Sri Lanka hikes defense spending to record high

Updated 28 September 2014
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Sri Lanka hikes defense spending to record high

COLOMBO: Sri Lanka raised defense spending to record levels for a second straight year despite pressure to scale down its military after ending decades of ethnic war, official figures showed.
The government allocated 285 billion rupees ($2.22 billion) for the defense ministry in calendar 2015, up 12.25 percent from this year, according to the appropriation bill tabled in parliament.
There was no immediate comment from the government on its record defense spending to maintain a large security force more than five years after President Mahinda Rajapakse’s troops crushed separatist Tamil rebels.
Colombo is under international pressure to reduce its military presence in the island’s former war zones and take troops away from civilian duties.
However, official sources said a three-year spending plan of the government envisaged even more increases in national security spending to over 370 billion rupees ($2.89 billion) by 2017.
Security forces in May 2009 declared an end to 37 years of ethnic war which had claimed at least 100,000 lives, according to UN estimates.
Defense spending accounts for 16.6 percent of the government’s projected revenue for 2015, according to official figures.
Sri Lanka’s economy recorded more than eight percent growth in the first two full years after the end of the fighting, but is expected to grow at a slightly slower 7.8 percent this year.
Rajapakse, who holds both the finance and defense portfolios, is due to unveil the full 2015 budget in November, when he is expected to announce revenue proposals to meet state expenses.


EU takes aim at Turkish steel sector

Updated 1 min 20 sec ago
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EU takes aim at Turkish steel sector

LONDON: The European Commission’s move to extend its steel import restrictions threatens to force Turkish mills, already buckling under the weight of US tariffs, to cut production further or in some cases close down, sources said.
The Commission said on Wednesday it will extend and beef up its existing “safeguard” steel import caps until July 2021 to counter concerns that European Union markets are being flooded with steel no longer being exported to the US.
For Turkey’s vast steel sector, the fourth largest contributor to the country’s economy, the caps could prove particularly painful as the EU has given it additional “country-specific” quotas.
Under the safeguards, Turkey has a tariff-free quota for rebar, a construction steel that makes up most of its steel exports, of around 300,000 tons for the first nine months of the respective quota periods, down 60 percent from its 2018 exports.
Country-specific restrictions do not apply in the last three months of the quota periods and Turkey could make up some sales then, but its annual export levels will still be sharply lower.
“Our export markets have disappeared, the local market hardly exists, we’ve got lots of capacity and no market,” said a London-based Turkish steel trader.
He added that hopes the US would soon cut its 50 percent tariff on Turkish steel imports were also fading given it is demanding that in return, Ankara hold fire on Kurdish forces in Syria, something Turkish President Tayyip Erdogan cannot do ahead of local elections.
Major Turkish mills such as
Cebitas and Ekinciler said they had, before the EU announcement, already slashed output while Koc Metalurji said it had stopped
output for about a month.
Erdemir, Turkey’s largest producer, said it was producing as normal.
Investment bank Jefferies estimates EU caps on rebar from all countries combined should reduce its total rebar imports by at least 28 percent a year, adding that producers such as ArcelorMittal and CMC should benefit most from EU caps on long products like rebar.
“(EU) quotas for (Turkish) rebar are extremely low and will be exceeded in the first one or two months. Local demand is also extremely poor,” said Turkish Steel Exporters’ Association (CIB) head Adnan Aslan.
The CIB estimated late last year, before the latest EU move, that Turkey’s steel production, consumption and exports would fall 30 percent this year.
Wednesday’s beefed-up EU safeguards come after the US placed tariffs of 25 percent on
imported steel early last year, while singling out Turkey later in the year with tariffs of 50 percent due to political tensions with
Ankara.
The US had been Turkey’s largest steel export destination in 2017, but the country’s steel flows to the EU ballooned 80 percent last year, according to Jefferies, making the EU Turkey’s the largest steel export destination.
“Traditional export destinations (for Turkish mills) are closing one after the other. Most probably, the (EU) quotas will be filled immediately, so EU producers will have a relatively good year,” the International Rebar Producers and Exports Association said in a note.