business Sri Lanka

India’s new port-led development strategy, Sagarmala, is an ambitious, large scale project that is slated to improve India’s port operational efficiency and harness the potential of India’s long coastline. This Policy Brief looks at Sagarmala and its implications for Sri Lanka, and recommends steps to be taken in order to secure the opportunities that could arise from this initiative.

I. Introduction

Maritime trade plays an important role in the Indian Ocean. In fact, one-third of global bulk shipping trade,1 which includes petroleum products and coal, transits through this region. The maritime sector makes a significant contribution to the economy of many countries in that region. However in India, due to infrastructural constraints and poor operational performance,2 the growth of the sector has slowed in recent years. To address this, Indian Prime Minister Narendra Modi rolled out the ambitious Sagarmala3 development project in 2015 to boost India’s maritime sector. This port-led development strategy is designed to address some of the most pressing issues faced by Indian ports and improve its operational efficiency. At the same time, this is likely to have major implications for shipping sectors across the region, including Sri Lanka. Arguably, the development of these ports could lead to increased competition between India and Sri Lanka. However, this article discusses that while Sagarmala may well be a threat and lead to increased competition in the region, there is also a possibility that it could pose as an opportunity for Sri Lanka, especially for the Port of Colombo. This policy brief will explore the current state of ports in India and Sri Lanka, introduce Sagarmala and review some challenges and opportunities and finally provide some policy recommendations.

II. Comparison of Indian and Sri Lankan Ports

Both India and Sri Lanka, are key players in maritime trade in the South Asian region (defined as Bangladesh, India, Pakistan, Maldives and Sri Lanka), with India being the biggest player holding the lion’s share of 53% of the regional market in terms of container throughput followed by Sri Lanka holding 24% and Pakistan and Bangladesh holding 12% and 10% respectively in 2017. Both nations have several key seaports which sit near the globally important, East-West shipping route. Given these locational advantages, within South Asia, Indian and Sri Lankan container throughput has been growing faster than the regional average of 7.25% with 9.71% and 8.71% (2017) respectively.

There are four major ports in Sri Lanka including Colombo Port, Galle Port, Hambantota Port, and Trincomalee Port. Colombo Port is by far the largest, dealing with 94.84% of total handled cargo in the country in 2017. With three operational terminals,4 Colombo has a collective installed capacity of about 7.1 million5 TEUs (Twenty-Foot Equivalent Units) and handled roughly 6 million TEUs in 2017 and recently crossed 7 million TEUs in December 2018.6

Between 2014 and 2017, container throughput at Colombo port grew at an average rate of 9.8% as shown in Figure 1. Interestingly, growth peaked after Colombo International Container Terminal (CICT) operations commenced in 2013. This was mainly because the port was able to facilitate more shipments and larger vessels as CICT is the only deep-water terminal in South Asia capable of handling the largest vessels afloat.

The ports overall performance compares well with the South Asian regional averages and other Indian Ports. In a comprehensive study by the World Bank,7 it was found that, the number of days it takes a ship to dock or the “Waiting Time” at Colombo Port was only 0.09 days, which was far quicker than the South Asian average of 2.08 days (MRE). In addition, the percentage of idle time at berth was roughly 6.9%, in Colombo but 19% within the region. Port efficiency, among other factors have facilitated growth in throughput over the years.

On the other hand, India has 12 major ports out of which Jawaharlal Nehru Port Trust (JNPT) in Mumbai and Chennai Port handled 18% of total Indian cargo in 2017. Both these ports have a locational advantage, as they are situated on either side of the East-West shipping route. Collectively, they have an installed capacity of roughly 7.3 million TEUs and handled about 6 million TEUs in 2017.

One of the five terminals at JNPT, the Bharat Mumbai Container Terminal operationalised in 2016 and thus JNPT was able to boost its port throughput growth from -6% to 14.6%8(YoY) in 2017. Similarly, Chennai port throughput growth contracted by -5% in 2016, but grew at a rate of 4.5%9(YoY) in 2017. However, under the Sagarmala initiative, both ports have been identified for further expansion, due to capacity constraints weighing heavy against growing demand.

As for port performance, both Indian ports have various strengths, and have been improving over the years. Idle Time as a share of total time at berth reduced significantly at JNPT from 36% in 2000 to 8.1 % in 2012. Similarly, in the Chennai port, it reduced from 25% to 14.7% (MRE) respectively. However, in terms of Waiting Time, the Chennai port was able to reduce it by 73% over the 12-year period (2000-2012) to 0.35 days, while Waiting Time at JNP has been slightly worsening. These ports perform reasonably well compared to the regional averages, but not across all indicators.

On an aggregate level, the average growth rate of container traffic in India fell from 15.5% between 2001 and 2008 to 7.2% between 2010 and 2014 as shown in Figure 2. There are many factors that could have contributed to this downturn, including slowing world trade growth in the post-crisis period. Within the domestic framework, one could also argue, that Indian ports lacked the capacity to facilitate further shipments due to various infrastructural constraints and poor operational performance10. In a bid to address these issues, the Sagarmala initiative was introduced.

III. Is Sagarmala a Threat?

The Sagarmala initiative is based on four components, namely; Port Modernization, Port Connectivity, Port-linked Industrialisation, and Coastal Community Development. Sagarmala expects to invest over INR 8 trillion11 (about USD 50 billion) to further develop this infrastructure with 577 projects having been identified so far, and 49212 already at various stages of implementation. Some of these projects are designed to increase the capacity of the 12 major ports by 62% to 1,414.5 million tonnes per annum (MTPA).13

This project mainly attempts to address a number of issues that have restricted the growth of the Indian shipping sector, especially that of inadequate infrastructure. Port capacity limitations in India have so far resulted in major shipping lines turning to other ports in the region, including the Port of Colombo. In 2017/2018, Colombo attributed 42%14 of its traffic to transshipment of Indian cargo.

However, this could change in the coming years as Indian port capacity begins to expand under Sagarmala. For example, the Enayam Port in Tamil Nadu, which is only 10 nautical miles from the international East-West shipping route, could have its capacity increased from 10 to 18 million TEUs;15 by comparison, Colombo’s installed capacity is currently 7.1 million TEUs.16 Meanwhile, Vizhinjam Port in Kerala is being designed to be the world’s deepest multipurpose seaport17 Vizhinjam has an 18-20 metre natural draft depth;18 this is already greater than Colombo, which only has a depth of 18 metres.19

The recent relaxation of the cabotage rule in India20 is also likely to adversely impact21 Sri Lanka’s transshipment trade in the short to medium term. As foreign flagged vessels will now be allowed to transport goods from one Indian port to another, Sri Lanka’s ports might no longer play a major role in transshipping these goods. This could be a major blow as the Sri Lankan shipping industry relies heavily on its transshipment role. As such, both port expansions under Sagarmala as well as the liberalisation of Indian shipping regulations could deteriorate the feeder network that Sri Lanka has been able to maintain, thereby undermining its competitiveness as a hub.

IV. Is infrastructure expansion enough?

However, one could argue that infrastructure expansion alone won’t make Indian ports more competitive, and that if one adopted a more holistic view of port performance, Colombo could still retain its market share. Shipping lines often place great value on port efficiency, as it translates to lower costs. In this respect, Colombo is generally more efficient than Indian ports. On average, selected major Indian ports have a Turn Around Time (TAT)22 of 2.16 days, which is far longer than Colombo’s average of 0.86 days (MRE). Colombo also has a less complex administrative process compared to Indian ports. Currently, Indian ports require 10 forms and 22 signatures on average for administration purposes, whereas Colombo Port only requires 7 and 13 respectively.23 As a result, border compliance24 in India takes roughly 9 more days, compared to Sri Lanka.25

While India has a higher overall ranking of 77 in the Doing Business Report 2018,26 they perform relatively poorly on some sub-indices, one such area being average trading costs. The average cost to export and import goods (which includes documentary and border compliance costs) from Sri Lanka is USD 424 and USD 583 respectively, whereas in India, the costs are higher, being USD 474 and USD 678 respectively. To add to this, the investment environment in Sri Lanka also compares well against India. According to the “Starting a Business” sub-index, it takes only 9 days to open a business in Sri Lanka, whereas in India, it takes roughly 30 days. Due to the low-cost advantage and the deregulated registration process, one could argue that Sri Lanka generally has a more conducive business environment than India.

