SRI LANKA NEWS (MAY 2023)
Compiled by Victor Melder.
Approximately one out of every six (16 percent) persons in the country is multi-dimensionally poor, says the Sri Lanka’s first official national Multidimensional Poverty Index (national MPI). The National MPI, using data from the Household Income and Expenditure Survey 2019, launched last week, shows that more than eight out of every 10 (80.9 percent) persons who are poor live in rural areas. The National MPI, prepared jointly by UNICEF, the Oxford Poverty and Human Development Initiative (OPHI) and the European Union, the Department of Census and Statistics (DCS) indicates that poverty levels in districts vary significantly, from a low of 3.5 percent in Colombo to 44.2 percent in Nuwara Eliya. Even for districts with similar MPI values, high-impact policies must consider the indicator composition of poverty, in order to plan the most cost-effective response. Estate areas are pockets of poverty, requiring policy attention, as more than half (51.3 percent) of all people in these areas are living in poverty. The Executive Summary of the report, titled ‘Sri Lanka’s Multidimensional Poverty Index 2019 Results: National and Child Analyses’ shows that 17.9% of the people, aged 65 years and older, are the poorest age group in Sri Lanka, with the highest headcount ratio (17.9 percent), as well as intensity of poverty and MPI. . Deprivation patterns – and therefore policy and budgetary responses – vary by district and age. The deprivations that require immediate policy attention are the lack of access to health facilities and basic facilities, clean cooking fuels, and safe drinking water. It says: In 2021, the Department of Census and Statistics (DCS) developed the first official national Multidimensional Poverty Index (national MPI) for Sri Lanka. A key population of concern around poverty is young children, whose deprivations in nutrition and cognitive development have lifelong effects. To further probe and support child poverty policies, DCS crafted an individual child Multidimensional Poverty Index (child MPI) for children aged 0-4, which includes exactly the same indicators as the national MPI, plus undernutrition and early childhood development. The national MPI and the child MPI are both based on data from the Household Income and Expenditure Survey 2019 (HIES 2019). The HIES 2019 was modified to include key MPI indicators, and will do so in future, permitting updates of both MPIs. Sri Lanka’s child MPI is the first official measure of child poverty that links directly and precisely with the national MPI. The MPI is not just a statistic, it is a policy tool. It provides relevant information to accelerate poverty reduction with limited resources – by informing high-impact budget allocation, focused interventions, policy design and coordination, and poverty monitoring. This report presents the key findings of Sri Lanka’s official permanent national MPI and its linked child MPI, further disaggregated by location, age and sex, and the policy implications of these findings. This report explains why Sri Lanka was motivated to develop multidimensional poverty indices, the process followed to design these policy-salient measures, and the measurement methodology. The national MPI results convey the level and composition of multidimensional poverty, disaggregated by age, area, district, and sex of the household head. The child MPI results delve further into an individual measure for children aged 0-4 that is directly linked to the national MPI, but which exposes particular needs of young children. (Daily Island, 4.5.2023)
Sri Lanka with a population of approximately 22 million has 31,382,000 telephones at the rate of 142 phones per 100 people According to the 2022 annual report, released by the Central Bank, the total number of landlines is 2,651,000. Internet density is 97.7 per 100 people. According to the Digital Quality Life index last year (2022), Sri Lanka has been ranked 89th out of 117 countries, the Central Bank said. The Bank said: The telecommunications sector registered a robust growth momentum during the first half of 2022, largely driven by the continuation of online based modalities for work, education, and other daily activities that were adopted from the onset of the pandemic. Fixed and mobile telephone penetration, as measured by connections per 100 persons, stood at 12.0 and 142.0, respectively, while internet penetration stood at 97.7 by the end of 2022. (Daily Mirror, 4.5.2023)
Sri Lanka’s monthly tourism earnings have consistently stayed above US$ 160 million a month in 2023 supported by rising arrivals following the end of Covid restrictions and the gradual recovery in the island nation’s economy. Sri Lanka received US$ 166.5 million in earnings from tourism, the second largest foreign currency earning source to Sri Lanka’s current account after workers’ remittances.
