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Sri Lanka’s trade deficit widens in July amidst economic recovery

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September 02, Colombo (LNW): Sri Lanka’s merchandise trade deficit widened in July, reflecting an increase in imports as the economy showed signs of normalisation.

The country’s exports reached US$ 1,130 million, marking a robust 10.8 per cent increase from the same period last year.

This growth was driven by strong performances in industrial exports, particularly textiles and garments, and agricultural products such as spices, tea, and coconut-related items.

However, the rising import demand, which surged by 25 per cent to US$ 1,734 million in July, outpaced the growth in exports.

All major categories of imports—intermediate, consumer, and investment goods—saw significant increases as economic activities picked up.

This resulted in a trade deficit of US$ 604 million for the month, a notable increase from the US$ 367 million recorded in July 2023.

Cumulatively, for the first seven months of the year, the trade deficit expanded to US$ 3,143.8 million, compared to US$ 2,656.6 million in the same period last year.

Despite the widening deficit, the overall economic situation indicates a return to normalcy, with the exception of vehicle imports, which remain suspended for the fifth consecutive year.

Fuel imports have also moderated, with the country spending US$ 336.9 million on refined and crude oil in July, a decline of 11.6 per cent from the previous year.

Over the first seven months, Sri Lanka’s fuel expenditure totalled US$ 2,546.1 million, down 6.9 per cent from the same period in 2023, thanks to relatively stable global oil prices.

On the positive side, the textile and garment sector continued to be a strong performer, earning US$ 444.6 million in July, a 3.7 per cent increase year-on-year, which helped narrow the sector’s overall earnings decline for the year to 1.3 per cent.

Tea exports also saw an 8.2 per cent increase, reaching US$ 124.7 million, while coconut and spices exports grew by 23.3 per cent and 63.3 per cent, respectively, to US$ 38.4 million and US$ 60.8 million.

Consumer imports, a key indicator of domestic demand, also showed signs of recovery, rising by 21.2 percent to US$ 323.3 million in July.

Food and beverage imports contributed US$ 177.7 million to this total, up 10.8 percent from last year.

Although dairy imports fell sharply by 53.1 percent, sugar and confectionery imports surged by 212 percent, reaching US$ 46.4 million.

Additionally, imports of consumer discretionary items such as home appliances, clothing, telecommunication devices, and household furniture showed significant increases, signalling a revival in consumer confidence and spending.

Philippines and Sri Lanka strengthen legal cooperation through treaty negotiations

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September 02, Colombo (LNW): In a significant step towards enhancing legal collaboration, the Department of Justice (DoJ) of the Philippines, in partnership with the Department of Foreign Affairs (DFA), recently hosted negotiations in Manila to finalise a Mutual Legal Assistance Treaty (MLAT) and a Treaty on the Transfer of Sentenced Persons (TTSP) with Sri Lanka.

The talks were part of a broader effort to bolster bilateral legal frameworks, with discussions also encompassing an extradition treaty.

Both nations tentatively agreed to hold the next round of negotiations in Colombo next year, reflecting their commitment to deepening judicial cooperation.

The successful conclusion of the negotiations was marked by the signing of the agreed minutes in the presence of Sri Lankan Ambassador to the Philippines, Chanaka Talpahewa.

The Sri Lankan delegation was headed by Attorney General Parinda Ranasinghe (Jnr.), with key legal and diplomatic officials including Additional Secretary (Legal) Piyumanthi Peiris from the Ministry of Justice and Assistant Legal Adviser Sanjika Kammanankada from the Ministry of Foreign Affairs.

On the Philippine side, the delegation was led by DoJ Chief State Counsel Dennis Arvin Chan, accompanied by Assistant Chief State Counsel Mildred Bernadette Alvor and several other state counsels.

The DFA was represented by Directors Shiela Mae Briones and Ameroden Daudey Tago from the Office of Treaties and Legal Affairs, alongside Assistant Director Bojer Capati from the Office of Asian and Pacific Affairs.

The discussions reflect a shared commitment to enhancing legal cooperation, with the MLAT and TTSP expected to streamline mutual legal assistance and the transfer of sentenced individuals between the two countries, thereby strengthening the legal ties that bind the Philippines and Sri Lanka.

