Sabaragamuwa Provincial Governor Tikiri Kobbekaduwa has informed that he will resign from that position. Accordingly, he has informed the President in writing that he will resign from that position from tomorrow (10). Political sources say that a senior member of the United National Party will be appointed for that vacancy.
Sabaragamuwa Provincial Governor Tikiri Kobbekaduwa Announces Resignation
South-West Monsoon Brings Showers and Strong Winds to Sri Lanka
According to the Department of Meteorology’s weather forecast for Friday (June 09), the south-west monsoon has now settled over the island. As a result, showers or thundershowers are expected intermittently in the Western and Sabaragamuwa provinces, as well as in the districts of Galle, Matara, Kandy, and Nuwara-Eliya.
In specific areas of the Sabaragamuwa Province and the districts of Galle, Matara, and Kalutara, fairly heavy showers exceeding 75mm are anticipated. Additionally, the North-Western province will experience several spells of showers.
During the evening or night, showers or thundershowers will occur in various locations within the Uva province, as well as in Ampara and Batticaloa districts.
Northern and North-Central provinces, along with Hambantota, Puttalam, and Trincomalee districts, should expect strong winds ranging from 40-45 kmph at times.
To minimize potential damages caused by temporary localized strong winds and lightning during thundershowers, the Department of Meteorology urges the public to take adequate precautions.
CBSL issues special notice for depositors of Swarnamahal Financial Services
Colombo (LNW): The eligible beneficiaries of Swarnamahal Financial Services PLC (SFSP) have been informed that the payment of compensation under the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will recommence from June 09, 2023 and expected to continue such payments until July 12, 2024, following the cancellation of the financial body’s licence, the Central Bank of Sri Lanka (CBSL) said in a statement today (08).
“The Central Bank of Sri Lanka wishes to inform the eligible depositors/relevant legal beneficiaries of eligible depositors of Swarnamahal Financial Services PLC (SFSP) that the payment of compensation under the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) will recommence from 09.06.2023 and expected to continue such payments until 12.07.2024. However, in a case of appointment of a liquidator prior to 12.07.2024, by a competent court in respect of the liquidation of SFSP, compensation payment under SLDILSS will be immediately discontinued.
Accordingly, the eligible depositors/relevant legal beneficiaries of eligible depositors who have not yet obtained compensation subject to a maximum of Rs. 1,100,000/= can obtain their claims from any branch of the People’s Bank commencing from 09.06.2023 by producing relevant documents.”
Imperative to equip armed forces with state-of-the-art technologies and capabilities: Defence State Minister
As an extension of the excellent bilateral relations between Sri Lanka and India, cooperation in the area of Defence has continued to grow and strengthen over the years. In the last decade with the growth and development of your Defence industry, procurement of Defence related hardware from India has added a new dimension to our cooperation, said the State Minister of Defence Hon. Premitha Bandara Tennakoon gracing the Indian Defence Export Promotion Seminar and Exhibition at Hotel Taj Samudra in Colombo, on Wednesday (Jun 07).
Defence Secretary General Kamal Gunaratne was also present at the opening ceremony.
Indian High Commissioner H.E. Gopal Baglay making the opening remarks said that they believe in sharing their experience and growing capabilities with others and that they consider cooperation with Sri Lanka in all domains as invaluable.
Organized by the Indian High Commission, the first of the India – Sri Lanka Defence Seminar and Exhibition is conducted to promote cooperation and collaboration amongst the two countries in Defence equipment.
State Minister Tennakoon also said that he believes this event would provide an opportunity for Sri Lanka to showcase our own indigenously developed defence vehicles by local industries and Sri Lanka armed forces and to interact with relevant Indian entrepreneurs. It is essential for us to remain at the forefront of these developments, continuously modernizing our armed forces to counter emerging threats effectively, he said.
Addressing the gathering over remote technology, the Indian Defence Secretary (Defence Production) Giridhar Aramane said that Sri Lanka is one of India’s major development partners and that it has been an important pillar in bilateral ties.
During the opening session, Army’s Adjutant General Major General Chandana Wikramasingha and Defenec Advisor of the Indian HC Captain Vikas Sood made presentations.
