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Monday December 4th, 2023

China welcomes resumption of Sri Lanka free trade talks

ECONOMYNEXT – China has welcomed the resumption of free trade agreement talks by Sri Lanka as the country attempts to boost exports, after years of closed market policies under the Rajapaksa regime that allowed businessmen to exploit domestic consumers.

“I am glad to see after five years suspension Sri Lanka government decided to resume bilateral FTA negotiations in the second half of this year,” Li Guangjun, Economic and Commercial Counsellor, Embassy of Peoples’ Republic of China in Colombo said.

“I sincerely wish that both sides could work together and reach an agreement as early as possible for expanding our trade and investment co-operation.”

He was speaking at the 21st Annual General Meeting of Sri Lanka – China Business Council of the Ceylon Chamber of Commerce.

“Over the past decade bilateral relations have been cordial and friendly which had made the possibility of great progress in achieving economic and trade co-operation between our two countries,” Li said.

In 2021 China was Sri Lanka’s second largest trading partner and the largest source of foreign direct investment, he said.

“In spite of the pandemic and sluggish global growth business ties have continued to grow,” Li said.

Sri Lanka started to rob consumer sovereignty extensively from around 2005, with key economic policy makers and of then President Mahinda Rajapaksa supporting 1970s style import substitution, calling it ‘import replacement.’

High import duties allowed key businessmen close to the administration making building materials, shoes and confectionery businesses in particular to exploit consumers selling goods at twice or three times the world prices, critics say.

In addition to high informal port duties, other so-called para tariffs, the Airport and Port Levy and- CESS was deployed against consumers.

The CESS was an unusual tax brought to boost exports coming under the Export Development Board, allowing valued added exporters to exploit primary producers with lower than global prices in another dog-eat-dog policy –

Sri Lanka started to close the economy with ever tightening exchange controls around 1952 about two years after a Latin America style central bank was set up in 1950 abolishing a currency board.

As economists printed money to suppress rates, import controls were brought in.

In 1969 a formal import control law was brought as economists misled then Prime Minister Dudley Senanayake to enact the Import and Export Control Law instead of controlling economist’s ability to print money under ‘flexible’ policies.

He was defeated in subsequent elections.

The 1970s saw the height of trade controls with the central bank owning most of the Treasury bills issued by the government, a situation almost replicated in 2022 as the country goes through the worst currency crisis in the history of the central bank.

From around 1978 Sri Lanka opened the economy from trade but did not reform its central bank economists, continuing to print money, while the export CESS was also brought in.

In 1980 with the rupee coming under pressure as the economy grew strongly then President J R Jayewardene brought in Goh Keng Swee, the economic architect of Singapore whose advise not to print money was apparently ignored by the economists denying monetary stability to the people. (Colombo/Nov20/2022)

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Sri Lanka stocks close up as some investor interest returns

ECONOMYNEXT – The Colombo Stock Exchange closed up on Monday, CSE data showed.

The All Share Price Index was up 0.22 percent, or 23.33 points, at 10,743.59.

The S&P SL20 index was up 0.68 percent, or 20.60 points, at 3,067.73.

Turnover was at 708 million. The banks sector contributed 189 million, while the food, beverage and tobacco sector contributed 176 million of this.

Sri Lanka’s stock market has seen some investor interest return after last week’s news that the country had managed an agreement on a debt restructuring deal with an official creditor committee, and foreign funds for some development projects resumed.

Top positive contributors to the ASPI in the day were Sampath Bank Plc (up at 71.50), LOLC Holdings Plc (up at 379.00), and Commercial Bank of Ceylon Plc, (up at 90.90).

There was a net foreign outflow of 52 million.

Citrus Leisure Plc, which announced that its banquet hall and revolving restaurant at the Lotus Tower would launch on or around Dec 9, saw its share price rise to 6.20 rupees. (Colombo/Dec4/2023).

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Sri Lanka rupee closes broadly steady at 328.10/30 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 328.10/30 to the US dollar on Monday, from 328.00/10 on Friday, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.70/14.00 percent from 13.70/95 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.10 percent from 13.90/14.05 percent.

A bond maturing on 15.01.2027 closed at 14.00/14.10 percent from 14.05/10 percent.

A bond maturing on 01.07.2028 closed at 14.20/35 percent from 14.15/25 percent.

A bond maturing on 15.05.2030 closed at 14.25/45 percent, from 14.20/45 percent.

A bond maturing on 01.07.2032 closed at 14.05/40 percent, from 14.00/45 percent. (Colombo/Dec4/2023)

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Gov minister highlights abortion rights, sex-ed for children, and Sri Lanka men killing their women

ECONOMYNEXT – Sri Lanka’s legislators have politicized the topics of rape and violence without addressing the elephant in the room, Jeevan Thondaman, Minister of Water Supply and Estate Infrastructure Development said in parliament on Monday (4).

“All the members here are talking about rape. What happens after that? We must talk about abortion rights. That is not something anyone wants to touch on, and that is why we are in this place right now,” Thondaman said.

“Despite alarming statistics on rape and violence, women are often blamed and punished for it. The criminalisation of abortion is a major example of this.”

Sri Lanka has some of the most restrictive abortion laws in the world. According to a 2016 estimate by the Health Ministry, he said, approximately 658 abortions take place a day, and close to 250,000 a year.

“That’s 250,000 women whose lives you are endangering.”

He added that what was needed at this point in time was comprehensive sexual education (CSE) for children and young people.

“Only through CSE in schools will children and young people develop, accurate, age appropriate knowledge attitude and skills; positive values such as respect for human rights, gender equality, diversity and attitude and skills that contribute to a safe, healthy and positive relationship.”

Thondaman pointed out that CSE plays a pivotal role in preparing young people for a world where HIV, AIDS, sexually transmitted infections, unintended pregnancies, and sexual and gender based violence still pose a risk to their well-being.

“CSE basically empowers children take control and make informed decisions freely and responsibly.”

Thondaman also highlighted the findings of a 2021 study (Fatalities_20211109_UNFPA) by the UNFPA and the University of Kelaniya that showed that a majority of women killed in Sri Lanka were murdered by those close to them.

“62 percent of homicides of Sri Lankan women are committed by either an intimate partner, ex-partner or family member. 84 percent are killed in their own homes by someone they know.”

Police and the judiciary have failed Sri Lanka’s women, the minister pointed out.

“Only 5 percent of these cases, between 2013-2017, were ever concluded. Men claim they were provoked, or are of unsound mind or have mental illness: These have been successful defenses. And the Police often express sympathy to this narrative as opposed to the victim’s.”

“We have a history of protecting oppressors.”

It takes 7-10 years for a child rape case to conclude, he pointed out.

Establishment of child courts are needed, he said, as well as several legislative amendments. “The government is working on a new law to reform the domestic violence act, reform of marriage and divorce laws to ensure there is an easier path to divorce: no one should be forced to remain in a marriage that is either abusive or not healthy.” (Colombo/Dec4/2023)

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