*With inputs from The Manila Times

Heavy rains and strong winds expected across Western SL: Advisory issued for coastal and inland areas

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September 02, Colombo (LNW): Showers or thundershowers will occur at times in Western, Sabaragamuwa and North-western provinces and in Galle, Matara, Kandy and Nuwara-Eliya districts, with heavy showers above 100 mm being likely to occur at some places in Western and Sabaragamuwa provinces and in Galle and Matara districts.

Showers or thundershowers may occur at a few places in Eastern and Uva provinces during the evening or night.

Strong winds about (40-50) kmph can be expected at times over Western slopes of the central hills, Northern, North-central and North-western provinces and in Hambantota and Trincomalee districts.

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

Meanwhile, the sun is going to be directly over the latitudes of Sri Lanka during 28th of August to 06th of September due to its apparent southward relative motion. The nearest places of Sri Lanka over which the sun is overhead today (02) are Marawila, Narammala, Mawathagama and Kalmunai about 12.09 noon.

Marine Weather:

Condition of Rain:
Showers or thundershowers will occur at times in the sea areas off the coast extending from Puttalam to Matara via Colombo and Galle. Showers or thundershowers may occur at a few places in the other sea areas around the island during the afternoon or night.
Winds:
Winds will be south-westerly in direction and wind speed will be (30-40) kmph. Wind speed can increase up to (55-60) kmph at times in the sea areas off the coasts extending from Trincomalee to Chilaw via Kankasanthurai, Mannar and Puttalam and from Hambantota to Pottuvil. Wind speed can increase up to 50 kmph at times in the sea areas off the coasts extending from Chilaw to Hambantota via Colombo and Galle.
State of Sea:
The sea areas off the coasts extending Trincomalee to Chilaw via Kankasanthurai, Mannar and Puttalam and from Hambantota to Pottuvil will be rough at times. The sea areas off the coasts extending from Chilaw to Hambantota via Colombo and Galle may be fairly rough at times. The wave height (about 2.0–2.5 m) (this is not for land area) may increase in the sea areas off the coast extending from Mannar to Matara via Colombo and Galle. Temporarily strong gusty winds and very rough seas can be expected during thundershowers.

Sri Lanka Original Narrative Summary: 02/09

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  1. President Ranil Wickremesinghe announces his candidacy for the upcoming presidential election, seeking a five-year term to solidify Sri Lanka’s recent economic progress: emphasises his efforts to stabilise the economy, contrasting his approach with those of his opponents: highlights his achievements in reducing inflation, boosting GDP, and improving public services, urging voters to support his vision for continued economic stability.
  2. Opposition leader Sajith Premadasa, the Samagi Jana Balawegaya-led alliance’s presidential candidate, pledges to address Sri Lanka’s unemployment crisis through a comprehensive plan focusing on youth and unemployed graduates: promises a 24% salary increase for state employees, reduced tax rates, affordable fertiliser, and the construction of seven manufacturing factories in Anuradhapura district.
  3. Presidential Candidate of the National Peoples Power MP Anura Kumara Dissanayake says the public’s presence and support for the 2024 presidential election will steer Sri Lanka towards a new renaissance and a vision of a thriving nation, a beautiful life: asserts regardless of the political opponents’ attempts of tearing down the stronghold made around the NPP by the people, their victory will be absolute and will rectify injustice people had suffered for decades.
  4. ‘Sarvajana Balaya’ Presidential Candidate Dilith Jayaweera emphasises the party’s national strategic plan is based on scientifically and logically achievable goals within a set timeline, rather than mere promises: highlights key aspects of the plan, including boosting household incomes, facilitating vehicle purchases for youth, and empowering Sri Lankan women through entrepreneurship.
  5. The Postal Department reports 95% of postal ballot papers for the presidential election have been distributed, with only a few remaining for military bases: These are to be dispatched today: A total of 712,318 state sector employees are eligible for postal voting from 4-6 September 2024, with the Kurunegala district having the highest number of eligible voters.
  6. The Sri Lanka Ports Authority (SLPA) addresses concerns about a perceived decline in transshipment volumes at the Port of Colombo, attributing it to global supply and demand dynamics rather than competition from regional Indian ports: Despite temporary fluctuations, Colombo Port saw a 9.6% growth in 2024, handling 5.02 million TEU, with SLPA emphasising collaboration and industry resilience.
  7. The Ceylon Private Bus Owners’ Association announces bus fares will not change despite recent fuel price reductions: Chairman Gemunu Wijeratne explains the Rs. 10 fuel price cut is too small to affect fares, which are set by a specific price formula: Adds a minimum Rs. 25 reduction in fuel prices is required to consider lowering bus fares.
  8. IndiGo commences daily non-stop flights between Chennai and Jaffna, with the inaugural flight arriving at Jaffna International Airport yesterday at 3:05 p.m: The aircraft, carrying 52 passengers, was welcomed with a water cannon salute and traditional performances: IndiGo’s service aims to strengthen connectivity between India and Sri Lanka, with tickets available through their website and mobile app.
  9. A Sri Lankan passenger was caught at the BIA Airport attempting to smuggle foreign cigarettes worth over Rs. 3 million, disguised as cosmetics from Doha: Police Narcotic Bureau officials found 20,000 prohibited cigarette sticks in the suspect’s baggage: The suspect was released on bail and must appear before the Negombo Magistrate on 3 September.
  10. England secures a 190-run victory over Sri Lanka in the second Test at Lord’s, taking an unbeatable 2-0 lead in the three-match series: Chasing a record 483 runs, Sri Lanka were bowled out for 292 after tea on the fourth day, marking their seventh consecutive defeat against England.

