Sri Lanka to get update on GSP+ cycle at EU joint commission meeting

Sri Lanka will get an update on the GSP+ trade concessions at a Joint Commission meeting with the European Union, the Foreign Ministry said.

Three working groups on Governance, Rule of Law and Human Rights, Trade and Economic Cooperation, Development Cooperation will report to the Joint Commission.

“The European Union will also brief on the current developments in the EU including an update on new GSP Regulation and the new cycle of the EU GSP+ concessions,” the statement said.

The full statement is reproduced below:

The 26th session of the Joint Commission between Sri Lanka and the European Union will be convened on 22 February 2024 in Brussels. The meeting will be co-chaired by Secretary of the Ministry of Foreign Affairs of Sri Lanka Aruni Wijewardane and EU European External Action Service Deputy Managing Director for Asia Pacific Paola Pampaloni.

Sri Lanka delegation to the Joint Commission will comprise senior officials of the Ministry of Foreign Affairs, Attorney General’s Department and Ministry of Finance.

The EU- Sri Lanka Joint Commission serves as a platform for dialogue and cooperation between Sri Lanka and the European Union, covering a broad range of bilateral and multilateral issues of mutual interest inter alia trade and investments, development assistance, fisheries, education, counterterrorism, governance and human rights, Indo-pacific & maritime security and environment.

The outcome of the three Working Groups which reports to the Joint Commission, Governance, Rule of Law and Human Rights, Trade and Economic Cooperation, Development Cooperation will be presented to the Joint Commission.

The European Union will also brief on the current developments in the EU including an update on new GSP Regulation and the new cycle of the EU GSP+ concessions.

The previous session of the Joint Commission meeting was held in May 2023 in Colombo.

Enjoining order issued restraining ITAK from holding national convention

The Trincomalee District Court issued an enjoining order restraining office bearers of Ilankai Tamil Arasu Kadchi (ITAK) from holding the National Convention which was scheduled to be held on February 19.

The District Court made this order consequent to a plaint filed by plaintiff Chandrasekaram Para, a member of the ITAK, and this enjoining order will be effective till February 29.

The plaintiff is challenging the election of the newly elected leader of the ITAK based on alleged irregularities followed at the election.

The plaintiff has named Mavai Senathirajah, S. Sritharan, P. Sathiyalingam, S. Kugathasan, S.X. Kulanayagam, M.A. Sumanthiran and S. Yogeshwaran as defendants.

The plaintiff further sought an enjoining order restraining the ITAK office bearers from implementing any of the decisions taken at the purported General Council meetings held on January 21, 2024 and January 27, 2024.

This plaint had been filed through Attorney-at-law Ishwarya Sivakumar.

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Beggars can’t be choosers!

Sri Lanka’s inflation, based on the National Consumer Price Index (NCPI), for January 2024 was recorded at 6.5 per cent, Year-on-Year (YoY), the Department of Census and Statistics (DCS) revealed in its latest report published on Wednesday (21). This is an increase of 4.2 per cent compared to the headline inflation recorded in December 2023.

Compared to December, the reported inflation for January was mainly due to the higher prices in both food and non-food groups, according to the DCS report.

On a monthly basis, the YoY inflation of the food group went up to 4.1 per cent in January from 1.6 per cent in December. The YoY inflation of the non-food group meanwhile increased to 8.5 per cent in January from 6.3 per cent in December.

The contributions (YoY) to the inflation recorded in January from the food group and non-food group stood at 1.86 per cent and 4.66 per cent, respectively, in comparison to December.

Even in the absence of official data, the increased cost of living is felt by every ordinary citizen of this country except a privileged few. January has been difficult and February worse, with prices of everything soaring and income remaining stagnant, or, in some cases, reducing, making purchasing power even weaker.

Meanwhile, the new school year started a few days ago. Parents of an average family struggle to supply their children with the basics as the price of everything has doubled. For instance, school supplies for a Grade 1 student, including a lunchbox, small school bag, a water bottle, coloured papers, varnish papers, bristle boards, crayons and pencils which cost around Rs 8,000 last year has doubled this time. The items on the book list alone cost over Rs 15,000 this year.

Yet, as they are common citizens, they must grin and bear and tighten their belts even further. Meanwhile, the Central Bank of Sri Lanka (CBSL) as the apex financial institution in Sri Lanka that seeks to achieve and maintain a healthy and stable economic and financial system while maximising resource utilisation and maintain domestic price stability has instead gone for a massive salary increase while others are pushed to the wall by its miscalculations and flawed policies that led to a major economic recession.

