SRI LANKA NEWS
(JULY 2024)
Compiled by Victor Melder
In a remarkable dive that highlighted historical reverence, the Diving Unit of the Sri Lanka Navy on 30th June 2024 explored the sunken remains of HMS Hermes, a fascinating and historic World War II shipwreck off Batticaloa. The event, which took place in the eastern seas, was joined by the Commander of the Navy, Vice Admiral Priyantha Perera and former Commander of the Navy, Admiral Piyal De Silva (Retd). During the World War II, HMS Hermes was targeted and ultimately sunk by Japanese aircraft. During the Second World War, following the Japanese bombing of Colombo on 05th April 1942, the Royal Navy’s HMS Hermes and HMAS Vampire, stationed in the South Sea area of Trincomalee, were sunk by aerial attacks on 09th April 1942. Under the directives of Vice Admiral Priyantha Perera, a seasoned diving expert, the Navy Diving Unit conducted this exploratory diving exercise on the sunken HMS Hermes, located 55 meters below sea level. This initiative aims to further develop the skills of Navy divers. Meanwhile, in tribute to the Commanding Officer and crew of HMS Hermes who perished in the attack, Navy Commanders laid a wreath of poppies and honoured their memory. This diving exercise was historic as it marked the first occasion where both a current and a former Navy Commander simultaneously undertook an exploratory dive around HMS Hermes. It was also the first time they jointly paid tribute to the Royal Navy members who perished when the ship sank. Numerous historically significant ships and maritime artifacts, including this vessel, are located in and around Trincomalee harbour in the Eastern Sea. The Navy’s organized exploratory diving exercises of this nature will greatly enhance diving tourism in the waters surrounding Trincomalee, thereby promoting the island’s diving tourism industry. (Daily Mirror, 1.7.2024)
Injuries continue to exact a devastating toll on Sri Lankans, with at least 32 individuals succumbing to injuries every day, according to the latest data released by health authorities. This revelation is the profound impact of injuries as a leading cause of death in the country, claiming approximately 12,000 lives annually. The statistics, disclosed in line with the National Injury Prevention Week from July 01 to 07, highlight emphasize that injuries constitute a significant public health challenge, particularly affecting individuals in the economically active age group of 15 to 44 years. Further, over one million Sri Lankans require hospitalization annually due to injuries, reflecting a significant health challenge that affects nearly one-fifth of the population, with millions more needing medical attention for various injury-related complications. Health officials emphasized the critical need for enhanced safety protocols, public awareness campaigns, and improved emergency response systems to mitigate the toll of injuries on the population. They noted that injuries not only result in fatalities but also impose a substantial economic burden on families and the healthcare system. Moreover, injuries are reported to be the 10th leading cause of hospital admissions in Sri Lanka, with severe injuries or their complications contributing significantly to mortality rates among hospitalized patients. (Daily Mirrpor, 1.7.20-24)
Sri Lanka faces a stark reality as suicides emerge as the leading cause of intentional injury-related deaths, claiming over 3,000 lives each year. This statistic was highlighted by the Ministry of Health during the National Injury Prevention Week to be observed from July 1 to July 5, 2024. Health officials emphasised that suicides constitute a significant public health challenge, stressing the urgent need for enhanced mental health support services, community awareness programmes, and effective suicide prevention strategies to combat this alarming trend. (Daily Mirror, 2.7.2024)
President Ranil Wickremesinghe told Parliament yesterday that Sri Lanka’s foreign debt totaled USD 37 billion. Delivering a special statement, the President said, “Sri Lanka’s external debt now totals $37 billion, which includes $10.6 billion in bilateral credit and $11.7 billion in multilateral credit. The commercial debt is $14.7 billion, of which $12.5 billion is in sovereign bonds. The debt restructuring aims at making the debt sustainable, freeing up funds for public services.” He announced that Sri Lanka was among the first middle-income countries to utilise the new debt sustainability analysis framework, introduced specifically for middle-income nations, to undertake debt restructuring. The President said that an agreement had been reached on 26 June with Sri Lanka’s official creditors concerning debt repayment. Highlighting the specific details of the agreements reached with the official creditor committee co-chaired by India, Japan and France and China Exim Bank on debt restructuring, the President noted that the agreements include a grace period for principal repayment extended until 2028. He said that the interest rates have been maintained at or below 2.1% and a full debt repayment grace period was extended until 2043. Additionally, the Head of the State noted that based on the agreements reached on debt restructuring, the repayment of the principal loan amount can be incrementally increased, thereby deferring debt servicing costs. He said that Sri Lanka will have remaining debt service of USD 5 billion. (Daily Island, 4.7.2024)
