An Echelon Media Company
Tuesday November 29th, 2022

Sri Lanka opposition will support a new PTA to protect freedoms, get GSP+: Eran

ECONOMYNEXT – Sri Lanka’s main opposition said it would support the government to bring a new prevention of terrorism law, as the misuse of the current one against the public and minorities was reducing civil liberties.

The European parliament has cited Sri Lanka’s existing Prevention of Terrorism Act (PTA) has been cited as one of the tools through which democratic freedoms were being stripped away and minorities targeted, which may lead to the GSP+ trade benefits being taken away.

“A robust national security framework can be developed without compromising democracy,” opposition Samagi Jana Balawegaya legislator Eran Wickremaratne said.

“Obviously new act PTA has to give primacy the defense of the country. The new act has to be able to protect democracy of the country and human rights.”

He said the SJP viewed the draft framework prepared by the National Law Commission as a starting point.

Under the PTA, Ahnaf Jazeem, a poet, has been detained without trial. Hejaz Hibullah, a lawyer, has also been detained without trial.

Egged on by nationalists, the government had also been forcibly cremating Muslim victims of Coronavirus, which was stopped following pressure from the United Nations.

“This government has gone after minorities,” Wickremaratne said. “The minorities are really under pressure.

“We have seen Shani Abeysekera, Sri Lana’s most well-known detective head of the CID, he had been held. No charges against him a well.”

Wickremeratne said the media and social media were now being targeted on claims of ‘fake news’.

The loss of GSP+ benefits would hurt export industries and jobs, he said.

Wickremeratne said when the last administration came to power there was no GSP+ and there was also a ban of the export of fish to the EU.

“It was in very difficult circumstances, it is not very well understood by people,” Wickremeratne said.

“In about one and a half years after negotiations we go the bans lifted. We could export our fish. The garment, ceramics and rubber industries were direct beneficiaries.”

The of GSP+ would undermine the competitiveness of Sri Lanka’s exports and result in job losses. (Colombo/June14/2021)

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Sri Lanka rubber farmers to get boost from France, Michellin

ECONOMYNEXT – Sri Lanka will start a project supported by France and Michellin group to support 6,000 rubber farmers, cabinet spokesman Minister Bandula Gunawardena said.

Rubber farmers in Badalgama and Medagama in the Moneragala district will be supported improve their capacity and supply chains at a cost of 726,700 Euros.

Financial support will be provided by France’s Michellin group which has a subsidiary in Sri Lanka and the government of France.

The project will be implemented by France’s Ksapa group under the guidance of Ministry of Industries.

The cabinet of ministers had cleared a proposal by the Plantations Industries Minister to enter into an agreement to implement the project. (Colombo/Nov29/2022)

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A new Sri Lanka monetary law may have prevented 2019 tax cuts?

ECONOMYNEXT – A new monetary law planned in 2019, if it had been enacted may have prevented the steep tax cuts made in that year which was followed by unprecedented money printing, ex-Central Bank Governor Indrajit Coomaraswamy said.

The bill for the central bank law was ready in 2019 but the then administration ran out of parliamentary time to enact it, he said.

Economists backing the new administration slashed taxes in December 2019 and placed price controls on Treasuries auctions bought new and maturing securities, claiming that there was a ‘persistent output gap’.

Coomaraswamy said he keeps wondering whether “someone sitting in the Treasury would have implemented those tax cuts” if the law had been enacted.

“We would never know,” he told an investor forum organized by CT CLSA Securities, a Colombo-based brokerage.

The new law however will sill allow open market operations under a highly discretionary ‘flexible’ inflation targeting regime.

A reserve collecting central bank which injects money to push down interest rates as domestic credit recovers triggers forex shortages.

The currency is then depreciated to cover the policy error through what is known as a ‘flexible exchange rate’ which is neither a clean float nor a hard peg.

From 2015 to 2019 two currency crises were triggered mainly through open market operations amid public opposition to direct purchases of Treasury bills, analysts have shown.

Sri Lanka’s central bank generally triggers currency crises in the second or third year of the credit cycle by purchasing maturing bills from existing holders (monetizing the gross financing requirement) as private loan demand pick up and not necessarily to monetize current year deficits, critics have pointed out.

Past deficits can be monetized as long as open market operations are permitted through outright purchases of bill in the hands of banks and other holders.

In Latin America central banks trigger currency crises mainly by their failure to roll-over sterilization securities. (Colombo/Nov29/2022)

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Sri Lanka cabinet clears CEB re-structure proposal: Minister

ECONOMYNEXT – Sri Lanka’s cabinet has cleared proposals by a committee to re-structure state-run Ceylon Electricity Board, Power and Energy Minister Kanchana Wijeskera said.

“Cabinet approval was granted today to the recommendations proposed by the committee on Restructuring CEB,” he said in a message.

“The Electricity Reforms Bill will be drafted within a month to begin the unbundling process of CEB & work on a rapid timeline to get the approval of the Parliament needed.”

Sri Lanka’s Ceylon Electricity Board finances had been hit by failure to operate cost reflective tariffs and there are capacity shortfalls due to failure to implement planned generators in time. (Colombo/Nov28/2022)

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