Since the government has recognised that women led SMEs face significant difficulties in accessing finance, a grant of USD 12.5 million will be mobilized from the Asian Development Bank's (ADB) Women Entrepreneurs Finance Initiative (We – Fi), the Ministry of Finance said today.
Accordingly, a total of USD 12.5 million will be available where USD 9.5 million will be provided to women entrepreneurs on grant basis through participating financial institutions.
The balance amount of the grant will be used for technical assistance and administrative costs.
Additional incentives will also be provided for women who complete business skills training as well as for women entrepreneurs in Uva, Sabaragamuwa, Northern and Eastern provinces.
Dr. R H S Samarathunga, Secretary to the Ministry of Finance and Media and Sri Widowati, ADB's Country Director for Sri Lanka signed the grant agreement at the Ministry of Finance and Media on Friday (06).
China will reduce or cut to zero tariffs on a total of 8,549 types of goods originating in Sri Lanka and four other Asian countries from 1 July.
The adjustment, covering products made in India, Bangladesh, Laos, South Korea and Sri Lanka, was part of the tariff concession arrangement reached under the Asia-Pacific Trade Agreement (APTA), it said.
The goods include chemicals, agricultural and medical products, clothing, steel and aluminum products. The items on the list from the five Asian countries will have a new tariff rate effective on Sunday.
"The change was decided upon as unilateralism and trade protectionism are on the rise and tensions appear in the trade relations among global economies," the state-run China Daily said, referring to the looming US-China trade war.
After the adjustment, tariffs on 2,323 categories of commodities such as certain chemicals, optical components and television cameras will be reduced, state-run Xinhua news agency reported, citing the ministry.
The move came after a new arrangement was reached during the fourth round of tariff concession negotiations among the six APTA members in January 2017.
The trade agreement, formerly known as the Bangkok Agreement, signed in 1975 and renamed in 2005, has been the oldest preferential trade agreement among economies in the Asia-Pacific region. Formed by six member countries, the trade agreement covers a population of three billion.
Sri Lanka's tourist arrivals rose 19.0 percent in June this year compared to the same period last year, the data released by the Sri Lanka Tourism Development Authority (SLTDA) showed.
The month recorded 146,828 tourists arriving in the country compared to the 123,351 arrived in June 2017.
As at 30th June, 1,164,647 tourists had visited Sri Lanka for this year. It is a 15.3 percent growth over last year when 1,010,444 tourists had visited the country during the same period.
Over 2.1 million tourists arrived in Sri Lanka in 2017 contributing US$ 3.9 billion of earnings to the government revenues.
The Manufacturing Sector's Purchasing Manger Index (PMI) recovered in May following the seasonal contraction observed in the previous month and recorded an index value of 60.6 in May with an increase of 15.1 index points from April.
The recovery of PMI was largely attributable to the significant increase in production to cater both the new orders received during the month and the uncompleted orders received in April due to the new year holidays, especially in the manufacturing of textiles, wearing apparel, leather and other related products.
Overall, all the sub-indices of PMI recorded values above the neutral 50.0 threshold in May 2018 signaling an overall expansion in manufacturing activities during the month.
Moreover, the expectation for activities indicates an improvement for the next three months. The Services Sector PMI recorded 56.9 index points in May 2018 from 53.2 index points in April 2018.
The service sector experienced a strong upturn in May following subdued activity levels seen in April and was mainly supported by the faster growth in new businesses, business activity and employment.
The rise in new businesses and business activities was mainly observed in financial services, telecommunication and warehousing sectors.
Respondents cited expansion of service delivery channels and technology based improvements as contributory factors to this growth.
The General Treasury in a statement has responded to former Central Bank Governor Ajith Nivard Cabraal's recently published article under the heading, "The Government’s Growth Scam" by pointing out that the former Governor had tried to present a different and distorted viewpoint on the Central Government’s financial statement.
