Resignation of central bank boss in Bangladesh

by Swadesh Roy

( March 21, 2016, Dhaka, Sri Lanka Guardian) After one month ten days of a hacking incident, the governor of Bangladesh Central Bank resigned on Tuesday, 15 March. For the first time, in the history in Bangladesh, central Bank boss has to resign. The governor of the central bank, named Atiur Rahman was a different type of central bank boss. He was appointed by political choice, it is a norm in Bangladesh that, central Bank governor is appointed through political choice. Mr. Atiur Rahaman was never a banker, he is a teacher of development economics and a leader of development related non government organization (NGO).

So, from the very first day Atiur Rahman started to run the central Bank of Bangladesh in different way, did not maintain the traditional process. Besides, for the first time in Bangladesh central Bank governor was very much visible in the media and easy to accessible, which normally did not go with a central Bank governor. But it was true, a section of people were happy with him, traditional Bankers did not like it. However, through the governor post, Atiur made himself as a figure in Bangladesh. After his resigning, it is seen in the social media of Bangladesh that he had a lot of fan. So it can be said that, if he had got a normal departure, it would have been a ceremonial departure.

But reality was that, he was forced to resign. Though after submitted his resignation to Sheikh Hasina, the Prime Minister of Bangladesh, Primer uphold his resignation, on behalf of her, press secretary of Primer gave a statement to the press, resignation of Atiur was a good precedent, and a symbol of moral courage. However, on Monday, 14 March in the cabinet meeting, finance minister of Bangladesh talked with Prime Minister regarding this issue, after that, in the evening, finance minister called the governor at his residence, at 7.42 PM of Bangladesh time governor reached to his government residence; finance minister returned home half an hour later. They had a meeting. But the news of that meeting did not come to the media. Government successfully diverted the nose of the media to the Prime Minister’s Government residence, named Ganabhaban, (people’s house). All the online portal and televisions uploaded and broadcast the news that governor was at the Ganobhaban. However, in his residence, finance minister asked to governor to resign, he also told to governor that it was the decision of the government. After got that message, governor tried to reach Prime Minister but he failed. At last, on Tuesday, 15 March, Governor put his resignation paper to the Prime Minister. According to the law of the Bangladesh, governor has to submit his resignation to the secretary of the finance ministry at banking division. Ultimately the resignation of the governor of Bangladesh will come to that section of the administration.

Why this popular governor of central bank even the man of Prime Minister’s soft cornered had to resign? The cause is heisting one billion taka of Bangladesh Bank by hacking. The money was stolen by hacking a group of Philippines hacker in February on 4th. Though it is now under enquiry, federal bureau of investigation (FBI) and all the intelligence departments of Bangladesh are now in the operation, but the way the hacking was happened, it was a very much organized hacking. Hackers took a long preparation for this operation, even some attitude of the BB officials express that a few numbers of BB people involved with this hacking. Even it might have been, that Atiur was misguided by them. Because, Atiur is still convinced, he did not make any wrong to hide the news to the government. Hacking was committed on 4th February, but BB and its boss did not inform it to the government, the concern ministry. The Prime Minister along with the concern ministry came to know it on 1 March when it was published in the Philippine Daily Inquirer on 29 February.

Atiur’s comment was that, he did not inform the government, because he wanted the money to be back first. His opinion, he wanted to do it silently without informing any one. He was telling like this, despite it was not his own policy. He was misguided by his officers. When Atiur was the governor of the BB, he was very much dependable to his officers- like his boys and girls, it might had been, he was a teacher. He loved his officers like his students. Therefore, officers of the concern department of BB could convince him easily that, it is better to keep mum. Atiur did not think they might be involved and they were trying to purchase time from him. The mode of the incident is now telling this, they needed time for cash out the money from the Bank account. They knew that, after cash out, it is impossible to get the money back. Some of the BB officers might have been part of this hacking.

Before the inquiry, some points come to screen that, the hackers open three dollar account on 15th May, 2015. A numbers of BB computer’s fire guard wall were inactive before the hacking and BB officers insisted to the governor not to inform it to the government. All the activities went in favor of the hackers that they get time to cash out the money. Through the inquiry, more things will come to the people that how many BB officers were involved and who they are. Some of the senior bankers of Bangladesh, telling personally that, Atiur did not clinging BB rather he promoted some Islamic fundamentalist without knowing them. They could help the hackers as revenge against Sheikh Hasina government, because Hasina is fighting against Islamic fundamentalist. Besides that, some young information technologist are telling this now, government should recruit more young people in this type of highly technological place because most of the old guards are not computer literate.

