Sri Lanka vehicle sales have come down to zero level and the car sale centres are on the verge of closing down as a result of the government ban on vehicle imports , motor traders complained.
The Secretary of the Vehicle Importer’s Association of Sri Lanka Prasad Kulatunge says that even used car sales have been affected by the government’s decision as no one wants to buy vehicles now.
Sri Lanka’s auto sector is grinding to a halt while some types of tyres are also not available in the market, with import controls triggered by money printing through an unstable soft-pegged monetary regime.
While some dealers of reconditioned vehicles still have stocks as sales have also weakened amid an economic crisis , many brand agents of cars, as well as commercial vehicle agents, are already out of stock.
Many agents are struggling and are planning to close dealerships and showrooms or lay off staff.The industry is calling for stable policies to survive.
New vehicles bring large volumes of taxes, petrol sales, in particular, is a key source of tax income. As a communications path, transport is also the main tool to keep economic activity going.
Sri Lanka auto service providers warns of job losses, breakdowns over import controls. Vehicles are also a key driver of insurance, finance as well as an islandwide motor vehicle repair business which is claiming to employ around 500,000 persons.
Sri Lanka slapped severe import controls in April 2020, after unprecedented money printing by the central bank.
Cars are a favourite target of bureaucrats each time money printing triggers a currency crisis.
The latest complete import ban comes on top of restrictions imposed in 2018, after the central bank printed large volumes of money to target the call money rate from April 2020 in pro-cyclical liquidity injections just as the economy recovered from a 2015/2016 currency crisis.
There have been calls to reform the monetary regime, without which critics say the country will not be able to progress and policy frameworks will founder on an unstable foundation of unsound money as they had in the past.
Uncertainty arises from Government tax policies which are unfavourable to the motor trade industry and the more recent import restrictions on passenger and commercial vehicles which have impacted the core of the business model of companies .
Sri Lanka vehicle sales down to zero forcing motor traders to close shops
SL compels to settle US$ 3.2 billion even after backfiring preemptive debt default
Sri Lanka is compelled to settle US$ 3.2 billion worth foreign currency obligations to be settled this year even after announcing a debt standstill (preemptive default) on selective debt last year until creditors agree to restructure them.
The data made available by the Central Bank showed the country is still required to repay external obligations stemming from foreign currency loans, securities and deposits up to US$ 3,185 million in 2023 consisting of US$ 2,738 million in principal payments and US$ 447 million in interest.
This irresponsible and illegal decision of pre-emptive default plunged Sri Lanka into a serious abyss of economic and financial isolation as a “bankrupt” nation, with the consequential severely damaging repercussions due to haunt the nation for many years to come, several economic experts warned.
However, the debt suspension applied only to select debt categories, owed predominantly to bilateral partners and commercial creditors for the debt raised through International Sovereign Bonds.
The Central Bank said this US$ 3.2 billion payable in 2023 consists of, “projected short-term net drains after the announcement of the suspension of selected external debt servicing by the government for an interim period”.
The debt suspension doesn’t seem to apply on swap facilities the Central Bank obtained from its friendly central banks and multilateral funders.
Under normal circumstances, Sri Lanka has about US$ 6.0 billion total debt repayments for a year at least for the next 3-4 years.
A few days ago, Bangladesh expressed confidence that its US$ 200 million swap facility first extended to Sri Lanka in 2021 would be repaid by the Lankan authorities by September this year.
Sri Lanka’s IMF programme grinds on as the country entered the IMF process after defaulting on its foreign currency loans. Hence, this requires debt assurance from all its bilateral creditors before the Executive Board approved the envisaged US$ 2.9 billion programme.
As both the Paris Club creditors and India have provided their assurance by now, Sri Lanka awaits more credible assurances from China whose 2-year moratorium on debt falls short of what the IMF requires.
The ratings agency affirmed its ‘SD’ long-term and ‘SD’ short-term foreign currency sovereign ratings on Sri Lanka, as well as reiterated the outlook for the island nation at ‘negative’.
Without taking action to manage forex debt servicing of $244 million in April 2022 using available forex inflows, the Central bank has suspended repayment of $ 789 million for May and June dragging the country into debt default abyss, an eminent economist said.
He stated that when a sovereign forex loan is not repaid, the credibility of the country will be lost, and investors will avoid that country.
It will be very difficult for the defaulting country to obtain new forex loans thereafter. The access to International Bond Markets may be lost for at least 5 to 10 years after the default.