As the overall trading environment in Colombo is generally more welcoming, there is potential for the Port of Colombo to grow as the region’s main transshipment hub, ahead of Indian ports, even when the latter have had its infrastructure upgraded under Sagarmala.

V. Is Sagarmala an Opportunity?

India is currently the world’s fastest-growing economy27 and is likely to account for 9.5% of World GDP (PPP terms) by 2025 according to a study by the Overseas Development Institute.28 Meanwhile, Sri Lanka is relatively a much smaller economy, and while it is growing above the world average, it is likely to only account for 0.2% of World GDP by 2025. As India gears up to meet growing demand, certain opportunities may become available for Sri Lanka which could catalyse its growth and accelerate the rate of development.

Besides the possibility that Sagarmala’s infrastructure-led development alone, would not result in undermining Colombo’s regional hub status, there is also the possibility that the project may create positive spillovers for the region, resulting in a win-win outcome for both Colombo and Indian ports. For example, with India’s ability to accommodate greater cargo volumes as a result of Sagarmala would arguably lead to an absolute increase in regional container traffic. Over the years, the shipping environment has gravitated towards a hub and spoke distribution system.29 This is where large vessels load more cargo and ship it to one hub or distribution centre. These centres receive products from various origins, which they then consolidate and ship off to their final destinations through feeder vessels. As a result of this trend, higher traffic volumes could drive down the cost per TEU handled for both shippers and shipping lines,30 drawing further shipping lines to the region to benefit from scale economies. Given that the Port of Colombo was ranked 13th in the Drewry Global Container Port Connectivity Index31(4Q 2017) and is the only South Asian port to be listed in the top 20 on this index, its existing complex networks are likely to strengthen and grow under this expansion of container traffic. Therefore, with this influx of container traffic, Sri Lanka may be in a better position to strengthen as a transshipment hub. As such, Sagarmala could create something of a complementarity effect between the ports of the two countries.

VI. Policy Recommendations

In the long run, securing a complementary relationship with Indian ports will, to some extent allow Colombo to maintain its competitiveness as the region’s transshipment hub. Sri Lanka should work toward (i) strengthening its links across different maritime networks and (ii) investing in expanding capacity and (iii) providing more complimentary services, that are aligned with the nation’s goal of becoming a regional hub.

Connectivity

One such way of improving maritime network connectivity is through leveraging regional and bilateral coastal agreements, such as the bilateral coastal shipping agreement32 with Bangladesh. This agreement is designed to give third-party access for Sri Lankan vessels to East Indian Ports. It is expected that it will improve transit time, reduce costs and improve connectivity between Bangladesh’s Chittagong Port and Colombo. Similarly, Sri Lanka could also look to regional platforms to further develop its network. Currently, a coastal shipping agreement33 is being drafted under the BIMSTEC framework, which is designed to promote greater and more cost-effective movement of cargo. By leveraging these agreements, Colombo would be able to expand its feeder network to facilitate the existing hub and spoke system and strengthen as a regional transshipment hub.

Capacity

Recently a tripartite agreement between the three terminals was signed in order to ensure smooth port operation and significantly reduce waiting time. Though this will help in the short term, Colombo port is likely to reach its full capacity quite soon. One way to resolve this issue is to prioritise the construction of the East Terminal, Sri Lanka’s second deep draft terminal34 after CICT. Once completed, it will be instrumental in reducing shipping congestion and will allow Colombo port to maintain its upward growth trend, adding 2.4 million TEUs35 in capacity. In addition, investing in infrastructure and equipment should be prioritised to ensure that demand is being matched with efficiency and good service. As such, reforms should not delay, and proactive measures must be taken in order to overcome this bottleneck.

Services

Similarly, Sri Lanka could also work towards adopting modern distribution services and warehousing in order to secure clients in this competitive market. Currently, there are talks of encouraging Multi-Country Consolidation (MCC) services,36 where half-full container loads are brought to Sri Lanka and cargo is reshuffled into full container loads and shipped to the destination country. These types of logistics services would complement Sri Lanka’s vision of becoming a stronger transshipment hub and would help it fully exploit the scale economics opportunity offered by Sagarmala.

VII. Conclusion

Sagarmala’s infrastructure-led development strategy and the repeal of the cabotage law are likely to boost India’s maritime sector by a large scale. Though this might mean increased competition within the region, especially for Colombo, one could argue that infrastructure development alone won’t be enough to capture more market share. Especially when Colombo performs better in terms of port operational efficiency than most Indian ports. However, Colombo should take advantage of the scale economics Sagarmala could offer and leverage regional agreements to further strengthen as a transshipment hub. India’s progression is inevitable but by being proactive, Colombo may be able to retain its market share and hold a temporary advantage.

Nevertheless, Sri Lanka should not rest on her laurels. In order to remain competitive, Sri Lanka should strengthen its national port development strategy and address bottlenecks that constrain the shipping and port industry. Increasing capacity through reviving the East Terminal37 at the Colombo Port and investing in infrastructure and other ancillary services would allow further growth.

Implementing forward-looking policy would enable Colombo to be better able to accommodate future demand and be better equipped to indirectly benefit from initiatives such as Sagarmala.

(Written by Pabasara Kannangara, from Lakshman Kadirigamar Institute)

AIA Insurance Lanka PLC (AIA Insurance Lanka) announced that it intends to delist the Company’s shares from the official list of the Colombo Stock Exchange (CSE), subject to shareholder and regulatory approval.

An Extraordinary General Meeting (EGM) on this matter will be held on March 27, 2019. The proposed delisting of the Company’s shares will be based on a revised and final offer made by AIA Company Limited of Hong Kong of Rs. 2,500 per share.

The decision to delist from the CSE is based on AIA Group’s preferred target operating model for its business units of operating as wholly owned subsidiaries, with the parent Company being the only publicly listed entity. Since its entry into Sri Lanka, AIA Group has disclosed its intent to delist AIA Insurance Lanka from the CSE.

As part of this process, AIA Insurance Lanka has secured, in accordance with the amendments made to Sri Lanka’s Insurance Law in 2017, an exemption, as approved by the Insurance Regulatory Commission of Sri Lanka (“IRCSL”), from the requirement to be listed on a Stock Exchange, based on the listing of its ultimate parent entity AIA Group Limited, on the Stock Exchange of Hong Kong Ltd (HKSE).

Fitch Ratings revised the Outlook on the National Insurer Financial Strength (IFS) Ratings of Sri Lanka-based life insurer HNB Assurance PLC (HNBA) and its fully owned non-life subsidiary, HNB General Insurance Limited (HNBGI), to Positive from Stable and affirmed the ratings at ‘A(lka)’.

The Outlook revision reflects better non-life capitalisation and financial performance while maintaining satisfactory life capitalisation. The rating affirmation takes into account the insurers’ favourable business profiles and prudent investment policies.

Fitch expects the insurers’ capitalisation, as measured by their risked-based capital (RBC) adequacy ratios, to remain comfortably above the 120% regulatory minimum in the medium term. HNBA’s life RBC ratio was strong at 319% at end-2018 (2017: 358%), while the non-life RBC continued to steadily increase to 200% in 2018, from 178% in 2017, supported by an improved non-life underwriting performance.

Leading Sri Lankan insurer, Janashakthi Insurance PLC (Janashakthi), delivered steady growth during the period under review, registering 8% growth in First Year premiums, with Gross Written Premiums (GWP) of Rs.3 billion, along with a reported surplus transfer of Rs.395 million.

