SriLankan Airlines wishes to clarify its position with regards to the temporary suspension of the Colombo-Shanghai operation by the Civil Aviation Administration of China (CAAC) for a period of four weeks.
The airline operated a charter flight with 223 Chinese national onboard from Dubai to Shanghai via Colombo on the 7th of August 2020. Prior to this flight SriLankan operated two similar flights from Dubai to Shanghai with zero COVID positive cases.
For the charter flight on 7th August, the charter operator insisted for all passengers to take the COVID PCR test from the local professional testing facilities which is also used by other prominent international airlines and carried out PCR tests on each of the 223 passengers. This testing process was carried out 72 hours prior to boarding the flight and all passengers boarded the flight with negative test results shown at the time of operation of the special charter flight. These tests were carried out as a pro-active safety measure for the passengers and the crew at a time the PCR test was not considered as a mandatory requirement for China -bound flight out of Dubai.
Despite these measures taken, 25 passengers who were in this charter flight were found positive for COVID upon their arrival in China.
In the wake of the COVID outbreak, The Civil Aviation Authorities in China (CAAC) had introduced a new policy referred as the five one policy, which restricts an airline to operate to one point to China per week. In line with this new policy, SriLankan Airlines had engaged in operating 15 such charter flights repatriating over 3000 Chinese passengers from United Kingdom and Dubai to China without any incidents.
As per the CAAC policy, temporary flight suspensions are given to airlines, if only more than five COVID positive cases are found on a flight. The particular special charter flight operated on 7 August had 23 passengers tested positive for COVID, thus CAAC temporarily suspended SriLankan Airlines for four weeks as per the new regulations in place.
SriLankan Cargo operation remains unaffected and will continue to fly to China when required.
Spotlight on ‘Emerging Issues for Macroeconomic Stability’
The Central Bank of Sri Lanka co-hosted the CBSL-ADBI-APAEA Online Macroeconomics Conference for the third consecutive year, in collaboration with the Asian Development Bank Institute (ADBI) and the Asia-Pacific Applied Economics Association (APAEA), on 23 September 2022. This year’s theme remained same as the previous year; ‘Emerging Issues for Macroeconomic Stability’.
Inaugurating the Conference, Dr. Nandalal Weerasinghe, the Governor of the Central Bank, elaborated on some key challenges faced by many countries over the world, mainly driven by the COVID-19 pandemic and geo-political tensions, driving most central banks to prioritise on stabilising their corresponding economies. He highlighted the increasing concern faced by both advanced and emerging market economies alike, in the balancing act between supporting economic growth on the one hand, and maintaining overall macroeconomic stability on the other, amidst varying levels of macroeconomic buffers. He also noted the importance of research collaborations between the academia and policymakers to address various issues faced by the economies amidst the prevailing high volatility in the global economic landscape.
The Governor highlighted that although the applicability and validity of findings of certain models and theories presented in theoretical academic research could be somewhat limited amidst crisis situations like the one Sri Lanka is facing at present, ongoing effort to study the dynamics of emerging market economies is an essential element in the recovery process. Professor Tetsushi Sonobe, Dean and Chief Executive Officer (CEO) of ADBI delivered opening remarks and noted the heterogeneity among different regions in terms of the exposure to inflation pressures, available policy space and the soundness of macro-fundamentals. He emphasized that workshops of this nature would help stimulating a dialogue among academia and policymakers and support further development of policy research.
The Conference comprised two sessions of research paper presentations by authors from the Central Bank of Sri Lanka, ADBI and APAEA. The sessions were chaired by Dr. John Beirne, Vice-Chair of Research at ADBI, and Mrs. Yvette Fernando, Deputy Governor of the Central Bank.
The proceedings of the conference can be accessed via the Central Bank Website in the ‘Conferences, Seminars and Workshops’ section (https://www.cbsl.gov.lk/sites/ default/files/cbslweb_documents/research/CBSL_ADBI_APAEA_Workshop_Sep2022_Agenda.pdf).
