By: Staff Writer

July 06, Colombo (LNW): The Central Bank of Sri Lanka (CBSL) has taken a major step toward promoting financial inclusion and public empowerment with the launch of a series of strategic initiatives under its Financial Literacy Roadmap. The move is part of its long-term vision to build a “Financially Literate Sri Lanka” by equipping citizens with essential knowledge and tools for making informed financial decisions.

Spearheaded by the Central Bank’s Regional Development Department under the National Financial Inclusion Strategy (NFIS), these new initiatives fall under the roadmap’s Content Development and Harmonisation Pillar. The primary aim is to unify and standardise financial education efforts across the country, replacing disjointed campaigns with a coordinated, impactful national strategy.

A central highlight of the launch is Sri Lanka’s first-ever comprehensive Financial Literacy Curriculum. This well-researched framework has been developed with inputs from Central Bank departments, academic experts, and external consultants. Covering six key areas—Economic and Financial Environment, Personal Finance, MSME Finance, Digital Literacy, Financial Consumer Protection, and Tax Literacy—the curriculum is expected to serve as a cornerstone for future public awareness and financial education programs.

Supported by the United Nations Development Programme (UNDP) and developed in collaboration with the University of Kelaniya, the curriculum aims to deliver accurate, relevant, and practical financial knowledge to Sri Lankans across all regions and demographics.

In a bid to make financial education more engaging and accessible, the Central Bank has also launched two educational video series, backed by the UNDP and the Japan International Cooperation Agency (JICA). These videos tackle real-world financial issues such as rising debt levels, lack of savings, and increasing fraud, using clear messaging to build public awareness and resilience.

To expand the reach and sustainability of its efforts, the Central Bank has rolled out a Certified Trainer in Financial Literacy (CTFL) program in partnership with the Institute of Bankers of Sri Lanka (IBSL). Targeting banks and public institutions, the program aims to produce 100 certified trainers annually, equipped with standardised teaching tools to deliver consistent financial education nationwide.

Further reinforcing its academic approach, the Central Bank also signed a Memorandum of Understanding (MoU) with the University of Kelaniya to promote research and innovation in financial literacy.

The Central Bank has invited media professionals, educators, and community leaders to join in disseminating these resources, marking the beginning of a broad-based movement toward greater financial empowerment and inclusion in Sri Lanka.

By: Staff Writer

July 06, Colombo (LNW): Sri Lanka’s long-standing ambition to link its power grid with India has entered a decisive stage, as the much-deliberated electricity interconnection project gains momentum. The move is expected to bolster energy security, stabilize the grid, and facilitate the integration of renewable energy—particularly wind power—into the national electricity system. With growing demand and a shift towards clean energy, this project marks a milestone in regional power cooperation.

The State-run Ceylon Electricity Board (CEB) is preparing to make critical policy decisions following the submission of a joint technical feasibility report, according to CEB Chairman and Energy Ministry Secretary Prof. Udayanga Hemapala. He confirmed that technical teams from both countries have completed comprehensive site visits and evaluations. The findings of the report, once reviewed by the Government, will help determine the implementation roadmap.

The India-Sri Lanka grid interconnection has been under consideration for more than two decades. The initiative was first explored in 2002 through a pre-feasibility study conducted by Nexant, with support from the United States Agency for International Development (USAID). In 2006, India’s Power Grid Corporation conducted an updated review, followed by the signing of a Memorandum of Understanding (MoU) in 2010 between the two governments to initiate a full-scale feasibility study.

Over the years, extensive joint efforts between the CEB and India’s Power Grid Corporation have addressed the technical, financial, and regulatory aspects of the project. Route options ranging from overhead lines to undersea cables were examined. The Asian Development Bank (ADB) also supported the project by funding the economic and financial feasibility analysis.

The current plan, as recommended by the fourth Joint Working Group meeting, is to adopt a High Voltage Direct Current (HVDC) system with a ±320 kV, 2×500 MW link using Voltage Source Converter (VSC) technology. The system will run from Madurai in India to Mannar in Sri Lanka. The HVDC option was chosen for its ability to allow controlled power transfers, system stability, and reactive power support—important features for integrating intermittent renewable sources like wind and solar.

