Connect with us

Business

Foreign investors urged not to be dissuaded by Moody’s erroneous stance on Sri Lanka

Published

on

In response to recent Moody’s ratings, the Central Bank of Sri Lanka issued the following statement.

We observe, with disappointment, the rating downgrade by Moody’s Investors Service and the recent release of an erroneous analysis by an international investment bank expressing concern s about Sri Lanka’s economic and financial strength and external debt service capacity.

This downgrade and the report failed to do justice to the ground reality of the ongoing rapid economic recovery backed by vastly improved business confidence arising from the return of political and policy stability after a lapse of five years. Such announcement is also unwarranted especially at a time when the new Government is about to announce its Budget for 2021, spelling out the policy framework proposed in the medium term.

While Sri Lanka too like many of its peers in the emerging market group, experienced initial capital outflows, exchange rate depreciation, slowdown in activity, and pressure on government finances, in response to the effects of COVID-19 pandemic, unlike many of its peers, the country has been able to decisively deal with the domestic spread of the pandemic, for which Sri Lanka is hailed as one of the few countries to have been able to do so. The swiftness with which decisions were taken followed. by the landslide vi story of the Government, Sri Lanka is now moving along a recovery path towards growth and stability.

Merchandise exports have returned to pre-COVID monthly avers ges of US dollars 1 billion. With the curtailment of non- essential imports, the trade deficit has improved notably. Although inbound tourist movements are not yet allowed, other services exports, including IT services and shipping, remain robust. Workers’ remittances have recorded a sharp increase in spite of the initial expectation of a slowdown. Amidst the COVID response the Government also initiated reforms in State Owned Enterprises (SOE) and the Impact of such actions can be seen already with some SOE’s showing positive results.

Foreign Direct Investments, which slowed in the first half of the year, appear promising looking ahead, particularly with the expected inflows to the Port City project and for new manufacturing projects. The expected finalization of new legislation for the Port City within a month will result in the realization of investment by those who have already completed due diligence on such investment. Other expected investments include import alternative industries as well as investments by international financial institutions. With regard to portfolio flows, foreign inflows to the government securities market have already shown signs of resumption. The stock market indices have improved to pre-COVJD levels.

The tourism sector has been supported by the flourishing domestic tourism. With increased emphasis on domestic agriculture, agro-based industries and resource-based industries, domestic economic activity has seen a remarkable turnaround with more opportunities being created for entrepreneurs to flourish, and available economic indicators point towards a promis ing recovery in the second half of the year, following the setback in the first half.

Given these developments, the exchange rate has sharply appreciated since mid-April, and remains stable at appreciated levels allowing the Central Bank to accumulate reserves through market purchases of foreign exchange. In fact, official reserves of the Central Bank increased to US dollars 7.4 billion by end August 2020, and the Government has repeatedly expressed its ability and willingness to meet all its debt obligations falling due in the period ahead. The recently introduced measures to entice foreign investors to the government securities market and the real economy through an attractive foreign exchange swap arrangement are likely to help enhance foreign currency inflows, in addition to the support of friendly countries, such as the swap arrangement with the Reserve Bank of India in July 2020 and the expected disbursement of the 21 1<1 tr anche of the Foreign Currency Term Financing Facility proceeds from the China Development Bank in October 2020.

Sri Lanka’s policy environment remains facilitative of enabling high economic growth beyond the recovery phase while preserving macroeconomic stability. On the back of over 11 years of well anchored mid-single dig it levels of inflation, the Central Bank has pursued an increasingly accommodative monetary policy stance. Fiscal policy, while remaining focused on supporting the economy, will return to a path of consolidation as envisaged in the Government’s policy framework, “Vistas of Prosperity and Splend our”. Hence, both fiscal and monetary policies have prioritized supporting people, businesses and thereby the economy, without jeopardizing the ma croeconomic balance of the country.

Given these circumstances, the Government of Sri Lanka wishes to reaffirm to foreign investors that ha ve put faith in Sri Lanka continuously over the past several years that Sri Lanka remains willing and able to meet its debt obligations, as it has done impeccably in the past. In fact, Sri Lanka is one of the few countries to have recognized the external sector pressures and decisively curtailed all non- essential imports with a view to prioritize external debt service obligations.

Furthermore, the press release added that all payment transactions for the repayment of the International Sovereign Bond of US dollars 1 billion maturing on 04 October 2020 have already been lined up and funds will be credited to the paying agent’s account on 02 October 2020. It is puzzling that Moody’s has downgraded Sri Lanka on the eve of this repayment, which seems similar to the previous premature and reckless downgrades by rating agencies in the immediate aftermath of the en d of the internal conflict in 2009 and during the political impasse at end 2018.

