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Sri Lanka in dilemma over import restrictions removal – Economics don

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Prof. Priyanga Dunusinghe

The government has taken a number of steps to pass the International Monetary Fund (IMF)’s first review of its loan, Prof. Priyanga Dunusinghe, Department of Economics at the Colombo University says.

“The IMF made several recommendations. One of them is increasing the tax revenue of the government. It also wanted the government to make the Central Bank independent and ensure that the state-owned enterprises adhere to cost reflective pricing. The IMF also wanted a strong safety net. Some progress has been made on these fronts,” he said.

Prof. Dunusinghe said the government had already faced tough resistance to those moves.

“Not all goals set by the IMF have been met, but it’s obvious that the government is serious about meeting the targets,” he said.

Prof. Dunusinghe added that Sri Lankans must be proud that the government had repaid the loan taken from Bangladesh in 2022.

However, the decision to remove all import restrictions, apart from those on private vehicles, from October might be premature, he said. There are still restrictions on importing over 600 items, he said.

“We must do a thorough study first to see if we are in a position to do so. I know there is a lot of pressure on the government to lift import restrictions. There is a lot of pressure from the EU. They have opened their markets to us through GSP+, but we have closed our doors to their goods. The IMF is also not a big fan of import restrictions. I personally don’t think we are ready to let go of import restrictions so early,” he said.

“However, we can’t keep import restrictions going on for a long time as well. Sri Lankan products too are being sold to other countries and we need to show reciprocity,” he said.

“Some businesses might import large quantities of items to buffer up stocks. The government must ensure that the rupee is not greatly depreciated. We can control the import of goods through tariffs. We have signed agreements with the World Trade Organization (WTO) that we won’t go beyond certain tariff thresholds. However, there is room for us to operate. We can get rid of import bans, but we can still discourage imports,” he said.

Prof. Dunusinghe also said that politicisation of key institutions was a serious problem for the country as those with political affiliations were not keen on delivering bad news to their political masters.

“Sri Lanka is also talking about giving tax concessions to attract investors. We have tried this since 1977, without much success. We have not addressed what really deters investors, such as policy inconsistencies, corruption, and lack of infrastructure. We just give tax concessions, which are often used by crooks,” he said.



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Greek bond case: Cabraal, three others acquitted

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Former Central Bank Governor Ajith Nivard Cabraal and three others were yesterday acquitted in a high-profile case over the Central Bank’s purchase of Greek bonds, after the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) withdrew the charges against them.

Colombo High Court Judge Mohamed CIABOC had earlier alleged that the officials, despite Greece being mired in a deep economic crisis, knowingly proceeded with the 2011 purchase of Greek treasury bills, causing losses exceeding Rs. 184 million to the government.

Defence counsel told court that the Supreme Court had already held the transaction to be lawful and carried out in line with Central Bank regulations and financial reporting standards. They argued that CIABOC’s attempt to pursue the matter as a corruption case for a second time was unwarranted.

With the indictment withdrawn, the High Court formally cleared Cabraal and the three co-accused of all charges.

By A.J.A. Abeynayake

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Suspect ordered to be arrested for making allegedly derogatory remarks about Colombo Archbishop

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Fort Magistrate Isuru Nettikumara on Tuesday ordered the police to arrest Attanayake Mudiyanselage Namal Kumara,  for allegedly  making derogatory remarks about Colombo Archbishop Malcolm Cardinal Ranjith, and produce him in court.

The order came after the suspect failed to appear when the case was taken up in open court. The Magistrate subsequently issued a warrant for his arrest.

The second suspect, Asela Nuwan Rajapaksa, was present in court when the matter was called.

Investigators told court that inquiries were continuing under the International Covenant on Civil and Political Rights (ICCPR) Act.

Both suspects were earlier arrested and released on bail following a complaint lodged with the Colombo Crimes Division by Rev. Father Jude Krishantha, Director of National Catholic Social Communications.

By AJA Abeynayake

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US, Lanka join forces for rapid lifesaving response after Cyclone Ditwah

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US and Lankan troops on a mission to distribute relief aid in Jaffna

At the request of the government of Sri Lanka, the US military is working alongside the Sri Lankan Disaster Management Centre and Sri Lankan Armed Forces to provide foreign disaster relief to communities impacted by Cyclone Ditwah, which caused severe flooding, widespread displacement and tragic loss of life.

The forward presence and rapid response posture of United States Indo-Pacific Command enabled immediate coordination and a swift delivery of assistance to affected regions, underscoring the US commitment to Sri Lanka as a partner and friend during times of crisis.

Working closely with the Sri Lankan Disaster Management Centre, Sri Lankan Armed Forces, and the US Department of State, the US. military deployed a range of personnel, aircraft and logistical support capabilities to assist with lifesaving and life-sustaining humanitarian operations.

“Sri Lanka has shown remarkable resolve in the face of this disaster, and we are humbled to work alongside them,” said US Air Force Gen. Kevin Schneider, Pacific Air Forces commander. “We value our strong partnership with Sri Lanka as they lead these efforts and are committed to doing everything in our power to support the response. Together we are focused on providing lifesaving assistance to affected communities. Our regular joint training exercises with the Sri Lankan Armed Forces have built strong relationships and enhanced our ability to respond effectively to crises like Cyclone Ditwah.”

Since the declaration, US military and interagency partners have worked with Sri Lankan officials to assess needs, transport critical relief supplies and coordinate support to the nation’s most affected communities. These efforts highlight the enduring partnership between the United States and Sri Lanka and the shared commitment to regional resilience and humanitarian assistance.

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