Business

Transport policy doesn’t cover roads

Transport Ministry’s draft transport policy is not integrated in that it does not cover roads, air and water transport.

This was revealed at a seminar on Thursday.

Neither does it cover three wheeler and two wheeler passenger transport which comprises 70% of road transport, Dr. Rohan Samarajiva, Executive Director LIRNEasia, a think tank said.

It covers only public and rail transport.

Transport specialist Prof. Saman Bandara of Moratuwa University told The Sunday Leader that the reason why the draft policy does not cover roads was because the Highways Ministry was preparing a separate road policy.

He told seminar participants that the Ports and Aviation Ministry was involved in preparing a separate Ports and Aviation policy for the country. Bandara who was involved in formulating the draft transport policy admitted that it would have had been better if all of the aforesaid policies were integrated into one over-arching development policy framework, complementary to each other.

Meanwhile Samarajiva said that the draft transport policy report refers to Government of Sri Lanka’s (G.o.S.L.’s) involvement in the transport sector, similar to its involvement in both the health and education sectors, which has however proved to be failures.

 He further said that rail and government owned bus losses in the period 1999 to 2008 increased from Rs. three billion to Rs. eight billion.

Samarajiva said that despite this, G.o.S.L. had no desire to pull back, inspite of its failure in transport services.

National Transport Commission, the appellate body under this policy, comes under the Transport Ministry. The policy is also silent about transparency, of politicization and does not touch on inter-connections and multiple terminals, he said.

Bandara continuing said that transportation, a service industry, which is defined as the movement of people and goods, contributes to about 10-15% of the country’s G.D.P. He said that 68% of the passengers travel by bus, 5% by rail and the balance 27% by private transport.

However in the case of freight, 99% of it is transported by road and only 1-2% by rail.

Bandara also stressed the importance of inter-connectivity in transport.

He  asked the rhetorical question whether the island has a policy to reduce accidents?

 He said that 16,000 of those who perished in the 2004 tsunami were those who were either on road or on rail, when this calamity caught up with them.

Another lacuna was that the environmental impact of transport not being taken into account, though there are emission control standards.

Bandara also said that nothing has been done to develop the country’s rail system after the British left the island in 1948.  

He  added that inland transportation has not been taken-up, though there had been a recent study done in relation to this,  of transport through inland waterways, along the Diyawanna Oya to Wellawatte..

Former Treasury Secretary Charitha Ratwatte another speaker at this event advocated for less or no regulation for the growth of the transport industry.

He pointed out that the three wheeler industry, there are some 350,000 three wheelers plying in the country, grew without any regulation. The three wheeler industry does yeoman service in the village, he said. Ratwatte even claimed that the reason why the suicide rate in the country had come down was because of three wheelers. “They are used to transport poison cases to hospitals on time for resuscitation,” he said.

Ratwatte also pointed out that another thriving industry was the van service, particularly to transport schoolchildren, an industry which grew inspite of the fact that it’s unregulated. The policy doesn’t refer to the school van transport industry.

DHL Global Forwarding Lanka Pvt. Ltd. Chairman Col. Faiz-ur Rahman in his speech said that because of poor logistics, a kilo of sour plantains in Mahiyangana which is Rs. seven a kilo, is sold at Rs. 40 when it comes to Colombo. But in India this differential is only 10%, he claimed.

In this connection he referred to the 30-40% waste of fruits and vegetables in the island, known as post harvest losses.

Rahman said that the meaning of transport logistics was to get goods from one place to another at least cost and in the most effective and safe manner.

He pointed out that Sri Lanka’s transport and logistics costs were more expensive than that of China and India’s.

Rahman said that while transport and logistics costs in Sri Lanka was equivalent to 22% of G.D.P., in China it was only 16.4% of G.D.P., India (16.6% of G.D.P.) and the U.S.A., 11.4% of G.D.P.

The conference was organised by Pathfinder Foundation, Sri Lanka, a think tank.

I.M.F. funds for debt servicing

The I.M.F U.S. $ 2.5 billion standby arrangement (s.b.a.) may be used for foreign debt payment, but not for other Government of Sri Lanka (G.o.S.L.) expenditure, informed sources said.

