Other proposals also include major income support schemes and social security net for the poorest sectors including farmers, fishermen and lower income earners and also some relief for the middle class…reports Asian Lite News
Sri Lankan President Ranil Wickremesinghe will present an interim budget on Tuesday with major relief measures aimed at the poor who has been among the worst-hit due to the ongoing economic crisis, the biggest-ever since the island nation gained independence in 1948.
Wickremesinghe, in his capacity as the Finance Minister, will present the interim budget for the remainder of 2022 containing food ration schemes with essentials like rice, wheat flour and dal, adding nutritional assistance to the worst-hit groups of the population.
Other proposals also include major income support schemes and social security net for the poorest sectors including farmers, fishermen and lower income earners and also some relief for the middle class.
Presented in the midst of Sri Lanka’s ongoing negotiations with the International Monetary Fund (IMF) for a possible bailout package, the interim budget would slash expenditure for defence and other major infrastructure development projects to use funds for welfare and to repay interests on loans.
The new budget will have a 20 per cent increase in total expenditure to $9.1 billion (3,275 billion LKR) for the next four months of 2022 compared to the original budget passed in November 2021 in which the expenditure was $7.8 billion (2,796 billion LKR).
The interim budget also plans to reduce budget deficit from a 12 per cent to aim a 9.9 per cent and government has announced that 2023 budget due in November would aim to reduce the fiscal deficit to 6.8 per cent.
The interim budget will be debated until Friday before it is being presented for voting.
A comprehensive budget is also planned to be presented for the year 2023 in November.
As the financial crisis hit the country earlier this year leading to severe shortages of essential items including food, fuel, medicine and long hours of power cut, violence broke out on the streets which ultimately led to the fall of the Gotabaya Rajapaksa-led government.
The prime minister told the IMF delegation that Sri Lanka has taken steps to cut down on imports and boost exports…reports Asian Lite News
Prime Minister of Sri Lanka Dinesh Gunawardena told an International Monetary Fund (IMF) team led by Peter Breuer and Masahiro Nozaki that the country’s social security net needs to be enhanced when an agreement is reached with the IMF.
In a press statement released on Sunday, the Prime Minister’s Media Division said the country is facing the biggest economic and social crisis since independence, Xinhua news agency reported.
The prime minister told the IMF delegation that Sri Lanka has taken steps to cut down on imports and boost exports.
“The poor are the most adversely affected by the crisis. We need to provide them social welfare during the economic reforms,” Gunawardena told the IMF delegation.
Prime Minister’s Media Division said IMF’s Masahiro Nozaki agreed that the welfare of vulnerable groups is important when making plans for debt restructuring and economic revitalisation.
The IMF delegation earlier met Nandalal Weerasinghe, governor of the Central Bank of Sri Lanka, and Ranil Wickremesinghe, president of Sri Lanka.
Foreign firms keen on biz in Lanka
Twenty-four companies from India, the United Arab Emirates (UAE), Saudi Arabia, the US, China, Russia, the UK, Malaysia, Norway, and the Philippines are interested in the petroleum business in Sri Lanka, a Minister said.
Minister of Power and Energy Kanchana Wijesekera said on Sunday night that his ministry has appointed a committee to evaluate the expressions of interest (EOIs) submitted by the foreign firms, which will finalise the process within six weeks, reports Xinhua news agency.
Wijesekera said companies in petroleum-producing countries were invited to import, distribute and sell petroleum products in Sri Lanka.
The Minister added 700 petrol pumps under the state-owned Ceylon Petroleum Corporation (CPC) can be given to selected companies for operations, and the selected companies can also use other CPC facilities on a commercial basis, he said.
Currently, the CPC and the Lanka Indian Oil Corporation are permitted to distribute fuel to retail customers.
Wijesekera said that the CPC, which holds 80 per cent of the retail petroleum market, is unable to keep on supplying fuel because of dollar shortages.
