PRESS RELEASE

24th May 2022

Photo Captions:

1. Section of the audience at the NATCON ‘22
2. Participants engaging in activities
3. Outdoor team building 

At AIESEC, we are determined to develop young people. To make this happen, AIESEC Sri Lanka successfully conducted NATCON ’22, the largest youth leadership development conference at Citrus Waskaduwa on April. The 3-day conference laid the foundation for the newly elected leadership bodies of AIESEC to prepare for the upcoming year, hence this was a critical phase in the AIESEC calendar. 

Understanding the leadership skills required in today’s highly evolving context, the conference was bound to be one of epic proportions, engaging 260 delegates from leading universities of Sri Lanka including University of Colombo, University of Moratuwa, University of Sri Jayewardenepura, University of Kelaniya, University of Ruhuna, University of Peradeniya, SLIIT and NSBM. 

The young and determined leaders who participated in the conference were university undergraduates seeking career prospects and pathways. Meeting all of these remarkable individuals under one roof was undoubtedly a unique opportunity for an organization. There were a series of sessions organized, focusing on leadership development with national facilitators such as LEAD, Activating Leadership, and Lead Innovate Evolve, and a platform to interact with other delegates including mentorship. Among the other highlights was the outbound training, enhancing participant performance through experiential learning activities and games.

The conference also featured a gala night where members of AIESEC were recognized and rewarded for their tremendous performances and dedication, encouraging them to be the future advocates of change. AIESEC in University of Sri Jayewardenepura won the Most Outstanding LC Award and Apoorva Ekanayake was bestowed with The Best Young Leader title.

NatCon 2022 was delivered successfully in strict accordance with health and safety requirements exceeding the planned outcomes as well. It would not have been successful without the support given by our partners including the exclusive title partner Stax, Technomedics International (Pvt) Ltd as the exclusive healthcare partner, SOZO as the beverage partner for the gala night and outbound training, Unilever as national talent partner, Innovate as exclusive youth partner and Nestle the official beverage partner. Hello TV and Hello Radio as the exclusive media partner, with Mark & Comm as the PR partner also helped us to bring Natcon 2022 to perfection.

The enormous favorable response from both the AIESEC Sri Lanka membership and external partners attests to the event’s success, which was held on an even larger scale than prior years in terms of its importance in developing youth leaders. NatCon 2022 organized by AIESEC in Sri Lanka signals the continued enthusiasm of Sri Lankan youth in contributing towards the betterment of the country.

Photo Caption:

1. Dr. Mohammed Rushmi Sacquaff

Dr. Mohammed Rushmi Sacquaff, Group CEO of Kitchen & Bedroom, one of the leading names in interior designing and manufacturing of contemporary kitchenette and bedroom furniture, was recently recognized as an Ambassador for Peace by the Centre for Peace Studies (CPS), an institution engaged in activities such as conflict resolution, mediation, peace keeping, human security and peacebuilding.

Dr. Sacquaff was bestowed with this influential title at the 17^th International Educational Tourism Research Conference also coinciding with the seventeenth-year anniversary of CPS. An Ambassador for Peace are individuals whose lives exemplify the ideal of living for the sake of others, indulging in practices that promote universal moral values, interreligious cooperation, national and international harmony, respecting UN Rights Charter, responsible public media, and establishing a culture of peace.

They are also those who contribute to fulfill hope of all ages, aiming to create a unified world of peace harmonizing both spiritual and material dimensions of life. Dr. Sacquaff is one of the most sought-after interior designers in the country, and a leading business personality with a visionary and strategic mindset well-balanced with the utmost need to also be morally and socially responsible.  

Under his leadership, Kitchen & Bedroom saw tremendous growth including the establishment of a new state-of-the-art, sustainable-centric manufacturing facility to further strengthen its presence in Sri Lanka and to expand into key export markets and showcase the country’s talent and capabilities in designing and developing modern and impactful furniture to the global stage. Dr. Sacquaff was also instrumental in shortening project delivery timelines, improving operational efficiencies and steering innovation and sustainability in all aspects of the business. 