Accordingly, foreign investors are invited not to be dissuaded by the recent unwarranted rating downgrade and the erroneous analysis published recklessly, but to be guided by improving economic conditions as outlined above. As in the past, any investor can approach the Ministry of Finance, the State Ministry of Money and Capital Market and State Enterprise Reforms, and the Central Bank of Sri Lanka, and the highest level officials of these entities remain committed to facilitate any one-on-one or roadshow d is cussions with investors.

In addition, the Government will commence regular roadshows to strengthen investor relations following the announcement of the National Budget in November 2020, which will provide further clarity on the Government’s medium term fiscal and financing plans.



Business

Planters’ Association of Ceylon charts course for sustainable future at 170th AGM

Published

on

(L-R) - PA, Secretary General - Lalith Obeyesekere, Chairman - Sunil Poholiyadde, Deputy Chairman - Shanaka Samaradiwakara

The Planters’ Association of Ceylon (PA) held its 170th Annual General Meeting (AGM) on September 14, 2024, at The Galadari Hotel in Colombo. The event, graced by the presence of Chief Guest, Mohan Pandithage, Chairman and Chief Executive of the Hayleys Group, marked a pivotal moment for the nation’s plantation industry.

The AGM witnessed the formal handover of leadership from outgoing Chairman, Senaka Alawattegama, to Sunil Poholiyadde, who assumes the role for his second term. The transition comes at a critical juncture for the industry, facing significant challenges and opportunities.

In his final address, Alawattegama reflected on the substantial progress made during his tenure, notably the successful resolution of long-standing wage negotiations. He highlighted the introduction of a new wage structure that includes a daily minimum wage of Rs. 1,350 and a productivity-linked component of Rs. 50 per kilogram. This achievement, he noted, represents a significant victory for both workers and Regional Plantation Companies (RPCs), accomplished despite considerable challenges and pressures.

“As we move forward, decisions related to wages and policies must be made with the best interests of the entire industry—including workers—at heart,” Alawattegama stated. “We must ensure that our industry remains affordable and sustainable so that it can thrive for generations to come.”

Taking over the helm, Poholiyadde delivered an incisive speech outlining his vision for the future. He commended the industry’s collective resilience in successfully navigating the recent wage crisis, which had been considered a potential existential threat to the industry.

“On May 1st, 2024, a proposed wage increase to Rs. 1,700—a 70% hike—threatened to cripple our industry,” Poholiyadde remarked. “Recognizing the gravity of the situation, the PA took unprecedented steps, including legal action up to the Supreme Court. Our persistent efforts resulted in a more sustainable wage agreement, a testament to what we can achieve when we unite.”

Emphasizing the crucial role of innovation and technology in overcoming current challenges, Poholiyadde asserted, “We must embrace innovation to sustain our industry. Mechanization can provide relief, especially with our diminishing labor force.” He highlighted that since 1992, the industry has lost 50% of its workforce, adversely affecting production volumes. “We may not reach even 250 million kilograms of tea this year, although the industry had initially targeted over 300 million.”

Poholiyadde also underscored the necessity of adopting new technologies, mechanization, and automation in both field and factory operations to enhance productivity and remain competitive globally. “The technology exists globally; it’s a matter of us embracing and implementing it,” he said. (PA)

Continue Reading

Business

SLITHM chief on a mission to bring back the glories of the Ceylon Hotel School era

Published

on

Shirantha Peiris

By Harischandra Gunaratna

The chairman of the Sri Lanka Institute of Tourism and Hotel Management (SLITHM), Shirantha Peiris, in an interview with The Island Financial Review recently said that his dream was to take the school back to its ‘golden days’ when it functioned as Ceylon Hotel School.

‘The Ceylon Hotel School produced world class hoteliers, where some of them held top positions in hotels owned and operated by international chains in different parts of the world, he said.

Peiris assumed duties as the chairman of SLITHM in June 2022 and the institute has seen steady advancement during this short period, according to SLITHM sources.

When queried as to how the standards and the quality of such a prestigious institution had deteriorated, Pieris admitted that there was a drop in the quality of some of the students. He attributed the deterioration of standards to multiple reasons, which he has identified and rectified.

Some of the improvements effected by him relate to the student enrollment process. For example, students are now enrolled purely on merit, with external influence not being taken into consideration. The same practice is followed with regard to employee recruitment.

