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Sri Lanka’s Retail Market: Resilience amid Challenges, Growth Ahead

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Sri Lanka’s Retail Market: Resilience amid Challenges, Growth Ahead

By: Staff Writer

September 15, Colombo (LNW): Sri Lanka’s retail sector, particularly its e-commerce market, is set for notable growth. Between 2023 and 2027, the e-commerce sector is projected to expand by 15.59%. Businesses are gearing up to capitalize on this evolving market.

The broader retail landscape globally is shifting toward hyper-personalization and artificial intelligence (AI)-driven experiences.

A survey by Salesforce revealed that 73% of consumers expect businesses to understand their individual needs, while over half anticipate that companies will predict their preferences.

This marks a new phase in the evolution of e-commerce, where the lines between digital and physical shopping experiences blur.

In Sri Lanka, this is reflected in the growing number of digital retail transactions, showcasing the country’s ability to integrate both online and offline retail strategies effectively.

Despite facing economic challenges in 2023, including inflation and a sluggish economy, Sri Lanka’s supermarket sector has remained relatively stable due to the demand for essential goods.

In the second quarter of 2024, the supermarket industry experienced moderate growth, thanks to a slow recovery in consumer spending, especially in urban areas. In contrast, rural regions continue to grapple with rising living costs and reduced purchasing power.

A report from the Trade Ministry highlighted increased sales volumes in supermarkets, driven by household consumption and improved supply chain conditions.

The retail sector, while resilient, remains cautiously optimistic due to the upcoming Presidential election on September 21, 2024, which has led to uncertainty in the market. Retail sales have shown signs of improvement, and private credit is expected to rise in the latter half of 2024 if businesses shift towards expansion.

 However, many businesses are currently focused on reducing debt after the currency crisis and renegotiating loans at lower interest rates.

John Keells Group’s performance in Q1 2024/25 reported a 12% increase in same-store sales due to higher footfall. However, discretionary spending is predicted to slow in the short term as consumers’ disposable income shrinks, affecting non-essential goods demand.

Despite these hurdles, the supermarket sector is expected to stay resilient, as essential items make up a significant portion of consumer purchases.

Cargills PLC, which operates the Food City chain, reported a 12% year-on-year revenue increase for the three months ending March 31, 2024. However, operating profit decreased by 19.5% due to higher electricity costs, increased VAT, and the removal of the VAT exemption on locally produced dairy products.

Despite these challenges, Cargills’ profit after tax grew by 4.9%, underscoring the resilience of the supermarket sector.

Sri Lanka’s economy, which has faced inflation, import restrictions, and supply chain disruptions since 2022, is on the path to stabilization. Inflation is expected to remain in single digits, and with increasing consumer spending, tourism recovery, and rising investments, the retail sector is poised for steady growth in 2024, contributing significantly to GDP and employment.

Virajini Tennakoon’s “Camellia” wins the 2024 Golden Book Award

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Virajini Tennakoon’s “Camellia” wins the 2024 Golden Book Award

September 15, Colombo (LNW): Virajini Tennakoon’s novel “Camellia” has been recognised with the 2024 Golden Book Award, one of the highest honours in Sri Lankan literature.

The prestigious award ceremony, organised by the Sri Lanka Book Publishers Association, celebrated its 18th year at the Bandaranaike Memorial International Conference Hall in Colombo.

In addition to the accolade, Tennakoon was awarded a cash prize of Rs. 850,000, highlighting the novel’s literary excellence.

“Camellia” stood out among a group of distinguished finalists, each contributing to the country’s rich literary heritage.

The other finalists included Mahinda Prasad Masimbula for “Mai Mara Prasangaya,” Eric Ilayapparachi for “Thiwanka Kathawa,” Malith Thusitha Gunaratne for “Silver Trips,” and Liyanage Amarakirthi for “Kalalikarayo.”

Each finalist received a cash prize of Rs. 100,000 in recognition of their significant contributions to literature.

The Golden Book Awards continue to spotlight outstanding literary works, fostering a culture of reading and writing in Sri Lanka.

This year’s event not only honoured individual achievements but also celebrated the diversity and depth of the country’s literary scene.

