Business
SL has very limited policy tools to provide relief and boost output recovery – IPS Executive Director
By Ifham Nizam
Sri Lanka’s economy, hit by a series of crises, including a foreign currency shortage, fuel and food scarcities and a sharp decline in government revenues, is struggling to emerge from the turmoil. Besides, it has very limited policy tools to provide relief and boost output recovery, Institute of Policy Studies (IPS) Executive Director, Dr. Dushni Weerakoon said.
Speaking at the recent launch of the IPS report, ‘Sri Lanka: State of the Economy 2024’, on the theme, “Economic Scars of Multiple Crises: From Data to Policy,” Weerakoon said the report provides a deep analysis of the country’s recovery efforts and the policy choices that will shape its future.
Some100 representatives of the government, private sector and civil society gathered at the launch to discuss Sri Lanka’s fragile economic recovery, dissect the root causes of its persistent challenges and to debate potential solutions.
While the country is on a path to recovery, it is a delicate one, Weerakoon said.
Weerakoon stressed the need for “marginal changes” in tax and spending policies to address deep-rooted inequalities. These adjustments, she suggested, are the most prudent means to improve living standards in a nation that continues to reel from economic shocks. ‘The State of the Economy 2024’ report underscores the importance of refining policy strategies to ensure that they are both effective and equitable, without derailing the country’s fragile recovery process, she said.
‘The IPS report brought attention to one of the most controversial issues in Sri Lanka’s post-crisis economic recovery: taxation. VAT hikes and the removal of exemptions have disproportionately impacted the country’s poorest, further widening the socio-economic divide, the IPS head explained.
IPS Research Economist, Priyanka Jayawardena said that households in the lowest income decile spend about 10% of their income on VAT, compared to only 6% among higher-income groups.
The findings also show that while direct taxes, such as PAYE and PIT, are progressive—meaning they tax the wealthy more heavily—Sri Lanka is still plagued by high levels of tax evasion. In 2023, less than one-third of the estimated Rs. 131 billion payable in personal income tax was actually collected.
According to Dr. Pulasthi Amerasinghe, Research Economist at IPS, the Aswesuma welfare program adopts more stringent eligibility criteria, making it a more targeted approach to social welfare. Around 54% of former Samurdhi beneficiaries qualify for Aswesuma, reflecting the programme’s improved focus on deprivation indicators across 22 criteria.
However, despite the programme’s refined targeting mechanisms, there remain serious concerns about those left behind. As Dr. Amerasinghe noted, nearly 40% of food-insecure households, a group particularly vulnerable in times of economic crisis, were found to be ineligible under the Aswesuma criteria.
IPS Director of Research, Dr. Nisha Arunatilake, revealed troubling statistics from the Labour Force Survey: 65% of young Sri Lankans aged 20-24 not being engaged in any form of education. This means that a significant portion of the country’s youth is entering the labour market with low or outdated skills, which undermines their ability to compete in an increasingly digital global economy.
Adding to this is the decline in high-skilled employment, which dropped from 23% in 2018 to 20% in 2023. Emigration of skilled workers, drawn by better wages abroad, has resulted in a shortage of professionals in critical sectors, such as, engineering, IT and management.
Suresh Ranasinghe, IPS Research Officer, highlighted this “brain drain” as a significant factor driving down managerial positions in Sri Lanka, which have halved over the past five years. The consequences of this are far-reaching: as skilled talent leaves, the country’s labor market struggles to meet the demands of modern industries, thereby stifling productivity and innovation.
Business
SL’s coconut price hike has roots in past erratic policies on fertilizer use – CDA chairman
By Ifham Nizam
Sri Lanka’s coconut industry is facing a significant crisis, with production levels plummeting from three billion nuts annually to just 2.85 billion nuts. Erratic policies of previous governments regarding fertilizer use have played a key role in precipitating this situation, Coconut Development Authority (CDA) chairman, Shantha Ranathunga said.
Speaking to The Island Financial Review, Ranathunga highlighted that the impact of foreign exchange fluctuations has led many farmers to neglect best practices in nurturing coconut trees, thus exacerbating the problem.
Ranathunga added: ‘Additionally, the industry is grappling with various diseases and pest infestations, often a result of insufficient care and oversight. Despite these challenges, the global market is witnessing an unexpected boom for local exporters. A shortage of coconut supplies in the Philippines and Indonesia has created opportunities for Sri Lankan exporters, who are now able to secure better prices for their products.