The April inflows brought the cumulative tourism income to US$ 696.3 million in the first four months of the year, up 17.8 percent from the same period in 2022. China’s reopening in early January is adding a new impetus to the long-battered industry in Sri Lanka from Easter attacks in 2019 to the pandemic in 2020 and 2021 to the economic crisis in 2022. Tourism authorities are getting ready to kick off promotional campaigns in China while the national carrier, SriLankan Airlines began operating weekly flights to China from April. Sri Lanka in early April said it was raising the 2023 tourist arrivals target to 2.0 million tourists from the original 1.55 million. n March Sri Lanka welcomed 125,495 tourists and 105,498 in April, bringing the cumulative arrivals to 441,177 in the four months. (Daily Mirror, 8.5.2023)
Due to the prevailing bad weather, 9,034 people from 2,178 families in Colombo, Kalutara, Negombo, Badulla, Trincomalee, Ratnapura, Kegalle, Jaffna, Mullaithivu, Puttalam and Kurunegala districts were affected as of 6 am yesterday (7), the Disaster Management Centre said. Negombo police said that a person went missing due to the overflowing of the depa ela in Hunupitiya, Lazarus Road. The missing person is a 60-years-old father of four. The body has not been found by yesterday afternoon; however the Navy and the residents are searching the body. In the 24 hours that ended yesterday (7) 8.30 am, a rainfall of 117.4 mm had been received in Jaffna area. As of 9.30 am yesterday there was no dangerous situation in the rivers. Valid till 9 am today (8), the National Building Research Organization in Badulla, Galle, Kegalle, Kurunegala, Matale districts, Passara, Baddegama, Nagoda, Alpitiya, Yakkamulla, Yatiyanthota, Rambukkana, Deraniyagala, Mawanalla, Kegalle, Galigamuwa, Ridigama, Mawathagama, Alawwa, Polgahawela, Pallepola Divisional Secretariat Divisions have issued the first phase warning notice for landslides.(Daily News, 8.5.2023)
Sri Lanka recorded at least one elephant death a day in the first quarter of 2023, nearly half of them due to human causes, putting the country on track for a record death toll from human-elephant conflict, said a report published by Mongaby yesterday. It quoted experts as having said that various approaches adopted since 1959 to tackle the problem have only aggravated the issue or failed to solve it. A national plan formulated in 2020 to mitigate the problem has not been fully implemented due to a lack of funding. Wildlife conservationists say that up to 70% of wild elephants could die unless effective measures are urgently adopted. On average one elephant has died each day in Sri Lanka in the first three months of this year, with nearly half of those deaths due to human causes. This escalation of the perennial problem of human-elephant conflict on the island has prompted calls for urgent solutions to save this endangered and iconic species. The Department of Wildlife Conservation (DWC) recorded 151 deaths of Sri Lankan elephants (Elephas maximus maximus) between Jan. 1 and April 28. Of these, at least 67 were due to human intervention, including shooting deaths (38) and electrocution caused by electric fences (23). Six elephants died after eating so-called hakka patas (jaw bombs), improvised explosive devices concealed in food bait that detonate when bitten. The devices are used by farmers to keep animals from their crops. Ravi Corea, founder and president of the Sri Lanka Wildlife Conservation Society (SLWCS), said he fears Sri Lanka might be on track to set a new unwanted record for the highest number of elephant deaths in a single year. Elephant deaths last year hit an all-time high of 433, while human fatalities from these conflicts was also a record 145. “Every time the department sends out these statistics of elephant deaths, there is always an increased hue and cry. This is a good sign. But unfortunately, that outcry subsides with time,” Corea told Mongabay. The government estimates the population of Sri Lankan elephants, a subspecies of the Asian elephant (Elephas maximus), at about 7,000. But wildlife conservationists suggest the real number may be far lower, given the rapid loss of the animal’s habitat and the rising death toll from the conflict with humans. Sri Lanka has long strived to find a balance between its human and elephant populations amid limited land and resources. But various approaches adopted since 1959 to mitigate human-elephant conflict have only