Blueprint for making Indo-Lankan relations “special” By P.K.Balachandran

The Sri Lankan High Commissioner-designate to India, Milinda Moragoda, has submitted to President Gotabaya Rajapaksa, a detailed blueprint for making Sri Lanka-India relations a “special” one marked by “inter-dependence, mutual respect and affection.”

The document, entitled “Integrated Country Strategy for Sri Lanka Diplomatic Missions in India” covers the entire gamut of bilateral relations, and aims at addressing the “trust deficit” that has marked Sri Lanka-India relations. The idea is to transform the relationship from a narrow “transactional” one to one which will be broad-based and long lasting.

The document suggests adoption of multifarious bilateral interactions ranging from the top-most political level to the grass-roots people to-people level.

Worked out by a broad-based team led by Niluka Kadurugamuwa, the Deputy High Commissioner of India in New Delhi, under the guidance of High Commissioner-designate Milinda Moragoda, the proposals are founded on the belief that India-Lanka relations rest on a sound foundation based on Buddhism “India’s most precious gift to Sri Lanka.”

Buddhism was brought to Sri Lanka by the son and daughter of the Buddhist King Dharmashoka. “Against this backdrop, any setbacks to our relationship, however intractable they may appear to be at any given point of time, can only be temporary,” Moragoda says in his covering letter to the President.

The need for a fresh look at the relationship arose from the fact that despite the existence of a lot of good in it, it has increasingly become transactional “as a consequence of the changes in the geo-political equilibrium in the region, that has resulted in a growing trust deficit.”

However, the documents says that the transactional relationship “could be channeled towards building confidence and utilized to a means to bridge the trust deficit.”

The document stresses the importance of high level political visits –visits by the Head of State/Head of Government from either side, each year. There should be frequent visits by the Foreign Ministers. Line ministers should also make visits. These interactions could be virtual. There should be coordination with India in multilateral forums to strengthen bilateral ties. The India-Lanka Parliamentary Friendship Group should be re-activated with visits organized.

Sri Lanka should not only interact with the Central government in New Delhi but also with State governments some of which are particularly important for Sri Lanka, such as Tamil Nadu, Odisha, and West Bengal. The proposed opening of a Consul General’s office in Kolkata is welcomed. Sri Lankan Provincial Councils and local bodies members should be encouraged to interact with their equivalents in India under the relevant protocols. Chief Ministers of Indian States should be invited to visit Sri Lanka to promote economic and other ties. Sri Lanka could also explore appointing competent Honorary Consuls in key States for making local contacts.

For the implementation of policies and also for the generation of new ideas, the Indo-Sri Lanka Joint Commission and other Joint Committees should meet regularly. The Indo-Sri Lanka Foundation and the Kalinga Foundation could help generate new ideas.

Investments

To attract Indian investment to Sri Lanka, the High Commissioner designate has envisaged an Inter-Agency Committee on Trade, Investment and Tourism. Representatives of the Export Development Board, Board of Investment, Sri Lanka Tourism, Sri Lanka Tea Board and Sri Lanka Airlines will be participants in the committee. The BOI has set out targets for an Indian investment of US$ 300 million in 2021 and the Lankan Mission in India has set a goal of US$ 256 million. Indian investments could be in auto parts, electric and electronic goods, the hospitality industry, IT services, infrastructure, manufacturing, pharmaceutical, textiles and renewable energy. The documents has urged follow-up action in existing projects such as the West Container Terminal in Colombo Port, the Trincomalee Oil Tank Farm and projects in the power sector.

The Lankan missions in India should draw up a list of high net-worth investors, hold meetings with them and organize seminars and field trips to Sri Lanka. Sri Lanka’s access to Indian markets is hampered by protectionism and also challenging and changing regulatory mechanisms. And on its part Sri Lanka should improve its export basket whose content is now limited. However, the ED has set an export target of US$ 621.9 million for 2021 and the Lankan missions in India have proposed a figure of US$ 674.17 million for 2022.

