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Late City edition

P14-15

Future of tourism

Problems facing the construction industry

Tourism is a “masala tea”

An analysis of the UNHRC Resolution on Sri Lanka

P12P13

P10-11

By Charumini de Silva

DeSpite the invitation extend-ed by Finance Minister Ravi Karunanayake requesting citizens holding Swiss bank

accounts to redeposit the cash in the country’s banking system with a promise that no questions will be asked, industry experts say that it is against internation-al regulations.

FINANCE Minister Ravi Karunanayake left the island early last morning to attend the 2015 Annual Meetings of the World Bank Group and the International Monetary Fund which will take place in Lima, Peru, from 9 to 11 October.

The Minister was accom-panied by Central Bank Governor Arujuna Mahendran and Secretary to Treasury and Ministry of Finance Dr. R.H.S. Samarathunga.

Finance Minister Ravi Karunanayake will hold a special discussion with World Bank and IMF team on the aid provided to Sri Lanka.

By niSthar CaSSim in tokyo

Ja pa n e S e Fo r e i g n M i n i s t e r F u m i o K i s h i d a o n Monday declared that bilateral ties with Sri Lanka would strengthen further and urged his country’s private sector to contribute to the future development of the island nation.

He made this clarion call when he delivered the key-note at a packed Sri Lanka investor Forum organised by nWS Holdings Ltd. yes-terday in tokyo.

Fresh from a meet-ing with the visiting Sri Lankan prime Minister Ranil Wickremesinghe in tokyo, the Japanese Foreign Minister said that bilateral ties with Sri Lanka were bound to strengthen further.

H e i n f o r m e d t h e to k y o F o r u m t h a t prime Minister Ranil

Wickremesinghe was now visiting Japan as a ‘Distinguished Official Guest’ following the election of the new

Government on 17 august.“With the summit with

prime Minister Shinzo abe (scheduled today in tokyo), now our histori-

cal amicable relations are about to strengthen greatly,” Kishida told the nWS Holdings investor Forum attended by over 300 Japanese investors.

However, the Japanese Foreign Minister said stronger economic rela-tionship could not be achieved only by an effort of the Government. “powerful initiatives of the private sector togeth-er with the effort of the Government make it pos-sible to achieve the goal. i believe this forum is very timely in such circum-stances,” Kishida said.

Ravi K’s blanket amnesty against global financial rules: Nahil

Japanese Minister for Foreign affairs Fumio Kishida shakes hands with Minister of Finance Ravi Karunanayake as Prime Minister Ranil Wickremesinghe looks on last morning in Tokyo – Pic by Pradeep Pathirana

Ravi K to attend WB/IMF annual meeting in Peru�� This year’s discussion by

Minister with IMF aimed at increasing annual aid to SL

Japanese firms urged to contribute to Lanka’s future economic development

Japanese Foreign Minister Fumio Kishida shakes hands with Tourism Minister John amaratunga in Tokyo at the NWs Holdings Investor Forum on sri Lanka. bansei Holdings Co. Ltd. Japan President Toyohiko Murakami, NWs Holdings Chairman Takashi Igarashi and Group Managing director Viraj Malawana are also present. below: some of the participants at the Forum in Tokyo which drew over 300 Japanese investors

With the summit with Prime Minister Shinzo Abe (scheduled today in Tokyo) now our historical amicable relations are about to strengthen greatly

I expect tha t many Japanese companies wi l l con t r i bu t e t o economic development promoted by the new Government through brisk and lively business activities, and consequently the bond between people in Sri Lanka and Japan will be stronger – Japanese Foreign Minister Fumio Kishida in his keynote at the NWS Holdings Sri Lanka Investor Forum in Tokyo

PRIME Minister Ranil Wickremesinghe who is on a State visit in Tokyo will address the Japanese Parliament today, followed by top level meeting with Premier Shinzo Abe.

Today’s address in Parliament and meeting with Abe are key highlights of Wickremesinghe’s five-day visit that began on Sunday.

After the meeting the two Prime Ministers will hold a joint press conference. Thereafter Abe will host Wickremesinghe to an official banquet.

