30% to N.E.
30% of funds from the World Bank’s (W.B.’s) Country
Assistance Strategy (C.A.S.) programme-which has an
allocation of around US$ 900 million for the next four
years beginning from this year will be set aside for
north and east reconstruction and development, W.B.
Country Director Ms. Naoko Ishii told Benchmark last
asserted that conflict sensitivity was at the heart of
WB’s assistance: “At the beginning of the C.A.S., we
made it clear that the W.B. would like to assist or
address the conflict issues: the causes and consequences
of the conflict throughout our country programme the
conflict filter is our instrument to ensure that our
project will do the right thing,” she said.
also stressed that Sri Lanka’s fiscal deficit and high
debt “wouldn’t necessarily help the Government to
position itself to prepare a response to the global
economic crisis, because it will limit the room for
fiscal stimulus and increase the risk of debt
also said: “Public-Private Partnerships (P.P.P.) is our
dream. Sri Lanka is at a critical juncture to move out
of being a low-income country to a middle-income country
and should utilise the private sector’s engine as a key
lever to move that transition successfully. Even if
there are difficulties, we shouldn’t give up. The
enthusiasm for P.P.P. is not strong enough, but we
continue to encourage the Government, private sector and
civil society to harness that momentum for the future of
will decline only if I.M.F. or Libyan money comes
Inflation, interest rates bottom-out
Treasury (T) Bond rates of 2012 and 2013 maturities in
secondary market trading moved up by 25 basis points (b.p.s)
to the 13.60% and 13.70% levels on Friday, over that of
Thursday’s rates due to profit taking and complemented
by Thursday’s T Bond primary auction which saw the
weighted average yield (W.A.Y.) for the April 2013
maturities fetch 13.60%, market sources told The Sunday
Players bought these bonds for rates as high as 21% only
four months ago, in January, so there is an element of
profit taking that pushed rates up, they said.
“However both inflation and interest rates appear to
have had bottomed out, average inflation will remain at
the double digit level throughout the year because of
Government’s added expenditure burden for relief,
rehabilitation and reconstruction works in the war
ravaged Northern and Eastern provinces,” they said.
moving annual average inflation this month was 14.7%,
two percentage points less than that of the previous
month, while point to point inflation was 3.3%, 0.4
percentage points more than in the previous month.
Meanwhile, W.A.Y.s at Wednesday’s primary T Bill
auction remained flat week on week (W.o.W.), with
W.A.Y.s for 91, 182 and 364 day T Bills, dropping by
only one b.p. each to 12.04%, 13.14% and 13.40%
Selling T Bills and T Bonds to the market is a popular
way that the Government raises money to meet its
movement of T Bill rates is also a gauge in regard to
the movement of lending rates.
Recently the President appealed to the banking sector to
bring down lending rates, however, Upali de Silva,
Secretary General, Sri Lanka Banks’ Association (S.L.B.A.)
said that banks’ have told the President that lending
rates can come down only if deposit rates too come down.
Bill yields will continue to remain at these levels
until and unless the Libyan or the I.M.F. money comes,”
a market source said.
“Though the Central Bank (C.B.) expects inflation to be
in the single digit level by the year end, he opined
that the average annual inflation rate by the year end
would be in the 11-12% levels. “So, W.A.Y.s are in line
with this figure,” he added.
the policy rate cut made by the C.B. recently was only a
¼ %, not enough to bring interest rates down, the source
said. With this cut, C.B.’s benchmark, overnight (o/n)
policy lending rate to banks and primary dealers is
11.50%, while the o/n rate it pays banks for parking
their excess money with it is 9%. However with exporters
encashing their dollar proceeds, one of the Government’s
agents in the market, State owned Bank of Ceylon was
buying dollars at Rs. 114.90 per unit last week in order
to stem the further collapse of the greenback. There is
sluggish demand for the dollar in the market, he said.
order to protect the exporter, the ideal rate of the
dollar should be Rs. 115,” the source opined.