In this article, Mr. Cabraal claims that there is some discrepancy in published statistics on Gross Domestic Product (GDP) and Government’s Debt to GDP ratio. While leaving for the relevant institution to clarify on the matters relating to compilation of GDP statistics, the General Treasury would like to place the following on record on the outstanding Debt to GDP ratio of the Government.
The writer in his article had mentioned three debt to GDP ratios to be applicable as at end of 2017, while arriving subjectively at his own GDP value as Rs 12,967 billion whereas the official figure is Rs 13,289 billion.
As shown in the Table above, the officially published ratio of Debt to GDP in 2017 is 77.6 percent. Ajith Nivard Cabraal for reasons best known to him has endeavoured to manipulate this official figure of the debt to GDP ratio as 82.5 percent.
As per the decisions taken by the then Cabinet of Ministers during the period from 2010 to 2013, the loan obtained by certain State Own Enterprises (SoEs) were not included in the government’s Financial Statements. Accordingly, the previous government had transferred the loan balances of Hambantota Port Project, Mattala Airport, Ceylon Electricity Board and the Airport and Aviation Services Authority from the central government’s financial statement on the assumption that these debts could be repaid by the respective SoEs. It is pity that Mr Cabraal as the then Governor of the Central Bank who was privy to this decision is now trying to manipulate the debt to GDP ratio by citing the public policy of non-inclusion of debt, held by SoEs in the government’s balance sheet. This was a decision taken by the then government in which he was a prominent stakeholder in handling the government’s debt management.
The General Treasury has nothing to hide about the debt to GDP ratio or the highest debt liabilities to be meted out in 2018 and 2019. The government is on record to make the highest debt servicing of Rs 4.2 trillion in 2019 of which a substantial portion is to meet the maturity of loans obtained prior to 2015
Changing of GDP estimates by the author concerned based on his own assumptions, and then reporting a different Debt/GDP ratio is of no significance to the General Treasury. Because, the General Treasury relies on the independent GDP compiling authority, namely, Department of Census and Statistics, when it comes to computing ratios of government statistics vis-a-vis GDP. Hence, the so called Debt/GDP ratio of 82.5 percent as reported in the newspaper article is a hypothetical figure for which the General Treasury would not need to comment on.
However, the General Treasury would like to explain the difference between officially published government debt of Rs. 10,313 bn at end 2017 and Auditor General’s calculations of Rs. 10,702 bn, which led to the increase of Debt/GDP ratio from 77.6 percent to 81.0 percent as at end 2017. It is important to note at the outset that such difference is entirely due to classification differences of certain debt obligations as reported in Government’s accounts and Auditor General’s report. Such classification differences are explained below.
A majority of such classification difference is due to the transfer of debt liability relating to eight loan agreements from the Central Government to the respective State-Owned-Enterprises (SOEs) by Cabinet decisions taken during 2010 and 2013. According to Auditor General’s report on Government Accounts for 2017, “The debt balance of Rs.330,221 million remained as at 31 December 2017 relating to 08 loan agreements entered into by the Government under the contractual agreements had not been included in these financial statement.
The remaining difference between officially published outstanding debt balance of Rs. 10,313 bn and Auditor General’s calculations of Rs. 10,702 bn as at end 2017 is mainly due to exclusion of Treasury bonds issued to two State-Owned-Enterprises, namely, Ceylon Petroleum Corporation (CPC) and Sri Lankan Airlines for settling dues. As reported in the Annual Report of Central Bank of Sri Lanka for 2017 (Statistical Appendix, Table 118), the outstanding debt balance of Rs. 10,313 bn excludes treasury bonds issued to CPC in January 2012 to settle dues; and to Sri Lankan Airlines in March 2013 for capitalization purposes, which in total amounts to an outstanding balance of Rs. 69.8 bn as at end 2017. Any remaining marginal difference if exists, can be attributable to the net credit to government from banking sector operations.
Thus, the classification differences in government debt statistics as highlighted date back to debt management measures implemented during 2010 through 2013. This has caused confusion among the general public, hence, corrective measures would be taken in due course. Nonetheless, any attempt to discredit the official statistics on government debt at present deems to call into question the debt management measures taken then, while serving no any other purpose in the interest of the economy.
