Demand for beer may increase as affordability declines: Fitch

Rating agency Fitch states that the demand for beer may increase in the near future as the affordability for Sri Lankans may decline.

The US based credit ratings firm states that consumers may trade down from spirits to strong beer, given beer’s lower price point.

Moreover, Fitch forecasts that the drop in sales volumes will be moderated in the next 12-18 months, assuming an ease in inflation spikes.

Fitch also forecasts mild beer sales to rise on a gradual recovery in tourism.

Excise duties from alcoholic-beverage makers made up 11% of government tax revenue in the past year, however with the imposition of a social security tax of 2.5% on revenue in addition to the increase in Value Added Tax to 15% from 12% may increase the price of alcoholic beverages.

Crisis-hit Sri Lanka takes baby steps to boost dollar earnings

Sri Lanka is fast-tracking a move to utilise all its resources to send citizens abroad to earn as jobs are lost in an economic contraction in the wake of a forex crisis and domestic salaries have lost value.

Sri Lanka has already raised interest rates and taxes in the run up to a deal with the International Monetary Fund to reduce money printing which created forex shortages. The sovereign debt defaulted island nation is in the initial stage of debt restructuring discussions with its creditors who must agree on a plan for Sri Lanka’s anticipated 2.9 billion US dolalr deal with the International Monetary Fund (IMF) to be approved.

Sri Lanka is now taking some baby steps to raise its dollar earnings within and outside the country.

On Friday, the Ministry of Labour and Foreign Employment conducted a job fair titled “Glocal Fair” to showcase employment opportunities available to Sri Lanknas both globally and locally.

“Our Ministry is responsible for providing a wide range of services such as employment to the country’s youth and directing them for foreign jobs, giving them solutions for the issues faced by the foreign workers and the local workers as well,” Minister of Labour and Foreign Employment Minister of Manusha Nanayakkara said at the job fair.

“We have decided to go the villages and give our services to the people.”

The government has already introduced some incentives to Sri Lankan migrant workers who remit their foreign earnings in dollars. Those incentives include houses, apartments, and electric vehicle import licenses, all of which have now become a luxury.

Sri Lanka’s foreign remittances have declined by over 47 percent to 2.2 billion dollars in the first eight months of 2022 mainly because migrant workers stopped sending their earnings through formal channels as the central bank maintained a peg and a parallel exchange rate until March this year.

Though the central bank has allowed some flexibility, remittances did not recover as migrant workers still do not have confidence in the formal banking system amid speculations of a collapse of the system after the economic crisis, analysts say.

Record number of passports, sportsmen for sale

The Department of Immigration and Emigration has overstretched itself to cater to the unprecedented demand for passports this year partly because more Sri Lankans are leaving the country and partly due to workers seeking jobs abroad.

The department has already issued a record 385,000 passports in the first six months of this year compared to 105,000 in the same period last year.

It was forced to ask the public to make an appointment to visit the the Controller General to obtain passports.

Sri Lanka migrant workers who left the country this year have almost doubled to 221,551 in the first nine months of this year, compared to the same period last year, with workers in skilled, professional, and unskilled categories showing record high numbers.

The foreign ministry this week launched an e-channelling service to do away with long queues for consular services including the authentication of government certificates. The move was to ease the process and help Sri Lankans migrate quickly.

This week, President Ranil Wickremesinghe issued a gazette for Sri Lanka’s China backed Port City’s regulator to acquire operating licenses for an annual fee of 2,000 US dollars.

“We see some liquidity in the dollar market, but it is below the level we saw before the economic crisis,” a currency dealer told EconomyNext.

The island nation has already curbed many imports including some essentials to save dollars and has been encouraging exports of merchandise goods, services, and even sportsmen.

“In March, we trained 120 swimmers in four districts under the Sri Lanka Life Saving (SLLS) for both pool and coast lifeguards, and some were selected for the foreign market,” Amal Edirisuriya, Director of the Department of Sports told reporters in Colombo this week.

“In the future, we are planning to carry out this process within the 25 districts and to give 200 more lifeguard employments to our children.”

