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New Government Plans Relief Measures for SMEs tackling Debt Crisis

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By: Staff Writer

December 08, Colombo (LNW): The Sri Lankan government is preparing a comprehensive relief scheme targeting small and medium enterprises (SMEs) as a suspension of parate executions (foreclosures) ends on December 15.

Deputy Finance Minister Harshana Suriyapperuma revealed that the government, in collaboration with the Central Bank, is devising mechanisms to support SMEs in financial distress.

Speaking in Parliament, Suriyapperuma noted that the administration has analyzed debt data to assess the scale and nature of SME challenges. “We are finalizing a system to deliver maximum benefits to the largest number of SMEs, which will soon be submitted to the Cabinet for approval,” he said.

The analysis revealed that many bad loans date back over five years, including those incurred before the 2019 Easter Sunday bombings and during subsequent economic crises.

The country has provided multiple debt moratoria in the past, starting after the Easter Sunday attacks, followed by relief during the pandemic and the economic fallout from the currency collapse.

However, SMEs have continued to face difficulties due to reduced consumer demand, inflation, high production costs, and elevated interest rates.

The government is prioritizing SME relief through high-level discussions involving the Finance Ministry, Central Bank, and commercial banks.

The President’s Media Division (PMD) reported that a meeting chaired by Senior Additional Secretary for Finance and Economic Affairs G.N.R.D. Aponsu explored ways to support SMEs as the temporary suspension of debt recovery nears expiration.

The meeting also considered preparing a comprehensive report on SME loans to guide future relief measures.

Central Bank and commercial banks are reviewing options for extending the temporary suspension of parate executions.

This comes as SMEs, which account for 70% of Sri Lanka’s 1.3 million businesses and over 50% of GDP, struggle for survival. Many are burdened with unprecedented levels of debt, leading to operational shutdowns and financial crises.

According to former State Finance Minister Shehan Semasinghe, the 2024 budget proposal has allocated Rs. 50 billion for SME rehabilitation, emphasizing their importance to the national economy.

Of this, Rs. 30 billion will support SME recovery, while Rs. 50 million will be used to establish a facilitating institution under the Ministry of Finance in January. Another Rs. 50 million is earmarked for subsidized financial facilities to alleviate high borrowing costs.

However, Mahendra Perera, President of the National Trade Protection Council, cautioned that many SMEs are trapped in debt from earlier low-interest loans. He stressed the need for clear criteria in selecting eligible SMEs for the new relief scheme, noting past misuse of financial facilities. Perera also highlighted the impact of debt moratoria, which accrued interest on interest, leaving many SMEs vulnerable to parate executions.

The government’s new measures aim to balance SME recovery with prudent financial management, providing much-needed relief to stabilize Sri Lanka’s economy.

Sri Lanka to Introduce Key Bills to Strengthen Financial Crime Laws

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By: Staff Writer

December 08, Colombo (LNW): Sri Lanka’s government plans to introduce new legislation aimed at combating financial crimes and modernizing its legal framework. Recognizing the need for updated laws in a rapidly evolving financial system, the government is taking proactive measures to align with global regulatory standards.

Justice and National Integration Minister Harshana Nanayakkara announced the government’s intent to present three significant Bills in Parliament early next quarter. These include the Proceeds of Crime Bill, the Rescue, Rehabilitation, and Insolvency Bill, and amendments to the Audit Act.

“These laws are critical for reinforcing the integrity of our financial systems, ensuring economic stability, and promoting fairness for both creditors and debtors,” Nanayakkara stated during an adjournment debate on the President’s policy statement.

The Proceeds of Crime Bill is a key component of this legislative effort, targeting financial and criminal misconduct. It aims to trace and recover stolen assets, deter money laundering, and curb proceeds from drug trafficking and other crimes.

The Rescue, Rehabilitation, and Insolvency Bill seeks to modernize insolvency laws, boost creditor confidence, and protect debtor rights by establishing a framework for financial recovery and business stability.

