Sri Lanka

Rising Price of Rice in Sri Lanka: The Roots and Remedies

Rice is the dietary staple and the major domestic crop cultivated in Sri Lanka since ancient times. Therefore, the production and availability of rice are closely tied to food security as well as political stability in the country. Every government since independence has given prominence to the goal of achieving self-sufficiency in rice. Accordingly, a significant amount of resources are allocated for the supply of irrigation water, land development, research on technological improvements, farm mechanisation, and support facilities such as credit, subsidised inputs, and farmer welfare measures. As a result, the cultivation of paddy and production of rice increased steadily with Sri Lanka reaching near self-sufficiency in rice and rice imports dropping to an insignificant amount. Despite these achievements, problems relating to the paddy and rice sector continue to occupy a foremost place among the country’s socio-economic issues. At present, supply shortages and rising retail prices have caused severe social unrest. In this background, this blog identifies the current problems in the rice sector and suggests some policy recommendations.

Healing the Ozone Layer: The Need for a National Cooling Policy (NCP) for Sri Lanka

The ozone layer is located in the lower stratosphere at a height of 15 to 30 kilometres above the earth, protecting it against the sun’s harmful ultraviolet (UV-B) radiation. It is like a blanket that protects the planet; a reduction in ozone concentration increases solar radiation damaging plants, animals, and human beings. Human-induced depletion of the ozone layer due to excessive emissions of ozone-depleting substances (ODS) which are primarily used in the cooling sector is a major global environmental concern. This blog discusses the importance of a National Cooling Policy (NCP) for Sri Lanka as a part of IPS’ ongoing research, to phase out ODS to prevent ozone depletion and mitigate global warming.

GSP+ Withdrawal: How Would it Impact Sri Lanka’s Economy?

Sri Lanka’s preferential access to the vital European Union (EU) market faces fresh challenges after the European Parliament’s special resolution adopted in June 2021. The GSP+ is a non-reciprocal trading arrangement whereby Sri Lanka does not have to lower tariffs in return but is required to implement certain non-trade related conventions to benefit from preferential access. The GSP+ arrangement slashes import duties to zero for vulnerable low and lower-middle-income countries that implement 27 international conventions related to human rights, labour rights, environment protection, and good governance. This article assesses the impact of a hypothetical withdrawal of GSP+ on Sri Lanka’s exports to the EU: the largest single trading bloc, with the United Kingdom (UK), accounting for 30% of Sri Lanka’s exports.

Bridging the Gaps: The COVID-19 Crisis and Sri Lanka’s Healthcare Response

Like many other countries, Sri Lanka faces numerous challenges in the battle against COVID-19. The pandemic has caused deep uncertainty and presented a colossal challenge for the country’s healthcare system. With the rapid increase in cases and the emergence of new variants, Sri Lanka began to face shortages of medical resources, including hospital beds and medical equipment. The vaccination programme was beset with a host of problems early on due to the irregular and inconsistent supply of vaccines, disorganised deployment and deviation from the scientifically agreed prioritisation. There was also alleged misreporting of COVID-19 daily statistics in the Gampaha district and Eastern Province. The absence of real-time data acted as a hindrance to obtain a reliable risk assessment in the country. Against this backdrop, this blog examines the gaps in the ongoing pandemic control programme and outlines ways to bridge these gaps so that more lives could be saved from COVID-19.

Sri Lanka’s Macroeconomic Policy Setting: Cohesion or Confusion?

Efforts to attract FDI should be coupled with building effective policy strategies that instill and maintain credibility. Indeed, this is all the more important as Sri Lanka appears to be firmly against an International Monetary Fund (IMF) bailout. An IMF programme is mostly useful in firming up sovereign credit ratings and reviving the sentiments of investors. But investor sentiments can also improve if governments put forward and implement credible policy strategies. By contrast, the CBSL’s policy rate adjustment to anchor expectations, for instance, will not stick if direct financing of fiscal spending is to continue under yield control measures. Instead, market convictions on the credibility of the policy mix will drive economic fundamentals. As Sri Lanka readies to transition out of pandemic-related emergency support, some notion of fiscal and debt sustainability to anchor confidence should be the priority in Budget 2022 preparations.

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