The Police Kennels Division has acquired a pack of 35 sniffer dogs at a cost of Rs.58 million from the Netherlands. The pack of sniffer dogs had been airlifted to the Bandaranaike International Airport in the early hours of last morning. The dogs had been purchased from the private livestock farm “K- 10Working Dog” in the Netherlands, and they were of Belgian Malinois, German shepherd and English Spaniel, breeds. 14 of them were males and 21 females.A senior police official said two female English Spaniel dogs were pregnant and a Belgium Malinois had undergone breeding with a strong dog in the farm. He said the Police Kennel Division had imported sniffer dogs earlier in 2018. Police Media Spokesman DIG Nihal Thalduwa was present at the animal quarantine unit of the airport to receive the pack of dogs. The DIG said the pack of dogs were between 08 and 12 months of age and that they would undergo training for three months before attaching to the Police Kennel Units all over the country. He said that these sniffer dogs would be used especially for the anti-narcotic activities in the Western and the Southern Provinces and the “ Yukthiya” operations. He further said the 35 sniffer dogs would be added to the present strength of 372 sniffer dogs in the Police Kennel Division. (Daily Mirror, 6.7.2024)
Sri Lanka’s tourism sector has demonstrated remarkable performance, generating over $ 1.55 billion in revenue during the first half of 2024, registering a substantial 78% increase compared to the same period last year. The impressive revenue surge within the first six months is significant, given that it took almost 10 months to achieve a similar milestone in 2023.June alone saw tourism earnings of $ 151.1 million, reflecting a 23% year-on-year (YoY) increase, though a slight 1.8% decline from the previous month. In June, a total of 113,470 tourist arrivals were registered, marking a 67% YoY increase. February 2024 stands out with earnings of $ 345.7 million, the highest recorded in a month post-COVID-19. Since the Easter Sunday attacks in 2019, Sri Lanka’s tourism industry has faced significant hurdles but has shown strong resilience, boosting confidence in its recovery and future prospects. During the first four days of July, Sri Lanka Tourism has welcomed a total of 21,298 tourist arrivals, pushing the YTD total to 1.03 million visitors. Sri Lanka Tourism has set an ambitious goal for 2024, aiming to attract 2.3 million tourists and generate over $ 4 billion in revenue. (Financial Times, 8.7.2024)
Workers’ remittances in the first half of this year have risen by 11.4% to $ 1.34 billion, according to latest data from the Central Bank. In June the inflow amounted to $ 519.6 million, the lowest since $ 476 million in February and has been on the decline month-on-month. Financial Times, 8.7.2024)
There are 495 persons who are more than one hundred years old in Sri Lanka, State Minister Ranjith Siyambalapitiya told Parliament today. He said these persons are also entitled to the special allowance given to the aged. “There are 2.7 million people who are more than 60 years old. The number of pensioners will exceed one million by the year 2030,” he added. (Daily Mirror, 11.7.2024)
State Minister of Transport, Lasantha Alagiyawanna, announced that a gazette, with the necessary regulations on speed limits, aimed at reducing road accidents, will be issued within the next two weeks. In 2023, there were 2,214 reported road accidents resulting in 2,321 deaths. As of the 30 June 1,103 road accidents have been reported this year, with 1,154 fatalities. The National Council for Road Safety has allocated Rs 50 million to the Sri Lanka Police for the purchase of necessary speed control equipment. Additionally, the Ministry of Transport will issue a gazette with new road speed limit regulations within the next two weeks. Furthermore, arrangements have been made to provide teachers with manuals for establishing Road Safety Clubs at the school level. These clubs will be included in the school system as an extracurricular activity, and a medal awarding program has also been introduced.” (Ceylon Today, 12.7.2024)