However, Sunil Wijesinha, chairman Dankotuwa Porcelain
said that the dollar should appreciate to Rs. 120 in
order for exporters to be competitive. He further said
that Dankotuwa exports most of its products to the E.U.
region. However, the rupee in recent times has made
gains over the Pound and the Euro, said Wijesinha. The
rupee is the strongest currency in the region, making
exports uncompetitive, he added.
Meanwhile, in the first quarter of the year banks’ loan
growth remained flat at Rs. 1.6 trillion year on year (Y.o.Y.).
S.L.B.A.’s de Silva attributed this performance to “no
takers’ due to the dissipation of consumer spending
power as a result of the economic downturn, coupled with
the non-availability of good borrowers.
non performing loans in the quarter ended March 31, 2009
increased by Rs. 25 billion quarter on quarter to Rs.
125 billion, comprising 7.2% of banks’ total loan
portfolio. De Silva attributed this increase to an
increase in housing loan defaults.
200 mn., unemployed
International Labour Organisation (I.L.O.) said that
2009 will represent the worst global performance on
record in terms of employment creation.
said that the global labour force is expanding at an
average rate of 1.6%, equivalent to around 45 million
new entrants annually, while global employment growth
decreased to 1.4% in 2008 and is expected to drop
further to between 0-1% in 2009.
Global Employment Trends Update, May 2009, I.L.O.
revised upwards its unemployment projections to levels
ranging from 210 million to 239 million unemployed
worldwide in 2009, corresponding to global unemployment
rates of 6.5 and 7.4% respectively.
Trends report projects an increase of between 39 and 59
million unemployed people since 2007 as the most likely
range. Updated projections of working poverty across the
world indicate that 200 million workers are at risk of
joining the ranks of people living on less than USD 2
per day between 2007 and 2009.
global economic crisis is hitting youth hard. The number
of unemployed youth is expected to increase by between
11 and 17 million from 2008 to 2009. Youth unemployment
rate is projected to increase from around 12% in 2008 to
a range of 14-15% in 2009.
Director-General Juan Somavia cautioned that past
experience suggested a considerable lag of 4-5 years on
average in the recovery in labour markets after economic
recovery. There was a risk of the global jobs crisis
“persisting” for the next several years.
Whilst, no doubt, a large number of troops will be
needed to man newly established or re-established camps
in the North and East to ensure that there is no repeat
of terrorism from those areas, there may still remain a
surplus of soldiers who are no longer needed by the
army, now that the 26 year long war with the L.T.T.E. is
then is the Government going to do with those excess
numbers of military personnel who have been trained to
handle weapons, who have been trained to kill, but whose
services are no longer required now that the war is over
is the million dollar question.
Therefore the onus before the Government is to find
alternative avenues of employment to those demobilized
this to happen, they may need to be trained in various
vocational skills in order to be made employable
elsewhere, similar to what the Government is doing to
those captured or surrendered terrorist cadres who are
now in the process of being rehabilitated, before being
released to society.
course the excess number of troops are not terrorists,
that is the subtle difference. But the sheer numbers
involved in the case of demobilized troops may be
phenomenal, possibly numbering in the thousands, if not
in the tens of thousands, gigantic, when compared with
the head counts of those Tigers who are being
rehabilitated, and whose numbers may add up to only a
few hundreds, if not a couple of thousands at the most.
Government may also be hard pressed to find the
necessary resources to train them in various vocations
so that they would be equipped with the necessary skills
to make them suitable for employment in non military
who has been trained to kill, if not gainfully employed
in other trades in the event of being demobilized, may
be a threat to society itself, this is the reality.
way that the Government may make these demobilized
troops useful is to employ them in construction and
reconstruction works, a very real requirement for a
country whose assets have been destroyed and development
and progress stultified as a result of the 26 year old
However, a cash strapped Government with little
resources will be hard pressed to do this alone. It will
need to muster the support of the donor community and
N.G.O.s to see this through.
are one of several issues which the Government faces in
peacetime, for which international goodwill and
international support are essential for lasting peace
and sustainable development of this island nation.
week, the main story in the business pages of this
newspaper was about the closure of Nisol Corrugated
Cartons Ltd., a company set-up in 1978.