He is also expected to attend a luncheon hosted by Japan-Sri Lanka Parliamentarians League after address-ing the Parliament.

Yesterday the Premier met Japan’s Foreign Minister Fumio Kishida, Deputy Premier and Finance Minister Taro Aso, Internal Affairs and Communication Sanae Takaichi and ruling Liberal Democratic Party Vice President Masahiko Komura.

SRI Lanka has seen the highest tourist arrivals growth this year in September, propelling the cumu-lative figure to over 1.3 million.

As per data released by the Sri Lanka Tourism Development Authority, arrivals in September amounted to 143,374, up by

36%, the highest year-on-year growth so far

this year. The previ-ous best was in July,

which produced a 31% growth to record

an arrivals figure of 175,804.

BaSeD on certain good gov-ernance measures, the Board of Directors of Sampath Bank pLC has decided to do away with alternate directors.

the company in a stock mar-ket disclosure said: “in terms of Section 8 on Corporate Disclosure of the Listing Rules of the Colombo Stock exchange (CSe), we wish to inform you that at the meeting of directors held on 30 September it was

decided that all appointments of directors as alternate direc-tors are cancelled and cease to be in effect.”

By Shehana dain

tHe Government will raise more revenue via the latest hike in tax on cigarettes, a move that has been welcomed by anti-

tobacco lobby but with caution by the sole manufacturer.

a n i n d u s t r y e x p e r t told the Daily Ft that the Government’s decision to go ahead with the tax hike on cig-arettes would result in at least a 10% increase of tax revenue to the State.

Sampath does away with alternate directors

tHe Board of Directors of Sampath Bank pLC has decided to raise Rs. 7 billion through a listed debenture issue.

Sampath Bank to raise Rs. 7 b via debentures

September sees highest tourist arrivals growth

�� ADICT hails hike in tax; CTC wary

Govt. to inhale more revenue from fags

streets in Tokyo adorned with the sri Lanka National Flag to mark the important ongoing state visit by Premier Ranil Wickremesinghe

Ranil to address Japanese P’ment today; talks with PM AbeMore Page 2

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Newswww.ft.lk

Tuesday OcTOber 06, 20152

The Government anticipates signing a new agreement with the estate sector to increase their daily wages, Minister of Labour and Trade Union Relations W.D.J. Seneviratne said.

he also said that preparation of the agreement to resolve the problem related to the estate Sector wages done in a manner fair to both the workers and the plantation companies.

The Minister expressed these views during a meeting with representatives of the plan-

tation companies and trade union members at his Ministry.

The collective agreement on estate sector wages came to an end on 31 March and since then the estate workers are in a labour dispute with the compa-nies over the wages.

The trade union repre-sentatives have held discus-sions with the companies on increasing the daily wage of plantation workers to Rs. 1,000. however, the tea estate compa-nies say that if the daily wage was increased to Rs. 1,000 their companies would face a risk.

Under the Government pro-posed agreement, the daily wages for the estate workers will be increased to Rs. 770.

The collective agreement is expected to be prepared by including the proposals of the Lanka estate Workers Union, Ceylon Workers Congress and the collective of estate trade unions.

Prime Minister Ranil Wickremesinghe met Deputy Prime Minister, Minister of Finance and former Prime Minister Taro Aso in Tokyo yes-terday. Wickremesinghe is on an official visit to Japan since 3 October – Pic by Pradeep Pathirana

Prime Minister Ranil Wickremesinghe met Japanese Minister for Foreign Affairs Fumio Kishida last morning in Tokyo – Pic by Pradeep Pathirana

President Maithripala Sirisena yesterday said that this is the best time to develop Sri Lanka as all the countries in the world and interna-tional organisations do not have any animosity against us.

he made these remarks at the inauguration ceremony of the National Program for Local Food Production, held in Iranamadu, Kilinochchi yesterday.

The President pointed out that over 80% of the requirement of chilies, soya, cowpea and green gram are imported. he recalled over Rs. 6 billion spent on the importa-tion of food in 2014. “When this hap-pens the farmers can never get rid of the debt burden,” he said.

he said that it was a shame to import food from foreign countries for consumption when the country was capable of producing all essen-tial food requirement within the country.

