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Loss suffered by country due to pandemic Rs.1,600 billion so far this year

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By Saman Indrajith

Finance Minister Basil Rajapaksa told Parliament yesterday that the country had suffered a revenue loss of Rs 1,600 billion due to the COVID-19 pandemic so far in the year.

Participating in the debate on regulations imposed under the Financial Bill and Export Import Control Bill, the Minister said that revenue from the Inland Revenue Department, Customs and Excise Department had gone down drastically owing to the lockdown.

 He said the government had also lost revenue from the Customs Department due to the suspension of vehicle imports for more than one and half years. The decision to suspend vehicle importation had been made to save foreign exchange.

 Minister Rajapaksa said that the VAT revenue that should have been added by the Inland Revenue Department had decreased by around 75 per cent.

 The Minister said that there had been a decrease in foreign loans too and added that Sri Lanka had to purchase around 80 percent of COVID-19 vaccines on ready cash.

“Total revenue has dropped drastically compared to expenditure.

This is not totally due to the pandemic as Sri Lanka’s state expenditure has exceeded the revenue for centuries,” he said.

“We have decided to use foreign assistance with utmost diligence and will only work with institutions such as the World Bank and Asian Development Bank and will only go for concessionary loan schemes. Sri Lanka will not agree to political conditions any donor would impose when it comes to external borrowings,” the Minister said.

He said that the amount of foreign reserves too had decreased, and the government had commenced producing some medicine in the country to prevent the drain of foreign reserves and started producing the country’s saline requirement on Sept 1.



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GL follows up Udaya’s initiative, negotiates concessionary crude oil supplies with UAE

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Balance-of-payment crisis continues to stagger govt.

By Shamindra Ferdinando

The United Arab Emirates (UAD) has agreed to discuss a possible arrangement to provide Sri Lanka crude oil on concessionary terms in the face of the country experiencing a severe balance-of-payments crisis, according to the Foreign Ministry.

Foreign Minister Prof. G.L. Peiris took up the matter with UAE Minister of Industry and Advanced Technology Dr. Sultan Al Jaber, on the sidelines of the 76th session of the United Nations General Assembly (UNGA) in New York. Prof. Peiris is on President Gotabaya Rajapaksa’s delegation to the UNGA.

In late August, Energy Minister Udaya Gammanpila sought the intervention of the Acting Head of the UAE Embassy in Sri Lanka, Saif Alanofy. Minister Gammanpila also met the Iranian Ambassador in Colombo in a bid to explore the possibility of obtaining oil from Iran on concessionary arrangements.

The Foreign Ministry statement on Prof. Peiris meeting with the UAE Minister dealt with the financial crisis experienced by the country. “Foreign Minister Peiris explained the challenges Sri Lanka is experiencing in respect of its external budget, as a result of the COVID-19 pandemic. Prof. Peiris focused in particular on the country’s requirement for oil and requested concessionary arrangements from the UAE.”

The Foreign Ministry quoted Minister Al Jaber as having said that the UAE would be happy to assist and proposed the establishment of a strategic framework to take the process forward.”

The ministry stressed that both sides agreed to follow-up rapidly.

Energy Minister Udaya Gammanpila earlier told The Island that concessionary arrangements were required to procure oil as part of an overall strategy to overcome the developing crisis.

Pivithuru Hela Urumaya (PHU) leader and Attorney-at-law Gammanpila said that increase in fuel prices in the second week of June this year was only a part of the government’s response to heavy pressure on foreign reserves. Minister Gammanpila said that the decision was taken close on the heels of dire warning from the Central Bank.

Minister Gammanpila said that in spite of foreign currency crisis, the government ensured an uninterrupted supply of fuel. According to him, Sri Lanka spent as much as USD 3.5 to 5 bn annually on oil imports depending on the world market prices.

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President attends 9/11 commemoration in NY

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President Gotabaya Rajapaksa yesterday attended the special commemorative event near the Manhattan Memorial in the United States to mark the 20th anniversary of terrorist attacks in Washington and New York.

The terrorist attacks took place on September 11, 2001, targeting the World Trade Center in New York and the Pentagon, the headquarters of the United States Department of Defence.

Coinciding with the 76th Session of the United Nations General Assembly, the United Nations Office of Counter-Terrorism and the 9/11 Memorial Museum jointly organised the event. Other Heads of State and government representatives, who were in New York to attend the UN General Assembly, were also present at the event to pay tribute to those who lost their lives in those attacks.

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FSP calls on govt. allies not to pretend to oppose adverse deal with US firm

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By Anuradha Hiripitiyage

Due to the secret agreement signed with US firm New Fortress Energy, Sri Lanka would soon face a situation akin to the one already faced by Ukraine, the Frontline Socialist Party (FSP) predicted yesterday.

“Sri Lanka is trying to reduce its dependency on coal and switch over to LNG. With this in mind, several coal and diesel power plants are to be converted into LNG in the coming decade. Now, we will entirely depend on the US to provide us with LNG to power these plants. Given that the US intends to control the seas in which Sri Lanka is placed strategically, they will not let us off the hook once they establish their foothold here. We are in deep trouble,” FSP Propaganda Secretary, Duminda Nagamuwa said.

Nagamuwa said that some constituents of the government were pretending that they opposed the transfer of government’s shares in the Yugadanavi Power Plant to New Fortress Energy. “But this is not the time for theatrics but for concrete action”, he said.

Nagamuwa said that the agreement between the government and US Company New Fortress Energy to construct a new offshore liquefied natural gas (LNG) receiving, storage and regasification terminal at Kerawalapitiya as well as the transfer of government’s shares in the Yugadanavi Power Plant had to be scrapped.

“Even government ministers agree that the agreement was not discussed with them. Several affiliates of the government are trying to convince the people that they are fighting this decision from inside. However, past experience has shown that when push comes to shove they will stay with the government. They must show the leaders of the government that they are not puppets,” he said.

Nagamuwa said that if those affiliated to the government were serious in their opposition to undermining Sri Lanka’s energy security they should show their commitment by doing something concrete.

The Yugadanavi Power Station at Kerawalapitiya already produced 300 MWs of energy and there was a plan to build another 350 MW plant there. The US Company had now been allowed to build an offshore LNG receiving, storage, and regasification terminal and to provide LNG to the existing Power Station and the new 350 MW power plant to be built, he said.

“Now we are under the power of the US. We will soon be facing the plight of Ukraine,” he said.

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