Meanwhile, amendments to the Audit Act focus on promoting transparency and trust in Sri Lanka’s financial ecosystem.

“These reforms are not only about recovering stolen assets but also about creating deterrents for future financial crimes,” Nanayakkara emphasized, adding that they would bolster economic stability and align the country with global best practices.

The government has long prioritized combating financial crimes, particularly in light of the country’s history of addressing terrorist financing. Over the years, Sri Lanka has implemented measures to strengthen its financial regulations and is now collaborating with the Financial Action Task Force (FATF) to enhance laws and prevent such crimes further.

While significant progress has been made, challenges remain. Ensuring robust financial inclusion at the grassroots level while maintaining global compliance standards is a delicate balance. The government acknowledges the importance of integrating with the global financial architecture to provide accessible finance to all sectors of society.

The proposed Bills are expected to enhance Sri Lanka’s legal arsenal for tackling financial crimes and securing economic justice.

 As the government continues to amend existing regulations, it remains focused on building a resilient financial system capable of withstanding evolving challenges. Nanayakkara highlighted that staying ahead of financial crime trends is essential but demanding, requiring ongoing adaptation and vigilance.

 By implementing these legislative reforms, Sri Lanka aims to strengthen its legal and economic framework, ensuring a fair and transparent financial system while fostering global trust and economic stability.

SL faces growing health crisis with rising thalassemia and renal cases, failed to implement WHO food quality standards: Gammanpila

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December 08, Colombo (LNW): Sri Lanka has yet to implement essential tests outlined by the World Health Organisation (WHO) to ensure the safety and quality of its food supply, Bio-Medical Scientist Dr. Kamal Gammanpila disclosed.

Speaking at a recent briefing, Dr. Gammanpila raised alarm about the country’s escalating health issues, particularly the surge in thalassemia and kidney disease cases, which are placing increasing strain on the healthcare system.

Dr. Gammanpila shared concerning data from a recent survey conducted in the Anuradhapura district, which involved 100 schoolchildren aged between 15 and 17.

The results revealed a startling Thalassemia prevalence rate of 23.9 per cent, highlighting the widespread nature of the condition among the younger population.

Similar findings were reported in the Kurunegala district, where the Thalassemia prevalence rate stood at 20.6 per cent, further stressing the gravity of the situation.

The rise in Thalassemia cases is not the only cause for concern. Kidney diseases are also on the rise, contributing to an overall public health crisis that demands immediate attention.

Dr. Gammanpila emphasised that these statistics underscore the urgent need for both preventative measures and effective treatment strategies.

He called for a national response to address these issues, which he argued could be exacerbated by the lack of proper food safety regulations.

The alarming prevalence of Thalassemia in particular points to deeper systemic issues, including inadequate screening, genetic counselling, and public awareness about the condition.

Dr. Gammanpila emphasised that there is a critical gap in the nation’s healthcare infrastructure, with the necessary interventions and testing measures to monitor and prevent such diseases yet to be fully implemented.

US expresses support for SL’s anti-corruption efforts in key meeting with President

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By: Isuru Parakrama

December 08, Colombo (LNW): Donald Lu, the U.S. Assistant Secretary of State for South and Central Asian Affairs, reiterated the United States’ commitment to assisting Sri Lanka with its ongoing anti-corruption initiatives.

The above assurance was made during a special meeting held at the Presidential Secretariat yesterday (07), according to a statement by the President’s Media Division (PMD).

The discussion with President Anura Kumara Dissanayake focused on areas of financial and technical cooperation aimed at strengthening the nation’s security and economy.

Lu expressed the US government’s readiness to offer both financial aid and technical expertise to support Sri Lanka’s efforts in securing the nation’s future.

He particularly highlighted the willingness of the United States to assist in recovering funds that had been illicitly taken out of the country, an essential component of Sri Lanka’s broader anti-corruption strategy.

The talks also underscored the appreciation of the United States for the new administration’s approach to addressing Sri Lanka’s pressing political, economic, and social challenges.

