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Tuesday June 18th, 2024

Sri Lanka will deal with policy measures if GSP+ reversed: CB chief

ECONOMYNEXT – Any reversal of over 500 million US dollar worth European Union trade concession for Sri Lanka could be met through policy measurements and deal with if such a situation arises, Central Bank Governor Ajith Nivard Cabraal said .

Sri Lanka is facing the risk of losing the EU’s Generalized Systems of Preference Plus (GSP+) trade concession from April next year if the government does not take drastic measures to address human rights concerns as the island nation had promised to fulfill when the facility was given back in 2017.

The GSP+ helped the island nation’s garments to bring over 5 billion US dollar export revenue.

“We believe that the impact of any reversal could be met with the policy measures that we would take in such an event,” Cabraal told a press briefing on October 14 when he was asked the size of the GSP+ trade concession.”

“Therefore we have assured all the stakeholders that we would be able to deal with that situation in case there is any necessary to deal with it and we would not hesitate to do that as well.”

Sri Lanka has had problems with rule of law and freedoms of citizens with the deterioration the independence of the civil service and judiciary over several decades amid tinkering of the constitution to favour the state and rulers over un-armed citizens, critics have said.

Sri Lanka is a European style nation-state with a legislating parliament, standing army and police but the institutions of liberty that should stand between the armed state and the people have weakened according to freedom advocates.

The European parliament adopted a resolution on June 10 calling for the repeal of Sri Lanka’s Prevention of Terrorism Act (PTA) and inviting the European Union (EU) Commission to consider temporarily withdrawing access to GSP+.

A five-member European Union (EU) delegation reviewed the island nation’s human rights situation while discussing with all the stakeholders of the GSP+ beneficiaries renewed concerns about the country’s human rights situation.

The EU is the secnd largest export destination for Sri Lankan products, and GSP+ has helped the country’s exporters to consolidate their position.

Sri Lanka lost the GSP+ in 2010 due to alleged human rights violations including war crimes in the final stage of the 26-year war that ended in 2009.

However, the commitment by the previous government to the international community to address human rights concerns in 2015 helped the country to regain the facility.

Small and medium sector garments and outsourced industries related to garment exporters faced closure after the GSP+ was withdrawn in 2010, but the industry rebounded later even without the trade concession. (Colombo/Oct14/2021)

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Sri Lanka’s Ceylon Chamber links up with Gujarat Chamber

ECONOMYNEXT – The Ceylon Chamber of Commerce has signed an agreement with the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to increase trade cooperation between India and Sri Lanka.

The MOU was signed by CCC CEO Buwanekabahu Perera, SGCCI President Ramesh Vaghasia, in the presence of Dr Valsan Vethody, Consul General for Sri Lanka in Mumbai, India.

“With the signing of the MoU, … the Ceylon Chamber of Commerce and SGCCI aim to facilitate trade between the two countries via initiatives such as trade fairs and delegations, business networking events, training programmes,” the Ceylon Chamber said in a statement.

“This partnership will open doors for Sri Lankan businesses to explore opportunities in Surat’s dynamic market and enable the sharing of expertise and resources between the two regions.”

Established in 1940, SGCCI engages with over 12,000 members and indirect ties with more than 2,00,000 members via 150 associations. It promotes trade, commerce, and industry in South Gujarat.

The region’s commercial and economic centre Surat has risen to prominence as the global epicenter for diamond cutting and as India’s textile hub, and is ranked the world’s 4th fastest growing city with a GDP growth rate of 11.5%

Surat’s economic landscape is vibrant and diverse. As India’s 8th largest and Gujarat’s 2nd largest city, it boasts the highest average annual household income in the country.

The nearby Hazira Industrial Area hosts major corporations like Reliance, ESSAR, SHELL, and L&T. (Colombo/Jun18/2024)

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Sri Lanka telecommunications bill some clauses ruled unconstitutional by SC: Speaker

ECONOMYNEXT – Sri Lanka’s Supreme Court has found a number of clauses in a proposed amendment to the Telecom Telecommunications Amendment bill unconstitutional, speaker Mahinda Yapa Abeywardana said.

“Clause No 8, proposed section 9A 2 of the bill is inconsistent with Article 12 1 of the constitution, however this inconsistency shall cease if word ‘may’ will be replaced with word ‘shall’ as set out in the determination of the supreme court.”

“Clause No 9 is inconsistent with Article 12 1 of the constitution and only can be passed with special majority required under paragraph 2 of the Article 84. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.

Clause No 12, proposed section 17 10 of the bill is inconsistent with Article 12 1 of the constitution and can only be passed with special parliament majority required under Article 84 paragraph 2. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.”

Sections of clauses 13, 18, 20, 33 and 35 were also in violation of the constitution, and could only be passed by a special majority of parliament. (Colombo/Jun18/2024)

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Sri Lanka to exempt one house from imputed rent wealth tax: President

ECONOMYNEXT – Sri Lanka will exempt one house from a proposed wealth tax outlined in an International Monetary Fund program, President Ranil Wickremesinghe said.

About 90 percent of the people’s houses are likely to be exempt from the proposed tax, he said.

“[O]ne house will be exempt from this,” President Wickremesinghe told parliament Monday.

“It is going to have a very high threshold and I do not think the vast majority of the people in this country should even be worried about their house

“Don’t worry your house will be safe.”

The IMF program document however did not mention an exempt on one house, but did mention a threshold.

Taxing houses and thrift in general could have detrimental effects on people’s well-being housing stock and their willingness to remain in the country without migrating, critics say.

Related Sri Lanka to tax imaginary rents on houses under IMF deal

The mechanism of imputed rents was used because rates on houses was assigned to provincial councils and courts could strike it down.

Opposition legislator Harsha de Silva said the Samagi Jana Balwegaya welcomed President Wickremesinghe’s statement. (Colombo/June18/2024)

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