Sri Lanka offers deep-sea port to India and Japan
Colombo, Sri Lanka - Sri Lanka will offer a strategically located deep-sea port to India and Japan, an official said on Tuesday, as the island seeks to balance traditional ties against China’s rising regional influence.
The government last month abruptly pulled out of an agreement with Delhi and Tokyo to jointly develop the partially built East Container Terminal, located next to a US$500mn Chineserun container jetty within the capital Colombo’s sprawling port.
But Colombo reversed course on Tuesday, offering the West Container Terminal (WCT), which is yet to be built and located on the other side of the Chinese-run jetty known as the Colombo International Container Terminal (CICT).
“The discussions to develop the WCT will be only with India and Japan,” government spokesman Keheliya Rambukwella told reporters in the capital.
Rambukwella said the Cabinet decided on Monday to allow India and Japan to have an 85 per cent stake in the West Container Terminal - the same terms China was granted when building the CICT.
It’s unclear how Tokyo and Delhi will divide their majority stake in the port.
The government said the Indian High Commission in Colombo has “approved” Sri Lanka’s latest offer.
There was no immediate response from India’s Foreign Ministry in New Delhi, and a government spokesman said Japan has yet to respond to the new proposal.
The government blamed trade unions calling for local instead of foreign development for last month’s abrogation of the East Container Terminal, which will now be completed by the Sri Lanka Ports Authority.
London, UK - Britain is expected to keep vast emergency financial support propping up the UK’s virus-battered economy when unveiling its annual budget today, but could also raise tax to fight surging debt.
“The key thing is right now to keep supporting the economy... but also level with people,” Finance Minister Rishi Sunak said as Britain from next week begins to exit its third COVID lockdown.
Britain is the worst-hit country in Europe with more than 120,000 COVID deaths and 4mn cases but its economic recovery hopes have been boosted by its vaccination of millions of adults.
Reports suggest that Chancellor of the Exchequer Sunak will pump out extra billions of pounds to help save jobs and businesses.
But he is expected also to increase corporation tax, or a levy on company profits, from a UK record-low 19 per cent while sticking to the Conservative government’s pre-pandemic pledge not to increase income tax or value-added tax (VAT).
‘An increase in corporation tax is likely to be, intentionally or not, the flagship measure,’ Barclays said in a client note.
‘Put in perspective, corporation tax is not a main lever in terms of revenues - around 10 per cent of tax receipts - but probably the path of least resistance as the government explores ways to fix its revenue shortfall.’
Prime Minister Boris Johnson’s government has in fact cut VAT on food, accommodation and attractions during the coronavirus outbreak. It has also lifted the threshold at which stamp duty is due on home purchases, helping property buyers and the construction sector.
Both these temporary measures could be extended in the budget, according to economists.
A cross-panel of MPs, in a report on Monday, said it was too soon to raise taxes and that corporation tax should eventually be raised only moderately, while being combined with continued support measures for businesses.
‘It is clear that a very significant increase in the corporation tax rate would be counterproductive,’ the Treasury Committee said.
Committee chair and Tory MP Mel Stride noted that with Britain’s public finances on an unsustainable long-term trajectory, ‘our clear message is that Budget 2021 is not the time for tax rises or fiscal consolidation’, which could undermine the economic recovery.
“But we will probably need to see significant fiscal measures, including revenue raising, in the future,” he added.
Since April 2020, or soon after the UK’s first virus lockdown, the government’s net borrowing has ballooned by £271bn, according to recent data.
A big chunk of the outlay has been to keep millions of privatesector workers in jobs via the government’s furlough scheme, with the bulk of wages to be paid until the end of April. Again this could be extended.
Analysts argue that UK must use the budget to both extend coronavirus financial support measures and tackle inequalities exacerbated by COVID.
The Institute for Fiscal Studies and Citi bank noted that lowerincome households had not been able to save as much cash as richer counterparts, sparking greater inequality in society.