closure was not due to bankruptcy, but due to militant
labour which had the temerity to assault its General
Manager when one of its workers were asked to do some
numbers affected due to this liquidation may be small,
some 200 workers and 20 staff, but the bigger picture is
the attitudinal problem of some of our workers who feel
that they could do just as they please in their
workplaces and are not prepared to take orders from
their superiors, a dangerous situation, and a threat to
the consequence, 220 being made redundant due to the
action of one bad egg.
message that Nisol’s liquidation brings about is that
there are those employers who will not tolerate
indiscipline among its workers even if it results in the
closure of their establishment, and the other is,
naturally, the need for a more disciplined labour.
prevent such incidents being repeated, there also needs
to be flexible labour laws that will allow for the swift
punishment of such miscreants to ensure that the
majority won’t suffer for the sins of a few, thus
ensuring that the wheels of business/production will
continue to move along, unimpeded and uninterruptedly,
despite unlawful acts by some of its labour.
Nisol’s liquidation also brings home the need for a
continuous dialogue between the Government/Labour
Ministry, employers and trade unions that such things
will not recur, more so, in these times where the world
is going through one of its worst economic crisis since
the Great Depression of the 1930s, where jobs are being
lost not only globally, but in Sri Lanka as well, due to
falling consumer demand and tighter credit.
Otherwise the country may be sitting at the edge of a
volcano due to rising unemployment caused not due to a
dearth in job opportunities, i.e. in cases such as Nisol,
but due to militant labour who take the law into their
own hands, not realizing that they are recruited or paid
to work, and not to shirk.
Setting up a “school of work” which will teach labour
their duties and responsibilities in their workplaces
may not be a bad idea, so that they would then be
equipped with the correct mindset and right attitude
when they enter the labour market, thereby being an
asset to their employers and their country, and also
ensuring that their home fires would be kept burning,
From manufacturing to services
is offering e. mail facilities on its mobile phones, the
second mobile phone manufacturer to offer such services
the difference is that our hand phones which are
equipped with such services are sold at ¼ th the price
of a Blackberry device,” its General Manager Emerging
Asia Prem Chand told reporters from Sri Lanka,
Bangladesh and Nepal in Dhaka last Saturday.
of Nokia hand phones equipped with such applications
range from US$ 50 and upwards.
further said that those Nokia devices also come with the
company’s own e. mail service, ovi.com.
“Having our own e. mail service, other examples being
google and yahoo, helps us to strengthen our brand
image,” said Ms. Paula Laine, the company’s Vice
President, Entry Category Marketing.
the launch of this service six months ago, they have had
got 300,000 such subscribers.
service was officially launched in Bangladesh last
Saturday, with plans to roll it out in Colombo next
Finnish means door.
from making devices, added on offering services to their
business portfolio only 2½ years ago. It’s also enabling
the offering of such e. mail services in local
languages, including in Sinhalese. However, Laine said
that Nokia will continue with its core business, i.e. of
Go West, East with Qwest
we founded Qwest Destinations we were determined to
create a special kind of travel Company. We had a vision
and a goal for seeking out new destinations which
reflect our spirit. Quality is one of those over-used
words. Quality that we emphasize is about accommodation,
comfort travel and unique experiences: as in a ride to a
most sought destination like Machu Picchu in Peru or a
thrilling rollercoaster ride in Orlando.
April Qwest operated almost 12 tours across half the
world to amazing destinations.
West’s summer months, i.e. its weather conditions are
excellent for travel, and due to the downturn in
economies several offers are available to discover new
lands. To coincide with the July/ August school
holidays, even extending up to December, Qwest will
offer value added tours to many countries.
