A high-level delegation from the Institute for Security Governance (ISG), USA, accompanied by representatives from the United States Embassy, held discussions with Acting Defence Minister Major General Aruna Jayasekara (Retd) in Colombo on Wednesday (15).
The ISG, a key entity within the U.S. Defence Department, is instrumental in reviewing and developing Institutional Capacity Building projects with the Sri Lanka military, including the Navy, Air Force, Coast Guard, National Defence College, Kothelawala Defence University, and the Defence Services Command and Staff College.
The delegation, led by Michael Rembold, Regional Programme Leader (Indo-Pacific Region), included:
Matt Ashley – Sri Lanka Country Programme Coordinator (CPC).
Daniel Simpson – Deputy CPC.
Oscar De Soto – Subject Matter Expert and Team Lead for the Defence Ministry effort.
Col. Tony Nelson – Defence Attaché, U.S. Embassy in Colombo.
Cdr Sean Lin – Chief, Office of Defence Cooperation, U.S. Embassy in Colombo.
The meeting emphasised collaborative efforts between ISG and Sri Lankan counterparts, fostering trust and mutual understanding. These interactions provided valuable insights into Sri Lanka’s defence priorities and decision-making processes, laying a robust foundation for developing enhanced partnerships.
Future collaborative opportunities were also explored, focusing on the shared commitment to regional stability and security. The discussions highlighted the enduring partnership between Sri Lanka and the United States in fostering mutual growth and understanding in the defence sector.
The engagement reflects both nations’ strategic emphasis on institutional development and regional cooperation, aligning with their broader vision for security and stability in the Indo-Pacific region.
The Sri Lankan government has unveiled a comprehensive relief package aimed at supporting Small and Medium Enterprises (SMEs) struggling with loan repayments. The initiative, developed in collaboration with the Central Bank of Sri Lanka (CBSL), the Sri Lanka Banks’ Association (Guarantee) Ltd. (SLBA), SME sector representatives, and relevant government agencies, seeks to provide financial breathing room for SMEs while safeguarding the banking sector’s stability.
Eligibility Criteria
SMEs with credit facilities classified as Non-Performing Loans (NPL) on or after April 1, 2019, by licensed banks.
SMEs initiating discussions with Relief Banking Units and submitting required documentation before March 31, 2025.
The relief measures include the suspension of Parate Execution until March 31, 2025, allowing SMEs to engage in revival plans. Eligible SMEs may also receive working capital loans based on repayment capacity and a credible business revival plan. Credit Information Bureau (CRIB) reports will not be the sole basis for loan rejections, and banks must provide a breakdown of capital, interest, and other charges upon request.
Specific relief measures include reasonable interest rates for restructured loans, extended repayment terms up to 10 years, and the suspension of legal actions during the relief period. The government has also introduced a grievance handling mechanism to ensure fair property valuations for auctions.
The government will establish an Advisory Committee for SMEs under the Ministry of Industries to coordinate policy development and stakeholder activities. Additionally, a scorecard mechanism will be introduced to improve SME access to finance, and the National Credit Guarantee Institution Limited (NCGIL) will provide credit guarantees starting January 2025.
With SMEs contributing over 50% of Sri Lanka’s GDP, this package addresses challenges from the Easter Sunday attacks (2019), COVID-19 pandemic, and the economic crisis of 2022, which resulted in 494,000 NPLs worth Rs. 886 billion. These measures aim to revive the SME sector while ensuring economic stability and growth, reaffirming the government’s commitment to long-term development.
MP Ravi Karunanayake strongly opposed devaluing the Sri Lankan Rupee to facilitate vehicle imports, citing economic instability and undue strain on the population. Speaking at a press conference on January 16, he emphasized the need for prudent economic policies to sustain the country’s growth.
Key Points from His Address:
Rupee Stability: Karunanayake highlighted that devaluing the Rupee for the satisfaction of a few would harm the broader economy.
Economic Policy: He called for a strategy that generates state revenue without currency depreciation and criticized reliance on imports over exports, which could lead to Rupee depreciation.
Tax Burden: The MP cautioned against imposing excessive taxes on the public, arguing it would distort the economy and leave citizens unable to cope financially.
