Colombo Development Symposium highlights the Road Not Taken
The Colombo Development Symposium, organized by BiZnomics, was successfully held at the Shangri-La Hotel in Colombo on March 24, with the attendance of corporate leaders, captains of industry, and foreign emissaries.
Secretary to the President, Dr. P.B. Jayasundera delivered a keynote address titled “The Road Not Taken”, where he outlined Sri Lanka’s development story so far, and the critical reforms needed to stimulate inclusive growth and development in line with President Gotabaya Rajapaksa’s manifesto: “Visions of Prosperity and Splendor”.
Jayasundera said that Sri Lanka’s debt problem has been exaggerated, and that total external debt declined by 500 million US dollars in 2020. Emphasizing that Sri Lanka has never defaulted on a debt or LC (Letter of Credit), even amid war and natural disasters. He said that the government has taken progressive steps for debt sustainability, such us reducing foreign borrowing, relying on domestic financing, and rationalizing imports.
He said that resorting to the IMF to deal with the country’s current challenges would force the government to raise taxes, which would harm both consumers and producers, throttle growth, and cause the economy to contract. The government would instead maintain a stable tax policy for five years and that the government would opt for currency SWAPS with friendly countries such as China to buffer foreign reserves.
Jayasundera urged the private sector to change its thinking. Local banks which enjoy high profitability and low rates of non-performing loans should engage in long term lending for production, and develop new instruments and investment banking. Large plantation companies should learn from the innovative examples set by smallholders and companies such as Dilmah.
More investment should be poured into expanding the production, processing and value-addition of agricultural products, especially for export. He also urged local businesses to start using CNY (Chinese Yuan) and also embrace usage of the Chinese Renminbi, which is an IMF basket currency.
He said that the government, led by President Gotabaya Rajapaksa has identified five areas in need of critical reforms in order to facilitate inclusive growth. The President has appointed bodies to research and recommend reforms in the areas of business regulation, commercial law, customs, finance, and land use.
The Jayasundera speech was followed by a panel discussion featuring Secretary to the Treasury S.R. Attygalle, Board of Investment Chairman Sanjaya Mohottala, Access Engineering Chairman Sumal Perera, and John Keells Holdings Chairman Krishan Balendra. The panel was moderated by senior broadcast journalist Indeewari Amuwatte.
During the broad ranging discussion, Attygalle said that government’s Budget for 2021 was designed to enhance inclusive growth, with a focus on lower taxation, rural investment and domestic financing mechanisms. He said that the country will depend less on external borrowing, while ironing out bottlenecks for investment.
Mohottala said that the country needs law reforms and digitization of processes such as customs and tax reforms in order to enhance the ease of doing business and foreign companies required large local companies to partner for investments here. He requested the private sector to rise to this task.
Sumal Perera expressed the need for media cooperation in presenting a positive image of Sri Lanka to the world. The media has a responsibility to build Sri Lanka as a brand and showcase positive success stories from the country.
Krishan Balendra said that the country’s tourism sector continues to be badly affected by the fallout of the COVID-19 pandemic. However successful rollout of vaccines will alleviate these problems. Domestic consumption has recovered since lifting of lockdowns and footfall in the Western Province is close to pre-pandemic levels.
The Symposium was organized by BiZnomics, a magazine about business, economics and lifestyle. BiZnomics has an in-house research team that dissects raw data into analysis and provides insights into current business trends. The magazine also celebrates local entrepreneurs who have gone beyond our shores to become “Global Sri Lankans”.
The event was sponsored by Capital Alliance Limited, LOLC Holdings PLC, Bank of Ceylon, People’s Bank, Sri Lanka Insurance Corporation, and CHEC Port City Colombo. The official media partner for the event was Ada Derana and the official newspaper for the event was the Daily FT.
‘Govt. lacks mechanism to recover USD 40 billion spirited out of SL from 2008 to 2018’
By Hiran H.Senewiratne
The government doesn’t have any mechanism to recover the USD 40 billion that was siphoned out of the country illegally from 2008 to 2018 by Sri Lanka’s business elites, Senior Lecturer, Department of Economics, University of Peradeniya Dr. Kalpa Rajapaksha said.
“Most people think that the IMF loan is a victory for Sri Lanka without knowing its risk factors. These are exceptionally high because one of the main impacts would be for the banking sector whose liquidity is due to weaken on account of high tax impositions and certain economic reforms, Dr. Rajapaksha told The Island Financial Review.
Dr. Rajapaksha added: ‘The tax relief given during President Gotabaya Rajapaksha’s tenure triggered this issue, which cost government coffers more than Rs 450 billion. However, Sri Lanka has to carefully follow IMF recommendations taking its history into consideration. It is said that Greece and Ethiopia and several other countries absolutely failed by following IMF recommendations in the past.
‘We are in the dark as to the method of economic recovery because the government is attending to deeper, burning issues in the country, such as reduction of poverty and ending economic inequities.
‘The imposition of heavy taxes on people, especially professionals, via a wealth tax and a heritage tax by 2025 and the increasing of direct taxes, such as VAT, on low income classes, without taking into account the need for a wage hike, will iraise the poverty level and widen wealth inequalities.
