SRI LANKA NEWS (AUGUST 2023)
Compiled by Victor Melder.
Inflation has decreased to 6.3 percent in July compared to 12 percent in June, said State Finance Minister Shehan Semasinghe. Semasinghe in a tweet added that Food Inflation decreased to -1.4 percent in July from 4.1 percent in June. “Non Food Inflation came down to 10.5 percent in July from 16.2 percent in June. We are regaining stability,” he added. The Department of Census and Statistics yesterday added that Sri Lanka’s Headline Inflation, as measured by the change in the Colombo Consumer Price Index (CCPI), has further decreased to 6.3 percent in July, compared to the previous month. The CCPI-based Inflation was calculated as 12.0 percent for the month of June 2023. “The inflation of Food Group dropped to -1.4 percent in July from 4.1 percent in June 2023, the Department added. (Daily News, 1.8.2023)
The Ports, Shipping and Aviation Ministry has planned to re-construct the Talaimannar Pier to facilitate passenger vessels from Rameswaram, India after 37 years. The pier was destroyed and had been abandoned to deteriorate during the conflict era in the north. Accordingly, under the instructions of Minister Nimal Siripala de Silva, the Sri Lanka Ports Authority (SLPA) has been vested with the re-construction of the pier. The estimated cost of the investment is Rs. 1,800 million. Parallel to the re-construction of the pier, about 10 acres of government-owned land bordering the port will be acquired for port infrastructure development activities. Under these new developments, a modern passenger terminal and warehouse facilities will be constructed. It has also been decided to call for RFPs for these investments to be carried out under PPP. In the past, a passenger ferry service existed between Talaimannar and Danushukodi. However, the Dhanuskodi port was completely destroyed due to cyclones. At present, India has completed developments at the Rameswaram Port, and the Indian government has declared clearance to commence a passenger ferry service between Mannar and Rameswaram. The Minister emphasized that the commencement of the ferry service between Talaimannar and Rameswaram will also facilitate Sri Lankan pilgrims to India by providing low-cost travel facilities. He also said that these measures will facilitate the exchange of goods between the two countries and will be a commendable opportunity to popularize the products of the people of northern Sri Lanka in India. (Daily Mirror, 5.8.2023)
Organised groups had torched over 25,000 acres of forests around the country this year in a bid to encroach forest land, environmentalists claim. About 50 acres of the Tabbowa Forest Reserve were destroyed by a fire on Wednesday. Such groups had been burning forests during the dry season. Chamikara said. “However, the frequency of such incidents has increased this year, Sajeewa Chamikara of the Movement for Land and Agricultural Reform (MONLAR) said. “Organised groups are setting fire to forests in many areas in the dry zone and the wet zone has also not been spared. These incidents have increased due to wrong policy decisions taken by the government. At the beginning of this year, Minister of Wildlife Pavithra Wanniarachchi received Cabinet approval for releasing forest land to people in 11 districts,” he said. The government wanted to prepare the ground for handing over those lands to various companies, Chamikara said. (Island, 12.8.2023)
A total of USD 541 million in foreign exchange was sent to Sri Lanka boosting the remittances from Sri Lankan foreign workers, Labour and Foreign Employment Minister Manusha Nanayakkara said. Receipts of foreign remittances have increased by 78% since last year. The cumulative remittances by Sri Lanka’s global workforce reached USD 3363.6 million. (Daily Mirror, 12.8.20223)
About 2,000 doctors had left the country during the past two years, All Ceylon Medical Officers’ Association (ACMOA) General Secretary Dr. Jayantha Bandara said. Now about 5,000 more doctors were planning to leave the country, Dr. Bandara said. “There are many reasons why professionals are leaving the country. Instead of addressing the concerns of doctors, the government is threatening to blacklist them and arrest them at the airport,” he said. Dr. Bandara added that most professionals were worried about their future. “They are also troubled by high taxes and low pay,” he said. “Most doctors are now compelled to do 24-hour shifts. We are only paid for 10 hours. There are many other factors that drive them away. There is a severe shortage of pharmaceutical drugs, and most healthcare staff spend time looking for medicines for patients.” Dr. Bandara said all doctors unions were unhappy about the government’s decision to take legal action against medical professionals who left the country without the approval of the Minister of Health Keheliya Rambukwella. Secretary to the Government Medical Officers Association (GMOA) Dr. Haritha Aluthge said that the Secretary to the Ministry of Health had issued a circular stating that they will not approve leave for medical specialists, if there were only a limited number of them available in Sri Lanka. They included anaesthetists, he said. “These unilateral actions will only make people angry. If people want to, they can leave without applying for leave and that is already happening,” he said. Recently, the only specialist anaesthetist at the Hambantota Hospital left the country without informing the relevant officials. (Daily Island, 17.8.2023)
