An extraordinary gazette revising the retirement age of government medical officers has been issued by Prime Minister Dinesh Gunawardena, in his capacity as the Minister of Public Administration, Home Affairs, Provincial Councils and Local Governments.
MIAP
Voice Artist and prominent activist of the ‘Aragalaya’ Dilan Senanayake was brutally assaulted by two assailants yesterday (14), raising suspicion whether a trend of mob attacks is on the rise.
Injured, Dilan was admitted to Kalubowila Hospital, according to Police.
The assailants who barged into Dilan’s residence in Pagoda, Nugegoda assaulted the activist by a sharp weapon, wounding him on a shoulder and a leg.
Dilan, who was a prominent voice at the anti-government protests in recent times, was one of the key witnesses holding digital evidence to the organised assault launched by pro-Rajapaksa activists on May 09, 2022.
Dilan’s condition is reportedly not serious.
MIAP
President Ranil Wickremesinghe stressed that he will definitely work towards resurrecting the country from bankruptcy and stressed that he will build an economy that is free from debt and create a stable economy that is able to pay its debts.
He said during the opening of the Toyota Lanka fulfilment Centre in Mahara, Kadawatha yesterday (14), coinciding with 70 years of Japan-Sri Lanka relations.
The President said that today the country has become bankrupt due to the failure to change the economic program after the war, but said that he expects to increase the investment opportunities and move the economy forward by next year.
President Ranil Wickremesinghe emphasized the need for an institutional system that can revive the country’s economy and bring investment opportunities to the country and said that steps will be taken to create an economic corporation by merging the Investment Promotion Division of the Sri Lanka Board of Investment and the Export Development Board.
The President further said,
“Vietnam’s economy today is like a Formula One racing car. Our economy is still like a three-wheeler. So how do we go about racing in Singapore? Other countries have Formula One racing cars. How can we go and compete in a three-wheeler? This is sufficient to meet the day-to-day traveling of the people. There is no issue. I say again that this is good. But, it does not suit the race. How can we win? If we are to win, we must also find ourselves a racing car. It should have a good engine. This means we must have a strong economy. This is the economy that were are in the process of making.
We are constructing that engine by creating an open economy in this country. This racing car is made to compete with the world by creating a competitive export economy. I believe you all have the ability to win.
First of all, we need to create a digital economy in the country, an environmentally friendly economy, as well as a socially just economy, and a very competitive export economy. This restructuring is done for that. People who are used to the old ways may be against this. But we have to go on a new path. Tell me, do you want to go in a racing car or a bicycle? Because the future belongs to all of you.
The president, unveiled the plaque and declared open the Toyota fulfilment centre and also went on an inspection tour.
Senior Advisor to the President on National Security and Chief of Staff to the President Sagala Ratnayake, Japanese Ambassador to Sri Lanka Mizukoshi Hideaki, Chairman of Toyota Lanka Company Sachio Yotsukura and a group of staff members of Toyota Lanka Company attended the event.
PMD
The World Food Program (WFP) Executive Board approved Sri Lanka’s Country Strategic Plan (CSP) for the period between 2023 and December 2027 valued at USD 74.87 million.
The WFP Sri Lanka CSP will be effective from January 2023 and is aligned with the national policy framework and consistent with the United Nations’ Sustainable Development Corporation Framework (UNSDCF) 2023-2027.
The CSP is designed to support the country in achieving food security and improved nutrition by 2030 in line with the Substantial Development Goal (SGD) 2. It also seeks to contribute to the progress of SDGs 1, 5, 10 and 13 and foster a reinforced partnership in strengthening the national humanitarian and development response, in accordance with the SDG 17.
The WFP appreciated the Government’s commitment towards achieving food security and improved nutrition and to corporate with achieving the Agenda for 2030 and SDGs.
Executive Director of the World Food Program (WFP) in Rome David M. Beasley said that the WFP Executive Board approved Sri Lanka’s CSP, at its second Regular Session to assist Sri Lanka’s national efforts through food assistance in the short term, while restoring and improving food security and nutrition by developing in-country capacity to reduce vulnerability levels.
Beasley in writing to President Ranil Wickremesinghe in his capacity as the Finance Economic Stabilization and National Policies Minister, also said that WFP will also provide technical assistance and policy advice to help maximize the return on the government’s investment in food security and nutrition.
The resources for WFP operations derive from voluntary contributions pledged solely to WFP. Disbursements under this CSP will therefore be dependent on the level of resources provided by donors to WFP.
PMD
A showery condition is expected to enhance in the northern, north-central and eastern provinces of the island in the next few days (from the 17th), said the Department of Meteorology in a statement today (15).
Several spells of showers will occur in Eastern and Uva provinces and in Polonnaruwa and Matale districte.
Showers or thundershowers will occur at a few places in Western, Sabaragamuwa and Southern Provinces during the afternoon or night.
