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Automakers wait and watch as crisis worsens 



Top executives at Tata Motors, Bajaj Auto, TVS Motor and Mahindra Finance which have operations in Sri Lanka said it’s a challenging environment to do business but they remain committed to the Sri Lankan market, and are hoping that the situation will improve over the next 3-4 months, Times of India reported.

Experts said some companies may mull de-scaling operations or even pull out of the country if the situation doesn’t improve in the near to medium term.

The distributors said there has been a reduction in per day production as the political and economic crisis escalated in the country.

They said the ground situation is very different.

“We have to fend for ourselves and get foreign exchange to import kits and keep assembly lines running,” said Nalin Welgama,Executive Chairman of Ideal Group, a leading automobile dealer.

Import of vehicle kits is currently heavily restricted in Sri Lanka owing to the foreign currency shortage. Industry executives said that shipment of vehicle kits, including those of light commercial vehicles, trucks and buses, has declined sharply, as the country grapples with precariously low forex reserves and fuel shortage.

While Tata Motors has been exporting vehicle kits to distributors in Sri Lanka, others such as Mahindra & Mahindra, Ashok Leyland and TVS Motor have local assembly operations in the country.

“We have to go with the flow,” said Rakesh Sharma, executive director of Bajaj Auto.

“TVS, through its partnership with TVS Lanka, remains committed to the potential of the Sri Lankan market. While the current situation presents challenges, we are hopeful that they will be overcome,” said Rahul Nayak, vice president, international business, TVS Motor Company. “In the meantime we are committed to taking care of our existing customers with service and spare parts.”

Ramesh Iyer, vice chairman of Mahindra Finance, said the company is monitoring the situation and taking necessary precautions. “The situation in Sri Lanka has led to a natural slowdown in business operations. Our commitment to the Sri Lanka market is for the long term and we are hopeful that the situation will improve soon, he said.

People in the know said that with the collapse of the administration, there is very little financing activity at the NBFCs and most are instead giving loans against gold.

A spokesperson for Tata Motors said the company is hopeful that the country recovers from the crisis soon. The company sells a wide range of products in Sri Lanka–from the 750-kg Ace to the 45-tonne Prima trucks.

In January this year, the Sri Lankan government had approved the purchase of 500 buses from Ashok Leyland for its transport board. In August 2019, Mahindra & Mahindra had set up assembly operations in Sri Lanka with the Ideal Group to produce the KUV 100 mini sport utility vehicle (SUV) and Bolero Maxi pickup truck.

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Protesters ask PM to serve justice for May 09 attack



ECONOMYNEXT – Hundreds of anti-government protesters agitated in front of Prime Minister Ranil Wickremesighe ’s office Colombo demanding justice for May 09 attack by the supporters of previous prime minister Mahinda Rajapaksa and immediate measures to overcome ongoing economic crisis to prevent a looming social unrest.

The youth-led groups which had been protesting near presidential secretariat and prime minister’s official residence in the heart of commercial Colombo shifted neat the prime minister’s office and shouted against the new government’s inaction against the brutal attack at unarmed and peaceful protesters by Rajapaksa supporters on May 09.

They demanded the new Prime Minister Wickremesinghe to implement the rule of law without being biased to any parties and serve the country.

Rukshan, a 25 years old protester said, as per the initial demands of their protests, former Prime Minister Mahinda Rajapaksa resigned from his position, but his successor should do his duties towards the country and the people without trying to protect corrupt politicians.

“When we started the protest back in April our main demand was to bring all Rajapaksas before justice and get all the wealth they have stolen from the common people of this country,”  Rukshan told Economy Next.

The protest started around mid-day on Thursday (26) and protesters’ route was blocked by police barricades on the main road in front of the prime minister’s office.

The protesters, however, withdrew from their positions and regrouped at a nearby road to go towards the Wickremesinghe’s office.

However, by the time the protesters regrouped, a court order was issued by the Fort Magistrate to stop the protest due to inconvenience to the public.

“Ranil Wickramasinghe should remember why he is here now. We’re not asking him to resign. He is here to do his duty towards this country and its people,” Rukshan said.

“On May 09, we were attacked but no justice has been served yet. That is the main reason we came today to the prime minister’s office,” he said.

“We still see queues for medicine, fuel, and gas. To be honest, there is no medicine in the market. No medicine for cancer patients. If you get bitten by a dog, then there is no medicine for you. They (the market) don’t have any of that.”

