Sri Lanka: Economic consequences and challenges of the Geneva resolution

Nimal Sanderathne

Good governance is good for the nation and people. Irrespective of any economic consequences of the Geneva resolutions, the country must ensure law and order and protect human rights of its citizens. This was the central message left in the minds of those who attended the LBR-LBO CEO forum on Meeting the Challenges of a Resolution on Sri Lanka by UN’s Human Rights Council.

Sri Lanka has 1.4 M Govt employees; one third of them are police and armed forces

Eran drops bombshell in P’ment over public finance

•     No evidence of Parliamentary control over finance, says Eran
•     UNP MP charges Article 148 has been violated in Legislature for four years
•     Claims bloating public sector stifling private sector growth, projects incorrect picture of unemployment figures
•     Budget split half and half between Cabinet of Ministers and Rajapaksa family: UNP
  

Economy: Sri Lanka's anti- India attitude hurts vehicle industry and could lead to a trade war - Indian media

Indian vehicles at Sri Lanka;s Hambantota port

by SLB

Number of major media outlets published reports on Sri Lanka raising taxes for Indian vehicles and providing favourable conditions to other countries. Some reports hints of India exerting diplomatic pressure in order to reduce the taxes and some others criticise the government inactivity over the issue. 

Political observes suspect  whether  Sri Lanka is taking a revenge on India for its expressed   concerns on deteriorating human rights situation in Sri Lanka and especially its support for the Sri Lankan Tamil minority demand for autonomy.

Lanka does a Maldives, raises duties on Indian vehicles by 73%

Sindhu Bhattacharya
This could become the second instance, after the eviction of GMR Infrastructure from Maldives, where Indian companies suffer high handedness of India’s tiny neighbours with the government remaining a silent spectator.
Last month, Sri Lanka suddenly increased duties on SUV’s and commercial vehicles after more than doubling them for cars earlier in the year. If the island nation remains unchecked, this could spell the death of Indian automobile exports to Sri Lanka.

Sri Lanka raises taxes to boost defence spending

(AFP) COLOMBO — Sri Lanka's President Mahinda Rajapakse on Thursday increased import taxes in an annual budget which allocated a record $2.2 billion for defence, three years after ending a war with Tamil rebels.

Rajapakse, who also holds the defence and finance portfolios, told parliament the country had suffered the effects of a global economic downturn as it emerged from nearly four decades of ethnic bloodshed.

"The economic crisis in the US and Europe, the political uncertainties in the Middle East and the slower growth in China and India have adversely affected us," Rajapakse said.

Is there any hope in COPE?

By Kelum Bandara
Minutes after day’s business started in Parliament on Thursday, Senior Minister D.E.W. Gunasekara rushed to his seat in the chamber of the House, as he was to present the interim report of the Committee on Public Enterprises (COPE).
The COPE, the parliamentary watchdog committee on financial performances at state bodies namely boards, bureaus, commissions and authorities, has furnished its interim report spotlighting financial malpractices and irregularities at 32 institutions which came under scrutiny so far this year.

Change in India’s trans-shipment policy hits Colombo

Cochin Port

The Cabinet’s recent decision to relax India’s policy on granting ships the right to operate in its waters ~ its “cabotage policy” ~ has Sri Lankan media crying itself hoarse over how this is India’s latest attempt to punish Sri Lanka for seeking closer ties with China.
Government sources suggest that these Sri Lankan critics are correct.
On 6 September this year, the Cabinet decided to relax the cabotage policy under the Merchant Shipping Act of 1958 for trans-shipment of export-import (EXIM) containers to and from the International Container Trans-shipment Terminal (ICTT) at Vallarpadam, Cochin.

Divineguma Bill: Signs of authoritarianism - Editorial, The Sunday Times

Moves to set up a Divineguma Department estimated to be worth more than Rs. 80 billion by bringing together the existing Samurdhi Authority, the Southern Development Authority and the Udarata Development Authority (the successor to the Kandyan Peasantry Commission) have seemingly run into a judicial-political storm.

A storm in a teacup it may be eventually, but as our Political Editor seems to think, the Government is determined to steamroll its way through the Legislature, notwithstanding what appears to be a stand-off with the Judiciary on the provisions contained in the Bill insofar as its constitutionality is concerned.

SL tops SAARC region in Human Development

An UNDP Human Development report said yesterday the country secured first place in terms of Human Development among SAARC countries.

According to the report, SAARC countries, other than India and the Maldives, have not even reached Sri Lanka’s HDI for 1980 which was 0.539.

The report said Sri Lanka has vast potential to further improve the situation compared to Singapore and Malaysia.

Sri Lanka resumes printing money to sterilize forex sales

Sri Lanka's central bank has sterilized a foreign exchange sale injecting 8.0 billion rupees in one-month money into the banking system, ending several weeks of monetary policy that has been favourable of a stronger exchange rate.

On Friday the central bank printed 8.0 billion rupees for one month at 9.81 percent, slightly above the 9.75 percent reverse repo rate at which overnight liquidity is injected into the banking system for 31 days.

EC warns of further depreciation of rupee, trouble in garment sector

A senior advisor to the European Commission (EC) has said that the exchange rate would stabilize at Rs. 138 per US dollar within the next six months.

The warning was given by Dr. Dilesh Jayantha, economic advisor to the European Chamber of Commerce, at a seminar organized by the EC on Oct 3, evening at Hilton Colombo Residence, to discuss the Euro zone crisis and its impact on the Sri Lankan economy.

