‘Dollar reserves in SL plummet drastically, putting the economy in jeopardy‘
By Steve A. Morrell
Sri Lanka’s dollar reserves have declined from $ 7.15 billion in 2019 to $ 2.8 billion currently. The President conceded economic failures although reasons for such failure were not explained, chairman, National Chamber of Industries (CNCI) Canisius Fernando said.
Fernando added recently at a forum: “Forex reserves are insufficient to expedite payment of import bills. More so that cost incurred on container traffic for imports and or exports was on a rising spiral. In comparison to cost of container shipping recorded at $ 2,800 earlier, it is now $ 12,000, indicating a rise in multiples of 250.
“Additionally, the Generalized System of Preferences (GSP +) affecting our trade with EU countries, placed Sri Lanka’s reputation at a risk, meaning that countries could veer away from Sri Lanka prompted by a possible inability to honor our trade commitments. The clear example being trade with the US. Rather than await goods and services transactions with Sri Lanka, that could invariably take three months, US economists and their trade sector opted to transact trade with countries in close proximity to US shores.
“Dearth of container traffic and rising cost for on- loading and off- loading of cargo seriously affect trade imbalances. Consequently, the credit worthiness of the Sri Lankan economy is affected, which in turn seriously affects the GDP.
“Worker wages which were static because of trade shut- downs caused demands for increased wages. Wage demands of Rs 1,500 from employees became a major phenomenon in most sectors. The question at issue was the hypothetical position of business establishments of about 4000 employees demanding increased wages. This would cause closure of those companies resulting in unemployment.
“The proverbial domino effect of such repercussions would cause further chaos in the economy.
“There was no proper policy in most sectors. Suspension of the import of fertilizer and consequent confusion would, in the short run, result in famine and food shortages. Already this was evident in the public panic caused by having to stand in line to purchase essentials. That the crisis is upon us and the question of a quick solution is not feasible in the current context of the economy.
“Foreign investors are lured by the possibility of cheap labour in Sri Lanka to establish their businesses here, but in this instance too, this is only a hypothetical situation but not the reality.”
Technical Certificates of Completion for 64 out of 74 plots of Port City Colombo SEZ
Technical Certificates of Completion for 64 out of 74 plots of the Port City Colombo SEZ have been received by the Commission, a Colombo Port City Economic Commission semi-annual progress report for FY 2022 notes.
A press release by the Commssion said: ‘The Colombo Port City Economic Commission (the Commission), the Single Window Investment Facilitator authorised to assist investors, businesses, and residents in conducting their activities seamlessly and efficiently in Port City Colombo, is pleased to release its semi-annual progress report for FY 2022 from July to December 2022.
‘The Port City Colombo Special Economic Zone (SEZ) is designed to be a prestigious, strategically located city in the heart of South Asia, with sustainable high-quality public spaces and infrastructure, providing top-quality commercial, entertainment, medical, education and lifestyle. International destinations such as DIFC, DMCC, Labuan, Singapore, and Mauritius were studied for their regulatory frameworks, fiscal incentives, and operational efficiency to identify the most competitive processes and policies for Port City Colombo. The benchmarking study was done by global consultants such as Boston Consulting Group, PwC, KPMG, EY, Pinsent Masons, Zico Law, JLL, etc., for the SEZ’s thrust sectors, supported by market feedback on both fiscal and non-fiscal parameters.
‘Port City Colombo SEZ Regulations for the registration, licensing, authorisation and other approvals of Authorised Persons, were published by extraordinary gazette in September 2022, bearing number 2299/46. The SEZ’s Regulations for the registration and licensing of Authorised Person Fees, were also gazetted in September 2022, bearing number 2299/47. The registration of offshore company regulations were gazetted in the month of November 2022, bearing number 2306/54.
‘Agreements have been signed between the Commission and the Registrar General of Companies and Controller General of Immigration and Emigration in order to streamline services offered to Authorised Persons.
‘Sectoral Progress Highlights:
Banking – The Minister of Finance issued licences under the Colombo Port City Economic Commission Act to four (4) banks during the first half of 2022. The Commission has since received requests from three (3) more banks during 2022. Additionally, 10 Financial and Banking Regulations were also drafted under Sections 44 and Sections 45 of the Colombo Port City Economic Commission Act No. 11 of 2021 and are awaiting review with the Monetary Board of Sri Lanka.
Security – The Sri Lanka Police opened a Post on-site for visitor protection, with water access control and lifeguard services being handed to the Sri Lanka Navy. CCTV networks were also installed in public areas.
Social Infrastructure – In addition to an internationally-reputed hospital and school, the Commission has identified the need for a world-class university within Port City Colombo and modified the Master Plan accordingly.
Commercial Infrastructure – With the retail mall infrastructure complete, the commencement of the interior work has begun. The mall will showcase premium merchandise, with an array of cuisine options and entertainment, and is set to commence operations by Q2 of 2023.
