Sri Lanka’s merchandise exports earnings fell 9.68 percent in January to February 2023 year-on-year as the island nation saw a drop in buying from its key export destinations which are facing a looming recession after the Russia-Ukraine war, Export Development Board sources revealed.
For the period of January to February 2023, merchandise exports decreased by 9.68 % to US$ 1,983.42 Million compared to the corresponding period of 2021.
Export earnings of Apparel and Textiles, Rubber-based products and Coconut based products decreased by 2.32%, 17.81% and 19.74% respectively during the period of January – February 2023 compared with the corresponding period of 2022.
However, earnings from Spices and Concentrates, Electronics & Electronic Components, Food & Beverages and Seafood increased by 27%, 13.72%, 17.22% and 5.57% respectively during the period of January – February 2023 compared with the corresponding period of 2022.
Apparel and Textile exports decreased by 10.18% to US$ 946.46 Mn during the period of January to February 2023 compared to the same period of 2022, export of Apparel down by 16.82% while export of Textiles expanded by 74.16% in January to February 2023.
Export earnings from Tea increased by 6.27% to US$ 204.13 Mn during the period of January to February 2023 compared with the corresponding period of 2022.
Exports of all the sub categories of tea sector except Bulk Tea and Tea Bags; Tea packets (14.74%), Instant Tea (42.78%) and Green Tea (21.82%) increased during the period of January to February 2023 compared with the same period of 2022.
Export earnings from Rubber & Rubber finished products decreased by 15.44 % to US$ 152.45 Mn in January – February 2022 compared with the same period of 2021 attributed to lower exports of Pneumatic and Retreated Rubber Tyres & Tubes (-5.22%) and export of Industrial and Surgical Gloves of Rubber (-35.92%).
For the period of January to February 2023, export earnings from Coconut and Coconut based products decreased by 24.58% to US$ 102.72 Mn from the same period last year.
Earnings from all the major categories of Coconut based products decreased in the period of January – February 2023 compared with the corresponding period of 2021 due to the poor performance in export of Liquid Coconut Milk, Coconut cream, Coconut Milk Powder, Cocopeat, Activated Carbon, Coconut Oil and Desiccated Coconut.
Meanwhile, earnings from export of Electrical and Electronic Components (EEC) increased by 10.19 % to US$ 81.29 Mn in the period of January to February 2023 compared to the corresponding period of 2022.
Earnings from export of Switches, Boards and Panels and Other Electrical & Electronic Products increased by 37.31%, and 19.03 % respectively during the period of January to February 2023 compared with the corresponding period of previous year.
Export earnings from Seafood decreased by 1.84% to US$ 140.71 Mn in the period of January to February 2023 compared to year 2022 due to the poor performance in all the sub categories; Frozen Fish (-7.5%) and Prawns (-44.03%).
Out of the top 15 export markets, Italy, Canada, UAE and Bangladesh recorded positive performance in February 2023.
During the period of January to February 2023, only UAE has recorded a positive performance compared to the corresponding period of previous year.
Exports to the United States of America, Sri Lanka’s single largest export destination, decreased by 20.94 % to US$ 231.06 Mn in February 2023 compared to February 2022.
In addition, exports to United States of America decreased by 17.31 % to US$ 485.83 Mn in the period of January to February 2023 compared to January to February 2022
Sri Lanka’s exports earnings decline 9.68 percent in Jan to Feb 2023
Japanese Volunteer Support continues for SL’s development at grass-root Level
Japan is continuing its volunteer support towards the country’s development efforts at Grass-root Level by extending Volunteer Dispatch Program.
Ms.MINAMI Yuka, Ms. MORI June and Ms. NIKI Hiroko, the new Japan Overseas Cooperation Volunteers (JOCV) arrived in Sri Lanka on the 16th of February 2023 under this new initiative.
This new batch of three JICA volunteers will be involved in the fields of environmental education (in Kegalle and Ratnapura) and physical education (in Kurunegala) attached to institutions coming under several ministries.
Since the inception of JICA’s Volunteer Dispatch Program in Sri Lanka in 1981, a total of 1,160 volunteers have worked in the country, and their contribution towards development activities at grass-root level has been greatly valued by the organizations that have received their services in a variety of technical fields.