Oddamawadi Solar Plant Faces obstacles over Power Purchase Agreement

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Oddamawadi Solar Plant Faces obstacles over Power Purchase Agreement

By: Staff Writer

September 15, Colombo (LNW): Sri Lanka is preparing to launch a 100 MW solar power plant in Oddamawadi, Batticaloa, by next year, despite allegations of manipulation in its power purchasing agreement with the Ceylon Electricity Board (CEB).

The project, which will follow a Build, Own, and Operate (BOO) model for 20 years, has been criticized by senior engineers for a potentially costly agreement that could result in substantial financial losses for the CEB.

According to a senior official from the Ministry of Power and Energy, the Cabinet-appointed committees considered realistic energy output projections to avoid artificially low tariffs.

The Cabinet approved the project for Solar Forge Batticaloa following an evaluation of expressions of interest (EOIs) solicited in 2021.

Solar Forge obtained land clearances, Environmental Impact Assessment (EIA) approval, and an energy permit between 2022 and 2023, with development set to start in 2024 and operations in 2025.

The Technical Evaluation Committee had recommended a unit price of $0.0666 (6.66 cents) for electricity, but the final power purchase agreement was set at $0.0875 (8.75 cents) per unit, despite an initial proposal of $0.0978 (9.78 cents) per unit. This discrepancy raises concerns as it could lead to an annual loss of Rs. 1.39 billion for the CEB, totaling Rs. 27.85 billion over 20 years.

This solar project is part of a larger government initiative to increase renewable energy capacity. The Cabinet’s decision on 31 August 2021 led to the invitation of EOIs for projects over 50 MW, receiving a total of 533 submissions.

In March 2023, a Standing Cabinet-Appointed Negotiating Committee (SCANC) and Project Committee were established to manage large-scale renewable projects.

Despite navigating this process and securing necessary permits, the project has faced criticism for potentially bypassing competitive bidding, which may have led to higher tariff rates.

CEB engineers argue that global market rates suggest wind power projects should be below $0.05 (5 cents) per unit and solar projects around $0.06 (6 cents) per unit

Nevertheless, the Oddamawadi solar power project advances, illustrating the challenge of expanding renewable energy while maintaining financial sustainability for state utilities like the CEB.

CHURCH LEADERSHIP AND EASTER DAY CARNAGE

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CHURCH LEADERSHIP AND EASTER DAY CARNAGE

By A Genuine Catholic

Time is ticking to choose our next President and memories are still hauntingly fresh as to how we chose our last President Gotabhaya Rajapakse. This is despite that we Sri Lankans tend to forget experiences very soon. Even Velupillai Prabakaran made capital out of it. I am a Church going Catholic but I wish to call spade. His Eminence Malcom Cardinal Ranjith has issued a statement for Catholics to vote wisely not naming any candidate by name, but few  weeks earlier he indirectly called upon his flock to favour the  candidates from the SJB and JBB for pledging to punish the Easter Day massacre perpetrators.

The Colombo Diocese founded in 1845 was considered the flagship of the Church in Sri Lanka and Archbishop the leader. Thomas Cardinal Cooray was the first Sri Lankan Archbishop of the Diocese installed in 1947 ending his term in 1976. The Church leadership of the Archbishops of the past prior to Cardinal Ranjith becoming Archbishop in 2009 was very circumspect in its liaison with political leadership of the country maintaining a healthy balance and distance. They provided leadership at the most difficult and challenging periods under the Bandaranaikes and later the ethnic war. They respected the saying if you sleep with dogs you will get up with fleas and that politicians are a unique breed who will sacrifice just and the best causes to achieve own selfish ends. So much so the Catholic Church earned immense respect for its firm and dignified stand on politicians and politics. Archbishops Thomas Cardinal Cooray, Nicholas Marcus Fernando and Oswald Gomis are still revered and respected for what they were in most astutely and religiously guiding and serving their flock.

It is a majority opinion that Archbishop Malcom Cardinal Ranjith has gone beyond the line of his eminent predecessors. Aspersions were galore on the Church leadership mainly that of Cardinal Ranjith on his pattern of behavior before and after the last Presidential Election held on 16th November 2019. He seriously flawed by almost fanatically calling on his flock to vote for Gotabhaya. Then much later he finds that he had been double crossed for a massive price of hundreds of his flock being massacred and maimed for life whilst at prayer in Church.