Unkept Promises: He pointed out that the government must address promises made to voters, including offering vehicles at Rs. 1.2 million and reducing fuel prices.
Revenue and Investment: With the state revenue requirement for 2025 set at Rs. 5,000 billion, Karunanayake stressed the importance of investment promotion to achieve this target.
Cargo Challenges: He warned about the economic impact of ships departing without unloading, reflecting inefficiencies that could hurt trade and revenue.
Karunanayake’s remarks underline the urgency of adopting sustainable economic policies that balance public needs with national revenue goals while safeguarding the currency’s stability.
Sri Lanka achieved a historic milestone by securing its largest-ever foreign direct investment (FDI) during President Anura Kumara Dissanayake’s recent four-day State visit to China.
The landmark agreement was signed between Sri Lanka’s Energy Ministry and Sinopec, a leading Chinese petroleum corporation, on January 16.
Key Highlights of the Investment:
Project Value: USD 3.7 billion.
Development: Construction of a state-of-the-art oil refinery in Hambantota with a production capacity of 200,000 barrels per day.
Economic Impact: A significant portion of the refinery’s output will be allocated for export, boosting Sri Lanka’s foreign exchange earnings.
Community Benefits: Expected to enhance economic growth, provide job opportunities, and uplift the livelihoods of low-income communities in the Hambantota region.
The signing ceremony in China was attended by high-ranking officials, including:
Vijitha Herath, Minister of Foreign Affairs, Labour, and Tourism.
Bimal Rathnayake, Minister of Transport, Highways, Ports, and Civil Aviation.
H.S.K.J. Bandara, Director General of Government Information.
This strategic investment not only strengthens ties between Sri Lanka and China but also represents a pivotal step in accelerating Sri Lanka’s post-crisis economic recovery and long-term development goals.
Rainy condition is expected to be temporarily enhanced over Eastern, Northern, North-central and Central provinces from tomorrow.
Showers or thundershowers will occur at times in Uva provinceand in Matale and Nuwara-Eliya districts.
Several spells of showers may occur in Eastern, Northern and North-central provinces and in Hambanthota district.
Showers or thundershowers will occur at a few places in Sabaragamuwa and Western provinces and in Galle and Matara districts during the afternoon or night.
Fairly strong winds of (30-40) kmph can be expected at times over Eastern slope of the central hills and Northern, North-central, Eastern, North-western and Uva provinces and in Hambantota district.
Misty conditions can be expected at some places in Western, Sabaragamuwa, Central, province in Galle and Matara districts during the morning.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
January 16, Colombo (LNW): The escalating cost of electricity in Sri Lanka has become a major financial strain on consumers, particularly as the Ceylon Electricity Board (CEB) continues to report significant profits.
Despite CEB’s claims of financial distress due to inadequate tariffs, recent reports suggest the utility is both profitable and plagued by inefficiencies and mismanagement.
This situation has led to increasing calls for the reduction of electricity tariffs, with public opinion heavily favoring tariff cuts.
The Public Utilities Commission of Sri Lanka (PUCSL) is set to finalize its review of public opinions on the proposed electricity tariff revision by January 17.
The PUCSL has gathered public feedback since December 17, holding oral hearings from December 27 to January 10 across all nine provinces.
Approximately 400 individuals submitted their views, with many advocating for a significant reduction in tariffs. Based on these submissions, the PUCSL’s final report is expected to recommend a reduction of around 20%.
In stark contrast to the public’s demand for a reduction, the CEB continues to argue that reducing tariffs would result in financial losses. However, this claim has been met with skepticism.
The CEB’s financial report for the first half of 2024 shows substantial profits, challenging the utility’s justification for high tariffs.
Former Power and Energy Minister Patali Champika Ranawake highlighted the discrepancy, noting that while the CEB has repeatedly claimed it would incur losses with reduced tariffs, its financial performance paints a different picture.
For instance, the CEB proposed a modest 3.4% relief in the first quarter of 2024, but after public submissions, the PUCSL authorized a 21.3% reduction.
Further examination of the CEB’s financial situation reveals a profit of 157.5 billion rupees in 2024, which includes a depreciation gain of 30.7 billion rupees.
This marks a notable increase from 2023, when the CEB reported profits of 70.3 billion rupees, also bolstered by a depreciation gain.
