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Govt Firm on Postal Workers’ Dispute: Minister Tells Unions to Accept Policy or Leave

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Health and Mass Media Minister Dr. Nalinda Jayatissa has made it clear that the Government will not alter its position regarding the ongoing trade union action by postal workers, stressing that those unwilling to work under government policy are free to seek employment elsewhere.

Addressing the weekly Cabinet press briefing yesterday (19), the Minister said that of the 19 demands raised by postal trade unions, 17 have already been fulfilled or are being addressed. The only remaining issues, he noted, concern overtime payments and the fingerprint attendance system.

“The government stands by its policy and is open to discussions only if the trade unions agree to the government’s stance on overtime pay and the fingerprint system,”
Dr. Jayatissa said.

Salaries and Overtime Policy

The Minister highlighted that postal workers have already received significant salary benefits. Basic state sector salaries were increased in three phases—April 2025, January 2026, and January 2027. Overtime payments for around 23,000 postal workers are being calculated on the January 2027 salary scale, providing higher compensation compared to the past.

“This is the final decision on overtime pay. It is in line with government policy and will not be changed under any circumstances,”
he stressed.

Fingerprint Attendance System

On the second contentious issue, Dr. Jayatissa said the fingerprint attendance system is already in use at administrative offices of the Postal Department, with only a small minority at the Central Postal Exchange opposing it.

“That cannot be tolerated. Postal workers unwilling to accept the fingerprint system can find employment elsewhere,”
he warned.

Allegations of Political Influence

The Minister accused political parties of fuelling union action, noting that the Postal Department is operating at a loss, with revenue insufficient to cover even salaries and overtime.

“In such a situation, we cannot entertain unjust demands,”
he added.

Government’s Modernisation Drive

Despite the standoff, Dr. Jayatissa emphasised that the government is actively modernising the postal service, addressing long-neglected issues. Approvals for new recruitments have been granted and interviews are already underway.

“The postal sector is receiving more attention now than at any time in the past. We are tackling problems ignored for 7 to 8 years,”
he said.

The Minister reiterated that while the government remains open to dialogue, discussions will only take place once unions accept the government’s policy decisions.

Sri Lankan Garment Sector to Gain Boost with UK’s Liberalised Trade Rules from 2026

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Sri Lankan garment manufacturers are set to gain unprecedented access to UK markets under new liberalised trade rules coming into effect in early 2026. The reforms will allow manufacturers to source up to 100 percent of garment inputs from any country worldwide, while still enjoying tariff-free access to the UK.

According to the British High Commission in Colombo, Sri Lanka benefits from the UK’s Developing Countries Trading Scheme (DCTS) as an ‘Enhanced Preference’ country. Currently, Sri Lankan garment exports qualify for tariff-free access only if inputs are sourced from within South Asia and subject to strict processing restrictions.

The upcoming reforms will place Sri Lanka on par with lower-income countries such as Bangladesh, which enjoy ‘Comprehensive Preferences’ under the scheme. This means Sri Lankan garment exports will now be eligible for zero tariffs regardless of where raw materials are sourced.

British High Commissioner to Sri Lanka, Andrew Patrick, noted:

“We are pleased to confirm further details of the reforms to the DCTS. I know from my discussions with the JAAF, Sri Lankan manufacturers and UK brands that the changes are likely to have a significant positive impact on the garment sector in Sri Lanka, while helping lower prices on the UK high street.”

Mark Surgenor, President of The Council for Business with Britain, also welcomed the changes, calling it “a particular success story for Sri Lanka’s garment industry,” and highlighting that more exports will now qualify for zero tariffs, strengthening bilateral trade.

The British High Commission added that the reforms reflect the UK’s role as a progressive trade partner, simplifying rules of origin and enabling Sri Lankan manufacturers to be more competitive in global markets while retaining preferential access to the UK.

The DCTS, covering 65 developing countries, provides tariff reductions across multiple product categories. Sri Lanka’s Enhanced Preference status offers significant advantages under this framework.

