The Provincial Councils and the Local Government Ministry have taken a decisive step to provide job security to 10,000 employees who have not been confirmed in Local Government institutions.
State Minister of Provincial Councils and Local Government, Janaka Wakkumbura, announced that casual and contract employees in Local Government bodies will soon be granted permanent employment status.
With approximately 12,000 vacancies currently existing within Local Government institutions, efforts are underway to fill these positions with permanent appointments. The program’s implementation is pending approval from the relevant Ministers.
This move aims to address employment uncertainties and enhance the stability of the workforce within Local Government, ensuring a more secure and reliable public service sector.
Showers will occur at times in Western, Sabaragamuwa and North-Western provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts.
Mainly fair weather will prevail elsewhere over the Island.
Fairly strong winds of about 40 kmph can be expected at times in western slopes of the central hills, Northern and North-Central provinces, and in Monaragala, Hambantota and Trincomalee districts.
Colombo (LNW): The calling in of an all-party meeting by President Ranil Wickremesinghe on Wednesday (26) at the President’s House to settle an accord on national reconciliation has met with diverse responses from the Opposition, days after it once again raised the debate on the 13th Amendment to the Constitution and the simultaneous national crisis.
The Samagi Jana Balawegaya (SJB) declared that it will be attending the President’s all-party meeting as long as it serves the interest of the people but will not fall prey to political schemes. The SJB will not hesitate to unplug itself from the talks were it to sense any political play behind the negotiations, assured Leader of the Opposition Sajith Premadasa.
The National People’s Power (NPP) said it would be boycotting the meeting as the President has already failed to fulfill the promises made so far with regard to the national crisis.
The Tamil National Alliance (TNA) said it would attend the meeting tomorrow, but the Tamil National People’s Front held a different opinion, saying that it would be boycotting the meeting.
A number of other political parties in Parliament including the Sri Lanka Freedom Party (SLFP) and the Jathika Nidahas Peramuna (NFF) asserted that they will attend the all-party conference called in by the President, whilst the debate on the 13A finds its entry into a burning political arena, leading to contrast and diverse opinions by different political envoys.
Cabinet Spokesman Bandula Gunawardena told media that the President is of the opinion that a decision pertaining to the 13A would be reached only after discussing the matter with the Parliament and the party leaders.
The 13th Amendment to the Constitution was introduced to Sri Lanka as an outcome of the Indo-Lanka Peace Accord of July 1987, signed between then Prime Minister of India Rajiv Gandhi and then Sri Lankan President J.R. Jayawardena, proposing the devolution of power, in an attempt to resolve the longstanding ethnic conflict. The outcome of it was the establishment of Provincial Councils.
The Accord proposed the devolution of power by sharing it, but none of the Provincial Councils in Sri Lanka are in operation and are only exercised by the governors appointed by the President himself. This led to a longstanding debate on the non provisions of powers to the Provincial Councils, and arguably, India’s intervention on the matter continues to heat up the scenario.
Colombo (LNW): Sri Lanka has marked a significant rise in its export revenue from the gems, jewellery, and diamonds sector, recording a 32% increase compared to the same period the previous year.
The country’s ability to leverage its rich natural resources and skilled craftsmanship has played a vital role in this sector’s growth, despite global economic challenges and the. Serious threat posed to the industry by Unlicensed foreign traders.
However the National Gem and Jewellery Authority (NGJA) reports that the revenue from these exports has increased dramatically.
The Chairman of the NGJA, Viraj de Silva, announced that the total revenue generated from gems, jewellery, and diamonds exports from January to the end of May 2023 reached US$ 222 million.
The figure indicates a substantial surge in comparison to the same period in 2022, which saw approximately $161 million in revenue.
The Export Development Board (EDB) said Sri Lanka’s gem and jewellery sector is under serious threat, due to a surge in foreign traders’ involvement in key gem markets without the required licences, threatening the sector’s integrity and sustainability.
An advisory committee of the export promotions agency pointed out that the presence and influence of illegal foreign traders and buyers at the China Fort Gem Market and Ratnapura have become a major challenge to the local gem traders.
“While these markets have brought new opportunities to the industry, it has also presented specific challenges that require careful navigation,” the advisory committee on the gems, diamonds and jewellery sector of the EDB said in a statement, yesterday.
The primary challenge faced by the Beruwala Gem Market and Ratnapura is the intensified competition from illegal foreign traders.
According to the committee, the so-called foreign traders arrive in Sri Lanka using a visit visa and engage in gem business without any licence from the National Gem and Jewellery Authority. Obtaining the necessary licence from the authority is mandatory to engage in gem trade.
“This unlicensed gem trading could seriously damage Sri Lanka’s reputation, as it can lead to a lot of malpractices.
These foreign traders have a wider range of buyer and seller access via online platforms, as they do more with online channels,” the committee added.
The increasing participation of the foreign traders and buyers in the Beruwala Gem Market and Ratnapura adds pressure on the local traders and pushes towards smuggling, the committee cautioned.
Further, the money for gem purchases is being brought into the country without following any government rules and regulations. Similarly, the purchased stones are also taken out unofficially without being regulated.