The biggest strength of JICA’s volunteers is their practical approach to problem solving and the use of local languages (Sinhala and Tamil) which enables them to understand and speak to the hearts and minds of local people.
These volunteers use extremely creative means of communication which is essential for effective training/teaching, and are able to positively influence those who work with them due to their positive attitude, strong sense of discipline and teamwork.
These volunteers not only transfer technical skills, but also share knowledge on cultural aspects, and most importantly, build strong and long-lasting friendships with local people that outlast their stay in Sri Lanka.
The new volunteers were introduced to their host organizations at an assigning ceremony, which was held at the Department of External Resources (ERD), on the 17th of March 2023.
The occasion was graced by the officials of Department of External Resources, volunteer host organizations and JICA Sri Lanka Office.
Rohan Chrishantha, Additional Director General (Debt Management) at Department of External Resources under the Ministry of Finance, paid attribute to the Japanese government and people for supporting Sri Lanka during the current economic difficulties
Moreover, he said, “he was really happy that three Japanese voluteers introduced themeselves to the audience very clearly in Sinhala Language after a very short period of study.
He expressed the belief that all of them will speak Sinhala very well when they finish their service in Sri Lanka during their 2-year assignment in the country.
After a hiatus of more than 2 years government restarted its volunteer activities in the month of August 2021, and this will be the dispatch of the 7th batch since then.
Therefore, the finance ministry is proud of new volunteers continuously being recruited to the country and also wish that new volunteers will carry out activities to the best of their ability, he claimed.
SL government to reconsider the recent revisions in tax structure
The government is exploring the possibility of amending the existing tax mechanism and it will be negotiated with the International Monetary Fund (IMF) in the first review of $ 2.9 billion EFF program in June this year.
Thousands of Public sector workers have demanded the government roll back high taxes imposed as a precondition to unlock the US $2.9 bn IMF loan.
The Government and the IMF will review the programme every six months. The first review will take place in June.
The government has already focused attention on amending the existing tax mechanism and the Treasury is already in the process of preparing amended proposals, President Ranil Wickremasinghe disclosed in parliament recently.
Further, intellectuals and economic experts have already submitted their views in this regard, which we hope to discuss, and reach an agreement,” the President said in his special address in Parliament on the Extended Fund Facility which the IMF Executive Board approved on Monday.
“We are discussing with the IMF to include these tax reforms in our plans at the review in June. In addition, we are discussing the other policy reforms which we think are necessary at present,” the President added.
“Some people try to portray that these issues can be solved through confrontations.
However, these problems have to be solved through caution, care and wisdom,” said President Ranil Wickremesinghe in an apparent response to continuous protests in the country by trade unions against the new tax regime which they say is unbearable.
On Monday IMF Senior Mission Chief for Sri Lanka Richard Breuer said at 8.6% of GDP, Sri Lanka is amongst the countries that collects the least amount of fiscal revenue in the world.
The President also told Parliament that the IMF-approved plan should be implemented and completed in four years.
“However, depending on our strength and determination, we should be able to finish it in three to three and a half years. Let’s give it a try. Let us put in the effort,” the President told the House.
Sri Lankan President Ranil Wickremesinghe said that if the country continues according to the existing plan, Sri Lanka can rise out of bankruptcy shortly.
He added that the government is committed to securing the financial system that was on the verge of collapse, noting that the government expenditure was controlled, while measures were taken to increase tax revenue.
Tax revenues decreased due to decisions taken in the past. As of 31st December 2019, 1.6 million businesses, companies and individuals paid taxes.
However, by December 2021, the number of taxpayers decreased to five hundred thousand. Government tax revenues fell to an all-time low.
Realizing the destruction this caused to the economy of the country, many institutions and organizations requested to revert to the tax system which existed in 2019,” he added.
“However, it is the same people who requested such tax policies, who are criticizing the present tax regime.
The President said that if PAYE tax is abolished, the country will lose 100 billion rupees, and if the tax limit is raised to two hundred thousand rupees, the economy will lose 63 billion rupees.
“The total amount that will be lost is 163 billion rupees. We are presently not in a position to lose this income,”he noted
However the Finance Ministry top officials are now considering other tax revenue options without burdening the middle class and the poor while focusing attention on alternate revenue enhancing proposals.