Sri Lanka needs to improve business & investment framework environments: US envoy

Ambassador of the United States to Sri Lanka, Julie Chung says Sri Lanka needs to improve its business environment and investment framework environment in order to tap into foreign direct investment.

Addressing the 2022 Annual General Meeting of the American Chamber of Commerce. The event was attended also by Governor of Central Bank, Dr. Nandalal Weerasinghe.

“It is important to reduce red tape and make sure that there are no unreasonable obstacles to investors as they look for opportunities in Sri Lanka and bring in the foreign capital that the country desperately needs.”

She noted that concerns about consistency and transparency in government decision-making, and above all, a lack of predictability, are the primary reasons American firms give as to why foreign direct investment has not grown faster.

“What our companies want is a level playing field, a good regulatory framework, and trust that their arbitration and their contracts will be honored. When you have that kind of strong investment climate, then companies will want to come.”

With regard to the staff-level agreement reached by Sri Lanka and the International Monetary Fund (IMF), US ambassador said the USD 2.9 billion program, if approved by the IMF board, would help restore macroeconomic stability, safeguard financial stability, protect the vulnerable, implement structural reforms, and most importantly address corruption, all to encourage Sri Lanka’s economy to growth at its full potential.

“While we are all celebrating this very important milestone, now is not the time to become complacent. Much more hard work lies ahead. Now more than ever, the private sector can make a difference in creating a more inclusive and sustainable economy.”

Speaking on President Ranil Wickremesinghe’s pledge to establish a “State-Owned Enterprise Restructuring Unit” to recommend how to reform Sri Lanka’s loss-making government-run companies, the US ambassador said the work on these critical reforms must start immediately and the results need to address the root causes of this crisis so that the country finally enshrines international standards of good governance and transparency for the benefit of all Sri Lankans.

“Similarly, there should be swift action to establish and convene the Parliamentary Committee on Ways and Means, National Debt Management Agency, National Agency for Public Private Partnership, and the other committees and agencies laid out in the president’s speech. We support these efforts,” she continued.

Before the IMF board approves Sri Lanka’s 17th assistance package, the Sri Lankan government must negotiate with its official creditors to provide adequate financing assurances. The US ambassador said she is encouraged to hear President Wickremesinghe and the Governor of the Central Bank of Sri Lanka talk about the need for equitable and comparable debt treatment. “The United States, through the Paris Club, looks forward to collaborating with Sri Lanka in this effort. The president asked all creditors to “sing from the same hymn sheet.” We call on all parties to come to the negotiating table and join the choir.”

Stating that United States is still Sri Lanka’s largest single country export market and thus a key and unparalleled element to the island nation’s prosperity and that the two countries’ bilateral trade amounts to about three percent of Sri Lanka’s GDP and supports at least 180,000 Sri Lankan jobs, the US ambassador noted that Sri Lanka, with the help of American Chamber of Commerce, can expand on the economic relationship between the United States and Sri Lanka and grow its exports and investments in the United States.

“This is a defining moment in Sri Lankan history, and a time when we all must come together: government, private sector, civil society, and the international community. We must do whatever each of us can constructively do to solve the problems of the day,” she added.

The US envoy reiterated that the United States continues to stand by Sri Lanka during these challenging times.

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NEWSUK considers imposing sanctions on Gen. Silva, others over ‘war crimes’

The House of Commons has been told that the UK government is exploring the possibility of imposing sanctions on Sri Lanka’s Chief of Defence Staff (CDS) General Shavendra Silva and other members of the military.The UK has reiterated its readiness to use what Foreign and Commonwealth Development Office (FCDO) Minister Jesse Norman called, diplomatic tools including sanctions amidst the ongoing 51 sessions of the Geneva-based United Nations Human Rights Council (UNHRC).

The sessions, which commenced on Sept. 12, will conclude on Oct. 08.The former Financial Secretary to the Treasury has said that the government kept the situation, in Sri Lanka, under close review, including in relation to human rights and accountability. “Within this, the government keeps under active consideration how to use the diplomatic tools we have, including sanctions,” Minister Norman has said.

Lawmaker Norman received the appointment as FCDO Minister, on Sept 07, 2022,following the appointment of Elizabeth Truss as the Prime Minister, on the previous day. At the time Truss received the premiership, she served as the FCDO Minister.

