SRI LANKA NEWS – SEPTEMBER 2020 – By Victor Meldor

Headline inflation as measured by the year-on-year (Y-o-Y) change in the Colombo Consumer Price Index (CCPI, 2013=100)1 decreased to 4.1 per cent in August 2020 from 4.2 per cent in July 2020.
This was mainly driven by the statistical effect of the high base prevailed in August 2019. Food inflation (Y-o-Y) increased to 12.3 per cent in August 2020 from 10.9 per cent in July 2020, whereas Non-food inflation (Y-o-Y) decreased to 0.8 per cent in August 2020 from 1.5 per cent in July 2020, the Central Bank said in an announcement. The change in the CCPI measured on an annual average basis remained unchanged at 4.8 per cent in August 2020. The monthly change of CCPI was recorded at 0.0 per cent in August 2020. This was due to setting-off the price increase of 0.1 per cent in the Food category, with the price decline observed in the Non-food category by the same magnitude. Accordingly, within the Food category prices of coconut, vegetables and turmeric increased in August 2020. However, prices of fresh fish and limes recorded significant declines during the month. Within the Non-food category, prices of items in Health (payments to medical laboratories) sub-category declined during the month. The core inflation (Y-o-Y), which reflects the underlying inflation in the economy, remained unchanged at 3.2 per cent in August 2020. However, annual average core inflation declined further to 3.8 per cent in August 2020 from 4.0 per cent in July 2020. (Times Online, 2.9.2020)

Sri Lanka has ranked high, out-performing South Asian neighbours in its Air Quality measurement according to the Environmental Performance Index 2020 (EPI) released by researchers at Yale and Columbia Universities recently.
The prestigious index, now in its 22nd year, has become the premier metrics framework for global environmental policy analysis, ranking 180 countries on several performance indicators across a range of issue categories covering environmental health and ecosystem vitality, according to a media release issued by Drivegreen, a vehicle emission testing centre. Based on peer comparisons, overall Sri Lanka is ranked 109th with an EPI score of 39 out of 100, ahead when compared with its South Asian counterparts.
The Air Quality issue category measures the direct impacts of air pollution on human health in each country. It consists of three indicators: PM2.5 exposure, household solid fuels, and ozone exposure.
Sri Lanka is ranked 91 in Air Quality according to the 2020 EPI, and importantly the country has over a 10-year period continued to demonstrate a positive growth when compared to the region, the release said.
In contrast, other South Asian nations lagged behind in Air Quality, notably with Bangladesh ranked 166, India 179 and Pakistan 180. Sri Lanka’s favourable Air Quality and strong performance may be attributed to its vehicle emission testing programme. Following a Supreme Court decision to increase air quality levels, the programme to ensure mandatory testing commenced in 2008 with two companies, CleanCo Lanka (Pvt) Ltd and Laughs Eco Sri (Pvt) Ltd chosen to test vehicles and issue vehicle emission certificates. To-date, Sri Lanka’s vehicle emission testing programme has proven to be an effective mechanism to detect high emitting vehicles and play a vital role in improving air quality especially in urban areas. Despite a vehicle population numbering over 5.6 million including motor cycles, three wheelers and personal vehicles, total emissions have remained stagnant contributing to preserving the nation’s ambient air quality and a high score in the 2020 EPI Air Quality category.
Better air quality has also contributed to fewer air-pollution-related illnesses and other health effects when compared to countries in the region. “Despite these positives, more work remains to be done for Sri Lanka to ascend the ranks of having cleaner air. Significant initiatives that are necessary include creating awareness among the public on the effects of vehicle emissions, the use of fuel which are not recommended by manufacturers, inculcating a proactive attitude among vehicle owners on the importance and benefits of vehicle maintaining on an ongoing basis, ensure regular monitoring of mechanical condition of vehicles for better fuel efficiency and conducting studies and implementing changes in driving patterns and traffic can contribute to further erosion of Sri Lanka’s air quality,” the release said.(Times Online, 2.9.2020)

