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Monday February 6th, 2023

Sri Lanka to buy 18mn Covid-19 vaccines, India says regulator independence should be respected

ECONOMYNEXT – Sri Lanka is planning to order 18 million vaccines as part of efforts to protect up to 60 percent of the population as India said the national regulator’s independence should be respected.

Sri Lanka’s National Medical Regulatory Authority has already approved the AstraZeneca vaccine, branded COVISHIELD produced in India. India had given 500,000 free doses, which would be used to vaccinate at least 250,000 health workers, police and military personnel.

“Probably because of the success of this initiative, I am given to understand that Sri Lanka is placing large scale orders for more vaccines from India,” Vinod K Jacob, Indian Deputy High Commissioner to Sri Lanka said at a business forum in Colombo.

“Having seen at closed quarters, the benefits of jointly fighting COVID-19 related challenges, I am confident that both countries can deepen our cooperation in this field.”

“Sri Lanka One of the lessons learned is that while dealing with public health matters as important as vaccines, it is imperative to respect the national regulator’s freedom and competence,”

“I would like to commend the professionalism of Sri Lankan authorities who cut no corners and yet provided necessary approvals in just about a week to COVISHIELD.”

Sri Lanka is planning to order 18 million vaccine doses, Deputy Director General of Health Service Hemanthe Perera told reporters earlier this week.

The stock would be enough to vaccinate 9 million out of a population of 20 million.

Under the WHO’s Covax initiative Sri Lanka would get enough vaccines for about 20 percent of the population, he said.

Sri Lanka has made progress in analyzing a vaccine produced by Pfizer, which is also approved by the World Health Organization an officials said. The Pfizer vaccine is said to be more expensive (about 30 dollars against 4 dollars for the AstraZeneca according to reports).

Pfizer also needs low temperatures (about -70 degrees), which makes is difficult to store and transport while maintaining efficacy.


Sri Lanka makes progress in approving Pfizer vaccine, data awaited from China, Russia

More data has been requested from China for its Sinopharm vaccine and Russia on its Sputnik vaccine.

Chinese vaccines heve not been approved by many authorities due to lack of peer reviewed third phase study data.

A second phase study of Sinovac, one of the vaccines produced by China had been published in Lancet, a British medical journal.

Cambodia, which has close links with China, started using Sinopharm this week.

Sinopharm has claimed that its vaccine is 79 percent effective. However different countries have reported different efficacy levels. (China’s COVID-19 shot has four wildly different efficacy rates)

UAE which had used the vaccine had said it is 86 percent effective based on a study in the country.

Some Latin American countries which also used it have reported different rates of effectiveness ranging from 50 percent upwards.

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Sri Lanka Railways to seek PPPs to boost revenue streams

CURFEW RUSH: Commuters scrambling to get home after curfew was declared in Sri Lanka on March 20, 2020.

ECONOMYNEXT – Sri Lanka Railway department hopes to expand Public Private Partnerships and earn more non-passenger revenues to offset recurring operational costs, an official said.

“For the past 10 years, except the last few years, the Railway operational income only covers around 50 percent of the operational expense of the Department,” the General Manager of the Railway, D.S. Gunasinghe told EconomyNext.

“Our plan is to increase the non-passenger revenue of the Railway department.

“And we cannot expect and do not hope for money from the government.”

Sri Lanka Railways already has agreements with Prima, a food firm, and Insee Cement, which is bringing in additional income, Gunasinghe said.

“We had agreements for material transportation such as sand in the past, however it was canceled but we hope to start it again” he said.

The department will rent out its storage facilities and circuit bungalows for the tourism sector to create additional revenue streams.

Sri Lanka Railways recorded an operating loss of 10.3 billion rupees during 2021, compared to a loss of 10.1 billion rupees in 2020, the Central Bank 2021 annual report showed.

The total revenue of the SLR stood at 2.7 billion rupees, a 41.3 percent drop from a year ago.