Lu reaffirmed his country’s steadfast support for preserving Sri Lanka’s sovereignty and territorial integrity, emphasising that the US stands by Sri Lanka as it navigates these critical issues.

In his remarks, President Dissanayake discussed how the political culture in Sri Lanka plays a significant role in perpetuating corruption and waste within the system.

He shared that efforts are currently underway to foster a more transparent and effective political environment that would address these concerns.

The President also highlighted ongoing initiatives to improve living standards in rural areas by boosting the rural economy and modernising the civil service, with a particular focus on enhancing public service quality.

The meeting, which included several key figures from both governments, also served as a platform for further collaboration on issues of mutual interest.

Sri Lanka’s Minister of Labour and Deputy Minister of Economic Development, Anil Jayantha Fernando, along with senior officials such as Secretary to the President Dr. Nandika Sanath Kumanayake and U.S. Ambassador to Sri Lanka, Ms. Julie Chung, were also present.

The US delegation included notable figures such as Ms. Anjali Kaur, Deputy Assistant Administrator for Asia at USAID, and Mr. Robert Kaproth, Deputy Assistant Secretary for Asia and the Pacific at the U.S. Department of Treasury, among others.

No need for concern over population and housing census 2024, Dept assures

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December 08, Colombo (LNW): The Department of Census and Statistics has reassured the public that there is no reason to be apprehensive about providing information to the enumerators conducting the ongoing Population and Housing Census 2024.

Director General Anoja Seneviratne underscored the importance of full cooperation from the public to ensure the success of this critical national exercise.

In a statement to the media, Mrs. Seneviratne addressed concerns regarding some households reportedly refusing to share information with census enumerators.

She reassured citizens that the data collected will be kept strictly confidential and used solely for statistical purposes.

She emphasised that the information will not be used for any personal or individual decision-making but will serve as an essential tool for shaping national policies, development strategies, and future planning over the next decade.

The census, which began its data collection phase on October 07, 2024, follows an earlier preparatory phase that began in October 2023.

During this phase, red labels were placed on buildings to identify households for enumeration. Enumerators are now in the process of collecting detailed data about residents and their living conditions based on these identifiers.

This census is being conducted under the legal authority of the Census Ordinance, and we aim to complete the enumeration by 23rd December,” Seneviratne explained.

She also highlighted that the President had declared December 19 as the official census date, as per a gazette notification.

In her message to the public, the Director General reminded citizens that if an enumerator had not yet visited their household, they could contact the dedicated hotline, 1901, for assistance.

Mrs. Seneviratne further stressed the significance of the census, stating, “The data we gather during this process will play a vital role in shaping the future of our nation. It is crucial that every household participates fully to ensure accurate and comprehensive representation in the census.

She urged everyone to contribute, reinforcing that this data is crucial for informed planning and the overall progress of the country.

India offers relief to flood victims in Northern Sri Lanka in act of solidarity

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By: Isuru Parakrama

December 08, Colombo (LNW): The High Commission of India in Colombo has extended critical relief to those affected by the recent devastating floods in Sri Lanka’s Northern Province.

Responding swiftly to the displacement and suffering caused by the severe flooding, the Indian government has ensured that much-needed aid reaches the affected communities in a timely manner.

The distribution of aid was led by Shri Sai Murali, the Consul General of India in Jaffna, in collaboration with MP Kader Masthan.

The relief was provided to families in several flood-hit areas, including Pesalai and Vellankulam in Mannar District, as well as Thunukkai and Manthai East in Mullaitivu District.

Around 2,100 families received essential supplies to help them cope with the aftermath of the disaster.

The relief packages included mats and blankets, offering comfort and some respite to the affected families during a difficult period.

These items were part of a broader relief effort aimed at addressing the immediate needs of those who have lost their homes and belongings.

The Indian High Commission in Colombo expressed that this gesture of assistance was in line with Prime Minister Narendra Modi’s “Neighborhood First” policy, which underscores India’s commitment to supporting its neighbours during times of crisis.

The High Commission further emphasised that India is determined to stand by Sri Lanka, providing timely and effective relief to ensure the well-being of those impacted by the floods.

