By: Staff Writer

May 05, Colombo (LNW): Sri Lanka President Anura Kumara Dissanayake met with General Secretary of the Communist Party of Vietnam (CPV), Tô Lâm, in Hanoi on Sunday, in a significant diplomatic engagement underscoring shared interests in economic development, anti-corruption efforts, and multilateral cooperation. The meeting took place at the CPV Central Committee Headquarters, as confirmed by the President’s media office.

General Secretary Tô Lâm, currently Vietnam’s most powerful leader, has led a far-reaching anti-corruption campaign that resulted in the resignation or dismissal of high-ranking officials, including a Prime Minister, President, and Speaker of Parliament.

At one point in 2024, this effort left nearly one-third of Vietnam’s politburo seats vacant. Following a brief tenure as State President, Tô Lâm assumed leadership after the death of former General Secretary Nguyễn Phú Trọng in July 2024.

Under his leadership, Vietnam plans to reduce its public workforce by 20 percent—a strategy aimed at easing the fiscal burden on citizens through spending-based consolidation. This contrasts with Western-style fiscal stimulus approaches that rely on increased public spending.

Tô Lâm praised President Dissanayake and the JVP Party, the core of Sri Lanka’s National People’s Power coalition, for their electoral success, calling it a reflection of the people’s trust in their leadership. He expressed optimism that Sri Lanka, under Dissanayake’s leadership, would achieve significant national development.

President Dissanayake, in turn, congratulated Vietnam on the historic reunification of the country on April 30, 1975, and commended its remarkable progress in economic development since. He lauded Vietnam’s transformation into one of the fastest-growing economies globally, with a steadily rising international profile.

The Sri Lankan President expressed a strong interest in learning from Vietnam’s experience in institutional reform, anti-corruption, and governance. Both leaders agreed to deepen cooperation, particularly at multilateral platforms like the United Nations, and to enhance South-South collaboration.

Vietnam began liberalizing its economy in 1984, several years after Sri Lanka, and stabilized its monetary system by the late 1980s, creating favorable conditions for business and foreign investment. Today, it is a low-cost, food-secure nation with low malnutrition rates and strong trade openness.

The visit marked a reaffirmation of Sri Lanka’s commitment to regional partnerships and a desire to model successful reform strategies from Asia’s emerging economies.

By: Staff Writer

May 05, Colombo (LNW): Despite a significant rebound in private sector credit, Sri Lanka’s fiscal pressures remain a concern as the country’s banking and finance sectors closed 2024 on a high note. The Central Bank of Sri Lanka’s Annual Economic Review 2024 reveals that private lending across licensed financial institutions surged by over Rs.1 trillion, driven by falling interest rates and a cautiously recovering economy.

According to the report, licensed commercial banks led the way with a Rs.789.6 billion increase in private sector credit—marking a 10.7% year-on-year growth. Licensed finance companies posted a striking 21.0% rise, adding Rs.277.1 billion to the credit flow, largely fueled by consumer demand for gold-backed loans, personal financing, and vehicle leasing. Licensed specialized banks, while growing at a slower pace, still registered a Rs.27.9 billion or 2.5% increase in loans.

This reversal from the credit stagnation seen in 2023 reflects improved liquidity and a reduction in market interest rates. However, analysts caution that the credit surge, while indicative of short-term economic recovery, does not fully address deeper fiscal vulnerabilities—including high public debt, revenue shortfalls, and the structural reforms demanded by international creditors.

The growth in credit was broadly distributed across key economic sectors. Lending to industry, which represents nearly 40% of private sector credit from commercial banks, rose by 8.4%, driven by increased financing to construction, textiles, chemicals, and transport equipment. The construction sector alone saw a 5.5% credit rise, signaling a tentative rebound after years of decline.

The services sector, accounting for 27.4% of credit, expanded by 12.3%. Retail and wholesale trade, IT and communication, logistics, and business services were among the primary beneficiaries. Agriculture, though a smaller credit recipient at 7.3%, recorded a healthy 8.2% loan increase, supported by favorable weather and improved rural market integration. Notably, credit flowed into food crops, fisheries, and paddy cultivation, aligning with national efforts to strengthen food security and reduce import dependence.

