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Sunday July 14th, 2024

Sri Lanka inks US$251mn tea for oil debt deal with Iran

ECONOMYNEXT – Sri Lanka had inked a deal to set off export of tea to Iran against a legacy oil credit owed by state-run Ceylon Petroleum Corporation to the National Iranian Oil Company, without busting US sanctions, the island’s Ministry of Plantations Industries said.

Sri Lanka was unable to settle the credit after US sanctions barred dealings with Iranian banks.

Each month Sri Lanka’s Treasury will release 5 million dollar equivalent in rupees to the Sri Lanka Tea Board, a state-run industry regulator and promotion office.

The Tea Board will then pay individual exporters in rupee at the central bank exchange rate.

“This scheme will not violate any UN or US sanctions since tea has been categorized as a food item under humanitarian grounds while none of the black listed Iranian Banks will be involved in the equation,” Sri Lanka’s Plantation Ministry said in a statement.

“Since the Iranian authorities have been repeatedly highlighting the importance of the early settlement of the debt, this scheme will enable the Ministry of Finance to make the settlement in local currency through trenches of USD 5 million equivalents.”

The deal will neither bring foreign exchange to the country and non will go out, the ministry said.

Sri Lanka is in the midst of a severe balance of payments crisis after record money printing to keep interest rates down.

Sri Lanka usually gets oil credits from friendly countries whenever the central bank prints money, and forces the state-run CPC to run an unhedged forex position. The oil loans then generate massive losses as the currency collapses.

The credit lines also worsens the ‘current account deficit’ which is then conveniently blamed for currency crises in a Mercantilist knee jerk reactions, analysts have said.

The MoU was signed by Ramesh Pathirana, Minister Plantation of Sri Lanka and Alireza
Paymanpak, Deputy Minister of Industry, Mine and Trade of Islamic Republic of Iran in Colombo on Tuesday, the Plantation Ministry said in a statement.

Sri Lanka had exported 14.5 million US dollars of tea to Iran up to November 2021, up 0.39 percent from a year earlier.

Sri Lanka’s Plantation MInistry said Ceylon Tea export to Iran had dropped from a peak of 38.42 million kilograms in 2013.

“Due to US sanctions imposed on Iran in November 2012 and with the absence of an accepted payment
mechanism through the banking system, Sri Lanka tea exporters found it difficult to receive the export
proceeds from Iranian buyers,” the ministry said.

“As at present the payments are usually channeled through intermediary countries and on many occasions export proceeds are received in installments incurring inordinate delays.”

“The additional US sanctions on Iran are creating further impediments for Sri Lanka to export tea to
that destination.”

Iran has been in discussion with Sri Lankan governments for a barter system – exchanging only goods and services without involving US dollars – to get over the problem of making payment to Iran banks.

The monthly payments from the Treasury will continue until the entire 251 million dollar debt is settled.

“The Sri Lanka Tea Board will establish a dedicated account to receive funds from the Ministry of Finance and disburse the same to tea exporters.” (Colombo/Dec21/2021)

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Ex-US President Trump shot at in campaign rally

ECONOMYNEXT- Republican nominee to the upcoming polls and former US President Donald Trump has been shot during a campaign rally, media reports said.

The bullet grazed the ear of Trump, who is reported to be doing well.

The gunman was shot and killed by secret service snipers within second of firing the shots at Trump.

At least one civilian was killed reports said.

Television footage showed blood in Trumps ear.

As he was hustled out of the venue by Secret Service officials Trump was seen shaking his fist in the air. (Colombo/July14/2024)

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UNESCO DG to discuss archaeological endeavours in Anuradhapura, Sri Lanka: President

ECONOMYNEXT – Sri Lanka’s president has said that he will discuss initiatives for long-term archaeological endeavours in the Anuradhapura city with visiting UNESCO Director General Audrey Azoulay.

Azoulay will visit Sri Lanka from July 16-19 and take part at the celebration of the 75th Anniversary of Sri Lanka’s membership of UNESCO at the Nelum Pokuna Theatre in Colombo.

She will also travel to UNESCO World Heritage Sites around the island, the Ministry of Foreign Affairs said.

“I have invited the Director General of UNESCO to visit Sri Lanka and discuss initiatives for long-term archaeological endeavours in the Anuradhapura city. Several universities overseas have shown interest in supporting us for these activities, and we are moving forward with their collaboration,” Ranil Wickremesinghe said.

“Anuradhapura boasts a rich history spanning over a millennium, once renowned as a hub of trade and economics. Preserving and exploring this ancient city’s archaeological treasures remains a significant endeavour.”

“New archaeological efforts in the Anuradhapura district are now imperative,” Wickremesinghe said during a ceremony to inaugurate a 150-kilowatt solar power system installed by the LTL Group at the Sri Maha Bodhiya premises in Anuradhapura on Saturday (13).

Wickremesinghe pointed out that UNESCO has undertaken extensive archaeological projects in Angkor Thom in Cambodia, and Luang Prabang in Laos.

“However, we have not taken the necessary steps to implement these activities in Anuradhapura city. Therefore, I have advised both the Department of Archaeology and the Cultural Triangle to undertake these initiatives.”

These efforts are part of a comprehensive program aimed at establishing Anuradhapura as a globally renowned city, Wickremesinghe said.

While Sigiriya has gained international fame, Sri Lanka has not adequately highlighted Anuradhapura’s historical significance as a major trade and economic center in the past, the president pointed out.

“Cities like Tanjore (Thanjavur), Madurai, and Sanchipuram are often discussed, yet Anuradhapura, the fourth city, has been overlooked. Therefore, it is crucial to develop Anuradhapura city.”

As part of these initiatives, preparations are underway to establish new hotels in Anuradhapura, which will contribute significantly to its development, Wickremesinghe said. (Colombo/Jul13/2024)

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Government committed to improving living conditions in Jaffna: Sri Lanka PM

ECONOMYNEXT – Sri Lanka’s prime minister, who is in Jaffna “to monitor the progress” and “get a little feedback” has said the government is committed to improving living conditions of the people in the northern peninsula.

“This government is dedicated to improving the living conditions of the Jaffna Peninsula,” Dinesh Gunawardena told a Jaffna District Coordinating Committee meeting on Friday, according to a statement by his media division.

“In order to increase the living conditions, we have embarked on an increase in most of the expenditure needed by the departments, and also special allocations for rural and urban development in the local government area.”

Nationalist Gunawardena met with Tamil politicians at the Jaffna Divisional Secretariat Office and participated in the distribution of rice and egg incubators for low income families.

“A special privilege to be with you all, in order to monitor the progress made by all of you, as well as to get a little feedback where we stand today in relation to the reports given.”

Gunawardena joins a string of leading political figures who have visited the north ahead of upcoming polls.

The government was, he said, “committed to improve the services and living conditions, therefore, to provide the necessary infrastructure for developments, which means much to your area.”

The prime minister said he appreciated the efforts of farmers because “farmers are all private sector, I would say. Let us not forget, farmers are all in the private sector, either in the ownership or in the tenancy. They are private contributors to the national development of the economy.”

The poverty numbers are “fairly managed” in the country. Gunawardena said, pointing out that poverty was a key problems in any economy. “Any country, you would agree with me, the richest country, in the United States even, food stamps have been given. So all economies the world are going through difficult situations in relation to the poor.

“We have to look after the poor especially in these remote villages of the Northern Province…”

Minister Douglas Devanada, MPs M A Sumanthiran, Angajan Ramanathan, C Vigneshwaran, Dharmalingam Siddharthan, and other officials participated in the meeting. (Colombo/Jul13/2024)

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