Terrible fiscal numbers show only hardship to grow; less money for education more for urban development

Construction on the newly repaired A9 road by JAMES MORGAN

Dr. Harsha De Silva
The very recent fiscal and government borrowing numbers released by the Central Bank fail to inspire confidence in the economy and concerns are mounting that taxes could be raised while key public investments too could be cut as was the case in the past resulting in more hardship for the people.

With the budget deficit showing signs of veering off target, Opposition MP and Economic spokesman for the UNP Dr. Harsha De Silva yesterday reiterated that the government would have to increase taxes, duties and utility rates while sacrificing much needed public investments in critical areas of the economy such as education.

As Gota gets lion’s share of budget and rule of law deteriorates, Sri Lanka must learn from other Asian nations

Dr. Jehan Perera 

The increase in the economic rate of growth that has taken place in the Sri Lankan economy since the end of the war puts it amongst the better performing countries. Colombo has now got

Gotabaya

facilities that the more demanding international visitor has come to expect, and indeed it is more pleasing to the eye than many other capitals most particularly in its wider Asian neigbourhood.

Can Burma Leapfrog Sri Lanka?

Forbes
With the rapid-fire opening of Burma/Myanmar stemming from apparently real reforms under new President Thein Sein, an intriguing regional competition may develop.  Across the Andaman Sea lies another economic laggard of recent decades, Sri Lanka.  Will the Burmese leapfrog it?
To the degree the Burmese closed economy has been measurable, its output has lagged Sri Lanka’s by GDP adjusted for purchasing power parity. This, despite the fact that Burma’s population is considerably larger.  The two countries share a sorry recent history of socialist and/or kleptocrat rulers who deprived their countrymen of what appeared to be prosperous times in the post-colonial independence that followed World War II.  (Both were once huge rice exporters, for example.)

‘Divi Neguma’ Dept: Development catalyst, dependency creator or just a white elephant?

Basil R: on right gets the Divinaguma dept

Charitha Ratwatte
The Government has gazetted a Bill, on 27 July 2012, to set up a Divi Neguma Department, which will take over the existing Samurdhi Authority, the Southern Development Authority and the Udarata Development Authority (successor to the Kandyan Peasantry Commission).

The Bill will also set up a Divi Neguma Community Based Organisation, Divi Neguma Community Based Banks and Banking Societies.
It is significant that what is being established is a run-of-the-mill Government department which will have to comply with the full force of the Financial Regulations (FR), Administrative Regulations (AR) and the Establishment Code (Esta Code).

SEC: Dhammika Perera Appointment Fails To Inspire Transparency Hopes

Dhammika Perera

By Faraz Shauketaly

The appointment of Dhammika Perera as the Deputy Director General (DDG) at the Securities and Exchange Commission has failed to halt the flow of negativity associated with Sri Lanka’s stock market regulator. Many veteran investors question the suitability of the new DDG and say that his record in the past does not augur well for the workload of current investigations to be completed. According to our sources – Dhammika Perera has constantly called for cases to be compounded as opposed to a prosecution, especially when it came to investigations of high profile investors, traders and  politicians.

China's top legislator meets Sri Lankan president on bilateral ties

China's top legislator Wu Bangguo met with Sri Lankan President Mahinda Rajapakse here Monday, vowing to insert new energy into relations between the two countries.

"China-Sri Lanka relations are now at the best period of development in history," said Wu, chairman of the Standing Committee of China's National People's Congress (NPC), who is on a four-day official goodwill visit to the South Asian nation.

Reactivate 17th Amendment before next elections, Editorial Sunday Times

Unpopular former CM Pillayan polled the highest number of votes

Pro-Government political analysts and pundits have hailed as outstanding the victory of the United People’s Freedom Alliance (UPFA) in last Saturday’s election to the Sabaragamuwa, Eastern and North Central provincial councils. But the government needs to look at the results not only in a magnanimous way but in a sober and realistic spirit.

Most independent analysts and observers are of the view that a free and fair election cannot be held under the present system where the executive presidency has been given absolute power with the enforcement of the 18th Amendment to the Constitution.

Treasury stalls Customs probe on alcohol ‘firms’

Ethyl alcohol:sold to Liquor manufactuers

Customs have been ordered by the Treasury to halt investigations into nine dummy companies that imported ethyl alcohol for industrial purposes but sold it surreptitiously to liquor manufacturers.

The revenue loss during the past two years due to this racket, a senior Customs official who investigated the matter said, was more than one billion rupees. Speaking on grounds of anonymity since Customs investigators are not expected to talk to the media, he said the companies were linked to a powerful politician.

Sri Lanka: US calls for more libaralisation of economy

Blake: Foreign investors  face an uphill battle in Sri Lanka’s marketplace

Remarks by Assistant Secretary Robert Blake at AmCham Luncheon
It is a great honor to be here with so many old friends at the American Chamber of Commerce.  I would like to begin by thanking President Vijaya Ratnayake and the rest of the AmCham staff and Board of Directors, for hosting this event and bringing our focus to expanding trade and investment opportunities for the United States and Sri Lanka.
We have strong, important, and long-standing ties between our two countries.  The United States was encouraged to see the end of the terrible conflict that divided Sri Lanka for so long.  We now want to join Sri Lanka to look forward to pursue a better future for all Sri Lankans.