Following China’s repeated meetings with Colombo, Sri Lanka allowed the ship to enter Hambantota and stay from August 16 to 22 but on conditions…writes SUSITHA FERNANDO
In a scathing response to the remark made by the Chinese envoy in Sri Lanka on India over the arrival of controversial vessel, the Yuan Wang 5, to the island’s southern port, New Delhi stated that the Chinese Ambassador ‘violated basic diplomatic etiquette’.
In a strongly worded tweet, Indian High Commission in Sri Lanka on Saturday said, “We have noted the remarks of the Chinese Ambassador. His violation of basic diplomatic etiquette may be a personal trait or reflecting a larger national attitude.”
Without directly referring to India, the Chinese envoy in Colombo Qi Zhenhong had stated that “External obstruction based on so-called security concerns but without any evidence from certain forces is de facto a thorough interference into Sri Lanka’s sovereignty and independence.”
Qi Zhenhong was referring to the arrival of the high-tech ballistic missile and satellite tracking ship, which was originally scheduled to arrive at the Chinese run Hambantota Port on August 11 but was delayed when Sri Lanka requested to defer the arrival following security concern raised by India.
“His view of #SriLanka’s northern neighbour may be coloured by how his own country behaves. #India, we assure him, is very different. His imputing a geopolitical context to the visit of a purported scientific research vessel is a giveaway,” in a tweet Indian High Commission hit out at the comment made by the representative of Beijing.
“Opaqueness and debt driven agendas are now a major challenge, especially for smaller nations. Recent developments are a caution. #SriLanka needs support, not unwanted pressure or unnecessary controversies to serve another country’s agenda,” Indian High Commission stressed in its twitter thread.
Writing an article on Friday, Chinese Ambassador had stated, “Looking back at the great history of the island, Sri Lanka who overcome aggression from its northern neighbour for 17 times, colonisation by the west for 450 years, and an anti-terrorism war for nearly three decades, is now still standing in the world bravely and proudly. Any infringement on the national sovereignty, independence and territorial integrity of Sri Lanka shall not be tolerated.”
Following China’s repeated meetings with Colombo, Sri Lanka allowed the ship to enter Hambantota and stay from August 16 to 22 but on conditions that it would keep the Automatic Identification System (AIS) switched on within the Exclusive Economic Zone (EEZ) of Sri Lanka and no scientific research be conducted in Sri Lankan waters.
With dried up gross official reserves limited to $1.8 billion at the end of July, the country failed to make interest payments on the loans and defaulted on the debt of $51 billion in May….writes Susitha Fernando
Amidst the soft-peg crisis, Sri Lanka has temporarily suspended the import of over 300 ‘non-essential’ items with effect from Wednesday.
Signed by President Ranil Wickremesinghe in his capacity as the Finance Minister, the gazette was issued under the Import and Export Control Act.
The list of items included cosmetics, electrical goods, water craft, ships, aircraft, electrical and electronic goods and building materials. It also included chocolate and other food products such as cocoa, condensed milk, yoghurt, coconuts, coconut-based arrack, roses, perfumes, beauty or make-up products, deodorants, shampoos and dental floss, trunks, suitcases, briefcases, and various clothing items.
The building materials, which are banned for export by the Finance Ministry includes, marble, travertine, and other calcareous monumental or building stone, tubes, pipes and hoses, and fittings.
The list also included bags, bottle cases, jewellery boxes, powder-boxes, cutlery cases, toilet or facial tissue stock, towel or napkin stock and electrical goods such as refrigerators, freezers and other refrigerating or freezing equipment, electric or other heat pumps.
However, the goods in the suspended list which were shipped on or before August 23 and arrived at any sea ports or airports in Sri Lanka on or before September 14 would be allowed for customs clearance.
With dried up gross official reserves limited to $1.8 billion at the end of July, the country failed to make interest payments on the loans and defaulted on the debt of $51 billion in May.