These profits have raised questions about the CEB’s justification for imposing high tariffs, especially when consumers have been charged an additional 33,000 rupees each. Critics argue that these excessive charges, along with the utility’s inefficiencies, should be returned to the public.
Despite these profits, the government has continued to collect large sums from the public, amounting to 578 billion rupees. Critics argue that no tariff revisions have been made since 2013, with some questioning the lack of relief for consumers.
The CEB’s financial figures, including claims of rising debt and costs, have also come under scrutiny. For example, significant investments have been made to the Ceylon Petroleum Corporation (CPC) for fuel payments, adding further strain.
However, audit reports indicate that the CEB’s accumulated financial losses have already been largely covered through past tariff increases and government subsidies.
Despite these findings, the CEB maintains that higher tariffs are necessary to address ongoing debts. Critics, however, argue that this narrative is misleading, as many of these debts have already been addressed through past tariff increases and other financial strategies, such as debt-equity conversions.
In light of this, the public is calling for a transparent review of the CEB’s financial situation and for the profits accumulated in recent years to be used to reduce electricity costs for consumers.
The total profits reported by the CEB for 2023 and 2024, amounting to 178.7 billion rupees, should be used to offset the excessive charges imposed on the public.
With many Sri Lankans already struggling with the high cost of living, the demand for tariff reductions is not merely a plea for financial relief but also a call for accountability and fairness in how electricity costs are managed.
In conclusion, as the PUCSL finalizes its report on electricity tariff revisions, it is essential for the government and the CEB to consider the overwhelming public support for reduced tariffs.
The substantial profits reported by the CEB and the financial burden on consumers make a compelling case for tariff reductions.
It is time for the CEB to act in the best interest of the public and ensure that the benefits of its profits are passed on to the people who have been bearing the cost for too long.
January 16, Colombo (LNW): Colombo City Marina is set to become a standout feature of Sri Lanka’s vibrant capital, blending luxury and innovation. This ambitious project promises to offer a one-of-a-kind experience, allowing visitors to sail through Colombo’s scenic waters while enjoying views of the city’s modern skyline. The Marina is expected to leave a lasting impact, offering unforgettable memories for all who visit.
As the first luxury yacht marina in South Asia, the development will accommodate up to 250 mid-sized vessels and be located within the renowned Port City Colombo. The Marina precinct will also feature top-tier hotels, gourmet dining, upscale retail outlets, entertainment centers, and recreational spaces, making it a comprehensive luxury hub for both tourists and locals.
Kapila Jayawardena, Group Managing Director of LOLC Holdings PLC, recently expressed that the US$ 120 million Marina development at Colombo Port City is poised to revolutionize Sri Lanka’s tourism and maritime sectors.
Speaking at the groundbreaking ceremony, Jayawardena emphasized that this project represents a significant milestone for both Colombo Port City and Browns Investments PLC. He described it as a transformative development that could redefine the nation’s tourism and maritime industries.
Sri Lanka has faced significant challenges in recent years, including economic uncertainty and global crises. Despite these setbacks, Jayawardena pointed to the country’s resilience and the optimism of international investors, who are seeing greater opportunities in Sri Lanka. The groundbreaking event symbolized the perseverance and capability of LOLC-Browns in driving major projects that will shape Sri Lanka’s future.
As the largest and first investor in Colombo Port City, Browns Investments has secured six strategically important land parcels. Jayawardena expressed confidence that Colombo Port City will emerge as one of the world’s top special economic zones, attracting much-needed foreign investment and creating numerous jobs for Sri Lankans.
The Group Managing Director also highlighted the importance of infrastructure development in driving economic growth. He praised the partnership between the Government and CHEC for their continued support in realizing this ambitious vision. With the strategic location of Sri Lanka at the crossroads of global maritime routes, Jayawardena sees the Marina development as a unique opportunity to create a full-service maritime hub.
Spanning 37,776 square meters, the Marina will boast modern facilities such as sunset bars, seaside restaurants, retail outlets, and entertainment areas. It will also have berthing capacity for up to 200 mid- to large-sized yachts, addressing a critical infrastructure gap in the region. This initiative is expected to position Sri Lanka as a key player in luxury maritime tourism, making it an attractive destination for international visitors.
