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Wednesday December 6th, 2023

Sri Lanka to change privatization agreement of firms that do not raise salaries

ECONOMYNEXT – Sri Lanka will change the privatization agreements of plantations companies that do not raise salaries to 1,000 rupees a day, Finance Minister Mahinda Rajapaksa said.

The companies were privatized in the 1990s as they were mismanaged after expropriating from foreign and local investors resulting in monthly losses to the Treasury.

Prime Minister Rajapaksa claimed that plantations firms contributed about 25 percent of production while small holders have expanded.

“Under these circumstances, steps will have to be taken to encourage plantation companies that have become more successful and to review the privatization agreements of unsatisfactory plantation companies and to setup alternative investments that can be commercially developed,” Prime Minister Rajapaksa said in a budget for 2021.

“I also propose to increase the daily wage of plantation workers to Rs. 1,000 from January 2021.

“I intend to present to Parliament in January a legal framework that will change the management agreements of plantation companies that are unable to pay this salary and provide opportunities for companies with successful business plans.

He said smallholders were producing more.

However, plantations companies have said smallholders are giving productivity base wages of 30 rupees a kilo where workers were plucking over 30 to 40 kilos a day, while plantations workers were doing about 22 due to daily wages which are imposed mostly with government interference.

Two firms that are still in state hands have EPF in arears and are still bailed out by tax payers.

Related

Sri Lanka tax-payers fork out Rs600mn for state plantations

Sri Lanka has a history of expropriation which has hurt private investment and kept economic growth down.

Undermining private property rights is a form of the economic barrier killing business confidence which economists call ‘regime uncertainty’, where government policy is uncertain or threatens property rights.

“Such attenuations can arise from many sources, ranging from simple tax-rate increases to the imposition of new kinds of taxes to outright confiscation of private property, explains Economist Robert Higgs.

“Many intermediate threats can arise from various sorts of regulation, for instance, of securities markets, labour markets, and product markets.

“In any event, the security of private property rights rests not so much on the letter of the law as on the character of the government that enforces, or threatens presumptive rights.” (Colombo/Nov17/2020-sb)

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Sri Lanka rupee closes stronger at 327.40/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 327.40/90 to the US dollar on Tuesday, from 328.10/30 the previous day, dealers said.

Bond yields were stable.

A bond maturing on 01.06.2025 closed at 13.60/70 percent from 13.70/14.00 percent.

A bond maturing on 01.08.2026 closed at 13.90/14.00 percent from 13.90/14.10 percent.

A bond maturing on 15.01.2027 closed at 14.00/15 percent from 14.00/14.10 percent.

A bond maturing on 01.07.2028 closed at 14.10/20 percent from 14.20/35 percent.

A bond maturing on 15.05.2030 closed at 14.20/35 percent, from 14.25/45 percent.

A bond maturing on 01.07.2032 closed at 14.10/35 percent, from 14.05/40 percent. (Colombo/Dec5/2023)

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Sri Lanka stocks close down as investor sentiment dips

ECONOMYNEXT – The Colombo Stock Exchange closed down on Tuesday, CSE data showed.

The All Share Price Index was down 0.40 percent, or 43.50 points, at 10,700.09.

The S&P SL20 index was up 0.43 percent, or 13.32 points, at 3,054.41.

Turnover was at 711 million. The capital goods sector contributed 172 million, the food, beverage and tobacco sector contributed 140 million, and banks 113 million of this.

Top positive contributors to the ASPI in the day were John Keells Holdings Plc (up at 193.00), Richard Pieris And Company Plc (up at 19.80), and Nation Lanka Finance Plc, (up at 0.40).

Negative contributors were Commercial Bank of Ceylon Plc (down at 89.70), Sampath Bank Plc (down at 71.00), and Central Finance Company Plc, (down at 106.00). (Colombo/Dec5/2023).

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Sri Lanka plans to reduce number of school grades from 13 to 12

ECONOMYNEXT – The Ministry of Education proposes to reduce the number of school grades from 13 to 12, according to a government information department statement.

“Every child will be given the opportunity to finish school in 17 years through the proposed new education reforms,” education officials were quoted as saying after a discussion on budget allocations.

Under the proposed system, pre-school education will be at the age of 4 years, the primary section between grades 1-5, junior section between grades 6-8, and senior section between grades 9-12.

The General Certificate of Education Ordinary Level Exam (GCE O/L) is proposed to be conducted in grade 10, and the Advanced Level Examination in grade 12.

It has also been decided to reduce the number of mandatory subjects at the GCE O/L Exam from 9 to 7.

Three new subjects, information and communication technology (ICT), technical and professional skills, and religion and values will be made mandatory and included in those 7 subjects. (Colombo/Dec5/2023)

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