SRI LANKA NEWS IN BRIEF (DECEMBER) 2018) – Compiled by Victor Melder

One-year no pay leave will be granted to female public officers to obtain fertility treatment to have a baby, according to a decision taken by the Cabinet recently. The Ministry of Finance and Economic Affairs has, in a circular informed all state institutions that the rules have been revised to include this benefit for women employees in the public sector. No-pay leave up to one year would be granted for female public officers to spend in or out of the island to obtain treatments for sub fertility on the recommendations of a Consultant Obstetrician & Gynaecologist. These provisions are effective from November 21, 2018. Fertility transition in Sri Lanka began in the mid-1960s and the declining trend continued over the decades. The Demographic and Health Survey (DHS) showed the total fertility rate (TFR) reaching 2.3 births per woman, a level below replacement fertility. The analysis of factors affecting the likelihood of having a larger family (more than 2 children) revealed that lower educated women were more likely to have a higher number of children than their counterparts with a higher level of education. (Daily Financial Times, 3.12.2018)

Trade union action demanding Rs. 1,000 daily wage in the plantation sector continued for the second day, dimming hopes for a breakthrough, with Regional Plantation Companies (RPCs) insisting on an alternative productivity-based wage model, and politicians calling for fair reasoning. United National Front (UNF)-linked MPs, National Union of Workers (NUW) Leader MP Palany Thigambaram, Up-Country People’s Front (UCPF) Leader V. S. Radhakrishnan, and UNP MP Vadivel Suresh yesterday called on the estate workers to think before they take part in the strike, noting that they would have to face issues in January without a proper salary.
“The union that had called for the strike hasn’t even been able to work towards in getting the arrears from the strike that took place in 2015. So, be thoughtful in taking part in this strike,” the MPs told journalists in Colombo. Ceylon Workers Congress (CWC) Leader MP Arumugam Thondaman on 3 December requested all plantation workers to join in an indefinite strike, until plantation companies agrees to increase their daily wages to Rs. 1000, which continued to day two. Shifting entirely into a productivity-based wage model is the only sustainable way that can benefit the industry, companies, workers and the national economy, said the plantation industry stakeholders.

“Rising productivity is an absolute must, amidst the internal and external challenges. It is critical that wage is linked to productivity for the sustainability of the industry, and the national economy as a whole,” sources told Daily FT on condition of anonymity. It was pointed out that if the daily wage is increased to Rs. 1,000 the impact would be as high as Rs. 9.1 billion, while gratuity impact is Rs. 10.9 billion totalling to Rs. 20 billion. Furthermore, annually the companies have to absorb Rs. 9.6 billion, including the Rs. 437 million as gratuity impact.DFT, 4/12
Sources said that the impact for the RPCs for the proposed wage package of Rs. 940 is, for wages alone, Rs. 6.3 billion, and for gratuity, Rs. 5.5 billion, totalling to Rs. 11.8 billion.  Furthermore, annually the companies have to absorb Rs. 6.5 billion every year, as the cost of the wage increase and the annual gratuity impact of Rs. 218 million. Currently the average annual plucking average per worker is around 21 kilos.  The norm is a worker should pluck between 16 kilos to 18 kilos per day.  If they pluck more than the norm, the workers are entitled to an additional payment of Rs. 28 per kilo over and above the daily wage package at present. “Therefore, the worker has to increase only one kilo output if they are to reach the Rs. 1,000 per day, based on the productivity-based wage of Rs. 46/- per kilo, including the EPF/ETF,” they pointed out. (Daily Financial Times, 6.12. 2018)

In the wake of an indefinite strike action declared by trade union (TU) leaders from December 4 onwards, the Planters’ Association of Ceylon (PA) firmly reiterated the position of its membership – that a 100 per cent increase in daily basic wages as demanded by the TUs simply cannot be sustained by the industry. The Regional Plantation Companies have already advanced multiple productivity- linked models that could easily enable workers to earn beyond Rs. 1,000 per day. This time’s RPC proposal is a 20 per cent increase in the basic wage escalating it from Rs. 500 to Rs. 600. A 33 per cent increase in the Attendance Incentive (AI) up to Rs. 80 plus the Productivity Incentive (PI) and Price Share Supplement (PSS), all totaling Rs 940 per day, amounting to an average increase of Rs. 3,375 per month per worker.” “Additionally, tea harvesters who are able to bring in harvests above the norm will continue to be entitled to an over-kilo pay of Rs.28.75 per kilo in excess of the plucking norm which could easily expand their earnings beyond the Rs. 1,000.” In the interim, the PA estimated that the ongoing strike action would cost the industry approximately Rs. 240 – 250 million in losses each day in the tea and rubber industry. (Daily Financial Times, 7.12.2018)

