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Sunday April 14th, 2024

Sri Lanka to get on the missed bus with China-backed Port City: Minister

ECONOMYNEXT – Colombo Port City will allow Sri Lanka to get on the ‘missed bus’ since independence that economists had been commenting on for many decades, State Minister for Money and Capital Markets AjithNivardCabraal said.

“We don’t want to miss the bus this time,” Minister Cabraal told reporters on a May 28 briefing. “This will be a turning point in our history. We don’t want to miss the bus this time.

Some people in a rather unsympathetic way said that Sri Lanka has missed the bus. They say at the time of independence, Sri Lanka was only behind Japan.

“But I think we need to put that narrative behind us, we need to ensure that we turn a new chapter in Sri Lanka’s economic history. We don’t want to be stagnating once again.”

Sri Lanka set up a Latin America style money printing central bank, under the advice of a so-called Federal Reserve ‘money doctor’ in 1950 ending a Hong Kong and Singapore style currency board in 1950, triggering forex shortages andimport controls barely two years later.

The Fed Latin America unit, under its then chief Robert Triffin had been setting up money unstable soft-pegs styled after the Argentina central bank set up by Raul Prebisch in several countries that ran into import substitution, economic collapses and sovereign default later.

“This law had been drawn up under American tutelage and long the lines that have been the subject of experiment in certain Latin American countries for some eight years past,” a classical financial expert wrote prophetically in the 1950 July issued of the UK-based The Banker magazine.

“This step from an “automatic” currency system (such as that which Ceylon inherited with its old Colonial Currency Board) to an ultra-modern “managed” currency system is necessarily fraught with great dangers and there may be some who will regret that Ceylon has decided to run such risks at this time.”

Some economists and analysts have been calling for a currency board to be re-established to halt ‘stop-go’ policies, currency collapses and negative output shocks that accompany soft-pegging.

Sri Lanka suffered unusual output volatility from 2015 after a bout of ‘stop-go’ policies involving targeting a output gap with money printing and busting the currency from 151 to 182 to target a real effective exchange rate index, destroying real salaries and savings.

The rupee collapsed from 131 in 2015. In 2020, amid more money printing the rupee had collapsed to 200 to the US dollar.

“Sri Lanka suffered in the last 5-6 years in its macroeconomic numbers, our growth suffered, our rupee struggled and our interest went up,” Cabraal said.

“But we needed to have a turning point as quickly as possible that’s why we spent a lot of time in getting this law (Colombo Port City Economic Commission Act) into place.”

The collapsing rupee was driving both educated people and less skilled people to countries with better central banks and monetary stability where their salaries are protected.

The China-backed Colombo Port City will be protected from soft-pegging policy errors of the Monetary Board of the central bank though dollarization, which is a step further than a currency board.

“It would generate about 83000 jobs to people who will be paid in dollars or in foreign currency so that they don’t need to go to Dubai, they don’t need to go Singapore to work. They can work out from Sri Lanka itself.”

Dubai has a currency board like system, which does not have a true policy rate enforced with money printing but piggy-backs on US rate policy rates and has uses certificates of deposits to sterilize inflows and build forex reserves.

Singapore has a modified currency board with no policy rate, and uses Monetary Authority of Singapore securities (MAS paper) to mop up inflows and build up forex reserves.

Sri Lanka’s central bank buys government treasury bills to inject liquidity, trigger unsustainable outflows, and lose forex reserves.

In addition to monetary instability Sri Lanka was also hit by nationalism shortly after independence, exemplified by an immigration law that suddenly ended thousands years of immigration and naturalization dating back to the island’s ancient kings and beyond creating state-less citizens.

The Port City on the other hand will have liberal visa rules.

Ministers said the Port City will be a cosmopolitan area which is not confined to a single country though it was reclaimed by a Chinese company.

“Now this optimum benefit will not come only from one country,” he said. “This optimum benefit will come from an international flavour in this entire city. That will not be done by Sri Lanka doing business with one country only. We want to do business with all the countries.”

“We are non-aligned, we are friends of all, we are open for business with everyone,” Justice Minister Ali Sabry said.

He said investors who bought land in the first round will get a benefit because prices will go up as the city progressively gets built.

After independence Sri Lanka’s public service was also broken systematically through direct presidential appoints of ministry secretaries and others senior officials.

Reporters asked whether the same problem that befell permanent secretaries (still found in Singapore) would also befall the Port City and whether the problem could be solved by appointing ex-officio members.

