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Monday April 22nd, 2024

Sri Lanka considers name change for politically-mired Chinese-built ‘Lotus Tower’- Official

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe is considering changing the name of the Chinese-built Lotus Tower as its name and structure are similar to a key political party which was forced to step down from the government last year.

The Lotus Tower is built similar to lotus bud, which is the symbol of Buddhist nationalist Sri Lanka Podujana Peramuna (SLPP) led by ousted prime minister Mahinda Rajapaksa in the face of strong public protests on May 9, last year. 

“The President is considering a name change but there is nothing officially about a change of name,” Lotus Tower’s Head of Marketing Bimsara Rosario told EconomyNext.

During the procedure of changing names it will deal with rebranding, remarketing and design changes,which will encounter further expenditure, Rosario said.

Shanuka Karunarathne, the director of the Presidential Media Division (PMD) told EconomyNext that they have not been informed about such a name change from President Ranil Wickremesinghe. 

Many still call the tower as “Rajapaksa Tower”, which is criticized for being a prestige project of the Rajapaksa government and considered as a white elephant project. 

The design is derived from the Lotus flower. The lotus symbolizes purity within Sri Lankan culture and is also said to symbolize the country’s flourishing development. The tower base is inspired by the lotus throne. 

The 350-meter or 1,150-feet tower, the tallest tower in South Asia,  was built with $104.3 million with the 80 percent of this being borrowed from Exim Bank of China and China National Electronics Importers and Exporters Corporation (CEIEC) and Aerospace Long March International Trade Co. Ltd, (ALIT) are the contractors. 

Located in the commercial heart of Colombo, the tower has been called a symbolic landmark of Sri Lanka. 

The state-run Telecommunications Regulatory Commission (TRC), which was under the purview of then President Rajapaksa in 2012 funded the local funding for the project. 

“If an analysis is conducted, the name of the Tower is one of its strengths. The more controversial the tower, the higher the inquisitiveness to come visit the tower,” an official from the TRC said. 

The tower triggered controversy when the Indian government raised concerns over its purpose as China was behind the construction amid concerns over spying, Sri Lanka government officials have said. Beijing has rejected Indian allegations. 

The Tower  has earned a revenue of 700 million rupees since its opening in September, last year through April 30, an official from the Lotus Tower said. 

“All of the biddings are coming to an end and we only have two slots left and by next Christmas we hope to have the entire tower open,” Rosario said, referring to the shopping slots in the entire Tower. (Colombo/May 9/2023) 

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IMF official: Sri Lanka’s road ahead is challenging, critical to keep up with reform momentum

ECONOMYNEXT –International Monetary Fund’s First Deputy Managing Director Gita Gopinath said Sri Lanka’s future with many reforms are challenging, but it is critical to keep up with the reform momentum.

Gopinath stated this after meeting the island nation’s State Finance Minister Shehan Semasinghe Central Bank Governor Nandalal Weerasinghe, and Treasury Secretary Mahinda Siriwardena on the sideline of the IMF/World Bank Spring Meetings in Washington.

“I commended them on hard-won economic gains in the past year. The road ahead is challenging and it’s critical to keep up with the reform momentum,” Gopinath wrote on her X platform.

Under IMF programme, President Ranil Wickremesinghe has implemented a raft of hard reforms including higher taxes.

Sri Lanka agreed to the IMF programme after it declared bankruptcy with sovereign debt default in April 2022.

Semasinghe after the meeting tanks Gopinath for acknowledging Sri Lanka’s economic progress.

“Our discussion was insightful and productive, and we appreciate the opportunity to delve into the challenges and opportunities ahead,” the State Finance minister said in his X platform.

“We remain steadfast in our commitment to our reform agenda and eagerly anticipate continued collaboration with the IMF to advance our shared goals.”

Sri Lanka was compelled to go for IMF after the unprecedented economic crisis which was followed by a political crisis that ousted former president Gotabaya Rajapaksa and his government who were legitimately elected.