However, after the big hacking in Bangladesh Bank, now it is a million dollar question for Bangladesh, how the country will walk now? Country is walking fast towards digitalization, it has no way to step back; on the other hand, cyber security is not that much advanced in Bangladesh. In spite of that, country must go forward to digitalization; it is never wise to step back from the present.

Swadesh Roy, Writer and columnist, working as the Executive Editor of The Daily Janakantha, Dhaka, Bangladesh, he can be reached swadeshroy@gmail.com

Trouble in paradise: Thailand and the expatriate experience

A foreigner walks past a market vendor in Bangkok. Pic: AP.

by Murray Hunter-21st March 2016

OVER the last few decades Thailand has attracted expatriates to the country to work, stay long periods of time to explore the country, or retire.

Thailand attracts many young professionals, particularly to Bangkok. Others work as teachers all around the country, some doing online business or some form of short- or long-term visa. Some operate small businesses with their Thai spouse.

In addition, Thailand has always been a place of interest for the traveller within the SE Asian region, where many like to stay medium- to long-term, sight-seeing, travelling, and ‘just hanging out’.

Retirement in Thailand is part of a global trend of people relocating from high income countries to lower income countries. There are large numbers of expatriates living all around the country, concentrated within the tourist precincts. In addition, clusters of wealthy retirees live in apartments and villas they have purchased or leased, in popular areas like  Phuket, Pattaya, Rayong and Chiang Mai.

There is also a high incidence of expatriates married to local women, residing in areas like Isaan in the north-east of Thailand.

The nationalities of expatriates include Europeans, Russians, Americans, Australians, New Zealanders, Singaporeans, Malaysians, Koreans, Japanese and Chinese.

Just how many expatriates are actually living in Thailand is really an unknown. Various databases exist, but unable to provide any definitive answers to this question.

Various estimates put the expatriate population in Thailand somewhere between 500,000 and 1 million. Formal estimates tend to be on the lower side, as they tend not to include those overstaying illegally in Thailand on expired visas. An article in The Independent estimates that there are even 10,000 homeless expatriates living in Thailand.

Thai authorities have become weary of foreigners or ‘farangs’, as evidenced in the tightening of entry and visa regulations over the last two years. Immigration is turning away people from the borders who they suspect are living and/or working in Thailand on short term visas. New regulations concerning persons who overstay their visas are coming into force, banning them from re-entering Thailand for between one and 10 years.

Thailand is no longer the haven for those who want to domicile themselves in the country like before.

For many the dream of living in Thailand has turned sour, where cultural and social problems have brought abrupt endings their Thai lifestyle.

The writer spoke with a member of the Thai Immigration Police who wanted to remain anonymous. He was able to shed some light on the reasons why Thai authorities are cracking down on the large numbers of people trying to live long-term in Thailand without the right documentation.

The alcohol problem

Thailand’s citizens are heavy consumers of alcohol, and this suits the drinking culture of many expatriates who settle here. Alcohol is both cheap and plentiful.

Expatriates can drink unchecked, to the point where it can become a problem. There are also the associated longer term problems of depression, anxiety, and sickness that are being left unchecked among

Many expatriates marry local girls and settle in places like Issan where there is an embedded drinking culture. Boredom often leads to excess drinking in these remote villages, as expatriates find it very difficult to settle into the local culture.

Unfortunately there are no programs available to solve the expatriate drinking problem in Thailand. This problem has not been formally identified in any health studies, and Thai authorities have no programs or resources to tackle this issue. Likewise, foreign embassies have no responsibilities over these types of issues concerning their nationals, so this problem will most likely continue to grow and fester over time.

Another major issue is depression. Boredom, inability to adjust and settle in, a failed marriage, loss of savings, are some of the causes of deep depression in retirees. Some expatriates come to Thailand with existing problems such as debt in their home country, or leaving wives and children at home, in search of something better. Some just come with not enough money to retire on.

Almost every week there is a report about an expatriate death in a house or hotel room. This is common enough for Pattaya to be called the suicide capital of Thailand.

In addition, with the common demographic of retirees being over 50, so many arrive in Thailand not in the best of health and die here. British figures indicate that there were 389 British deaths alone in Thailand in 2013.

According to statistics collated by the website “Farang Deaths”, 25 percent of foreign deaths in Thailand occur from road accidents, 20 percent from drowning, and 12 percent through other accidental reasons.

Crime among foreigners

News of foreigners being arrested for both petty and serious crimes is common. Foreigners are operating fraud schemes, scams, passport and credit card fraud schemes all over Thailand.

“Foreigners do the crimes and Thailand gets the bad reputation for it,” said the source.

Many foreigners run bars through proxy owners without the right visas. These establishments are sometimes a front for other activities, which are crimes on the books of Thai Law. Many ventures have not followed Thai investment laws, and are flaunting the system in Thailand.

