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Thursday June 20th, 2024

Sri Lanka confident of no immediate withdrawal of EU’s GSP+: Foreign Secretary

ECONOMYNEXT – Sri Lanka is confident that the European Union will not withdraw the lucrative GSP Plus trade concession immediately as it has already addressed some concerns raised by the block on human rights, Foreign Ministry Secretary Jayanath Colombage said.

The Generalised Scheme of Preferences (GSP) Plus – an annual trade concession worth over 500 million US dollars – has boosted Sri Lanka’s exports to EU member states. Sri Lanka lost access to GSP Plus in 2010 due to alleged human rights violations but regained it in 2016 after pledging to implement 27 international conventions.

However, Sri Lanka has failed to implement several commitments it had made to the EU and the bloc has warned that the concession could be withdrawn if the island nation fails to implement a few key demands including the repeal of the Prevention of Terrorism Act (PTA) and the release of long detained suspects under the PTA.

“We are fairly confident that the GSP Plus will not be withdrawn immediately because we have provided very credible, genuine answers to the queries made by the EU Commission,” Colombage told a media conference ahead of his visit to face United Nations Human Rights Council sessions starting on Monday (28) in Geneva.

“One of the main focuses of the EU was the PTA. Now we have done the amendment and it is before the parliament. Hopefully, on the 8th or 9th of the next month, it will become the law of the country. So that is the concrete positive step we have taken.”

“They were also very concerned about long term returnees. Eighty-one detainees are already released and we will release more. Because this is all Sri Lankans languishing in a jail somewhere and it is not fair to keep them any longer.”

A loss of GSP+ will be a huge blow to cash-strapped Sri Lanka which is facing an unprecedented economic and debt crisis. The concession has helped Sri Lanka earn more US dollars at a time the island nation cannot borrow from international capital markets due to a series of rating downgrades by global rating agencies.

Foreign Minister G L Peiris has tabled the amendment in parliament though a debate has yet to be scheduled. Though government critics say the move was to hoodwink the international community ahead of the next week UNHRC session and prevent the loss of GSP+, some government officials say the amendment will dilute the power of authorities to detain suspects for a long period.

“So we are confident that we will have the GSP Plus for a while. But it does not mean that we should take it lightly. We have to work very hard. We have to address the concerns and issues so that we will continue to derive the GSP Plus continuously.”

Colampage said the GSP+ has really helped fishermen, garment factories, and farmers more than the government.

“And if it is withdrawn, these will be the worst affected categories,” he said. (Colombo/Feb25/2022)

 

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Sri Lanka shares debt management experience at global forum

ECONOMYNEXT – Sri Lanka has shared its experiences at a forum on debt management to “provide lessons for others”, State Minister of Finance Shehan Semasinghe has said.

Semasinghe spoke on “The Role of Debt Management in Navigating Crises” at the 14th Debt Management Facility (DMF) Stakeholders’ Forum, in Livingstone, Zambia.

“I shared the experiences of Sri Lanka which can provide valuable lessons for others and explored the critical elements of capacity building and sound institutional practices in managing debt, particularly in the context of economic challenges,” Semasinghe said on X (twitter).

“Sri Lanka’s experience demonstrates that effective debt management is not just about managing numbers but also about building robust institutions and capacities.”

The journey underscores the importance of transparent, accountable governance and the need for international support and cooperation in times of crisis, he said.

“Sri Lanka prioritized addressing gaps in public debt management by drafting a consolidated Public Debt Management Act, ensuring clarity and legal robustness and establishing a centralized Public Debt Management Office with operational autonomy.

“The role of debt management in navigating crises is multifaceted and critical. Further, by investing in capacity building, adhering to sound institutional practices, and strategically managing debt restructuring and liability operations, countries can better withstand economic shocks and pave the way for sustainable recovery.”

Developing countries face severe debt distress as they are more vulnerable to external shocks, Semasinghe said, and “managing global debt requires coordinated international efforts on debt restructuring where necessary, timely fiscal policy adaptation and help sustainable economic growth.”

The state minister also pointed out the financial impact of climate change was an emerging challenge, as countries need investment to mitigate and adapt to climate impacts, “especially through non-debt creating inflows, which would require private capital mobilization.” (Colombo/Jun20/2024)

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Sri Lanka rupee closes stronger at 305.10/30 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed stronger ahead of the long weekend at 305.10/30 to the US dollar on Thursday, up from 305.40/55 to the US dollar Wednesday, dealers said, while some bond yields edged up.

A bond maturing on 15.12.2026 closed at 10.45/80 percent, up from 10.35/75 percent.

A bond maturing on 01.07.2028 closed at 11.20/45 percent.

A bond maturing on 15.09.2029 closed at 12.00/15 percent, up from 11.95/12.35 percent.

A bond maturing on 01.12.2031 closed at 12.05/25 percent.
(Colombo/Jun20/2024)

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Sri Lanka stocks close up, JKH trade pushes turnover

ECONOMYNEXT – The Colombo Stock Exchange closed up on Thursday, data on its site showed.

The broader All Share Index closed up 0.19 percent, or 23.11 points, at 12,249; while the more liquid S&P SL20 Index closed up 0.15 percent, or 5.33 points, at 3,610.

Turnover was 2 billion. Nearly half of this (Rs980mn) came from a crossing on John Keells Holdings Plc. The share closed down at 202.00.

“There were several crossings today which pushed turnover,” market participants said.

“Institutions and high net-worth activity drove the market, while the retail investors we feel are still about uncertain and adopting a wait-and-see approach.”

Melstacorp Plc was among the companies that saw active volumes (Rs194mn) in the day. The share closed up at 87.10.

Top contributors to the index included TeeJay Lanka Plc (up at 41.70), Sampath Bank Plc (up at 79.50), Hatton National Bank Plc (down at 201.00). Hayleys Plc (up at 105.00) and its subsidiary Hayleys Fabric Plc (up at 46.60) were also positive contributors. (Colombo/Jun20/2024)

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