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Japan warns of threat of global downturn

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Japanese Ambassador in Colombo Akira Sugiyama recently said that although Sri Lanka had been successful in combating Covid-19 pandemic, the continuing global crisis caused serious difficulty to the Sri Lankan economy, especially in export and tourism sectors.

Ambassador Sugiyama said so at the 41st Annual General Meeting of the Sri Lanka-Japan Business Council held recently at the JAIC Hilton where Merrick Gooneratne received the appointment as President of the Sri Lanka–Japan Business Council

The Ambassador said: First of all, on behalf of the Government of Japan, I would like to express our solidarity with the people and the Government of Sri Lanka in combatting COVID-19, while commending the strong leadership of the Government and the business leaders of Sri Lanka in tackling successfully the unprecedented challenges posed by COVID-19. Japan has provided USD9.6M grant aid to help Sri Lanka’s fight against COVID-19, including procurement of essential medical equipment like MRI system and CT scanners and improvement of hospital facilities.

The COVID-19 has had a serious negative impact on the global economy. Both Sri Lanka and Japan, like other countries in the world, are tackling the challenge of resuming and rebuilding economic activities while controlling the spread of the virus.

“Sri Lanka effectively implemented the curfew to contain the spread of the virus, while ensuring the people’s access to basic needs, including food and medicine, and without disrupting essential services in both public and private sectors. Now, the virus infection in Sri Lanka is successfully under control with zero community transmission. This is a commendable achievement. The global pandemic, however, caused serious difficulty to the Sri Lankan economy, especially in export sector and tourism. The Government of Sri Lanka announced several financial and monetary measures to mitigate this economic difficulty, and, most assuredly, they could lead to significant positive impacts on the Sri Lankan economy.

“Japan’s economy is in severe difficulty. The Government of Japan declared a State of Emergency on April 7th to request that the people and business community limit their activities to the minimum, although on a voluntary basis, to contain the COVID-19. Although the state of emergency was lifted on May 25 after pulling off the crisis, we still see new cases of infection every day. As disruption of social and economic activities in Japan and abroad takes a heavy toll on our economy. Japan’s economy contracted by 7.9 % in the second quarter of this year compared with the first quarter, which is equivalent to 28.1 % decline on an annualized basis. Japan is now struggling to strike an appropriate balance between reviving the economy and containing the virus spread. New Prime Minister Yoshihide Suga stressed in his first press conference, the most urgent agenda for the new Government is of course how we will get our economy back on track.

“Let me briefly discuss how consumer habits have changed in Japan after the COVID-19 pandemic, although I have to say that this is my layman’s view.

“As people start to work from home and spend more time at home because of the pandemic, their lifestyle and way of consumption have significantly changed. First, the COVID-19 has brought a considerable shift in the consumer’s style of shopping – from store shopping to on-line shopping. Because of stay-at-home requirement, consumers who were not familiar with online services such as restaurant delivery applications are now experimenting with these new devices. This has stimulated the uptake of digital commerce among more Japanese. Second, we are seeing an increasing demand for the goods and services which make working-from-home easy and efficient and staying-at-home more comfortable and enjoyable, including electronic appliances and online video services. In Japan, such consumption trend is called “nesting consumption”, which means that, like nesting birds, people stay and work at home and buy things online to keep their home tidy and comfortable.

“Next, products essential for the health and wellbeing of people such as masks and alcohol disinfectants are high in demand among consumers since people are now more conscious about hygiene and good health. In this connection, it should be noted that the COVID-19 has caused serious disruptions to global supply chains, resulting in shortages of various products, including such hygiene products. We keenly feel the need to diversify production bases of those products.

“Staying at home and health concerns are also changing payment methods of Japanese people. As some of you may know, Japanese people still have a preference for cash payment in daily lives, but prevalence of online shopping and hygiene concerns about touching money make people go for credit cards or prepaid cards more frequently.

