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The International Monetary Fund (IMF) has granted waivers for Sri Lanka’s nonobservance relating to the performance criteria on the primary balance of payments and net official international reserves.

Sustaining policy discipline remains critical to strengthen resilience, given still sizable public debt and low external buffers, and support strong and inclusive growth. IMF pointed out.

Government has been directed to take measures focusing on liberalizing trade, improving the business environment and promoting investment, strengthening governance, encouraging female and youth labor force participation, enhancing social protection, and improving crisis preparedness to natural disasters.

Prompt action to advance fiscal consolidation

The Executive Board of the IMF says that despite setbacks, the government took prompt action by advancing fiscal consolidation through a well-targeted 2019 budget, rebuilding reserves, while maintaining a prudent monetary policy under greater exchange rate flexibility, and reviving structural reforms.

"Sustained revenue mobilization is needed to place public debt on a downward path, while making space for critical public investment and an expansion of the social safety net under well-defined selection criteria," the IMF suggested.

Strengthening the selection and appraisal process of large-scale investment projects and assessing their fiscal affordability is critical, given Sri Lanka’s high public debt. Stronger fiscal rules and a medium-term debt management strategy will support medium-term fiscal consolidation and debt reduction efforts, it added.

The IMF urged government authorities to renew their efforts to strengthen SOE governance and transparency, including by advancing a restructuring plan for SriLankan Airlines and completing energy pricing reforms, building on important progress with the implementation of the fuel pricing formula.

Efforts to build reserves should be sustained, under greater exchange rate flexibility, to protect the economy against shocks. Harmonizing regulation and supervision of financial institutions, strengthening the macro prudential policy framework, and enhancing the crisis-preparedness toolkit will help further strengthen financial sector stability. Furthermore, the continued implementation of structural reforms is essential to support strong and inclusive growth.

Sri Lanka Customs Department has been directed by the Finance Ministry to conduct a prompt inquiry in to the current controversial issue of importing discarded material such as used mattresses in to the country without considering its detrimental impact on environment and public health.

Finance minister Mangala Samaraweera has issued this directive to Director General of Customs Ms. P.S.M. Charles, soon after his return to the island concluding an official overseas visit today (23).

According to Finance Ministry, this stock of waste material has been brought to the island by a local company without obtaining the required license from the Central environmental Authority.

Minister Samaraweera vowed to take stringent legal action against relevant companies responsible for the importing and storing the stock of mattresses which were allowed to perish without restuffing and reprocessing it for several months.

Hayleys Free Zone Limited MD Ruwan Waidyaratne noted that they will find an overseas buyer and reship the stock of mattresses soon after reprocessing it.

However, the Director of the company Amal Rodrigo said that the reprocessing processes had been delayed due to the bankruptcy of the UK Company and there was no one to accept the stock when they return it to the sender.

It has also been revealed that Hayleys Fibre Ltd, the premier manufacturer & exporter of value added coil fiber products to international markets is engaged in the production of a wide range of premium quality mattresses with the opening of a new showroom “Mattress Shop” in Colombo 10 in 2015.

Therefore the management of Hayleys Free Zone Limited cannot wash their hands and absolve from their responsibility claiming that they were not the importer or the owner of the stock of mattresses, Customs official said.

Hayleys Free Zone Limited absolved from any involvement in importing garbage to Sri Lanka while putting the blame solely on Ceylon Metal Processing Corporation (Pvt) Limited ,the importer of these discarded mattresses from UK.

Hayleys Free Zone company vehemently denied allegations against it light of recent adverse media publicity in relation to 130 container loads of used mattresses that are currently stored at its yard premises.

The company clarified that these mattresses were imported by Ceylon Metal Processing Corporation (Pvt) Limited, who is the actual owner of the cargo.

Hayleys Free Zone entered into an agreement with the freight forwarder ETL Colombo (Pvt) Ltd, who was appointed by Ceylon Metal Processing Corporation (Pvt) Ltd, for the purpose of processing and re-exporting the mattresses in question.

Sri Lanka’s only state-owned manpower recruiting entity, the Foreign Employment Agency (Pvt) Ltd is losing its market share owing to management weakness and lack of dynamism in the face of high competition from mushrooming job agencies.

Around 1,000 foreign employment agencies are functioning countrywide forcing stiff competition to the state owned agency. However, only 350 agencies have registered with the Association of Licensed Foreign Employment Agencies (ALFEA), official sources said.

According to the statistics of Sri Lanka Bureau of Foreign Employment (SLBFE), 310,786 foreign job opportunities have been received for the country in the year under review (2017/2018).

