SRI LANKA NEWS – (DECEMBER 2019) – Compiled by Victor Melder.

About 4,126 persons from to 1,156 families had been affected by the inclement weather conditions in several districts of the country, the Disaster Management Centre (DMC) said. Five persons are dead and one is missing in the Matale, Polonnaruwa and Nuwara Eliya districts owing to landslides. According to DMC Assistant Director Pradeep Kodipilli 569 persons of 158 families are being sheltered at four welfare centres in the Ampara District. Lunugala Divisional Secretary Nimal Dissanayake said that 35 families of Galula Estate in Madolsima have been evacuated and sent to welfare centres in schools in safer areas as there were landslide threats. Three persons have been killed while two others have gone missing in an earth slip which occurred in Malapattawa, Nuwara Eliya. Meanwhile, the National Building Research Organization (NBRO) has declared the Ratnapura, Badulla and Kegalle districts as landslide-prone districts. Landslide warnings have been issued for these areas. Vehicle traffic was disrupted in several areas including the Haldummulla-Kiriwanagama Road in the Badulla District and the Welimada Road and Badulla-Passara Road in the Nuwara Eliya District. Later, yesterday a single lane of Badulla Passara road was opened for vehicle movements. The Badulla-Haldummulla and the Ragala-Nuwara Eliya roads have become impassible due to earth slips. (Daily Island, 2.12.2019)

Parliament has been prorogued on the instructions of President Gotabaya Rajapaksa.The Gazette notification announcing the prorogation was issued, last night. The new session of Parliament will be held on January 03, 2020. A prorogation which is a temporary recess of Parliament, should not extend beyond more than two months, However, such date for summoning Parliament may be advanced by another presidential proclamation provided it is summoned for a date not less than three days from the date of such fresh proclamation. During the prorogation the Speaker continues to function and the MPs retain their membership even though they do not attend meetings of Parliament. The effect of a prorogation is to suspend all current business before the House and all proceedings pending at the time are quashed except impeachments. When the new sessions starts, the President is empowered to make a statement of Government Policy at the commencement of each new Session. In the past, it was known as the Throne Speech, which was delivered by the Governor-General. President Rajapaksa will open the new session of Parliament and is expected to deliver the policy statement of his Government. The President can prorogue Parliament under Article 70 of the Constitution and is empowered to make a Statement of Government Policy at the commencement of each Session of Parliament and to preside at ceremonial sittings of Parliament. Last week, President Rajapaksa appointed his Cabinet of 16 ministers as well as 38 State Ministers as part of the interim government which will be in place till the next general election. The President is constitutionally empowered to dissolve Parliament on 1 March 2020 when it completes four-and-a-half years. The next Parliamentary Election is expected in late April or the first week of May. President Rajapaksa is heading a minority government with the UPFA, which had 95 MPs. The UNP has 106 MPs, ITAK has 16 MPs, JVP 6 MPs, and the EPDP and SLMC one MP each in the 225-member Parliament. (Daily Island, 3.12.2019)

Scientists say protecting Sri Lanka’s Blue Tarantula (Chilobrachys jonitriantisvansicklei) is of foremost importance especially in view of the ever expanding exotic pet trade. Researcher and field biologist Amila Prasanna Sumanapala told The Island that the Blue Tarantuala species were very rare. He believes Convention on International Trade in Endangered Species of Fauna and Flora (CITES) committee would include Blue Tarantula in its endangered species list. The spider measuring up to five inches and is a predator that hunts insects from underground burrows. It is found in a section of Sri Lanka’s southwestern rainforest, surrounded by tea and rubber plantations. Blue tarantula was given the scientific name Chilobrachys jonitriantisvansicklei, in honor of Joni Triantis Van Sickle conservationist and founder of IDEA WILD, a project dedicated to protecting biodiversity around the world. Amila noticed the beautiful spider in a small patch of rainforest in the western province in 2012, when conducting a research for the University of Colombo. He wasn’t completely sure if the blue spider was a new species and he sent his colleague, Ranil Nanayakkara, a conservation biologist specialising in arachnology (study of spiders), to the rainforest to take photographs. (Daily Island, 5.12.2019).

