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Pros and cons of loans on lines of credit

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by Neville Ladduwahetty

An MP is reported to have claimed that several types of vegetables and yams have been imported at a cost of $293 million. Following this disclosure, Minister Mahinda Amaraweera has instructed the Department of Agriculture to investigate the allegation and submit a report.

The country from which vegetables and yams were imported has not been disclosed. Furthermore, although serious attempts have been made and continue to be made to restrict imports to ease pressure on the country’s foreign reserves, the fact remains that items listed in Agreements relating to Lines of Credit continue to be imported despite its impact on local production due to systemic shortcomings. This aspect is reflected with regard to items listed in the Lines of Credit extended by India.

INDIAN LINE of CREDIT

The document of the Ministry of Finance titled “Importation of Essential Items under Indian Credit Facility Operating Guidelines” prepared by the Indian Credit Facility Coordinating Unit (ICFCU) Ministry of Finance Sri Lanka 2022 in its Introduction states:

Introduction

1.” The Government of India has agreed to provide a USD 1,000,000,000 (United States Dollar one billion) credit to the GOSL. Accordingly, a credit facility agreement was signed with the State Bank of India (SBI) to obtain up to an aggregate sum of USD 1 billion for the purpose of importation of essential items from India. This facility will enable registered importers to import essential food items, essential pharmaceuticals and raw materials for local industries from India. The Ministry of Finance together with the Ministry of Trade will take necessary steps to implement this facility.

Once the importers are selected by the Ministry of Trade to import assigned quantities of selected items, they can place orders with the identified Indian suppliers. The importers are required to secure their order by placing a deposit at the General Treasury through their respective banks and once the imports are arrived and cleared by the customs, the Indian suppliers shall be paid with equal Indian Rupees through the SBI.

2. Objectives of the Facility 2.1.1 Cater the demand for essential items. 2.1.2 Supply of essential items in the market without a shortage. 2.1.3 Minimize the pressure on foreign exchange reserves.

SCOPE of ITEMS to be IMPORTED

It is evident from the foregoing that while the Finance Ministry expects to minimize the pressure on foreign exchange, it is the Trade Ministry that identifies the essential items and the supply of these to the market without shortage.

Referring to the Indian Credit Facility a report by the GLOBAL TRADE ALERT identifies the items to be imported and states:

“On 17 March 2022, the State Bank of India signed an agreement with the government of Sri Lanka to provide the latter with a credit facility of USD 1 billion. The credit will be used for the procurement of food, medicine, and other essential commodities. The Indian Finance Minister, Minister of External Affairs, and the Ministry of Finance shared this information on Twitter after the ministers had had a meeting with the Sri Lankan Finance Minister”.

According to some news reports, the credit will be used to procure the above goods from India (see related intervention). The State Bank of India is an Indian government-owned bank.

AGRICULTURAL PRODUCTS IMPORTED as per GLOBAL TRADE ALERT

Cereals; Vegetables; Fruits & nuts; Oilseeds & oleaginous fruits; 015Edible roots & tubers with high starch or inulin content; Stimulant, spice & aromatic crops; Pulses (dried leguminous vegetables); Sugar crops;

Raw milk; Eggs of hens or other birds in shell, fresh Meat & meat products

Prepared & preserved fish, crustaceans, molluscs; Prepared & preserved vegetables, pulses & potatoes; Prepared & preserved fruits & nuts; Animal fats; Vegetable oils; Margarine & similar preparations; Processed liquid milk, cream & whey; Other dairy products; Eggs, in shell, preserved or cooked; Grain mill products; Starches & starch products; sugars & sugar syrups n.e.c; Bakery products; Sugar & molasses; Cocoa, chocolate & sugar confectionery; Macaroni, noodles, couscous & similar farinaceous products; Food products n.e.c.

PROCEDURAL SHORTCOMINGS

Although the Introduction to the Indian Line of Credit states that it is to “import essential food items, essential pharmaceuticals and raw materials for local industries from India”, the task of identifying the items to be imported is left to the “Ministry of Finance together with the Ministry of Trade”.

However, it is the Ministry of Trade under Section 3.2 that “sets out the Committees Established under the Ministry of Trade for this facility a) Main Committee to select importers and Imports 3 b) Subcommittee to provide recommendations to the main committee on essential food items/ animal feed c) Subcommittee to provide recommendations to the main committee on essential pharmaceuticals d) Subcommittee to provide recommendations to the main committee on cement, apparel, special fertilizers and raw material for industries”.