Out of this number, 427 job opportunities or 0.14 per cent had only been sent abroad by Sri Lanka Foreign Employment Agency (Pvt) Ltd, data showed.

Further, job orders decreased significantly considering the drop in job opportunities by 2211 received in the year under review as compared with the year 2016.

The company has failed to recruit qualified workers for 140,100 and 60 normal job opportunities received from countries such as Jordan, Singapore and Bahrain, respectively in the year under review.

Further, out of 58 technical and professional job opportunities received from Maldives, workers had also not been recruited for 55.

Although job orders had been received from countries like Qatar, Kuwait and Oman, the agency had failed to recruit enough people which resulted in the cancellation of job orders.

The Foreign Employment Agency (Pvt) Ltd has sent only 44 workers via MoUs for jobs mainly to West Asia out of 806 migrants in the year under review, the audit inspection revealed.

According to the SLBFE, ‘job orders’ from foreign countries are sent to the Sri Lankan embassy in that particular country and it is the responsibility of the embassy to check the type of employment being requested and the wages offered for it.

These orders are received by the foreign employment agencies in Sri Lanka, only with their approval, he explained

In the face of declining migrant worker numbers, the Ministry of Foreign Employment is in the process of training workers to fulfill 10,000 vacancies in Japan and a number of European countries, a senior official of the Ministry said adding that the opportunities are mostly in care giving and the construction sector.

However, the training centres run by the SLBFE are running below capacity, although some centres are equipped with modern resources to train large numbers, an onsite inspection revealed.

Solid waste management and disposal of Aircraft at the Bandaranaike International Airport (BIA) in Katunayaka is now being handled in a shocking manner following the handing over the task to several private companies, informed sources disclosed.

Airport & Aviation Services (Sri Lanka) Ltd handled the aircraft waste management for a period of over 15 years sending the stocks of garbage to Nai kanda furnace to burn it.

This practice has been halted three years ago and several businessmen selected through tender procedure have now been allowed to sort out waste disposed by air crafts arriving at the airport for recycling purposes.

The remaining stock of waste is being sent to Nai kanda furnace to destroy it by burning and this has become a severe environmental pollution issue due to improper management of solid waste disposal.

Airport & Aviation Services (Sri Lanka) Ltd is selling the garbage to businessmen without considering the environmental pollution issues, several leading environmentalists complained.

Solid waste management and disposal is one of the most significant issues in the environmental management of the airline industry.

A waste composition analysis was conducted by a group of experts for in-flight service waste, and potential waste minimisation measures were evaluated.

The total in-flight waste was estimated to be up to 500 kg per flight, including food waste, and galley and cabin waste.

The waste composition analysis showed that paper (mainly newspaper, meal menu cards, etc.) was the largest component, ranging from 32 to 71 percent by weight of the total galley and cabin waste.

Another major component was plastic items. Transparent polystyrene drinking cups and food covers accounted for up to 13% of the total weight.

Aluminium cans accounted for up to 4% of the total waste. These recyclable materials can be sorted on board to facilitate the waste reduction and recycling programme.

The proposed on board sorting and collection programmes can achieve a recycling rate of as much as 45–58% of the total galley and cabin waste from in-flight services, the waste composition analysis revealed.

A couple of much hyped housing programmes for the rural poor mooted by the National Housing Development Authority (NHDA) spearheaded by Minister Sajith Premadasa fail to fulfil the needs of the needy due to improper planning and implementation, government audit inspection unearthed.

The Grama Shakthi Udagammana Programme was slated to kick start at a cost of LKR 250 million and complete 500 houses by the end of 2017/2018 period.

Provisions of LKR 100 million had been made therefore in the year under review and work had commenced with regards to the construction of 1,304 houses.

However, not even a single house had been constructed and completed by the end of the year under review, the government audit concluded.

Another shelter programme of this nature called Welioya Housing Project had been implemented by the National Housing Development Authority at an expenditure of LKR 61 million to build 1,042 houses in the year under review.

The construction of 995 houses had been completed by spending a sum of Rs.57 million for the project.

However, the project had been implemented without a proper study or a search on natural factors such as water resources of the area prior to the commencement of the project. As such, the beneficiaries had left due to lack of water in the area, residents complained.

Sri Lanka’s vehicle imports continues plummeting to very low levels as a result of tax increases and other controlling measures, the Motor Traffic Department claimed.

Vehicle registrations across most categories have declined in June comparing to statistics in May, a drop in 2-wheeler registrations have driven down the total to 26,201 the lowest on record over the past 36 months.