The Company also reported post-tax profits (PTP) of Rs.11.1 billion for the financial year ended 31st December 2018, with a group consolidated post-tax profit of Rs.9.2 billion. This included proceeds from the divestment of its General Insurance business in early 2018 and the recognition of deferred tax asset.

Investment income stood at Rs.1,503 million, growing by 13% year on year, from Rs.1,327 million in FY 2017. This was driven largely by the 27% growth in the Company’s investment portfolio, which grew from Rs.12.4 billion to Rs.15.7 billion.

Net claims and benefits grew by 35% year on year, from Rs.1,119 million to Rs.1,510 million, primarily due to maturity payments. While the separation of branch offices and the discontinuation of shared services had an impact of overhead expenses, the Company has established several stringent measures to control restructuring and expansion related expenditure.

“2018 has been a truly transformational year for us at Janashakthi. Returning to our roots as a standalone Life Insurance company, we embarked on a host of strategic initiatives through the year to lay a strong foundation for Janashakthi Life,” said Prakash Schaffter, Chairman of Janashakthi Insurance PLC.

“Post the divestment of our General Insurance business, we have been able to better focus on the Life Insurance segment. We relaunched the Janashakthi Life brand, unveiled our new corporate strategy and purpose and moved to our new Life headquarters.

We rolled out our new, dedicated Life branch network which will be completed in early 2019.

As part of our digital-led transformation efforts, we empowered our Sales teams further with the Advisor Virtual Office (AVO) system,” said Jude Fernando, Director / Chief Executive Officer of Janashakthi Insurance PLC.

Commercial Credit and Finance PLC Group recorded a strong performance for the quarter ended December 31, 2018 with an un-audited Profit Attributable to Shareholders of Rs. 808,425,246 as compared to Rs. 678,095,749 recorded in the quarter ended December 31, 2017.

The Group recorded a growth of Rs. 130,392,497 in profit attributable to shareholders or 9% in comparison to the corresponding period last year. The performance is commendable as it was achieved in a very challenging environment in the last quarter of 2018.

The Group’s performance for the nine months ended December 31, 2018 also ended on a high note with Commercial Credit and Finance PLC Group recording a profit attributable to shareholders of Rs. 1,890,707,367 compared to Rs. 1,782,354,731 rupees recorded as at December 31, 2017 which is a 6% growth.

The Company has fully implemented Sri Lanka Financial Reporting Standards 9 during the Financial Year of 2018/2019. The above results are after providing for impairment of financial assets under SLFRS 9.

Chief Operating Officer Rajiv Casie Chitty of Commercial Credit and Finance PLC said, “The main driving force behind Commercial Credit’s astronomical success has always been at the hands of our very dedicated workforce. We are truly humbled and elated that we were able to record such successful results. We are deeply committed to ensuring that our success reaches all stakeholders of the company”.

HNB Assurance Group delivered striking financial results for 4Q 2018, posting a Profit After Tax (PAT) of Rs 2.7 billion.

This includes the regular profits for the period together with the One- Off Surplus which is resultant of the Life Fund Valuation rule change and the Deferred Tax asset of Rs 1.2 billion. The profit hence showcased a 241% growth in comparison to the corresponding period of 2017. However, the aforementioned One-Off Surplus will only be applicable for the year 2018. The Group recorded a Gross Written Premium (GWP) of Rs 8.7 billion against a GWP of Rs 7.8 billion recorded in 2017.

Rose Cooray, Chairperson of HNB Assurance PLC (HNBA) and its fully owned subsidiary HNB General Insurance Limited (HNBGI) stated, “HNBA and HNBGI have stood strong against numerous challenges prompted by economic factors prevailing in the market. Continuing its journey steadily, on the impressive growth trajectory commenced in the recent past, the two companies have delivered outstanding overall results in the current year. This has resulted in further reinforcing our firm standing in a highly competitive industry coupled with a healthy reputation and a favorable future outlook”.

Managing Director/CEO of HNBA and HNBGI, Deepthi Lokuarachchi stated “with our focus on delivering value to our customers and shareholders these financial results denote the Company’s continued commitment to expand profitable lines of business and reassure a dominant position in the market”.

Furthermore, Lokuarachchi added “Segments such as Motor and Fire of the General Insurance business depicted impressive results and the Life Insurance Business reflected a growth on par with the market rates. The total asset of the Group reached a value of Rs 22.3 billion and the investment in financial instruments surpassed a value of Rs 17 billion. The Life and General Insurance Funds reached values of Rs 12 billion and Rs 2.5 billion respectively”.

Sri Lanka needs to implement much needed economic reforms at least for the next five years, particularly to address the issue concerning the debt burden, Dr. Ganeshan Wignaraja, from the Lakshman Kadirgamar Institute of International Relations and Strategic Studies, Sri Lanka said.

Dr. Ganeshan Wignaraja made these views on the first day of the ‘Asia Liberty Forum 2019,’ held at the Hilton Hotel, Colombo. The two -day forum is being organized by the Advocata Institute, Sri Lanka.

Noting that country would face the reality of debt overheads despite that fact that who would come to power following the results of the upcoming Presidential election and Parliamentary election to be held by the end of this year and next year respectively, he said.

“It is the responsibility of successive governments to place the economy on a sounder footing to revive growth and most importantly to accrue benefits to the ordinary citizens,” he added.

Speaking on the common challenges faced by the South Asian region, he pointed out three main challenges, which include the political instability in the region, mainly due to the escalating conflict between Pakistan and India, the upcoming elections in India and Sri Lanka and most importantly, specific issues relating to the One belt-One Road initiative of China.

He further said that China had inspired the infrastructure growth and investment model, while the western inspired growth model had been poorly implemented in Sri Lanka.

Speaking on the Economic freedom and political freedom in the South Asian region, he said, “On the economic freedom front, South Asia has done something reasonably, but still it is fairly protected. South Asia may be somewhat ahead of the economic freedom front, but on the personal freedom side, South Asia did not do well.”

Dr. Christer Ljungwall from the ENC Center for Global Affairs, Sweden, speaking at the forum on the growing influence of China in the South Asian region, said he would not consider China as a challenge. Instead, he emphasized that the rest of the countries in the region need to deal with it in a pragmatic manner.

“We have to deal with it and find ways to integrate with them in order to create value for the ordinary citizens, while conveying our message to them in a right manner.”

Hong Kong Exchanges and Clearing, which operates the Hong Kong stock exchange, the third-largest bourse in Asia, reported a record net profit of HK$9.3 billion (US$1.18 billion) for last year, an increase of 26 per cent over 2017.

“HKEX has benefited from a rising turnover and this trend has continued this year. Its turnover has reached HK$170 billion on some days this week. This shows investment sentiment has improved, as many central banks, including the US Federal Reserve, have indicated a slow down in interest rate increases. This has led fund managers and other investors to put their money in equities,” said Ben Kwong Man-bun, a director at brokerage KGI Asia.

“The January data for China is also positive. The announcement of the ‘Greater Bay Area’ blueprint is also going to add more cross-border trading between the Hong Kong and mainland China markets, which will benefit HKEX. However, investors should beware. The share price of HKEX has risen substantially in recent months. I believe it will retreat a bit after hitting HK$290 per share,” he said.

Investment bank China International Capital Corporation was more bullish, raising its target price for HKEX shares from HK$310 to HK$345 in a report released on Tuesday, before the profit announcement.

“HKEX will announce its 2019–2022 corporate strategy on February 28, which we see as a short-term catalyst that could push the stock price higher,” the report said.

HKEX chairwoman Laura Cha Shih May-lung said in a statement: “We are entering 2019 with more geopolitical and economic uncertainty than has been the case for many years.

(South China Morning Post)

China’s mechanical industry will maintain an overall stable growth in 2019, the China Machinery Industry Federation said Monday.

