Business
EU calls for ‘time horizon’ on Sri Lanka import ban
by Sanath Nanayakkare
Sri Lanka should give a ‘horizon’ to its businesses and potential investors as to until when the import ban will be in place, Denis Chaibi, ambassador/ Delegation of the European Union to Sri Lanka and Maldives said at the official launch of the Sri Lanka Trade Information Portal (SLTIP), held at Shangri La Colombo recently.
The 4-year EU funded project worth EUR 8 million supports local SMEs’ export competitiveness in regional and EU markets as well as value addition in sectors with high potential for economic growth and development.
Excerpts from ambassador Chaibi’s speech:
“This project is a good indication of our overall relationship which is characterised by engagement, respect and results. This project sends three powerful messages. The first one is about the importance of the EU market to Sri Lanka and vice versa. The EU is the second export market for Sri Lanka just after the US”.
“If you take the EU’s trade figures with Sri Lanka in 2019 and if you add services and the EU tourists who came to the island – hopefully who will return soon – you can see the importance of the EU”.
“Further the return of GSP in 2017 was a significant development that led to more than a quarter’s increase of exports from Sri Lanka to the EU. It’s not only the biggest market in terms of quantity. But it’s also an important market in terms of quality”.
“I have been in Sri Lanka a bit more than a year and the thing that strikes me every day is the quality of Sri Lankan products. If you compare the cinnamon, it’s the best in the world. Sri Lankan coconut is the best in the world. Jack fruit is the best in the world. Tea is the best in the world. Who appreciates the best in the world products more than Europeans? Who has the refinement that Sri Lanka has which is only found in civilizations. The Europeans are ready to pay a premium for all these products. Perhaps the South Americans will pay a bit more for Sri Lankan cinnamon, but at the end of the day those who buy the most refined Sri Lankan products are mostly Europeans. We are not only a quantitative market but a qualitative market with a huge potential for the future. The best way for Sri Lanka is to increase its product-quality, and quality is where Europe will be there as a very happy customer.”
“But we are a very demanding market. We have a lot of barriers and those have to do with qualitative standards. In the future, I can imagine that Sri Lankans will want to sell directly to Europeans through online websites. When Sri Lanka exports to Europe, it is ready to export to anywhere else in the world because the European standards are high. We are a demanding market but we are happy to be a good market for Sri Lanka because Sri Lankan products are the best.”
“My second message is that markets and trade is not a one-way street. We have full consideration for the public finances situation in Sri Lanka We fully understand the measures that have been introduced to safeguard public finances and especially the foreign exchange reserves of Sri Lanka.”
“But we need three things. We need recognition notification in the horizon. We need recognition that there is an import ban. And sometimes we are told that there is no import ban but just impediment for the banks to pay in foreign currencies, but these payments are linked to products, so we have to recognize that they are trade restrictions. And then on that recognition, we can quantify that to the WTO and work together in the international organisation that is precisely set up to deal with this kind of issues.”
“I think Sri Lanka would benefit tremendously from giving a horizon to its businesses and potential investors as to until when the measures will be in place so that people can prepare and also can invest in Sri Lanka.”
“That is important if we want to attract foreign direct investments to Sri Lanka. We need to have certainty and we need to be able to export [raw materials].Who would invest in Sri Lanka not knowing if he or she will be able to export because they know that the trade restrictions may attract some reaction. So, in order to attract foreign direct investments, we have to give a horizon on the trade restrictions. We say this in full respect of whatever the Sri Lankan government decides.”
“My third point is; if you look at this project of EU-Sri Lanka Trade Related Assistance, it is in full respect of the government’s priorities. We don’t have an agenda. We are not a military super power. We are a standards super power, and a lifestyle superpower. We live very well in Europe and we live very well for many reasons. But when it comes to aid and support what we do is follow the priorities of the government. Before we take policy decisions and priorities we always look at the manifesto. I was at the Sri Lanka National Day events and its manifesto specifically dealt with agriculture. Agriculture is the sector that we have favoured in our last budget cycle. So from 2014 to 2020, we have invested more than half of the EU aid in the development of rural Sri Lanka. We have spent almost EUR 100 million in that sector. This shows that we are following priorities of the government and that’s why we are supporting this project so that we in Europe can enjoy more of the best Sri Lankan products and Sri Lankan exporters can create more added value by collaborating with Europeans.”
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SLT-Mobitel, the nation’s ICT and Telecommunications Service Provider recently partnered with Spotify, to mark their launch in Sri Lanka. Spotify is a paid premium music streaming app which allows subscribers to listen to music to their hearts content. Both, SLT-Mobitel Post-Paid and Pre-Paid customers will now be able to enjoy Spotify by activating a monthly recurring subscription or one-time subscription plan and access unlimited music streaming and downloading facilities.
The subscription charges will get added to the user’s customary billing, where payment will be deducted in real time. Starting from the payment date, the user will be able to access Spotify and download their favourite songs, for the next 30 days. Users who sign up for their first monthly subscription will receive an additional one month, courtesy of Spotify. The one-month subscription plan is not applicable with one-time subscription plans. SLT-Mobitel data rates, depending on the user’s respective broadband charges, will apply.
Spotify also has some exciting features that will provide SLT-Mobitel customers with the opportunity to listen to ad-free music, access millions of uninterrupted music under one platform, play any song they like, anywhere they go, and also be able to enjoy their music offline.