His Eminence castigated and pinned the entire blame on Yahapalana Government for the Easter Day massacre identifying more with Ranil and the UNP. Resultantly Ranil and UNP were reduced to zero in the Catholic coastal belt. Sadly it did not occur to His Eminence’s narrow perception the liability and failures of President Sirisena as the Head of State and Head of Security at that time and the possibility of a political conspiracy that profusely helped Gotabhaya. And interestingly because Sirisena and Gotabhaya were on the same side. Was his haste to ensure Gotabhaya victory a colossal negligence for his failure to patiently and logically fathom the truth. 

The close relationship that existed between the Cardinal and Rajapakses was a well known fact hence cannot be denied. It was a reflection of His Eminence the Cardinal’s undeniable inner political liking. We are made to believe that the Rajapakses and the Cardinal are now foes and that he is after their blood for the Easter massacre. But we saw the Cardinal himself marrying Mahinda’s son in Church dispensing with all the guidelines for the solemnizing of church marriage. So much so doubts were formed around Cardinal’s displayed collision course with the Rajapakses as a part of a drama. And more recently we saw how cordially he entertained Namal the Candidate to the Palace.

His Eminence Malcom Cardinal Ranjit’s flirtation in the political playing field did end with serious repercussions. He outdid the dominant Buddhist Clergy joining hands with President Sirisena in street demonstrations of protests against the drug menace although noble in principle was pitting the Church against powerful and dangerous drug barons. The Church was having its’ own programme in Schools against the menace run by Rev.Fr.Benedict.  Alexander Pope wrote “Fools rush in where Angels fear to tread.” Sirisena however showed no iota of goodwill to the Cardinal failing at least to hint the Cardinal about the possible threat to Churches. 

His Eminence acted like an enraged woman with incessant calls for investigation to reveal the mastermind of the Easter attacks which angered President Gotabhaya who in his royal anger went on a warpath against the Catholic Church. He targeted the base and foundation of religious activity in the Archdiocese which is mainly in the Negombo belt. His Muturajawela Gazette was a salvo against the Church. Churches with its land and the Catholic households in the area clearly becoming the main targets. State Media began witch hunting the Clergy. Gota then appointed Gnanasara Thero as Chairman of the Task Force for the implementation of his concept One Country One Law. Gnanasara Thero stance against the Catholic Church was well known. He visited Madhu area involving himself in a land ownership matter against the Madhu Church. He  bared his stance on admissions to schools of religious base. Wholly an attempt to admit non-Catholics in numbers to Catholic schools to upset the balance in a new Constitution to be drafted. If admissions are to be on a proportionate or pro rata basis Catholic children seeking religious atmosphere would suffer with a Buddhist majority occupying Catholic schools. And Gota on purpose failed to nominate any Catholic to the Committee to represent Catholic interests. Then came the Bopitiya Church fiasco with some Naval Officers of the Welisara Camp warning the Parish Priest of a Bomb threat and to be vary of persons in Cassocks, the threat to be subsequently withdrawn by the Defense Secretary himself stating it as mistake. Then we had the

Borella Church bomb incident fizzling out to be a hoax after some innocent and respected Catholics being remanded on false charges.                        

The Cardinal clearly seems to be wholly obsessed with the punishment of the fiends behind the Easter Day massacre and not with other large matters related to the welfare and the status quo of the Church. It becomes important that his perceived support to Marxist colouring need to be more and deeply considered in view of the traumatic experiences the Church underwent during the Bandaranaike era especially under Marxist backed Sirimavo government. Cardinal’s haste could again be waste and is bothering the flock. It is no trivial matter of what others are thinking as to how one person’s behavior as the leader could affect the Catholic Church as a whole in the context of Christians being a minority in the country.

Empowering Smallholder Farmers: Frontier Co-op’s SPICE Project Success

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Empowering Smallholder Farmers: Frontier Co-op’s SPICE Project Success

By: Staff Writer

September 15, Colombo (LNW): Frontier Co-op has successfully completed its Safe Processing in Cooperative Enterprises (SPICE) development project, which was supported by the United States Agency for International Development (USAID) Cooperative Development Program (CDP).

This multi-year initiative, which began in 2018, aimed to enhance the capabilities of smallholder farmers in Sri Lanka, India, and Guatemala by addressing barriers related to knowledge, infrastructure, and environmental challenges.