There were 42,122 registered Buddhist monks in Sri Lanka, Minister of Buddhasasana, Religious and Cultural Affairs Vidura Wickremanayake told parliament yesterday (11) in response to a question posed by Samagi Jana Balawegaya (SJB) MP, Gayantha Karunatilleka. Wickremanayake added that there were 12, 235 temples, 743 dasasil matha monasteries and 38 devales registered with the authorities. He added no temple had closed down due to non-availability of Buddhist monks and that the government had developed 900 temples under the Sasun Udawa programme, introduced in 2020 to properly maintain and develop the temples in rural areas. Wickremanayake said Sri Lanka had a declining birth rate and that most families had one or two children each. “Due to this development, families do not like their children becoming monks,” he said. (Daily Island, 7.12.2024)
Sri Lanka is in the process of starting spatial mapping on all tree species in the island nation before going for carbon credit trading in the global market, Senior Presidential Advisor on Climate Change Ruwan Wijewardene said. Sri Lanka has been in the process of carbon credit for more than a decade. Carbon credit is a way of compensating for emissions of carbon dioxide or other greenhouse gases. If Sri Lanka reduces its Carbon Dioxide emissions through efforts like reforestation and large number of renewable energy projects, they will help the country to earn money through carbon trading from some other higher Carbon Dioxide emitting nations as compensation. “We are doing spatial data plan. We have just put the plan to cabinet. We are still waiting for approval,” Wijewardene, the Senior Advisor to President Ranil Wickremesinghe on Climate Change, told EconomyNext in an interview on Friday (12). “That is where we will map out whole of Sri Lanka’s every tree species, and what the carbon output of each tree species.” “Then we have the knowledge of what our potential is in Sri Lanka. Then it will be much helpful when we go out to tap market for (Carbon) trading. The process will take two years. ”He said the aim is to earn money through conservation and projects protecting the environment. The island nation is also in the process of drafting regulations to ensure the monetary benefits from a proposed 6,400 “Green Entrepreneurs” projects along Sri Lanka’s coastline, focusing on mangrove restoration and development. “Right now we are drawing up a framework – some kind of regulations how the carbon trading in the carbon market can trickle down to communities.” He said Sri Lanka will have to go for certification from international agencies before it goes for carbon trading. “The regulations we are trying is how the carbon trading money can be used by the communities and used in projects to conserve the environment.” The government move to speed up carbon credit trading comes as it has planned to become carbon neutral or zero carbon emission by 2040 with a raft of large renewable energy projects. The island nation has been adversely hit by the impacts of climate change leading to frequent floods and droughts across the country resident Wickremesinghe at COP-28 in Dubai last year launched his ambitious plans on establishing an International Climate Change University, Tropical Belt Initiative (TBI) and Climate Justice Forum (CJF) in a move to gather all countries vulnerable to climate change under a common theme to bargain strongly with advanced countries to invest in their nations on green initiatives including wind and solar power projects. (Sunday Island, 14.7.2024)
Government Printer Gangani Liyanage has said initial estimates for printing ballot papers for the upcoming presidential election amount to Rs 600 million. She said that arrangements had been made to commence printing ballot papers when the Election Commission announced the date of the election. Police Headquarters sources said that an estimate of the overall costs related to the security arrangements would be submitted to the Election Commission soon. (Daily Island, 16.7.2023)
The collection of books containing Mahawansa chronical, the main source of history of Sri lanka in the Peradeniya University Library was yesterday declared a world heritage. Director General of the UNESCO was the chief guest of the ceremony. The certificate of declaring the Mahawansa as a world heritage was handed to Chancellor of Peradeniya University Prof. G.H.Peiris by UNESCO Director General. Vice Chancellor Prof.M.D.Lamawansa presented a memento to the Director General to mark her visit to the university. University Librarian Dr. M.Maheshvaran was present at the occasion. (Daily Mirror, 18.7.2024)