Dr. Sacquaff was named ‘Best CEO of the Year’ under the Platinum- Medium Category at BIO Awards, and earlier this year was conferred the Master Project Manager (MPM) certification and designated as a Fellow of the American Academy of Project Management (FAAPM).

Established in 2004 with the aim of promoting reconciliation and social harmony among communities living in Sri Lanka, CPS is at the forefront of addressing deep and underlying causes of conflict, to enhance the roles of UN peacekeeping operations as conflict resolution interventions and to work in post conflict situations to sustain cultures of peace through peace education and conflict resolution training.

Kitchen & Bedroom continues to grow resilient and stronger, with an expanding portfolio of quality, elegant and functional furniture and accessories backed by professional with a wealth of expertise in interior designing solutions. It was awarded as the Best Manufacturing Business and named Outstanding Customer Service Organization at ADFFA this year.

The UK is working closely with fellow Paris Club members to discuss potential solutions to Sri Lanka’s external debt crisis, the UK Parliament was told this week.

Social unrest, political uncertainty and a complex web of creditors could scupper Sri Lanka’s push for a swift overhaul of its $12 billion overseas debt, analysts warn, saying the South Asian nation is fast running out of road.

 Sri Lanka’s investors are in wait-and-see mode until there is more clarity on what an IMF programme would look like, but time is running out.

“It  has a $2.5 billion gap to be filled for 2022 and 2023,” an economist said adding Sri Lanka needs at least $1 billion from the IMF. The country needs fresh money to spend. If not, it’s going to collapse” he said.

“The UK is also working closely with fellow Paris Club members to discuss potential solutions to Sri Lanka’s unsustainable debt levels in the event that an IMF program is agreed,” said Conservative MP for Chelmsford Vicky Ford who holds the Government post of Parliamentary Under-Secretary (Foreign, Commonwealth and Development Office).

She was responding to a question posed by Conservative MP for Hendon Dr. Matthew Offord who is also Chair of the All Party Parliamentary Group on Sri Lanka.

He asked the Secretary of State for Foreign, Commonwealth and Development Affairs what support her Department is providing to the Sri Lankan Government in response to the financial situation in that country.

In her response, MP Ford said the UK Government is closely monitoring the situation in Sri Lanka including food security and livelihoods.

“We encourage a peaceful, democratic, and inclusive approach to resolving the current political and economic challenges. In April, the World Bank (WB) agreed to provide $ 600 million in financial assistance, and we understand there are discussions to extend this support. The UK is a major donor to the WB and continues to engage with international financial institutions on Sri Lanka’s economic situation,” she added.

According to her, the UK has welcomed the start of in-depth discussions with the International Monetary Fund (IMF) on the reforms needed to bring the economy back to a sustainable path. These negotiations are likely to take up to 6 months.

“Sri Lanka has requested support from the IMF, however, at present no Sri Lanka proposal has been shared with members. When one is made available, we will scrutinise it carefully against the IMF criteria alongside other IMF members. 

“In the meantime, discussions are underway with several countries to obtain bridge financing in order to maintain flows of essential imported goods. The UK is also working closely with fellow Paris Club members to discuss potential solutions to Sri Lanka’s unsustainable debt levels in the event that an IMF programme is agreed,” MP Vicky added. 

The Central Bank of Sri Lanka reassures its commitment to ensuring the availability of foreign exchange through the banking system for importation of essential food items 

The Ministry of Finance issued Import Control Regulations on Payment Terms No.07 of 2022, dated 06 May 2022, and to be effective from 20 May 2022, by restricting the use of Open Account Payment Terms or Consignment Account Terms, subject to conditions, when importing goods to Sri Lanka. 

