The European Union has provided a US $ 22.83 million and € 18.75 million grant for the sustainable industrial development in Sri Lanka the United Nations Industrial Development Organisation (UNIDO) Representative in Sri Lanka Dr. Rane Van Berkel said
This was revealed at a steering committee meeting to formulate Sri Lanka’s National Industrial Policy in Colombo recently.
The committee provides coordination and recommendations for the projects implemented by the UNIDO in Sri Lanka.
The formulation of Sri Lanka’s National Industrial Policy include; development of infrastructure in export-oriented industries, promotion of small and medium-scale enterprises (SMEs), management of chemical use, ensuring food safety and quality,
It also contains improvement of production value chains, minimization of environmental impacts caused by industries, and pollution and energy management.Those were some of the key areas that the EU and UNIDO are supporting Sri Lanka on.
The amount of $ 22.83 million provided by the EU has been allocated for eight-year industrial development projects from 2015 to 2023, covering sectors such as climate change, energy management, and conversion to renewable energies affecting Sri Lanka’s industrial sector.
In addition, the EU and UNIDO have extended € 11 million for the development of agri-food production, enhancing food safety and quality, improving facilities, training, and laboratories for food quality control in Sri Lanka.
It was noted that many of these projects are being implemented to improve facilities to ensure food chain development.
Another € 7.75 million has been allocated for industrial waste management activities in Sri Lanka and these projects have been implemented together with the Ministries of Industry, Environment as well as Power and Energy. Already, an Energy Management System has been developed with the support of 75 energy experts.
The Government is accelerating the implementation of the National Industrial Policy to boost the development of the industrial sector with product diversification, increase export revenues, manage energy and resources.
It will enhance value chains, developing enterprise skills, improve industrial infrastructure, and boost economic growth. UNIDO National Director Nawaz Rajabdeen and key officials representing the public and private sectors participated in this event.
EU and UNIDO grant over US$ 40 m from for SL industry sustainability
Organic fertilizer blunder continues to send shock waves through agriculture sector
The disastrous organic fertilizer blunder of previous Gotabaya Rajapaksa regime , which came to a head in the second quarter of this year, plunged Sri Lanka’s agriculture sector to an unprecedented decline, creating a massive food crisis in the country.
Some trace his downfall back to an ill-fated decision in April 2021 to stop all imports of chemical fertilizers and abruptly put the country on a path to organic agriculture.
One analyst wrote that “Mr. Rajapaksa’s imperious decision to impose organic farming on the entire country … led to widespread hunger after the agricultural economy collapsed.”
The reality is that this policy had everything to do with foreign currency shortages and an inability to pay for imports rather than a planned shift to organic agriculture. As such, the former president’s hasty call for an organic transition was a convenient excuse to stop paying for fertilizer imports.
While former president Rajapaksa abandoned his ban on chemical fertilizer imports at the end of 2021, supplies are still erratic and only available to wealthier farmers as the underlying problem of a lack of foreign exchange reserves remains a problem.
The agriculture sector, which first contracted by 2.8 percent in the third quarter last year, continued to deepen its decline to 3.1 percent in the final quarter in 2021 and 6.8 percent in the first quarter in 2022, before shedding as much as 8.4 percent in the most recent quarter ended in June from a year ago.
The government made an embarrassing acknowledgement of its policy blunder and made a U-turn in November last year to restore chemical fertilizer supply.
However, it never returned to its former levels of supply and instead ran into severe shortages of fertilizer from the beginning of the year, due to the crippling dollar shortage and soaring prices of fertilizer, exacerbated by the Russia-Ukraine war.
As of late, the government has managed to ensure continuous supply of fertilizer by way of donor funding and prioritizing the limited foreign currency spending into fertilizer to ensure that the country averts a severe food shortage.
Releasing the second quarter GDP data, the Census and Statistics Department said the deeper agricultural sector decline was led by the 32.3 percent contraction in cereals, 19.7 percent decline in tea, 15.6 percent slump in paddy, 15.3 percent fall in marine fishing, 13.7 percent slide in rubber and 13.6 percent and 13.2 percent plunges in animal production and vegetables, respectively.