aggravated the problem, according to Corea, who works closely with villagers on the issue. He blamed this on the authorities’ failure to address the factors that underlie the problem. One of these factors, he said, is the “flawed” process by which authorities allocate land for development projects and other activities like farming. “Every time there is a development program, they go and grab elephant habitats. Where are these animals going to go? Land settlement schemes are the main drivers of this issue,” Corea said. “Some elephant habitats are now towns, villages, paddy fields, cultivations, harbors, airports and cricket stadiums. We need to carefully assess and identify the remaining habitats and declare them protected areas,” he said. The government’s own data underscore this overlap: a national report shows that humans and elephants inhabit the same landscape across 44% of Sri Lanka’s terrestrial area. And 70% of existing elephant range falls within areas where humans live, the report adds. (Daily Island, 9.5.2023)
India has decided to extend the credit facility of US$ 01 billion given to Sri Lanka by another year, according to report. Quoting a Sri Lankan official, Reuters reported on Tuesday that India has extended a $1 billion credit line for Sri Lanka by one year giving the crisis-hit country a backup funds to pay for essential imports. India provided the credit facility to Sri Lanka, which is in the middle of an economic crisis, to import essential food items and medicines. That US$1 billion is one part of the US$04 billion loan facility that India provided when Sri Lanka was at the height of its financial crisis. Its term was supposed to end last March. However, after discussions with the authorities, the loan concession has been extended until March 2024, Sri Lanka’s Deputy Treasury Secretary Priyantha Rathnayake has told Reuters. “There is about $350 million left of the credit line that can be utilized as needed,” the official has said. “However, given the increase of foreign exchange availability in the market, the need is not as keen as it was last year. “The situation has now improved with Sri Lanka finalizing a nearly $3 billion bailout package from the International Monetary Fund in March and kicking off debt restructuring talks with key bilateral creditors India, Japan and China. Sri Lanka’s foreign exchange reserves hit $2.7 billion at the end of last month. (Colombo Page, 10.5.2023)
The Government has decided to reintroduce paying wards at State hospitals countrywide to serve locals and foreigners. The move was a 2023 Budget proposal by President Ranil Wickremesinghe to re-implement the ‘paying wards system’ at Government hospitals. The proposal to this effect submitted by Health Minister Keheliya Rambukwella was approved by the Cabinet of Ministers at its meeting on Monday. “The proposal was tabled taking into account the fact that there are many citizens who are willing to secure paying wards at Government-run hospitals,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing yesterday. A statement containing weekly Cabinet decisions issued by the Government Information Department noted that the State has already provided ‘Agrahara’ health insurance coverage for public sector employees and retiree. (Ceylon Today, 10.5.2023)
President Ranil Wickremesinghe has given directions for the initiation of “Aswesuma” welfare benefit payments worth a staggering Rs. 485 billion ($ 1.5 billion) starting from 1 July. Of the mammoth amount, Rs. 139 billion or $ 421 million will be incurred within the next nine months encompassing 2 million people. The President’s Media office said yesterday a necessary gazette has been published in accordance with the authorities delegated to Wickremesinghe as Minister of Finance, Economic Stabilisation, and National Policy. These payments will be distributed among 4 social categories, namely transitional, vulnerable, poor, and extremely poor. Additionally, the usual allowances for the differently-abled, elderly, and kidney patients will also be provided Accordingly, 400,000 transitional beneficiaries will receive Rs.2,500 per month until December 31, 400,000 vulnerable beneficiaries will receive Rs.5,000 per month until 31 March 2024, 800,000 poor beneficiaries will receive Rs.8,500 per month, and extremely poor beneficiaries will receive Rs.15,000 per month for three years beginning 1 July. Currently, 72,000 differently abled people getting welfare benefits will each receive