The controversial salary hike even raised eyebrows at the Diyawannawa August Assembly. Members of both the Government and the Opposition were up in arms about the recent salary hike granted to CBSL employees.

The recent controversy was over the alleged 70 per cent salary increase of CBSL employees.

Chief Opposition Whip Lakshman Kiriella stated in Parliament that officers of the Central Bank, who allegedly led the country to bankruptcy, have been given a 70 per cent salary increase.

He queried whether such an action was justified while advising the people to tighten their belts and other institutions to reduce staff. The MP said the salary of a Deputy Governor of the Central Bank has been increased by over Rs 700,000 and noted that the salary of an office assistant at the Central Bank has been increased by Rs 75,000.

Minister Nimal Siripala de Silva said Parliament should be given the right to decide on salary increments of CBSL officials.

“Parliament should approve any salary hikes for Central Bank officials as it is the Legislature that has the power over finances. Let us bring in such a law,” he said.

“Do office assistants of the Central Bank perform any special role to become entitled to an exorbitant salary,” he asked in response to the salary hike given to Central Bank office assistants.

It was insisted that while the Central Bank has independence, it does not mean it could bypass Parliament; any changes in salaries require parliamentary sanction.

In response, State Minister of Finance Ranjith Siyambalapitiya clarified in Parliament that the increase in salaries at the Central Bank cannot be controlled by the Ministry of Finance.

According to their agreement, salaries are increased every three years and the decision lies with the Central Bank’s governing body, the State Minister explained.

He added that considering the current circumstances, it would be preferable if they could work with a minimum wage, highlighting that high salaries are common in central banks worldwide due to their need for top economic experts.

Siyambalapitiya stressed the importance of making special provisions for non-replaceable positions and said salaries at the Central Bank are paid from the consolidated fund, not from their account.

While the powerful and influential keep bargaining for their already high salaries to be increased further, a majority of citizens – who have literally become beggars – are compelled to carefully prioritise basics with meagre salaries, as they no longer have a say in the matter. And, demanding the Government to reduce the price of ‘gal arrakku’ or special arrack is certainly not a priority!

Sri Lanka should not become Indianized: Government MP Sarath Weerasekara

A government MP said today that Sri Lanka should not be subjected to Indianisation, claiming that he was against the Indian rupee being used in Sri Lanka and to provide Sri Lankan airports to Indian investors.

SLPP MP Sarath Weerasekara told Parliament that the President’s efforts to rescue the country from economic shambles was praiseworthy and that he was against it if Sri Lanka was gradually subjected to indianisation.

“We are against if the Indian rupee is used in Sri Lanka or Sri Lanka becoming the 29th State of India. We highly appreciate the support extended to Sri Lanka by India. However, we are against providing the airports to Indian investors. The airport, the access point to the country is a sensitive place. It is a threat to the sovereignty of the country if a foreign company gets hold of the country’s airport,” he said.

The MP said Sri Lanka should not sign the Economic and Technology Cooperation Agreement (ETCA) with India, adding that this would allow Indians to find employment opportunities in Sri Lanka.

“We are against if Sri Lanka is going to sign the ETCA agreement with India. This will allow Indians to enter the country for employment. There are 44 million people without jobs in India. Some 200,000 doctors are without jobs in India. Around 1.5 million engineers pass out anually from universities in India and 42 percent of the graduates below 25 years of age are unemployed. Allowing Indians to find employment in Sri Lanka will pose a threat to Sri Lankans,” he said..

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US sanction-hit Iran explores new partnerships with crisis-hit Sri Lanka

Iran, which is still grappling with a 2012 economic sanction imposed by the United States is exploring new ventures and trade and investment in Sri Lanka, the island nation which is still recovering from an unprecedented economic crisis.

Iranian Foreign Minister Amir Abdullahian met top Sri Lankan government officials including President Ranil Wickremesinghe, Prime Minister Dinesh Gunawardena, and his counterpart Ali Sabri on Tuesday (20).

Sri Lanka is unable to pay for Iran investment and imports due to the US sanctions, but it has successfully started paying for the dues in crude imports before 2012 through a “tea for oil” deal.

Iranian Foreign Minister comes after an official visit from Sri Lanka Foreign Minister Ali Sabri when he went to Tehran in August last year.

His visit also comes ahead of Iran President Ebrahim Raisi’s official visit later this year, government officials said.

“The visit of his excellency (Iran Foreign Minister) into Sri Lanka is vital and will further enhance the close and cordial bilateral relationship,” Sabry said after his Iranian counterpart met all top Sri Lankan political dignitaries.

