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Sri Lanka’s securing of IMF’s third tranche challenging – State Minister

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By: Staff Writer

April 02, Colombo (LNW): Sri lanka has made substantial progress in the debt restructuring program. The second review with the International Monetary Fund (IMF) was finalized two weeks ago and has been approved at the staff-level. However, obtaining the third instalment has become increasingly challenging, Finance State Minister Shehan Semasinghe said.

The IMF Board approved a 48-month extended arrangement under the Extended Fund Facility (EFF) of SDR 2.286 billion (about US$3 billion) to support Sri Lanka’s economic policies and reforms.

The objectives of the EFF-supported program are to restore macroeconomic stability and debt sustainability, safeguarding financial stability, and stepping up structural reforms to unlock Sri Lanka’s growth potential.

All program measures are mindful of the need to protect the most vulnerable and improving governance.Close collaboration between Sri Lanka and all its creditors will be critical to expedite a debt treatment

Finance State Minister Shehan Semasinghe emphasized the significant progress made under the leadership of President Ranil Wickremesinghe, affirming his capability to tackle the country’s economic crisis effectively.

Stressing the necessity of President Wickremesinghe’s continued leadership, Semasinghe cautioned against the misconception that anyone could manage the country’s affairs, highlighting the unique expertise and suitability of President Wickremesinghe for the task.

The Finance State Minister further announced that following the distribution of relief benefits to 2.4 million “Aswesuma” recipients, plans are underway to conduct a follow-up survey.

Expressing his views further, State Minister Semasinghe said, “Following the call for applications for the “Aswesuma” second phase, authorities anticipate receiving around 400,000 submissions. This will complete the provision of insurance for 2.4 million beneficiaries.

“The current stability and positive trajectory have been the result of meticulous planning and strategic decisions.

It is widely believed that by staying the course with the current program, the country can surpass a 2% economic growth rate in the year 2024.

This optimistic outlook underscores the significance of maintaining effective leadership and prudent economic strategies moving forward.”

“Although the exchange rate has strengthened and inflation has dropped significantly from 70% to 5%, there have been public complaints about not seeing the benefits of these reduced prices. This issue has emerged due to unregulated prices in the black market.

To address this, the Minister of Commerce has announced plans to launch a weekly notification system for wholesale prices starting next week. This move is aimed at enhancing transparency in wholesale pricing, allowing the public to have a clearer understanding and estimation of retail prices.”

US assists in preserving SL’s rich maritime history via Shipwreck conservation

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By: Staff Writer

April 02, Colombo (LNW): The U.S. Embassy in Colombo, in partnership with the Central Cultural Fund’s Maritime Archaeology Unit, has undertaken a significant step in preserving Sri Lanka’s rich maritime history through the conservation and documentation of the Godawaya Shipwreck, the oldest known shipwreck in the Asia-Pacific region.

The initiative, funded by the U.S. Ambassadors Fund for Cultural Preservation, underscores the enduring partnership between the United States and Sri Lanka in cultural preservation and archaeological research.

U.S. Ambassador to Sri Lanka, Julie Chung, along with Counselor for Public Affairs at the U.S. Embassy Heidi Hattenbach, and Senior Archeology Officer of the Central Cultural Fund’s Maritime Archaeology Unit Rasika Muthucumarana led an inspection dive to the ancient Godawaya shipwreck off the coast of Hambantota.

This venture is part of a broader effort supported by the U.S. Ambassadors Fund for Cultural Preservation, which began funding the project in 2022 to study and safeguard the submerged cultural treasure dating back to the 2nd Century B.C.

Ambassador Chung expressed her awe and the importance of the mission, stating, “Witnessing the Godawaya shipwreck firsthand at 33 meters below the surfaces of the ocean was a breathtaking experience, shedding light on Sri Lanka’s significant history as a pivotal maritime hub.