Country’s Central Bank announced that negotiations with the IMF towards reaching a staff-level agreement on the Extended Fund Facility (EFF) arrangement are scheduled in coming weeks, while expeditious measures are being taken to advance the debtrestructuring process with the assistance of financial and legal advisors.
Food price inflation
Sri Lanka is ranked fifth among the 10 countries with the highest food price inflation in the world, according to the latest World Bank assessment.
In its Food Security update, the World Bank said trade policy actions on food and fertilizers have surged since the beginning of the war in Ukraine. Countries actively used trade policy to respond to domestic needs when faced with potential food shortages at the beginning of the COVID-19 pandemic.
As of July, Sri Lanka is experiencing significant shortages in the domestic food supply.
In Sri Lanka, agricultural production has decreased by 40 per cent to 50 per cent because of fertilizer shortages, and there is a lack of foreign exchange to purchase food imports.
“Fertilizer and fuel (for land preparation, transport, and harvesting activities) shortages are expected to limit the food supply. Some relief is coming from the first shipment of 44,000 tonnes of urea supported by Indian credit (and 21,000 tonnes is expected to arrive soon). There has been an increase in demand for Indian rice, with roughly 9.6 million tonnes shipped this year,” the assessment says.
Exporters, concerned that export restrictions will be introduced (as has been done for wheat), are moving quickly to open letters of credit and have signed contracts to export 1 million tonnes of rice from June through September 2022. Moreover, food price inflation reached 80 per cent in Sri Lanka.
This comes as food price inflation remains at a multiyear high in South Asian countries including Pakistan. The first Ukrainian grain shipment is underway, but challenges to food security persist.
According to the World Bank assessment, the agricultural, cereal, and export price indices globally were stable over the past two weeks, with the agricultural and cereal price indices 1 per cent higher than two weeks ago.
Domestic food price inflation remains high around the world, with high inflation continuing in almost all low and middle-income countries and the share of high-income countries with high inflation increasing sharply.
A recent World Bank blog discussed three policy proposals for making fertilizers more accessible and affordable.
Firstly, countries should lift trade restrictions or export bans on fertilizers.
Secondly, World Bank says fertilizer use must be made more efficient, for instance by providing farmers with appropriate incentives that do not encourage overuse.
Furthermore, the international lender called for investment in innovation to develop best practices and newer technologies that may help increase output per kilogram of fertilizer used. (IANS/ANI)
The Commission headed by a retired Supreme Court judge recommended the government to take all necessary steps…reports SUSITHA FERNANDO
The Human Rights Commission of Sri Lanka (HRCSL) ruled on Tuesday that former President Gotabaya Rajapaksa, who fled the country in July amid the unrest triggered by the ongoing economic crisis, should be allowed to return to the country.
Writing to President Ranil Wickremesinghe, the HRCSL stated that Rajapaksa is entitled to certain privileges and benefits under law and the government should take necessary steps to ensure his security to return.
The Commission headed by a retired Supreme Court judge recommended the government to take all necessary steps to assess the threat situation and provide Rajapaksa and his family access to return whenever he wants.
Following the three-month long street violence over the economic crisis that led to the acute shortages of food, fuel, electricity and cooking gas, Rajapaksa announced his resignation on July 9 and fled the country on July 13.
He first went to the Maldives and then to Singapore.
On the request of the Sri Lankan government, Rajapaksa and his wife were allowed to enter Thailand where he currently resides.
A former dual citizen of Sri Lanka and the US, Rajapaksa was refused visa by Washington as he had to give up his American citizenship before the 2019 presidential election.
Sri Lankan election law prohibits foreign nationals from running for presidency.
Last week, the Sri Lanka Podujana Peramuna (SLPP) party formed by Rajapaksa family including Gotabaya’s brothers — former Prime Minister Mahinda and former Finance minister Basil — had urged Wickremesinghe to facilitate the former President’s return to the country.
Gotabaya Rajapaksa’s safe return was one of the key deals to support Wickremesinghe in his presidency.
