October 15, Colombo (LNW): Showers or thundershowers will occur at times in Western, Sabaragamuwa, North-western and Northern provinces and in Galle, Matara, Kandy, Nuwara-Eliya and Trincomalee districts, the Department of Meteorology said in its daily weather forecast today (15).
Fairly heavy showers about 75mm are likely at some places in Western, Sabaragamuwa, North-western and Northern provinces and in Galle, Matara and Trincomalee districts.
Showers or thundershowers will occur at several places elsewhere during the evening or night.
The general public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.
Marine Weather:
Condition of Rain:
Showers or thundershowers will occur at several places in the sea areas around the island.
Winds:
Winds will be south-westerly or variable in direction and speed will be (30-40) kmph. Wind speed can increase up to (60-65) kmph at times in the sea areas off the coasts extending from Galle to Hambantota via Matara. Wind speed can increase up to 50 kmph at times in the other sea areas around the island.
State of Sea:
The sea areas off the coasts extending from Galle to Hambantota via Matara can be very rough at times. The other sea areas around the island can be rough at times. The wave height (about 2.5–3.0 m) (this is not for land area) may increase in the sea areas off the coast extending from Chilaw to Pottuvil via Colombo, Galle and Hambantota. Temporarily strong gusty winds and very rough seas can be expected during thundershowers.
UNDP Assistant Secretary General Kanni Wignaraja meets with President Anura Kumara Dissanayake to discuss governance, constitutional reforms, and Sri Lanka’s electoral system: focuses on women’s economic participation, challenges in rural financial literacy, and improving agricultural productivity: pledges support for anti-corruption efforts, reforms, and women’s empowerment, and the President highlights plans to strengthen farmers’ associations and the microfinance sector.
Former MP Dayasiri Jayasekara, who is contesting the upcoming Parliamentary Election from Kurunegala District under the Samagi Jana Sandhanaya says Sri Lanka so far witnessed a Parliament under the jurisdiction of the President, and in this Election, therefore, a strong Parliament not subjugated to the Head of State must be created: emphasises that a Parliament not under a President’s shadow is a timely accurate requirement for the nation.
Sri Lanka together with 39 other nations vehemently condemns the recent attacks against UN peacekeepers in Lebanon by Israeli forces: Foreign Minister Vijitha Herath expresses deep regret over the attacks on two Sri Lankan peacekeepers in Lebanon: emphasises Sri Lanka’s concern about the Middle East crisis, calling for a Gaza ceasefire and a two-state solution: also highlights progress in Sri Lanka’s debt restructuring and economic recovery efforts, supported by the IMF and World Bank.
Fathima Nada, a 14-year-old from Kattankudy, cycles to Colombo and hands a memorandum to Prime Minister Harini Amarasuriya: Her appeal calls for urgent action to address the rising drug crisis affecting children and youth, as well as to prevent child abuse: The meeting took place at the Prime Minister’s Office.
The Western Province Education Director announces all schools in the Colombo Education Zone will continue to remain closed today (15) due to adverse weather: Schools in the Gampaha, Kelaniya, Kolonnawa, and Kaduwela zones will also stay closed, following the decision made on Sunday (13): These zones were closed yesterday as well due to the ongoing inclement weather.
The Colombo Magistrate Court hands down a six-month prison sentence to Director of W.M. Mendis Distilleries Arjun Aloysius along with two other executives for their failure to settle Rs. 3.5 billion in unpaid Value Added Tax (VAT): The Inland Revenue Department filed the case against the company for defaulting on tax payments owed to the government from 2016 to 2019: An appeal filed by Aloysius and Anthony Randev Dinendra John demanding the nullification of the prison sentence was rejected.
The Attorney General’s Department informs the Supreme Court that the Sri Lankan government will review the Mannar Wind Power Project involving India’s Adani Group: The review follows concerns raised by petitioners about environmental and community impacts: The Attorney General pledges to maintain the project’s status quo until a final decision is made after the general election: The Supreme Court orders any observations from the government’s end be informed before January 31, 2025.