Despite this growth, concerns persist about the long-term sustainability of credit-fueled expansion in the absence of robust fiscal consolidation. The Central Bank noted that short- to medium-term loans outpaced long-term borrowing—raising questions about investment in infrastructure and capital formation necessary for sustained development.

While the lending uptick paints a picture of resilience, policymakers are reminded that without parallel progress in tax reforms, debt restructuring, and governance improvements, Sri Lanka’s fiscal outlook will remain fragile—even amid signs of credit and consumption revival.

By: Staff Writer

May 05, Colombo (LNW): The Sri Lankan government plans to impose surcharges on those found guilty. This move follows a recommendation made by the International Monetary Fund (IMF) in its 2023 governance diagnostic assessment report, which called for amendments to the National Audit Act by March 2024.

The revised policy aims to empower the Auditor General to levy surcharges on public officials — including Chief Accounting Officers — who fail in their duties of financial oversight and accountability. These surcharges may be imposed in cases of negligence, misconduct, financial losses, or failure to account for public funds as required by law.

Although no action had been taken since the IMF’s initial recommendation, the current government has now announced an expedited implementation plan. Within two months, a new procedure will be introduced, involving the appointment of an independent five-member committee by the Constitutional Council. This committee will review the Auditor General’s findings and take necessary action against culpable officials.

Previously, the Auditor General’s Department had the authority to disallow expenditures and recommend surcharges for issues such as legal violations in accounts or unreported transactions. However, these powers were limited to a select group of institutions, including local governments and universities. Under the new policy, the scope will expand to include ministries, departments, state-owned enterprises, corporations, and boards.

The independent committee will be led by a retired Supreme Court judge and will also include a retired public finance officer and a representative from the Institute of Chartered Accountants. This panel is expected to bring impartiality and credibility to the process.

The Auditor General’s Department routinely investigates state bodies for financial discrepancies and submits reports to Parliament, recommending necessary corrective actions. These can include disciplinary actions, policy reforms, and strengthened internal controls. However, due to inadequate follow-up and systemic coordination, such measures have often failed to materialize.

This renewed effort reflects the government’s commitment to improve accountability and transparency in public finance, as well as align with international standards on good governance.

By: Staff Writer

May 05, Colombo (LNW): The Arthur C. Clarke Institute for Modern Technologies (ACCIMT) in Sri Lanka has come under scrutiny following revelations by the National Audit Office regarding a case of official negligence involving an unmanned aerial vehicle (UAV), or drone, worth Rs. 10.56 million. The drone, purchased in 2016 for archaeological exploration and excavation purposes on behalf of the Department of Archaeology, has remained unused for nearly six years.

According to the audit findings, despite obtaining the necessary training and flight permissions, the drone was never put into service. An additional Rs. 110,320 was also spent on operating-related expenses, which too have gone to waste due to the drone’s prolonged idleness.

The drone was expected to serve as a practical alternative to satellite imagery in development projects across several fields. However, the Ministry of Defence’s initial restriction of the drone’s maximum flight height to 60 meters (200 feet) significantly limited its utility. Although later regulations introduced in 2022 allowed drone operations up to 400 feet, ACCIMT was still unable to deploy the drone due to a software error in its flight planning system, further compounding the waste of public funds.

ACCIMT is known for utilizing advanced space technology and applications such as remote sensing and Geographic Information Systems (GIS) in various projects. These tools are used for land use mapping, crop monitoring, and studies such as early detection of tea blight.

Though the institute does not run a specific program for archaeological mapping, its capabilities in geospatial data analysis and satellite imagery are relevant to such efforts. With the appropriate application, these technologies could assist in identifying potential archaeological sites, analyzing terrain, and tracking landscape changes over time—functions highly valuable to archaeologists.

The audit findings point to a lack of strategic planning and follow-through on the part of ACCIMT, raising concerns over the mismanagement of advanced technological resources and public funds. The drone, equipped with remote sensing and GIS capabilities, could have been a valuable asset not only in archaeology but in various national development initiatives.

This case highlights the importance of operational readiness, regulatory coordination, and software reliability in deploying technology for public benefit. The underutilization of the UAV, despite its significant cost and potential, stands as a stark reminder of the consequences of bureaucratic inefficiency and missed opportunities in harnessing modern technologies.