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Thursday December 7th, 2023

Sri Lanka squandered chance to reform and grow: Razeen Sally

ECONOMYNEXT – Sri Lanka has thrown away a once in a lifetime opportunity to reform the economy and grow that opened up in 2015, and is continuing with China dependent controlled economy, where modest political reforms achieved may also be reversed, a top economist has said.

Ranil Wickremesinghe in 2015 had probably the best opportunity since 1977 for liberal and economic reforms to ratchet up growth, Razeen Sally, a visiting professor at the National University of Singapore said.

“On the political front we have seen modest successes, and I suspect those reforms are not major enough not to be reversed in the near future,” Sally said delivering a lecture on 69 year anniversary of Sri Lanka’s central bank.

“On the economic front it failed comprehensively.”

He said some modest success had been achieved in correcting of the past and current administration had been corrected.

Sally said the administration came to power without an economic team of the likes of which that was put into place in July 1977.

“The new government came into power without an economic plan and they did not develop one,” Sally said.

The new administration had continued the same plan as adopted by the Rajapaksa administration with China as ‘first friend’.

He said the administration came up with a rhetorical wish list where a Singapore style take-off was supposed to happen.

The machinery of the state to implement reforms had been lost, he said.

“In academic jargon there is a serious lack of state capacity,” Sally said. “Even quite simple reforms were difficult to push through because of the dysfunction of the Sri Lanka state.”

It was not a Sri Lankan exception and echoes were seen in other parts of the world as well. Sally said he had served as a ‘failed advisor; to the government for three years.

Sri Lanka public service has been systematically broken through first in the republican constitution and the 1979 one, critics say.

In 1977 however there were enough remaining senior officials from the permanent secretary era to carry out reforms, analysts say. Now ministry secretaries lose power as soon as a cabinet is dissolved leaving dangerous discontinuity and vacuum, as well progressive deterioration of capacity.

Meanwhile Sally said high level ministry meetings which he had taken part in were a ‘shambles’.

“There is hardly a coherent agenda, there are five or six different people speaking at the same time veering off in five or six different directions, everybody taking and nobody listening, and nobody talking notes.There is no conclusion and the process starts all over again.”

From 2005 to 2015 Sri Lanka had been de-liberalized by the Rajapaska regime, with a swing towards state intervention away from markets.

Sri Lanka had swung away from the West and India towards China and become more nationalist.

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He said Sri Lanka was now heading into a world where a rule based order set up after the second World War and strengthened in the 1980s which helped East Asia and later India to grow with free and peaceful global order was breaking down. (Colombo/Sept12/2019)

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COP28 sees new era for climate action with $57 bln pledge; Sri Lanka’s proposals need approval

ECONOMYNEXT – The 2023 United Nations Climate Change Conference (COP28) has witnessed governments, businesses, investors, and philanthropies announcing support of over $57 billion across the climate agenda in just the first four days of the global event with eight pledges and declarations receiving historic support.

After a historic deal to operationalize a fund for climate impact response on the first day, announcements have poured in across the entire climate agenda, including on finance, health, food, nature, and energy.

On climate finance, the COP28 host United Arab Emirates launched a $30 billion catalytic fund, ALTÉRRA, with an emphasis on unlocking private finance across the Global South.

The host nation also has announced $200 million for SDRs and $150 million for water scarcity.

The World Bank has announced an increase of $9 billion annually to finance climate-related projects, while the first two days of COP28 saw $725 million in pledges after a historic response to loss and damage was operationalized.

Eight new declarations have been announced which are expected to help transform every major system of the global economy.

These include the first ever declarations on food systems transformation and health, plus declarations on renewable energy and efficiency, as well as initiatives to decarbonize heavy emitting industries.

The eight declarations are:

  • The Global Renewables and Energy Efficiency Pledge has been endorsed by 119 countries.
  • The COP28 UAE Declaration on Agriculture, Food, & Climate has received endorsements from 137 countries.
  • The COP28 UAE Declaration on Climate and Health has been endorsed by 125 countries.
  • The COP28 UAE Declaration on Climate Relief, Recovery & Peace has been endorsed by 74 countries and 40 organizations.
  • The COP28 UAE Declaration on Climate Finance has been endorsed by 12 countries.
  • The Coalition for High Ambition Multilevel Partnerships (Champ) Pledge has been endorsed by 64 countries.
  • The Oil and Gas Decarbonization Charter has been endorsed by 51 companies, representing 40 percent of global oil production.
  • The Industrial Transition Accelerator has been endorsed by 35 companies and six industry associations, including World Steel Association, International Aluminium Institute, Global Renewable Alliance, Global Cement and Concrete Association, Oil and Gas Climate Initiative, International Air Transport Association.

Three additional declarations will be announced in the coming days on hydrogen, cooling, and gender. The number of countries supporting these declarations and pledges is growing and demonstrates an unprecedented level of inclusivity at this COP.

Sri Lanka President Ranil Wickremesinghe announced three new proposals: Climate Justice Forum (CJF), Tropical Belt Initiative (TBI), and International Climate Change University in Sri Lanka.

However, the proposals are yet to get approval from the general UN body though the island nation’s authorities expect wide support for the moves.

“What we have done is to talk to countries about the initiatives and launch them. Next step is for them to be formally recognized by the main body,” Ruwan Wijewardena, the Senior Advisor to President Wickremesinghe on Climate change, told Economy Next.

Breakdown of financial pledges and contributions so far:

  • Loss and Damage: $725 million
  • Green Climate Fund: $3.5 billion (increasing second replenishment to $12.8 billion)
  • Renewable Energy: $2.5 billion
  • Technology: $568 million
  • Methane: $1.2 billion
  • Climate Finance: Over $30 billion from UAE (plus $200 million in Special Drawing Rights and an increase of $9 billion annually from the World Bank)
  • Food: $2.6 Billion
  • Nature: $2.6 Billion
  • Health: $2.7 billion
  • Water: $150 million
  • Relief, Recovery and Peace: $1.2 billion
  • Local Climate Action: $467 million (Dubai/Dec 6/2023)
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Sri Lanka to start international tourism branding campaign

ECONOMYNEXT – Sri Lanka will soon start a tourism international marketing campaign under the theme ‘You will come back for more,” Tourism Minister Harin Fernando said.

“We have not had a branding campaign for 15 years,” Fernando told parliament. “A campaign has been developed by Ogilvy.

“It will help us reach the target of 2.3 million tourists next year.”

This year Sri Lanka is expecting a 1.5 million tourists with close to 1.3 million reached by November.

About 6,000 tourists are now coming each day, at the moment he said.

On December 10, three cruise ships are due. (Colombo/Nov06/2023)

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Sri Lanka 3-month Treasuries yields fall

ECONOMYNEXT – Sri Lanka’s Treasury bill yields eased across maturities with the tree month yield falling 19 basis points to 14.67 percent, data from the state debt office showed.

A total of 185 billion rupees in bills were sold, with sharply lower than offered volumes in 12-months sold.

The debt office offered 55 billion rupees of 3 -month bills and sold 87 billion.

92 billion rupees of 6-month bills were sold after offering 60 billion at 14.38 percent down 14 basis points.

Only 5.2 billion rupees of 12-month bills were sold after offering 70 billion rupees, at 12.88 percent, down 01 basis point. (Colombo/Dec06/2023)

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