COLOMBO, Sri Lanka — Sri Lanka is considering the possibility of allowing the use of the Indian rupee for local transactions, as the island nation struggles to build its depleted foreign reserves and to emerge from last year’s unprecedented economic crisis.
Sri Lankan Foreign Minister Ali Sabry said Saturday the move to allow the use of its giant neighbor’s currency would enable “tourists and other people from India to directly use Indian rupees here” without going through the hassle of multiple currency conversions.
Sri Lanka imports plenty of items from India — its largest trading partner — including food, pharmaceuticals, construction materials, automobiles, fertilizers and chemicals. Trade between the two nations stood at $5.45 billion in 2021, according to official figures.
Sabry said accepting the Indian rupee would work as an advantage for Sri Lanka as the trade imbalance between the two countries is in favor of India.
“We need more Indian currency, so more Indian people coming here and spending Indian currency is good for us,” Sabry told reporters a day after visiting India with Sri Lankan president Ranil Wickremesinghe.
During the visit, India and Sri Lanka signed a series of energy, development and trade agreements, signalling growing economic ties between the neighboring countries.
Relations between the two countries surged last year when Sri Lanka was mired in its worst economic crisis in modern history, triggered by a severe foreign currency crunch that saw essential items run out and citizens queue for fuel for days. It also suspended its repayment of foreign debt last year.
India provided critical financial and humanitarian assistance worth over $4 billion to its neighbor, including food, medicine and fuel.
India was also the first creditor to extend a letter of support towards Sri Lanka’s debt restructuring efforts that helped kickstart support from the IMF, which approved a $3 billion bailout package in March.
Sri Lanka’s total debt has exceeded $83 billion, of which $41.5 billion is foreign and $42.1 billion is domestic. Sri Lanka has now started the process of restructuring it’s debt.
Sri Lanka’s strategic location in the Indian Ocean has long attracted attention from regional rivals India and China. For years, free-flowing loans and infrastructure investments from Beijing helped it gain an upper hand against New Delhi in the quest for influence.
But the country’s economic collapse gave New Delhi an opportunity to swing the pendulum back in its favor, especially as China delayed its support for debt restructuring, experts say. China owns about 10% of Sri Lanka’s foreign debt.
PMD: The first fuel shipment of China’s Sinopec, which signed a contract to enter the Sri Lankan fuel market, will arrive in the country early next month, State Minister of Power and Energy D. V. Chanaka stated.
Meanwhile, steps will be taken to replace the fuel price formula with a maximum retail price, thereby creating a fuel competitiveness that benefits the country, State Minister D. V. Chanaka said.
Meanwhile, he assured that a Maximum Retail Price (MRP) will be stipulated by the Government to all fuel companies under the price formula from August.
The State Minister also said that it is expected to take a decision regarding the QR code after discussing it with all the parties in the future. He expressed these views today (23) during a press conference themed ‘Collective Path to a Stable Country’ held at the Presidential Media Centre (PMC).
PMD: President Ranil Wickremesinghe instructed the officials to expedite the Anuradhapura Sacred Site Development Plan, giving priority to the Maha Viharaya Development Plan.
The President also mentioned that a Committee consisting of a team of experts from the National Physical Planning Department (NPPD), the Department of Archeology, and Universities will be appointed to implement the Maha Viharaya Development Plan.
President Ranil Wickremesinghe mentioned this while joining a discussion held yesterday (22) afternoon at the Bomalu Viharaya, Anuradhapura on the Maha Viharaya Development Plan and Anuradhapura Sacred Site Development Plan.
The discussion was held under the Chairmanship of the Atamasthanadhipathi and Chief Sanghanayaka of Nuwara Kalaviya most Venerable Pallegama Hemarathana Nayaka Thero.
The President remarked that it is regrettable that we, who are entitled to a proud civilization and history, are not paying adequate attention to it when the countries of the world continue to emphasize their historical civilization.