The revenue generated from motor vehicles significantly declined by 46.2 per cent to Rs. 40 billion in the first four months of 2019, which was 16.5 per cent of the total annual estimate for 2019.

This drop was mainly due to reduction of imports of motor cars by 70.2 per cent stemming from the restriction imposed on cash margin for the establishment of Letter of Credits (LCs) and the temporary suspension of the establishment of LCs for the importation of motor vehicles under the concessionary permit schemes.

Upward revisions of excise duty rates in August 2018 on motor vehicles with engine capacity less than 1000cc as measure of controlling the foreign currency outflow and the revision of excise duty rates on motor vehicles were the other factors tords this end.

Total car registrations recorded 1,580 units in June down from 1,816 units in May and significantly down from 6,819 units 12 months ago.

Brand new cars recorded 222 units in June down from 291 units in May and 992 units 12 months ago. Small cars accounted for bulk of them recording 185 units (83%). Imports from India and Japan accounted for 45% and 41% of units, respectively. Financing share was 50% in line with the normal monthly average.

Electric cars recorded 7 units in June up from 6 units in May but marginally down from 10 units 12 months ago. Nissan Leaf accounted for 6 of these units.

SUV registrations recorded 289 units in June down from 303 units in May and significantly down from 637 units 12 months ago.

Bus registrations recorded 40 units in June down from 66 units in May and significantly down from 177 units 12 months ago.

Van registrations recorded 480 units in June marginally up from 464 units in May and significantly down from 665 units 12 months ago.

The United States Millennium Challenge Corporation (MCC) Sri Lanka Compact has no bearing on land ownership, administration and management in the island, US diplomatic sources said.

The USD 67 million land administration project has an estimated economic rate of return of 30% and aims to expand and improve existing Government of Sri Lanka initiatives to increase the availability of spatial data and land rights information. The project will initially focus on districts in the Central, North-Western, North-Central and Eastern Provinces.

This was disclosed by US Ambassador in Colombo Alaina B. Teplitz appearing in online via the embassy’s social media site out lined current Sri Lanka –USA relations dispelling false propaganda campaign of the opposition recently.

Land activities will help the Government create an inventory of state lands, modernize methods of valuing lands, strengthen tenure security for smallholders, women, and firms, and digitize deeds records so that they are less vulnerable to damage, theft, and loss.

The US Government will not buy, sell, or own any actual land - or take control of any actual land - under this agreement.

Under the land administration project, the land activities will be done in the preparation of parcel fabric map and inventory of state land. improvement of deeds registry, improvements of the land valuation system, land grants registration and deed conversion activity and land policy and legal governance improvement activity.

The above activities will be implemented in 7 districts with the limited funds available for the land sector. Accordingly, these will be implemented in Kegalle, Kandy, Matale, Kurunegala, Anuradhapura, Polonnaruwa and Trincomalee. Furthermore, it is learnt that the US has requested to include Gampaha district as well.

Hayleys Free Zone Limited absolved from any involvement in importing garbage to Sri Lanka while putting the blame solely on Ceylon Metal Processing Corporation (Pvt) Limited, the importer of these discarded mattresses from UK.

Hayleys Free Zone company vehemently denied allegations against it in the light of recent adverse media publicity in relation to 130 container loads of used mattresses that are currently stored at its yard premises.

The company clarified that these mattresses were imported by Ceylon Metal Processing Corporation (Pvt) Limited, who is the actual owner of the cargo.

In the wake of this incident, the Government has been urged to tighten entrepôt trade regulations introduced by then president Mahinda Rajapaksa in 2013 which allows re-exporting rackets of unscrupulous exporters to enjoy tariff relief, customs officers emphasised.

The gazette notification No. 1818-30 issued during the Rajapaksa regime has provided provisions for import and re-export goods without the control of Customs Ordinance, Exchange Control Act, and Import – Export Control Act etc.

These regulations indirectly paved the way for racketeers to exploit its loop holes in manipulating entrepôt trade without considering the country’s economic prosperity and environment, General Secretary of All Ceylon Customs Service Union J.A. Gunatilleke said.

Hayleys Free Zone is a legal entity established under the Commercial Hub Regulation Act No.1 of 2013 and operates as an offshore location to provide logistics services to global clients, mainly with the aim of offering storage and value added services for re-export, as done in other free zones across the Globe.

Under this set up several environmentalists questioned as to whether this service provider could be absolved from its involvement in storing and reprocessing environmentally hazardous stock of discarded mattresses in question.

