JOINT APPAREL ASSOCIATION FORUM SRI LANKA (JAAFSL)
The Economy
Sri Lanka foreign exchange earnings exceed imports by USD 586 million in June
Sri Lanka’s current foreign exchange earnings from exports, remittances and gross
services, totaled USD 2,033 million in June 2024, surpassing imports by USD 586 million,
according to official data released by the Central Bank of Sri Lanka (CBSL).
Link: https://tinyurl.com/y4x9bh3b
Sri Lanka poised to break 2018 tourist arrival records
As of July 15, 2024, Sri Lanka has welcomed 1,095,675 tourists, with further growth
anticipated in the coming months. Secretary of the Ministry of Tourism and Lands,
Somarathne Vidanapathirana stated that if the current upward trend continues, Sri
Lanka is poised to exceed its peak tourism numbers from 2018, which remains the
highest recorded figure since the end of the war.
Link: https://tinyurl.com/2ppprwyt
Sri Lanka accumulates record revenue in May
In May, Sri Lanka achieved a record revenue collection of approximately LKR 400 billion,
signaling a positive shift as revenue growth begins to outpace the effects of high
inflation. As per Central Bank data, during the five months ending May 2024, the
Government revenue and grants have increased to LKR 1,619.2 billion compared to LKR
1,122.4 billion in the corresponding period of the year 2023.
Link: https://tinyurl.com/2s3up4xt
The Port of Colombo globally recognised as the best-performing port for the first quarter (Q1) of 2024
The Port of Colombo has achieved significant recognition as the best-performing port
globally for the Q1 of 2024, according to Alphaliner, a leading information platform in
the liner shipping industry. This accolade reflects the port’s remarkable performance,
with domestic volumes increasing by 19.2 percent, transshipment volumes growing by
9.6 percent, and total volumes surging by 12.5 percent compared to the same period
in 2023. From January to June 2024, the Sri Lanka Ports Authority (SLPA) terminals
reported a 23.6 percent rise in domestic volumes, a 15.5 percent increase in
transshipment volumes, and an overall volume growth of 17.7 percent.
Link: https://tinyurl.com/yc2bxzzc
Sri Lanka Customs earn LKR 708 billion in 2024 void of vehicle imports
Sri Lanka Customs has achieved an income of LKR 708 billion from the LKR 1,537 billion
revenue target set for the year 2024. This success comes despite the suspension of
vehicle imports, which is a major revenue source for Customs.
Link: https://tinyurl.com/wvzv7zzf
⚖ Politics & Policy
Presidential Election to be held on 21 September
The Election Commission of Sri Lanka has issued the Gazette notification announcing
the date of the 2024 Presidential Election and the date for accepting nominations.
Accordingly, the Presidential Election will be held on 21 September 2024 and
Nominations will be accepted on 15 August 2024.
Link: https://tinyurl.com/5ba2fd3m
International Monetary Fund (IMF) delegation to discuss fourth tranche with President Ranil Wickremesinghe
A key meeting between representatives of the IMF and President Ranil Wickremesinghe
is scheduled to take place on 01 August. The discussion will focus on the potential
release of the fourth tranche of the IMF funding.
Link: https://tinyurl.com/zsj86zyb
Cabinet approves Economic Transformation Bill and Public Financial Management Bill
Sri Lanka Parliament passed the Public Financial Management and Economic
Transformation Bills with amendments on 25 July. The bills aim to ensure a sustainable
economy and prevent the country from returning to a crisis. The Economic
Transformation Bill, in particular, ensures consistency and continuity of policies.
Link: https://tinyurl.com/4xkwj8m3
Sri Lanka and Thailand sign agreement for public debt management capacity building
The Neighbouring Countries Economic Development Cooperation Agency (NEDA) of
Thailand and Sri Lanka Ministry of Finance, Economic Stabilisation and National Policies
have signed a Record of Discussion (RoD) to launch a Capacity Building Programme for
officials attached to the forthcoming Public Debt Management Office (PDMO). This
cooperation marks a significant step in strengthening the country’s fiscal framework
and enhancing its capacity to manage public debt efficiently. This initiative is critical
as Sri Lanka aims to establish the PDMO by the end of the year, seeking to improve its
public debt management practices and ensure long-term fiscal sustainability.
Link: https://tinyurl.com/yc8ydr75
Sri Lanka establishes new division in police to address legal issues faced by investors and exporters
Sri Lanka has set up a new division in the police to address legal issues faced by investors
and exporters, and to provide them with additional security in the future, the country’s
Export Development Board (EDB) said in a statement.
Link: https://tinyurl.com/5enxv2j3
Cabinet clears drafting bill for Public Private Partnerships (PPP) Agency
Sri Lanka’s Cabinet has approved the drafting of a new law to set up a National Agency
for Public Private Partnerships, following a proposal by President Ranil Wickremesinghe.
The agency will design and manage PPP projects and co-ordinate with international
agencies. The agency will be entrusted with identifying projects where public private
partnerships could be implemented.
Link: https://tinyurl.com/b64379s7
Port City Economic Commission Act No. 11 of 2021 to be amended
The Cabinet of Ministers has approved the President’s proposal to direct the Legal
Draftsman to prepare a bill amending the Port City Economic Commission Act No. 11 of 2021
The proposed amendments aim to enhance the feasibility of the Port City as a
globally competitive specialised economic zone.