The United States is proud to support this endeavor, enhancing the understanding of Sri Lanka’s historical role in global maritime trade and ensuring the preservation of its rich cultural legacy for future generations.”

Adding to the Ambassador’s sentiments, Counselor for Public Affairs Heidi Hattenbach highlighted the project’s unique value, “We are honoured to partner with the Maritime Archeology Unit on the study and preservation of this important site, a partnership that has supported skilled Sri Lankan divers and researchers to really dive deep into an important avenue of Sri Lanka’s maritime history.

Over the coming months, their dedicated efforts will deepen the understanding and accessibility of Sri Lanka’s underwater cultural heritage, paving the way for future archaeological discoveries and conservation initiatives.”

Senior Archeology Officer Rasika Muthucumarana, reflecting on the technical aspects and the depth of the project, added, “Collaborating with the U.S. Embassy on this Godawaya shipwreck excavation project has been an honour.

While the depths of our explorations present unique challenges, the shared commitment to unveiling the truths and preserving the history of ancient maritime routes and trade practices creates a strong bond between our teams. This partnership is a model for future cultural preservation endeavors.”  

Located in Galle, the Maritime Archaeology Unit (MAU) is dedicated to the preservation and exploration of Sri Lanka’s rich underwater cultural heritage, conducting extensive research, and applying advanced conservation techniques. 

Sri Lanka Original Narrative Summary: 02/04

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  1. The President’s Defence Division rescues a woman who attempted suicide by throwing herself into the sea: The Defence Division team rescues the woman near the flag pole of Galleface Green.
  2. Opposition Leader Sajith Premadasa says even though it has been 05 years since the Easter Sunday attack, the government has failed to implement or consult the recommendations made by the Malalgoda Committee report, the Presidential Commission report and the Parliamentary Special Committee report on this heinous attack: alleges that parts of the report on this genocide have been concealed even from members of Parliament and various people are making controversial comments due to the naming of masterminds who were picked without sufficient evidence.
  3. Sri Lanka’s Tamil political parties aim to nominate a minority candidate for the upcoming presidential election in the last quarter of 2024, seeking a credible solution for Tamil minority issues: TNA Leader R. Sampanthan raises the importance of supporting a candidate committed to resolving these issues: While the TNA proposes a Tamil candidate, Sampanthan acknowledges challenges in garnering widespread support and emphasises the need for a credible political solution, including addressing the merger of north and east provinces.
  4. Finance State Minister Shehan Semasinghe says Sri Lanka has progressed well in its debt restructuring programme, with the second review by the IMF approved at the staff level: adds however that obtaining the third instalment has become challenging: asserts under President Wickremesinghe’s leadership, an extended arrangement with the IMF was approved to support economic policies and reforms, aiming to restore stability and sustainability while protecting the vulnerable: adds plans for relief benefits distribution and addressing public concerns about reduced prices are underway.
  5. Laugfs Gas slashes the prices of its domestic LP gas cylinders, with a reduction of Rs. 625 for a 12.5kg cylinder in the Colombo district: The price adjustment follows positive economic factors such as the strengthening Sri Lankan rupee, lower interest rates, and ample foreign exchange availability.
  6. Five export associations in Sri Lanka collectively address challenges posed by the recent strengthening of the Sri Lankan rupee against the US dollar: cite concerns such as reduced export competitiveness, increased operational costs, and pressure on worker wages: criticise the mandatory conversion of export earnings into local currency and urged the Central Bank to reconsider its policy to support export growth and economic development.
  7. Sri Lanka awaits clarification on hazardous materials aboard the Singapore cargo ship Dali, which collided with a Baltimore bridge: Among known cargo are 57 containers with dangerous goods: The US National Transportation Safety Board is assessing the ship’s manifest: SL anticipates its arrival post New Year: The SLPA chairman outlined port protocols, indicating transshipment likelihood: Meanwhile, concerns persist regarding hazardous waste entry, subject to Basel Convention regulations.
  8. In the fiscal year 2022/23, government revealed foregone revenue of Rs. 978 billion due to tax concessions, representing 56% of total tax revenue collected that year: This disclosure, reported by PublicFinance.lk, aims to enhance financial transparency and align with international standards: Additionally, the government pledged to regularly disclose firms benefitting from tax exemptions through the Board of Investment and the Strategic Development Projects Act.
  9. Finance State Minister Ranjith Siyambalapitiya orders the transfer of all officers from the Excise Department’s Narcotics Prevention Unit after four excise officers were arrested for transporting a large quantity of cannabis: The arrestees have been suspended pending further investigation, and a thorough probe into the incident has been launched: The arrests were made by the Police Narcotics Bureau, and 45 kilograms of cannabis were seized along with an Excise Department van used in the operation.  
  10. Sri Lanka dominated Bangladesh in the second Test match at Chattogram, with Asitha Fernando shining with 4 wickets for 34 runs, limiting Bangladesh to 178 all out in their first innings: Despite SL’s initial struggle in their second innings, they managed to secure a lead of 455 runs by the end of the third day: Debutant Hasan Mahmud impressed for Bangladesh with 4 wickets for 51 runs: Today, on the fourth day, Bangladesh faces pressure with a significant deficit.

