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TRACE City emphasises need for urgent solutions to current crisis

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TRACE Expert City experts in a statement said it is extremely concerned about the current economic crisis, the lethargic response of the executive and the legislature, and the continued failure to listen to the demands of a populace reeling from the effects of ill-advised policies.

“Steering Sri Lanka out of the current crisis requires courage, ethics, pragmatic decision making, and the ability to make unpopular, but much-needed reforms with complete transparency they pointed out.

It is regretful that the nation’s public representatives have failed to understand this fundamental truth so far,” said TRACE Expert City, which contributes to the GDP and employment of highly skilled professionals in Sri Lanka while being a catalyst for entrepreneurship, innovation, growth, and sustainability.

It said the global technology sector is undergoing a period of rapid growth and Sri Lanka has the potential to be a part of it too. However, doing so requires a stable operating environment with a clear path towards sustainable growth underpinned by well-planned reforms, thus allowing our fellow Sri Lankans to harness their talents to the maximum.

“The only way for Sri Lanka to vault itself into the league of the rich economies in the world, is to pursue policies which align the country’s growth to that of the global economy. As a nation with a rich history of innovation, trade, and openness, it is vital that we leverage upon emerging trends in the global economy instead of insulating ourselves from it,” TRACE City said.

In that context TRACE is urging the people’s representatives and policymakers to:

1.Immediately chart a course to stabilise the volatile domestic economy, by fast tracking debt restructuring and negotiating bridge financing. This will provide the economy with some breathing space and enable the continuous supply of vital essentials such as food, fuel, and medicines

2.Embark on a plan of accelerated reforms, particularly in the energy, transportation, agriculture, and education sectors

3.Enact a long-term policy framework with buy-in from representatives across the entire political spectrum, so that Sri Lanka will be well positioned to benefit from the fourth industrial revolution

4.Encourage and embrace collaboration with the private sector, and provide a level playing field for all, free of corruption and political interference

“We at TRACE believe that it is our generation’s duty to not leave our children with the same ‘developing country’ we inherited.

Instead, let’s bequeath them with a developed, prosperous nation they would be proud to call home. TRACE will readily support any national initiatives which share this vision,” said the statement issued by Trace Board of Directors, members, and management.

Sri Lanka Tea crop drops to 13-year low of 63 million kg

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Revenue loss from export crops like tea played a big part in Sri Lanka’s rapid economic decline. For descendants of Tamil-bonded labourers, life is more difficult now.

The estimated loss from the drop in tea production alone isUS$ 425 million. And now, due to chronic shortages and steep prices, fertiliser isn’t even available to those who need it.

The cost of fertiliser in Sri Lanka has gone up from Sri Lankan Rs 1,500 to Rs 16,000, forcing those who work in the tea industry — and farming in general — to reconcile with what feels like an unofficial ban.

Tea is one of Sri Lanka’s top exports, besides garments. With the dollar price going up, income is increasing too.

But plantations can’t concentrate on manufacturing and are being forced to spend extra on expensive fuel and other inputs.

Power cuts and diesel shortages, along with shortages in paper for packaging, have affected the business even if tea itself is bringing in more money.Tea production in March had slumped by 24% to 22 million kg from a year earlier, marking it as the lowest crop since 2009, Asia Siyaka Commodities said.

It also said in 2020 when the country went into complete lockdown in mid-March and production declined to 13.5 million kg.

Quoting Sri Lanka Tea Board preliminary data, Asia Siyaka said first quarter production dropped by 15% to 63 million kg from 74.5 million kg a year ago.

This year’s January – March figure is also the lowest since 2009. In that year production slumped due to fallout from the global financial crisis and the market collapsed, teas remained unsold and farmers stopped plucking their fields and estates were pruned.

Asia Siyaka said this year’s first quarter losses however resulted from dry weather that took its toll on bushes that had not received adequate fertilizer since Q4 2021 and in some cases even before.

All three elevations are down but the sharpest loss has come from Low Growns. Last year’s Q1 quantity was 46.4 million kg for the elevation whereas during January – March 2022 production has slumped 18% to 38 million kg.