This is particularly rampant within tourist precincts. My source told me that occasionally directives are given to crack down of particular types of activities from time to time.

“It’s our job to carry out these directives ….and it’s the job of the top to allocate our scarce crime fighting resources,” he said. “We have many areas to focus upon, and when we stop focusing on one specific area, the police are accused of being inconsistent and corrupt”.

Visa applications

There is a massive screening problem on long term visa applications. Although police reports may be required when foreigners apply for visas at embassies within their home countries, those that apply for them within Thailand are rarely required to provide police checks. This loophole within the visa system allows many foreigners to reside in Thailand without any proper screening of previous criminal activities.

Another issue cited by our source is that many foreigners are living hand to mouth in Thailand. This includes many on retirement visas. As a consequence many are unable and/or unwilling to seek regular medical check-ups and attention. Not all have medical or even accident insurance, and risk large medical bills if they are unfortunate enough to have an accident or get sick.

When we touched upon visa issues, my source became somewhat emotional and concerned. He said “while many have followed the correct procedures and acquired the correct visas for long-stay residency, there are also many who are dodging this to stay in Thailand, by abusing the system”. Tourist visas and visa exemptions, he explained, are not intended for long-staying foreigners within the Kingdom. Those who have the correct visas will not have any difficulty staying in Thailand. My source saw those who abused the visa system as those who showed no “respect for the legal system of Thailand”.

Cultural differences

“Thai culture is very accommodating. However the things many farang do here can be considered ignorant and even rude.”

My source gave the example of loud music often played by neighbours during the day or night. This generally presents little or no problem for a Thai, but some foreigners make complaints about these issues which are culturally acceptable in Thailand. He said that many farangs expect the same cultural standards here in Thailand as they have within their home countries.

Social problems caused by foreign expatriates are likely to increase, particularly as expatriate numbers increase over the coming years, unless measures are put in place by both Thai and foreign governments to assist foreign residents in their stay in Thailand.

Unfortunately these issues are not on any government agenda, for now at least.

Still uninsured for your Latin American event? Then expect a Zika exclusion

An Aedes aegypti mosquito is seen at the Laboratory of Entomology and Ecology of the Dengue Branch of the U.S. Centers for Disease Control and Prevention in San Juan, Puerto Rico, in this March 6, 2016 file photo.REUTERS/ALVIN BAEZ/FILES

 BY NOOR ZAINAB HUSSAIN AND CAROLYN COHN

Organizers of rock concerts and conferences in Latin America or fringe events at the Rio Olympics beware: if you still need insurance to cover cancellation due to the Zika virus, it's probably too late.

The International Olympic Committee (IOC) should be fine. It took out cancellation insurance for this August's games in the Brazilian city years ago, long before the mosquito-borne virus spread from the country through the Americas.

Anyone else who acted early is probably also safe. "Existing policies are unaffected and cover is provided," said Gary Flynn, at insurance broker JLT Specialty.

But organizers still seeking protection are finding clauses that block any payout, should their event be called off due to the Zika outbreak. "Insurers are now excluding this peril from any new cancellation policy for events in an affected area," said Flynn, who is JLT's practice leader for sport federations.

Insurers said they were unaware of any events being canceled because of Zika, but underwriters are not taking any chances about the possible impact on sponsors or hospitality providers, as well as on other events in the region.

Much about Zika remains unknown and a link with microcephaly in babies, a condition defined by unusually small heads that can result in developmental problems, has yet to be proved.

Nevertheless, the World Health Organization has advised pregnant women against traveling to areas affected by the outbreak, due to the potential risk of birth defects.

Some organizations and countries have gone further. The United States has told sports federations that athletes and staff concerned for their health should consider not going to the 2016 Olympics.

IOC PREPARED

The IOC says it has bought cancellation insurance worth about $800 million for the Olympics, with a premium of about $13 million.

Cover for such big events is bought at least five years beforehand, underwriters say. But sponsors, hotels and bar owners or people running venues such as fan parks - where sports enthusiasts can watch events on giant TV screens - may not yet have bought insurance, they add.

The 2014 FIFA World Cup in Brazil had an estimated event cancellation cover including television rights and sponsorship of $1.25 billion, according to underwriter Beazley Plc. Other cancellation cover for hotels or hospitality providers added around $600 million, it said. (bit.ly/1S1QSoP)

With South America a popular destination for international rock bands, concerts are among the events in affected countries which face Zika exclusion clauses, along with trade shows, exhibitions and conferences.

"We do consider applying Zika-specific exclusions when we see events taking place in certain areas of the world like South America," said Jeremy Cooke, contingency underwriter at insurer ProSight.

Theoretically cover may still be available for Zika cancellations, but insurers say customers would have to pay a "significant" premium - meaning the cost would probably be prohibitive.