Fishermen in Rameswaram stage strike over arrest of fishermen by SL Navy

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By: Isuru Parakrama

December 08, Colombo (LNW): Fishermen associations in Rameswaram, Tamil Nadu, have announced a two-day strike, from Saturday (08) to Sunday (08) in protest over the recent arrest of 14 fishermen by the Sri Lankan Navy on charges of poaching.

The strike is part of a much bigger call to the Indian government to take immediate action for the release of the detained men.

At a gathering of major fishermen associations on Friday, a resolution was passed urging the community to suspend all fishing activities for the duration of the protest.

The decision comes in response to growing frustration within the community, as they face increasing difficulties and uncertainty about their livelihoods.

Fishermen leader Sesu Raja, speaking to The Hindu, expressed his concerns about the lack of government intervention and the ongoing hardships faced by the fishing community.

For months, Union Ministers in New Delhi assured us that we should be patient, citing the elections in Sri Lanka. Now that the elections are over and a new President and Prime Minister are in power, the Union government has failed to take any decisive action,” Raja said.

He stressed that the future of Tamil Nadu’s fishermen appears increasingly bleak without substantial governmental support.

Raja pointed out that the Tamil Nadu fishermen community has been engaged in traditional fishing in the Palk Bay for decades, and their troubles began only after the onset of the civil war in Sri Lanka, which had a significant impact on their activities.

Despite the end of the conflict, the problems faced by these fishermen seem to persist.

Raja questioned why the Indian government has not initiated a high-level dialogue with Sri Lankan authorities, a promise made by the late External Affairs Minister Sushma Swaraj during a visit to the region almost a decade ago.

He also criticised the Union government for praising the fishing industry’s rising exports while neglecting the issues that local fishermen face.

We cannot tolerate this double standard. If the government truly values the fishing sector, it must address the ongoing challenges that are threatening our livelihood and safety,” he asserted.

During the meeting, the fishermen associations passed three resolutions:

  • The first called for the immediate release of the 14 fishermen and their trawlers, which had been seized by the Sri Lankan Navy.
  • The second resolution demanded that the Sri Lankan courts stop imposing long prison sentences under the pretext of ‘repeat offences’ on fishermen.
  • The third resolution urged the Tamil Nadu State government to provide compensation to the families of those detained in Sri Lanka.

*With inputs from The Hindu

SL sees decline in workers’ remittances for Nov 2024

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December 08, Colombo (LNW): Sri Lanka has experienced a slight dip in workers’ remittances, with November 2024 witnessing a total of US$ 530.1 million, a decrease from US$ 587.7 million in the previous month.

This decline continues a trend of fluctuating remittance figures, as the country has seen a marginal reduction compared to the same month last year, when remittances amounted to US$ 537.3 million in November 2023.

The fall in remittance inflows in November comes as a concern for Sri Lanka’s economy, which heavily relies on these funds to support foreign exchange reserves and manage economic stability.

Experts suggest that the decline could be attributed to a combination of factors, including global economic challenges, tighter immigration policies in key remittance-sending countries, and the ongoing economic adjustments in Sri Lanka.

Despite the drop, remittances continue to be one of the primary sources of income for millions of Sri Lankan families, with many relying on these funds to meet daily expenses, invest in education, and support healthcare needs.

However, the recent trend has raised concerns about the potential long-term impact on the overall economy, especially as the country faces challenges such as inflation and a weaker currency.

The government and central bank officials have indicated that measures to stabilise and encourage remittance flows are closely being monitored, asserting that these inflows are crucial in the ongoing efforts to rebuild Sri Lanka’s financial standing and support economic recovery in the wake of past crises.

Electricity tariffs stay high due to lack of low-cost power generation and rising demand?

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December 08, Colombo (LNW): Increased demand and the lack of new, low-cost power generation plants in recent years have largely contributed to the government’s inability to reduce electricity tariffs for the next six months, Director General of the Power Sector Reforms Secretariat Pubudu Niroshan disclosed.