Europe-8 country tour: Italy, Austria, Germany,
Switzerland, Holland, Belgium, Luxembourg and France,
starts in the “ city of love”–Venice and thereafter
through Padua-a city devoted to St Anthony-Austria over
the Alps via the Brenner pass travelling on the longest
bridge in Europe-Europa Bridge-to Innsbruck, then to
Switzerland-Lake Lucerne, to Germany.
short cruise on the river Rhine passing vineyards and
castles in Germany to Amsterdam and through the Benelux
Countries ending in France. The Europe Tour unfolds
great travel experiences.
has a terrific Tour to Alaska on a 7 night voyage of the
glaciers stopping in almost four cities in the heart of
Alaska-Ketchikan, Juneau, Skagway, etc. Something new
this year will be to combine three days in Seattle.
After the cruise, Los Angeles is offered to you. This 16
day tour is memorable and you will carry treasure-troves
Region and Scandinavia: Qwest’s 11 day Baltic Cruise
takes you to the historic city St. Petersburg-Russia’s
No. 1 travel destination.
Stockholm, Oslo, Copenhagen and Helsinki are all offered
to you on the Baltic Cruise together with Poland and
Estonia. Europe’s unique magic will be seen through the
eyes of experienced guides. Qwest has been exceptionally
strong to U.S.A. and we have affordable 20 day tours
covering Orlando, New York, Washington D.C. and Niagara
National Geographic recently rated Machu Picchu as the
world’s most sought after destination. Machu Picchu is
now a wonder of the world visited by so many. Qwest
unfolds a 15 day tour to the heart of Peru covering all
“must see” cities and sights including Lake Titikaka,
the highest navigable lake in the world. Qwest Peru Tour
is planned for October 17.
September Qwest Tour to China will give you flexibility
to discover this vibrant country which has great sights.
greatest wildlife show on earth unfolds in Kenya in
Masai Mara especially during the migration period when
millions of animals cross between Tanzania and Kenya. We
now offer a 12 day tour in August combining the world
famous Ngoron Goro crater with parks in Kenya.
Egypt-Home of the Great Pyramids at Giza, the Sphinx,
leaving either from Luxor or Aswan, explore the wonders
along the Nile, Qwest offers a four night cruise on a 10
day tour in November/ December.
Destinations in August take you on a spiritual journey
to Lourdes, Fatima, Rome, Vatican and Nevers Prague and
Krakow are also offered. Holy land continues to grow as
one of the most important destinations in the Qwest
Travel calendar offering series of Tours throughout the
year.A 7 night cruise to the Greek Islands and to
Qwest’s travellers benefit from the planning expertise
of our specialist tour consultants plus the knowledge
and support of the very best guides and tour
representatives across half the world.
Borrowings at discounts
the world’s economies are contracting, it is the
individual borrower, entrepreneur, the small household
that are hit hardest.
weather the storm and ride the crest of the wave in the
upturn, business must continue and borrowing must
continue. Hatton National Bank (H.N.B.) realizes the
importance of proper pricing that will keep the wheels
“Partnering the Progress” of millions of Sri Lankans,
continues assisting in the development of every Sri
which introduced home loans in 1996 under the ‘Shanthi’
brand is the leader in this sector amongst private
commercial banks. H.N.B. has played a dynamic role in
disbursing large amounts of money for purchase and
construction of houses amongst a wide spread clientele
catered to by a network of 178 customer services centres
bank is conscious of providing this service at
affordable interest rates, during this month home loan
interest rate was reduced twice.
BD Asst. General Manager P. Sridharan said that H.N.B.
launched the first branded product in the banking
industry titled ‘Singithi’ Minor Savings almost 15 years
ago, introduced education loans and “graduate” loans a
few years back, thus providing a continuation of
“Singithi” minors to pursue their higher education when
reaching major status.
facility is also available even for non-Singithi
accountholders. “At a time when external degree
qualifications are costly, HNB has consciously reduced
the rate on graduate/educational loans. Keeping in line
with the state focus of promoting agriculture, H.N.B.
has taken the initiative to provide attractive leasing
packages to this sector coupled with tailor made
promotions organized through various partners.
significant feature in such promotions has been the
bundling of insurance and credit cards to provide a
total solution at reasonable interest rates. The bank
has reduced the interest rate further to facilitate the
bank is promoting the ‘Gami Pubudu Upadesaka’ (G.P.U.)
scheme to elevate the entrepreneurial poor to take part
in economic development. Advances under the G.P.U. loan
scheme have always been at special rates. The success of
this scheme could be measured from the large number of
small time borrowers who have now borrowed in excess of
Rs. 500,000-1,000,000. The mission of the bank of
promoting the entrepreneurial poor through micro
financing to the SME sector is a vision accomplished.