"COMMUNICABLE" RISK?

The Lloyd's of London insurance market is the global leader in specialist insurance such as event cancellation, or contingency.

The UK contingency class is worth 150-200 million pounds ($215-$290 million) in premiums, according to JLT, with exposure to billions of dollars of losses.

Alan Norris, head of contingency at Talbot Underwriting, said underwriters became concerned about communicable diseases after the 2001 foot-and-mouth disease outbreak among farm livestock in Britain.

As the disease spread rapidly, people were discouraged from visiting the countryside, leading to the cancellation of many events and badly hitting tourism in particular.

The insurance industry has since seen claims arising from the outbreak of the severe acute respiratory syndrome (SARS), including from Singapore and Toronto, as well as avian and swine flu.

The result is that contingency policies normally contain a blanket exclusion for communicable diseases - those which are spread between people or from animals to humans.

The only possible element of doubt for existing policyholders is the definition of Zika.

Insurers are divided on whether the virus, being transmitted by mosquitoes, can as yet be classified as a communicable threat, explaining the need for separate Zika exclusion clauses.

"I personally would always view it as a communicable disease, despite some wordings referring to airborne pathogens or other characteristics that do not fit the Zika virus," Cooke said.

As ever, everything will depend in the end on the small print in each policy.

And insurers said that even if companies' policies do cover cancellation due to Zika, cancellation would have to be out of an organizer's control for cover to apply.

"It must be a necessary cancellation," said Elizabeth Seeger, contingency underwriter at insurer Hiscox. "An insured (organizer) can't choose to stop their event."

($1 = 0.6920 pounds)

(Additional reporting by Karolos Grohmann and Richa Naidu; editing by David Stamp)

A sturdy right to information bill

Mar 20, 2016

Senior journalist Dr. Ranga Kalansuriya said that international organizations has named the draft proposed right to information bill supposed to be presented to the parliament of Sri Lanka is one of the seventh supreme right to information bill in the world.

Dr. Ranga Kalansooriya joining for a discussion with BBC said organizations such as Article 19 of the UK and Democratic Campaign of Canada has named this bill a sturdiest bill.

 

He said Sri Lanka was one of the countries in the south Asia which did not adopt the right to information bill so far.

 

He said although there was a strong public opinion in India to legislate the right to information act, but in Sri Lanka the opinion was created not by the public but for the necessity of the government and few nongovernmental organizations.

 

He said the public don’t have much knowledge about the fundamental rights obtained through this right to information bill.

 

Right to question

 

“Public can get information’s and the public get the right to question the government in power”

 

“Why my child was not permitted school?”

 

“Why the hospital whom I get treatment doesn’t give me free medicine?”

 

“How much money spent to repair the road in my village? Is the amount spent is reasonable? Who was the contractor?”

 

“Why I cannot sell my paddy? Why nobody buys my paddy?”

 

By legislating the right to information bill the public legally gets a right to question the government in power said Dr. Ranga Kalansooriya.

 

Effective measure

 

“Currently 70% of the countries in the world has adopted the right to information bill. However none of the countries legislate the bill during their first term in power. Many countries legislates this act during the last period of their second term because this bill is not favourable for the government in power”

 

However the current government in power has decided to take a sturdiest measure to legislate the bill during its first term said Dr. Ranga Kalansooriya.

 

“Due to that, some partners of the government raised a doubt can they work with such a public favourable bill”

 

Dr. Ranga Kalansooriya said Prime Minister Ranil Wickramasinhe has pledged that he would adopt the bill without hindering the quality of its content.

 

The government said that it would present the draft bill gazette to the parliament by the coming week.

What is wrong with our ailing tea industry and where does its cure lie?

Tea should have a wider angle than a mere beverage

Monday, 21 March 2016

At a panel discussion following an evening presentation organised by the Institute of Certified Professional Managers or CPM in Colombo last week, a questioner from the audience put an interesting poser to Anil Cooke, CEO of Asia Siyaka, a leading tea brokering company in the city. 

The questioner, apparently dismayed by the current gloomy situation faced by the country’s tea industry, asked Cooke: “Why should I invest in Sri Lanka’s tea plantations?” Cooke was quick to correct the questioner before answering his question. He said: “Tea should not be taken as a plantation crop or even an industry. It should be viewed as a beverage. It faces all the problems which any beverage faces and its salvation too lies in the salvation of beverages in a global sense.” 

Cooke here has looked at tea from a wide angle, an angle which many concerned about it normally miss out. However, Cooke’s wide angle can be developed further into a wider angle. In that wider angle, tea is not only a beverage, but also an essential ingredient for manufacturing medicines, cosmetics and perfumes – three industries which are growing faster than the growth of the global output.