(Colombo/ Feb 06/2023)

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Sri Lanka’s doctors distribute anti-tax hike leaflets to train commuters

ECONOMYNEXT – Doctors representing Sri Lanka’s Government Medical Officers Association (GMOA) distributed leaflets outside the Colombo Fort railway station against a progressive tax hike, threatening to address the government in a “language it speaks”.

GMOA Secretary Haritha Aluthge told reporters outside the busy Fort railway station Monday February 06 afternoon that all professional associations have collectively agreed to oppose the personal income tax hike.

“The government is taking a lethargic approach. They cannot keep doing this. They have a responsibility towards the citizens, the country and society,” said Aluthge.

The medical officer claimed that the government was acting arbitrarily (අත්තනෝමතික).

“If it cannot understand the language they’ve been speaking, if the government’s plan is to put all professionals out on the street, if it doesn’t present a solution, all professional unions have decided unanimously to address the government in a language it speaks, ,” he said.

Aluthge and other GMOA members were seen distributing leaflets to commuters leaving the railway station. Doctors in Sri Lanka in general are likely to earn higher salaries than the average train commuter, and a vast majority of Sri Lanka’s population, most of whom take public transport, don’t fall into the government’s new tax bracket. Many doctors, though certainly not all, collect substantial sums of money at the end of every month as doctor’s fees in private consultations.

About two miles away from the doctors, the Ceylon Blank Employees’ Union, too, engaged in a similar distribution leaflet campaign on Monday at the Maradana railway station. A spokesman promised “tough trade union” action if there was no solution offered by next week.

Sri Lanka’s cash-strapped government has imposed a Pay As You Earn (PAYE) tax on all Sri Lankans who earn an income above 100,000 rupees monthly, with the tax rate progressively increasing for higher earners, from 6 percent to 36 percent.

A person who paid a tax of 9,000 rupees on a 400,000 rupee monthly income will now have to pay 70,500 rupees as income tax, the latest data showed. This has triggered a growing wave of anti-government protests mostly organised by public sector trade unions and professional associations.

Even employees of Sri Lanka’s Central Bank recently joined a week-long “black protest” campaign organised by state sector unions against the sharp hike in personal income tax, even as Central Bank Governor Nandalal Weerasinghe said painful measures were needed for the country to recover from its worst currency crisis in decades.

The government, however, defends the tax hike arguing that it is starved for cash as Sri Lanka, still far from a complete recovery, is struggling to make even the most basic payments, to say nothing of the billions needed for public sector salaries.

Economists say Sri Lanka’s bloated public service is a burden for taxpayers in the best of times, and under the present circumstances, it is getting harder and harder to pay salaries and benefits.

Sri Lanka’s new tax regime has both its defenders and detractors. Critics who are opposed to progressive taxation say it serves as a disincentive to industry and capital which can otherwise be invested in growth and employment-generating business ventures. Instead, they call for a flat rate of taxation where everyone is taxed at the same rate, irrespective of income.

Others, however, contend that the new taxes only affect some 10-12 percent of the population and, given the country’s economic situation, is necessary, if not vital, at least for a year or two.

Critics of the protesting workers argue that most of the workers earn high salaries that most ordinary people can only dream of, and, they argue, though there may be some cases where breadwinners could be taxed more equitably, overall, Sri Lanka’s tax rates remain low and are not unfair.  (Colombo/Feb06/2023)

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Sri Lanka bond Yields end steady

ECONOMYNEXT – Sri Lanka’s bond yields closed steady on Monday, dealers said while a guidance peg for interbank transactions remained unchanged.

A bond maturing on 01.07.2025 closed at 32.15/30 percent, steady from Friday’s 32.05/10 percent.

A bond maturing on 01.05.2027 closed at 28.90/29.10, steady from Friday’s 28.90/20.05 percent.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by one cent to 361.96 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 370.35 rupees on Monday, data showed. (Colombo/Feb 06/2023)

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