The products Sri Lanka could sell in India are: pepper, cloves, cinnamon, nutmeg , vegan and vegetarian food, processed meat and fish, confectionary and beverages, paper desiccated coconut and related products, tiles and kitchenware, electrical conductors, switch boards and panels, various kinds of tea, men’s trousers, shirt and skirts.

Sri Lanka should take the initiative in getting help from India in the field of technology innovation, capacity building and product development to expand the export market. Indian technical help could be sought for the automation of the gem and jewelry industry, and the pharmaceutical industry.

Sri Lankan trade associations and trade associations should participate in trade fairs in India. The missions should help organize B to B meetings and seminars. Lankan missions should interact with Indian governments to secure easier access to Lankan products. Indian businessmen should be invited to visit Si Lanka to interact with their Lankan counterparts.

Tourism and Connectivity

There is immense potential in the Indian tourism sector. The Lankan Tourism Board has set a target of 63, 733 Indian arrivals in 2021 and 169, 955 in 2022. The areas which show potential for travel expansion are: MICE, weddings, film shooting, and the Ramayana Trail, Murugan and Siva Sakthi Trails. Sri Lanka needs to be present in tourism fairs in India. Fully vaccinated Indian tourists should be encouraged to visit Sri Lanka.

Since it is People-to-People contacts which will be the bedrock of a bilateral relationship, connectivity must be improved ,the document says, and suggests resumption or establishment of passenger ferry services beween Thalaimannar and Rameswaram, Colombo and Tuticorin, an Kankesanthurai and Karaikal. The document also propagates the facilitation of grid connectivity between the two countries for Sri Lanka to get power from India in times of drought and for Sri Lanka to sell power to India in case it has a surplus.

Defense Cooperation

In the field of defense cooperation, the document points out that Sri Lanka has not used the Indian Special Line of Credit of US$ 50 million for countering terrorism. Ways of using it should be explored, especially since more Lines of Credit in the defense sector are in the pipeline. The document points out the importance of having “political level strategic cooperation in the field of defense and security.” It can build on the model of the war-time Indo-Lankan Troika which was very useful.

Mechanisms for political level strategic cooperation existing in India and other countries should be studied. This would be apart from organizing regular high level visits of defense personnel and exchange of visits. There should be Sri Lankan high level defense personnel visits to India at least once a year. There should be India-Lanka and multilateral military exercises every year. There should be facilities in Sri Lanka for training Indian military personnel. There should be closer and regular interaction between the police forces of the two countries with places in Indian paramilitary and police institutions for Sri Lankan personnel. The office of the Defense Advisor in the Sri Lanka High Commission ought to be strengthened.

Fishing Issue

On the contentious issue of Indians fishing in the Palk Strait, the document says that the Sri Lankan missions in New Delhi and Chennai should interact with officials of the Central and State governments and also fishermen’s associations in Tamil Nadu to highlight the issue of IUU especially bottom trawling by Indian fishermen.

However, the document advocates a “humane approach” to the “genuine problems faced by fishermen on both sides of the maritime boundary.” The Sri Lankan government, it said, is working out a proposal on this issue.

Detailing the other areas of cooperation the document calls for joint research in fisheries and marine resources. It also talks of cooperation to set up a mechanism for disaster management

Lankan Refugees in India

The document makes suggestions for the resolution of the problem of Sri Lankan displaced persons in India. Its resolution will keep vested interests and fringe elements from exploiting the community’s plight for their narrow political ends. The Sri Lankan government should announce a comprehensive package which may include customs duty waivers, settling-in expenses, housing, and economic rehabilitation. The documents seeks the involvement of the UNHCR and also the political leadership of Tamil Nadu where the refugees live.

