Business

IPS Proposals for the Interim Budget

Published

4 years ago

2022/08/2

Food related issues coming to the fore in Sri Lanka (File pic)

Ahead of the presentation of the Interim Budget, the Institute of Policy Studies of Sri Lanka (IPS) has recommended policy proposals for inclusion in the forthcoming Budget. Some key policy issues and recommendations follow.

Trade Policy

Despite strict import controls, Sri Lanka’s trade deficit in merchandise goods widened in 2021. The slight increase was mainly due to the sharp price movements in the world market, with the import reduction patterns across categories being consistent with the post-pandemic controls. As consumer goods imports are prioritised, including food imports, it generates two key undesirable impacts. First, it impacts food security and nutrition needs. Second, high food prices will incentivise a further resource shift – such as labour – to agriculture, raise wage costs for sectors like manufacturing and impact their competitiveness. In this context, two key recommendations are:

Prioritise imports for industrial expansion and food security needs: IPS research shows that about 88% of food imports are now subject to quantitative or price restrictions. The Special Commodity Levy (SCL) on items such as canned fish, green/black gram, cowpea, palm oil, and black gram flour should be removed to ensure that food security and caloric needs are met. Licensing restriction on maize imports which feeds poultry production costs must also be revisited. Sri Lanka must prioritise fertiliser imports and reintroduce fertiliser subsidies to paddy and vegetable farmers to raise productivity and prevent a resource shift that will impact overall economic efficiency.

Focus on increasing exports in sectors that use minimum foreign raw materials: There are certain products in which Sri Lanka enjoys a comparative advantage in global markets, requiring low imported raw materials in production such as tea, spices and mineral products like graphite. To meet immediate needs, bottlenecks such as fertiliser shortages should be addressed to raise productivity and export earnings whilst mineral resources can be auctioned to increase revenues.

Education Policy

The COVID-19 pandemic and the current economic crisis have severely affected the education sector. Health concerns, union action, social unrest and transport issues have resulted in frequent school closures. Inadequate budget allocations and improper recruitment of teachers have deteriorated the quality of education. Recent news items have highlighted difficulties faced by schools due to shortages of paper and other materials necessary for the functioning of schools. Further, deterioration of school facilities has affected the effective functioning of schools. Interruptions to school-based relief measures such as the school meal programmes can also increase school dropouts and malnutrition. Data from the Ministry of Finance reveals that public investment in education has remained just above 1%. Of this minuscule allocation, a large share is spent on teacher salaries. Frequent absorptions to the teaching cadre to provide jobs to unemployed graduates has worsened this situation crowding out funds from other necessary education inputs.

The government has recommended online lessons as a solution to difficulties in conducting on-site school classes. But IPS research shows that the access to online lessons is not equitable due to poor access to the internet, lack of necessary devices and high cost of data. In this context, two key recommendations are:

Increase public investment in education: Public investment in education should be increased and an adequate share of such investments should be dedicated to increasing the quality of education delivery such as the maintenance of school facilities, paper, and maintenance of school-centred relief programmes (e.g. school meals). This can be done by putting a cap on the share of government spending on salaries and wages of total expenditure in education. Given the lower enrolment rates for A-Levels, the government should consider introducing targeted financial assistance programmes for deserving children from poorer families to continue their studies.

Minimise school closures due to transport issues: Increase the existing fleet of school buses and provide adequate fuel for school buses to limit school closures due to transport issues. Measures should also be taken to ensure that children do not travel long distances to attend schools so that schools can function uninterrupted even in times of crisis.

Food Security and Nutrition Policy

IPS research shows that long-term environmental, social, and economic trends heightened by domestic and international challenges have eroded the resilience of Sri Lanka’s agri-food systems. On the global front, the COVID-19 pandemic and the Russia-Ukraine conflict are generating a global recession with high world market prices of food, oil, and fertiliser. At the local level, crop failures have resulted from poor government policies such as the chemical fertiliser import ban. Inflationary pressures arising from a combination of factors including excessive money printing and the sudden free float of the exchange rate have also taken a toll on domestic food prices and food supply. All these have resulted in low farm incomes, high food prices, food shortages and hunger and malnutrition. In this context, two key recommendations are:

Introduce a targeted food ration scheme for the poor and strengthen nutritional assistance: As an immediate measure to help the poor and marginalised who are the most vulnerable, introduce a targeted food ration scheme covering essentials like rice, wheat flour and dhal. Strengthen nutritional assistance programmes such as the School Meals programme, ‘Thriposha’ and ‘Poshana Malla’. Support from the World Food Programme (WFP), Food and Agriculture Organization (FAO) and regional (SAARC) and bilateral sources can be sought for this purpose.

