The U.S. government, through its development agency, the U.S. Agency for International Development (USAID), is committed to accelerating clean energy to drive social and economic sustainable growth in Sri Lanka.

On August 16, Sri Lanka’s Minister of Power and Energy, Kanchana Wijesekera and U.S. Ambassador to Sri Lanka, Julie Chung attended a signing ceremony for a Memorandum of Understanding between the USAID Sri Lanka Energy Program and David Pieris Motor Company (DPMC) that will facilitate the electrification of three-wheelers, commonly known as “tuk tuks”.

Under this partnership, DPMC, Sri Lanka’s largest automotive company, will convert internal combustion engine three-wheelers to electric three-wheelers and offer after sales services through their island wide service centers.

USAID-supported Sri Lanka Energy Program will provide technical assistance to DPMC and establish a network of charging stations that will help build an enabling environment for the uptake of electric three-wheelers.

“The partnership between USAID and DPMC to electrify three-wheelers is innovative and exciting, and it stands to greatly benefit Sri Lanka’s economy. Plus, sustainable energy projects like this program help create a greener future for all Sri Lankans,” said U.S. Ambassador to Sri Lanka Julie Chung.

The transportation sector is the biggest contributor to greenhouse gas emissions in Sri Lanka. Transitioning to electric three-wheelers will help mitigate negative

environmental impacts, reduce dependency on fossil fuels, and will minimize the foreign exchange outflows for fuel.

“As pioneers who introduced and built the three-wheeler industry in Sri Lanka, creating sustainable employment for over 500,000 people along with convenient and accessible transport to supplement both public and personal transport island wide; DPMC is deeply committed to ensuring the successful introduction of the electric three wheelers.

We have been on this journey since 2016 and have successfully converted and tested several prototypes. With support from the USAID Sri Lanka Energy Program, we are confident that the infrastructure required to ensure market acceptance and commercial viability can be established,” stated Rohana Dissanayake, DPMC’s Chairman and Managing Director.

Rick Whitaker, Chief of Party of the USAID Sri Lanka Energy Program, and Naalaka Madugalle, Director/Chief Operating Officer, DPMC signed and witnessed the agreement on behalf of their organizations.

This is the second partnership announced by USAID’s Sri Lanka Energy Program for electric mobility. In June 2022, the program signed a similar agreement with VEGA Innovations to promote electric three-wheelers and support the manufacturing of locally designed batteries and inverters.

The USAID Sri Lanka Energy Program is a key activity under the longstanding partnership between the American and Sri Lankan people. Since 1961, USAID has provided more than $2 billion (approximately Rs.700 billion in current exchange rate) to programs in support of economic development, entrepreneurship, women’s empowerment, and environmental conservation, as well as other sectors, in Sri Lanka.

Britain has launched a scheme to extend tariff cuts to hundreds of products, such as clothes and food, from developing countries including Sri Lanka, part of London’s post-Brexit efforts to set up systems to replace those run by the European Union.

In June, British Prime Minister Boris Johnson said he wanted to start a new trade system to reduce costs and simplify rules for 65 developing countries to replace the EU’s Generalised System of Preferences, which applies import duties at reduced rates.

Trade minister Anne-Marie Trevelyan said the Developing Countries Trading scheme (DCTS) would extend tariff cuts to hundreds more products exported from developing countries, a system, she said, that goes further than the EU scheme.

“As an independent trading nation, we are taking back control of our trade policy and making decisions that back UK businesses, help with the cost of living, and support the economies of developing countries around the world,” Trevelyan said in a statement.

“UK businesses can look forward to less red tape and lower costs, incentivising firms to import goods from developing countries.”

The DCTS covers 65 countries including Sri Lanka, simplifies rules such as rules of origin, which dictate what proportion of a product must be made in its country of origin, and removes some seasonal tariffs, such as making cucumbers tariff-free in the winter.

Products that are not widely produced in the UK, like olive oil and tomatoes, will also have lower or zero tariffs, making them cheaper to import.