A Defence Procurement Brochure was presented by the Indian High Commissioner to the State Minister of Defence and Secretary, Ministry of Defence.
The Exhibition showcases related products and services of defence industry from India and Sri Lanka.
Chief of Defence Staff Gen Shavendra Silva, Navy Commander Vice Admiral Priyantha Perera, Army Chief of Staff Major General Channa Weerasuriya, Air Force Chief of Staff Air Vice Marshal Udeni Rajapaksa, Senior DIG Ranmal Kodithuwakku, former Tri Forces Commanders, senior armed forces officers and Indian High Commission officials were also present at the occasion.
Private sector borrowing continues downward trend
By: Staff Writer
Colombo (LNW): Sri Lanka’s bank may need a 1.4 trillion rupee capital injection after bad loans from a currency crisis and debt -restructure hit their balance sheets, according to an analysis by the International Monetary Fund.
Private sector borrowing from the banking sector continued its dip in April amidst the prevalent high interest rate regime and contraction in the economy.
As per the Central Bank data, outstanding credit extended to the private sector declined by Rs. 43.2 billion in April 2023 to Rs. 7.1 trillion.
Credit to the private sector from the banking sector has been decelerating since June 2022 with the biggest drop of Rs. 107.6 billion in March due to high interest rate environment and downturn in the economy according to analysts.
As at December 2022 the outstanding amount was Rs. 7,426 billion (a peak of Rs. 7.6 trillion in August) as against Rs. 6,981 billion in 2021.
However the Central Bank said last week that the credit to the private sector is expected to gradually increase with the easing of monetary conditions and rebound in economic activity.
On Thursday the CBSL announced a 250 basis points reduction in policy rates, the first downward revision in nearly three years.
Due to the economic contraction, half a million jobs were lost in industry and services and back-up lower-paying agricultural jobs could not compensate for income losses.
Combined with increases in the cost of living, this economic contraction led national and urban poverty to double (to 25 percent) and triple (to 15 percent), respectively. The crisis left 52 percent of the population in estate areas living in poverty, exacerbating spatial disparities, and led to an increase in overall inequality.
Key downside risks include a slow debt restructuring process, limited external financing support, a sharper global slowdown, and a prolonged recovery from the scarring effects of the current crisis. A lower-level external trade equilibrium could have contagion effects on domestic trade, economic activity, jobs, and incomes.
This and adverse effects from revenue-mobilization efforts could worsen poverty projections. The financial sector needs to be managed carefully, given rising non-preforming loans and large public sector exposures.
The necessary macroeconomic adjustments may initially adversely affect growth and poverty but will correct overall imbalances, help regain access to international financial markets, and build the foundation for sustainable growth.
Mitigating the impacts on the poor and vulnerable remains critical during the adjustment. Reducing poverty requires better-targeted social assistance, an expansion of employment in industry and services, and a recovery in the real value of incomes. On the upside, the government’s reform program, supported by financing from international partners, could boost confidence and attract fresh capital inflows key to restart the labor market and restore livelihoods.
Today’s CBSL Exchange Rates
Colombo (LNW): The official exchange rate list of the Central Bank of Sri Lanka (CBSL) today (08) reveals a slight depreciation of the Sri Lankan Rupee against the US Dollar, in comparison to yesterday.
Accordingly, the buying price of the US Dollar has increased to Rs. 285.69 from Rs. 285.56, and the selling price, to Rs. 298.91 from Rs. 298.43.
The Sri Lankan Rupee also indicates depreciation against several other foreign currencies as well.
However, it indicates a slight appreciation against the Swiss Franc and the Gulf currencies.
Ajith Prasanna to further serve in prison for contempt of court
By: Isuru Parakrama
Colombo (LNW): Retired Major Attorney-at-Law Ajith Prasanna has been sentenced to two terms of rigorous imprisonment for a period of six months each, after he pleaded guilty for contempt of court.
Prasanna, who is currently serving in prison, will serve his two prison sentences separately at the same time.
The retired major was arrested upon a lawsuit filed against him based on a comment he had delivered during a briefing in 2019, which had been interpreted as a contempt of court.