Collaborative Research Conference by CBSL-ADBI-APAEA – 23 September 2022.
A compelling value proposition for investing in SL in the context of Port City Colombo
On the heels of the interim budget speech and a Staff Level agreement on an Extended Fund Facility with the IMF, the Ceylon Chamber of Commerce hosted a virtual session on the 01st of September 2022 to discuss, ‘How can Sri Lanka compete for investment amidst turbulence times: Economic growth vs Fiscal consolidation’.
Joining the discussion were Natarajan Sankar, Managing Director and Partner at Boston Consulting Group (BCG), Dr Dushni Weerakoon, Executive Director at the Institute of Policy Studies, Ashique Ali, chairman of SLASSCOM, and Thulci Aluwihare, Deputy Managing Director of CHEC Port City Colombo. The session was moderated by Shiran Fernando, Chief Economist at the Ceylon Chamber of Commerce.
During the discussion, Natarajan Sankar highlighted how the development of economic clusters could be an important policy tool to activate growth in new sectors, similar to Dubai, Singapore and Malaysia. The presentation demonstrated that Sri Lanka is now at an inflection point, where bold reforms must be implemented to enhance export competitiveness and FDI attraction, similar to major South Asian Economies following the 1997 Asian Financial Crisis.
Discussing these ideas further in the context of Port City Colombo, where BCG has been engaged as the International Strategy Consultant, Sankar stressed that the structural advantages offered by Sri Lanka need to be augmented by strengthening the country’s brand as a destination for investment, as well as by improving the ease, risks and costs of doing business. As many SEZs have failed due to poor conceptualization and implementation, he emphasized the need to form a compelling value proposition through a comprehensive package of fiscal incentives, infrastructure support, talent pool and a conducive legal/ regulatory framework.
Sankar also discussed the vast potential that exists in the IT, Digital Education and Professional Services segments, where Sri Lanka could position for an India+1 strategy, on the back of lower cost of operations, good quality talent pool and robust connectivity. In the context of IT companies, he pointed out that businesses consider a multitude of factors in their international location decisions, as they take a long-term view on graduating from Outposts to Satellites, and eventually, Hub operations. Hence, a precise overarching narrative and investor pitches, tailored for sectors and sub-sectors, should be set out to appeal for international investment, he explained.
Adding to the discussion, Dr Dushni Weerakoon, Executive Director of the Institute of Policy Studies, referred to the World Bank’s Global Investment Competitiveness Report, which points out the top 3 factors for investment decisions as: supportive political environment, macroeconomic stability and a supportive regulatory regime. Sri Lanka’s poor performance across these pillars, coupled with the ongoing economic crisis, could cause investors to generally steer away from long term investments and consider opportunistic/portfolio investments where exit is relatively easier.
However, to attract “efficiency seeking FDIs”, which are the conduit for new technology, management know-how and business networks, the long-term reform agenda plays a crucial role. Amidst an economic crisis and an era of fiscal consolidation, there is a case to be made for strategically considering tax incentives to attract investment in sectors such as IT, construction and exports. This could also position Sri Lanka competitively amongst the 50-70% of developing countries that offer fiscal incentives to attract investment.
Providing an insight from an IT/BPM perspective, Ashique Ali, chairman of SLASSCOM, underscored the importance of developing globally relevant skills to benefit from the vast opportunity within the IT/BPM sector, which remained resilient globally even during the pandemic, due to the rising demand for digitalization. He stressed that Sri Lanka continues to remain attractive for global clientele despite the disruptions to business activity that the industry experienced over the recent couple of months.
Discussing the matter from the point of view of the Port City Colombo development, Thulci Aluwihare, Deputy Managing Director at CHEC Port City Colombo explained the significance of strong economic growth in achieving long term debt sustainability, notwithstanding fiscal consolidation. Whilst agreeing that efficiency of the workforce, quality of infrastructure, political stability etc. take precedence over fiscal incentives in the context of investment decisions, Aluwihare revealed a comparative analysis of regional peers, which highlights Sri Lanka’s poor ranking in these aspects. Furthermore, Sri Lanka is also a relatively high tax jurisdiction, where taxes were second to India despite the lack of a vast domestic market. On the other hand, even developed jurisdictions such as Singapore and Dubai, UAE provide targeted tax incentives for as long as 40-50 years.
