SRI LANKA NEWS IN BRIEF (JANUARY 2019) – Compiled by Victor Melder                                             

Foreign reserves had declined by USD 1 billion within the 51-day political crisis completely upsetting the debt management plans of the country, Prime Minister Ranil Wickremesinghe said, yesterday, making a ministerial statement in Parliament. The PM said he was confident of overcoming all the challenges in the economic front and the government would present a “people-friendly budget”. Wickremesinghe remained focused on stabilising the rupee. “The rupee depreciated by 3.8 percent within the 51 days of the crisis while other currencies gained value. From October 26 to December 16, 2018, USD 312.9 million in Treasury Guarantees, USD 29.1 million in Treasury Bills and USD 29.8 million in Treasury Bonds flowed out of the country. We previously had a target of reaching USD 8 billion foreign reserves by the end of this year. We had USD 7,991 million foreign reserves as at October 26, but this had dropped to USD 6,985.4 million owing to the political crisis. As per the estimates, we need a total of USD 5,900 billion to pay for foreign loans and interests this year. Sri Lanka’s highest ever loan installment of USD 2,600 million is due on January 14. Our effort was to manage this debt in manner that it does not burden the ordinary masses. That is why we had made far-sighted plans, but now we have to start again.” The Reserve Bank of India had agreed to provide USD 400 million under SAARC swap facility, the PM said. Asked by NFF Leader Wimal Weerawansa whether the government had promised to lease out China Bay and Kankasanturai ports, Mattala airport and Colombo Port’s East Terminal to India in return, the PM answered in the negative, adding that only the terms and conditions of SAARC swap facility would apply to it.   The PM also said that another USD 500 million was expected from Chinese Panda Bonds and Japanese Samurai Bonds. He said that USD 1 billion was expected to be obtained from the international monetary market, adding that Finance and Mass Media Minister Mangala Samaraweera would fly to Washington next week to discuss about it. The Premier expressed confidence that those would help arrest the depreciation of Rupee and stabilize it in the market. (Daily Island, 11.1.2019). 

State-owned vehicles will be exempted from the newly introduced Carbon tax. The tax was introduced this week for vehicles running on fossil fuel but excluded government vehicles and hybrid varieties. According to the new tax structure, passenger transport private buses less than five years old must pay a flat rate of Rs 1,000 and buses between 5-10 years – Rs 2,000 while those over ten years old must pay Rs 3,000 as Carbon tax to the State. An owner of a private bus plying on the Kohuwala-Kelaniya route said it was unfair that the government-owned Sri Lanka Transport Board (SLTB) buses which contribute considerably to air pollution would be exempted from the green levy. According to the Commissioner General of the Department of Motor Traffic Jagath Chandrasiri, the tax will be tied to the revenue licence from next year. “But in 2019 the tax will not be compulsory to get the annual Revenue licence,” he said. The Carbon tax which is charged in addition to the emission tax will be implemented from January 1 this year. It is calculated based on the year of manufacture, engine capacity and the fuel type – hybrid or otherwise. The tax structure for privately owned hybrids will be Rs.250 for a vehicle with a 1000cc engine capacity and not more than five years. Every additional engine cc will be charged 25 cents. For hybrids between 5-10 years, the tax will be 50 cents for one engine cc (Rs.500 for 1000cc) and for over ten years it will be Re.1. For vehicles running on fossil fuel, the tax structure is 50 cents for 1 engine cc (less than five years from the date of manufacture), Re.1 (for vehicles 5-10 years) and Rs.1.50 for vehicles over ten years. (Sunday Observer, 13.1.2019)

With a new scheme to exempt from income tax foreign earnings remitted to the country through banks, the Government hopes to raise an additional US$ two billion, a Finance Ministry official said. Finance Minister Mangala Samaraweera has said foreign remittances sent through banks will be granted tax relief. The concession is applicable to remittances sent from November 15, 2018 onwards. The Finance Ministry official said the current remittance level of US$ six billion a year was expected to rise with the exemption coming into effect. He said the Finance Minister in his budget proposals to be announced next month would outline other measures aimed at increasing the annual foreign remittances to about US$ 10 billion The official said the Inland Revenue Act would be amended soon to implement the scheme. (Sunday Times, 13.1.2019)

The number of workers leaving Sri Lanka to take up jobs as housemaids in the Gulf Cooperation Council (GCC) countries and the Far East has soared by more than 16 per cent in the past year. Saudi Arabia, Kuwait and Qatar were the main destinations in the Middle East for domestic employees coming from Sri Lanka, with Japan and South Korea most popular in the Far East. Figures for the areas highlighted show that a total of 64,965 people left Sri Lanka to work as housemaids in 2018, an increase from 55,884 the year before. Madhava Deshapriya, deputy general manager for corporate communications at the Sri Lanka Bureau of Foreign Employment, told Arab News on Friday that the upward trend is being put down to recruitment agencies making salary payments of up to SR6,000 ($1,600) to housemaids in advance of them leaving Sri Lanka for their new jobs abroad. One Sri Lankan recruitment agent, Abdul Rahman, said new laws restricting working hours for women had encouraged maids to seek out better-paid jobs in other countries. It is estimated that there are 1.5 million Sri Lankans currently working in the Middle East. (Daily Mirror, 13.1.2019)

