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Sunday February 25th, 2024

After crisis, Sri Lanka president moots ‘regional educational hub’ idea to preserve forex

ECONOMY NEXT- After an unprecedented economic and foreign exchange crisis, Sri Lanka President Ranil Wickremesinghe said the island nation should consider becoming a regional hub for education in order to retain the forex outflow of the country as more students go abroad for higher education.

Sri Lanka has banned dollar payments in mid-2022 to contain the dollar outflows from the country after it faced a severe shortage of forex following the rupee was floated in March 2022.

“At the end of the day, we should not have bricks and mortar universities. It will be something else. But why can’t we be a regional hub for that? Sri Lanka can be a regional hub for education. Let us make up our mind. You are allowing billions of dollars to go out.”

He said around $3 billion is going out of the country for those who spend for education from foreign countries.

“By doing this, we not only can save $3 billion, but we can earn an additional $10 billion.”

The cabinet on several occasions disclosed plans of allowing branches of foreign universities to open in Sri Lanka to improve the quality of education system in Sri Lanka as thousands of youth have been leaving the country to have a quality education. This has increased after the economic crisis, analysts say.

Though the central bank has said it has allowed banks to facilitate outward remittances for education processes, many foreign students have complained that it is extremely difficult to receive foreign remittances from local banks because the island nation does not have dollars.

President Wickremesinghe in October, said he will open several new universities including in Kurunegala and Batticaloa districts as well as give national status for private institutions such as NIBM and SLIIT to speed up the reforms in the country’s higher education system.

The government is focusing to advance the education system and facilitate the establishment of foreign branch universities, particularly focusing on Science, Technology, Engineering and Mathematics (STEM) subjects.

The President said in the revised 2022 budget that scholarships will also be provided to Sri Lankan students to study in such foreign university branches and that the private investment in higher education will release the government resources, maintain free education for needy people and broaden beyond the present levels.  (Colombo/Dec02/2022)

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Sri Lanka could get US$500mn from ADB in 2024

ECONOMYNEXT – Sri Lanka could receive 500 million US dollars in support from the Asian Development Bank in 2024 based on the progress of policy reforms, Country Director of the Manila-based lender, Takafumi Kadono said.

The ADB expect to go to its Board around March or April with a 100 million US dollar power sector loan subject to the cabinet of ministers of approving a revised electricity reform bill.

A 100 million dollar loan to support SMEs could also be approved in the early part of the year. Sri Lanka is setting up a credit guarantee agency to support credit for small firms.

A 200 million dollar credit for financial sector was also slated for the year. The ADB gave the first tranche of the financial sector policy loan late last year.

A $100mn for the water sector could also be approved later in the year.

Sri Lanka could get around 200 to 300 million US dollars a year at the lowest rate, or concessional ordinary capital resources (COL) rate of 2 percent.

The balance of would come at the ordinary capital resource rate linked to SOFR.

The ADB has also started work on a ‘Country Partnership Strategy’ for Sri Lanka covering the 2024-2028 period, Kadodo said. (Colombo/Feb25/2024)

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Sri Lanka’s multi-aligned foreign policy based on friendship: Min

ECONOMYNEXT – Sri Lanka’s multi-aligned foreign policy is based on friendship to all and enmity to none, its Minister of Foreign Affairs has said.

“Non-alignment means not becoming a bystander. Non-alignment means you are not forced or coerced into a camp to take sovereign decisions… you make your own choices. Whether it is commercial, security, regional or otherwise,” M U M Ali Sabry said on X (twitter).

“I have repeatedly stressed that sovereignty is the right to have your own opinion on what’s right and wrong, and to stand by your principles. Our multi-aligned foreign policy is based on friendship to all and enmity to none,” Sabry was quoting from his speech at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI) Foreign Policy Forum, on the theme ‘Reassessing Non-Alignment in a Polarised World’.

Sri Lanka is one of the founding members of the Non-Aligned Movement.

The strategically located island has been increasingly walking a fine line between opposing global factions as it seeks to come out of a financial crisis. (Colombo/Feb24/2024)

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Sri Lanka’s Commercial Bank Dec net down on tax provisions

ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon reported profits of 6.9 billion rupees from the December 2023 quarter down 21 percent, despite an improvement in net interest income and lower provisions, amid a change in tax provisions.

Pre-tax profits were 8.89 billion rupees up from 2.4 billion rupees. There was a 6.4 billion tax reversal last year compared to a 1.7 billion rupee tax charge this year.

Commercial Bank reported earnings of 5.26 rupees for the quarter. For the year to December 2023 earnings were 16.07 rupees per share on total profits of 21.1 billion rupees, down 11.3 percent.

Net fee and commission income was down 1.2 percent to 6.1 billion rupees.

Net interest income went up 16.8 percent to 25.5 billion rupees, with interest income rising marginally by 1.3 percent to 73.0 billion rupees and interest expense falling 5.45 percent to 47.5 billion rupees.

Loans and advances to customers grew 4.06 percent to 1.17 billion rupees in the year to December. Debt and other financial instruments fell 10.5 percent to 649 billion rupees.

Financial assets measured and fair value through other comprehensive income was at 287 billion rupees, up from 117 billion rupees.

Impairment charges were 13.1 billion rupees, down from 19.6 billion rupees last year.

Gross assets were up 6.45 percent to 2.36 billion rupees. Net assets were up 5.51 percent to 214 billion rupees. (Colombo/Feb24/2024)

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