The heavy downpour experienced in the tea planting districts resulted in a drastic drop in the November yield, with low growns dipping from 14.4 million kilos and high growns falling to 3.4 million kilos in comparison to the previous month’s (October) figures of 17.4 million and 7 million kilos, respectively. However, the crop decline was not restricted to Sri Lanka as other major producing countries such as Kenya and India also suffered a drop in production resulting in overall price increases at the auctions. World production figures were higher in 2018 in comparison to the previous year. Sri Lanka showed minus variance of 3.87 million kilos, while Kenya, India, China, Uganda and Malawi had plus variances. The drop in production this year led to an upward trend in prices, the Forbes & Walker (F&W) tea report confirmed. Price increases are usually experienced at this time of year because of winter buying by CIS countries and Russia. The November average was Rs. 569.67, which was higher than the Rs. 525.53 sales average for October, a significant increase of Rs. 44.24. However the report also reflected a year- on-year performance of a reduced average of about Rs. 14.00 per kilo. The trend for price increases is expected to continue with the Western quality season at hand. Subject to weather conditions returning to normal with the rains easing by mid-December, the onset of cold nights in the Western districts, production levels are bound to improve with the quality weather, the report added. Analyzing price fluctuations, the F&W report further said high growns recorded the highest increase average of Rs. 540.81 for November, an increase of Rs. 63.22 over the same month in 2018. Flowery grades sold well. Although such quantities were low, prices realized exceeded Rs. 1,000. per kilo. BOP 1 fetched Rs. 1,300, while OP 1 sold at Rs. 1,700 per kilo. (Daily Island, 8.12.2019)

The total number of international tourist arrivals to Sri Lanka during November 2019 was 176,984. In comparison to November last year, there was a decline of 9.5% when the arrivals were 195,582. This month, the largest source market for tourists was India followed by Germany and China. Almost 90% of tourists travelled by air to Sri Lanka. As of 30th November 2019, 1,672,039 of tourists had visited Sri Lanka for this year. It is a decline of 19.6% over last year when 2,08,0,627 of tourists had visited the country during the same period. However, Sri Lanka saw a 70.8% significant drop in arrivals last May due to Easter Sunday Attacks and gradually it has decreased to 9.5% by November which is a promising sign for Sri Lanka Tourism. (Daily Island, 9.12.2019)

Sri Lanka has been ranked 71 out of 189 countries according to ‘the Human Development Index (HDI) 2019’ released by the United Nations Development Programme (UNDP) yesterday. Compared to 2018, this is an improvement by 5 ranks. Sri Lanka, with a value of ‘0.780’ in a scale ranging between 0-1, falls under the category of countries with ‘High Human Development’. Key dimensions considered in the HDI rankings were “having a long and healthy life, being knowledgeable and having a decent standard of living”. According to the HDI 2019 report, Sri Lanka’s average life expectancy at birth is 80.1 years for females and 73.4 years for males. Sri Lanka’s expected years of schooling is 14 years, employment to population ratio (15 years and older) is 50.2 percent, and per capita Carbon dioxide emissions is 1.0 tonnes. It states that 34.1 percent of the country’s population uses the Internet. Compared to Sri Lanka, other South Asian countries are lagging behind in the index. Neighbouring India has been ranked at 129, Bhutan at 134, Bangladesh at 135, Nepal at 147, Pakistan at 152, Myanmar at 145, and Afghanistan at 170 in the latest HDI.Norway, Switzerland, Ireland, Germany, Hong Kong and China (SAR) are the top five countries with the highest human development respectively. According to the report’s data, the income share held by Sri Lanka’s poorest 40 percent is 17.7 percent, while the income share held by the country’s richest 10 percent is 32.9 percent. In the sector-wise analysis, the report stated that the current health expenditure of Sri Lanka is 3.9 percent of its GDP and the Government expenditure on education is 2.8 percent of GDP. The infant mortality rate is 7.5 deaths per 1,000 live births. The adult literacy rate (15 years and older) is 91.9 percent. Sri Lanka’s annual number of live births to adolescent women (15-19 years) is 20.9 per 1,000 adolescent women. The female share of employment in senior and middle management is 25.6 percent in Sri Lanka. Moreover, the mobile phone subscriptions in Sri Lanka exceed the total population and this figure is 115.1 per 100 people. This year’s Human Development Report is titled “Beyond income, beyond averages, beyond today: inequalities in human development in the 21st Century”. (Daily News, 10.12.2019)

