April 29, Colombo (LNW): In a bid to proactively address potential tensions with India, the Sri Lanka Freedom Party (SLFP) faction, led by Nimal Siripala de Silva as acting chairman, recently met with Indian High Commissioner Santosh Jha.

The purpose of the meeting was to officially distance themselves from remarks attributed to their former Chairman, Maithripala Sirisena, regarding alleged Indian involvement in the Easter Sunday attacks, Daily Mirror reported citing a reliable source.

Media reports previously circulated claims of Sirisena implicating India in the attacks during his statement to the Criminal Investigation Department (CID).

Sirisena’s recent controversial statements, suggesting knowledge of the masterminds behind the Easter Sunday carnage, have added complexity to the party’s internal dynamics.

However, Public Security Minister Tiran Alles clarified in Parliament last week that the former President did not specifically name any Sri Lankan or Sri Lankan organisation in his CID statement.

Presently, the SLFP is grappling with internal divisions, with Sirisena restrained from acting as party chairman due to a legal injunction.

Representatives of the faction opposed to Sirisena, including MPs Lasantha Alagiyawanna, Duminda Dissanayake, Suren Raghavan, and Faizer Mustapha, met with the Indian envoy to assert their disavowal of the ex-President’s purported claims and stress the importance of maintaining cordial relations with India.

The SLFP is currently embroiled in a legal dispute with a faction led by Minister Siripala de Silva and former President Chandrika Bandaranaike Kumaratunga, who seek to wrest control of the party by sidelining Sirisena.

April 29, Colombo (LNW): The Ceylon Teachers Service Union has announced its intention to initiate trade union action to address existing salary disparities within the education sector.

Deans and teachers from National Education Academies, Government Teacher Colleges, and Teaching Centres will participate in a token strike to highlight these disparities, according to Union Secretary Dhammika Mirihana.

Mirihana emphasised that besides their salaries, no allowances are provided to them, resulting in unfair treatment.

April 29, Colombo (LNW): Sri Lanka has made a partial payment of US $ 35 million out of the total debt of US $ 250 million owed to Iran for oil purchases made in 2012, a report by Daily Mirror said quoting an official.

The delay in payment was initially due to sanctions imposed on Iran.

Subsequently, the Sri Lankan government decided to address the outstanding dues through a barter agreement involving tea in exchange for oil.

A source familiar with the matter revealed that as of the end of February, Sri Lanka had successfully settled US $ 35 million of the owed amount, with an additional US $ 10 million slated for imminent settlement.

Although the tea-for-oil arrangement was formalised in December 2021, the export process encountered delays attributed to the prevailing economic challenges in the country.

By: Isuru Parakrama

April 29, Colombo (LNW): The Intertropical Convergence Zone (where winds from the Northern Hemisphere and Southern Hemisphere converge) is affecting the island’s weather, the Department of Meteorology said.

Showers or thundershowers will occur at several places in the most provinces of the island after 01.00 p.m., with heavy showers above 100 mm being expected to occur at some places in Western, Sabaragamuwa, Southern and North-western provinces, the Department said in its daily weather forecast today (29).

Showers or thundershowers may occur at several places in the coastal areas of Eastern and Southern provinces and in Mullaitivu district during the morning as well.

Misty conditions can be expected at some places in Sabaragamuwa and Central provinces during the morning.

General public is kindly requested to take adequate precautions to minimise damages caused by temporary localised strong winds and lightning during thundershowers.

Marine Weather:

Meanwhile, heat index, the temperature felt on human body is expected to increase up to ‘Caution level’ at some places in Northern, North-central, Sabaragamuwa, Eastern and North-Western provinces and in Monaragala and Hambantota districts.

The public, therefore, is urged to stay hydrated and take breaks in the shade as often as possible, check up on the elderly and the sick, never leave children unattended, limit strenuous outdoor activities, find shade and stay hydrated, and wear lightweight and white or light-coloured clothing.

By: Staff Writer

April 28, Colombo (LNW): A specialized committee has been entrusted with the task of formulating the framework for the Energy Sector Regulator within a concise timeline of two months

The Cabinet of Ministers has approved a proposal to establish a dedicated regulator for the energy sector.

