Business
Cabraal explains way forward amid challenges
by Sanath Nanayakkare
If we opt for a debt restructuring programme with the support of the IMF, it will take another 10 years for us to emerge from the consequences related to such a move, so we must explore all ways in partnership with all the stakeholders of the economy and every citizen of this country to rally round a home grown solution to come out of the current economic crisis, Central Bank Governor Ajith Nivard Cabraal told a webinar hosted by the Advocata Institute on Saturday.
“We need not make unnecessary turbulence by going to the IMF. We are able to deal with the situation. We have enough local economic think tanks who do know about this country and how best a solution to the present crisis can be evolved. If we invite the IMF to come in, they will come with a prescription. That is not what we want right now. With a potential arrival of the IMF, our tourist arrivals won’t increase. We have been able to successfully conduct the vaccination drive without them.” he said.
“We have stabilized the value of the rupee against the U.S. dollar not because they asked us to do so. We maintained a low interest rate regime for economic recovery not because they recommended it. If they come in, they will ask us to stabilize the rupee at a different value. We need space for that.”
The Governor said that he and his team at the Central Bank have not only understood the issues, but also have explored ways to resolve the issues.
“When analysing the economy, everybody has an angle of his or own according to their aspirations. Our undertaking is to balance all these competing interests and allow the economy to move forward progressively. The two main things that we have on our minds are economic growth and stability. We will ensure growth and stability in the next 3-4 months. We will unveil the plan on how to do that when we roll out the Road Map on October 1.
When asked about debt repayment challenges , he said, “We can always roll over because we have instruments to do so.”
When asked whether there was a Balance of Payments crisis looming due to excessive money printing, he said, ” It is like doing an open heart surgery. The surgeons know when to open the heart, perform the operation properly and close it. Likewise, we know how to deal with it. We jnow when to give an economic stimulus and how to wrap it up. Money printing has now reached its maximum point. We will now ensure a soft landing,”
The Governor said the country’s under-utilized assets will be vested in investors to add their real value to the economy.
When asked about the transfer of the Secretary to the Monetary Board of the Central Bank Ms. K.M.A.N. Daulagala, the Governor said that it was in line with periodic changes, implying that the change was based on service requirements. He went on to say that if someone is not willing to move on, that also could convey a message.
Notably, the Governor emphasised the point that all citizens should contribute to the growth of the economy in their own way meaningfully.
Dhananath Fernando, the Chief Operating Officer of Advocata conducted the virtual interview.
Business
Affairs of Sri Lankan Airlines could be turned around using local expertise – former CAA chair
The financial affairs of national carrier Sri Lankan Airlines could be turned around along with the fortunes of Mattala Airport, using local management expertise without divesting these assets, former chairman CAA and veteran travel and tourism expert Upul Dharmadasa said.
“Sri Lanka has experts and knowledgeable persons to develop Sri Lankan Airlines into a viable entity. But when it comes to the debt restructuring process the government should absorb the losses to salvage our national carrier, former chairman Civil Aviation Authority Upul Dharmadasa told The Island Financial Review.
Speaking on Mattala Airport Dharmadasa said that during the Covid 19 pandemic he spearhead the airlines’ operations to bring more than 138,000 Sri Lankans back into the country. “At that time Mattala Airport functioned as a second international airport and it assisted the government in managing Covid patients in a more systematic way, he said.
Dharmadasa added: ‘Further, Mattala Airport’s 12 anniversary falls today. It falls on the government to develop it as the second international airport. It could attract large aircraft.
“We need to deploy proper and qualified persons to streamline the entire process.
“I have been in the airline industry for more than four decades. The number of airline arrivals in the country and departures from it have come down considerably after Covid 19 pandemic.
“In this scenario, Sri Lankan Airlines should focus on launching new flights to US and Canada. Together they account for more than 1.4 million Sri Lankan diaspora members who fly to Sri Lanka.
“Sri Lankan Airlines should resume Rome flights as well, which is a lucrative market. Apart from that Sri Lankan Airlines should focus on new destinations, wherein they could sell tickets and attract huge revenue to the airline.
“The airline should have 25 aircraft to offer uninterrupted services to air travelers but at present it has only 23 aircraft.”
By Hiran H Senewiratne
LOLC Al-Falaah, Sri Lanka’s leading provider of alternate financial solutions, proudly announces the launch of ‘Al-Falaah Wakalah Future-Cash’, a pioneering Shariah-compliant alternative for Factoring, Invoice & Cheques discounting facility, designed to transform business financing. This ground-breaking financial solution empowers businesses to elevate and realize future cash flows in real-time, while maintaining adherence to ethical financial principles. Setting a new benchmark in Sri Lanka’s Islamic financial services sector, this initiative strengthens LOLC Al-Falaah’s commitment to innovation and excellence in the alternate finance arena.
Unlike conventional Factoring, which relies on interest-based returns against receivables, LOLC Al-Falaah’s ‘Wakalah Future-Cash Today’ product is structured under the ‘Wakalah-Bil-Istithmar’ concept, ensuring full compliance with Islamic economic jurisprudence. Through this model, LOLC Al-Falaah provides capital infusion into business operations in exchange for a pre-determined Anticipated Profit Return (APR), eliminating interest-based transactions. Businesses are appointed as agents to deploy these funds within their operations, with surplus earnings allocated as a performance incentive. This structure enhances financial discipline, promotes transparency, and encourages ethical business practices.
The introduction of this pioneering facility is particularly timely as Sri Lanka transitions towards economic recovery and long-term stability. Shiraz Refai, Head of Alternate Financial Services at LOLC Al-Falaah, emphasized the significance of this initiative: “As Sri Lanka embarks on a path of economic resurgence, businesses require the right financial instruments to capitalize on emerging opportunities. As a trailblazer in the alternate financial services sector, LOLC Al-Falaah has identified a critical gap in the bills-discounting and factoring industry. The launch of LOLC Al-Falaah’s ‘Wakalah Future-Cash Today’ product presents a strategic solution that enhances liquidity and working capital efficiencies while adhering to Islamic financial principles.
City Cycle Industries Manufacturing (Pvt) Ltd, a leading provider of sustainable mobility solutions and renowned for its household brand Lumala, has been honored with the Best National Industry Brand award under the Large-Scale Other Industry Sector at the recent National Industry Brand Excellence Awards 2024.
Organized by the Sri Lanka Technical Development Board under the Ministry of Industry and Entrepreneurship Development, the award ceremony was held on 21 February at Eagle Lakeside and saw the participation of distinguished leaders from diverse industry sectors. The vent was graced by Prime Minister Harini Amarasuriya as the Chief Guest.
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