The country’s banking system will be placed under a lot of pressure and face very serious difficulties when opening letters of credit and carrying out forex transactions, he pointed out
Sri Lanka Original Narrative Summary: 11/02
- Supreme Court grants permission for the 2023 Local Government Election to go ahead as planned by the National Election Commission: stresses the EC is bound to protect the people’s franchise – Hearing of writ by Retd. Col. W.M.R. Wijesundara adjourned till February 23, 2023.
- President Ranil Wickremesinghe requests political leaders to dedicate themselves to building the country: asserts investments currently receiving confirm the belief that the country’s economy would ‘recover’ very soon: stresses unpopular and difficult decisions may have to be taken, as the popular ones would not serve to develop a country: Remarks made during the unveiling of SL’s first locally assembled Hyundai i10 Grand.
- The National Election Commission summons LG Commissioners and Assistant Commissioners to the EC: Chairman Nimal Punchihewa says the discussion will focus on the preparations for the LG polls including setting up polling booths, counting of votes etc.
- Concerns pertaining to releasing land needed to start investments in Sri Lanka taken into consideration at the Parliament Select Committee to study and provide recommendations on the problems and difficulties arisen in relation to enhancing the rank in the Ease of Doing Business Index: Committee stresses the need for the officials of the relevant institutions to work efficiently, paying special attention to the provision of land required for investment even within the existing legal provisions.
- Pakistan’s Chairman of the Joint Chiefs of Staff Committee, General Sahir Shamshad Mirza calls on President Ranil Wickremesinghe in Colombo during his three-day visit in Sri Lanka; recalls the long-standing close relationship between the two nations; also presents a momento to President Wickremesinghe.
- NEC introduces a new web portal for citizens of Sri Lanka to obtain information about the candidates contesting for the upcoming LG polls: The site allows the public to obtain information on the list of candidates of a particular political party/independent group in a local council who are contesting the polls.
- Former Minister, MP Vasudeva Nanayakkara says the Rs. 5000 must be removed from the monetary system of Sri Lanka as a measure to help ‘mitigate the black currency;’ asserts the move alone will help the government collect the necessary income tax.
- Foreign Affairs Minister Ali Sabry assures the Sri Lankan Government will ‘decriminalise’ homosexuality, but same-sex marriage will not be legalised – Response made towards appeals made by UN member states including UK, US, Canada and Norway at the 4th cycle of the Universal Periodic Review in Geneva, Switzerland.
- The Supreme Court dismisses a contempt of court application filed by the Human Rights Commission of Sri Lanka against several state officials of the power sector over the failure to comply with the settlement to provide uninterrupted electricity for AL students during the exams: Parties include the Chairman of the CEB, the Secretary of the Ministry of Power and Energy and the Chairman of the CEYPETCO.
- Sri Lanka beat South Africa in the opening match of the Women’s T20 World Cup in Cape Town: SA 126/9 in 20 overs: SL 129/4: SL to take on Bangladesh next, whilst SA to be aiming to bounce back in a key encounter against New Zealand.
A meeting between Milinda Moragoda and the Indian Minister of Health and Family Welfare
A meeting between Sri Lankan High Commissioner to India Milinda Moragoda and Indian Minister of Health and Family Welfare Mansukh Mandavia was held in New Delhi on the 8th. India’s Ministry of Chemicals and Fertilizers is also under Minister Mansukh Mandavia.
In the discussion between the Minister and Milinda Moragoda, attention was paid to many matters related to the health sector, including methods to expand the existing cooperation between Sri Lanka and India in the field of health.
Accordingly, it is stated that, it was discussed there to get support for Sri Lankan importers to speed up the process of purchasing medicines from India, to effectively and efficiently use the line of credit given by India to the country for purchasing essential medicines and to create a government-to-government transaction mechanism for buying medicines from India.
Also, the High Commissioner has asked the Indian Health Minister to look into the possibility of providing post-graduate study opportunities for Sri Lankan doctors in Indian medical colleges.
The opportunities for Indian companies to start joint ventures and bring investments to establish pharmaceutical factories in selected areas of Sri Lanka have also been discussed here.
In addition, High Commissioner Milinda Moragoda has thanked Minister Mansukh Mandaviya for the support given by the Indian Ministry of Chemicals and Fertilizers in obtaining a loan amount of US$ 55 million last year to purchase urea fertilizer for rice cultivation in the last spring season.
