Sri Lanka govt to lend Rs1bn to private plantations for mandated wage hike
ECONOMYNEXT – The Sri Lankan government is to lend up to a Rs1 billion to private regional plantations companies through two state banks to enable them to give a monthly Rs2500 pay hike to workers, a spokesman said.
The Cabinet Committee on Economic Management has recommended financial aid to plantations companies given difficulties they face owing to depressed tea prices in the world market, Mass Media Minister Gayantha Karunathilaka said.
A Rs.2500 monthly wage increment proposed for the private sector should also be applied for employees in plantation companies, he told a news conference.
The Cabinet of Ministers has approved a proposal by Minister of Finance Ravi Karunanayake for the Treasury to provide ‘letters of comfort’ to back loans to plantation companies of up to Rs1 billion from the Bank of Ceylon and People’s Bank.
The loan scheme will be implemented through the Sri Lanka Tea Board with each bank lending Rs500 million.
The ‘letters of comfort’ will be given to the Tea Board which will borrow the money and lend to regional plantations companies since the Treasury can give such assurances only to government institutions under current rules.
Sri Lanka privatized the plantations in the 1990s to stop monthly payments of 400 million rupees to keep the plantations afloat and pay salaries. Sri Lanka’s current administration has manadated not just minimum wages – which were originally devised in by Western eugenicists as a tool to keep immigrants, minorities and women out of the workforce – but also a wage hike. (COLOMBO, July 22, 2016)