Sri Lanka’s democracy ranking has fallen more than any other country in the region with a marked decrease in its score from 6.48 in 2017 to 6.19, driven by a worsening in the functioning of government and in civil liberties. The Economist Intelligence Unit’s Democracy Index 2018 provides a snapshot of the state of democracy worldwide for 165 independent states and two territories. “Sri Lanka was plunged into a constitutional crisis in late October when the president, Maithripala Sirisena, announced the dismissal of the prime minister, Ranil Wickremesinghe, replacing him with an ally, Mahinda Rajapaksa,” the report said. “This overreach of the president’s powers has dampened public confidence in government.” Sri Lanka ranked 71st position (62nd in 2017) with an overall score of 6.19. The Democracy Index is based on five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture. Sri Lanka received 7.83 points for electoral process and pluralism, 5.71 for the functioning of government, 5.00 for political participation, 6.25 for political culture and 6.18 for civil liberties. Sri Lanka is also among the 55 flawed democracies in the world. These countries have free and fair elections and, even if there are problems, basic civil liberties are respected. However, there are significant weaknesses in other aspects of democracy, including problems in governance, an underdeveloped political culture and low levels of political participation. (Sunday Island, 13.1. 2019)

Judicial Medical Officer of the Mannar General Hospital Dr. Saminda Rajapaksa, yesterday, revealed that skeletal remains of 300 persons had been found, in the Mannar mass grave, and those of 294 of them removed for further investigations. Among them were the skeletal remains of 23 children. (Daily Island, 14.1.2019)

Six samples from the Mannar mass grave sites would be sent on Jan. 23 for carbon testing in Florida, Dr. Rajapaksa said, noting that the samples had been selected in the presence of a team comprising medical experts and government lawyers on the instructions of the Mannar Magistrate. Dr. Rajapaksa stressed that bones for carbon testing had been selected in a transparent manner without any room left for controversy. The Mannar mass grave excavation was launched nearly 140 days ago. The recent discovery of two pieces of human bones, bound by a cable gave rise to the question whether some of the people buried there had been tortured. The human skeletal remains were first found by some construction workers while excavating the site behind the CWE Building in Mannar as part of a development project on May 25, 2018. On the same day a complaint was lodged with the Mannar Police regarding the findings. Investigations began under the supervision of former Mannar Magistrate and District Judge Alex Raja. Excavations commenced, on May 28, after it was determined by a team of scientists that the area contained undisturbed skeletons. Judge J.T. Prabhakaran, who succeeded Judge Alex Raja, as Magistrate/District Judge Mannar gave some important rulings with regard to the mass grave. The excavations of the site are now being carried out under the supervision of incumbent Mannar Magistrate Swarnaraj. Prof. Raj Somadeva, who leads the forensic archaeological investigation into the grave said that they were yet to date the skeletal remains scientifically. He said that one section of the grave contained skeletal remains in a pattern that could be observed easily while the other section did not show such specific pattern. (Daily Island, 18.1.2019)

Sri Lanka has earned over $ 4 billion from tourism this year with a steadily increased revenue of 11.6% compared to 2017, according to the Sri Lanka Tourism Development Authority.  The data suggests that an average duration of stay per person is 11 days in Sri Lanka, while average daily expenditure is $ 174, amounting to approximately $ 2000 during their entire stay. The Industry expectations for 2019 are 3 million tourist arrivals and revenue of $ 5 billion with Lonely Planet naming Sri Lanka as the number one destination to travel in 2019. India, China and Britain have managed to remain as the leading markets throughout the year in 2018 as well. (Daily Financial Times, 21.1.2019)

President Maithripala Sirisena yesterday reiterated that there would be no change at all in his stand that those found guilty of drug dealing will be hanged. Speaking at a ceremony to launch the National Drug Prevention Week at the Vidyanandan Maha Vidyalaya, in Mulliyavelai in Mullaitivu he said that the country’s fight against the drug menace during the last four years would undergo a change from next week. The Philippines had assured Sri Lanka of its fullest support to deal with the drug menace and a team of experts would visit Sri Lanka to ascertain how technical assistance could be provided. “The Philippines was badly affected by the drug menace, but today it has been able to overcome the problem due to anti-narcotic operations,” he said. “I will not not take every step taken by the President of the Philippines to curb drug dealing in that country, but I will not change the stance taken against the drug dealers in fear of the some NGOs,” President Sirisena said. “Although, Human Rights Orgainisations make a hue and cry about the stand I have taken against the drug mafia operating here, they do not talk about the fact that the drug mafia has ruined this country.” Sirisena warned that he would not hesitate to reveal to the whole country not only those engaged in drug dealing but also others who were behind them. (Daily Island, 22.1.2019.