An I.M.F. condition that G.o.S.L. has to fulfil in order to obtain the U.S.$ 2.5 billion s.b.a) is to allow for the free float of the rupee (vis-à-vis the U.S. dollar) in order to build up its foreign exchange (forex) reserves which G.o.S.L. is now doing by buying dollars from the market in order to prevent the rupee from appreciating, thereby building up its forex reserves in conformity with I.M.F. conditions.

The approval for the disbursement of the first tranche of U.S.$ 313 million was expected on Friday, with the total amount to be disbursed over a 20 month period. Another condition was that these moneys are not to be utilized for any expenditure, be it current or capital, but only to be utilized to build up the country’s forex reserves. 

An insider said that such a build up of reserves attract investors and other donors, bilateral or multilateral and even helps G.o.S.L to raise monies.

He said that he has seen such positive developments in the past.

Another source said that another I.M.F. condition was that the budget deficit should be restricted to 6% of G.D.P. But this was contested as Budget 2009 had estimated for a budget deficit of 6.5%. The country in the first four months of the year recorded a 4% budget deficit according to Finance Ministry statistics. C.B.S.L. Governor Ajith Nivard Cabraal is reported to have had said that the budget deficit will have to be contained to 7% of G.D.P. according to I.M.F. conditionalities.

“Wait for G.o.S.L.’s letter of intent (l.o.i.), that will spell out I.M.F. conditionalities for this s.b.a.,” a knowledgeable source said. This l.o.i. was expected to be made public by the I.M.F. on Friday.

Two Ws to swing Uva 

Water and the War” are the two factors that will decide the Uva provincial council election, two voters, to whom this reporter spoke at random at a whistle stop visit to a Dialog function in Pelwatte, Wellawaya on Monday, where the President was the chief guest, said.

“The deciding factor to win the voter in Moneragala is water and not jobs,” R.M. Gunewardena, an adviser on education attached to the Bibile Office said.

The Government’s integrated irrigation development plan encompassing tanks in the area has won the hearts of the voter, he alleged.

Gunewardena said that Moneragala is an agrarian farming area, with a focus on paddy, sugar cane cultivation and such like. “But in the minds of the voter, when the previous U.N.P./U.N.F. regime tried to introduce the concept of water management among the farming community, was interpreted as an attempt to introduce a water tax, and thus did not go well with the voter,” he said.

However, a sugar cane farmer in the area said that they have been unable to do any cultivation at present because of the drought. “We are tiding over this rough patch through a government grant,” this farmer said.

“But our area until recently was akin to a border village, where we were living in constant fear of terrorist attacks,” he said. But the end of the war has dissipated those fears, the source said.

The government will win the election hands down, there are no U.N.P.ers here, he added.

The forthcoming Uva Provincial Council elections are due next month (August). Pelwatte, Wellawaya and Moneragala come under the Uva province.

NEW BEGINNING

The win over the L.T.T.E. terrorists after 26 years of war in May coupled with I.M.F.’s approval of a U.S. $ 2.5 billion standby arrangement (s.b.a.) to tide over the island’s balance of payments (b.o.p.) crisis last week, bodes well for Sri Lanka.

This, among other things relieve pressure on exchange and interest rates, boosts investor confidence and helps the Government of Sri Lanka (G.o.S.L.) to raise money from international capital markets.

This is while monies for project assistance could be got from traditional lenders as well as from new lenders such as India and China.

However, President Mahinda Rajapaksha must address the law and order issue. Without that being addressed it will be difficult to get down foreign investors to the country. Killing of an opposition U.N.P. politico in Galle on Wednesday does not bode well for G.o.S.L. in this score.  G.o.S.L. must speedily arrest those culprits if it wants to restore both public and investor confidence. Investors are crucial for Sri Lanka’s economic revival.

Meanwhile Rajapaksha and Central Bank of Sri Lanka (C.B.S.L) Governor Ajith Nivard Cabraal will now no more have to go to Libya again with the begging bowl to chase after the elusive U.S.$ 500 million loan allegedly promised by its leader Col. Muammar Gaddafi when Rajapaksha visited that desert state a few months ago, but of which not even an iota has been received to state coffers to date.