Current government is determined to consolidate the outstanding government debt over the medium-term supported by a credible fiscal consolidation framework. The envisaged path for primary surplus and current account surplus in fiscal operations would ensure a steady fall in Debt/GDP ratio in the coming years. Having recognized the Government’s fiscal consolidation plan, the international organizations such as International Monetary Fund (IMF) and World Bank project a lower Debt/GDP ratio for Sri Lanka over the medium-term. For instance, IMF Staff Report on Sri Lanka published in June 2018 projects Sri Lanka’s Debt/GDP ratio at 66.7 percent by 2023 (Source:https://www.imf.org/en/Publications/CR/Issues/2018/06/19/Sri-Lanka-2018-Article-IV-Consultation-and-the-Fourth-Review-Under-the-Extended-Arrangement-45997). Such projections would necessarily inform the international rating agencies in their review of Sri Lanka’s debt sustainability and overall economic stability over the medium-term.
The Ministry of Ports and Shipping in a statement today said that the final tranche of investment value for the Hambantota Port concession was released by China Merchant Port Holdings Limited (CM Port).
This third final tranche in the amount of USD 584,194,800 follows the 1st and 2nd tranches released in December last year and January 2018, amounting to USD 292 million and USD 97 million respectively. With this payment, CM Port fulfills the USD 976 million investment value 1 of the port concession and in terms of the Concession Agreement, CM Port has agreed to deposit a further sum of USD 146 million being investment value 2 to be utilized for port and marine related activities.
This incidentally makes the single highest ever Foreign Direct Investment (FDI) received by Sri Lanka to date, the Ministry added.
The two companies established in Hambantota plans further to invest an additional USD 400 million to USD 600 million on phase I and II of the Hambantota Port. These investments will attract many other foreign investors to the country, making Sri Lanka a pivotal maritime and Logistics Centre
“CM Port is one of the most successful global companies in the ports sector, and their investment in the Port of Hambantota can be described as a credible vote of confidence in its potential as well as in the economy of Sri Lanka,” said Parakrama Dissanayake – Chairman SLPA.
“Thurunu diriya” a special loan scheme has been launched by the Bank of Ceylon (BOC) as a result of discussions held by the Policy Development Office (PDO) of the Prime Minister’s Office, Small Enterprises Development Division (SEDD) and the Central Programme Management Unit (CPMU) of the Ministry of National Policies & Economic Affairs with BOC.
E.D.A.T. Gunadasa of Ankumbura BOC branch became the first entrepreneur ever to receive the “Thurunu diriya” loan and 9 other young entrepreneurs have already received this loan scheme followed by him. Granting of the rest of the loans for the selected beneficiaries are now in process.
The scheme aims at providing special loan scheme for professionally qualified young entrepreneurs under the age of 35 years who already have businesses. This will assist them to expand and stabilize their businesses, which will contribute to the economic development of the country.
Awareness programmes have been conducted by the Small-Scale Development Divisions which are under the District Secretariats to identify the potential young entrepreneurs. 904 beneficiaries who are eligible for the above loan scheme have already been selected from the large number of loan applications received by the BOC.
During the loan application period, these beneficiaries can seek assistance from field officers who are attached to the Divisional secretariats to prepare business plans and other required documentation. 366 business plans have already been handed over to the Divisional secretariats while 102 out of them have been handed over to the BOC.
Further details of this loan scheme can be obtained from the nearest Bank of Ceylon branch or the Divisional secretariat office.
The losses incurred by government institutions last year is over LKR 50 billion, Speaker of the House Karu Jayasuriya said yesterday. He pointed out that these funds could have been used for the welfare of the public or economic development, if proper public finance management was carried out by these institutes.
Speaker Jayasuriya also said that these losses should draw more public attention.
“Instead we see reports of 118 MPs who are alleged to have been involved in the Treasury Bond issue, of which neither me nor the Presidential Secretary is aware of,” he said.
