News
Developers halt new condos after currency collapse, costs skyrocket
ECONOMYNEXT –Sri Lanka’s condominium developers said they have halted new projects and building materials were skyrocketing with the collapsing rupee and import protection given to building material producers triggering a crisis in partially built apartments.
“At present no Developers are embarking on new Projects as budgeting even in the short term is impossible, the Condominium Association of Sri Lanka said in a statement.
“The stark reality though is that Developers with partially constructed properties and current Buyers [and] those who have paid deposits on “old pricing” will jointly face difficulty.
“On the one hand, exponentially increased costs preclude the adherence to previously quoted prices and on the other hand buyers facing unanticipated cost increases and hiked-up interest rates.”
Sri Lanka’s rupee collapsed and the country is trapped in the worst currency crisis in the history of the island’s Latin America style central bank.The rupee collapsed from 182 to 360 to the US dollar in the current cycle of printing money to suppress rates.
Monetary instability worsened and the central government, state enterprise and the central bank itself borrowed heavily abroad through seven years of ‘flexible inflation targeting’ with output gap targeting (printing money to boost growth) despite having a reserve collecting peg and defaulted in 2022.
Inflation officially has soared 67 percent in the year to June, with food prices doubling over two years.Price of steel has shot up 350 percent from 100,000 rupee a tonne in 2021 to 450,000 rupees now.Price of tiles has rocketed from 300 percent from 150 a square feet 600 rupees.Price of cement has increased from 800 rupees to 3100 rupees per 50kg bag or about 287 percent.Prices of some fittings are more than 500 percent the condominium developers association said.About 600,000 person are employed in the construction industry, the association said.
Central bank interest rates suppression and the resulting credit and mal-investment for output gap targeting usually hits the construction sector the hardest.Construction sector was also hit in the 2016 and 2018 interest rates suppression and currency collapse cycles, with most of the industry backing the then opposition.However the 2019 administration printed even more money and gave 7 percent loans to construction driving up imports which were financed with central bank reserves driving up imports and the interventions were sterilized leaving the banks with central bank borrowings and deteriorating loan to deposit ratios.Because reserves for imports are sterilized with re-purchased Treasury securities, ultimately monetization of budgets are blamed.
Sri Lanka has been going from one currency crises to another ever since a Latin America style central bank was set up in 1950 by US money doctor. Latin American central banks collapse default with budget surpluses.Sri Lanka’s intermediate regime central bank has taken the country to the International Monetary Fund 16 times so far. The country is now negotiating the 17 IMF deal along with debt re-structuring.
The U.S. Embassy in Colombo welcomed the U.S. Sports Envoys to Sri Lanka, former National Basketball Association (NBA) and Women’s National Basketball Association (WNBA) players Stephen Howard and Astou Ndiaye, from June 8 through 14.
The Public Diplomacy section of the U.S. Embassy said that it would launch a weeklong basketball program intended to harness the unifying power of sports, made possible through collaboration with Foundation of Goodness and IImpact Hoop Lab.
While in Sri Lanka, Howard and Ndiaye, both retired professional basketball players, will conduct a weeklong program, Hoops for Hope: Bridging Borders through Basketball. The Sports Envoys will lead basketball clinics and exhibition matches and engage in leadership sessions in Colombo and Southern Province for youth aged 14-18 from Northern, Uva, Eastern and Western Provinces, offering skills and leadership training both on and off the court. The U.S. Envoys will also share their expertise with the Sri Lanka Basketball Federation, national coaches, and players, furthering the development of basketball in the country. Beyond the clinics, they will collaborate with Sri Lankan schoolchildren to take part in a community service project in the Colombo area.
“We are so proud to welcome Stephen and Astou as our Sports Envoys to Sri Lanka, to build on the strong people-to-people connections between the United States and Sri Lanka,” said U.S. Ambassador Julie Chung. “The lessons that will be shared by our Sports Envoys – communication, teamwork, resilience, inclusion, and conflict resolution – are essential for leadership development, community building, equality, and peace. The U.S. Sports Envoy program is a testament to our belief that sports can be a powerful tool in promoting peace and unity.”
SJB Colombo District MP Mujibur Rahuman in parliament demanded to know from the government the reasons for CEB suspending the leave of all its employees until further notice from Thursday.
MP Rahuman said that the CEB has got an acting General Manager anew and the latter yesterday morning issued a circular suspending leave of all CEB employees with immediate effect until further notice.
“We demand that Minister Kanchana Wijesekera should explain this to the House. This circular was issued while this debate on the new Electricity Amendment Bill was pending. There are many who oppose this Bill. The Minister must tell parliament the reason for the urge to cancel the leave of CEB employees,” the MP said.However, Speaker Mahinda Yapa Abeywardena prevented Minister Wijesekera responding to the query and said that the matter raised by MP Rahuman was not relevant.
The Chartered Institute of Personnel Management (CIPM) successfully concluded the 8th Annual CIPM Symposium, which took place on 31st May 2024. Themed “Nurturing the Human Element—Redefining HRM in a Rapidly Changing World,” the symposium underscored the pivotal role of human resource management (HRM) in today’s dynamic global landscape. Since its inception in 1959, CIPM has been dedicated to advancing the HR profession through education, professional development, and advocacy, solidifying its position as Sri Lanka’s leading professional body for HRM.
Ken Vijayakumar, the President of the CIPM, graced the occasion as the chief guest. The symposium commenced with the welcome address by the Chairperson, Prof. Arosha Adikaram, followed by the Web Launch of the Symposium Proceedings and Abstract Book by the CIPM President. The event featured distinguished addresses, including a speech by Chief Guest Ken Vijayakumar, President of CIPM, and an address by Guest of Honor Shakthi Ranatunga, Chief Operating Officer of MAS Holdings Pvt. Ltd., Sri Lanka.
The symposium also featured an inspiring keynote address by Prof. Mario Fernando, Professor of Management and Director of the Centre for Cross Cultural Management (CCCM) at the University of Wollongong, Australia.
Vote of Thanks of the inauguration session was delivered by Dr. Dillanjani Weeratunga, Symposium Co-chair.
The symposium served as a comprehensive platform for researchers to present their findings across a wide range of critical topics in HRM. These included Cultural Diversity and Inclusion, Talent Development and Retention, Ethical Leadership and Corporate Social Responsibility, Adapting to Technological Advancements, Mental Health and Well-being at Work, Global Workforce Challenges, Employee Empowerment, and Reskilling and Upskilling.
The plenary session was led by Prof. Wasantha Rajapakse. Certificates were awarded to the best paper presenters during the valedictory session, followed by a vote of thanks delivered by Kamani Perera, Manager of Research and Development.
The annual symposium of CIPM was a truly inclusive event, attracting a diverse audience that spanned undergraduates, graduates, working professionals, research scholars and lecturers. This widespread interest highlights the symposium’s significance in the field of HRM, offering a unique opportunity for everyone to network and learn from scholarly brains.The CIPM International Research Symposium was sponsored by Hambantota International Port, Sri Lanka Institute of Information Technology (SLIIT), E B Creasy & Co. PLC, and Print Xcel Company.
US sports envoys to Lanka to champion youth development
Rahuman questions sudden cancellation of leave of CEB employees