Tea marketing in Sri Lanka is still where it was left by British planters 

 - See more >>>

NEW CONSTITUTION, HOW TO MAKE IT A PATH TO FUNDAMENTAL RIGHTS

by Professor S. Sarath Mathilal De Silva.-21/03/2016

The present Government’s decision to obtain views of the public in the constitutional making process is highly commendable. In case the adoption of a new constitution as promised by the government is not forthcoming, the incorporation of a improved fundamental rights Chapter to the existing Constitution of 1978 is still highly recommended.

New Constitution, How to Make It a Path to Fundamental Rights by Thavam Ratna

Anand: Police likely to seek Interpol help to probe Sri Lanka link to kidney racket

Investigators say that the documents have also confirmed that more than five persons travelled to Sri Lanka with help from “agents” to sell their kidneys.

Victims wait for medical tests at BJ Medical College in Ahmedabad on Tuesday. (Express Photo: Javed Raja)

Written by Aditi Raja-March 20, 2016

The Special Investigation Team (SIT), formed by Anand District Superintendent of Police Ashok Kumar Yadav to probe into the kidney racket of Pandoli village, has fanned across to Delhi and Mumbai to trace the timeline of the alleged organ extractions as well as “big fish” involved in the racket. Investigators have hinted that it could seek help from the Interpol to probe the link into the kidney extractions carried out in Sri Lanka, after following the due procedure of law.

Investigators say that the documents have also confirmed that more than five persons travelled to Sri Lanka with help from “agents” to sell their kidneys. In what could escalate into an international racket, the Anand police are looking at seeking help from the Interpol to probe the Sri Lanka link. A senior investigating officer said, “More than five people from Pandoli have travelled to Sri Lanka for kidney extractions via Chennai, with help of agents. There are high chances that we will report this international link to the Centre and seek help from the Interpol after following the procedure of law. With help from Interpol, we will be able to probe this link.”

 

Petlad Deputy Superintendent of Police, M R Gupta, is heading the SIT. Its two teams are currently in Delhi and Mumbai to locate the network of the racket. A 27-year-old cattle trader from Pindoli, Aamir Malik, had alleged that another villager, Rafiq Vora, had “cheated” him into selling off his kidney to a Delhi hospital in February this year. A team of officers, along with one of the three arrested accused, are currently probing the sequence of events and the other touts involved in the transaction that earned Aamir Rs 2.3 lakh for one kidney. Another team of Anand investigators is in Mumbai to probe the link between a kidney donor, Poonam Solanki, from Pandoli in a 2001 case — the transplant of which, occurred in the Muljibhai Patel Urological Hospital (MPUH) in Nadiad. Senior officials added that the SIT will also question the recipients of the two the kidney transplants conducted at the Nadiad hospital regarding their link to their donors. “It will help us get to the touts who lure the naive villages with money.”

The MPUH authorities have clarified that the hospital had, on its own accord, requested the police to initiate a probe into another suspicious case in 2002. The recipient and donor of that case were acquitted by the Gujarat High Court in 2008.

ETCA: A Different Perspective

By Rajeewa Jayaweera –March 20, 2016

Rajeewa Jayaweera

One of the topics currently under intense debate and discussion in the public domain is the much disputed Economic & Technical Cooperation Agreement (ETCA). It has led to a serious dispute between the present government and Sri Lanka’s professionals in the medical and IT sectors, besides members of civil society. It does not mean ETCA is without supporters though it would appear opponents outnumber supporters to the proposed agreement.

Not being well versed in International Trade Agreements and Goods & Services Agreements, it is not the intention of the writer to analyse the pros and cons of ETCA other than to state, any agreement need be thoroughly vetted by a group of experts before a decision is made of its suitability or lack of it. It should not be evaluated based on emotions or impact on one or a few stake holder groups, but based on overall benefits that would accrue to the nation.

At the outset, it must be stated, the proposed bridge between India and Sri Lanka is in no way comparable to the proposed ETCA. The bridge could facilitate the movement of unskilled and unemployed persons from the state of Tamil Nadu with a population of 77.8 million. Around 20% of the population live below the poverty line. According to Indian Labour Ministry, Tamil Nadu’s youth population (15-30 age group) amounts to 21 mil. 6 mil of the said youth group including 14% who are graduates, are unemployed. These would be candidates to cross the proposed bridge in search of greener pastures, as did their grand- fathers in the 1950s and 1960 as illicit immigrants. Other ill effects could be smuggling, diseases, epidemics etc. from Tamil Nadu besides the loss of Sri Lanka’s island status. Retaining island status may not be necessary under normal circumstances but is absolutely necessary in view of our giant neighbour India and its Tamil Nadu state. On the other hand, agreements such as ETCA are meant for qualified persons. Their appointments and arrivals are meant to be properly recorded and monitored. The duration of their stay could be pre-determined.

