August 01, Colombo (LNW): The insurance sector in Sri Lanka reported a total Gross Written Premium (GWP) of Rs. 78,589 million for the first quarter of 2024, marking a 7.39 per cent increase from Rs. 73,178 million in the corresponding period of 2023.
The Long-Term Insurance Business saw a substantial growth of 19.26 per cent, with a GWP of Rs. 40,230 million, whilst General Insurance Business experienced a 2.75 per cent decline, amounting to Rs. 38,358 million.
The industry’s total assets grew by 10.88 per cent to Rs. 1,098,988 million. Long-Term Insurance assets rose by 18.54 per cent to Rs. 824,890 million, whereas General Insurance assets decreased by 7.17 per cent to Rs. 274,098 million.
Investments in Government Debt Securities increased by 30.07 per cent to Rs. 552,158 million.
Claims incurred by both insurance sectors dropped by 6.97 per cent to Rs. 32,384 million, with Long-Term Insurance claims at Rs. 18,320 million and General Insurance claims at Rs. 14,064 million.
The Profit Before Tax (PBT) for the period rose by 35.06 per cent to Rs. 12,332 million, driven by significant growth in General Insurance Business PBT, which surged by 106.11 per cent to Rs. 5,677 million.
August 01, Kandy (LNW): The Kandy District Coordinating Committee has unanimously decided to prosecute businesses in Akurana town that dispose of waste into Pinga Oya.
This decision followed a complaint regarding the pollution of the river, which has led to environmental and health issues.
The meeting, chaired by Central Province Governor Lalith U Gamage, highlighted that many businesses along the Kandy Akurana road are responsible for the waste disposal.
The Akurana Divisional Secretary reported that a recent investigation revealed significant waste disposal into Pinga Oya, including toilet waste. In response, the Governor directed the Central Environment Authority, Akurana Regional Council, Akurana Regional Secretariat, and the Regional Health Medical Officer’s Office to jointly pursue legal action against the offending businesses.
Kandy District Secretary Chandana Tennakoon emphasised the need for business inspections and legal measures against illegal constructions.
The Governor also requested a detailed report on Pinga Oya’s current condition to be presented at the next District Coordination Committee meeting.
The meeting also saw inputs from Kandy District Coordinating Committee Chairman MP Gunathilaka Rajapakse, Central Province Chief Secretary Ajith Premasinghe, and Kandy District Planning and Methodology Composition Director Ramya Wijesundara.
August 01, Colombo (LNW): President Ranil Wickremesinghe has appointed U.D. Chandana Jayalal as the new Chairman of the Central Environment Authority (CEA), effective from 30th July.
The removal of the previous Chairman, Venura Fernando, was not explained, according to CEA unions.
The appointment was confirmed in a letter from the Secretary to the President, Saman Ekanayake, which was also sent to the Secretary to the Ministry of Environment and the Director General of the CEA.
Five trade unions within the CEA have expressed strong opposition to Fernando’s removal, praising his integrity and noting that he did not claim his salary.
The unions questioned the timing of the removal amidst an ongoing election and reported the matter to the Election Commission and the independent monitoring body PAFFREL.
A union spokesperson mentioned a planned special discussion due to the disheartenment among CEA employees.
Election Commission Chairman R.A.M.L. Rathnayake stated that appointments and transfers for service requirements or disciplinary action are permitted during an election period, but concerns of political motives can be reported to the commission.
Sources in the Ministry of Environment indicated an ongoing audit query concerning a recent CEA board decision to increase staff salaries by Rs. 10,000.
August 01, Colombo (LNW): Passport issuance will be limited for the next two months as the country prepares for its first issuance of e-passports, Public Security Minister Tiran Alles announced.
He explained that numerous technical and logistical challenges need to be addressed before the e-passports arrive in mid-October, necessitating careful management of the current passport stock.
Despite these limitations, the immigration department continues to issue passports to individuals with urgent travel needs.
Alles highlighted that historically, only 30 per cent of issued passports were used for travel, with the remainder obtained for safekeeping.
Currently, 1,000 passports are being issued daily to meet urgent requirements.
The department aims to commence issuing e-passports by mid-October.
Should the e-passport system not be ready by then, the issuance of regular passports will continue.
August 01, Colombo (LNW): The Central Committee of the Sri Lanka Freedom Party (SLFP) met with President Ranil Wickremesinghe yesterday (31), expressing firm support for his bid in the forthcoming presidential election, as per the President’s Media Division (PMD).
Following a meeting of the SLFP’s Politburo and Central Committee yesterday evening, they decided to back Wickremesinghe.
MP Duminda Dissanayake noted, “Only the incumbent President Ranil Wickremesinghe has made a request in writing asking for our support.”
Additionally, 92 Members of Parliament, including Ministers and State Ministers, recently pledged their support for Wickremesinghe.
Despite the Sri Lanka Podujana Peramuna (SLPP) deciding to field their own candidate, some SLPP MPs and Ministers have declared their backing for President Wickremesinghe.