However, the fresh water fishing, plant propagation and agriculture supporting activities, growing of oleaginous fruits, including coconut, forestry and logging, perennial crops and spices expanded during the quarter under review from a year earlier
SL Construction shrinks 16.2 percent almost twice of economic contraction in 2Q
While the broader economy contracted by 8.4 percent in the second quarter ended in June, the construction activities, which contributed an outsize 9.5 percent to the overall economic output, shrank by nearly twice as much as in the same period, indicating its importance to the Sri Lankan economy, specially in the post-war era.
According to the data released by the Census and Statistics Department, construction activities declined by a significant 16.2 percent in the April-June quarter, as the economic crisis sent ripple effects across multiple sectors.
The sputtering economy came to a near standstill in the second quarter, after the foreign exchange crisis unravelled in proportions and magnitudes, which nobody had anticipated, forcing the government to suspend almost all its big infrastructure projects.
Meanwhile, private developers scrambled to source materials such as cement and others amid their inability to find dollars to import them and soaring prices, which sent the cost of construction through the roof.
The cement imports plummeted 84 percent to 35,000 metric tonnes in June, bringing the first six-month slump to 26.2 percent to just over a million metric tonnes over the same period last year.
In the first half, the broader construction sector shed 8.9 percent of its value with its share in the total gross domestic product (GDP) coming down to 8.7 percent.
In the first half, the industry sector, with construction being part of, contributed 31.5 percent to the GDP, recording a decline of 7.1 percent over the same period, last year, compared to the 7.6 percent and 0.6 percent contractions recorded by the agriculture and services sectors, respectively.
As the government has suspended its major infrastructure projects, private developers have either followed suit or scaled down their projects and home building has significantly slowed down, due to the soaring construction cost.
It is unlikely that the industry could see any revival any time soon, given the acute shortage of foreign currency and the tight fiscal and monetary policies, which could stay for some time.
The depth of the construction sector’s decline and how long it continues will determine the fate of hundreds of thousands of people, who made a living out of the industry, which accounted for nearly one-tenth of the total economy.
Revenue management authority to enhance tax collection and end corruption
The government is planning to set up a separate revenue management authority to minimize corruption and financial leakage in the process of tax collection of the Inland Revenue Department (IRD) and Sri Lanka Customs, official sources disclosed.
Measures will be taken to draft a new bill to set up the authority with powers of a Directorate of Revenue or to amend the Inland Revenue Act with a view of separating revenue management and tax administration of the two key state revenue collection institutions.
Sri Lanka needs to improve its tax revenue to ensure that the government has enough money to spend towards welfare and growth while not running the risks of high budget deficits and debt levels.
This has become an extremely difficult task as the tax evasion has become the order of the day with many billionaire businessmen, rich men with high political connections even professionals are allowed to escape from the tax net by hundreds of corrupted officials in the two departments.
Details of these officials and tax evaders have made known to the government in a special report of the intelligence divisions.
Chairman of the Inland Revenue Commissioners Association and senior commissioner Sarath Abeyratne said that their association is ready to expose these top corrupt officials other rankers, persons with high political connections and some of the so called tax consultants.
The association is planning to meet President Ranil Wickremasinghe to reveal all the details of corrupt practices in the department which has resulted in billions of rupee loss of tax money for the country coffers.
The government should accord immediate priority to take stern action against such perpetrators rather than focusing attention on the setting up of new revenue management authority, he said that he cannot make any comments on the proposed authority which is still to be materialized.
The government has foregone massive amount of over Rs.515.15 billion during the past six years due to tax avoidance by several companies and the department is still continuing the recovery process and legal procedures against those tax evaders.
“These tax evaders were making use of the loop holes in tax net specially, regulations, taxation complexity, weakness in tax administration as well as official collection procedures and corruption”, he said.
Sri Lanka Original Narrative Summary: 22/09
- Chief Opposition Whip Lakshman Kiriella calls for details of the staff level agreement with IMF: SJB MP Harsha Silva says discussions with creditors on debt restructuring will need Parliament approval.
- Inflation based on NCPI increases to 70.2% in August from 66.7% in July; Food inflation 84.6% in August (82.5% in July).
- Lanka Coal to call for fresh tenders to buy coal for electricity generation, as the first awardee refuses to proceed following controversy and litigation threats: risk of 10-hour power cuts unless stocks of coal are replenished by 20th October.
