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Saturday March 2nd, 2024

Sri Lanka should sell more to Asia in a post-COVID 19 scenario – Pathfinder Foundation

GO EAST – Think tank advises Sri Lanka to sell to Asia

ECONOMYNEXT – The Pathfinder Foundation, a think tank advising the government, wants Sri Lanka to sell more to Asia which it calls the most dynamic region in the world and recovering fast from the COVD 19 threat.

It also recommends Sri Lanka enlarge preferential market access to attract FDI to promote export growth.

In a media statement, Pathfinder said that since the country has achieved success in “containing the danger posed by the COVID 19” it is time for “a concerted and decisive focus on reviving the economy.”

“This is particularly timely now that the economy has been removed from its “induced coma” with the elimination of daytime curfew throughout the island,” it said.

Last month a Pathfinder Foundation Study Group produced a report which set out a new economic vision for post-COVID-19 Sri Lanka which was shared with the key leaders of the government.

Yesterday in discussions with exporters President Gotabaya Rajapaksa brought up the idea of exploring the Asian region market for Sri Lanka’s exports, according to the Presidential Secretariat.

Pathfinder in its statement noted that the Doha Round of Multilateral Trade Negotiations is making no progress and many countries are going for “bilateral, regional and plurilateral trade agreements to boost their growth and employment prospects.”

The think tank says “Sri Lanka has fallen behind and is confronted with the possibility of falling even further behind.”

Although the country has stabilized the situation somewhat after a huge blow was dealt due to fall in remittances, income from tourism, shipping and other sources, it needs to urgently seek export earnings to support the country’s ambitions on growth and employment.

Pathfinder says Sri Lanka “has to work towards a transformation of its export and FDI performance. This has proved elusive so far.  The measures needed to achieve this are well known.  They must now be implemented effectively and trade agreements need to be an integral part of this effort.”

It predicts that the “shift of the centre of gravity of the global economy to the East is likely to be accelerated in the post-COVID-19 world.  At present, over 50% of Sri Lanka’s exports are to the EU and US.  More needs to be sold to Asia.  In addition, the export basket needs to be more diversified and complex.  Trade agreements provide access to markets, investment and know-how which can catalyse the diversification of both export markets and the product mix.”

It advises the government to treat as “an urgent priority to revive and accelerate the negotiation of a partnership agreement with China; an expanded agreement with India; and an agreement with Thailand.  Agreements with other Asian countries, particularly other ASEAN members and Japan, should also be explored.  Another goal should be maximizing the benefits from the Agreement with Singapore.” (Colombo June 12, 2020)

Reported by Arjuna Ranawana



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Sri Lanka eyes SOE law by May 2024 for better governance

ECONOMYNEXT – Sri Lanka is planning to pass a Public Commercial Business (PCB) Act improve governance of state-owned enterprise by May 2024 as part of an anti-corruption efforts following an International Monetary Fund assessment.

Sri Lanka’s state enterprises have been used by politicians to give ‘jobs of the boys’, appropriate vehicles for personal use, fill board of directors and key positions with henchmen and relatives, according to critics.

Meanwhile macro-economists working for the state also used them to give off-budget subsides or made energy utilities in particular borrow through supplier’s credits and state banks after forex shortages are triggered through inflationary rate cuts.

The government has taken billons of dollars of loans given to Ceylon Petroleum Corporation from state banks.

There have also been high profile procurement scandals connected to SOEs.

An SOE Reform Policy was approved by Sri Lanka’s cabinet of ministers in May 2023.

The Public Commercial Business (PCB) Act has now been drafted.

A holding company to own the SOEs will be incorporated and an Advisory Committee and Board of Directors will be appointed after the PCB law is approved, the statement said. (Colombo/Mar01/2024)

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Sri Lanka rupee closes at 308.80/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 308.80/90 to the US dollar Friday, from 309.50/70 on Thursday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.65/75 percent up from 10.50/70 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent from 11.90/12.10 percent.

A bond maturing on 01.07.2028 closed at 12.15/35 percent down from 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent up from 12.30/45 percent.

A bond maturing on 15.05.2030 closed at 12.30/45 percent down from 12.35/50 percent.

A bond maturing on 01.07.2032 closed at 12.50/13.00 percent from 12.55/13.00 percent. (Colombo/Mar1/2024)

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Sri Lanka stocks close up 0.37-pct, Expo to de-list

ECONOMYNEXT – The Colombo Stock Exchange closed up 0.37 percent on Friday, and SG Holdings, the parent company of Expolanka Holdings Plc, said it was taking the company private.

Expolanka is the largest listed company on the Colombo Stock Exchange.

“Expolanka Holdings PLC has, at the Board Meeting held on 1st March 2024, considered a request from its principal shareholder and resolved to initiate the de-listing of the Company’s shares from the Official List of the Colombo Stock Exchange subject to obtaining necessary shareholder approval and regulatory approvals,” the company said in a stock exchange filing.

As per arrangements with SG Holdings Global Pte Ltd, the Company’s majority shareholder, it will purchase its shares from shareholders who may wish to divest their shareholding in the Company at a purchase price of Rs 185.00 per share. The share closed up at 150.50.

The broader All Share Index closed up 0.37 percent, or 39.47 points, at 10,691; while the S&P SL20 Index closed down 0.64 percent, or 19.59 points, at 3,037.

Turnover stayed above the 1 billion mark for the sixth consecutive day, registering 1.4 billion.

Crossings in Melstarcorp Plc (135mn) up at 89.50, Hatton National Bank Plc (64mn) up at 158.00, Hemas Holdings Plc (53mn) up at 75.00 and Central Finance Company Plc (26mn) up at 103.50, added significantly to the day’s turnover.

“The upward trend is continuing, with more retail buying also coming in, the number of trades was more than 10,000 today,” a market participant said. “Investors are looking for undervalued stocks and buying in quantities.” (Colombo/Mar1/2024).

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