Rs.5000 per month, 39,150 people receiving kidney support will each receive Rs.5000, and 416,667 people receiving senior assistance would each receive Rs.2000. Around 3,712,096 applications for welfare benefits have been received from 340 Divisional Secretariats across the country, with 91.5% of the process of verifying program information to identify those who are eligible for payment of these welfare benefits completed as of yesterday (08). The data has been monitored through selection committees consisting of three members at the regional office level, and the process of approval by the district secretary has also started. The highest number of applications that have been confirmed and finalised are from Vavuniya district, which is 98% followed by 96.5% from Kandy district, 96% from Kilinochchi district, 96% from Jaffna district and 95.5% from Trincomalee district respectively, 3,362,040 applications covering the entire country have been verified so far. (Daily Financial Times, 10.5.2023)
In the first four months of this year, the amount of remittances sent by Sri Lankan migrant workers to the country has exceeded 1.8 billion US dollars. In the first four months of this year, migrant workers have sent US$ 1867.2 million to this country and in the month of April alone, US$ 454 million have been sent. Sri Lankan migrant workers’ foreign remittances increased to US$ 454.0 million in April 2023 from US$ 248.9 million in April 2022. This is an 82.4% (US$ 205.1 million) increase compared to the inflows recorded in April 2022, Minister of Labor and Foreign Employment Manusha Nanayakkara said. In January of this year, migrant workers sent US$ 427.5 million, which was a growth of 68.8 percent. The US$ 407.4 million sent by migrant workers in February is an increase of 98.6 percent compared to February of last year. In March, migrant workers have sent US$ 568.3 million It is a growth of 78.5 percent compared to last year. Arrangements have been made so far to provide vehicle import permits for migrant workers who send money to Sri Lanka through legal means, and to increase the duty concessions given at the airport. (Colombo Page, 13.5.2023)
Cash-strapped Sri Lanka’s national airline announced a staggering US $ 525 million annual loss yesterday. With nearly 6,000 staff, SriLankan Airlines is the biggest and most expensive of the cash haemorrhaging state companies that have drained the budget and compounded the worst financial crisis in Sri Lanka’s history. The bankrupt South Asian island’s US $ 3 billion bailout by the International Monetary Fund requires Colombo ‘restructure’ — a euphemism for privatise — the airline along with another 51 loss-making state enterprises. The carrier lost 163.58 billion rupees (US $ 525 million) in the year to March 2022, it said in a statement — more than three times its deficit in the previous 12 months, when air travel was hit by the Covid-19 pandemic. The airline missed interest payments on a US $ 175 million bond in December, eight months after the government itself defaulted on its sovereign debt after running out of foreign exchange. The nation’s unprecedented financial crisis ‘posed a greater challenge to the airline, as it was only beginning to recover from the largest challenge faced since its inception, the pandemic’, Chairman Ashok Pathirage said. (Daily Mirror, 13.5.2023)
The Australian Government has announced that it will gift a former Royal Australian Air Force Beechcraft KA350 King Air aircraft (registration A32-673) to the Sri Lankan Government. The aircraft will be used to enhance Sri Lanka’s sovereign aerial maritime surveillance capability. The gift of the aircraft is part of the Australian Government’s commitment to strengthening and enhancing the cooperation and collaboration that is the foundation of the strong bilateral relationship between Australia and Sri Lanka. A key focus of this relationship remains the continued cooperation on countering all forms of transnational crime, including drug smuggling, as well as strengthening border management through intelligence sharing and the deterrence, disruption, interception and return of maritime people smuggling ventures under the border security operation known as Operation Sovereign Borders. The Australian Government greatly values this cooperation, which has led to the disruption of a significant number of maritime people smuggling ventures, and has protected the lives and livelihoods of vulnerable people by preventing