Let’s dedicate ourselves to building the country despite having to take unpopular and difficult decisions – President
The President requested the political leaders to dedicate themselves to building the country, during the launching ceremony of the Hyundai Grand i10 car, assembled for the first time in Sri Lanka at the Colombo City Centre yesterday (10).
These investments confirm the belief that the country’s economy would recover very soon, he said.
President Ranil Wickremesinghe said that popular decisions would not serve to develop a country, adding that he believed political leaders would take difficult and unpopular decisions in the future, for the benefit of the country.
The President also mentioned that taxes were imposed with the full knowledge of the difficulties faced by the people and those decisions had to be taken to run the country’s economy. However, he also said that relief could be provided to the people very soon.
The president also said that the belief the country’s economy would reinvigorate soon is confirmed by introducing such a brand new vehicle to the market at a critical moment such as this.
The President further said that the positive confidence the foreign countries have placed in our country is obvious by introducing the locally assembled Hyundai Grand i10 vehicle to the market.
This vehicle is assembled in a factory equipped with sophisticated modern technology in Seeduwa in a cooperate venture by Abans Auto Company of Sri Lanka and Hyundai Motor Company of Korea. President Ranil Wickremesinghe further said that this was a huge step in the domestic vehicle assembling industry and vehicle spare parts manufacturing industry.
The statement made by the President is as follows:
Assembling the Hyundai Grand i10 in Sri Lanka is a tribute to the firm determination of Mrs. Pestanjee. I know how she initiated this journey when the economy was opened up in 1977. I still remember that there was an Abans Showroom on the fifth lane heading towards Galle Road. Thank you very much for having come this far from that point.
I hope that this step will be a good start for the arrival of other investors to Sri Lanka based on the cooperation between South Korea and Sri Lanka as well as the higher investment made by Korea here.
Today, the Hyundai Grand i10 vehicle is introduced to the Sri Lankan market further confirming the trust placed in our country.
I must extend my special thanks to Abans Company and Hyundai Company as well Mrs. Pestanjee for introducing a vehicle to the market, at a crucial time when our economy dropped.
The introduction of this vehicle takes place at a time when Sri Lanka’s economy collapsed. But the initiation was taken with the belief that the economy of the country would recover and I would again extend my heartiest thanks to you all for it.
We stepped into 2023 in the background of the complete collapse of our country’s economy last year. But now the country’s economy is recovering. Accordingly, it has been possible to provide solutions to the shortage of fuel, LP gas, and essential goods. In the same way, we have solved many other problems as well.
We anticipate a good harvest during the Maha Season. Furthermore, we have taken steps to purchase Rs.20 million worth of paddy and distribute it to low-income families.
We have taken numerous steps to strengthen the country’s economy. It has been possible to reach an agreement with the IMF organization. Negotiations with the Paris Club, India, and China are currently underway. We are attempting to reconcile their differences.
As a consequence, there is no doubt that a group of consumers in the country will be able to purchase cars again in the months ahead and there will be more economic progress than today.
A businessman will not invest money if there is no sale and you think the economy has collapsed, and there is a market. But, in this case, such investments are being made as our economy is growing.
Various decisions must be made as we work to build the economy. Among them, some difficult decisions must be made through those decisions could be unpopular.
I am aware of the hardships that people are experiencing as a result of the economic collapse. Also, I am aware of the difficulty caused by the tax increase. After paying taxes and debts, some people have very little money left over. This adversity will only last a short time. We must advance the country. However, if we had not made these decisions, the country would not be in this state today.
Furthermore, I believe that all of our political leaders will commit to considering the country and making decisions in the future. We have the ability to make popular decisions. But the country will not develop if only popular decisions are taken.
Singapore is a good example. Singapore Prime Minister Lee Kuan Yew never made popular decisions. He made decisions on behalf of the country. People accepted his decisions and cooperated with him. The rulers of South Korea also made difficult decisions for the country. In Europe, the situation is similar.
Specifically, Prime Minister Boris Johnson of the United Kingdom stated that if the United Kingdom left the European Union, he would be able to gain new markets and improve healthcare services with the money saved. They walked away from the EU. There was no funding for health care. The available market decreased even more.
Then Prime Minister, Liz Truss, worked to lower taxes. The value of the Sterling Pound collapsed. Perhaps the rupee crashed, but the pound crashed more quickly. She resigned as Prime Minister, and a new Prime Minister has been appointed in her place. The country’s current Prime Minister is making wise decisions.
We must make these decisions for the sake of our country’s future and for the sake of creating a good country for the youth. I believe that the country’s economy will be rebuilt before long.