China seeks to deepen anti-fraud law enforcement cooperation with Sri Lanka following the arrest of several foreign online fraud suspects, including Chinese nationals: The Chinese Embassy supports Sri Lankan authorities in combating telecom and online fraud, which has impacted China’s image and relations: China is committed to joint efforts with Sri Lanka to curb fraud activities targeting citizens of both nations.
SriLankan Airlines is investigating an incident on flight UL 607 from Sydney to Colombo on 21 September 2024, where the captain allegedly locked the female first officer out of the cockpit during a disagreement over a toilet break which led passengers anxious: The captain has been grounded pending the investigation: The airline is fully cooperating with authorities and emphasised its commitment to safety and regulatory compliance.
Sri Lanka’s Kamindu Mendis and England’s Tammy Beaumont have been named the ICC Players of the Month for September 2024: Mendis, awarded for his stellar Test performances, scored 451 runs in four matches, whilst Beaumont excelled in England’s short-format success: This marks Mendis’ second win, following his March 2024 accolade, and Beaumont’s second since February 2021.
October 14, Colombo (LNW): Sri Lanka’s new government is keen on exploring its substantial untapped export potential, which has been hindered by a variety of challenges.
These include production-related barriers, unforeseen climate changes, labor shortages, high production costs, and low productivity, according to the Export Development Board (EDB).
Following the directives from a recent World Bank report, the government aims to address these issues to boost export growth.
Current Export Landscape
As of August 2024, Sri Lanka’s export revenue reached $10.69 billion, marking a 5.82% increase compared to the same period in 2023. However, the country’s full export potential remains largely unrealized. Factors such as the lack of awareness among exporters, difficulty in meeting product-specific market requirements, and trade barriers have contributed to this situation. Previous policymakers’ lack of focus on these ground realities has also played a role in hindering export growth.
Untapped Sectors: Agriculture and Food Products
Agricultural products like tea and spices are among Sri Lanka’s highest potential exports. Despite a reported export value of $1,213.75 million for tea in 2021, a significant gap exists between actual and potential exports. For example, black tea exports to regions like South Asia and OECD countries have unrealized potentials of 91% and 82%, respectively. Similarly, spices like cinnamon, pepper, and cloves show a combined unrealized export value of $453 million.
Countries like the USA, UK, and India offer significant opportunities for Sri Lankan tea and spice exports. The untapped tea export potential to the USA and UK alone stands at $103.5 million and $87.8 million, respectively, indicating that there is a massive opportunity for growth in these markets.
World Bank Insights: A $10 Billion Opportunity
According to the World Bank’s bi-annual Sri Lanka Development Update, the country has an estimated $10 billion in untapped export potential annually
By leveraging this potential, Sri Lanka could generate about 142,500 new jobs and significantly boost its economy. This marks an increase from the $7.4 billion estimated in 2020 by the World Trade Organization.
Despite the potential, Sri Lanka lags behind its East and South Asian counterparts in several manufacturing sectors, except for clothing and rubber products. The World Bank has identified these missed opportunities as “missing” exports, urging the country to address its export-related challenges to capitalize on sectors like tourism and agriculture.
Strategic Reforms and Recommendations
To overcome these obstacles, Sri Lanka must implement strategic reforms to eliminate its “anti-export bias.” The World Bank recommends several key measures, including:National Single Window (NSW): Streamlining international trade processes through the implementation of an NSW to simplify and expedite export procedures.
Economic Transformation Act (ETA): Revamping the Foreign Direct Investment (FDI) regime through the ETA to attract more investments.
Diversified Trade Agreements: Signing comprehensive trade agreements to broaden market access and improve export conditions. Sectoral Reforms: Investing in value-added sectors like tourism and promoting product diversification, especially in high-growth areas like machinery.
October 14, Colombo (LNW): The United States Agency for International Development (USAID) has expressed its readiness to assist Sri Lanka in any necessary way, highlighting a mutual commitment to advancing development and collaboration.