“Since people stay home and do not go out, they do not pay for travel and hospitality services. As in Sri Lanka, in Japan tourism and hospitality business have lost business substantially because of the COVID-19. Since the tourism industry in Japan is increasingly dependent on inbound tourists, the entry ban of foreign tourists has been giving a serious negative impact on the tourism industry, especially local (outside Tokyo) businesses. To address this issue by promoting domestic travel, the Government of Japan has embarked on “Go to Travel Campaign” which gives domestic travelers a discount on travel costs, including hotel accommodations, if hotels or restaurants they use take strict health precautionary measures against the COVID-19.

“Of course, business people like you have much better ideas about these new trends. Having said that, I think that some of these changes will be here to stay even after the COVID-19 threat passes and could even open up new business opportunities.

With the lessons learnt from this pandemic, our two countries should come up with proper strategic moves to convert the global pandemic challenge into opportunities and I hope this would turn a new leaf in Japan-Sri Lanka business relations.”



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Dispute over cobalt-rich seabed: FSP alleges India exploiting hapless Lanka

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Pubudu Jagoda

… Indian HC denies dispute

By Shamindra Ferdinando

Top spokesperson for Jana Aragala Sandhanaya, Pubudu Jagoda, yesterday (12) said that India was brazenly exploiting the continuing political and economic crisis here to secure rights to explore a cobalt-rich underwater mountain in the Indian Ocean, situated in an area staked by Sri Lanka in terms of Article 76 of the United Nations Convention on the Law of the Sea (UNCLOS).

Jagoda, who also represents the Peratugaami Pakshaya (Frontline Socialist Party), a breakaway faction of the JVP, said so when The Island sought further clarification after he discussed the developing situation with India, in an interview with Asoka Dias on Sirasa ‘Pathikada.’ telecast earlier in the day.

Jagoda told The Island that the unprecedented Indian move on Afanasy Nikitin seamount that lies entirely within an area, also claimed by Sri Lanka way back in 2009 as being within the boundaries of its continental shelf, should be a warning to both the government and the Opposition.

The former JVPer declared that Jana Aragala Sandhanaya would take up this issue vigorously in the run-up to the forthcoming presidential election. Jagoda emphasized that India took advantage of hapless Sri Lanka while frequently uttering like a mantra its self-proclaimed Neighbourhood First Policy and Security and Growth for All in the Region (SAGAR). The Peratagaamis-led grouping recently pledged to contest both the Presidential and Parliamentary polls.

While asserting that political parties represented in Parliament, along with the government, lacked the courage to take up this issue with India, Jagoda therefore urged the Wickremesinghe-Rajapaksa government to deal with it diplomatically at the highest level.

The Indian High Commission spokesperson said there was no dispute and asked The Island to refer to a statement dated July 08, 2024 issued by Sri Lanka Ministry of Foreign Affairs.

Appearing on ‘Pathikada’, Jagoda questioned the failure on the part of the government to respond to the Indian move much earlier.

Pointing out that India sought the intervention of Kingston Jamaica-based International Seabed Authority (ISA) to secure approval for exploration of cobalt-rich ferromanganese crusts located at the Afanasy Nikitin seamount thereby undermined Sri Lanka’s efforts to win recognition of the outer limits of its continental shelf, Jagoda said that India seemed to be resorting once again to bullying tactics.

War-winning President Mahinda Rajapaksa, who always jealously guarded the country’s interests, made Sri Lanka’s claim on May 08, 2009, as ground forces were engaged in the last phase of operations on the Vanni east front. The war was brought to a successful conclusion 10 days later.

Jagoda explained how India unfairly pressured Sri Lanka over Chinese research ship visits, finally leading to the government to declare a ban on such stays during whole of this year. The FSP spokesman also expressed concerns over the Katchatheevu issue, massive Indian poaching and the recent death of a Special Boat Squadron (SBS) member as a result of aggressive maneuvers resorted to by an intercepted trawler off Kankesanthurai.

Jagoda alleged that poaching on such a scale couldn’t take place without India’s tacit approval. “They have a much bigger Navy and significant Coast Guard assets therefore there cannot be any excuse for not being able to effectively hinder crossing of the Indo-Lanka maritime boundary at will by their poachers,” Jagoda said. Declaring that destructive bottom trawling had been banned in Indian waters though the invading Indian fishing fleet freely adopted the highly harmful method in our waters, Jagoda alleged that New Delhi conveniently turned a blind eye to what was going on in the neighbour’s waters.