Singapore-based Sarbana Jurong to devise plan to transform Hambantota into economic hub

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By: Staff Writer

September 01, Colombo (LNW): The Greater Hambantota development plan is to be devised by. Singapore-based urban planning company Sarbana Jurong (Pvt.) Limited to transform the region into a major hub for tourism, industry, trade and port activities.

The government has entrusted the same company with which the responsibility of preparing major development plans for Colombo City and the Western Province, as well as the strategic development of the tourist zone of Eastern Province.

The Cabinet nod was first given in 2018 and renwed it recently to obtain consultation services from the said urban planning company to prepare a regional plan and a detailed ‘master plan’ of Greater Hambantota for fundamental improvement centers,

Thereby, as the government has decided to prioritize the development activities pertaining to Hambantota, the proposal to hand over the preparation of the master plan to Sarbana Jurong (Pvt.) Limited was green-lighted by the Cabinet of Ministers.

President Ranil Wickremesinghe announced his vision to transform the region into a major hub for tourism, industry, trade and port activities.

Speaking during an election campaign rally in Hambantota, he assured commitment to improving the livelihoods of Sri Lankans.

Wickremesinghe underscored his commitment to developing the Hambantota Port, noting the involvement of China Merchant Company and Surbana Jurong.

“The two firms have developed a comprehensive plan for expansion,” Wickremesinghe added.He also announced a plan to allocate 4,000 acres for a large-scale planning zone in the area, including the introduction of the Sinopec refinery, Sri Lanka’s second refinery.

“With these initiatives, we aim to transform Hambantota into a hub for tourism, industry, trade, and port activities over the next five years. Let us work together to achieve this progress,” he added.

He urged the public to join him in working toward these ambitious goals, emphasising that this development would secure the region’s economic future and enhance the prosperity of its residents.

Wickremesinghe stressed that increasing national production and strengthening the rupee would help alleviate the financial burden on citizens. The President also highlighted initiatives to create job opportunities for youth.

He outlined a strategy to boost economic relief by increasing income levels, distinguishing his policies from those of other Presidential candidates.

He stressed the importance of responsible leadership, highlighting that safeguarding the nation’s economy requires sound management practices.

The President warned against trusting the country’s future to leaders who lack fundamental economic knowledge and make unrealistic promises.

He highlighted that Sri Lanka’s gross domestic product (GDP) reached $ 84 billion in 2023 and noted that the Government tripled the Samurdhi grant for low-income families under the Aswasuma program. Wickremesinghe outlined various economic relief measures, including plans for a fertiliser subsidy to boost sugarcane cultivation.