In addition to garment sector reforms, the UK in June announced the creation of a new Asia Regional Cumulation Group comprising 18 countries, including Sri Lanka. For all eligible products, inputs sourced from any member country will be treated as originating in Sri Lanka if final processing or manufacturing occurs locally. This broadens opportunities for exporters and enhances competitiveness.

The group includes Afghanistan, Bangladesh, Bhutan, Cambodia, India, Indonesia, Kyrgyzstan, Laos, Mongolia, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Tajikistan, Timor-Leste, Uzbekistan, and Vietnam.

Govt. Moves to Curb Exploitative Lending With New Microfinance Law

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The government has approved fresh legislation to rein in widespread abuses in the country’s microfinance sector, a long-criticised industry blamed for trapping poor and vulnerable families in cycles of debt.

At its weekly meeting on Tuesday (12), the Cabinet of Ministers gave policy clearance to draft a new Microfinance and Loan Regulation Authority Bill, on the recommendation of President and Finance Minister Anura Kumara Dissanayake. The new law will replace the outdated Microfinance Act No. 6 of 2016 and aims to establish a stronger regulatory authority with wider powers.

The move follows the collapse of the Microfinance and Credit Regulatory Authority Bill introduced by the previous administration.

 That draft, published in October 2023 and tabled in Parliament in January 2024, was withdrawn after facing widespread public resistance, constitutional petitions, and Supreme Court challenges.

Civil society groups including Transparency International Sri Lanka (TISL) argued that the bill failed to address the heart of the problem—unethical lending practices such as exorbitant interest rates, intimidation of borrowers, and harassment during loan recovery.

Some petitioners also noted that the earlier draft excluded major players such as banks, finance companies, and leasing firms, effectively leaving large segments of borrowers unprotected. Despite amendments suggested by the Supreme Court, the Finance Ministry withdrew the bill, acknowledging that it failed to reflect the government’s intended policy.

To rebuild public confidence, the Treasury and Central Bank appointed a joint committee to review the issue, while the Parliamentary Sectoral Oversight Committee on the Economic Crisis Impact gathered submissions from stakeholders. Their recommendations form the basis of the new bill now cleared for drafting.

Sri Lanka’s microfinance industry has been at the centre of controversy for over two decades. While originally promoted as a poverty alleviation tool, the sector has increasingly been associated with debt distress, farmer suicides, and exploitation of women in rural areas.

 Borrowers often take out loans for consumption or emergency needs, rather than income generation, only to find themselves unable to meet repayment schedules. With interest rates sometimes exceeding 200 percent annually, families are forced to pawn assets, sell land, or migrate for low-wage labour abroad.

Today, the country has over 11,000 microfinance institutions, but fewer than 100 are formally regulated by the Central Bank. The lack of oversight has allowed money lenders to operate unchecked, often demanding repayments on a daily or weekly basis and using public humiliation, threats, and coercion as collection tactics.

The Central Bank of Sri Lanka has consistently warned that leaving this sector unregulated could lead to illegal deposit-taking, exploitation of low-income communities, and systemic financial instability.

The proposed new authority will be tasked with licensing, regulating, and supervising all microfinance and money-lending institutions, capping interest rates, and ensuring stronger borrower protection measures.

The government’s move marks its second legislative attempt in less than a year and underscores growing recognition of the urgent need to reform microfinance. If effectively enforced, the new law could finally bring relief to thousands of Sri Lankan families burdened by years of exploitative lending.

CHOGM Luxury Buses Back on the Road after Years of Neglect

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Nearly a decade after they were imported at massive cost for the 2013 Commonwealth Heads of Government Meeting (CHOGM) in Colombo, nine out of 35 luxury buses have finally been restored and redeployed for passenger transport. The move comes as the government attempts to salvage value from a controversial purchase that once symbolized extravagance and waste.

The fleet of 35 super luxury buses was brought down in 2013 under the Mahinda Rajapaksa administration to ferry CHOGM delegates between venues and hotels. Official records show that billions of rupees were spent not only on the buses but also on extensive infrastructure projects to host the high-profile summit.

