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Inflation rises to 16.8 percent in January; food inflation up 24.4 percent

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Sri Lanka’s inflation in January has skyrocketed to 16. 8 percent from 12.1 percent in December 2021and 14.2 percent in the 12-months to December with food prices up 25 percent, Census and Statistics Department (DCS) data showed.

Headline inflation in January had risen to 16.8 percent as against 14 percent in the previous month, the DCS revealed

DCS said as per the National Consumer Price Index (NCPI), contributions to the inflation rate of January 2022 from the food group and non-food group was 11.4percent and 5.4 percent respectively.

Whilst contributions of food and non-food groups to the inflation in January 2021 were 2.7 percent and 1.0percent respectively, resulting in a headline inflation of 3.7 percent .

DCS said the reported inflation for January was mainly due to the higher price levels prevailing in both food and non-food groups.

Accordingly, the Year-on-Year inflation of the food group increased to 24.4 percent in January 2022 from 21.5 percentin December 2021 and the Year-on-Year inflation of the non-food group increased to 10.2 percent in January 2022 from 7.6 percent in December 2021.

Comparing the month-on-month changes, NCPI in January 2022 has increased to 166.0 from 161.0 reported in December 2021.

This shows an increase of 5.0 index points or 3.1 percentages as compared to December 2021. The month-on-month change was contributed by increases of index values of food items by 1.71 percent and non-food items by 1.35 percent respectively.

Price increases of food items were reported for rice, milk powder, fresh fruits, fresh fish, wheat flour, bread, vegetables, coconut oil, chicken, chilli powder, dried chilies, green chilies, mysore dhal, infant milk powder, coconuts, dried fish, potatoes, red onions and big onions. However, decreases in index values were reported for limes and eggs.

The increases in index values of non-food groups in January 2022 compared to the previous month was mainly due to the price increases in groups of items ‘Alcoholic Beverages, Tobacco and Narcotics’ (Betel leaves), ‘Clothing and Footwear’, ‘Housing, Water, Electricity, Gas and Other fuels’ (Material for the Maintenance), ‘Furnishing, Household equipment and Routine household maintenance’, ‘Health’ (Fees to private medical practices), ‘Transport’(Petrol & Diesel, Bus fare), ‘Recreation and Culture’, ‘Education’(Tuition fees), ‘Restaurants and Hotels’ and ‘Miscellaneous Goods and Services’.

Meanwhile, the price indices of the ‘Communication’ group remained unchanged during the month. Core inflation, which reflects the underlying inflation by excluding volatile items of food, energy and transport groups in the economy as measured by the Year-on-Year change based on NCPI for the month of January 2022 was increased to 12.9 percent from 10.8 percent reported in December 2021.

An Extraordinary Gazette notification issued regarding electricity and hospital services!

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A special gazette notification has been issued declaring the supply of electricity and maintenance of patients in hospitals, nursing homes, dispensaries and other similar institutions as essential services.

This gazette notification has been issued by President Gotabhaya Rajapaksa with effect from 22nd February 2022.

Stop media repression. Ensure freedom of speech! – Sajith’s statement in Parliament (VIDEO)

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Opposition Leader Sajith Premadasa has called for an immediate end to the repression of the media by the current government and for the freedom of speech guaranteed by the Constitution.

He recalled the attack on Lake House journalist Maduka Thaksal, arrest of social media activist Ramzi Razik, arrest of Chathuranga Alwis, arrest of poet Ahnaf Jazeem, summoning of social activists such as Chirantha Amarasinghe, Sudaththa Thilakasiri, Keerthi Ratnayake, Asela Sampath, Shehan Malaka and Manorama Weerasinghe to the CID and tabled a list of such journalists and social activists in Parliament.

He also said that there were many complaints that journalists, social media activists, and website operators in the North and East were being threatened.

He also said that government ministers and MPs have repeatedly stated that new laws should be enacted to regulate social media networks and stressed that such things should not happen in a democratic society.

Sajith Premadasa made this statement in Parliament yesterday (22).

Diesel price in Sri Lanka is even lower than in Dubai – Bandula

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Trade Minister Bandula Gunawardena says that the price of diesel in Sri Lanka is lower than in Dubai, a fuel-producing country.

