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I became the Litro chairman for an hour and solved the country’s gas problem completely – Renuka (VIDEO)

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Renuka Perera, the new Chairman of Milco, the Managing Secretary of the SLPP, says that he was able to solve the gas problem in the country within an hour of assuming the post of Chairman of Litro.

Q. Now you have been in several government agencies. How long can you stay here?

“Let’s do the right thing as long as we can. You are asking about the appointment of Litro, right? As I recall, His Excellency the President had inquired on the 3rd of January at a time when there was a major crisis over gas in the country, and. He asked if it is not possible to take over this institution. While that was going on, the President had planned to oversee the Litro Company. However, after he supervised, he spoke to me in a very friendly manner and told me that this company only has to fill the cylinders with gas coming from the ship and send it to the market. He said, I can do more than that, so he suggested Milco would be a good fit. The plan is to increase milk production in our country. That is how this change took place. But I am happy that the media reports that I am the ‘chairman of an hour’ – but with my appointment, during that hour the gas problem in the country has completely disappeared ”

Renuka Perera was speaking to the media after assuming duties as the Chairman of Milco yesterday (21).

Pohottu Ministers and MPS request the president to offer Vice-Chancellor posts to their friends!

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It is reported that several parliamentarians of the SLPP and several state ministers have sent letters to President Gotabhaya Rajapaksa requesting that the post of Vice-Chancellor of the Wayamba University be given to ‘a friend’ of them.

Following is the letter sent to the President by Minister of State for Livestock D.B. Herath requesting that Prof. H.M.A. Herath be given the post as he is well known.

At first glance, the letter appears to have included the professor’s name and the post of Vice-Chancellor in the same general letter template as the traditional letters that MPs give to their voters to get minor jobs in the SLTB, Railway Department.

In addition, MPs Samanpriya Herath, D.Y.G. Ratnasekera, Nalaka Kottegoda and Minister of State Sanath Nishantha Perera, as well as the convener of the Sri Lanka People’s Doctors’ Association have written to the President in this regard. This was stated by the Member of Parliament for the Janatha Vimukthi Peramuna – Vijitha Herath in Parliament.

Do not forget that there was a dark age in our country when art was banned – Mahinda (VIDEO)

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Prime Minister Mahinda Rajapaksa says that it should not be forgotten that there was a dark era in this country where art was banned by restricting the views of artists.

“Artists make great efforts to bring the social reality to the masses creatively. We know that in the past, these people faced many difficulties due to the Covid epidemic. We know that several artists in our country lost their lives due to the Covid. We even lost the opportunity to pay our last respects to certain artists as we had to submit to various restrictions. We should remember them with respect.

Every artist is an asset to the country. Their ideology is seen in the whole society. Therefore, artists should have the right to enjoy democratic freedom in the country. Do not forget that our country had a dark past when this right was taken away from artists. Although such a situation does not exist today, we cannot forget it completely and move on to the future.”

Prime Minister Mahinda Rajapaksa said this addressing a function held at Temple Trees yesterday (21) to present insurance policies to artists.

We have to cut off electricity for an hour and a half a day. Everyone must make sacrifices – Gammanpila (VIDEO)

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Udaya Gammanpila, Minister of Energy has stated that a power cut of one and a half hours per day should be started immediately until the next rainy season.

“Until the rains start in April, we will have to generate electricity from fuel. As we now try to provide electricity 24 hours a day, I understand that if we do not take a big dollar loan from somewhere by the end of March – if we take a loan, we will have to pay it back with interest – we will have to go for a 4 hour power cut by the end of March. Wouldn’t it be better if we went for an hour and a half right now until the next rain came?”

Minister Udaya Gammanpila stated this addressing a function held in Hanwella yesterday (21).

South Korea opens more employment avenues for Sri Lankans

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The South Korean Government will support to promote employment generation, vocational training and investment opportunities, said Park Byeong-Seug, Speaker of the National Assembly of South Korea. 

