By: Staff Writer

May 27, Colombo (LNW): The plan to lift the ban on motor vehicle imports next year relies on recommendations from a committee of Treasury officials aiming to meet revenue targets set by the IMF.

The committee emphasizes that without allowing vehicle imports, hitting these targets would be difficult. President Ranil Wickremesinghe, also the Finance Minister, will review these recommendations before making a final decision.

The urgency arises from the understanding that controlling the US dollar rate for an extended period isn’t feasible. Additionally, the committee considers the IMF’s higher revenue targets for the next year.

 While specifics like which vehicles to import and their manufacturing years are still undecided, the goal is clear: to boost revenue.

Already, 1,000 vehicles, including coaches and vans, have been allowed for the tourism sector, showing a gradual relaxation of restrictions.

The substantial increase in foreign reserves, from $431 million to $4,951 million in March, supports the case for lifting the ban. Despite an expected annual loss of up to $800 million, the projected tax revenue of Rs 340 billion helps meet local revenue targets.

The Government is also planning to pass a law implementing vehicle import standards to prevent malpractices and irregularities in the current process before removing the present restrictions finance ministry sources said.

The state authorizes are compelled to take this decision in the wake of directives issued by a parliamentary committee on present scheme of importing e-vehicles for foreign expatriate workers.

The gradual increase in dollar reserves and the rise in the value of the rupee will allow the import of vehicles at least by next year, Finance State Minister Ranjith Siyambalapitiya said.

The committee appointed to carry out a comprehensive study to systematically remove restrictions on the import of vehicles has already made its recommendations, he added.

Cabinet of ministers have recently approved the extension of an electrical vehicle import license scheme, for Sri Lankan expatriates, till June 30.

The Chairman of the Committee on Public Finance Dr. Harsha de Silva noted that there is no transparency in the scheme of providing fully electric vehicle licenses to Sri Lankans working abroad.The committee also stated that through this, vehicles with a tax relief amounting to Rs. 100 million have been imported. It was disclosed that 1,019 licenses have been granted so far and $109.8 million remittances have been received through this.

By: Staff Writer

May 27, Colombo (LNW): Sri Lanka’s banking regulator has announced plans to explore a central bank digital currency (CBDC) to improve the country’s financial inclusion and complement cash use.

Plans for a CBDC launch are underway, with leading central bank executives eyeing the end of 2024 as a tentative launch date. The executives appear before the Ways and Means Committee in Parliament, responding to lawmakers’ inquiries related to a CBDC.

Committee Chairman Patali Champika Ranawaka pointed out the absence of a proper structure for online payments in the country, seemingly indicating support for pursuing a retail CBDC. Given the lack of tighter regulations in Sri Lanka’s financial ecosystem, resulting in 45% of all transactions being unregulated.

Central bank officials noted that exploring a retail CBDC is a veritable solution to bring financial transactions within the purview of authorities. The central bank will begin a proof-of-concept (PoC), augmented by a public consultation, before proceeding with a phased pilot to test real-world scenarios.

Sri Lankan lawmakers doubted the timeline for the CBDC plans over fears of a potential disruption to the financial ecosystem. Members of parliament are pushing for a cautious approach toward rollout despite the lack of regulatory control and supervision over a chunk of the financial system.

Alongside plans for a CBDC launch is the proposed launch for Lanka Pay, a national payment network to support real-time interbank transfers. During the meeting with the MPs, the central bank executives mulled over the prospects of integrating a QR code system into the financial ecosystem.

To bring the financial system under control, initial plans will see the migration of payment systems used by the Inland Revenue Department and Customs to blockchain-based platforms.

Committee members tasked the central bank to conduct a comparative analysis of payment systems employed by India and Bangladesh and make a report within 14 days.

In the process of introducing digital Currency (CBDC), it is essential to integrate Real-Time Gross Settlement (RTGS), Common Electronic Funds Transfer Switch (CEFTS), payment cards QR payment platform (Lanka QR) and the Government Digital Payment Platforms.

Central bank digital currencies can improve payment systems as well as financial inclusion—if they are appropriately designed. If not, they could pose risks. IMF sources revealed. .

