Commentaries Wed, 24 Jan 2018 01:38:23 +0000 en-gb Sri Lanka trade deficit contracts significantly by 13.2 percent in November 2015 as imports fall

Sri Lanka's trade deficit contracted significantly by 13.2 percent to US$ 630 million in November 2015 from US$ 726 million a year earlier, due to the decline in import expenditure at a higher rate than the reduction in export earnings, according to the Central Bank data released in its External Sector Performance Review Thursday.


According to Colombo Page, despite the slowdown in imports during the recent months, however on a cumulative basis, the trade deficit during the first eleven months of 2015 increased marginally by 1.0 percent to US$ 7.57 billion, the Bank said.

Central Bank attributed the expansion in the cumulative trade deficit mainly to the subdued export performance as a result of depressed global demand.

For the ninth consecutive month since March 2015, year-on-year export earnings dropped by 9.3 percent to US$ 835 million in November 2015, reflecting lower earnings from exports.

Decline in tea, rubber products, petroleum products and garments exports due to weak global demand contributed largely to the overall decline in exports.

The continued decline in demand for tea from Russia and the Middle East mainly caused export earnings to decline significantly by 21.1 percent, year-on-year in November 2015.

On a cumulative basis, earnings from exports declined by 4.4 percent to US$ 9.68 billion during the first eleven months of 2015.

Expenditure on imports also declined by 11.0 percent, year on year, to US$ 1.465 billion in November 2015 mainly due to the reduction of fuel imports, which declined by 27.9 percent in November.

On a cumulative basis, expenditure on imports during the first eleven months of 2015 decreased by 2.1 percent to US$ 17.24 billion.

Workers' remittances declined by 7.2 percent, year-on-year, to US$ 574.5 million in November 2015 from US$ 619.3 million recorded in November 2014. The cumulative inflow from workers' remittances increased marginally by 0.8 percent to US$ 6.36 billion during the first eleven months of 2015 in comparison to the corresponding period of 2014.

The cumulative earnings from tourism increased to US$ 2.86 billion during 2015 compared to US$ 2.43 billion recorded during 2014.

Sri Lanka's gross official reserves as at end November 2015 amounted to US$ 7.3 billion.

The Sri Lankan rupee depreciated against the US dollar by 9.03 percent during 2015. During 2016 up to 27 January 2016, the rupee appreciated by 0.1 percent against the US dollar.


Commentaries Fri, 29 Jan 2016 08:53:31 +0000
India: Child stunting declines, but still high, data show,-but-still-high,-data-show,-but-still-high,-data-show

Indian states have seen some improvements in child nutrition over the last decade, the first official data in over a decade shows, but over one in three children is still stunted, and over one in five underweight.


As of 2005-6, India had 62 million stunted children, accounting for a third of the world's burden of stunting. India's official source of nutrition data – key to measure stunting, wasting and other indicators of acute malnutrition – is the National Family Health Survey whose fourth round was conducted in 2014-15 after delays and disagreements that took ten years to resolve.

As a result, India has had no official data on whether its high economic growth since 2005-6 improved nutritional outcomes.

The new NFHS-4 data for 15 states shows that 37 per cent of children under the age of five in these states is stunted, a fall of just five percentage points in a decade. Bihar and Madhya Pradesh are the worst off, with 48 and 42 per cent respectively of children stunted.

The proportion of underweight children has reduced equally slowly, from 39 per cent to 34 per cent, with Bihar and Madhya Pradesh the worst off again.

The one success has been in the area of child wasting (low weight for height). The states for which data is available have more than halved their proportion of wasted children in the last decade, from 48 per cent to 22 per cent, the new data shows.

The proportions of adult men and women with below normal Body Mass Index have also declined.


Commentaries Thu, 21 Jan 2016 09:45:51 +0000
India: Bombay Stock Exchange to begin price reasonability check in equity derivatives

To strengthen its pre-trade risk management framework, top bourse Bombay Stock Exchange (BSE) has decided to introduce price reasonability check (PRC) for equity derivative segment as well as currency options from January 18.

According to Press Trust of India, the mechanism is on the lines of globally prevalent risk management measures and helps to reduce potential instances of market abuse and fat-finger errors while also facilitating true price discovery and investor protection.

"The exchange proposes to introduce PRC functionality in equity derivatives segment as a measure to further strengthen the exchange's pre-trade risk management framework," BSE said in a circular on Wednesday.