The President questioned the officials about the identification of the Maha Viharaya complex’s boundaries and the status of the excavation work. He also inquired about the number of archaeological officers employed in the Maha Viharaya’s excavation and the development of the Anuradhapura Sacred Site, the composition, and the allocated provisions.
The President stressed the necessity to correctly implement the Maha Viharaya Development Plan by immediately addressing the flaws and the fact that he could not be content with the ongoing efforts.
Also, President Ranil Wickremesinghe mentioned that a new legal system tailored to Anuradhapura is expected to be brought in to preserve the city’s historical legacy.
President Ranil Wickremesinghe further commented:
Sigiriya and Anuradhapura can be considered as our heritage. Sigiriya is our greatest achievement and our civilization lies in this city of Anuradhapura. The Maha Viharayaya takes precedence there. The Maha Viharaya is the headquarters of Pali Buddhism. This time, during my visit to India, I presented Prime Minister Modi with an English copy of the Tripiṭaka.
Other development initiatives in the Anuradhapura Sacred Site region should be put into action based on this Maha Viharaya Development Plan. During Mr. Bandaranaike’s rule in 1947, the Anuradhapura Sacred Site was initiated. But up until now, we haven’t been able to complete this properly.
India began the construction of Nalanda University in the 1990s. Today, Nalanda University has been established as a major University. Many countries made contributions to it. Pakistan, a Muslim country, also built Taxila in the same way. Despite the fact that Sri Lanka is a Buddhist nation, we were unable to finish the Maha Viharaya’s construction. We should all feel guilty about it.
The Department of Archeology is sending me letters asking me to protect the archaeological sites. We are ready for it. But we must remember the basic work of this Maha Viharaya. A new city can be built at any time. But we have to proceed with the excavation work of the Maha Viharaya. These activities should be carried forward on the advice of the Maha Sangha of the Atamasthana.
A new law that will apply to Anuradhapura should be prepared. Additionally, a Committee is anticipated to be formed to carry out this activity with the concerned officials. Despite the existence of Departments and Corporations, this work is not overseen by a single administrative officer. We should focus on that as well.
If we start this project now, we can achieve some progress in the next 10 years, but it will take at least 25 years to complete it. When these operations begin, Sri Lanka will develop into an archaeological hub.
Malwathu Oya is where the Sinhalese civilization first emerged. Before beginning the Malwathu Oya project, excavations at Maha Viharaya should be completed in the following two years. Retired archaeologists can be contacted if necessary. These initiatives are connected.
We have successfully completed the Sigiriya project with Senaka Bandaranaike, Roland Silva, and Shiran Deraniyagala. We should develop the city of Anuradhapura in the same way. When I went to Paris, I also discussed it with UNESCO.
We can also get assistance from Rajarata University in this regard. This area has to be developed so that visitors can remain for a few days. Therefore, it is important to prioritize and advance this program. Once this is underway, we will receive support from around the world to carry out the project.
Anuradhapura has a rich history. While Other countries emphasize their historical civilizations we have not paid adequate attention to it. If Dimbulagala excavations were done today, tourists from Thailand, Cambodia, Vietnam, and Laos would come to visit the place. Let’s first finish the Anuradhapura work.
We should be proud of our history and civilization. We should showcase our history to the world. Therefore, if we develop our heritage, we will be able to reap high benefits from tourism.
A showroom by the name ‘Rajarata Civilization’ will be built here. It is necessary to establish a separate location for Buddhist culture. I also spoke with the Indian Prime Minister about how Kusinarawa and Sanchi were built. Such locations have been constructed in Hindu countries to draw Buddhist tourists. But this is not the case right now.
Additionally, we are now discussing the establishment of the Maha Vihara University. We intend to carry out those tasks in-depth in accordance with the old Piriven education. The historical city of Anuradhapura will gain from these endeavors.
