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Tuesday May 21st, 2024

Sri Lanka main opposition proposes cash transfers for those affected by electricity tariff hike

SJB MP Kabir Hashim

ECONOMYNEXT – Sri Lanka must provide direct cash transfers to low-income households and small & medium enterprises (SMEs) affected by a recent hike in electricity tariffs, opposition MP Kabir Hashim said.

Speaking in parliament on Monday August 29 during an adjournment debate on the impact of the tariff hike, the MP said rate hike unfairly impacted consumers that consumed the lowest number of units of electricity per month.

“There are two million who use under 30 units (though it is 1.4 million according to Minister Kanchana Wijesekara). Another two million who use 30 to 60. There’s a 125-percent for those who use 60 to 90, a majority of whom are salaried workers in the public and private sectors. Then there are SMEs who are effected.

“As the Samagi Jana Balawegaya, we propose that a direct cash transfer is made to these groups – something that’s even recommended by the International Monetary Fund (IMF).”

It wasn’t the consumers who are responsible for the crisis in the power sector, the SJB MP said, blaming it on politicians who had had deals with a privileged group within the state-run Ceylon Electricity Board (CEB) with vested interests.

However, the Power & Energy Ministry has defended the tariff hike saying that it was necessary and that when taken in isolation the percentage average increase seems like a bigger increase than it actually is in rupees.

The MP claimed the CEB is extremely inefficient and corrupt and that the general public must not be punished for the parties with vested interests including certain engineers, union leaders and ministry officials who have come together to gain the maximum benefits possible through unsavoury deals.

The CEB has illegally paid the income tax of the high-income earning employees of the CEB, he claimed, calling this influential cabal a ‘mafia’.

Sri Lanka’s electricity tariffs were raised for the first time in nine years earlier in August. The 75 percent overall hike came after a series of internal investigations and stakeholder consultations, at a time when the CEB is operating at massive losses, and the country is spiralling into an economic crisis.


Explainer: Sri Lanka’s electricity tariff hike and how it works

MP Hashim also called for amendments to Sri Lanka’s Electricity Act which he said is outdated.

He also faulted the incumbent ruling party for scuttling efforts by previous United National Party (UNP)-led governments to restructure CEB.

“It is ironic that the task of restructuring the CEB has now fallen into your lap,” he said.

“It was this mafia that didn’t allow these reforms to take place all this time,” he added.

Restructuring is not a bad word, said Hashim, and that Sri Lanka must come up with a model that’s unique to the country, similar to efforts to liberalise the telecom sector in the 1990s.

“You created this crisis. It’s not the consumers who pay for it, but members of this government,” he said. (Colombo/Aug29/2022)

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Sri Lanka declares May 21 as National Mourning day over Iranian President’s death

ECONOMYNEXT – Sri Lanka declared a national mourning day on Tuesday, May 21 in view of expressing its solidarity with Iran after sudden death of Iran President Ebrahim Raisi following a helicopter crash.

President Raisi and eight others including Iranian Foreign Minister Hossein Amir Abdollahian were killed in the crash when the helicopter had a “hard landing” reportedly due to adverse weather conditions with heavy fog. However, President’s two convoy helicopters reached the destination safely.

“The Sri Lankan government has declared a national mourning day on tomorrow (May 21) on behalf of the sudden death of Iranian president Mr. Ebrahim Raisi,” the Department of Government Information said in a statement.

It also urged all the state institutions have to hoist the national flag half mast.

Raisi was in Sri Lanka on April 24 to launch the Uma Oya dam on a one-day official visit amid tight security. His helicopter crashed when he was returning to Iran after launching a dam in the Azerbaijan border.

President Raisi is seen as a hardliner and a potential successor to Supreme Leader Ayatollah Ali Khamenei.

Earlier this month, Sri Lanka’s Foreign Minister Ali Sabry said the island nation will deal with Iran for investments and trade without being caught into the United States-led sanctions.

Sri Lanka was unable to receive $450 million from Iran for a recently opened Uma Oya multipurpose project started before the sanctions.

Sri Lanka now exports tea to Iran for no dollar payment. Instead, Sri Lanka tea producers are paid by the state-owned Ceylon Petroleum Corporation (CPC) in rupees for the pending crude oil import payments for Iran.

President Ranil Wickremesinghe expressed his condolences on the tragic incident.

“Sri Lanka is deeply shocked and saddened by the tragic death of President Ebrahim Raisi, Foreign Minister Amir Abdollahian and other senior Irani official,” he said in his official X-platform.

“I express my deepest sympathies and sincere condolences to the bereaved families, the government and the people of Iran.”

Raisi, a Muslim jurist, served as the eighth president of Iran from 2021 until his death. (Colombo/May 20/2024)

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Sri Lanka helps launch Global Blended Finance Alliance

ECONOMYNEXT – Sri Lanka has joined a group of nations led by Indonesia which aims to mobilise capital to achieve carbon neutrality, Minister of Water Supply and Estate Infrastructure Jeevan Thondaman said.

The Global Blended Finance Alliance mooted by Indonesia in 2018, was formally launched at the World Water Forum in Bali today.

Among the other founding members are Fiji, France, UAE, Kenya, Luxembourg and Canada.

“Through our collective efforts, the Global Blended Finance Alliance aims to mobilise both public and private capital to help nations achieve carbon neutrality and the SDGs,” Thondaman said on social media platform X (twitter).

“The world has a USD 2.5 trillion funding gap to achieve the Sustainable Development Goals (SDGs) by 2030,” he said.

Blended finance is the strategic use of development finance, such as public and/or philanthropic funds, for the mobilisation of additional commercial finance towards sustainable development in developing countries. (Colombo/May20/2024)

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Sri Lanka rupee closes slightly stronger at 299.60/75 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee appreciated slightly to close at 299.60/75 to the US dollar on Friday, from 299.70/80 the previous week, dealers said. Bond yields were up.

A bond maturing on 15.12.2026 closed up at 10.15/35 percent from 10.05/15 percent.

A bond maturing on 15.09.2027 closed up at 10.45/55 percent from 10.25/40 percent.

A bond maturing on 01.07.2028 closed at 10.80/90 percent.

A bond maturing on 15.01.2030 closed at 11.70/80 percent.

A bond maturing on 01.10.2032 closed up at 11.90/12.05 percent from 11.85/12.00 percent. (Colombo/May20/2024)

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