Sri Lanka and Japan plan to formulate and sign a Free Trade Agreement between the two countries to enhance bilateral trade, reports Colombo Page.

Sri Lanka Japan Business Co-operation Committee said that it is preparing for a future Free Trade Agreement, during a meeting between in Colombo with the Japanese Ambassador to Sri Lanka, Nabuhitho Hobo.

A report by the World Bank on South East Asia, noting structural barriers to competitiveness in Sri Lanka, predicted a decline in Sri Lanka's growth to 6.9 percent due to several factors including slowing down in the construction industry.

The Sri Lankan government has assured its commitment to implementing the Chemical Weapons Convention (CWC), after Sri Lanka’s Deputy Foreign Minister of Sri Lanka met with the head of the Organisation for the Prohibition of Chemical Weapons (OPCW) last week.

Sri Lankan minister Ajith Perera met with OPCW Director-General Ambassador Ahmet Üzümcü at the organisation’s headquarters at The Hague, where they “discussed ways of further enhancing cooperation, ” said a press release.

The deputy foreign minister “assured the Director-General of Sri Lanka’s serious commitment and meaningful contributions to achieve the goals of the CWC,” whilst Mr Üzümcü “further expressed OPCW’s support and assistance towards the full and effective implementation of the CWC in the country”.

The State Finance Minister Mahinda Samarasinghe said the full implementation of the 13th Amendment to the Sri Lankan constitution was unrealistic and India could not compel the government to implement it.

Speaking on Rupavahini TV, Mr Samarasinghe, who used to be former president Mahinda Rajapaksa’s special envoy on human rights, said land and police powers should not be devolved to the provinces as stipulated in the amendment, highlighting that JR Jayawardene, the president at the time of the amendment, was strongly opposed to the devolution of those powers.

The minister accused India of pressuring the government in 1987 to accept the amendment, despite opposition by Sri Lanka, and said no Sri Lankan leader would give in to Indian pressure to accept its position which was “unfair and unacceptable”.

Army camps built on land that has been reportedly released by the Sri Lankan government has left displaced Tamils unable to resettle in their native villages, said Tamil National Alliance (TNA) spokesperson and MP Suresh Premachandran.

Speaking after visiting the 1000acres of land that was reportedly released by the Sri Lankan government in Vali North, Mr Premachandran said the lands “have not been fully released”.

“Inside the 1000 acres of land, is two big army camps,” said the MP.  “If those army camps are removed, then people those lands belong to can resettle. The owners of the lands are now in Urumpirai welfare centre,” he added, referring to a housing camp for displaced Tamils in Jaffna.

Sri Lanka’s Cabinet Spokesperson Rajitha Senaratne said if former president Mahinda Rajapaksa had established an inquiry similar to the South African ‘Truth and Reconciliation Commission’, the resolutions passed at the UN Human Rights Council could have been avoided.

Mr Senaratne, who is also Health Minister, said Mr Rajapaksa was not prepared to listen to anyone, despite his advice to establish a South African style commission.

South Africa’s TRC did not include a justice or accountability mechanism, strongly demanded by Tamils and sections of the international community.

Former president Chandrika Kumaratunga has defended Prime Minister Ranil Wickremesinghe for his comments last month, in which he justified the shooting of fishermen from Tamil Nadu.

Speaking to DNA, Ms Kumaratunga said people misunderstood his joke.

“He was joking and people misunderstood him. Media persons kept harassing him with questions. In response, he just said that if an unwanted person came into my house illegally, I had a right to shoot him for trespassing,” she said.

Mr Wickremasinghe had defended the Sri Lankan navy's shooting of fishermen, stating: "If someone tries to break into my house, I can shoot. If he gets killed...Law allows me to do that.”

After criticism from India and Tamil parties, the prime minister repeated his "joke".

"The Lankan navy has the right to shoot in any part of the country if anyone enters territorial waters, this is nothing new," Mr Wickremasinghe said a week after the initial comments.

Ms Kumaratunga in her interview also said despite the closeness of India and Sri Lanka, there was some fear amongst average Sri Lankans, pointing out that the island was "invaded 52 times by south Indian kings" in ancient times.

Internally Displaced People who were allowed to resettle in their original homes in the Valikamam found their homes destroyed by vandal upon return.

Families returned to their houses, which had been marked for resettlement over a month ago, to find windows, doors and roofs missing from the structures.

Chinese navy ships may now choose to dock in Pakistan's Gwadar port, which has now come under the control of a Chinese firm, as the Sri Lankan government may deny permission for Chinese vessels to dock in Colombo, reports the Press Trust of India.

“The Gwadar port will also guarantee China’s naval ships’ maintenance and supply in the Indian Ocean,” said Zhao Gancheng, director of South Asia Studies at Shanghai Institute for International Studies in the state-run Global Times. “The move is widely seen as crucial for China, especially as it is unlikely that Sri Lanka will open its ports to Chinese naval ships,” he added.

The reports come after controversy following the docking of Chinese submarines in Colombo last year. China defended the move, but Sri Lanka’s foreign minister Mangala Samaraweera said that the docking caused “serious suspicion”.

The Central Bank of Sri Lanka has cut policy interest rates by 0.5% for the first time in over a year, in order to boost growth in the country.

The bank said in a statement its monetary board had decided to cut the standing lending facility rate to 7.5% from 8% and the standing deposit facility rate to 6% from 6.5%.

“Current behavior of market interest rates is viewed to be inconsistent with the continued low inflation and investments needed to address concerns on economic growth for the year,” the statement said. The “relaxed monetary policy stance will also be pursued in months to come” until market rates come down enough to boost growth, it further said.

The World Bank says Sri Lanka’s economic growth will decline to 6.9% in 2015, as the government reassesses the investment-led growth model of the previous regime.

The organisation’s South Asia Economic Focus report said the trend was “partially set off by consumption growth thanks to increased public sector wages and higher disposable income”.

The report further stated the country needed to attract increased foreign direct investment to maintain its high growth rate, saying that it attracts less than expected.
"With limited public and private national savings compared to national investment, Sri Lanka needs to attract FDI—in order to maintain its high growth rate," the report said.

SriLankan Airlines announced today it will increase flights to Chennai.

In a statement, the airline said it would add a fourth daily flight to the capital of Tamil Nadu.

According to Lanka Business Online, Saminda Perera, the general manager of worldwide sales said in a statement that “Chennai is a key market for us and one of the fastest growing cities in southern India”.

“While we have always received a strong response from this market, Chennai serves as a key business hub for all multinational corporations. This daily flight will cater to growing business, corporate and leisure demand between Sri Lanka and Chennai."