criminal exploitation, dangerous sea voyages and loss of life at sea. Following the Australian Home Affairs Minister’s visit to Sri Lanka in June last year, the Department of Home Affairs has driven forward a number of new initiatives in these areas, in partnership with a number of Sri Lankan Government departments. In pursuing these initiatives, Australia has emphasized the importance of supporting Sri Lanka to develop sovereign capabilities. As part of the gift of the aircraft, the Australian Government will also provide sustainment support for a period of 12 months, after which sustainment will become the sole responsibility of the Sri Lanka Government. The Australian Government is confident that this gift will further strengthen the strong bilateral relationship between Australia and Sri Lanka, and will help to enhance Sri Lanka’s ability to counter transnational crime and protect its borders (Colombo Page 15.5.2023)
Sri Lanka’s tea exports in value in the first four months of this year have increased, whilst volume dips, industry sources said. Siyaka Research said January – April earnings have increased sharply by 11% to $ 407 million compared to $ 367 million in the same period a year earlier. In April earnings increased by 16% to $ 93 million compared to $ 80 million in April 2022. Siyaka Research said the higher earnings were possible because of the high FOB per kilo, a value which more than compensated for a 14% drop in quantities from 81.9 million kilos to 70.2 million kilos during January – April 2023. April recorded the highest ever FOB of $ 5.78 per kg, pushing the cumulative FOB figure to a record $ 5.80 per kg. “Following the rupee depreciation in 2022 earnings have shot up a massive 58% to Rs. 140 billion compared to Rs. 88 billion in 2021,” it added. Siyaka Research also said Türkiye continued to lead exports as the top market with volumes soaring by 92% to 8.7 million kilos from 4.5 million kilos in 2022. Russia has secured the second position with volumes slightly up by 6% YoY to 7.8 million kilos, while Iraq secured the third position with volumes plunging by 51% YoY from 15.3 million kilos to 7.4 million kilos in 2023. Exports to UAE have also declined by 28% YoY to 5.2 million kilos in 2023, whilst China makes up the top five destinations with volumes dropping by 15% YoY to 3.1 million kilos from 3.7 million kg in 2022. Forbes and Walker Tea Brokers said the volume of tea exports in April was 16.16 million kilos, down by 2.13 million kilos from a year ago. “All Product Categories have witnessed a decline against the corresponding month of 2022,” it said. January-April 2023 cumulative exports totalled 70.25 million kilos, down by 11.74 million kilos from the corresponding period of last year. “Tea in bulk and packeted tea continue to show negative variances, whilst the remaining product categories recorded a marginal increase,” Forbes and Walker Tea Brokers added. (Daily Financial Review, 20.5.2023)
Sri Lanka’s nationwide inflation in April 2023 determined under the National Consumer Price Index (NCPI) marginally increased to 33.6 percent from 49.2 percent recorded in March 2023 on a year-on-year basis, the Department of Census and Statistics reported Monday. The NCPI for all items for the month of April 2023 is 202.7. The month-on-month change was contributed by decreases in food items of 0.94 percent and increases in non-food items of 1.30 percent. Year-on-Year inflation of the food group decreased to 27.1 percent in April 2023 from 42.3 percent in March and the Year-on-Year inflation of the non-food group decreased to 39.0 percent in April from 54.9 percent in March 2023. Contributions to the inflation rate of April 2023 from food group and non-food group are 12.33 percent and 21.29 percent respectively. (Colombo Page, 23.5.2023)
The country’s critical apparel sector is suffering multi-year lows in terms of exports with April performance confirming its ongoing challenge. April saw exports down sharply by 24% to $ 318 million from a year ago and forced the performance in the first four months to decline Year on year by 17% to $ 1.5 billion. All major markets have witnessed reduction in purchases. April 2023 exports value was the lowest in recent years (except COVID-hit 2020). The previous lowest was in 2018 April which was $ 323 million. On a cumulative basis, exports in the first four months of 2023 were the lowest (except COVID-2020) and were below $ 1.6 billion range in 2018 and 2021.