Much has been stated of over two hundred PhD holders applying for some Peon’s vacancies in India. It is a progressive step compared to Sri Lanka’s unemployed graduates, many who are categorized as ‘unemployable’ in the private sector, agitating for white collar jobs in the state sector.

This writer wishes to examine some other aspects, based on the objections voiced specifically by those in the Medical and IT professions and some in the general public. It need be understood, we live in a globalized world. Free movement of trade, goods, services, skilled labour to name a few are all necessary components in the context of globalization. Unfortunately, many Sri Lankans are unable to grasp the advantages of globalization unless they have some personal benefit. Many tend to approach such issues with a ‘tunnel vision’ mentality.

Read More

CTC welcomes health warnings on beedi packs

Leveling field among tobacco players

March 19, 2016, 5:11 pm 

Ceylon Tobacco Company PLC which last year contributed over seven percent of the state’s total tax revenue and is the country’s second most valuable company listed on the Colombo Stock Exchange has welcomed government moves to regulate what CTC calls the long "under-regulated" beedi industry now commanding approximately 43% of the country’s tobacco market.

CTC Chairman Susantha Ratnayake has said in the company’s annual report that "we are please to see the extension of the pictorial health warning to all tobacco products including beedi which accounts for a significant portion of the total tobacco market."

He added: "Proposals to levy higher levies on beedis are also welcome as it will reduce disparities among market players."

The CTC report revealed that the company which had lost almost 25% of their volumes from 2011 to 2014 has seen increasing demand for their premium brands and the migration of beedi smokers to cigarettes during the year under review.

The company’s MD/CEO Felicio Ferraz said that excessive increase in excise duty always leads to a volume decline as demonstrated for four years from 2011 to 2014 and that could lead to lower tax revenue for government when smokers shift to beedi and smuggled products.

He made the point that the 80% pictorial health warning on cigarette packs can favour illegal products such as smuggled or counterfeit cigarettes "mainly because smugglers do not respect any regulation on top of which they pay no excise or taxes."

Further, unreasonable restrictions on tobacco cultivation would result in the need to import leaf from elsewhere. This would be a loss for Sri Lanka’s national economy, loss of hard currency, loss of value infused into rural areas and loss of jobs.

Ratnayake reported that during the latter part of last year tobacco farmers faced difficulties owing to proposed restrictions on growing tobacco on paddy land. But tobacco farmers and barn owners had mobilized themselves "to meet this challenge headlong" by entering into a dialogue with the relevant stake holders – something the CTC chairman saw as "encouraging."

"…we are confident that the government will not ignore the significance of tobacco cultivation which in 2015 infused over Rs. 790 million into the rural economy and strengthened over 20,000 farmer livelihoods," he said.

During the year ended Dec. 31, 2015, CTC increase turnover to Rs. 106.5 billion from Rs. 87.9 billion a year earlier partly on account of government levies which went up from Rs. 66.2 billion to Rs. 80.4 billion. The company’s after tax profit was up to Rs. 10.6 billion from Rs. 8.6 billion.

Earnings per share grew to Rs. 56.77 from Rs. 46.01 and dividends per share to Rs. 45.15 from Rs. 39.50.

BAT is the dominant shareholder of CTC with 84.13% of the company with a number of foreign funds holding the lion’s share of the balance. The Lankan shareholders in the top 20 include the Bank of Ceylon (0.12%), Channa Nalin Rajamoney (0.08%) and AIA Insurance ( (0.08%).

The directors of CTC are Messrs. Susantha Ratnayake (Chairman), Felicio Farraz (MD/CEO), Dinesh Weerakkody, Premila Perera, Shigeki Endo (Finance Director), Syed Javed Iqbal and Kenneth George Allen.

Sri Lanka will not allow military base for China; port city project given green light

BY MUNZA MUSHTAQ on MARCH 18, 2016 

COLOMBO–The six-month-old Sri Lankan coalition government has declared that it will under no circumstance permit a Chinese military base to be constructed in the country.

The assurance came amid concerns from India that China is looking at constructing a military base in the island nation due to its strategic location.

“There is absolutely no such thing and we assure that we will never permit anything like that in Sri Lanka,” Deputy Foreign Minister Dr. Harsha de Silva told Asia Times.

His comments came just days after Prime Minister Ranil Wickremesinghe-led government gave the green light to resume construction on the $1.5 billion China-funded Colombo Port City project which was suspended a year back over environmental issues and on grounds that former President Mahinda Rajapaksa had not followed proper procedure while signing the deal with China.

The project, which is the largest foreign-funded investment on record in Sri Lanka, was inaugurated in September 2014 under Rajapaksa’s presidency, who relied heavily on China for investments.