High Growns performed relatively better largely due to Regional Plantation Companies pumping in their fertiliser reserves which limited crop loss to 7% from 16 million kg to 14.8 million kg. Mediums declined from 11.9 million kg to 10.1 million kg this year.

Shipping lines up in arms over the rule of dollar payments only

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Shipping lines are up in arms over the sudden decision by the Government requiring settle payments to the Sri Lanka Ports Authority (SLPA) only in dollars with effect from 1 June.

The move was announced last week by new Ports and Shipping Minister Premitha Bandara Tennakoon, following discussions with stakeholders to boost dollar liquidity in the country. 

However this decision has been taken arbitrarily by the new Minister without the Central Bank’s consent and monetary  authority is not in favour of such demands. 

 The central bank was also planning to relax a rule that required tourists to pay hotels in dollars only, CB Governor Dr. Nandalal Weerasinghe said.

Shipping industry sources said “We don’t know how much research has been done  prior to taking this decision. However, the shipping principals are now up in arms with this decision,”.

They said traditionally shippers had the opportunity to settle their freight to  the shipping lines in Sri Lanka through their local agents in Sri Lanka Rupees at the exchange rates prevalent. These funds were in turn repatriated to their principals.

“However, over the last year the banks were unable to support the repatriation of funds to their principals which resulted in most of the shipping principals insisting upon freight settlement only by way of dollars in Sri Lanka which is the current norm,” they said.

It was pointed out that shipping lines are saddled with rupees collected prior to their change of stand which they were using to settle their local disbursements including Port related charges.

With this recent decision the shipping principals are now faced with a new problem.

Shipping agents and their principals said the arbitrary policy decisions would only drive away the existing lines calling Colombo.

They said one hand the freight which was collected in Sri Lanka has suddenly reduced significantly with the devaluation which is a huge burden to them and over that we are stuck with these funds in Sri Lanka.

“The shipping business  has been built over the years and  today is one of the buoyant industries in the country bringing in much revenue into the country which we badly need furthermore supporting the export industry, hence it is not ideal timing to erode this industry especially at a time like this,” sources warned. 

Number of ships calling Colombo port in the first two months of the year has reduced by 7% in comparison to a year ago. However total container handling has risen by 8% to 1.2 million TEUs. Transhipment volume grew by 8% to 0.96 million TEUs and domestic boxes by 9% to 0.21 million TEUs.

More dollars pour into CB’s fund for essential imports 

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More dollars are pouring into the fund set up by the Central bank to collect a few dollars more for the use of the country’s essential imports due to the rapidly dwindling of its foreign reserves.   

Though Sri Lanka foreign exchange reserves fluctuated substantially in recent months, it tended to decrease through the April 2021 – March 2022 period ending at US$ 1,938.7 million US dollars last month.

Foreign reserves at $1.9 billion are about 1 months of imports. Of this about $1.6 billion is from a Chinese swap. Central Bank without reserves can float the currency and suspend convertibility.

The Central Bank has received $ 37,000 in humanitarian donations from overseas following a personal appeal for the same by new Governor Dr. Nandalal Weerasinghe.

As of 27 April, the amounts included $ 20,114.12, 11,729.25 sterling pounds, 1,967 euros and 100 AUD. In the previous week, the amounts stood at $ 15,809.77, 10,657.70 pounds and 467 euros.

The funds had been received to four of the six accounts published to the public by the CBSL. They are Deutsche Bank Trust Company Americans Account No. 04015541; Bank of Ceylon (UK) Ltd., Account No. 88001249; ODDO BHF Bank, Frankfurt Germany Account No. 0000739854 and Reserve Bank of Australia Account No. 81736-4. The other two designated accounts are HSBC London Account No. 39600144; MUFG BANK, Tokyo Account No. 653-0407895.

CBSL Governor Dr. Weerasinghe told a media conference on Friday that donations will be used to source essential medicines.

