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Sunday June 16th, 2024

Sudden rise in COVID-19 cases in Sri Lanka; children, pregnant among infected

ECONOMYNEXT – More children and pregnant women in Sri Lanka have tested positive for COVID-19 in recent days, health officials said on Thursday (20), noting a sudden spike in cases overall and urging the public to minimise travel and avoid gatherings.

Senior consultant in obstetrics and gynaecology at the Castle Street maternity hospital Dr Sanath Lanerolle said COVID-19 cases among pregnant women have increased.

Lanerolle attributed the spike in cases to increased travelling and public gatherings in December.

“Follow guidelines as usual. There will be long weekends. Stop going to public places and reduce travelling,” he told reporters on Thursday .

Meanwhile, Director of Lady Ridgway Children’s Hospital Dr G Wijesuriya said the number of children with the virus has also increased in the past week.

“Earlier there only few children getting treatment at the hospital but it has now increased to around 35,” Wijesuriya told reporters.

Meanwhile Deputy Director General of Health Services Dr Hemantha Herath said health officials are now investigating a possible increase in cases among children islandwide.

“We know interaction among children increases with the schools being open. With that there is a possibility of cases increasing.

“Keeping the schools open is very important for the children. We must work to keep the schools open and control the situation. The Ministry of Health as well as the Ministry of Education have taken the necessary steps to contain it,” he said.

Sri Lanka detected 829 new infections on Wednesday (19), a notable increase in daily cases.

Herath said, as expected with increased travels and gatherings in December, and the previous long weekend, a spike in cases can be seen.

However, he said, the rate of infection is slower than expected as a majority of the country have followed health guidelines when travelling.

“But we must be careful because a minority who do not follow guidelines can make the situation worse.”

So far, 15,000 beds have been dedicated to treat COVID-19 patients, of which around 30 percent are currently in use, officials said.

With the 829 new patients, total cases in Sri Lanka has reached 598,536 with 14,656 currently receiving treatment in hospitals or at home.

With 13 deaths confirmed on Wednesday, the COVID-19 death toll has increased to 15,243.

Out of 70 ICU beds, 52 beds are in use and the number of patients who need oxygen has increased by five percent as well.

“One thing we have to understand is Omicron is highly transmittable, more than other variants” Ministry of Health, Medical Technical Services Director, Anwar Hamdani told reporters earlier this week.

“We are informing the general public from the ground level to national level about how to protect themselves. The health sector is ready, but you must decide whether you suffer by getting infected, or protect yourself by following health guidelines and being vaccinated.”

There are also discussions under way about reforming the rules and regulations regarding vaccination, he added. (Colombo/Jan20/2022)


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Sri Lanka state airport agency swimming in cash after sovereign default

ECONOMYNEXT – State-run Airport and Aviation Services (Sri Lanka) Ltd is swimming in cash after a sovereign default halted debt repayments allowing it to post a profit of 29.7 billion rupees with 10.4 billion rupees in interest income, official data showed.

In April 2022 Sri Lanka declared a sovereign default after printing large volumes of money over more than two years to enforce rate cuts and blowing the biggest hole in the balance of payments in the history of the island’s money printing central bank.

Interest earnings of Airport and Aviation Services also shot up to 10.4 billion rupees in 2023 from 6.1 billion in 2022 and 3.3 billion rupees in 2021 before the sovereign default.

Under the terms of the default or ‘debt suspension’, state agencies like the Airport and Aviation Services, and Sri Lanka Port Authority were also not required to service loans, even if they had the cash to repay loans.

AASL’s finance income shot up in 2023 “mainly because the company has invested surplus cash saved by not servicing the foreign loans obtained by the company due to the temporary debt moratorium policy of the country,” the Finance Ministry said in a report.

Sri Lanka’s rupee and foreign currency interest rates also shot up in 2022 and 2023 as rate cuts enforced by money printing were lifted to clear anchor conflicts.

After inflationary rate cuts kill confidence in a currency triggering capital flight and parallel exchange rates, excessively high rates are needed to kill domestic credit and stabilize the currency.

Countries with such flawed operating frameworks in central banks tend to have chronic high nominal interest rates in any case.

AASL’s rupee revenues went up to 48.8 billion rupees in 2023 from 32.2 billion rupees in 2022 as passenger movements increased to 7.5 million from 5.5 million with a recovery in tourism and local traffic.