Despite the war win, the blockage of the I.M.F. s.b.a. by Sri Lanka’s principal export markets, the U.S.A., and U.K., together with the E.U., which wields tremendous voting clout in the Fund, allegedly over civilian casualties in the prosecution of G.o.S.L.’s war against terror, was to balloon into a serious b.o.p. crisis, particularly in the context of a trade deficit, made worse by falling export revenue mainly due to the global recession and foreign debt servicing, if it was not resolved.

But thankfully for Sri Lanka, that impasse has now been relegated to history.

Despite the bugbear of a global recession, the worst since the Great Depression of 1929, the end of the 26 year terrorist war, buttressed by I.M.F.’s U.S.$ 2.5 billion s.b.a., opens up new vistas of development to the country, akin to the opportunities that came up when the country first opened up the economy in 1977, and again 25 years later when the then Government entered into a phony peace with the L.T.T.E.-phony peace no doubt, but which “hastened” the break-up of the L.T.T.E. with Karuna’s defection from the L.T.T.E. in 2004, culminating in that organisation’s total destruction five years later.

Tourism is a thrust area that can easily be developed, with a number of visitors testifying to the island’s varied shades of beauty, captured in so smaller an area of land, found, virtually in no other place in the world.

In fact Malaysia’s Economic Planning Unit’s Deputy Director General Dato Dr. K. Govindan speaking at the Ceylon Chamber of Commerce’s economic summit that was held in Colombo recently expressed surprised that Sri Lanka attracted only 500,000 tourists annually, whereas Malaysia, which according to him didn’t have half the things that Sri Lanka had to offer, attracted 40 times that number, some 20 million.

No doubt the dividing line was the war, which Govindan however was too “polite” to bluntly spell out.

He however said that Colombo needs to be spruced-up, because it’s the capital city of a country that first catches the eye of an investor (visitor), according to him.

Govindan knows what he is talking about, because this reporter has been to both Paris and Kuala Lumpur and could not see a difference, with both cities equipped with superb roads, skyscrapers and being spotlessly clean and orderly, making it difficult to find that dividing line that separates a first world  economy from that which belongs to a Third World country.

No doubt, the island’s hotel sector too, which has been neglected for the past 26 years due to the war also needs sprucing up, and, hopefully, to make this happen, bank borrowings will once more become cheap, with the influx of I.M.F. moneys to state coffers.

The opportunity of building a new Sri Lanka, with the backing from the international community, especially from that sector which matters most has come to Rajapaksha after four years in office, it’s now upto him to deliver the goods, the country might not get a 4th chance.

Diplomatic apathy

Sri Lanka, perhaps missed a golden opportunity to mend fences with the West by not condemning last Friday’s Jakarta bombings of the plush Ritz Carlton and Marriott hotels, both U.S. owned, allegedly by Islamist terrorists.

Relations between Sri Lanka’s key trading partners, U.S.A., U.K. and E.U. in particular, in the past few months have been strained due to the methodology adopted by Colombo to crush L.T.T.E. terrorism, largely in part due to successful lobbying by Eelamists, coupled with political expediency.

Meanwhile, there was a recent news item to say that the E.U. will submit its report to the G.o.S.L. of its findings on alleged human rights (H.R.) violations in the island next month.

E.U./U.K., together with the U.S.A., is the country’s top two export destinations. Further, the E.U., through its G.S.P. Plus concessionary window, allows the country to export some 7.000 products duty free, with the “jewel in the crown” being garment exports, Sri Lanka’s largest foreign exchange earner, which provides direct jobs to 300,000.

However this concession is linked to the observation of H.R., which, allegedly in the eyes of West, there is controversy in regard to Colombo’s just handling of this issue, largely in part due to its alleged link with L.T.T.E. terrorism.

But last Friday’s Jarkarta’s hotel bombings may have had been a good opening for Colombo to start mending fences with the West by simply issuing a note of condemnation, which, it however did not.