Atamasthanadhipathi and Chief Sanghanayaka of Nuwara Kalaviya most Venerable Pallegama Hemarathana Nayaka Thero As a leader who recognized the value of Anuradhapura, your efforts to re-establish the Maha Viharaya will be blessed by the Maha Sangha. Also, we express our appreciation for your desire to exchange Buddhist philosophy with other countries of the world as a center of Theravada Buddhism in accordance with the international relations that existed in history.
In 1948 Mr. Bandaranaike gazetted and developed the Anuradhapura Sacred Site. President J.R. Jayewardene along with the Central Cultural Fund worked to restore Jethavanaramaya and Abhayagiriya temples. But no one’s attention has been focused on other temple complexes of the Atamasthana.
In the Anuradhapura Sacred Site Development Plan, it seems that no attention has been paid to Lankaramaya. Therefore, I remind the NPPD, the Department of Archeology, and the Central Cultural Fund to prepare a proper plan for the development of Lankaramaya within two weeks and include it in the Anuradhapura Sacred Site Development Plan. Otherwise, this Anuradhapura Sacred Site Development Plan will basically fail.
Also, I see it as a work of great national importance if a system of rules and regulations particular to this land can be prepared and gazetted to protect this sacred Anuradhapura city for the future.
Adhikarana Sangha Nayake of Malwatte Chapter of Siam Nikaya for North Central Province and Incumbent of Lankarama Temple Venerable Pandit Ralapanawe Dhammajothi Thero
We as Maha Sangha offer our blessings to the President on his accession as the Maha Viharaya on completing one year since assuming office as the President. When the President won the election in 2001 and became the Prime Minister, when he came to worship the Jaya Sri Maha Bodhi, our Atamasthanadhipathi Pallegama Hemarathana Nayaka Thero brought a proposal to renovate the second golden fence (Ranveta) of the Jaya Sri Maha Bodhi.
At that time, our current President, the then Prime Minister, said that he should appoint a Committee for this purpose. He named it as the Jaya Sri Maha Bodhi Development Committee. The work commenced in 2002 under the Chairmanship of former Secretary to the Prime Minister Mr. K.H.J. Wijayadasa. A meeting was held at the Prime Minister’s Office that year. The President continued to advocate for the development of the Maha Viharaya throughout those times as well. I commend him today for visiting the Maha Viharaya in his capacity as President and speaking with the authorities on the development of the Maha Viharaya.
According to the Maha Viharaya Development Plan, the proposed works will take two years to complete at a cost of an estimated Rs. 555 million, Director General of Archeology Mrs. Pradeepa Serasinghe stated.
Following this discussion, President Ranil Wickremesinghe also joined to observe some shrines connected to the Maha Vihara complex. The President first visited the Southern Stupa and afterward visited the Thuparama temple complex to observe the continuing excavation operations there as well.
Chancellor of the Rajarata University & incumbent of Ruwanweliseya Venerable Ithalawetunawewe Gnanathilake Thero, Incumbent of Abhayagiriya Temple Venerable Dr Kalanchiye Rathanasiri Thero, Incumbent of Tuparamaya Temple Venerable Kahalle Gnaninda Thero, Incumbent of Mirisawetiya Temple Royal Pandit Venerable Dr. Welihene Sobhitha Thero, Ven. Godamune Pannaseeha Thero representing Abhayagiriya Project, Secretary of the Ministry of Buddhasasana, Religious and Cultural Affairs SomaratneVidanapathirana, Secretary of the Ministry of Tourism and Land H. M. B. P. Herath, Secretary of the Ministry of Urban Development and Housing W.S. Sathyananda, Secretary of the Ministry of Irrigation U.D. C. Jayalal, Additional Secretary to the President Kamal Pushpakumara, North Central Province Chief Secretary Chandrasiri Bandara, Anuradhapura District Secretary Mr. J.M.J.K.Jayasundara, Director General of National Physical Planning Department, Commissioner General of Buddhist Affairs, Director General of Central Cultural Fund, Land Commissioner General, Conservator General, Director General of Wildlife Conservation Department, Director General of Irrigation Department, Director General of Mahaweli Authority, Director General of Urban Development Authority, Director General of Road Development Authority, officials including North Central Province Land Commissioner, Nuwaragam Palatha Central Divisional Secretary, Urban Development Authority Provincial Director, Pooja Bhumi Development Director participated in this discussion.