Minister of Plantation Industries Ramesh Pathirana, Korean Ambassador to Sri Lanka Santhush Woonjin Jeong, Chairman of the Board of Investment Dinesh Weerakkody, Directors of Abans Group of Companies Saroshi Dubash and Rusi Pestonjee attended the event.
Sri Lanka should have never defaulted prior to debt rescheduling
It was good news for Sri Lanka when Paris Club members at their meeting on January 25, 2023, in the presence of representatives from Hungary, Saudi Arabia, the Kuwait Fund for Arab Economic Development and India, as well as from the International Monetary Fund and the World Bank, agreed to provide financing assurances to support the approval by the IMF Executive Board of the envisaged IMF program for Sri Lanka, which would allow to restore the country’s macroeconomic stability. The Paris Club, formed in 1956, is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries. Paris Club members are Japan, France, Korea, Germany, the United States of America, Spain, the Netherlands, Russia, Sweden, Austria, Canada, the United Kingdom, Den-mark, Belgium, and Australia. Non-Paris Club members include China, India, Saudi Arabia, Kuwait, Hungary, Iran, Pakistan, and Bangladesh.
The members, according to the media, examined the macroeconomic and financial situation of Sri Lanka, including its long-term debt sustainability, and the need for a debt treatment by all bilateral creditors to both fill the financing gap and to ensure Sri Lanka’s debt sustainability is in line with the proposed Extended Fund Facility.
They noted “We acknowledge that the Sri Lankan authorities had the opportunity to present Sri Lanka’s economic and financial situation to their creditors, which underscored the need for debt treatment from all creditors. They also presented their reform program that will be supported by an IMF arrangement requiring a debt treatment to restore debt sustainability, as well as the prior actions already implemented. Paris Club members as well as Hungary, Saudi Arabia and India continue to look forward to working together along with all bilateral creditors and to engage with other key stakeholders in order to proceed with a comparable debt restructuring as soon as possible.”
Further the members noted “To support the implementation of the envisaged IMF supported program and the Sri Lankan authorities’ efforts with other official bilateral creditors, Paris Club members, jointly with Hungary, expressed their full commitment to negotiate with Sri Lanka, in accordance with the comparability of treatment principle among all bilateral creditors, and with the goal of restoring debt sustainability with due regard to targets and overall macroeconomic goals under the Extended Fund Facility.
According to reports Saudi Arabia expressed its support for the process and acknowledged the importance of offering financing assurances in the near future. Members further expressed appreciation for the specific and credible financing assurances issued by India on January 16, 2023 and its coordination with the Paris Club. The Paris Club members as well as Hungary and Saudi Arabia urged other official bilateral creditors, including China, to do the same in line with IMF program parameters as soon as possible.
| Overall Sri Lanka is far from bankrupt. It is estimated that SL has over $ 450 billion of assets and $ 50 billion of debt. So it is not bankrupt as people claim. |
Next steps
Given that a staff-level agreement has been signed between Sri Lankan authorities and the International Monetary Fund staff for a 48-month arrangement under the Extended Fund Facility (EFF) over 4 months ago, the next steps for Sri Lanka would be to get China also to agree to similar terms . Sri Lanka will also need to get commitments from its commercial creditors and other official bilateral creditors to a debt restructuring structure on some favourable terms and to hold all creditors together until an equitable debt treatment is agreed by a majority. The private creditors are a more challenging subset to deal with.
This is why many top experts are challenging the former government’s arbitrary decision to default without consultation with the lenders. Some termed it a soft default. Anyone doing a business would know the consequences of defaulting to a financial institution – soft or hard. This is why borrowers approach the financial institution way before the deadline to restructure their loans and agree on a new payment plan. As a result of the default Sri Lanka now cannot borrow and secure any borrowing against our assets in the way we were doing pre default. So this is a mess of our own making. Unfortunately as a result the private sector is saddled with crazy interest rates and high taxes.
