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Wednesday June 19th, 2024

Sri Lanka CEB experienced staff in alarming exodus after inflation, taxes: Union

ECONOMYNEXT – Sri Lanka’s state-run Ceylon Electricity Board is losing qualified engineers at an alarming rate, after a currency collapse and new progressive taxes slapped on the debased salary, and they are not coming back, union officials said.

Ceylon Electricity Board has a cadre of around 1,000 engineers but they have been usually managing with lower levels of around 900, they said.

Since 2022, about 150 have left the CEB for foreign countries, leading to serious gaps in some branches with engineering staff down to about 750, Dhanushka Parakramasinghe, President of the CEB Engineers Union told reporters in Colombo.

Sri Lanka’s rupee collapsed from 200 to 330 to the US dollar in 2022 after two years of money printed by macro-economists to target ‘potential output’ using ‘data driven’ monetary policy, followed by a float failure with a surrender rule.

About 105 engineers have resigned and about 54 have taken leave, Parakramasinghe said.

Most have left with jobs already found.

There have been reports that doctors who left the country are coming back.

“Engineers are not coming back,” Parakramasinghe said. “Some are coming back to resign. Some who left on leave having got PR, have sent resignation letters from abroad.”

Engineers are leaving for Ireland, Australia and New Zealand, to work in utilities and also the mining sector.

Sri Lanka’s coal power complex needs 96 staff and they are now down to 70, he said. CEB runs in shifts, round the clock.

Coal plant staff can easily get jobs in the mining sector in many countries including South Africa, where heavy machinery is in operation, he said.

“But our people usually like to go to Australia or Western European countries,” Parakramasinghe said.

Those who are leaving are offered jobs from 4,000 to 8,000 dollars based on experience and type of jobs, he said.

Engineers working in operations and maintenance (O & M) in transmission and generators are also in high demand abroad, the Union said.

An entry level engineer gets around 150,000 to 170,000 rupees, at the CEB. It works out to around 5 dollars a day.  At the central bank, which debases money, office assistants were paid 186,000 according to disclosures made in parliament.

Sri Lanka’s progressive taxes under an International Monetary Fund program, apply from around 3 dollars a day (100,000 rupees) through pay-as-you-earn taxes.

On one side senior staff are retiring and the CEB is seeing a drain of middle level staff who have about 10 years of experience, who are next in line, the Union said.

CEB will have problems maintaining service if the staff go abroad at this level, Buddhika Wijayawardhana, joint secretary of the CEBEU said.

There is also no incentive for young graduates to join the CEB under current conditions, he said.

Sri Lanka has some of the highest housing costs in the world, based on calculations done by reputed organizations, union officials said, and acquiring a house is now next to impossible. The same applied to a car.

Comparable living standards elsewhere was much higher. Salary was a key reason for people leaving.

At one time low interest rates were given for staff for housing, which was now in doubt he said.

After Sri Lanka’s rupee was left without a credible monetary anchor from around 1978, Sri Lanka’s interest rates and inflation shot up for ordinary people but some private and state entities gave low interest rate loans to staff. (Colombo/Mar15/2024)

Comments (4)

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  1. Kavan Ratnatunga says:

    An entry level engineer gets around 150,000 to 170,000 rupees, at the CEB. It works out to around 5 dollars a day. 5$per day is 150$ per month which is 45,000 not 150,000
    3 dollars a day (100,000 rupees) is 90$ per month is Rs27,000
    It is bad, but not that bad

  2. Wimal Wijeratne says:

    GBR

  3. Ajith jayarathna says:

    They are just trying to do the same what the center bank did

  4. sacre blieu says:

    so much so, for patriotism by the professionals.

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Comments (4)

Cancel reply

Your email address will not be published. Required fields are marked *

  1. Kavan Ratnatunga says:

    An entry level engineer gets around 150,000 to 170,000 rupees, at the CEB. It works out to around 5 dollars a day. 5$per day is 150$ per month which is 45,000 not 150,000
    3 dollars a day (100,000 rupees) is 90$ per month is Rs27,000
    It is bad, but not that bad

  2. Wimal Wijeratne says:

    GBR

  3. Ajith jayarathna says:

    They are just trying to do the same what the center bank did

  4. sacre blieu says:

    so much so, for patriotism by the professionals.

Central banks expect to increase gold reserves after buying 1,037 tonnes in 2023: Survey

ECONOMYNEXT – About 29 percent of central banks in the world intended to increase their gold reserves in 2023, up from 24 percent in 2023 and just 8 percent in 2019, a survey by the World Gold Council showed.

“The planned purchases are chiefly motivated by a desire to rebalance to a more preferred strategic level of gold holdings, domestic gold production, and financial market concerns including higher crisis risks and rising inflation,” the WGC said.

About 81 percent of 70 central banks that responded to the survey expected global central bank holdings of gold to go up, from 71 percent in 2023.

While in prior years, gold’s “historical position” was the top reason for central banks to hold gold, this factor dropped significantly to number five this year.

This year, the top reason for central banks to hold gold is “long-term store of value / inflation hedge” (88%), followed by “performance during times of crisis” (82%), “effective portfolio diversifier” (75%) and “no default risk” (72%).

