Powering through Droughts and Crises: Redesigning Sri Lanka’s Energy Resilience
Sri Lanka has lived with energy insecurities for decades. Today, the crisis is a structural problem that is no longer limited to mere episodes. The country’s electricity system sits at the intersection of three converging vulnerabilities. Firstly, the system relies on a bimodal rainfall pattern that makes hydropower inherently boom-and-bust. Secondly, Sri Lanka has a near-total dependence on imported fossil fuels and limited use of other renewables, mainly rooftop solar, to fill the gaps. Thirdly, the country deals with an ageing grid infrastructure that is ill-equipped for the distributed energy future that could solve the problem.
Tariff Wars: How Will the US Reciprocal Tariff Impact Sri Lanka?
The proposed additional tariffs on the US imports from Canada, China, and Mexico went into effect early Tuesday morning (March 4), paving the way for a trade war between the US and major trade partners. In addition, the Presidential Memorandum on Reciprocal Trade and Tariff of the United States (US) has called for studies on the “unfair trade practices” of US trade partners to determine reciprocal tariff rates as a counter measure. This means that, if the EU has a 10% automobile tariff, the US reciprocal tariff would also be 10%, matching its trade partner’s tariff.
VAT Hike in Sri Lanka: Who Really Pays the Price?
Earlier this year, Sri Lanka introduced major changes to the Value Added Tax (VAT) system. The VAT rate increased from 15% to 18%, and tax exemptions were removed for 97 items, including essential goods such as gas and stationery. While these revisions aimed to boost government revenue, they have also significantly increased the tax burden on low-income households, making life even more challenging for the most vulnerable during this ongoing crisis. This blog offers a comprehensive overview of the recent VAT revision and potential solutions for easing the VAT burden in Sri Lanka.
Who Really Benefits? Tackling Inequality, Welfare, and Healthcare Challenges in Sri Lanka
Sri Lanka’s recent Value Added Tax (VAT) revisions have placed a heavier burden on lower-income households, who now spend 10% of their income on VAT. This tax burden, along with broader issues in taxation, welfare, and healthcare, was a central focus at the Institute of Policy Studies of Sri Lanka (IPS) flagship publication launch, Sri Lanka: State of the Economy 2024, under the theme ‘Economic Scars of Multiple Crises: From Data to Policy’. The opening session, ‘Distributional and Social Impacts: Who Gains, Who Loses?’ chaired by IPS Research Fellow Dr Ganga Tilakaratna, shed light on the uneven distribution of tax burdens, welfare shortfalls and healthcare access, sparking important discussions about how Sri Lanka can address these challenges.
Sri Lanka’s Palm Oil Industry: Balancing Economic Benefits and Environmental Sustainability
The palm oil industry in Sri Lanka has been a vital policy initiative aimed at reducing palm oil imports and boosting the economy. Oil palm cultivation was allowed initially to reduce reliance on imported palm oil, but concerns over environmental and health impacts led to a decision to phase out cultivation within ten years. In this Q&A Explainer with Author, Dr Erandathie Pathiraja, Research Fellow at the Institute of Policy Studies of Sri Lanka (IPS), provides valuable insights into the recently published IPS study, ‘Palm Oil Industry in Sri Lanka: An Economic Analysis’. Dr Pathiraja shares her perspectives on the reasons behind the ban on oil palm cultivation, the potential impact on the economy and environment, the industry’s economic contributions, environmental concerns and their mitigation, health issues related to edible oil consumption, and alternative solutions to meet the local edible oil demand. The study authored by Dr. Erandathie Pathiraja, Ruwan Samaraweera, Hiruni Fernando, and Jaan Bogodage, offers a comprehensive analysis of the economic and environmental impacts of the palm oil industry in Sri Lanka.
Demystifying Hawala/Undiyal – The Not So Dismal Science:[…] believed that informal fund transfer operations in Sri Lanka have expanded considerably due to the wide gap between the…