In a new global index, Sri Lanka has been ranked second among the countries most affected by extreme weather events in 20 years since 1998. The 2019 Long-Term Climate Risk Index, published by Germanwatch, has listed Puerto Rico, Sri Lanka, and Dominica as the top three affected countries. The index is part of a report – Global Climate Risk Index 2019 – which was released at the annual climate summit in Poland this week. The Global Climate Risk Index 2019 analyses to what extent countries and regions have been affected by impacts of weather-related loss events such as storms, floods, heat waves, etc., from data available for 2017 and from 1998 to 2017. Puerto Rico, Sri Lanka, and Dominica were at the top of the list of the most affected countries in 2017. For the period from 1998 to 2017, Puerto Rico, Honduras, and Myanmar rank highest. The report said, In May 2017, heavy landslides and floods occurred in Sri Lanka after strong monsoon rains in south-western regions of the country, and more than 200 people died after the worst rains on the Indian Ocean island since 2003. The monsoons displaced more than 600,000 people from their homes and 12 districts were affected. The inland southwest district of Ratnapura was most affected, where over 20,000 people faced flash floods. Of the 10 most affected countries and territories (1998-2017), eight were developing countries in the low income or lower-middle income country group, one was classified as an upper-middle income country (Dominica) and another, an advanced economy generating high income (Puerto Rico). Sri Lanka according to the report, more than 526,000 people died worldwide, and there were losses of $ 3.47 trillion as a result of more than 11,500 extreme weather events between 1998 and 2017. The report recommended the Climate Summit in Katowice to adopt the ‘rulebook’ needed for the implementation of the Paris Agreement, including the global adaptation goal and adaptation communication guidelines. (Daily Financial Times, 8.12.2018)

Tea production in October gained by 3.9 million kilos or 15% to 29.6 million though the first 10 months figure was down marginally by 2% to 253 million kilos. Forbes and Walker Tea Brokers said all elevations have shown a growth year-on-year (YOY) growth with High Growns and Medium Growns in particular showing a substantial gain over the corresponding period of 2017. On a cumulative basis, High Growns remained static YOY, whilst Medium Growns have shown a growth. Low Growns however, show a decrease compared to the corresponding period of 2017. It said CTC production of October 2018 of 2.8 M/kgs shows a significant growth YOY when compared to 1.8 M/kgs of October 2017. All elevations have shown a growth YOY with Mediums followed by High Growns show a fairly substantial growth. January-October 2018 cumulative production of 20.08 M/kgs however show a 2 M/kgs decrease vis-à-vis 18 M/kgs of January-October 2017. On a cumulative basis too High and Medium Growns show a growth whilst Low Growns show a marginal decrease compared to the corresponding period of 2017.(Daily Financial Times, 8.12.2018

A total of 2,590 people were killed in 2,481 road accidents during the past eleven months, the National Council for Road Safety (NCRS) said. NCRS Chairman Dr. Sisira Kodagoda said accidents involving motorbikes and the number of pedestrian deaths had increased drastically with 1,011 people getting killed in accidents involving motorbikes while 792 pedestrians were also killed. “The increase of such accidents can be attributed to incorrect overtaking, high-speed driving and riding, failure to follow road signs and not adhering to road rules as a whole,” Dr. Kodagoda said. According to the report, an average of eight persons are killed while nearly 20 become permanently disabled every day as a result of road accidents. (Daily Mirror, 12.12.2018)

Former president Mahinda Rajapaksa, who was appointed as prime minister by President Maithripala Sirisena on October 26, has informed UPFA MPs that he has resigned from PM post, MP Shehan Semasinghe said. Mahinda Rajapaksa said in a statement a short while ago that he resigned from the position of Prime Minister to make way for the President to form a new government.  He made this statement at his residence in Wijerama after signing to the resignation letter. “I have no intention of remaining as Prime Minister without a general election being held, and hampering the President in any way,” Rajapaksa said. Former Prime Minister Mahinda Rajapaksa will take on the Opposition Leader post while UPFA MP Dinesh Gunawardena will take on the Chief Opposition Whip, MP S. B. Dissanayake said today. Speaking to the Daily Mirror, he said the Tamil National Alliance (TNA) had no right to hold the opposition post in parliament because they were acting according to the whims and fancies of the UNP (Daily Mirror, 15.12.2018)

UNP Leader Ranil Wickremesinghe was sworn in as the Prime Minister before President Maithripala Sirisena a short while ago at the Presidential Secretariat. (Daily Mirror, 15.12.2018)