Once the event concluded, however, the majority of these buses were left idle at depots, deteriorating without any accountability or clear plan for their use.

At a ceremony held yesterday at the Katubedda Super Luxury Tourist Depot, Highways, Ports and Civil Aviation Deputy Minister Prasanna Gunasena confirmed that nine buses had been repaired at a cost of Rs. 375 lakh.

He said the government had already procured spare parts to restore the rest of the fleet and expressed confidence that all remaining buses would return to service within the next three months.

“The buses brought for CHOGM had been withdrawn from service. Today, nine of them have been renovated and redeployed. There is a high demand for long-distance services to destinations such as Galle, Matara, and Kandy. These buses will initially run 5,000 km of short-distance services before being assigned to long-distance routes,” Minister Gunasena explained.

The government’s decision highlights a stark contrast between past misuse of public funds and present efforts to maximize resources.

Analysts point out that the original procurement reflected a lack of planning, as vehicles intended for foreign dignitaries ended up wasting away for years. Critics argue that such neglect illustrates a broader culture of impunity that has plagued state expenditure.

In addition to restoring the buses for intercity travel, Minister Gunasena announced that the government plans to expand rural transport networks, in line with the President’s vision of strengthening connectivity across underserved regions. “Reliable public transport is essential for both urban and rural populations. These buses, once symbols of waste, can now be put to productive use,” he said.

For many citizens, the reactivation of these buses offers a glimpse of accountability long overdue. While questions remain about the billions lost during CHOGM preparations, the current government’s move to repurpose idle assets signals a pragmatic step towards efficiency in public transport

Sri Lanka’s Coconut Industry Faces Policy Vacuum amid Falling Prices

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Sri Lanka’s coconut industry, a key pillar of its agricultural economy, is facing renewed challenges as prices fell at the latest weekly auction, despite a modest recovery in production earlier this year. According to Coconut Development Authority (CDA) data, the average price for 1,000 coconuts dropped by 5.4 percent to 133,623 rupees at the August 16 auction.

Auction volumes also reflected uncertainty in the market. The number of coconuts offered fell to 658,480 from 751,836 a week earlier, while sales rose slightly to 582,000 nuts compared to 523,823 previously.

On the ground, wholesale prices ranged between 170–180 rupees for a large nut and 140–160 rupees for smaller ones, while farmgate prices in Kurunegala — Sri Lanka’s main coconut belt — stood at 120–155 rupees per nut.

 Meanwhile, copra traded at 120,000–125,000 rupees per 250 kg, and local coconut oil prices ranged from 880,000 to 900,000 rupees per metric ton.

Central Bank figures show coconut production had risen 18.3 percent year-on-year in June 2025, with output climbing from 170 million nuts in January to 289.5 million by mid-year.

This recovery followed drought-hit declines in late 2024, when adverse weather and irregular rainfall severely impacted cultivation. However, growers and exporters warn that the improvement is fragile.

Exports of coconut-based products such as desiccated coconut, virgin coconut oil, coir, and activated carbon continue to contribute significantly to foreign exchange earnings, but shipments have slowed this year.

Provisional data shows that in the first seven months of 2025, coconut product exports brought in around USD 450 million — a decline compared to USD 510 million during the same period in 2024.

 Industry analysts attribute the slowdown to inconsistent production, volatile global demand, and competition from the Philippines and Indonesia, the world’s two largest coconut producers.

The structural problems in Sri Lanka’s coconut sector go beyond temporary price fluctuations. Smallholder farmers, who account for nearly 80 percent of coconut cultivation, struggle with rising input costs, aging trees, land fragmentation, and a lack of access to modern technology.

Erratic weather patterns linked to climate change have also worsened yields in traditional growing regions such as Kurunegala, Puttalam, Gampaha, and parts of the Southern Province.

 Industry stakeholders argue that the absence of a coherent government policy has left the sector vulnerable. Although successive governments have promised replanting programs, irrigation schemes, and research investments, progress has been slow.