Conservative Party Minister Norman has said so in response to a query raised by Beth Winter representing the Labour Party (Cynon Valley). The lawmaker has asked the FCDO Minister of the recent assessment made of the potential merits of imposing sanctions on (a) the Sri Lankan Chief of Defence Staff, Shavendra Silva, and (b) other members of the Sri Lankan military.

The question has been actually directed at Truss, at the time she served as the FCDO Minister, though the government responded to the query, following her appointed as the Prime Minister.

Minister Norman has said that their Global Human Rights Sanctions regime is a powerful mechanism in the hands of the UK Government meant to hold accountable those who had been involved in serious human rights violations or abuses. The Minister said that their strategy was intended to send a clear signal of the values the UK held.

The Minister said: “The UK Government continues to consider designations globally, guided by evidence and the objectives of the human rights sanctions regime; but it is not appropriate to speculate on potential future designations, in order to avoid reducing their impact.”

British political parties have stepped up attacks on the war-winning Sri Lankan military, especially General Silva in the wake of the US issuing a travel ban, in Feb 2020, on the wartime General Officer Commanding (GoC) of the celebrated Task Force I/58 Division. The US travel ban also covered General Silva’s immediate family.

The Sri Lanka Core Group, led by the UK, recently handed over a new resolution to the UNHRC seeking further action against those whom the group considered human rights violators. The 47-member council, divided into five zones, is expected to vote for the resolution, next week.

Former Minister and leader of Pivithuru Hela Urumaya (PHU) Udaya Gammanpila told The Island that the government should at least now place all available information, pertaining to the conflict, before the Geneva council. Acknowledging that successive governments, including those he served as a Minister, neglected the accountability issues, and thereby allowed interested parties to humiliate the war-winning military, lawmaker Gammanpila said that the move against the CDS was an affront to the country.

The Attorney-at-Law said that the FCDO’s position should be challenged on the basis of wartime dispatches it received from the UK High Commission in Colombo (January –May 2009). Thanks to untiring efforts made by Lord Naseby, the world knew the BHC, Colombo, reported to FCDO that 40,000 Tamil civilians didn’t die as alleged by interested parties, lawmaker Gammanpila said.

The ex-Minister urged the government to review the overall picture and take tangible measures to have politically motivated efforts countered. Sri Lanka brought the war to a successful conclusion in May 2009. PHU leader Gammanpila asserted that perhaps Sri Lanka’s defence in Geneva should be based on wartime US Defence Advisor Lt. Col. Lawrence Smith’s declaration in Colombo, late May 2011, two years after the end of the war, that there was no basis for war crimes allegations against the Sri Lankan military.

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More countries join as co-sponsors

Several new countries have co-sponsored the UK-led Core Group resolution on Sri Lanka, with voting scheduled for 6 October 2022 at the 51st Session of the United Nations Human Rights Council in Geneva.

The UK-led core group comprises the United Kingdom, the United States, Germany, Canada, Malawi, North Macedonia and Montenegro. The new countries that would join the fray in co-sponsoring the resolution are Albania, Australia, Austria, Belgium , Czechia, Denmark, Estonia, Finland, France, Iceland, Ireland, Latvia, Liechtenstein, Lithuania, Luxembourg, Marshall Islands, The Netherlands, New Zealand, Norway, Slovakia, Sweden and Türkiye.

Last year the resolution was passed on Sri Lanka with 40 countries voting in favour of the resolution 46/1 and it is speculated there would be more countries supporting the resolution this time too. The GoSL rejected that resolution altogether and criticised the Office of the High Commissioner of Human Riths (OHCHR) recommendation of an evidence-gathering mechanism, a measure that was strongly opposed by Sri Lanka.

The Annual Report of the United Nations High Commissioner for Human Rights and reports of the Office of the High Commissioner and the Secretary-General has been presented at the Human Rights Council at the 51st session.

The draft of the resolution that would be taken for voting recognised the severe economic crisis that has affected Sri Lanka since late 2021, exacerbated by the coronavirus disease (Covid-19) and the profound impact that this has had on the people of Sri Lanka, including women-led households.

