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South Asia not ready for common currency
(Daily Star/ANN) South Asia is not yet ready for a common currency, said economists from countries in the region at the opening of a two-day 14th South Asia Economic Summit in Sheraton Dhaka on Saturday.
However, integration in trade and investment, increased mobility and people-to-people connectivity will provide the incentive for monetary cooperation in the region, they told a session on macroeconomic cooperation and the possibility of a common currency.
South Asia accounts for nearly one fourth of the global population and it has the market and ability to grow together, said the economists at the event being hosted by the Centre for Policy Dialogue.
Yet it is the least integrated in terms of trade, said Zahid Hussain, former lead economist at The World Bank, Bangladesh.Intra-regional trade accounts for 5 percent of South Asia’s total trade whereas the share of intra-regional trade in the Association of Southeast Asian Nations (Asean) region is 25 percent, he said.
South Asia is diverse in land area, gross domestic product or economic output, and population but the region’s countries have similar levels of human and economic development which calls for increased integration, he said.However, there is a lot of barriers to mobility, he said, citing non-tariff barriers, complicated visa policies and rigid bureaucracies.
“There is high sensitivity to national sovereignty. National currencies evoke strong attachment and emotion,” said Hussain at the event.
Political will to give up fiscal and monetary autonomy is also necessarily to go for a common currency, he said.
Complementarity in trade and free flow of labour and capital among the members can make cooperation over a currency more likely, he said.
Several countries have taken steps to reduce dependence on the US dollar and Bangladesh also took bilateral initiatives to settle trade in Chinese yuan and Indian rupee in 2022 and 2023, said Hussain.
However, the response with regard to trade in rupee is muted while exporters in China prefer receiving payments in dollars, euro and pound sterling, he said.There is persistent and growing trade deficit among Bangladesh, China and India, which makes trade in rupee and yuan limited here, he said.
Bangladesh’s average monthly trade deficit is $1.13 billion with China and $644 million with India.Comparability of economies is needed for a common currency, said Md Habibur Rahman, chief economist at Bangladesh Bank. “We are not right there…We can search for an appropriate time and opportunity for this,” he said.
A mechanism enabling independence is needed to avoid sanctions, said Abid Qaiyum Suleri, executive director at Sustainable Development Policy Institute, Pakistan.
Pakistan is relying on barter trade with countries such as Afghanistan, China and Russia, he said.
“Instead of losing hope on a common currency, we can explore so that we reduce dollar dependence,” said Suleri.
Posh Raj Pandey, senior economic advisor of the finance ministry of Nepal, proposed for establishing a regional financial market in this regard.
Use of the US dollar for international transaction settlement is declining, said Professor Sachin Chaturvedi, director general of the Research and Information System for Developing Countries, India.
International transactions other than that of the US dollar accounted for 9 percent of total global trade in July 2022 and it rose to 14 percent in December the same year, he added.
“This is an indication of rising arrangement of settlement in non-dollar,” he said, adding that 38 countries have shown interest to trade with India in rupee.
However, to make trade in the rupee popular between Bangladesh and India, a large line of credit in rupee is needed, said Ahsan H Mansur, executive director of the Policy Research Institute of Bangladesh.
“Otherwise, the performance we have seen is dismal…We also should think of currency swap to protect against external shock,” he said.
Countries should start with trade facilitation for economic integration and go for common documentation for customs, encourage firms to invest regionally and foster people to people connectivity, said Mansur.
Visa issuance and border control is quite pervasive and old fashioned, he said.
The economist also suggested harmonisation of tax and trade policies among members of the South Asian Association for Regional Cooperation.
“We also need monetary policy harmonisation. We need to think about bringing inflation close to each other and currency stability. Cooperation at the institutional level is critical,” he said.
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Coal ash surge at N’cholai power plant raises fresh environmental concerns
Environmental groups have raised fresh concerns over increasing levels of coal ash generated at the Norochcholai Coal Power Plant, warning of serious environmental and public health risks if proper disposal mechanisms are not urgently implemented.
Environmental scientist and Centre for Environmental Justice (CEJ) Chairman Hemantha Withanage, in a strongly-worded comment yesterday, said the growing volume of ash was being treated as a “blessing” by authorities, while, in reality, it posed a major ecological threat.
He told The Island: “More coal and more ash are being celebrated as a blessing. People around Norochcholai should get ready to apply it on their foreheads — and this will affect everyone, regardless of political affiliation.”