The dip in April YoY was sharper than the 11% YoY decline in March. April also marked the fourth month of exports below $ 400 million level. Since September last year, apparel exports have been on a downward trend year on year. Markets wise, apparel exports to the US in April decreased by 25.5% to $129 million, while the EU (excluding UK) dipped sharply by 27.53% to $ 90 million. Exports to the UK were down by 26.7% to $ 45.8 million and to other countries by 9% to $ 53 million. In terms of performance in the first four months of 2023, overall exports to the USA decreased by 22.67% to $ 599 million, to the EU (excluding UK) were down by 16.7% to $ 434 million and to the UK by 14.3% to $ 213.6 million. Exports to other countries declined by 4% to $ 254 million. Apart from higher inventories in markets, industry analysts said Sri Lanka has also become expensive for apparel sourcing given recent cost overruns. “Customers are asking for price reduction as countries such as Bangladesh, Egypt and African countries are far cheaper,” they claimed “Sri Lanka is fast losing its competitive edge. Logically we are more expensive and lead times are longer,” said an exporter. Future orders appear slim as well. Imports of textiles in the first quarter of 2023 are down by 31% to $ 604.6 million. In the first half of last year (January to June) imports grew by 16% to $ 1.68 billion before finishing the year flat at $ 3
Sri Lanka has been ranked as the 11th most miserable country in the Hanke’s Annual Misery Index (HAMI) 2022. Economist Steve Hanke’s index provided rankings for a total of 157 countries. The index is the sum of the year-end unemployment, inflation, and bank-lending rates, minus the annual percentage change in real GDP per capita. Zimbabwe has been ranked as the ‘most miserable country’ in the Index. Among the countries ranked, Zimbabwe, Venezuela, Syria, Lebanon, Sudan, Argentina, Yemen, Ukraine, Cuba, Turkey, Sri Lanka, Haiti, Angola, Tonga, and Ghana emerged as the 15 most miserable countries worldwide. Among the 157 countries analysed, Switzerland emerged as the least miserable, occupying the top position (157) on the list. (Daily Mirror, 25.5.2023)
A more than 1500 year old Lakshmi coin and items of archaeological value have been found in the excavations of the old Dagaba in Anuradhapura Angamuwa Rajanganaya Sri Sudarshana Maha Pirivena. At the request of the Maha Sangha, the officers of the Department of Archeology, had done excavations of this Dagaba for about 35 days. A few beads, a Lakshmi coin believed to be around 1,500 years old, and several items of archaeological value have been found. (Daily News, 29.5.2023) Sri Lanka’s tea crop has begun to see a marginal improvement in volumes, as a result of favourable weather conditions and robust distribution of fertiliser. In April, tea production increased by 8% year-on-year to 24.72 million kilos, but the 2023 first four months crop dipped by 2.49% compared to 2022 reflecting the struggle for recovery after detrimental policy decisions. High-grown elevation produced 6.04 million kilos up by 7.11% YoY whilst, medium elevation production was 4.37 million kilos up by 6.29% YoY, and low-grown elevation crop was up by 8.04% to 13.05 million kilos. The production of green was at 206,167 kilos in April 2023, up by 113.54% YoY. However, on a cumulative basis, all elevations have shown a decline over the corresponding period of 2021. January-April 2023 cumulative production totalled 84.09 million kilos, registering a drop of 2.14 million kilos or vis-à-vis 86.23 million kilos YoY. Forbes and Walker Research showed that compared to 2022, all elevations except for the low-grown and green tea segments have shown negative variances in the year 2023. High-grown elevation produced 18.62 million kilos down by 8.46% YoY whilst, medium elevation production was 13.3 million kilos down by 5.61% YoY. However, the low-grown elevation crop was marginally up by 0.29% to 51.35 million kilos and the green tea crop was at 806,447 kilos, up by 37.59% YoY. When compared to 104.54 million kilos of January-April 2021, cumulative production of 2023 shows a decrease of 19.57% or 20.46 million kilos. Industry growers had said that some estates were cut off from fertilisers for up to 18 months and they warned that it had a detrimental impact on crop production. In addition, the cost of production of tea growers has steeply risen by around 30% amidst the foreign exchange crisis. “From electricity to labour to packaging; all the prices have hit the roof,” tea growers claimed.
As per the Sri Lanka Tea Board, the country’s total national production for the year 2022 was 251.50 million kilos compared with 299.49 million kilos in 2021. This was the lowest in 26 years when 246 million kilos were produced in 1995.Sri Lanka expects tea production to recover in 2023 to 300 million kilos, whilst targeting export earnings of $ 1.5 billion for the year. (Daily Financial Times, 31.5.2023)