Election Commission Chairman Mahinda Deshapriya has found fault with political parties for unnecessary high number of candidates at the 2019 presidential poll. He says those struggling to make ends meet had to bear the burden of the heavy expenditure caused by nearly three dozen contesting the Nov 16 national poll. Deshapriya explained that sharp increase in polls-related expenditure was due to too many candidates. Responding to assertion by some representatives of political parties that the right of those interested in contesting couldn’t be denied, Deshapriya insisted such wasteful expenditure couldn’t be justified under any circumstances. The meeting was told as to how interested parties exploited loopholes in the existing law to join the fray either as proxies of two leading candidates Gotabaya Rajapaksa (Sri Lanka Podujana Peramuna) and Sajith Premadasa (National Democratic Front). Jathika Hela Urumaya representative at the discussion Nishantha Sri Warnasinghe told The Island tangible measures were required to restrict the number of candidates at the next presidential election. Warnasinghe explained as to how the Election Commission had to revise expenditure estimated initially at Rs 400 mn to staggering Rs 750 mn owing to the total number of candidates being 35. Only 35 contested the presidential poll though at the onset of the process there were 41 in the fray. According to Warnasinghe of the 35 candidates, only three- Sajith Premadasa, Gotabaya Rajapaksa and Anura Kumara Dissanayake conducted real countrywide polls campaign, whereas as a couple of others, namely retired General Mahesh Senanayake, Duminda Nagamuwa, Ajantha Perera and Rohan Pallewatte engaged in electioneering to some extent. Of those 35 in the fray; Sajith Premadasa had ten proxies against Gotabaya Rajapaksa’s 13. Warnasinghe said that the rest contested to enjoy some perks and privileges for several weeks. Warnasinghe’s JHU backed Sajith Premadasa at the presidential election. At the moment, those who contested on the registered political party ticket/independents had to pay Rs 50,000 and Rs 70,000, respectived. Warnasinghe underscored the need to cut down on waste to ensure the next presidential in five years from now wouldn’t attract 50 persons. (Daily Island, 13.12.2019)

Sri Lanka’s ranking in the Human Development Index (HDI) has risen from 72 to 71 out of 189 countries, maintaining the country’s status as the best performer in South Asia, says a report by the United Nations Development Program (UNDP) released in Colombo. The Human Development Report 2019 by the UNDP noted that Sri Lanka’s HDI climbed from 0.776 in 2017 to 0.780 in 2018. The report noted that the country has defeated malaria this year and maintained an annual 0.49 percent growth in HDI from 2010 to 2018. At 71, Sri Lanka is ranked much higher than China (at 85) and India (at 129) among 189 countries in the 2019 human development index. However, the report noted that taxation policies have increased the number of people living below the 2.50-U.S. dollar-per-day poverty line in the country. Notably, the new Sri Lankan government has recently announced widespread tax reliefs, especially on indirect taxes such as value added tax, to address this issue. Sri Lanka is the highest ranked country in South Asia in terms of HDI. Sri Lanka and Maldives are the only South Asian countries categorized as having High Human Development by the UNDP. The 2019 HDR explores inequalities in human development by going beyond income, beyond averages and beyond today and tries to set policies to redress these inequalities within a framework that links the formation of capabilities with the broader context in which markets and governments function. According to the HDI report, the incidence of multi-dimensional poverty varies enormously across countries and is still high. Out of the 1.3 billion multi-dimensional poor, 661 million are in Asia and the Pacific, which shares almost half of the multi-dimensional poor living in 101 countries of the world. South Asia alone shares more than 41 percent of the total number of multi-dimensional poor. Despite Indias significant progress, it accounts for 28 percent of the 1.3 billion multi-dimensional poor. The index includes a total of 189 nations and is topped by Norway followed by Switzerland, Ireland, Germany, Hong Kong and Australia in the top slots. Sudan, Haiti and Afghanistan were placed at the last three spots of the index respectively. (Daily Island, 17.12.2019)