‘Inflation at the global level is very high and strategies are required to increase exports and cut down the heavy import dependency of the economy. This is a prerequisite to address all economic woes.
‘The previous ruling party squandered and stole billions of dollars but the present government not having any plan to recover that money is a tragedy. Therefore, promoting neo- liberal principles is impossible under the current corruption scenario.
‘Further, the IMF has set the target of reducing the debt to GDP ratio to 0.7 per cent in 2023, along with their recommendations. Many people doubt the achievability of these aims.’
Global banking sector instabilities affect local bourse
By Hiran H.Senewiratne
CSE trading got off to a positive start but later turned negative yesterday due to huge selling pressure. The reasons being investor worries over a domestic debt restructuring mechanism after having secured the IMF loan and the negative global scenario when it comes to the banking sector, market analysts said.
According to analysts, during the last week strategically important banks in the global economic system went through credit default swaps, especially Silicon Valley Bank, Signature Bank and Credit Suisse Group AG. But another leading European Corporate Bank possibly facing a credit default swap, created some ripple effects for economies like Sri Lanka, analysts said.
The All- Share Price Index went down by 134.1 points and S and P SL20 declined by 51.6 points. Turnover stood at Rs 871 million with two crossings. Those crossings were reported in NDB, which crossed 1.2 million shares to the tune of Rs 51.6 million; its shares traded at Rs 43 and Aitken Spence 772,000 shares crossed for Rs 47.1 million, its shares traded at Rs 61.
In the retail market top seven companies that mainly contributed to the turnover were, SLT Rs 82 million (717,000 shares traded), Browns Investments Rs 52.8 million (8.2 million shares traded), Lanka IOC Rs 50.1 million (298,000 shares traded), Tokyo Cement (Non- Voting) Rs 36.5 million (388,000 shares traded), Expolanka Holdings Rs 33.6 million (251,000 shares traded), ALC Cables Rs 33.3 million (406,000 shares traded) and Sunshine Holdings Rs 27.2 million (633,000 shares traded). During the day 45.4 million share volumes changed hands in 15000 transactions.
The market is generating revenue from SLT over news of it being divested; moreover, there has been interest for the hotel and tourism indexes, since tourist arrivals and earnings have been attractive, an analyst said.
It is said that Treasury bond yields opened steady on Monday, while the rupee opened weaker at spot market, dealers said.
A 01.07.2025 bond was quoted at 30.75/31.00 per cent on Monday, up from 30.90/31.20 per cent on Friday. A 15.09.2027 bond was quoted at 28.00/70 per cent, up from 28.00/50 per cent from Friday. The Sri Lanka rupee opened at 322/325 against the US dollar, weaker from 320/325 a day earlier.
Holding ‘Raid Amazones’ for second consecutive year in SL, a rare honour for her – Head of Marketing Srilankan Airlines
By Hiran H.Senewiratne
More than 250 female French athletes arrived in Sri Lanka for the challenging ‘Raid Amazones’ adventure event that took place last week in Kandy. They arrived in Sri Lanka for the second consecutive year, which was a big achievement for the country when it comes to the tourism sector, Head of Marketing SriLankan Airlines Saminda Perera said.
“For the first time in ‘Raid Amazones’ history they selected one country for two consecutive years, which could be considered a great honour for Sri Lanka. This would enable more French tourists to arrive in Sri Lanka in the future, Perera told the media recently during the event in Kandy. ‘Raid Amazones’ will hit the streets of the fabled hill capital, Kandy, with the participation of over 250 female athletes.
‘Raid Amazones’ is a well-known annual destination adventure event originating in France, which features female athletes competing their way through a range of challenges, such as, orienteering, mountain biking, canoeing, riding, running and archery.
“Sri Lanka was chosen over rival destinations by the event’s founders due to the unparalleled warmth of its people and support on the ground to pull off a successful event. Their decision is also due to SriLankan Airlines’ tireless marketing efforts to secure the popular trail on successive occasions for Sri Lanka in its hour of need for international tourism support, Perera said.
Tourism sources added: “During the 21st edition of the trail, the participants will be able to connect with a potpourri of natural and historical highlights as they trek through the Kandyan plateau in Central Sri Lanka.
“Their journey, though, would begin from the moment that they step onboard SriLankan Airlines to fly from Paris to Colombo, on an aircraft dedicated to ‘Raid Amazones 2023’.
“Named as a UNESCO World Heritage Site, Kandy, the iconic setting of ‘Raid Amazones 2023’, is renowned for two of the most recognizable cultural symbols that define Sri Lanka.
“SriLankan Airlines partnered Raid Amazones in 2022 soon after recommencing operations to Paris.
“SriLankan Airlines, together with Connaissance de Ceylan, the official ground- handling partner of the event, will go all out to ensure that the French group experiences the best in Sri Lankan hospitality.
“This event will especially help create more awareness of Sri Lanka as an adventure travel hotspot among French travellers and the rest of Europe, where ‘Raid Amazones’ is sought-after and attracts adventure-seekers.”
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