In a significant revision made in 2023, the Sri Lankan termination point was shifted from New Habarana to Mannar, enabling better utilization of the island’s wind energy potential. This adjustment also required re-evaluation of the undersea cable design due to the complexity of marine infrastructure.

The project will be implemented in two phases. Phase one, with a 500 MW capacity, is estimated at $1.225 billion and includes undersea cables capable of scaling up to 1,000 MW. Phase two will add another 500 MW based on future power exchange needs, aligning with Sri Lanka’s Long-Term Generation Expansion Plan (2025–2044).

By: Staff Writer

July 06, Colombo (LNW): Sri Lanka’s efforts to avoid being caught in the crosshairs of U.S. trade tensions remain uncertain after former U.S. President Donald Trump revealed he had signed 12 tariff-related letters, with their contents set to be dispatched Monday. This announcement came after initial expectations that these letters would be issued on Friday, leaving countries like Sri Lanka anxiously awaiting their fate.

“I signed some letters and they’ll go out on Monday, probably twelve,” Trump told reporters on Saturday, adding that they involved “different amounts of money, different amounts of tariffs.” The ambiguity in his statement has only deepened concerns among smaller exporting nations.

Sri Lanka is currently facing a steep 44% tariff on certain exports to the U.S. under Trump’s revived trade policy, a duty that had been temporarily reduced to 10% and suspended until July 9. Colombo had pinned its hopes on securing a revision before this deadline, following weeks of behind-the-scenes lobbying efforts through diplomatic channels and trade envoys—without any direct high-level state involvement.

Cabinet spokesperson Nalinda Jayatissa confirmed last week that Sri Lanka expected to receive official communication from the U.S. ahead of the deadline. “We have an expectation from our side that we can get some amendment of the tariff to minimise the effect on the economy and our exporters as a result of interventions the government has made,” he said.

However, signs point to the revised tariffs potentially taking effect from August 1, further escalating concerns within Sri Lanka’s export sector, particularly the garment industry. The lack of clarity over Trump’s reference to “different amounts of money” has raised speculation that certain nations may have negotiated more favorable terms through increased U.S. imports or strategic concessions.

Smaller economies like Sri Lanka are particularly vulnerable to being sidelined in Trump’s transactional trade calculus. While larger countries like India—whose trade surplus with the U.S. is proportionately smaller—were hit with a relatively modest 26% tariff, others like Pakistan and Bangladesh were assigned 29% and 37% tariffs, respectively.

Sri Lanka, which relies heavily on U.S. markets for apparel exports, fears that the 44% tariff—if reinstated—could make its goods uncompetitive compared to regional rivals, shifting orders to Bangladesh or Vietnam. Trump recently claimed he had reached a deal with Vietnam’s President To Lam to lower its tariff from 46% to 20%, although details remain vague, characteristic of Trump’s often broad-stroke trade remarks.

Without high-level state-to-state engagement, Sri Lanka’s ability to secure meaningful relief appears limited. With just weeks left before potential reimposition, Colombo now faces a race against time to prevent a serious blow to its struggling export economy.

By: Staff Writer

July 06, Colombo (LNW): Sri Lanka has agreed to halt the approval of new tax concessions under the Port City Act and the Strategic Development Projects (SDP) Act, as part of a broader reform agenda under the International Monetary Fund (IMF) program aimed at improving fiscal discipline and transparency.

 The government will amend both laws to establish rule-based, transparent criteria for granting tax incentives and reduce the duration of tax holidays.

The SDP Act has been especially controversial, facing allegations of corruption and offering unusually long tax exemptions, including tax-free salaries to executives—raising concerns about fairness when other individuals earning over Rs. 100,000 are taxed.

 As per the IMF agreement, the SDP Act is scheduled to be amended by August 2025. Revisions to the Port City Act will follow by October 2025, in consultation with IMF staff, to align with international best practices.

According to the IMF, unchecked and overly generous tax exemptions have severely reduced government revenue, contributing to Sri Lanka’s financial crisis. The Fund emphasized that while targeted tax incentives can support foreign investment, they cannot replace essential structural reforms in governance, legal frameworks, labor markets, and land use.