Taking to the ‘X’, Power and Energy Minister Kanchana Wijesekera said the Petroleum, LPG, LNG, Lubricants, Oils, and broader Energy sectors are set to fall under the purview of the newly formed regulatory body.

The Public Utilities Commission of Sri Lanka (PUCSL) will retain its role as the regulator for the electricity sector, while the forthcoming regulator will assume responsibility for governing various aspects of the petroleum and energy industries.

This separation of oversight is expected to streamline regulatory processes, foster greater accountability, and optimize sector-specific regulations.

A specialized committee has been entrusted with the task of formulating the framework for the Energy Sector Regulator within a concise timeline of two months.

This framework is envisioned to encompass a comprehensive spectrum of regulatory considerations, ranging from fair pricing mechanisms and quality assurance to compliance monitoring and environmental standards.

Among the key areas slated for inclusion in the proposed regulatory framework are, fair pricing mechanisms & pricing formulas, quality assurance, compliance monitoring, safety in unloading, storage & distribution, environmental standards, industry collaboration & stakeholder engagement, dispute resolution, public awareness & education, emergency response and risk management.

This separation of oversight is expected to streamline regulatory processes, foster greater accountability, and optimize sector-specific regulations.

A specialized committee has been entrusted with the task of formulating the framework for the Energy Sector Regulator within a concise timeline of two months.

This framework is envisioned to encompass a comprehensive spectrum of regulatory considerations, ranging from fair pricing mechanisms and quality assurance to compliance monitoring and environmental standards.

Among the key areas slated for inclusion in the proposed regulatory framework are, fair pricing mechanisms & pricing formulas, quality assurance, compliance monitoring, safety in unloading, storage & distribution, environmental standards, industry collaboration & stakeholder engagement, dispute resolution, public awareness & education, emergency response and risk management.

By: Staff Writer

April 28, Colombo (LNW): The Committee of Public Finance (COPF), at its most recent meeting, has examined the effectiveness of recent tax increases on tobacco and liquor, aimed at discouraging consumption and boosting government revenue.

Drawing attention to the Laffer curve in taxation, the COPF observed a decline in government revenue over the past two months compared to the same period last year, attributing it to higher taxes that have led to increased smuggling and the adoption of alternative measures.

At the meeting held recently under the chairmanship of MP Harsha de Silva, the COPF members recommended a thorough analysis of the inflation index to guide tax adjustments and research into existing tax systems to prevent revenue loss.

Hpwever State Plantation Enterprises Reforms and State Minister of Finance, Ranjith Siyambalapitiya, announced that in the first quarter of this year, state revenue has reached an impressive Rs. 834 billion.

This achievement not only surpasses the projected revenue but also indicates a growth of 6%.

Motrover the state minister emphasized that with prudent financial management and a consistent revenue pattern, 2024 promises to be a year where revenue targets can be successfully attained.

The COPF also raised concerns about the failure of the Excise Department to address issues such as non-payment of taxes and the use of fake stickers by liquor license holders, despite instructions from the Ministry of Finance.

Expressing dissatisfaction over the lack of action, the Committee emphasized the urgency of implementing recommendations to safeguard government revenue.

Questions were raised regarding the Ministry of Finance’s decision-making process on taxing essential goods, given inefficiencies in revenue collection from liquor license holders.

It was revealed that the Excise Department continues to operate manually, hindering efficient revenue collection and enforcement against illegal activities.

The COPF emphasized the need for digitalization to address these challenges, expressing surprise at delays attributed to cost concerns. They urged immediate measures to solicit quotations for digital software to prevent corruption within the Excise Department.

The Department of Treasury Operations is encountering a challenging task in handling cash flow this year. This difficulty arises from the limitations imposed by existing laws, which prohibit obtaining loans and printing money.

Moreover, government spending has escalated, attributed to both welfare and recurrent expenses. However, it is noteworthy that effective financial management practices are underway in the country.

In comparing recurring expenses between the first quarters of 2020 and 2024, there has been a substantial increase of 35% in the latter period.

Notably, there is a significant surge of 114% in loan interest repayment and a noteworthy uptick of 60% in capital expenditure. Furthermore, the capital repayment of public debt has escalated by 177%, indicating substantial financial commitments.

