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Sunday May 19th, 2024

Short term pain from Sri Lanka’s reforms subsiding, economy strengthening: Minister

ECONOMYNEXT — Short term pains caused by Sri Lanka’s economic reform efforts have relieved to some extent and the decisions taken by the government have started to pay off with the economy getting stronger, State Minister of Finance Shehan Semasinghe said.

Semasinghe told reporters on Tuesday April 02 that various political parties had tried to bring the government to disrepute using the public’s initial resistance to the reforms.

“There was severe criticism of our reforms from the people at the outset, and because the government took on that challenge, various political parties tried to bring the government to disrepute,” said Semasinghe.

“There was a short term pains from those reforms, and by today those pains have subsided a bit. The economy is becoming stronger. The decisions taken regarding the economy have now started to bear fruit,” he said.

According to the World Bank, Sri Lanka’s economy has stabilised though poverty remains, underlining the need to maintain stability and continue on the reform path.

The World Bank’s April 2024 Sri Lanka Development Update projected 2024 growth at 2.2 percent up from 1.7 percent projected last year and 2.5 percent for 2025.

Sri Lanka’s economy has stabilised and it was essential for stability and reforms to continue, Country Manager Chiyo Kanda told reporters on Tuesday.

Sri Lanka’s inflation was low, interest rates were falling and the rupee was appreciating, World Bank’s Senior Country Economist Richard Walker said.

Results were already beginning to be seen, but there was unlikely to be a quick bounce back, he said.

Sri Lanka upcoming elections and the possibility of reform fatigue or reversals were, a key risk to the recovery path.

Related World Bank concerned over potential reform fatigue in Sri Lanka’s election year

Meanwhile the sudden poverty created from a currency collapse in 2022 was likely to persist for some time.

By 2026 World Bank was forecasting growth at 3.0 percent for 2026. The International Monetary Fund was also forecasting around the same level of growth.

Sri Lanka has to make sure that the debt restructuring was sufficiently deep to prevent repeated events in the future, he said.

“The modest economic recovery will likely be insufficient to reverse welfare losses experienced during the crisis, and the poverty rate is estimated to remain above 22 percent until 2026,” the report warned.

“Falling household spending on health and education is likely to impact future human capital, especially in poorer households.”

Extreme macro-economic policy (tax cuts on top of inflationary rate cuts to target potential output) drove the country to an external default in 2022, after quickfire currency crises in 2012, 2016 and 2018 boosted foreign borrowings and the central bank reserves also turned into net debt, analysts have shown.

The country has had a tendency to recover quickly from currency crises but this was the first external default. The are also possibility of global headwinds over fiscal and monetary risks in reserve currency countries, following years of loose policy analysts say. (Colombo/Apr03/2024)

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Sri Lanka seeks to draw youth into agri-entrepreneurship with 1.6bn funding

ECONOMYNEXT – Sri Lanka’s Ministry of Agriculture and Plantation Industries has earmarked 1.6 billion rupees for the establishment of 160 model farms across the island, that are to be owned and operated by youth agri-entrepreneurs.

“The Ministry of Agriculture and Plantation Industries has taken steps to allocate 1,600 million rupees to establish 160 villages in 25 districts with 6 youth agri entrepreneurship villages in each district,” Minister Mahinda Amaraweera was quoted in a statement.

“Arrangements have been made to provide an amount of one million rupees to each village under the first phase.”

The Minister said the aim of the program is to attract youth to agriculture and to introduce them to new agricultural technology, so they could target local markets and exports.

Under the initiative vegetables, fruits, plantation crops, and fish are to be harvested, and livestock products are to be produced in the villages. (Colombo/May18/2024)

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Sri Lanka Navy nabs fishermen engaged in illegal fishing

ECONOMYNEXT – Sri Lanka’s Navy apprehended eight persons engaged in illegal fishing in the seas off Ambalanpokkanei, Mullaitivu, Poduwakattu, and Trincomalee, this week.

“The operations also led to the seizure of 3 dinghies and unauthorized fishing gear employed for these illegal acts,” it said in a statement.

“The Sri Lanka Navy remains vigilant and conducts operations to combat illegal fishing in its sea and coastal areas, with a view to supporting legal fishing activities.”

The fishermen were engaging in light-coarse fishing and using unauthorized fishing nets.

They were intercepted by the SLNS Gotabaya and SLNS Walagamba of the Eastern Naval Command.

The individuals were identified as residents of Mullaitivu, Kuchchaveli and Poduwakattu, aged between 21 to 53 years.

The fishermen, dinghies and unauthorized fishing gear were handed over to the Assistant Directorate of Fisheries – Mullaitivu, and the Fisheries Inspector of Trincomalee for legal action, the Navy said. (Colombo/May18/2024)

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Fifteen years after the end of the war, victims still await justice at Mullivaikkal: Amnesty

ECONOMYNEXT – Speaking at a commemoration marking the 15th anniversary of the end of Sri Lanka’s internal armed conflict on 18 May 2009, which culminated in the brutal Mullivaikkal offensive where countless civilian lives were lost, Secretary General at Amnesty International Agnès Callamard said:

“Today’s anniversary is a grim reminder of the collective failure of the Sri Lankan authorities and the international community to deliver justice to the many victims of Sri Lanka’s three-decade-long internal armed conflict.

It is sobering to stand in the same place where, 15 years ago, countless civilian lives were lost during the last days of the war.

Ahead of this event, we have witnessed clampdown on the memory initiatives, including arrests, arbitrary detentions and deliberately skewed interpretations of the Tamil community’s attempts to remember their people lost to the war. Authorities must respect the space for victims to grieve, memorialise their loved ones and respect their right to freedom of expression and peaceful assembly.

UN investigations have found credible evidence of crimes under international law and other violations of international human rights and humanitarian law committed by those on both sides of the conflict, yet there has been little in the way of an independent or impartial national inquiry into such serious crimes.

Meanwhile, the families of those who were forcibly disappeared during the conflict have been left to search desperately for their loved ones. It is truly heartbreaking to hear from victims how long they have been demanding justice in vain.

The Sri Lankan government is best placed to provide answers to the victims, however numerous domestic mechanisms to establish accountability in the last 15 years have been mere window dressing.

The report by the UN Office of the High Commissioner for Human Rights released earlier this week too reiterates the gaping deficits in Sri Lanka’s accountability initiatives that has contributed to impunity remaining deeply entrenched.

Tens of thousands of victims and their families continue to suffer in anguish as they await truth, justice, and reparations. We stand in solidarity with them here in Mullivaikkal today.”

Background:

During the internal armed conflict from 1983 to 2009, Sri Lankan government forces and their armed political affiliates committed extrajudicial killings, enforced disappearances and acts of torture against Tamils suspected of links to the Liberation Tigers of Tamil Eelam (LTTE).

The LTTE also launched indiscriminate suicide attacks on civilian targets like buses and railway stations, assassinated politicians and critics, and forcibly recruited children as fighters.

Violations of international human rights and humanitarian law peaked in the final months of the conflict, most notably in May 2009 when some 300,000 displaced civilians were trapped between the warring parties.

It was at Mullivaikkal, a small village in Mullaitivu district in the Northern Province of Sri Lanka, where the final offensive between the Sri Lankan forces and the LTTE took place, killing at least 40,000 civilians according to UN estimates.

Each year, on 18 May, a memorial event at Mullivaikkal brings together thousands of war-affected Tamils to commemorate those lost to the war and demand justice and accountability.

The Office of the High Commissioner for Human Rights (OHCHR) this week released a report on accountability for enforced disappearances in Sri Lanka.
(Colombo/May18/2024)

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