Besides, the exchange in a separate circular said it will implement the mechanism for currency options products. It had introduced PRC for the currency segment in 2014.

The PRC functionality would be made live "from Monday, January 18, 2016".

In PRC functionality, each new incoming limit order price is validated with a stock exchange defined 'price reasonability range (PRR).'

"PRR shall be dynamically computed and applied by the trading system using a real-time reference price. This shall ensure that the price of an incoming limit order is not too far off from the prevailing market prices," BSE said.

PRC is applicable to incoming limit orders and the price of these orders is checked with respect to PRR prevailing at that point of time.

"Trading system automatically switches, in real-time, between using the best bid/offer price and previous close price as the reference price to compute PRR, depending upon the order book situation," BSE said.

According to BSE, PRC would be applicable for all futures and option contracts of equity derivatives segment.

BSE said it may relax the applicable PRR and order price slabs depending on prevalent market conditions.

To familiarise members with working of PRC, BSE has asked the stock brokers to test it in simulation environment.

Commentaries Wed, 13 Jan 2016 14:09:54 +0000
Pakistan: Basic health facilities failure major reason behind recurring newborn deaths in Thar

One of the major reasons behind recurrence of newborn deaths in Tharparkar is the failure of dispensaries and basic health units to provide adequate treatment to the ailing mothers and their babies, compelling them to rush to Mithi civil hospital, and thereby stretching its already scarce resources to the limit.


According to official statistics, about 70 per cent government dispensaries in the desert region are either partly functional or without having an 'approved schedule of new establishments (SNEs)'.

In bureaucratic jargon, a government establishment or infrastructure without an SNE will have no budget, no staff, no furniture and other facilities necessary for running it, thus seriously crippling its capacity to function.

Such establishments are run often on ad hoc basis by sending there some staff posted somewhere else and arranging material enough to make it run.

In Tharparkar, 26 posts of doctors, 25 of them BS-19, are still lying vacant, inquiries by Dawn showed on Wednesday.

The arid region is again in the eyes of media because of newborns' death which have risen to 13 to date, according to Tharparkar's District Health Officer (DHO) Dr Arjun Kumar who attributed the deaths to birth asphyxia, underweight, premature labour, diarrhoea and pneumonia.

Sources in health department said that Tharparkar health facilities were under dual management of the People's Primary Healthcare Initiative (PPHI) and the provincial health department.

The PPHI caters to needs of 21 per cent of Thar area through 49 facilities, 31 basic health units (BHUs) and 18 dispensaries, whose budgets are with PPHI, while the health department manages six rural health centres (RHCs), four taluka hospitals and Mithi civil hospital.

Thus, out of total 256 health facilities, 49 are under PPHI and 30 under the health department which makes 79 in all with approved SNEs. But, a staggering 177 facilities or 69 per cent of the total are yet to have SNEs for which health authorities offer various explanations.

According to break-up shared by DHO, Tharparkar has, in all, 207 dispensaries and 30 of them have approved SNEs for medicines, equipment and human resource.

He claimed that 92 of the facilities under the health department were being run with medicines received in aid. "I seriously doubt if these facilities are fully functional," said a source in the health department.

If the six RHCs, dispensaries and taluka hospitals been working satisfactorily, the entire burden of newborns would not have landed at Mithi civil hospital, he said.

Secretary Health Saeed Ahmed Mangnejo gives a different explanation. He said that furniture of 85 dispensaries had been made available and staff — appointed last year — would draw their first salary now whereas tenders for medicines supply would be floated soon.

"It will take some time. I don't have exact numbers but there are also some dispensaries which health department has opened on experimental basis," he said.

He said that these dispensaries were opened in all districts including Thar over community's demand, hence by the time they received their infrastructure they would keep working experimentally.

Except for 85 new ones, he admitted, there could be a large number of such experimental dispensaries in Tharparkar.

Most deaths of newborns, as confirmed by authorities right form health secretary to director general of health services and down to the DHO of Tharparkar, are reported at Mithi civil hospital.

In view of these figures, a safe assumption can be made that since dispensaries are not functional, the parents eventually rush to Mithi as a last resort.

Tharparkar has been a victim of official neglect for decades. Figures about doctors' availability indicate that 64 doctors were appointed on contract basis in 2014 for two years in BS-17/18, who included chest specialists, paediatricians, anaesthetists, gynaecologists.