Traditional Sri Lankan dealers on the other hand are subjected to all taxes and regulations, the committee pointed out.
As a result, the miners, dealers and brokers tend to sell stones to these foreigners for cash without any documentation. “
This has badly affected the exporters, who are using the official channels to obtain merchandise for exports. Also, this will reduce the government tax revenue and employment opportunities,” the committee cautioned.
The committee called on the government to focus on making local traders more competitive by addressing such issues.
Colombo (LNW): The Government is set to sign the impending free trade agreement (FTA) with Thailand within the first quarter of 2024 at least by March, to boost exports from the country by three folds to $ 1.5 billion.
Sri Lanka exports to Thailand last year and year before stood at US $ 62 million varying it from $58 million in 2018, $101 million in 2019 and $ 39 million in 2020.
Imports from Thailand has come down to $293 million due to government’s restrictions from $ 497 in 2018, $437 million in 2019 $ 363 in 2020 and $398 million in 2021, finance ministry data shows.
This was clear indication of the trade between the two countries favorable for Thailand during the past five years.
.Inking the FTA with Thailand is the first step to joining the Regional Comprehensive Economic Partnership (RCEP) trade agreement and a step towards strengthening traditional ties with the country.
Sri Lanka and Thailand initiated the proposal in 2016, and the negotiations commenced in 2018 with two rounds of discussions in the same year, whilst the third round of discussion concluded in January 2023.
President Ranil Wickremesinghe briefed the Cabinet on the progress of the discussions between the two countries, including the deal with trade in goods and services, investment rules, customs cooperation, trade facilitation and economic cooperation.
Cabinet spokesman Bandula Gunawardena disclosed that the objective of the Government is to boost exports from the current $ 550 million to $ 1.5 billion via Sri Lanka and Thailand FTA.
“Bilateral, regional and multilateral trade and investment agreements encourage boosting foreign inflows which is critical for Sri Lanka right now. These FTA are tools to boost the foreign inflows into the country to reduce the burden on the current account,” Gunawardena explained.
Accordingly, negotiations pertaining to the proposed FTA are scheduled to conclude in February 2024, as per the information presented by the President on the progress of the fifth round of negotiations on the proposed trade agreement, during the cabinet meeting held July 24.
The fifth round of negotiations on the proposed agreement was held in Colombo from 26 -28 June, during which discussions regarding customs cooperation and trade facilitation, economic cooperation as well as sanitary and phytosanitary chapters were completed.
The next round of negotiations is scheduled to take place in Thailand from August 21st to 23rd, 2023. Three additional rounds are planned to conclude the Agreement by February 2024, with the signing expected to occur in March 2024.
Sri Lanka aims to expand its economic reach first within South Asia and then extend further eastward to become a part of the Regional Comprehensive Economic Partnership (RCEP).
Sri Lanka will formally request the member countries of RCEP to support its application. Given Thailand’s active participation in both ASEAN and RCEP, Sri Lanka will seek Thailand’s support in joining RCEP.
Colombo (LNW): Sri Lanka’s interest payments reach highest levels worsening debt burden, a leading economic research agency Verité Research highlighted.
Sri Lanka is continuing to spend a substantial amount of its earnings for its interest payment on public debt this year, Finance Ministry data shows.
The interest expenditure on public debt will be the largest item in all previous budgets presented in parliament during the past several decades up to now,finance ministry dotces said.
Sri Lanka’s debt-to-GDP ratio is increasing alarmingly owing to high interest payments, limited access to global financial markets, and dwindling revenues.
Based on the Central Bank data, Verité Research recently pointed out that Sri Lanka’s interest payments had reached their highest levels in 2022..
This increase in interest payments suggests a significant debt burden on the government. The ratio of interest payments to total government revenue has surged from 35 percent in 2015 to a striking 78 percent in 2022.
Notably, there was a substantial rise in interest payments between 2019 and 2020, with payments escalating from 47 percent to 71 percent, mainly due to a substantial fall in government revenue, as a result of the tax cuts in late 2019 and early 2020.
This increase in interest payments suggests a significant debt burden on the government
Total government revenue in the first four months of 2023 was Rs. 821.35 billion whereas the total expenditure on interest payments for domestic and foreign debt stood at Rs. 818. 97 billion in the same period. The revenue and interest payments all most equal with slight difference of Rs. 2.38 billion
In comparison with the year 2022 figures, the total revenue in the first four months posted as Rs 631.13 billion while the payment of interest rate for total debt recorded at Rs.426.79 billion
Accordingly there was a substantial revenue surplus of Rs.204.34 billion after the payment of debt interest at that time, finance ministry data shows.
Interest payments on foreign debt fell by 64.9 percent to Rs. 29.8 billion in the first four months of 2023, compared to Rs. 84.9 billion in the same period of 2022 whereas interest payment for domestic debt increased by 130.8 percent to Rs. 789.1 billion in the first four months of 2023 from Rs. 341.9 billion in the same period of 2022.
