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Wednesday February 28th, 2024

Sri Lanka 2022 interim budget proposes new targeted welfare system

ECONOMYNEXT – A new mechanism to find eligible welfare beneficiaries in Sri Lanka will see better-targeted welfare programmes and cash transfers that will be made directly to beneficiaries’ bank accounts, President Ranil Wickremesinghe said.

Presenting an interim budget for the remainder of the year, Wickremesinghe told parliament on Tuesday August 30 that the new mechanism, upon its completion, will also ensure that transparent laws and systems are in place.

Sri Lanka is going through its worst economic crisis in 74  years of independence, and the public is facing immense hardships due to rising prices and shortages of a number of goods. In the midst of a crippling foreign exchange shortage, the island nation has had to default on its external debt and much needed but politically unpopular economic reforms including expenditure cuts are already under way that that will add to the people’s difficulties in the short term.

“I am well aware of the difficulties faced by many due to the ongoing crisis. That’s why I decided to cut some of the capital expenditure and find room to provide enhanced support for vulnerable communities,” President Wickremesinghe said.

He noted that, between May and July 2022, the government had spent 31 billion rupees to as a monthly allowance in urgent assistance o those affected due to loss of employment, decline in agriculture or inability to cultivate.

“I propose to continue this programme for another four months to reduce the pressure of the economic crisis [on those people],” he said.

Other welfare measures include 2,500 rupees in addition to 20,000 rupees already paid to pregnant women, and 10,000 rupees to be allocated per family to 61,000 food-insecure families in need of urgent assistance. Some 46.6 billion rupees has been allocated for these measures, according to the interim budget document.

As previously announced by Energy Minister Kanchana Wijesekara, direct cash transfers will be made to fisheries and plantation sector workers who are impacted by a recent hike in kerosene prices.

Meanwhile, 133 billion rupees has been allocated under a World Bank loan and approval has been obtained through the Supplementary Estimate presented prior to the interim budget reading to provide immediater elief to around 3.2 million people affected by the current economic situation.

Under this, the president said, the monthly Samurdhi allowance has been increased to an amount ranging between 5,000 and 7,500 rupees per month for approximately 1.7m illion families currently Samurdhi. Apart from this, 5,000 rupees was provided per month temporarily to around 726,000 families who were in a waiting list for expecting Samurdhi benefits.

An allowance paid for Sri Lanka’s elderly, disabled, and kidney patients has also been increased to 5,000 to 7,500 rupees, and a temporary assistance of 5,000 rupees has been allocated for people in the waiting lists for this assistance.

In addition to the above concessions provided under this project, 110 million US dollars (40 billion rupees) has been allocated for the import of urea requiredf or paddy cultivation in the 2022/2023 ‘Maha’ season, and fertilizerp rocurement is already underway, said the president.

“I believe that this will enable paddy farmers to get a good harvest in the coming season and we will thus be able to get rice at a reasonable price consumers,” he said.

“Under the same loan facility, domestic cooking gas was imported and distributed in the country during a short time duration to overcome thed domestic gas shortage that had arisen due to the currents hortage of foreign exchange. Also, we are working to meet the domestic gas requirement without shortage in the future as well. It is intended to spend about 70 million US dollars (25 billion rupees) from this loan assistance for that.” (Colombo/Aug 30/2022)

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Sri Lanka confident of “smoother” IMF second review: State Minister

ECONOMYNEXT – Sri Lanka’s second review for the International Monetary Fund (IMF) loan would be smoother than the first as the government has implemented many reforms required for the economic recovery, State Finance Minister Shehan Semasinghe said.

An IMF mission will visit Sri Lanka on March 7 and will engage in the review of second tranche of the $3 billion IMF loan for two weeks, he said.

“The second review will commence on the 7th of March, and we are very confident that will be a smoother review than the first review,” Semasinghe told reporters at a media briefing in Colombo on Wednesday (28).

He said the the first review was difficult because of hard policy decisions taken by the government in the initial stages.

The global lender completed the first review of the 48-month Extended Fund Facility (EFF) on December 12 before disbursing $337 million to support the island nation’s economic policies and reforms.

The IMF after the first review said Sri Lanka’s performance under the program was satisfactory while “all but one performance criteria and all but one indicative targets were met at end-June”.

Sri Lanka implemented most structural benchmarks due by end-October 2023, though some with delay. (Colombo/Feb 28/2024)

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Sri Lanka’s religious leaders need to cultivate harmony: Prez

ECONOMYNEXT – The responsibility of cultivating harmony rests significantly on the shoulders of religious leaders, Sri Lanka’s President Ranil Wickremesinghe has said.

“While politicians often pursue power, religious leaders strive to maintain their positions, frequently resorting to the perilous avenues of racism and bigotry. This unfortunate trend has plagued our country since the 1930s, yielding disastrous outcomes,” Wickremesinghe was quoted by his media division as saying at the ‘Religions to Reconcile’ national inter-religious symposium, organized by the National Peace Council of Sri Lanka, held today (28) at the Bandaranaike International Conference Hall (BMICH).

“Our nation has endured the bitter consequences of racism and religious extremism, culminating in a devastating conflict.