This measure complements the various other measures that are being implemented by the Central Bank of Sri Lanka (CBSL) and the Government in order to improve the foreign exchange liquidity conditions in the domestic banking system. 

It has been brought to the notice of the CBSL that concerns are being raised at various cohorts of trading community that there will be a large shortage of essential food items in the country due to the above-mentioned restrictions on payment terms. 

Against this backdrop, the CB has reassured  its commitment to ensuring the availability of foreign exchange within the banking system for the importation of essential goods, including the food items, in the ensuing period. 

Further arrangements are being worked out  by the Central Bank to ensure that the restrictions imposed on payment terms would not cause shortages of essential goods, including food items, and they would not result in any hindrances to manufacturers of export goods.

The CBSL is in a continuous dialogue with the banking community in order to ensure the facilitation of essential goods imports. Following the restrictions imposed on payment terms and the introduction of the exchange rate determination mechanism, there has been significant moderation of activity in the grey market.

This has resulted in foreign exchange inflows routing through to the banking system, thereby increasing foreign exchange liquidity conditions in the banking system. 

This momentum is expected to continue in the period ahead, thereby speeding up the correction of the exchange rate overshoot that took place since March 2022. 

Such improvement in the domestic foreign exchange market and subsequent increase in liquidity conditions would help channel foreign exchange to facilitate imports of essential goods. 

Communications Department 30 May 2022 2 b) The CBSL has commenced negotiations with the Trade Association and other parties who are engaged in importing essential goods.

 Accordingly, a preliminary assessment is being carried out, with the participation of the Ministry of Trade, the Consumer Affairs Authority, and the Sri Lanka Customs, in order to identify the availability of stocks of essential goods at present and the monthly requirement of the same in the ensuing period. 

Based on such findings, an arrangement would be put in place to ensure imports of essential goods in required quantities and frequency, along with the existing arrangement agreed by the Government of India to utilise the existing line of credit to import essential goods. 

 The Essential Food Commodities Importers and Traders Association assured the Central Bank during recent discussions that they would not resort to engage in grey market activity and extend the fullest cooperation in traversing through these challenging economic conditions. 

Accordingly, collective efforts would be put in place to ensure adequacy of essential food items in the period ahead, alongside the arrangements that are being made under the Indian Line of Credit, among others. 

 The CBSL, the Sri Lanka Customs, and the Ministry of Trade, along with other agencies, are taking measures to clear the imported goods that are being held at the Customs, thereby minimising costs to traders while releasing stocks to the market as a matter of priority. 

 Measures are already underway to facilitate the exporters, when importing raw material required for their exports, and to utilise their export proceeds to make payments under open account payment/consignment account terms. 

Further, local suppliers, who supply for these exporters, and receive payment in foreign currency, are also allowed to make payments under open account payment/consignment account terms.

 The CBSL requested  the trading community and the general public to act responsibly under these challenging circumstances. 

Sri Lanka is gradually easing the fuel crisis with the receiving of emergency oil  supplies from India  and the situation will be further improved after restarting the Sapugaskanda oil refinery using Russian crude oil purchased by paying $US72.6 million.    

The government has paid  US$ 72.6 million to buy a 90,000-tonne shipment of Russian oil docked at Colombo’s port for weeks, , as the island nation works to restart its only refinery and address a crippling energy crisis,Energy Ministry said. . 

Sri Lanka has struggled to pay for fuel, food and medicine imports due to a severe shortage of foreign currency. An unprecedented financial crisis has also forced the country to default on some external debt.

Like the rest of Asia, Sri Lanka wants to shift to long-term crude tenders to hedge against high crude spot prices, but dwindling foreign exchange reserves have hampered its ambitions, the power minister said on Saturday.

“I have reached out to multiple countries, including Russia, for support to import crude and other petroleum products,” Power and Energy Minister Kanchana Wijesekera disclosed..

The 90,000-tonne consignment was ordered through Dubai-based Coral Energy, Wijesekera said, adding that the payment would facilitate restarting the country’s sole refinery, which has been closed since March 25.