The total number of confirmed COVID-19 cases rose to 3,092 yesterday, with the identification of 43 new patients.
The new cases include 28 arrivals from Qatar, five from Kuwait, one arrival from the UAE, and one arrival from India, and the Epidemiology Unit includes 22 of the new cases in the 59 COVID-19 cases identified during the 24-hour period ending at 10 a.m. yesterday. Yesterday’s situation report by the Epidemiology Unit states that all 59 cases were overseas arrivals and include three foreigners. To date, 1,146 Sri Lankan returnees from abroad and 43 foreigners have tested positive for COVID-19 and the Epidemiology Unit states that the local COVID-19 cases include 950 Navy personnel and their close contacts. In addition to this, the Army states that 639 persons connected to the Kandakadu Treatment and Rehabilitation Centre have also tested positive, of which 518 are detainees, 67 are staff members, 48 are family members and close associates, and five are guest staffers. There are currently 190 persons receiving medical care at various hospitals, including 66 at the Welikande Base Hospital, 38 at the Iranawila Hospital, 35 at the National Institute of Infectious Diseases (NIID), and two at the Colombo East Base Hospital. While the number of active cases increased from 132 at 10 a.m. on Monday, the number of COVID-19 recoveries also rose in the country. The Epidemiology Unit states that 2,879 persons have recovered from COVID-19 thus far. This includes 11 persons discharged from various hospitals during the 24-hour period ending at 10 a.m. yesterday, of which five were from the Welikande Base Hospital, three were from the Iranawila Hospital, two were from the NIID, and one was from the Minuwangoda Base Hospital. At present, there are no COVID-19 patients at the Minuwangoda Base Hospital. According to the Army, 624 COVID-19 patients connected to the Kandakadu Treatment and Rehabilitation Centre have recovered and 15 persons are currently under medical care. The country’s recovery rate is currently 93.69%, while its fatality rate is 0.39%. A total of 12 COVID-19-related deaths have been reported from Sri Lanka thus far. The Health Promotion Bureau adds that 228,052 PCR tests have been performed in the island, including 1,941 on Monday. Meanwhile, 187 persons left quarantine centres yesterday having completed the process and undergoing a PCR test. This includes 98 persons from the Hotel Farm Garden Quarantine Centre, 79 persons from the Forest Rock Garden Quarantine Centre, six persons from the Kalpitiya Ruwala Quarantine Centre, and four persons from the Mount Lavinia Hotel Quarantine Centre, the Army added.

A total of 7,576 persons remain in quarantine at 71 centres managed by the Army, Navy, and Air Force, while a total of 35,142 persons have left quarantine centres thus far. The Army, in a statement issued yesterday, added that 265 persons from Dubai, 221 persons from Kuwait, 178 persons from Hyderabad, 67 persons from Qatar, and seven persons from Chennai arrived in the island yesterday. All overseas arrivals will be directed to quarantine centres in the island.
The Army added: “Other than detainees, associates, expatriates, and foreigners, not a single COVID-19 positive case was reported from elsewhere in the country. It is the responsibility of all Sri Lankans to continue to adhere to health practices in order to wipe out this pandemic from our country.” (Daily Financial Times, 2.9.2020)
Justice Minister Ali Sabry said, that one in every 40 people in the country was addicted to narcotic drugs and the government would do everything in its power to remove the scourge of narcotics. “We’ll eradicate the drug menace from this land. We will set up a special task force for that purpose if necessary. As per the statistics there are 553,000 drug addicts in the country. That means above 2.5 per cent of the total population and one per every 40 is a drug addict. This is not a situation we could let further develop.” The Minister said: “In 2015, there were 6,600 drug related cases. I checked with the Government Analyst’s Department and law enforcing authorities recently and found that there had been an alarming increase in cases. In 2016 the number exceeded the 8,000 mark; in 2017 it was over 11,000 and in 2018 figure jumped over 12,000. Last year, there were 16,000 cases. Since January this year the number of drug related cases has reached 13,000. (Daily Island, 3.9.2020)
At least 1418 persons were killed in road accidents during the last eight months, latest police statistics revealed. This is despite the country being under lock down for more than three month due to COVID-19 situation. The statistics show that 1358 fatal accidents took place during the eight months. The police also explained that there were 4257 with serious injuries due to accidents. During the eight months a total number of 15402 accidents have taken place Island wide. (Times Online, 5.9.2020)

