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Prominent capitalist warns against IMF-backed high tax regime in Sri Lanka

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January 31, Colombo (LNW): The current high-tax regime backed by the International Monetary Fund (IMF) could potentially exacerbate the growth of the informal economy, impeding economic recovery and constricting the tax base in Sri Lanka, leading advocate of free-market capitalism, Dr. Tom G. Palmer, Executive Vice President (International Programmes) at the Atlas Network, warned.

Speaking at a panel discussion during the Economic Freedom Summit organised by the Advocata Institute in Colombo, Dr. Palmer highlighted the experiences of nations emerging from debt crises.

He noted that countries successfully recovering from such crises often embraced simplified, low tax rates, diverging from the high tax rates prescribed by the IMF.

Dr. Palmer cited Greece as an example where a bold rejection of IMF-prescribed high taxation contributed to a thriving economy, particularly in the tourism sector.

The result was an expanded tax base and increased tax collection. Similarly, war-torn Ukraine opted for a flat tax rate, moving away from a complex ‘optimised tax rate,’ ultimately curbing the influence of corrupt oligarchs.

Encouraging the Sri Lankan government to take a bold stance in negotiations with the IMF on taxation, Dr. Palmer emphasised that a lower tax rate should be coupled with digitisation and a reduction of bureaucratic inefficiencies in the public sector to combat corruption.

Drawing parallels with the transformation of Georgia’s entire police force within three months, Dr. Palmer underscored the potential impact of bold policies and decisive actions.

He suggested that such measures, when implemented, could yield positive and desired results for Sri Lanka’s economic landscape.

Media and Civil Society groups urge Speaker to exercise caution on Online Safety Bill

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January 31, Colombo (LNW): Media and civil society organisations have jointly appealed to Speaker of Parliament Mahinda Yapa Abeywardena, requesting careful consideration before endorsing the recently passed Online Safety Bill.

Expressing concerns about potential violations of freedom of expression and constitutional principles, the collective urged the Speaker to ensure full compliance with the directives issued by the Supreme Court.

In a letter addressed to Speaker Abeywardena, the Media, Civil Society, and Trade Union Collective to Rise against Oppressive Laws emphasised the need for a thorough examination of the legislation.

The letter highlighted the perceived haste in passing the Bill on January 24, without adequate discussion with stakeholders and, notably, without incorporating the Supreme Court’s directives.

The collective, representing various media and civil society groups, contested the parliamentary process, with opposition MPs asserting that the Bill was passed without due consideration of the amendments and guidelines mandated by the Supreme Court.

These directives had emerged from a series of 45 fundamental rights petitions challenging the draft Bill.

Expressing concern that such a scenario might constitute a violation of the Constitution, undermining the sovereignty of the people and potentially leading to contempt of court, the collective voiced strong objections to the legislation.

They emphasised their commitment to continuing the fight against regulations that impede freedom of expression and potentially harm the economy.

The groups accused the government of expediting the passage of the Online Safety Bill to counter opposition ahead of upcoming elections.

They urged Speaker Abeywardena to uphold his responsibility in ensuring parliamentary orders are followed, insisting on the incorporation of Supreme Court-directed amendments into the Bill before granting his approval.

As citizen activists and proponents of democracy, the collective respectfully requested Speaker Abeywardena to withhold consent to the Bill until full satisfaction that the Supreme Court’s orders and guidelines are seamlessly integrated.

The letter signifies their dedication to defending democratic values and safeguarding the right to free expression against regulations they deem detrimental to both democratic principles and economic well-being.

Cloudy skies expected over most parts of island during morning

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By: Isuru Parakrama

January 31, Colombo (LNW): Cloudy skies can be expected over most parts of the island during the morning, and showers will occur at times in Eastern, Uva and North-central provinces and in Mullaitivu and Matale districts, the Department of Meteorology said in its daily weather forecast today (31).

Showers or thundershowers will occur at several places elsewhere of the island after 2.00 p.m.

Fairly heavy showers about 75 mm are likely at some places in Uva, Sabaragamuwa and Central provinces and in Ampara district.

Misty conditions can be expected at some places in Central, Sabaragamuwa and Uva provinces and in Galle and Matara districts during the morning.

