore, as well as other areas such as the timber industry, agriculture, etc., exploiting the most beneficial and lucrative terms and conditions presented for FDIs in Gabon. The President of Gabon also invited Sri Lankans to engage in the most gainful trade and business activities in diverse areas, for which plenty of opportunities are within reach.

At the conclusion of the meeting, the President, while wishing the High Commissioner every success in promoting bilateral relations between Sri Lanka and Gabon, assured him of the Gabonese government’s fullest support and cooperation towards that end.

High Commissioner Kananathan also had a series of meetings in Gabon with ministers and officials, which included the Minister of Foreign Affairs Hermann Immongault; the Minister of Energy and Hydraulic Resources Oswald Severin Mayounou; the Minister of Mines and Geology Elvis Ossinji; the Minister of Fisheries Biendi Maganga-Moussavou; the Minister of Agriculture Charles Mve Ella and the Director General of the National Investment Promotion Agency of Gabon (ANPI-GABON) Steeves Tsounghat. All these meetings mainly focused on potential investment opportunities for Sri Lankan investors in Gabon. The Minister of Fisheries, while remarking that Gabon’s tuna fish from the Atlantic Ocean is one of the best in the world, proposed that Sri Lankan investors consider investing in the construction of a tuna processing plant in Libreville. On the whole, the Ministers and authorities assured the High Commissioner of assistance and cooperation to promote Sri Lankan investments in Gabon and exploit the untapped and profitable areas of interest.

Gabon, a country along the Atlantic coast of Central Africa, is rich in natural resources. One of the most significant business opportunities in Gabon is in the mining industry. Gabon has large deposits of manganese, gold, iron, and timber resources, and the government is actively encouraging foreign investment in the mining sector. Gabon is also rich in oil and gas, which have traditionally been the country’s largest sources of revenue. Another promising sector for investment in Gabon is agriculture, which is promoted through agricultural development zones. Foreign investors can take advantage of these arrangements and related attractive policies by investing in agribusiness ventures, such as the processing and export of agricultural products.

High Commissioner Kananathan is currently serving as the resident High Commissioner of Sri Lanka in Kenya and Permanent Representative to the UNEP and UN-HABITAT in Nairobi, as well as being concurrently accredited to twenty-one countries in the region.

High Commission of Sri Lanka

Nairobi

29 March 2023

The  time period given for expatriates workers to import electric vehicles further extended – Other people who bring dollars to the country are also given the opportunity to obtain such vehicle import licenses

Colombo (LNW): Minister of Labour and Foreign Employment Manusha Nanayakkara said that the period given to import electric vehicles to foreign workers depending on their remittances will be extended until August this year.
He also said a mechanism will be prepared to give electric vehicle import licenses to other people who bring dollars to the country on a private basis.

While participating in an event organized by the Overland Automobile Institute, the Minister said that the period for issuing licenses to foreign workers depending on their remittances was limited from May to December 31 last year and that period will be extended to August.

The minister addressing the gathering said:

Everyone has forgotten where our country was by March last year. Just like there were fuel queues a year ago, there are may be queues today as well. Owners of fuel stations do not order fuel because they think that the prices will decrease. It is good to remember that there were fuel queues in the past. It is also good to remember that people have been in the dark in the past, for eight to ten hours without electricity. But now there are no power cuts. There are no fuel queues on the roads. There is no problem with medicine. By March, April and May last year, there was a situation where it was impossible to run the vehicle with a full tank of fuel.
Many people left the country. This country had become an unlivable country without law and order. Large scale businessmen took their businesses to countries like Dubai. The exporters did not bring the money that the country deserved. The country fell into an abyss. It was then that we accepted the challenge to revive this country. We took responsibility. We came up with a program to bring dollars to the country. We took measures to bring benefits to migrant workers.
Expatriate workers did not send dollars to the country because they had trust issues and because they can get enhanced currency rates by sending money through illegal methods such as Undiyal. To change that, we arranged to grant licenses for the import of electric vehicles to  expatriate workers. When this proposal was brought, the cabinet fully supported it.
A decision has not yet been taken in our country to import only electric vehicles. But as a government, we are determined to go for renewable energy and green energy sources. As a government, our policy is that it is better to import only electric vehicles.. It has been decided that all the vehicles bought for the state sector will be electric vehicles only in the future.