Experts stress the need for an integrated national coconut policy focusing on replanting with high-yielding varieties, promoting value-added exports, expanding irrigation facilities, and ensuring price stabilization for farmers.

Without a strategic approach, Sri Lanka risks losing its competitive edge in global markets. As one industry representative put it, “We have the potential to double coconut export earnings within five years, but only if policymakers treat this industry as a national priority.”

Thailand Turns to Sri Lanka for Workers amid Labour Crisis

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Thailand’s government has approved the recruitment of 10,000 Sri Lankan workers as part of its drive to plug a deepening labour shortage, a move that reflects both the country’s growing demographic challenge and its dependence on foreign labour.

The decision, announced by Labour Minister Pongkawin Jungrungruangkit, comes in the wake of a mass exodus of Cambodian workers who returned home after a deadly border conflict last month.

The fighting, the worst in decades, killed at least 43 people and displaced more than 300,000 on both sides before a fragile ceasefire was struck.

Before the clashes, over 520,000 Cambodians were employed in Thailand, making up nearly 12% of its foreign workforce. An estimated 400,000 have since returned home, leaving serious gaps in key industries.

Thailand, already grappling with a fast-ageing population and shrinking domestic workforce, has relied heavily on foreign labour to sustain its economy.

According to the International Labour Organization, at least three million registered foreign workers are employed in agriculture, construction, and manufacturing.

With fertility rates dropping and one in five Thais projected to be over 60 by 2035, the government faces mounting pressure to secure a steady inflow of migrant workers.

Sri Lanka has emerged as a major source. More than 30,000 Sri Lankans have registered, with the first batch of 10,000 expected to depart soon. Bangkok is also opening doors to workers from Nepal, Bangladesh, Indonesia, and the Philippines to ensure supply continuity.

For Sri Lanka, the opportunity is significant. Labour migration remains the largest source of foreign exchange for the island nation, which sent a record 314,786 workers abroad in 2024 amid ongoing economic struggles.

While the Middle East continues to be the top destination, demand from East and Southeast Asia, particularly South Korea, Japan, and now Thailand, is rising rapidly.

However, analysts warn that the Thai government’s plan may not be without risk. On the one hand, the influx of Sri Lankan and other

South Asian workers will stabilize industries reliant on low-cost labour and cushion the economy from immediate shocks caused by the Cambodian exodus.

On the other hand, critics argue that excessive reliance on foreign labour could strain social services, spark cultural tensions, and potentially erode wages for local workers.

For Thailand’s ruling socialist-leaning coalition, the move is politically delicate. While business groups welcome the decision, opposition parties could exploit fears over job competition and national identity.

If mismanaged, the migrant recruitment drive may dent the government’s popularity, particularly among its rural voter base, who already feel neglected in the country’s economic model.

In the long run, Thailand faces a difficult balancing act: meeting urgent labour demands while addressing demographic decline and safeguarding social stability.

Whether the recruitment of 10,000 Sri Lankans is a temporary fix or the beginning of a deeper shift in Thailand’s labour strategy remains to be seen.

WEATHER FORECAST FOR 20 August 2025

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A few showers will occur in the Western and Sabaragamuwa provinces and in Kandy, Nuwara-Eliya, Galle and Matara districts.

Mainly fair weather will prevail over elsewhere of the island.

Fairly strong winds of about (30-40) kmph can be expected at times over Western slopes of the central hills.

Sri Lanka’s IT Growth and ‘Five Weapons’ for Economic Recovery

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By:Staff Writer

August 19, Colombo (LNW): Sri Lanka’s Information Technology (IT) industry is emerging as a key driver of economic transformation, while policymakers call for bold strategies to secure long-term recovery after years of financial turmoil.

IT Sector Powers Ahead

The IT and Business Process Management (BPM) industry has grown into a pivotal sector, now contributing 4.37% to the country’s Gross Domestic Product (GDP), equivalent to around USD 3.47 billion. This expansion reflects the impact of government digital policies, improved connectivity, and strong private sector participation.