President Sirisena said every State-owned land which had not been cultivated would be used for food production in the future. he said he would call for explanations from the responsible officials about lands which have not been cultivat-ed.

“The empty lands which have not been utilised for food production and owned by private sector will also

be taken on temporary basis for food production. every inch which can be cultivated should be cultivated,” the President stated.

he said home garden cultiva-tion was a key feature of this national program which is carried out not only by the Department of Agriculture and Presidential Secretariat, but also by every insti-tute of State and private sector.

he pointed out that the people could cultivate vegetables and fruits in their plots of land in home gar-dens for their day-to-day consump-tion.

President Maithripala Sirisena requested the people, who enjoy free-dom and democracy under this new

Government, to unite irrespective of race, religion and caste differences to eliminate poverty in the country.

The program, which was inaugu-rated in Kilinochchi District yester-day, will be implemented around the country in the future and the aim of the program is to grow agricultural products that can be grown in our county.

The President symbolically dis-tributed title deeds of 613 acres of land in Kilinochchi and Mullaitivu Districts used by the military to their original owners and to the rel-evant institutions.

Marking the inaugural ceremony of the National Food Production program, the President went to a

paddy field and switched on a paddy planting machine.

Parallel to this program the inau-guration of the growing of agricul-tural products including corn, fruit and coconut was commenced yester-day. In addition to that, goats, dairy cows and coconut saplings were also distributed among the people and organic fertilisers were introduced for farming.

President Sirisena also declared open the Aquaculture Development Centre in Iranamadu.

President Sirisena also made an observation tour of the Vocational Training Centre being built in the Iranamadu area with financial assis-tance from Germany.

By Chamodi Gunawardana

P I V I T h U R U h e l a U r u m a y a ( P h U ) L e a d e r a n d M P U d a y a G a m m a n p i l a alle ged that President M a i t h r i p a l a S i r i s e n a h a d v i o l a t e d t h e C o n s t i t u t i o n b y a p p o i n t i n g J a n a t h a Vi m u k t h i P e r a m u n a ( J V P ) P r o p a g a n d a S e c r e t a r y a n d M P Vij i tha herath to the Constitutional Council (CC).

S u b m i t t i n g a l e t t e r

to President Sirisena, Gammanpila has alleged that herath’s appoint-ment as the representa-t ive o f o t h e r p a r t i e s took place without the a c k n o w l e d g m e n t o f other party leaders.

h e h a s m e n t i o n e d that the United People’s F r e e d o m A l l i a n c e ( U P F A ) , t h e S r i Lanka Muslim Congress (SLMC) and the eelam P e o p l e ’ s D e m o c r a t i c Party (ePDP) were eligi-ble to nominate a repre-sentative collectively for the CC, but did not enjoy

the opportunity.G a m m a n p i l a h a s

s u b m i t t e d t h i s l e t -ter in order to request P r e s i d e n t S i r i s e n a to reveal the reasons behind this appointment.

The CC has been recog-nised as the main com-ponent to establish nine i n d e p e n d e n t c o m m i s -sions and it should guide those commissions con-tinuously. The Speaker, Prime Minister and the Opposition Leader have the power to nominate MPs for the CC while b e i n g i t s p e r m a n e n t members.

The CC will comprise 1 0 m e m b e r s . S e v e n o f t h e m s h o u l d b e Parl iamentarians and r e m a i n d e r s h o u l d b e civil organisation repre-sentatives. The Speaker, Prime Minister and the Opposition Leader could nominate five members and rest would be nomi-nated though small par-ties’ recommendations.

�� according to the proposed agreement, daily wages to be increased to rs. 770.�� agreement will include

proposals of the Lanka estate Workers union, ceylon Workers congress and the collective of estate trade unions

Govt. to sign new agreement on estate sector wages

Ranil meets Japan’s Deputy pm

best time to develop our country as the world is with us today: President

Ranil meets Japanese Fm

By Chamodi Gunawardana

The Sri Lanka Freedom Party (SLFP) Youth Front yes-terday asser ted that Sri L a n k a n s s h o u l d r e s p e c t President Maithripala Sirisena and former President Mahinda Rajapaksa equally as the coun-try’s saviours.