When permission was given to foreign workers to import electric vehicles as a pilot project, we met many people and got their opinions and submitted them to relevant officials. Although the Ministers, took  forthright decisions without delay some officials who are stuck in their traditional thinking modes delayed implementing the process.
There, the President and the cabinet gave approvals to move forward with this decision without delay.
When foreign workers were given permission to import electric vehicles, some said that this was another political gimmick. This government does not endorse populist politics. That’s why taxes were increased in anticipation of giving concessions when possible to all citizens. Interest rates have decreased. Today, the fuel distribution is being diversified. By doing the right thing, we have got the ability to reciprocate the work done by expatriate workers. The opportunity to import vehicles for expatriate workers was limited from May 1st to December 31st last year. We are making relevant amendments so that those who have sent money legally to the country can import vehicles until the end of August this year. Cabinet approval will be obtained for that. Also, if there are people who bring dollars to the country privately, they will also be given permission to import electric vehicles.

(Washington, DC, March 29, 2023) – The government of Sri Lanka should ensure that policies to enhance revenues do not further erode economic and social rights and that anti-corruption reforms provide accountability, Human Rights Watch said today. On March 20, 2023, the International Monetary Fund (IMF) approved a US$3 billion loan to Sri Lanka to help resolve the spiraling economic crisis that began after Sri Lanka defaulted on its debt in April 2022.

The loan was approved seven months after IMF staff and government officials reached an initial agreement and following financing assurances from the country’s major bilateral creditors. Although it focuses on growing revenues and emphasizes tackling corruption and improving social protection, the program as structured risks further undermining people’s economic and social rights. The government has announced policies that effectively reduce salaries in public service agencies, eliminate subsidies, and increase regressive taxes – steps that could degrade public services and further raise prices at a time when a large segment of the population is already struggling due to high inflation.

“Official corruption and tax rules that benefitted the wealthiest were key drivers of Sri Lanka’s economic crisis, for which Sri Lankans struggling to make ends meet should not have to carry the burden,” said Meenakshi Ganguly, South Asia director at Human Rights Watch. “The government should recognize that the public deserves real accountability, whether it’s for past war crimes or ongoing misgovernance and repression of critics.”

IMF approval of the loan paves the way for multilateral institutions such as the World Bank and Asian Development Bank to offer Sri Lanka new financing, which the government has said it expects to reach $7 billion over the next four years. Financial institutions and donors should insist on transparent, rights-respecting governance.

The IMF loan is intended to provide the country with a lifeline while addressing deep-seated problems that contributed to the crisis. Under international law, governments and financial institutions have an obligation to respond to economic crises in a way that advances rather than further jeopardizes human rights, and should avoid pursuing policies that reduce low-income people’s access to essential goods and services.

Sri Lanka’s economic crisis triggered soaring inflation, as well as shortages of essential goods such as fuel and medicine, causing severe and ongoing economic hardship. In January, the World Food Programme reported that one in three families in Sri Lanka were experiencing food insecurity and half were purchasing food on credit.

Waves of protests have made ending corruption a central demand, and led to the ouster of President Gotabaya Rajapaksa in July 2022. Currently, the IMF program’s anti-corruption measures are centered on the government passing legislation in line with the United Nations Convention Against Corruption and the IMF carrying out a governance diagnostic that assesses Sri Lanka’s strengths and weaknesses in six areas, including the rule of law and fiscal governance. The conclusions could be used to set conditions later in the loan program.

For the analysis to be effective, civil society should play a prominent role, Human Rights Watch said. Subsequent anti-corruption reforms should ensure that the government enforces its rules and holds corrupt officials and private businesspeople to account, including for past malfeasance. These efforts should include recovering stolen assets, imposing back pay and penalties for tax evasion, and stemming illicit financial flows out of the country.