Culture and Education

India and Sri Lanka share a common cultural, linguistic, intellectual and religious legacy going back centuries into history. There has been a cultural cooperation agreement since 1977, but a lot more can be done. Sri Lanka should emulate the Indian Cultural Center in Colombo and spread Sri Lankan culture, dance, music and art in India by setting up a Sri Lankan Cultural Center and also participating in cultural events in India to showcase Lankan culture.

Buddhism has been a lynchpin of the age-old relations between Sri Lanka and India. While the mission in India is in touch with the Mahabodhi Society, it has to expand to other parts of India where there are Buddhist communities, the document said. Facilities should be provided for Indian scholars to study Buddhism in Sri Lanka and Sri Lankans should be able to study Pali and Buddhism in India. Sri Lanka should be able to provide Ordination for Indian Buddhist monks and allocate places for them in its Pirivenas. The government of India has already set apart US$ 15 million for the promotion of Buddhist links between India and Sri Lanka.

Religious Trails

With the help of Ambassador Dr.V.K.Valsan, the document has identified areas of cooperation in the field of Hinduism. The promotion of the Ramayana Trail, the Murugan Trail and the Siva Sakthi Trail will increase religious tourism between the Hindus of Sri Lanka and India. e The Hindu epic Ramayana intimately links the two countries. Cooperation between Sri Lanka and India in this area already exists as Sri Lanka has sent a sacred stone from the Sita temple here to the Ram Mandir in Ayodhya.

The document further urges the government to provide opportunities for Indian Hindu religious leaders and scholars to interact with their counterparts in Sri Lanka and to enable Sri Lankan diplomatic missions to actively participate in major Hindu religious ceremonies. The Lankan government should also facilitate Catholic devotees and scholars to visit the Velankanni church in Tamil Nadu which is very popular among both Tamil and Sinhalese Catholics.

Opinion Makers

The document urges the Lankan missions in India to be in touch with Indian journalists, foreign journalists based in India, intellectuals, opinion makers, film makers, archeologists, artistes, and think tanks to enhance Sri Lanka’s profile and also have positive stories presented in the Indian media. The South Asian University in New Delhi should be helped to become a center of excellence.

Tours of Sri Lanka should be organized for opinion makers to enable them to understand the realities in Sri Lanka and interact with their counterparts in the island. Heads of Lankan missions in India should give six interviews per year to the Indian print and electronic media and also be active on social media to clarify matters about Sri Lanka and promote the country.

The Lankan government and the missions in India should draw up plans to celebrate the centenary of Rabindranath Tagore’s visit to Sri Lanka in 2022 and the 75 th. Anniversary of the establishment of diplomatic relations between Sri Lanka and India in 2023.

Inter-provincial travel ban to be lifted

The inter-province travel ban is to be lifted on Monday, Government sources said. Sources told Daily Mirror the matter had been discussed during a meeting chaired by President Gotabaya Rajapaksa yesterday.

Accordingly, sources said the interprovince travel ban is expected to be lifted from Monday and a formal announcement will be made today or tomorrow.

However, access will remain restricted to areas placed under isolation.

The Director General of Health is expected to issue amended guidelines lifting the inter-province travel ban.

Public transport services between the provinces will also resume from next week.

The government had already announced that the work from home option has been cancelled for public servants from Monday. All public servants have been instructed to return to work from Monday, 2nd August. They have been instructed to return to work by following the health guidelines. Secretary to the President P.B. Jayasundera informed the Secretary of Public Services, Provincial Councils and Local Government J.J. Ratnasiri to take measures in this regard.

A travel ban enforced around the island was lifted earlier this month while the inter-province travel ban remained.

India consistently called upon Sri Lanka to protect interests of Tamils: Indian Govt

India on Thursday said it has consistently called upon Sri Lanka to fulfill its commitments to protect the interests of the Tamil community and supported efforts to preserve the island nation’s character as a multi-ethnic and multi-religious society, PTI news agency reported.