While not all countries may see an immediate case to deploy a CBDC, many countries are exploring CBDCs so they will have the option to introduce one in the future if it becomes pertinent for them.

Benefits are more likely to come in time, following the policies pursued by countries and the private sector’s response, as well as the evolution of technology, International Monetary Fund (IMF) stated.

1. President Ranil Wickremesinghe discusses integrating the global ‘Starlink’ network in Sri Lanka to improve Wi-Fi connectivity outside Colombo: The TRCSL is assessing Starlink, with preliminary work almost done: Feedback from the Ministry of Defence is awaited for approval: SpaceX is expanding the beta test of its Starlink satellite internet service, priced at $99 a month plus a $499 upfront cost.
   
2. Three Opposition MPs depart from the BIA Airport on a diplomatic mission to Thailand, aiming to rescue 49 Sri Lankans held in a cyber camp in Myanmar and Sri Lankan war veterans caught in the Russia-Ukraine conflict: The delegation, including MPs Wasantha Yapa Bandara, J.C. Alawathuwala, and Sujith Sanjay Perera, will spend ten days negotiating with diplomatic officials and third parties in Myanmar and Russia: carry letters from Buddhist leaders and the Opposition Leader, and plan to meet Sangha leaders in Thailand and Myanmar, and diplomatic officials in Russia: The group left on SriLankan Airlines flight UL-402 to Bangkok.
   
3. SLPP Anuradhapura District MP S.M. Chandrasena says the next President and the Government of Sri Lanka will be formed by the SLPP: acknowledges there were mistakes committed from their end: asserts Basil Rajapaksa is ‘a gamer’ who will probably contribute to the establishment of a SLPP-led regime in the upcoming elections.
   
4. Several major global players, including China, India, the US, and France, are competing to invest in the country’s graphite industry: The interest comes in addition to the existing involvement of Canadian and Australian companies: Experts note that Sri Lanka boasts high-quality vein graphite in substantial deposits: Director General of the Geological and Mines Survey Bureau Prof. Ranjith Premasiri confirms that Chinese and Indian companies are among the interested foreign investors: Recently, Indian officials discussed advanced exploration and mining technologies, focusing on value addition for modern industries such as electric vehicle batteries and lubricants.
   
5. Tea smallholders, who produce over 75% of the country’s tea, are concerned about the government’s decision to increase the minimum daily wage without securing additional revenue or consulting the industry: The wage hike impacts small and medium estate owners heavily, leading some to consider switching to other crops: They face challenges like high fertiliser costs and bureaucratic hurdles for subsidies: The new wage proposal includes a 70% increase to Rs.1700 daily, but maintaining this requires a minimum green leaf price of Rs.300 per kg, which is difficult due to auction price fluctuations: Estate owners suggest linking wages to productivity and propose various initiatives to enhance worker skills and industry integration, urging the government to set a US$5 floor price per kg for tea to support the wage increase.
   
6. Tourist arrivals in Sri Lanka for May are expected to exceed 100,000 but fall short of the projected 120,934 to 131,112: From May 1-21, arrivals were 79,431, slightly down from last year’s 83,309: The daily average of 3,782 is less than the 5,000 seen in previous months: The off-peak season and recent visa issues contributed to the decline: India is the top source of tourists (26%), followed by the Maldives (11%): Russia has dropped to seventh place, while Germany, the UK, and China are now amongst the top five markets.
   
7. IGP Deshabandu Tennakoon announces the establishment of a special committee to determine if any individuals associated with the ISIS are residing in Sri Lanka: asserts an immediate probe has been initiated to address this concern: The committee incorporates with the TID, Intelligence Unit officials, and the STF, under the oversight of the DIG of the CID: Commenting on the links between the Sri Lankans recently apprehended in Gujarat, India, and the Easter attacks, the IGP said the Police’s legal division has been directed to thoroughly review the commission report and provide relevant details: notes there are currently no reports confirming such links.
   
8. French Ambassador to Sri Lanka Jean-François Pactet passes away aged 53: The demise was reportedly due to a sudden illness: The Foreign Affairs Ministry conveys its deepest condolences on the sudden demise of Pactet: affirms all necessary assistance will be provided to the French authorities and the late Ambassador’s family.
   
