SL Purchasing Managers’ Index – January 2022
Manufacturing PMI improved in January 2022 recording an index value of 58.7 with an increase of 0.6 index points compared to December 2021. This was mainly attributable to the improvements recorded in New Orders, Production together with the recovery in Employment during the month. Further, Stock of Purchases increased while Suppliers’ Delivery Time lengthened on a month-on-month basis.
The expansion in New Orders, Production and Stock of Purchases, particularly in the manufacture of textile & wearing apparel and food & beverage sectors, have mainly contributed to the improvement in the PMI. Although Employment sub-index recovered to positive territory in January 2022, employment sub-index with respect to the manufacture of textile & wearing apparel sector continued to decline, reflecting the difficulty in attracting employees to the sector.
Meanwhile, the Stock of Purchases increased in line with the expansion in New Orders and Production.
The Suppliers’ Delivery Time lengthened at a slower pace in January 2022 on a month-on-month basis. Many respondents stressed that they experienced delays in receiving import consignments, partly due to the impediments in the clearance of shipping documents, opening of letters of credit, and congestions at the port.
In the next three months, the expectations for manufacturing activities remain at elevated levels anticipating continuous improvements in economic condition, locally and globally.
Placing SL as a world class logistics hub: the challenges
By Lynn Ockersz
‘Sri Lanka’s proximity to emerging and developing markets and its already developed air and seaports in Colombo and Hambantota gives it a unique opportunity to be the next leading logistics hub in the region, with the potential to overtake Singapore and Dubai, if the cards are played right and the right governance and Ease of Doing Business regulations are handled sensibly, logistics and supply chain specialist Sanjeeva Abeygoonewardena (SA) said.
Abeygoonewardena made the above observation, among several others, while presenting an issues paper on Sept. 18 at a Sri Lanka Innovators’ Forum, functioning under the aegis of the Gamani Corea Foundation, Colombo. The event was chaired by the chairman, Gamani Corea Foundation Dr. Lloyd Fernando and was held at the BMICH. The paper was titled, ‘Shipping & Logistics, the Promising Frontier – Innovation-led Logistics Hub.’
Responses to SA’s paper came from a panel of specialists in logistics and allied disciplines, representing the state and private sectors, with Prof. Amal Kumarage, chairman, Chartered Institute of Logistics & Transport, Sri Lanka, functioning as moderator. The rest of the panelists were: Messrs. Rohan Masakorale, Krishantha Fernando, K.D.S. Ruwanchandra, Ports and Shipping Ministry Secretary, and Ted Muttiah.
Some of the recommendations made by SA for the elevation of Sri Lanka as a number one logistics hub were as follows:
Establishment of rail and water networks from the seaport that will enhance and support the strength of Sri Lanka’s local connectivity.
Establishment of an International Maritime Centre, providing services for ship management operations and other value-added activities that will pull liners to Sri Lanka.
Sea-air hub connectivity must be streamlined, enhancing the efficiency of a single customs bonded platform via the single window concept.
More advanced abilities leveraging AI robotics and frontier technology to provide more value-added services at the hubs to support single-window and trade facilitation portals.
Skilled logistics professionals and an educated workforce through a Maritime and Logistics Campus will boost the growth of the local logistics industry.
Governance framework through a Collaborative Council of private-public officials who will act as custodians to carry out the national roadmap as a national logistics and transport services policy.
Invest in a consulting firm that can facilitate a capacity-building programme on improving Ease of Doing Business, Economic Freedom, Logistics Performance Index and Corruption Perception Index across schoolchildren and business councils that will create better awareness for the future.
A point that was emphasized by most panelists and participants in the lively and wide-ranging forum that followed the presentation of the paper was the need for the Sri Lankan polity to think beyond self and short term interests. There is an urgent need to prioritize the future well- being of the country over the gratification of immediate, selfish interests.
Rohan Masakorale, among other things, focused on the problem of bribery and corruption. It is difficult to achieve anything without greasing palms. There is also no leadership worth speaking of in Sri Lanka, he pointed out. These problems need to be eliminated. Local education needs to be upgraded and we need to achieve the standards obtaining in countries such as Singapore. His views found resonance with many in the audience.
Krishantha Fernando drew attention to the fact that local logistics development plans have a short term focus. There is a need to eliminate paper work in this context and to fast track planning processes. The Port Community system is vital he pointed out, among other things. K.D.S. Ruwanchandra pointed to the need for a system change in the logistics development field. In this context, the state agencies are working in a ‘crisis situation’. The proper legal frame work is being evolved by the state to resolve outstanding issues in this connection. Capacity improvements are being prioritized in the logistics field. There are considerable problems in most public spheres that need resolving.
Ted Muttiah stressed, besides other things, that although much has been achieved in the logistics field in the past there is a need to bring them all together, going forward. It was pointed out that port capacity takes years to build.