Way forward
Overall Sri Lanka is far from bankrupt. It is estimated that SL has over $450 billion of assets and $50b of debt. So it is not bankrupt as people claim. Sri Lanka can pay its debt on the due dates had we proactively worked out a repayment plan way before we defaulted . With exports doing over a $ 1 billion a month, FDI climbing and Remittances improving to $350-$400 a month and tourist arrivals increasing, Sri Lanka only needs a good Team to hammer out a debt restructuring plan with the private creditors based on our forex flows despite our pathetic ratings . In its absence what we need the IMF to do for us is to help us negotiate with our lenders and restructure our debt. Meanwhile we have to fix the trade deficit and the negative current account balance. Otherwise we will have a persistent forex problem. Also it is very important to continuously explain to the people that we will have to make the hard decisions to get out of this mess and we have to pay our way to come out of the crisis. Importantly our tax net from 500,000 files needs to expand. No creditor is going to help us until we help ourselves. President is on the right track, but needs to sell the story more effectively.
| We have to fix the trade deficit and the negative current account balance. Otherwise we will have a persistent forex problem. Also it is very important to continuously explain to the people that we will have to make the hard decisions to get out of this mess and we have to pay our way to come out of the crisis. Importantly our tax net from 500,000 files needs to expand. No creditor is going to help us until we help ourselves. President is on the right track, but needs to sell the story more effectively. |
Sources
https://www.ft.lk/top-story/Chinese-credit-conundrum-for-Sri-Lanka/26-745032
https://www.ft.lk/front-page/Paris-Club-Creditors-provide-financing-assurances-to-support-IMF-bailout-of-SL/44-745042
https://youtu.be/jrN6HRiT0UY
Sri Lanka to attract investments from Russian businessmen
Sri Lanka is open for investment from Russian businessmen and the Government is actively discussing such opportunities, including with representatives of the construction industry, Sri Lankan Ambassador to Russia Janitha Liyanage disclosed.
“Sri Lanka is open for investment, and we are discussing with Russian entrepreneurs, and Russian construction companies … There are a lot of opportunities for Russians,” Liyanage said.
She added that Sri Lanka invited Russian companies to open their branches on the islandIn addition, in the near future, Sri Lanka plans to open a trading house in Russia and increase the deliveries of tea, coconut-based products, and spices, Liyanage noted.
According to the diplomat, the minister of transport and the minister of industry and agriculture of Sri Lanka will also visit Russia in March and April.
Liyanage added that in the summer of 2023, she planned to attend the St. Petersburg International Economic Forum, while invitations to the event for the rest of the country’s representatives were under consideration in Sri Lanka.
A business delegation of the Sverdlovsk Region of the Russian Federation recently paid a courtesy visit to the Board of Investment of Sri Lanka (BOI) to explore investment opportunities and reinforce the bilateral economic relationship between the two countries.
The Russian delegation met with BOI Chairman Dinesh Weerakkody, Director General M. Weerakone and other top officials to discuss investment opportunities, attract foreign direct investments (FDIs) from Russia and promote Sri Lankan products and services in Russia, thereby strengthening the economic cooperation between the two nations.
The delegation consisting of 16 members arrived in Sri Lanka on 23 January to participate in the Russia-Sri Lanka Economic Forum held from 23-26 January in Colombo, organised by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL). The program was facilitated by the Embassy of Sri Lanka to Russia.
The Russian delegation headed by Sverdlovsk Regional Government Deputy Governor Kozlov Vasily Valerievich; others include representatives from the Sverdlovsk regional government, large companies, investors, and education institutes.
In addition, Sverdlovsk Regional Government Minister of International Economic Relations Yarin Vyacheslav Yurievich, and Sverdlovsk Region Department for the Development of Tourism and the Hospitality Industry Director Tukanova Elmira Nailvna, are also part of this high-level Russian delegation.
The close relationship between Russia and Sri Lanka has always been full of vitality. Russia has been a reliable partner and more than a friend to Sri Lanka for decades, being the largest buyer of Ceylon Tea and the leading destination of Sri Lanka.
According to the recent statistics of the Sri Lanka Tourism Development Authority, 24% of the total tourists arriving in the first three weeks of 2023 are Russian nationals, which is the highest. Thus, Russia’s contribution towards the socioeconomic development of the country is immense and commendable.
Indo –Sri Lanka gold smuggling racket continues in both countries
In a joint operation, the Indian Coast Guard along with India’s Directorate of Revenue Intelligence, Chennai, seized a gold consignment of 17.74 Kg worth approximately INR 105 million from Mandapam seashore in Tamil Nadu while the consignment was being smuggled from Sri Lanka by sea route.
According to an official statement on Thursday, based on intelligence input from the Directorate of Revenue Intelligence (DRI), Chennai, Indian Coast Guard Station Mandapam deployed a joint team onboard Interceptor Boat (IB) C-432 on February 7.
“The team maintained surveillance in the Gulf of Mannar for two days for any suspicious activity. On the night of February 08, the IB boarded a suspicious boat which was trying to escape at high speed to evade interception.