Also, the draft resolution underscores the importance of addressing the underlying governance factors and root causes that have contributed to that crisis, including deepening militarisation, lack of accountability in governance and impunity for serious human rights violations and abuses, which remains a central obstacle to the rule of law, reconciliation and sustainable peace and development in Sri Lanka.

The Government has held a series of meetings with the UN member countries that have voting rights to vote in favour of the Sri Lankan government.

Currently, the GoSL and the Tamil Diapora are lobbying to favour them at when the resolution is taken up for voting while several international rights groups, like the Human Rights Watch have been pushing for a strong resolution on Sri Lanka to address the alleged human rights violations.

Reprisals continue against people cooperating with the UN in Sri Lanka

People in 42 countries, including Sri Lanka, faced reprisals and intimidation for cooperating with the UN on human rights, a new report says, highlighting a number of disturbing trends over the past year.

The annual report by the UN Secretary-General details how people – mainly victims of human rights violations, human rights defenders and journalists – suffered reprisals and intimidation by States and non-State actors. This included people being detained, targeted by restrictive legislation and surveilled both online and offline.

All the cases highlighted in the report happened between 1 May 2021 and 30 April 2022 and involved individuals and groups who cooperated with UN human rights mechanisms, or used UN procedures to share information, testimonies and seek redress for human rights violations and abuses.

People who tried to cooperate with the UN or were perceived as doing so were also affected. In a third of the countries named in the report, individuals and groups either refrained from cooperating or only agreed to report their cases anonymously out of fear of reprisals.

“Despite positive developments, including pledges and shared commitments by Member States against reprisals, this report once again shows the extent to which people are pursued and persecuted for raising human rights concerns with the UN. And we know that, shocking though this number is, many cases of reprisals are not even reported,” said Assistant Secretary-General for Human Rights Ilze Brands Kehris.

The surveillance of individuals and groups who cooperate with the UN continued to be reported in all regions with growing evidence of online surveillance and cyberattacks, the report says. The massive digital shift accelerated by the COVID-19 pandemic also increased challenges relating to cyber-security, privacy, and access to online spaces.

Another concerning global trend is the use and impact of restrictive legislation that prevents and punishes cooperation with the UN, resulting in some cases of people being sentenced to long prison terms or placed under house arrest. There were recurring and similar allegations of intimidation reported in a number of countries, which could indicate a pattern.

Another global trend is self-censorship, choosing not to cooperate with the UN or doing so anonymously amid concerns for their safety. Increased surveillance and monitoring, as well as the fear of criminal liability, have created what the report terms a “chilling effect” of silence, stopping people from cooperating further with the UN and deterring others from doing so.

As in previous years, the report shows that intimidation and reprisals disproportionally affect certain populations and groups, including representatives of indigenous peoples, minorities or those who work on environment and climate change issues, as well as people who may suffer discrimination based on age, sexual orientation and gender.

“The risks affecting women victims, as well as women human rights defenders and peace builders, who share testimony and cooperate with the UN remain daunting. We will continue to work to ensure that all can safely engage with the UN,” Brands Kehris stressed as she presented the report to the Human Rights Council in Geneva.

The 42 States referred to in the report (which covers the period from 1 May 2021 to 30 April 2022) are: Afghanistan, Andorra, Bahrain, Bangladesh, Belarus, Brazil, Burundi, Cameroon, China, Cuba, Cyprus, Democratic Republic of the Congo, Djibouti, Egypt, Guatemala, India, Indonesia, the Islamic Republic of Iran, Israel, Kazakhstan, Laos People’s Democratic Republic, Libya, Maldives, Mali, Mexico, Morocco, Myanmar, Nicaragua, Philippines, Russian Federation, Rwanda, Saudi Arabia, South Sudan, Sri Lanka, Sudan, State of Palestine, Thailand, Turkmenistan, United Arab Emirates, the Bolivarian Republic of Venezuela, Viet Nam, and Yemen.

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Only India helped Sri Lanka when it faced crisis, others looked for business: Bhagwat

It was only India which helped Sri Lanka and Maldives when these countries were in distress while other countries were interested in finding business opportunities, RSS chief Mohan Bhagwat has said.