It is understood that some Tamil political parties based in Sri Lanka have sought an international probe into allegations of human rights abuses during the country’s civil war, Minister of State for External Affairs V Muraleedharan said in a written reply to a question in the Rajya Sabha.

He said India had urged the government of Sri Lanka to carry forward the process of reconciliation and address the aspirations of the Tamil community.

“India has always supported efforts to preserve Sri Lanka’s character as a multi-ethnic, multi-lingual and multi-religious society in which all citizens, including the Sri Lankan Tamil community, can live in equality, safety and harmony,” the minister said.

He was replying to a number of questions, including on human rights abuses during the civil war in Sri Lanka.

“The government of India has consistently called upon Sri Lanka, during bilateral discussions at all levels, to fulfil its commitments on addressing the issues related to protecting the interests of Tamils in Sri Lanka,” Muraleedharan said.

The Tamil community in the island nation has been demanding the implementation of the 13th amendment to the Constitution that provides for devolution of power to it. The 13th amendment was brought in after the Indo-Sri Lankan agreement of 1987.

At the 46th Session of the UN Human Rights Council (UNHRC), India stressed on its abiding commitment to the aspirations of the Tamils of Sri Lanka for equality, justice, peace and dignity, Muraleedharan said.

He said it was reiterated that respecting the rights of the Tamil community, including through meaningful devolution, would contribute to the unity and integrity of Sri Lanka.

The minister did not give a direct reply to a question on whether India will initiate measures for an international probe as there is no scope for the domestic process to fix accountability against human rights abuses in that country.

Muraleedharan said India believes that delivering on the legitimate aspirations of the Tamil community is in the best interests of Sri Lanka.

“In addition, India also urged the government of Sri Lanka to carry forward the process of reconciliation, address the aspirations of the Tamil community and continue to engage constructively with the international community to ensure that the fundamental freedoms and human rights of all its citizens are fully protected,” he said.

CBSL prints record Rs 213.48 in a single day

The central bank has printed 213.48 billion rupees on Tuesday, central bank data show, the highest amount to be printed by the country so far this year.

The money had been printed a day after Sri Lanka settled a USD 1 billion bond payment.

But Ajith Nivard Cabraal, the state minister of Money & Capital Market and State Enterprise Reforms, had told the AlJazeera news outlet that the country’s economy is stable.

“Our rupee has been stable for the past three months, our interest rates have been the same for the past three months,” he said adding that the turnover at the stock exchange is also increasing almost daily.

“What more do you need to have as indicators of economic stability?” he queried.

Sri Lanka fails to sell 31-pct of Treasury bond auction, tap offer

Sri Lanka has failed to sell 31 percent of a bond 120 billion rupees Treasury bond auction, and a tap issue has been opened for part of the balance, data from the state debt office showed.

30 billion rupees of 01 December 2024 bonds were sold at 6.87 percent after calling bids for 30 billion.

21.23 billion rupees of 01 February 2026 bonds were sold at 7.47 percent, after calling bids for 35 billion.

11.4 billion rupees of 01 May 2028 bonds were sold at 8.17 percent after calling bids for 35 billion.

20 billion rupees of 15 March 2031 bonds were sold at 8.86 percent, after calling bids for 20 billion

The debt office said bonds would be available on tap till 1600hour on July 30, for 2024 and 2021 maturities at the weighted average yields, up to 20-pct of the offered amount.

Sri Lanka has estimated maturing bonds and coupons in excess of 150 billion on August 01.

Sri Lanka has printed large volumes of money over the past year inflating the monetary base and losing forex reserves as the newly minted money generate import or the Treasury use them to repay foreign debt.

To the extent that the Treasury is able to roll over paper and sell to real buyers instead of inflating reserve money, foreign reserves would be ‘saved’ by crowding out domestic credit.

China’s loan books carry crucial lessons Sri Lanka By Jeevan Kelum

In our last column published on 24 June titled “Are Sri Lankan banks failing the production economy?”, we wrote about how Sri Lanka’s banks have been failing the production economy due to their risk aversion and lack of lending towards productive sectors of the economy.