- Health Minister Keheliya Rambukwella says there is no Aflatoxin chemical in Thriposha: warns of action against the health official who made such a baseless statement.
- Around 34 Opposition MPs call upon Speaker Mahinda Yapa Abeywardene to appoint a Select Committee to carry out a probe to determine the reasons for the economic crisis, identify responsible persons and decide on steps to avoid such crisis in the future.
- State Minister of Women and Child Affairs Geetha Kumarasinghe says the President has ordered to reduce taxes on sanitary products.
- Malaysian Government agrees to take 10,000 migrant workers from Sri Lanka to assist Sri Lanka in dealing with its economic crisis.
- Former Minister Mahindananda Aluthgamage says main culprits who assist in tax evasion are Chartered Accountants: calls for regulatory action against them: also says if due taxes are collected, there will be no need for IMF assistance.
- Central Bank data shows the increase in its Treasury Bill holdings (money printing) has been a staggering Rs.643 bn after Governor Nandalal Weerasinghe assumed office: average of Rs.3.92 bn per day: about 78% higher than during the term of his predecessor.
- Committee for Muslim Law Reforms proposes the retention of the controversial polygamy law applicable to Muslim men: final proposal to be submitted to the Justice Minister.
SL still grapples to get US$7- 10 b compensation for X-Press Pearl sinking
More than a year since the sinking of the cargo ship the X-Press Pearl , Sri Lanka still continues to clean its beaches of the plastic pellets that the vessel was carrying, and still trying to claim compensation for the environmental damage.
Auditor General Chulantha Wickramaratne has called for a full investigation into the process of obtaining compensation for environmental damage caused by the sinking of the X-Press Pearl ship last year, according to official sources.
A Maritime law expert said Sri Lankan authorities have taken a long time to file for compensation and are reluctant to go through years of strenuous legal battles in international courts.
Sri Lanka has obtained an interim payment of $3.7 million in damages, but the country could claim as much as $5 billion to $7 billion.
With Sri Lanka currently mired in the worst economic crisis in the country’s history, those higher numbers would prove a much-needed injection of foreign currency.
But further delays would diminish the cash-strapped island’s chance of getting sufficient compensation for the environmental damage
Meanwhile, Environmental Scientist Hemantha Withanage said Sri Lanka could claim as much as US$ 10 billion as compensation.
Laboratory tests conducted on samples of plastic pellets collected from the beach had revealed a high concentration of harmful chemical compounds such as Bisphenol and Polycyclic Aromatic Hydrocarbons, Withanage said.
“Both these chemical compounds remain in the environment for a long time, resulting in bio accumulation.
The scope of our tests was limited due to financial constraints, but there can be more such toxic chemical compounds in the debris. People are not aware of the danger,” he added.
Withanage had also spent time and resources to rescue the crew on board the distressed vessel, douse the fire, and mitigate environment
“The Marine Environment Protection Authority (MEPA) and the AG’s Department have not taken legal action and we may ultimately lose the opportunity to do so,” he alleged, calling for a Presidential Commission of Inquiry to investigate the matter.
He said two petitions had been filed in the Appeal Court and another petition in the Supreme Court over the X-Press Pearl disaster.
The ill-fated ship was carrying 81 containers of dangerous goods and contained 25 tons of nitric acid.The affected area encompasses 746 km from Mannar to Kirinda Hambantota.
An expert committee investigating the extent of damage to the country’s marine and coastal environment has now concluded the disaster to be the worst in terms of chemical and plastic pollution of the sea.
That’s according to Ajith de Alwis, co-chair of the X-Press Pearl damage assessment committee and a professor of chemical and process engineering at the University of Moratuwa.
The committee has submitted its assessment report to the Attorney General’s Office for use in claiming compensation from the Singapore-based operators of the ship.
“However, the report is only the first edition of the damage assessment, and further assessments would continue based on the monitoring,” De Alwis said
US stresses the need of SLs support to ensure free and open Indo-Pacific
The United States (US) noted the importance of Sri Lanka’s support to ensure a free and open Indo-Pacific region.
The US Ambassador to Sri Lanka, Julie Chung, tweeted saying Sri Lanka’s leadership is essential to supporting a free and open Indo-Pacific region.
