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China welcomes resumption of SL free trade talks

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China has welcomed the resumption of free trade agreement talks by Sri Lanka as the country attempts to boost exports, after years of closed market policies under the Rajapaksa regime that allowed businessmen to exploit domestic consumers.

“I am glad to see after five years suspension Sri Lanka government decided to resume bilateral FTA negotiations in the second half of this year,” Li Guangjun, Economic and Commercial Counsellor, Embassy of Peoples’ Republic of China in Colombo said.

“I sincerely wish that both sides could work together and reach an agreement as early as possible for expanding our trade and investment co-operation.”

He was speaking at the 21st Annual General Meeting of Sri Lanka – China Business Council of the Ceylon Chamber of Commerce.

“Over the past decade bilateral relations have been cordial and friendly which had made the possibility of great progress in achieving economic and trade co-operation between our two countries,” Li said.

In 2021 China was Sri Lanka’s second largest trading partner and the largest source of foreign direct investment, he said.

“In spite of the pandemic and sluggish global growth business ties have continued to grow,” Li said.

Sri Lanka started to rob consumer sovereignty extensively from around 2005, with key economic policy makers and of then President Mahinda Rajapaksa supporting 1970s style import substitution, calling it ‘import replacement.’

High import duties allowed key businessmen close to the administration making building materials, shoes and confectionery businesses in particular to exploit consumers selling goods at twice or three times the world prices, critics say.

In addition to high informal port duties, other so-called para tariffs, the Airport and Port Levy and- CESS was deployed against consumers.

The CESS was an unusual tax brought to boost exports coming under the Export Development Board, allowing valued added exporters to exploit primary producers with lower than global prices in another dog-eat-dog policy –

Sri Lanka started to close the economy with ever tightening exchange controls around 1952 about two years after a Latin America style central bank was set up in 1950 abolishing a currency board.

As economists printed money to suppress rates, import controls were brought in.

In 1969 a formal import control law was brought as economists misled then Prime Minister Dudley Senanayake to enact the Import and Export Control Law instead of controlling economist’s ability to print money under ‘flexible’ policies.

He was defeated in subsequent elections.

The 1970s saw the height of trade controls with the central bank owning most of the Treasury bills issued by the government, a situation almost replicated in 2022 as the country goes through the worst currency crisis in the history of the central bank.

From around 1978 Sri Lanka opened the economy from trade but did not reform its central bank economists, continuing to print money, while the export CESS was also brought in.

In 1980 with the rupee coming under pressure as the economy grew strongly then President J R Jayewardene brought in Goh Keng Swee, the economic architect of Singapore whose advise not to print money was apparently ignored by the economists denying monetary stability to the people.

(economynext.com)

(Except for the headline, this story, originally published by economynext.com has not been edited by SLM staff)

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China offers openness to all South Asian countries – Kusal Perera (Video)

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The 9th China-South Asia Expo, which opened on June 19 in Kunming, China, will conclude tomorrow (June 24).

This year’s event held under the theme “Solidarity and Coordination for Common Development, has attracted over 1,400 companies from 54 countries and regions, with Sri Lanka as the Guest of Honour country and Thailand as the special partner nation.

China-Sri Lanka bilateral trade reached a record high of USD 5.36 billion in 2024, representing a 13.4% year-on-year increase. This makes Sri Lanka China’s fastest-growing trade partner in South Asia.

The Sri Lankan pavilion was officially declared open by Sri Lanka’s Minister of Trade and Commerce – Wasantha Samarasinghe and Deputy Minister of Foreign Affairs and Foreign Employment – Arun Hemachandra, who jointly led the country’s high-level delegation to the prestigious regional event.

CGTN’s Ms. Li Qiuyuan spoke with Mr. Kusal Perera, a political analyst and writer for ‘Sri Lanka Mirror’, about his expectations for the expo.

Speaking, Mr. Perera said that Sri Lanka needs to see how the ‘export basket’ can be diversified from the traditional export goods such as tea, in order to make the most of this platform to boost bilateral trade and engagement with China.

When asked which emerging areas such as energy transformation, digital economy and low carbon development seem to be the most promising for the island nation, Mr. Perera highlighted the importance of a combination of energy, technology and environment. “But in the process, we also have to have our national economy planned to accommodate all that,” he emphasised, adding that it will be a long process for Sri Lanka.

He further commented : “I see China opening up instead of getting into protectionism like Europe. It’s basically the second largest economy in the world… still expanding… still improving… still developing…”

China’s economic openness for all South Asian countries is a huge opportunity in a global economy that now retreats with regulated and protected markets. Protectionism would not be a catalyst for economic growth. We in South Asia have to be open too. China is already open and its economy is growing on global trade. It’s their openness that has taken them everywhere” he adds.

(Video : CGTN)

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Fresh probe into Shiranthi’s bank account

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Deputy Minister of Public Security and Parliamentary Affairs – Attorney-at-Law Sunil Watagala has informed Parliament that a renewed investigation is underway into a fraudulent bank account allegedly maintained by Shiranthi Rajapaksa, wife of former President Mahinda Rajapaksa.

He stated that a fake account titled ‘Siriliya Saviya’ had been opened in her name and that the mandate form related to the ‘Siriliya’ Organization’s bank accounts had been fraudulently removed from the bank.

The Minister further revealed : 

The account, now suspended, was opened on November 14, 2006, at the People’s Bank, Suduwella Branch, Darley Road, Colombo 10, under account number 143/1/001/4/6235069. Shiranthi Rajapaksa is listed as the chairperson of the account, with Kalyani Dissanayake as secretary and Nirosha Jeevani as treasurer.

The account currently holds a balance of Rs.43 million. Records indicate that Rs. 82,900,088 had been deposited on 88 occasions, while Rs.39,015,656 had been withdrawn on 129 occasions. Additionally, a fixed deposit of Rs.10 million had been opened under the name ‘Siriliya’.

The Financial Crimes Investigation Division (FCID) has resumed investigations into the matter.

Deputy Minister also mentioned several other questionable financial transactions involving the Rajapaksa family, such as ;

  • Rs.152 million allegedly obtained by CSN (Carlton Sports Network) from the Treasury.
  • Rs.35 million obtained by Gotabaya Rajapaksa from the Urban Development Authority to build a memorial for his parents.
  • Rs.208 million used by Basil Rajapaksa to purchase a house in Malwana.

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Maldivian President’s office officials on study tour at Prez secretariat

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Officials from the Maldivian President’s Office arrived at the Presidential Secretariat today for a study tour. They are expected to remain in Sri Lanka until June 27th.

The primary areas of focus for their study tour include archives and records maintenance and preservation, stores management, inventory control and stock preservation.

During their visit, they are scheduled to tour the Department of National Archives, Sri Lanka Customs, Thimbirigasyaya Divisional Secretariat and the Parliament of Sri Lanka.

Eight officials from the Maldivian President’s Office are participating in this study tour. They met with Mr. Roshan Gamage, Senior Additional Secretary to the President, at the Presidential Secretariat and engaged in a discussion.

A group of officials from the Presidential Secretariat also attended the meeting.

(President’s Media Division)

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