To briefly recap, we argued that the banking system plays a significant role in bridging gaps in financial resources and allocating resources in an economy. Lending plays an important role in balancing the structure of the economy and providing credit for capital formation in strategic economic sectors for sustainable and inclusive growth.

This week, we offer the contrasting example of China – an Asian economy which started out as one of the poorest in the world but has since grown to become the largest economy in the world in purchasing power parity terms, lifting 850 million people out of extreme poverty in the process.

Post-Covid stimulus

This analysis looks at data from six of China’s biggest banks which account for over 50% of the sector’s market capitalisation. The banks include Agricultural Bank of China, Bank of China, China Construction Bank Corporation, China Merchants Bank, Industrial and Commercial Bank of China, and Ping An Insurance.

Figure 1 depicts the total volume of loans and advances and their spread between personal and corporate. In 2020, the total stock of personal loans was $ 4.4 trillion, while the total stock of corporate loans was $ 5.7 trillion. This means that 44% of total loans and advances were for personal loans and the remaining 56% was corporate lending.

It is clear from the data that both corporate and personal lending have been increasing since 2017. However, corporate lending in particular has grown by 13% in 2020, perhaps as a response to the Covid-19 outbreak. As mainstream economic theory argues that such lending can be inflationary, it is important to understand how (if at all) this liquidity is being used to support production.

Personal loans and advances

Figures 2 and 3 depict the sector-wise composition of personal and corporate loans in 2020.

In the last four years, residential mortgages have comprised around 74% of the total loan stock. This is parallel to the 11% of corporate loans given to real estate, and 37% of corporate loans given to infrastructural sectors such as “Water, environment, and public utility management”, “Production and supply of electric power, heat, gas, and water, “ and “Transportation, storage, and postal services”. These trends reflect China’s rapid urbanisation and an over 90% home ownership rate which is higher than most advanced economies in the west. This synergy between personal and corporate lending has helped spur the development of the housing industry.

When compared to Sri Lanka, it is noteworthy that loans and advances for personal consumption (including credit card loans) account for 21% of total personal loans and less than 10% of the combined loan book of the six Chinese banks. When considering the loan books of the top eight banks of Sri Lanka, loans for personal consumption account for 25%. This indicates that a significant portion of Sri Lanka’s credit has been directed to consumption (most likely on imports), instead of growth enhancing capital formation.

Facilitating consumption while neglecting production can push a country like Sri Lanka further towards imports dependency, placing pressure on the exchange rate, and therefore the inflation rate too. Sri Lanka is dealing with the legacy and consequences of such policies today.

Corporate loans and advances

Five main sectors account for about 75% of corporate loans and advances in the six Chinese banks under study. These sectors are “Transportation, storage, and postal services”, “Manufacturing”, “Leasing and commercial services”, “Real estate”, and “Production and supply of electric power, heat, gas, and water”. China’s developmental goals of maintaining the production base and strengthening supportive and connective infrastructure are clearly reflected in this spread.

The vast amount of credit provided to infrastructure, combined with China’s low external debt and well developed infrastructure, indicates that the country has been largely self-reliant in terms of financing infrastructure. By contrast, Sri Lanka’s infrastructure development has historically been dependent on financing from foreign multilateral agencies like the World Bank and Asia Development Bank, or bilateral partners like Japan and China. Local private commercial banks’ lending for transport and energy infrastructure is virtually negligible compared to China. Meanwhile, Sri Lanka’s external debt to gross national income (GNI) is 69% compared to China’s 15%.

Long-term lending, long-sighted development

A stand-out feature of the loan books of Chinese banks is the relatively long maturity periods of the majority of loans and advances. Figure 4 shows the maturity period of respective loan stocks as at the end of the year 2020 of six major financial institutions in China. About 50% of the Chinese corporate loans are due after five years, and another 22% due in the one-to-five-year period. In other words, about 70% of loans and advances granted by Chinese banks are medium to long term. Businesses in China therefore enjoy patient financial support to expand the production and sustain growth.

