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Sri Lanka Tourism to request debt and interest waivers from Central Bank

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With the tourism sector being one of the most severely impacted industries in Sri Lanka, Sri Lanka Tourism has continued to support the industry stakeholders through a host of measures to help tide over the crisis. In its latest initiative, the tourism authorities have extended the validity period of licenses of all tourism establishments registered with the SLTDA until the 31st December 2021 with the hope that it will decrease the burden facing tourism establishments presently. The validity of Tourist Guides licenses has also been extended until later on this year.

When the borders initially opened in January 2021, in order to ensure both large and small tourism establishments and stakeholders are supported, Sri Lanka Tourism introduced the Safe and Secure certification in adherence to health protocols after an audit by KPMG and Ernst & Young. This certification which was offered as a complimentary service to the industry has helped even smaller establishments and travel guides benefit from tourism activities conducted under the bio bubble concept.

With the third wave of the pandemic severely effacting the Industry, tourism authorities have requested new relief from the Central Bank of Sri Lanka in addition to the extended debt moratorium from banks and finance companies, as well as concessionary working capital which was arranged for the industry in 2020/2021. In order to extend this support, Sri Lanka Tourism is further requesting the Central Bank to write-off of outstanding debts or interest waivers in order to sustain stakeholders who would otherwise have to shut down operations in the absence of tourists.

Further, the authorities secured VAT exemption for the tourism industry by lobbying for tourism to be classified as an export industry; 12 month instalment facility for utility payments and six month grace period for vehicle lease rentals was obtained; provisional registration to support informal sector was structured; loan and refinancing schemes to the value of Rs. 150 billion for affected industries which included tourism was provided and a Memorandum of Understanding with the Vocational Training Authority (VTA) to provide island-wide training for Tourist Drivers was facilitated. The authorities additionally provided the opportunity to convert existing accommodations to Safe and Secure Level 1 and Level 2 hotels and intermediary care centres while the liquor license fee was waived off for 2021.

With the outbreak of the pandemic in 2020, Sri Lanka Tourism took the initiative to expand the support provided to stakeholders previously overlooked, and reached out to Tour Guides, including National guides, Chauffer Guides, Area Guides and Site Guides, trained and registered with the SLTDA and provided relief totaling LKR 40.52 million. Additionally, as COVID-19 support; Sri Lanka Tourism recognized that there were many unregistered guides who were not able to garner the support extended during a time of crisis hence steps were taken to register Provincial Guides and grant them a one-off payment of Rs. 15,000.00. Further, Provincial licenses were issued to the accommodation providers for the first time.

Sri Lanka Tourism will continue to assist all stakeholders who have been gravely affected by the onset of the pandemic by liaising with relevant line agencies while continuing to explore new markets and promotional channels to attract the ‘new normal’ traveller to ensure the revival and sustainability of the industry. Concurrently the tourism authorities are taking measures to ensure that all tourism industry employees are vaccinated by October as part of the concentrated and systemic vaccination drive carried out by the government.



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‘Economic Transformation Bill ‘ and ‘Public Financial Management Bill’ to Parliament on May 22 – Acting Finance Minister Shehan Semasinghe

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Acting Finance Minister Shehan Semasinghe announced plans to introduce two significant bills to Parliament on May 22, aimed at bolstering the country’s economy.

These bills, the “Economic Transformation Bill” and the “Public Financial Management Bill,” are designed to enhance the management of public finances, thereby safeguarding against future economic downturns.

Minister Semasinghe made this announcement during a press conference at the Presidential Media Centre today (20), themed ‘Collective path to a stable country’.

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Macroeconomic policies in Sri Lanka are starting to bear fruit: IMF

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Julie Kozack, Director of IMF Communications

However, the global lender still requires two things from Sri Lanka

By Sanath Nanayakkare

Julie Kozack, Director of IMF Communications, last week highlighted Sri Lanka’s macroeconomic policies, rapid inflation decline, and steady economic growth as commendable.

“Sri Lanka now anticipates finalizing debt restructuring with private and official creditors. Domestic debt operations are largely completed, paving the way for faster-than-expected economic recovery following the crisis”, she said.

“So, just stepping back and giving the lay of the land. On March 21st of this year, the IMF staff and the Sri Lankan authorities reached a staff-level agreement for the second review of the program and also concluded the and also finished the Article IV mission. Completion of the review by the Executive Board of the IMF requires two things. The first is implementation by the authorities of the agreed prior actions, and the second is the completion of the financing assurances review, and that would confirm multilateral partners’ financing contributions. And the financing review will also assess adequate progress with debt restructuring.”

“With respect to Sri Lanka’s economic performance, macroeconomic policies in Sri Lanka are starting to bear fruit. Commendable outcomes include a rapid decline in inflation, robust reserve accumulation, and initial signs of economic growth, while also preserving stability in the financial system. Overall, program performance has been strong. The next steps with respect to the debt restructuring are to conclude negotiations with external private creditors and to implement the agreements in principle with Sri Lanka’s official creditors. The domestic debt operations are largely completed. The initial debt restructuring negotiations with external bondholders ended in mid-April without an agreement, and discussions are continuing with a view to reaching agreement in principle. And on the official creditor side, these agreements in principle still need to be finalized,” she said.

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CMTA hosts forum to explore Sri Lanka’s economic growth and mobility

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On Left - Katsuki Kotaro, Deputy Head of Mission - Embassy of Japan delivers the keynote address. On Right - Thilaka Jayasundara (Secretary, Ministry of Education), Eng. Ranjith Rubasinghe (Secretary, Ministry of Transport and Highways), Bingumal Thewarathanthri (Chairman, Sri Lanka Bankers Association), Katsuki Kotaro and CMTA officials

The recent event organized by the Ceylon Motor Traders Association (CMTA), themed “Mobility and Economic Growth,” brought together key stakeholders and thought leaders to delve into crucial discussions shaping Sri Lanka’s economic landscape. The event, highlighted by a keynote speech from Katsuki Kotaro, Minister and Deputy Head of Mission at the Embassy of Japan, and a dynamic panel discussion, provided invaluable insights and strategies for sustainable growth and enhanced mobility.

Kotaro emphasized Sri Lanka’s significant strides in economic recovery since the challenges of 2022. He explained that Sri Lanka’s economy has rebounded since 2022, with steady growth rates approaching the 3% target for 2024. Inflation, previously at 70%, has dropped to 2.5%, though prices remain high. Government efforts and IMF support have stabilized the economy. He went on to explain, that Sri Lanka’s practical strategy should involve starting with hybrid vehicles until about 2030, then transitioning gradually to EVs and fuel cell vehicles by 2035, mirroring Japan’s carbon neutrality goals. This phased approach acknowledges Sri Lanka’s current infrastructure and fiscal limitations. It’s crucial to develop industrial policies that support automobile production and enhance mobility while balancing economic growth with environmental sustainability.

During the course of the discussion, Bingumal Thewarathanthri, Chairman of Sri Lanka Bankers Association, spoke about Sri Lanka’s current economic trajectory, and possible risks the country might face. He explained, “We don’t see a risk of not crossing this review. As a country, we’ve made significant progress in several areas, including fiscal policy and the external sector, which has performed exceptionally well. Although there are still areas that need improvement, particularly in debt restructuring, the requirement is to show meaningful progress rather than completion for the second review. Given our advancements, I’m confident that Sri Lanka will secure the $300 million needed to move forward.”

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