In his international appeal in mid-last month, the Governor said currently Sri Lanka is facing social, economic and financial distress creating hardships to its people due to the long-lasting impact of the COVID-19 pandemic, global political imbalances and macroeconomic imbalances of the country. 

The authorities are taking measures to address the fiscal crisis situation of the country, including taking steps to actively manage its debt obligations, finding immediate financial assistance from other nations and progressing at the discussions with the International Monetary Fund for a comprehensive program.The positive impacts of such measures will benefit the people only in the medium to long term. Therefore, urgent measures are needed to enhance the foreign reserve position of the country to meet its day-to-day essential imports including food, fuel and medicine.

In this background, the CBSL welcomes the communications made by the Sri Lankans living abroad, expressing their willingness to support the motherland at this crucial juncture by donating much needed foreign exchange to the foreign reserves of Sri Lanka.

The well-wishers may make foreign exchange transfers to the following accounts maintained at respective banks under the beneficial ownership of CBSL, and CBSL assures that such foreign currency donations will be utilised only for the purpose of importation of essentials such as food, fuel and medicine.

Well-wishers are also requested to send an image of the payment confirmation to [email protected] for reconciliation purposes, and any enquiries can be made through the same email address. Upon verification, each payment will be acknowledged by email.

In order to maintain the transparency of collection and utilisation of such foreign currency resources, a Committee consisting three members from CBSL has been appointed.
The Committee will publish the financial statements of the foreign currency funds received from the well-wishers into the said accounts on a quarterly basis via the official website of CBSL, while the receipt and utilisation of funds of these accounts will be subject to periodic independent audit.

Any inquiries can be made through email to [email protected] or by sending a message to WhatsApp on +94 76 831 5782

Australia delegation in Colombo marks 75th Anniversary of relations

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Visiting First Assistant Secretary, North and South Asia Divisions of the Department of Foreign Affairs and Trade of Australia, Gary Cowan, held discussions with the officials of the Ministry of Foreign Affairs headed by the Secretary, Admiral Prof. Jayanath Colombage on Friday, 29 April 2022, at the Ministry of Foreign Affairs.

The meeting, which coincided with the 75th anniversary of the establishment of diplomatic relations between the two nations, covered the whole gamut of bilateral engagements between Colombo and Canberra and the future course of action on pending issues of mutual and strategic interest.

The Australian delegation expressed deep satisfaction over the economic, trade, investment and cultural ties that have existed over the past 75 years, which, in the recent years, are being transformed into a strategic and cooperative partnership.

Foreign Secretary offered the delegation a comprehensive briefing on the current situation in Sri Lanka with emphasis on the economic situation and Colombo’s engagement with her friends to overcome what is termed as an unprecedented economic downturn precipitated by the COVID-19 pandemic and the catastrophe that followed.

Foreign Secretary also briefed the delegation on the ongoing dissension by a section of the Sri Lankan society with various demands. He clarified that the Government and the President are open to any solution in line with the provisions of the Constitution. On a few sporadic incidents and claims of disproportionate reaction by the law enforcement authorities against the protestors, the Foreign Secretary stated that the law of the land will take its own course in dealing with the perpetrators and the investigations are underway.

The visiting envoy, who was appreciative of the briefing, expressed that Sri Lanka, given its reputation to preserve and protect democratic values, deals with the dissenters through democratic means and tools. He assured that the Government of Australia currently is exploring alternatives to assist Sri Lanka in whatever manner possible in this hour of need.

Both delegations acknowledged the significant progress and cooperation in the fields of border risk assessment, vessel monitoring, counter people smuggling and other transnational crimes and resolved to intensify engagements with the authorities concerned towards full implementation of decisions agreed upon.

Both parties took stock of the progress made thus far on the vital initiative of “Maritime Disaster Preparedness Mechanism” and agreed to expedite the process of the initiative. The visiting Assistant Secretary Cowan, the High Commissioner David Holly and his team were updated on the latest developments on the human rights front by the Foreign Secretary.

Sri Lanka and Australia established formal diplomatic relations on 29 April, 1947, well before the independence of Sri Lanka.