Colombo was quick to condemn last November’s attack on Taj Hotel, Mumbai by Islamist terrorists, but has maintained an ominous silence upto now over last Friday’s bomb attacks on the Ritz Carlton and Marriott Hotel in Jarkata, perhaps not the best way to go about, in the best interest of this island nation.

W.P. contributes 45.4% to G.D.P.

Central Bank of Sri Lanka (C.B.S.L.) has compiled Provincial Gross Domestic Product (P.G.D.P.) for 2008 based on the disaggregation of the Gross Domestic Product (G.D.P.) estimated by the Department of Census and Statistics (DCS).

As reported in C.B.S.L.’s 2008 Annual Report, national G.D.P. at current prices grew by 23.2% in 2008, reaching Rs.4,411 billion with a per capita income of Rs. 218,161, equivalent to US$ 2,014. Its disaggregation across provinces is given in Table 1.

Regional disparity declined in 2008 and has been declining from 1996. During the year Western Province’s (W.P.) share in G.D.P. reduced further from 46.5% in 2007 (revised estimates) to 45.4% in 2008, while contribution from all other provinces except Uva province either increased or remained at the same level over the previous year. Southern and Northwestern provinces contributed 10.6% and 10.0% to GDP in 2008 compared to 10.5% and 9.9% respectively in 2007.

As in the previous year, W.P. continued to have the highest share of G.D.P., resulting from the high concentration of country’s major resources such as infrastructure facilities, banking and finance, industries, business centres, airports and the main seaport.

Meanwhile, Central, Eastern and Northcentral provinces also recorded improvements even though the contribution of each of these three provinces to total GDP still remained at less than 10%.  Northern (2.9%) followed by Uva (4.6%) were the provinces with the lowest contributions to G.D.P.

Provinces with smaller G.D.P. have grown faster. Northcentral province, Eastern province, Central province, Northwestern province and Southern province recorded nominal growth rates of 45.1%, 30.7%, 26.7%, 24.5% and 24.1% respectively.  In conformity with this observation, the Western Province with a high share of G.D.P. grew slower.  However, contrasting this observation, two provinces, i.e. Northern and Uva which had smaller share in the G.D.P. grew slower.  These provinces require a further boost to develop income generating activities. 

W.P.’s per capita income (Rs. 347,730 or US$ 3,210) was 1.6 times the national per capita both in 2007 and 2008, while all other provinces continued to fall below the national per capita income.  Central and Northcentral provinces showed marginal improvements in 2008, while Uva province showed marginal decline. 

The sectoral contribution to G.D.P. in provinces (Table 2) shows a considerable disparity. The contribution by Agriculture to the G.D.P. of the W.P. (the richest province) was only 3.2%, while the contribution from Industry and Services were at 31.7% and 65.1% respectively.   This contrasts with contribution to G.D.P. by these sectors in 2008 in the four neighbouring provinces where the contribution from Agriculture was 19.6%, Industry (29.5%) and   Services (50.9%).  The outermost four provinces had a high share of Agriculture of 26.4% in 2008 and lower shares from Industry and Services compared to national G.D.P

This shows that when the spatial difference between the W.P. Province and other provinces increase, the contribution by Agriculture to the provinces increases.

m waste & elearning

The country’s largest telecoms operator inaugurated two C.S.R. projects on Sunday and on Monday.

Dialog Telekom, which has 50% of the island’s 10.2 million mobile telecoms market, on Sunday inaugurated a project in Weerawila to collect and recycle mobile telephony waste (m waste) that will go islandwide, while on the following day, in Moneragala, the company inaugurated a project for elearning targeting O’ Level students by using the medium of the television or through the internet at a cost of Rs. 100 million to Dialog.

The educational programme will be relayed through Dialog T.V. (and also through the internet) with the content developed by the National Institute of Education and the Education Ministry with resource persons/teachers being experts in the relevant subjects.

“This programme will be relayed Monday through Friday for two hours on each of these days,” Dialog Telekom C.E.O./director Dr. Hans Wijayasuriya told reporters. Additionally the company will donate 1,000 T.V. sets to identified backward schools islandwide. The course content, other than English, will be in the vernaculars.

The programme has a main focus on the compulsory subjects such as maths, science, first language, religion and also English.