Sri Lankan President Anura Kumara Dissanayake recently held a virtual meeting with USAID Administrator Samantha Power to discuss future cooperation, as reported by the President’s Media Division.
This meeting marked the first interaction between President Dissanayake and Administrator Power following the presidential elections on September 21.
During the discussion, both leaders exchanged views on topics of shared interest and explored opportunities for enhanced cooperation. Power reiterated USAID’s support for the Sri Lankan government’s efforts to align with the President’s policy framework, which emphasizes strong anti-corruption measures, President’s Media Division disclosed.
The USAID has consistently provided financial aid to Sri Lanka, especially following the country’s economic crisis and debt default in 2022. Recently, the U.S. Embassy announced an additional $24.5 million (Rs 7.2 billion) commitment to support Sri Lanka’s development goals.
The additional funding was announced during a visit to Sri Lanka by the U.S. Agency for International Development’s (USAID) Assistant Administrator of the Bureau for Asia Michael Schiffer at an event at the Ministry of Finance in August this year.
The funds, committed through a Development Objective Grant Agreement between USAID and the government of Sri Lanka, will strengthen Sri Lanka’s market-driven growth, foster environmental sustainability and resilience, and promote good governance practices.
As a result of USAID partnerships across government, non-governmental organizations, and civil society, the funds support collaborative efforts that are making a positive difference in the lives of Sri Lankans.
U.S. Ambassador to Sri Lanka, Julie Chung, emphasized America’s long-standing investment in the nation’s economic progress and governance, stating that this funding strengthens the partnership with Sri Lanka to build a foundation for lasting stability and prosperity.
Since 1956, the U.S. has provided more than $2 billion in aid to Sri Lanka, contributing to various sectors including agriculture, education, health, infrastructure, and women’s entrepreneurship.
This ongoing support from USAID has played a significant role in modernizing Sri Lanka’s infrastructure, supporting nutrition and health programs, developing sustainable energy solutions, and empowering women entrepreneurs to contribute to economic growth.
This additional funding demonstrates our steadfast commitment to working with local partners in Sri Lanka. Together, we are building a foundation for lasting stability and prosperity for communities across the country.”
Over the last seven decades, U.S. support has helped modernize Sri Lanka’s diesel coaches, supported its thriposha supplemental nutrition program, supportedthe development of electric vehicle charging stations and empowered women entrepreneurs to drive economic growth.
October 14, Colombo (LNW): The Institute of Policy Studies of Sri Lanka (IPS) recently released its annual flagship report, “Sri Lanka: State of the Economy 2024,” under the theme “Economic Scars of Multiple Crises: From Data to Policy.”
The report offers an in-depth look at Sri Lanka’s economic recovery, outlining key challenges and necessary policy measures for the country’s development.
Limited Policy Options amid Fragile Recovery
Dr. Dushni Weerakoon, IPS’ Executive Director, discussed the constraints faced by Sri Lanka’s macroeconomic environment. Emphasizing the limited policy tools available for boosting economic recovery, she highlighted the need for marginal adjustments in tax and spending policies to address the distributional impact on different income groups.
According to Dr. Weerakoon, the data-driven insights in the report aim to guide policy discussions to navigate Sri Lanka’s economic path forward.
Addressing Taxation Inequities
One of the report’s significant findings focuses on the impact of recent tax reforms. IPS Research Economist Priyanka Jayawardena pointed out that the poorest income groups are disproportionately affected by increases in VAT rates, spending up to 10% of their income on VAT compared to just 6% for higher-income earners.
In contrast, direct taxes like Pay-As-You-Earn (PAYE) and Personal Income Tax (PIT) were found to be more progressive, with the wealthiest 10% contributing 95% of these taxes. However, tax evasion remains a major issue, as less than one-third of the estimated PIT payable was actually collected in 2023.
Enhancing Welfare Programs through Better Targeting
The report also delves into the effectiveness of the Aswesuma welfare program in targeting the most vulnerable populations. Dr. Pulasthi Amarasinghe from IPS highlighted that Aswesuma uses a more multidimensional approach than its predecessor, the Samurdhi program.
