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Friday January 27th, 2023

Sri Lanka cabinet nod for truth & reconciliation mechanism as talks threaten to collapse

ECONOMYNEXT – As talks between Sri Lanka President Ranil Wickremesinghe and the opposition Tamil National Alliance (TNA) on a final solution to the island nation’s decades-long ethnic issue hang in the balance, the cabinet of ministers has greenlit a high-level proposal to initiate a truth and reconciliation mechanism.

A government statement said on Tuesday January 17 that the cabinet has approved a consolidated resolution made jointly by the president, prime minister and five cabinet ministers to take measures needed “to take necessary actions to implement the concept of truth and reconciliation mechanism (sp)”.

The proposal was made by President Wickremesinghe, Prime Minister Dinesh Gunawardena, Minister of Fisheries Douglas Devananda, Minister of Education Susil Premajayantha, Minister of Justice Wijeyadasa Rajapakshe, Minister of Urban Development Prasanna Ranatunga and Minister of Foreign Affairs Ali Sabry.

“Requirement of an independent local mechanism to search for the truth as a meaningful way to bring forward the peace achieved after ending the conflicts sustained for 30 years and to secure it is apparent. Sri Lanka has established several independent investigation commissions for seeking reconciliation after the conflicts. Accomplishment all the recommendations of those commissions is vital,” the government statement said.

The announcement came in the wake of a statement by President Wickremesinghe on Sunday January 15 that a full implementation of the 13th amendment to the constitution was on the cards.

However, the TNA, a key player in the ongoing talks, has expressed scepticism.

TNA legislator M A Sumanthiran told EconomyNext on Monday that successive governments have made the same promise for 35 years, to no avail.

“Nobody takes it with any seriousness because it has been constantly promised. It’s a question of implementing it. The president with his executive powers can do it,” he said.

Related:

Sri Lanka president pledges full implementation of 13th amendment; TNA sceptical

The 13th amendment to Sri Lanka’s constitution emerged from the controversial Indo-Lanka Accord of 1987 as a purported solution to the worsening ethnic conflict, four years after war broke out. Provincial councils came in the wake of this amendment, though land and police powers have yet to be devolved to the provinces as originally envisioned. Both Sinhalese and Tamil nationalists have historically opposed the amendment, the former claiming it devolved too much, the latter complaining it didn’t devolve enough.

President Wickremesinghe in November 2022 expressed his intention to find a final solution to the ethnic issue by February 04 this year when Sri Lanka celebrates the 75th anniversary of its independence from the British.

This deadline is now appearing increasingly unrealistic, with talks between the government and the TNA being less than successful. (Colombo/Jan17/2023)

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Sri Lanka’s Dialog Axiata hopes to hold prices despite rising costs

ECONOMYNEXT – Sri Lanka’s Dialog Axiata hopes to hold prices despite higher taxes, rising costs like energy, officials said as the country goes through the worst currency crisis in the history of its intermediate regime central bank.

High inflation following a collapse of the currency has reduced real incomes of customers.

“There are many factors to consider, especially with the last price increase we did in last year did not resulted in a significant increase in revenue” Pradeep De Almeida · Group Chief Technology Officer at Dialog Axiata said at the launch of its Future zone at Lotus tower.

In September,2022 following an electricity tarrif hike dialog increased its tariffs on Mobile, Fixed Telephone, Broadband Plans and Value Added Services (Prepaid and Postpaid) by 20 percent while tariffs on all Pay Television Services were raised 25 percent.

Value Added Tax (VAT) was also raised by the government from 12 percent to 15 percent on all Telecommunications and Pay TV services.

“Even though we increase the prices we only saw around 8-9 percent increase in revenue,” Almeida said.

“That is because many users cut off their usage to limit the spending”.

Dialog will increase efficiencies and manage costs in an attempt to avoid prices increases for customers, he said.

Over the 24 months to December 2022, Sri Lanka;s central bank has generated inflation of 76 percent, based on the Colombo Consumer Price Index official data shows. Following the currency collapse, more power tariff hikes are planned.

“We are trying to mainly bear the cost from our side. We are getting a massive support from our parent company Telekom Malaysia International,” Navin Peiris, Group Chief Enterprise Officer at Dialog told EconomyNext.

“Therefore as of now, there is no plan to increase prices”. (Colombo/Jan 26/2023)

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Sri Lanka shares fall at market close on profit taking

ECONOMYNEXT – Sri Lanka shares fell on Thursday as profit taking entered the market mainly on financial and diversified sectors, brokers said.

The main All Share Price Index (ASPI) fell 0.13 percent or 11.50 points to close at 8,926.56.

“The market was trading on dull trade mainly due to profit taking,” an analyst said.

“Also we saw investors taking a sideline as quarterly reports started to come”.

The earnings in the first quarter of 2023 are expected to be negative with revised up taxes and an imminent electricity tariff hike.

Earnings in the second quarter are expected to be more positive with the anticipation of IMF loan and possible reduction in the market interest rates as the tax revenue has started to generate funds.

The central bank’s policy decision was expected and investors have been eying on IMF deal with hopes of rapid economic recovery from the current unprecedented economic crisis, however since the market gained in the last sessions profit taking has come about, analysts said.

The market has been on a rising trend on the hopes of a faster IMF deal. However, the central bank government said the IMF deal is likely in the quarter or in the first month of the second quarter.

The most liquid index S&P SL20 fell  0.33 percent or 9.21 points to 2,798.

LOLC had seen some attention by investors as the firm disposed 90,256,750 shares held with Agstar PLC at 15-17.50 rupees a share.

The market witnessed a turnover of 1.2 billion rupees, lower than the month’s daily average of 1.9 billion rupees.

Expolanka dragging the market down closed 2.36 percent down at 186.7 rupees a share. Sampath bank fell 1.41 percent to close at 42 rupees a share while Royal Ceramic Lanka closed 2.59 percent dwn at 30.1 rupees a share.

(Colombo/Jan26/2023)

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Sri Lanka bonds yields steady at close

ECONOMYNEXT – Sri Lanka bond yields were steady at close on Thursday, dealers said, while a guidance peg for interbank transactions by the Central Bank remained steady.

A bond maturing on 01.05.2024 closed at 31.00/20 percent unchanged from the last close.

A bond maturing on 15.05.2026 closed at 26.60/90 percent, up from 28.50/70 percent on Wednesday.

A bond maturing on 15.09.2027 closed at 28.60/85 percent, up from 28.50/60 percent at the last close.

The three months bill closed at 29.75/30.25 percent unchanged from the last close.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by another 2 cents to 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 360.49 rupees on Thursday, data showed.  (Colombo/Jan 26/2022)

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