The Australian High Commissioner, officials of the High Commission and senior officials of the Foreign Ministry took part in the discussions.

Ministry of Foreign Affairs

Colombo

1 May, 2022

Couple who posted anti-govt views over drug shortage brutally assaulted by SLPP MP’s brother

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A couple who had made a Facebook post criticising the President for not being able to give their child medicine amidst the drug shortage has been brutally assaulted by two people, one of whom is the brother of Ruling Party MP Milan Jayathilaka.

Barging into the couple’s house at about 11 am this (01) morning, the two had assaulted the husband and the wife.

The victims, Asitha Shasheen Hewapathirana and his wife who are residents of Maligawatta, Kirindiwela, are currently receiving treatments at a hospital.

“There are no medicines for my child in pharmacies. In pain, I made a FB post against President Gotabaya Rajapaksa. Someone had commented to it against MP Milan Jayathilaka. Then I commented back. It is in this backdrop had the brother of that MP and another arrived in my home at about 11 and assaulted me and my wife. The two beat me on the ground, so my wife. They beat me and strangled my neck. People nearby hurried there and saved us,” Shaheen said.

Upon media query, MP Jayathilaka commented that the relevant person had insulted his mother on Facebook and that the matter was ‘personal’.

MIAP

JVP-led May Day march and rally in Colombo, Anuradhapura and Matara (VIDEO)

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The Janatha Vimukthi Peramuna (JVP) organised a public rally and a protest in Colombo, Anuradhapura and Matara, in celebration of the May Day today (01).

Themed ‘Let’s oust the oppressive government and build a people’s government,’ the protest and the rally were attended by many political and civil activists.

MIAP

This economic crisis can be solved, Ranil reveals how! (VIDEO)

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The prevailing economic crisis in Sri Lanka can be solved via a programme which should be launched within a period of two years on the basis of international examples and advice, directly raising income taxes and providing relief to the affected constituencies, said Leader of the United National Party (UNP) MP Ranil Wickremesinghe addressing the UNP-led May Day rally held today (01).

The former Prime Minister added that he opposes the 20th Amendment to the Constitution and that the powers of the President must be abolished via the 21st Amendment.

The adaptation of the 21st Amendment to the Constitution, however, would not be a sole solution to the prevailing economic crisis, he emphasised.

MIAP

Why Lanka’s failed dairy experiment is glass half full

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Nirupama Subramanian writes: Crippled by an acute shortage of dollars, Sri Lanka has restricted all its imports, including essential food items. At the time Kurien ventured into Sri Lanka, the country’s annual milk powder import bill was $60 million.

By Nirupama Subramanian

It was sometime in 1997. In Colombo, in the basement banquet hall of a five-star hotel, the “milk man of India” was addressing a press conference to announce a $20 million joint venture between the National Dairy Development Board and Sri Lanka’s state-owned MILCO. It would be called Kiriya — kiri being the Sinhalese word for milk. Varghese Kurien was upbeat about his new project. He had come at the invitation of then President Chandirka Bandaranaike Kumaratunga. He said the aim was to make Sri Lanka self-sufficient in milk. We want to replicate Operation Flood here, he said.

By then, I had been about a year or so in Colombo as the Sri Lanka correspondent of The Indian Express, long enough to realise that fresh milk was an exotic commodity, and milk powder ruled the market — rows of neatly stacked packs of full-cream milk powder on supermarket shelves, and in the refrigerated sections, tubs of creamy yoghurt made with imported milk powder, and a full range of cheese, all flown in from Europe and Down Under. My lasting memory of a first meeting with a Tamil militant leader-turned-mainstream politician in Colombo is of him sitting in the basement of his well-guarded fortress-like home, his back to the wall with a clear view of the bunker’s metal door, munching crackers with cubes of Kraft cheese.

At the press conference, I had made bold to ask Kurien if he was aware of the import lobbies in Sri Lanka and how much of a fightback he expected from them. His reply was something to the effect that he had faced bigger challenges in India, and this was no problem at all.