Upon query, Niroshan addressed concerns regarding the country’s energy situation, revealing that the electricity demand for the upcoming year is expected to rise by one billion units.

This surge in demand, combined with the failure to construct affordable power plants over the past five years, has created a situation where the additional units needed will primarily come from high-cost energy sources.

Niroshan elaborated that the estimated electricity requirement for 2025 is forecasted to reach 17.5 billion units. However, Sri Lanka’s hydro and coal power capacities have already been maximised, contributing 12 billion units, leaving a shortfall of 5.5 billion units.

To meet this gap, the country will need to rely on a combination of renewable energy sources and fuel oil.

He highlighted that approximately three billion units of this shortfall will be sourced from fuel oil, which is significantly more expensive than hydro or coal power.

This is one of the main drivers behind the current electricity tariff structure, as two-thirds of the electricity bill consists of generation costs, according to Niroshan.

In response to these challenges, Niroshan emphasised the need for urgent action to diversify the energy mix. He suggested that accelerating the development of competitive renewable energy sources, particularly wind and solar power, should be prioritised.

Additionally, he proposed the use of liquefied natural gas (LNG) as a transitional fuel to reduce dependency on more expensive fuel oil.

On the subject of the Ceylon Electricity Board’s (CEB) financial situation, Niroshan revealed that by the end of August 2024, the CEB had used Rs. 112 billion to cover loan repayments and other payables.

With only Rs. 41 billion remaining to cover the revenue shortfall for the year, the government has been left with no choice but to pass on the burden to consumers through the recent tariff adjustments.

CEJ criticises govt’s stance on animal control in crop protection

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December 08, Colombo (LNW): The Centre for Environmental Justice (CEJ) has strongly condemned a recent statement made by Agriculture Minister K.D. Lal Kantha, which suggested that farmers have the freedom to determine how to deal with animals damaging their crops.

Legal advisor to the CEJ Ravindranath Dabare voiced his concerns, describing the government’s stance as unacceptable and legally flawed.

In his remarks made in Parliament on December 05, Minister Lal Kantha asserted that there are no legal restrictions on farmers when it comes to dealing with animals that cause harm to their crops.

His comments sparked immediate protests from various environmental groups, who expressed their alarm at the potential consequences of such a statement.

Dabare pointed out significant flaws in the Minister’s argument, emphasising the potential legal ramifications of encouraging such actions.

When a responsible Minister makes such statements, it gives the impression that people have permission to kill any animal that causes damage to their crops,” Dabare said.

He stressed that this could lead to a widespread misunderstanding of the laws in place to protect wildlife in Sri Lanka.

The legal advisor specifically drew attention to the protection afforded to certain animals, notably elephants, under Sri Lanka’s Fauna and Flora Protection Ordinance. According to the 12th clause of the ordinance, elephants are granted special legal protection, and killing one, even in response to crop damage, is a criminal offence.

Similarly, peacocks are also protected under the same legislation, and it is illegal to harm or kill them.

Dabare warned that the Minister’s comments could mislead farmers into believing they have the legal right to harm or kill these species.

Statements made without a full understanding of the relevant laws can lead to dangerous misunderstandings, with people thinking they have the right to kill protected animals,” Dabare emphasised.

He called on the government to take a more responsible approach to addressing the issue of crop damage caused by animals, urging the exploration of alternative solutions that do not involve harm to wildlife.

Despite the legal protections in place, many farmers have raised concerns about the significant damage caused by animals to their crops. Reports suggest that paddy fields have been especially affected, with animals such as parrots, peacocks, and toque macaques being identified as major culprits behind extensive crop losses.

Farmers have expressed frustration over the lack of effective measures to prevent such damage, calling for immediate action from the government to protect their livelihoods.

Dabare concluded by advocating for more sustainable and humane solutions to address the conflict between agricultural production and wildlife conservation, stressing that the government must take a proactive role in providing guidance and support to farmers, rather than resorting to statements that may lead to harm being inflicted on vulnerable species.