The primary goal of the SPICE project was to enable these farmer cooperatives to market ready-to-eat spices and teas to U.S. consumers. Frontier Co-op collaborated with various cooperatives within its supply chain to achieve this goal.

The partners included the Small Organic Farmers’ Association (SOFA) in Sri Lanka, FEDECOVERA in Guatemala, and Young Mountain Tea (YMT) in India.

In India, Frontier Co-op worked with Young Mountain Tea to establish the first farmer-owned tea processing facility in Kumaon.

This facility will benefit approximately 500 farmers, the majority of whom are women, by providing them with higher commodity rates and dividends. If successful, the model could eventually support up to 6,000 farmers, contributing to economic growth and environmental improvements in the region.

In Guatemala, Frontier Co-op’s partnership with FEDECOVERA—a cooperative representing 33,000 farming families—focused on enhancing their processing capabilities.

The introduction of steam pasteurization, grinding, and sterile handling techniques has increased the value of their cardamom, allspice, and turmeric crops, improving their market prices.

Sri Lanka’s collaboration with SOFA involved agricultural training for over 3,500 farmers. This training has led to better farming practices and improved crop yields, benefiting the local farming community in Sri Lanka’s Central Province.

The SPICE project underscores Frontier Co-op’s dedication to organic agriculture, environmental stewardship, and social equity. By supporting these smallholder farmers, Frontier Co-op reinforces its commitment to sustainable and socially responsible practices within its supply chain.

Tony Bedard, CEO of Frontier Co-op, emphasized the organization’s commitment to creating positive social and environmental impacts globally. “This partnership with USAID extends our legacy in sourcing high-quality, organic spices while supporting smallholder cooperative farmers worldwide,” he said.

Raj Vable, co-founder of Young Mountain Tea, highlighted the impact of the project on gender-diverse farmers, noting that the partnership has enabled women farmers to earn significantly more from their harvests and gain additional income through their ownership in the new factory.

Gabriela Delgado from FEDECOVERA also praised the project’s impact, stating that it has brought social, economic, and agricultural benefits to Guatemalan farmers, providing them with greater economic empowerment.

Moving forward, Frontier Co-op will continue to invest in community and business development projects to bolster the long-term resilience of smallholder farmers and their participation in the regenerative supply chain. 

International observers arrive in Sri Lanka for comprehensive election monitoring

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International observers arrive in Sri Lanka for comprehensive election monitoring

September 15, Colombo (LNW): A total of 71 representatives from various international election observation organisations have recently arrived in Sri Lanka to oversee the upcoming electoral process.

This group includes 43 observers from the European Union (EU) and 22 from the Commonwealth.

Additionally, six observers from the Asian Network for Free Elections (ANFREL) are on the ground, marking a significant international presence aimed at ensuring a fair and transparent election.

Further strengthening this effort, 34 more EU observers and three additional ANFREL representatives are expected to join in the coming days, along with seven observers from neighbouring countries.

Their presence underscores the global attention on Sri Lanka’s electoral proceedings and the commitment to upholding democratic standards.

The National Election Commission has confirmed that these observer teams have already initiated pre-observation activities.

They aim to ensure thorough and comprehensive coverage across all 22 electorates, scrutinising the election environment, campaign practices, and the overall voting process.

This proactive engagement reflects a concerted effort to bolster electoral integrity and reinforce public confidence in the democratic process.

Major Win for Environmental Protection: Forest Safeguards Reinstated

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Major Win for Environmental Protection: Forest Safeguards Reinstated

By: Staff Writer

September 15, Colombo (LNW): In a significant triumph for environmental conservation, the crucial protections for Other State Forests have been reinstated, guaranteeing their conservation and sustainable management.

A new cabinet decision has effectively addressed the legal challenge posed by the Environmental Foundation (Guarantee) Ltd., securing enduring protection for these essential forest regions.

The Environmental Foundation (EFL), alongside environmentalist and former EFL Director Rukshan Jayawardene, filed a Fundamental Rights Application (No: SC/FR/01/21) on behalf of Sri Lankan citizens in the Supreme Court.

This application sought to overturn the Cabinet decision dated 12/10/2020 and Circular No. MWFC/1/2020 dated 04/11/2020, which had transferred control of Other State Forests to District and Divisional Secretaries.