Colombo (LNW): The Joint Apparel Association Forum (JAAF) yesterday stressed the need to go beyond the current export quota in the India-Sri Lanka Free Trade Agreement (ISFTA) for the apparel sector to reap any real benefits.
While under the current FTA, Sri Lanka is permitted to export eight million pieces of ready-made apparel to India without applicable duties, the apex body of Sri Lanka apparel is hopeful this will be expanded, as the FTAs carry the propensity to offer immense trade opportunities for both countries.
“Unfortunately, the apparel industry is showing a decline of 20 percent in exports of textiles and apparel, driven mainly by a reduction in demand in the primary apparel export markets. We believe that India, as our closest trading partner, could offer a lifeline to the country, whilst also benefiting Indian fabric manufacturers,” said the JAAF in a statement.
It pointed out that as Sri Lanka recovers from the worst economic crisis since independence, the role of the merchandise export sector has never been more important.
Since the operationalization of the ISFTA, Sri Lanka’s export trade has multiplied 18 folds from US $ 47 million in 1999 to US $ 815 million in 2021. Sri Lanka has also been able to promote a diverse range of products under the ISFTA.
Moreover, nearly 70 percent of Sri Lanka’s exports to India use the FTA provisions. However, despite these many successes, the aforementioned eight million export quota acts as a hindrance to the apparel industry’s ability to reap the full benefits of the ISFTA, the JAAF said.
It pointed out that, for instance, Sri Lanka imports more from India, than it exports. In 2022 alone, while the total earnings from apparel exports to India stood at just US $ 149.28 million, yarn worth US $ 146.47 million, knitted fabrics worth US $ 311.78 million and woven fabrics worth US $ 278.38 million were imported from India.
“This highlights a serious sectoral imbalance of trade between India and Sri Lanka with the overall balance of trade continuously favouring India, allowing Indian companies to grow their footprint on the island with greater access for Indian mills to the Sri Lankan market,” the JAAF said.
It is also important to note that the limited eight million quota has to be shared by all Sri Lankan exporters, leaving exporters compromised to negotiate any meaningful orders with Indian buyers under the current restrictions.
However, the JAAF welcomed the talks between India and Sri Lanka on an FTA that are ongoing and is confident that this will bring benefits to both countries.
Pending the finalizing of the FTA, the JAAF requested that the quota of eight million pieces be removed to give Sri Lanka an opportunity to use this as an avenue to increase its exports of apparel to India. “
Colombo (LNW): An All-Party meeting will be convened next Wednesday (26) under the patronage of President Ranil Wickremesinghe.
The All-Party meeting will be held at the President’s House, and leaders of all political parties representing Parliament are expected to attend.
The meeting is believed to be addressing a number of matters of importance, including the 13th Amendment to the Constitution and initiatives to be implemented for the promotion of national harmony.
The focus on the 13A comes in subsequent to President Wickremesinghe’s recent visit to India, where he met with his Indian counterpart and discussed the subject.
Colombo (LNW): The Auditor General’s Department has launched a special probe into the use of substandard medicines, following reports on a number of incidents in the Health Sector surrounding controversy.
Following investigation, a report is expected to be submitted to Parliament, said Auditor General W.P.C. Wickramaratne.
Previous investigations on the National Medicines Regulatory Authority (NMRA) and the Ministry of Health revealed significant information about the use of substandard and unregistered drugs, the Auditor General emphasised, adding that the Parliament Committee on Public Business has also discussed the matter.
Meanwhile, a separate probe into the computer system related to the purchase and distribution of medicines will also be conducted, he added.