Sri Lanka allocated less than 2% of its GDP on education, which falls well below the international benchmark of 4-6% of GDP and is among the lowest in the South Asia region, a statement issued by UNICEF said. The Ministry of Education (MOE) and UNICEF spearhead a national initiative to help 1.6 million primary school children impacted by prolonged school closures and sporadic disruptions to their education over the past three years, to catch up on their learning. According to a Moe-led national assessment, 85% of Grade 3 children are not achieving minimum proficiency in literacy and numeracy, which is essential in their transition to secondary school and beyond, both in life and work. “There is an urgent need to increase the national budget allocation for education, especially for primary grades, where we need to boost foundational learning for children, while also ensuring the implementation of vital Education Reforms so that we can build the solid
human resource skills needed to support the country’s development,” said Minister of Education Susil Premajayantha at the event. The learning crisis has affected vulnerable children the most, including younger children in primary grades and those in plantation estates in the country. In July, the MOE and UNICEF held a special briefing on ‘Learning Recovery’ to leverage the support of development partners, while more technical level workshops were held across nine provinces, to identify gaps and prioritize actions (Daily Mirror, 17.8.2023)
Proposed amendments to Sri Lanka’s Inland Revenue Act will serve to address purported under performance of Inland Revenue Department (IRD) officials in a bid to enhance income tax collection, Government MP Mahindananda Aluthgamage said. The objective is to make formidable decisions regarding officials not contributing effectively to the state’s tax revenue enhancement, a statement from the president’s media division (PMD) quoted Aluthgamage as saying. “There’s only one person in Sri Lanka who pays more than 300 million rupees in tax. Only three people between 50 million and 100 million rupees; only 16 people between 25 and 50 million; One hundred and thirty seven between five and 10 million; 508 between two and five million; 804 between one and two million, and 5,473 between 500,000 and one million rupees,” he said. The MP said Sri Lanka is still behind on a condition imposed by the International Monetary Fund (IMF) in exchange for a bailout package to increase state revenue. “We’re trying to reach that target. The government will have to take some unpopular measures,” he said. “Instead of taxing the small man on his salary, state revenue can be increased by taxing those who should be taxed,” he said, noting that the IRD is owed 904 billion rupees in tax collection. .A substantial burden rests on the Inland Revenue Department, tasked with collecting the 904 billion rupees in taxes. He said that Sri Lanka is the only country in the world permitting four tax appeals and it would take a “staggering” 15 years to dispose of these appeals. Aluthgamage said only 31,000 Sri Lankans out of some 500,000 persons with registered income tax files pay personal income tax while 328 registered limited companies out of 105,000 contribute to 82 percent of tax revenue. Sri Lanka has been compelled to increase its tax revenue in the wake of the 2022 currency crisis, the worst in decades, and the subsequent agreement with the IMF over a 2.9 billion dollar extended fund facility. However, resistance to a hike in progressive personal income tax has been high, with many high-income earning professionals in the state sector holding a number of protests against the increase. Value added taxes were also raised to 15 percent from eight percent last year. Another 2.5 percent cascading tax was imposed on top of VAT, the effect of which was estimated to be around 4.5 or more through the cascading effect. The IMF had reportedly asked the cash strapped Sri Lankan government to impose taxes on all who receive monthly income of above 41,667 rupees as a prior condition for the bailout, but President Ranil Wickremesinghe’s administration had instead imposed a Pay As You Earn (PAYE) tax on everyone who earns over 100,000 rupees a month. The IMF has defended the tax hike, arguing that creditors and investors will not support Sri Lanka because tax to GDP had fallen steeply. Taxes, including value added taxes were slashed in 2019 December to target a ‘persistent output gap’, after serial currency crises from flexible inflation targeting reduced growth. (Island, 20.8.2023)
President Ranil Wickremesinghe addressing a special Committee meeting held at the Trincomalee Air Force Base on Thursday (24) drew parallels to the successful implementation of the Mahaweli Development Project during the 1980s, affirming a similar commitment to expediting the Eastern Development Project. President Wickremesinghe highlighted the comprehensive vision for Trincomalee’s transformation into a multifaceted hub encompassing energy, transportation, maritime commerce, naval operations, aviation, industry, and tourism and stressed on the need to engage India’s assistance for this endeavour. (Island, 23.8.2023)