9. Veteran Sri Lankan musician Ananda Perera has passed away aged 67: His demise was pronounced while receiving treatment at a hospital in Kandy, according to family sources.
   
10. Sri Lanka Junior Table Tennis players excel on the first day of the South Asian Youth Table Tennis Championship in Kandy: The Sri Lanka under-19 girls’ team won 3-2, and the under-15 girls’ and boys’ teams both secured 3-0 victories over Bangladesh and the Maldives, respectively: The under-15 boys’ team also had a hard-fought 3-2 win against Pakistan: The tournament continues today, with finals scheduled for May 29: Teams from Sri Lanka, Maldives, Bangladesh, Pakistan, India, and Nepal are participating.

May 27, Colombo (LNW): In a recent development highlighting the strategic importance of Sri Lanka’s resources, several major global players, including China, India, the United States, and France, are competing to invest in the country’s graphite industry, a report by Daily Mirror disclosed.

This interest comes in addition to the existing involvement of Canadian and Australian companies.

Experts note that Sri Lanka boasts high-quality vein graphite in substantial deposits.

Prof. Ranjith Premasiri, Director General of the Geological and Mines Survey Bureau, confirmed that Chinese and Indian companies are among the interested foreign investors.

He emphasised the need to assess which companies are adding the most value and utilising the graphite for advanced industrial applications, given the presence of over 3,000 abandoned pits across the country.

Recently, officials from the Indian Government engaged in preliminary discussions with the Bureau to explore opportunities for developing Sri Lanka’s graphite industry.

The talks focused on collaboration in advanced exploration and mining technologies, such as airborne geophysical methods for locating vein-type graphite deposits.

Additionally, the discussions considered how to maximise the value addition of graphite for use in modern industries, including the potential for establishing graphite-based industries like electric vehicle batteries and lubricants.

May 27, Colombo (LNW): Three members of the Opposition have departed from Katunayake Bandaranaike International Airport (BIA) on a diplomatic mission to Thailand, aimed at rescuing 49 Sri Lankan youths and women reportedly held against their will in a cyber camp in Myanmar, as well as Sri Lankan war veterans caught in the conflict between Russia and Ukraine.

The Opposition delegation embarked on this mission to Myanmar this (27) morning for a 10-day visit to establish a programme for negotiations with diplomatic officials and third parties.

The group comprises Opposition MPs, including lawyer Wasantha Yapa Bandara, J.C. Alawathuwala, and Sujith Sanjay Perera.

The MPs stated that they will spend five days each in Myanmar and Russia as part of this rescue operation.

The delegation carried letters containing the demands of the Chief incumbents of the three Buddhist chapters and the Leader of the Opposition.

They plan to meet with Sangha leaders in Thailand and Myanmar, as well as diplomatic officials in Russia.

The group departed from the BIA at 01:10 this morning on SriLankan Airlines flight UL-402 to Bangkok, Thailand.

May 27, Colombo (LNW): The National Consumer Front has reported that the retail price of ginger has surged to Rs. 5,000 per kilogram at the Narahenpita Economic Centre today (27).

In addition, the retail price of beans has escalated to Rs. 700 per kilogramme, and the price of lime has reached Rs. 1,800 per kilogramme at the same centre.

May 27, Colombo (LNW): Sri Lanka’s tea smallholders, responsible for over 75 per cent of the country’s tea production, have voiced serious concerns about the government’s decision to raise the minimum daily wage without securing additional revenue streams or consulting the industry.

The wage increase disproportionately impacts small and medium estate owners, Ushan Samarasinghe, Founding General Secretary of the Medium Scale Tea Estate Owners Association, warned.

Samarasinghe told Daily Mirror that there is necessity for the government to identify new markets to generate the additional revenue needed to support the wage increase.

Without this, many tea estate owners might be compelled to switch to other crops, a trend already observed among numerous estate owners, he added.

Smallholders, still recovering from crises such as the agrochemical ban, are struggling to afford fertilisers.

