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UK economy officially in recession

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The UK economy has shrunk by 20.4% between April and June, when the coronavirus lockdown was at its most severe. Experts say the downturn brought on by the pandemic led to the biggest fall in quarterly GDP on record.

The UK on Wednesday officially fell into recession for the first time in 11 years. The economy collapsed by a record 20.4% in the second quarter, compared to the first quarter, as a result of coronavirus lockdown measures imposed to contain the outbreak, agency reports said.

Between April and June, household spending plunged as businesses were ordered to shut down, while industries such as construction rolled back on output and production.

“The recession brought on by the coronavirus pandemic has led to the biggest fall in quarterly GDP on record,” Jonathan Athow of the Office for National Statistics (ONS) said.

Data from the ONS showed that the UK economy had a 2.2%  quarterly contraction in the first three months of the year.

The technical definition of a recession is two straight quarters of economic decline.

The economic decline was concentrated in April —  the peak of lockdown.

The ONS said the economy bounced back in June as the government started to relax coronavirus restrictions.

Non-essential retailers in England, including clothes shops and bookshops, reopened their doors on June 15.

“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and house-building continuing to recover,” Athow said. But “Despite this, gross domestic product (GDP) in June still remains a sixth below its level in February, before the virus struck,” he added.

The UK’s service sector, which makes up four fifths of the economy, suffered the biggest quarterly decline on record. Car manufacturing, meanwhile, faced its slowest production rate since 1955.

Chancellor of the Exchequer Rishi Sunak warned that the economic slump would lead to further job losses in the coming months.

“Today’s figures confirm that hard times are here,” Sunak said. “Hundreds of thousands of people have already lost their jobs, and sadly, in the coming months many more will.”

Some 1.2 million employers have taken advantage of the government’s Coronavirus Job Retention Scheme to furlough 9.6 million people at a cost to the government of 33.8 billion pounds ($44 billion, €38 billion).

Sunak said he is ending the program in October because it gives “false hope” to furloughed workers and hinders them from getting new jobs as their skills decline.

The UK’s recession is deeper than those recorded by comparable countries such as the US and other European economies, notably Germany and France.

Germany’s governing coalition in June agreed on a €130 billion stimulus package to help pull the country’s economy out of recession. The government hoped the package would ease Germans’ financial strain and boost consumer spending.

In comparison to other European countries, Germany’s almost one month of lockdown was relatively short. But the German economy still went into recession in the first quarter of 2020.

Unemployment in May rose from 5.8% to 6.3%, figures which could have been higher if it were not for Germany’s “kurzarbeit”  program, a wage subsidy scheme that allows struggling companies to decrease employees’ working hours instead of making them redundant.

 

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Mohan Pieris to be appointed as Ambassador to the UN?

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Extensive orientation course for heads of mission deignate

Former Chief Justice, Mohan Pieris, is mentioned as likely to be appointed as Sri Lanka’s new Permanent Representative (PR) to the United Nations in New York, informed sources said.

Ms. Kshenuka Senewiratne, the serving PR, who has been recalled to Colombo is expected to be back by mid-October. A career Foreign Service office, she turned 60-years in June. The Foreign Ministry is retiring career diplomats at age sixty but political appointees beyond that age are being posted.

Eight others to be appointed heads of Sri Lanka diplomatic missions overseas have been summoned to be interviewed by the 18-member High Posts Commitee recently named by the Speaker. This committee is charged with the responsibility of screening uigh appointments including those of ambassador/high commissioner.

The former chief justice is not among them as his name, according to a ighly placed source, came up later.

Those summoned are: Admiral (Retd.) KKVP Harischandra (Afghanistan), Vishramal Sanjiv Gunasekera (Japan), Milinda Moragoda (India), Ravinatha Ariyasinha (USA), Prof. Kshanika Hirumburegama (France) and Palitha Kohona (China).

Meanwhile Foreign Secretary Jayanath Colambage has organized an intensive orientation program for the heads of mission (designate) to be held between Oct. 5 and 15 at the foreign ministry. The innaugural meeting will be addressed by Foreign Minister Dinesh Gunawardene and Foreign Secretary Colombage who will speak on “National interests and Sri Lanka’s foreign policy perspective.

The other resource persons include Foreign Service veterans holding senior positions in the ministry in Colombo who will speak on subjects ranging from the country’s multilateral relationship, human resource and mission management as well as overseas office management procedures relating to the appointments of heads of mission.

