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Sunday February 25th, 2024

Amid Chinese tourism shutdown, Sri Lanka says flights to and from Beijing to increase

Chinese Ambassador to Sri Lanka Qi Zhenhong delivered a special message from Chinese President Xi Jinping to President Gotabaya Rajapaksa on June 16 Photo Credit: Chinese Embassy Twitter page

ECONOMYNEXT – Sri Lanka President Gotabaya Rajapaksa’s office on Monday said the Chinese ambassador to Colombo has revealed that Beijing will operate three flights to Sri Lanka from this week while local carrier Sri Lankan also will reciprocate by increasing flights to Beijing.

It was not immediately clear why both countries want to boost the number of flights when there is no demand for air travel in the two countries. Most Sri Lankans cannot go on business trips as earlier because of dollar shortages. Chinese visitors, who were at the top of the tourist arrival list, cannot come because the Chinese government has not lifted a travel ban.

“It has been decided to increase the number of flights between China and Sri Lanka,” President’s Media Division (PMD) said in a statement,

“Accordingly, China will operate three flights to Sri Lanka from this week. Sri Lankan Airlines offers
frequent flights to China,” it said.

“This was revealed by the Chinese Ambassador to Sri Lanka Qi Zhenhong when he paid a courtesy
call on President Gotabaya Rajapaksa at the President’s House in Colombo.”

The PMD said the Chinese Ambassador briefed the President on the economic and humanitarian assistance provided and
expected to be provided by the Chinese Government to Sri Lanka.

“Measures have been taken to provide opportunities for Sri Lankan medical students to return to China to continue their studies.
Further development of bilateral trade and economic activities were discussed at length,” the PMD said.

“President Rajapaksa commended China for its support to Sri Lanka as a friendly country during this
current economic crisis.”

The Chinese Embassy in Colombo did not comment on the meeting. But on Thursday, the embassy on its official Twitter page said Ambassador Qi Zhenhong went to the Presidential Palace and delivered the birthday congratulatory letter from President Xi Jinping to President Gotabaya Rajapaksa.

“The two sides also conducted friendly exchanges on China’s aid to Sri Lanka and the promotion of major economic cooperation projects.”

China, the largest bilateral commercial loan lender of Sri Lanka, has pledged 2.5 billion US dollars to overcome Colombo’s ongoing economic crisis. However, the loans have been delayed as Beijing has said it will wait until there is clarity on the IMF negotiations and debt restructuring.

Beijing has not been in favour of any debt restructuring. However, it has agreed to lend Sri Lanka further loans to repay its own past loans. (Colombo/June 20/2022)

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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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