While issuing a warning over the extreme heat, the Meteorology Department said today that there is a higher temperature that can be felt in the body. The Duty Meteorologist attached to the Department said higher temperatures were reported from the North, North Central, Eastern and Uva Provinces and the Hambantota district. People in these areas are requested to be cautious during the daytime. The Duty Meteorologist also requested the people in these areas to drink as much water as they could to prevent dehydration. The temperature remains between 32 and 36 degrees Celsius. The warning was issued not because of the temperature but because of the calculations done based on the atmospheric humidity. (Daily Mirror, 23.8.2023)
In July 2023, Sri Lanka’s foreign reserve position exhibited a strengthening trend, reaching USD 3.8 billion, a notable YTD increase of 98.2% from USD 1.9 Bn in December 2022. First Capital Research says that this upward momentum was underpinned by an easing of pressure on the BOP (surplus of USD 2 Bn in 1H-2023) supported by the substantial 34.8% YoY reduction in the trade deficit in 1H2023. Similarly, remittances and tourism receipts marked an impressive YoY growth rate of +75.3% and +28.8%, respectively which further bolstered the reserve position. “However, a deceleration in the MoM growth of the reserve position was observed in July 2023 amidst the gradual relaxation of import restrictions initiated in May-23.” Consequently, the month of May-23 recorded the first YoY increase in import expenditure since February-22, amounting to USD 1.5Bn while the trend persisted into the subsequent month. As the GoSL further lifted a ban on imports of heavy vehicles w.e.f Aug-23 for the first time since Mar-20, it further added pressure on the BOP and overall reserves. “Although foreign inflows continue to infuse into the CSE and Government Securities markets throughout the year, these inflows have not yet attained a magnitude sufficient to counterbalance the impact of import relaxation constraints.”. (Daily News 23.8.2023)
In the wake of escalating killings and robberies across the country, the police, in collaboration with the Special Task Force (STF), have launched special operations to crack down on organized criminals and individuals associated with them, with the aim of completely controlling organized crimes in the country within the next six months.. The authorities have implemented measures to take strict legal action against those involved in organized crimes as Sri Lanka has recently experienced a disturbing increase in shootings, resulting in a significant loss of lives and injuries. According to statistics, 40 people have been killed in shootings so far this year while several more have been injured. Earlier, a committee was appointed headed by Tennakoon, appointed by the Inspector General of Police (IGP) to investigate and report on measures that can be implemented to combat drug and underworld activities. The committee was appointed for assessing the current situation and proposing effective strategies to address drug and underworld activities, have compiled an extensive database of organized gangsters and associates operating within Sri Lanka. It was revealed that some of these criminals continue to run their operations from within prison walls. As a result, a special operation targeting to arrest these gangsters will commence next week, he said. In response to the concerning rise in shootings and underworld activities carried out by gangsters operating from overseas, the Senior DIG said that efforts will be made to tackle underworld figures operating from overseas. The police, in conjunction with the Criminal Investigations Department (CID), will launch a coordinated effort to address this issue. Furthermore, he said a programme has been initiated to re-investigate unsolved crimes and expedite pending investigations. The objective is to identify and apprehend suspects, as well as those who have aided and abetted criminal activities. (Daily Mirror, 25.8.2023)
The Dutch State Secretary for Culture and Media, Gunay Uslu, will arrive in Sri Lanka today on a five-day visit leading a delegation to sign the legal document transferring the ownership of the cultural artifacts that will be returned to Sri Lanka later this year. The decision was taken by the Government of the Netherlands in July to return, to Sri Lanka, cultural artifacts seized during the colonial period: including the famous Lewke canon, two Gold kastanes (ceremonial swords), Sinhalese knive, Silver kastanes and two guns. In 2021, the Dutch government acquiesced that “indigenous populations of colonial territories were served an injustice through the involuntary loss of objects that formed part of their cultural heritage” In December 2022, the government appointed an independent commission, the Advisory Committee on the Return of Cultural Objects from Colonial Context, chaired by Lilian Gonçalves-Ho Kang You, to assess and facilitate the return of colonial objects to their respective countries of origin. A team of researchers from both the Netherlands and Sri Lanka confirmed these items were taken as loot by Dutch from the Kandyan Kingdom during the siege of the Palace, in 1765. The Kingdom of the Netherlands in a press release said, “the return process is expected to form the basis for further cooperation between the two countries and the cultural institutions concerned. The cooperation will mainly be focused on the exchange of technical expertise, knowledge sharing and education”. The official delegation includes Barbera Wolfensberger, Director General Culture and Media in the Netherlands, Lilian Gonçalves-Ho Kang You (Chairperson Dutch Colonial Collections Committee) and Alicia Schrikker (member of the Committee). (Sunday Times, 27.8.2023)
