SRI LANKA UPDATE | 03 – 09 NOVEMBER 2023
The Economy:
Sri Lanka Economic Commission to be established – According to the Cabinet spokesman, the establishment of the Sri Lanka Economic Commission and the creation of the Draft Bill for the Sri Lanka New Investment Act have received Cabinet approval. The Cabinet meeting approved the merger of the Investment Board and the Export Development Board, citing the need for a robust structure to foster an environment more favourable for investment and export promotion. Under the umbrella of the President’s Office, a supervisory committee on exports and investments has been formed encompassing experts in respective disciplines.
Sri Lanka’s official reserve assets increase by 0.6 per cent in October 2023 – According to the Central Bank of Sri Lanka (CBSL), official reserve assets in Sri Lanka increased by 0.6 per cent between September 2023 and October 2023. As a result, reserve assets increased from USD 3,540 million in September 2023 to USD 3,562 million in October 2023 growing by 0.6 per cent. This includes a swap facility of USD 1.3 billion from the People’s Bank of China, which has conditional usage.
Tourism earnings in first 10 months increase nearly USD 1.6 billion – The Minister of Tourism stated that despite a decline in arrivals in 2023, the industry has recovered, with earnings approaching USD 1.6 billion. He said that Sri Lanka Tourism has set an ambitious goal to welcome 2.5 million visitors and generate USD 4 billion in revenue.
Politics & Policy:
The Supreme Court moves for Online Safety Bill to be passed by simple majority subject to amendments – The Supreme Court determined that the Online Safety Bill tabled by the Government last month can be passed by a simple majority in parliament subject to 31 amendments. The laws, prohibiting the spread of false information on event in Sri Lanka, information that could incite an uprising, disrupt a religious gathering and false information with the specific intent to offend religious feelings are some of the provisions requiring amendment.
Government flags off resurgence in Sri Lanka-India economic ties – The 12th Round of Economic and Technology Cooperation Agreement (ETCA) negotiations between Sri Lanka and India took place in Colombo from October 30 to November 1, marking a critical milestone in Sri Lanka’s technological and economic path. According to the President’s Media Division (PMD), Sri Lanka has always prioritized export diversification while preserving and expanding its core export markets in order to integrate with the biggest economies in Asia and East Asia. The ultimate objective is to establish connections with important stakeholders in the global value chain in order to strengthen the national economy and raise the standard of living for its citizens.
USA to support Sri Lanka’s energy reforms – The US continues to support energy efficiency and reforms implemented by the Ministry of Power and Energy, including the new DFC financing to support green lending in solar rooftops, charging stations and electric three-wheelers. This was revealed by the US International Development Finance Cooperation CEO Scott Nathan and US Ambassador to Sri Lanka Julie Chung.
Cabinet green-lights amendments to Customs Ordinance for improved trade practices – The Customs Ordinance was amended by the Cabinet of Ministers to improve revenue collection, transparency, trade facilitation and compliance requirements. The action was taken in response to President Ranil Wickremesinghe’s suggested amendments to sections 47, 57, and 153 of the current Ordinances, which he presented in his capacity as Minister of Finance, Economic Stabilization and National Policies. The Cabinet accepted the proposed revisions on October 13th 2022, which was a significant step in modernizing and simplifying the nation’s customs procedures. With the goal of fostering a more effective and transparent system, the reforms will have a significant impact on companies involved in international trade.
Government takes action to regulate unregistered microfinance institutions – The State Minister of Finance declared that steps are being taken to create a distinct regulatory body tasked with supervising microfinance institutions. He revealed that just five of the 11,000 microfinance institutions in the nation are officially recognized. He further emphasized the harsh consequences of operating microfinance institutions in violation of the law, saying that offenders face fines of up to LKR 5 million and five years in jail.
Business confidence wanes – According to the LMD-NielsenIQ Business Confidence Index, business confidence remains clouded by ongoing developments and heavily dependent on their outcomes. In October, the BCI decreased by six basis points to reach 75. Since July, the barometer’s trend has been somewhat erratic, decreasing from 103 in June to 73 in August before rising to 81 in September before declining once more in October. The index is 14 basis points shy of where it stood a year ago and 12 notches less than its median since then.
US lends USD 553 million to majority Adani-owned port in Sri Lanka – The US will provide a USD 553 million loan to Indian businessman Gautam Adani to establish a container terminal in Sri Lanka. The West Container Terminal in Colombo is being developed by Adani Ports and Special Economic Zone in partnership with the Sri Lanka Ports Authority and Sri Lankan company John Keells Holdings, with a 51 percent share.
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