Myanmar assists Sri Lanka tackle illegal migration and human trafficking
By: Staff Writer
Colombo (LNW): Myanmar is to assist Sri Lanka tackle illegal migration and human trafficking. Human trafficking in the country has been increased following the economic misery in Sri Lanka.
Following representations made by the Government of Sri Lanka to Myanmar authorities, six Sri Lankans, who were victims of human trafficking and stranded in Myanmar have been rescued by the Myanmar authorities and handed over to the Sri Lanka Embassy in Yangon for repatriation to Sri Lanka recently.
The six Sri Lankans were identified as victims of an organized trafficking ring operating in Southeast Asian countries.
They were successfully repatriated to Colombo via Bangkok by the Sri Lankan Airlines flight on 25 May 2023, the Embassy of Sri Lanka in Yangon said.
Under instructions of the Ministry of Foreign Affairs, Ambassador Janaka Bandara and the officials of the Sri Lankan Embassy in Yangon coordinated the rescue process and repatriation of the victims to Sri Lanka.
The International Organization for Migration (IOM) and Eden Myanmar Foundation facilitated and extended assistance in the repatriation, the release said.
The Ambassador of Sri Lanka to Myanmar Janaka Bandara met with the Deputy Prime Minister and Home Affairs Minister of Myanmar, Lt-Gen Soe Htut at the Ministry of Home Affairs in Nay Pyi Taw, the Sri Lankan Foreign Ministry said.
During the meeting, Ambassador Janaka Bandara expressed appreciation to the Myanmar Government and the Deputy Prime Minister for his intervention and support extended in the recent repatriation of several Sri Lankans who were victims of human trafficking and stranded in Myanmar.
Further, the Ambassador requested continuous support and close cooperation between authorities of Myanmar and Sri Lanka to address issues of illegal migration and human trafficking.
The Deputy Prime Minister assured the Ambassador of support and cooperation from Myanmar side to tackle illegal migration and human trafficking.
The Ambassador further discussed with the Deputy Prime Minister on a range of issues pertaining to human trafficking, money laundering and cyber-crimes and the prospect of enhancing cooperation between two countries to combat these issues.
The meeting was attended by Deputy Chief of Police Maj-Gen Aung Aung and other high officials from the Ministry of Home Affairs of Myanmar.
Mean while The Republic of Italy has expressed its willingness to help Sri Lanka by supplying helicopters for anti-human trafficking measures taken by the Government of Sri Lanka.
The Italian Ambassador Rita Giuliana Mannella revealed this during a meeting with Hon. President Ranil Wickremesinghe today (25) at the Presidential Secretariat.
The duo discussed the strengthening of the partnership between Italy and Sri Lanka and special attention was paid to cultural exchanges, tourism enhancement, possible investments, defence aspects, and on how Italy can help Sri Lanka during these challenging times.
Myanmar is to assist Sri Lanka tackle illegal migration and human trafficking. Human trafficking in the country has been increased following the economic misery in Sri Lanka
Following representations made by the Government of Sri Lanka to Myanmar authorities, six Sri Lankans, who were victims of human trafficking and stranded in Myanmar have been rescued by the Myanmar authorities and handed over to the Sri Lanka Embassy in Yangon for repatriation to Sri Lanka recently.
The six Sri Lankans were identified as victims of an organized trafficking ring operating in Southeast Asian countries.
They were successfully repatriated to Colombo via Bangkok by the Sri Lankan Airlines flight on 25 May 2023, the Embassy of Sri Lanka in Yangon said.
Under instructions of the Ministry of Foreign Affairs, Ambassador Janaka Bandara and the officials of the Sri Lankan Embassy in Yangon coordinated the rescue process and repatriation of the victims to Sri Lanka.
The International Organization for Migration (IOM) and Eden Myanmar Foundation facilitated and extended assistance in the repatriation, the release said.
The Ambassador of Sri Lanka to Myanmar Janaka Bandara met with the Deputy Prime Minister and Home Affairs Minister of Myanmar, Lt-Gen Soe Htut at the Ministry of Home Affairs in Nay Pyi Taw, the Sri Lankan Foreign Ministry said .
