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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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President meets Gates Foundation delegation

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President Anura Kumara Dissanayake today (July 10) met with Dr. Chris Elias, President of Global Development at the Gates Foundation, for high-level discussions focused on key areas critical to Sri Lanka’s development. 

The meeting, held at the Presidential Secretariat, explored collaborative efforts in agricultural modernisation, nutrition, digital public infrastructure and rural technological integration.

Central to the discussions was the Inclusive Digital Agriculture Transformation (IDAT) initiative, which leverages data and technology to enable better decision-making and service delivery for smallholder farmers. The initiative represents a shared commitment to modernising agriculture, improving rural livelihoods and enhancing climate resilience.

President Dissanayake welcomed the partnership, expressing optimism about the country’s path forward. “We welcome the continued support of the Gates Foundation as we work together to build a healthier, more equitable and digitally empowered Sri Lanka. This collaboration is a testament to our shared commitment to sustainable development and improving the lives of all our citizens,” he said.

He further noted that the Government seeks the Foundation’s support for its broader programme aimed at integrating rural communities with modern global technology. 

Despite the economic challenges facing the nation, the President expressed gratitude for the Foundation’s engagement and emphasised that the visit would help identify and implement national development priorities.

Representatives of the Gates Foundation reiterated their commitment to supporting Sri Lanka’s digital economy strategy. They highlighted that particular focus would be given to the digital transformation of the agriculture sector, with the aim of enhancing productivity and revitalising the economy. The Foundation also assured its full support for the wider socio-economic development agenda, including initiatives in the livestock and dairy industries.

President Dissanayake underscored the importance of connecting rural communities, many of whom remain unaware of global technological advancements, with the tools and knowledge needed for empowerment. He stressed the value of the Foundation’s global experience and technical expertise in addressing development challenges common to many countries.

“One of our Government’s foremost objectives is to extend advanced technology to all levels of society, not only to uplift the national economy but also to improve efficiency across all sectors,” the President noted.

Dr. Elias acknowledged Sri Lanka’s ongoing transformation and welcomed the opportunity for deeper engagement. “We value the opportunity to engage with the Government and local institutions as they pursue strengthened systems to support inclusive growth. Our continued discussions in areas such as agriculture, health and digital infrastructure reflect a shared interest in advancing impactful solutions. I would like to thank the President and the Government of Sri Lanka for their continued commitment to improving the lives of all those living in Sri Lanka,” he stated.

The Gates Foundation delegation included Dr. Chris Elias, President, Global Development Gates Foundation, Jamal Khan, Regional Representative for Policy & Government Relations, South and Southeast Asia; Archna Vyas, Director of Policy Advocacy and Communications, Thushan Wijesinghe, Director Enterprise Data Solutions and Chandita Samaranayake, Chairman Connect To Care. 

The Sri Lankan delegation included Deputy Minister of Digital Economy Mr. Eranga Weeraratne, Dr. Nandika Sanath Kumanayake, Secretary to the President; Dr. Hans Wijayasuriya, Chief Advisor to the President on Digital Economy; and Mr. Roshan Gamage, Senior Additional Secretary to the President.

(President’s Media Division)

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TUs oppose appointment of Premarathne as new Excise chief

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Trade Unions of the Department of Excise have opposed the appointment of M.B.N.A. Premarathne, a retired Commodore of the Sri Lanka Navy, as the new Commissioner General of Excise.

TUs say that for the first time in the history of the Excise Department, a Commissioner General has been appointed from outside despite the existence of 03 senior, qualified officials within the department.

On July 06, the department’s TUs have directed a letter to President Anura Kumara Disanayake. urging to appoint an officer from the department to the post.

According to reports, Commodore (Retd.) Premarathne is said to be the husband of NPP National List nominee for the 2024 General Election – Prof. Wasantha Subasinghe. He is also said to be hailing from the President’s hometown of Thambutthegama.

The post of Excise Commissioner General fell vacant after Udaya Kumara Perera retired from public service today (July 10) upon reaching the age of 60.

On July 07, Cabinet approval was granted to appoint Commodore (Retd.) Premarathne to the post.

The proposal was presented by President Anura Kumara Dissanayake, in his capacity as Minister of Finance, Planning and Economic Development.

(Source : Lankadeepa)

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CCC calls for ‘continued engagement’ on US tariff reduction

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The Ceylon Chamber of Commerce (CCC) says the reduction in the tariff rate from 44% to 30% is a constructive and important first step by the Government toward bringing Sri Lanka’s tariff structure for exports to the US closer to that of regional competitors.

“We encourage continued engagement with the U.S. administration to secure a further reduction by 1 August, especially given that several regional peers are expected to benefit from even lower rates,” it said, in a statement.

The CCC further said that progress in achieving a further reduction will be critical to strengthening Sri Lanka’s position in this key market, maintaining buyer confidence, and supporting sustained trade growth over the long term.

“The Ceylon Chamber stands ready to support the Government’s efforts in this regard through constructive dialogue, industry feedback, and coordinated advocacy,” the statement adds.

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