These proposals have been put forward by economic and financial experts and employees associations without heeding to the demands of politically motivated trade union leaders.
Sri Lanka seeks US$ 1 billion currency swap from India to facilitate trade
After receiving the US$330 million first tranche of the International monetary Fund’s (IMF) Extended Fund facility of around $3 billion, Cash strapped Sri Lanka is in talks with India for a billion US dollar equivalent Indian rupee central bank swap, to facilitate trade.
This follows the country’s immediate repayment of $ 121 million as the first installment of the Indian credit line soon after unlocking of $3 billion IMF EFF on Monday 20.
“The amount of Indian loan facility is still uncertain; it could be up to the equivalent of a billion US dollars,” former Central Bank Governor and presently an advisor to the government Indrajit Coomaraswamy told an online forum hosted by Sri Lanka’s central bank.
The money will be used to facilitate India Sri Lanka trade, he said adding that this facility could be in US dollars or in Indian rupees.
India has provided about $4 billion in rapid assistance between January and July, including credit lines, a currency swap arrangement and deferred import payments, and sent a warship carrying essential drugs for the island’s 22 million people
India has been trying to popularize the use of Indian rupees for external trade and also encouraged Sri Lanka banks to set up Indian rupee VOSTRO accounts.
However, the first step in popularizing a currency for external trade is to get domestic agents, especially exporters, to accept their own currency for trade, like in the case of the US or EU, economic analysts said.
India’s billion US dollar credit to Sri Lanka given during the 2022 crisis is settled in Indian rupees However the Indian government itself has chosen to denominate it in US currency for debt purposes (future value).
In most South Asian nations, receivers of remittances are willing to accept domestic currencies, leading to active VOSTRO account transactions.
Sri Lanka is expected to repay a 400 million US dollar swap with the Reserve Bank of India next year under an International Monetary Fund backed program for external stability and debt restructuring.
Central bank swap proceeds sold to banks, which are then sterilized with inflationary open market operations, can trigger forex shortages and currency crises, analysts warn.
Sri Lanka went to the International Monetary Fund after two years of inflationary monetary operations by the central bank’s issue department (money printed to suppress interest rates) triggered the biggest currency crisis in its history and external sovereign default.
Meanwhile the government is negotiating with India to extend a US$1 billion credit line by a few months as the island nation tries to line up funds for the rest of the year after the receiving of IMF EFF of around US$3 billion.
The credit line was due to expire on March 17 with Sri Lanka having used only about two-thirds of it, mainly for medicines and food, said the finance ministry sources and another official familiar with the matter.
A Finance Ministry official said the government wanted to extend the credit line by 6-12 months because there was about US$300 million left unused. No agreement had been reached, he added.
Bandula Gunawardene Grants Permission for Roadside Trading During New Year Festive Season
The Minister of Transport and Highways, Bandula Gunawardene, has announced that permission will be granted for individuals to carry out trade activities on the sides of roads in all parts of the island during the upcoming New Year festive season.
Speaking at an event in Galle, Minister Gunawardene stated that producers will be allowed to sell their goods on the sides of roads temporarily, from April 1 to April 12. Previously, such special locations were reserved for selling garment items in several places, including Maharagama city.
The minister emphasized that this permission will be extended to producers who are temporarily engaged in self-employment to sell their products directly to consumers in the same way in other parts of the country until the end of the festival season.
He further stated that manufacturers are temporarily entitled to this permission to sell their products on the sides of roads without making permanent constructions in specific areas with the approval and supervision of the Divisional Secretary of the respective area.
This move is expected to provide relief for local producers who have been struggling due to the impact of the COVID-19 pandemic. It will also offer an opportunity for consumers to purchase goods at affordable prices during the festive season.
The minister added that this decision was made in accordance with the government’s policy of promoting and supporting local businesses and entrepreneurs.
The announcement has been welcomed by the public, particularly those engaged in self-employment, as it provides a much-needed opportunity for them to increase their income during the festive season.
The Ministry of Transport and Highways has assured the public that all necessary measures will be taken to ensure the safety and security of traders and consumers during the New Year festive season.
Unforgettable Experiences In Sri Lanka!