The IMF programme has included reforms in state-owned enterprises, fiscal sector and financial sectors to ensure debt sustainability.

The global lender also has pledged its support to speed up the island nation’s lingering debt restructuring process with private creditors including sovereign bond holders. (Colombo/April 22/2021)

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Sri Lanka motor racing crash claims 7 lives, 4 critical

ECONOMYNEXT – A deadly accident at motor Race Sri Lanka’s hill country town of Diyathalawa has claimed at least 7 lives police said, after a racing vehicle, in the seasonal Fox Hill Super Cross ploughed in to spectators after running off the track.

Another 21 spectators were injured Sunday, and hospitalized and at least four were critical, police said.

Thousands of people come to watch the Fox Hill Super Cross race, which is usually held in April, as large numbers of people head to the cooler climes in the hills.

According to footage taken by spectators one car overturned on the side of the track.

Sri Lanka’s Newsfirst television said Marshalls were waving flags to caution other vehicles, when another car went off the track and crashed into spectators. (Colombo/April21/2024)

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Widespread support for Sri Lanka debt workout, reform progress at IMF/WB meet: Minister

ECONOMYNEXT – There was widespread support for Sri Lanka’s debt restructuring and acknowledgement of progress made under an International Monetary Fund program, at meeting of the fund and World Bank, State Minister for Finance Shehan Semasinghe said.

“The strides made in our economic recovery and financial stability have been acknowledged as significant advancements towards our country’s prosperity by our stakeholders and international partners,” Minister Semasinghe said in an (twitter) post after attending the meetings.

“Further, it was heartening to note the widespread appreciation and support for Sri Lanka’s debt restructuring process.

“We remain steadfast in our commitment to reaching the restructuring targets and confident of smooth progress in the continued good-faith engagements for a speedy debt resolution that will ensure debt sustainability and comparability of debt treatment.”

Sri Lanka ended a first round of talks with sovereign bondholders in March without striking a deal but some agreement on the basis for a deal.

An initial deal with bilateral creditors have been reached, but they may be awaiting a deal with private creditors to sign formal agreements.

International partners have appreciated reforms made under President Ranil Wickremesinghe, Minister Semasinghe said.

“It was great to engage in productive bilateral discussions with all of whom appreciated the recent economic developments, progress in debt restructuring, strengthening of tax administration, and ongoing governance reforms,” he said.

Sri Lanka’s rupee has been allowed to re-appreciate by the central bank amid deflationary monetary policy, bringing tangible benefits to people in the form of lower energy and food prices, unlike in past IMF programs.

Electricity prices were cut as a strengthening currency helped reduce the cost of coal imports.

Related Sri Lanka central bank mainly responsible for electricity price cut

The currency appreciation has also allowed losses to the Employment Provident Fund imposed to be partially recouped, helping old workers near retirement, as well as raising disposable incomes of current wage earners on fixed salaries.

Related Sri Lanka EPF gets US$1.85bn in value back as central bank strengthens rupee

The IMF, which was set up after World War II to end devaluations seen in the 1930s after the Fed’s policy rate infected other key central banks, started to actively encourage depreciation after a change to its founding articles in 1978 (the Second Amendment).

The usefulness of money as a store of value, or a denominator of current and future values then decline, leading to loss of real savings, real wages and increases in social unrest.

Before that, members who devalued more than 10 percent after printing money for growth or any other reason, faced the threat of suspension from the organization as punishment.

Sri Lanka’s rupee has appreciated to around 300 to the US dollar now from 370 after a surrender rule was lifted in March 2023.

But there is no transparency on the basis that economic bureaucrats are allowing the currency to gain against the US dollar (the intervention currency of the central bank).

The rupee is currently under pressure, despite broadly prudent monetary policy, due to an ‘oversold position’ in the market after recent appreciation made importers and banks to run negative open positions as the usefulness of the currency as a denominator of future value declined with sudden strenghtening. (Colombo/Apr21/2024)

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