August 01, Colombo (LNW): Showers will occur at times in Western and Sabaragamuwa provinces and in Galle, Matara, Kandy and Nuwara-Eliya districts, the Department of Meteorology said in its daily weather forecast today (01).
Fairly heavy showers above 50 mm are likely at some places.
Several spells of showers will occur in North-western province and in Matale district.
Showers or thundershowers may occur at a few places in Badulla, Ampara and in Batticaloa districts in the evening or night.
Strong winds of about 50 kmph can be expected at times over Western slopes of the central hills and in Northern, North-central and North-western provinces and in Trincomalee, Monaragala and Hambantota districts.
Fairly strong winds about (30-40) kmph can be expected at times elsewhere of the island.
Marine Weather:
Condition of Rain:
Showers will occur at times in the sea areas off the coast extending from Puttalam to Matara via Colombo and Galle.
Winds:
Winds will be westerly to south-westerly and wind speed will be (30-40) kmph. Wind speed can increase up to 60 kmph at times in the sea areas off the coasts extending from Kankasanthurai to Puttalam via Mannar and from Hambantota to Pottuvil. Wind speed can increase up to 50 kmph at times in the sea areas off the coasts extending from Trincomalee to Kankasanthurai via Mullaittivu and from Puttalam to Hambantota via Colombo and Galle.
State of Sea:
The sea areas off the coasts extending from Kankasanthurai to Puttalam via Mannar and from Hambantota to Pottuvil will be rough at times. The sea areas off the coasts extending from Trincomalee to Kankasanthurai via Mullaittivu, and from Puttalam to Hambantota via Colombo and Galle can be fairly rough at times. Naval and fishing communities are requested to be attentive in this regard.
July 31, Colombo (LNW): Sri Lanka is on the path of economic recovery followed by shifting from brain drain to brain gain, as emphasized by Former Finance Minister and Presidential national organizer Ravi Karunanayake.
With nearly 3 million Sri Lankans living abroad, there’s significant untapped potential in the expatriate community, many of whom excel in various fields.
To leverage this, strategies should be developed to attract expatriates back to Sri Lanka and encourage their investment and expertise, he said. .
This includes facilitating brain gain through attractive incentives, encouraging periodic returns, and enabling financial investments.
Expatriates can significantly contribute by leading multinational corporations’ Sri Lankan branches, driving technological innovation, and enhancing global competitiveness.
Their international experience and networks can help attract investment, raise global awareness, and bridge skill gaps.
For Sri Lanka to advance to a higher income level, the knowledge and investment of expatriates are crucial. Expatriates trained in advanced economies can foster innovation and growth, while their savings and networks can provide vital investments and access to markets.
Potential growth areas include capital markets, venture capital, private equity, outsourcing, and education.
Attracting international students and developing natural resources through strategic marketing can also boost the economy.
Offering tax and citizenship benefits to the second-generation diaspora could further enhance investments in manufacturing and export industries. Additionally, appealing to the senior diaspora with high-quality caregiving options could provide another influx of resources.
To compete globally, Sri Lankan companies must produce world-class products and embrace global marketing. Unlike American firms, few Sri Lankan companies have excelled in global branding.
The education system often emphasizes connections over practical skills, which can create an unfair advantage. Bridging the gap between educational theory and real-life success is essential for creating equal opportunities.
In the first quarter of 2024, 75,175 Sri Lankans left for foreign employment, with a monthly average of 25,058. In 2022, over 1.1 million Sri Lankans departed, primarily for education.
In 2023, 297,656 left for foreign employment, with a monthly average of 24,805. Worker remittances averaged US$ 541 million per month in the fourth quarter of 2023, up from $ 507 million in the third quarter.
Sri Lanka’s economic recovery relies heavily on the successful implementation of policies agreed upon with the International Monetary Fund (IMF).
Under President Ranil Wickremesinghe, the government has enacted significant reforms, including increasing taxes, cutting government spending, and restructuring state enterprises Mr Karunanayake disclosed. .
These measures aim to stabilize inflation and restore economic stability. Deviating from these policies could risk a return to previous economic crises.
The IMF-backed reforms have shown positive outcomes: the Sri Lankan rupee has strengthened, inflation has decreased, tax revenues have risen, and state enterprises have reduced their losses.
Interest rates have also dropped, contributing to overall economic growth. In 2023, the country achieved a primary surplus, a significant milestone.
Despite these improvements, opposition parties are advocating for revisions to some of the IMF’s conditions, particularly those related to higher taxes.
Mr. Karunanayake stressed that while the IMF’s core objectives—fiscal consolidation, revenue enhancement, and financial stability—remain unchanged, the methods to achieve them can be adjusted. External factors such as global economic shifts and geopolitical tensions could influence Sri Lanka’s recovery.
A major challenge is ensuring consistent policy implementation across different administrations to sustain long-term economic stability.
For 2024, Sri Lanka’s economy is projected to grow by 2.2%, recovering from the downturn experienced in 2022.
However, persistent issues such as high poverty rates, income inequality, and labor market difficulties continue to challenge the nation. Sri Lanka’s economy has shown resilience by outperforming expectations in the first quarter of the year.
