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Friday January 27th, 2023

Sri Lanka expropriation drums beat loud over privatized tea farms

ECONOMYNEXT – Sri Lanka is planning to bring a law re-nationalize land in privatized tea farms according to plan proposed by ex-President Gotabaya Rajapaksa, Minister of Plantation Industries and Minister of Industries Ramesh Pathirana said.

“Former President Gotabaya Rajapaksa brought a proposal to the cabinet and approved to take back the under-utilized land to the government,” he told the parliament on Tuesday replying opposition member Vadivel Suresh to expropriate lands and give them to workers.

“The bill has been sent to the legal draftsman, and the law must be implemented and it has to be passed in parliament”

“We will also vote with both hands to take back this lands to the government”.

The plantation companies had 70,000 hectares, legislator Suresh said.

“There are 1.5 million plantation sector people. From the official 25 districts, the plantations sector people are in 10 districts.

“All these lands are run by three business man. When these people got into agreements with the government, were the plantation sector workers also included in that?”

Minister Pathirana said 13,900 hectares were already taken over from the privatized plantations for public purposes from the originally privatized plantations.

Sri Lanka is planning to expropriate private property despite suffering the worst currency crisis in history and defaulting on foreign loans amid low growth and money printing.

Sri Lanka had some of the highest living standards at independence in 1948 with monetary stability coming through a currency board and a history of foreign direct investment especially into tea and rubber.

After independence, the plantations were expropriated both from foreign and domestic investors violating their property rights.

Many investors in tea fled to Kenya who gave land for them, as Zimbabwe farmers were given land in neighboring nations to grow maize.

Sri Lanka has since then found it difficult to attract foreign investors and the then president J R Jayewardena put in a constitutional clause to stop expropriation in a bid to stop elected ruling class from expropriating private property.

The ruling class mis-used to powers that came to them from a parliament set up by the British rulers to expropriation citizens and non-citizens and undermined the investment safety in the island.

While un-armed public can fight ordinary thieves who come to rob their property, they are helpless when the state engages in the same activity, freedom advocates say.

But 2011 Sri Lanka’s elected ruling class expropriated several foreign and domestic businesses through an ad hominem law and also blocked judicial review in a shocking violation of the separation of powers between the legislature and judiciary.

The claim was that the property was ‘underutilized’.

Pathirana claimed the plantations lands were also underutilized.

“In President Premadasa’s time these lands were given to these firms through a very weak agreement,” he claimed.

“The 70,000 hectare that is owned by these firms are being neglected. Replanting is not doe. His (Vadivel’s) requests are fair.

From 1992 the plantations were privatized because they were making losses and people’s taxes were being used to pay salaries.

After privatization under long leases, the firms have paid lease rentals and taxes to the government.

Suresh said plantations companies had 75 percent of the tea land in the country and produced only a fraction of the tea made by small holders.

Plantations firm in turn had said that they were trying to put in place the same models used by small holders to improve productivity but a change in work practices are resisted by trade unions.

Plantations manages have said any unused lands are in inaccessible areas and some of the lands given for public purposes are prime land bordering roadways.

Some land given to local authorities are lying unused, they have claimed.

Meanwhile Suresh said the estate Tamil community did not join the Tamil Tiger separatists nor the 1980s JVP struggles, but had always stood beside the country to strengthen the economy/

“When the war was happening, these plantation sector people did not support the LTTE,” he said. “They were with Sri Lankans. Even during JVP issues they were with the government. Even during the Covid they worked every day. Yet for 200 years, for 6 generations we are suffering,”

“The President is talking about food security. But how can we achieve food security if this is the situation,”

“We are only asking to be considered as Sri Lankans and we are ready to strengthen the economy.”

The Speaker of the Parliament, Mahinda Yapa Abeywardena said he was also in favor of re-exporpriating the land government. (Colombo/ Jan 18/2023)

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  1. sacre blieu says:

    This has been due to unethical and conspired capitalism, sometimes leading to a barbaric style of acquisition with the help of politics of the third kind. The public, thereafter, is made to bear and fund the losses, after the profits are syphoned off by devious accounting means.

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  1. sacre blieu says:

    This has been due to unethical and conspired capitalism, sometimes leading to a barbaric style of acquisition with the help of politics of the third kind. The public, thereafter, is made to bear and fund the losses, after the profits are syphoned off by devious accounting means.

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.


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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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