“The next shipment will also be ordered from the same company. Another consignment will be needed within the next two weeks to keep the refinery running continuously,” Wijesekera said.

Queues of two-wheelers and cars outside fuel stations, sometimes miles long, have become a familiar sight for Sri Lankans this year, with high global oil prices exacerbating their misery.

Wijesekera estimates that Sri Lanka will need $US568 million to pay for a dozen fuel shipments needed in June.

The country is struggling to pay $US31 million for a furnace oil shipment docked at Colombo’s port. State-run Ceylon Petroleum Corporation (CPC) needs $US735 million to clear letters of credit for previous oil purchases.Total foreign reserves were $US1.82 billion at the end of April.

Protests have rocked Sri Lanka in recent days, with demonstrators demanding the resignation of President Gotabaya Rajapaksa over the financial crisis.

Minister of Power and Energy Kanchana Wijesekara says 1,000 metric tonnes of diesel are expected to be produced daily from the Sapugaskanda Oil Refinery once it recommences operations.

Meanwhile, a Siberian shipment that arrived in Colombo began unloading the product yesterday.With speculations rife that the shipment was from Russia due to the product being Siberian oil, Power and Energy Minister dismissed the claims stressing that the supplier is a Dubai-based company.

The procurement of the Siberian crude oil shipment was arranged before he took office, the minister added.The order for this crude oil shipment was placed after opening a non-resident rupee account (NRRA), he explained.

The minister said there is a tri-party agreement between the supplier, the bank and the Ceylon Petroleum Corporation (CPC), according to which the money is deposited in rupee terms.

 He added tha the Central Bank governor has given undertaking to convert the rupee amount to dollars for the payment after a 30-day period or a 60-day period as agreed with the supplier.

The next shipment of crude oil will also be procured under the same basis “because we need another crude oil consignment in the next couple of weeks to keep the Sapugaskanda oil refinery going,” the minister said further.

However, the government wants to enter into long-term contracts and accordingly a tender procedure has commenced already, the minister said, pointing out that this will be a less burden on the Ceylon Petroleum Corporation and the Treasury if the government can enter into a similar agreement with the companies that are willing to provide crude oil with the financial restrictions that are in place.

Speaking further, he confirmed that Sri Lanka has sought assistance from Russia. The minister has made an official request from the Russian ambassador to Sri Lanka during a recent meeting. 

Giving an update on the fuel stocks in Sri Lanka, the minister said Sri Lanka has necessary fuel stocks to last the next two weeks. In a tweet posted earlier today, he said 17,077 MT of diesel, 1,072 MT of super diesel, 37,391 MT of 92 Octane Petrol, 6,142 MT of 95 Octane Petrol, 2,437 MT of JET A-1 aviation fuel are available in the country as of today.

Sri Lanka’s state-owned insurance firm Sri Lanka’s state-owned National Insurance Trust Fund Board’s may incur losses in excess of Rs 1 billion due to the violent clashes between anti- and pro-government protesters in the country earlier this month, New York-based Fitch ratings agency  said.

On May 9, violence erupted in Sri Lanka after supporters of former Prime Minister Mahinda Rajapaksa attacked peaceful anti-government protesters demanding his ouster over the country’s worst economic crisis that led to acute shortages of staple food, fuel and power.

The clashes killed at least 10 people, injured over 200 others, and the properties of 78 government parliamentarians faced arson.

State-owned National Insurance Trust Fund Board (NITFB), which provides strike, riot, civil commotion and terrorism cover (SRCCT) to the island nation will bear the brunt of the losses due to the violent clashes, while primary insurers would experience little impact, Fitch said in a statement on Friday,.

It has been observed that gross losses from the riots are likely to exceed Rs1 billion.,However, NITFB’s losses will be limited to Rs1 billion, as the insurer can recover the additional losses under its excess loss reinsurance cover of up to a maximum of Rs10 billion.