Chung said that she met with the Director General of the Sri Lanka Coast Guard, Rear Admiral Anura Ekanayake yesterday , to review shared priorities and opportunities for collaboration, including maritime security, environmental protection and combating smuggling.
The Ambassador also made her first official visit to the Southern Province yesterday .
Sri Lanka, holding strategic importance in its geolocation, needs to move beyond the binary choice between the US and China, for example through strategic alliances with ‘middle powers’, an expert in foreign affairs said.
.With the US pivot to Asia policy and China’s maritime silk route ambition, India’s maritime activities has also heated up in the maritime domain of Indian Ocean in particular.
The Indo-Pacific is now at the forefront of the global geopolitical discourse as an important regional strategy involving the Indian and Pacific Ocean regions.
The protection of the Sea Lines of Communication and the chokepoints are an essential prerequisite to maintaining regional peace and stability, he opined.
Sri Lanka maintains close ties with all the major powers of the Indo-Pacific region. This includes cooperation in infrastructure development, trade, security, and people-to-people contact.
While Sri Lanka cannot play a defining role in the overarching Indo-Pacific strategy and may perhaps even not have a strategy of its own, Sri Lanka sees it in their best interest to engage with these major powers through continued cooperation in areas that could beneficial for Sri Lanka.
This is further supplemented by Sri Lanka’s strategic location in the Indian Ocean Region, astride busy sea lines of communication, coupled together with its vision to become an international financial center and a regional maritime hub, he claimed. .
The strategies of the major players of the Indo-Pacific namely the United States, India, Australia, and Japan has some fundamental differences insofar as the territory and the overarching objectives are concerned.
The United States sees the Indo-Pacific as a geographic entity strengthening economic and security in the region. The US government has adopted a whole-of-government approach to further cooperation with the Indo-Pacific region.
Dialog Axiata to invest US$152.4 Mn in SL’s Telecom and ICT Infrastructure
Dialog Axiata Group, the largest Foreign Direct Investor (FDI) operating under the aegis of the Board of Investment of Sri Lanka (BOI), announced the entering into of two supplementary agreements with the BOI for the investment of an additional sum of US$ 152.4 Mn (LKR 56.7 Bn) in Sri Lanka’s Telecommunications and ICT Infrastructure on 13 September 2022.
The investment comprises of US$ 112.8Mn from Dialog Axiata PLC and $ 39.6Mn from its subsidiary Dialog Broadband Networks (Private) Limited.
These agreements span a broad scope of telecommunications and ICT infrastructure development by the Dialog Axiata Group, encompassing the expansions of mobile and fixed 4G-LTE networks to provide rural and deep-indoor coverage, enhancement of big-data analytics and customer interaction capabilities, the evolution of IP and fibre networks, and the further development of the Group’s Wi-Fi and broadband networks, officials of the company said.
It is envisaged that these developments will offer more reliable and cost-effective internet connectivity, and significantly contribute to propelling the nation’s mobile telephony and fixed infrastructure to the forefront of innovation accelerating Sri Lanka into a digital nation.
Dialog Axiata Group is a subsidiary group of companies of Axiata Group Berhad, Asia’s second largest Telco with operations spanning across 8 countries including Malaysia, Indonesia, Bangladesh, Cambodia, Sri Lanka, Singapore and India, and Axiata has been a committed and long-term investor in Sri Lanka since the inception of Dialog.
Dialog is Sri Lanka’s largest Foreign Direct Investor (FDI) with cumulative investments totalling $ 3.1 billion. In this regard, it has been recognized by BOI as the first company to invest $1Bn in the country.
“Dialog Axiata has been instrumental in progressing our nation towards becoming a formidable next generation digital infrastructure champion in a global setting.
As the largest foreign investor in the country, Axiata has been a consistent and key enabler of this journey, even amid uncertainties. We are pleased to see the continued investments and unwavering commitment by the company which exemplifies the innumerable opportunities available in Sri Lanka to foreign investors who believe in and are willing to invest in the nation with a focus of capturing long-term value,” said. Raja Edirisuriya, Chairman, BOI.