The program’s focus on increasing government revenues, rather than reducing public spending as a percentage of Gross Domestic Product (GDP), will better protect rights, Human Rights Watch said. When the crisis began, Sri Lanka had among the world’s lowest tax-to-GDP ratios in the world at 7.3 percent. That ratio is expected to nearly double to 14 percent of GDP. However, while some of the new measures are designed to increase taxes on the wealthy and eliminate tax exemptions that benefit them, the heavy reliance on value-added taxes can worsen the cost-of-living crisis.

The government has already increased corporate tax rates and removed all sector-specific tax exemptions, according to the IMF staff report. But most new tax revenue will come from value-added taxes (VAT), which were raised from 8 to 12 percent in May 2022 and again to 15 percent in September. Basic food items remain exempt from VAT, but the government committed to VAT reform by 2024 that would remove “almost all” product-specific exemptions.

While the wealthy pay more VAT in absolute terms because they spend more, the expense makes up a much greater share of income for low-income people. In 2019, the amount of revenue that came from VAT and income taxes were on par, but by the end of the program, VAT is expected to make up 32 percent of all taxes, whereas income taxes would make up 21 percent.

The program reduces the threshold for taxing annual income to 1.2 million rupees ($3,694), a change that some have protested as burdening families who are already struggling to realize their rights. The government should publish data on the percentage of the population that is subject to income taxes under this change, Human Rights Watch said. It should also consider advancing the introduction of taxes on property, gifts, and inheritance, which the program mandates by 2025.

The program includes other measures that could harm low-income people. Public services are central to delivering rights and are an important source of employment. The program calls for keeping any increase in public wages to less than inflation, effectively reducing real salaries, and reducing total spending on wages from 5 to 3.6 percent of GDP. It also eliminates subsidies for both fuel and electricity and imposes an excise tax on fuel, but does not ensure that these critical measures are carried out in a way that fulfills rather than erodes rights. To protect rights when removing subsidies and introducing taxes for fossil fuels, the government should adequately invest in social protection, the use of renewable energy sources, and other measures to move toward a rights-aligned economy, Human Rights Watch said.

The program includes a so-called “social spending floor” that would “gradually raise” spending on four cash transfer programs “to help cushion the potential impact of macroeconomic adjustment on the poor and vulnerable groups.” Recognizing the pervasive flaws in the country’s targeted cash transfer programs, it also mandates overhauling eligibility criteria in partnership with the World Bank to make them “based on objective and verifiable characteristics of households,” and notes the government is working with the World Bank on a new electronic registry for selecting beneficiaries.

While the floor brings up total spending on these programs to 0.6 percent of GDP, it is set at far less than developing countries’ average spending on safety nets, which is 1.6 percent. Furthermore, the insistence on targeting benefits based on eligibility criteria also risks continuing to exclude people who are unable to access goods and services essential for an adequate standard of living. The details of the new eligibility criteria and electronic registry have not been made public, but research has shown pervasive problems with targeting benefits, including high error and exclusion rates.

For example, a proposal to use electricity consumption as a proxy measure – to overcome the lack of data on household income as well as the risk of corruption in selecting beneficiaries – would leave out about 35 percent of the bottom half of the population. Because current beneficiaries who are ineligible under the new criteria would be removed by January 2024, this could mean people losing benefits they are currently receiving.

Contrary to this approach, the IMF’s technical note on social safety nets advises that in countries with “low administrative capacity” efforts should focus on enhancing tax capacity to “claw back” benefits from high-income households, rather than lowering benefits or excluding low-income beneficiaries.

“When half of Sri Lankan families are buying food on credit, it’s not the time to experiment with fixing chronic and pervasive problems with targeted cash transfer programs,” Ganguly said. “Instead of investing precious funds in new registries, the government’s focus should be on building a tax system that makes sure the wealthy pay their fair share.”