Shifting focus to welfare expenditure, in the first quarter of 2020, Rs. 93,670 million was allocated for Samurdhi. However, in the corresponding period of 2024, this figure has risen to Rs. 117,107 million, reflecting a notable growth of 25% compared to 2020.

By: Staff Writer

April 28, Colombo (LNW): Defence Secretary Kamal Gunaratne met the Secretary of the Security Council of the Russian Federation where they discussed a wide range of topics, including counter-terrorism efforts, cyber security and defence cooperation, the Ministry of Defence said.

The meeting took place recently in line with the 12th International Meeting on Security Matters held in Saint Petersburg, Russia attended by high-ranking officials from around the world.

The meeting between the two secretaries underscored the importance of fostering international cooperation and collaboration in addressing security threats and promoting peace and stability in the region.

Both parties expressed their commitment to strengthening bilateral ties and exploring avenues for enhanced cooperation in the security domain.

The 12th International Meeting of High-Ranking Officials Responsible for Security Matters provided a valuable opportunity for participants to exchange insights, share best practices and forge partnerships aimed at addressing common security challenges facing the global community.

Oriflame announces withdrawal from Sri Lanka due to economic challenges

Oriflame, a global beauty company, has announced its decision to withdraw from the Sri Lankan market effective 15 May 2024, citing a range of economic challenges that have made its operations unsustainable.

In a statement released, Oriflame expressed deep regret over its departure from Sri Lanka, a market it has been a part of since 1997. Despite years of dedication and resilience in the face of various challenges, the company cited a confluence of factors that have rendered its operations untenable.

“Unfortunately, despite our efforts, the macroeconomic environment, characterised by a series of financial crises, the global impact of COVID-19, stringent import restrictions, fluctuating exchange rates, increased operational costs and regulatory changes has significantly hindered our operations.

These factors have made it unsustainable for us to continue our business in the foreseeable future,” it added.

By: Staff Writer

April 28, Colombo (LNW): State Minister of Finance Shehan Semasinghe highlighted that the Sri Lankan economy has stabilized and growth is now emerging.

The Sri Lankan appreciation from Rs. 360 per USD in 2022 to Rs. 300 per USD at present.

He posted on X: “It is important to understand that exchange rates in Sri Lanka are market-determined which allows currency values to adjust according to supply and demand dynamics in the foreign exchange market”.

He said that strengthening of the Sri Lankan Rupee will make purchasing of goods and services cheaper over the period.

He added: “This will result in increased purchasing power, help reduce inflationary pressures and contribute to price stability and stability in the financial system. Importantly reduce the burden of debt servicing of the country”.

The State Minister said that the GDP which contracted 7.8% in 2022 returned to growth in the 3rd and 4th quarters of 2023, with Q4 GDP growth reaching 4.5%.

He says recognising progress in macroeconomic reforms, the measures to stabilise the economy have been thus far been successful, and the government is now in the process of shifting the economy to a new growth path.

Sri Lanka’s economy is projected to see moderate growth of 2.2% in 2024, showing signs of stabilization, following the severe economic downturn of 2022. But, the country still faces elevated poverty levels, income inequality, and labor market concerns, says the World Bank’s latest bi-annual update.

The Sri Lanka Development Update, Bridge to Recovery, highlights that Sri Lanka saw declining inflation, higher revenues on the back of the implementation of new fiscal policies, and a current account surplus for the first time in nearly five decades, buoyed by increased remittances and a rebound in tourism.

However, poverty rates continued to rise for the fourth year in a row, with an estimated 25.9% of Sri Lankans living below the poverty line in 2023. Labor force participation has also seen a decline, particularly among women and in urban areas, exacerbated by the closure of micro, small, and medium-sized enterprises (MSMEs).

Households are grappling with multiple pressures from high prices, income losses, and under employment. This has led to households taking on debt to meet food requirements and maintain spending on health and education.

“Sri Lanka’s economy is on the road to recovery, but sustained efforts to mitigate the impact of the economic crisis on the poor and vulnerable are critical, alongside a continuation of the path of robust and credible structural reforms,” emphasized Faris Hadad-Zervos, World Bank Country Director for Maldives, Nepal and Sri Lanka.