An Echelon Media Company
Saturday April 20th, 2024

Sri Lanka minister mulls paths of self-sufficiency or economic freedom for 2023

ECONOMYNEXT – Sri Lanka is mulling the continuation of an autarky or giving back economic freedom stolen from the people during monetary instability in 2020, according to a statement by the island’s state minister for finance Ranjith Siyambalapitiya.

Sri Lanka had to decide whether to rise as nation by limiting imports of items like coconut kernels, vesak lanterns and kites, he had said.

Wracked by monetary instability from a flexible exchange rate or soft-peg – a mongrel monetary regime which is neither a hard peg nor a clean float – economic bureaucrats banned the import of 1645 items as money was printed from 2020 suppress interest rates triggering forex shortages.

Up to now import bans on 795 items had been removed, Minister Siyambalapitiya had said during an event at a Temple in Ruwanwella in his home district.

There were 670 items under trade controls and removing imports were being considered for items that are not manufactured domestically.

“It am requesting whether to allow the unlimited import of coconut kernels, Vesak lanterns, kites, bamboo products, or do we produce them domestically and rise as a nation,” he was quoted as saying.

Sri Lanka’s native rulers began to rob the economic freedoms of the populace from shortly after a money printing central bank started generating monetary instability, driving the country towards autarky.

Each time the central bank created forex shortages, the hands of economic nationalists were strengthened, leading to more state interventionism, planning and spilling over to general nationalism as had happened in other European nations.

Import controls allow businessmen and producers to exploit customers with high prices. Such protected businesses also cannot export as they are un-competitive globally.

Stabilization policies that follow money printing in particular had led to anti-minority nationalism in countries like Germany. The National Socialist party gained ground in Germany in the wake of stabilization policies of the Heinrich Bruning.

In Sri Lanka similar trends were seen in 1956. The German National Socialists were among the most ardent promoters of autarky or self-sufficiency.

Read more

Early Nazi self-sufficiency policies here.

The Hossbach Memorandum where autarky was modified.

In Sri Lanka liberty and freedom is viewed with deep suspicion by the urban intelligentsia in particular and nationalism revered.

“Liberty is not, as the German precursors of Nazism asserted, a negative ideal,” explains economist Ludwig von Mises.

“It aims at free competition and at the sovereignty of the consumers.

” It is the aim of nationalism to promote the well-being of the whole nation or of some groups of its citizens by inflicting harm on foreigners. The outstanding method of modern nationalism is
discrimination against foreigners in the economic sphere.

“Foreign goods are excluded from the domestic market or admitted only after the payment of an import duty.

“Neither is nationalism identical with patriotism. Patriotism is the zeal for one’s own nation’s welfare, flowering, and freedom.

“Nationalism is one of the various methods proposed for the attainment of these ends.

“But the liberals contend that the means recommended by nationalism are inappropriate, and that their application would not only not realize the ends sought but on the contrary must result in disaster for the nation.

“The liberals too are patriots, but their opinions with regard to the right ways toward national
prosperity and greatness radically differ from those of the nationalists.

“They recommend free trade, international division of labor, good will, and peace among the nations, not for the sake of foreigners but for the promotion of the happiness of their own nation.”

After promoting monetary instability through ‘flexible’ policies and the inevitable import restrictions and import substitution or self-sufficiency that comes it its wake, Sri Lankans then wonder why they cannot become a Singapore or Vietnam. (Colombo/Dec25/2022)

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka discussing giving extra land, water for Chinese oil refinery

ECONOMYNEXT – Sri Lanka is in discussions with China’s Sinopec to give extra land and assure water supplies after the company decided to expand the capacity of a planned oil refinery in Hambantota, Energy Minister Kanchana Wijesekera said.

“There are concerns on how the water supply is going to be provided for the refinery,” Minister Wijesekera told reporters Friday.

The refinery will need more land and also revise conditions in a Board of Investment agreement, he said.

Read more
Sinopec to double capacity of new refinery in Sri Lanka’s Hambantota

Recommendations and decisions from Sri Lanka’s side had already been sent and Sinopec is expected to revert back in May.

“We are hoping to sign the agreement once everyone has agreed,” Wijesekara said.

The principle agreements are expected to be signed by June, he said.

The refinery could sell up to 10 percent of its output in the domestic market.

“There is no commitment by the government to purchase anything,” Minister Wijesekera said. (Colombo/Apr19/2024)

Continue Reading

Sri Lanka rupee closes weaker at 302.00/50 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 302.00/50 to the US dollar in the spot forex market on Friday, down from 301.50/302.00 a day earlier, dealers said.

There was increased demand for dollars after the central bank bought 715 million dollars from forex markets. In the previous two months it was buying on average about 200 million US dollars, leaving market participants and bank in a ‘oversold’ position.

There were some official dollars sales Friday dealers said.

READ Sri Lanka rupee quoted wide to US dollar as peg inconsistencies flare up

Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed at 11.30/40 percent down from 11.35/40 percent.

A bond maturing on 15.09.2027 closed at 11.95/12.05 percent up from 11.90/12.05 percent.

A bond maturing on 15.12.2028 closed stable at 12.15/25 percent.

A bond maturing on 15.09.2029 closed stable at 12.30/40 percent.

A bond maturing on 01.10.2032 closed stable at 12.40/50 percent. (Colombo/Apr19/2024)

Continue Reading

Sri Lanka stocks close down, banks trade down

ECONOMYNEXT – The Colombo Stock Exchange closed down on Friday, data on its site showed.

The broader All Share Index closed down 0.38 percent, or 44.80 points, at 11,753; while the S&P SL20 Index closed down 0.53 percent, or 18.46 points, at 3,456.

Turnover was at 1.4 billion. The diversified financials (Rs366mn) and banks (Rs266mn) sectors continued to see selling pressure.

“This was possibly due to uncertainty around the bond discussions,” market participants said.

With the exception of Sampath Bank Plc (up at 77.50) all other banks traded down in the day. Commercial Bank of Ceylon Plc was down at 104.50, Hatton National Bank Plc was down at 188.50, and DFCC Bank Plc was down at 77.00.

LOLC Finance Plc saw the most trades and closed up at 6.40. Another LOLC company, Browns Investments Plc, also saw high traded volumes and closed up at 5.60.

Softlogic Capital Plc was up at 7.00, and Softlogic Holdings Plc was up at 11.20. A trading suspension imposed on SHL.N0000 was lifted effective today as the company submitted the annual report for the year ended 31st March 2023.

However, shares of the Company will remain in the Watch List “due to Qualified Audit Opinion and Emphasis of matter on going concern in the Independent Auditor’s Report in the Audited Financial Statements for the year ended 31st March 2022.”

Dialog Axiata Plc, which announced its merger with Bharti Airtel Thursday, saw its share price close up at 11.90.

“There was some traction on index heavyweights,” market participants pointed out.

Top contributors to the APSI included Aitken Spence Plc (up at 134.50), Ceylon Tobacco Company Plc (up at 1,245.25, and Lion Brewery (Ceylon) Plc (up at 1,048.50).

There was a net foreign inflow of 5 million. (Colombo/Apr19/2024)

Continue Reading