Despite this improvement, nearly 40% of food-insecure households were found to be ineligible under the current Aswesuma criteria. Dr. Amarasinghe recommended incorporating nutrition and disaster exposure as additional factors for eligibility to ensure better support for food-insecure families.
Youth Employment and Skill Development
Challenges in youth employment and education were another focal point of the report. Dr. Nisha Arunatilake, IPS Director of Research, noted that while there has been an increase in vocational training since 2018, a significant issue remains with 65% of youth aged 20-24 not engaged in any form of education. This lack of skill development poses a threat to Sri Lanka’s labour market productivity, especially in light of technological advancements and evolving job requirements.
Conclusion
The IPS report underscores the complex socio-economic issues facing Sri Lanka and highlights the need for strategic policy interventions to support equitable growth. By focusing on progressive taxation, targeted welfare, and youth skill development, Sri Lanka can navigate its fragile economic recovery more effectively.
October 14, Colombo (LNW): With inflation returning to single-digit levels and expected to stabilize further, retail sector growth is anticipated in 2024, according to several leading retail traders. This recovery is projected to be fueled by increased consumer spending, the revival of tourism, and rising investment activities.
The local retail sector plays a vital role in Sri Lanka’s economy, contributing over 30 percent to national GDP and accounting for 14 percent of direct employment.
As the economy continues its recovery, the retail sector is poised to be instrumental in driving growth and generating employment opportunities throughout the country.
Since 2023, Sri Lanka’s consumer market has encountered substantial hurdles, although the supermarket sector has displayed relative stability, supported by the demand for essential goods.
In the second quarter of 2024, despite ongoing economic struggles, including variable inflation and a sluggish economy, the supermarket sector recorded modest growth.
This increase is attributed to a slow recovery in consumer spending, particularly in urban areas where the demand for essential items remains robust. In contrast, rural areas continue to face challenges due to elevated living costs and diminished purchasing power.
A report from the Trade Ministry underscored rising sales volumes in supermarkets, driven by heightened household consumption and improved supply chain conditions.
Although the sector exhibited signs of resilience, cautious optimism prevails, particularly in light of the upcoming Presidential election on September 21, which has resulted in a conservative approach within the industry.
Retail sales are on the rise, and private credit is expected to increase in the latter half of the year, provided that businesses commence investments in expansion, as stated by Central Bank Governor Nandalal Weerasinghe.
Currently, however, businesses are prioritizing de-leveraging following the currency crisis and renegotiating older loans to secure lower interest rates.
This de-leveraging is critical for strengthening financial stability and preparing businesses for future growth opportunities.
The John Keells Group’s Q1 2024/25 performance review revealed that its supermarket segment had a strong quarter, with same-store sales increasing by 12 percent, driven by a surge in customer visits.
Nevertheless, consumer discretionary spending is likely to moderate in the short term due to reduced disposable income, potentially impacting the demand for non-essential products.
Despite these challenges, the supermarket sector is expected to remain insulated, as essential items constitute a significant part of consumers’ shopping baskets.
Cargills PLC, which operates the Food City supermarket chain nationwide, reported a year-on-year revenue increase of 12 percent for the three months ending March 31, 2024, amounting to Rs. 54,403 million.
However, the operating profit for this quarter declined by 19.5 percent compared to the previous year, primarily due to rising electricity costs, increased VAT, and the elimination of the VAT exemption on locally produced dairy products.
Nonetheless, the company’s profit after tax grew by 4.9 percent year-on-year, showcasing the sector’s resilience.
October 14, Colombo (LNW): The Colombo Magistrate Court rejected an appeal filed by Director of W.M. Mendis Distilleries Arjun Aloysius and Anthony Randev Dinendra John demanding the nullification of the six-month prison sentence imposed on them by the Court today (14).
The Colombo Magistrate Court handed down a six-month prison sentence to Aloysius, along with two other executives, for their failure to settle Rs. 3.5 billion in unpaid Value Added Tax (VAT).