Pieris added: ‘When I left school in 1982, it was extremely difficult to join Ceylon Hotel School as there was a very clear and a transparent selection process. At present we adopt the same practice.

‘When I assumed duties, one of my first tasks was to look into the existing value chain of the organization and introduce efficiency.

‘The institution follows a strict enrolment process with multiple eliminating stages to ensure that the right candidate is selected.

‘We must ensure that only the right students who have a passion for hospitality are enrolled as this has a positive impact not only in meeting customer expectations, but often exceeding same when our students are in the industry. We have seen this many a time in the industry, where our students have maintained high standards in a consistent manner.

‘Deteriorating standards of English of some of the staff members and students in the school is an issue. It has to be addressed and recommendations are made to the senior management. English is mandatory when engaging in hospitality as well as when being employed.

‘The standards of students who pass out of the institution are high and they could secure employment in any top-class hotel in Sri Lanka with handsome remuneration packages. We need to ensure that every student meets these criteria and this cannot be done overnight. If you look around the leading hotels, most of the General Managers and senior management are former students of SLITHM (Ceylon Hotel School). We need to maintain these standards, be consistent and adopt the best practices at SLITHM. Our main objective is to train people for the local industry.

‘SLITHM had the very first Innovation Fair last week which was an excellent initiative by the Director General – SLITHM, where we were able to witness our students’ innovation and creativity, not restricting to the usual practices but also introducing AI driven technology. During the last two years we have introduced multiple events for students, including sports activities, which will be an annual event from now on.

‘We have nine schools, covering all provinces and at present seven schools run at full capacity and one of the constraints is that we need more space to run the institution. We have already communicated to the authorities requesting additional space to increase the number of students. We are working towards increasing the number of students at the Jaffna and Batticaloa schools as well.

‘It is imperative that we introduce and engage in global best practices and be current with the rapid changes that take place in hospitality and tourism. Restructuring and succession planning have commenced and are on-going.

‘We are also focused on the wellbeing of our employees and have introduced a “Pink Day”, which takes place in October as it is ‘Breast Cancer Awareness Month’. On this day we have health care experts creating awareness and all our female employees are invited to go through a screening process at no cost. We will be introducing employee engagement initiatives too to ensure that we have a work force that is engaged in being high performers.

‘SLITHM also has the “Samudra Training Hotel” (STH) located in the Colombo School. STH is currently going through a transformation process and will be a fully operational hotel before this winter. The Samudra Restaurant has been fully renovated and is already in operation. The other areas that will be operational soon are the pub, the terrace with a beautiful ocean view and all rooms refurbished with the support of the industry. We have already written to the industry and have received positive responses. The uniqueness of this operation will be that the hotel will be run by students. STH will be a place to talk about very soon.

‘Another area we are working towards is going paperless and introducing automation where applicable. In this day and age, we cannot be comfortable with old practices and need to embrace technology.

‘I must thank my staff for their contribution and continuous support in the transformation process as well as all stakeholders working closely with SLITHM.’

Continue Reading

Business

SimCentric Technologies enhances information security standards with ISO 27001:2022 Certification

Published

on

(Left to Right): Disnaka Mallikaarachchi – Systems Engineer – SimCentric Technologies (Private) Limited Kasun Samarasinghe – Systems Lead – SimCentric Technologies (Private) Limited Haridhu Abeygoonaratne – Managing Director – SimCentric Technologies (Private) Limited Ishara Jayamanna – Senior Manager- IT Operations & Security – SimCentric Technologies (Private) Limited Shan Nanayakkara – Country General Manager – Bureau Veritas Lanka (Pvt) Ltd Subash De Silva – Manager – Marketing & Sales – Certification Service Line – Bureau Veritas Lanka (Pvt) Ltd Buddhika De Alwis – Managing Director – TrustVault Pvt Ltd.

SimCentric Technologies, a leading provider of simulation software and solutions in the defense and security sectors, has achieved a significant milestone by upgrading to the ISO 27001:2022 Certification. This new certification marks a crucial step forward from the previous ISO 27001:2013 standard, reflecting SimCentric’s ongoing commitment to enhancing its information security practices in line with the latest global standards.

The transition from ISO 27001:2013 to ISO 27001:2022 introduces several key improvements that are vital for the evolving security landscape. These enhancements include the integration of threat intelligence, robust security measures for cloud services, improved ICT readiness for business continuity, enhanced configuration management, data leakage prevention, and secure coding practices. By adopting these new measures, SimCentric has strengthened its overall information security posture, ensuring it can better protect sensitive data and adapt to emerging threats in today’s digital environment.

Continue Reading

Trending