SRI LANKA UPDATE | 01 – 07 SEPTEMBER 2023
The Economy:
Government confident of receiving International Monetary Fund (IMF) second tranche amid progress – Cabinet Co-Spokesman expressed optimism on the Government’s chances of securing the much-anticipated second tranche of funds from the IMF Extended Fund Facility (EFF). Following a post-Cabinet meeting, he noted that while the IMF mission is yet to conduct its review meeting, the Government has made significant progress in meeting the required conditions. However, he also acknowledged the challenges faced while optimizing domestic debt.
India boosts financial allocation for Sri Lankan grant projects by 50 per cent – The Government of India (GOI) has increased the funding allocation for the various grant projects being implemented in Sri Lanka by 50 per cent. This is in response to the swift changes in Sri Lanka’s economic environment. Nine projects under the umbrella of the India-Sri Lanka High Impact Community Development Project (HICDP) gain an increase in funding bringing the total amount committed to these nine projects to approximately LKR 3 billion. These initiatives span several industries, including those of agriculture, health and education.
Supreme Court gives green light to Inland Revenue Amendment Bill – The Speaker delivered the Supreme Court’s ruling regarding the contentious Inland Revenue Amendment Bill. As a result, the Supreme Court ruled that a simple majority vote in Parliament is required to enact the Bill. The court’s decision clarifies a contentious legislative topic that attracted significant public attention. The judgment is important because it opens the door for the Bill’s future passage into law. The Supreme Court’s decision not only permitted a simple majority vote but also addressed petitioners’ concerns.
Excise Department to take strict action against tax stamp fraud on alcohol – The Excise Department is to take effective and urgent measures to cancel the licenses of producers who affix fake tax stamps on alcohol products. Addressing representatives of alcohol producers last week, Excise Commissioner General stated the fraud could not be carried out without collusion between manufacturers and retailers, and noted such misdeeds come at great costs to Government revenue.
Politics & Policy:
Cabinet nod to Gazette Bill on Online Security – The Cabinet of Ministers has granted consent for the publication of a draft Bill on Online Security in the Government Gazette and its subsequent presentation to Parliament for approval. This Bill has been introduced with the aim of safeguarding society against harmful manipulations and the spread of misleading information that can occur online. As outlined in Section III of the draft Bill, the following are some of the actions that have been addressed: communication of false statements about incidents within Sri Lanka, spreading false statements that cause defamation, incitement to riots without reasonable cause and disturbing a religious assembly through false statements.
Sri Lanka and Thailand to sign Free Trade Agreement (FTA) in February 2024 – To coincide with Sri Lanka’s Independence celebrations, Sri Lanka and Thailand plan to sign the bilateral free trade agreement on February 3rd 2024. The decision was arrived after the sixth round of Sri
Lanka-Thailand Free Trade Agreement (SLTFTA) Negotiations successfully concluded in August in Bangkok, Thailand. Seven working groups under the subject areas of trade in goods, trade in services, rules of origin, technical trade obstacles, trade remedies, investment and legal and institutional issues were involved in these negotiations.
Cabinet nod to amend Export Agriculture Promotion Act – The Cabinet of Ministers gave its affirmation to amend the Export Agriculture Promotion Act. The Export Agriculture Promotion Act No. 46 of 1992 has played a pivotal role in regulating and promoting the export agriculture sector in Sri Lanka for several decades. However, as the agricultural and export sectors have undergone significant changes over the years, it has become evident that amendments to the existing legislation are necessary to align it with current needs and challenges.
Digital Nomad Visa to boost tourism industry – In a proactive move to add fillip to the tourism sector and attract a new wave of remote workers, the Cabinet of Ministers has given its seal of approval to a range of visa programmes including the “Digital Nomad Visa” (DNV). Under the Digital Nomad Visa, applicants are required to demonstrate a minimum monthly income of USD 2,000, which must be channelled through the Sri Lankan banking system. This visa is renewable annually, subject to certification of the requisite funds. The application fee for the DNV is set at USD 500, and it encompasses the visa holder’s spouse and dependents. This initiative comes in response to a noticeable shift in people’s attitudes towards online business and the newfound ability to work remotely.
Sri Lanka unveils National Hydrogen Roadmap for Green Energy – The National Hydrogen Roadmap was presented by the Power and Energy Ministry in an effort to create a more sustainable and environmentally friendly future. The roadmap, which plots a route for Sri Lanka’s energy landscape change, was developed jointly by the Petroleum Development Authority of Sri Lanka (PDASL) and Greenstat Hydrogen India with the essential assistance of the United States Agency for International Development (USAID). Sri Lanka will handle three crucial socioeconomic issues: energy security and independence, energy affordability and fairness and environmental sustainability.
Disclaimer – This advisory is intended for circulation among JAAF stakeholders only. Please do not circulate or share on social media.
This Advisory, written for our partners interested in developments in Sri Lanka against the backdrop of the current crisis, is an update on the one issued last week. This document summaries developments covering significant political and economic events. The Advisory includes economic, political, social and governance perspectives. It draws on news reports, analyses, Government announcements and documents, and from other sources that we may be in contact with or have access to.
This Advisory was prepared by the Strategic Communications Unit of Adfactors PR Lanka. For inquiries, contact pumudika.amarasekara@adfactorspr.com