This project also has a commercial bent. Wijayasuriya told The Sunday Leader that it has been observed that parents are now becoming strict with the time their children spend watching T.V. “But when value added programmes such as this are telecast over T.V., then such goods are an investment to homes,” he said.

Wijayasuriya said that with such programmes taking up only two hours a day, they hope to include more value added content to make such educational channels operate right round the clock.

“When we inaugurated Dialog TV a few years ago, we were selling some 5,000 connections a month,” he said. But when inflation started hitting in a big way from about the second half of 2007, when it went upto the 20% levels, then demand dropped to less than a half, to some 2,000 monthly connections, Wijayasuriya said. He said that those connections are priced at Rs. 10,000 a piece.

On the m waste initiative, the company has already invested in such a recycling plant at a cost of Rs.10 million at Piliyandala a few years ago. The commonly attributed toxic or hazardous waste in mobile telephones and its ancillaries are lead, cadmium and bromide batteries.

“There is however even gold found in such m waste,” Wijasuriya said.

Generally a mobile phone, after repairs, has a life span of not more than 10 years, said Dialog Telekom’s Duleep Thilakaratne. Dialog this way has collected some 12,000 redundant mobile phones which have been shipped to China at the company’s expense for recycling.

However it’s estimated that there are one million old mobile phones in the island, he said. Meanwhile, Wijaysuriya, justifying the company’s m waste C.S.R. initiative said that sustainable development also benefits corporates. He further said that Dialog even pays a fee for consumers who return their discarded mobile phone together with its rechargeable battery and charger for recyling purposes.

Wijayasuriya said that this islandwide operation would be extended to take in discarded m waste of other mobile telecoms operators as well. Other commonly identified electronic waste items are discarded computers and television sets.

Environment Minister Patali Champika Ranawaka who was the chief guest at this occasion said that Sri Lanka annually imports some 72 million D.V.D.s and C.V.D.s. Those discards too add on to electronic pollution, he said.

Markets to make more gains on I.M.F. deal

Markets across the board reacted favourably to the Government of Sri Lanka sewing up a U.S. 2.5 billion standby arrangement with the I.M.F., and predicted that more gains would be made when markets open for trading tomorrow, with the deal being signed up last Friday, and the first tranche of U.S. 313 million expected to be disbursed either last Friday or tomorrow, to give markets a further thrust.

Foreign buying in J.K.H. was witnessed at Friday’s trading, with this blue-chip alone contributing Rs. 478 million to Friday’s total turnover of Rs. 1.1 billion. Market indices were up 11 and 30 points over that of Thursday’s, while foreign to foreign trading worth Rs. 90 million was witnessed on Dialog on Friday. (See also page 21)

With news of this impending deal, U.S. dollar forward rates last week came down by between 15-50 Sri Lanka (S.L.) cents, while the Central Bank of Sri Lanka, through its agent state owned Bank of Ceylon continued to build up its foreign exchange reserves by buying dollars at Rs. 114/90 per unit, while at the same time preventing the rupee from appreciating.

Likewise the more popular 2013 maturing Treasury bond, dropped by 35 basis points to be trading at 12.65% in the secondary market, the sources said.

In forwards, the one month quote for the greenback closed last week at Rs. 115/20, down 15 S.L. cents; three months, down 30 cents to close at Rs. 115/70 and six months, down 50 cents to close at Rs. 116.75

HNB the best

Hatton National Bank (HNB) was recognized by the eminent international finance magazine Euromoney as the “Best Bank in Sri Lanka” at the Euromoney Awards for Excellence 2009 Asia Dinner held in Hong Kong recently.

 “In recognition of the turmoil the country was facing, Euromoney did not give an award for best bank in Sri Lanka last year,” said Euromoney Magazine MD Simon Brady. “Although the economic backdrop arguably worsened and the political situation only stabilized towards the end of this year’s review period, HNB led the way of the country’s leading banks in posting solid results.”

“ Euromoney praised the bank for being able to post solid results during an economic backdrop that arguably worsened and a political situation that stabilized towards the end of the review period.”