The Speaker was addressing an awareness programme for Parliamentary journalists organised by the Westminster Foundation for Democracy, at the Waters Edge in Baththaramulla yesterday (18) morning. He also observed that a survey in 2014 revealed that 40% of all government department expenses is wasted.
The Speaker pointed out that the Committee on Public Accounts and Committee of Public Enterprises are now able to summon the media at any time to update the public on investigations that they are conducting. Speaking on the strict supervision maintained by the present government over public fund management, Jayasuriya said that public funds cannot be used according to whims and fancies (of officers) like in the previous times.
“Now nobody can spend public money as they wish for whatever they want. We are striving hard for transparency in utilising public funds. The government institutions have to undergo an internal audit every three months now, unlike in the previous times. The government departments must submit information required by COPA on time, otherwise the responsible authorities will be regarded as not qualified to handle these subjects," the Speaker added.
Although much has been said about the recent depreciation of the currency, the Sri Lankan Rupee has depreciated by 3.3%, much less than other Asian countries, Finance and Media Minister Mangala Samaraweera said.
“Whilst the Sri Lankan Rupee has depreciated 3.3% this year, the Indian Rupee has depreciated by 8%, the Pakistani Rupee by 10.5%, Indonesian Rupiah by 5.2%, and Thai Bhat by 5.4%”, the Minister added.
The Minister made these remarks at the AGM of the Ceylon Chamber of Commerce held yesterday (28).
Samaraweera further said that the government is of the view that the currency should be determined by market forces.
“The recent depreciation of the Rupee is due to external factors, particularly the rise in policy interest rates in the United States. This has affected all emerging and frontier market economies all over the world”, he said.
Amidst a turbulent global economic environment with disruptions in global interest rates, oil markets, geopolitical security concerns in the Middle East, and political turnover in Europe, Sri Lanka’s economy has been navigated into calm waters.
“The focus of the Ministry of Finance, the Central Bank, and other economic bodies in government has been on macroeconomic stabilization over the past 3 years. Inflation has declined to 2.1% in May 2018, a manifestation of concerted efforts to bring down the cost of living. Interest rates have moderated as the prime lending rate has declined by over a 100 basis points in the last 12 months. Today’s Prime Lending Rate (PLR) has dipped below 11%. Sri Lanka’s official reserves have reached comfortable levels of US$ 9.9 billion by end April”, the Minister said.
While Sri Lanka’s footprint in global boats and shipping sector is small, exports in the sector continue to surge in strong numbers, and as a result Sri Lanka is ambitiously targeting US$ 200 million boats and shipping exports by 2022, Minister of Industry and Commerce Rishad Bathiudeen says.
“Global ship and boat building industry has slowed down with less and less demand Due to global economic pressures. Despite this it is interesting to note that Sri Lankan boat builders and exporters have shown resilience and even increased export revenues,” Minister Bathiudeen said addressing the launch of Boat Show Sri Lanka 2018 at Cinnamon Grand Hotel.
The pioneering web portal for Lankan boating industry at www.srilankaboating.com was also jointly unveiled on this occasion by Ministers Malik Samarawickrama, John Amaratunga and Rishad Bathiudeen with Chairperson of Exports Development Board (EDB) Indira Malwatte, and Chairman of Boat Building Technology Improvement Institute Neil Fernando.
“This Show will be the first ever marine festival in Sri Lanka organized to showcase the country’s capabilities in marine tourism recreational boating and yachting boat building and related services for export and local markets,” said Minister Bathiudeen. He added that the event is expected to provide ample opportunities to network, shop, connect and get in to know among the best of the Marine Industry of the region.
The National Export Strategy (NES) of the Export Development Board with technical assistance of the International Trade Center Geneva has included the boat and ship building sector as one of the priority sectors to be actively promoted in the export strategy. As a result the Budget 2018 allocated Rs. 100 million for the initial activities of promoting investment in the infrastructure development required for the boating industry.