Norochcholai, Sri Lanka’s largest coal-fired power station, produces thousands of tonnes of fly ash and bottom ash annually. Environmentalists say a significant portion of this waste is either inadequately stored or disposed of without proper environmental safeguards.
Withanage said coal ash contains toxic heavy metals, such as mercury, arsenic, cadmium and lead, which can contaminate soil, groundwater and nearby marine ecosystems.
“Coal ash is not ordinary waste. It is a hazardous industrial material. If it leaks into the environment, it can enter food chains and drinking water sources,” he said.
He warned that communities living around Norochcholai were already exposed to air pollution from ash particles, especially during windy conditions, leading to respiratory problems and long-term health risks.
CEJ has repeatedly called for a transparent national policy on coal ash management, including safe storage facilities, independent monitoring, and exploring environmentally responsible reuse options under strict regulation.
Withanage stressed that while some countries recycle coal ash in construction materials, Sri Lanka lacks the regulatory framework and technical safeguards to do so safely.
“Without proper standards, recycling can become another pathway for toxic exposure,” he cautioned.
Environmentalists are also urging the government to accelerate the transition away from coal towards renewable energy, arguing that continued dependence on coal will only multiply waste and health burdens in the coming years.
Norochcholai supplies nearly one-third of the country’s base-load electricity, but has remained controversial, since its commissioning, due to repeated technical failures, marine pollution concerns and its long-term environmental footprint.
“With climate change and public health risks, coal is a problem we should be reducing, not normalising,” Withanage said. “Otherwise, the ash will eventually come back to all of us.”
by Ifham Nizam
News
Akuregoda double murder: Suspected gunman in custody a duly discharged ex-soldier
The police have arrested one of the two gunmen involved in the killing of Attorney-at-Law Buddhika Mallawarachchi and his wife, at Akuregoda, on 13 February. The suspect has been identified as a legally discharged soldier.
A team of the Homagama Divisional Crime Investigation Bureau personnel apprehended the ex-soldier at Delduwa, Ambalangoda, on Saturday, around 6.20 p.m. Sources said that the suspect, identified as drug addict, had admitted that he was the one who fired the T-56 assault rifle in the attack. The other attacker used a pistol. He is still at large.
Police identified the suspect in custody as a 46-year-old resident of Baddegama. He made use of a general amnesty offered to deserters, after the conclusion of the war, to secure legal discharge. He was with a friend at Delduwa, Ambalangoda, and worked on a nearby cinnamon estate.
The suspect has been detained under PTA and the police given the power to hold him for 90 days.
The police recovered his mobile phone.
The killers arrived at Akuregoda, in a car, and fled the area after killing the couple. The ex-soldier had got off the car, near Kottawa, and then took a bus to Dehiwala, from where he proceeded to Ambalangoda.
Under interrogation, the suspect has revealed that he carried out the hit on a contract given by Karandeniye Sudda, a notorious underworld figure, who paid him Rs 1 mn and provided a quantity of heroin.
The ex-soldier is among nine persons taken into custody in connection with the ongoing investigations into the Akuregoda double murder.
Among those taken into custody are two brothers from Athurugiriya who allegedly transported one of the firearms used in the killing and provided information about the lawyer’s vehicle. Another person, identified as “Polgasowita Dila,” believed to have coordinated the Akuregoda hit, was also taken into custody during preliminary investigations.
The Police Special Task Force’s Southern Province Special Operations Unit arrested six more suspects over the weekend at Ethkandura, Kahaduwa, for aiding and abetting the double murder
Investigations have further revealed that the individual, who moved the gunman to a hotel in Pannipitiya, had fled to Thailand, via the Bandaranaike International Airport (BIA).
News
Those who hid under beds fearing Gotabaya, now talking big: Justice Minister
Justice Minister Harshana Nanayakkara said in Parliament on Friday that some Opposition politicians who had not even dared to mention the name of Gotabaya Rajapaksa during the Rajapaksa era were now acting like heroes.
Minister Nanayakkara said so when SJB Kalutara District MP Ajith P. Perera asked whether the government would reopen cases against Gotabaya Rajapaksa, who no longer enjoyed presidential immunity. The former UNP Deputy Minister asked the Justice Minister whether the NPP, as promised during the polls campaign, had resumed hearings into 42 cases filed against the Rajapaksas and others.An irate Minister Nanayakkara said that those who had been under their beds those days were now acting as if they were heroes. He refused to answer MP Perera’s question. (SF)
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