Aftermath of the Resolution

A resolution was passed. We all know that market do not have any immediate impact from it.
It is not as bad as many expected and that credit should go to the government for aggressive lobbying campaign.

However the next reaction of the government could effect the market in an adverse manner.
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・Government has decided to close down many Sri Lankan embassies, maintained in the European countries.
(http://lankacnews.com/english/news/many-sri-lankan-embassies-in-the-european-countries-to-be-closed-down/)
・Defence Secretary says that, he is against the resolution which was passed in the U.N. Human Rights Convention, and not bound to activate that.
(http://lankacnews.com/english/news/not-bound-to-activate-the-resolution-Deleted/)
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If above is true and government decided to go ahead with, market will definitely have a negative impact.
Possibility of economic sanctions are very remote as we have support from China, Russia & (India).
(India was forced to vote against us, but in the event of sanctions chances are high that India will support us)
However we should not forget that over 60% of our exports goes to US & EU.
If they implement import restrictions from SL, economy will virtually chock to death.
It is true that resolution is non binding, but since it has passed with majority votes from a internationally recognized body.
A legitimate government have the responsibility to act positively. (at least pretend that they do)
To me above actions seems to be suicidal.

On the plus side, US have reacted in a constructive manner.
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・They have eased the export ban on defense equipments
(Do not know why we should make any purchases at this point though)
・Iran oil imports, We have given a very modest target of just 15% reduction on imports.
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From my point of view, Only problem market face in next couple of month is the rupee depreciation.
But there is a risk that government might screw up the things by acting unwisely at this very crucial point.
As investors we should consider about all possibilities and take precautions if necessary.

There wont be economic sanctions against us by the US ... but we are asking for more trouble i think

The Government yesterday dissociated itself from a campaign launched to boycott the use of US products in Sri Lanka. Acting Media Minister and government spokesman Lakshman Yapa said the government did not encourage the campaign which had been launched against US products.

“This is not the government policy and we are not involved in the campaign which is on”, he said.
A group calling itself Mavubima Surakimu (Protect the Nation) continued a street campaign yesterday calling on consumers to refrain from using US products including wheat flour.

Dr Gunadasa Amarasekara who is among those spearheading the campaign said they would carry out a house-to-house campaign on the issue. “Our aim to create anti-American sentiment. We may not succeed in a short period, but in the years to come we will succeed”, he said. On Friday activists of the movement distributed handbills and stickers with slogans calling for the boycott of US products. They went from shop to shop in the Pettah asking them not to sell US products.

But, there was no immediate response from shop keepers. The campaign came as a US backed resolution against Sri Lanka was passed at the United Nations Human Rights Council (UNHRC) sessions in Geneva on Thursday.

Meanwhile Minister Yapa said that if any of the groups try to disturb the operations of multinational companies the government would provide the necessary security.

A spokesman for the US embassy in Colombo responding to the campaign to boycott American products said, “The US is pleased that the next round of the US-Sri Lanka Trade and Investment Framework Agreement (TIFA) talks will open in Colombo this week. This is an indication that both the US and the government of Sri Lanka understand that the important bilateral trade relationship must continue to grow for the benefit of consumers and businesses in both countries’.

http://sundaytimes.lk/120325/News/nws_03.html

A spokesman for the US embassy in Colombo responding to the campaign to boycott American products said, “The US is pleased that the next round of the US-Sri Lanka Trade and Investment Framework Agreement (TIFA) talks will open in Colombo this week. This is an indication that both the US and the government of Sri Lanka understand that the important bilateral trade relationship must continue to grow for the benefit of consumers and businesses in both countries’.

It is very important that both parties have understand this.

wiki wrote:There wont be economic sanctions against us by the US ... but we are asking for more trouble i think

The Government yesterday dissociated itself from a campaign launched to boycott the use of US products in Sri Lanka. Acting Media Minister and government spokesman Lakshman Yapa said the government did not encourage the campaign which had been launched against US products.

“This is not the government policy and we are not involved in the campaign which is on”, he said.
A group calling itself Mavubima Surakimu (Protect the Nation) continued a street campaign yesterday calling on consumers to refrain from using US products including wheat flour.

Dr Gunadasa Amarasekara who is among those spearheading the campaign said they would carry out a house-to-house campaign on the issue. “Our aim to create anti-American sentiment. We may not succeed in a short period, but in the years to come we will succeed”, he said. On Friday activists of the movement distributed handbills and stickers with slogans calling for the boycott of US products. They went from shop to shop in the Pettah asking them not to sell US products.

But, there was no immediate response from shop keepers. The campaign came as a US backed resolution against Sri Lanka was passed at the United Nations Human Rights Council (UNHRC) sessions in Geneva on Thursday.

Meanwhile Minister Yapa said that if any of the groups try to disturb the operations of multinational companies the government would provide the necessary security.

A spokesman for the US embassy in Colombo responding to the campaign to boycott American products said, “The US is pleased that the next round of the US-Sri Lanka Trade and Investment Framework Agreement (TIFA) talks will open in Colombo this week. This is an indication that both the US and the government of Sri Lanka understand that the important bilateral trade relationship must continue to grow for the benefit of consumers and businesses in both countries’.

http://sundaytimes.lk/120325/News/nws_03.html

But government can not do anything against them as it is a peaceful campaign.Otherwise USA may try to pass another resolution on human rights against SL government on this issue

Hope Americans will not boycott our products.