Primary insurers have net retention of Rs  2.5 million for motor claims under the SRCCT cover with aggregate losses of over Rs 10 million rupees passed onto the NITFB.

NITFB’s net loss will be limited to this amount due to the protection provided by its excess loss reinsurance coverand it has sufficient liquid assets to meet its claim obligations, it said.

Non-motor claims are fully passed on to NITFB, subject to any excess borne by the policyholder, it added.

NITFB’s reinsurance cover for SRCCT, which is placed with international reinsurers, is effective from February 2022 to July 2023.

During the violence, irate mobs destroyed several tents and other structures erected at Galle Face and also attacked some of the demonstrators.

The violence saw arson attacks on the homes of several politicians, including the ancestral home of the Rajapaksas in Hambantota.

Sri Lanka has been witnessing large-scale protests against the government’s handling of the debt-ridden economy — the worst-ever economic crisis in the country’s history.

The country of 22 million is grappling with unprecedented economic turmoil since its independence from Britain in 1948.

The crisis is caused in part by a lack of foreign currency, which has meant that the country cannot afford to pay for imports of staple foods and fuel, leading to acute shortages and very high prices.

Industry giant Bank of Ceylon has managed to improve its income in the first quarter whilst profitability suffered due to heavy provisioning influenced by external factors, BoC sources said.  

Total net non-fund-based income of the Bank amounted to Rs. 36.6 billion and this includes Rs. 34.4 billion of exchange gain resulted from revaluation of foreign currency denominated assets and liabilities and transactional foreign currency gains due to the 49% rupee depreciation that took place during 1Q-2022.

Net fee and commission income of Rs. 3.9 billion was derived through the retail transaction level banking services and trade finance including card transactions and remittances. 

Mark to market loss of Rs. 1.9 billion was resulted from the investment in unit trusts and equity shares due to market price fluctuations.

Further, the BOC increased the Expected Loss Rate to 12% applicable for investments in foreign currency denominated sovereign instruments and foreign currency denominated loans and advances to sovereign in order to capture the impact of country rating downgrade.

Due to increase in exchange rate the Bank had to make additional provision of Rs. 19.4 billion for the foreign currency denominated loans and advances and Rs. 8 billion for the increase in credit risk and changes in ECL factors. 

Accordingly, the Bank made impairment provision of Rs. 33.9 billion for 1Q-2022 bringing the gross loan to impairment provision reserve ratio to 8%. Impaired loan ratio (Stage 3) stood at 5.5% against the 5.1% reported by end 2021.

In terms of impairment for investments in foreign currency denominated sovereign instruments, the Bank made Rs. 12.6 billion due to downgrade of country rating adjusting ECL (Expected Credit Loss) to 12% as mentioned afore and Rs. 8.6 billion due to increase in exchange rate aggregating the total impairment provision made for investment during the period to Rs. 21.2 billion.

Nevertheless, in calculating the impairment charge, the BOC said it always follows a prudential approach; given the high degree of uncertainty and extraordinary circumstances in the short-term economic conditions mainly caused by the continuous disruptions to businesses.

BOC’s operating expenses of Rs. 10.2 billion consists of personnel costs, assets maintenance, deposit insurance and other overhead expenses. The increment of 5% by Rs. 0.4 billion reported in operating expenses in line with the increase in personnel expenses. Other expenses settled at Rs. 2.6 billion for the period with a 12% dip, backed by the Bank’s effective cost management practices.

VAT on financial services which is charged based on the value addition made by the financial services has a direct relationship to the PBT showed 14% decline to Rs. 2.3 billion in line with the decrease in PBT. Income tax expense for the period amounted to Rs. 3.4 billion.

Return on Assets (ROA) ratio of the Bank stood at 0.9% while reporting a 10.6% Return on Equity ratio. Both these ratios showed a decline compared to previous year due to deterioration in the bottom line.