Dollar rate against LKR at banks today (April 02)

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April 02, Colombo (LNW): The Sri Lankan Rupee (LKR) indicates further appreciation against the US Dollar today (02) in comparison to yesterday, as per leading commercial banks in the country.

At Peoples Bank, the buying price of the US Dollar has dropped to Rs. 294.54 from Rs. 294.59, and the selling price to to Rs. 304.51 from Rs. 304.56.

At Commercial Bank, the buying price of the US Dollar has dropped to Rs. 293.72 from Rs. 293.80, and the selling price to Rs. 303 from Rs. 303.50.

At Sampath Bank, the buying price of the US Dollar has dropped to Rs. 295 from Rs. 295.50, and the selling price to Rs. 304 from Rs. 304.50.

Police officers offer apology before Supreme Court amidst release proceedings for Easter Attack suspects

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April 02, Colombo (LNW): Five police officers, including the Officer-in-Charge (OIC) of Horowpothana Police, presented a traditional Sinhala-style apology before the Supreme Court during proceedings related to the release of three individuals from the Horowpothana area.

These individuals had been arrested and detained on suspicion of involvement in the Easter Sunday terror attacks.

The Supreme Court convened to address the fundamental rights petitions filed by Zeynul Abdeen Irfan, Zeynul Abdeen Khalifatullah, and Noor Zakaria.

These petitions alleged violations of their fundamental rights due to their unlawful arrest and detention, which extended beyond six months.

During the hearing, the Deputy Solicitor General, representing the implicated police officers, assured the court that there would be no further interrogation of the individuals concerning the incident.

The petitions were brought before a bench comprising Justices S. Thurairaja, Kumuduni Wickramasinghe, and Achala Vengappuli.

SL reports Rs. 978 bn in tax concessions for FY 2022/23, accounting for 56% of total tax revenue

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April 02, Colombo (LNW): In the fiscal year 2022/23 (April to March), the Sri Lankan government reported a total of Rs. 978 billion in foregone revenue due to tax concessions, as disclosed on March 31, 2024.

This amount represents 56 per cent of the total tax revenue collected by the government during 2022.

The information was brought to light by PublicFinance.lk, a leading economic insights platform in Sri Lanka managed by Verité Research.

The data originates from a document titled “Tax Expenditure Statement,” released by the Ministry of Finance of Sri Lanka.

The purpose of this disclosure is to enhance transparency in Sri Lanka’s financial reporting, aligning with international best practices.

Additionally, the government has committed to the International Monetary Fund (IMF) programme to semi-annually publish a comprehensive list of all firms benefiting from tax exemptions through the Board of Investment and the Strategic Development Projects Act (SDP), along with an estimation of the value of these tax exemptions.