During the meeting, Ambassador Janaka Bandara expressed appreciation to the Myanmar Government and the Deputy Prime Minister for his intervention and support extended in the recent repatriation of several Sri Lankans who were victims of human trafficking and stranded in Myanmar.
Further, the Ambassador requested continuous support and close cooperation between authorities of Myanmar and Sri Lanka to address issues of illegal migration and human trafficking.
The Deputy Prime Minister assured the Ambassador of support and cooperation from Myanmar side to tackle illegal migration and human trafficking.
The Ambassador further discussed with the Deputy Prime Minister on a range of issues pertaining to human trafficking, money laundering and cyber-crimes and the prospect of enhancing cooperation between two countries to combat these issues.
The meeting was attended by Deputy Chief of Police Maj-Gen Aung Aung and other high officials from the Ministry of Home Affairs of Myanmar.
Mean while The Republic of Italy has expressed its willingness to help Sri Lanka by supplying helicopters for anti-human trafficking measures taken by the Government of Sri Lanka.
The Italian Ambassador Rita Giuliana Mannella revealed this during a meeting with Hon. President Ranil Wickremesinghe today (25) at the Presidential Secretariat.
The duo discussed the strengthening of the partnership between Italy and Sri Lanka and special attention was paid to cultural exchanges, tourism enhancement, possible investments, defence aspects, and on how Italy can help Sri Lanka during these challenging times.
Net credit to the Government from the banking sector swells by half a trillion
By: Staff Writer
Colombo (LNW): Net credit to the Government from the banking sector swelled by half a trillion in April 2023 pushing the outstanding amount to cross the Rs. 8 trillion mark.
As per provisional data released by the Central Bank, the Government borrowed Rs. 523 billion in April whilst total outstanding as at end April was Rs. 8,091 billion. As at end 2022, the outstanding value was Rs. 7,471 billion.
Last week the Central Bank said net credit to the Government by the banking system that notably expanded in 2022 is expected to moderate with the receipt of substantial foreign financing to the Government.
Outstanding credit to public corporations saw a massive decline of Rs. 463.0 billion in April to Rs. 1,130 billion. As at end 2022, the figure amounted to Rs. 1,734 billion.
The CBSL said credit to the State Owned Business Enterprises (SOBEs) by the banking system is expected to reduce significantly in the period ahead, underpinned by the cost recovery pricing adopted by major SOBEs.
Outstanding short term domestic debt stock significantly increased by 35.9 percent to Rs.4,267.7 billion at the end of 2022 from Rs. 3,139.8 billion at the end of 2021 due to the significantly enhanced Treasury bills stock by 81.2 percent, to Rs. 4,113.9 billion by end 2022, compared to Rs. 2,270.5 billion recorded at the end of 2021.
The share of short-term debt in total domestic debt stock increased slightly to 28.4 percent by the end of 2022 from 28.3 percent reported at the end of 2021. Furthermore, the share of Treasury Bills in total domestic debt stock increased to 27.4 percent at the end of 2022from 20.5 percent at the end of 2021.
The medium and long term domestic debt stock increased by 24.2 percent to Rs. 9,882.1 billion by the end of 2022 from Rs. 7,957.4billion recorded at the end of 2021.
However, the share of medium and long term debt in the total domestic debt stock further declined to 65.7 percent in 2022 from 71.7 percent at the end of 2021 due to the continued dependency on short term instruments for deficit financing in 2022 than medium and long term financing.
The share of Treasury Bonds of the total outstanding domestic debt stock declined to 57.9 percent at the end of 2022 from 62.8 percent at the end of 2021.The banking sector debt increased by 62.5percent to Rs. 8,525.7 billion at the end of 2022 from Rs. 5,247.9 billion in 2021 due to the increased debt to commercial banks and the Central Bank. Meanwhile, non-bank sector debt also increased by 27.8 percent to Rs. 6,164.1.
Opposition MP advocates urgent measures to revive SL’s struggling MSME Sector (VIDEO)
In a compelling speech delivered in Parliament today, Harsha de Silva, Member of Parliament, shed light on the dire state of Sri Lanka’s Micro, Small, and Medium Enterprises (MSME) sector. He emphasized the urgent need for comprehensive measures to address the mounting challenges faced by these enterprises, which are crucial to the country’s economy and employment landscape. To provide immediate relief to the struggling sector, MP Harsha de Silva called for a two-year suspension of Parate execution for non-willful defaulters and the introduction of insolvency legislation to support MSMEs.