By comparison, most loans and advances by Sri Lankan banks are concentrated in the five-year category. This tends to drive Sri Lankan businesses towards the pursuit of short-term profits, which in turn contributes to macroeconomic instability and poor economic planning. Short-term lending is fundamentally incompatible with policy goals of developing infrastructure and technology – both of which require patient, long-term financial support.

Running with a balance sheet mismatch

When banks start to fund long-term projects and offer grace periods and extended credit terms, a balance sheet mismatch is one of the major concerns of many treasury managers (Figure 5). Depending on the economic condition in the country, many risk-averse bankers resort to minimise this risk by encouraging short-term trade-oriented investments. However, bankers have a fiduciary duty to secure the depositor’s money and pay the return. So, how do China’s banks manage this mismatch while contributing to growth?

In total, we can see a significant net liability position in the on-demand category, and after the three-month category, it turns to a net asset position. Theoretically, these banks have funded long-term projects using short-term financing and therefore have critical liquidity risks. However, these banks manage their liquidity and continue to maintain loan books to fund strategic sectors. A comprehensive study on this area will help Sri Lankan banks learn strategies and best practices for risk mitigation and liquidity management.

Maintaining policy consistency

China’s domestic credit to the private sector by banks (Figure 6) has been increasing rapidly over the years and crossed 180% of gross domestic product (GDP) by 2020. By contrast, Sri Lanka’s risk-averse banking sector has a much lower leverage, with bank credit to the private sector amounting to about 50%.

One of the main contributors to the success of the Chinese economy, and the high volume of credit to the private sector, is policy consistency. Since 1978, China’s policy rates have been maintained in single-digit figures except on a few occasions (Figure 7). As the regulatory body of the banking system and the facilitator of economic development, People’s Bank of China (central bank of China) maintains low policy interest rates to reduce the cost of financing corporations and to direct resources to strategic sectors. Post-2000, the country’s exponential economic growth has been fuelled by low interest rates. The policy rate was reduced even after the Covid-19 outbreak, with an intention of heating up the economy. Strong economic policy consistency led by political stability in the country is the key to push the economy where it is now today.

Conclusion

Over the past decades, Sri Lanka’s policymakers have lacked a strategic plan to shift the economy from a services and consumption base to a manufacturing and production base. The few Asian countries that managed this transition did so through bold policy moves, including harnessing the banking system to re-engineer the structure of the economy. Countries like China, Singapore, South Korea, and to an extent even Bangladesh, have done what Sri Lanka has failed to do, thereby ensuring social stability and a higher standard of living for their people.
Sri Lankan policymakers and bureaucrats have to take a holistic approach to align all elements of the economy towards well-defined national economic objectives. When the Central Bank reduces the policy rates to increase liquidity, with the objective increasing investment and production, measures such as targeted lending must be put in place to ensure that commercial banks pump this liquidity towards strategic sectors.
Moreover, it is important that such policies are consistent and maintained for a period of time sufficient to allow investments to mature and generate profits.

(The writer holds a BSc. in Accountancy (Sp), FCA, ACMA, and MBA-PIM (SJP) and is Vice President (Finance, Research, and Strategic Development) at Econsult Asia, which is an economic research and management consultancy firm with an alternative development outlook)

In Sri Lanka, teachers resist Bill ‘militarising’ education

Academics from Sri Lanka’s state universities on Wednesday withdrew from online teaching and administrative duties in resistance to a government Bill that, they say, threatens to “militarise” education.

University teachers also held a silent protest across campuses on the island, according to Harshana Rambukwella, a spokesman for the Federation of University Teachers Associations’ (FUTA) campaign against the General Sir John Kotelawala National Defence University (or KDU) Bill.