Sri Lanka’s currency crisis hit in 2022 just as the island was recovering from Coronavirus pandemic triggering fuel shortages and power cuts as money printing triggered forex shortages.

From 2022 March the rupee collapsed from 200 to 370 levels an attempt to float the rupee was failed by a surrender rule (a type of buy-side pegging which pushes the exchange rate down).

In 2023, after hiking rates to kill credit, the surrender rule was removed, leading to a currency appreciation.

The airport agency also made an exchange gain of 6.1 billion rupees in 2023 against an exchange loss of 10.5 billion rupees in 2022 the rupee appreciated. (Colombo/June16/2024)

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Sri Lanka car import relaxing roadmap given to IMF: State Minister

ECONOMYNEXT – Sri Lanka has submitted a roadmap on relaxing vehicle imports to the International Monetary Fund, State Minister of Finance Ranjith Siymabalapitiya said as the country recovers from the worst currency crises in the history of its central bank.

The import relaxation will allow vehicles for public transport, goods transport, then motor cycles and cars use by private individuals and after that, luxury cars, Minister Siyambalapitiya said.

Luxury cars however attract the highest taxes for each dollar spent on imports.

Economic analysts have characterized vehicle import controls as a ‘cascading policy error’ that follows inflationary rate cuts, which then deprive taxes to the state and triggers more money printing and more forex shortages, requiring even higher corrective interest rates and a contraction of economic activities to save the rupee.

According to the latest IMF report car import controls may have led to revenue losses of 0.7 to 0.9 percent of GDP.

Sri Lanka started controlling imports few years after a central bank was set up in 1950 and also tightened exchange controls progressively, so that macroeconomists using post-1920 spurious monetary doctrines taught at Anglophone universities could print money through various mechanisms to suppress rates.

Sri Lanka is working with the IMF as a guide on many issues and the roadmap was submitted to the agency on June 14, Minister Siyambalapitiya said.

The IMF in an economic report released last week the plan was expected to be submitted by June 15.

Whatever the IMF’s faults, which some wags have called ‘progressive Saltwaterism’, the agency does not advocate import controls as solution to balance of payments problems, despite a Mercantilist fixation with the current account deficit in countries with reserve collecting central banks, analysts say.

Import controls have the same effect as import substation on the balance of payments, which is none, classical economists have pointed out and is now mainly a problem associated with macro economists and economic bureaucrats of so-called basket case countries.

Any pressure on the currency or missed reserves targets in the IMF program has come in the past only if the central bank printed money to suppress rates as credit growth picked up from car imports.

Sri Lanka had 3,000 items under import controls when rates were suppressed with printed money from 2020 to 2022 but eventually ended up with the worst currency crisis triggered by macro economists in the history of the country and eventual external default.

A committee made up of the Department of Trade and Fiscal Policy of the Finance Ministry, the Department of Registration of Motor Vehicles, the Central Bank and two associations representing vehicle imports were appointed to come up with the roadmap, he said. (Colombo/June15/2024)

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Chitrasiri Committee presents draft constitution for Sri Lanka Cricket

ECONOMYNEXT – A draft constitution for Sri Lanka Cricket, the governing body for cricket in the island, prepared by a committee headed by retired Supreme Court judge K T Chitrasiri, was presented to President Ranil Wickremesinghe today (15).

The Sri Lanka team were ignominiously knocked out of the Men’s T20 World Cup tournament this week, sparking renewed criticism of the team and the governing body.

Last November, a cabinet sub-committee was appointed to address challenges faced by Sri Lanka Cricket and provide recommendations after consecutive losses became a hot topic in parliament.

After parliament decided to remove the administrators of the sport, the International Cricket Council (ICC) Board suspended Sri Lanka Cricket’s membership.

Based on the sub-committee’s recommendations in its report, the Cabinet then appointed an expert committee to draft a new constitution for Sri Lanka Cricket.

The committee headed by judge K T Chitrasiri includes President’s Counsel Harsha Amarasekara, Attorney-at-Law Dr Aritha Wickramanayake and Chairman of the Sri Lanka Chamber of Commerce Duminda Hulangamuwa.

Deputy Solicitor General Manohara Jayasinghe, and Shamila Krishanthi, Assistant Draftsman representing the Legal Draftsman’s Department, and Loshini Peiris, Additional Secretary to the President were also on the committee. (Colombo/Jun14/2024)

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