August 21, Colombo (LNW): US Acting Assistant Secretary of State for Oceans, International Environmental, and Scientific Affairs, Jennifer Littlejohn, is currently on an official visit to Sri Lanka. During her stay, she is expected to hold discussions with Sri Lankan officials and partners, focusing on U.S.-supported wildlife protection projects. The visit began with US Ambassador in Colombo, Julie Chung, greeting Littlejohn.
August 21, Colombo (LNW): Sources reported that former President Maithripala Sirisena has paid Rs. 100 million in compensation, as mandated by the Supreme Court, to the victims of the Easter Sunday bomb attacks. This payment was credited to the “Easter Attack April 2019 – Victim Fund” at the Office for Reparations Sri Lanka on August 16.
The Supreme Court had previously ordered Sirisena, along with other officials, including former IGP Pujith Jayasundera, to compensate the victims for their failure to prevent the attacks. In July, the former President had already paid Rs. 58 million in compensation to the victims.
August 21, Colombo (LNW): Epidemiologist Dr. Chinthana Perera announced yesterday (20th) that the Medical Research Institute (MRI) is fully equipped to conduct tests for Monkeypox. He assured that routine monitoring is being conducted across the country to detect any potential cases of Monkeypox, and the Health Ministry is prepared with the necessary treatment facilities should any cases arise.
Dr. Perera also mentioned that they are closely tracking the spread of the disease within the Asian region and are keeping a watchful eye on the global situation. This follows the World Health Organization’s recent declaration of a global emergency concerning Monkeypox, along with the release of a set of guidelines to manage the virus.
August 21, Colombo (LNW): The National Election Commission announced that polling cards for the upcoming Presidential Election will be handed over to the Department of Posts (Sri Lanka Post) on September 2, 2024. According to Chairman R.M.A.L. Rathnayake, a special day will be designated on September 8, 2024, to ensure the distribution of these polling cards.
The printing process for 17,140,354 polling cards has already begun. These cards will assist voters in verifying their identity at polling stations, making the voting process smoother and more efficient.
Sri Lanka aims to attract 3 million tourist arrivals in 2024, driven by strong performance so far this year and favorable conditions anticipated during the upcoming winter season, according to tourism officials.
As part of this effort, the country will launch its first significant promotional campaign in over two decades starting next month, targeting key markets to boost tourist numbers.
The initial phase of this campaign will focus on five major markets: India, China, the UK, Germany, and France.
This will be executed through a six-month digital marketing campaign and a year-long public relations initiative, backed by an investment of Rs. 1.6 billion (Rs. 1 billion for digital marketing and Rs. 600 million for PR).
In the second phase, slated for next year, Sri Lanka will expand its reach to seven emerging markets, including Russia, Australia, the Middle East, Japan, Korea, Italy, Poland, Scandinavia, and Benelux.
This phase will have an investment of Rs. 1.2 billion (Rs. 750 million for digital marketing and Rs. 450 million for PR).
To implement these campaigns, Sri Lanka has selected several agencies through a competitive tender process, including Ogilvy and Holmes Pollard, along with specialized in-country agencies in markets like China and Russia.
The funding for these campaigns has been sourced from the Tourism Development Levy (TDL) and the Embarkation Levy (EL).
Reflecting on the tourism sector’s resilience Sri Lanka Tourism Promotion Bureau (SLTPB) Chairman Chalaka Gajabahu noted that the industry rebounded quickly after the 2022 crisis, thanks to collaborative public-private initiatives.
Notably, the “Check-In” short-term promotion campaign launched in late 2023 and the “Seeing is Believing” PR initiative, which engaged influencers, bloggers, and media outlets, played a key role.
The new tourism branding identity, “Sri Lanka: You will come back for more,” emphasizes the fact that over 30% of tourists to Sri Lanka are repeat visitors.
Nalin Perera, Managing Director of the Sri Lanka Tourism Promotion Bureau (SLTPB), highlighted that over 50 foreign media personnel, including travel influencers and bloggers, generated more than $500 million in media publicity for Sri Lanka.
Additionally, Sri Lanka participated in 16 international travel shows and organized 16 roadshows in key markets such as India, China, Australia, and Turkey, with a strong focus on business-to-business sessions.