The Inland Revenue Department (IRD) had filed the case against the company for defaulting on tax payments owed to the government from 2016 to 2019.
The appeal was lodged in determination of it being forwarded to the Colombo High Court, however to no avail.
The appeal challenging the prison sentence was called in before Colombo Additional Magistrate Bandara Illangasinghe, after which the rejection was declared.
The appeal is also said to have requested the Court to settle the defaulted taxes in instalments.
October 14, Colombo (LNW): The World Food Programme (WFP) has pledged to continue its ongoing initiatives in Sri Lanka without disruption, ensuring the steady delivery of vital assistance, according to the President’s Media Division (PMD).
This assurance came following discussions between WFP representatives and President’s Secretary Dr Nandika Sanath Kumanayake at the Presidential Secretariat on the October 11.
During the meeting, the WFP delegation emphasised their commitment to supporting Sri Lanka through both existing and new programmes, despite the country’s food crisis showing signs of easing.
They reiterated that should additional needs arise, the WFP would be ready to provide further assistance to ensure that vulnerable communities remain supported.
The WFP delegation was led by Country Director Abdur Rahim Siddiqui, who was joined by Government Partnerships Officer Musthafa Nihmath and Deputy Country Director Gerard Rebello.
The discussions centred on reinforcing the existing partnership between Sri Lanka and the WFP, which has played a crucial role in alleviating the food insecurity that gripped the country during its economic crisis.
The WFP has been instrumental in delivering essential food aid and nutritional programmes over the past few years, helping the government stabilise the situation for its most affected populations.
Although Sri Lanka has made significant progress in overcoming the worst of its food shortages, the WFP officials acknowledged that challenges remain, particularly for the country’s most marginalised groups.
They assured Sri Lanka of their continued engagement, indicating that future support would be tailored to meet the evolving needs of the population as the country transitions from immediate relief efforts to longer-term food security strategies.
Dr Nandika Sanath Kumanayake, in response, expressed gratitude for the WFP’s unwavering assistance during Sri Lanka’s most critical periods.
He further emphasised the importance of continued collaboration, as the nation works towards securing a more stable food supply and enhancing agricultural productivity.
Also present at the meeting was Roshan Gamage, Additional Secretary to the President, who highlighted the importance of strengthening these collaborative efforts to ensure that Sri Lanka’s recovery remains on track.
October 14, Colombo (LNW): The government’s much-anticipated fertiliser subsidy programme is set to commence today (14), according to Minister Vijitha Herath.
The initiative aims to provide crucial support to farmers across the country, beginning with the agricultural heartland of Ampara District.
Under the first phase of the scheme, eligible farmers will receive Rs. 15,000 to help mitigate the rising costs of fertiliser and other essential inputs.
In the subsequent second phase, an additional Rs. 10,000 will be disbursed, ensuring sustained support throughout the upcoming planting seasons.
Minister Herath highlighted that the distribution would initially focus on Ampara but is slated to quickly expand to cover other key agricultural regions.
Farmers in Polonnaruwa, Anuradhapura, and the Mahaweli Zone will be amongst the next to benefit from the subsidy, as the government moves swiftly to extend relief to those impacted by rising global fertiliser prices and economic challenges, he emphasised.
With this subsidy programme in motion, the government is aiming to enhance productivity and ensure that farmers can access necessary resources to meet growing demands.
Minister Herath underscored the importance of efficient implementation, noting that this timely financial support could play a significant role in boosting both crop yields and farmers’ incomes.
October 14, Colombo (LNW): The Sri Lankan Rupee (LKR) indicates slight depreciation against the US Dollar today (14) in comparison to last week, but remains below the Rs. 300 threshold, as per the official exchange rates released by the Central Bank of Sri Lanka (CBSL).
Accordingly, the buying price of the US Dollar has increased to Rs. 288.50 from Rs. 288.46, and the selling price to Rs. 297.49 from Rs. 297.46.
Meanwhile, in a contradictory trend, the LKR indicates appreciation against several other foreign currencies, however remaining depreciated against Gulf currencies.