The contested Circular No. MWFC/1/2020 had annulled Circular No. 05/2001 (amended by Circular No. 02/2006), which had previously entrusted the Department of Forests with the management, development, and protection of Other State Forests.

Under Circular No. 05/2001, development of these forests was only permissible following a review by the Inter-Ministerial Committee and an Environmental Assessment as mandated by the National Environmental Act.

In contrast, Circular No. MWFC/1/2020 allowed District and Divisional Secretaries to alienate these forests using standard procedures for state land alienation, without a robust mechanism to assess environmental impacts.

This could lead to reduced forest cover and significant environmental and biodiversity damage, violating the National Forest Policy and national laws.

EFL’s legal challenge underscored the necessity for stronger protections for these forests, which, while not formally designated as protected, are vital to the country’s ecosystem.

The case concluded on 04.09.2024 with the reliefs sought by EFL being granted through Cabinet memorandum No. MWRFC/2023/06 and the Cabinet decision dated 05.07.2023. These actions reinstated Circulars No. 05/2001 and 02/2006 and nullified the problematic Circular No. MWFC/1/2020.

Additionally, State Counsel was instructed to inform relevant authorities of these updates. EFL expresses sincere gratitude to President’s Counsel Saliya Peiris and Charith Galhena for their pivotal role in achieving this outcome and protecting our valuable environment.

SL introduces hefty fines and jail terms for voting fraud

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SL introduces hefty fines and jail terms for voting fraud

September 15, Colombo (LNW): Sri Lanka has taken a firm stance against electoral malpractice by significantly increasing the penalty for fraudulent voting.

The Election Commission has announced that individuals found guilty of such offences will now face a fine of Rs. 200,000, alongside the possibility of imprisonment for up to one year.

This move comes as part of the Election Special Provisions Act No. 23 of 2023, aimed at reinforcing the integrity of the electoral process.

This new legislation represents a drastic shift from the previous penalty, which stood at a mere Rs. 500.

US issues travel advisory for Sri Lanka amidst Presidential Polls

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US issues travel advisory for Sri Lanka amidst Presidential Polls

September 15, Colombo (LNW): The United States Department of State has revised its travel advisory for Sri Lanka in anticipation of the country’s presidential election set for 21st September 2024.

This update underscores the heightened risk of civil unrest and potential terrorist activities during the election period, advising American citizens to exercise increased caution while in the country.

The advisory specifically warns of the likelihood of protests and demonstrations before, during, and after the election.

According to the State Department, such events have historically escalated into violence, with security forces using measures like water cannons and tear gas to disperse crowds.

The advisory also stresses the ongoing threat of terrorism in Sri Lanka, pointing out that past attacks have occurred in various public areas. These include tourist spots, transport hubs, markets, government buildings, and places of worship.

Such incidents are often unpredictable and can happen with little to no forewarning, the statement added.

To ensure the safety of travellers, the U.S. Department of State has issued several key recommendations:

  1. Avoid Gatherings: U.S. citizens are urged to steer clear of public demonstrations and large gatherings, even if they appear peaceful, as they can rapidly turn volatile.
  2. Stay Informed: Travellers are advised to keep abreast of local news and follow the instructions of local authorities.
  3. Exercise Caution: Increased vigilance in public spaces is recommended, with an emphasis on being aware of one’s surroundings at all times.

This advisory serves as a precautionary measure, reminding American travellers of the potential risks associated with periods of political tension.

Cabinet approves Bill to prohibit Corporal Punishment

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Cabinet approves Bill to prohibit Corporal Punishment

September 15, Colombo (LNW): The Cabinet of Ministers has endorsed a proposal by the Minister of Justice, Prisons Affairs, and Constitutional Reforms to introduce a bill that aims to prohibit corporal punishment in all forms.

The proposal will now be published in the Gazette before being presented to Parliament for approval.

The decision to pursue this legislative change was initially approved during the Cabinet meeting held on 29th April 2024.

It seeks to amend the Penal Code to explicitly ban any form of corporal punishment, ensuring that appropriate legal provisions are established to safeguard individuals from such practices.

The proposed amendment has undergone thorough scrutiny, with the Attorney General providing clearance for the draft prepared by the legal draftsman.

By enacting this legislation, the government aims to create a more humane and just society, reflecting its commitment to uphold the dignity and safety of all citizens.

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