The Ministry of Health urged the public to wear masks again following a reemerging threat of the Covid-19 pandemic.
There is an increase in the spread of the virus in Sri Lanka and the Director General of Health Services (DGHS) Dr. Asela Gunawardena, accordingly, has recommended that people should continue to wear masks in domestic premises, public transport and public places where people gather.
MIAP
President Ranil Wickremesinghe will soon leave for China on an official tour, sources said. Wickremesinghe’s departure has also been hinted by Sri Lankan Ambassador to China Palitha Kohona during an interview with Reuters.
The SL Ambassador has requested the Chinese government to provide continuous support in the fields of trade investment and tourism and encourage Chinese companies to buy products such as Sri Lankan tea, spices, garments and gems.
Every predecessor regimes led by the Rajapaksas followed a pro-China agenda in their foreign policies and analysts argue that the policy will remain unchanged under Wickremesinghe’s regime.
MIAP
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Education Minister Susil Premajayantha is to be appointed as the Leader of the House, as the predecessor Dinesh Gunawardena is now serving as the Prime Minister, sources disclosed.
MIAP
President Ranil Wickremesinghe has issued an extraordinary gazette declaring the scopes and functions of the Ministries including the Ministry of Defence, the Ministry of Finance, Economic Stability and National Policies, the Ministry of Technology and the Ministry of Investment Promotion.
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The Criminal Investigation Department (CID) yesterday (25) informed the Colombo Magistrate Court that it will be withdrawing a case filed against former Minister Rajitha Senaratne over the allegation of delivering eight ships from a Chinese company to Sri Lanka and leasing the Modara fishing port to a foreign company during his tenure as the Minister of Fisheries.
The charges will be dropped in the event that the Commission to Investigate Allegation of Bribery or Corruption (CIABOC) has already lodged a case against the former Minister under the offence ‘corruption,’ the CID told the Court.
Accordingly, the Colombo Magistrate Court allowed the case to be dropped.
MIAP
Several airlines are contemplating on suspending their operations to Sri Lanka threatening tourism industry’s recovery, which depends on air connectivity as no credible solution to resolve the jet fuel shortage and the fund repatriation issues faced by the country’s aviation industry.
The Cabinet of Ministers last month approved a joint proposal to allow the importation, supply and sale of Jet A-1 aviation fuel by bunker holders registered with the Sri Lanka Ports Authority (SLPA) in order to sustain aviation services.
This decision has been taken after Ceylon Petroleum Corporation (CPC), which holds the fuel supply monopoly, failed to import the required jet fuel due to the foreign exchange crisis.
However, bunker fuel license holders are yet to act on the proposal due to several issues, a leading bunker fuel licence holderclaimed.
He said jet fuel (jet A1) trade involves a different supply chain, which requires finding new suppliers, who are willing to provide jet fuel on a minimum 30-day credit basis.
One solution is that four or more bunker fuel license holders should form a consortium and move ahead with imports.
In addition, they also need to secure a line of credit from suppliers for a minimum 30-day period.
So, they can refuel aircraft, collect payments in US$ and pay up the suppliers. Otherwise, I don’t believe that anyone is in a position to make upfront payments in US$,” he elaborated.
However, he suggested that the government should instead focus on bringing another player into the jet fuel trade or a third player into overall fuel business by setting up a mechanism, which would ensure an uninterrupted supply of jet fuel to aircraft.
BIA officials said currently there are no moves to bring in jet fuel either via CPC or any other alternative method.
“There are potential mechanisms and models, but nothing has been done yet. Airlines are diverting their flights to other airports.
As of now, some airlines have already pulled out and some airlines are talking about pulling out. Once they pull out, it would be quite hard to get them back,” a BIA official said.
The situation has been exacerbated with local airline representatives failing to remit about US$ 200 million worth funds collected via ticket sales owed to their principles through banking channels over the past 6-7 months.
As a result, Sri Lanka and Pakistan have been moved to IATA’s ‘blocked funds’ list from the ‘watchlist’ recently.
“There is no mechanism to remit these funds. So, obviously, airlines are increasing airfares in order to mitigate foreign exchange losses. Airfares have doubled compared to 2-3 months ago, it’s a direct result of these issues, “a local airline representative said.
According to industry officials, airlines have cut seat capacity to Sri Lanka by 53 percent over the past couple of months.
“The usual legacy carriers continue to operate, but with less frequencies. However, it’s mostly SriLankan Airlines that makes tech stops in South Indian airports incurring additional costs.
Most other carriers fly to Colombo with a full tank and go back. This limits the payload of each flight, which means they can’t carry intended passenger and cargo capacities. Even for a narrow-body aircraft coming from northern India, it needs to be refueled here” he noted.
According to Aviation Worldwide Limited’s airline frequency and capacity trend statistics report, air seat capacity to Sri Lanka declined by 27.6 percent year-on-year in both June and July to-date.