The arrangement under Section 3.2 confirms that the task of identifying the items to be imported it left entirely to the Ministry of Trade. Furthermore, judging from the few sample items cited above by Global Trade Alert relating to Agriculture, it is clearly evident that Ministry of Trade has determined the items to be imported from India without consulting the interests of affected Ministries such as Agriculture, Health, Tourism etc.

In such a context the assurance given by the Minister of Agriculture to the Sri Lankan farmers that “the Government would not approve the import of any vegetables that can be grown in Sri Lanka”, should have been directed to the Ministry of Trade and not to the farmers. The unilateral action taken by the Ministry of Trade undermines not only the interests of local producers of agricultural products at a moment when Sri Lanka is desperately urging farmers to strengthen their efforts even further, but also sabotages efforts towards food security.

Under provisions of Section 4 “Implementation Mechanism”, once the ICFCU sends the supplier’s approved “Performa Invoice” to the Importer’s Bank, that Bank is expected to open an LC in INR with the Standard Bank of India (SBI). Therefore, according to the procedure stated above, if on arrival the goods fail quarantine clearance the Sri Lankan Importer would lose his deposit to secure his order according to the terms of the Line of Credit.

Had similar clearance criteria existed for items relating to pharmaceutical products that were supplied under the Indian Line of credit and diligently implemented, perhaps the deaths of some and for others to go blind could have been avoided; an issue that prompted the Medical Profession to protest against the quality of some of the medical products delivered under the Indian Line of Credit. Therefore, the agreement should contain provisions to check the quality of the products before they are shipped from India and deposits to secure orders to suppliers made refundable or for payment to the supplier to be withheld until quality assurance and clearance by Customs are completed.

IMPACT of LINES of CREDIT

There is no denying that goods imported from countries such as India and China are cheaper than what is produced locally. Furthermore, payment for goods imported is made in Indian rupees and dollars can be saved.

Their costs are low due to low costs of production, either due to lower wages or higher productivity or a combination of both. Whatever the reason may be, when goods from such countries are imported to countries with higher costs of production, the local producers are seriously disadvantaged because they lose their market share to low priced poorer quality imported products.

This is the case with Sri Lanka. Under such circumstances, the Lines of Credit become attractive mechanisms for countries with low production costs but whose product quality is such that meeting global competition is a challenge, to get rid of their products and win the gratitude and appreciation of countries such as Sri Lanka. This is no different to easing restrictions on imports of items such as tiles that are produced in Sri Lanka.

Therefore, when Lines of Credit on agricultural products that could be grown and processed in Sri Lanka become items to be imported under Lines of Credit from countries such as India, the development of the agricultural sector and its plans for expansion would be seriously impacted. On the other hand, if products that could be grown or produced locally are deleted from items to be imported under Lines of Credit, the government may not be in a position to not only meet the local consumer demands of the nation but to also to deal with the consequences of increase in the cost of living.

Notwithstanding such pros and cons inherent with Lines of Credit, the intention should be to treat them as interim measures with specified time bars, thus giving the local producers incentives and rewards to improve productivity. Therefore, since there is an urgent need to develop the agricultural sector, it is imperative that immediate measures be adopted by the committees and subcommittees appointed under Section 3.2 of the Indian Line of Credit to revise the agricultural products that were to be imported forthwith.

The need for such reviews and revisions apply to other products as well. The objective therefore should be that no item that could be grown, processed or produced in Sri Lanka should be imported from India if Sri Lanka is to not undermine the efforts of Sri Lankan farmers and the aspirations of entrepreneurs engaged in agriculture and overall economic development.

CONCLUSION

Lines of Credit such as those with India should be treated strictly as an interim measure to overcome a temporary crisis situation that Sri Lanka experienced if its long-term national interests are not to be undermined. On the other hand, if it is open ended as reflected with the 2022 Indian Line of Credit, it would be a fetter to ongoing and future economic growth and overall development. This is particularly so in the field of agriculture because it would not only dampen and discourage local efforts of nearly a third of Sri Lanka’s population engaged and committed to the field of agriculture, but also their very livelihoods. Furthermore, it is equally imperative that overall items to be imported under Lines of Credit be identified in a manner that does not hamper overall long-term growth plans.

Judging from the items listed by Global Trade Alert in respect of agricultural products to be imported as determined by the Committees and Subcommittees set up under Section 3.2 in the Indian Line of Credit, they appear to have been guided ONLY by the compulsion to meet demand without shortage. The fact that such narrow perspectives undermine the agendas of the Ministry of Agriculture does not appear to have occurred to the Ministry of Trade.

Equally, the Ministry of Finance has not realised any need for coordination between affected Ministries. What is starkly evident is the tendency for each Ministry to operate strictly within its respective domain regardless of the negative impact of such an attitude on the development plans of other Ministries.