Jayawardena emphasized that the $120 million project is not just about constructing buildings, but also about fostering economic growth, boosting investor confidence, and showcasing Sri Lanka’s potential in both luxury tourism and maritime industries. He foresees that by 2027, when the Marina is fully operational, it will symbolize the nation’s economic progress and contribute to its growth story.
LOLC and Browns remain committed to investing in projects that drive Sri Lanka forward, creating value and enhancing the country’s international standing. Jayawardena concluded by reiterating their dedication to shaping a future where Sri Lanka becomes a leading destination for luxury, innovation, and opportunity.
January 16, Colombo (LNW): The recent hike in cigarette taxes in Sri Lanka aims to enhance government revenue and reduce smoking rates. However, its effectiveness is shaped by consumer behavior, market trends, and enforcement against illicit trade.
According to the Alcohol & Drug Information Centre (ADIC), the latest tax increase has allowed cigarette companies to earn an additional Rs. 7 billion in profit.
While the tax on the most popular cigarette category rose by Rs. 4.51 per stick, retail prices increased by Rs. 10 per cigarette, enabling companies to capture substantial profits.
ADIC attributes this to inefficient tax collection systems, which persist regardless of changes in government leadership.
Tobacco and alcohol consumption in Sri Lanka have significant public health consequences. Smoking causes nearly 20,000 deaths annually, while alcohol consumption accounts for around 15,000 premature deaths. Despite these figures, tax hikes on these products show mixed outcomes.
For instance, a 20% alcohol tax increase in 2023 reduced alcohol consumption by 8.3 million liters while boosting government revenue by Rs. 11.6 billion. Similarly, cigarette excise revenue increased by Rs. 7.7 billion, even with a decline in cigarette sales. These trends highlight the dual impact of taxation on consumption patterns and state revenue.
In July 2023, Sri Lanka implemented another 20% cigarette tax increase, with specific rates varying by product size. However, the Ceylon Tobacco Company (CTC) reported a decline in both sales volume and revenue in early 2024 compared to the previous year.
Revenue dropped from Rs. 46.93 billion to Rs. 45.85 billion, and turnover-linked taxes fell from Rs. 34.2 billion to Rs. 31.7 billion. This decline is attributed to reduced cigarette consumption, a shift to cheaper alternatives like beedi, and increased smuggling.
Over the long term, however, cigarette tax revenue has shown a positive trend. Between 2015 and 2023, revenue from cigarette taxes grew from Rs. 81.15 billion to Rs. 110 billion, despite a notable decrease in cigarette consumption.
The effects of cigarette tax increases can be summarized as follows:
Economic Impact: Higher taxes aim to boost government revenue, but reduced legal sales and shifts to untaxed alternatives like beedi or smuggled cigarettes may undermine this goal. Illicit trade also negatively impacts the broader economy.
Corporate Outcomes: Although CTC experienced reduced sales and revenue in early 2024, the company increased its profits from Rs. 5.999 billion to Rs. 6.8 billion by cutting costs. This occurred despite rising expenses for wages and raw materials.
Consumer Behavior: Rising cigarette prices due to tax hikes have led many consumers to reduce consumption, opt for cheaper alternatives, or turn to smuggled products. These shifts may impact public health negatively if consumers choose more harmful substitutes and can also reduce government revenue from taxed products.
While cigarette taxes have proven effective in reducing consumption and increasing state revenue over time, their success hinges on strong regulatory enforcement, minimizing illicit trade, and addressing market shifts to untaxed alternatives.
January 16, Colombo (LNW): Efficient border operations are vital for an island nation like Sri Lanka, where trade plays a critical role in driving economic growth.
However, delays in cargo clearance at Colombo Port have disrupted the smooth flow of goods, leading to increased costs and diminished competitiveness in global markets.
This ongoing issue not only undermines the country’s gross domestic product (GDP) but also inflates operational expenses for businesses and discourages foreign direct investment.
The congestion at the port’s container terminal has reached critical levels. According to Customs Media Spokesman Seevali Arukgoda, the delay in clearing 603 containers already released by Sri Lanka Customs has severely restricted space.
To address this, Sri Lanka Customs initiated a special program, as directed by President Anura Kumara Dissanayake, aimed at expediting container clearance.