General public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.
Marine Weather:
| A low pressure has developed over southeast Bay of Bengal today. It is likely to intensify further and move westward towards southwest Bay of Bengal. Fishing and naval community are requested to be attentive to future forecasts issued by the Department of Meteorology in this regard. |
| Condition of Rain: |
| Showers or thundershowers will occur at several places in the sea areas off the coast extending from Trincomalee to Hambanthota via Batticaloa and Pottuvil. |
| Winds: |
| Winds will be north-easterly and wind speed will be (20-30) kmph. Wind speed may increase up to (40-50) kmph at times in the sea areas off the coast extending from Pottuvil to Hambantota and Kankasanturai to Chilaw via Mannar. |
| State of Sea: |
| The sea areas off the coast extending from Pottuvil to Hambantota and Kankasanturai to Chilaw via Mannar will be rough. |
MIAP
Sri Lanka’s arduous road ahead for external debt restructuring saw some progress last week with the International Monetary Fund (IMF), requesting China to play its part and the biggest bilateral lender indicating willingness.
In a statement following the fruitful meeting with China’s Premier Li Keqiang and following the Seventh “1+6” Roundtable in China, IMF Managing Director Kristalina Georgieva said several issues concerning the need to reduce the risk of debt crises were discussed.
“We need to build on the momentum of the agreement on Chad’s debt treatment and accelerate and finalize the debt treatments for Zambia and Sri Lanka, which would allow for disbursements from the IMF and multilateral development banks,” Georgieva said.
With $ 7.3 billion, China is Sri Lanka’s biggest bilateral creditor accounting for 52% of the total worth $ 14 billion.
“We are also seeing new cases that are coming in this time of tightening global financial conditions. We talked about how we can prevent individual cases of debt distress from triggering a global debt crisis. The application of the G20 framework must become much faster and more predictable, and it needs to reach a broader set of countries. We also see space for a platform for more systematic engagement on debt issues, where China can play an active role,” she added.
China said all parties expressed that they would give full play to their respective advantages in the future, and continue to strengthen coordination and cooperation in related fields on international development and debt issues of developing countries etc.
“China will implement the G20’s Debt Service Suspension Initiative in all respects, and work with relevant G20 members to formulate and participate in a fair and equitable debt-restructuring plan,” said Li Keqiang in a tweet.
Separately, the presidents of China Exim Bank and China Development Bank co-hosted a working dinner last week for the visiting IMF Managing Director and World Bank Group President David Malpass. “They had a positive discussion on int’l economic situation and the debt of developing countries including Sri Lanka,” China said.
Main Opposition MP Dr. Harsha de Silva is calling on the Government to further revise the Inland Revenue bill on behalf of all professionals and to resolve the intensified brain-drain of late.
“Many professionals and associations representing various fields including healthcare, IT, engineering, architects, and professors have written to us asking to cease the proposed tax burden on them, especially considering the economic crisis. Higher taxes as much as 36% is actually contributing to the brain drain of this country,” he said.
The third reading of the Inland Revenue (Amendment) Bill was passed in Parliament last Friday with 79 MPs voted in favour whilst 36 voted against.
Noting that only after the Committee on Public Finance (COPF) refused to approve the proposed personal income tax amendment, he said the Finance Ministry came up with a comparative tax scheme to generate the target revenue of Rs. 68 billion.
“After analyzing data provided by the Finance Ministry and looking at the Indian tax model, it is quite evident that we are able to utilize the Indian tax schemes of 5%, 20% and 30% slabs and still generate Rs 62 billion which is just Rs. 6 billion short of what the Government expects from their 6%, 12%, 18%, 24%, 30% and 36% income tax,” he pointed out.
He said this way it will certainly give the middle income earners that the President Ranil Wickremesinghe used to be very concerned of, some breathing space.
Dr. De Silva also described how the Government could still achieve the set target income avoiding the shortfall of Rs. 6 billion.
“There are numerous ways to find the deficit of Rs. 6 billion. One way is to collect at least Rs. 2 billion from casinos that have evaded taxes and the other is by cutting down on all non-essential sectors,” he explained.
He argued how reasonable for the Government to have 38 State Ministers and 20 Cabinet Ministers in an economy that is declared bankrupt.
“We have large Government comprising nearly 60 MPs and they want it to further expand it to 70 with 10 new appointments. How can the Government even explain the rationale of these appointments knowing that our economy is bankrupt and telling public to fasten their belts only?” Dr. De Silva asked.
He asserted that there are alternate ways to gain expected revenue, while protecting the hard hit middle class professionals of this country.
Sri Lanka’s Foreign Direct Investment (FDI ) has been falling down under the present economic set back, policy uncertainty and political instability along with the removal of tax concessions including tax holidays, ministerial consultative committee report revealed.