“We are honoured to have been judged as the Best Bank in Sri Lanka by the prestigious Euromoney Magazine. This award reflects the financial stability of the Bank and the strong commitment we have towards consistently delivering exceptional value to all our stakeholders,” said HNB MD/ CEO Rajendra Theagarajah.

In awarding HNB as “Best Bank in Sri Lanka”, Euromoney cited the Bank as leading the way among the country’s leading banks recording a SLR 3.22 billion ($28 million) post-tax profit, up 6.5% on the previous year, with interest income the main reason for the 23.9% increase in total income to SLR 37.17 billion.

Regarded as the benchmark awards for financial services globally, the Euromoney Awards for Excellence are now in their 18th consecutive year. This year’s awards process, which began in April, attracted over 600 submissions from the world’s leading banks and brokerage houses competing for the awards.  Euromoney’s “dedicated” research team and awards panel then rated all the submissions on both quantitative and qualitative factors such as KPIs, financial ratios and innovation over the 12 month period to decide the award winners.

“The global financial crisis has hit all the world’s economies hard and the Asia-Pacific region has been no exception, with problems in Sri Lanka being well publicized. However the intrinsic fundamentals of the region in terms of demographics, mineral wealth and domestic demand remain strong. Most importantly of all, governments around the region have shown commitment to economic diversification and development and Euromoney sees the long term picture to still be strong.”

The final accolade of the evening was the Euromoney Award for Outstanding Contribution to Financial Services in Asia which was presented to Hong Kong Monetary Authority’s out-going Chief Executive Dr. Joseph Yam.

14 qualify for MDRT

Eagle Financial Services Adviser Mrs K. H. H. Wimalasena achieved the rare distinction of being admitted to the ‘Court of the Table’ of the Million Dollar Round Table (MDRT), an honour which is reserved for insurance sales performers with over triple the minimum MDRT requirement.

Fourteen insurance advisers of Eagle Insurance qualified to attend the annual MDRT conference this year where the best insurance producers in the world gather annually. MDRT is an international network of leading insurance and investment financial service professionals and advisers who serve their clients by “exemplary” performance and the highest standards of ethics, knowledge and productivity.

With a membership of nearly 30,000 insurance salespersons from about 450 insurance companies around the world, the MDRT conference, held in Indianapolis, USA is the most prestigious global event that a life insurance salesperson can attend.

Commending these professionals on their achievement, Managing Director Deepal Sooriyaarachchi says, “Qualifying for the MDRT is an achievement. It is only through sheer hard work and consistency that these high performers achieve this goal, while Eagle’s extensive training facilities hone their skills to the highest levels. This year we produced the 5th ‘Court of the Table’ participant. We are pleased to have produced the 1st ever Sri Lankan ‘Court of the Table’ participant–Ajith Fernando”. Nimal Balawardhana, M.A.I.A. Perera and Sampath Gunawardena were also “Court of the Table” participants in previous years.

Qualifying to attend the MDRT is a dream come true for these individuals. To qualify, the insurance adviser should achieve the necessary criteria covering several aspects including new business generation, productivity, customer retention, and provision of superior service.

Eagle Insurance, in line with its “human talent management” strategies, continuously supports the development of the members of the Eagle Team with Wings to achieve international standards of professionalism and distribution effectiveness. Eagle Insurance gained due recognition for its commitment to the training and development when the National Human Resources Award for “Best Training and Development Strategy and Practice” was awarded to the Company in the first ever HR Awards in Sri Lanka.

Meets reinsurers

Janashakthi Insurance which established its number three position in the General Insurance market within a short span of 10 years met with top executives of their overseas re-insurance partner companies in Colombo recently.

General Manager Insurance Ms. Dayalanie Abeygunawardana said, “It’s of paramount importance that we work with world renowned reinsurers to enable us to cover any large scale risks that we might be exposed to as an insurance company. This will in turn help us to ensure that we are able to swiftly honour any claims that might arise. This was seen with Janashakthi with the Tsunami, where we paid out the highest amount of claims amounting to over Rs.  five billion. We are also able to process claims in a timely and accurate manner due to our prudent financial & risk management competencies backed by professional renowned re-insurers such as Hannover Re, SCOR Paris, Toa Re Japan, GIC India & Best Re Tunisia (with regional office in Kuala Lumpur) to name a few.