Sri Lanka’s digital economy strategy aims to push the sector’s value to USD 3 billion by 2024, focusing on boosting tech exports, e-commerce, and IT-BPM services. Workforce development has also been a priority, with the industry’s employee base expected to more than double from 125,000 in 2018 to 300,000 by 2024.

With more than 60% of the population owning mobile phones and widespread internet access, the foundation for digital service adoption and e-commerce growth remains strong. The government has backed this momentum by planning two new Techno Parks to attract foreign investment and generate high-skilled jobs, while the ICT Agency continues efforts to transform state services through e-government initiatives and cyber legislation.

To secure future growth, experts highlight the need for investments in digital literacy, cybersecurity frameworks, startup support, and advanced broadband infrastructure. If sustained, these reforms could help Sri Lanka achieve its target of a USD 15 billion digital economy by 2030.

Wickremesinghe Warns on Economic Discipline

Amid these digital gains, former President and Prime Minister Ranil Wickremesinghe has cautioned that Sri Lanka must pair technological advancement with sound economic governance. Speaking at the launch of Bandula Gunawardena’s new book Arthikaye Panchayudhaya in Rajagiriya this week, he argued that the nation requires both capital and technology inflows to recover fully from its recent financial crisis.

Drawing parallels with Asian economies such as China and Vietnam, Wickremesinghe stressed that Sri Lanka must integrate more closely with India’s economy and attract large-scale foreign direct investment (FDI) to raise per capita income and secure debt sustainability. He underscored India’s critical role, recalling its USD 4 billion emergency support that helped prevent economic collapse in 2022.

The former leader described five legislative measures as Sri Lanka’s new “divine weapons” against instability: the Central Bank Law, Public Debt Management Law, Public Finance Act, Economic Transformation Law, and the new Anti-Corruption Act. Together, he said, they provide the framework for fiscal discipline, debt restructuring, and greater transparency.

Investments and Risks

Wickremesinghe warned against policy reversals on foreign projects, particularly in the energy sector. He pointed to the stalled USD 700 million Adani wind power project and other investments in Trincomalee, which could have drawn nearly USD 1 billion, as missed opportunities. Renegotiating tariffs or contracts, he said, risks undermining investor confidence at a time when billions of dollars’ worth of renewable energy projects are being considered.

He further identified energy security, education reform, agricultural modernization, and poverty reduction as pillars of sustainable growth, stressing that Sri Lanka cannot afford to jeopardize foreign partnerships at this critical stage.

Balancing Growth and Recovery

While Sri Lanka’s IT industry sets a promising course for the future, Wickremesinghe’s call highlights the parallel need for disciplined economic management and credible investment policies. With digital transformation underway and structural reforms taking root, the country’s challenge will be to balance innovation with stability to secure a resilient economic path by 2030.

Sri Lanka Gains Global Recognition for Investor Relations Efforts

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By:Staff Writer

August 19, Colombo (LNW): Sri Lanka is intensifying its push to attract foreign investment as part of its economic recovery, earning international recognition for its progress in 2025. The Institute of International Finance (IIF), in its latest Investor Relations and Debt Transparency Report, ranked Sri Lanka fifth globally for the largest improvement in investor relations among 54 developing and emerging economies.

According to the IIF, Sri Lanka’s investor relations score surged by 9.1 points over the past year to 37.33 on a 50-point scale. This marks a significant leap from 25.2 in 2023 and 28.21 in 2024, reflecting notable progress in improving communication with global investors.

The government views investor confidence as a cornerstone of economic revival, particularly as the country continues to refinance debt and seeks to re-enter international capital markets. A senior finance ministry official told Sunday Times Business that mobilizing both portfolio inflows and long-term investments into infrastructure, tourism, renewable energy, and manufacturing remains a top priority.

A key driver behind this improvement has been the establishment in 2025 of a dedicated Investor Relations Unit (IRU) under the newly created Public Debt Management Office (PDMO) in the Ministry of Finance, Planning and Economic Development. The IRU, launched in collaboration with the IIF, provides global investors with direct access to transparent, timely, and reliable information.