Closing months of negotiation between plantation worker trade unions and Regional Plantation Companies (RPCs), the two parties reached a settlement yesterday to increase the basic daily wage to Rs. 700, with a Rs. 100 million pledge by the Government to help companies pay three months’ wage arrears. The trade unions, which earlier called for a Rs. 1000 basic wage, brought down their demand to accept the offer by RPCs to increase the basic wage to Rs. 700, up Rs. 75 from their earlier offer of Rs. 625. The Collective Agreement on the wage negotiations is to be signed next week, while discussions on the General Agreement, dealing with other aspects of plantation employees’ welfare, will also commence in the coming weeks.  The representatives from Ceylon Workers Congress (CWC), LJEWU and Joint Plantation Trade Union Centre (JPTUC) present at the meeting agreed to the Rs. 700 basic wage offered, with a Rs. 20 increase from the current Rs. 30 in Price Share Supplement (PSS), totaling a total daily wage of Rs. 750. The negotiations also saw an increase in payment for additional output by Rs. 15 per kilo.  “The basic wage has increased by 40% from the current basic wage of Rs. 500, this is the largest percentage increase I have seen in a period of close to 20 years,” Joint Plantation Trade Union Centre (JPTUC) General Secretary S. Ramanathan told Daily FT. “Although we are not fully satisfied, this is the best offer and we have settled for it.” The new wage formula will only include the daily basic wage, PSS and over kilo rate, while both attendance incentive and productivity incentive have been removed. Further, the plucking norm is to be set at estate or regional level. “The workers did not want these incentive-based payments, even though the plantation companies offered it. So we have taken it off the formula,” CWC General Secretary Muttu Sivalingam told Daily FT.  The RPCs have also agreed to pay the arrears in wage payments from October, when the Collective Agreement signed in 2016 lapsed. In a bid to ease the financial burden on the companies, Minister Navin Dissanayake has agreed to allocate Rs. 150 million from Tea Board funds to finance the payments.  The arrears payments are likely to cost over Rs. 200 million. However, a proper calculation is yet to be done, he said.  In early January, Minister Navin Dissanayake intervened in the wage negotiations, which have dragged on since mid-last year, following requests by the trade unions. However, Dissanayake was not immediately able to reach a settlement, with discussions ending in a stalemate for three weeks. Following the final meeting with all stakeholders, the Minister said that the increase of Rs. 200 can be considered a victory for the workers. “The estate workers contribute a lot to the economy, and it is a victory to have received an increase of Rs. 200, which is equivalent to a 40% increase in the basic wage,” he said. (Daily Financial Times, 26.1.2019)

President Maithripala Sirisena has advised authorities to provide salaries and benefits for lifetime to disabled soldiers and the families of deceased soldiers. The President has instructed to implement a program to extend the salaries and benefits that are currently provided only until age 55 for lifetime for the soldiers who were disabled during operations, terrorist activities or when implementing law and order and for the families of the soldiers deceased while on duty. Accordingly, the necessary steps will be taken within the next two months, the President’s Media Division said. This was stated at a meeting held at the Presidential Secretariat on Friday to inform about the steps taken by the Ministry of Defence to resolve this long-standing request of disabled war veterans. Disabled soldiers have forwarded eight requests to the President and steps have been taken under the guidance of the President to find solutions to all these problems. The President was commended for his constant intervention to solve the problems of war heroes by identifying their issues. (Daily Financial Times 28.1.2019)

The National Sales Average (NSA) for tea in 2018 at Colombo auctions has declined by Rs. 36.23 or 6% to Rs. 581.91 per kilo from an all-time high of Rs. 618.14 in 2017. According to Forbes and Walker Tea Brokers, the NSA for High Growns for the period January-December 2018 of Rs. 571.51 was down by Rs. 29.42 per kilo. Medium Growns too averaging Rs. 521.86 per kilo was down by Rs. 41.68 in 2018 as against the previous year. Low Growns’ NSA totaling Rs. 600.79 in 2018 was down by Rs. 36.61.Forbes and Walker said both the December month and 2018 cumulative averages show a greater decrease in USD terms compared to the corresponding period of 2017, with Sri Lankan Rupee depreciating sharply particularly in the last 4 months of 2018.  In 2018 it was $ 3.59, a decrease of $ 0.52 as against $ 4.11 of 2017. (Daily Financial Times, 28.1.2019)

India has so far committed Lines of Credit worth around US$ 1.3 billion for development of railway sector in Sri Lanka, the Indian High Commission said yesterday. The restoration of arterial railway lines, connecting the North and the South after decades of conflict, was undertaken under Indian concessional financing. The tsunami-affected Southern Railway line was also upgraded under Indian Line of Credit. India has also supplied rolling stock to Sri Lanka and contributed to capacity building of Sri Lankan railway personnel. India remains ready to assist Sri Lanka to meet its developmental aspirations as per Sri Lanka’s own requirements, the High Commission said In June 2017, India signed a fresh Line of Credit Agreement for US $318 million for the development of railway sector in Sri Lanka. Under this Line of Credit, various projects are underway including procurement of 160 passenger coaches; up-gradation of railway track from Maho-Omanthai; up-gradation of signal and telecommunication system from Maho to Anuradhapura; and setting up of a Railway Workshop in Ratmalana, the Indian High Commission said in a statement. (Daily Mirror, 28.1.2019)