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South Asia to remain fastest growing region: ADB

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The Asian Development Bank (ADB) last week said South Asia was likely to hang on to its fast growth despite fresh outbreaks of COVID-19, with 9.5% overall economic expansion and Sri Lanka projected to grow by 4.1% this year. 

South Asia will have developing Asia’s fastest growth this year after suffering the region’s sharpest contraction in 2020. Aggregate output is forecast to expand by 9.5% in 2021, with growth tapering to 6.6% in 2022, the ADB said in its flagship Outlook report. 

South Asia’s largely reflects the performance of India, which will rebound from an 8% contraction in fiscal year 2020 and grow by 11% and 7% in this and the following fiscal year.

 A stimulus-fuelled surge in the US – India’s largest export market – will support the revival, but a severe second COVID-19 wave is threatening the recovery. 

Economic activity in Afghanistan, Nepal, and Pakistan will also rise as tight containment restrictions are lifted, with buoyant remittances stimulating growth in Nepal and Pakistan. Sri Lanka’s challenging macroeconomic situation will likely moderate growth in 2022 but is forecast to grow at 4.1% in 2021. However, this is lower than Government projections of 5.5%-6%. 

Growth recovery is dependent on an expansive budget and stronger global demand with a marked rebound expected in the major advanced economies, as well as from a base effect following contraction in 2020. 

“Growth is projected to slow somewhat to 3.6% in 2022. Building on growth momentum in Q3 and Q4 2020, the Purchasing Managers’ Index, a leading indicator of economic activity, moved strongly into expansionary territory above 50 in the three months to March 2021, with manufacturing above 60 and services in the high-50s,” the report said. 

Growth will benefit in the near term from increased private consumption as pent-up demand is released, and consumption and investment will benefit from low interest rates and ample liquidity. 

Progress on the Colombo Port City special economic zone is expected to foster Foreign Direct Investment, as does development in the Hambantota Industrial Zone. The Government’s reform priorities include deregulation to simplify governance structure, improvements to the Judiciary, Customs efficiency, financial sector regulation, and effective land use.



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Rs 1. 3 bn yahapalana building deal under investigation

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Jayasinghe building

Several ex-Cabinet ministers questioned; Ranil, Sajith, too likely to be summoned

The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) has initiated an inquiry into the shifting of the Agriculture Ministry situated at Rajamalwatte, to a building belonging to the D. P. Jayasinghe Group of Companies, at Rajagiriya, during the Yahapalana government.

The building was rented for a five-year period at a cost of over Rs 1 bn by the yahapalana government within months after the then President Maithripala Sirisena declared opened the 10-storey building complex.

The CIABOC yesterday morning recorded former yahapalana minister Gayantha Karunatilleke’s statement in connection with the investigation. Later in the day, CIABOC recorded the statement of SJB General Secretary Ranjith Maddumabanadara. Earlier CIABOC summoned former ministers Thalatha Atukorale, Wajira Abeywardena and Lakshman Kiriella. At the time of the finalisation of the deal, KIriella was in the UNP.

Sources said that former PM and President Ranil Wickremesinghe, too, was likely to be questioned in this regard. Responding to The Island queries, sources pointed out even SJB leader Sajith Premadasa was expected to be questioned.

The then Speaker Karu Jayasuriya is on record as having said that the building was rented in keeping with a decision taken by the government and not Parliament.

The UNP-SLFP coalition shifted the Agriculture Ministry to accommodate 16 Sectoral Oversight Committees therein.

Although the government paid as much as Rs. 21.5 mn monthly rent to D.P.A. Jayasinghe Company, the Agriculture Ministry failed to move in for over a year. The then Agriculture Minister Duminda Dissanayake sought Cabinet approval on Dec 1, 2015 to rent the building.

According to inquiries conducted earlier by the Presidential Commission appointed to probe state sector corruption, the Agriculture Ministry sought Cabinet approval for a new building after the then Prime Minister Wickremesinghe submitted a cabinet proposal on 21 September, 2015, to use the Agriculture Ministry building for Parliament’s sectoral oversight committees.

PM Wickremesinghe’s Secretary Saman Ekanayake has told the Commission that public funds could have been saved if the several vacant floors of Suhurupaya belonging to the Defence Ministry had been made available to the Agriculture Ministry.

By Shamindra Ferdinando ✍️

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SL Railways suffers staggering losses; more than 2/3 of rail tracks out of service

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Army personnel engaged in repairing damaged railway tracks in the Boo Oya area. Cyclone Ditwah caused extensive damage to railway tracks in several parts of the country (pic courtesy Army)

Railway sources said that the damages caused to railway tracks could be more than USD 300 mn.

According to UNDP Rapid Crisis Assessment Sri Lanka’s railroad system, over 278 km of railways were exposed to cyclone-related flooding, including 35 railroad bridges nationwide. This figure reflects flooding only, but other hazards (such as localised debris, landslides, or damage to a single bridge) can also disrupt operations, meaning that even relatively small obstructions can render long stretches of railway non-operational. Like road exposure, railway exposure limits mobility and the capacity of affected populations to access key services and infrastructure.

At the level of divisional secretariats, Colombo and Thimbirigasyaya in Colombo District, Ja Ela in Gampaha District, as well as Mannar Town and Nanaddan in Mannar District all registered over 10 km of exposed railways each.

Commissioner-General of Essential Services B.K. Prabath Chandrakeerthi is on record as having said that only 478 kilometers of Sri Lanka’s 1,593-km railway network were currently usable following extensive damage caused by the recent cyclone.

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US, SL advancing free, open, and resilient Indo-Pacific region: Embassy

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Allison Hooker

Under Secretary of State for Political Affairs Allison Hooker arrived in Colombo yesterday (11) to underscore US interest in defence, trade and maritime security in line with their Indo-Pacific strategy.

The US embassy here issued the following statement: “Under Secretary Hooker will meet with Sri Lankan counterparts to discuss a wide range of bilateral issues, focused on deepening economic and commercial ties, strengthening defence cooperation, and supporting Sri Lanka’s economic and maritime sovereignty.

The United States and Sri Lanka share a strong and enduring partnership rooted in our mutual commitment to regional security, economic growth, and prosperity for our peoples. Through close cooperation on defence, trade, and maritime security, we are working together to advance a free, open, and resilient Indo-Pacific region.

As we continue to build on our strategic partnership, the United States also stands with the people of Sri Lanka as they respond to the devastating impacts of Cyclone Ditwah. We remain committed to working together to address both immediate challenges and long-term opportunities for our two nations, reflecting our ongoing commitment to the U.S.-Sri Lanka partnership.”

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