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Wednesday September 27th, 2023

Sri Lanka import controls extended indefinitely amid money printing

ECONOMYNEXT – Sri Lanka has indefinitely extended sweeping import controls and license regime introduced for three months from May 22 after unprecedented money printing triggered foreign exchange shortages indefinitely.

Excess liquidity in money markets which was 88 billion rupees (representing the potential loss of about 470 million US dollars to keep the exchange rate stable when credit picks up or foreign loans are repaid) on May 22 when the regulations were gazette.

By June 26 excess liquidity had risen to 209 billion rupees which will require about 1.1 billion US dollars in reserves to mop up, while potentially also generating inflation if credit picks up.

Sri Lanka is also giving central bank re-finance (printed money) to boost credit. The money is printed despite Sri Lanka having to repay foreign loans.

Sri Lanka introduced sweeping import controls not seen since the 1970s, when the Bretton Woods system collapsed and President Nixon slapped controls on the US and Sri Lanka closed the entire economy, using provisions of an import and export control law of 1969.

The current regulations are slapped using the same law.

The controls which were originally set to expire in three months, will now be in place “from May 22, 2020 until further notice,” the new rules said.

The new rules introduced a series of regulations for exporters who need to imports.

Under the controls some items are allowed in under 3-month, some are suspended, some a allowed under a license regime.

Under the new regulations, freezing equipment, chest type freezer), tankers and bowsers, have been taken off a temporarily suspended list.

Washing machines over 10 kilograms and parts have been taken off the temporarily suspended list.

Some spare parts for televisions, video displays and knocked down forms have been allowed. Knocked down items typically bring less revenue to the government, but will benefit selected businesses.

Download import controls of June 30

Download import controls of May22

Some computer and electronic parts including chips, and diodes, solar cells and monitors, which were previously allowed in under credit have been removed from the list.

Carbon brushes have also been removed.

Crude coconut oil, virgin coconut oil and jute sacks for packaging had been removed.

A series of vehicle parts for cars and motor cycles have also been removed from the credit list.

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  1. Gamaya says:

    What can you do when the economic, monetary and fiscal policies run by people who don’t have any clue about what they do?

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  1. Gamaya says:

    What can you do when the economic, monetary and fiscal policies run by people who don’t have any clue about what they do?

Sri Lanka to have country pavilion at COP28 in bid for Climate Justice Forum

ECONOMYNEXT – Sri Lanka’s Cabinet has approved the proposal by its Minister of Environment to maintain a country pavilion during the 28th Conference of Parties (COP28), to display “national level initiatives related to climate change”.

Sri Lankan delegates representing the country’s interests at COP28 in November are to present a proposal to establish a forum, with the aim of raising a “common voice” for the aspirations of developing countries in the global dialogue over climate change.

While attending COP28 to the UN Framework Convention on Climate Change from 30 November to 12 December in Dubai, the Sri Lankan delegation is to present the proposal to the official body requesting permission for Sri Lanka to initiate a “Climate Justice Forum”.

The Cabinet decision said that the purpose of the forum is “raise a common voice regarding the aspirations of developing countries, together with countries that are more likely to be at risk due to climate change”. (Colombo/Sep27/2023)

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Sri Lanka’s sex workers face false charges: Women’s collective

ECONOMYNEXT – Sri Lanka’s sex workers have faced fundamental rights violations including unlawful detention and cruel, inhumane and degrading treatment, a representative of the Abhimani Women’s Collective said at a conference yesterday (26).

“Following their arrest, sex workers frequently experience the infringement of their fundamental rights, including the right to fair treatment, due process and protection from cruel and inhumane treatment,” said a report by the Abhimani Women’s Collective.

Soliciting on the street is currently illegal under section 7 1 (a) of the Vagrants Ordinance which criminalizes ‘any person in and about any public place soliciting any person for the commission of any act or of illicit sexual intercourse or indecency.

This provision along with section 2 of the Brothel’s Ordinance, which criminalizes the aiding and abetting of the management of a brothel, has been used to arrest sex workers in the country.

However, many sex workers claim that they have been presented before court on false charges of drug possession and have been subjected to harassment by both Police and customers.

“When inquiries are made over our arrest, the police say that we have been charged with drug possession,” Sakuni Mayadunna, a sex worker, said.

“Prostitution is not legal in Sri Lanka, so therefore, sex workers will face problems,” Chief of Police in charge of the Child and Women Abuse Prevention, Renuka Jayasundara, said.

“However, every citizen has fundamental rights in this country. We have not authorized the Police to carry out actions such as hitting detainees or not providing a female officer. If those actions happen, a complaint must be filed.”

Attorney-at-Law for the legal aid commission, Ganga Somarathna, said that the legal aid commission provides legal support for such victims whose income is below 45,000 rupees and also for women and children. (Colombo/Sep27/2023)

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Sri Lanka to introduce social security system: minister

ECONOMYNEXT – Sri Lanka’s Labour minister has said that they are set to introduce a comprehensive national social security system, covering all workers.

“The system will address the weaknesses of the current system and provide much-needed support to workers and their families,” Manusha Nanayakkara, Minister of Labour and Foreign Employment said on X (formerly known as Twitter).
He did not specify the details.

Nanayakkara also spoke of the need for robust social security when he met with exporters last week to discuss labor law reforms, boosting female workforce participation and attracting FDI.

Sri Lanka plans to reform labour laws for an export-oriented economy.

The pandemic and the economic crisis highlighted the need to improve the coverage of social security.

Studies have shown that Sri Lanka’s women are kept out of formal employment by childcare, elderly care and housework, as day care and elderly homes are either too expensive or too few.

The government imposed a Social Security Contribution Levy to increase its revenue last year. (Colombo/Sep27/2023)

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