Immigration and Visa Arrangements – In collaboration with the Department of Immigration and Emigration, the Commission has introduced three (3) new visa categories for Port City Colombo. These 3 visa categories are – the Investor visa for ten (10) years, the Employment visa for up to five (5) years, and the Resident visa for five (5) years. Port City Colombo visas allow supplementary benefits, such as visas for the spouse, kids, and other support staff members, which can be obtained under the primary visa applicant. The visa fee is USD 200 per year for each applicant. Visas are renewable as required and applicable only to Foreign Investors.
Master Plan Implementation – A planning committee consisting of key stakeholders was created to expedite the approval of building plans submitted under the Development Control Regulations (DCRs) for each plot of the Port City Colombo SEZ. The DCRs provide a clear framework for the development of buildings, land use, green spaces, utility networks, and sustainability measures, among other factors.
Preliminary designs for the Marina Development and Villa Project have been submitted by two investors, with several more plots in the final stages of discussion for lease.
New wealth tax proposals exert negative impact on shares
By Hiran H. Senewiratne
CSE trading activities yesterday were somewhat negative because investors were worried about the impact of the IMF-inspired new wealth tax proposals on citizens, market analysts said.
Apart from profit- takings, the effects of the new direct tax system on citizens created some confusion for stock market investors, analysts said. This was also highlighted by President Ranil Wickremesinghe in Parliament yesterday.
Amid those developments both indices moved downward. The All Share Price Index went down by 77.4 points and S and P SL-20 declined by 24.6 points. Turnover stood at Rs 1.5 billion with one crossing. The crossing was reported in First Capital Holdings, which crossed one million shares to the tune of Rs 33 million; its shares traded at Rs 33.
In the retail market, top seven companies that mainly contributed to the turnover were; SLT Rs 428 million (4 million shares traded), Lanka IOC Rs 115 million (651,000 shares traded), Expolanka Holdings Rs 98.7 million (716000 shares traded), Lanka Hospitals Rs 57.2 million (440,000 shares traded), Browns Investments Rs 51million (7.5 million shares traded), Capital Alliance Rs 50.40 million (1.5 million shares traded) and First Capital Treasuries Rs 46.2 million (two million shares traded). During the day 69.9 million shares volumes changed hands in 21000 transactions.
Yesterday the rupee appreciated against the US dollar. The buying rate was Rs 312.61 and the selling rate Rs 330.16. Further, the price of gold also reduced due to the rupee appreciation.
Dialog, Sri Lanka Air Force & EWIS provides digital education to Ravaneswaran Tamil School, Trincomalee
Dialog Axiata PLC recently joined hands with the Sri Lanka Air Force and E-W Information Systems Ltd to re-furbish the computer laboratory of the Ravaneswaran Tamil School in Kanniya, Trincomalee and upgraded the facility with digital educational tools and equipment. This worthy cause was initiated and directed by the Commander of Sri Lanka Air Force (SLAF) and the Group Chief Executive of Dialog Axiata PLC.
Dialog provided Magicbit Pro units with full pluggable and sensor modules to explore creativity with technology. Magicbit is an innovation platform and a STEM tool made for Internet of Things (loT), Robotics, Electronics and Programming. Dialog, furthermore, provided Nenasa TV facility and a pledged support for fully paid student broadband facility. Nenasa TV is a Public-Private-Partnership with the Ministry of Education; an initiative to support grade 1 to 13 students through eight dedicated TV channels in Sinhalese and Tamil. The content aired on each channel is provided and strictly monitored by the Ministry of Education.
The Sri Lanka Air Force in China Bay swiftly provided the labour for all civil work and assisted in repairing computers which needed attention, in a span of a few days. E-W Information Systems Ltd provided brand new desktop computers and sourced some of the hardware required to restore the remaining machines, together with Dialog.
Thamotharampillai Sivanantham, Principal of Ravaneswaran Tamil School, expressed his views on this occasion “Our children had an IT laboratory, but with hardly any usable equipment. Still one of our students won the Regional ICT award in 2022. I am very positive our students will fully benefit from the new ICT equipment and internet services. Additionally, our facility was beautifully restored in just a few days. On behalf of the school administration, parents & students I would like to thank Dialog, Sri Lanka Airforce and EWIS for coming together and providing us this service”.
The students and the school administration were overwhelmed by this generosity, a need for many years. Dialog also offered teacher-student training in the use of the technology and will continue to provide service and support on connectivity and together with the SLAF and EWIS would continue to monitor the progress achieved by the school through the provided technology and pledged further assistance in time. This worthy cause was executed parallel to the 10th edition of the Commanders’ Cup golf tournament in Trincomalee, which was sponsored by Dialog Enterprise.
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