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

Marine Weather:

Condition of Rain:
Showers or thundershowers will occur at several places in the sea areas off the coast extending from Mullaitivu to Hambantota via Trincomalee and Batticaloa. Showers or thundershowers may occur at few places in the sea areas off the coast extending from Puttalam to Galle via Colombo during the evening or night.
Winds:
Winds will be north-easterly or easterly and wind speed will be (20-30) kmph. Wind speed may increase up to (40-45) kmph at times in the sea areas off the coasts extending from Colombo to Mannar via Puttalam.
State of Sea:
The sea areas off the coasts extending from Colombo to Mannar via Puttalam can be fairly rough at times Temporarily strong gusty winds and very rough seas can be expected during thundershowers.

Sri Lanka Original Narrative Summary: 31/01

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  1. Govt starts acquisition of lands, mostly privately owned, for the Adani-backed 250MW Mannar Wind Power Project.
  2. Group of undergraduates storm the main administrative building of the Kelaniya University in protest against police attacks on them: on the previous night, the students had demonstrated opposite the university against an invitation extended by the university administration to President Ranil Wickremesinghe to open a new administrative building at the Faculty of Graduate Studies.
  3. International investors of SL ISBs say they are “extremely frustrated” over alleged Govt’s lack of engagement for months: allege that claims by Govt that it is making “good progress” on external debt re-structuring is a “distortion” and damages credibility & image of SL: value of ISBs increases from USD 12 bn to USD 13bn due to the delay so far in finalising settlement.
  4. Police fire water cannons & tear gas to disperse SJB protesters near the Public Library, Colombo: one person injured & admitted to the Colombo National Hospital.
  5. SLAF spokesman says 2 SLAF & 2 SL Army paratroopers suffered minor injuries due to their parachutes getting entangled while landing during Independence Day rehearsals.
  6. SL Telecom Chairman Reyaz Mihular and 3 other directors abruptly resign: no reasons given: inside sources have indicated that Mihular & the other directors were asked to resign by the Govt which is the controlling shareholder.
  7. Police attached to the Women’s and Children’s Bureau arrest a group of Parliament employees for allegedly abusing a fellow female staff member: Parliament Serjeant-at-Arms Narendra Fernando says these employees have already been interdicted as they were found guilty during an internal inquiry.
  8. Head of the Tsunami Division of GSMB – Seismologist Nilmini Thaldena says people need not panic because the probability of a tsunami striking the coastal areas of SL is very low: also says even an earthquake is unlikely in SL due to its geological position.
  9. Point Pedro Magistrate sentences 10 Indian fishermen to 2-year prison terms suspended for 5 years for poaching in the SL waters: also orders the owner of the trawler to be present in Court on 24th Oct’24 when the case will be next heard.
  10. West Indies Under-19 Cricket team beats SL Under-19 team by 3 wickets in their encounter in the ICC Cricket Championship held in South Africa: SL Under-19s – 231 in 50 overs: Dinura Kalupahana 53, Supun Waduge 31, Malsha Tharupathi 42; WI Under-19s – 232/7 in 49.3 overs: Dinura Kalupahana 2-39, Vishwa Lahiru 2-32, Sineth Jayawardena 2-39.

Police use tear gas and water cannons to disperse SJB protest

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January 30, Colombo (LNW): In a recent development, law enforcement authorities utilised water cannons and deployed tear gas to disperse the protest organised by the main opposition party, the Samagi Jana Balawegaya (SJB), near the Public Library in Colombo.

The protest, organised by the SJB, aimed to voice opposition to the government’s policies and actions. Law enforcement agencies intervened, resorting to crowd control measures to manage the gathering.

Water cannons and tear gas were deployed to disperse the protesters and restore order.

Police Academy launches groundbreaking training initiative on SOGIESC rights for in-service officers

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By: Editor (LGBTIQ)

January 30, Colombo (LNW): In a historic initiative, the National Police Academy inaugurated the first-ever series of training and sensitisation programmes aimed at educating in-service police officers on the Rights of people with diverse Sexual Orientations, Gender Identities, Gender Expressions, and Sex Characteristics (SOGIESC).

The opening ceremony of this pioneering programme was graced by distinguished guests, including Chairperson of the Human Rights Commission of Sri Lanka (HRCSL), Supreme Court Justice LBT Dehideniya, and Senior Deputy Inspector General (SDIG) Asanga Karavita, on behalf of the Acting Inspector General of Police (IGP).