The industry is expected to see a 6.5 percent growth of added value this year, and a 5 percent growth of total profit, according to the federation.

Meanwhile, the federation predicted a moderate export growth in 2019.

The industry’s growth is being spurred by a guideline, issued by 10 national authorities including the Ministry of Commerce and the Ministry of Industry and Information Technology in the beginning of the year, on optimizing supply and promoting consumption.

The industry is expected to accelerate innovation-driven development and seek new dynamics this year to advance high-quality growth and industrial upgrading, the federation said.

In 2018, the industry’s revenue amounted to 21.38 trillion yuan ($3.19 trillion), up 6.05 percent from the previous year, while total profits stood at 1.45 trillion yuan, up 2.18 percent year-on-year. (chinadaily.com.cn)

The Indian economy’s momentum continues to slow, shows the latest update of the Mint Macro Tracker, launched in October last year to provide a state-of-the-economy report each month based on trends across 16 high-frequency economic indicators.

The Mint Macro Tracker shows that out of the 16 macroeconomic indicators, only four were in the green (above the five-year average trend) as of January 2019, while eight indicators were in the red (below the five-year average trend). This reading is significantly worse than what it was six months ago, the data shows.

January’s score is also a shade worse than that of December 2018—which itself marked a downward slide compared to previous months—when five indicators were in the green, and eight indicators were in the red.

The domestic consumer economy remains the weakest spot, with automobile sales falling, air passenger traffic sluggish, and tractor sales anaemic.

Data from the consumer confidence surveys of the Reserve Bank of India (RBI) shows that the gap between respondents who claim to have raised non-essential spending and respondents who claim to have lowered non-essential spending has been shrinking in recent months, with 14.3% net positive response in December 2018 compared with 22.3% net positive response in September 2018.

The industrial sector report card appears to be similar to what it was last month.

While core sector growth (which captures trends in eight key industries—electricity, steel, refinery products, crude oil, coal, cement, natural gas and fertilizers) has continued to disappoint with the latest growth figures showing an 18-month low, the purchasing managers’ index (PMI) manufacturing index showed an improved reading in January compared with the previous month.

Non-food credit growth too continues to be above the trend but it is worth noting that this comes on the back of a very low base, and does not suggest a rapid expansion in credit off-take. As Neelkanth Mishra and Prateek Singh of Credit Suisse pointed out in a 20 February note, the total lending by banks and non-banking financial companies (NBFCs) in the December 2018 quarter was lower than what it was in the December 2015 quarter.

It remains to be seen how far the recent RBI rate cuts pushes up credit growth in the coming months.

The December quarter earnings for most listed firms were disappointing, with profit growth slowest in five quarters, and the outlook does not appear rosy, with analysts cutting earnings estimates for a plurality of firms. The earnings per share forecast was cut for 151 of the 253 companies tracked by at least 10 analysts, according to data compiled by BloombergQuint.

The price signals continue to offer mixed signals, with headline inflation low but core inflation relatively high over the past few months. Rural wage growth has continued to remain disappointingly low. The job outlook has been improving, at least in urban areas, according to data from RBI’s consumer confidence surveys.

Overall, the economic momentum appears quite weak in the country today. With global growth expected to remain muted over the next few months, and with domestic political risks high in the backdrop of the upcoming Lok Sabha elections amid a high-wire conflict with Pakistan, investments and growth are likely to remain subdued in the Indian economy.

(www.livemint.com)

The sixth seminar for the North Central Province entrepreneurs on the national program of developing 2000 New Exporters was held on February 22, 2019 at The Golden Mango Resort, Anuradhapura (Jayanthi Mawatha, Anuradhapura)

1st Seminar was held on March 23, 2017 launching the programme for Northern Province Entrepreneurs in Jaffna and the second phase of the Seminar was held in Kandy for the Central Province Entrepreneurs. The third phase was held for the Southern Province entrepreneurs in Matara. The fourth phase was held for the North Western Province entrepreneurs in Kurunegala. The fifth seminar was held for the Sabaragamuwa Province entrepreneurs in Kegalle.

The EDB is implementing a national programme to nurture 2000 new entrepreneurs to become exporters during the period 2017 - 2022 at regional level. The main objective of this programme is to encourage domestic enterprises to invest in export industries to achieve the overall export target of US $ 28 billion in 2022.

The program includes an awareness program for entrepreneurs, a technological display for the export industry for school students to educate about the export sector, a discussion with top business leaders to attract them to the export sector.

The Mini Exhibition on technology is with the participation of stakeholder organizations relevant for the export sector representing Industrial Development Board (IDB), Industrial Technology Institute (ITI), Sri Lanka Standards Institution (SLSI), National Engineering Research and Development Centre (NERD), Post-Harvest Technology Institute (PHTI), Department of Export Agriculture (DEA), Coconut Development Authority (CDA), Sri Lanka Institutes of Nanotechnology (SLINTEC), Bureau Veritas Consumer Products Services Lanka (Pvt) Ltd and Tulip Technologies (Pvt) Ltd.

The seminar will focus on introducing Export business opportunities for development of products suitable for the province including spice products, ornamental articles, processed foods, ayurvedic products, coir products, and Ornamental fish and wellness tourism with a view to increase export supplies from the province of those potential products and services.

Malik Samarawickrema, Minister of Development Strategies and International Trade, P. Harrison, Minister of Agriculture, Rural Economic Affairs, Livestock Development, Irrigation and Fisheries and Aquatic Resources Development, Chandrani Bandara, Minister of Women & Child Affairs and Dry Zone Development, Nalin Bandara Jayamaha, Deputy Minister of Development Strategies and International Trade, S.T. Kodikara, Secretary of the Ministry of Development Strategies and International Trade, Indira Malwatte Chairperson and Chief Executive of Export Development Board and Officials of government and private sector participated for the event.

Sri Lanka China Business Cooperation Council (SLCBCC) will be conducting a seminar on “How to benefit from new policy shifts in Chinese economy” today (28) commencing from 3 p.m. at the V.I.P Room, Galadari Hotel Colombo. This is for the benefit of the Sri Lankan entrepreneurs.

The economic ties between Sri Lanka and China have grown significantly over the past few years. China has invested massively in the development of the infrastructure facilities in Sri Lanka. This has as a part of the Belt and Road Initiative aims at promoting the trade routes for mutual benefits for involved countries.

The Sri Lanka China Business Cooperation Council is of the view that most of our entrepreneurs have so far failed to identify the available opportunities to reap the benefits of the Chinese investments effectively.

This seminar is aimed at identifying such opportunities and how to make use of achieving the best results by helping a person to successfully navigate the complexities of the market.

The 1st International Dental Implant Symposium was successfully held at the Dental Faculty of the University of Peradeniya recently, marking a new milestone in the local field of dentistry.

The event was organized by NucleOSS Dental Implants, a leading dental implant company, together with the Kandy branch of the Sri Lanka Dental Association and boasted the presence of a number of experienced and eminent speakers in the field of implantology from various countries. The Dean of the Dental Faculty and reputable dentists were among the distinguished audience.

Although the dental implant methodology that is used to replace a lost tooth with an artificial tooth that is very much akin a natural one, has been a process practiced in dental science worldwide for decades, it was only recently that it became popular in the Sri Lankan dental field. The revolutionary effect that the beginning of the use of this methodology in Sri Lanka had on the dental field, was expressed at this symposium.Lecturers shared their knowledge on various topics pertaining to the subject of Implantology, while also covering the latest technologies in Digital Implant dentistry.

NucleOSS Dental Implants, has been working with Sri Lankan dental surgeons by introducing a wide range of dental implant methodologies since 2013, while training many of the local dental surgeons through their Faculty of Education and Research Science, TFI - (Together for Implantology). The NucleOSS Study Club in Srilanka continues to engage in this task imparting knowledge by conducting courses, workshops and Study club meetings.