Many times during a recent trip to Colombo, my mind went back to that brief encounter as I heard about the milk powder scarcity, secretive WhatsApp tipoffs from groceries to loyal customers about fresh arrivals, the jacked-up rates for a 400 gm packet, children having to go without milk, and tea kades offering only black tea.

Crippled by an acute shortage of dollars, Sri Lanka has restricted all its imports, including essential food items. At the time Kurien ventured into Sri Lanka, the country’s annual milk powder import bill was $60 million. In 2021, dairy imports accounted for $317 million of Sri Lanka’s total consumer goods imports of $1.6 bn (the total imports in 2021 were $21 bn, of which non-fuel imports were $16bn).

Kiriya was never able to get off the ground. Union action over wages, hours of work, hirings and firings kept the three MILCO processing plants non-operational or functioning at levels much less than their capacity as to make them unsustainable. Influential ruling party politicians controlled the unions (as an aside, two decades later, it was again trade unions that ensured that the Rajapaksa government cancelled the tripartite agreement with India and Japan for the joint development of the East Container Terminal by paralysing work at Colombo Port for weeks on end).

Indian NDDB officials who had been sent over to run Kiriya were clearly unprepared for the extent of opposition. It was well understood by all that milk powder lobbies were hard at work to ensure there would be no “white revolution” in Sri Lanka. On one particularly bad day, the Indian managers at Kiriya had to hastily leave the premises as workers set up a menacing chant of “India Go Back”.

“All we know is that we are up against very powerful forces. The stakes are very high,” one official told me at the time.

Various other reasons were also forwarded for Kiriya’s failure — Sri Lanka does not have a pastoral tradition, its limited arable land cannot be used for growing fodder and grazing, and Sri Lankans love their coconut milk and have no special affinity to dairy milk, or cuisine that uses milk products. But Sri Lanka’s milk consumption has steadily grown since the 1980s, when the country introduced free market polices that opened the doors to unrestricted imports, and as the demand for milk grew among the country’s urban wealthy.

According to an appraisal of the dairy sector commissioned by Sri Lanka’s Ministry of Livestock Development and Estate Infrastructure and NDDB in 1998, the per capita consumption of milk and milk products in Sri Lanka, which was about 13 kg in 1981, had increased to 36 kg by 1996, low compared to India and Pakistan, but at the time close to the medically recommended 41.6 kg.

The dairy sector itself is tiny. There was some talk of strengthening it in the mid-2000s when the government’s move to raise the price of milk powder to set off the huge import bill met with political opposition. The plan included refurbishing the three MILCO plants that Kiriya had taken over and failed to turn around. But nothing came of it. Imported milk powder continued to fill the gap. Sri Lanka is to this day a great milch cow for the world’s milk multinationals.

It is bitter irony that Colombo has put in orders for milk powder and dairy products under the emergency $1 bn food and commodities credit line extended to it by India. That might be vindication for NDDB. In Sri Lanka, some see the present crisis as an opportunity to learn lessons about self-sufficiency at least in low-hanging sectors, including the dairy sector. It won’t be easy but it is definitely worth a shot.

The IndianExpress

SLPP-devoted Trade Unions hold May Day rally in Nugegoda (PHOTOS)

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The trade unions devoted to the Sri Lanka Podujana Peramuna (SLPP) is currently holding a May Day rally at the Ananda Samarakoon Outdoor Stadium in Nugegoda in support to President Gotabaya Rajapaksa and Mahinda Rajapaksa.

Themed ‘Janawarama Surakimu – Abhiyoga Jayagamu’ (Let’s Protect the Mandate and Win the Challenges), the May Day rally has been jointly organised by the United Trade Union Confederation and the Podujana Pragathisheeli Trade Union Federation.

Dinesh Gunawardena, Gamini Lokuge and other senior government politicians, Labour Minister Vidura Wickramanayake, MPs, representatives of Provincial Councils and Pradeshiya Sabhas as well as many trade union leaders and representatives affiliated to the SLPP are also present at the rally.

MIAP