Janashakthi has paid 17,633 claims amounting to Rs.672 million during first quarter 2009 covering both Life and General. Janashakthi paid in excess of Rs. 12 billion over the last five years of which Rs. 2.35 billion in year 2008. Furthermore Janashakthi has the highest stated capital among quoted insurance companies amounting to over Rs.1.49 billion, which is over 7.5 times the statutory requirement. The company is also backed by an asset base of Rs.10 billion, Rs.2.5 billion in government securities and the only insurer to acquire a state owned insurance company. Janashakthi Insurance Plc boasts of being the fastest insurance company to reach the Rs. five billion annual revenue mark and having the fastest growing branch network of over 100 islandwide branches

Taxation seminar

International Fiscal Association (I.F.A.) Sri Lanka Branch (S.L.B.) will hold a seminar on Taxation at the HNB Auditorium on Wednesday.

The objective of the seminar will be for the participants to receive information about the amendments to the Inland Revenue Act, Value Added Tax Act and other Acts arising from Budget 2009.

Speakers and panellists will analyse and discuss the most recent fiscal amendments and the consequential effects on taxpayers. The keynote address will be delivered by Inland Revenue (I.R.) Commissioner General E. M. M. Medagoda.

Among the other speakers are lawyer (Dr.) Shivaji Felix who will speak on ‘Critical Analysis of Major Fiscal amending enactments arising from Budget 2009’; lawyer Suresh Perera (KPMG Ford Rhodes Thornton & Co) on ‘Collective Impact of Fiscal Laws on Business’; I.R. Tax Policy, International Taxation, Information and Investigation Senior Commissioner H. B. A. Seneviratne on ‘Amendments to the I.R. Act and Economic Service Charge Act’ and Deputy Commissioner Ms. Dhammika Gunatilaka on  ‘Amendments to the Value Added tax Act, Nation Building Tax Act, Debit Tax Act and Finance Act (Construction Industry Guarantee Fund Levy)’ .

The panel discussion will comprise Finance Ministry Taxation Policy Senior Adviser R. P. L. Weerasinghe, SJMS Associates Partner Basheer Ismai and ECI Tax Chambers (Pvt.) Ltd. Director Denzil A. Rodrego. The moderator will be I.F.A. S.L.B. Chairman N. R. Gajendran.

I.F.A. was established in 1938 with its headquarters in Nertherlands. It is the only non-governmental and non-sectoral international organization dealing with fiscal matters. I.F.A. membership now stands at more than 12,000 from 100 countries. In 59 countries, I.F.A. members have established I.F.A. branches. Direct membership is possible in countries where there is no I.F.A. branch as yet.

I.F.A.’s objects are the study and advancement of international and comparative law in regard to public finance, specifically international and comparative tax law and the financial and economic aspects of taxation.

I.F.A. exerts its influence through its annual congresses, at branch level and through scientific research. Although I.F.A. operations are essentially scientific in character, the subjects selected take account of the current fiscal developments and changes in local legislation. In many jurisdictions the I.F.A. branch plays an active role where issues of international taxation are concerned, be it in a formal or informal way.

An annual Congress hosted by one of I.F.A.’s branches provides an opportunity for an exchange of knowledge and experience with respect to fiscal law. These congresses attract over 1,500 participants plus accompanying persons. They afford scope for useful contacts with leading experts in the fiscal field, both as part of the official programme and in the course of private discussions.

Two subjects are selected each year by the Permanent Scientific Committee. These subjects form the basis of discussions, normally resulting in some sort of a concluding statement or recommendation.  The annual Congress for the year 2009 is scheduled to be held in Vancouver, Canada from August 30 to September 4, 2009.

I.M.F. money short term

We really need the I.M.F. money but we don’t need some of those conditions. That’s left to them. I am not privy to what those conditions are. It is absurd to say we don’t need the money. This is short term and it’s a balance of payment issue really,” banker and Capital Trust Securities Chairman Moksevi Prelis told Benchmark last Sunday.