President Maithripala Sirisena swore in a 29-member Cabinet at the Presidential Secretariat yesterday, but there was no room for former Minister Sarath Fonseka or the three UPFA MPs, who crossed over to government ranks earlier this week. On Wednesday, President Sirisena said that he would  take disciplinary action against the UPFA MPs Wijth Wijithamuni Soysa, Lakshman Seneviratne and Indika Bandaranike, who pledged support to the UNP-led government. Conspicuous was the absence of a separate Law and Order Ministry, which existed in the previous Wickremesinghe administration. Sirisena is expected to bring the subject under the Defence Ministry, which he heads. Except for a few changes, most of the ministers retained the positions they had held prior to October 26, when Srisena appointed Mahinda Rajapaksa as Prime Minister in place of Ranil Wickremesinghe. Ravi Karunanayake was brought in as Minister of Power, Energy and Enterprise Development while Arjuna Ranatunga, who had earlier held the Petroleum Resources portfolio was given the Transport and Civil Aviation Ministry. Ministries that were assigned to SLFP Ministers in the previous Wickremesinghe Cabinet were distributed among the current ministers. Prime Minister Ranil Wickremesinghe, who was put in charge of National Polices and Economic Affairs, took on the additional tasks of Resettlement and Rehabilitation, Northern Province Development, Vocational Training and Skills Development and Youth Affairs. Despite objections from the GMOA, Rajitha Senaratne was reappointed the Health and Indigenous Minister. There could be some changes in the appointments made yesterday, depending on how many UPFA MPs were willing to support the UNF, government sources said, adding that some of the current ministers were willing to give up their positions if necessary to strengthen the government’s parliamentary majority in Parliament. (Daily Island, 21.12.2018)

Sri Lanka’s trade deficit widened significantly in October 2018 to 903 billion US dollars from 752 million dollars a year ago owing to higher growth in imports alongside a marginal growth in exports, the central bank said. “However, it is expected that the trend of increasing imports will reduce in the coming months with the lagged impact of recently introduced restrictions on certain import categories,” a statement said. Earnings from merchandise exports increased by 0.4 per cent year-on-year to 979 million US dollars in October 2018.  “The marginal growth of exports in October reflects mainly the decline in agricultural exports by 11.5 per cent which offset the 4.5 per cent growth of industrial exports.” Export earnings from textiles and garments increased marginally in October 2018 due to higher earnings from textile exports despite the slight decline registered in garment exports.  “The reduced earnings from garment exports was mainly driven by the lower demand from the USA, despite an increase in exports to the EU market and non-traditional markets such as India, Canada, Japan and Hong Kong,” the central bank said.  Earnings from agricultural exports were lower during the month owing to the poor performance in almost all sub categories except seafood, vegetables and rubber.  Export earnings from tea declined in October 2018 owing to lower average export prices and exported volumes. Spending on merchandise imports increased by 9.0 per cent year-on-year to 1,882million US dollars in October 2018.  Expenditure on intermediate goods increased due to higher imports of textiles and textile articles, fuel and wheat and maize imports.  Import expenditure on consumer goods increased during the month owing to higher imports of personal motor cars less than 1,500 cylinder capacity (cc), hybrid and electric motor vehicles.  “However, it is expected that the importation of motor vehicles would decelerate in the coming months reflecting the lagged impact on such imports of the policy measures introduced in September 2018,” the statement said. (Sunday Island, 23.12.2018)

The number of people, affected by floods mainly in the Northern Province, rose to more than 74,000 yesterday, the Disaster Management Centre (DMC) said yesterday. The DMC said that most of those affected by floods were from the Mullaitivu, Kilinochchi and Jaffna Districts. About 20,737 persons belonging to 6,520 families have been affected in Mullaitivu, 39,932 persons from 12,118 families in Kilinochchi and 12,642 persons from 4257 families in Jaffna. About 85 persons from Mannar and 455 from Vavuniya have also been affected by the floods. In total, 72,453 persons from 22,624 families have been affected by floods in the North. About 890 persons from Kandy district and 52 people in Puttalam have also been affected by flash floods. The DMC maintains 39 relief centres that are sheltering 11,310 persons by yesterday afternoon. (Daily Island, 26.12.2018)

The Sri Lankan rupee fell to a record low on Thursday amid dollar demand by State banks and continued outflows of foreign funds, mainly from Government bonds, as political uncertainty dented investor sentiment.

The rupee hit an all-time low of 182.35 to the dollar in early trade, surpassing its previous record of 181.85 marked in the prior session. It has weakened about 5% since Sri Lanka’s political crisis began on 26 October, and lost 18.7% so far this year. The rupee ended at 182.10/60 per dollar, compared with 181.80/182.00 in the previous session.  Parliament approved Rs. 1.77 trillion ($9.39 billion) to meet four months of expenditures and avert a Government shutdown from 1 January. (Daily Financial Times, 28.12.2018).

The Colombo stock index ended 0.02% weaker at 6,018.19 on Thursday. Turnover was Rs. 338.1 million, less than half of this year’s daily average of Rs. 840 million. Foreigners were net sellers of Rs. 6.4 million of stocks on Thursday. They have been net sellers of Rs. 13.3 billion since the political crisis began. The bond market saw outflows of about Rs. 56.7 billion between 25 October and 19 December, Central Bank data showed. 
Five-year Government bond yields have risen 35 basis points since the political crisis began. Credit agencies Fitch and S&P downgraded Sri Lanka’s sovereign rating in early December, citing refinancing risks and an uncertain policy outlook.(Daily Financial Times, 28.12.2018)

The Sri Lankan rupee hit a record low of 184.07 against the US Dollar today. According to the exchange rates of the Central Bank, the selling price of Sri Lankan rupee was recorded as 184.0758, indicative price as 182.2783 and buying price as 180.1015. (Daily Mirror, 29.12.2018)