Youth Front Leader and for-mer Deputy Minister Shantha Bandara said that the war vic-tory credits went to former President Rajapaksa and the credit for the current winning situation went to President Sirisena.

“President Sirisena won t h e t r u s t o f t h e U n i t e d Nations via his address at the 70th Session of the United Nations General Assembly in New York. It is a great victory which a small coun-try cannot obtain easily. We believe Prime Minister Ranil Wickremesinghe also contrib-

uted his best for this victory,” he stated.

Bandara added that the SLFP Youth Front stance regarding the war crime investigation mechanism remained the same.

“We think Sri Lanka is capa-ble of holding an impartial war crimes investigation process via a domestic mechanism. We do not expect international interference,” he stressed.

Bandara asserted that the Gover nment could use UN assistance in order to ensure harmony in the country.

“The Government should not give opportunities again for separatists to tear the country apart. We expect the UN to sup-port us continuously,” he said.

“We must reject all the alle-gations levelled against former President Rajapaksa and the war heroes. We should prove that LTTe leader Prabhakaran was the only culprit,” Bandara charged.

Gammanpila accuses President of violating Constitution

Japanese...The NWS Holdings Forum drew actual inves-

tors from Japan who have exposure to Sri Lanka Government bonds and listed equities apart from those with immense potential. NWS together with its partner Bansei Securities Group has been responsible for attracting nearly Rs. 60 billion in Japanese investments into Sri Lanka. Of that fig-ure over Rs. 40 billion is on Government Treasury Bonds.

“I expect that many Japanese companies including Bansei Group will contribute to eco-nomic development promoted by the new Government through brisk and lively business activities, and consequently the bond between people in Sri Lanka and Japan will be stronger,” the Japanese Foreign Minister added.

Sri Lanka’s Tourism Minister John Amaratunga who was the Guest of Honour at the forum made it a point to thank Japanese investors who have made investments in to Government Bonds. “I can confirm that Sri Lanka as a nation has never defaulted on repayments and as such our Sovereign Bonds are safe and secure investment for foreign investors,” he added.

Amaratunga also said the fact that Premier Wickremesinghe had chosen Japan as the sec-ond country to visit since assuming office high-lighted the importance and trust Sri Lanka had in Japan as a key ally in the region.

“The Prime Minister’s visit will surely strength-en the work that has already begun and foster further investment and relations between our two countries,” emphasised Amaratunga.

He said that the new Government’s agenda was strictly non-aligned and that the Government was keen to position Sri Lanka as a hub for the entire region given the Free Trade Agreements with India and Pakistan.

Revealing that Sri Lanka’s economic growth was at 6.7%, the Minister said the new Government was confident of continuing this momentum in the next few years.

The Japanese investors present at the NWS

Forum were briefed about some of the new Government’s plans on mega development and infrastructure projects including the ‘Megapolis’. Amaratunga also spoke of developments in the tourism industry, the impressive growth numbers achieved so far and projections for the future.

Other speakers at the forum included former Japanese Ambassador to Sri Lanka Nobuhito Hobo, Consul General for Sri Lanka in Osaka Udaya Aluthgamage, existing investors in Sri Lanka, NWS Holdings Chairman Takashi Igarashi and Bansei Holdings Co. Ltd. Japan President Toyohiko Murakami.

Several Sri Lankan companies including Just In Time Holdings, Jetwing, Micro Holdings, Altair, Spa Ceylon and Pan Asia Bank made brief presentations as well in addition to SriLankan Airlines, which partnered the Forum along with the Sri Lanka Tourism Promotion Bureau.

It was the sixth road show and investor forum organised by NWS Holdings, but this year the scope was expanded to cover additional sectors. These included tourism, leisure and lifestyles, real estate, property development and construc-tion, manufacturing and ICT apart from financial services and capital markets.