Promote community gardens in the short term: Promote community gardens that include neighbourhood community gardens and school gardens. The way a community garden is set up and maintained can vary greatly from one to the other. These can be established in an empty land and the neighbours can look after it. It can be even in private land where the neighbours can share the harvest in exchange for labour. Some examples of community gardens include Virginia Avenue Community Garden, Washington, D.C., and Community Gardens Australia.

Health Policy

Sri Lanka’s health system is recognised as an efficient, low-cost model. However, changing demographic and disease patterns along with domestic finance issues threaten the sustainability of the health sector. Inadequate service provision in the public sector and shortages of medicine and equipment are driving people towards the private sector causing inequities in access to healthcare, as not all can afford private sector healthcare. Over half of the existing budget is allocated for wages leaving very little resources for all other health inputs. As a result, investments in this vital sector have been curtailed over the past few years. Further, changing lifestyles have exacerbated the risk factors for non-communicable diseases (NCDs). Four major behavioural risk factors directly contribute to the escalating NCDs in the country: tobacco use, physical inactivity, alcohol misuse, and unhealthy dietary patterns. In this context, two key recommendations are:

(To be continued)

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Business

Ceylon Chamber welcomes IMF review approval, urges continued reform momentum amid external pressures

Published

9 hours ago

2026/05/30

Thilina Walpola

The Ceylon Chamber of Commerce welcomes and commends the Government of Sri Lanka on the successful completion and approval of the 5th and 6th Reviews under the International Monetary Fund (IMF) Extended Fund Facility (EFF) programme. This milestone enables Sri Lanka to access approximately USD 695 million in financing support, reinforcing confidence in the country’s ongoing economic recovery and reform agenda.

At a time of heightened global uncertainty and external sector pressures arising from the conflict in the Middle East, the Chamber believes this approval sends a strong positive signal to markets, investors, and the private sector. Continued engagement with the IMF programme remains critical to preserving macroeconomic stability, restoring investor confidence, and strengthening Sri Lanka’s external resilience.

The Chamber notes that the IMF review underscores the importance of sustaining structural reforms, including improving the investment climate, enhancing competitiveness, and accelerating infrastructure and institutional reforms that support private sector-led growth.

At the onset of the Middle East crisis, The Ceylon Chamber of Commerce submitted recommendations to the Government addressing several immediate economic and energy-related risks. These recommendations remain highly relevant in managing emerging pressures on the exchange rate, energy costs, and overall external sector stability.

In line with the Ceylon Chamber’s earlier recommendations, the following priority measures are reiterated:

Strengthen and optimize the fuel QR system as a digital platform to improve efficiency and facilitate better targeted support mechanisms for priority groups such as public transport and school transport operators, while maintaining cost-reflective pricing principles.

Continue to ensure clear and consistent communication on the direction of economic policy to further reinforce confidence among businesses and investors, support orderly exchange rate expectations, reduce market uncertainty, and sustain overall macroeconomic stability.

The Ceylon Chamber also emphasises the importance of accelerating reforms that improve Sri Lanka’s competitiveness in trade, investment, tourism, logistics, and digitalisation. Advancing these reforms will be essential to sustain and improve macroeconomic stabilisation and resilience. The Ceylon Chamber has also urged its members to act responsibly during this critical period by supporting measures that preserve economic stability and safeguard Sri Lanka’s long-term interests.

The Ceylon Chamber of Commerce remains committed to actively engaging with policymakers and stakeholders in supporting progressive economic reforms, the successful completion of future IMF programme reviews, and Sri Lanka’s transition towards a resilient and competitive economy.

Business

Abans Finance launches maiden debenture issue listing on CSE

Published

9 hours ago

2026/05/30

Thilina Walpola

(Left – Right): Upul Gunasekara, Deputy CEO – Abans Finance PLC (Abans Finance); Danushka De Silva, Director – Abans Finance; Rajeeva Bandaranaike, CEO – Colombo Stock Exchange (CSE); K.J.C. Perera, Chairman – Abans Finance; Thulci Aluwihare, Director – Abans Finance; Nirosh Madawala, CEO of Abans Finance; Ms. Kaushini Laksumanage, Deputy CEO – NDB Investment Bank Ltd; Ms. Nilupa Perera, Chief Regulatory Officer – CSE; Prashad Samantha, Chief Financial Officer – Abans Finance.

Abans Finance PLC (Abans Finance) recently marked the official listing of its maiden 13,384,000 debentures on the Colombo Stock Exchange (CSE) with a bell ringing and market opening ceremony held at the CSE trading floor.