Setting another benchmark in the fuel retailing industry in Sri Lanka, LAUGFS’s Southern Petroleum launched the country’s second solar-powered fuel filling station at Waskaduwa, Kalutara with a 46.1 KW solar-panelled roof.

The iconic solar-powered fuel station is expected to generate and add over 5,520 kWh per month to the National Grid as an annual average. This was launched as part of the company’s plans to meet the electricity requirements of its network of fuel stations with renewable energy sources.

“This innovative concept is a one of a kind in the local petroleum retailing industry and will enable us to not only utilise cleaner energy for daily operations of our fuel stations, but will also reduce our overall dependency on non-renewable energy sources for electricity,” commented Southern Petroleum Director/Chief Executive Officer, Mahesh A. Weerasena at the launch of the new fuel station in Waskaduwa.“Further in line with this, we aim to install solar rooftops across Southern Petroleum’s island-wide fuel filling station network and thereby add around 1 MW of electricity to the National Grid. Our next solar-powered filling station is coming up in the Southern region in Matara,” he remarked, further elaborating on the company’s future plans.

LAUGFS’s Southern Petroleum launched the first of its fuel stations with solar panelled roofing at Pepiliyana early this year, which was awarded with the prestigious Silver Award Certificate from the Green Building Council of Sri Lanka.“I would also like to thank the LIOC Chairman, Managing Director, Senior Vice President - Sales and HR and other key officials for their continued support,enabling us to introduce this innovative concept of solar powered fuel stations,” commented Weerasena.

The new Waskaduwa fuel station of Southern Petroleum offers Xtra Premium 95, Euro 4 Standard Petrol 92 Octane, Euro3, Lanka Super Diesel, Lanka Auto Diesel and Extra Mile. It also offers high quality branded lubricant and car care products for the convenience of motorists, together with LAUGFS domestic and industrial LPG cylinders.

LAUGFS Petroleum is a fully owned subsidiary of LAUGFS Holdings,and operates a broad network of fuel filling stations across the country. Today the company serves around 25,000 customers island-wide through its expansive filing station network. In its continuous efforts to pioneer and set new industry benchmarks, the company was also the first to introduce the concept of NFC technology to the local petroleum retailing industry.

Six of Evergreen Lines large vessels deployed in the Far East/ European Trade called at Colombo Port commencing from December 18, 2018.

Mv. Ever Golden was the first vessel to call at Colombo International Container Terminal (CICT) with carrying capacity of 20,388 TEUS followed by Mv.Ever Gifted making her maiden call on January 1, 2019, Mv. Ever Given on January 14, 2019, Mv.Ever Genius on January 28 2019, Mv. Ever Grade arrived on February 6, 2019 and Mv. Ever Goods on February 18, 2019.

Evergreen has taken the delivery of 8 of its Ultra Large Container Ships (ULCS) out of its 20,388 TEUS capacity 11 ships from Japanese shipyard Imabari Group ordered through Shoei Kisen Kaisha Ltd and all ordered vessels will be delivered over the next few months.

With a LOA of 400 M and a breadth of 59M (23 rows) the Evergreen’s Largest Fleet of vessels Mv. Ever Golden and her sister ships can reach a commercial speed of 21 knots.Taiwan based Evergreen Marine intends to continue to expand its fleet after confirming that 47 vessels will join the company between 2018 and 2021.

The ship design incorporates optimized hull profiles and minimize ballast water requirements to maximize cargo carrying capacity. The vessels are designed to have larger depth to strengthen hull structure and navigation safety and ships are fully comply with the regulations of International Maritime Agencies. Current service cooperation arrangements with its Global Alliance partners will enhance Evergreen to efficiently utilize the capacity and garner the potential benefits represented by lager vessels.

With the new deliveries and renewals and expansion of fleet, the program will rejuvenate the fleet thereby enhancing the quality of service offered to customers and reinforcing the Liner’s competitiveness in the market place.

The arrival of the Evergreen vessels were marked with a ceremony attended by SLPA Management, CICT Management as well as representative for Evergreen Line and local Agents – Hemas Maritime (Pvt) Ltd.

CHEC Port City Colombo was awarded ISO 9001:2015 certification for the Quality Management System (QMS), adopted by the project company.

The certification given by internationally recognised testing entity, TÜV SÜD PSB, an entity with 40 years of expertise in helping organisations achieve business excellence, covers the Project Management, Administration and Supervision aspects of the project.

Michael Chiam, Director - Capital Operation and Deputy CFO of Port City Colombo who spearheaded the certification process commended the efforts of the implementation team for their hard work in preparing the certification audit as well as implementing the quality management system. “After going through the ISO certification audit over the last week of November 2018, we have now been officially conferred with ISO 9001:2015 certification. Many thanks for the hard work and perseverance of everyone, particularly the leadership given by our Managing Director, Jiang, in achieving this standard.”

Chiam added that whilst looking forward to applying the QMS which they had implemented to every future aspect of the project, the implementation process had been a learning experience for everyone. “Each individual department has setup, reviewed, revised and/or standardized their respective operational processes and procedures in order to self-review and self-detect issues that may come up. This is done with a view towards continuously improving themselves.”

The Deputy CFO says that the system of continual improvement encourages a higher degree of leadership commitment and a significantly greater staff engagement as they seek better ways to achieve work objectives. “This means we as the project management company, have committed to provide a higher level of management, administration and supervision of the Colombo Port City overall.”

Managing Director of Port City, Jiang Houliang said that achieving the ISO quality certification at the initial stages of the project is a further testament to the international standards that would be applied in the construction and maintenance of Port City. “Our commitment towards quality management is proof of the high standards we apply to every aspect of our operations. This certification is an important signal to every one of our associates, suppliers and future developers, that we are committed towards achieving the highest levels of compliance and standardization for the benefit of all. We will continue to uphold uncompromising quality at all levels of our operations.”

The certifying company TÜV SÜD PSB, headquartered in Singapore, was the first certification body in Asia to introduce ISO 9000 as a basis of quality system certification and currently holds accreditations in Europe, the Americas, the Middle East, Asia and Africa.

The proposed Free Trade Agreement (FTA) between Sri Lanka and Bangladesh will undoubtedly prosper the economic co-operation of both countries in the coming years. Sri Lanka-Bangladesh Business Co-operation Council, newly elected President Renuka Jayamanne said.

President Jayamanne was addressing the, Sri Lanka-Bangladesh Business Co-operation Council, AGM held in Colombo. National Chamber of Commerce Sri Lanka, CEO Bandula Dissanayake and Sri Lanka- Bangladesh Business Cooperation Council, Past President Asela De Livera were among the distinguished guests.

Speaking further Jayamanne highlighted that Bangladesh and Sri Lanka has a history of 45 years diplomatic ties and this highly helped to strengthen the economic cooperation between the countries.

She said this economic relationship will further develop strength to strength in the years to come.

Speaking further on the Sri Lanka- Bangladesh economic investments President Jayamanne said Pharmaceuticals was the largest Bangladesh investment in Sri Lanka and the support given by the Bangladeshi Government to develop Lanka’s apparel sector note worthy. She also said that Sri Lanka is expected to be the Shipping and Logistics Hub and it would be beneficial for both Economies in the fruture. President Jayamanne said the ports of Chittagong in Bangladesh and the ports of Colombo and Hambantota in Sri Lanka are located nearly 1,515 nautical miles from each other and the linkages between these ports would facilitate shipping, tourism and investments between the two countries.

She also highlighted that Sri Lankan airlines flying regular direct flights between Colombo and Dhaka and this maritime connectivity will immensely help both countries to boost their economies.

Speaking on education and sports between the two nations, President Jayamanne said around 500 Sri Lankan students currently studying in Bangladeshi medical and dental colleges and in addition two hundred Bangladesh Buddhist monks presently receiving their education in Sri Lankan monastic schools (Pirivenas).