Ranil...Among today’s meetings are with Japan’s

Minister of Economy, Trade and Industry Youichi Miyazawa and Chief Cabinet Secretary Yoshihide Suga as well as JICA President Prof. S. Kitaoka.

Tomorrow Prime Minister will have an audi-ence with Japan’s Emperor Akihito and Empress Michiko, apart from attending a private luncheon hosted by former Prime Minister Yasuo Fukuda.

Wickremesinghe is accompanied by Maithree Wickremesinghe and other members of the Sri Lanka delegation include Foreign Minister Mangala Samaraweera, Finance Minister Ravi Karunanayake, Technology, Technical Education and Employment Minister Susil Premajayantha, Secretary to the Prime Minister Saman Ekanayake, Additional Secretary Saman Athaudahetti and Special Assistant to the Prime Minister Sandra Perera.

Ravi K’s...“If we are to follow Singapore and the UK

standards, all significant inward remittances need a declaration of source of funds,” East West Holdings Group Chairman Nahil Wijesuriya told the Daily FT.

He went on to say that it was mandatory for every bank to know the source of funds accord-ing to international monetary regulations.

“There is no way that a politician can say that no questions will be asked. Banks receiving these considerable amounts of funds are bound to know their customers and adhere to the

money laundering guidelines,” he explained. Karunanayake expressed last week that this

would be the first step in creating a financial hub in Sri Lanka and assured that the Finance Ministry would instruct the Exchange Control Department, Inland Revenue Department and other necessary institutions to bring in any other satisfactory measures in order to fortify investor confidence.

However, the Sri Lanka Banks’ Association told the Daily FT that there had been no directive given to them in receiving these funds to the banking system of the country.

“It is still a proposal of the Government and thus far we have not been given any directive on this,” said Sri Lanka Banks’ Association Secretary General Upali Silva.

When asked how the ‘no questions asked’ policy applied to the banking system under the current financial regulations of the country, he explained that if the Government imposed a ruling under the amnesty, then there was no objection for the banks in accepting those funds. Otherwise, according to current regulations, indi-viduals must provide a declaration of the source of funds.

Ravi...Sri Lanka receives long-term aid to the value of

$ 400 million annually from the WB/IMF.This year’s discussion by Karunanayake with

the IMF team is aimed at increasing the annual aid to Sri Lanka towards more areas of activities.

The Annual Meeting of the World Bank will bring together ministers of finance and central bank governors from its 188 member countries. It will provide a unique opportunity for a broad dia-logue on issues of global economic importance. They serve to discuss international economic and financial developments, the state of the global economy, and policies to reduce poverty and promote inclusive economic growth in the member countries especially the developing countries.

Secretary to Ministry of Finance Dr. Samarathunga said that WB/IMF provides Sri Lanka the long-term credit with the repayment period up to 40 years and the grace period of 7 years with 2% interest. Presently this aid is used in developing infrastructure facilities in different sectors of the economy.

En route to the WB/IMF meeting the Minister also visited Japan to join Prime Minister Ranil Wickremesinghe who is currently on an official visit to Japan where discussions will be held on economic and bilateral cooperation between the two countries.

Japan is a largest aid donor to Sri Lanka and the Sri Lanka team headed by Wickremesinghe is holding talks on further improving ties between the two countries in the field of economic coop-eration and investment.

September...With the September haul, tourist arrivals in the

first nine months were 1.315 million, up by 17% from the corresponding period of last year.

Sri Lanka Tourism Promotion Bureau Chairman Dr. Rohantha Athukorala said the European tour-ists registered a growth of 11.2% whilst the Asian travellers, accounting for 45.2%, grew by a com-manding 27.9% to reach 595,583 visitors.

“This indicates the changing trend that Sri Lanka will be challenged with in the future. Rather than focusing on numbers, Sri Lanka must gener-ate quality tourism which is what the 2016 market-ing plan will target,” Athukorala added.

Arrivals from Western Europe increased 26.9% in September with the arrival of 35,819 tourists, compared to the 28,234 tourists who arrived in the same month last year. Most of the tourist arrivals from Western Europe were from the UK (up 24% to 11,160) and Germany (up 18.5% to 8,292).