Foreign interest payments, which represent 4.7 percent of Sri Lanka’s total interest payments, have increased by 13.9 percent to Rs. 34.0 billion in the first four months of 2024, compared to the same period of 2023, according to the Mid-year fiscal position report–2024, presented by the Ministry of Finance to Parliament recently. Recurrent expenditure, which accounted for around 90 percent of Sri Lankan government’s total expenditure in the first four months of 2024, declined by 4.4 percent to Rs. 1,419.3 billion from Rs. 1,485.0 billion recorded in the same period of 2023. This was primarily led by the decline of 11.3 percent in interest expenditure to Rs. 726.1 billion from Rs. 819.0 billion in the same period of 2023, and is attributable to the decline in domestic interest payments by 12.3 percent to Rs. 692.1 billion due to the decline in domestic interest rates and the effects of the completion of Domestic Debt Optimization (DDO), the report said. However, foreign interest payments, which represent 4.7 percent of total interest payments, have increased by 13.9 percent to Rs. 34.0 billion. Non-interest recurrent expenditure increased by 4.1 percent in the first four months of 2024 compared to the same period of 2023 with the increase of expenditure on goods and services by 12.5 percent to Rs. 99.8 billion from Rs. 88.7 billion and the increase of expenditure on subsidies and transfers by 6.4 percent to Rs. 291.5 billion from Rs. 274.0 billion. Expenditure on salaries and wages declined by 0.5 percent to Rs. 301.8 billion in the first four months of 2024 from Rs. 303.3 billion in the same period of 2023 owing to the effects of limiting new recruitments to essential positions and effective management of cadres. Capital and Net Lending declined by 0.4 percent to Rs. 159.9 billion in the first four months of 2024 from Rs. 160.6 billion in the same period of 2023. This was marked by a decline in transfers to public institutions, provincial councils, and net lending, despite the increase in expenditure for the acquisition of fixed assets by 20.8 percent. Meanwhile, total Government revenue excluding grants increased by 48.3 percent to Rs. 1,216.0 billion in the first four months of 2024 compared to Rs. 820.1 billion in the same period of 2023 mainly due to the increase in tax revenue by 50.5 percent to Rs. 1,117.8 billion from Rs. 742.6 billion. The increase in tax revenue was led by the increase in revenue from: 1) VAT by 89.5 percent or 199.7 billion driven by the increase of the VAT rate to 18 percent from 15 percent with effect from January 1, 2024, reduction in the VAT registration threshold from Rs. 80 million per annum to Rs. 60 million per annum with effect from January 1, 2024, removal of the vast majority of VAT exemptions with effect from January 1, 2024 and the increase in imports by 9.5 percent in the first four months of 2024 compared to the same period in 2023;2) Income taxes by 27.3 percent or Rs. 52.3 billion due to the realization of the full impact of the tax policy changes that were made effective on January 1, 2023, but were reflected in increases of revenue from February 2023 onwards, impacts of increased wages both in the public sector and informal private sector (Year-on year increase of the public sector and informal private sector nominal wages rate indices were 10.6 percent and 7.1 percent, respectively in February 2024), positive impact of the increased economic activity and return to economic growth on the corporate and personal income taxes;3) Excise Duty on Petroleum by 165.7 percent or Rs. 46.0 billion driven by the increase in petroleum imports by 14.4 percent in the first four months of 2024 compared to the same period in 2023 and the net increase in Excise Duty rates with the increase of rates for petrol and diesel by Rs. 25 per litre on June 1, 2023 and the decrease of rates for Diesel by Rs. 6 per litre and for Petrol by Rs. 5 per litre on January 1, 2024;4) SCL by 107.4 percent or Rs. 16.0 billion driven by the rate increases for sugar and potato to Rs. 50 per kg and the increase in the volume of imports in major commodity items;5) CID by 68.5 percent or Rs. 13.9 billion due to the increase in CID rates from 0:10:15 percent to 0:15:20 percent effective from March 28, 2023, and the increase in imports;6) SSCL by 19.3 percent or Rs. 13.5 billion due to the increase in the number of taxpayers with the lowering of the registration threshold from Rs. 120 million per annum to Rs. 60 million per annum with effect from January 1, 2024 and the impact of the increase in imports;7) Excise Duty on liquor by 20.6 percent or Rs. 12.0 billion due to the realization of the full impact of excise duty rate revisions on liquor implemented with effect from July 1, 2023, the indexation of Excise Duty to inflation and increase of excise duty rates by 14 percent on January 1, 2024, and the revision of annual excise license fees with effect from January 12, 2024; and8) CESS by 64.3 percent or Rs. 10.7 billion due to the increase in imports. The increase of non-tax revenue by 26.8 percent or Rs. 20.8 billion in the first four months of 2024 also contributed to the increase in revenue. This was led by the increase in revenue from interest by Rs. 11.5 billion, fines, fees, and charges by 8.6 billion and profits and dividends by 3.7 billion. (Daily Island, 1.7.2024)
