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Sunday September 24th, 2023

Sri Lanka picked by ADB as priority country for natural capital linked financing

ECONOMYNEXT – Manila based Asian Development Bank has picked Sri Lanka as a priority country to pilot a new financing approach to conserve and build ‘natural capital’, Kenichi Yokoyama, Director General, South Asia Department said.

Natural capital could include forests, wetlands, marine eco-systems and also agricultural areas. The ADB has set up a division focusing on natural capital and climate, is drawing up a blueprint on how the lender can help enhance such assets.

“Sri Lanka was selected as a priority pilot country to country implement some of these approaches,” Yokoyama told a forum.

ADB support will be available in the form on knowledge, capacity development as well as funding and scaling up existing practices.”

Sri Lanka’s Peradeniya University will be partner for knowledge transfer.

The ADB is financing Sri Lanka with budget support loans under an IMF program, which are linked to policy actions. Among the areas the agency will fund is renewable energy and climate, with the immediate focus on economic and financial stability.

Several countries have started to issue green and blue bonds (linked to marine eco-systems) which are linked to targets on improving environment or actual conservation of biodiversity. Natural capital has to be identified and valued.

Academics in Sri Lanka universities have previously conducted studies on natural capital.

Sri Lanka needs more assessment and policy actions to enable natural capital linked financing, in the ADB will help, Sanath Ranawana, Principal Water Resources Specialist, ADB, South Asia said.

A natural capital assessment is now being conducted guided by the ADB, Rafael Schmitt, Lead Scientist, Natural Capital Project at Woods Institute for the Environment, Stanford University, USA said.

The information could be used for financing and debt for nature swaps, he said.

Sri Lanka has recently developed a framework for green and blue bonds. Sri Lanka is also and is developing an action plan and improving laws on climate, Anil Jasinghe, Secretary to the Ministry of Environment said. (Colombo/June05/2023)

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Sri Lanka India industrial zone around Trinco, maritime links mooted

ECONOMYNEXT – Sri Lanka’s Ports Minister Nimal Siripala de Silva had highlighted the desire of both the Governments to work closely to develop the industrial zone at Trincomalee, after accepting an invitation to participate in a maritime summit.

The Global Maritime India Summit (GMIS) will be held in India from October 17-19, 2023 at Mumbai where Sri Lanka has been invited at a partner country.

At a curtain raiser event on September 22, India’s High Commissioner in Colombo, Gopal Baglay had said both countries were working on enhancing sea connectivity according to a vision document launched during a recent visit of the President of Sri Lanka to India.

Minister de Silva will lead a delegation from Sri Lanka to the summit.

Secretary to the Ministry of Ports, Shipping and Waterways, Government of India, T K Ramachandran said the Global Maritime India Summit aims strengthen the Indian maritime economy by promoting global and regional partnerships and facilitating investments.

The event will give an opportunity to the Government of Sri Lanka to attracting greater investment from India in development of its maritime infrastructure, Ramachandran said.

It will also facilitate greater business to business interactions. (Colombo/Sept24/2023)

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Sri Lanka brings back import para tariff on milk

ECONOMYNEXT – Sri Lanka has brought back an import para tariff called the Ports and Airports Levy, to several grades of milk powder.

Milk powder has been removed from a list of PAL exemptions, making them liable for a 10 percent tax.

The PAL para tariffs are also a contentious issue in terms of export competitiveness, and the government has previously given undertakings that they will be eliminated.

Trade freedoms of the poor figure in an IMF/World bank reform program with the governments.

Milk is a protein rich food, in a country where children of poor families are facing stunting and malnutrition.

Economic nationalism is seen at high levels in food, with several businessmen are pushing for trade protection, amid an overall autarkist (self-sufficiency) ideology, going directly against policies followed in East Asia, which the same as hold up as examples.

Sri Lanka keeps dairy product prices up ostensibly to bring profits to a domestic dairy company and farmers.

Sri Lanka also keeps maize prices up, ostensibly to give profits to farmers and collectors. (Colombo/Sept22/2023)

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Sri Lanka govt warns liquor manufacturers: pay defaulted tax or lose licence

ECONOMYNEXT – Sri Lanka government which is struggling to raise the state revenue despite   higher taxes, has warned liquor manufacturers to pay defaulted taxes or lose their licence.

The government is now getting tough with past tax defaulters amid concerns over falling short of this year’s revenue target agreed with the International Monetary Fun (IMF).

“Liquor manufacturing firms owe us 660 crore rupees (6.6 billion rupees),” Siyambalapitiya told  reporters on Thursday (21).

“Most of this or around a third is the only excise tax amount to be paid. The rest is penalty. If a liquor manufacturer does not pay on time, we impose a penalty of 3 percent per month This means 36 percent (penalty) per annum,” he said.

“We have given them deadline to repay the basic excise taxes. If they don’t pay, we will cancel their licence.”

President Ranil Wickremesinghe’s government committed an ambitious revenue target among many other reforms to the International Monetary Fund (IMF) in return to a $3 billion loan package.

However, the revenue could face a short fall of 100 billion rupees, State Finance Minister Ranjith Siyambalapitiya has said.

A new Central Bank Act also has legally prevented the government of printing money at its discretion as  in the past.  (Colombo/September 24/2023)

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