‘In response to the escalating global demand and prices for coconuts, including desiccated coconut, the government has begun implementing measures to facilitate imports of coconut kernel. This decision, which follows requests from major companies like Nestle and CBL, is intended to support the local export market.
‘A Cabinet paper is currently being prepared to grant exporters the authority to import any quantity of coconut kernel they require, thereby removing restrictions that have previously hampered supply.
‘We have concerns over the influence of a “coconut mafia,” which has manipulated local prices, resulting in retail costs soaring to Rs. 150-160 for coconuts purchased from estates at Rs. 90-100. To counteract this, we have urged state estates participating in the coconut auction at the CDA to set auction prices at a minimum of Rs. 105, aiming to curb excessive profits made by middlemen.
‘Furthermore, the CDA is taking steps to provide financial relief to farmers. A subsidy of Rs. 60,000 to 65,000 per acre—covering approximately 50 trees—will be available, financed from the CDA’s funds. This initiative aims to assist small farmers in acquiring the necessary fertilizers to boost coconut production.
‘With local coconut and coconut oil prices rapidly escalating, the urgency to stabilize the domestic market has never been greater. Rising global edible oil prices have compounded these issues, with refined coconut oil prices climbing from USD 1,320 to USD 1,880 per ton, while palm oil prices approach USD 1,250 per ton due to climatic impacts and increased international demand.’
Business
CEAT Kelani inspires top dealers with ‘Autobahn’ convention & awards gala
Hosts top 125 dealers and their families at two-day event at Cinnamon Grand and Port City
Sri Lanka’s leading tyre brand CEAT pulled out all the stops to felicitate and recognise top dealers at a two-day convention and awards gala at the Cinnamon Grand and the Port City recently, blending glitz and fun with an illuminating technical session.
Themed ‘Autobahn’ to reference the German engineering, research and development expertise that underpin the brand, the event revolved around Sven Rath, General Manager – Global Outdoor Testing at the CEAT Research & Development Centre in Frankfurt, Germany, who was present in person.
Delivering the welcome address at the awards dinner, CEAT Kelani Holdings Chairman Chanaka De Silva said that collectively, the 125 top dealers felicitated represent the heartbeat of the company and are a vital part of its success.
Pointing out that CEAT Kelani had achieved several significant milestones despite the challenges in the market, De Silva said the company had continued to grow, innovate and serve customers better than ever before, retained its status as the most-loved tyre brand in the country, and received an AA+ rating from Fitch for the fourth consecutive year in 2024.
CEAT’s top 10 dealers countrywide received handsome awards for their contributions to the Company’s performance while the top 45 dealers received awards of excellence, and the top performers in each of tyre categories manufactured by the company were recognised separately at the dealer convention. A noteworthy feature was the presence of representatives of two of CEAT’s top customers in two key export markets – Singapore and Egypt.
Top dealers honoured at the event received cash awards, gift vouchers, trophies and certificates in recognition of their performances in each of the product categories that CEAT manufactures, as well for overall excellence.
Business
ASHR Awards Day 2024
Kumon Dehiwala Learning Centre held its Annual Advanced Student Honor Roll (ASHR) Awards ceremony at the Bishops College Auditorium on the 03rd of November 2024 under the patronage of Yohei Nakagawa, Managing Director, Kumon India Sri Lanka, Guests of honour including Ms.Prerna Moitra- Area Development Manager (Kumon India Sri Lanka.
Bangalore South-Sri Lanka division, Principal Bishops College- Ms.Chemali Goonethikale Herath, Ms. Jalani Premadasa and the directress for Kumon Dehiwala Learning Centre Ms.Femidah Wahid. The occasion was graced by almost 700 participants including dignitaries from various industries.
The ASHR Awards ceremony celebrates students who have demonstrated exceptional academic excellence by surpassing studying content beyond their respective school grade levels by 6 months,2 years ,3 years and 5 years. This year, Kumon Dehiwala has produced 314 awardees including 35 Kumon programme completers- one of the highest numbers of award recipients across India- Sri Lanka. The ceremony also celebrated the receipt of the third international award for the year. The celebration also commemorated the 10 year journey of Kumon Dehiwala and the success stories of its alumni (124 program completers) -a moment of immense pride and reflection.
In recognition of the outstanding performance in 2024, the Kumon Dehiwala learning centre was presented with an Award of Excellence at the prestigious Kumon Asia Oceania (K.A.O) conference 2024. The centre was recognized as one of the top three centres for producing the highest number of programme completers for native language programme(across 2400 Kumon centres globally).
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