The event also saw the participation of Acting Ambassador of the Embassy of the Kingdom of the Netherlands in Sri Lanka, HE Iwan Rugtens, DIG Renuka Jayasundara, Chief of the Police Women and Children Division, and Focal Point for the LGBTQIA+ Community.

Trainers leading the programme also joined hands with these eminent figures.

This initiative is hailed as a significant milestone in advancing the LGBTQIA+ movement within the Sri Lanka Police, signifying a commitment to fostering an inclusive environment.

The comprehensive training programmes aim to raise awareness, enhance understanding, and promote respectful engagement with individuals of diverse sexual orientations and gender identities.

The engagement of high-ranking officials and the commitment to such training initiatives underscore the evolving landscape of diversity and inclusion within the law enforcement community.

As advocates for inclusivity and human rights, the Sri Lanka Police Academy’s proactive approach is commendable, aligning with global efforts to create police forces that respect and protect the rights of all individuals, regardless of their sexual orientation or gender identity.

This training initiative is poised to contribute significantly to the ongoing efforts to build a more equitable and tolerant society within the framework of law enforcement.

Official exchange rates in SL today (Jan 30)

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January 30, Colombo (LNW): The Sri Lankan Rupee (LKR) indicates slight fluctuation against the US Dollar today (30) in comparison to yesterday, as per the official exchange rates issued by the Central Bank of Sri Lanka (CBSL).

Accordingly, the buying price of the US Dollar has increased to Rs. 312.81 from Rs. 312.67, and the selling price has dropped to Rs. 322.73 from Rs. 322.77.

The Sri Lankan Rupee indicates similar pattern against several other foreign currencies as well.

Red Sea crisis propels Colombo port bunkering business to new high

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By: Staff Writer

January 30, Colombo (LNW): In the aftermath of recent attacks in the Red Sea, vessels are opting to bypass the Suez Canal and navigate around South Africa’s Cape of Good Hope.

This shift has disrupted a crucial global shipping route, compelling ships to add another 15 days to their journeys, accompanied by increased costs.

The Port of Cape Town has become essential, particularly with the closure of the Algoa Bay bunkering zone on the Indian Ocean.

As the crisis in the Red Sea persists, the re-routing of ships through the Cape of Good Hope continues, providing South Africa and the continent with a unique economic opportunity for bunkering at ports in South Asia including Colombo port.

The crisis surrounding the Red Sea has propelled the Colombo port to post positive growth with record handling since November.

The eruption of the Israel-Palestine clashes on 7 October and the tensions spilling over to select parts of the region including attacks on cargo ships has had a positive impact on the Colombo port.

In November, transshipment traffic at the Colombo port saw an 8% negative growth year on year, and 2.8% negative growth in overall volume.

However, both turned positive in December. The total throughput jumped by 14% or 77,727 TEUs to a record 631,617 TEUs. The SLPA terminals saw 24% to 188,750 TEUs.

From January to November 2023 the total number of containers handled remained flat at 6.3 million as against the corresponding period the previous year.

However, the surge in December saw the Colombo port ending 2023 at 6.94 million TEUs, thereby enjoying a 1.17% growth over 2022. Growth in 2023 was driven by transshipment as handling of domestic import and export boxes was down by 6% in the first 11 months.

The spike in demand for the Colombo port has spilled on to January as well. In the first 25 days of January the total throughput rose by 27.5% to 554,651 TEUs. The SLPA terminals saw their volume jump by 70% to 193,524 TEUs.

Given the surge in activity, Ports, Shipping and Aviation Minister Nimal Siripala de Silva visited the Colombo port yesterday.

The Ministry confirmed that due to the current crisis in the Red Sea in the Middle East, the number of cargo vessels arriving at the port of Colombo has increased resulting in an increase of the container operation capacity.

During the visit the Minister gave instructions to the officers to carry out the ship operations effectively and efficiently. He expressed gratitude to the management, executive officers, employees and trade union representatives for their support to make this process a success.

Sri Lanka records US$ 14.94 Bn merchandise exports in 2023

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By: Staff Writer

January 30, Colombo (LNW): Sri Lanka’s total exports reached US$ 14.94 Bn in 2023 including merchandise exports (US$ 11.85Bn) and estimated service exports (US$ 3.08 Bn). It is  only  a 0.39 % decline when compare to the value recorded in previous year (US$ 14.99 Bn). Estimated increase in service exports is around 63%, Export Development Board data showed.