She said the Business Council is now planning to collaborate with various Bangladeshi institutes and key companies to strengthen economic ties further.

Speaking on the agricultural sector, she said that the Sri Lankan agricultural sector could be upgraded by sharing experience between agricultural institutes of both countries at grassroots levels.

“Our Business Council is now in the process of organizing a business delegation from Sri Lanka to Bangladesh by the end of next month with the objective of strengthening the economic cooperation between the countries.”

The HORIBA Group of Japan, a leading company that provides analytical and measurement systems throughout the world, has entered the Sri Lankan market through the company’s regional office HORIBA India Private Limited, situated in New Delhi. The ceremony to announce the launch was held recently at The Hilton, Colombo.

With the launch HORIBA in Sri Lanka the company now ventures into the expanding local market with offerings in world-class Automotive Test Systems, Medical Equipment, Process & Environment Equipment, Scientific Instruments & Semiconductors. HORIBA’s expansion in Sri Lanka will be driven by a strong distributor network and a highly-experienced team. Distributors of HORIBA for respective products were introduced to the market on this platform. Headquartered at Kyoto, Japan, the HORIBA Group was established in 1953 and is listed at the Tokyo Stock Exchange.

Over the years, the company has built a solid reputation in the global market, especially in the fields of automotive emissions and stack-gas measurement, air pollution, water pollution monitoring, quality control in various industries and Medical diagnostics, achieving dramatic growth over the past few years. Globally, HORIBA commands 80% market share of Emission Measurement Systems, 60% in Mass Flow Controllers, both of which are the flagship products of the company.

The company employs over 7,000 individuals across the globe and is founded on the philosophy of “Omoshiro Okashiku” (Joy and Fun precept),which is put it into practice in all offices on a daily basis.

HORIBA India Private Limited commenced operations in 2006 and currently has 7 regional offices in Delhi, Pune, Bangalore, Chennai, Kochi, Mumbai and Haridwar. HORIBA India has been growing steadily with an average growth rate of about 20% every year and currently has a workforce of around 400 employees.

Addressing the audience at the event, Dr. Rajeev Gautam - President of HORIBA India stated, “Since last year, Sri Lanka, Bangladesh, Maldives and Nepal have been handed over to HORIBA India.

We understand the culture, attitudes, languages and situations in this region and also logistically it makes more sense for the company to bring these operations under HORIBA India. Sri Lanka has shown significant progress in human development index and medical scientific activities especially during the past 10 years but still there are a lot of possibilities to grow even further. HORIBA is a Japanese company and we are down-to-earth and humble. We are open to know the ground realities of the country so we want to receive your feedback and want to listen to you on how we can grow.”

HORIBA is looking very positively at this growth driven market and wants to stay close and connected to the customers.

Sri Lanka has formulated and presented the National Physical Planning Policy and the plan for 2050, said Chairman of the Urban Development Authority (UDA) Dr. Jagath Munasinghe. This 30 year plan was prepared by the UDA after a careful study.

Munasinghe said that this, ‘National Physical Plan 2050’ will be the future policy plan to develop Sri Lanka for the next 30 years until 2050. He said that cultural factors urban migration too has been considered and most importantly great concern was also given towards environmental protection and safe water recourses.

He said that modern transport methods along with new areas for development too were included in this policy statement.

Nine new modern cities were also planned under this 30 year plan document. “One of the key points in this planning is to maximize available recourses o its full potential” He said that this would be presented by end of March to the public.

(SS)

Sri Lankan Micro Finance institutions have lent over Rs. 160 billion on high interest rates while the borrowers now have to pay more than Rs. 250 billion to settle them, Secretary-General and Chief Economist of the National Economic Council (NEC) Lalith P. Samarakoon said.

He said that there are over 10,000 unregistered finance companies in Sri Lanka and out of which, only four companies could be registered. These registered finance companies have lent around Rs. 60 billion, while unregistered companies have lent Rs. 68 billion while the rest were dispersed by NGO related institutions.

Samarakoon disclosed that most of these Micro Finance lending institutions borrow from commercial banks at around 16% of interest and then lend at 32% or even more. “We are also looking at offering a new low interest credit line for Micro Finance lenders, so that they could offer credit to borrowers at a lower interest.”

He said that the irony of these scenario is that most of the borrowers of micro credit take loans for non commercial matters; hence the contribution made from these loans to the economy is very low.

There are some instances where these unauthorized finance companies offer credit almost by force, as most of the borrowers have little financial literacy.

“It’s the tough collateral from the Commercial Banks that force micro credit borrowers to move away from the banking sector. The solution to this is to reactivate a banking system such as the Regional Banks and educate people to borrow from it.

Samarakoon also pointed out that some companies are now offering micro credit online which would further aggravate this system as ‘tracking of loans’ would be difficult. There is also a trend where customers take one loan and have to take about five to six loans to settle the previous claim.

He said that this subject was taken up at the last meeting of the NEC and it was decided to bring in new legislature to regularize this industry in consultation with Central Bank and Ministry of Finance soon. Deputy Governor Central Bank, H. A. Karunaratne said that these micro finance companies are exploiting a regulation that prevents Central Bank from regulating lending institutions.

“However, we have now decided to bring in new legislation along with the Finance Ministry to regularize this industry.”

He said that new regulations would put a check to these illegal Micro Finance institutions, while the Central Bank also hopes to educate the public on the micro finance. He also said that the EAP deal was done after considering the best options that were on the table during the time.

The foreign investor consortium, Singapore-registered Blue Summit Capital Management Ltd., offered US$ 75 million and at the time it was the best offer.

“ The Singaporean company later did not want to purchase Swarnamahal Investor Services and the deal was sealed for US$ 69 million out of which US$ 54 million was paid. The remaining US 15 will be settled this week.”

He said that depositors were paid 20% of their dues and a further 10% of their capital would be paid next week. 

The bourse ended on a mixed note yesterday as the ASPI decreased by 0.07% or 3.99 points to close at 5822.27 points, while the S&P SL20 Index increased by 0.09% or 2.63 points to close at 2980.46.

Market turnover decreased by 65.77% relative to yesterday to amount to Rs 0.26 billion while crossings for the day accounted for 37.8% of the day’s total turnover. Foreign Investors meanwhile, recorded a net inflow of Rs 72.3 million over the day compared to a net outflow of Rs 14.2 million recorded the day before.

In the year 2018 Union Bank showcased an impressive performance aided by its robust strategic plan, particularly excelling in core banking operations despite a challenging macroeconomic framework.

The Bank concluded 2018 recording an impressive profit before all taxes of Rs. 1,248 Mn. More importantly, the core-income of the Bank, excluding the capital gains and the negative impact due to the investments on the newly launched credit cards, reflected a 124% growth year on year (YoY). Commenting on the performance of the Bank, Director/Chief Executive Officer of Union Bank Indrajit Wickramasinghe stated “2018 was a year that placed heavy demands on the banking industry which faced multiple headwinds in the economic and political spheres.”

Introduction of the Debt Repayment Levy (DRL) during the last quarter of the year under assessment further amplified the negative impact on the effective tax rate.

The PAT of the Bank was Rs.473 Mn and was only a 2.6% growth YoY. Total Assets of the Bank grew by 5.8% to Rs. 125,920 Mn.

The Bank continued to maintain its robust Capital Adequacy ratio which was well above the limits even after adoption of SLFRS 9.

The Net Interest Income of the Bank reached Rs.3,652 Mn in 2018. This is a significant improvement of Rs. 606 Mn which translated to an increase of 19.9%. Net Interest Margins (NIM) increased to 3.0% compared to 2.9% recorded in 2017. NIM for the current period would have been 3.2% if the return on investment in units were considered. Cost of funding of investments in units was accounted under interest expense of the Bank.