Education Minister G L Pieris said suggested ex-officious members already had too much work on their hands, and it was too much to expect them to act as member of the Colombo Port City Commission as well. (Colombo/May29/2021)

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LGBTQIA+ Rights: Europe and South Asia See Similar Discriminatory Practices

ECONOMYNEXT – The rights and protections of the LGBTQIA+ community have been fraught with challenges and continue to be so, despite the many gains achieved in recent years.

Nor are those handful of rights universally applied, a recent discussion which looked at the European and South Asian perspectives on same-sex rights and unions revealed. Most developed nations have introduced protections for those identifying as LGBTQIA+, and a view from a distant lens paints a picture of tolerance. Yet, a closer look at the European arena throws up the many gaps that are evident in the application of the law.

In the so-called conservative South Asian nations, changes to legislation are slow to be implemented. That may come as a surprise, for, contrary to popular belief, same-sex relationships were culturally acceptable in the South Asian region and is not a Western concept points out Ruhaan Joshi, a Public Policy Practitioner from India.

Society’s view on same-sex relationships dimmed with the imposition of Western values and the criminalisation of such relationships with the advent of colonial rule.

While the LGBTQIA+ communities in South Asian countries currently battle to have same-sex relationships decriminalised and their unions legally accepted, the irony is that countries that first made such relationships punishable by law have moved on to be more welcoming, though some discriminatory practices continue.

Joshi was part of a discussion themed ‘On Being Queer and LGBTQIA+ in South Asia and Europe, held in Germany on April 9 this year. The discussion which included the release of two papers which examined the rights and protections of the LGBTQIA+ community in Europe and South Asia, respectively, was organised by the Friedrich Naumann Foundation for Freedom.

Joining Joshi in the discussion were lawyer and parliamentarian Premnath C Dolawatte from Sri Lanka, Milosz Hodun, President, Projekt Polska Foundation, Poland, Michael Kauch, a Member of the European Parliament and RENEW Europe Group and Inaya Zarakhel, a Dutch-Pakistani actress and an activist on Queer Rights, who moderated the discussion. The two papers were presented by Hodun and Joshi, respectively.

In his opening remarks, Kauch pointed out that while the view of the liberals is that the rights recognized in one member nation of the EU must be accepted by all member countries, that is not the ground reality, the issue of Rainbow families being a case in point.

In the context of the European Union, though the Court of Justice has ruled on the freedom of movement of those in same-sex partnerships and their families, the ruling is not universally applied by member nations.

In Italy, and some European nations, surrogacy which helps childless couples to become parents is illegal. In other situations where same-sex parents are of different nationalities a child in that union faces restriction of movement or the possibility of being stateless if one parent hails from a country where such parental rights are not recognised.

Hodun meanwhile stated that in Poland transgender persons must first sue their parents for the gender assigned to them at birth, to have their gender marker changed on documents.

Some countries such as Russia and Azerbaijan resort to State-sponsored homophobia, and in many instances politicians and political parties promote such biases to boost their voter base it was pointed out. Even where laws are in place for the protection of LGBTQIA+ rights, there is no political will to implement them.

In Europe where migrants arrive in droves seeking asylum, and are frowned upon by many of those countries, LGBTQIA+ members face even more discrimination Hodun says, both by other refugees and governments, where most often the state ignores the situation despite the guidelines issued by the UN and the European Court of Justice. Hate speech and hate crimes too are on the rise he adds stating that at least 80 per cent go unreported.

Increasingly the LGBTQIA+ community has experienced a diminishing of their safe spaces as right-wing and populist governments are elected across the globe. Taking a dig at feminism, meanwhile, Kauch states that though feminists uphold a woman’s right to opt for an abortion, they take a different approach on the topic of surrogacy.

Dolawatte who waded into unchartered waters when he presented a Private Member’s Bill to decriminalise same-sex relationships through an amendment to section 365 of the Penal Code and the repealing of section 365A in its totality, is hopeful that the Bill will pass its third reading. It’s been an uphill battle he says, referring to the case filed in the Supreme Court against the Bill. The court ruled in his favour.

He had little or no support from his own party members, but says the President of the country, and younger party members are with him on this issue. Apart from making Sri Lanka a safe space, it would encourage foreign nationals identifying as LGBTQIA+ to visit without fear, and thus boost tourism he opines.