He made these remarks when he met President Gotabaya Rajapaksa at the Presidential Secretariat on Thursday (20).Park Byeong-Seug is the Speaker of the 21st National Assembly of the Republic of Korea. 

There is ample scope for investment opportunities in Sri Lanka due to its strategic location in the region, the President said and requested Park Geung-seog to encourage leading Korean companies to explore investment opportunities. 

Nearly 22,000 Sri Lankans are employed in South Korea and they are happily contributing to the workforce and they have remitted  around US$ 520 million to Sri Lanka from Korea. 

The Korean government and the Korean Embassy highly value the significant role of Sri Lankan migrant workers and their precious contribution. The migrant workers bridge both countries in many ways, as they continue to contribute to the economic development of Korea and Sri Lanka. 

Geung-seog told the President that steps would be taken to fulfill the request made to increase the quota provided for employment for Sri Lankans in South Korea. 

The South Korean Speaker also agreed to provide assistance to enhance vocational training opportunities in Sri Lanka and further stated that he would be willing to provide assistance to meet the present needs of the country. 

The Korean Ambassador to Sri Lanka Woonjin Jeong assured the Foreign Minister that the facilities required for the Sri Lankan youth who are eligible for employment in Korea to travel to Korea will be provided shortly. 

He was speaking at a discussion on the delays faced by young people who are eligible for jobs in Korea, chaired by the Foreign Minister Dinesh Gunawardena at the Foreign Ministry recently

 The Korean Ambassador to Sri Lanka explained the position of the Korean Government and stated that it has been planned to provide employment opportunities in Korea to all those who are eligible for employment in Korea. 

He said there is a delay in providing those opportunities due to the COVID pandemic; however assured that he is focused on sending them to Korea at the earliest available opportunity.  

He also stated that the Korean government is planning to assist in the development of the agricultural sector in Sri Lanka.The discussions also focused on several matters including increase of employment opportunities for Sri Lankan youth in Korea and enhancing economic cooperation between the two countries.

Special GST sparks wide spread protests over tax collection unit

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Sri Lanka government is set to introduce the Special Goods and Services Tax (SGST) setting up a separate tax revenue collection unit at the treasury forcing trade unions of the Departments of Inland Revenue and Excise to stage protest campaigns. 

Trade union leaders said that this move will affect the whole tax revenue collection system creating confusion among tax payers encouraging them to default. 

The new bill titled ‘Special Goods and Services Tax’ was published by gazette dated 07 January 2022.  The Special Goods and Services Tax (SGST) was originally proposed in Budget speech 2021 but was not implemented. 

It has once again been presented in Budget 2022.  The SGST aims to consolidate taxes on manufacturing and importing cigarettes, liquor, vehicles and assembly parts, while also consolidating taxes on telecommunication and betting and gaming. 

The rationale for this new tax as per the bill is .to promote self-compliance in the payment of taxes in order to ensure greater efficiency in relation to the collection and administration on such taxes, officials said. 

Another aim is to avoid the complexities associated with the application and administration of a multiple tax regime on specified goods and services, Finance Ministry sources said. The SGST Bill is silent on the treatment of the existing VAT on these goods and services. 

However, according to the Value Added Tax (Amendment) Bill also gazetted on 07 January 2022, liquor, cigarettes and motor vehicles will be exempted from VAT while telecommunications and betting and gaming services will still be subject to VAT. 

While the gazetted Bill sets out some of the features of the proposed SGST there are many important areas not covered in the Bill.  These are expected to be gazetted as and when required by the Minister in charge. 

Tax revenue which was 13% of GDP in 2010, declined to 8% in 2020.  Ad hoc policy changes and weak administration contributed to the decline in tax revenue collection. 

According to the budget speech the SGST is estimated to bring in an additional Rs. 50 billion in revenue in 2022.  Revenue from taxes proposed to be consolidated under the SGST has significantly declined over the past 3 years. 