Three FMCG firms aims to Transform Plastic Waste Management in Sri Lanka

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By: Staff Writer

September 01, Colombo (LNW): In response to Sri Lanka’s pressing solid waste management issues, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH has partnered with three of the country’s largest Fast Moving Consumer Goods (FMCG) companies—Coca-Cola Sri Lanka Beverages Ltd. (along with The Coca-Cola Foundation), Nestlé, and Unilever—to launch a groundbreaking plastic waste management project.

This initiative, named “Waste to Value,” aims to address the plastic pollution crisis by enhancing infrastructure for plastic waste collection, segregation, recycling, and upcycling while fostering a shift towards a circular economy.

Funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) under its develoPPP programme, the project will be executed in collaboration with the Ministry of Public Administration, Home Affairs, Provincial Councils, and Local Government.

The initiative began in 2022 with a comprehensive baseline survey to assess the plastic waste management capabilities of Local Authorities in the Western Province.

The survey examined factors such as the amount of waste collected, available space for waste processing, and the potential for effective segregation and recycling. Based on these findings, nine Local Authorities were selected to participate in the project.

The project will be implemented in two phases. The first phase involves establishing material recovery facilities (MRFs) in three Local Authorities with adequate space: Gampaha Pradeshiya Sabha, Homagama Pradeshiya Sabha, and Kesbewa Urban Council.

These facilities will focus on recovering plastic and other recyclable materials. The second phase will expand the project to include five additional Local Authorities that lack space for MRFs. In these areas, the project will encourage residents to segregate waste at the household level, promoting a more grassroots approach to waste management.

Beyond infrastructure development, the project aims to strengthen waste collection systems in the selected areas by introducing incentive schemes for waste collectors and raising public awareness about the importance of responsible waste disposal.

The project also emphasizes training and development for entrepreneurs and other stakeholders involved in plastic waste management, ensuring they are equipped with the necessary skills and knowledge to contribute effectively to the initiative.

In a joint statement, GIZ, The Coca-Cola Foundation, Coca-Cola Beverages, Nestlé, and Unilever expressed their commitment to creating a sustainable and resilient future for Sri Lanka. “Our goal is to establish a sustainable plastic waste management system by involving all stakeholders in the waste value chain—from creators to collectors and processors.

By promoting recycling and upcycling, we aim to unlock the value of plastic waste and support a circular economy in Sri Lanka.”

Pradeep Yasarathna, Secretary of the Ministry of Public Administration, Home Affairs, Provincial Councils, and Local Government, praised the initiative, noting the critical need for effective plastic waste management. “With 60% of the country’s municipal solid waste, including plastic, generated in the Western Province, this project is crucial. 

Colombo Security Conclave Strengthens Regional Security with Charter

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By: Staff Writer

September 01, Colombo (LNW): The Colombo Security Conclave (CSC), comprising India, Sri Lanka, the Maldives, Mauritius, and Bangladesh, has taken significant strides towards enhancing regional security cooperation by finalizing its charter and agreeing to establish a permanent secretariat. These developments were formalized during a ceremony hosted by Sri Lanka on August 30, 2024.

The CSC, initially formed in 2020 as a trilateral alliance between India, Sri Lanka, and the Maldives, aimed to strengthen maritime and security collaboration within the Indian Ocean region. Over time, the group expanded its membership to include Mauritius and Bangladesh, with the Seychelles serving as an observer.

The recent event in Colombo saw the signing of both the CSC Charter and a Memorandum of Understanding (MoU) for the creation of the CSC Secretariat. The documents were signed by Ajit Doval, India’s National Security Adviser (NSA), alongside his counterparts from the Maldives, Mauritius, and Sri Lanka.

Curiously, Bangladesh did not participate in the signing, which some sources attributed to the recent change in government in Dhaka. Although it was expected that Bangladesh’s envoy to Sri Lanka would be the signatory, the absence remains unexplained.

The CSC’s core mission is to promote regional security by addressing transnational threats and challenges shared by member states. The Conclave’s cooperation is anchored on five key pillars: maritime safety and security, counterterrorism and radicalization, combating trafficking and transnational organized crime, cybersecurity, and humanitarian assistance and disaster relief.

Ajit Doval’s visit to Colombo underscored the importance of the CSC in maintaining security and stability in the Indian Ocean Region. He highlighted the Founding Documents as crucial for reinforcing CSC’s role and emphasized the need for sustained, collective efforts to address traditional, non-traditional, and emerging hybrid challenges across the region.