Link: https://tinyurl.com/yjywebdx
Government targets 20 percent Gross Domestic Product (GDP) from manufacturing industry by 2030
The Government has set an ambitious target to increase the manufacturing sector’s
contribution to the country’s GDP from 16 percent to 20 percent by 2030, according to
the Ministry of Industry. Secretary to the Ministry Shantha Weerasinghe, outlined that
this goal also encompasses enhancing the role of entrepreneurship in the workforce
from 2.8 percent to 7 percent and raising the contribution of industrial exports to GDP
from 14 percent to 20 percent. Accordingly, a “National Industry Policy” and a five-year
strategic plan for 2023-2027 have been developed to establish a globally competitive
industrial base in Sri Lanka.
Link: https://tinyurl.com/282eeb77
Sri Lanka unveils blueprint to transform outdated plantation sector to thriving agro-business
On 25 July, President Ranil Wickremesinghe introduced a comprehensive blueprint
aimed at modernising Sri Lanka’s antiquated plantation sector and transforming it into
a dynamic agro-business through a series of major reforms. The strategy includes the
abolition of the colonial-era ‘line-room’ culture that has restricted estate workers to
the estates and proposes a revenue-sharing model between managing companies and
workers. The Tea Research Institute (TRI) is also expected to play a major role in
modernising the Ceylon Tea industry, aligned with latest global consumer trends, and
possible joint ventures with the private sector. Further, plans are underway to 2021 restructure both Sri Lanka Tea Board (SLTB) and Tea Small Holdings Development
Authority under this strategy.
Link: https://tinyurl.com/4maztpym
📰 Government to announce stance on vehicle import ban in August
Finance State Minister Shehan Semasinghe announced that the Government will reveal
its position on relaxing vehicle import regulations by August 2024. The Government is
hoping to import vehicles that will facilitate business activities and transport, while
managing the foreign reserves. Further, the import of private vehicles will be made in
the first phase of 2025.
Link: https://tinyurl.com/ypaujxvy
Colombia and Sri Lanka Governments adopt textile standards of the American Association of Textile Chemists and Colourists (AATCC)
AATCC test methods and procedures are international standards, meeting the criteria
set forth by the World Trade Organization (WTO) and used around the globe. The
standards gain additional recognition through a Memoranda of Understanding (MoU)
with Colombia and Sri Lanka. Currently, the Sri Lanka Standards Institution (SLSI) is in
the process of adopting the AATCC standards.
Link: https://tinyurl.com/hm2n5u87
⁉ What you need to know
Apparel earnings for June increase by 4 percent Year-on-Year (YoY)
Earnings from the apparel sector in June expanded 4 percent YoY, a move towards
growth after witnessing a contraction for two consecutive months. Data compiled by
the Joint Apparel Association Forum (JAAF) indicated that in June, export earnings
surged to USD 417 million from last year’s USD 401 million. The expansion is due to
increased exports to the United States (US). In June, the US accounted for USD 174
million of total exports, a 12.78 percent growth YoY.
Link: https://tinyurl.com/mr3359vr
The International Chamber of Commerce Sri Lanka (ICCSL) and the International Monetary Fund (IMF) deliberate Simplified Value Added Tax (SVAT) abolition’s impact on the export sector
The International Chamber of Commerce Sri Lanka (ICCSL) recently convened a meeting
with representatives from Sri Lanka’s export sector and a delegation from the IMF. The
focus was to evaluate the potential effects of abolishing the SVAT on Sri Lanka’s export
industry. This strategic stakeholder forum served as a crucial platform for dialogue and
policy planning, highlighting the significance of informed decision-making in shaping
the future of Sri Lanka’s export landscape amidst evolving economic policies.
Link: https://tinyurl.com/3895hxez
*JAAF urges prompt review of SVAT abolition decision *
With the deadline for the abolition of the SVAT system set for 1 April 2025, JAAF has
urged the Government to reconsider its decision due to escalating pressures on the
apparel industry. JAAF asserted that the decision to abolish the SVAT scheme is based
on two incorrect assumptions: that the current system leads to revenue loss and that
eliminating SVAT will improve state revenue collection.
Link: https://tinyurl.com/37ctmkhv
Hela and Authentic Brands Group announce outerwear partnership for Reebok
Authentic Brands Group (Authentic), a global brand development, marketing, and
entertainment platform, announced a long-term partnership with Focus Brands, the
brand licensing division of Hela Apparel Holdings PLC, for Reebok. Through the
partnership, Focus Brands will design, manufacture and distribute Reebok-branded
outerwear products across the UK and Europe.
Link: https://tinyurl.com/5f3z94s7
Omega Line Toastmasters Club honoured with Corporate Award
Omega Line Toastmasters Club of Omega Line Ltd received a prestigious Corporate
Award at the 2023/2024 Annual District 82 Toastmasters Conference. This award
recognises the club’s steadfast dedication to employee development and its significant
contributions to Toastmasters.
Link: https://tinyurl.com/mvxczaut
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 summarises results 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 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 sarah.muiz@adfactorspr.com