Given the already difficult macroeconomic environment, along with ad hoc tax policy changes raising the additional revenue estimated at Rs. 50 billion seems a difficult task.

According to the bill, SGST  will now be collected through a new unit set up under the General Treasury where a Designated Officer (DO) will be in charge of the administration, collection and accountability of the tax. 

The existing revenue collection agencies, such as the Inland Revenue Department (IRD) or the Excise Department will not be primarily responsible for the collection of this tax. 

By removing the  IRD and Excise Department, a parallel bureaucracy will be created, at a time when public spending needs to be carefully managed. 

The General Treasury also has no previous experience and expertise in direct revenue collection. Weak administration is one of the key reasons for the low tax collection and success of this tax would depend on the strength of its administration. 

In addition to the above mentioned concerns, as per the Bill the minister in charge of the SGST has been vested with the power to set the rates, the base and grant exemptions. Accordingly, Parliamentary oversight over fiscal matters is weakened under this proposed Bill.

Sri Lanka expects tourism industry recovery to solve BOP troubles

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Sri Lanka’s recovering tourism sector will help end the balance of payments troubles, Central Bank Governor Nivard Cabraal said, echoing statements made by ministers.

“When the pandemic is in the world for around two years there will be a pressure for the country. With the pandemic, the tourism sector is also under pressure,” Governor Cabraal said.

However tourism industry is heading for booming recovery with record number of tourist arrivals exceeding 31600 to Sri Lanka  posted in the first 11 days of 2022, Tourism Ministry said .

He said, in 2021, even though the foreign reserves had five billion US dollars, Sri Lanka was able to pay six billion US dollars in debt, and save three billion US dollars as well.

Cabraal said, with the tourism sector under pressure the country is not getting an income of nine billion US dollars.

“We are doing all this while we are lacking that income at the moment. What I see is not having patience,” he said.

“In another two-three months, the tourism sector will develop further. When that happens, the pressure we have will reduce.”

Economic analysts using classical principles however have warned that tourism fall is not the reason for currency troubles but liquidity injections.

Tourism receipts are owned by the people who earn the money and the government does not own it.Tourist arrivals to Sri Lanka have exceeded 31,600 in the first 11 days of 2022, despite the challenges emanating from the global COVID pandemic and reinforcing the industry’s optimism. From 1 to 11 January, Sri Lanka received a record 31, 688 tourists, a significant rebound from 2021. 

Sri Lanka Tourism Development Authority (SLTDA) said during the first 11 days the highest number of tourist arrivals was from the Russian Federation – 5,726.

In addition, tourists have also arrived from India – 5,566, Ukraine – 3,028, UK – 2,370, Germany – 2,046, Maldives – 1,269, France – 1,241, Australia – 1,093, Poland – 771 and US – 662.

However, future trend of tourism remains uncertain amidst the evolving nature of the pandemic and other correlated variables such as vaccination rates and efforts in curtailing the pandemic.

“It is great to see the tourism is beginning to rebound amidst concerns on highly infectious COVID variant Omicron. The collective effort of all citizens contributed to the successful recovery of the industry,” Sri Lanka Tourism Chairperson Kimarli Fernando told journalists yesterday. 

Speaking at a discussion titled ‘Tourism Resumes’ organised by Presidential Media Centre (PMC) she said Sri Lanka needs to ‘ride with the tide’ to sustain the industry despite the challenges emanating from the COVID pandemic.

Fernando said they were also concerned about the continuity of the current arrival trends, given the global spike in COVID cases.

“We saw several cancellations particularly from European countries and India following resurgence of COVID Omicron variant. Certain countries have imposed restrictions already, these are inevitable in a pandemic situation,” Fernando said.

With partial reopening in January 2021 which saw 1,682 tourists, arrivals have been on the rise in tandem with the vaccination rollout, improved health and safety precautions, and easing of travel restrictions.

