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Foreign debt manageable – CB Governor

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by Sanath Nanayakkare

Doomsayers had predicted that the country’s debt burden would be unmanageable, but that was not the case when one took the alternative economic indicators into account, Central Bank Governor Prof. W.D Lakshman said yesterday at the inauguration session of Sri Lanka Economic Summit 2020, held on a virtual platform.

Prof. Lakshman said that he particularly felt obliged to touch upon the current controversies surrounding Sri Lanka’s fiscal deficits and the current level of its debt.

“There are arguments that Sri Lanka’s fiscal deficits have been excessive and the debt levels are at unmanageable levels, but let me attempt to expand on this aspect in terms of alternative thinking in economic theory,” he said.

“Several countries including Japan, Singapore, and the United States have debt levels far exceeding their GDP. Firstly, this shows that even such high levels of debt could be sustainable when domestic debt is the predominant component in the debt portfolio. It can be shown through alternative indicators that even foreign debt is more manageable than doomsayers indicate.

“The ratio of government’s foreign non-concessional debt to GDP is around 23%, and the remainder is either domestic debt that can be rolled over or dealt with upon long term concessional financing. The annual foreign debt service payments as a percentage of export earnings and remittances stand at around 12% in ‘business as usual’ years such as 2018.

“With the adoption of a fiscal consolidation path from 2021 and the increased emphasis on domestic debt when it comes to financing budget deficits, the aforementioned indicators will improve further. The fears surrounding debt sustainability, therefore, indeed appear unfounded.”

Referring to widespread concerns on import restrictions, foreign trade and foreign economic relations the Governor said: “Import restrictions on non-essential goods working along with low oil prices have provided the country with a saving of US$ 4 billion in import expenditure in 2020. This saving is almost equivalent to the foreign currency debt service payments we settled during the year.

“Import restrictions have also provided an opportunity for our local enterprises to gather steam within the domestic market and to evaluate possibilities of expansion abroad – a mechanism used in all successful growth stories of the world. Those who argue for so-called ‘debt restructuring or debt reprofiling’ must realise that this means reforms of austerity. In my view, Sri Lanka is already undergoing some austerity, but on our terms. This is evident when the ongoing programme of import compression is considered.

“Sri Lanka is introducing ground-breaking reforms to improve its domestic production economy, enhance exports and reduce foreign debt dependence. It is commendable that Sri Lanka is following this approach without being prompted by any foreign agency, while continuing to honour all its financial obligations.”



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Navy assists to bring ashore an ill fisherman through coordination of MRCC Colombo

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The Sri Lanka Navy rendered assistance to bring ashore an ill fisherman, who was aboard a local multi day fishing trawler on the high seas south-west of Sri Lanka, about 881 nautical miles (1631km) off Dondra. Initially, the fisherman was taken aboard a Merchant Vessel in the sea area, on being coordinated by the Maritime Rescue Coordination Centre (MRCC) Colombo. After being brought ashore today (15th October 2024), he was rushed to the National Hospital of Colombo, for medical attention.

The local multi day fishing trawler “Sun City 02” (Reg No. IMUL-A- 1671 MTR) was reported to have left the Dikkowita Fisheries Harbour with 06 fishermen on 29th August 2024 on a fishing voyage. Meanwhile, the Department of Fisheries and Aquatic Resources (DFAR) alerted MRCC Colombo established in the Navy Headquarters that a crew member onboard the fishing trawler has developed an abdominal illness, and requested Navy’s assistance to transfer him ashore for treatment.

In the meantime, a nearby Merchant Vessel named ‘MV – CCNI Andes’ was directed to the trawler’s location to provide assistance, through the coordination of MRCC Colombo.

With the assistance of MRCC Colombo, the Merchant Vessel managed to retrieve the fisherman and he was brought to the Colombo Offshore Patrol Limit (OPL) by this morning, while administering first aid.

Following this, the Sri Lanka Navy dispatched a Fast Attack Craft (FAC), attached to the Western Naval Command, to the Colombo Offshore Patrol Limit (OPL), where they took on board the ill fisherman and brought him ashore.

The Sri Lanka Navy in coordination with MRCC Colombo continues to exemplify its dedication and unwavering commitment to safeguarding lives within Sri Lanka’s search and rescue jurisdiction, serving as a beacon of hope and security for seafarers and the fishing community.

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Cabinet approves fuel subsidy of Rs 25/- per liter for fishing vessels

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Although, approval had been granted at the cabinet meeting held on 21-08-2024 to make remedial measures for the unfavorable effects  to the fishing industry due to the considerable increase of the price of  fuel, the said decision has not been implemented so far.

Therefore, the Cabinet of Ministers  approved the proposal presented by  the President in his capacity as the Minister of Agriculture, Land, Livestock , Irrigation, Fisheries and Water Resources to provide following concessions for a period of six (6) months with effect from 01-10-2024 with the objective of uplifting the economic condition of the fisheries community.

• To grant an allowance of Rs.25 per liter of diesel,  subject to the maximum of rupees 300,000 per month for fishing vessel owners who utilise diesel.

• To provide “fishing industry recovery allowance” of Rs 25/- per liter of kerosene for vessel owners who obtain kerosene as a fuel, subject to a maximum of 15 liters of kerosene per day and 25 days per month.

 

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Food Policy Committee to be reestablished

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The Cabinet of Ministers has approved the proposal presented by  the President to reestablish the Food Policy Committee comprising of the following officers.
• Secretary to the President
• Secretary to the Prime Minister
• Secretary, Ministry of Finance, Economic Development, Policy Compilation, Planning and Tourism
• Secretary, Ministry of Power and Energy
• Secretary, Ministry of Agriculture, Land, livestock, Irrigation, Fishery and Water Resources
• Secretary, Ministry of Justice, Public Administration, Home Affairs, Provincial Council, Local Government and Labour

• Secretary, Ministry of Trade, Commercial, Food Protection\, Cooperative
Development, Industry and Entrepreneurship, Development
• Ministry of Health
• Secretary, Ministry of Transport, Highways, Ports and Civil Aviation
• Secretary, Ministry of Environment, Wildlife, Forest Resources, Water Supply, Plantation and Community Infrastructure Facilities

The food policy committee had been established as per the cabinet decision dated 03-10- 2022.

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