Sri Lanka’s economy shrank by record 7.8pc last year
Sri Lanka’s crisis-hit economy shrank by a record 7.8 percent last year, official data shows, as the country struggles with its worst financial crisis in seven decades.
The island’s fourth-quarter gross domestic product (GDP) contracted by 12.4 percent, according to the figures released by the state-run census and statistics department on Thursday.
Sri Lanka’s growth is expected to shrink by 3 percent this year, Moody’s Investors Service said on Monday but growth is expected to rebound in 2024.
An unprecedented economic crisis sparked huge protests in the island nation, culminating last July when a mob stormed the home of then-President Gotabaya Rajapaksa, forcing him to flee the country and resign.
Since then, a new government has worked to repair Sri Lanka’s battered public finances and secure a sorely needed International Monetary Fund (IMF) bailout.
Last year’s contraction – the biggest in the country’s 75 years of independence – compared with 3.5 percent growth in 2021 and a 4.6 percent contraction in 2020 as the coronavirus pandemic hit.
It was “caused by the deepening of the economic crisis … frequent power disruptions, shortages in fuel, raw materials, (and) foreign currency”, the census and statistics department said in a statement.
Germany, Japan seek cooperation on economic security
Germany and Japan agreed to cooperate closely on economic security on Saturday during their first ever high-ministerial government consultations, held amid tensions over global supply chains and economic disruptions caused by the war in Ukraine.
German Chancellor Olaf Scholz, accompanied to Japan by six ministers, is looking at ways to reduce German dependence on Chinese raw materials.
“The Russian invasion of Ukraine as well as the COVID-19 pandemic have made us painfully aware of the difficulties that can arise when there is too much economic dependency in critical areas,” Scholz said at a news conference following the talks.
“We must react to this. Together with Japan and other partners, we are working on drawing the right conclusions from these experiences,” he added.
Malaysia looks east to Korea
Malaysia is one of the Southeast Asian countries that turned its gaze toward the East earlier than its neighbors. It has celebrated the 40th anniversary of its Look East Policy (LEP), which aimed to gain knowledge and expertise from East Asian countries including Korea, Japan and China, when everyone else looked to the West.
While the policy’s first target was Japan, Malaysia is hopeful that now the LEP can contribute to strengthening ties with Korea amidst global challenges.
Malaysia’s Ministry of International Trade and Industry (MITI), Malaysian Investment Development Authority (MIDA) and Malaysia External Trade Development Corporation (MATRADE) co-hosted a seminar on business and investment opportunities in Malaysia at a hotel in central Seoul on March 14, attracting hundreds of Korean businesspeople and related officials.
Malaysia’s International Trade and Industry Minister Tengku Zafrul Aziz, who led a large delegation from Malaysia with the aim of strengthening existing business ties and forging new partnerships with Korean companies, gave a keynote speech during the seminar.
“MITI is determined to re-position Malaysia as a stable, investor-friendly, ESG-committed and competitive economic force in Southeast Asia,” he said, with respect to his top four priorities.
Maldives’ balanced global outreach
The Maldivian Foreign Ministry’s announcement on restoring diplomatic ties with Iran as President Ibrahim Solih was meeting with German counterpart Frank-Walter Steinmeier, in Berlin, has lent a new impetus to the archipelago nation’s global outreach, which has been expanding ever since this government came to power in 2018. In doing so, the Solih leadership has unabashedly and unapologetically stuck to an ‘India First’ policy but without hurting existing and new relations, including China. In reality, Solih has made ‘India First’ a trusted and tested launch pad for his nation’s increasing forays into the international arena, with a balanced approach and positive results, all-round.
Restoration of Iranian ties came almost immediately after the latter patched up with traditional adversary Saudi Arabia, in the presence of Chinese President Xi Jinping in Beijing. In January 2021, the Solih government had revived ties with Qatar, likewise, on the same day Saudi Arabia, the United Arab Emirates (UAE), Bahrain and Egypt did so after the predecessor administration of President Abdulla Yameen (2013-18) had snapped them.
Anti-money laundering grouping asks Nepal to curb private sector corruption
The Asia Pacific Group on Money Laundering has pointed out Nepal’s failure to criminalise corruption involving the private sector as one of the country’s deficiencies in complying with the standards on anti-money laundering and terrorist financing, a senior government official said.
Nepal’s existing anti-corruption laws—the Prevention of Corruption Act-2002 and the Commission for Investigation of Abuse of Authority Act 1991—criminalise corruption involving the public sector. Bills to amend these laws registered at the National Assembly three years ago will also fail to criminalise corruption involving the private sector. Nepal’s constitution authorises the CIAA, the anti-corruption authority, to investigate and prosecute only the malpractices involving public officials.
However, Nepal in 2011 ratified the United Nations Convention Against Corruption that calls for preventive measures and criminalisation of the most prevalent forms of corruption in both public and private sectors.
“The Asia Pacific Group on Money Laundering [APG], in its initial report submitted a month ago to Nepal for its opinion, has pointed at the non-criminalisation of corruption involving the private sector as problematic,” a government official with access to the report told the Post on condition of anonymity because he was not authorised to speak to the media.
Japan, Singapore and Hong Kong downplay credit suisse fallout
Financial authorities in Asia have moved to downplay the local fallout of the turmoil at Credit Suisse, saying they do not expect the takeover of the troubled Swiss bank to affect the stability of local lenders.
The Monetary Authority of Singapore (MAS) said on Monday that Credit Suisse would operate as normal in the city-state, with customers having full access to other accounts, following the lender’s purchase by UBS Group over the weekend.
“The takeover is not expected to have an impact on the stability of Singapore’s banking system,” MAS said in a statement.
“MAS will continue to closely monitor the domestic financial system and international developments, and stands ready to provide liquidity through its suite of facilities to ensure that Singapore’s financial system remains stable and financial markets continue to function in an orderly manner,” the city-state central bank said.
Hong Kong’s Monetary Authority (HKMA) and the city’s Securities and Futures Commission said that Credit Suisse is open for business as usual and the bank’s local assets of 100 billion Hong Kong dollars ($12.7bn) represent less than 0.5 percent of the total in the Chinese territory’s banking sector.