It cannot be absolved from chargers of aiding and abetting, they said adding that under the present regulations the service provider is also a party in enrepot procedures .

Hayleys Free Zone entered into an agreement with the freight forwarder ETL Colombo (Pvt) Ltd, who was appointed by Ceylon Metal Processing Corporation (Pvt) Ltd, for the purpose of processing and re-exporting the mattresses in question.

The said cargo was consigned to Hayleys Free Zone by the freight forwarder ETL Colombo (Pvt) Ltd, as per the Hub Regulation where it states that any cargo arriving at the Free Zone premises must be consigned to the Free Zone operator.

The company further stated that the cargo in question was accepted to the Hayleys Free Zone yard, after carefully scrutinising the documents which stated that the 130 containers were non- hazardous cargo.

In light of the current situation, Hayleys Free Zone revealed that it has taken a decision to processes these mattresses and re-export them expeditiously at the cost of the company.

Opposition Leader Mahinda Rajapaksa, who has continuously opposed the Sri Lankan government’s discussions with the US on several key defence agreements, has today met with US Ambassador to Sri Lanka, Alaina B. Teplitz.

The meeting had taken place at the Opposition Leader’s official residence in Colombo.

Former Foreign Minister, Professor G.L Peiris and Parliamentarian Keheliya Rambukwella have also attended the meeting.

US agreements

The US and the government of Sri Lanka are in the process of reviewing and discussing the signing of the Acquisition and Cross-Servicing Agreement (ACSA) and Status of Forces Agreement (SOFA) that were signed in 2007 and 1997 respectively.

Opposition has also been raised against signing the US Millennium Corporation Challenge (MCC) compact for Sri Lanka. Despite the MCC compact being targeted for development programmes in the highways and transport sectors, the Opposition claims the agreement too would impact the country’s sovereignty.

However, the Rajapaksa led Opposition has been continuously criticizing the government of Sri Lanka for negotiating with the US to sign the two agreements, stating it would harm the sovereignty of the country and would lead to the setting up of a US military base in Sri Lanka.

Key among the Opposition critics are MPs Wimal Weerawansa and Udaya Gammanpila.

Anti-US fear mongering

Finance Minister Mangala Samaraweera, who was the country’s former Foreign Minister, on several occasions severely criticised the Opposition for “anti-US fear mongering” against signing agreements between the two countries.

Samaraweera has noted that it could have a significant impact on relations with the US, which is Sri Lanka’s largest single country export partner.

According the Minister, Weerawansa was on a campaign to spread fear and hate against engagement with the US, which would not be beneficial for Sri Lanka, as the US is Sri Lanka’s largest single country export partner, annually purchasing about $3.7 billion worth of goods and services.

“The Opposition is jealous of our achievements. We took a country that was isolated and broadened engagement with many international countries. Sri Lanka has benefited from this engagement, whether it is GSP+ or the US$ 480 million grant from the Millennium Challenge Corporation (MCC). I can speak extensively on the MCC grant, because I have been personally involved, and the funds have been allocated by the Government to improve a range of services, including transport and land. The grant may not seem like much, but as a middle-income country, Sri Lanka does not receive such large amounts of funds anymore, and it is important that it be productively used,” the Minister told the media last month.

Samaraweera also dismissed Weerawansa’s claim that the new versions of the SOFA and ACSA agreements were different and would threaten Sri Lanka’s sovereignty, by pointing out that the documents only had more pages because additional addendums were attached.

“It is ridiculous to say that the agreements are bad for Sri Lanka based on the size of the agreements, or the number of pages. I ask Weerawansa to learn an additional language and come see me, so that I can explain to him what is exactly in these agreements. The first ACSA agreement was signed in 2007 by none other than former Defence Secretary Gotabaya Rajapaksa, so how can he say this agreement is bad? SOFA was signed in 1997 and will only be renewed. What catastrophes have befallen Sri Lanka because of it? Ninety-four other countries, including India and Malaysia, have signed these agreements, and they have used them to engage more and develop their countries. Instead, we are being pushed in the opposite direction by a person who has no idea what they are talking about, a person with a small mind.”

 US denies allegations

The US has meanwhile rejected false claims which implied that America is interested in building a military base in Sri Lanka.

US Ambassador to Sri Lanka, Alaina B. Teplitz has insisted that the US have no plans of establishing military power in Sri Lanka.

Meanwhile, US Embassy Spokesperson Nancy Van Horn has told the media that as democracies in the Indo-Pacific, the US and Sri Lanka have a built a strong partnership that enhances security for the people of the two countries and for the region.