SLTPB officials also noted that various initiatives have led to Sri Lanka receiving 15 international endorsements in 2024, including being ranked as the 5th most popular solo travel destination by Forbes magazine and being recognized as the “Best International Tourism Board” at the Global Tourism Awards in New Delhi.
Moreover, the Meetings, Incentives, Conferences, and Exhibitions (MICE) market has seen growth, increasing its share of total arrivals from 4% to 10%.
Major companies like Pfizer, Toyota, Hero, Tata, and KPMG have hosted large MICE events in Sri Lanka. To further expand the MICE offering, SLTPB, in collaboration with the Sri Lanka Conventions Bureau, has been promoting the Northern and Southern provinces, in addition to Colombo
August 21, Colombo (LNW): For the first time since April 2020, Sri Lanka’s Net Foreign Assets (NFAs) in the banking sector have turned positive, reaching Rs. 636.3 billion in the first half of 2024 (1H24), as reported by the Central Bank of Sri Lanka (CBSL).
This improvement is primarily attributed to the accumulation of foreign assets, as outlined in the CBSL’s latest Monetary Policy report.
The report highlights that the NFAs of licensed commercial banks (LCBs) improved due to an increase in foreign assets, coupled with the settlement of foreign currency exposures to non-residents.
The Central Bank’s NFAs also experienced growth, primarily through net purchases of foreign exchange from the domestic market. This increase was bolstered by enhanced performance in the external sector, leading to an improvement in Sri Lanka’s gross official reserves.
In 2023, NFAs saw a significant positive shift of Rs. 1.3 trillion, a sharp contrast to the Rs. 785 billion contraction observed in 2022.
Additionally, credit extended to the private sector grew by approximately Rs. 146 billion during 1H24, marking a 6.2% year-on-year increase by the end of June 2024.
While much of this credit expansion was consumption-driven, there was also notable growth in credit provided to other sectors of the economy.
On the government front, net credit to the government (NCG) by the banking system contracted by Rs. 196 billion during 1H24.
This contraction was primarily due to a decrease in NCG by the Central Bank, driven by the maturity of treasury bills and a reduction in the use of the standing lending facility (SLF) by LCBs.
However, NCG by LCBs saw an increase, reflecting their growing investments in government securities.
Furthermore, credit extended to state-owned business enterprises (SOBEs) by LCBs contracted by Rs. 60.4 billion in 1H24. This reduction was largely due to net repayments by major SOBEs and the valuation impact of the rupee’s appreciation during this period.
Over the past two years, leading up to April 2024, Sri Lanka’s banking system has accumulated reserves or repaid debt amounting to 6.2 billion US dollars. This accumulation followed measures to curb inflationary pressures by halting money printing and preventing artificially low-interest rates.
In April 2022, Sri Lanka defaulted on its debt, ceasing repayments on bilateral and private loans. The savings from these deferred repayments, from April 2022 to March 2024, amount to 5.8 billion US dollars.
However, the Central Bank continued to borrow from the Reserve Bank of India and printed money to manage interventions, delaying a swift balance of payments correction.
Despite these challenges, the Central Bank has since adopted a deflationary policy, rebuilding reserves while private credit contracted. By April 2022, negative reserves had ballooned to 4.8 billion US dollars.
The International Monetary Fund has asked for a recapitalization plan for the central bank after an extension of maturities of central bank held Treasuries to meet the lender’s gross financing need (GFN) targets led to valuation losses.
“After assessing the impact of the DDO on the CBSL’s balance sheets, done in close consultation with external auditors and IMF staff and by applying good accounting standards and valuation frameworks, the government should stand ready to inject capital into the CBSL, as soon as fiscal buffers allow it, so as to reach positive equity from 2025, which would increase to 2 percent of GDP by 2031.”
Based on longstanding principles before inflation and peacetime currency collapses became routine from the last century with the defeat of sound money by state-run central banks running on Anglo-American post-Keynesian inflationist doctrine, note-issue banks typically bought 90 to 95 day bills, generally known as the ‘bills only policy’, analysts say.