SLTDA Director General Dhammika Wijayasingha said that the majority of incoming tourists stay for 14 or more days on an average, from the previous 7 to 10 days.

“Post-pandemic we saw a lot of tourists coming to Sri Lanka for wellness tourism and vacation with family. These tourists stay longer than the usual, which extends to minimum 14 or more days. It’s a great trend that we hope would continue from long-haul travellers,” she added. 

Given the challenges they encounter to reach final destination amidst health protocols, Wijayasingha pointed out that the travellers under new normal will want to explore the long haul countries to the fullest.

Since mid-2021, Sri Lanka Tourism Promotion Bureau (SLTPB) rolled out promotions in several countries, including Russia, France, Germany and the UK. The inflow of tourists has been boosted by increased connectivity as well by international airlines.

National carrier SriLankan Airlines also launched direct flights to Russia and France after a lapse of six years.

In November, four international airlines resumed operations to Colombo, these include France flag carrier – Air France, Swiss leisure airline – Edelweiss, Russia’s flag carrier – Aeroflot and Tata-SIA joint venture – Vistara Airlines.

In addition, Russia’s Azur Airlines and Kazakhstan’s Air Astana commenced direct flights to Sri Lanka, while popular European airlines Poland’s flag carrier Lot Polish Airlines and Italy’s Neos Airlines commenced operations from December 2021.

SRI LANKA: Participatory Constitution-making – The essentials

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An Article by the Asian Human Rights Commission

By Basil Fernando

Today, there is a consensus that Sri Lanka has entered into a period of crisis that is worse than it has ever faced in recent history. It is also agreed among most of the people who are highly knowledgeable in the field of economics and financing that this crisis will last for a long time even if some genuine effort is made to rescue the country even at this stage. However, if such a serious and genuine effort at taking the necessary decisions to address this problem is not taken, there are also predictions being made by persons who held very high positions in the Central Bank and also in the field of economics that Sri Lanka may reach a point of no return. Thus, looking for solutions of this economic crisis is a central concern in Sri Lanka. However, seeking such solutions itself brings up many more complicated problems. As it has been analyzed by many, the economic crisis was a product of an even deeper political crisis. Had it not been the adoption of the 1978 Constitution, quite certainly, Sri Lanka would not have reached the bleak point that it has reached now. The 1978 Constitution brought about a gradual breakdown of the functioning of all the major public institutions in Sri Lanka. The ludicrous notion that one person could make all the decisions that are needed for every area of the country’s life which is the most deeply embedded notion in the 1978 Constitution has necessarily brought about a situation where the decision making capacity of all those public institutions has been seriously suppressed. A senior Indian journalist in a televised interview compared the situation in Sri Lanka to what happened in China when Chairman Mao Zedong ordered all the sparrows to be killed in order to get over the problem of the damage done by these birds to the agricultural products. The result was the emergence of other pests through the loss of the natural avian by which the control of insects was done through the natural balance. The problem was so grave that China had to ask for imports of sparrows from Russia which was by then China’s close ally. What that demonstrated was the danger of leaving decision making to the hands of a single person.

In Sri Lanka also, the decision making processes are usually done through elaborate mechanisms within public institutions which are daily engaged in dealing with various problems. For example, the management of matters relating to money is done through highly sophisticated rational processes managed by persons who are highly trained in these fields and also have acquired experience through the engagement in these issues over a long period of time. What the 1978 Constitution did was to displace the effective management of all these processes. Relevant public institutions remained but their actual power had been taken away from them and was exercised by a single individual who was given the title “Executive President”. The title “Executive President” was in fact a misnomer. Going by the substance of the powers and the lack of control over that power, the better term would have been “The Dictator”.

However, the issue now is how to get rid of this Constitution which violates all the norms of a rational Constitution as a part of the strategy of fighting back the grave economic crisis the country is facing. Thus, doing away with the 1978 model of Constitution is not a mere legal exercise but a part of an overall strategy in order to deal with seemingly insoluble economic problems faced by the country.