As Joshi states society has come a long way from when LGBTQIA+ were made fun of and were subject to violence to the positive portrayal in movies. Such movies are also well-received by society. Transgender identity has a distinct recognition in South Asian religious beliefs. Hijra, Khwaja Sara or Kinnar are some names given to transgender folk and they have, since ancient times been an accepted group in society. On the one hand, there’s Afghanistan and the Maldives which make no allowances for the LGBTQIA+ community, while Nepal became the first South Asian nation in 2023, to register a same-sex marriage, Joshi states. In most South Asian nations, the courts have ruled in favour of relaxing the rules against this community, and, like in Europe, it is the governments that drag their feet.

For governments to change their stance, society must take the lead in fighting for the unconditional dignity of the individual, freedom of movement, and safeguarding the tenets of democracy, he says adding that it must also run parallel with the LGBTQIA+ community looking beyond themselves at issues that impact democratic values, and the societal restrictions non-LGBTIQIA+ groups face, such as opposition to inter-caste marriage and the right to adopt outside their caste systems and equal access to many other privileges.

While the panellists advocated working together across the global divide as a step towards achieving equal rights for all, Dolawatte also called for caution; too much pressure on such issues from Europe he said may not be welcome, and must be handled with care.

With right-wing and populist governments getting elected across the globe, Kauch claims the forthcoming EU elections will prove crucial in deciding how future and current governments ensure tolerance and diversity amongst their citizenry.

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Sri Lanka making new economic laws to embed structural reforms

ECONOMYNEXT – Sri Lanka is making new laws and also revising old legislation following a comprehensive review of past experience and lessons learned, Treasury Secretary Mahinda Siriwardana has said.

Most of these new laws focus on structural changes of the existing executive and administrative structures, Siriwardana was quoted as saying in a speech to ministry officials on April 08.

The laws related to public finance, procurement, public private partnerships, state enterprises and also a law on the offshore economy.

The following new laws are being made:

a. Public Financial Management Bill
b. Public Debt Management Bill
c. Economic Transformation Bill
d. Management of State Owned Enterprises Law
e. Public Private Partnership (PPP) Law
f. Investment Law
g. Public Procurement Bill
h. Unified Labor Law Bill
i. Food Security Bill
j. Public Asset Management Bill
k. Microfinance and Credit Regulatory Authority Bill
l. Secured Transaction Bill
m.Offshore Economic Management Bill
n. New law for facilitating proposed agricultural land lease programme
Public Service Employment Bill
o. Sri Lanka Accounting and Standard Monitoring Act

Changes are planned to the following laws

a. Amendments to Agrarian Development Act
b. Amendments to Excise Ordinance
c. Amendments to Customs Ordinance
d. Amendments to Finance Act
e. Amendments to Foreign Exchange Act. Colombo/Apr15/2024)

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After PM’s Chinese visit, US NSA talks to Sri Lanka President’s advisor on peace, security

ECONOMYNEXT – The United States National Security Advisor (NSA) Jake Sullivan held talks with Sri Lanka President’s Senior Advisor on National Security Sagala Ratnayaka focusing on regional security issues this week.

The conversation between the two comes days after Sri Lanka Prime Minister Dinesh Gunawardena ended an official visit to China in which he met President Xi Jinping and his counterpart Li Qiang in Beijing amid discussions over further investments in Sri Lanka and concerns over banning Chinese research ships.

The United States along with India is highly concerned over increasing Chinese influence in Sri Lanka, which is located in a strategic location in the Asia.

China already owns a port and a proclaimed land next to the main Colombo port in Sri Lanka and analysts say the Beijing’s ownership of assets has raised doubts if China is planning to use Sri Lanka as a military base. China has denied this and said its relationship with Sri Lanka is only based on commercial aspects.

The discussion between Sullivan and Ratnayaka focused on a range of crucial topics aimed at bolstering bilateral relations between the two nations, the President’s Media Division (PMD) said.

“Central to their discussion was the unwavering U.S. commitment to supporting Sri Lanka’s security and sovereignty,” the PMD said in a statement.

“Acknowledging Sri Lanka’s ongoing endeavours, Sullivan emphasized the importance of completing the fiscal, monetary, and governance aspects of the IMF program.”

The US along with India has raised possible threats of increasing Chinese influence in Sri Lanka, government officials have said. Both  countries see China as a security threat to the Indian Ocean region, they say.

“The conversation also delved into future prospects for collaboration between the two countries, exploring avenues for enhanced cooperation in various spheres,” the PMD said.

“Sullivan conveyed his keen interest in fostering continued engagement with Sri Lanka, underscoring the mutual objective of advancing peace and security in the region.”

“This dialogue marks a pivotal moment in U.S.-Sri Lanka relations, demonstrating a shared commitment to promoting stability and prosperity in the Indo-Pacific region.” (Colombo/April 13/2024)

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