Earlier this month, Wickremesinghe had told media that it was not the right time for Gotabaya Rajapaksa to return as his presence could again inflame political tensions in the island nation.
The consignment of urea fertilizer was officially handed over by India’s High Commissioner to Sri Lanka…reports SUSITHA FERNANDO
Sri Lanka on Monday received the second shipment of over 21,000 MT of fertilizer supplied under India’s financial assistance to the people of the island nation.
The consignment of urea fertilizer was officially handed over by India’s High Commissioner to Sri Lanka, Gopal Bagley.
In a series of tweets, the High Commission of India in Colombo said: “Adding to the fragrance of friendship and cooperation. High Commissioner formally handed over 21,000 tonnes of fertilizer supplied under India’s special support to the people of Sri Lanka.
“This follows 44,000 tonnes supplied last month under Indian support totalling about $4 billion in 2022.
“The fertilizer will contribute to food security and support the farmers of Sri Lanka. It demonstrates benefits to the people from close ties with India and mutual trust and goodwill.”
When the shipment of 44,000 tonnes had arrived in July, Agriculture Minister Mahinda Amaraweera said that it would be distributed to the agricultural service centres soon.
While addressing Parliament, the Minister said that Sri Lanka was grateful to India which had helped the country that was going through a difficult time.
“The government of India had supplied the fertilizer ship to Sri Lanka, which had been ordered for use in India,” he added.
The Sri Lankan government has distributed the Indian fertilizer to paddy and maize farmers for the Yala season, one of the two seasons during which rice and vegetables are cultivated.
Experts and farmers have blamed former President Gotabaya Rajapaksa’s overnight decision to convert chemical fertilizer farming to organic in April 2021.
Although the decision was reversed, Sri Lanka with no dollar reserves, could not import fertilizer and many farmers had to give up farming leading to shortages of food specially rice supply to the country.
Public agitations with street fights against the Rajapaksas toppled the government, prompting the President to flee the country in July.
Amidst the continued economic crisis, India has so far provided financial assistance nearly $3.8 billion from January to purchase essential items including food, fuel, medicine and fertilizer.
Kerosene is used among several vulnerable communities and was earlier sold at a subsidized rate of 87 LKR…reports Asian Lite News
Amid the continuing economic crisis, Sri Lanka’s state-owned fuel distributor Ceylon Petroleum Corporation (CPC) has hiked the price of kerosene to cut losses.
The hike took effect on Sunday midnight, reports Xinhua news agency
Issuing a statement, the CPC said the price of a liter of kerosene increased by 253 LKR ($0.7) to 340 LKR.
Kerosene is used among several vulnerable communities and was earlier sold at a subsidized rate of 87 LKR.
Last month, Minister of Power and Energy Kanchana Wijesekera told Parliament that they planed to raise the price of kerosene and give a subsidy to low-income groups.
He said that the cost to produce a liter of kerosene is 421 LKR.
Selling kerosene at a subsidized rate is one of the main reasons why the CPC makes a loss, the Minister said.
Half the cases were reported from the Western province, comprising Colombo, Gampaha and Kalutara districts…reports Asian Lite News
Sri Lanka reported nearly 50,000 cases of dengue in the first eight months of 2022, local media reported.
According to the National Dengue Control Unit (NDCU), 49,941 people have been admitted to hospitals for dengue treatment in the past eight months.
Half the cases were reported from the Western province, comprising Colombo, Gampaha and Kalutara districts, Xinhua news agency reported quoting NDCU.
Colombo Municipal Council (CMC) Chief Medical Officer Ruwan Wijemuni told journalists that 12,754 cases were reported from Colombo, 7,496 from Gampaha and 4,731 from Kalutara.
Wijemuni said they are facing multiple challenges in their annual mosquito control programmes as the CMC lacks funds to purchase chemicals and insecticides used to control the dengue mosquito population.
Reported cases of dengue usually increase between June and August and between November and January, Wijemuni said.