Commenting, Tan Sri Shahril Ridza Ridzuan, Chairman, Independent Non-Executive Director of Axiata Group Berhad said, “As the largest FDI in Sri Lanka, this latest investment agreement bears testimony to Axiata’s continued confidence in the nation and our commitment to Sri Lanka and its people.
Dialog considers Sri Lanka to be one of the key innovation hubs, where it has achieved many region firsts, staying true to its ethos of delivering he claimed.
‘He said The Future. Today.’ As always, we greatly value our long-standing partnership with the Board of Investment and remain committed to investing in Sri Lanka to accelerate the country into a Digital Nation.”
A fuel ship arrived at the port of Colombo starts selling fuel on a retail basis!
Strange things have been happening in the country for several years. Those include ports where ships don’t come, airports where planes don’t come, presidents who say tomorrow will be difficult and tomorrow will be even more difficult, and ministers who tweet messages are some of them.
This is about another such thing.
A fuel ship that has arrived at the port of Colombo has started selling fuel on a retail basis. It is not because of the fault of the ship but because of the mischief of the rulers of our country.
40 million dollars must be paid for unloading the fuel stock of the ship. The petroleum corporation, which is now completely bankrupt, cannot find even one dollar, let alone 40 million dollars.
Because of this, the central bank has been requested to provide dollars, but the central bank is releasing only 05 million dollars per day for fuel import. According to that, the petroleum corporation has to go to the store to buy a kilo of rice and unload fuel equivalent to it at 05 million dollars.
Accordingly, it takes at least 08 days to complete the unloading of fuel in the fuel ship. It can also be done only if the central bank provides 05 million dollars each day.
By the time the fuel is unloaded, late fees and hundreds of thousands of dollars will have to be paid in addition.
That’s how the central bank comes up with strange plans to save dollars.
ISSUANCE OF VEHICLE LICENSES TO THOSE WHO SEND FOREIGN REMITANCE LEGALLY
The first license of the electric vehicle import license program was issued to foreign workers who legally send dollars to Sri Lanka through the banking system yesterday(20). This first vehicle license was obtained by a Sri Lankan who is currently working abroad.
Accordingly, the Foreign Employment Minister Manusha Nanayakkara granted this license to Mr. Dhamma Perera, his authorized representative in Sri Lanka.
As Foreign Employment Minister Manusha Nanayakkara said, Currently, there is a special demand for electronic vehicle licenses and many foreign workers are continuously making inquiries about this and information and applications in this regard can be obtained from the website of the Ministry of Labor and Foreign Employment or the website of the Sri Lanka Foreign Employment Bureau.
US military provides aircraft equipment to Sri Lanka Air Force
The Sri Lanka Air Force is set to receive aircraft loading and refuelling equipment from the Department of Defense in 2023 under the Building Partner Capacity Program.
To prepare the Sri Lanka Air Force on how to handle the equipment, a Mobile Training Team event was organized by the 36th Contingency Response Squadron at Montana Air National Guard Base last week.
A 15-member team from the Sri Lanka Air Force spent four days learning to operate the gear from airmen assigned to 120th Logistics Readiness Squadron and 120th Maintenance Squadron.
Procedures such as pallet buildup, refuel/defuel, and forklift operations were imparted to the Sri Lankans.
“This isn’t the first time Airmen from the 120th AW have worked alongside their Sri Lanka Air Force counterparts”SL Air Force spokesman said. .
Over the last year, the 120th AW and Sri Lanka Air Force have worked together several times as part of the State Partnership Program.
“We brought a mix of pilots, loadmasters, crew chiefs, fuel specialist, maintenance officers and logistics officers on this Mobile Training Team,” said Danushka Premadasa, Sri Lanka Air Force wing commander.
“We got to see and use this equipment; it is going to help us effectively use this new equipment for our refueling and loading operations.”he added.
Through the SPP, the Montana National Guard conducts military-to-military engagements with Sri Lanka to support defense security goals while facilitating engagements spanning military, government, economic and social spheres.
This international partnership strengthens government relations while building a network of allies throughout the U.S. and Indo-Pacific Command.
“It was great to have the Sri Lanka Air Force members here again,” said Master Sgt. Mark Payton, 120th Logistics Readiness Squadron, aircraft fuels technician.
“This is the second time I have worked with them, and it provides a great atmosphere of sharing knowledge while learning about each other’s cultures. he claimed