Investor relations, officials explained, involve ongoing engagement between governments and the investment community, including global funds, banks, bond investors, and credit rating agencies. For Sri Lanka, this means ensuring regular communication on economic performance, fiscal policy, and debt management, while also enabling direct interaction between policymakers and investors.

The IRU’s role is to facilitate high-level dialogue, ensure clarity in debt and fiscal disclosures, and respond promptly to market queries. These measures, the IIF noted, have boosted Sri Lanka’s reputation, demonstrating its commitment to openness and credibility in dealing with the global financial community.

By strengthening investor relations, Sri Lanka is sending a clear signal to international markets that it is committed to long-term structural reforms. The government is currently negotiating funding for major infrastructure and energy projects while seeking private sector participation through public-private partnerships (PPPs).

Officials emphasized that the IIF’s recognition is not just a statistical achievement but an endorsement of Sri Lanka’s new investment narrative: transparent, reform-driven, and business-ready. The reforms, they added, will continue to expand in scope, enabling stronger ties with global investors.

If sustained, these efforts could accelerate Sri Lanka’s path back to international capital markets, providing crucial financing for the next phase of its economic recovery.

UN Urges Sri Lanka to End Impunity and Deliver Justice

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By:Staff Writer

August 19, Colombo (LNW): A new report from the United Nations Human Rights Office has called on Sri Lanka to take decisive steps to confront its history of conflict-related abuses, dismantle entrenched impunity, and implement long-overdue reforms. The report emphasizes that the country has a “historic opportunity” to deliver truth, justice, and accountability to victims while setting a new course for national unity.

UN High Commissioner for Human Rights Volker Türk said the moment was critical. “Today, an opportunity presents itself for Sri Lanka to break from the past, with the leadership pledging a fresh direction on long-standing issues, including delivering justice to victims, restoring the rule of law, and eliminating discrimination and divisive politics. It now needs a comprehensive roadmap to translate these commitments into results,” he stated.

The report follows Türk’s recent official visit to Sri Lanka, during which he met government officials, civil society, victims’ groups, religious leaders, and political representatives. His tour included stops in Jaffna, Trincomalee, and Kandy, where he said he witnessed “the palpable pain and suffering” of victims and their ongoing demands for truth and justice.

Among its recommendations, the report calls for sweeping reforms of the security sector as well as constitutional, legal, and institutional changes in line with international human rights obligations. These, Türk noted, are essential to achieving the government’s stated goal of “national unity” and preventing any recurrence of past violations.

The UN welcomed Sri Lanka’s move to establish an independent Public Prosecutors Office but urged stronger measures, including a dedicated judicial mechanism with an independent special counsel to handle serious human rights cases and breaches of international humanitarian law. It also pressed for the release of military-occupied land in the north and east, repeal of the Prevention of Terrorism Act (PTA), and the release of long-term detainees held under the law.

While recognizing some progress in creating space for dialogue and memorialisation, the report expressed concern over ongoing intimidation of activists, particularly those advocating for accountability over enforced disappearances, land disputes, and environmental issues. Families of the disappeared, it noted, continue to face harassment and surveillance.

The document criticized the government’s continued reliance on the PTA despite pledges to repeal it. It highlighted reports of arbitrary arrests, torture, and deaths in custody, urging an immediate moratorium on the law’s use. The report also flagged other legislation—including the Online Safety Act, the ICCPR Act, and proposed laws on NGOs and personal data—that it said risk undermining fundamental freedoms of expression, association, and peaceful assembly.

Beyond civil and political rights, the UN drew attention to Sri Lanka’s economic crisis and its impact on vulnerable groups, including plantation workers from the Malaiyahar Tamil community. Türk urged international financial institutions and creditors to give Sri Lanka fiscal space to meet social and economic rights obligations and ensure austerity measures do not erode human rights.

The report concludes by calling on both Sri Lanka’s government and the international community to work together in pursuit of accountability, reconciliation, and reform. “The responsibility lies first with Sri Lanka,” Türk stressed, “but international support can and must play a vital role.”