Sri Lanka’s inflation, measured by the National Consumer Price Index, gained pace in June to 2.4 percent from a year ago, from 1.6 percent through May, as the food prices rose in June, largely due to the weather-related disruptions to the crops. This was also seen in the monthly prices, which edged up 0.9 percent between May and June, from a negative 0.9 percent between April and May. Specially the food prices climbed 2.4 percent in June, measured on a month-on-month basis, turning from a negative 1.6 percent in May. Measured annually, the food prices rose by 1.9 percent, accelerating from 0.5 percent in May. The prices of many varieties of food such as vegetables, fresh fish, potatoes, coconut and sugar and the likes climbed in June, from the May levels. The prices also declined in some other varieties such as big onions, fresh fruits, milk powder and chicken. The non-food prices rose by 2.7 percent in June from a year ago, picking up from 2.4 percent in May. However, the monthly prices declined by 0.4 percent, a basis point higher than May’s 0.3 percent decline. The downward revision in the prices of petrol and domestic gas had an outsized impact on the non-food prices in June. The so-called core prices, which are measured barring the often-volatile food, energy and transport, reported 3.9 percent for June, up from 3.1 percent through May. This is the last inflation report the Central Bank gets to see before its rate setting committee meeting today for the fourth monetary policy review. The expectations are split between the Central Bank staying pat and cutting policy rates by 50 basis points to prop up lending activity. The Central Bank expects to maintain the headline inflation at around 5.0 percent in the medium term. (Daily Mirror, 23.7.2024)
Transport, Highways, and Media Minister Bandula Gunawardena yesterday (21) said that there is one public servant for every 13 citizens in the country. Speaking at a ceremony in Homagama to inaugurate a new four-storeyed building for the Divisional Secretariat, the Minister mentioned that there are 1.6 million public servants in the country. Gunawardena said that one of the primary responsibilities of any government was to ensure the timely payment of salaries to these public servants, along with pensions. “These payments constitute a significant portion of the government’s recurring expenditure. Successive governments have resorted to borrowing to meet these financial obligations. Ultimately, all state expenditure is funded through taxation. None of the previous governments was able to find a sustainable solution to this issue,” he said. (Daily Island, 22.7.2024)
The prices of vegetables have seen a significant increase, contributing to the overall rise in inflation. According to official data, several vegetables have experienced noticeable price hikes, both in the wholesale and retail markets. The retail prices for beans cost Rs. 650.00, up from Rs. 550.00, while in Dambulla, the price has risen from Rs. 545.00 to Rs. 650.00. Carrots are now Rs. 450.00 in Pettah, up from Rs. 300.00, and Rs. 420.00 in Dambulla, up from Rs. 355.00. In Narahenpita, beans are now priced at Rs. 800.00, and tomatoes in Pettah have gone from Rs. 240.00 to Rs. 280.00, and in Dambulla, from Rs. 255.00 to Rs. 520.00. In addition, prices of certain vegetables in supermarkets too have witnessed a rise. The cost of lime has surged to Rs. 3,820.00 per kg, green chillies have increased from Rs. 550.00 to Rs. 700.00 per kg, ginger has risen to Rs. 4,860.00 per kg, carrots are now Rs. 620.00 per kg, potatoes are Rs. 530.00 per kg, capsicum is Rs. 980.00 per kg, and green beans are Rs. 780.00 per kg. As per the wholesalers and retailers in the Economic Centres, the main reason for the vegetable price hike is the rainy conditions and low supply. The adverse weather has affected crop yields, leading to reduced availability and driving up prices. According to the Department of Census and Statistics, the overall rate of inflation rose to 2.4% in June 2024, up from 1.6% in May 2024. Food inflation increased significantly, reaching 1.9% in June 2024, compared to 0.5% in May 2024. Meanwhile, the Year-on-Year inflation rate for the non-food group climbed to 2.7% in June 2024 from 2.4% in the previous month. In June 2024, the contribution of food commodities to inflation was 0.85%, compared to the same month in 2023. (Daily Mirror, 24.7.2024)
