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Tuesday May 30th, 2023

Crisis-hit Sri Lanka likely to see $100 million from Canada diaspora

ECONOMYNEXT – Sri Lanka is likely to see $100 million infrastructure investment by Canadian diaspora into Small and Medium Enterprises (SMEs) State Minister of Foreign Affairs Tharaka Balasuriya said.

The minister said this after meeting a visiting Canadian diaspora group this week.

“A $100 million infrastructure investment is likely to be finalized,” said Balasuriya without elaborating.

Sri Lanka is looking to bring in more foreign investment from Diasporas from Canada, United Kingdom, United States and United Arab Emirates.

The move comes as a part of attracting more foreign inflows into the country which has defaulted sovereign debts amid an economic crisis.

The Chairman of the Sri Lanka Business Convention of Canada, Ganesan Sugamer said, his diaspora group  is willing to help Sri Lanka to come out of the crisis through investing in SMEs, bring business, create confidence, stability, employment and give publicity for ventures in the island.

The Canadian diaspora group had discussions with President Ranil Wickremesinghe and Prime Minister Dinesh Gunawardena regarding their plans of investment.

Both leaders have asked the diaspora group to consider investing in long neglected North and the East.

Sri Lanka is in the process of amending a number of laws to fast track investment to boost foreign inflows, the state minister said.

“Certain enterprise laws will be altered for the interest of brining investment to Sri Lanka, such as Free Trade Agreements, tax exemptions, labor laws,” Balasuriya told EconomyNext separately.

Sri Lanka is looking for avenues out of an economic crisis that was generated through poor implemented economic reforms and poor management.

A raft of poor economic policies triggered month long protest ‘Aragalaya’ early this year and the economic crisis turned into a political crisis which forced former president Gotabaya Rajapaksa and his government to resign.

“Bringing investment to Sri Lanka is one step of recovery and for any form of recovery there has to be macroeconomic stability, which was somewhat there before the Aragalaya and incidents of protests.”

“Three months ago with the publicity Sri Lanka was given, no one wants to invest or visit Sri Lanka, because the mindset is that there are riots, looting, theft and burning of houses.” (Colombo/Nov04/2022)

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Sri Lanka cabinet approves President’s proposal to resume Japanese LRT after soared ties 

ECONOMYNEXT – Sri Lanka’s Cabinet of Ministers approved a proposal by President Ranil Wickremesinghe to resume the unilaterally cancelled Japan funded Light Rail Transit (LRT), cabinet spokesman said, as the island nation is in the process of mending ties with Tokyo.

However, any such deals are likely to take place after the debt restructuring and Sri Lanka starts to repay its foreign loans to come out of default, analysts say.

Former President Gotabaya Rajapaksa unilaterally cancelled the 1.5 billion US dollar LRT and East Container Terminal (ECT) projects in 2021. Japan agreed to fund the LRT project while it was one of the tripartite members of the ECT project along with India and Sri Lanka.

The abrupt cancellation hit the diplomatic ties between the two countries and Sri Lankan government officials have said Japan had given the project to Sri Lanka at a very lower financing cost.

President Wickremesinghe returned from Japan late last week after having met top officials of the Japanese government including its prime minister.

“In recent history, due to the stopping of several agreements and proposals suddenly, President Wickremesinghe went to Japan after creating the background to clear some of the worries we have,” Cabinet Spokesman Bandula Gunawardena told the weekly media briefing.

“Before he went, he got the approval from the cabinet to resume the discussion on the light railway project. He got the approval from the cabinet to get parliament approval for bilateral agreements signed or any other investments project. Any change or cancellation of a project could be done only with the approval of the parliament.”

Japan has backed Sri Lanka under Wickremesinghe’s presidency after the island nation declared sovereign debt default. (Colombo/May 30/2023)

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Sri Lanka to tighten grip on television with broadcast law

ECONOMYNEXT – Sri Lanka has formulated a broadcast authority law to regulate electronic media which will be made public soon, Cabinet spokesman Minister Bandula Gunawardana said.

“The draft prepared by a cabinet subcommittee under Justice Minister Wijedasa Rajapaksa has discussed with various parties will be given to all media institutions and broadcast media,” Gunawardana said.

“We do not have to hide or force anyone. A legal framework that can be acceptable to all for all sectors.”

“In a week or two Minister Wijedasa will discuss with state and private stakeholders.”

At the moment Sri Lanka has issued frequencies without conforming to an “international procedures”, he said.

In Sri Lanka television frequencies are issued under a state television act.

Successive administrations in Sri Lanka has since around 1980 mis-used state television duopoly which including for conducting elections according to critics.

Private television as well a raio emerged around the 1990s and has since over shadowed state media.

There have been calls by ruling party politicians from time to time to control private media. There is now calls to control social media.

At a Committee on Public Accounts meeting of the Department of Government Information, ruling coalition legislators called for regulation of television content. (Colombo/May30/2023)

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Sri Lanka rupee at 296.75/297.25 to dollar at open, bond yields steady

ECONOMYNEXT – Sri Lanka’s rupee opened at 297 /297.50 against the US dollar in the spot market on Monday, while bond yields were steady, dealers said.

The rupee closed at 296.75 /297.25 to the US dollar on Monday after opening around 296.50 /297.50 rupees.

A bond maturing on 01.09.2027 was quoted at 26.50/75 percent steady from Friday’s close at 26.50/65 percent.

Sri Lanka’s rupee is appreciating amid negative private credit which has reduced outflows after the central bank hiked rates and stopped printing money. (Colombo/ May 29/2023)

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