MP Harsha de Silva highlighted the significant suffering experienced by the MSME sector, with businesses closing down, jobs lost, entrepreneurs facing bankruptcy, and even tragic cases of suicide. Painting a grim picture, he emphasized that approximately 80% of Sri Lankan enterprises fall under the MSME category, contributing 52% to the country’s GDP and accounting for 45% of employment opportunities.
The MP pinpointed a series of events that have inflicted severe blows on the MSME sector since October 2018, including the constitutional coup, the Easter attacks in 2019, the COVID-19 pandemic, and the subsequent economic crisis triggered by Sri Lanka’s declaration of bankruptcy in April 2022. These calamities have resulted in a cascading effect on banks, government institutions, and the general population as a whole.
While the government has proposed some solutions, MP Harsha de Silva argued that the deteriorating economic conditions have exacerbated the situation, leading to further neglect of the struggling MSMEs. Recognizing the immense impact of these issues, he expressed his willingness to support the government in any endeavor aimed at revitalizing the MSME sector.
To tackle the challenges faced by the MSME sector, MP Harsha de Silva presented four key points during his speech:
Firstly, he highlighted the need to alleviate financial constraints faced by MSMEs. He pointed out that the lack of financing options has forced many MSMEs to seek collateral loans from banks, but the economic meltdown has made it difficult for them to repay these loans. As a result, banks have seized their assets under the Parate execution act. From 2023 Jan to April alone over 400 assets have been seized. MP Harsha proposed an “investor-equity eco-system model” as an alternative to collateral loans or venture capital, which would generate localized economic growth and provide investment opportunities for MSMEs.
Secondly, the MP emphasized the pressing need to address the escalating cost of production. He highlighted how inflation and increased interest rates have placed significant burdens on MSMEs, making it challenging for them to sustain their operations. The rising import costs have further contributed to the increase in production expenses thus, reducing their competitiveness. Additionally, bureaucratic hurdles and high-cost utilities have added to the difficulties faced by MSMEs. In light of this, MP Harsha urged for comprehensive trade policy reforms, streamlined trade facilitation, and increased regional collaboration to enhance the competitiveness of MSMEs.
Thirdly, MP Harsha de Silva identified problems with government policy as a significant hindrance to the growth of MSMEs. He pointed out that the absence of a clear and universally accepted definition for MSMEs limits their recognition and support. He also criticized the high tax rates of 30 percent imposed on even micro and small businesses, urging for amendments to tax policies.
Furthermore, he advocated for the establishment of an “SME Authority” that would centralize the functions of various institutions, simplifying the authorization processes for MSMEs. This authority would coordinate regional programs, leverage resources from government institutes, and engage private agencies and organizations to facilitate efficient service provision. By implementing these proactive measures, Sri Lanka can extend crucial support to struggling MSMEs, paving the way for their revival and fostering sustainable growth.
Lastly, MP Harsha de Silva emphasized the significance of integrating MSMEs into global value chains. He noted that Sri Lanka’s limited consumer market necessitates focusing on producing key components for global value chains. MP Harsha proposed substantial trade reforms and enhanced business models to enable MSMEs to participate effectively in global value chains. He also suggested reducing the minimum investment requirement for obtaining BOI (Board of Investment) approval to facilitate funding for MSMEs, as it currently stands at $500,000.
In his concluding remarks, MP Harsha de Silva recommended the formation of a bipartisan parliamentary committee to engage with the MSME sector, discuss proposed solutions, and find ways to address the challenges faced by these enterprises. He emphasized the importance of giving special attention to SMEs when connecting to global value chains, citing a paper by Dani Rodrik and Kaushik Basu.
With the MSME sector being the backbone of Sri Lanka’s economy, MP Harsha de Silva’s passionate speech serves as a wake-up call for immediate action to support and revive these enterprises, which are currently struggling under the weight of economic hardships.