He was commenting on the Central Bank Governor’s recent remark regarding the I.M.F. loan that “we don’t really need the money”.

Commenting on the demands by the government for a condition-free loan from the I.M.F., Prelis said: “No bank, whether foreign or local, gives a loan without conditions. It’s a negotiation. Some conditions that the bank can impose are beneficial, and some may be detrimental. As a Sri

Lankan, I’m hopeful that it will come through. Because, don’t forget, this is our right. This is not some generosity of the I.M.F. or any Western country. This is our right, and these funds are meant for that.”

Touching on the primary challenges for the Government and the country as a whole in reintegrating the north and east back into the mainstream, Prelis noted that immediate reintegration was the need of the hour.

“There are short-term and there are medium-term issues. Short term is definitely the rehabilitation and resettling of the IDPs. Of course, it is easier said than done because it involves a tremendous amount of other activities. Not only de-mining but infrastructure, et al, because everything was devastated,” he added.

To kick-start the engine of growth, Prelis observed that “first there must be a good driver or drivers, and you must look at other issues down the line, including where we want to go”.

 He added, “ There is an ‘effort’ with the Mahinda Chinthana, which we have all seen. This is appropriate and good but I don’t consider it a plan. It is something between a policy and perhaps sometimes a wish list. So that has to be translated into a plan. There is a 10 year plan-I’m not sure how well the implementation is being done. But the main thing is you must have the resources. It’s nice to have a wish list, but if you can’t match it with financial, human and various other economic resources, there is no point.”

Discussing whether the country could emerge as a true democracy or whether there was a danger of it slipping into a junta-like state, Prelis told the show’s Special Correspondent Ms. Savithri Rodrigo that he didn’t think Sri Lanka could ever end up in a military junta. “I think it’s out of the question. We have so much in us. But I think people are waiting to be properly led. No junta, no military, but it will be a strong government,” he observed. The widely-watched business TV programme is presented by LMD and produced by the wrap factory. (Business Editor’s note: The I.M.F. standby arrangement was finalized on Friday according to reports)

Sampath opens 117th branch 

In a bid to provide easier access to hassle free and modern day banking, Sampath Bank’s latest branch was opened for business recently at Kirulapona.

 Located at High Level Road, the branch provides ample parking space for customer convenience, to those resident in the area as well as for those who are passing through Kirulapona town.

Being the 117th of the Sampath Bank’s electronically linked branch network, the new branch will allow 24hour banking conveniences to customers of the metropolitan township. The branch is geared with cutting edge technology and enthusiastic and trained Sampath team members who attend to customer requirements, with the trade mark “Sampath Smile”.

Sampath Bank CEO Harris Premaratne speaking at the opening said that the bank has come a long way as being the preferred banking partner for discerning Sri Lankans who look for service and quality in banking services.

He said that the Sampath team was proud to be acknowledged as the bank that has introduced and developed many innovative banking products and services and delivered them with the traditional Sri Lankan touch. He assured that the team will always strive to offer a comprehensive package of futuristic banking solutions with high accessibility from anywhere in the island. 

Celebrating Habitat Day

Government of Sri Lanka (G.o.S.L.) is an active member in the U.N.’s Human Settlement programme and HDFC Bank ‘takes this important moment’ of having had facilitated and promoted the Essay and Art Competition for the school community to mark World Habitat Day that falls on October 1.

We also need to bring awareness to the community towards matters pertaining to climate change, urban congestion as well as urban settlements in the future,” UN Habitat, Colombo Programme Manager Lakshman Perera said at a press briefing recently organized by Housing Development Finance Corporation (HDFC) Bank at its auditorium to mark World Habitat Day.

HDFC Bank Chief Executive Officer/General Manager. Suresh Amarasekara said that this children’s art competition coincides with the Bank’s 25th anniversary.

Twenty two students from Seevalee College Borella and St. John’s College Dematagoda were  given gift items and ‘Thilina’   children’s savings accounts at the briefing.

Also present were HDFC Bank Chairman S.M.M.Yaseen, Education Ministry’s Director (Aesthetic) Thushara Gunathilaka and NHD General Manager A.L.S. Palansuriya. 

In Brief