Sri Lanka’s tea industry has survived world wars and global depressions – but now it’s really in jeopardy as its production down 22.7 percent in June 2022 from a year earlier to 18.5 million kilograms while the total output for the first six months dipped 17.8 percent from the previous year, official data shows.
If the tea industry goes to the wilderness, it will be another calamity in a season of catastrophes unraveling Sri Lanka’s failing economy
Fertilizer can be used again after lifting import restrictions but has gone up twenty times in price not least because of the war in Ukraine. Herbicide and pesticide are also hard to come by.
Making matters worse, demand has declined too as overseas markets tip toward recession, Ministry of plantation industry sources said.
In June high grown teas were down 31.6 percent to 3.7 million kilograms, medium grown was fell 31.6 percent to 2.5 million kilograms and low-grown were down 16.2 percent to 12.3 million kilograms, industry data published by Forbes and Walkers Tea Brokers showed.
“Elevation-wise analysis shows that for the month of June 2022 High, Medium & Low Growns show a decrease of –1.87Mn/Kg, -1.55 Mn/Kg & -2.49Mn/Kg respectively when compared to the same month last year,” industry data revealed.
Low-grown teas, mostly grown by smallholders and exported to the Middle East and Central Asia, are now the most sought-after and expensive Ceylon Teas.
The national average tea price in the month of May was 3.46 dollars or 1,245.22 in rupees.
Sri Lankan tea has been earning higher prices for tea exports in rupees after the currency was depreciated in March against the USA dollar in 2022.
However, the industry had previously predicted the tea output to dip following a fertiliser ban imposed from April to November 2021.
The ban was imposed on fertilizer and agrochemicals after money printing created forex shortages and health concerns.
. Sri Lanka’s June tea exports too dipped 12.6 per cent to 23.58 million kilograms
Sri Lanka has asked China to help with trade, investment and tourism to help it grow sustainably, Colombo’s envoy to Beijing said on Monday as it negotiates for an emergency $4 billion package to help it emerge from an economic meltdown.
The island nation of 22 million people is suffering its worst economic crisis since independence in 1948 after running out of foreign reserves. Protesters angry about the shortages of fuel, food and medicine toppled the Rajapaksa ruling family.
Ambassador Palitha Kohona’s emphasis on China as a key to Sri Lanka’s economic recovery reflects Beijing’s status as one of Sri Lanka’s two largest foreign creditors, along with Japan. China also holds some 10% of Sri Lanka’s external debt,
In an interview with Reuters at Sri Lanka’s Beijing embassy, Kohona said Colombo wants China to ask its companies to buy more Sri Lankan black tea, sapphire, spices and garments and to make Chinese import rules more transparent and easier to navigate.
He said Beijing could also help by pouring further investment into vast China-backed port projects in Colombo and Hambantota. Major Chinese investment plans had not materialised because of the COVID-19 pandemic, Kohona said.
In addition, Sri Lanka would like to see more Chinese tourists, whose numbers fell from 265,000 in 2018 to almost zero after the 2019 suicide attacks and the pandemic.
Kohona said new Sri Lankan President Ranil Wickremesinghe has plans to visit China to discuss cooperation on matters including trade, investment and tourism.
Wickremesinghe is no stranger to China. A photo of him shaking hands with Chinese President Xi Jinping when he visited Beijing in 2016 as prime minister hangs in the hallway of the embassy where Reuters interviews Kohona.
Kohona said he expects no fundamental change in the new government’s policy towards China.
He said he understands China is finding it hard to act quickly to help Sri Lanka now because as a major global creditor it is also financially exposed to many other countries in financial difficulty. “Maybe if it was only Sri Lanka, then the decision-making would’ve been much easier.”
For several months Sri Lanka had been in talks in China for a $4 billion aid package, consisting of a loan of $1 billion to repay a roughly equivalent amount of Chinese debt due this year.
It is also asking for a $1.5 billion credit line to pay for Chinese imports. Kohona said these imports are mainly inputs needed by his country’s lucrative garment industry such as buttons and zippers.
Sri Lanka also hopes to persuade China to activate a $1.5 billion bilateral currency swap. Kohona said discussions on financial aid with China are still underway but no date for the next meeting has been set.
Chinese foreign ministry said this month that Beijing is willing to work with other countries and international financial institutions to “play a positive role” to help Sri Lanka.
Beyond financial aid, Sri Lanka also hopes China can help it buy fuel, fertilizer and other urgently needed supplies.
China pledged 500 million yuan ($74.09 million) of emergency support for Sri Lanka in April and May. “We need a lot more,” Kohona said.
The Energy Ministry has decided to dispense limited volumes of fuel in the next 12 months from Ceypetco filling stations to vehicles but it will be starting QR code system with effect from August 1st.