Total government revenue in the first four months of 2023 increased by 30.0 percent to Rs. 820.1 billion From Rs. 630.9 billion in the same period of 2022,
The total expenditure on interest payments including both domestic and foreign debt increased by 16.5 percent to Rs. 426.8 billion in the first four months of 2022; compared to Rs. 366.2 billion in the same period of 2021, latest finance ministry fiscal report revealed
Interest payments on foreign debt fell by 8.1 percent to Rs. 84.9 billion in the first four months of 2022, compared to Rs. 92.4 billion in the same period of 2021 whereas interest payment for domestic debt increased by 24.8 percent to Rs. 341.9 billion in the first four months of 2022 from Rs. 273.8 billion in the same period of 2021.
Colombo (LNW):Port City Colombo (PCC), Sri Lanka’s most ambitious integrated development project and the country’s first foreign currency designated Special Economic Zone dedicated to exports of services, has taken a significant step towards fostering stronger ties between the Thai and Sri Lankan business communities.
Accordingly, a Memorandum of Understanding (MoU) was recently signed between Port City Colombo and the Thai-Sri Lanka Chamber of Commerce (TSLCC) in Bangkok, Thailand.
The MOU marks a pivotal moment in promoting bilateral trade and investment opportunities between Sri Lanka and Thailand, through PCC.
The objective of the agreement is to facilitate and enhance cooperation, providing a platform for business development and collaboration between the two nations.
Sri Lanka and Thailand have a warm history of trade and political cooperation stretching back many centuries, and share similarities between their cultures and aspirations, making for a strong foundation for further international cooperation. Representatives from both entities were present at the signing ceremony.
During the event, discussions focused on the abundant business opportunities within Port City Colombo and the potential for collaboration in various sectors. Both parties expressed their commitment to exploring avenues for mutual growth, trade expansion and investment promotion.
The MoU between Port City Colombo and the Thai-Sri Lanka Chamber of Commerce marks a significant milestone in strengthening economic cooperation and fostering greater connectivity between Sri Lanka and Thailand.
It paves the way for deeper engagement, and opens up a multitude of possibilities for businesses in both countries.
The scope of the MOU would be to disseminate trade and investment related information to enhance bilateral trade and business, initiate/promote joint ventures, partnerships and other business linkages, provide technical expertise, arrange business promotion missions between the two countries, formulate proposals to accelerate bilateral relations, and convene Business Forums and Business Matchmaking Sessions.
Balance of trade with Thailand is in favour of Thailand. Exports from Sri Lanka to Thailand amounts to US $ 53 million during 2017 compared to US $ 34 million in 2016. Imports from Thailand amounted to US $ 519 million in 2017 compared to US $ 492 million in 2016.
The Ceylon Chamber of Commerce, have already signed 127 Memoranda of Understanding to expand and further strengthen strong relationships with overseas trade promotion organisations for the benefit of business community in Sri Lanka.
Colombo (LNW): The Cabinet has granted approval to enter an agreement with the World Bank to obtain US $ 200 million for welfare benefit, announced Cabinet Spokesman Bandula Gunawardena.
The scheme will be granted in three components, namely US $ 185 million for the ‘Aswesuma’ welfare benefit scheme, US $ 07 million for a pilot project to economically assist selected beneficiaries, and US $ 08 million to strengthen the entire project management and social security system under the project, he said.
The government of Sri Lanka, accordingly, will be signing this new agreement with the WB soon, the Minister added.
Bloomberg: The Sri Lankan rupee has turned into Asia’s worst-performing currency from being the best in the first half of the year, and is poised to extend losses amid headwinds from interest-rate cuts and the loosening of import controls.
The currency has tumbled more than 6% this month as it fell a 14th day on Monday, on track for its longest daily losing streak in almost five years.
That’s a stark reversal from its stellar performance in the first six months of this year when the rupee was Asia’s top performer with a 19% advance.
According to Natixis SA in Hong Kong, the currency may further weaken by 8% by year-end.
Demand for dollars is rising as the crisis-hit nation eases import controls on more goods such as tiles and medical supplies. Sri Lanka cut its benchmark rate for the second consecutive meeting early this month amid faster disinflation, a move that’s also weighed on the currency.
“The trade balance will go more negative and more rate cuts may come as inflation is cooling rapidly,” said Haoxin Mu, an economist at Natixis SA. Mu forecasts a further 8% depreciation in the rupee to about 355 per dollar by the end of the year.
The rupee volatility is due to banks covering positions, central bank Governor Nandalal Weerasinghe said last week.
Businesses should use hedging instruments, avoid basing decisions on the exchange rate and instead use inflation expectations, he said.
Colombo (LNW): A new committee of experts will be appointed to put forward proposals for the restructuring of Sri Lanka Railways.
The suggestion to restructure Sri Lanka Railways was given the green light today (25) by the Cabinet, and the Department of Sri Lanka Railways has been recognised as an institution that needs to be restructured, in order to maintain the service at a precise level by minimising issues, the Department of Government Information said.
The new committee, accordingly, is expected to submit proposals in this regard in view of establishing a more appropriate structure for Sri Lanka Railways in the future.