In that backdrop, there is now a discussion on the displacement of the 1978 Constitution, on what is to replace that Constitution and how to bring about this change. There are some basic ideas that have been discussed on this issue and some of the prominent ideas are as follows:

That the entirety of the 1978 Constitutional model should be abolished and a Constitution that is based on principles that are totally opposed to that of the 1978 one should replace it. The replacing Constitution should be able to provide for the operation of the basic notions of democracy, the rule of law and the supremacy of the law. Above all, nobody should be placed above the law. It means that the powers of the Legislature and the Executive which have been diminished should be brought back to life and it should be held together by the principle that all the three branches have equal power within the State. By operating these principles, the public institutions should be brought back to life with the necessary independence so that they could effectively manage the country’s economic establishment as well as all other areas of national life. By the combination of granting the necessary independence combined with checks and balances, these institutions would manage the country irrespective of whatever regime changes that may take place from time to time. That briefly is a vision for the basic structure of a Constitution that could provide a kind of State structure that could pull the country out of this economic mess. The next question would be how to bring about this Constitution. The 1972 and 1978 Constitutions were also made to suit the needs of a particular regime in power. Both these regimes had over two thirds majority in the Parliament and they had no difficulty in getting anything past through the Parliament without considering the possible bad consequences of the laws that they were passing. 

A new Constitution should not be made in this manner. It should be made with the full participation of the people and this is not an exceptional situation anymore. All the successful Constitutions of recent times have been made through Constitutional conventions, and not by a Government in power. One of the reasons for the strength of the Indian Constitution was that it was created through a long process of nation wide participation. The result of such participation was that all the vital questions that affect the country were addressed within the framework of Constitutional law. Due to this, a foundation was laid for the resolving of those problems. The South African Constitution is another example of this type and also the manner in which the Nepalese Constitution was made within the last few decades. Just now, another inspiring example comes from Chile where in the midst of a national crisis, people demanded for not just the change of a regime but the change of the Constitution. The people also ordered that the Constitution must be made by a Constitutional convention where there will be a representation of all sectors of society and the entire nation will participate in the process of the debate.

Those who agree with this perspective for Sri Lanka also find that there is one difficulty to achieve a Constitution through a Constitutional convention. That is because of the provisions in the 1978 Constitution which have laid down that like any other Act of Parliament, the Constitution can also be made through a two thirds majority of the Members of the Parliament and if necessary, through a referendum. If a regime in power has a two thirds majority, then the result would be that anything could be made into a Constitution, irrespective of the harm that such a Constitution could create for the nation and its people. Suggestions that are being discussed is that this problem could be overcome through a referendum by which particular limits imposed on the making of the Constitution should be changed and an internationally accepted procedure for the making of a Constitution should be adopted so as to enable to bring about a Constitution through a participatory process.

Sail Lanka implements Marine Training Project in SL’s North

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Sail Lanka Yachting Group (SLYG) and ‘Building a Future Foundation (BAFF)’ are to replicate in the north of Sri Lanka, their successful boat-building and marine training project for youth.

Following the recent inauguration of the project in Velanai in the Jaffna district, Pierre Pringiers, Chairman of SLYG said, “Our idea is to replicate in the north of Sri Lanka, the successful ‘Building a Future Foundation’ project which we developed in south Sri Lanka to assist the local economies, following the devastating tsunami of 2004.

BAFF has already created hundreds of employment opportunities for young people in the yachting industry in the south of the island, and we hope to replicate this in Jaffna. Twelve youth from the north have already followed a theoretical and practical training course of 12-months duration at the BAFF training center in southern Sri Lanka.”

The company said the project was inaugurated with Douglas Devananda, Minister of Fisheries in the presence of several distinguished guests.