India affirms commitment to Katchatheevu Island Pact amidst political discourse

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April 02, Colombo (LNW): India has affirmed its commitment to uphold the agreement transferring sovereignty of the Katchatheevu Island to Sri Lanka, despite recent political discourse within India, largely attributed to domestic considerations amidst the approaching Lok Sabha elections, Daily Mirror claimed citing sources.

Prime Minister Narendra Modi targeted the DMK party on Monday regarding the Katchatheevu island matter, accusing the ruling party of Tamil Nadu of neglecting the state’s interests.

Modi’s remarks shed light on the DMK’s purported inconsistency concerning the issue, as reported by X.

It is evident that the current ruling Bharatiya Janata Party (BJP) in India does not align with the stance adopted by the previous Indian National Congress government. Nevertheless, with the agreement having been formalised, insiders revealed that the ongoing debate within India does not directly involve Sri Lanka.

Indian External Affairs Minister S. Jaishankar reiterated yesterday that India and Sri Lanka reached an agreement in June 1974, delineating the maritime boundary and designating Katchatheevu under Sri Lankan sovereignty.

The 1974 agreement encompassed three additional clauses.

Firstly, it affirmed the sovereignty and exclusive jurisdiction of each nation over the adjacent waters.

Secondly, Article 5 guaranteed Indian fishermen continued access to Katchatheevu without the need for travel documentation.

Lastly, it ensured reciprocal rights for Indian and Sri Lankan vessels within each other’s maritime territories, consistent with historical practices.

Furthermore, an exchange of letters between India and Sri Lanka established mutual recognition of sovereign rights over living and non-living resources within their respective exclusive economic zones.

Jaishankar highlighted that over the past two decades, Sri Lankan authorities have detained 6,184 Indian fishermen and seized 1,175 Indian fishing vessels.

SL yet to ascertain nature of hazardous materials aboard Singapore cargo ship collided with Baltimore bridge

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April 02, Colombo (LNW): Sri Lanka is yet to ascertain the nature of hazardous materials aboard the Singapore cargo ship Dali, chartered by Maersk, which collided with the Baltimore bridge on March 26, revealed an official statement.

The available information suggests that among the cargo are 57 containers containing materials falling under the International Maritime Dangerous Goods Code, comprising mainly corrosives, flammables, miscellaneous hazardous substances, and Class-9 hazardous materials, including explosives and lithium-ion batteries, contained within 56 containers.

However, the US National Transportation Safety Board is still analysing the ship’s manifest to determine the contents of its other 4,644 containers.

Before reaching Baltimore, the Dali made stops at New York and Norfolk, Virginia, the location of the world’s largest naval base.

Its next scheduled destination was Colombo, following a route around South Africa’s Cape of Good Hope, with an estimated travel duration of 27 days, anticipated to arrive shortly after the Sri Lankan New Year.

In response to queries regarding this matter, Keith Bernard, Chairman of the Sri Lanka Ports Authority (SLPA), emphasised that ships are required to declare container contents 72 hours before arriving at the Colombo Port.

“The vessel is expected to arrive here on April 21, 2024. This implies that they should notify us by April 17 or thereabouts. Sufficient time is available.

Should hazardous items be declared within containers, we will implement protocols to isolate them accordingly.

As a major transshipment hub, we have established procedures for handling such containers. It is probable that these containers are intended for transshipment,” he explained.

When inquired about the protocol for containers intended for entry into the country, Bernard stated that clearance from the Defence Ministry and other relevant authorities would be sought.

However, Ajith Wijesundara, Deputy Director of the Central Environment Authority (CEA), indicated that it remains uncertain whether the ship carried containers containing hazardous waste or toxic substances.

He noted that, according to the Basel Convention, such wastes would not be permitted entry into the country.