The Bank continued to make significant efforts to improve its fees and commission income using the key enablers articulated in the strategy. Fee and commission income which mainly comprise of deposit related fees, trade and remittances, loans, cards and other fees stood at Rs. 968 Mn recording an impressive growth of Rs. 185 Mn which translated to a 23.6% growth YoY.

The Bank reported net trading and other income of Rs. 800 Mn, which was a 21.9% growth over the previous year. This comprised of capital gains from Government Securities and investment in Units as well as exchange gains.

Despite the weakening of currency towards the end of the year, the Bank’s exchange income showed a noteworthy growth of 73.6% YoY. Income from Investments in Units were 23.5% lower YoY, as a result of lower investments made in Units during the year.

Reflecting the overall improvement in core-banking operations of the Bank, capital gains on government securities as a percentage of profit before all taxes declined to 18.9% from prior period’s 29.6%.

The Embassy of Sri Lanka in the Republic of Korea in collaboration with the Board of Investment (BOI) of Sri Lanka held an Investment Promotion Programme in Seoul from February 19 - 22, 2019 under the Economic Diplomacy Programme of the Ministry of Foreign Affairs of Sri Lanka.

The programme included an Investment Promotional Forum titled “Investment Climate and Business Opportunities in Sri Lanka,” which was jointly organised by the Korea Chamber of Commerce and Industry (KCCI) and the Sri Lanka Embassy on February 19, 2019. KCCI is Korea’s largest private economic organization that encompasses 71 regional chambers and approximately 160,000 members covering all the sections of the Korean economy.

The Forum attracted over 80 Korean companies involved in manufacturing, logistics and warehousing, agriculture and agro-based products, tourism and leisure industry, infrastructure, and knowledge-based industries i.e. IT / BPM, among others.

During his speech, Chargé d’ Affaires Jagath Abeywarna highlighted that Sri Lanka is very keen to attract Korean investment along with Korean know-how and technology.

He added that Sri Lanka would be able to benefit from the Korean new technology and hi-tech manufacturing, as the Republic of Korea is playing a leading role in the field.

Presentations on available investment opportunities in Sri Lanka were made by Additional Secretary Madhawa Waidyaratna of the Ministry of Megapolis and Western Development and Executive Director Prasanjith Wijayatilake of the Board of Investment of Sri Lanka. Director Yang Dongcheol of the Korea Exim Bank made a presentation on the financial support available at the Korea Exim Bank for the Korean companies. The Forum was followed by a B2B Meeting organized by the KCCI with the participation of Sri Lankan delegates and Korean companies who attended the Forum.

The Embassy also arranged a series of meetings for the visiting delegation from Colombo with senior representatives of Korea Overseas Infrastructure & Urban Development Corporation (KIND), Korea Foundation of Textile Industries (KOFOTI), Science & Technology Policy Institute, Korea Agricultural Machinery Industry Cooperative (KAMICO), Korea Land & Housing Corporation (LH), Ministry of Land, Infrastructure and Transport (MOLIT), International Contractors Association of Korea (ICAK), Korea Rail Network Authority (KRNA) and other Korean potential Companies.

Simrin Singh, Director, ILO Country Office for Sri Lanka and the Maldives yesterday said it is important for Sri Lanka to have policies that enable the export sector to grow into higher value products and services and enable diversification.

“The service sector is already the largest employer, and not the agriculture sector as it is still the case in most other SA economies. So here it could be interesting to understand better to what extent trade in services can create more and better jobs in the future,” she said.

Speaking at the launch of the report “Exports to Jobs - Boosting the Gains from Trade in South Asia” compiled by the researchers of the ILO and the World Bank, the ILO Country Director said, “the impacts of globalization and technological transitions on labour markets continues to be an important issue for Sri Lanka. It is especially important to ensure the right labour market policies are in place to ensure everyone benefits.”

The report has also put focus on globalization and labour markets. “Even though South Asia has come a long way and opened up to international trade over the last two decades, it is true that the region appears to be less linked to global markets than other regions in Asia. In Sri Lanka, the apparel sector has been important for employment, not least for more female employment, but growth of Sri Lankan exports has slowed down over the last years. So what benefits could more globalization bring to South Asia if any? Understanding the impacts of globalization and technological transitions on labour markets continues to be an important issue for Sri Lanka. It is especially important to ensure the right labour market policies are in place to ensure everyone benefits.”

She said, many people around the world are currently asking what the benefits of globalization are for them, for workers, and for labour markets and social systems. International trade opens up opportunities for efficiency gains and productivity gains. But for whom exactly, where in the country and how long does it take for these positive impacts to become visible and pervasive?

The links between international trade and the labour markets in developing and emerging countries are not yet well known. And it is my understanding that the authors of this report have picked up some of these questions for Sri Lanka, in a novel manner and following the most recent research in the field.

Increasing exports can lead to better jobs and higher wages in Sri Lanka, including more formal jobs for women. Labor market policies can help different groups of workers to acquire the right skills and to ensure that the gains of more exports are shared more broadly across society.

A new report, “Exports to Jobs: Boosting the Gains from Trade in South Asia”, launched yesterday in Colombo, shows that increasing exports would boost average wages.

The report, jointly produced by the World Bank and the International Labour Organization (ILO), breaks new ground in examining the impact of exports on local labor markets in South Asia. It uses an innovative approach, analyzing the effect on local employment and wages of changes in exports by combining disaggregated data from household-level or worker-level surveys with trade data from India and Sri Lanka. The approach builds on a new wave of research looking at how globalization might contribute to local jobs and wages, but, unlike previous studies, it focuses on exports.

“Our research shows that exports can improve the performance of local labor markets and that policies need to be put in place to increase exports in South Asia, while ensuring that the benefits of higher exports are shared more broadly,” said Gladys Lopez-Acevedo, World Bank Lead Economist and one of the report’s authors. “Addressing constraints that prevent people from moving and from switching to new jobs is important.”

The report provides options on how to expand and widely share the benefits of higher exports. Improving workers’ skills, getting women and youth into more jobs, and addressing distortions that make labor mobility costly are some of the recommended policy actions.

“Economists and policy makers need a better understanding of how exactly globalization affects both workers and national labour markets,” said Daniel Samaan, Senior Economist, ILO Research Department and one of the report’s authors. “Our research shows that more exports can create benefits for workers by raising wages and reducing informality, but we need stronger policies to ensure these benefits reach everyone in the labour market, and don’t leave any groups behind”

Sri Lanka grew at an average rate of 5.8 percent between 2010-2017, and the number of people living in poverty also fell. However, many Sri Lankans still don’t have regular jobs in the formal economy and there are large differences in wages across regions and worker characteristics. Sri Lanka’s exports have fallen from a high of 39 percent of Gross Domestic Product (GDP) in 2000 to only 21.4 percent of GDP in 2016, with export growth limited to a few industries such as textiles, apparel and agriculture. With the right policies, Sri Lanka can ensure that greater export orientation can boost the workers’ gains from trade and spread them more widely, so benefiting disadvantaged groups.

SilkAir, the regional wing of Singapore Airlines, will launch non-stop flights between Singapore and Busan, South Korea’s second-largest city, this year. Commencing from 1 May 2019, SilkAir will operate four weekly flights to Busan.

Slik Air also operates flights to Colombo.

The launch of Busan flights will mark a milestone for SilkAir as it adds its first South Korean city to its network and demonstrates its commitment to bringing customers new and exciting destinations in the Asia-Pacific region. Currently, no other airline operates scheduled flights between Singapore and Busan.

The new service will be operated with Boeing 737 MAX 8 aircraft, which feature both Business and Economy Class cabins. Customers can look forward to a full-service experience, including in-flight meals, wireless in-flight entertainment on SilkAir Studio, complimentary baggage allowance as well as through check-in if they are connecting to or from another SilkAir or Singapore Airlines point via Singapore.