Concerns about sanctions were listed as by 23 percent of emerging market central banks (0 advanced).

De-dollarization as a reason to hold gold gained ground, but was not among the main reasons.

About 13 percent of emerging market central banks listed de-dollarization as one of the reasons to buy gold up from 11 percent last year and 6 advanced nations said the same from zero last year.

Around 49 percent of central banks expected gold reserves to be moderately lower five year from now in the 2024 survey, against 49 percent in 2023 and 38 percent in 2022.

About 13 percent of central banks surveyed said US dollar reserves would be significantly lower in the 2024 survey, up from 5 percent in 2023 and 4 percent in 2022. (Colombo/June18/2024)

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Sri Lanka rupee closes weaker at 304.75/305.40 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed weaker at 304.75/305.40 to the US dollar Tuesday, down from 304.15 to the US dollar Friday, dealer said, while some bond yields edged up.

Sri Lanka’s rupee has weakened amid unsterilized excess liquidity from earlier dollar purchases.

Excess liquidity fell from as high as 200 billion rupees, helped by some sales of maturing bills and also allowing some term contracts to run out.

However the central bank has started to inject liquidity again below its policy rate to suppress interest rates.

On Tuesday 30 billion rupees was printed overnight at an average yield of only 8.73 percent.

Separately another 25 billion rupees was printed till June 25 at 8.09 percent to 9.05 percent, which was still below overnight the policy rate of 9.5 percent.

Nobody has so far taken the central bank to court for printing money beyond overnight at rates lower than the overnight rate.

Sri Lanka operates an ad hoc exchange rate regime called ‘flexible exchange rate’ which triggers panic among market participants, as the central bank stays away when spikes in credit either creates import demand or unsterilized credit is used up.

“If large volumes of unsterilized liquidity is left, the exchange rate has to be closely defended to prevent speculation involving early covering of import bills and late selling of exports proceeds,” EN’s economic columnist Bellwether says.

“Just as an appreciating or stable exchange rate leads to late covering of import bills, a falling rates leads to immediate covering of import bills.

“Keeping exchange rates stable is a relatively simple exercise but it is difficult to do so if short term rates are also closely targeted with printed money, as liquidity runs out, as if the country had a free float and no reserve target.”

“When there is a large volume of excess liquidity remaining (except those voluntary deposited for long periods by risk averse banks) the the interest rates structure is under-stated compared to the reported reserves.

“Interest rates would be a little higher than seen in the market if the liquidity was mopped up and domestic credit and imports were blocked to prevent the reserves from being used up.”

In East Asia there is greater knowledge of central bank operational frameworks, though International Monetary Fund driven flawed doctrine are also threatening the monetary stability of those countries, critics say.

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Vietnam selling SBV bills to stabilize the Dong, as Sri Lanka rupee also weakens

Sri Lanka’s rupee started to collapse steeply after the IMF’s Second Amendment in 1978 along with many other countries as flawed operational frameworks gained ground without a credible anchor.

A bond maturing on 15.12.2026 closed at 10.10/30 percent up from 10.05/30 percent Friday.

A bond maturing on 15.10.2027 closed at 10.60/57 flat from 10.60/80 percent.

A bond maturing on 01.07.2028 closed at 11.15/35 percent, up from 11.05/20 percent.

A bond maturing on 15.09.2029 closed at 11.80/90 percent unchanged.

A bond maturing on 15.10.2030 closed at 11.90/12.00 percent.

A maturing on 10.12.2031 closed at 11.95/12.10 percent.

A bond maturing on 01.10.2032 closed at down at 11.95/12.10 percent, down from 12.00/10 percent. (Colombo/Jun14/2024)

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Sri Lanka’s Ceylon Chamber links up with Gujarat Chamber

ECONOMYNEXT – The Ceylon Chamber of Commerce has signed an agreement with the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to increase trade cooperation between India and Sri Lanka.

The MOU was signed by CCC CEO Buwanekabahu Perera, SGCCI President Ramesh Vaghasia, in the presence of Dr Valsan Vethody, Consul General for Sri Lanka in Mumbai, India.

“With the signing of the MoU, … the Ceylon Chamber of Commerce and SGCCI aim to facilitate trade between the two countries via initiatives such as trade fairs and delegations, business networking events, training programmes,” the Ceylon Chamber said in a statement.

“This partnership will open doors for Sri Lankan businesses to explore opportunities in Surat’s dynamic market and enable the sharing of expertise and resources between the two regions.”

Established in 1940, SGCCI engages with over 12,000 members and indirect ties with more than 2,00,000 members via 150 associations. It promotes trade, commerce, and industry in South Gujarat.

The region’s commercial and economic centre Surat has risen to prominence as the global epicenter for diamond cutting and as India’s textile hub, and is ranked the world’s 4th fastest growing city with a GDP growth rate of 11.5%

Surat’s economic landscape is vibrant and diverse. As India’s 8th largest and Gujarat’s 2nd largest city, it boasts the highest average annual household income in the country.

The nearby Hazira Industrial Area hosts major corporations like Reliance, ESSAR, SHELL, and L&T. (Colombo/Jun18/2024)

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