Billions of dollars lie idle in the sand
Waste enough to build a kingdom and conceal a hoard
Choots my sister-in-law laments "Ane what a waste"
Highways as barren as a mule?
by Kumar David-August 13, 2016, 5:52 pm
"My name is Percy Mahinda, king of kings:Look on my works, ye Mighty, and despair"-One Percy about another
Ramses II on whom Percy Bysshe Shelly modelled Oxymandius (from the Greek word) was indeed king of kings, the most celebrated of all Pharaohs and lord of all he surveyed. Abu Simbel stands three thousand two hundred years on; one of the greatest monuments of the ancient world. His was an age of prosperity for the peoples who lived on the banks of the Nile and the Nile delta; he extended the kingdom to Canaan, Syria and Nubia in the south. The great pharaoh left mountains of monuments that now stand silent and bare in the desert sands and in a midget to a mighty comparison he is aped by our own Ozymandian upstart. I doubt whether in those days emperors were surrounded by sycophantic place seekers who fawned at every whim and greased their palms with every racket, but in Lanka’s unwept decade it was not only the megalomania of mad-Mahinda that buried treasure in the sand, but also corrupt political hangers-on assisted by the supine toadying of spineless high bureaucrats.
A few weeks ago I had the opportunity to tour Mattala Madness and was taken into the lounges, security areas and technical facilities to get an idea of how much public money had been buried in this loony binge. On the day in question there were two arrivals and departures, one in the morning and the other in the afternoon but I counted a staff of 80 (x three shifts remember) milling around, bored, chatting with each other or their own shadows. There were security types, information counter staff, senior controllers, cleaners, handlers and women in pretty saris at empty counters. It is also a punishment transfer station for Rajapaksa loyalist detritus. The senior guy who took us round said with a poker straight face that airlines had stopped using Mattala because the present government was not providing enough chairs (those on hand were 100% unoccupied) in the passenger lounges!
Let’s estimate the staffing expenditure of this wasteland. Apart from the 80 I counted there are large numbers out of sight; in the control tower, in engineering, on the apron, gardeners and baggage handlers who must be sleeping all day. Let us say 150 per shift and not to push the number up too much let say a total of 400 people. How much are they paid? Say Rs40,000 a month on average or a gross annual wage bill close to Rs500 million – half a billion rupees a year for doing sweet brinjals! This is the wage bill only; add to it equipment servicing and maintenance expenditure. And this is without saying a word about the burden of repaying capital and making interest payment. One man’s lunacy inflicts ruin on a country!
Now for a sample of the capital-cost side - not recurrent expenditure - let me turn to the Hambantota harbour project. The port was developed in two phases, first phase construction cost US $ 500 million jointly funded by Exim Bank of China and the Sri Lanka Ports Authority; phase 2 cost US $ 800 million. To add insult to injury the organisers of the opening tamasha in November 2010 spent Rs 140 million to welcome Rajapaksa royalty with genuflecting ceremonies, a stage show, gifts , victuals and beverage. Of this Rs. 20 million went to actor Jackson Anthony for the show. This farce will be investigated by a Presidential Commission; yet another impotent commission which will not punish anyone! The Commission has issued notice on Jackson Anthony and Port Authority officials including former chairman Priyath Bandu Wickrema. So far, in all cases, all blood suckers have got away scot free and there is no sign that this pathetic display of Sirisena-Wickremesinghe impotence will cease.
There is a multimillion dollar international conference hall in Hambantota that has hosted just one (yes one!) event, a stadium at which one (yes one!) international match has been played and then there are miles upon miles of highways! Yes four lane highways stark in the middle of the bush; if you are patient you will see the occasional car pass by. As friends travelling with me remarked these tens upon tens of miles (perhaps adding up to a hundred) of highways would have cost as much as the woefully overdue Colombo-Kandy arterial expressway may cost.
Blame not only the megalomaniac but also remember the dozens of august civil servants, high ministry and government officials and smart engineers who did not dare say to His Majesty that he was plain off his rocker. And now the propaganda arm of the present government is bereft of imagination. To win a propaganda war it must organise bus loads of townsfolk and villagers to tour empty highways and stark, silent monuments in concrete. The people must SEE the waste, then the people will be educated. Mahinda’s marching from Kandy hordes too can be invited to track these empty highways without impediment and hold unobstructed rallies to hearts content in vast unpopulated space; no need to haggle over Hyde park and Campbell Park. Ah what an opportunity lost for Oxymandian feats!