“With the military conflict resolved, Sri Lanka’s political challenges are now receiving attention, necessitating a renewed focus on coexistence,” Wickremesinghe said, adding that steps are being taken to resolve land disputes, address the issue of missing persons, release certain individuals, and initiate a delimitation of powers.

The President’s speech:

Having acknowledged the intrinsic connection between religion and reconciliation, our nation has endured the bitter consequences of racism and religious extremism, culminating in a devastating conflict. Following the cessation of hostilities, our main objective has been to foster coexistence among all communities.

The responsibility of cultivating harmony rests significantly on the shoulders of religious leaders. It is imperative that we remain mindful of our intentions. While politicians often pursue power, religious leaders strive to maintain their positions, frequently resorting to the perilous avenues of racism and bigotry. This unfortunate trend has plagued our country since the 1930s, yielding disastrous outcomes that require no further explanation.

Take Singapore, for example, where the absence of racism and bigotry has contributed to its rapid development despite its diverse linguistic landscape. With the military conflict resolved, Sri Lanka’s political challenges are now receiving attention, necessitating a renewed focus on coexistence, a topic also being deliberated in Parliament.

Mr. Karu Jayasuriya, served as the Chairman of the Sectoral Oversight Committee on Religious Affairs and Co-Existence when he was serving as the Speaker. This committee was established in response to conflicts involving Muslims in March 2018, as well as incidents in Galle in 2017 and Beruwela in 2014. Various proposals were put forth by these committees to address these issues, and consensus was reached on their implementation. It’s crucial that we uphold this agreement and continue working collaboratively to resolve these challenges.

Towards the close of last year, numerous Buddhist monks and Tamil leaders presented the Himalaya Declaration, a document we are currently adhering to. As we move forward, the final phase entails fostering synergy, particularly through discussions with Tamil political parties and MPs, aimed at addressing lingering issues. Steps have been initiated to resolve the matter of missing persons, with further updates forthcoming in the near future. Additionally, arrangements have been made for the release of certain individuals held in connection with these matters.

The primary concern at present revolves around the fate of the missing persons. To address this issue, we’ve presented and successfully passed a bill in Parliament to establish the Truth and Reconciliation Commission (TRC). Numerous reports from Disappearance Commissions have been reviewed, and one report authored by Judge A.H.M.D.Nawaz was selected.

Following the approval of the draft for the Truth and Reconciliation Commission, South African President Cyril Ramaphosa pledged his support for these initiatives. Similar assistance is being extended by other nations as well, enabling us to advance these critical endeavours.

Addressing the on-going political challenges, our attention is directed towards resolving land disputes, particularly in regions like Jaffna where tensions persist between villagers and the Wildlife Department. Similar conflicts also arise in areas such as Vavuniya, Trincomalee, Polonnaruwa, and Mahianganaya. We aim to address these issues through inclusive dialogue, involving all concerned parties. Furthermore, I have instructed to proceed in accordance with the 1985 map. Additionally, I anticipate meeting with Tamil MPs in Parliament next week to discuss these matters further. Following consultations with the security forces, agreements have been reached to release more land, providing a pathway forward in our efforts.

Another pressing issue is the delimitation of powers. A key demand is the empowerment of the 3rd list of devolution, with an emphasis on not interfering with police powers at present, leaving them open for future consideration. The Land Act is slated for presentation, and there are no objections to the delegation of other subjects in the 3rd list. However, securing the necessary consensus with other parties in Parliament to achieve a two-thirds majority remains crucial.

Simultaneously, discussions are underway regarding the implementation of the Provincial Board of Education. Proposals have been made to establish provincial professional training institutes in each province. Additionally, plans are underway to appoint provincial-level committees to lead the modernization of agriculture, establish a tourism board, and undertake related initiatives.

Additionally, the work of five provincial ministries is expected to be distributed among twenty ministries. This restructuring cannot simply resemble a general ministry, so officials are currently deliberating on adjusting their structure accordingly.

I eagerly anticipate addressing the final aspect of this matter, the decentralized budget, once all parties have convened. There’s also a call for a secondary board, akin to a Senate, which the government does not oppose. However, such an initiative would need to coincide with the framing of a constitution, potentially requiring a referendum. I also intend to engage in discussions on this topic with other party leaders.

These measures aim to lay the groundwork for a new era in our country. Religious leaders have been entrusted with significant responsibilities in this endeavour. I am confident that further discussions on these matters will yield fruitful outcomes.

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Sri Lanka rupee closes at 310.00/15 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 310.00/15 to the US dollar Wednesday, from 310.25/50 on Tuesday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.60/80 percent from 10.60/75 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.00 percent up from 11.80/95 percent.

A bond maturing on 15.03.2028 closed stable at 12.00/15 percent.

A bond maturing on 15.07.2029 closed at 12.20/50 percent from 12.25/50 percent.

A bond maturing on 15.05.2030 closed stable at 12.25/40 percent.

A bond maturing on 15.05.2031 closed at 12.55/75 percent down from 12.60/80 percent.

A bond maturing on 01.07.2032 closed at 12.50/90 percent down from 12.55/13.00 percent. (Colombo/Feb28/2024)

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