“There is a huge potential for further corporation in multi-faceted areas. During our discussion today, we addressed key areas of mutual of interests. Including political, economic, and cultural corporation, reflecting very solid bilateral relations.”

Government officials said Iran President is likely to visit when Sri Lanka sees the commissioning of Uma Oya 120 MW power generation project this year.

“Sri Lanka and Iran stand united in our pursuit of peace, security, and prosperity in our regions,” Sabry added.

Before the 2012 US sanctions, Sri Lanka heavily depended on Iranian light crude to its only refinery constructed by Iran in 1969. The island nation is now paying $250 million due for crude imports through tea exports.

The Iranian Foreign Minister during the meeting with Prime Minister Gunawardena noted that Iran is keen to cooperate with Sri Lanka in future projects utilizing their expertise in energy, water, agriculture, nanotechnology, medicine and biotechnology.

“Iran has also agreed to provide another 31 million euro grant for the rural electrification project,” Prime Minister’s office said in a statement.

“The Prime Minister and the Iranian Minister agreed that trade should be done in Asian currencies instead of US dollars. Minister Amir-Abdullahian said that banking arrangements have already been made to trade with Iran, India and China and similar arrangements can be made with Sri Lanka.”

“The Prime Minister expressed his appreciation for Iran’s continued support to Sri Lanka at the United Nations Human Rights Council and other international forums.”

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Mass Procession in Kilinochchi Marks Seven Years of Agony for Families of Enforced Disappearances

Families of victims of enforced disappearances in Sri Lanka gathered in Kilinochchi to commemorate seven years of truth-seeking and agony in their quest to uncover the fate of their missing loved ones during the war.

Hundreds of members of the Association for Relatives of the Enforced Disappearances (ARED) from the five branches spanning the Northern and Eastern Provinces are converging in Kilinochchi to voice their grievances and demand justice.

The main procession, scheduled to commence from Kandasamy Kovil in Kilinochchi at 9:30 am, will wind its way up to the special monument at Depot Junction, covering a stretch of four kilometers. Widowed mothers, particularly affected by the enforced disappearances, are expected to join the procession, traveling from Jaffna, Mullaitivu, Mannar, and Vavuniya to stand in solidarity with others who share their anguish.

Leaders of Tamil political parties from across the Northern Province have pledged their support to this remembrance, which has been a tradition since its inception on February 20, 2017.

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Pro China Wimal questions Harin’s statement Sri Lanka was part of India

The government must inform Parliament wether the statement made by Tourism Minister Harin Fernando in India that Sri Lanka was part of India was the government’s official stance or his personal opinion, Parliamentarian Wimal Weerawansa said.

He told Parliament that the Minister had stated in India that Sri Lanka was a part of India and the three airports will be given to India.

“The govenment must reveal if the Minister’s statement is the official stance of the government or the collective stance of the Cabinet or the Minister’s personal opinion. “Can a Minister make such a statement while represnting a country?” he asked.

Chief Government Whip Prasanna Ranatunga said the Cabinet had not discussed any such matter and said the Minister concerned will make a statement in Parliament.

Minister Manusha Nanayakkara said social media had twisted the Minister’s statement and said if someone listens to his full statment, his idea would become clear.

“The Minister requested the Indians to visit Sri Lanka while pointing out the historical and traditional relationship between the two countries,” he said.

Weerawansa said the Minister had not refuted his statement and said he should make an official statement regarding his remarks made in India.

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Sri Lanka said to offer new restructuring plan to bondholders

(Bloomberg) – Sri Lanka sent a new restructuring proposal to dollar bondholders through its adviser Lazard as the South Asian nation seeks to complete overhauling its defaulted debt, according to people familiar with the matter.

A counter proposal to a bondholder group’s offer in October for a 20% haircut and the issuance of macro-linked bonds was conveyed through Lazard, the people said, declining to be named because negotiations are private. They did not elaborate on the details of the offer. Government representatives may travel to London soon to meet Sri Lanka’s commercial creditors, one of the people said.

Completing the overhaul of Sri Lanka’s $27 billion of foreign debt is critical to ensure financing from the International Monetary Fund bailout keeps flowing. President Ranil Wickremesinghe said this month that authorities expect to complete the restructuring within the first six months of the year.

Calls to Sri Lanka’s treasury secretary, junior finance minister and central bank governor went unanswered. Representatives of the bondholder group and Lazard weren’t immediately available for comment.