About 350 deaths of newborns because of malnutrition were reported in Mithi hospital last year.

Perhaps, the PPHI has not taken the trouble to analyse whether the malnourished newborns were from the areas falling under the BHUs and dispensaries it managed as Mirpurkhas regional director Riaz Rahujo insisted that no death was reported last year or this year at any of PPHI's facility.

Courtesy --


Commentaries Thu, 07 Jan 2016 09:37:50 +0000
China’s economic slowdown adversely affected India: Rajan’s-economic-slowdown-adversely-affected-india-rajan’s-economic-slowdown-adversely-affected-india-rajan

China’s pain of economic slowdown is India’s pain too, Reserve Bank of India (RBI) Governor Dr. Raghuram Rajan said contradicting government assertions that India will not be affected by deceleration of Chinese economy.

“The Chinese slowdown is a concern for the whole world. There is a lower demand for some of our exports to China. But indirectly too, many of the countries are not exporting to China as much as they did and they are buying less from us,” Rajan said in an interview with Hong Kong-based South China Morning Post.


“But India being a commodity importer, has been helped a bit by cheaper commodities. So the impact has not been as bad as it could have been. Still, on the whole, we have been adversely affected by the Chinese slowdown because China’s slowdown has impacted global growth and India is very well integrated into the global economy”, Rajan said.

Finance Minister Arun Jaitley had told a gathering at Columbia University last month that India is “not impacted” by the slowdown as it is not part of Chinese supply chain and India could become the “additional shoulder” the global economy needs to stand on as China slows.

Some comments from India that China’s pain is India’s gain has drawn strong reactions from the Chinese media.

Rajan was in Hong Kong on Friday to receive honorary doctorate awarded by the Hong University of Science and Technology.

In his interview Dr. Rajan also pointed to “growing interdependence” between India and China.

Rajan said he hopes India will emulate China’s growth rates and the country would like to learn from things China got right.

“We would like to learn from its manufacturing success, how it built up its infrastructure, how it encouraged its village enterprises and how it manages FDIs in such enormous quantities. A lot of Indian businesspeople who travel to China also keep coming back with stories of why it works better than India”, he said.


Commentaries Sat, 21 Nov 2015 19:50:25 +0000
India: Economy to improve in next 2 quarters

Majority of India Inc. feels optimistic about the state of economy improving in the next two quarters at the industry and firm level, though the last six months have not witnessed much of a change at the ground level, according to an Assocham Biz Confidence survey.


“In the coming six months, there seems to be growing optimism in terms of the economic performance with 80 per cent respondents feeling that the state of the Indian economy would be better,” the Biz Con survey for September pointed out. The percentages of optimist respondents in the June 2015 round were close to about 54.8 per cent.

As to tentative recovery in the last six months, the survey explained while there were signs of economic recovery underway, the situation is still far from robust.

The underlying economic activity, remains weak on account of the sustained decline in exports, rainfall deficiency and weaker than expected momentum in industrial production and investment activity.

“But riding on hopes of some decisive decisions expected after the Bihar elections, the industry respondents remain optimistic about improvement in the sentiment, though at the present moment broad demand and investment activity remains subdued,” the chamber Secretary General D. S. Rawat said.

Another reason for the positive outlook stems from the macro-economic stability that will help bring down further interest rates, less volatility in the foreign exchange market and ease of doing business, he added.

However, when it comes to the period between June and September this year, the coverage period of the Biz Con Survey, majority of the industry feels (60 per cent) that the present economic situation is more or less same vis-à-vis the situation six months back.

Coming to specifics, the firms felt that though sales volume would pick up going forward, a commensurate change may not be visible on the profitability.

That means, the power with the producer to improve margins on increasing sales would remain limited. As many as 68 per cent of the respondents expect that during October to December 2015 their sales volume will further increase, adds the survey.

In terms of cost of credit we see that majority of the respondents (44.0 percent) feel that there is no change in the cost of credit during July to September 2015. This is slightly surprising considering the fact that the monetary authority has reduced the policy rates.

The possible explanation to this could be that the benefit of the rate cuts is not being passed onto the industry appropriately.

However, the industry feels that possible there could be a decline in the cost of credit going forward. A rise in investment is critical for a sustained pick-up in overall economic activity, the survey pointed out.