More than 350 elephants and about 100 people have perished due to the human-elephant conflict so far this year, the Department of Wildlife Conservation says. Wildlife officer Maithri Madushan Wickramasinghe was killed by an elephant on Sunday in Matale. The 42-year-old father of a nine-month-old infant was the third department official to die while on duty. The remains of Wickramasinghe, who was killed while on duty at Rathgammana, Matale were brought to his residence yesterday in the Kubulweva area in Raththota. (Daily Island, 18.12.2019)

September quarter earnings declined by 9.6% year-on-year (YoY) to Rs. 45.8 billion for 264 companies, but still showed better performance than previous quarters, First Capital Research said September quarter earnings dipped by 9.6% YoY to Rs. 45.8 billion, primarily due to sluggish performance in Insurance (-48% YoY), Consumer Services (-495% YoY), Capital Goods (-39% YoY) and Food, Beverage and Tobacco (-12% YoY) sectors, a report released by First Capital Research said.  However, earnings upside was witnessed in Material (108% YoY), Consumer, Durable and Apparel (13600% YoY) and Energy (646% YoY) sectors negating the negative performance in the above-mentioned sectors. “Lacklustre performance in Insurance, Consumer Services and Food, Beverage and Tobacco was mainly owing to the lower consumer spending stemmed from subdued economic activities.” Insurance sector earnings recorded a substantial drop mainly due to earnings decline in AAIC (-85% YoY) from a deferred tax adjustment and UAL (-91% YoY) due to the increased transfer of insurance contract liabilities to the life fund. Consumer Services sector earnings declined and posted a loss of Rs. 1.67 billion relatively to a profit of Rs 0.4 billion in September 2018 as a result of drop in tourist arrivals subsequent to the Easter Sunday attacks. Food, Beverage and Tobacco sector earnings dipped by 12% YoY to Rs. 7.8 billion led by BIL, MELS and tea plantation companies.  BIL posted a loss of Rs. 1.19 billion compare to loss of Rs. 0.6 billion due to higher finance and admin cost. MELS earnings dropped by 58% due to hefty taxes while the cost of sales also surged against the last year same period. Profit dip witnessed across the tea plantation counters due to weaker tea prices further dragged down the Food Beverage and Tobacco sector earnings. Material sector saw a profit growth of 108% YoY to Rs. 1.8 billion driven by TKYO (573% YoY). TKYO profits were boosted due to operational efficiencies and increase in maximum retail price. Consumer, Durable and Apparel sector saw impressive earnings growth of 13600% YoY with TJL, MGT and GREG posting earnings growth of 84%, 83%, and 184% respectively. TJL and MGT earnings growth was supported by efficiency improvements, strong order book and stable cotton prices. (Daily Island, 20.12.2019)

National economy advanced 2.7 percent year-on-year in the third quarter of 2019, up from a revised 1.5 percent in the prior period. The growth was mainly boosted by an increase in services (2.8 percent compared to 1.6 percent in Q2), particularly wholesale and retail trade (2.1 percent vs 1.2 percent) and industrial activities (3.3 percent vs 1.3 percent). Releasing National Accounts Estimates for the third quarter of 2019, the Department of Census and Statistics (DCS) stated that the Gross Domestic Product for Sri Lanka for the third quarter of 2019 at current price and constant (2010) price have reached up to Rs.4,027,051 million and Rs.2,507,363 million respectively against the current and constant (2010) prices of Gross Domestic Product reported for the third quarter of 2018 which was recorded as Rs.3,692,822 million and Rs.2,441,796 million respectively. The four major components of the economy; ‘Agriculture’, ‘Industry’, ‘Services’ and ‘Taxes less subsidies on products’ have contributed their share to the GOP at current prices by 6.9%, 26.8%, 60.0%, and 6.2% respectively in the third quarter of 2019. During the third quarter of 2019, Industry and Services activities recorded substantial growth rates of 3.3% and 2.8% respectively, while Agriculture activities recorded a slight positive growth rate of 0.4%. Among the sub activities of ‘Agriculture’ ‘Growing of Oleaginous fruits; including Coconut’, Fresh water fishing’ ‘Growing of Tea’ and Growing of Cereals’ have reported an outstanding positive growth rates of 13.9%, 10.9%, 10% and 8.1% respectively in the third quarter of 2019 compared to the third quarter of 2018. In addition. ‘Growing of Vegetables’, Forestry and Logging’, Growing of Fruits’ and ‘Growing of other perennial crops’ have reported considerable positive growth rates of 5.1%, 3.6%, 3.5% and 3.1% respectively in the third quarter of 2019. However some of the major agriculture activities have reported negative growth rates in this quarter when compared to the same quarter in 2018. Among those sub activities, “Growing of Rubber’, ‘Plant propagation’, Marine fishing’, ‘Animal production’ and ‘Growing of Rice’ have reported a substantial contraction during this quarter by 19.9%, 13.7%, 8.2%, 6.2% and 4.3% respectively. The ‘Industrial activities’, which shared the GDP by 26.8% at current price, has continued to expand further by 3.3% significantly. The overall manufacturing activities have grown by 2.5% during the third quarter of 2019, supported mainly by the sub-activities of ‘Manufacture of food, beverages and tobacco’ and Manufacture of textile and wearing apparels’, which recorded positive growth rates of 5% and 5.1% respectively during this period. (Daily Island, 20.12.2019)