On rummaging the boat, the suspected contraband was not found and it was suspected that the same was thrown overboard during interception,” the statement said.
A diving operation was conducted by the ICG team in the probable area and a consignment of 17.74 kg of gold was recovered from the sea bed.
The fishing boat along with 3 crew members have been handed over to Coastal Security Group, Mandapam for further legal action.
Authorities in Sri Lanka have limited the import of gold jewellery to 22 carats per person in a bid to curb illegal gold smuggling operations.
A special permit is now required for any individual to enter Sri Lanka carrying gold jewellery weighing more than 22 carats.
Sri Lanka remains in the midst of economic chaos with inflation reaching a record of 70 per cent. Months of significant food shortages, as well as a lack of access to medicine, fuel, and electricity have plagued the country.
State minister of finance Ranjith Siyambalapitiya said that approximately 50 kilograms of gold is smuggled into Sri Lanka each day. The cost of these practices was estimated at $US360 million annually.
The report also revealed details of a police raid in early December which led to the recovery of 22 kilograms of gold, the second largest gold smuggling seizure in Sri Lankan history.
Sri Lanka remains in the midst of economic chaos with inflation reaching a record of 70 per cent. Months of significant food shortages, as well as a lack of access to medicine, fuel, and electricity have plagued the country.
An international racket of smuggling gold to Sri Lanka in connivance with airport staff has been busted following the two largest gold detections in history by Sri Lanka Customs at the Bandaranaike International Airport last year
An Airport maintenance worker and a passenger were arrested with 26 kilograms of gold worth nearly Rs. 320 million.
Customs Spokesperson stated that this was the largest single haul of gold seized by Sri Lanka Customs.
The previous attempt to smuggle gold was made 26 days ago when 161 biscuits of gold weighing 17 kilograms were apprehended on the 4th of April 2022 . The value of these gold biscuits was estimated to be over Rs. 220 million.
Foreign Minister Ali Sabry meets former UNSG Ban Ki-Moon
Minister of Foreign Affairs Ali Sabry met former Secretary General of the United Nations and President of the Assembly and Chair of the Council of the Global Green Growth Institute (GGGI) Ban Ki-moon at the Ministry of Foreign Affairs on Tuesday, 07 February 2023.
Foreign Minister Ali Sabry thanked Mr. Ban Ki-moon for his visit to Sri Lanka to strengthen cooperation between the Government of Sri Lanka and GGGI and to support Sri Lanka’s green growth aspirations. The Minister highlighted the importance of working together with the GGGI to gain expertise and enhance the capacity of stakeholders working towards the implementation of the government’s green initiatives related to environment and development. Minister Sabry invited the GGGI to organize a brainstorming session for officials of the stakeholder ministries engaged in reaching out to international green-blue financing and renewable energy projects.
Elaborating on GGGI’s active engagement with Sri Lanka Mr. Ban Ki-moon expressed his commitment to continue his support for President Ranil Wickremesinghe and Sri Lanka’s efforts towards economic progress and environmental sustainability. He noted the current economic downturn and challenges faced by many countries including those in the developed world and the negative spillover on Sri Lanka. He expressed confidence that Sri Lanka will overcome the present economic challenges soon under the able leadership of the President and the government.
The former UNSG was accompanied by the Ambassador of the Republic of Korea Santhush Woonjin Jeong, CEO of GGGI Dr. Frank Rijsberman, and officials of the GGGI office in Sri Lanka. Foreign Secretary Aruni Wijewardane and senior officials of the Foreign Ministry were associated with the meeting.
Ministry of Foreign Affairs
Colombo
Mitsubishi decides to end its operations in Sri Lanka
It is reported that Japan’s Mitsubishi Corporation, which was a major stakeholder in many infrastructure projects in Sri Lanka, has decided to end its operations in Sri Lanka. Accordingly, Mitsubishi Corporation has decided to shutdown the Colombo office by March 31, 2023.
Mitsubishi Corporation’s Sri Lanka office was one of the company’s first overseas offices. It also played an important role in the bilateral relationship between Japan and Sri Lanka.
Sri Lanka’s adverse international ratings and economic outlook and foreign debt default are the main reasons behind this decision of Mitsubishi Corporation.
Mitsubishi Corporation was the main partner in several major Japanese infrastructure projects funded by the Japan International Cooperation Agency (JICA) implemented in the country. However, goodwill between Sri Lanka and Japan had been damaged recently due to the cancellation of several major projects, including the light rail project and the LNG plant project, which were proposed by Japan.