The CSC meeting concluded with discussions on the next steps and future activities. This included potential initiatives under the CSC’s five pillars of cooperation, which are designed to address pressing security issues in the region.

In addition to his participation in the CSC event, Ajit Doval met with Sri Lankan President Ranil Wickremesinghe and Prime Minister Dinesh Gunawardena.

Their discussions focused on ongoing economic collaboration between India and Sri Lanka, a key aspect of the bilateral relationship.

Doval also engaged with other political leaders in Colombo, including the Leader of the Opposition Sajith Premadasa and representatives from various political factions, signifying India’s broader engagement in Sri Lanka’s political landscape.

The establishment of the CSC Secretariat marks a pivotal step in the institutionalization of the Conclave, ensuring that regional security cooperation remains structured and effective in addressing the myriad challenges facing the Indian Ocean region.

SriLankan Airlines celebrates 45th anniversary in a trailblazing journey

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By: Staff Writer

September 01, Colombo (LNW): A pioneer in the region, the airline has always remained resilient in the face of turbulence and has consistently championed true Sri Lankan hospitality globally.

“Forty-five years is a long time in any industry, but achieving this milestone in the commercial airline sector is an even greater feat. SriLankan Airlines is one of the oldest commercial airlines in this region, and we are incredibly proud of our journey over the past 45 years, despite the regular challenges we have faced.

Through it all, SriLankan has remained steadfast in its commitment to our loyal customers and in supporting Sri Lanka through every high and low,” SriLankan Airlines Chairman Ashok Pathirage reflected.

Over the years, SriLankan Airlines has proven its versatility in an ever evolving and testing environment. Today, SriLankan continues to be one of the major international airlines from South Asia, having achieved numerous milestones and accolades along the way.

“On this occasion, it is important to express our gratitude to our people. We owe our successes and resilience to every individual within the airline, both current and past, who has dedicated themselves and made sacrifices for our success.

As we celebrate our achievements, we will also focus on our vision for the future, striving to be the airline of choice for travellers seeking an authentic Sri Lankan experience, personified by the warmth and hospitality of our people,” SriLankan Airlines Chief Executive Officer Richard Nuttall added.

SriLankan Airlines provides convenient connections to a global network (including codeshare partners) of 114 destinations in 62 countries around the world.

The airline’s direct route map covers major cities across the Europe, Australia, Middle East, Indian Subcontinent, Southeast Asia and the Far East. SriLankan operates an all-Airbus fleet consisting wide-bodied A330 aircraft, A321 aircraft and mid-range A320s.

Notable achievements include the 1999 rebranding from Air Lanka to SriLankan Airlines and joining the oneworld alliance in 2014.

The airline has also been recognised with multiple awards, such as the World Travel Awards for “World’s Leading Airline to the Indian Ocean” (2016, 2017, 2018, 2019, 2020, 2021) and APEX’s 4-star rating in the Major Airline category (2017, 2018, 2019, 2020, 2022, 2023).

Other accolades include the PATA Gold Award for Marketing-Carrier (2019, 2020, 2021, 2022, 2023, 2024) and the Golden City Gate Awards for various marketing campaigns.

SriLankan Airlines has also been at the forefront of innovation, introducing South Asia’s first self-service check-in and bag drop facility in 2023.

Additionally, the airline’s commitment to sustainability was recognised with the Sheikh Mohammed Bin Rashid Al Maktoum Global Aviation Award for Best Aviation Sustainability Programme in 2022.