She has recalled that in 1995, the US and Sri Lanka concluded an agreement on the status of US Department of Defence (DoD) military personnel and civilian employees who visit Sri Lanka for exercises or official duties.

“We have proposed amending this agreement to include some additional privileges, such as the mutual recognition of professional licenses, how US military personnel and DoD civilians can visit Sri Lanka, fees for support services rendered, and regulations for hiring foreign and local contractors,” she has been quoted as saying.

Van Horn has further noted that the updates will streamline processes already in place and will facilitate collaboration with the Sri Lankan military on counter-terrorism practices, maritime security, and other issues of common concern.

The Trincomalee strategic gateway in the Eastern province is to be re-positioned as a tourism and export hub under a National Physical Plan for 2018-2050 prepared with the inputs of around 3000 Sri Lankan scholars and experts and not a single American was not involved in the endeavour.

Minister of Megapolis and Western Development Patali Champika Ranawaka claimed that the Colombo-Trincomalee Economic Corridor (CTEC) development plan has a potential to generate 1.2 million new jobs by 2030.

The government was expected to invest US$ 400 million for initial infrastructure development activities over the 30-year period while attracting over US$ 4 billion foreign investment of some of the mega projects under public private partnerships.

He expressed the belief that Trincomalee could be developed as the Eastern Gateway to countries in the Bay of Bengal region, home to around 3 billion people, which will be will be fast developed within the next 20 years.

The Export-Import Bank of Korea (Korea Eximbank) along with Asian Development Bank (ADB) and the Sri Lankan Government has drawn up the blueprint for the CTEC.

Under the master plan, Trincomalee would be converted into an export hub by creating a clean industrial ecosystem, which can add value to the already abundant agriculture, aquaculture, minerals and resources in its hinterland.

Trincomalee would also be re-positioned as the Eastern Tourism Hub, by increasing regional connectivity through the development of the Colombo-Trincomalee economic corridor and the establishment of an international airport in Hingurakgoda.

The region will also be converted into an eastern logistics centre through the economic opportunities gained as a result of the many Free Trade Agreements Sri Lanka has entered into with South and South East Asian nations, as well from maritime traffic in the Bay of Bengal and the Indian Ocean.

The third international airport and an international cricket stadium will also be constructed in the area while developing the Trincomalee harbour as an international port.

Korea Eximbank's collaboration with ADB is expected to make the CTEC development plan more implementable because Korean experts are expected to make augmentative contributions to the CTEC initiative based on the very experiences that Korea acquired while carrying out similar economic corridor development projects in 1970s to 1980s.

Therefore, people of this country should reject baseless allegations of bankrupt unqualified politicians linking US with Trincomalee development, Minister Ranawaka said.

Former Defence Secretary, Gotabhaya Rajapaksa has returned to Sri Lanka from Singapore last night after recovering from a heart procedure.

The trial on the case filed against Gotabhaya for the alleged misappropriation of public funds in the construction of a D.A. Rajapaksa memorial museum in Hambantota is to now commence before the special High Court trial at bar from Friday (26).

The trial was postponed due to Gotabhaya’s absence and later due to medical reasons after his counsel informed court of the surgery and the need for him to recover.

Meanwhile, Gotabhaya loyalists say that he is expected to launch his presidential campaign at the August 11th special convention of the Sri Lanka Podujana Peramuna (SLPP) led by his brother, former President and Opposition Leader, Mahinda Rajapaksa.

The tussle over the chairmanship of Sri Lanka Rupavahini Corporation has intensified with the State Media Minister making a new appointment to the post despite the incumbent chairperson continuing to serve in the position.

State Media Minister Ruwan Wijewardena has appointed Sanjeewa Wijegunawardena on July 18th as the Chairman of Sri Lanka Rupavahini Corporation. Meanwhile, incumbent chairperson Inoka Sathyangani continues to serve in the position.

The controversy has further aggravated with Sathyangani stating that she has no notice of a new appointment to her post and that she had no intention of resigning from office. She has hence refused to relinquish her post and welcome Wijegunawardena when he had visited the Rupavahini Corporation today to assume duties.

Interestingly, Wijegunawardena was rejected earlier this month by the committee headed by the President's Secretary that authorises appointments to state media institutions when his name was proposed at the time by Minister Wijewardena to replace Sathyangani.

However, Minister Wijewardena has now unilaterally appointed Wijegunawardena as chairman of the Sri Lanka Rupavahini Corporation.

The committee headed by the President's Secretary has previously rejected names of two other individuals proposed by Minister Wijewardena to the post of Rupavahini Corporation Chairman to replace Sathyangani.