Sigiriya
Sigiriya, also known as the lion rock, is a UNESCO World Heritage Site and one of srilanka’s most iconic landmarks. Climb to the top of this ancient rock fortress to see breathtaking views of the surrounding countryside.
The Ancient City Of Anuradhapura
Anuradhapura is an ancient city that was once the capital of Sri Lanka. Explore the ruins of this once-great city, including the towering dagobas (stupas) and ancient place.
Safari In Yala National Park
Yala National Park is home to a wide variety of wildlife, including elephants, leopards, and rare bird species. Take a safari tour to see these magnificent animals in their natural habitat.
Visit The Temple Of The Tooth
The temple of the tooth in Kandy is one of Sri Lanka’s most important Buddhist sites. It houses a sacred tooth relic of the Buddha and is an important pilgrimage site for Buddhists.
Whale And Dolphin Watching In Trincomalee
Whales and Dolphins are incredible and absolutely unforgettable. Whale and dolphin watching tours in Trincomalee between March and July are the best.
Explore Galle
Galle is a charming colonial city located on Sri Lanka’s southwest coast. Explore the historic fort, stroll through the narrow street lined with colonial-era buildings, and shop for souvenirs at the local markets.
Iconic Train Ride
The train ride from Kandy to Ella is considered one of the most scenic train rides in the world. Enjoy breathtaking views of the lush hill country as the train winds its way through the mountains.
Visit Tea Plantations
Sri Lanka is famous for its Tea Plantations, and a visit to one of these plantations is a must-do. From the tea making process to tasting some of the world’s finest teas, there’s so much to do in Sri Lanka.
source; TimesOfIndia
Education Ministry Announces Commencement of 2023 First School Term
The Ministry of Education announced that the first school term for the 2023 academic year will begin on Monday, March 27. All government and government-approved private schools are expected to commence the new academic year tomorrow.
The first school term for 2023 will continue until April 04, according to the Education Ministry. This will be followed by the Sinhala and Tamil New Year holiday, which will be observed from April 05 to April 16.
Students, teachers, and parents have eagerly awaited the start of the new school term, which marks the beginning of a new academic year. With the COVID-19 pandemic still ongoing, many are hoping for a safe and successful school year with the implementation of strict health guidelines.
The Ministry of Education has reminded all students and teachers to adhere to the health and safety protocols to minimize the risk of infection. Schools have been instructed to implement strict measures such as mandatory mask-wearing, frequent handwashing, and social distancing to ensure a safe learning environment.
As the academic year begins, the Education Ministry encourages students to focus on their studies and to take advantage of the resources available to them. With hard work and dedication, they can achieve their academic goals and succeed in their future careers.
Opposition MP Urges Extensive Discussion on Sri Lanka’s IMF Agreement
In response to the President’s speech on the IMF agreement, Dr. Harsha de Silva, an opposition MP, expressed relief that the government had obtained the approval of the IMF Board for the USD 3 billion facility. Dr. de Silva commended the President for convincing his majority SLPP government on the IMF program, who until recently had been opposed to it.
However, Dr. de Silva stated that the only political party that tabled their own plan out of the crisis was the SJB, which contained a detailed plan on how to come out of bankruptcy and set the stage for sustained growth. He criticized the highest marginal tax rate of 36% being applied at Rs 300,000 a month and called for massive economic reforms to increase government revenue from 8.5% to 15% of GDP.
Dr. de Silva noted that the IMF agreement was only a stabilization program and not a roadmap to develop the country. He urged extensive discussions on critical issues, including domestic debt restructuring and the impact of the economic crisis on low-income households.
In particular, he highlighted the issue of electricity tariffs, which have increased by over 1,100% in a short span of time for the bottom 25% of consumers. He suggested that the government should provide subsidies to those who need them, while the Electricity Board focuses on becoming profitable. He insisted Sri Lanka adopt a mechanism of targeted subsidies.
Dr. de Silva concluded by expressing his general agreement with Sri Lanka’s IMF program but urged further discussion to resolve the contentious issues. He emphasized the need to move away from traditional politics that advocate for providing subsidies to all or going on strike and suggested that Sri Lanka adopt a mechanism of targeted subsidies.
Tourism and Ceylon Tea Promotion in Vienna
The Embassy and Permanent Mission together with Sri Lanka Tourism Promotion Bureau and Sri Lanka Tea Board organised a destination promotion to commemorate 75th Anniversary of Independence of Sri Lanka at the high-end Wien Mitte Mall recently.