The Asian Development Bank (ADB) highlighted that the future remains uncertain, particularly due to the approaching election cycle in 2024 and 2025. Policy reforms and continuity are critical concerns as the nation prepares for these elections.
July 31, Colombo (LNW): Melco Resorts & Entertainment’s new City of Dreams project in Colombo, Sri Lanka, is poised to capitalize on the growing wealth and outbound tourism from India. According to Morgan Stanley, the casino at this integrated resort could generate around 50% of the property’s EBITDA.
Melco announced a joint venture with John Keells Holdings PLC, Sri Lanka’s largest conglomerate, to include a casino in the $1 billion-plus project. During a conference call, Melco executives expressed confidence in their $125 million investment, viewing it as a strategic move with substantial returns.
Melco Resorts & Entertainment’s casino project in Sri Lanka will predominantly target the Indian market, with estimated annual gaming revenues of up to US$250 million per year, the company stated on Tuesday.
Melco will fit-out and operate the casino and some hotel rooms at Sri Lanka’s US$1 billion Cinnamon Life Integrated Resort after being awarded a 20-year casino license by the Government of Sri Lanka. The casino is expected to open in mid-2025.
Providing some further insight into the deal during the company’s 1Q24 earnings call, Melco Chairman and CEO Lawrence Ho said he saw Sri Lanka becoming to India what Macau is to China by tapping into its enormous population base and growing economy.
Tourism in Sri Lanka has experienced disruptions due to a terror attack in 2019 and the COVID-19 pandemic. However, the market is rebounding, with tourist visits peaking at 2.3 million in 2018, of which 18% were Indian nationals. As of May 2024, tourism levels have recovered to 88% of the 2018 peak.
Melco’s City of Dreams aims to leverage the increasing interest and financial capability of Indian tourists. Although Indian tourists traditionally spend less on casinos than their Chinese counterparts, the partnership with John Keells is expected to bolster the project’s success.
John Keells, a veteran in the leisure and hospitality industry, operates around 2,500 rooms across Sri Lanka and the Maldives under the Cinnamon brand.
The City of Dreams development will feature a casino and 113 ultra high-end hotel rooms. Melco will operate the casino, which is expected to begin operations by mid-2025.
Financial arrangements dictate that Melco will receive EBITDA from gaming operations after remitting a portion to John Keells and paying income tax on the remainder. Additionally, Melco will earn management fees for the hotel operations.
With a significant investment and strategic partnership, the Melco project aims to capture the rapidly growing wealth in India, potentially generating substantial returns and contributing to the growth of Sri Lanka’s tourism sector.
July 31, Colombo (LNW): Sri Lanka Government is losing massive amounts in tax revenues due to illegal imports of luxury consumer items, electronic appliances, mobile phones and leather products with the connivance of some corrupt custom officials.
As per Volza’s Sri Lanka Import data, Grey import shipments in Sri Lanka stood at 94.7K, imported by 3,353 Sri Lanka Importers from 2,875 Suppliers.
Sri Lanka imports most of its items illegally from India, Pakistan and China..The top 3 importers of Grey market products are India with 871,942 shipments followed by United States with 609,583 and Indonesia at the 3rd spot with 312,705 shipments.
Thulitha Mendis, Chairman of the Import Section at the Ceylon Chamber of Commerce, recently emphasized the severe economic repercussions of unauthorized imports on Sri Lanka. At the 89th Annual General Meeting,
Mendis explained that grey market products, or parallel imports, involve the unauthorized import and sale of branded goods, which significantly undercuts legitimate importers by avoiding taxes and tariffs.
Mendis highlighted that these unauthorized imports have led to substantial tax revenue losses and foreign exchange outflows.
In 2023, Sri Lanka reportedly lost Rs. 3.1 billion ($9.4 million) in tax revenue and Rs. 31.6 billion ($96 million) through illegal channels due to grey market activities.
The influx of parallel imports is also expected to reduce legitimate imports by Rs. 2.5 billion, driven by the rising costs of genuine products.
The clandestine nature of these operations makes it difficult to quantify the exact losses, but the impact is undeniably severe.
Grey market imports create an uneven playing field for legitimate businesses that adhere to legal importation processes and tax regulations. Authorized distributors and retailers struggle to compete with the lower prices offered by grey market operators who evade the costs associated with tariffs and taxes.
While grey market imports might offer lower prices, they carry significant risks. Products sourced through unofficial channels often lack proper warranties, support, and after-sales service, which can lead to higher costs for consumers if the products fail or need repairs.
Without the backing of the manufacturer, consumers have limited recourse for defective or substandard products.
To mitigate the economic impact of grey market imports, Mendis emphasized the need for a multi-faceted approach. Strengthening regulatory frameworks, raising consumer awareness, and supporting legitimate businesses are essential steps.
The government’s ongoing efforts to curb grey market activities will be crucial in securing a more robust and equitable economy for Sri Lankans. While grey market products might offer short-term financial benefits to consumers, the long-term consequences for the country’s economy are profound.