Referring to the dispute over the Indian claim contrary to that of Sri Lanka, the FSPer said the Indian media coverage of the issue indicated that they intended to go ahead with the exploration of the cobalt rich region. Reference was made to India reaching agreement with Taiwan to undertake the exploration amidst rising tensions between China and India.

Acknowledging that the two issues – Sri Lanka’s submission made in terms of UNCLOS in 2009 and India’s appeal to ISA this year – were before the UN as declared by Sri Lanka Foreign Ministry, Jagoda said that the government should discuss the contentious matters with India without further delay.

Jagoda said that no political party represented in Parliament so far commented on the developing situation.

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Another FR petition to stay Presidential Poll at 11th hour

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Another fundamental rights petition was filed in the Supreme Court yesterday (12), requesting the court to prevent the Election Commission from declaring the next presidential election.The petitioner, a lawyer by profession, has argued that the 19th Amendment to the Constitution, which reduced the President’s tenure to five years from six, was not passed properly.

He has argued that the 19A must be approved by the people at a referendum and holding a presidential election, as per the aforementioned amendment, is a violation of the Constitution.

The members of the Elections Commission, the Secretary General of the Parliament and the AG were named as respondents.

The petition says that the 19th Amendment strips the President of the power to dissolve Parliament a year after it was elected. The Supreme Court at that time said the provision had to be approved by the people at a referendum for it to become law. A referendum was never held, and therefore 19A could not be considered law.

The petitioner has said the Elections Commission is planning to hold a presidential election this year based on 19A and that it is unconstitutional to hold the election until 19A is subjected to a referendum.

The petitioner has asked the Supreme Court to declare the holding a presidential election, five years into the term of the President, unconstitutional. He also urged the court to instruct the Secretary General of Parliament to subject 19A to a referendum.

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COPF uncovers major failings in online visa procurement process

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Harsha de Silva

The Committee on Public Finance (COPF), chaired by Dr. Harsha de Silva, released a critical report revealing major discrepancies in the procurement process and agreement with a Consortium, comprising GBS Technology Services, IVS Global-FZCO, and VF Worldwide Holdings Ltd.

Issuing a press release, MP de Silva said the Committee’s findings highlight significant concerns and recommend urgent corrective actions.

The COPF found that the company got the deal through an uncompetitive Procurement Process

“The Consortium was appointed without a competitive bidding process, preventing the Department of Immigration and Emigration (DOIE) from securing the best value for money.

“Proposals were submitted before finalising the System Specification Requirement (SSR), raising concerns on procedural integrity.

“Critical Issues Identified:

Unclear Fee Structure: Lack of transparency in fee components, including discrepancies in service fees and convenience fees.

“Data Breach and Termination: A significant data breach was reported by a major travel vlogger in May 2024 potentially triggering a termination clause.

“Conflicting Exclusivity: The exclusivity granted to the Consortium contradicts the presence of existing service providers and the recommendation by the evaluation committee.

“Uninvested Funds: The USD 200 million investment promised to Cabinet remains uninvested and not mentioned anywhere in the agreement.

“Terminated Service Provider: Mobitel, the previous ETA service provider since 2012, submitted multiple proposals for system improvements and a comprehensive proposal for new services was overlooked.

“Recommendations:

Comprehensive Forensic Audit: The COPF recommends that the Auditor General undertake a comprehensive forensic audit of the entire procurement process. This audit should be completed at the earliest opportunity to serve as the foundation for necessary actions, which could include abrogating or amending the Consortium Outsourcing Agreement.

“Data Protection Measures: The COPF urges the Ministry of Public Security (MOPS), DOIE, and the Sri Lankan Data Protection Authority to review the KPMG report and take immediate and decisive actions to ensure the complete security and protection of all data handled through the ETA application process.

“Dr. Harsha de Silva, Chairman of COPF, stated, “The absence of a competitive bidding process in the procurement of online visa services has likely resulted in an agreement that does not provide the best value for money. Our findings call for immediate action by the Auditor General to address these critical issues and ensure transparency and accountability, which could even mean abrogation of this agreement.”

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