Wickremesinghe has been working over a new budget and discussing with international partners to ensure uninterrupted supply of essentials, officials close to him have said. However, it will take time, they say.

Rukshan said the country is running due to the state workers, who are working as they are being paid salaries after the government’s excess money printing.

“When that stops, then there will definitely be a revolution in this country,” he said.

“When a person goes to office in the morning, there is no fuel for the vehicle, or no public transport available. They get late and the salaries are being cut because of that. And when they come home, they don’t have gas to cook a meal.”

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Weerawansa’s wife gets two years for passport offence



Her lawyers file appeal challenging sentence

Colombo Chief Magistrate Buddhika Sri Ragala on Friday sentenced Shashi Weerawansa the wife of former minister Wimal Weerawansa to two years in prison. Shashi was found guilty of using falsified documents to obtain a passport.

The Magistrate also ordered the accused to pay a fine of Rs. 100,000 in addition to the imprisonment and an additional six months of jail if she does not pay the fine.

Sashi Weerawansa is found guilty by the court for obtaining diplomatic and general passports by submitting birth certificates with forged names and dates of birth.

She had applied for a diplomatic passport in 2010 by submitting false personal information which was different to what appears in her previous normal passport that expired on May 24, 2009.

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India, Japan to work together to help Lanka during crisis



By Meera Sirinivasan

India and Japan have agreed to work together on assisting crisis-hit Sri Lanka, the Japanese government said, following a recent meeting between Prime Ministers Narendra Modi and Fumio Kishida in Tokyo.

Modi and Kishida met on May 24 on the sidelines of the Quad summit and held bilateral talks on “close cooperation” to promote efforts to realise a ‘Free and Open Indo-Pacific’, in addition to collaboration in spheres including defence, clean energy, and investment.

Following the meeting, Japan’s Ministry of Foreign Affairs said the leaders “discussed the situation in Sri Lanka and confirmed that they will cooperate with each other in light of the current economic crisis and deterioration of the humanitarian situation in the country.” Further, they “shared the view to work together to develop Indo-Pacific Economic Framework into an inclusive framework that will bring substantive benefits to the region,” according to a statement.

Ministry of External Affairs made no specific mention of Sri Lanka. “The two leaders exchanged views on recent global and regional developments. They noted the convergences in their respective approaches to the Indo-Pacific and reaffirmed their commitment towards a free, open, and inclusive Indo-Pacific region,” read its May 24 statement.

For over half a century, Japan has been one of Sri Lanka’s top donors and development partners, although its grants and investments have received much less attention compared to those from China or India.

Japan’s announcement of collaborating with India to help Sri Lanka, assumes significance, coming shortly after Sri Lankan Prime Minister Ranil Wickremesinghe’s proposal that Quad members— United States, India, Japan, and Australia — take the lead in setting up a foreign aid consortium to assist Sri Lanka, that is reeling under the worst economic crisis since Independence.  India has extended about $ 3.5 billion assistance since January this year, by way of loan deferments and credit lines for essential imports.

Japan’s initiative also comes despite Colombo scrapping two major infrastructure projects with Japanese involvement. In September 2020, Sri Lankan President Gotabaya Rajapaksa ordered the termination of a $ 1.5-billion Japanese-funded light rail project, on that basis that it was not a “cost-effective solution”. In early 2021, Sri Lanka ejected Japan and India out of a trilateral project to jointly develop a container terminal at the strategically located Colombo Port, causing considerable diplomatic tensions. India’s Adani Group was subsequently roped in to develop another terminal at the same port.

Meanwhile, addressing the ‘International conference on the future of Asia’ organised by Nikkei virtually, Gotabaya said Sri Lanka “urgently requires” assistance of friends in the international community “to ensure that our immediate needs in terms of the importation of essential medicines, food supplies, and fuel are met.”

Japan “remains one of Sri Lanka’s key development partners”, the Sri Lankan President said, expressing hope that ongoing negotiations on “bridging funds” from Japan would soon conclude. “We are also in urgent need of bridging financing to restore confidence in our external sector and stabilise our economy until the debt restructuring process is completed and an IMF programme commences,” he said, while thanking India, Sri Lanka’s “close friend and neighbour”.

Colombo earlier sought India’s help in securing bridge financing to cope with the downturn, until an International Monetary Fund package materialises. The government is in talks with IMF on debt restructuring after opting for a preemptive default on its foreign debt of about $ 50 billion.(The Hindu)

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