Sri Lanka’s merchandise exports decreased by 11.25% to US$ 947.5 Million in December 2023 compared to December 2022 as per the provisional data released by the Sri Lanka Customs. Also, it is a 5.16 % decrease when compared to the value recorded in November 2023.

However the exports of Apparel and Textile recorded the highest in the year in December 2023 showing a positive sign of regaining its momentum.

Export earnings from tea which made up 12% of merchandise exports, increased by 3.57 % y-o-y to US$ 111.12 Mn in December 2023 compared to December 2022.

 This increase is mainly due to the strong performance in the export of Tea packets & Tea bags, increased by 10.95% and 142.37% respectively in December 2023 compared to December 2022.

In addition, Export earnings from Rubber and Rubber Finished products have increased by 6.92 % y-o-y to US$ 79.62 Mn in December 2023, with the strong performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (18.43 %).

On monthly analysis, export earnings of Coconut based products increased by 2.02 % in December 2023 compared to December 2022. Moreover, export earnings of Coconut kernel products and Coconut shell products increased by 9.07 % and 3.53 % respectively in December 2023 compared to December 2022.

Export earnings from Coconut Oil, Coconut Cream and Liquid Coconut Milk which are categorized under the Coconut kernel products increased by 9.17 %, 41.38 % and 22.27 % respectively in December 2023 compared to December 2022.

Earnings from Activated Carbon, which is categorized under the Coconut shell products increased by 4.6 % to US$ 11.5 Mn in December 2023 compared to December 2022.

Export earnings from Spices and Essential Oils increased by 0.1 % to US$ 31.42 Mn in the month of December 2023 compared to December 2022. This increase was mainly driven by a significant increase in the export of Cinnamon by 13.75 %.

Export earnings from Seafood increased by 11.64 % to US$ 23.79 Mn in December 2023 compared to December 2022. This increase was mainly due to the strong performance in export of Fresh fish (74.58 %) and Shrimps (49.74 %). Furthermore, the estimated value of ICT exports is expected to increase by 33.3 % to US$ 112.9 Mn in December 2023 when compared to December 2022. Also, the value of Transport & Logistics services exports is expected to increase by 107.4 % in December 2023 compared to the corresponding period in the previous year

150,000 individuals comprising politicians, and media heads liable to declare assets

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By: Staff Writer

January 30, Colombo (LNW): The new Anti-Corruption Act which is to be enacted this year contains provisions to strengthen the mechanisms for asset declaration.

Publication of Asset Declarations for senior officials (President, Prime Minister, ministers) on a designated website in line with Anti Corruption Law by July 2024, ministry of justice sources revealed.

The anticorruption framework is in the process of undergoing major changes. The recent adoption of the Anticorruption Act (ACAACA) introduced substantial improvements in the legal framework for anticorruption and organizational arrangements for confronting corruption.

The Act will go far in aligning Sri Lanka’s legal framework with international commitments and good practice standards.

The Bribery or Corruption Allegation Investigation Commission has issued a stern directive, setting a deadline for the submission of asset declarations from various high-profile figures, including the President, the Prime Minister, public servants, and media heads.

This move comes in accordance with the recently enacted Bribery or Corruption Allegations Act.

Under the provisions of the new legislation, approximately 150,000 individuals, comprising politicians, public servants, and media leaders, are mandated to submit detailed asset and liability statements to the Bribery or Corruption Allegations Commission on an annual basis.

The scope of the directive extends to individuals across thirty-one different sectors. The deadline for compliance with this mandatory disclosure is fixed at March 31st of each year, adding a sense of urgency to the process.

While these steps are critical, and will be reviewed in greater detail, accurate asset declaration mechanisms are only one element of an effective conflict of interest (CoI) system, sources said.

Equal attention must be placed on clarity in elaborating a definition what constitutes a conflict (which may extend well beyond ownership of assets), training officials in their obligations and responsibilities, and establishing procedures to provide rapid and consistent guidance on how to manage a conflict once it has been declared.

Public reporting on system performance is necessary to demonstrate the probity of officials, and officials found to have acted in non-conformity with CoI requirements must be appropriately and visibly sanctioned.

Approximately 90% of jurisdictions have legislation requiring some form of asset disclosure due to their potential value in helping promote a culture of integrity. Less evident is the fact that asset disclosures can also help public officials build trust in their work and, therefore, in public institutions.

Finally, asset disclosure systems can promote key partnerships with civil society and journalists.