However, the survey seems to reflect that in terms of the domestic investments it is believed by the majority of the respondents (56 per cent) that there has been no change in the firm investment plans. The sentiment seems to grow even more going forward with 60 percent respondents of the view that October to December 2015 quarter also would not see much change in the investment levels.

Courtesy – The Hindu, India’s English Language Daily


Commentaries Mon, 09 Nov 2015 16:51:11 +0000
India's choked capital fails to collect new 'pollution toll'

New Delhi has failed to collect a new "pollution toll" from trucks entering the city, officials said Monday, just one day after the levy was introduced to improve air quality in the choked city.


According to AFP, India's top court last month approved a four-month trial plan to charge light commercial vehicles an extra 700 rupees ($11) and 1,300 rupees for large trucks entering Delhi, blamed for much of the filthy air in the world's most polluted city.

But private contractors collecting existing tolls for the city refused to enforce the Supreme Court's directive from November 1, citing a lack of clear instructions from Delhi authorities.

"We didn't collect any extra 'green tax' last night. There is still so much confusion -- no proper communication, no trained staff, no instructions about monthly passes," a toll official told AFP on condition of anonymity.

Trucks have long been banned from entering the city during the day, but every night after 8:00 pm about 52,000 pour in, according to the Delhi-based Centre for Science and Environment (CSE).

The independent centre says lorries account for nearly a third of the pollution in Delhi, adding to a toxic mix of industrial fumes and dust from construction sites to produce hazardous levels of smog.

Many of the trucks drive through the capital at night to avoid paying tolls outside the city, which is ranked as having the world's worst air quality by the World Health Organization.

"This is contempt of court," SunitaNarain, head of CSE, told the NDTV news network.

"The cess is being imposed only because of the pollution in Delhi."

Delhi was covered in smog on Monday, blamed on farmers in neighbouring states burning stubble in their fields after the harvest.

The Delhi government-appointed contractor SMYR Consortium LLP said it wouldn't collect the toll because it lacked manpower and software.

Among the issues, officials worried over security -- a common concern for collectors in India where they are often roughed up by angry motorists who refuse to pay.

SMYR went to court last month complaining that the new toll will lead to traffic snarls and losses since it may encourage drivers to use alternative routes.


Commentaries Mon, 02 Nov 2015 20:08:51 +0000
Pakistan ranks 138 out of 189 on ease of doing business

Pakistan has dropped on the World Bank's Doing Business 2016 ranking, placing at 138 out of 189 countries, with a Distance to Frontier (DTF) score of 51.69, which is marginally higher than last year's score of 51.62.


The ranking reveals performers with good rules which allow efficient and transparent functioning of businesses and markets while protecting public interest, the report says.

The report says estimated losses in Pakistan due to power outages cost up to 34 per cent of the annual revenue. In comparison, businesses in the Central African Republic only reported losses of up to 25pc of revenue.

Neighbouring India placed higher than Pakistan on the Doing Business ranking at 130 with a DTF score of 54.68. It was also lauded as the most improved economy in South Asia.

The World Bank typically studies two major cities from each country with a population over 100 million. The report studies the business environment in both Karachi and Lahore for this reason, attributing weights of 65pc to the former and 35pc to the latter.

Two cities are chosen from countries with a large population which, due to their size and diversity, are more likely to have differences in performance on indicators.

Additionally, the larger the population in an economy, the larger the number of people who can benefit from improvements in business regulation, the World Bank said in its Doing Business 2015 report.

India has recorded the biggest increase in its DTF score since 2004 compared to other South Asian economies.

While it used to take 127 days to start a business in India in 2004, this number dropped to just 29 days in 2015.

One of the reasons for India's improved position is the launch of an ambitious programme of regulatory reform in 2014 aimed at creating a more business-friendly environment, particularly in New Delhi and Mumbai, the DB report says. Other reasons the report cites for India's improved position are shown below.

Courtesy –


Commentaries Wed, 28 Oct 2015 17:46:28 +0000
IMF forecasts Sri Lanka economy to grow at 5.5% this year and 3% inflation

The recent International Monetary Fund (IMF) staff mission to the country has projected Sri Lanka's economy to grow 5 to 5.5 percent this year and the inflation to rise to 3 percent by the end of the year.


According to Colombo Page, the staff mission led by Todd Schneider visited Colombo from September 8 - 18 to conduct a routine Post-Program Monitoring discussions following Sri Lanka's successful completion of the US$ 2.6 billion stand-by arrangement in 2012.