“The FUTA’s main demand is that the government keep military and civilian education separate,” Prof. Rambukwella said. “This Bill is not just about one university, it is essentially a model of private education, subsidised by the government and run by the military. It is an assault on the country’s public education system,” he said.

The KDU Bill, scheduled for parliamentary debate on August 6, seeks to change the governance structure of the University that was set up in 1980 as an Academy exclusively for the tri-forces, and named after Sri Lanka’s former Prime Minister. The proposed changes could pave way for a greater military role in education policy and administration, academics warn.

With their symbolic action, the university teachers joined other teacher and student groups calling for withdrawal of the controversial Bill. The Ceylon Teachers’ Union (CTU), a body of school teachers across the country, and the Inter University Students’ Federation (IUSF), one of the largest student bodies in Sri Lanka, are also opposing the Bill. Earlier this month, dozens, including CTU general secretary Joseph Stalin, were arrested during a protest against the Bill, on charges of violating “health regulations”. They were forcibly quarantined for a week.

Following wide condemnation of the arrest, including by the Bar Association of Sri Lanka, they were released. “Discussions with the government have been very disappointing so far, we will continue our strike action,” Mr. Stalin told The Hindu, of the CTU’s ongoing protests against both, the KDU Bill and for a “long-pending” salary hike.

‘Growing militarisation’

Concerns over militarisation in Sri Lanka grew following the election of ex-military officer Gotabaya Rajapaksa as President in November 2019. In her report in January this year, UN Human Rights Chief Michelle Bachelet referred to “the accelerating militarisation of civilian governmental functions”, citing the appointment of at least 28 serving or former military and intelligence personnel to key administrative posts.

For a decade now, the Tamil people living in the north and east, who have faced the brunt of post-war militarisation, have repeatedly objected to the visible presence and participation of the army in civilian activities, including agriculture. The growing momentum and media coverage of the ongoing protests against the KDU Bill lately have put militarisation in the spotlight in the country’s Sinhala-majority south.

Those slamming the Bill are flagging the possibility of a military-run, parallel structure of higher education, with provisions to quell students’ right to free expression and dissent. In a recent Oped article, Opposition legislator and former professor Harini Amarasuriya wrote: “The proposed KDU Bill offers a privatised, military model of higher education, which will take Sri Lanka on a trajectory towards militarisation of society as a whole.”

President Gotabaya Rajapaksa told the politically influential Maha Sangha [Buddhist clergy] recently that the “obstacles” in the “University Grants Commission Act” would be removed, and the KDU would be brought under its purview. “It is a mistaken reference to Sri Lanka’s Universities Act, as there is no UGC Act,” Prof. Rambukwella said. Questioning the “ad hoc” amendment of laws governing the University system without wider consultation, he said: “Even this move is a back door attempt to bring the KDU under the purview of the University Grants Commission, which has neither the authority nor competence to oversee military education. The objective of both will only get diluted.”

Source:The Hindu

Vaccine card to be made compulsory for inter-provincial travel from August 1 – LPBOA

The Lanka Private Bus Owners’ Association (LPBOA) has decided to make COVID vaccine cards compulsory for inter provincial travelling from August 1.

LPBOA President Gemunu Wijeratne said requests in this regard have already been sent to the President and Transport Minister.

He also requested the government to issue an identification card as proof of vaccination and such document would be treated as a pass for inter-provincial travelling.

Wijerathne further said that all bus operators in the Western Province (WP) should ensure they are inoculated by August 15. If not, permission will not be granted for them.

A relief period will be allowed until the end of August for the bus crew to get their vaccines those who operate outside WP, Wijerathne added.

Sri Lanka rupee dollar swaps turn positive at the short end

Sri Lanka’s short end swap rates turned positive after dollars flowed into banks from government debt repayments, thought the interbank market for outright trades is mostly inactive, while bond yields were mostly flat, market participants said.

