An Echelon Media Company
Monday September 25th, 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)

FILED UNDER:

Leave a Comment

Your email address will not be published. Required fields are marked *

Leave a Comment

Leave a Comment

Cancel reply

Your email address will not be published. Required fields are marked *

Sri Lanka sells 2028 bonds at 14.52-pct

ECONOMYNEXT – Sri Lanka sold all offered bonds in 2026 and 2028 maturities raising 220 billion rupees from an auction Monday, data from the state debt office showed.

The debt office sold 135 billion rupees of 1 June 2026 bonds to yield 15.64 percent.

Another 85 billion rupees in 01 July 2028 bonds were sold to yield 14.52 percent.

The 2028 bond is offered on tap at the weighted average yield. (Colombo/Sept25/2023)

Continue Reading

Sri Lanka’s stocks end down on Monday after slow day of trading

ECONOMYNEXT – Sri Lanka shares were down at close of trading on Monday.

Turnover was 550 million rupees.

The main All Share Price Index was down 0.36 percent or 40.02 points to 11,216.50, while the S&P SL20 was down 0.44 percent or 14.07 points to 3,164.52.

Trading in the Capital Goods Industry (174,037,134) drove turnover.

Commercial Bank, Expolanka Holdings, and Aitken Spence plc saw losses, while National Development Bank, John Keells Holdings and Melstacorp saw gains in the day’s trading.

The market saw a net foreign inflow of 13 million rupees, while the yearly net foreign inflow was 429 million rupees. (Colombo/Sep25/2023)

Continue Reading

Sri Lanka rupee closes at 324.75/324.90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 324.75/90 to the US dollar on Monday, from Friday’s close at 324.70/325.00 dealers said.

Bond yields were up.

A bond maturing on 01.07.2025 closed up at 15.55/15.70 percent on Monday, after closing at 14.95/15.30 percent on Friday.

A bond maturing on 01.08.2026 closed up at 15.50/15.65 percent up from 14.95/15.10 percent.

A bond maturing on 15.09.2027 closed up at 14.75/15.50 percent from 14.55/15.00 percent.

A bond maturing on 01.05.2028 closed up at 14.25/14.60 from 14.00/14.30 percent.

A bond maturing on 15.05.2030 closed stable at 13.00/13.50.

A bond maturing on 01.07.2032 closed at 12.95/13.45 percent from 13.00/13.45 percent. (Colombo/Sept25/2023)

Continue Reading