The mission met with the Prime Minister, Government, and Central Bank of Sri Lanka (CBSL) officials, as well as civil society and private sector representatives.

Issuing a statement at the end of the visit, Mr. Schneider noted that first half GDP data indicate a pickup in growth, which is likely to continue in the range of 5 to 5.5 percent through end-2015, driven mainly by strong growth in services and a recovery in agricultural output.

However, the increase in consumer spending created by the sharp rise in public wages and salaries has also contributed to a sizeable increase in imports of consumption and other goods, more than offsetting savings from lower oil prices.

"The resulting deterioration in the nonoil trade balance has contributed to persistent downward pressure on Central Bank foreign exchange reserves during the first eight months of the year," the staff mission observed.

The current headline inflation of near zero is expected to end the year around 3 percent while Core Inflation has risen steadily since the beginning of the year, consistent with higher demand for domestic nontradables and a gradual reduction in economic slack.

Risks to outlook are tilted to the downside with more volatile external financing conditions resulting from the expected monetary policy tightening in the U.S. and uncertainties over growth prospects in emerging markets.

The mission welcomed the Central Bank's recent decision to cease setting daily spot prices for the rupee and let market forces play a greater role in determining the exchange rate.


Commentaries Sat, 19 Sep 2015 15:35:39 +0000
Anger as India's growth fails to provide employment

India's economy expanded by seven percent in the last quarter, making it one of the world's fastest-growing, but experts say violent protests over jobs in the prime minister's own state last week are a sign many are still not feeling the benefits.


According to AFP, they say that could spell trouble for Narendra Modi, who swept to power last year promising jobs, investment and a revival of India's flagging economy after 13 years in charge of the prosperous western state of Gujarat.

Many hoped the prime minister could replicate his success in Gujarat across India, where nearly one in four people lives on less than $1.25 a day.

But the huge turnout last week for a mass rally in the state to demand better access to government jobs and university places for the Patidar caste has raised questions over the success of the so-called Gujarat model on which Modi built his reputation.

With the Patidar movement threatening to spread to other caste groups in India, economist Sunil Kumar Sinha said a lack of employment prospects for young people appeared to be driving social unrest.

"There has been a lot of trumpeting of the Gujarat growth model. But if this model was as successful as people thought, then agitation like we have seen by the Patels (Patidars) shouldn't have happened," said Sinha, a senior economist at India Ratings and Research.

"The government might rightly say that it's boosted the GDP number, or built roads, or provided power 24/7, but the bottom line is, can your model produce enough jobs? If not, protests will happen."

Last week's protests centred on the demands of the Patidars, a relatively well-off caste of farmers and traders, for caste-based reservations -- long a sensitive issue in India.

The country sets aside a proportion of jobs and university places for Dalits, known as "untouchables", and for other so-called "backward castes", under measures intended to remedy centuries of discrimination.

"Either everyone should get reservation or no one should," said Hardik Patel, the movement's young firebrand leader, who has vowed to hold similar protests in other major Indian cities.

Some observers say Patel's own motives are more political than economic, and accuse him of manipulating local grievances over caste reservations to win popular support.

But there is no doubting the authenticity of those grievances, which analysts say stem from a failure to translate economic growth into job creation.

Figures out on Monday showed India's economy grew by seven percent year-on-year in the first quarter of the current financial year, matching China and outpacing most major economies.

Modi's government has relaxed rules for foreign investors and has promised to slash red tape which has long frustrated overseas companies, eager to create jobs for the millions of Indians who enter the employment market each year.

But Edward Rodrigues, an expert in social systems at New Delhi's Jawaharlal Nehru University, argues that India has failed to adapt its workforce since liberalising its economy in 1990.

"We never paid attention to producing a skilled workforce," he said, contrasting India's highly educated workforce with China's skilled one.

"It created an army of clerks for the state who lack skills to compete in a free market atmosphere."

India's unemployment rate was only 3.6 percent in 2013 according to World Bank figures, but underemployment is a critical issue and government jobs remain highly sought-after.

The scale of the problem was thrown into relief recently when 75,000 people, including qualified engineers, applied for 30 jobs with the Chhattisgarh state government as "peons", whose duties traditionally include fetching tea and other menial tasks.

The department head called the numbers "surreal" and said he had expected between 2,000 and 3,000 applicants.


Commentaries Wed, 02 Sep 2015 13:23:24 +0000