Minister Bandula Gunawardena stated this while expressing his views to the media after a program held in Homagama yesterday (22).

The Petroleum Corporation currently sells a liter of petrol in Sri Lanka at Rs. 177 and a liter of diesel at Rs. 121.

President instructs to supply fuel with no disruptions – Fuel prices will not be increased (VIDEO)

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President Gotabhaya Rajapaksa has ordered the government to continue supplying fuel to the people at a special cabinet meeting held yesterday (22).

Minister Mahinda Amaraweera stated that it was decided not to increase fuel prices.

“The discussions were to provide fuel continuously without increasing fuel prices. Money has already been paid for the fuel tanker today. Also, we all discussed the view that fuel should be provided without any shortage in the future as well. There will be no increase in fuel prices at this time. Also, the Secretary to the Ministry of Finance agreed to provide the required funds for the loans available with the CEB. Then about 80 billion rupees will be received by Monday.

Amaraweera was speaking to the media while leaving a special cabinet meeting held at the Presidential Secretariat yesterday afternoon.

Sri Lanka to manufacture yarn by using recycled plastics in a big way

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Sri Lanka is set to embark on a novel venture to produce yarn by using recycled plastics with the aim of preventing environmental pollution caused by dumping plastic items in haphazard manner.  

Eco Spindles (Pvt) Ltd, Sri Lanka’s largest plastics recycler, has announced plans to expand its capacity to manufacture yarn using recycled plastics, as well as innovative new additions to its suite of cutting-edge, eco-friendly products used by some of the world’s leading fashion brands.

The company owns one of only two plants in the world capable of creating polyester yarn directly from recycled polyethylene terephthalate (PET) plastic flakes.

 After the completion of the second phase of its yarn plant expansion programme in April 2022, the company expects its capacity to manufacture recycled polyester yarn to increase by 120 per cent, from 100 tonnes of Draw Textured Yarn a month to 220 tonnes a month.

For its third phase of expansion, Eco Spindles is exploring potential opportunities to expand its footprint within or beyond Sri Lanka, the company said this week in a media release.

Given that its products, made using recycled PET plastics, are primarily exported, these developments pave the way for the company to generate more export earnings and foreign exchange for Sri Lanka.

 It also addresses the improper disposal of plastics, one of the world’s biggest environmental issues.

These developments were announced at Eco Spindles’ annual yarn conference held virtually on February 14, with the participation of the company’s senior management. During the conference, Eco Spindles also felicitated its top 10 buyers of 2021.

The conference featured keynote addresses from BPPL Holdings PLC Managing Director and Chief Executive Officer (CEO) – Dr. Anush Amarasinghe, Eco Spindles Yarns CEO – Nalaka Senavirathna and Eco Spindles Yarns Head of Sales – Jerome De Mel. 

In addition to plans for business improvement, the speakers also shared their insights into the ongoing battle against plastic pollution and offered promising solutions adopted on a national scale with global impact.

“As people who are passionate about the environment, we are painfully aware of the impact plastic materials have on nature since more than 583 billion PET plastic bottles are produced each year with 85 per cent of it going to landfills. 

We also believe that to resolve this crisis, the solution is social entrepreneurship which seeks to create and support a circular economic model.

 It is from this understanding that Eco Spindles emerged, and we are fortunate that our customers and partners have supported us in this vital mission. We look forward to continuing to collaborate with them in the future,” Dr. Amarasinghe said.

Eco Spindles also announced plans to manufacture recycled polyester yarn using textile waste during the conference. 

The company has been working closely and trailing this innovation with leading apparel manufacturers in Sri Lanka and global apparel brands. The first commercially viable product will be launched in May 2022.

President’s directive on PTA needs to be built into law

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President Gotabaya Rajapaksa has issued a directive that the police should not use the Prevention of Terrorism Act as a shortcut to dispense with investigations under the criminal procedures code and to use it only if there are clear links to terrorism.  This presidential directive comes at a time when the government’s proposed amendments to the PTA have been criticized as being inadequate by UN Human Rights Commissioner Michelle Bachelet in her report on Sri Lanka, by international human rights organisations and challenged in the Supreme Court by national organisations. 