The Basel Convention, concerning the Control of Transboundary Movements of Hazardous Wastes and their Disposal, was adopted on March 22, 1989, and entered into force on May 5, 1992.

Wijesundara emphasised that toxic substances imported as raw materials are subject to guidelines and regulations.

Export associations call for action amidst LKR appreciation

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April 02, Colombo (LNW): Five prominent export associations have jointly urged the authorities to address the significant challenges arising from the recent appreciation of the Sri Lankan rupee against the US dollar.

Highlighting key concerns, including restrictions on foreign currency movement among commercial banks and mandatory conversion of export earnings into local currency, the Exporters Association of Sri Lanka, Joint Apparel Association Forum of Sri Lanka, National Chamber of Exporters, Tea Exporters Association, and Sri Lanka Association of Manufacturers and Exporters of Rubber Products issued a collective statement to the media.

“The appreciation of the rupee has rendered our exports more expensive for international buyers, directly impacting our competitiveness in the global market.

This situation has escalated operational costs, necessitating adjustments in line with the country’s heightened inflation,” the associations emphasised.

Expressing concern over the rapid appreciation of the rupee, which has fallen below Rs. 300 per US dollar since March 19, the associations underscored the threat to business sustainability and employee livelihoods.

Despite the rupee’s appreciation, the associations noted that the high cost of living persists, putting continued pressure on worker wages.

Furthermore, they pointed out that the timing of the rupee’s strengthening coincides with weak global demand for merchandise exports and stiff competition from other countries.

The associations raised objections to the Central Bank of Sri Lanka’s policy, enacted through Gazette No.2251/42 on October 28, 2021, mandating the conversion of foreign exchange receipts into rupees within a specified timeframe.

They argued that this policy restricts exporters’ flexibility in planning currency conversions, often resulting in conversion at an overvalued exchange rate and placing additional strain on export operations.

In light of the evolving economic landscape and positive foreign exchange reserves, the associations deemed the continued enforcement of the mandatory conversion policy counterproductive.

They stressed the urgent need for the Central Bank to reconsider and revoke the aforementioned gazette to create an environment conducive to the growth and competitiveness of Sri Lanka’s exports.

“Addressing these policy concerns is essential to laying the foundation for sustainable economic development, ensuring employment security for citizens, and fostering the continued prosperity of our nation,” the associations concluded.

LAUGFS announces significant price reduction for domestic LPG

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April 02, Colombo (LNW): Laugfs Gas PLC announced a substantial reduction in the prices of its Laugfs-branded domestic liquefied petroleum gas (LPG) effective midnight yesterday.

Effective immediately, the price of a 12.5kg domestic cylinder, under the Laugfs brand, will be reduced by Rs. 625, bringing the MRP to Rs. 4,115 within the Colombo district.

Prices in other areas and pack sizes will be adjusted accordingly.

In a statement, Laugfs Gas attributed this significant price revision to several positive developments and factors contributing to the favourable economic climate.

The company acknowledged supportive government policies, including the appreciating value of the Sri Lankan rupee against the US dollar, reduction in interest rates, and availability of ample foreign exchange facilitating the opening of letters of credit.

Since the expiration of the trade monopoly held by multinational Shell Gas in 2000, Laugfs Gas PLC has emerged as the sole private sector player in Sri Lanka’s dynamic LPG industry.

Operating one of the largest LPG import and export terminals in the Indian Ocean region at the Hambantota Port, capable of handling 30,000 m/tonne shipments, Laugfs Gas leverages this strategic advantage to optimise LPG costs, facilitating the substantial price reduction.

Additionally, Laugfs Gas PLC maintains a fleet of LPG vessels, solidifying its position as the only Sri Lankan LPG ship-owning company.

Leveraging its robust infrastructure and logistic capabilities, the company has emerged as a leading LPG trader in the Asian region.

Looking ahead, Laugfs Gas PLC reaffirmed its commitment to passing on these advantages to Sri Lankan LPG consumers.