Ranil’s emerging strategy
The economic strategy of this government is driven by Ranil and the President’s role is to intervene only when there is political necessity. The Mahendran non-renewal, VAT and GMOA’s foreign trade pact delusions fall into this category. This column has for some time been commenting on Ranil’s economic approach on the basis of its potential or otherwise for success as a capitalist strategy. That is I have refrained from interjection of my socialist predilections. This piece continues this approach but to speak of success in a development strategy is to bear two sides of the coin in mind; (a) there has to be growth, and (b) if there is growth then the distribution of its benefit must include a degree of equity. What degree of equity? The answer is equity corresponding to populist social democratic expectations.
But before spreading the butter there has to be butter to spread. If there is no (a) then (b) is kaput. Hence the first question to address is ‘Will Ranil’s strategies succeed in growing the economy?’ There are some points in his approach to growing on a capitalist basis that are sensible, some others are not well thought through. Where he is correct is in opening Lanka to regional economic interactions. ECTA with India, hated by Sinhala chauvinists for that reason, and opposed by the GMOA in its quest to preserve a closed shop for pecuniary gain for the medical profession, must be pushed through. ECTA must not be diminished into a purely trade agreement; it must be a substantive economic framework including investment and manpower movement, the latter on short-term (5 or less years) work visas.
The move to engage China in an economic development zone in the Hambantota area making use of the billions of dollars that have been sunk into the ground is wise. Once a madman has dug a well and we have fallen in, the only thing to do is to start from the bottom and make the best of it from the depths. This is similar to dynamic programming in optimisation theory where one starts from the given, defined by past events however deplorable, and maximises future benefits. The Chinese are doers. Once they take on a responsibility, and if it is in their interests as well, they will deliver; they have done their bit in win-win scenarios elsewhere. Exploring opportunities with them is in the right direction. However Lanka cannot sit back and expect a Chinese Godot to deliver all; there must be activity on our side and ensuring employment creation (say 100,000 jobs within three years) must be a priority. This is where there is much misgiving in my mind. Our officials are reputed to be incompetent and/or corrupt compared to outsiders and there is unease that we will fail to make the best of the opportunity.
In principle I am supportive of the agreement reached with a Singaporean investment consultancy company. I say in principle because little detail has been revealed of what will actually be done. And this brings me to my worries about Ranil’s approach to regional economic cooperation. Let me take several snippets from the PM or his close advisors to make my point.
Western Megapolis; Financial City; hub for financial and logistical services in South Asia complementing Hong Kong and Singapore.
Finalising a Free Trade Agreement with China in 2017.
Expanding trade treaties with out South Asian neighbours.
Navigating trade liberalisation and enhancing bilateral trade enhancement initiatives.
Opportunity for Sri Lankan exporters to access a market of three billion people.
One couold go one quoting from speech upon speech at international forums and symposia by the PM and his collaborators like Malik Samarawickrema. The elephant missing in the room is the production side; production of tangible, fungible, locally consumable or exportable industrial and/or agricultural commodities. For heaven’s sake what’s the use of easier and bigger export markets if you have bugger-all to export! Ranil and his buddies are blindsided to the production side and obsessed with financial services, trade liberalisation and consultancy services. They simply cannot get their priorities in perspective.
Lanka can play a role as a financial and commercial service centre but not as a global hub like Hong Kong, Singapore, New York or London – those slots are already taken. Lanka’s development will have to prioritise production of material goods and tangible services, and I mean hard growth on a capitalist basis. This way of looking at things is far removed from the priorities that occupy the central cortex of Ranil and his buddies.
Local economic experts are of no help either. They repeat platitudes. "Exports must be promoted; debt must be brought down; fiscal deficit must be brought under control; Sri Lanka is moving towards a grave situation" – oh dear, any A-level student can parrot this. Don’t our experts have a concrete forward strategy to lay before us? Obviously not! Yes Lanka needs FDI though the international climate is frigid; yes Lanka needs to go regional in its strategic thinking on economic (not just finance and trade) growth; yes the local capitalist class has failed to respond to the opportunities opened by its own UNP led government. It’s good that the state has stepped in with strategy I enumerated in five or six bullet points. But NO this is less than halfway to what needs to be done. At some point in time the government has to wake up and bring its interrupted act to fruition with a determined programme to increase the production of tangible commodities in the manufacturing and agricultural sector.