He said mosquito eradication campaigns are hampered by fuel shortages as well.
After protesters stormed President’s house and office on July 9, Gotabaya went into hiding and later fled to the Maldives and then to the Singapore. ..reports Asian Lite News
Ex-Sri Lankan President Gotabaya Rajapaksa, who fled the country following protests against economic crisis in the island nation, will return to Sri Lanka on August 24.
Former Ambassador to Sri Lanka and Rajapaksa’s cousin Udayanga Weeratunga, who appeared before an investigation into a procurement of MiG aircraft during the civil war against Tamil rebels, said that the former President would return to the country. Gotabaya was the powerful Defence Secretary during the last stages of war.
“Gotabaya should return to the country and people will welcome him but he would not continue in politics as he is not suitable,” Weeratunga, who was critical of the role of Gotabaya as a President, told media.
“Gotabaya must be a good administrator but he is not suitable for politics,” Weeratunga who praised his other cousin and former President and Prime Minister Mahinda Rajapaksa said.
After protesters stormed President’s house and office on July 9, Gotabaya went into hiding and later fled to the Maldives and then to the Singapore. On a request of Sri Lankan government, Gotabaya entered Thailand last week.
The Thailand government denied reports that the Sri Lankan ex-president had sought asylum there.
The Thailand Foreign Ministry said it received a request from Rajapaksa to visit the country with no intention of seeking political asylum.
“Thailand saw no problem with Rajapaksa entering on a diplomatic passport, which would allow him to stay 90 days,” Thailand Foreign Ministry had stated.
The island nation has been facing unprecedented economic crisis.
OPS was expelled in a general council meeting of the AIADMK that was held on July 11 in Chennai…reports Asian Lite News
The family of former Tamil Nadu Chief Minister O. Panneerselvam, who stands expelled from the AIADMK, has handed over two cheques worth Rs 25 lakh each to the Additional Chief Secretary of Tamil Nadu, N. Muruganandam, for contribution towards the aid of Sri Lanka.
OPS, as Panneerselvam is popularly known, had announced in the state Assembly on April 29 that he would contribute an amount of Rs 50 lakh as aid to Sri Lanka.
The sons of OPS, Theni MP P. Ravindranath and V.P. Jayapradeep, handed over the cheques to Additional Chief Secretary N. Muruganandam, who is in charge of the finance department.
It may be noted that OPS is fighting a battle of existence in the AIADMK with his betenoire and former Chief Minister, Edappadi K. Palaniswami, who is presently the interim general secretary of the AIADMK.
OPS was expelled in a general council meeting of the AIADMK that was held on July 11 in Chennai.
OPS, according to party insiders, has been trying to forge an alliance with V.K. Sasikala to form a Thevar grouping to get back into the party fold.
Several Thevar groups had already issued statements that OPS, a Thevar, was marginalised in the party and that EPS, a Goundar, was taking over the reins of the AIADMK.
The Thevar community is a traditional support base for the AIADMK and if the community is estranged, it would affect the poll prospects of the party in Tamil Nadu where the Thevar community has significant say.
Emergency in Lanka
Sri Lankan President Ranil Wickremesinghe will not extend a state of emergency declared during the anti-government protests, his office announced on Wednesday.
After the improvement of the situation Wickremesinghe sees no necessity to extend the measure, the presidential office said in a statement.
The state of emergency gives broad powers to security forces to make arrests, reports dpa news agency.
It has been in effect for a month and is officially due to end this Thursday.
Amid the ongoing economic crisis, Sri Lanka witnessed months of widespread protests against the government and storming of several key buildings last month which eventually led to the resignation of former president Gotabaya Rajapaksa.
Wickremesinghe was picked as his successor in a parliamentary vote on July 20.
He has in part addressed shortages of gas and fuel and restored some political stability, and the protests have recently largely fizzled out.
Sri Lanka still faces an unprecedented economic crisis and is currently negotiating with the International Monetary Fund (IMF) to secure a bailout package.