Tourist arrivals from East Asia increased 34.9% as 31,729 visited the country compared to the 23,516 who visited in September 2014. Arrivals from China compared to last year increased 54.0% with the arrival of 20,502 visitors while arrivals from Japan declined 6.2%.

Arrivals from South Asia increased by 41.8% as 40,498 tourists visited the island in September. Of those who arrived from South Asia, 27,233 were from India, corresponding to an increase of 41.5%.

Arrivals from the Middle East increased by 65.9% with 13,752 visitors arriving in September 2015.

Arrivals from Eastern Europe increased by 21.9% with the arrival of 8,601 tourists in September 2015 compared to the 7,058 arrivals in September 2014. However, tourist arrivals from Eastern Europe declined this year by 5.5% due to the economic recession in Russia and the crisis in Ukraine.

Arrivals from North America increased 41.3% to 5,419 in September. Arrivals from US were up 47.5% to 3,232 while arrivals from Canada increased by 33.0% to 2,187 during the month.

In the first seven months of this year earnings from tourism increased by 16.8% to $ 1.6 billion.

Sri Lanka exceeded its target of 1.5 million tourist arrivals last year and earned $ 2.206 billion from tourism. The Tourism Authority has set a tar-get of two million tourist arrivals this year and 2.5 million by 2016.

Sampath...Alternate Directors at the time were Kulatilleke

Arthanayake Malik Kumar Ranasinghe (Alternate Director to D. Sooryaarachchi), Deepal Sooriyaarachchi (Alternate Director to Prof. K.A.M. Ranasinghe), Sanjiva Kanishka Gamini Senanayake (Alternate Director to W.D.P. de Mel)

and Saumya Amarasekera (Alternate Director to Channa Palansuriya).

Sampath Bank...The bank informed the Colombo Stock

Exchange (CSE) that it has decided to issue 50 million debentures with an option to issue up a further 20 million debentures in the event of an oversubscription at a par value of Rs .100 subject to the necessary regulatory approval.

Govt....Over the weekend the Government increased

the excise duty on 1,000 cigarettes of the Gold Leaf variety by Rs. 2,140 to Rs. 23,750, and as a result the price of a cigarette increased by Rs. 3 to Rs. 33.

“If the volumes are stable and because it’s a price increase of 10%, the Government can expect a 10% revenue increase,” he said

In the first half Ceylon Tobacco Company (CTC) contributed Rs. 43.7 billion to the Government as excise and other taxes. This is an increase of 18% in comparison to the same period last year and was primarily driven by an excise-led price increase experienced in October 2014 along with higher volumes during the first six months of 2015.

Alcohol and Drug Information Centre (ADIC) Information Analyst Asitha Darshan emphasised: “With the increase of Rs. 3 this time, we only get to hear about the price. We have a question as to how much the Government will get as tax and how much the manufacturing companies will profit via this tax; that’s something we need to know directly via the Treasury. According to our research, the Government receives 60% and the manufacturing company receives 40% through such tax imposed.”

Darshan further went on to say that while an increase of Rs. 3 per cigarette was commendable compared to the prior year’s increase of Rs. 2, it would be a temporary solution as the customer would adapt to the price change in the long term.

“According to Sri Lanka’s inflation and buy-ing power, the price of a cigarette should be minimum Rs. 45 but ours is only Rs. 33. If it does increase to that level, the average cigarette con-sumption will reduce by 80%. If the Government really wants to reduce consumption of these two products, what’s needed is an increase of 50% which can make a considerable impact, not a step-by-step annual increase of 10%-15%, which is adaptable.”

However, an industry expert defended that statement, highlighting: “Even the Finance Ministry explained to them saying that their calcu-lation is false. From our prices in Asia Pacific from 40-50 countries, Sri Lanka is the fourth highest price market. Countries that have higher prices are Australia, Singapore and Hong Kong. Even Japan and Korea are way below us.”

Continuations FRom page 1

MR, MS must enjoy equal respect: SLFP Youth Front