The kerb market for US dollar was around 222.70/223.50 rupees, traders said.

In the swap market spot/1 month was quoted at 00/60 cents positive for the first time this week since.

Spot/2 months was 00/05 positive

Spot/3 months was negative 15/00

Spot/6 months was -300/-200

Spot/12 months was -650/-500

Sri Lanka’s forward rates inverted in late 2020 as downgrades made it harder for banks to borrow abroad and counterparties cut lines. Authorities were unable to fully roll over Sri Lanka Development Bond maturities.

This week a billion dollar bond was repaid, with 310 million dollars to come back to resident holders.

Sri Lanka’s interbank forex markets are not allowed to deal above 200 to the US dollar and import customers are not allowed to be given dollars above 203 to the US dollar in curbs announced after money printing triggered forex shortages.

However parallel markets have developed, with foreign and some smaller banks paying higher rates of around 206 for negotiated deals.

The central bank’s indicative spot rate was 199.9033 on July 28, down from 199.9000 on July 28.

The buying rate for telegraphic transfers was 197.6023 and the selling rate was at 202.8977 on Thursday from 197.9023 and the selling rate was at 202.8977 on Wednesday

In bond markets, short tenor gilt yields were steady while the long tenors remained unchanged.

A 2-year bond maturing on 15.12.2022 closed at 5.65/75 per cent down on Thursday, from 5.68/75 on Wednesday.

A bond maturing on 15.11.2023 closed at 6.35/38 per cent on Thursday, steady from 6.35/40 per cent at Wednesday’s closing.

A bond maturing on 1.12.2024 closed at 6.85/88 per cent Thursday, up from 6.78/87 percent on Wednesday.

A bond maturing on 01.02.2026 closed at 7.40/50 per cent on Thursday, up from 7.35/50 per cent on Wednesday.

A newly auctioned bond maturing on 01.05.2028 closed at 8.10/20 on Thursday.

Mangala rejects invite saying SJB and SLPP two sides of same coin

Former Minister Mangala Samaraweera has rejected an invitation to consider rejoining the Samagi Jana Balawegaya (SJB) saying the SJB and the Sri Lanka Podujana Peramuna (SLPP) are two sides of the same coin.

SJB Working Committee member Rehan Jayawickrama had said yesterday that if Samaraweera is interested in rejoining the party then he is willing to raise the matter with party leader Sajith Premadasa.

In a brief statement posted on Facebook in response to a news published on Colombo Gazette, Samaraweera said that he decided to enter active politics in 1988 from the Sri Lanka Freedom Party (SLFP) which he felt was the most ‘liberal’ political party at the time.

He said he joined the SLFP despite some of its dubious past policies especially in 1956 and 1970, in the face of extra-judicial killings carried out by killer squads in the south from both ends of the divide.

“In 1994, the country elected Chandrika Bandaranaike Kumaratunga, the most liberal minded President so far and in 2005, I actively participated in Mahinda Rajapaksa’s campaign believing that he would continue with the earlier policies,” Samaraweera said.

However, he said that when he was sacked from the Cabinet in 2007 and then invited to rejoin the Government several times, he regretted all such invitations because the new SLFP under Mahinda Rajapaksa was taking the country in a direction his conscience nor his political beliefs could possibly endorse as with the SJB today.

“Sri Lanka Podujana Peramuna and Samagi Jana Balawegaya are two sides of the same coin. Our country is desperately gasping for a total u-turn in its policy direction. Thank you, Rehan but I have to regret your kind invitation; fondest regards to your leader,” Samaraweera said.

Recently Samaraweera spearheaded the launch of an apolitical movement called the ‘Radical Centre’ by a group of multifaceted multi-ethnic youth calling themselves true patriots.

Speaking at the launch Samaraweera was quoted as saying that the present Opposition has failed as it has gone beyond ‘Sir’ in proposing an ideology containing racism and majoritarianism as a solution.