Sri Lanka’s merchandise export performance for the first half of the year (1H24) totalled US$ 6.098 billion, a 3.87 percent growth Year-on-Year (YoY) when compared with the corresponding period in 2023. For the January – July period, the monthly merchandise exports showed positive variances when compared with the performance in 2023. Besides January and April, all other months saw export earnings above US$ 1 billion. Sri Lanka’s merchandise exports in June expanded marginally from the previous month, and from the corresponding period in the previous year to US$ 1.031 billion, data from the Export Development Board (EDB) showed. The provisional data released showed that the June merchandise export performance recorded 2.58 percent growth YoY and 1.97 percent growth from May 2024. “The increase is due to improved earnings fetched by apparel & textiles, tea, rubber-based products, coconut-based products, food & Beverages and spices & concentrates,” the EDB said in its monthly exports update. The estimated value of services exports for the month of June 2024 was US$ 323.13 million, increasing 39.05 percent over the corresponding period of 2023. Accordingly, the total exports for June (both merchandise and services) have expanded by 9.42 percent YoY to US$ 1.354 billion, while for 1H24 earnings recorded US$ 7.77 billion, up 5.57 percent YoY. In June, export earnings from Apparel & Textile, the largest foreign exchange generator for the economy, increased by 4.22 percent YoY to US$ 446.54 million with exports to the USA increasing by 13.28 percent YoY. Earnings from tea, which made up 12 percent of merchandise exports, grew 9.18 percent YoY to US$ 121.76 million. The EDB attributed the increase to the positive performance in the export of bulk tea (14.91 percent) and tea packets (4.13 percent). Rubber and Rubber finished product exports expanded by 11.8 percent YoY to US$ 82.63 million, with a strong performance in exports of pneumatic & retreated rubber tyres & tubes (3.78 percent) and Industrial & Surgical Gloves of Rubber (28.2 percent). Similarly, earnings from coconut-based products increased by 15.54 percent YoY in June 2024 compared to June 2023. Strong performance in pepper exports, especially to India, led to earnings from spices and essential oils to expand substantially by 62.63 percent YoY to US$ 47.91 million.Furthermore, the estimated value of ICT exports is expected to increase by 28.25 percent to US$ 141.64 million in June 2024 when compared to June 2023. In addition, the estimated value of construction services exports and Logistics & transport services are expected to increase by 4.89 percent and 52.96 percent respectively in June 2024 compared to June 2023. Contractions in earnings were seen from Electrical & Electronics Components (-19.69 percent YoY), other export crops (-22.29), and flowers & foliage (-45.83). Exports of diamonds, gems, and jewellery plunged 58 percent YoY to US$ 18.6 million. Among Sri Lanka’s top 10 export markets, USA, UK, Netherlands, France, Canada, and China markets showed positive growth in June 2024 and the cumulative period from January to June 2024, compared to the corresponding periods in 2023. Furthermore, the United States of America, Sri Lanka’s single largest export destination, which absorbs 23 percent of Sri Lanka’s merchandise exports, increased by 12.44 percent YoY to US$ 254.2 million in June 2024 compared to June 2023. In parallel, exports to the United States of America from January to June 2024 increased by 0.36 percent to US$ 1,371.76 million compared to the corresponding periods in 2023. Exports to the United Kingdom increased by 3.25 percent YoY to US$ 74.88 million in June, and on a cumulative basis, exports expanded 6.54 percent YoY to US$ 452.61 million. (Daily Mirror, 24.7.2024)
The gazette notification by the Elections Commission calling Presidential Election to be held on 21 September 2024 has been published. Accordingly, nominations will be accepted on 15 August 2024. A cash bond was placed for President Ranil Wickremesinge as an independent candidate for Presidential Election 2024. Ronald Perera PC, placed the cash deposit on behalf of the President. Justice Minister Wijeyadasa Rajapaksa and Field Marshal Sarath Fonseka have formally announced their candidacy at the forthcoming Presidential Election. Rajapakshe formally announced his candidacy a short while ago. Meanwhile, Field Marshal Sarath Fonseka, through an X message this morning announced his candidacy at the upcoming Presidential election. (Ceylon Today, 26.7.2024)