Dr. Lloyd Fernando questioned as to whether the country has a national plan. Do we have an effective system of governance? However, we need a holistic approach to national development. A prime need in this connection is to evolve a holistic plan within the logistics sector which would in turn be connected to a national plan.
Sri Lanka’s battle against NCDs: Is the Sugar-Beverage Tax doing enough?
By Priyanka Jayawardena
Non-communicable diseases (NCDs) lead to around 120,000 deaths in Sri Lanka each year, constituting 83% of the overall recorded deaths. The revised National Policy and Strategic Framework for the Prevention and Control of NCDs is a positive initiative by the government to address this. Such policies can play a crucial role in promoting healthier lifestyles, preventing NCDs, and improving overall public health. However, the question that lingers is, how effective are the existing measures, and where can we make improvements?
In the battle against NCDs, the government implemented a crucial policy in 2017 – the Sugar-Sweetened Beverage (SSB) tax. This tax aimed to curb the consumption of SSBs closely linked to health problems like obesity, diabetes, and dental issues. While this measure holds great promise, evaluating its effectiveness is difficult owing to data gaps. However, an IPS analysis of how SSB taxes are helping to reduce their consumption in Sri Lanka provides some initial insights.
The Case for Taxing SSBs
According to WHO 2019 estimates, diabetes is the second highest cause of death in Sri Lanka, accounting for 12,460 deaths. As rates of obesity and diet-related NCDs continue to increase, significant attention has been given to reducing the daily intake of sugar.
Taxing SSBs is a globally recommended option among evidence-based policy options to improve food environments. Research suggests several reasons for taxing SSBs, compared to other food products that contain free sugars. This is primarily due to the observed association between SSBs and NCDs, their high sugar content, and very little nutritional value.
By making these beverages more expensive, governments aim to discourage their consumption, ultimately leading to better public health outcomes. Beyond the health benefits associated with reduced SSB consumption, SSB taxes also raise revenue. When introducing the SSB tax in 2017, the government forecasted LKR 5 billion in revenue in 2018. Therefore, these taxes are recognised as a sensible way of reducing the incidence of NCDs.
Sri Lanka’s Sugary Drinks Tax
The effectiveness of the SSB tax can be influenced by its structure and rate. Higher tax rates are generally more effective in driving down consumption. In Sri Lanka, the SSB excise tax is imposed as a specific tax – i.e., applied on sugar content per 100 ml. By imposing higher costs on these beverages, the government intends to deter their consumption.
However, there is a factor that often goes unnoticed but can significantly affect the impact of SSB taxes – i.e., inflation. As the general price level of goods and services rises over time, the purchasing power of money decreases. This means that the same tax rate applied today might not have the same “real” value in the future due to the diminishing value of currency caused by inflation. On the other hand, as people’s average income per person goes up over time, specific tax rates have less impact over time.
Examining the timeline of SSB tax implementation in Sri Lanka reveals
SEC makes four new senior appointments
The Securities and Exchange Commission of Sri Lanka (SEC) is pleased to announce four new senior appointments with diverse backgrounds to leadership positions to fulfill its regulatory and developmental mandates.
Ms. Manuri Weerasinghe has been appointed as Director, Corporate Affairs. She has over 20 years of experience in the fields of Accounting, Financial Management, Financial Reporting and Auditing with over 8 years’ of experience at the SEC. She is a Fellow Member of CA Sri Lanka, member of the Chartered Institute of Management Accountants and a member of the Certified Practicing Accountants of Australia. Her academic credentials include a Master of Business Administration and a BSc (Hons) in Accountancy & Financial Management (Special). Prior to joining the SEC, she had served in several financial management positions in Bermuda and Sweden.
Madura P. R. Wanigasekara has been appointed as the Chief Digital Officer. He has a career spanning over 20 years in delivering and managing IT solutions, has held several senior management positions in both the public and private sectors. He has vast experience in formalizing and implementing organization-wide IT strategies and has a proven record of accomplishment in delivering many digital transformation programs. His academic qualifications include a Master of Science in Information Technology from the University of Colombo and a Bachelor of Information Technology from the Curtin University of Technology. He is also a member of the Australian Computer Society (ACS).
Ms. Sharmila Panditaratne has been appointed as the Assistant Director, Legal and Enforcement. She is an Attorney-at-Law with over 21 years of experience as a securities market regulator. Previously she held the post of Senior Manager Legal and Enforcement at the SEC. She holds a Master of Laws degree from the University of Houston, Texas and has worked at two law firms in the USA prior to joining the SEC.
In addition, the SEC has appointed Riyaz Bary, Deputy Solicitor General at the Attorney General’s Department as a Director on secondment basis.
These appointments are expected to increase the effectiveness of the SEC secretariat in the respective operating areas.
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