Logistics

Sri Lankaâ€™s ship agency liberalisation will draw foreign investment, cut costs: Eran

Tuesday October 2, 2018 11:54 am

ECONOMYNEXT – Liberalising Sri Lanka’s ship agency sector will attract foreign investment, improve efficiencies and reduce costs, Eran Wickramaratne, State Minister of Finance and Mass Media, said.

“Liberalisation of shipping agency business is a key stepping stone for us to develop Sri Lanka as a maritime and trading hub in the Indian Ocean,” he told a forum of key public and private sector stakeholders in the shipping industry.

“Allowing foreign ownership in the sector will expand the size of the overall market,” he said, referring to government plans to lift the 40 percent foreign ownership restriction on shipping agencies.

“We should take advantage of the window of opportunity available to us and maximise the advantage of Sri Lanka’s location,” Wickramaratne said at the Public-Private Dialogue hosted by the International Trade Centre (ITC).

It was held to provide a platform for all stakeholders, including the private sector, to share their views and concerns over liberalisation, which has been opposed by ship agencies.

Wickramaratne said that one of the island’s greatest advantages was its strategic location on maritime routes in the Indian Ocean, which has enabled it to become a container transhipment hub.

But the island’s full potential remains unused, he said.

A key aim of the government is to develop the island as a maritime and trading hub in the Indian Ocean.

“We hope to have taken the initial steps by 2025 for which we need to invest and reform our offering,” Wickramaratne said.

While port infrastructure is being developed, “another crucial step in this process is full liberalisation of the shipping industry,” he said.

Current ship agency pricing controls are artificial structures that do not reflect market dynamics.

“Also the industry is controlled by large domestic players and there is a lack of foreign participation in the agency business,” Wickramaratne said.

“Through liberalisation we could become more competitive and more efficient.

“By removing the 40 percent foreign equity ownership limit, more global firms will invest in Sri Lanka, increasing competition, leading to greater efficiency, lower cost and higher quality of services that would benefit exporters and importers.”
(COLOMBO, 02 October, 2018)

FILED UNDER: Sri Lanka

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Food Crisis

Sri Lanka food producers on countdown; 6-months to reduce trans fat content

Tuesday May 30, 2023 3:55 pm

ECONOMYNEXT – Sri Lankan food manufacturers only have another six months to reduce the amount of trans fat in food items as the government plans to ban high trans-fat food from January 2024 onwards, an official said.

“A six-month grace period has been given to existing manufacturers, sellers and distributors whose products contain trans-fat,” an official of the Ministry of Health told EconomyNext requesting anonymity.

According to a Ministry of Health gazette issued on… a person shall not sell, offer for sale, expose or keep for sale or advertise for sale, any packaged food product containing trans-fat unless the total amount of trans-fat of such food product per 100 grams or 100 milliliters of the food product is declared on the label of such packaged food product.

However, these regulations will not be applicable for export oriented food products.

Trans-fat is a type of fat that has certain chemical properties and is usually found in processed foods such as baked goods, snack foods, fried foods, shortening, margarine, and certain vegetable oils.

Eating trans-fat increases blood cholesterol levels and the risk of heart disease.

Meanwhile, the World Health Organization (WHO) has praised Sri Lanka for enacting a legislation on trans-fat to protect health and prevent premature deaths from coronary heart disease, a statement from the WHO said.

“Eliminating trans-fats from food supplies is a cost-effective measure with enormous health benefits,” the statement quoting Poonam Khetrapal Singh, Regional Director, WHO South-East Asia said.

“By enacting legislation on trans-fat, Sri Lanka has once again demonstrated its resolve to protect and promote the health of its people”.

The regulations are coming into effect as Sri Lanka is struggling with food insecurity as the country recovers from its worst economic crisis.

However, an improvement in food security across all provinces has been recorded, according to an assessment by a Crop and Food Security Assessment Mission (CFSAM) of two UN agencies. (Colombo/ May 30/2023)

Debt Restructuring

India extends under utilized $1 bln credit facility to Sri Lanka by one year

Tuesday May 30, 2023 2:22 pm

ECONOMYNEXT – India has extended a $1 billion credit facility to Sri Lanka by another year after the loan that was given to help the crisis-hit island nation to continue import of essentials was not fully utilized in the 12 month period originally agreed, officials said.

Sri Lanka faced with a looming sovereign default signed the credit facility in March 2022 for one year through March 2024. However, the full $1 billion had not been utilized yet.

The Facility has been used for urgent procurement of fuel, medicines, food items and industrial raw materials, as per the requirements and priorities of Sri Lanka.

“The initial agreement was signed in 2022 March and out of the 1000 million US dollars allocated materials were imported for $576.75 mil,” Shehan Semasinghe, State Finance Minister said in his official twitter platform.

“The agreement is extended for the remaining $423.25 mil. We will prioritize the import of essential medicines till March 2024.”

Indian High Commission in Colombo said the State Bank of India (SBI) has extended the tenure of the $1 billion Credit Facility provided to Sri Lanka in response to a request from the Government of Sri Lanka. (Colombo/May 30/2023)

Debt Restructuring

Sri Lanka President cleared to discuss cancelled LRT after soured Japan relations

Tuesday May 30, 2023 12:57 pm

ECONOMYNEXT – Sri Lanka’s Cabinet of Ministers approved a proposal by President Ranil Wickremesinghe discuss resuming a Japan funded. Light Rail Transit (LRT) project cabinet spokesman said, as the island nation is in the process of mending ties with Tokyo.

However, any such deals are likely to take place after the debt restructuring and Sri Lanka starts to repay its foreign loans to come out of default, analysts say.

Former President Gotabaya Rajapaksa unilaterally cancelled the 1.5 billion US dollar LRT and East Container Terminal (ECT) projects in 2021. Japan agreed to fund the LRT project while it was one of the tripartite members of the ECT project along with India and Sri Lanka.

The abrupt cancellation hit the diplomatic ties between the two countries and Sri Lankan government officials have said Japan had given the project to Sri Lanka at a very lower financing cost.

President Wickremesinghe returned from Japan late last week after having met top officials of the Japanese government including its prime minister.

“In recent history, due to the stopping of several agreements and proposals suddenly, President Wickremesinghe went to Japan after creating the background to clear some of the worries we have,” Cabinet Spokesman Bandula Gunawardena told the weekly media briefing.

“Before he went, he got the approval from the cabinet to resume the discussion on the light railway project. He got the approval from the cabinet to get parliament approval for bilateral agreements signed or any other investments project. Any change or cancellation of a project could be done only with the approval of the parliament.”

Japan has backed Sri Lanka under Wickremesinghe’s presidency after the island nation declared sovereign debt default. (Colombo/May 30/2023)