Colombo (LNW): The Government is alleged to have succumbed to Indian pressure kicking China out of Sri Lanka’s Liquefied Natural Gas (LNG) space.
The alleged move concerning LNG infrastructure projects in Kerawalapitiya has sparked concerns among various stakeholders within the energy sector. Sources claimed that the move could possibly jeopardise the Kerawalapitiya LNG-led clean energy power complex which was in the power development master plan into disarray.
The concerned projects are “Development of FSRU at Offshore Kerawalapitiya on BOO Basis and Mooring on BOOT Basis” initiated by the Ceylon Electricity Board (CEB), and the “Construction of a Re-gasified Liquefied Natural Gas (R-LNG) pipeline system from Floating Storage Regasification Unit (FSRU) to existing Kelanitissa and Kerawalapitiya power plants on Build, Own, Operate and Transfer (BOOT) basis” initiated by CPC.
They were published through an international bidding process in early 2021, (after four previously failed G2G/unsolicited attempts) which should have become the first project that introduced LNG to Sri Lanka.
Sources said the projects have experienced a long and stringent evaluation of the technical and financial proposals, after which it was deemed that the Chinese company, China Harbour Engineering Company Ltd., (CHEC) was the only Technically Qualified bidder.
“Such infrastructure ought to have been commenced if it were not for the economic issues faced last year, whereas both projects stagnated at the final stage of this procurement process for nearly one year,” sources said.
Especially with the FSRU&M Project, its Concession Agreement has been ready since September 2022, only requiring Cabinet Approval, and had the Ministry drafted the cabinet paper, it could have commenced right away as informed sources on the matter commented.
“Any delay or diversion in implementing these critical projects may be detrimental to Sri Lanka and Government’s plans to make Sri Lanka energy secure/independent and might create significant value chain losses which can only be avoided by robust, righteous, and timely decision-making,” sources pointed out.
As an essential energy infrastructure, after multiple studies, the projects were the only proven feasible way out to LNG in Sri Lanka, which is deemed a clean energy source with lower carbon emissions and higher economic efficiency.
The projects are of the potential to serve up to 8 power plants with capacity of 2,400 MW. By replacing diesel with LNG for power plants, the projects will facilitate the diversification of the energy mix. Hundreds of million US dollars in foreign exchange per year are expected to be saved, and the public will meanwhile reap benefits by way of reduced tariffs.
Sources alleged that plans underway by the Government to suspend this procurement process and the move ahead of President Ranil Wickremesinghe’s historic visit to India was an indication of the Government bowing down under the pressure from the giant neighbour.
Colombo (LNW): The government has decided to increase fuel quota under the QR system next month as there was a significant reduction in the consumption of petrol and diesel owing to drop in using vehicles for un necessary travelling and long distance driving by motorists.
Power and Energy Minister Kanchana Wijesekera revealed y that fuel quotas might see a further increase next month.
The decision comes after a comprehensive evaluation of fuel cargo plans and supply for the upcoming six months, carried out by the Ceylon Petroleum Corporation (CPC).
Fuel import plans, refinery operations, refinery upgrade proposals, QR quotas storage capacity, stock automation, distribution, and agreements with fuel stations were among the topics discussed.
The comprehensive evaluation of these aspects will serve as the foundation for determining the appropriate increase in fuel quotas for the following month.
Analysts opined the potential increase in fuel quotas in August is likely to have a positive impact on consumers and businesses alike. “With a surge in economic activities and the resumption of various sectors, a steady and reliable fuel supply is crucial to sustain the momentum of growth,” they pointed out.
Sri Lanka has recorded a significant reduction in fuel demand over the year from January 2022 to January 2023, with consumption of auto diesel and petrol dropping as much as 50 and 30 percent respectively, Power & Energy Minister Kanchana Wijesekara said.
He noted that retail and industrial fuel sales records of the state-run Ceylon Petroleum Corporation (CPC) show a reduction of about 50 percent in auto diesel, about 30 pertol in petrol, and about 70 percent in kerosene use.