Ministers, senior officials including the Secretaries for the Treasury and Defence, heads of organizations like the Tea Board, the Tourist Board and Foreign Employment Bureau are among those who will address the ambassadors/high commissioner designate.

Media personalities including Mr. Amal Jayasinghe, head of the Agence France Presse Bureau here, Arjuna Ranawana, senior media practitioner and Shihar Aneez who was a Reuters correspondent will public diplomacy from the perspective of a foreign correspondent.

Retired Foreign Secretaries HMGS Palihakkra and Bernard Goonetillake are among the resource persons who will address the diplomats-designate. The group is due to call on the president and prime minister closer to their departure dates.

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Captain of stricken oil tanker MT New Diamond ordered to appear in court

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A Colombo Magistrate has issued notice on the Captain of the stricken oil tanker MT New Diamond to appear before him on September 28, Court reports said.

On Wednesday, Attorney General Dappula De Livera directed the Director of the CID to name the Captain of the Very Large Crude carrier as a suspect in the case filed over the matter.

State Counsel Nishara Jayaratne, the Coordinating Officer to the AG in an audio press release said the Attorney General is of the view the Captain of MT New Diamond had committed offences punishable under the provisions of the Marine Pollution Prevention Act, No. 35 OF 2008.

The CID was also directed to report facts against the Captain under the provisions of the Code of Criminal Procedure to the Magistrate’s Court.

MT New Diamond carrying a quarter of a million tonnes of crude oil caught fire on September 3 in Sri Lankan waters as the vessel was travelling from Kuwait to Piradip in India.

Sri Lankan Navy, Coastguard and Air Force, as well as the Indian coastguard, fought the fire over a number of days.

One crew member aboard is missing presumed dead and another injured sailor was brought to shore and is in a hospital in Eastern Sri Lanka.

Sri Lanka is claiming Rs. 340 million as compensation from the owners of the tanker for expenses incurred by various government agencies engaged in fire-fighting and rescue operations.

(ECONOMYNEXT)

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Saaraketha modernizing Sri Lankan agriculture through Agri Tech

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When we think of greenhouses, we tend to think of the cold hills of Nuwara Eliya, old fashioned English homes and Victorian botanical gardens full of exotic plants. We don’t tend to think high-tech, modern or organic, and we certainly don’t think of Anuradhapura.

This is where Saaraketha, Sri Lanka’s only certified organic fresh fruit and vegetable retailer, has dreamt big and delivered better than anyone thought was possible. They have harnessed the future of agriculture and brought it to reality today, in the form of a greenhouse project that will see the face of Sri Lankan organic agriculture change overnight.

Not only a first for Sri Lanka, but a first for the entire region, the new Saaraketha Solar-powered Greenhouse project has a production capability of half a million square feet of controlled environment, entirely solar powered and completely carbon neutral. Projected to carry over 60 varieties of vegetables, greens and herbs, the Saaraketha Solar-powered Greenhouse Project will be able to deliver stable crops all year round, ensuring a consistent income for farmers and fixed prices for customers.

With global weather patterns constantly changing and becoming more and more unpredictable and unreliable, it is more important than ever to invest in Sri Lanka’s self-sufficiency and improve food security. And with increased understanding and awareness of the damage that pesticides do to both the environment and health, it is also the time to focus on crops and production that is genuinely good for us and planet earth, with no corners cut and with complete transparency.

Saaraketha has always led the way to ensuring traceability and transparency, launching their plant to plate tracing technology in 2019, and now they want to take it a step further.

With their founder Prasanna Hettiarachchi at the helm, they are taking on the impressive task of transforming Sri Lankan agriculture by exploring ways to harness the power of technology to ensure that farmers’ livelihoods are improved and their ability to feed the nation is stabilized.

From day one, Saaraketha has been committed to the farmers of Sri Lanka. It is their stories, their experiences and their ambitions that have inspired Saaraketha to create the platform that they have over the last nine years. And even now the Saaraketha Solar-powered Greenhouse Project is powered 80% by female farmers, all working with Saaraketha to bring excellence to our families while uplifting their own families’ futures.

To date organic in Sri Lanka was considered the privilege of the few, always the healthy but highly costly option. Normal families would prioritise their children and buy organic only for them, but that need not be the case anymore. With the Saaraketha Greenhouse Project, the prices of vegetables, greens and herbs are reducing by 50%.

Not as a one off, or a sale, but for good. From October onwards, internationally accredited, “Certified Organic” produce will be available online at www.saaraketha.com and all supermarket retailers.

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