Therefore, there is an urgent need to revisit the Indian Line of Credit developed in 2022 and to set up a coordinating body to identify the items to be imported including the relevant procedures if the national interests and development plans are to be protected. Such coordination should apply to other areas of economic activity as well. Failure to do so would amount to repaying another loan without an appropriate return to the country.



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Challenges faced by the media in South Asia in fostering regionalism

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Main speaker Roman Gautam (R) and Executive Director, RCSS, Ambassador (Retd) Ravinatha Aryasinha.

SAARC or the South Asian Association for Regional Cooperation has been declared ‘dead’ by some sections in South Asia and the idea seems to be catching on. Over the years the evidence seems to have been building that this is so, but a matter that requires thorough probing is whether the media in South Asia, given the vital part it could play in fostering regional amity, has had a role too in bringing about SAARC’s apparent demise.

That South Asian governments have had a hand in the ‘SAARC debacle’ is plain to see. For example, it is beyond doubt that the India-Pakistan rivalry has invariably got in the way, particularly over the past 15 years or thereabouts, of the Indian and Pakistani governments sitting at the negotiating table and in a spirit of reconciliation resolving the vexatious issues growing out of the SAARC exercise. The inaction had a paralyzing effect on the organization.

Unfortunately the rest of South Asian governments too have not seen it to be in the collective interest of the region to explore ways of jump-starting the SAARC process and sustaining it. That is, a lack of statesmanship on the part of the SAARC Eight is clearly in evidence. Narrow national interests have been allowed to hijack and derail the cooperative process that ought to be at the heart of the SAARC initiative.

However, a dimension that has hitherto gone comparatively unaddressed is the largely negative role sections of the media in the SAARC region could play in debilitating regional cooperation and amity. We had some thought-provoking ‘takes’ on this question recently from Roman Gautam, the editor of ‘Himal Southasian’.

Gautam was delivering the third of talks on February 2nd in the RCSS Strategic Dialogue Series under the aegis of the Regional Centre for Strategic Studies, Colombo, at the latter’s conference hall. The forum was ably presided over by RCSS Executive Director and Ambassador (Retd.) Ravinatha Aryasinha who, among other things, ensured lively participation on the part of the attendees at the Q&A which followed the main presentation. The talk was titled, ‘Where does the media stand in connecting (or dividing) Southasia?’.

Gautam singled out those sections of the Indian media that are tamely subservient to Indian governments, including those that are professedly independent, for the glaring lack of, among other things, regionalism or collective amity within South Asia. These sections of the media, it was pointed out, pander easily to the narratives framed by the Indian centre on developments in the region and fall easy prey, as it were, to the nationalist forces that are supportive of the latter. Consequently, divisive forces within the region receive a boost which is hugely detrimental to regional cooperation.

Two cases in point, Gautam pointed out, were the recent political upheavals in Nepal and Bangladesh. In each of these cases stray opinions favorable to India voiced by a few participants in the relevant protests were clung on to by sections of the Indian media covering these trouble spots. In the case of Nepal, to consider one example, a young protester’s single comment to the effect that Nepal too needed a firm leader like Indian Prime Minister Narendra Modi was seized upon by the Indian media and fed to audiences at home in a sensational, exaggerated fashion. No effort was made by the Indian media to canvass more opinions on this matter or to extensively research the issue.

In the case of Bangladesh, widely held rumours that the Hindus in the country were being hunted and killed, pogrom fashion, and that the crisis was all about this was propagated by the relevant sections of the Indian media. This was a clear pandering to religious extremist sentiment in India. Once again, essentially hearsay stories were given prominence with hardly any effort at understanding what the crisis was really all about. There is no doubt that anti-Muslim sentiment in India would have been further fueled.

Gautam was of the view that, in the main, it is fear of victimization of the relevant sections of the media by the Indian centre and anxiety over financial reprisals and like punitive measures by the latter that prompted the media to frame their narratives in these terms. It is important to keep in mind these ‘structures’ within which the Indian media works, we were told. The issue in other words, is a question of the media completely subjugating themselves to the ruling powers.

Basically, the need for financial survival on the part of the Indian media, it was pointed out, prompted it to subscribe to the prejudices and partialities of the Indian centre. A failure to abide by the official line could spell financial ruin for the media.

A principal question that occurred to this columnist was whether the ‘Indian media’ referred to by Gautam referred to the totality of the Indian media or whether he had in mind some divisive, chauvinistic and narrow-based elements within it. If the latter is the case it would not be fair to generalize one’s comments to cover the entirety of the Indian media. Nevertheless, it is a matter for further research.