Keheliya Rambukwella, who was spokesman for the government of former President Rajapaksa, claimed that even during Rajapaksa’s tenure, there was no proposal by the Chinese to establish a military base in Sri Lanka.

“They (China), however, extended us assistance when we were at a critical stage during the war with the Liberation Tigers of Tamil Eelam (LTTE),” he said.

During the over quarter century war in Sri Lanka, which ended in May 2009, China supplied the Sri Lankan government with necessary weapons to fight the LTTE.

The United Nations estimates that at least 40,000 civilians died during the final stages of the war which saw gross human rights violations.

Rambukwella said the rumors of a possible Chinese military base were floated by India which did not want Sri Lanka to have a close relationship with China.

“China is getting stronger and stronger by the day, and the United States is indirectly supporting India to control this,” he told Asia Times.

However, Field Marshall Sarath Fonseka, who served as Army Commander at the time the Sri Lankan military won the war against the LTTE, accused the Rajapaksa government of selling out to China.

“One of the regulations laid down by China to the then government was that even the Sri Lankan Air Force cannot fly over this port city. Basically, the Rajapaksa administration had agreed that the Chinese government can do anything, and we don’t have the right to question them even though it was happening in our land,” Fonseka said.

The Colombo Port City project will house a star class hotel, shopping and entertainment centers, offices, a marina and yacht club, a central boulevard, apartment complex, and a mini golf course. It will be built on 252 hectares of reclaimed land off Sri Lanka’s west coast.

Before taking over office, Wickremesinghe had vowed to halt the project on environment grounds, but reversed his decision and gave the green light to resume work on the project early this week.

The decision comes when Sri Lanka is heading toward a deepening economic crisis. Analysts believe this could be a move by Wickremesinghe to boost confidence among Chinese investors and encourage them to bring in more investments to the country.

Wickremesinghe seems to have a change of heart on the controversial project just days after the country received repeated setbacks from international credit rating agencies, with Fitch Ratings downgrading its ratings on Sri Lanka by a notch to B+ with a negative outlook, followed by Standard & Poor’s revised outlook last week on its B+ sovereign credit rating to negative, amid mounting concerns of rising debt, weaker revenue and decline in the country’s foreign reserves.

Meanwhile, following a formal invitation extended to China by the Wickremesinghe government to resume work on the project, CHEC Port City Colombo (Pvt) Ltd said it recognized Sri Lankan government’s decision as a positive step in moving forward.

While expressing its regret over the suspension of the project and the lengthy process taken to resume work which resulted in heavy losses, the company in a statement this week said: “With the resumption of work now approved, the project company will commence with preparatory work as soon as feasible to ensure that the project can be completed in the expected time-frame.”

The project company also reiterated that as a responsible corporate citizen, it will continue to be compliant with all existing laws and regulations in Sri Lanka.

Meanwhile, the People’s Movement against the Port City has demanded Sri Lankan President Maithripala Sirisena and Wickremesinghe to immediately halt the project on the grounds that it is detrimental to the country’s environment.

In a statement, the movement recalled Wickremesinghe’s initial stand on the project during the presidential campaign in 2014.

He then said: “The western coast would be severely affected as a result of the construction activities of the Port City project. We ought to protect the coast. The coastal belt from Colombo to Kalpitiya and from Colombo to Hikkaduwa will be lost as a result if it is carried out”.

Munza Mushtaq is a journalist based in Colombo, Sri Lanka. She is the former news editor of two leading Sri Lankan newspapers; The Nation and the Sunday Leader. She writes extensively on Sri Lankan current affairs with special focus on politics, human rights and business issues. She is currently the Colombo-based correspondent for International News Services, the Los Angeles Times and the Nikkei Asian Review.

Battered brokers bemoan Capital Gains Tax

By Charumini de Silva-

Monday, 21 March 2016

Battered stockbrokers are urging the Government to consider reintroducing the Share Transaction Levy (STL) as a less damaging alternative to the Capital Gains Tax (CGT), which they warn will further hurt the Colombo Bourse.

“At this juncture where markets’ daily trading volumes are at record-low levels, bringing in a Capital Gains Tax would be counterproductive,” Colombo Stock Brokers Association President Ravi Abyesuriya told the Daily FT.

As an alternative, the CSBA Chief suggested that it would be more appropriate for the Government to reinstate the STL which had contributed Rs. 38 billion to Treasury coffers as revenue over the last decade. Last year the amount raised was Rs. 1.5 billion.

In the 2016 Budget, in a surprise move, the Government decided to remove the 0.3% STL charged to both buyers and sellers with effect from 1 January.  

Originally capital market stakeholders welcomed the removal. However, following the Government’s recent announcement of the return of the CGT following its removal in 1987, the CSBA is urging a reintroduction of the STL. 