The Board of Investment (BOI) now acting as an intermediary rather than facilitator has been directed to provide actual FDI data to the Central Bank and the Treasury as it should be armed with clear record on foreign investment projects and the actual value of investments, the committee advised.
It observed that there were no investments coming under the new enhance capital- based package and BOI data on FDI should be clearly communicated to the Central Bank and the Treasury enabling them carry out negotiations with the International Monetary Fund (IMF).
The Ministerial Consultative Committee on investment Promotion instructed the BOI to clearly communicate to the Central Bank (CB) and the Treasury on foreign investment information with relevant documents on FDI inflows in the past five years.
It has been observed that the granting of tax exemptions was one of the BOI’s main roles until the responsibility moved to the ministry of finance (MOF) in 2011.
However the lack of clarity in BOI records of FDI inflows, number of project proposals received and number of projects approved or registered has jumbled actual data.
The removal of tax concessions including tax holidays for investors has triggered the slowdown of e FDI inflow, several BOI officials claimed, consultative committee minutes indicated.
With no plans and strategies properly being implemented, the BOI has become a burden for the state as a dormant institution after four decades of poor performance in its role of investment facilitator, foreign investment report of finance ministry revealed.
Since the establishment of this export promotion entity approximately 40 years ago, the institution has managed to attract only US $ 20 billion in Foreign Direct Investment (FDI), it added.
It has been observed that the average annual FDI inflow has merely been $ 500 million
Another main accounting practice of the BOI was the inclusion of foreign loans to Direct Investment Enterprises in annual FDI while publicizing dollar earnings of existing free trade zone enterprises
The BOI has attracted foreign direct investment (FDI) inflows amounting to $ 713 million in the first nine months of 2022, which is 71 percent of the 2022 full-year target of $ 1 billion, State Minister of Investment Promotion Dilum Amunugama said recently.
BOI has inked a total of 123 agreements to the value of $ 1.9 billion, which consists of US$ 1.5 billion in new projects and US$ 400 million in expansions as of the first eleven months, he added.
However according to finance ministry estimates computed by using mathematical models, the FDI in 2022 will be in the region of $ 476 million excluding foreign loans obtained for ongoing projects.
FDIs, excluding foreign loans to Direct Investment Enterprises, amounted to $598 million in 2021, in comparison to $548 million in 2020, $793 million in 2019 and $1.6 billion in 2018.
The main BOI function during previous regimes was to hand over concessional Government lands on lease for mixed development projects offering tax holidays as incentives for Investments, finance ministry investment assessment report divulged.
Dollar strapped Sri Lanka is now trying persuade India Japan, Singapore or some other donor agency to obtain a bridge finance loan amounting to US$ 850 million to survive until the receiving of executive board approval for $2.9 billion IMF bailout before beginning to rebuild usable foreign reserves next year, finance ministry sources disclosed.
Sri Lanka could get as much as $ 6-8 billion in “bridge financing” from India Japan and Singapore and talks are underway with those donor countries to get funds for a short period of six months
It has obtained foreign financing of $ 1.87 billion by entering into 8 agreements with foreign development partners and lending agencies in the first nine months of 2022, finance ministry data shows.
The government will have to manage imports with available foreign exchange inflows instead of bridging finance if it is not forthcoming, state finance minister Shehan Semasinghe said.
Negotiations are now underway with donor countries and international financial agencies to reach agreement on foreign fund mobilization for 2023 considering it as an emergency matter, he revealed.
Japan and India have both responded well for foreign exchange mobilization and debt restructuring while Japan is likely to agree on bridge financing and all of these issues have been conveyed to the President, minister Semasinghe confirmed.
The World Bank and ADB have already informed its inability on lending to Sri Lanka until debt is made sustainable and the macro-fiscal stability is restored but the two agencies are considering alternate ways to assist Sri Lanka he disclosed.
The World Bank this week approved Sri Lanka’s request to access concessional financing from the International Development Association (IDA).
This type of financing, will enable Sri Lanka to get IDA loan facility at low interest rates, to implement economic reform programme to stabilize the economy and protect the livelihood of millions of people facing poverty and hunger, he added.
Eight member Presidential committee is negotiating debt restructuring with China and India and the outcome so far was positive senior finance ministry official divulged.
The members of the committee are Minister of Foreign Affairs Ali Sabry, State Minister of Finance Shehan Semasinghe, Chief of Staff Sagala Ratnayake, Presidential Secretary Saman Ekanayake, Presidential Economic Adviser Dr.R.H.S. Samaratunga, Treasury Secretary Mahinda Siriwardena, Central Bank Governor Dr. Nandalal Weerasinghe and former Governor Indrajit Coomaraswamy.
He said ‘World Bank, ADB and the small amount of IMF debt would not be restructured. If it were to be restructured, those institutions could stop their operations in Sri Lanka, and even their financing in the pipeline may not be disbursed.”