Excerpts of the UN Human Rights Commissioner Michelle Bachelet’s report on Sri Lanka on a wide range of issues relating to human rights have been highlighted in the media and are a matter for concern. We call on the government to focus on protecting the human rights of citizens, meeting the expectations of the international community and securing the GSP Plus tariff concession. We believe that this reform of the law can be a part of the structural transformation in the country essential to sustainable peace and reconciliation in Sri Lanka. 

NPC notes the statement of the Human Rights Commission calling for the repeal of the PTA and that the offence of terrorism should be included in the Penal Code with a new definition for terrorism. We urge the government to provide a clear definition of the term “terrorism” in any future legislation which will prevent it from being used to arrest people for a wide variety of reasons, and also to make every arrest subject to judicial ratification.  The inclusion of the president’s directive to the preamble to the anti-terrorism legislation will serve to further strengthen the power of the judiciary to scrutinise police arrests under it and help put brakes on the prevailing culture of impunity.

National Peace Council of Sri Lanka

President makes a clarion call to business leaders to support nation building

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Sri Lanka’s top twenty business magnets and several other private sector leaders have been called upon to invest in local industries and to extend a hand in the nation building process.

This clarion call was made by President Gotabaya Rajapaksa on Monday 21at an extraordinary meeting with leading business personalities including Kasturi Wilson, Dhammika Perera, Krishan Balendra, Ashrof Omar, Mohan Pandithage, Ashok Pathirana, Sumal Perera, Gerard Ondaatje, Ranjith Pandithage and many others.

The high-powered meeting was chaired by President Rajapaksa along with Finance Minister Basil Rajapaksa, Central Bank Governor Nivard Cabraal and several senior officials.

The, meeting was convened with the objective of obtaining the assistance and views of the private sector leaders in the development process.

The discussion was centred on a range of current economic topics such as foreign exchange generation, State fiscal policy, foreign employment promotion, investment incentives, improving exports, investments around renewable energy, agricultural products, adequate supply of fertiliser and tourism promotion.

President Rajapaksa pointed out that large-scale investments on renewable energy, green agriculture, technology parks and greenhouses would open up great opportunities to control foreign exchange outflow.

He said the private sector has the ability to rectify the misconceptions that some are spreading to achieve their narrow goals in an environment where the Government is taking all efforts to revive the economy amidst the pandemic.

The Finance Minister pointed out that the shortage of cement is due to the increase in demand for cement as a result of the revival in the construction industry during the past two years, adding that the Government is focusing on manufacturing cement in the country in future.

He also assured that there is no shortage of essential commodities, whilst urging the top private sector leaders not to take undue advantage of the decision taken by the Government to remove some of the price controls on certain commodities except for medicinal drugs.

The Central Bank Governor Ajith Nivard Cabraal claimed the country is losing foreign investment opportunities as a reflection of the baseless propaganda carried out regarding the economy.

“The Government is capable of honouring all foreign loans and we will take steps to attract investments into the country,” Cabraal said.

Top business entrepreneurs also called on the President to introduce a mechanism to prevent the brain drain and foreign exchange outflow, asserting that a large number of young students go abroad to pursue their higher education.

They suggested to President Rajapaksa to set up a mechanism to create such educational opportunities with the same standards within the country.

SL companies to raise foreign capital via CSE main market segment

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Sri Lankan companies incorporated or listed in the country are now able to raise foreign capital by listing and issuing foreign currency denominated shares in the Colombo Stock Exchange, CSE officials disclosed.

  This new financing option for local companies is a result of the new strategic plan the CSE launched in 2020, they said.  

 The Colombo Stock Exchange (CSE) has enabled local entities incorporated or established in Sri Lanka to issue and list foreign currency denominated shares in the main market segment (Diri Savi and Main Boards).

Having obtained necessary clearances from the Securities and Exchange Commission of Sri Lanka (SEC) the Listing Rules and the Trading Rules of the CSE and the CDS Rules of the Central Depository Systems Ltd. have been suitably amended.

This action has been taken to facilitate the listing, trading and clearing and settlement of foreign currency denominated shares to be issued by local entities. The aforementioned regulatory framework has been effective since February 14. 