Developing the Wanni
Lanka is a multi-cultural, multi-lingual,
multi-religious and multi-ethnic society. That diversity
must be respected, protected and nurtured. It is only
through that kind of a conscious strategy that we would
be able to build confidence among each and every Sri
Lankan to think Sri Lankan,” Disaster Management and
Human Rights Minister Mahinda Samarasinghe told
have to address economic grievances-there are many
because these areas have been neglected for a long time.
When we go to Kilinochchi and Mullaitivu we see that
nothing has been done for the people in those areas…”
Outlining the steps that are being taken to resettle the
IDPs and initiate reconstruction of areas that were
under conflict, Samarasinghe told the show’s Special
Correspondent Ms. Savithri Rodrigo that it was important
to first secure their villages.
primary obstacle is mines. De-mining has to take place
as a matter of priority. And we will carry this out to
meet UN standards. Infrastructure development has to
Government services have to be put into place,” he
of this has to be put into place before resettlement
starts. Our objective is to act fast. Do all these
things followed by resettlement and then address
economic, political, cultural, linguistic and religious
grievances through a political solution. What we have at
the moment is the 13th Amendment. Hopefully something
else could be built up.” The widely-watched business TV
programme is presented by LMD and produced by the wrap
Janashakthi announced on Wednesday that the suspension
of the registration imposed on it by the Insurance Board
of Sri Lanka (I.B.S.L.) has been lifted with immediate
company was requested to show cause on why the
suspension should be lifted. I.B.S.L. has accepted the
Company’s explanations and the suspension has been
Rs. 1.7 bn. net foreign outflow
the Government announced that the war ended on May 18,
the Colombo bourse, in the nine market days from May
18-29 saw a net foreign outflow (n.f.o.) of Rs. 1.8
billion, indicating that more needs to be done to entice
foreign investments in the backdrop of a global
However, the market, mainly driven by locals, recorded a
daily average turnover of Rs. 1.2 billion during this
inherent weakness of the bourse, i.e. the absence of net
foreign inflows (n.f.i.s)was witnessed at Friday’s
trading which saw market indices move in opposite
directions (see above) due to month end “window
dressing” of accounts and settlements on investments
made from borrowed money having to be paid, market
however witnessed a marginal n.f.i. of Rs. 60.50
“Foreigners are adopting a ‘wait and see’ attitude, the
market is dominated by retailers who have no holding
power (a reason for Friday’s staticism), high networth
individuals and occasional institutional investors,”
however may continue to drive the bourse in the week
beginning tomorrow, the sources added. They were however
unsure when foreigners would step in. That is the
Achilles heel, the sources said.
S.L., India, black sheep
Malaysia last year scrapped the “visa on arrival”
facility for Sri Lankans and Indians because it was
scheme was introduced in 2007.
However, other countries in the region, such as
Bangladesh and Pakistan continue to enjoy this facility,
Rosli Ismail, High Commissioner for Malaysia in Sri
Lanka told reporters on Tuesday.
Meanwhile outbound tourism to Malaysia from Sri Lanka
increased by a third, from 30,000 to 40,000 last year.
However, the same was not true in regard to inbound
tourism from Malaysia, with the war being a detrimental
Bullish on S.L.
is optimistic about Sri Lanka’s future in the context of
its 26 year long war coming to an end, its manager to
this part of the region told reporters in Dhaka last
Chand, the company’s General Manager Emerging Asia, in
whose purview Sri Lanka, Bangladesh, Nepal, Maldives and
Bhutan comes under, said that among the added pluses in
Sri Lanka’s favour is its high literacy and G.D.P.
creates uncertainty among both investors and consumers
alike, he added.
however said that a constraining factor is Sri Lanka’s
high duty structure.
phones imports to Sri Lanka are charged with a 15% duty,
whereas in a country like Bangladesh it’s a flat rate of
US$ 4 per mobile phone that is being charged regardless
of its value.