The government had already struck restructuring deals with official creditors, including China, India and the Paris Club as well as with holders of its local debt.

Acid test for JVP -Editorial The Island

Sri Lanka and India are planning to conclude the Economic and Technology Cooperation Agreement (ETCA) soon, according to media reports. The news about attempts being made to sign the controversial agreement expeditiously could not have come at a worse time for the JVP, which is mending fences with New Delhi and crowing about its leader Anura Kumara Dissanayake’s recent India visit.

ETCA had to be shelved previously owing to vehement protests from Sri Lankan professional associations, civil society groups and political parties. Prominent among them was the JVP, which demonised ETCA, claiming that, if implemented, it would sound the death knell for Sri Lanka’s IT industry, etc.

There is said to be no such thing as a free lunch, and an all-expenses-paid junket is more so. One may argue that the invitation New Delhi extended to the JVP-led NPP, making the latter feel important, was aimed at furthering India’s economic interests more than anything else, given the JVP’s considerable trade union strength in the key sectors Indian ventures already have a presence in or are eyeing, such as ports, airports, power, energy and telecommunication and dairy farming. By smoothing over differences with the JVP, India has apparently sought to neutralise trade union resistance to the big fire sale the Rajapaksa-Wickremesinghe government is holding to dispose of Sri Lanka’s state assets that Indian business magnates, especially Prime Minister Narendra Modi’s Rockefeller, Gautam Adani, have evinced a keen interest in acquiring.

Big powers have weaponised trade and commerce to further their expansionist interests. They also use chequebook diplomacy for that purpose. The JVP is trying to obfuscate the issue of its past terror campaign against what it termed Indian expansionism. Its current leaders have claimed no knowledge of their party’s initiating lecture on Indian expansionism! But in the late 1980s, the JVP brutally murdered quite a few traders for selling ‘Bombay’ onions in defiance of its blanket ban on goods imported from India so much so that the then Trade Minister Lalith Athulathmudali was compelled to rename Bombay onions ‘Lanka loku loonu’ (‘Lanka big onions’) to save lives. One may argue that those unfortunate incidents happened several decades ago, and the world has since changed. But the JVP’s opposition to ETCA cannot be dismissed as history.

Making a fiery speech at a seminar, ‘Trading, Sacrifice and ETCA’, in Colombo, on 20 Sept., 2016, JVP Leader Dissanayake said ETCA would pave the way for an influx of low-grade IT professional from India, causing the Sri Lankan youth to lose employment opportunities. He warned that if ETCA was signed, the future of the Sri Lankan youth would be in jeopardy. The JVP had launched a struggle to defeat the Yahapalana government’s efforts to sign ETCA, he said, vowing to go all out to achieve that goal.

The JVP claims to have a considerable following among the Sri Lankan youth, many of whom are employed in the IT sector, and therefore it will have to reveal its position on ETCA, which it considers a danger to Sri Lanka’s IT industry as well as other vital sectors.

What has become of the JVP’s struggle against ETCA? It will be interesting to see the JVP’s reaction to the signing of ETCA on the cards. Will the JVP leaders go all out to scuttle it in keeping with their pledge to do so, or will they choose to soft-pedal the issue lest they should antagonise India, which they are ingratiating themselves with? The possibility of the JVP putting up some resistance to ETCA half-heartedly and allowing the government to go ahead with the signing of the controversial agreement, cannot be ruled out.

Jaffna International Airport upgrade initiatives begin

Sri Lanka’s North will witness a boost in connectivity, with efforts to upgrade Jaffna International Airport (JIA) kicking off.

The Airport & Aviation Services on Monday called for Expressions of Interest (EOIs) for enhancing facilities, infrastructure and capabilities of JIA. As per a notice, the EOIs were called by the Cabinet-Appointed Negotiation Committee, on behalf of Airport & Aviation Services.

“The objective is to enable the operation of wide-bodied aircraft, specifically designed of A330, through the mode of design, build, finance, operate and transfer approach.”

Interested parties are required to meet the minimum criteria of having an average annual turnover of at least US$ 50 million or equivalent in any other currency, in the immediate past five years, as at the date of the opening of the EOIs. In addition to having sufficient bank credit line facilities (at least equal to project cost) as proof of credit, those interested must also have an audited balance sheet, with minimum US$ 20 million of net assets for the last financial year.

The deadline to submit proposals is April 3, 2024.

In October last year, Aviation Minister Nimal Siripala de Silva announced JIA would receive a Rs.200 million upgrade, so that it can increase flight operations to India.

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