Spirituality is the “soul of India”, he said, addressing a program organized by Bharat Vikas Manch, an organization associated with the Rashtriya Swayamsevak Sangh (RSS). “Spirituality is the soul of India. What does India need to do? It is to tell everyone how to live life on the basis of this spirituality through our own example,” he said. “Living life without ego” was the soul of India, he added. Countries like China, United States and Pakistan turned their attention to Sri Lanka when they saw business opportunities there, he said.

“But now when Sri Lanka is in trouble, who is extending help? It is only India. Who sent water to the Maldives when it was facing a water crisis? It was India which did. This is the spiritual India,” he said.

Talking about all-round development of personality, he said one should not eat the wrong kind of food. “If you eat the wrong (kind of) food, it will lead you on the wrong path. One should not eat ‘tamasik’ food. One should not eat food that involves too much violence,” Bhagwat said. There are people in India who eat meat as elsewhere in the world, but in our country even those who are non-vegetarian observe restraint and follow certain rules, he said. “People who eat non-vegetarian food here do not eat it during the entire month of Shravan. They do not eat it on Mondays, Tuesdays, Thursdays or Saturdays. They impose some rules on themselves,” Bhagwat noted. (Courtesy PTI)

Japan puts preconditions to support Sri Lanka’s debt issue

Japan has placed preconditions in order to support Sri Lanka’s debt issue.

Finance Minister Shunichi Suzuki said that Japan is prepared to “do its part” over Sri Lanka’s debt issue.

However, he said that other creditors, such as China and India, should also be involved in efforts to resolve it.

Suzuki made the remarks after meeting with President Ranil Wickremesinghe, the Kyodo news service reported.

The Japanese Finance Minister said that he urged Sri Lanka to provide the necessary information, make its own efforts to get China, India and other creditors involved and boost transparency.

“Japan will do its part if such preconditions are met,” Suzuki told reporters without elaborating in the Philippine capital Manila, where he attended a meeting of the Asian Development Bank.

During his visit to Japan, the Sri Lankan President met Wednesday with Japanese Prime Minister Fumio Kishida and discussed the debt issue. The leaders recognized the importance of “fair and transparent” debt restructuring that involves all creditor nations, according to the Japanese Foreign Ministry.

Sri Lanka defaulted on its debt earlier this year. The COVID-19 pandemic added to the woes of the Asian nation, already struggling financially after taking out loans from countries such as China to develop its infrastructure.

In a speech at the annual meeting of the ADB’s board of governors, Suzuki said the COVID-19 pandemic and surging energy prices caused by Russia’s war in Ukraine have “heightened the risk of debt vulnerabilities.”

“All creditors should cooperate in providing support in a coordinated manner, while debtor countries undertake reform efforts towards achieving a sound level of debt,” Suzuki said, in an apparent reference to Sri Lanka.

Wickremesinghe says geopolitics is a contributory factor in Lanka’s economic crisis

Addressing the 55th Annual Meeting of the Asian Development Bank’s Board of Governors in the Philippines on Thursday, the Sri Lankan President Ranil Wickremesinghe said that apart from domestic factors, geopolitical developments have also contributed to the economic crisis being faced by Sri Lanka.

Wickremesinghe noted that as this global rivalry intensifies into a new cold war by 2050, the inability of the major countries to give leadership to the mitigation of the global climate change crisis will become more apparent.

“As they say in many of our countries, when the elephants fight, it is the grass that is crushed. This is the predicament of many of our member countries. Therefore, we must overcome geopolitical rivalries to address the major threats to our existence, otherwise we will all fail leading to instability in our region reminiscent of Europe after World War I. On the other hand, our ability to successfully meet these challenges will lead to remarkable progress in raising the living standards of our people through the rise of the economies of our member countries,” the Lankan President said.

The ADB’s Strategy 2030 seeks to respond to global challenges, including climate change and natural disasters, food and energy insecurity, whilst also embracing opportunities in the digital economy, sustainable energy, and leveraging technology for inclusive education and healthcare, the President noted.

“The ADB has a crucial role in helping to shape and finance policies that improve people’s lives and livelihoods across Asia and the Pacific.”

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