Nokia’s phones are priced from U.S.$ 23-24 and upwards.
duty structure also spawns a grey
market which ultimately hits government revenue, said
Survival of the fittest
not the strongest of the species that will survive, but
it are those that are adaptable to change that will
survive-CIMA President Glynn Lowth quoting Charles
Darwin, the father of evolution, at a function in
Colombo on Wednesday to celebrate
CIMA’s 90th anniversary.
J.K.H. P.A.T. down 9%
Keells Holding Group in the financial year ended March
31, 2009 saw net profits decline by 9.1% year on year
to Rs. five billion, while revenue in the period under
review increased by 2% to Rs. 41 billion.
CIMA has introduced a new syllabus effective from next year.
“CIMA Future,” this change was done with inputs received
from the University of Bath and from recommendations
made by scores of employers,
CIMA President Glynn Lowth, speaking at a function in Colombo
on Wednesday to celebrate
CIMA’s 90th anniversary said.
Lakshan Ferdinando (23), a talented photographer
launched his website recently. He had his secondary
education at St. Benedict’s College, Colombo.
during school days he had an interest and liking for.
photography which he inherited from his father who was
also a keen photographer.
Nevertheless Ferdinando has acquired a style of his own
unlike other photographers which gives a new dimension
to his photographs and when entrusted with an assignment
his vision is to create and set new standards that go
beyond the term customer satisfaction.
main assignments are weddings, events and commercials.
Hameedias sales down 30%
Hameedias, a clothing retailer, saw sales down by 30%
year on year (Y.o.Y.) in value terms in the quarter
ended March 31, 2009.
Y.o.Y. decline last year was also 30%.
are hoping that things will get better, now that the war
is over,” Hameedia Managing Director Fouzul Hameed told
The Sunday Leader.
Wednesday the company relaunched its Adidas outlet at
Havelock Road, Colombo at a cost of Rs. 25 million,
bringing its total investment on this project to Rs. 75
million, since its launch nine years ago.
CIMA in Arabic
employees have to follow
CIMA’s certificate in Islamic Finance course introduced in
course, for the first time is being translated into the
Arabic, a record, as this is the first time that
is being taught in another language other than in
President Glynn Lowth, speaking at a function in Colombo
on Wednesday to celebrate CIMA’s 90th anniversary.
Chevron’s P.A.T. down 33%
Chevron Lubricants in the first quarter (1Q) ended March
31, 2009 saw profits decline by 33% year on year( Y.o.Y)
to Rs. 232.93 million. A high cost base oil inventory
was attributed to the reduced margins.
Nestle’s P.A.T. down 30%
in the 1Q ended March 31, 2009 saw profits decline by
30% Y.o.Y to Rs. 465.33 million.
S.L.T. P.A.T. down 41%
Lanka Telecom in the 1Q ended March 31, 2009 saw profits
decline by 41% Y.o.Y to Rs. 974 million.
Cey. Ins. P.A.T. down 29%
Ceylinco Insurance in the 1Q ended March 31, 2009 saw
profits decline by 29% Y.o.Y to Rs. 101.16 million. Its
lower earnings were attributed to a decline in premium
growth in life and non life business. (Source: John
Keells Stock Brokers)
To university after O/Ls
Imperial Institute of Higher Education (IIHE) has
introduced a global passage to students who wish to
enter international universities after successfully
completing Ordinary Level Exams.IIHE, which is the only
validated centre of Wales University for Business &
Computing degrees in Sri Lanka, in collaboration with
Edexcel UK, which is a global giant in providing quality
International qualifications, is offering the Edexcel
BTEC National Diploma in Business which is accepted by
almost all British based universities and many more
universities in the Commonwealth as an entrance
qualification straight after O/Ls. This is a truly
global pathway to university straight after O/L,, rather
than most ‘foundation courses’ offered today.