Sri Lanka Original Narrative Summary: 01/09

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  1. President Ranil Wickremesinghe announces plans to introduce new legislation allowing individuals to choose burial or cremation based on personal and religious preferences: Addressing past grievances, he expressed regret for the mandatory cremation policy enforced during the Covid-19 pandemic, particularly affecting the Muslim community: A special committee will investigate the policy, and compensation will be provided to affected families.
  2. Presidential Candidate Wijeyadasa Rajapaksha says anyone from his party Sri Lanka Freedom Party (SLFP) who pledged their support to any other candidate during the 2024 Presidential Election will not be accepted into membership of the party.
  3. The National People’s Power (NPP) lodges a complaint with the Elections Commission against MP Rajitha Senarathne: NPP’s Sunil Handunnetti accuses Senarathne of issuing a threatening statement aimed at deterring expatriate workers from returning to Sri Lanka to vote in the upcoming Presidential election: claims this violates election laws and hinders a free and fair electoral process.
  4. SLPP Presidential candidate Namal Rajapaksa announces a temporary suspension of political activities in Jaffna to respect the Nallur Ther festival’s cultural and religious significance: emphasises the importance of preserving regional traditions during this sacred period, allowing the festival to proceed without political disruption: The Nallur Ther festival is a highly revered Hindu event in the Northern Province.
  5. Litro Gas Lanka Ltd. announces no price change for September, retaining the August pricing structure: Chairman Muditha Peiris emphasised that this decision aims to provide stability for consumers amidst fluctuating global energy prices: Litro Gas is closely monitoring the market and will reassess the pricing if needed, prioritising consistency and affordability for households.
  6. The Ceylon Petroleum Corporation announces starting from midnight (31), fuel prices across Sri Lanka will be lowered: The price of Petrol 92 will see a reduction of Rs 12 per litre, while Petrol 95 will drop by Rs 2 per litre: Diesel prices will be reduced by Rs 10 per litre, and Super Diesel will decrease by Rs 3 per litre.
  7. An extraordinary gazette notification has been released, formally listing the public and bank holidays for the year 2025: This announcement provides an official schedule, ensuring that institutions, businesses, and the general public are well-informed and can plan accordingly for the upcoming year.
  8. The Election Commission reports 1,592 complaints regarding the upcoming Presidential election between 31 July and 31 August, with 112 cases filed in the past month: Amongst these, 947 complaints were recorded by District Centres, and 645 by the National Centre for Election Complaint Management, including eight incidents of violence: The Commission is committed to investigating each case to ensure a fair election.
  9. Sri Lanka’s transparency in large foreign-funded infrastructure projects remains inadequate, with only 40% of required information disclosed in 2024, according to Verité Research: The Infrastructure Watch dashboard reveals just 20% of procurement-related data was shared, raising corruption concerns: suggests linking foreign loans to compliance with the Right to Information Act to improve transparency and reduce risks for lenders and contractors.
  10. Sri Lanka struggled in their first innings, reaching 129 for 7 at tea on day two of the second Test at Lord’s: Despite Asitha Fernando’s five-wicket haul and a brief partnership between Angelo Mathews and Dinesh Chandimal, the top order faltered: England, led by Gus Atkinson’s maiden century, posted 427, leaving Sri Lanka trailing by 298 runs and facing a potential follow-on.

Sri Lanka fails to meet transparency standards in foreign-funded infrastructure projects

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September 01, Colombo (LNW): Sri Lanka’s adherence to transparency laws in large infrastructure projects funded by foreign loans and grants remains significantly lacking, according to a recent statement from Verité Research.

The law mandates that all projects exceeding USD 100,000 must disclose relevant information online; however, in 2024, the government fulfilled only 40 per cent of this obligation.

The findings, revealed in the 2024 update of the Infrastructure Watch dashboard on PublicFinance.LK—Sri Lanka’s foremost economic insights platform—underscore ongoing transparency challenges.

This platform has been monitoring the government’s compliance with the proactive disclosure requirements of the Right to Information (RTI) Act since 2022.

Public procurement, a frequent target of corruption in public spending, saw even poorer compliance.

The dashboard reported that only 20 per cent of the legally mandated procurement-related information for foreign-financed projects was disclosed, raising concerns about the integrity of these projects.

Subhashini Abeysinghe, an economist and Director at Verité Research, suggested that foreign lenders could improve transparency by tying project financing to the government’s compliance with the RTI Act.

She emphasised that increased transparency is beneficial not only for the Sri Lankan public but also for the foreign lenders and contractors involved.

“Greater transparency fosters fair competition, reduces corruption risks, and minimises reputational risks for lenders and contractors,” Abeysinghe noted.

The RTI Act, specifically Section 9, along with guidelines from the RTI Commission, requires the proactive disclosure of information across five key areas: project details, rationale and beneficiaries, budget and financial details, approvals and clearances, and procurement and contracts.

The 2024 assessment focused on compliance concerning 50 major infrastructure projects.