CSE Chairman Dumith Fernando said: “The enabling of the raising of foreign capital would fulfil a gap for capital raising in the Sri Lankan Capital Market. 

This was formulated taking into consideration the interests expressed by several local entities in raising foreign currency denominated capital via the CSE. 

“He expressed the hope that “Sri Lankan companies aspiring to grow internationally can now make use of this unique opportunity via the CSE to meet their foreign currency growth capital needs.”

CSE Chief Regulatory Officer Renuke Wijayawardhane said: “The CSE submitted a comprehensive business proposal, including the proposed regulatory policy framework governing the listing and trading of foreign currency denominated shares issued by local entities on the CSE, to the Central Bank CBSL) and the Ministry of Finance.

This decision was conveyed via the SEC and the CSE continuously engaged with the Department of Foreign Exchange of CBSL in formulating the regulatory framework for this mechanism, resulting in a comprehensive set of regulations and directions being issued by the Ministry of Finance.

It facilitates and enables the listing and trading of foreign currency denominated shares and debt securities on the CSE by local entities. 

With this initiative, it also hopes to create a new stream of foreign currency-based revenue for the market participants.”

An updated regulatory framework can be accessed through the CSE website (www.cse.lk) for reference. 

Local entities interested in raising funds through this mechanism should contact Senior Vice President –Origination and Issuer Relations Purasisi Jinadasa at [email protected] or 11 235 6402 if further information or clarifications are required.

Foreign Minister Peiris addresses Diplomatic Corps based in New Delhi

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Foreign Minister Prof. G.L. Peiris addressed the Diplomatic Corps based in New Delhi virtually on 18 February, 2022. The objective of this briefing was to share information on progress related to human rights and reconciliation as part of the continued engagement ahead of the upcoming 49th Session of the Human Rights Council, which will commence in the last week of February.

Foreign Minister Peiris appreciated the opportunity to brief Heads of Mission accredited to Sri Lanka based in New Delhi as a continuation of the briefings organized by the Ministry to share current developments. 83 envoys participated in the briefing.

The Minister recalled that at the September 2021 Session of the Human Rights Council he had reiterated Sri Lanka’s commitment to the promotion and protection of Human Rights and to remain engaged with the United Nations including the Human Rights Council. In this context, the Minister referred to the constructive engagement with the international community in a spirit of cooperation and dialogue.

Foreign Minister Peiris said the Government of Sri Lanka has undertaken substantial steps with a view to accountability, restorative justice and meaningful reconciliation which were efforts due to the work of domestic institutions namely the Office for Reparations (OR), Office for National Unity and Reconciliation (ONUR), Office of Missing Persons (OMP), the Human Rights Commission of Sri Lanka (HRCSL) and the Sustainable Development Council (SDC).

The Minister was particularly pleased to inform that after 43 years, the Prevention of Terrorism Act is being amended with the objective of bringing it in line with international norms and best practices. The Minister explained that the PTA is being amended after lengthy deliberations over several months and underlined that the proposed amendments are an initial step towards the promulgation of a more comprehensive anti terror legislation.

He added that substantive amendments to the PTA include amendments to the sections on detention orders, restriction orders, expressly recognizing judicial review of orders, expeditious disposal of cases of those charged to avoid long term detention, repealing sections impinging on freedom of expression and introduction of provisions on access by magistrates and judicial medical officers, prevention of maltreatment and torture during the detention period, right to communicate with the family, grant of bail to long term detainees and day to day hearing of cases.

Foreign Minister Peiris also referred to the accountability process which is being addressed through the Commission of Inquiry (COI) headed by Supreme Court Justice Nawaz and informed that while the recommendations in the First Interim Report had been  implemented that the Second Interim Report had also been handed over to the President.

The Foreign Minister also referred to the 9 member Expert Committee appointed by the President to make proposals pertaining to drafting a new Constitution. The Minister stated that the Expert Committee has completed their preliminary consultations and that the proposals will be submitted to the President shortly. He said that thereafter broader public consultations based on a democratic process will follow.

The Foreign Minister responded to questions and appreciated the constructive engagement with the New Delhi based envoys and looked forward to continued cooperation at the UN Human Rights Council and other multilateral fora.

Foreign Ministry

Colombo 

22 February, 2022