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Sunday February 25th, 2024

Sri Lanka’s freedom of navigation initiative aims for platform to resolve issues: PM

ECONOMYNEXT – Sri Lanka’s freedom of navigation initiative is to create a rules based mechanism where Indian Ocean littoral states and major users can discuss and resolve issues amid a changing world order, Prime Minister Ranil Wickremesinghe said.

"Sri Lanka’s initiative on the freedom of navigation in the Indian Ocean is primarily aimed at maintaining a rules-based order," Prime Minister Wickremesinge said in Ha Noi, Vietnam.

"Our aim is not to draft a new code but initiate a process."

Wickremesinghe was addressing the third Indian Ocean Conference, which is backed by India and has Sri Lanka, Singapore and Bangladesh.

"China’s economic expansion has led to a specific focus on the Indian Ocean," Wickremesinghe said.

"The Indian Ocean sea routes are vital to the economic interests of China.

"The USA has been in the Indian Ocean in Diego Garcia and has been a key stakeholder.

"A free and open Indian Ocean is vital to Japan and its economy. India is the territorial power, with a direct stake in the Indian Ocean."

The US and Japan is pushing for free and open navigation in the ‘Indo-Pacific’ region which runs from the US coast to India.

China is pushing a Belt and Road initiative.  Wickremesinghe says small states bordering the Indian Ocean do not want world powers to dominated them.

"Security and economic challenges arise from both the complementary and competing interests of these large stakeholders as they interact with each other in the Indian Ocean region," he said.

"Littoral states especially  the smaller states, oppose domination of the Indian Ocean by the Great Powers.

"Such states have an important role to play in managing great power competition."

Wickremesinghe said the building of military bases by great and middle powers was taking place in the Indo Pacific region.

Wickremesinghe said existing mechanism do not have the capacity to deal with current developments.

Analysts have also said there is a power vacuum with US President Donald Trump taking a nationalist line which is inward looking.

Meanwhile Wickremesinghe said Sri Lanka has in the past played a role in developing the United Nations Convention on the Law of the Sea (UNCLOS).
Sri Lanka planned to host a track 1.5 conference in Colombo and also a diplomatic conference in 2019 in a bid to speed up the initiative.

"Historical events have demonstrated that Sri Lanka’s location can impact the security not only of the Indian Ocean but also other areas such as South East Asia, the Middle East and even the Pacific," he said.

Sri Lanka has leased a port to China for joint management in Hambantota and has said it will only be used for commercial activities.

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Sri Lanka could get US$500mn from ADB in 2024

ECONOMYNEXT – Sri Lanka could receive 500 million US dollars in support from the Asian Development Bank in 2024 based on the progress of policy reforms, Country Director of the Manila-based lender, Takafumi Kadono said.

The ADB expect to go to its Board around March or April with a 100 million US dollar power sector loan subject to the cabinet of ministers of approving a revised electricity reform bill.

A 100 million dollar loan to support SMEs could also be approved in the early part of the year. Sri Lanka is setting up a credit guarantee agency to support credit for small firms.

A 200 million dollar credit for financial sector was also slated for the year. The ADB gave the first tranche of the financial sector policy loan late last year.

A $100mn for the water sector could also be approved later in the year.

Sri Lanka could get around 200 to 300 million US dollars a year at the lowest rate, or concessional ordinary capital resources (COL) rate of 2 percent.

The balance of would come at the ordinary capital resource rate linked to SOFR.

The ADB has also started work on a ‘Country Partnership Strategy’ for Sri Lanka covering the 2024-2028 period, Kadodo said. (Colombo/Feb25/2024)

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Sri Lanka’s multi-aligned foreign policy based on friendship: Min

ECONOMYNEXT – Sri Lanka’s multi-aligned foreign policy is based on friendship to all and enmity to none, its Minister of Foreign Affairs has said.

“Non-alignment means not becoming a bystander. Non-alignment means you are not forced or coerced into a camp to take sovereign decisions… you make your own choices. Whether it is commercial, security, regional or otherwise,” M U M Ali Sabry said on X (twitter).

“I have repeatedly stressed that sovereignty is the right to have your own opinion on what’s right and wrong, and to stand by your principles. Our multi-aligned foreign policy is based on friendship to all and enmity to none,” Sabry was quoting from his speech at the Lakshman Kadirgamar Institute of International Relations and Strategic Studies (LKI) Foreign Policy Forum, on the theme ‘Reassessing Non-Alignment in a Polarised World’.

Sri Lanka is one of the founding members of the Non-Aligned Movement.

The strategically located island has been increasingly walking a fine line between opposing global factions as it seeks to come out of a financial crisis. (Colombo/Feb24/2024)

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Sri Lanka’s Commercial Bank Dec net down on tax provisions

ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon reported profits of 6.9 billion rupees from the December 2023 quarter down 21 percent, despite an improvement in net interest income and lower provisions, amid a change in tax provisions.

Pre-tax profits were 8.89 billion rupees up from 2.4 billion rupees. There was a 6.4 billion tax reversal last year compared to a 1.7 billion rupee tax charge this year.

Commercial Bank reported earnings of 5.26 rupees for the quarter. For the year to December 2023 earnings were 16.07 rupees per share on total profits of 21.1 billion rupees, down 11.3 percent.

Net fee and commission income was down 1.2 percent to 6.1 billion rupees.

Net interest income went up 16.8 percent to 25.5 billion rupees, with interest income rising marginally by 1.3 percent to 73.0 billion rupees and interest expense falling 5.45 percent to 47.5 billion rupees.

Loans and advances to customers grew 4.06 percent to 1.17 billion rupees in the year to December. Debt and other financial instruments fell 10.5 percent to 649 billion rupees.

Financial assets measured and fair value through other comprehensive income was at 287 billion rupees, up from 117 billion rupees.

Impairment charges were 13.1 billion rupees, down from 19.6 billion rupees last year.

Gross assets were up 6.45 percent to 2.36 billion rupees. Net assets were up 5.51 percent to 214 billion rupees. (Colombo/Feb24/2024)

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