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Sri Lanka economy managed in ‘alternative’ way: CB Governor
ECONOMYNEXT – Sri Lanka’s economy is managed through new policies in an ‘alternative way’ but critics are using the downturn seen in the second quarter of 2020 to make, doom and gloom predictions for 2021, Central Bank Governor W D Lakshman said on Friday.
The alternative policy now being deployed seemed to be criticized based on a political or ideological basis in his view, he said.
It was important to have a positive view he said. A pick-up in business confidence has been seen in the purchasing managers’ index.
Alternative Policy
“It is important to note the government’s determination to move away from the, so far, heavy dependence on imports for foodstuffs,” he said. “That is indeed a really significant long term policy approach despite in the short run there is an adverse impact in the prices.”
Sri Lanka was already growing enough turmeric he said. Sri Lanka banned the import of turmeric and as prices shot up to 200 rupees for 50 grams (about 4,000 rupees a kilogram) smuggling commenced.
But now nobody is talking about turmeric, he said.
The Navy was deployed to stop smuggling. Sri Lanka had seen similar smuggling in the 1970s.
Most negative analysis and critiques were based on the performance of the economy in the second quarter of 2020, but conditions for 2021 were different, he said.
The country was now using limited closures of areas instead of national lockdowns and business activity was picking up with people starting to move around.
Tourism, which was the most badly hit was also now starting to unlike in 2020, he said.
The government was moving towards a mass vaccination campaign which would also help.
The International Monetary Fund has forecast global economic growth to pick up to around 5.5 percent in 2021.
Pick Up
Gross domestic growth of 5.5 to 6.0 percent in 2021 was expected, recovering from a 3.9 percent contraction in 2019. The low base will also help the recovery number, Governor Lakshman said.
Per capita GDP is expected to be 4,000 dollars.
Inflation of 4-6 percent is targeted in 2020. Private credit is expected to grow by 850 billion rupees.
There were challenges in the fiscal side and external sector. But we will repay debt and maintain our unblemished record of debt repayment.
Year end gross official reserves were targeted at 5.5 billion US dollars. Negotiations were underway with multilateral lenders, and foreign central banks as well as commercial banks for credit and swaps, details of which would be announced as they are finalized, he said.
It was not correct to simply add debt repayments and compare against foreign reserves. The foreign share of central government debt was expected to fall to 35 percent in 2021 according to Central Bank projections. In 2020, foreign loans were repaid partly by using foreign reserves and selling Treasury bills to the Central Bank. Despite stronger private credit a 500 million dollar surplus in the current account is also forecast.
Inflows in 2021
Exports are targeted tat 13 billion US dollars, with apparel at 6.0 billion USD, tea 1.5 billion dollars, gem and jewelry 1 billion dollars. Imports are expected to be 17 billion USD. Among services, IT/BPO is expected to be 1.75 billion USD and tourist earnings 1.75 billion USD.
Worker remittances would be around 7.5 billion US dollars and foreign direct investments would be about 2.0 billion US dollars. Port City lease sales would bring in an additional billion US dollars.
Sri Lanka had recorded a surplus in the current account for part of 2020 for the first time in decades.
In 2020 up to October the government had repaid foreign debt on a net basis. Up to August 2020, private credit was negative, and the second quarter GDP was negative, which will also help create a current account surplus, analysts say.
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Bid for Basil’s extradition nears final stage: Police
Govt. is finalising extradition proceedings against Basil to have him stand trial here in respect of several cases
By Norman Palihawadane
The process of having former Minister Basil Rajapaksa extradited from the US to Sri Lanka was being finalised, Police Headquarters sources disclosed yesterday.
The government has formally sought assistance from the United States government to extradite former Minister Basil Rajapaksa, as multiple courts have reissued arrest warrants over his failure to appear before them in connection with two separate criminal cases, a senior police officer told The Island.
The officer, speaking on condition of anonymity, said matters pertaining to obtaining US government authorities’ assistance to extradite Rajapaksa were now being finalised.
Police headquarters sources said law enforcement agencies were currently evaluating red notices, which request the location and provisional arrest of a person pending formal extradition.
The CID and Police Headquarters earlier initiated steps to seek INTERPOL assistance to secure Rajapaksa’s return to Sri Lanka to face court proceedings relating to the two cases in which arrest warrants have been issued against him.