Samarasinghe pointed out the bureaucratic hurdles in obtaining subsidised fertiliser, suggesting that the wage hike could exacerbate these challenges.

The proposed new living wage of Rs.1700, a 70 per cent increase from the current Rs.1000, comprises a Rs.1350 daily wage (inclusive of the daily budgetary relief allowance and applicable for EPF and ETF payments) and a Rs.350 daily special allowance. Additionally, Rs.80 is proposed for each kilogramme over a specified rate.

However, Samarasinghe argued that maintaining a minimum green leaf price of Rs.300 per kilo is necessary to support the wage hike.

He highlighted the difficulty of achieving this due to fluctuations in tea auction prices, suggesting the government should establish a floor rate at auctions.

He also expressed concerns about the timing of the wage hike announcement, coinciding with the election cycle.

Samarasinghe emphasised that while they do not oppose wage increases, they believe it should be linked to productivity, proposing that a percentage of green leaf prices be allocated to workers based on productivity.

Currently, the green leaf count in Sri Lanka is significantly lower than in other tea-growing nations like Kenya.

In a letter dated 14 May to President Ranil Wickremesinghe, the Estate Owners Association (TEOA), representing leading tea entrepreneurs from the Sri Lanka National Institute of Plantation Management, presented a comprehensive proposal to integrate and empower the tea industry and its workers.

The proposal includes initiatives for the Integration and Marketing of High Polyphenol Tea Products and a Tea Technologist Project for Worker Empowerment.

The TEOA suggested launching a specialised Tea Technologist Project to enhance the skills and expertise of tea workers, thereby improving their contribution to the production process.

This initiative aims to ensure fair wages, improve living standards, and offer career advancement opportunities, enhancing the socio-economic well-being of tea workers and fostering a culture of dignity and respect within the industry.

Additionally, the TEOA urged the government to ensure a US$5 floor price per kilogram for manufactured tea to facilitate the wage increase.

Related news:

May 27, Colombo (LNW): The Ministry of Labour and Foreign Employment has announced an approved wage increase for workers in the plantation sector, effective from 21 May 2024.

The decision, endorsed by Minister Manusha Nanayakkara, was formalised through a gazette notification issued last week by Ministry Secretary R. P. A. Wimalaweera.

The wage hike applies to employees in both the Tea Growing and Manufacturing Trade and the Rubber Cultivation and Raw Rubber Processing Trade.

The new wage will come into effect on 21 May 2024, according to the notification, published in Gazette Extraordinary No. 2381/35 on 25 April 2024.

On 25 April, the Minister of Labour and Foreign Employment authorised a gazette permitting the Commissioner of Labour to set a minimum wage for these trades.

The new living wage of Rs.1700 represents a 70 per cent increase from the current wage of Rs.1000.

Stakeholders were given until 12.00 noon on 15 May to submit any objections to the proposed wage determination.

May 27, Colombo (LNW): Tourist arrivals in Sri Lanka are anticipated to surpass 100,000 for May, though they are expected to fall short of the projected target of 120,934 to 131,112 visitors, reports claim.

The first three weeks of May (from 1st to 21st) saw a modest increase in tourist arrivals, reaching 79,431 compared to 83,309 in the same period last year, according to provisional data from the Sri Lanka Tourism Development Authority.

The daily average of arrivals stands at approximately 3,782, a decrease from the 5,000 daily arrivals seen in previous months.

Tourism typically experiences a lull from April through the summer, as this period is considered off-peak.

Authorities also suggest that recent visa issues may have contributed to the decline in arrivals for the month.

India has emerged as the leading source of tourist traffic, accounting for 26 per cent of total arrivals. The Maldives ranks second with 11 per cent.

Russia, previously among the top two sources of tourists, has dropped to the seventh position for May.

Industry stakeholders attribute this decline to Russian charter flights opting for alternative destinations this summer, citing increased hotel room rates and landing charges at Mattala International Airport.

Germany has climbed to third place, contributing 8 percent of total arrivals, followed by the United Kingdom at 7 per cent.

China has entered the top five markets, accounting for 6 per cent of total arrivals for May, thus ranking fifth.