During a special media briefing, Cabinet Spokesman and Minister Bandula Gunawardena addressed misconceptions regarding the Government’s recent decisions, particularly about the International Monetary Fund (IMF) agreement and the upcoming Budget. The briefing aimed to clear up public misunderstandings about the country’s financial commitments and constraints.
The Minister explained that under the Extended Fund Facility with the IMF, the Government has secured funds to support the Budget through 2025-2027, and the salary proposals will not be revised within this period. Gunawardena stressed that any future government must adhere to these agreements.
Despite economic challenges, the Government has already granted a Rs. 10,000 allowance to public servants, with further relief promised as the economy recovers. A special committee was appointed by President Ranil Wickremesinghe to address wage disparities among public sector employees, and its recommendations will be implemented in the 2025 Budget.
This includes a 24% to 35% salary increase for all public sector employees starting January 2025, and an increase in the cost-of-living allowance to Rs. 25,000 for three years, with the minimum monthly salary for the lowest-ranking Government employee expected to reach Rs. 55,000.
The Government faces a Budget deficit estimated at $5.018 billion for the coming year. To address this, the IMF will provide $700 million, with additional support from the World Bank ($400 million) and the Asian Development Bank ($300 million). The total projected debt relief amounts to $3.655 billion.
As preparations for the 2025 Budget continue, the Government seeks input from other political parties on their economic plans for governing the country from January 2025.
Gunawardena underscored the importance of this year’s Budget process, especially with the upcoming Presidential election on September 21, and noted that financial provisions must be allocated within 100 days as required by the Constitution.
August 21, Colombo (LNW): More than three years after being detained in Sri Lanka following the fire and sinking of the container ship X-Press Pearl, Captain Vitaly Tyutkalo remains unable to return home, according to Seatrade Maritime News.
The X-Press Pearl, newly delivered from China in early 2021, caught fire in May 2021 due to leaking dangerous cargo and eventually sank off the coast of Sri Lanka despite the crew’s efforts to save it.
Captain Vitaly was arrested after the incident, released on bail, but his passport was confiscated, preventing him from leaving the country.
His health has deteriorated during his prolonged stay in Sri Lanka, including suffering a heart attack.
Captain Vitaly has appealed directly to Sri Lankan Prime Minister Dinesh Gunawardena, asking for assistance in returning home to his family, expressing his anguish over missing significant family events.
X-Press Feeders, the captain’s employer, has continued to support him with legal assistance, salary, accommodation, and a car.
However, the slow legal process has left Captain Vitaly in limbo, with no clear resolution in sight.
Despite the support from his employer, the uncertainty surrounding his case has taken a significant emotional toll on him
He describes the support he has received from his employers as “unbelievable” and says that his lawyer has been extremely involved in his case, Sea Trade Maritime news reported.
“But unfortunately, they have no control over how slow the court process is, they have no control over my case, or who has my passport.”
The Sri Lankan government has received Rs 3,068 million in compensation from the London P&I Club for the X-Press Pearl disaster, but this amount is deemed insufficient for the affected fishermen.
The insurance company has limited compensation to £19.8 million. In response, the Sri Lankan government has filed three separate lawsuits in Sri Lanka, Singapore, and the UK seeking additional compensation.
The disaster occurred on May 19, 2021, when the X-Press Pearl, carrying hazardous materials, caught fire near Colombo, leading to a significant environmental disaster.
The incident resulted in widespread contamination and damage to marine life, severely impacting local fishermen and coastal communities.
Despite the initial compensation, many fishermen and those involved in the fishing industry have yet to receive adequate compensation.
The disaster has also caused long-term economic and environmental damage, including reduced fish populations and tourism.
Fishermen continue to face challenges in their livelihoods, with ongoing fears about unexploded containers and further environmental harm.
August 21, Colombo (LNW): Showers or thundershowers will occur at times in Western, Sabaragamuwa, Southern and North-western provinces and in Kandy and Nuwara-Eliya districts. Fairly heavy showers above 75 mm are likely at some places in Western and Sabaragamuwa provinces and in Galle and Matara districts.
Showers or thundershowers will occur at several places in Eastern, Uva and North-Central Provinces during the evening or night.
Fairly strong winds about (30-40) kmph can be expected at times over Western slopes of the central hills and in Northern, North-central and North-western provinces and in Hambantota district.
The general public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