On a single day, 459 containers were released from Colombo Port, while another 242 were processed at the Rank Container Terminals (RCT) and associated yards after completing inspections.
Despite the efforts, Customs officials are struggling to inspect and release more than 500 containers daily due to the limited availability of clearance agents and vehicle drivers. As of the latest reports, gate permits have been issued, but 496 containers still await transfer to inspection yards.
The repercussions of these delays extend beyond the port. Deputy Minister of Ports and Civil Aviation, Janith Ruwan Kodithuwakku, revealed that 25 to 30 cargo ships had turned away from Sri Lankan ports due to prolonged clearance times.
These disruptions not only strain the country’s logistics but also highlight inefficiencies that jeopardize its reputation as a reliable trading hub.
President Dissanayake convened a meeting with key stakeholders to address the issue, during which customs officials committed to operating round-the-clock to resolve the backlog.
The Container Transport Owners’ Association noted that clearance processes have improved following these discussions, yet long queues of container trucks continue to plague the Orugodawatta customs yard.
Major importers have raised alarms over escalating costs stemming from these delays. Over 1,000 containers, including essential food items and raw materials, remain stuck, incurring additional costs exceeding Rs. 100 million.
On average, importers are paying an extra Rs. 100,000 per container, with some costs soaring to Rs. 300,000 due to higher transportation charges, port delay fees, and staffing expenses.
These rising costs have led importers to warn that consumer prices will inevitably increase as they pass on these financial burdens.
The Sri Lanka Logistics and Freight Forwarders Association (SLFFA) echoed these concerns, emphasizing that container vehicles are now spending over three days in port queues. Each day of delay adds Rs. 50,000 to Rs. 100,000 to importers’ expenses, further straining their operations.
SLFFA Chairman Channa Gunawardena highlighted the broader implications, noting that delays have prompted 30 cargo ships to bypass Sri Lanka altogether, exacerbating supply chain disruptions and threatening the country’s trade networks.
To compound matters, Customs has announced that all taxes on delayed containers must be paid before their release, further burdening traders already grappling with the crisis. With over 600 containers still awaiting clearance, the situation underscores systemic inefficiencies that demand urgent resolution.
Ultimately, the delays at Colombo Port have placed significant pressure on Sri Lanka’s economy, threatening its trade prospects and increasing costs for businesses and consumers alike.
A coordinated effort involving all stakeholders is essential to restore efficiency, minimize disruptions, and safeguard the country’s economic stability.
January 16, Colombo (LNW): The United Arab Emirates (UAE) has reaffirmed its commitment to increasing job opportunities for Sri Lankans and enhancing employment prospects for professionals in the UAE.
This pledge was made by UAE Ambassador to Sri Lanka, Khaled Nasser Al Ameri, during a meeting with Sri Lanka’s Secretary to the President, Dr. Nandika Sanath Kumanayake, at the Presidential Secretariat.
Ambassador Al Ameri shared that approximately 150,000 Sri Lankans are currently employed in the UAE, contributing significantly to the labour force in various sectors.
He expressed the UAE’s ongoing support for Sri Lanka’s economic development, with a focus on fostering deeper economic ties and creating new avenues for employment.
During the discussions, the Ambassador highlighted that the UAE is eager to expand its employment offerings for Sri Lankans, particularly targeting skilled professionals, and is keen to build on the existing strong workforce presence in the Gulf.
Al Ameri also noted that under the new political framework in Sri Lanka, opportunities for UAE investors have been significantly enhanced, providing a more attractive and conducive environment for business investments.
He went on to explain that while Sri Lanka had previously faced challenges in fostering an investment-friendly atmosphere, recent reforms have opened up promising prospects for foreign investors, particularly from the UAE.
As a result, the UAE is looking forward to entering into new trade and investment agreements with Sri Lanka, further strengthening the commercial relationship between the two nations.
The UAE Ambassador also extended an invitation to Sri Lankan President Anura Kumara Dissanayake to visit the UAE, with a view to engaging in direct discussions with UAE leaders and potential investors.
Al Ameri suggested that such high-level meetings would provide an excellent platform for advancing diplomatic and economic cooperation, ultimately benefiting both countries.