However, an overall point made by the speaker that as a result of the above referred to negative media practices South Asian regionalism has suffered badly needs to be taken. Certainly, as matters stand currently, there is a very real information gap about South Asian realities among South Asian publics and harmful media practices account considerably for such ignorance which gets in the way of South Asian cooperation and amity.

Moreover, divisive, chauvinistic media are widespread and active in South Asia. Sri Lanka has a fair share of this species of media and the latter are not doing the country any good, leave alone the region. All in all, the democratic spirit has gone well into decline all over the region.

The above is a huge problem that needs to be managed reflectively by democratic rulers and their allied publics in South Asia and the region’s more enlightened media could play a constructive role in taking up this challenge. The latter need to take the initiative to come together and deliberate on the questions at hand. To succeed in such efforts they do not need the backing of governments. What is of paramount importance is the vision and grit to go the extra mile.

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When the Wetland spoke after dusk

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Environmental groups and representatives

By Ifham Nizam

As the sun softened over Colombo and the city’s familiar noise began to loosen its grip, the Beddagana Wetland Park prepared for its quieter hour — the hour when wetlands speak in their own language.

World Wetlands Day was marked a little early this year, but time felt irrelevant at Beddagana. Nature lovers, students, scientists and seekers gathered not for a ceremony, but for listening. Partnering with Park authorities, Dilmah Conservation opened the wetland as a living classroom, inviting more than a 100 participants to step gently into an ecosystem that survives — and protects — a capital city.

Wetlands, it became clear, are not places of stillness. They are places of conversation.

Beyond the surface

In daylight, Beddagana appears serene — open water stitched with reeds, dragonflies hovering above green mirrors.

Yet beneath the surface lies an intricate architecture of life. Wetlands are not defined by water alone, but by relationships: fungi breaking down matter, insects pollinating and feeding, amphibians calling across seasons, birds nesting and mammals moving quietly between shadows.

Participants learned this not through lectures alone, but through touch, sound and careful observation. Simple water testing kits revealed the chemistry of urban survival. Camera traps hinted at lives lived mostly unseen.

Demonstrations of mist netting and cage trapping unfolded with care, revealing how science approaches nature not as an intruder, but as a listener.

Again and again, the lesson returned: nothing here exists in isolation.

Learning to listen

Perhaps the most profound discovery of the day was sound.

Wetlands speak constantly, but human ears are rarely tuned to their frequency. Researchers guided participants through the wetland’s soundscape — teaching them to recognise the rhythms of frogs, the punctuation of insects, the layered calls of birds settling for night.

Then came the inaudible made audible. Bat detectors translated ultrasonic echolocation into sound, turning invisible flight into pulses and clicks. Faces lit up with surprise. The air, once assumed empty, was suddenly full.

It was a moment of humility — proof that much of nature’s story unfolds beyond human perception.

Sethil on camera trapping

The city’s quiet protectors

Environmental researcher Narmadha Dangampola offered an image that lingered long after her words ended. Wetlands, she said, are like kidneys.

“They filter, cleanse and regulate,” she explained. “They protect the body of the city.”

Her analogy felt especially fitting at Beddagana, where concrete edges meet wild water.

She shared a rare confirmation: the Collared Scops Owl, unseen here for eight years, has returned — a fragile signal that when habitats are protected, life remembers the way back.

Small lives, large meanings

Professor Shaminda Fernando turned attention to creatures rarely celebrated. Small mammals — shy, fast, easily overlooked — are among the wetland’s most honest messengers.

Using Sherman traps, he demonstrated how scientists read these animals for clues: changes in numbers, movements, health.

In fragmented urban landscapes, small mammals speak early, he said. They warn before silence arrives.

Their presence, he reminded participants, is not incidental. It is evidence of balance.

Narmadha on water testing pH level

Wings in the dark

As twilight thickened, Dr. Tharaka Kusuminda introduced mist netting — fine, almost invisible nets used in bat research.

He spoke firmly about ethics and care, reminding all present that knowledge must never come at the cost of harm.

Bats, he said, are guardians of the night: pollinators, seed dispersers, controllers of insects. Misunderstood, often feared, yet indispensable.

“Handle them wrongly,” he cautioned, “and we lose more than data. We lose trust — between science and life.”

The missing voice

One of the evening’s quiet revelations came from Sanoj Wijayasekara, who spoke not of what is known, but of what is absent.

In other parts of the region — in India and beyond — researchers have recorded female frogs calling during reproduction. In Sri Lanka, no such call has yet been documented.

The silence, he suggested, may not be biological. It may be human.