The offer for subscription for the initial issue of ten million (10,000,000) listed, rated, senior, unsecured, redeemable five-year (2026/2031) debentures of LKR 100/- each, was rapidly oversubscribed, having received subscriptions for 13,384,000 debentures for a value of LKR, 1,338,400,000/-, reflecting strong investor confidence in Abans Finance’s strengths and the debt market.

Abans Finance is a licensed non-banking financial institution and subsidiary of the Abans Group and currently operates with nine branches, nine customer centres and four kiosks in addition to the head office, leveraging on the island wide presence of Abans Group to reach customers across the island. Abans Finance services include finance leasing, hire purchase, mortgage loans, personal loans, real estate development and acceptance of time and savings deposits. Founded in 2006, the Abans Finance was also listed on the CSE in 2011 and enjoys a Fitch Credit Rating of A – (lka) Stable Outlook.

Through its first debenture, which carries an “A-” (lka) rating from Fitch Ratings Lanka Limited and was managed by NDB Investment Bank Ltd, Abans Finance aims to expand its asset base, strengthen loan portfolios, grow its presence by leveraging the Abans Group financial ecosystem to drive digital transformation and deliver integrated solutions.

K.J.C. Perera, Chairman of Abans Finance PLC and keynote speaker at the ceremony, remarked upon the company’s debenture issue, commenting “This milestone underscores strong investor confidence in Abans Finance PLC and strengthens our capital base as we advance our strategy for sustainable growth and innovation.”

Delivering his welcome address at the event Rajeeva Bandaranaike, CEO of CSE, remarked upon the debenture listing, stating: “Today’s listing of the debt issue by Abans Finance PLC reflects a broader engagement by companies to use the capital market for their funding requirements. More recently we have seen a fair growth in the primary issuances of debt. In 2024 approximately LKR 95 Bn was from debt. In 2025, LKR 113 Bn was raised through debt – and in 2026 approximately LKR 60 bn was raised through debt.”

2025 saw 22 debt listings including 3 new companies listing on the exchange by way of debt initial public offerings (IPOs) including several firsts in the country from GSS+ debt instruments (Green, Social, Sustainability linked), Shariah compliant debt instruments and High Yield Bonds, with access to investors and brokers facilitated by a fully digitized CSE platform, which can be accessed through CSE’s website and mobile app.

Business

Sun Siyam Pasikudah brings community together for coastal clean-up

Published

10 hours ago

2026/05/30

Thilina Walpola

Sun Siyam Pasikudah, Sri Lanka’s five-star boutique retreat and part of the Privé Collection within Sun Siyam, reinforced its commitment to community and conservation with a beach cleanup along Pasikudah Bay on 08th May 2026. Held under the group-wide Sun Siyam Cares umbrella, guided by “Caring for our People, Nature and Culture”, the morning brought together school students, hotel staff, and in-house guests for hands-on environmental action.

Unlike typical cleanup drives, this initiative placed education at its heart. Students from a local school joined guided sessions on coastal ecosystems, the impact of marine litter on biodiversity, and the role every individual plays in protecting Sri Lanka’s coastline, giving young people from the surrounding community a firsthand understanding of why this bay matters, ecologically, culturally, and economically.

Arshed Refai, General Manager of Sun Siyam Pasikudah, said: “What makes this cleanup different is who we did it with. When a child understands why this bay is worth caring for, its ecology, its beauty, what it means to the families who live here, that knowledge stays with them. That is the most sustainable investment we can make.”

Pasikudah Bay’s shallow, crystal-clear turquoise waters and the Eastern Province’s rich marine and cultural heritage, from centuries-old mosques and kovils to the vibrancy of Kattankudy, make it a coastline worth protecting. Participants spread across the shoreline collecting and sorting waste in line with the resort’s zero-waste management principles, while guests noted the activity deepened their connection to the destination beyond a typical resort experience.

Sun Siyam Pasikudah holds the Travelife Gold Certification across 147 criteria spanning energy, water, wildlife, waste, and community welfare. The resort grows over 38 varieties of fruits, vegetables, and herbs on its organic farm, operates solar-powered installations, has eliminated single-use plastics entirely, and sources locally wherever possible. The Sun Siyam Cares Fund supports CarePhant, backing the care of Kalo, a young elephant at the Elephant Transit Home in Udawalawe, ahead of his return to the wild in 2029.

As part of Sun Siyam Resorts, named Most Influential Sustainable Hotel Group of the Year at the 2025 GO TRAVEL Awards, initiatives like this reflect a sustained, year-round commitment to ensuring tourism on the East Coast is a force for renewal, not depletion. For reservations, visit www.sunsiyam.com/sun-siyam-pasikudah or call 065 205 5555.