Rajapaksa is believed to be residing in Los Angeles, United States.
The Matara Chief Magistrate’s Court on July 21, 2026, reissued an arrest warrant for Rajapaksa after he failed to appear before court for the second time in connection with a case involving the alleged purchase of a 1.5-acre coconut estate on Eliyakanda Road in the Brown’s Hill area of Matara.
The case relates to the purchase of the property for Rs. 60 million.
The case was filed by the Police Financial Crimes Investigation Division and names Basil Rajapaksa and several other accused, including Ayoma Galappaththi, identified in court reports as the sister of Rajapaksa’s wife, Tissa Galappaththi, and Muditha Jayakody.
However, officials acknowledged that seeking US assistance would only begin a formal international process and would not automatically result in Rajapaksa’s arrest or return to Sri Lanka. Sri Lankan authorities would need to submit court orders, details of the alleged offences, and other supporting documents through the appropriate diplomatic and judicial channels. Any request would then be considered by the relevant US authorities under American law and applicable legal arrangements.
Sources at the Foreign Ministry said sealed correspondence had been exchanged between Sri Lanka’s Ministry of Foreign Affairs and the Legal Department of the US State Department relating to corruption allegations against members of the Rajapaksa family residing in the United States.
The legal foundation for any extradition is the bilateral treaty between Sri Lanka and the United States signed in Washington on September 30, 1999. The treaty applies the principle of dual criminality, meaning authorities must show that the underlying conduct amounts to a crime in both countries. Rajapaksa’s status as a United States citizen would not, on its own, make him immune from a valid request under the treaty’s provisions.
News
High blood pressure, diabetes lead to about 80% of deaths in Sri Lanka
Non-communicable diseases (NCDs) account for 80% of all deaths in Sri Lanka, with high blood pressure and diabetes among the leading causes, Secretary to the Ministry of Health and Mass Media, Dr. Anil Jasinghe, said early this week.
Dr. Jasinghe pointed out that the two conditions were interrelated and could lead to a range of serious health complications, with heart attacks being among the most severe consequences.
Dr. Jasinghe made these remarks while attending the commencement of construction of a modern Cardiac Care Complex at the Anuradhapura Teaching Hospital on Wednesday (16).
The Health and Mass Media Ministry Secretary said:
“The main issue is that these two diseases are interconnected and cause a range of complications in a person’s health. Looking at the current situation in Sri Lanka, only around 50% of those suffering from high blood pressure are under effective control. Similarly, only around 25% of diabetic patients are under proper control. As a result, this has now become a major problem in society.
“The most serious complication associated with both these diseases is Myocardial Infarction (MI), or a heart attack. This has also become the
leading complication. So, how do we control this modern epidemic? This is the biggest challenge before us.
“While establishing modern facilities across the country, our health system must also recognize the changes that have taken place in the demographic structure of our population and disease patterns. Accordingly, our health system must be adapted to suit these changing circumstances.
“Under the policies of the government led by the President and the guidance of the Minister of Health, the Ministry of Health and Mass Media is currently implementing a major programme in this regard. Its three main components are Arogya, Cluster Systems and High-End Care Institutions, which need to be developed to suit the requirements of our health system.”
News
Ex-NTC chief in remand over 56 bus permits
Former National Transport Commission (NTC) Chairman Renuka Perera was remanded until September 29 by the Colombo Magistrate’s Court after being arrested by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) over alleged corruption in the issuance of bus route permits.
Colombo Chief Magistrate Asanga S. Bodaragama issued the remand order after considering submissions by CIABOC officials and defence counsel.
According to CIABOC, Perera was arrested over allegations that he unlawfully issued route permits during his tenure as NTC Chairman, causing a financial loss to the government while conferring an unlawful benefit on an outside party.
Perera was arrested around 9.55 am yesterday (17) over allegations that he issued 56 passenger transport service permits for buses to operate on the Southern Expressway in violation of prescribed procedures and without collecting the applicable annual fees as a single payment.
CIABOC said the alleged offences were committed in contravention of the National Transport Commission Act No. 37 of 1991 and recommendations contained in a Cabinet decision dated September 19, 2014.
Perera, a senior member of the SLPP, currently serves as the party’s Administrative Secretary. He previously served as Chairman of state-owned dairy producer and marketer MILCO.
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