While acknowledging that the present Government needed to boost revenue, Abeysuriya said that re-implementing the CGT was not the best course of action.

He said that the market had seen a “huge plunge” following the announcement of the reintroduction of the CGT. “From an investor’s point of view, the Capital Gains Tax is a declaration file and it scares away investors,” he added.

Year-to-date, the market has dipped by 12%, with over Rs. 400 billion in value wiped off while net foreign outflow has been Rs. 1.3 billion.

Highlighting the practical difficulties in implementing the CGT, Abeysuriya asserted that while the Government taxed gains it would also have to accept the capital losses as the calculation and mechanisms of it were extremely complicated and cumbersome. 

“Sri Lanka does not have sophisticated systems like the US or the UK to undertake this whole calculation. With all that effort we will ultimately not get what we got through STL. The Government would have to forego what it was generating, which got credited to its account automatically on a daily basis,” he stressed.

In addition, Abeysuriya noted that the negative outlook posted by international rating agencies over Sri Lanka’s macroeconomic fundamentals had also impacted the Colombo Bourse with foreign investments exiting. 

Emerging debt swelled $1.6 t in 2015, poses risks: IIF

Reuters: Total debt in emerging markets grew by $1.6 trillion in 2015 to more than $62 trillion, the Institute of International Finance said last week, warning that higher indebtedness raised repayment risks and endangered future economic growth.

The Washington-based group, one of the most authoritative sources of data on investment flows to the developing world, noted that $730 billion of bonds issued by emerging markets governments and companies were due for repayment in 2016. Another $890 billion matures next year, a third of it in US dollars.

This debt-servicing hump is a result of a borrowing spree after the 2008 global financial crisis, Reuters has reported.

The IIF said in a report that as countries increasingly use money they raise to repay maturing debt, "high levels of indebtedness – andthe need for eventual deleveraging – willlikely constrain EM growth going forward".

The report noted year-to-date government bond and loan sales were almost 35 percent below the same period in 2015. "With a record level of upcoming redemptions through 2017, EM issuance has been subdued this year, with investors remaining uneasy about a potential rise in EM corporate default risk," it added.

The IIF contrasted developing countries' debt situation with advanced economies, where heavy deleveraging by governments as well as households brought down debt levels by $12 trillion last year to around $175 trillion.

That allows scope for more spending to boost recovery.

Emerging market indebtedness, on the other hand, is growing across all sectors. Non-financial corporate debt rose by over 6.5 percentage points in 2015 to more than 100% of GDP, surpassing mature markets' 87% average.

The IIF also noted that household debt rose more than $335 billion in 2015, surpassing $8 trillion, as consumers in many emerging markets continued to take advantage of monetary policy easing and low interest rates.

That took indebtedness close to 35% of GDP, up from 15-20% pre-crisis. The build-up was particularly pronounced in emerging Asia, where household debt-to-GDP ratios are over 40%, the report noted.

On the positive side, while emerging public sector debt rose over three percentage points in 2015 to more than 45% of GDP, this remains well below the 110% ratio in mature markets.

The increase last year was also concentrated entirely in local currency bonds, the outstanding volume of which swelled more than $2 trillion to some $22 trillion. Outstanding hard currency debt declined by $72 billion to $3.3 trillion.

The Western Province Megapolis: A Project Without Clear Directions Or Objectives

By DNR Samaranayaka –March 20, 2016

DNR Samaranayaka

An urban development plan for the Western Province of Sri Lanka is being undertaken by the newly established Western Province Megapolisdepartment. It is designed according to the features and characteristics of a Megapolis with the Colombo metropolitan region as the core of the Megalopolis. The area under this project is stretching in the shape of a neckless from Negombo in the North and Hikkaduwa in the south, and extending to about 30 kilometres to the east from the core area of the project. This project is a modified and enlarged version of the plan prepared by a group of Singaporean consultants under the Western Province Megapolis Structure plan in 2004, which is also known as the ‘CESMA’ plan.

A Megapolis is normally referred to a contiguous urban corridor covering a large urban space. It usually evolves overtime through expansion and amalgamation of individual metropolitan regions. One of the key features that facilitate the formation of a Megapolis is the strict application of planning regulations, and the orderly distribution of urban space among economic, social, recreational, business, residential, administrative and other urban activities. A Megapolis also has a fair distribution of original landscape, including open spaces, water bodies, streams and forest reservations. The urban centres within the Megapolis are connected with very efficient and fast transport systems, employing the ‘state of art’ or ‘smart’ technology, which is the highest level of technology that exists at any particular time. This technology is also applied to all types of functions and services found within a Megapolis to make such services more efficient, less costly and easy to use.

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