PRIME MINISTER’S ECONOMIC STATEMENT

HON. PRIME MINISTER’S ECONOMIC STATEMENT

IN PARLIAMENT ON 27^TH OCTOBER 2016

Mr Speaker,

With regard to the current state of the economy and the Way Ahead, I would like to recall the speech I made in the House on the 05^th of November 2015.

We can once again become the resplendent nation we were under Manawamma and Parakramabahu. But it is a path that must be pursued with determination, commitment and patience. Only then can we create the country that we can confidently pass on to the future generations.

At the time I made the statement last year, I affirmed that our collective economic journey requires revolutionary thinking, bold policies and initiatives that would transform Sri Lanka into a vibrant and prosperous nation. The National Government started work on a sound footing - by increasing the actual wages of the public sector including those of general workers. This process stimulated domestic demand and addressed the imbalance in income levels, the economic legacy inherited from the previous regime. 

Dialog to commission submarine cable by end 2014

Dr. Hans Wijayasuriya warns capability of telecommunication sector to deliver economic returns in the medium term is at risk unless structural corrections in industry pricing and cost structures are implemented - See more at: http://www.nation.lk/edition/biz-news/item/29757-dialog-to-commission-submarine-cable-by-end-2014.html#sthash.iV6Wt84x.zcyf75q4.dpuf

Dr. Hans Wijayasuriya

 Sri Lanka’s Dialog Axiata PLC, which entered into an agreement with the Bay of Bengal Gateway (BBG) Consortium to land a high capacity submarine cable through a Cable Landing Station to be located in Colombo last year, will commission the submarine cable and cable landing station in the fourth Quarter of 2014, a top official has announced.

Addressing shareholders at the release of the firm’s Annual Report 2013, Director/Group Chief Executive of Dialog Axiata Plc, Dr. Hans Wijayasuriya said that the investment is being made focusing ahead on the imperative of establishing a robust pipe to the Global Internet with capacity and speed commensurate with the burgeoning demand for Broadband services projected going forward.


“Dialog’s investment in the new high speed submarine cable and cable landing station will trigger the single largest infusion of International Bandwidth to Sri Lanka to date. The BBG cable will link Sri Lanka to high capacity Internet hubs in Singapore and India and to onward submarine cable pipes to Europe and the USA,” Dr. Wijayasuriya pointed out.

He noted that Dialog’s investments in Terrestrial (National) and Submarine (International) Fibre Optic infrastructure will combine with its fourth generation LTE customer access networks to deliver affordable and widely available High Speed Broadband services to businesses and consumers across Sri Lanka.

AllWorld Network to help Sri Lanka boost global trade

Sri Lanka President Mahinda Rajapaksa (centre) who is also the country's Finance Minister is seen having a light banter with his Ministry Secretary Dr P B Jayasundera at the launch of Sri Lanka 25 whilst his Deputy on (left) Dr. Sarath Amunugama looks on

Anne Habiby

(Pix by Chandana Wijesinghe)

Sri Lanka’s 25 fastest growing firms joining US-based AllWorld Network will gain wider visibility which will win more business and financial backing

Sri Lanka will be able to multiply trade volumes with the rest of the world following its recent entry into the AllWorld Network, which gives visibility to all the growth entrepreneurs of the emerging world, a high-profile event attended by President Mahinda Rajapaksa was told. The AllWorld Network, co-founded by Professor Michael Porter of Harvard Business School, and The Joint Apparel Association Forum (JAAF) last week announced the launch of AllWorld’s Sri Lanka Fast Growth 25 (SriLanka25). The event was also graced by Ministers, Basil Rajapaksa, Dr. Sarath Amunugama, Faiszer Mustapha, Treasury Secretary, Dr. PB Jayasundera, US Ambassador to Sri Lanka Michele J. Sison together with leading private sector business magnates and entrepreneurs.
“This a pioneering effort to showcase and rank the most innovative and dynamic fast-growth private companies in Sri Lanka through a rigorous international credentialing process that discovers entrepreneurs with a track record of success in growth markets,” said Anne Habiby and Deirdre Coyle, co-CEOs of AllWorld Network at the launch held at the Kingsbury Hotel in Colombo.

Potential DFCC-NDB merger will ‘not be forced’ assures Theagarajah

Rajendra Theagarajah

The Chief Executive Officer of National Development Bank Plc (NDB), Rajendra Theagarajah last week denied claims by a former head of the bank that the two private development banks, NDB and DFCC have been ‘forced’ by the banking regulator, the Central Bank of Sri Lanka to go for a merger. In a recent interview with The Nation, opposition parliamentarian Eran Wickramaratne had said the Central Bank had compelled the merger by hinting in their Master Plan that their expected outcome in consolidation is where “there will be a large development bank that will provide substantial impetus to development banking activities in the country”.

“Nobody needs to force us into this. I think the comment is coming from an outsider’s point of view and we from inside the Banks can assure that if this happens it wouldn’t be forced on us,” Theagarajah said in response.

Central Bank appoints audit panel to submit report on 38 NBFIs

Sri Lanka’s financial sector regulator, the Central Bank of Sri Lanka (CBSL) has appointed its nine-member accredited panel of auditors with the responsibility of performing a valuation, information memorandum and vendor due diligence on the 38 Non-Bank Financial Institutions (NBFI), an Assistant Governor of CBSL said last week. According to C. J. P Siriwardene, the panel of auditors have been tasked to submit a report to the CBSL by mid- March 2014 so that it could help determine pricing for potential buyers from Category A (Banks and the larger NBFIs).

“Since we will be paying for the services of the auditors, we will keep the report with us but will share the information with potential buyers on request,” Siriwardena said.
The CBSL has given a time period of until March 31, 2014 for local banks and category A NBFIs to identify partners of their choice from within the category B NBFI for such mergers/absorptions.

Financial sector consolidation faces numerous challenges

Financial sector confronted with HR, IT and Tax issues amongst others, say experts

With the island’s monetary watchdog recently setting the master plan towards the consolidation of the country’s financial sector, experts at a panel discussion last week suggested that the sector will be faced with numerous practical issues with some needing further clarity from the regulator. Outlining the challenges, Shiluka Goonewardene, Principal for Transactions and Restructuring at KPMG in Sri Lanka said that some of the key issues in the diligence process of amalgamation would be in relation to analyzing the quality of credit portfolio, completeness of deposits, valuation of plant, property and equipment, valuation of investment in real estate portfolio, valuation of investment in private companies, robustness of systems and procedures and tax compliance.

“One of the grey areas in the amalgamation process is in the calculation of taxes. Amalgamation should be tax neutral at least for the financial institutions. If there is no tax neutrality but additional taxes, the whole process of consolidation will not work,” KPMG Principal for Tax and Regulatory, Suresh Perera cautioned at a packed conference on consolidation held at the Galadari Hotel in Colombo last week.