Earlier it was planned tgo introduce this system from Monday 26 , a senior official of the ministry said adding that it has to be delayed till next month due to technical and practical issues in the implementation of QR code
Minister of Power and Energy Kanchan Wijesekera said that the ‘QR Code’ system was introduced since the country’s daily fuel demand cannot be fulfilled.
Due to foreign exchange issues, fuel imports have to be restricted in the next 12 months, he said in a tweet.
He also said that the Ceylon Petroleum Corporation (CPC) has never distributed fuel daily to every single fuel station and that is “practically not possible even when stocks are unlimited.”
The QR code system under the National Fuel Pass portal will be implemented islandwide from August 1 in multiple filling station locations of CEYPETCO and Lanka Indian Oil Company (LIOC) while placing the system to refuel for vehicles according to the last digit of the vehicle’s registration number until August 1, the Power and Energy Ministry said.
He said the stations not equipped or having technical difficulties will follow the last digit and fuel quota allocation until the technical issues are rectified.
“Sixty percent of the locations have already been outfitted and tested. They will be given priority in fuel distribution, he said.
Therefore, the Minister requested all CEYPETCO and Lanka IOC fuel station owners to adopt the system immediately, and distribution will be strictly enforced to fuel stations with the QR facilities by August 1.
We request the public to register with the National Fuel Pass portal and support the initiative, he said.
He said options will be given to users to register multiple vehicles with their business registration by the end of the week and to government institutes to register. Divisional Secretaries will be given access to the platform to register generators, gardening equipment, and other equipment, he said.
The Police Department and Divisional Secretaries will be given access to register three-wheelers while allocating each three-wheeler to one specific fuel station.
The Transport Ministry will be given access to register buses, allocating them to depots or fuel stations accordingly.
Other services such as health, agriculture, fisheries, tourism, industries, and service-providing sectors will be given access to the system to register their requirements and allocation of vehicles at fuel stations.
However, the QR system quota will be in place from August 1, and the last digit of the number plate system and other allocations will be invalid.
The National Youth Corp, National Youth Council members and volunteers will assist the programme at fuel stations for the next 10 days, the Minister added.
Highly respected eminent economist and former Central Bank Governor Dr. Indrajit Coomaraswamy has said the economic recovery will require painful treatment whilst expressing hopes that President Ranil Wickremesinghe would take all the tough decisions to avoid the disastrous situation.
“President Wickremesinghe is economically very literate. He knows what has to be done. At times, it has been difficult for him or any other politician to get it done, given the political dynamics and that toxic populist politics and entitlement culture that has driven the economy to where it is today.
But, if President Wickremesinghe understands this reality , he can get it done and tackle the economic crisis ,” Dr. Coomaraswamy said in an interview with The Wire on Saturday.
He said the President seems that he was ready to bite the bullet, noting that if he does not, Sri Lanka will go down the abyss and it will be a disaster.
“First, we need to get an IMF agreement because, at the moment, we neither have foreign exchange nor rupees. The Government does not have fiscal revenue and thus it puts enormous pressure on the Central Bank to print money.
“This has to be resolved immediately and the only way is via an IMF program, which gives us a certificate of good housekeeping and will also leverage other funding from the international donor agencies like the World Bank and Asian Development Bank and hopefully from others.
It will also allow flows of private investment into the economy. We also need to restructure our external debt by talking to creditors, he pointed out.
“Secondly, President Wickremesinghe has to find a way of getting essential supplies urgently, such as fuel, food, medicine, and so on, till the debt restructuring and the IMF program are finalised.
However, to get the IMF finalised to a disbursement level, will take around five to six months and during this period, the President has to get bridge finance to meet the essential imports, he said.
“Thirdly, the President needs to have a very clear plan on the structural reforms that he is going to undertake to accelerate growth in the economy,” Dr. Coomaraswamy outlined the three key factors the Government should focus on in the immediate future.
He suggested that the Government needs to and is beginning to do is, to strengthen the safety net by enhancing the cash transfers going to the poor and vulnerable.
“I think communication is going to be critical. Almost all Sri Lankans now recognize that sacrifice is necessary and inevitable. With that, the message needs to be reinforced and driven through. Simultaneously, we have to find a way of distributing the sacrifice and pain according to the capacity of the population to bear that pain,” he added.
He also revealed that around 750,000 have slipped into poverty and the data seems to suggest that by the end of the year, half the population could fall below the poverty line which had been elevated because of inflation.
In terms of employment, he said that he had not seen any numbers as to how many jobs have been destroyed, but confirmed that all parties certainly have intense hardships.
Considering all data available, he said Sri Lanka will see an economic downturn of around 8%-10% by the end of next year compared to 2019. “This, I believe it will take another three years or so to make up for that economic downturn of 8-10% and in terms of getting the level of the GDP back to where it was in 2019, I would say about five years,” he added.