“Perhaps we have not listened long enough,” he reflected.

The wetland, suddenly, felt like an unfinished manuscript — its pages alive with sound, waiting for patience rather than haste.

The overlooked brilliance of moths

Night drew moths into the light, and with them, a lesson from Nuwan Chathuranga. Moths, he said, are underestimated archivists of environmental change. Their diversity reveals air quality, plant health, climate shifts.

As wings brushed the darkness, it became clear that beauty often arrives quietly, without invitation.

Sanoj on female frogs

Coexisting with the wild

Ashan Thudugala spoke of coexistence — a word often used, rarely practiced. Living alongside wildlife, he said, begins with understanding, not fear.

From there, Sethil Muhandiram widened the lens, speaking of Sri Lanka’s apex predator. Leopards, identified by their unique rosette patterns, are studied not to dominate, but to understand.

Science, he showed, is an act of respect.

Even in a wetland without leopards, the message held: knowledge is how coexistence survives.

When night takes over

Then came the walk: As the city dimmed, Beddagana brightened. Fireflies stitched light into darkness. Frogs called across water. Fish moved beneath reflections. Insects swarmed gently, insistently. Camera traps blinked. Acoustic monitors listened patiently.

Those walking felt it — the sense that the wetland was no longer being observed, but revealed.

For many, it was the first time nature did not feel distant.

Faunal diversity at the Beddagana Wetland Park

A global distinction, a local duty

Beddagana stands at the heart of a larger truth. Because of this wetland and the wider network around it, Colombo is the first capital city in the world recognised as a Ramsar Wetland City.

It is an honour that carries obligation. Urban wetlands are fragile. They disappear quietly. Their loss is often noticed only when floods arrive, water turns toxic, or silence settles where sound once lived.

Commitment in action

For Dilmah Conservation, this night was not symbolic.

Speaking on behalf of the organisation, Rishan Sampath said conservation must move beyond intention into experience.

“People protect what they understand,” he said. “And they understand what they experience.”

The Beddagana initiative, he noted, is part of a larger effort to place science, education and community at the centre of conservation.

Listening forward

As participants left — students from Colombo, Moratuwa and Sabaragamuwa universities, school environmental groups, citizens newly attentive — the wetland remained.

It filtered water. It cooled air. It held life.

World Wetlands Day passed quietly. But at Beddagana, something remained louder than celebration — a reminder that in the heart of the city, nature is still speaking.

The question is no longer whether wetlands matter.

It is whether we are finally listening.

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Features

Cuteefly … for your Valentine

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Indunil with one of her creations

Valentine’s Day is all about spreading love and appreciation, and it is a mega scene on 14th February.

People usually shower their loved ones with gifts, flowers (especially roses), and sweet treats.

Couples often plan romantic dinners or getaways, while singles might treat themselves to self-care or hang out with friends.

It’s a day to express feelings, share love, and make memories, and that’s exactly what Indunil Kaushalya Dissanayaka, of Cuteefly fame, is working on.

She has come up with a novel way of making that special someone extra special on Valentine’s Day.

Indunil is known for her scented and beautifully turned out candles, under the brand name Cuteefly, and we highlighted her creativeness in The Island of 27th November, 2025.

She is now working enthusiastically on her Valentine’s Day candles and has already come up with various designs.

“What I’ve turned out I’m certain will give lots of happiness to the receiver,” said Indunil, with confidence.

In addition to her own designs, she says she can make beautiful candles, the way the customer wants it done and according to their budget, as well.

Customers can also add anything they want to the existing candles, created by Indunil, and make them into gift packs.

Another special feature of Cuteefly is that you can get them to deliver the gifts … and surprise that special someone on Valentine’s Day.

Indunil was originally doing the usual 9 to 5 job but found it kind of boring, and then decided to venture into a scene that caught her interest, and brought out her hidden talent … candle making

And her scented candles, under the brand ‘Cuteefly,’ are already scorching hot, not only locally, but abroad, as well, in countries like Canada, Dubai, Sweden and Japan.

“I give top priority to customer satisfaction and so I do my creative work with great care, without any shortcomings, to ensure that my customers have nothing to complain about.”

Indunil creates candles for any occasion – weddings, get-togethers, for mental concentration, to calm the mind, home decorations, as gifts, for various religious ceremonies, etc.

In addition to her candle business, Indunil is also a singer, teacher, fashion designer, and councellor but due to the heavy workload, connected with her candle business, she says she can hardly find any time to devote to her other talents.

Indunil could be contacted on 077 8506066, Facebook page – Cuteefly, Tiktok– Cuteefly_tik, and Instagram – Cuteeflyofficial.

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