Following the implementation of the QR-based National Fuel Pass, Sri Lanka’s monthly fuel import bill dropped to USD 230 Million, from USD 500 Million.
In a statement, the Energy Ministry says the distribution of fuel to the public, under the QR-code-based quota system has resulted in major savings for the state.
According to the Energy Ministry, six Million vehicles have registered with the National Fuel Pass so far, while 93% of the fuel stations across the country have implemented the QR-based fuel dispensing system.
Colombo (LNW): In the wake of Sri Lanka’s moves to recover from an unprecedented economic crisis, the government‘s foreign financing is set to strengthen with the resumption of funding from bilateral and multilateral creditors the first half of this year
As such, disbursements and new financing commitments received from conventional bilateral creditors have poured in significantly during this period. .
Multilateral creditors continued their operations and some of their projects were repurposed to cater to the budget financing requirements of the Government, a finance ministry report indicated.
The Government of Sri Lanka and the World Bank, European Union (EU) and Agence Française de Development (AFD) have recently signed financing agreements to help strengthen Sri Lanka’s management of public finances.
The grant of EUR 9.8 million for Public Finance Management aims to support improving economic governance, transparency, and accountability in how public finances are spent.
Under the Extended Fund Facility (EFF) 2023-2026 of the International Monetary Fund (IMF), Sri Lanka received the first tranche of US$ 333 million to meet budget financing needs.
Furthermore, it is evident that the Emergency Credit Lines received from the Government of India helped substantially to ease the foreign currency needs for the importation of essential goods.
$131 million was received under the Credit Lines in the first quarter of 2023. Accordingly, the Government secured $ 670.3 million during the period OF 1Q 2023 under review.
The government has received $ 142.5 million from India, $114.2 million from the World Bank nd $ 58 million from the ADB.
Foreign financing from the donor countries has also come down with the Netherlands loan of $ 3.9 million and German grant of $ 1.3 million.
The Government obtained a total of $40.9 million in Official Development Assistance (ODA) commitments by entering into two grant agreements with the Government of Japan in the first quarter of 2023.
This consists of $ 37.1 million for fuel grant assistance under the Japanese Economic and Social Development Programme and $ 3.8 million for the improvement of infectious waste management extended by the Government of Japan. This grant commitment was made for the health and social welfare sector.
The grant of EUR 9.8 million for the Public Finance Management reforms is provided through a multi-donor trust fund that is financed by the EU and AFD and administered by the World Bank.
The World Bank Group CPF, lays out a two-phased approach that starts with a focus on urgent macro-fiscal and structural reforms and support to protect the human capital and most vulnerable population.
After the first 18-24 months, and subject to successful implementation of the reform program and international debt relief and financial support, the CPF focus will gradually shift to investments in longer-term development needs that will help promote private sector job creation.
Colombo (LNW): The issuance of a new circular by the Ministry of Health to all health officials restricting them from providing information to the media without prior consent of the department heads has met with immediate backlash by health professionals, in what they call it a severe blow in the head against the freedom of speech and expression of the health employees.
The circular in question was singed by Secretary to the Health Ministry Janaka Shri Chandraguptha and asserts that disciplinary action will be taken against any official that provides information to the media, without the consent of the relevant department head.
The circular affects all officers in the Health Sector including Provincial Health Secretaries, Heads of institutions of the Ministry of Health, Provincial Directors of Health Services and Regional Service Directors.
The said circular has not clearly mentioned the provisions of the Establishments Code which concern the representatives of trade unions or health professionals’ associations, the Joint Council for Professionals of Supplementary Medicine said.
The circular in question was deliberately issued with the intention of suppressing the voice of the trade unions, alleged Council Chief Ravi Kumudesh, warning that trade union actions will be taken if the government proceeds with this communique to arbitrarily suppress the freedom of speech and expression of the health employees.
The Council added that an explanation is expected from the Health Secretary in this regard, and urged him to revoke the communique in question.