SLT-Mobitel customers can select their preferred premium package under four categories; Individual, Duo, Family, Student. Each category has recurring and non-recurring plans. After one month of free streaming, the package will activate once the offer period terminates. While both, the Individual and Student premiums are limited to one account user, the Duo package offers two accounts and the Family premium is accessible through six accounts. To view Spotify plans, users can log on to https://spoti.fi/3aLWvce
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by Sanath Nanayakkare
Anyone conversant with the elements of a political economy would know that Sri Lanka is using its ‘sovereign power’ to manage the different dynamics of the economy in a sustainable manner, Professor W. D Lakshman Governor of the Central Bank said on Wednesday.
“Some critics are saying that we adopt a so-called modern monetary theory. That’s not the case. In fact, Sri Lanka is using its sovereign power in a number of economic aspects to honour its external debt repayment commitments as well as to reduce its debt burden in the medium term as well as achieve resilient growth in the medium to long term, he said.
“We make policy decisions to boost our gross foreign reserves, meet our external debt servicing, to facilitate monetary expansion, to boost our GDP growth, to strengthen our current account balance and manage our domestic and external economic variables in a sustainable manner. This is not a modern monetary theory. This is an age-old tool used by central banks around the world when the circumstances demand it, he said.
“Certain trade-offs will be necessary when dealing with an economy which has a big fiscal gap to bridge. There are efforts to push Sri Lanka towards the IMF again which would in turn have influence on our policymaking. We have taken policy measures to stabilize the economy and we have adequate reserve levels to meet our debt repayments. Meanwhile, we are in negotiations with overseas central banks and multilateral agencies to further boost our reserve level and it would materialise within a matter of weeks,” he noted.
“One of the tools the Central Bank has introduced is in respect of repatriation of export proceeds into Sri Lanka and conversion of such proceeds into Sri Lankan rupees in order to strengthen the foreign exchange situation of the country,” he said.
The Governor made these remarks while delivering the keynote speech at a webinar organised by the Veemansa Initiative led by its Managing Director Luxman Siriwardene – the former Executive Director of Pathfinder Foundation.
The webinar revolved round the topic ‘External debt situation in Sri Lanka: Are we heading for a resolution or crisis?’
Professor Sirimal Abeyratne, Prof. Sumanasiri Liyanage, Dr. Nishan de Mel and Dr. Ravi Liyanage were the other speakers on the panel.
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By Hiran H.Senewiratne
CSE produced signs of a rebound yesterday with both indices closing positive, though turnover remained low. Central Bank Governor W.D Lakshman’s recent statement on managing foreign reserves gave some boost to the market yesterday, stock market analysts said.
The index experienced a zigzag movement within the early hours of trading; thereafter, it recorded a slight up-trend as it reached its intraday high of 7,439. Later, the market witnessed a down-trend at mid-day, followed by a sideways movement and closed at 7,372, gaining 43 points during the month of February, market sources said.
It is said the banking sector dominated turnover with a contribution of considerable parcel trades in Sampath Bank, Commercial Bank and HNB.
Further, the Commercial Bank’s impressive quarterly results during the recent turbulent period also built investor confidence. Commercial Bank was able to register a18 percent net interest income when other banks were reporting a decline. Its share price increased by Rs. 3 or 3.5 percent. On the previous day, its shares started trading at Rs. 85 and at the end of the day they moved up to Rs. 88. Due to the positive growth results, the bank announced a Rs. 4.40 dividend per share, plus a Rs. 2 script divergent for every share.
Further, Sampath Bank shares also appreciated in both crossing and retail. In crossings its shares appreciated by Rs. 1.At the end of the day they moved up to Rs. 154.50. In the retail market, its shares moved up by Rs. 2 or 1.3 percent. Previously, its shares fetched Rs. 154 and at the end of yesterday they moved up to Rs. 156.
Amid those developments, both indices moved upwards. The All Share Price Index went up by 104.48 points and S and P SL20 rose by 67.78 points. Turnover stood at Rs. 3 billion with four crossings. Those crossings were reported in Sampath Bank, where 3.9 million shares crossed for Rs. 602.2 million, its share price being Rs. 154.50, HNB 375,000 shares crossed for Rs. 39.4 million, its shares traded at Rs. 105, Pan Asia Power 9.5 million shares crossed for Rs. 33.2 million, its shares traded at Rs. 3.50 and Access Engineering 1.2 million shares crossed for Rs. 28.2 million; its shares traded at Rs. 24.
In the retail market top five companies that mainly contributed to the turnover were, Expolanka Rs. 450 million (10 million shares traded), JKH Rs. 205 million (1.3 million shares traded), Browns Investments Rs. 199 million (34.9 million shares traded), Sampath Bank Rs. 191 million (1.2 million shares traded) and Dipped Products Rs. 137.7 million (2.8 million shares traded). During the day 101 million share volumes changed hands in 18046 transactions.
During the day, Expolanka, the biggest contributor to the turnover, saw its share price appreciating by Rs. 6.20 or 15 percent. Its share price quoted on the previous day was Rs. 41 and at the end of trading yesterday it moved up to Rs. 47.
Sri Lanka’s rupee quoted wider at 193.50/195.50 levels to the US dollar in the spot next market on Thursday while bond yields remained unchanged, dealers said. The rupee last closed in the spot market at 194.50/195.00 to the dollar on Wednesday.