The scheme also simplifies complex trade rules, including so-called rules of origin, making it easier for businesses in countries like Bangladesh to export clothes to the UK.

Duties will also be reduced by 14 per cent on bikes from the South Asian nation, 12 per cent on T-shirts for Cambodia, 12 per cent on baby clothes from Sri Lanka, eight per cent on roses from Ethiopia and eight 8 per cent on onions from Senegal.

Broadly, the scheme will ensure British businesses benefit from more than £750m a year of reduced import costs, which the Department for International Trade said would lead to more choice and lower costs for UK consumers to help with the cost of living.

Trade Secretary Anne-Marie Trevelyan highlighted the fact the scheme goes further than its EU equivalent, adding: “As an independent trading nation, we are taking back control of our trade policy and making decisions that back UK businesses, help with the cost of living, and support the economies of developing countries around the world.

“UK businesses can look forward to less red-tape and lower costs, incentivising firms to import goods from developing countries.”

The scheme replaces the UK Generalised Scheme of Preferences, which was rolled over from EU membership, and will come into force in early 2023.

It covers 37 countries in Africa, 18 in Asia, eight in Oceania and two in the Americas.

Sri Lanka is among 8 countries under the scheme’s Enhanced Framework that will receive a preference of “0% import tariffs on two-thirds of product lines”.

Bolivia, Cape Verde, Kyrgyzstan, Mongolia, Pakistan, Philippines and Uzbekistan are the other countries under the Enhanced Framework.The scheme reduces and removes those tariffs reduced or removed by the EU GSP.

Both manufacturing and service activities in Sri Lanka declined in July 2022 , the Central Bank’s recent Survey report released last Monday July 15 showed.

Manufacturing sector continues its contraction in its activities on a month-on-month basis. driven by the decreases in all the sub-indices, except Suppliers’ Delivery Time. The decline in New Orders in July 2022 over the previous month was mainly due to subdued demand conditions, particularly in the manufacture of food & beverage sector.

Deterioration of consumer purchasing power and reduced retail footfall due to fuel shortage were among the major reasons for the subdued demand condition.

Meanwhile, Production declined on a month-on-month basis, particularly in the manufacture of food & beverage sector, which was a combined outcome of subdued demand conditions and supply side concerns such as shortage of materials and fuel.

Employment also declined, particularly in the manufacture of food & beverage sector, mainly due to the discontinuation of casual employees.

However, many respondents from the manufacture of textile and apparel sector mentioned that they were able to increase the employment count during the month.

The decline in the Stock of Purchases was in line with the decline in New Orders and Production, and partly due to the unavailability of required quantities of inputs in the domestic market and difficulties in importing materials. Moreover, the Suppliers’ Delivery Time lengthened during the month, mainly on account of vessel delays, and diesel shortage.

Expectations for manufacturing activities for the next three months remained in the negative territory, as manufacturers are concerned over the subdued demand conditions in addition to the continuation of supply-side constraints.

Servicessector also continues contraction driven by the declines observed in New Businesses, Business Activities, Employment and Expectations for Activity.

New Businesses contracted further in July 2022 compared to June 2022, particularly with the deteriorations observed in transportation, real estate and accommodation, food and beverage sub-sectors.

Business Activities dropped further in July with the decreases observed across most of the sub-sectors amid the severe fuel shortage experienced during the month.

In addition, as continuously highlighted by many respondents, the other supply side constraints as well as the subdued demand, driven by weakened economic conditions, price escalations and travel limitations also affected the business activities in the services sector negatively.

Accordingly, transportation, accommodation, food and beverage and other personal activities sub-sectors recorded considerable deteriorations during the month. Employment continued to fall in July due to freeze in new recruitments and non-renewal of existing employment contracts amid subdued business activities, retirements and resignations.

Meanwhile, Backlogs of Work increased further during the month with supply shortages, especially related to fuel, transportation difficulties faced by staff and power outages.