“Global ship and boat building industry has slowed down with less and less demand Due to global economic pressures. Despite this it is interesting to note that Sri Lankan boat builders and exporters have shown resilience and even increased export revenues. Therefore I am pleased that this event is announced in a background of new reports we receive about increasing export revenues from our Boats & Ships sector,” the Minister said.
He added that last year Sri Lanka’s Boats & Ship Exports increased by 50% to $97 million in comparison to 2016’s $65 million. Many Lankan companies are involved in making boats and ships while 11 identified companies are in exports.
The Minister thanked all the workers and companies involved in the sector for their commitment to develop Sri Lanka’s manufacturing and exports”.
Chairman of Cey-NOr Foundation B.K. Jagath Perera revealed that the government is aiming $100 million boat and ship exports in 2018. He surprised everyone when he said “The 2017 total exports of $97 million does not include our re-exports of ships and boats, which is $ 157 million by such firms as China Harbour Corp.”
Sri Lanka, under its new National Export Strategy targets $200 million exports in this sector by 2022. Global boats and ship building industry, despite its slowdown, is valued $169-$170 Billion annually.
The Governor of the Central Bank, Dr. Indrajith Coomaraswamy has refuted the recent statements made by former Finance Minister Ravi Karunanayake and asked him to submit evidence to support his allegations against Central Bank Senior Deputy Governor Dr. Nandalal Weerasinghe.
Issuing a statement, the Governor said that the former Finance Minister has continuously repeated his allegations against Dr. Nandalal Weerasinghe, the Senior Deputy Governor of the Central Bank of Sri Lanka (CBSL) in recent days.
"As the Governor of the CBSL, I want to formally place on record that Dr. Weerasinghe is an outstanding economist who has made a stellar contribution to the work of the Bank during the two years I have spent in this position."
"In addition, I am compelled to point out that the former Finance Minister Hon Ravi Karunanayake has not produced any evidence to back up his unfounded allegations", he added.
The country's foremost economic event - "Sri Lanka Economic Summit 2018", organized by the Ceylon Chamber of Commerce, Sri Lanka's premier business chamber, is to take place on 12th - 14th September at Cinnamon Grand Colombo. The theme for this year's Economic Summit is "On the Fast Track to a Turnaround".
Sri Lanka's economy is once again at a crucial juncture in need of a swift and well-strategized turnaround to bring about economic stability and development. This is in the backdrop of weak local economic growth, rising global commodity prices and uncertainty in global trade.
The summit, spanning over the course of 3 days, will be a wholesome opportunity to learn about government plans to develop the Sri Lankan economy (as well as the progress in implementation of plans), to improve business through knowledge enhancement pertaining to relevant sectors, to identify potential sectors and projects for investment in Sri Lanka, to clarify concerns with key government officials/industry leaders, and also to meet and network.
Last year's Economic Summit saw the participation of many Chairpersons, CEOs, Directors, Senior Managers, foreign investors, senior government officials, and academics. Furthermore, over 40 resource persons, consisting of high profile cabinet ministers, policymakers, business leaders and academics shared insights and made recommendations on how Sri Lanka can transform its economy to realize its potential. The outcomes of the discussions held at last year's summit have led to policy strategies such as the Innovation and Entrepreneurship strategy and Digital Economy Strategy. Furthermore, at last year's summit, the discussions around trade policy and in particular the Singapore FTA has moved forward with the signing of the SLSFTA earlier this year with a policy focus on accessing the ASEAN region.
At this year's summit, the emphasis will be on shaping a turnaround for the Sri Lankan economy whilst delving deep into areas such as trade, investment and services that will help drive this. The focus will also be on learning from successful companies and steering the bureaucracy to work more effectively, thus meeting the emerging challenges.
The Ceylon Chamber is pleased to partner with Standard Chartered Bank who is on board as the platinum sponsor for the event, CHEC Port City (Pvt) Ltd. as gold, Sunshine Holdings as silver, Tata Holdings as the strategic sponsor, and Dialog Axiata PLC as the official telecommunication partner. Echowave, Cinnamon Grand Colombo, and Omnicom Media Group are also on board as partners of the summit.
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