President Gotabaya Rajapaksa directed relevant authorities to renovate 5,000 tanks scattered across the island following a mechanism combining ancient technology and modern scientific methods. In parallel to this initiative the “National Food Production Contribution Programme” covering 120,000 abandoned paddy lands will also be launched. Tanks will be rehabilitated under the “Wari Saubhagya” programme. The assistance of the Civil Defence Force will be secured to expedite the project, according to the Presidential Secretariat. The proposed programme was reviewed in length during the meeting to discuss future activities of the State Ministry of Development of Rural Paddy Fields and Associated Tanks, Reservoirs and Irrigation held at the Presidential Secretariat yesterday.
“A project to rehabilitate tanks was carried out earlier too. It came under strong criticism by the experts as well as the public. This is due to the fact that despite dredging of tanks, ancient techniques and scientific methods of water retention were not used. Such shortcomings should be avoided and rehabilitation should proceed in a manner specific to each area and tank under a common criterion”, President said. The capacity of tanks has been reduced due to their silting. There are a large number of tanks with breached banks. The Chairman of the Presidential Task Force on Economic Revival, Basil Rajapaksa pointed out the necessity of rehabilitating such tanks targeting the Maha season. President Rajapaksa highlighted the possibility of using tank water not only for paddy cultivation but also to meet the needs for drinking water and other irrigation requirements. The Departments of Land Use and Agriculture have jointly conducted a survey on the pattern of agricultural land use depending on the irrigation system. Based on its findings, plans afoot to cultivate 17 identified crops in the intermediate and inter seasons supported by a satisfactory water management system. Rehabilitation of tanks should be carried out while preserving their related industries.it is imperative that the project should be implemented in conjunction with affiliated organisations and farmers’ societies. President Rajapaksa instructed to renovate the irrigation system including canals and dams in parallel with the project to rehabilitate tanks. (Times Online, 10.9.2020)
Loaded with massive debt of billions of rupees, and in order to overcome the financial crisis triggered by COVID-19, Sri Lanka is seeking more budgetary support from China using its strategic ties, highly placed official sources said. “Beijing is now in a better position to help the island, as it has already brought the COVID-19 issue under control, and the borrowing might be quicker and under favourable conditions,” an eminent economist who wished to remain anonymous told the Business Times. To resurrect the economy and prevent the recurrence of COVID-19, Sri Lanka urgently needs to seek China for technical assistance to contain the spread of the virus and necessary funds to tackle the economic recession forecasted in the coming months, he said. In the remaining months of this year, the government will have to pay around U$2.8 billion (balance of $3.2 billion) for loans and interest, followed by $13.8 billion for debt service from 2021 to 2023, latest available official data showed. The government has sought $1.5 billion from China in a currency swap, as an IMF loan of about $800 million under a new Rapid Credit Facility still hangs in the balance, a senior official connected to financial negotiations told the Business Times. It expects a balance of $1 billion in this lending, of which already $500 million was disbursed in March this year for budget support and to repay installments of loans falling due. Another $800 million is expected soon, the official said adding that the government seeks the additional Chinese credit to bridge the budget deficit. The ministry is currently negotiating with Industrial and Commerce Bank of China (London) PLC and three other foreign banks to raise at least $500 million under Foreign Currency Term Financing Facility (FTFF). The Government reserves the right to select or reject any of their proposals without giving reasons, he said. The FTFF is expected to be raised at a fixed rate or a floating rate, linked to the $ 6 Month LIBOR or its successor with a maturity period of one year or more. The proceeds of the FTFF will be used for the purposes of financing the expenditure as approved in the Vote on Account (VOA) for the fiscal year 2020. So far, China has provided an “urgent” loan of $500 million to help Sri Lanka fight the coronavirus. It will borrow another $80 million (Rs. 15 billion) from the China Development Bank soon, to improve 105 km of roads.(Sunday Times, 20.9. 2020)

Cabinet has approved a proposal by Prime Minister Mahinda Rajapaksa to ban cattle slaughter in the country. As a country with an economy based on agriculture, the contribution of the cattle resource to develop the livelihood of the rural people of Sri Lanka is immense, the Government noted, in justifying its decision. Various parties have pointed out that the livestock resource required for traditional farming purposes is insufficient due to the rise of cattle slaughter and the insufficient livestock resource is an obstacle to uplift the local dairy industry. This is enabling development of the livelihood of rural people while reducing the substantial amount of foreign exchange attracted towards foreign countries on imported milk powder, it further stated. Accordingly, the Government will be taking immediate action to amend the Animals Act No.29 of 1958, the Cattle Slaughter Ordinance No.09 of 1893 and other related laws and regulations passed by the local authorities regarding cattle slaughter which are currently in force the country. Immediate action will also be taken to import the required meat and provide it at a concessionary price for the people who consume beef. The Government also hopes to Implement suitable program for ageing cattle which cannot be used effectively for agricultural purposes. (Times Online, 29.9.2020)