President Gotabaya Rajapaksa says that General Elections would be held after March 3.Addressing the Foreign Correspondents Association at the Presidential Secretariat on Thursday, the President said that  a new budget would be presented  after he dissolved Parliament on March 3. P.B.Jayasundera, Secretary to the President said that expenditure maintained at efficient levels across all ministries would in time achieve the government’s goal of reducing National Debt to GDP ratio, from it’s current 90 percent to 70 percent. (Daily Island, 21.12.2019)

At least five people were killed and some 7,025 people belonging to 2,062 families in eight districts were affected by the prevailing heavy rains, the Disaster Management Centre (DMC) said. It warned of floods with the water levels in several reservoirs and rivers including the Mahaweli were increasing rapidly while some were overflowing because of torrential rains which had already claimed four lives. Those affected are from eight districts – Hambantota, Mullaitivu, Batticaloa, Kandy, Nuwara Eliya, Badulla, Moneragala and Jaffna. DMC Spokesman Pradeep Kodippily said a large number of reservoirs and tanks have started overflowing. Sluice gates at the Rajangana, Parakrama Samurda, Kala Oya, Lunugamwehera, Kumbukan Oya, Inginimitiya, Tabaowa and Ulhitiya reservoirs were overflowing by last afternoon People living along the banks of the Mahaweli River were asked to be vigilant as the water level was increasing rapidly and reaching mini flood level. Landslides warnings were issued in Nuwara Eliya, Kandy, Matale, Badulla Nuwara Eliya Eliya Monaragala districts. Meanwhile, the Department of Meteorology forecast heavy rains of about 150 mm in the Western, Sabaragamuwa and Central provinces and Galle District. Heavy rains of some 100mm are expected in the Eastern, Uva and North-Western provinces and in the Matara District during the next few days. The sea areas extending from Trincomalee to Negombo via Kankasanturai, Mannar and Puttalam and the sea areas extending from Galle to Pottuvil via Hambanthota are expected to fairly rough at times as the wind speed is expected increase up to 55kmph at times. Several areas have experienced heavy rains of 100 mm today with the highest rainfall of 136mm reported from Kurunegala, Hambantota, Kandy and Puttalam. (Daily Mirror, 22.12.2019)

The Department of Wildlife Conservation said the number of elephant deaths has increased during this year.About 350 elephants have died during the past 11 months for various reasons including human-elephant conflicts, natural causes, poisoning and collisions against trains. The department further said that the number of human deaths due to elephant attacks have also increased.According to figures, 92 persons were reported dead last year due to elephant attacks and this year the number has risen up to 103. The Wildlife Conservation Department also said 319 elephants had died during 2018. (Daily Mirror, 24.12.2019)