The promotion campaign showcased Sri Lanka as a tourism destination to the Viennese public.
The said event also featured Sri Lankan Dance by Sri Lanka’s world-renowned Channa-Upuli Performing Arts Foundation captivating the audience and visitors, who had an opportunity to join the dance during the performance.
The wheel of fortune which entailed questions on Sri Lanka gave the audience a chance to familiarise themselves with the destination. Several giveaways with the branding “So Sri Lanka”, promotional items, Sri Lankan biscuits, as well as Stassen tea were given to the winners. The grand prize of a 5-night/6-day stay including local transportation offered by the prestigious Aitken Spence hotel chain, was part of the raffle draw.
Visitors and potential travellers at the high-end mall had the opportunity to better understand the resplendent island.
The event also promoted the world-famous Ceylon Tea by Stassen which was served alongside traditional gnanakatha cookies to a large number of visitors. The consumer event positioned and branded Sri Lanka as a leading tourist destination, having provided potential travellers with an opportunity to get a glimpse of Sri Lanka’s wide-ranging tourist attractions in the heart of Vienna.
DAILY FT
Sri Lanka Original Narrative Summary: 26/03
- President Ranil Wickremesinghe advises to appoint an expert committee to plan progress of the sports field and its future; pays attention to the development of the Mahinda Rajapaksa Sports Complex in Diyagama as a Sports University: Steps to collect 100 of the best athletes to represent each sports event and provide them with the necessary facilities and training.
- Finance State Minister Ranjith Siyambalapitiya provides reassurance that steps are being taken to ensure that salaries, pensions and benefits, including ‘Samurdhi,’ of public servants will be paid before April 10, 2023; reveals the decision was made with consideration for the upcoming Festive season.
- SJB MP Dr. Harsha De Silva says he is relieved that the President has convinced his majority SLPP government on the IMF bailout who until recently was totally opposed to it; stresses the SJB was the only political party that tabled their own plan out of the crisis; assures the SJB economic plan “Blueprint” first tabled in August 2022 has an updated version in February 2023 and provides a detailed plan on how to come out of bankruptcy; Silva was previously a strong advocate on the April 14, 2022 sovereign debt default which officially declared Sri Lanka a ‘bankrupt’ nation.
- Police arrest a man for hooting Minister Bandula Gunawardena who was attending a ceremony to lay the foundation stone for a Buddhist shrine near the Pitipana Junction in Homagama – Suspect to be produced before Court for obstructing a religious ceremony.
- Chief of the President’s Staff and Senior Advisor to the President on National Security Sagala Ratnayake says the government has no intention of dissolving the Civil Service Department (CSD); reminds the CSD was approved as a depreciable service according to the 2015 Cabinet paper, but that period has now lapsed; assures the members of the CSD are allowed to request a service extension beyond the age of 55, enabling them to serve up to 60 years.
- Senior Counsel Kaushalya Navaratne takes office as the 27th President of the Bar Association of Sri Lanka (BASL); assures he will take steps to continue the future activities of the BASL independently, away from party politics: critics claim unlike predecessor Peiris PC, Navaratne holds a politically biased record.
- Election Commission says it requested a meeting with Prime Minister Dinesh Gunawardena to address the challenges against the holding of the LG Polls: Gunwardena previously said in Parliament that he wishes to call in the Commission to address the issue.
- IGP C.D. Wickramaratne granted a 3-month service extension through an order issued by the President: Wickramaratne was to retire from the post on March 23, 2023: Early reports on SDIG Deshabandu Tennakoon, a top police official with a controversial record, being appointed as the IGP remain unconfirmed.
- The ‘Stain Studios in Sri Lanka,’ one of South Asia’s largest studio complexes, dedicated to legendary Filmmaker and Actor Gamini Fonseka: The studio rechristened ‘The Gamini Fonseka Studio.’
- Indian Cricket news aggregator ‘Cricbuzz’ reports the Indian Cricket Board is contemplating having another short home series in June either against Afghanistan or Sri Lanka; options are being explored to see if a three-match ODI series against SL or AFGH in the second half of June 2023, more precisely after the World Test Championship final.