“We believe Jaffna has the potential to be our new hub for marine and experiential tourism. It will become our third centre of operations after Mirissa and the Port City Colombo Marina, and will allow us to develop local and cross-border tourism. The 540 square metre new SLYG training centre and boatyard is situated on a 4.5 acre land in Velanai,” Mr. Pringiers said.

The Jaffna training centre will conduct courses in the basic skills of mechanical engineering, electricity, welding, refrigeration and air-conditioning, followed by hands-on experience in dedicated boat building, and outboard and inboard engine repair and maintenance. 

The courses which will be conducted over one-year, will comprise a mixture of theory and practical training to enable the graduates to work in the developing boat manufacturing industry in Sri Lanka.

 The practical training will be in the manufacture of yachts such as the Ocean Diamond – an 80-foot floating boutique hotel, and the Ceycat – a 55-foot sailing catamaran for water-based tourism both in Sri Lanka and overseas.

Debt management reforms to tackle rising domestic borrowings

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Sri Lanka’s domestic debt is rising at an alarming rate forcing the government to introduce management reforms to ensure that the government’s financing needs are met at the lowest possible cost, the latest fiscal report of the Finance Ministry outlined.

 Currently, the Public Debt Department of the Central Bank is handling debt servicing of around 656 foreign loans and a domestic debt portfolio of Rs.2. 13 trillion.

 An effective mechanism is in place to monitor and debt service payment obligations on time. The annual and monthly debt forecasts are monitored by the Back Office staff and payment obligations are checked and approved by an internal committee, Finance Ministry sources said.  

However proposed new reforms are consistent with a prudent degree of risk, and developing and strengthening the government securities market, while enhancing efficiency and maintaining stability, the report added. 

 Reforms that are planned to be undertaken in the near future in the area of debt management are, a debt consolidation programme, the formulation of debt management guidelines, the implementation of a risk management framework and the introduction of a domestic debt data module.

The domestic debt management strategy is decided by the Domestic Debt Management Committee comprising senior officials of both the Ministry of Finance and the Central Bank. 

The Committee meets on a monthly basis and a market based strategy is adopted by considering market conditions, market appetite, monetary developments, inflation, government cash flow needs, the maturity profile and risks in the debt portfolio etc.

Information relating to domestic debt is maintained in an in-house developed computer based debt recording system. Information on the debt portfolio is disseminated to the general public and market participants weekly, monthly and annually.

Treasury Bonds, Treasury Bills, Sri Lanka Development Bonds (SLDBS) and Provisional Advance were the main sources of domestic borrowings of the Government. 

According to latest statistics of the Finance Ministry, around 55 percent of the total domestic borrowings were raised by way of Treasury Bonds while 29 percent were raised by way of Treasury Bills and another 16 percent was raised by way of SLDBS and Provisional Advance of Central Bank in 2021.

The total borrowing limit approved by Parliament for the year 2021 amounted to Rs. 2.99 trillion, within which the utilization of Government borrowings (Book Value) for the period from 01st January to 31st August 2021 was recorded as Rs. 1.75 trillion.

Total borrowing utilization of domestic and foreign borrowings amounted to Rs. 1.47 trillion and Rs 282.3 billion, respectively as at 31st August 2021 to finance cash flow operations and development projects during the period.

Domestic borrowing accounts for almost 83.9 percent of the total borrowings during the first eight months of 2021.

The debt stock which was elevated due to the rise of the fiscal deficit however, saw a change in its dynamics in line with the announced Foreign Resource Mobilisation 2020-2025 strategy, whereby with the rationalisation of the foreign debt in the share of foreign debt has reduced to almost 40 percent from the highs of nearly 50 percent in 2019, Fiscal report revealed. 

It is expected that such a path could be maintained, while also sourcing the required financing from multilateral and bilateral agencies which are provided at concessionary terms. At the same time, domestic financing will be sourced in particular to finance the public investment programme.