An Echelon Media Company
Tuesday December 5th, 2023

Sri Lanka did not resort to populism by hiking salaries too early: official

ECONOMYNEXT – Sri Lanka’s state minister of finance Shehan Semasinghe has defended a costly salary hike for state sector workers, arguing that the government did not resort to the “populist” measure of raising salaries from January.

“Despite the potential for engaging in populist measures, such as raising government employee salaries from January, the government pursued a correct course of action,” Semasinghe was quoted as saying in a statement by the president’s office.

“The decision was made with the foresight and responsibility to prevent undue economic pressure on the country. These initiatives were executed under the direct guidance of the president, demonstrating a commitment to prudent economic management and sustainable policies,” he said.

The state minister was speaking to journalists at a budget discussion on Tuesday November 14, following President and Finance Minister Ranil Wickremesinghe’s budget presentation the previous day.

The budget proposals included a 10,000-rupee salary  hike for government workers by increasing the present cost of living allowance to 17,800 rupees.

To give higher salaries more taxes have to be raised, since money printing and more borrowings could no longer be done, Wickremesinghe told parliament on Monday during his budget speech.

As a result, payments will be given from April as tax revenues come in, he said, adding that arrears will be settled from October in six monthly installments.

The cost of living allowance of state pensioners will also be raised by 2,500 rupees 3,525 per month.

Pensions payments would go up to 401 billion rupees in 2024.

Semasinghe said Sri Lanka anticipates 1.8 percent economic growth for the year 2024.

Particular emphasis will be placed on the advancement of small and medium enterprises as part of this overarching objective of “fostering a robust economy during this period”, he said.

“The 2024 budget is crafted with a strategic focus on alleviating the debt burden, aiming to reduce it from 128 percent to 95 percent. Concurrently, efforts are directed towards diminishing the financial requirement from 34.6 percent to 13 percent and curtailing foreign debt servicing from the current 9.4 percent to 4.5 percent,” a statement from the president’s office quoted the state minister as saying.

The government’s focus lies on meeting the primary requisites of state revenue amounting to 4,127 billion rupees, managing state expenditures totalling 6,978 billion rupees, and addressing a budget deficit of 2,851 billion rupees, he said.

“In response to the prevailing economic challenges, the government’s approach involves providing essential stimulus to reinvigorate the economy. This involves targeted measures in areas that have garnered attention and commentary from various stakeholders over the past few months. The commitment lies in addressing the economic crisis by proactively responding to identified concerns and fostering sustainable economic recovery,” said Semasinghe.

Aligned with the objectives outlined in this year’s budget, the government is diligently pursuing key targets as elucidated in the domestic debt restructuring programme, he said.

“The successful conclusion of the domestic debt optimisation programme has laid the groundwork for the on-going efforts in bilateral foreign debt restructuring. As we navigate this process, we hold the expectation that these strategic initiatives will pave the way for securing the second installment from the International Monetary Fund (IMF),” said Semasinghe. (Colombo/Nov15/2023)

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Sri Lanka stocks close up as some investor interest returns

ECONOMYNEXT – The Colombo Stock Exchange closed up on Monday, CSE data showed.

The All Share Price Index was up 0.22 percent, or 23.33 points, at 10,743.59.

The S&P SL20 index was up 0.68 percent, or 20.60 points, at 3,067.73.

Turnover was at 708 million. The banks sector contributed 189 million, while the food, beverage and tobacco sector contributed 176 million of this.

Sri Lanka’s stock market has seen some investor interest return after last week’s news that the country had managed an agreement on a debt restructuring deal with an official creditor committee, and foreign funds for some development projects resumed.

Top positive contributors to the ASPI in the day were Sampath Bank Plc (up at 71.50), LOLC Holdings Plc (up at 379.00), and Commercial Bank of Ceylon Plc, (up at 90.90).

There was a net foreign outflow of 52 million.

Citrus Leisure Plc, which announced that its banquet hall and revolving restaurant at the Lotus Tower would launch on or around Dec 9, saw its share price rise to 6.20 rupees. (Colombo/Dec4/2023).

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Sri Lanka rupee closes broadly steady at 328.10/30 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 328.10/30 to the US dollar on Monday, from 328.00/10 on Friday, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.70/14.00 percent from 13.70/95 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.10 percent from 13.90/14.05 percent.

A bond maturing on 15.01.2027 closed at 14.00/14.10 percent from 14.05/10 percent.

A bond maturing on 01.07.2028 closed at 14.20/35 percent from 14.15/25 percent.

A bond maturing on 15.05.2030 closed at 14.25/45 percent, from 14.20/45 percent.

A bond maturing on 01.07.2032 closed at 14.05/40 percent, from 14.00/45 percent. (Colombo/Dec4/2023)

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Gov minister highlights abortion rights, sex-ed for children, and Sri Lanka men killing their women

ECONOMYNEXT – Sri Lanka’s legislators have politicized the topics of rape and violence without addressing the elephant in the room, Jeevan Thondaman, Minister of Water Supply and Estate Infrastructure Development said in parliament on Monday (4).

“All the members here are talking about rape. What happens after that? We must talk about abortion rights. That is not something anyone wants to touch on, and that is why we are in this place right now,” Thondaman said.

“Despite alarming statistics on rape and violence, women are often blamed and punished for it. The criminalisation of abortion is a major example of this.”

Sri Lanka has some of the most restrictive abortion laws in the world. According to a 2016 estimate by the Health Ministry, he said, approximately 658 abortions take place a day, and close to 250,000 a year.

“That’s 250,000 women whose lives you are endangering.”

He added that what was needed at this point in time was comprehensive sexual education (CSE) for children and young people.

“Only through CSE in schools will children and young people develop, accurate, age appropriate knowledge attitude and skills; positive values such as respect for human rights, gender equality, diversity and attitude and skills that contribute to a safe, healthy and positive relationship.”

Thondaman pointed out that CSE plays a pivotal role in preparing young people for a world where HIV, AIDS, sexually transmitted infections, unintended pregnancies, and sexual and gender based violence still pose a risk to their well-being.

“CSE basically empowers children take control and make informed decisions freely and responsibly.”

Thondaman also highlighted the findings of a 2021 study (Fatalities_20211109_UNFPA) by the UNFPA and the University of Kelaniya that showed that a majority of women killed in Sri Lanka were murdered by those close to them.

“62 percent of homicides of Sri Lankan women are committed by either an intimate partner, ex-partner or family member. 84 percent are killed in their own homes by someone they know.”

Police and the judiciary have failed Sri Lanka’s women, the minister pointed out.

“Only 5 percent of these cases, between 2013-2017, were ever concluded. Men claim they were provoked, or are of unsound mind or have mental illness: These have been successful defenses. And the Police often express sympathy to this narrative as opposed to the victim’s.”

“We have a history of protecting oppressors.”

It takes 7-10 years for a child rape case to conclude, he pointed out.

Establishment of child courts are needed, he said, as well as several legislative amendments. “The government is working on a new law to reform the domestic violence act, reform of marriage and divorce laws to ensure there is an easier path to divorce: no one should be forced to remain in a marriage that is either abusive or not healthy.” (Colombo/Dec4/2023)

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