“We are pleased to introduce services to Busan, offering customers in Singapore and around the region yet another vibrant and charming destination to explore in our network,” said SilkAir Chief Executive Foo Chai Woo. “For Koreans travelling from Busan, the new route will also offer greater access and connectivity with the SilkAir and Singapore Airlines network in Asia-Pacific and beyond.”

Rome, 8 February 2019 – Alitalia’s passenger revenues increase continues the growth trend reported in the previous months.

The Italian airline reported in January 2019 the fourteenth consecutive month of growth, with a 4 per cent increase in passenger revenues, compared to January 2018. The growth was achieved without aircraft fleet expansion and was in particular driven by the excellent performance in the international and intercontinental sectors.

In January 2019, passenger revenues of long-haul services increased by 6 per cent compared to the previous year and now represent 48 per cent of total passenger revenues, a value never achieved in the last 5 years.

Number of passengers carried on long-haul flights also continues the growth trend: in January 2019, Alitalia carried 197,380 travelers on its intercontinental services with a 2.3 per cent increase compared to the same month of the previous year.

Alitalia - Società Aerea Italiana (alitalia.com) is the Italian largest airline. As part of its 2018/2019 winter schedule, Alitalia flies to 77 destinations, including 22 Italian and 55 international destinations, with over 3,600 weekly flights and 102 routes. Alitalia boasts one of the most modern and efficient fleets in the world.

It is a member of the SkyTeam alliance and is part of the Transatlantic Joint Venture alongside Air France-KLM and Delta Air Lines.

Scottish Planter Glendevon Bungalow by Theme Resorts & Spas, was recognized as “The Best Bungalow” at the sixth annual Sri Lanka Tourism Awards hosted by the Sri Lanka Tourism Development Authority recently. This awards night was held at Shangri-La Hotel, Colombo, in the company of the best tourism businesses in the country.

Glendeavon Bungalow was presented with this prestigious award under the “Supplementary Tourist Accommodation” category. Despite a number of entries into this category, only three accommodation providers were nominated as a potential winner; Scottish Planter Glendevon Bungalow rose amongst its’ fellow competitors and won their well-deserved title.

Theme Resorts & Spas believes in preserving Sri Lanka’s culture and practices through their hotels. This is evident in all their properties; Aliya Resort & Spa in Sigiriya (which aims to depict an uncomplicated lifestyle of a villager who is surrounded by all of nature’s splendor), Maalu Maalu Resort & Spa in Passikudah (a fishing village of the East), Kithala Resort in Tissamaharama (a bird watches paradise, surrounded by a paddy fields), Mountbatten Bungalow in Kandy (formerly the residence of Lord Mountbatten during the time of the British Rule), Ayurvie Resort & Spa in Weligama (an ayurvedic retreat) an, Scottish Planter Glendevon Bungalow situated in Ragala, Nuwara-Eliya (an olden day tea planter’s abode).

This property has significantly contributed to Sri Lanka Tourism by providing their guests with a second home and an experience not found elsewhere in the country.

A bungalow designed according to traditional Scottish allure and architecture, giving priority to its’ own heritage and luxury, whilst creating a sense of nostalgia for the good times that resound through her walls, the way of life, the conversations had and the guests’ entertained by the old Tea Planter that once took shelter inside and called her home. This property aims to recreate such memories and create a safe haven for guests to relax, indulge and enjoy.

The 2019 edition of the Thai International Travel Fair was held in Bangkok, Thailand last week. The inauguration was held at the Bangkok Convention Center at Central World Bangkok followed by a gala dinner at Centara Grand. The event was attended by over 500 tourism stake holders from around the world including Sri Lanka.

The Chief Guest at the inauguration was the Tourism Minister of Thailand while the Guest of Honour was the Tourism Minister of Sri Lanka, John Amaratunga who received an enthusiastic welcome from the capacity crowd that was present.

Later on Minister Amaratunga declared opened the Sri Lanka Booth, which was the cynosure at the travel fair. Sri Lanka Tourism Promotion Bureau made use of the opportunity to launch a promotional microsite highlighting the Buddhist trail in Sri Lanka. The microsite consists of the main Buddhist tourism attractions in the country, meditation centers and facilities available to learn Buddhism in Sri Lanka.

Launch of the Sri Lanka Stand

The microsite was launched by Minister Amaratunga along with Sri Lanka’s Ambassador to Thailand, Kshenuka Seneviratne, President of the Thai Travel Agents Association, Thanaphon Cheewarattanaporn and Chairman, Tourism Advisory Committee, Harry Jayawardena.

Meanwhile Minister Amaratunga and the Sri Lankan delegation met President of the Association of Thai Travel Agents, Vichat Prakobgosol on the sidelines of the Travel Fair.

The two parties discussed ways and means of increasing the number of arrivals to Sri Lanka from Thailand. Thai Travel agents emphasized that relaxation of visa requirements will help increase arrivals. The Thai travel agents pointed out that outbound traffic from Thailand to Japan increased by over one million when Japan granted visa on arrival to Thai nationals.

The Chamber of Tourism and Industry Sri Lanka (CTIS) will celebrate International Women’s Day on March 8, at the Arugam-Bay Pacific Hotel Auditorium in the Pottuvil DS Division in the Ampara district, said Chamber of Tourism and Industry Sri Lanka (CTIS) President A.M. Jaufer.

Women would be granted the Best Rural Women Society Award, Best Female Social Service Award, Women Journalist’s Awards, Small and Medium Business Women Award, Female employees who have worked for over 10 years in Government and non-Government sector award and female employees who have worked in the tourism sector.

The Chamber of Tourism and Industry Sri Lanka (CTIS) President A.M. Jaufer said this year’s programme has been designed by the Chamber of Tourism and Industry Sri Lanka (CTIS) for the convenience of the members of the Chamber who are engaged in the cottage industries and tourism sector, including Home Stay and related businesses. The Chamber requests rural women’s societies or interested women to apply for awards and join the programme.

Interested parties could join the programme by emailing their applications to President, Chamber of Tourism and Industry Sri Lanka, CTIS) at info@chambertourism.lk before March 3.

Informatics Institute of Technology (IIT), the pioneer in British higher education in Sri Lanka and the country’s premier IT and Business campus, is offering over 100 fully-sponsored scholarships to students through their InfoSchol programme.

InfoSchol, a brainchild of Dr. Gamini Wickramasinghe Founder and Chairman of the Informatics Group, provides talented students from across Sri Lanka the opportunity to obtain a 100% sponsored degree from the University of Westminster - UK while doing a full-time internship bat a leading organisation.

Applicants have access to a range of IIT degree programmes offered by the University of Westminster, UK. The programmes offered are the BEng (Hons) Software Engineering, BSc (Hons) Computer Science, BSc (Hons) Business Information Systems and BA (Hons) Business Management degree programmes. The degree programmes are part-time and will be 5 years in duration during which time IIT will assist the students to obtain placement in one of several reputed organisations in Sri Lanka that have partnered with IIT to offer job opportunities to all selected InfoSchol students throughout the entire duration.

InfoSchol students who complete their 5-year degree will make a saving of over Rs.1.7 million due to the zero costs in Registration Fees, Tuition Fees, University Fees and Exam Fees related to the degree. IIT will also offer a 3-month induction programme to all selected students before they commence the degree. Additionally, during their 5 years of employment, they are assured of receiving a substantial allowance from the company while gaining valuable experience that is in line with the degree that they are pursuing. Overall, at the end of the 5-year period, the student will enjoy a financial benefit of approximately Rs.6 million and will be geared to face the challenges of the business world of tomorrow.

Sharing his vision for the InfoSchol programme, Dr. Gamini Wickramasinghe said, “Sri Lanka has an incredible amount of young talent when it comes to IT and Business but unfortunately due to the lack of opportunities, they are unable to come through and shine on the national and international stage.”

The minimum requirements for entry to the scholarship programme are G.C.E. O/L with Credit Pass for English and Maths and G.C.E. A/L with 3 passes in any stream. The closing date for applications is March 31.