Ambassador Mahinda Samarasinghe visited the Boston Museum of Fine Arts (MFA) on  24 March 2023 and met with Museum Director Matthew Teitelbaum, Chief of Curatorial Affairs and Conservation and Matsutaro Shoriki Chair, Art of Asia, Christina Yu Yu, and senior staff.

He discussed the commemoration of Sri Lankan former curator of the Museum, Ananda Coomaraswamy, in conjunction with celebrations connected with 75 years of Sri Lanka – United States diplomatic relations in 2023.

Ananda Coomaraswamy, born in Ceylon (now Sri Lanka) to a Ceylonese father and an English mother, was educated in England. Upon his graduation from University College, London, he moved to Ceylon, where he worked and earned a PhD, and studied and collected Sinhalese art. He returned to London in 1906, where his conception of Indian art and modernity shared much with the flourishing Arts and Crafts movement and where modern artists began to find much of value in his thought. When he moved to Boston in 1917 to become the first Keeper of Indian Art (Curator) at the MFA, his collection became the core of the first significant collection of Indian art in America. In 1933, he took up the position of Fellow for Research in Indian, Persian, and Mohammedan art at the MFA, a position he held until his death in 1947. He is described as “the groundbreaking theorist who was largely responsible for introducing ancient Indian art to the West.”

Ambassador Samarasinghe discussed the various initiatives by the MFA to commemorate this distinguished personality and stated that the Embassy was pleased to associate itself with the efforts to celebrate the life’s work of Coomaraswamy and his service to the MFA, in particular.

Embassy of Sri Lanka

Washington D.C.

30 March 2023

By Jorgelina Do Rosario and Uditha Jayasinghe

LONDON/COLOMBO, March 30 (Reuters): Sri Lanka will kick off a reworking of part of its domestic debt next month and aims to finalise it by May, central bank and treasury officials told creditors during a virtual presentation on Thursday.

The financially strapped South Asian country will also start formal negotiations for the debt it owes to bilateral creditors and overseas bondholders after the domestic debt operation, aiming to complete those parallel debt talks by September.

Central bank and treasury officials said they expected that “exploring options for a domestic debt operation” will help achieve much-needed liquidity relief, including both local currency T-Bills and T-Bonds.

Government officials told investors that only T-Bills held by the central bank would be considered for a debt rework, while a voluntary domestic debt operation was expected for the holders of $24 billion of T-Bonds. Sri Lanka’s total local currency debt is equivalent to $36.6 billion, according to the presentation.

The Indian Ocean island nation of 22 million people owes international bondholders over $12 billion, while external debt with bilateral creditors such as the Paris Club, China and India totals $7.1 billion.

“The government will engage with all T-bills and T-bonds holders,” Central Bank Governor P. Nandalal Weerasinghe said.

Treasury Secretary Mahinda Siriwardena also participated in the presentation, along with representatives of financial and legal advisers Lazard and Clifford Chance.

Sri Lanka is struggling with its worst economic crisis in more than seven decades. It has led to shortages of essentials and the ouster of a president.

EYES ON ‘QUALITY’ OF SPENDING

The International Monetary Fund’s executive approved in March a nearly $3 billion bailout for Sri Lanka that is expected to catalyse additional support from other multilateral lenders.

To that end, Sri Lanka has already frozen public recruitment and has hiked taxes and power tariffs by 66% this year. It will continue to restrict government spending to keep public finances on an even keel and meet primary balance targets outlined by the IMF, Siriwardena told creditors during the online presentation.

Siriwardena added that the country will start looking at ways to improve the quality of its expenditures.

“The most important aspect of this will be tax policy – we see huge potential to increase the tax base and also revenue. On the expenditure side we are also looking to improve the quality of expenditure and extend more to areas like healthcare.”

Weerasinghe said the economy could perform better that the 3% GDP contraction the IMF forecasts for 2023, though he provided no other projections for the period.

He added that the tourism sector, a significant source of revenue, is rapidly reviving though “still hasn’t reach pre-COVID levels (seen) in 2019. However, we hope for a strong recovery in tourism next year”.

Source: REUTERS