Sri Lanka’s current corporate tax rate of 30% is significantly higher than many East and Southeast Asian economies. For instance, Cambodia, Vietnam, and Thailand levy corporate taxes between 15–20%, while currency-stable regions like Singapore, Hong Kong, and Brunei boast rates under 17%, with some not levying personal income taxes at all. The high tax burden in Sri Lanka, compounded by periodic currency crises, has undermined investor confidence.

The IMF and local analysts have criticized Sri Lanka’s repeated monetary policy missteps, especially the central bank’s reliance on aggressive money printing and interest rate targeting, which has destabilized the currency. Since 2012, the rupee has depreciated from 113 to over 300 per US dollar, triggering economic instability, public unrest, and the eventual default on external debt.

Although the government had earlier pledged to freeze new exemptions, Sri Lanka admitted that it had recently granted tax benefits to 24 companies designated as “Businesses of Strategic Importance” without consulting the IMF. These include four primary businesses, three duty-free enterprises, and 17 secondary businesses. Despite the breach, authorities said these approvals would stand due to legal and reputational concerns.

The government has committed to sharing monthly updates on tax exemptions with the IMF to ensure greater oversight. The IMF stressed that maintaining these commitments is vital for restoring credibility and preventing further revenue losses.

Meanwhile, concerns persist that the dollarized Port City, designed to offer monetary stability, may attract mainland firms seeking tax advantages, resulting in further leakage of tax revenue. Similar trends are already observed, with Sri Lankan businesses reportedly relocating operations to tax-friendly jurisdictions like Dubai.

By: Staff Writer

July 06, Colombo (LNW): In a major step toward preserving and rediscovering Sri Lanka’s colonial intellectual heritage, the Cabinet of Ministers has greenlit a groundbreaking research project focusing on Dutch-era palm leaf manuscripts of Sri Lankan origin.

The initiative, spearheaded by the Department of National Archives, comes after successfully securing a competitive research grant of €384,248 (approximately Rs. 140 million) from the Netherlands Research Council.

This project—titled “Whose Knowledge, Whose Values? Palm Leaf Manuscripts and the Question of Colonial Collections in Dutch Heritage Institutions”—will span from 2025 to 2029 and is part of a wider thematic academic inquiry into the provenance, ownership, and cultural significance of colonial-era knowledge artifacts.

The project brings together six partner institutions, including Sri Lanka’s Department of National Archives and leading academic entities such as the Free Universities of the Netherlands.

It has already received clearance from the Attorney General’s Department, with endorsements from the Ministry of Foreign Affairs, the Ministry of Foreign Employment and Tourism, and the External Resources Department.

The proposal was submitted by Prof. Hiniduma Sunil Senevi, Minister of Buddhism, Religious Affairs, and Cultural Affairs, and approved by the Cabinet this week.

The focus of this initiative lies in the rediscovery, documentation, and academic study of palm leaf and ola leaf manuscripts that were created or collected during the Dutch colonial regime in Sri Lanka, which lasted from 1658 to 1796.

These manuscripts—often written in Sinhala, Tamil, or Pali—covered a wide range of subjects, including local laws, Buddhist teachings, Ayurveda, astrology, and regional administrative practices.

During their 138-year rule in Sri Lanka, the Dutch East India Company (VOC) established a complex administrative and legal structure in the coastal areas they controlled. Local scholars and scribes recorded traditional and administrative knowledge on palm leaves, some of which were later collected by Dutch officials and shipped to the Netherlands.

These documents today remain stored in libraries and museums such as the Leiden University Library and the National Archives of the Netherlands, often with minimal contextualization or academic examination.

The current project aims to bridge that gap, facilitating joint research, digital archiving, and contextual interpretation of these manuscripts to better understand their origins and historical significance. It also addresses broader ethical questions regarding colonial-era collections and their rightful ownership or stewardship.By bringing these ancient texts into modern scholarly discourse, Sri Lanka hopes to not only reclaim a part of its lost intellectual legacy but also to contribute to global debates on cultural restitution and historical justice.