Headline inflation as measured by the year-on- year change in the National Consumer Price Index (NCPI, 2013=100)1 decreased to 4.1 per cent in November 2019 from 5.6 per cent in October 2019 contributed by the statistical effect of the high base prevailed in November 2018. Year-on-year (Y-o-Y) Food inflation decreased substantially to 4.0 per cent in November 2019 from 7.3 per cent in October 2019 while Non-food inflation (Y-o-Y) declined marginally to 4.2 per cent in November 2019 from 4.3 per cent in October 2019. The change in the NCPI measured on an annual average basis increased to 3.0 per cent in November 2019 from 2.8 per cent in October 2019. Monthly change of NCPI recorded 0.8 per cent in November 2019 and it was solely due to the price increases observed in the items of Food category. Within the Food category, prices of rice, vegetables, red onions and coconuts recorded increases. Meanwhile, prices of items in the Non-Food category recorded a marginal decrease during the month owing to price decreases of the items in Alcoholic Beverages and Tobacco; and Housing, Water, Electricity, Gas and other Fuels sub-categories. The core inflation, which reflects the underlying inflation in the economy, decreased to 5.5 per cent in November 2019 from 5.6 per cent in October 2019 on year-on-year basis. However, annual average core inflation increased to 5.6 per cent in November 2019 from 5.4 per cent in October 2. (Daily Island, 25.12.2019)

The media reported that the Police launched a countrwide operation during this festive season to apprehend drunk drivers. This is a common practice of the Sri Lanka Police during various festivities. During this period the policemen are kept on the road all day and night for a limited number of days. This is a limited enforcement focusing on achieving a specific object for a specific time.  In March 2010 the United Nations General Assembly proclaimed a Decade of Action for Road Safety 2011–2020, with a goal of reducing the forecasted level of road traffic fatalities around the world. Sri Lanka being a party to the “Brasilia Declaration on Road Safety;” – 2015, has undertaken to reduce by 50% road traffic deaths by the end of this decade. The Sri Lanka Police responsible for realizing this target has to do a miracle in the coming year (2020) to achieve it. The available statistics for the first seven years (2011 – 2017) of the targeted period (2011 – 2020) indicates the situation in Sri Lanka is critical. Instead of decreasing the number of people killed in road accidents in the first seven years (2011 – 2017); it increased. It is significant; the number of pedestrians knocked down and killed in road accidents; pedestrian fatality has increased. It’s 20% of the total road accident fatalities in 2017. The authorities need to wake up and be seriously concerned about this disturbing situation. Speeding, driving under the influence of liquor, and driving recklessly are often the major causes of the rising fatal road accidents. Perhaps, the increased fines, suspension of driving licence and prison terms would be a deterrent to reckless drivers, who disregard the safety of other road uses. (Daily Island, 26.12.2019)

Sri Lanka will have to repay $ 4.8 billion in debt in 2020 with the Central Bank awaiting the Government’s instructions on how the funds should be raised, a top official said, assuring there is a sufficient buffer of reserves to meet repayments for the first few months. Central Bank Senior Deputy Governor Dr. Nandalal Weerasinghe told reporters that they were awaiting directions from the Finance Ministry and said future plans will likely be clearer after President Gotabaya Rajapaksa’s address to Parliament, which is expected to set out the policy framework of the Government. The Central Bank as also preparing to issue its first $ 500 million Samurai bond but it is now unclear when this will take place. The Government will have to decide the repayment plan, when to go to the market, and how much to raise. There are different instruments under discussion by the previous Government but the new Government has to come up with short, medium and long-term financial plans looking at the financing requirement for the year. The large repayment of $1 billion is only coming in October, so till then, there is a smooth flow of repayments, and we have raised sufficient funds to meet at least the first few months of next year. We are in a comfortable position to meet payments at least until the new Parliament commences their activities,” he said. 
He also said the new government will have to make decision on reforms, which include amendments to the Monetary Law Act that were drawn up by the previous administration and were gazetted ahead of the Presidential Election in November. However, Dr. Weerasinghe assured that the functions of the Central Bank will not be impeded by the delay in passing the fresh legislation. A new Banking Act was also under consideration earlier. 
“A lot of reforms we were proposing was only to institutionalise what we are already doing, such as the inflation targeting framework. We will continue to do follow the monetary policy framework based on the inflation targeting framework. The other new element is macro prudential authority, which we have already been practicing from time to time, so we will continue to do all those things. The only thing that will be delayed is the governance structure. We have proposed a separate monetary policy board and governing body. That structure will come into place only if the proposed amendments are enacted. The way we do business will continue as usual.”  (Daily Financial Times, 30.12.2019)