ECONOMYNEXT — If there is a change in Sri Lanka’s current policy trajectory, the economy would not recover for another 15 years, State Minister of Finance Shehan Semasinghe warned.

Speaking to reporters on Wednesday May 15, Senasinghe said the economy will be the deciding factor at the upcoming elections.

“The president has stated clearly that the presidential election will be held first, followed by the parliamentary and other elections.

“The decisive factor of the next election will be the economy. Strengthening the economy and taking the country forward will receive more attention over what ones wants to hear,” he said.

Disingenuous statements will not count at the election, said Semasinghe.

“If there is a change in the policies that the country is currently on, the economy will collapse and we won’t be able to raise our heads again for another 15 years at least,” he added.

Both the main opposition Samagi Jana Balawegaya (SJB) and the leftist National People’s Power (NPP) have indicated that a government led by them would renegotiate Sri Lanka’s ongoing agreement with the International Monetary Fund (IMF).

IMF spokespersons have been vague about the likelihood of amendments to the agreement.

Meanwhile, a proposed Economic Transformation bill is expected to be gazetted shortly to establish an economic commission, investment zones and international trade office.

“The bill contains structural, quantitative, and qualitative changes to support future economic development,” Cabinet spokesman and Media and Transport Minister Bandula Gunawardena said on Tuesday.

The bill is part of a series of drafted laws that are to reform Sri Lanka’s legal framework, to meet the requirements for the IMF’s Extended Fund Facility.

Treasury Secretary Mahinda Siriwardana has said in April that the government is also revising old legislation following a comprehensive review of past experience and lessons learned.

Most of these new laws focus on structural changes of the existing executive and administrative structures. (Colombo/May16/2024)

ECONOMYNEXT – Indian tourists will be able to pay for their purchases in Sri Lanka through their mobile phones using QR codes after a tie up between Lanka Pay and India’s PhonePe, officials said.

With India being the top source of tourists to the county, the tie up will strengthen bilateral relations co-operation, Central Bank Governor Nandala Weerasinghe said.

Enhancing cross border payments was a priority among policymakers, and in Sri Lanka the central bank was also supporting cashless payments, he said.

India has seen a surge in online transactions especially through mobile phones, India’s High Commissioner in Colombo Santosh Jha said.

PhonePe, which uses India’s Unified Payment Interface will now allow Indian tourists visiting the country to pay at large network of merchants which use the LankaQR system of LankaPay.

As of 2008, India was the world’s most unbanked which banking penetration of less than 20 percent, High Commissioner Jha said.

In the last decade banking penetration had shot up to over 80 percent.

In 2016 India mostly used cash, and now has the highest volume of digital payments globally.

“The digital transformation of India has been driven by the interoperable and open protocol such as the UPI.

He said the need to pay taxes and government benefits to the citizens gave birth to India’s digital identify number and the unique identity authority.

Governor Weerasinghe said Sri Lanka’s digital payments were also growing but not at the pace of India.

Sri Lanka however has had a banking system spread out around the country, and a unique identify number – which can be presented at the users own volition – for decades.

People receiving government subsidies in Sri Lanka not only had bank account but also a savings component in their own banking system from which they could also get a loan if they needed, from the inception of the program, observers point out.

A new scheme subsidy schemed launched last year required all recipients to have accounts in the larger system and only about 200,000 did not already have accounts in the designated banks. (Colombo/May16/2024)

ECONOMYNEXT – Sri Lanka is planning to send a high-level mission on the instructions of President Ranil Wickremesinghe, to discuss the repatriation of ex-soldiers who have been hired by Russian mercenary companies as well as the injured, a minister said.

“We have already spoken to the Russian Ambassador regarding this,” State Minister for Foreign Affairs Tharaka Balasuriya told reporters in Colombo.

“But we will be asking the Russian ambassador to Sri Lanka to help us with some meetings with high-ranking officials.”

The mission may be headed by the Foreign Minister or himself, and will be made up of a former Ambassador to Russia, the Defence Secretary and the Director General of Consular Affairs, he said.

The delegation will be made up of the former Ambassador to Russia Saman Weerasinghe, Defense secretary Kamal Gunarathne, senior officials of the Foreign Ministry.

Returnees have said hundreds of Sri Lankan ex-soldiers and other are serving in Ukraine-Russia frontlines with most being duped that they were sent for support work as camp helpers.

“It is difficult to say how many people,” Minister Balasuriya said. “Our main problem is some people go with visit visa to Russia and some go to other countries like India and then go to Russia.

“Unofficially it is 600 to 800. It can be lower or higher.”

State Minister for Defence Pramitha Bandara Tennakoon said Wednesday that 16 persons have been confirmed killed and family members have lodged complaints about 280 persons who have gone to Russia.

Sri Lankan ex-soldiers have been recruited by several teams of people on the promise of high salaries for working as camp helpers.

Sri Lanka has already arrested two military officers who were involved in one recruitment team.

Returnees from the frontlines around Donetsk oblast has said over 200 Sri Lankans may have died and more are dying from a sophisticated drone warfare unleashed by Ukraine.

Ukraine has developed so-called Kamikaze drones as well as larger one (Baba Yaga) which can shoot RPGs and other weapons at ground targets.

(Colombo/April16/2024)