He also further explained that the hurdle return rates expected by international investors, commensurate with country risks, is significantly higher than in the region, which in turn makes large-scale development projects relatively unattractive. Aluwihare concluded by stressing that targeted incentives should be offered by considering a cost benefit analysis where the wider economic impact outweighs the cost of such incentives.
External and internal factors set stage for CSE revival
By Hiran H. Senewiratne
The CSE rose over 1 per cent within the first hour of trading yesterday, continuing the momentum from the previous day, unfolding a stock market driven by retail investors. The reasons for the market to bounce back were external and internal factors, stock market analysts said.
One external factor that propelled the market was the Asian Development Bank (ADB) reassurance of further support for crisis-hit Sri Lanka once the International Monetary Fund Board approves the US $ 2.9 billion four-year Extended Fund Facility program.
ADB President Masatsugu Asakawa told journalists that reaching the Staff Level Agreement by Sri Lanka with the IMF earlier this month was a positive development and expressed confidence in the government receiving “financing assurances” from relevant creditors leading up to the IMF Executive Board approving the new support program for Sri Lanka.
A further factor that positively impacted the market was the Export Development Board report that our export earnings from the beginning of the year to August this year reached more than US $ 8 billion, which was a 12 per cent increase, stock market analysts said.
Amid those developments both indices moved upwards. All Share Price Index went up by 97.25 points (0.99 per cent) to end of the day at 9958.87 and S and P SL20 gained 22.71 points (0.72 per cent) to end of the day at 3187.22. Turnover stood at Rs 3.1 billion without a crossing.
In the retail market top seven companies that mainly contributed to the turnover were, ACL Cables Rs 458 million (3.8 million shares traded), Lanka IOC Rs 299 million (one million shares traded), Expolanka Holdings Rs 198 million (890,000 shares traded), Lanka Wall Tiles Rs 169 million (2.2 million shares traded), First Capital Holdings Rs 121 million (6.2 million shares traded), Royal Ceramic Rs 106 million (2.5 million shares traded) and First Capital Treasuries Rs 101 million (4.4 million shares traded). During the day 181 million shares changed hands in 33000 transactions.
Between early August and yesterday, SG Holdings is estimated to have acquired 67 million shares or a 3.7 per cent stake in Expolanka at a price range of Rs. 200 and Rs. 230 per share.
It is said buying in September alone resulted in a net inflow of Rs. 14.6 billion to the stock market and more importantly boosted liquidity of those who sold out of Expolanka. On the previous day Expolanka saw 11.6 million of its shares change hands via 883 trades for Rs. 2.65 billion. It closed at Rs. 224.75, up by one rupee. Expolanka’s market value was Rs. 439.3 billion as of yesterday accounting for 10 per cent of CSE’s total.
Yesterday the Central Bank- announced US dollar buying rate was Rs 359.18 and the selling rate Rs 369.93.
PMB declines to release Rs 1.2 bn FD for paddy purchasing
PSC proposes amendment to Children and Young Persons Ordinance
80 houses destroyed in fire at Thotalanga
‘Dates have the highest sugar content to fight Coronavirus’
U.S. Congress to probe assets fleecing by US citizens of Sri Lankan origin
Sunday Island 27 December – Headlines
News3 days ago
Parliament rejected two anti-corruption proposals
News2 days ago
CID arrests barber for attempting to extort money from former First Lady
News5 days ago
Royal Park murder convict barred from leaving country
Sports2 days ago
Biology teacher Rukshika wins tennis double
Business2 days ago
FitsAir to launch low cost airline in Sri Lanka on October 5
Sports4 days ago
When your best brains call the shots
Editorial1 day ago
News1 day ago
Prez expected to rescind disputed gazette soon