By Wimal Dheerasekera
Peace for the World
First democratic leader of Justice the Godfather of the Sri Lankan Tamil Struggle: Honourable Samuel James Veluppillai Chelvanayakam
A Brief Colonial History Of Ceylon(SriLanka)
Monday, January 13, 2014
By Wimal Dheerasekera
US envoy’s visit to SL delayed
- Monday, 13 January 2014
The diplomatic-row between the United States (US) and India has delayed the planned visit of United States (US) Assistant Secretary of State Nisha Desai Biswal to Sri Lanka this month, it is learnt.
Earlier, she was supposed to come to Sri Lanka after a visit to India. However, the diplomat spat between India and the US, triggered by the arrest of Indian Deputy Consul General in New York Devyani Khobragade, had delayed her visit to India. Ms. Khobragade was accused of lying on an application for her housekeeper's work visa, over-reporting the amount of money the housekeeper was paid. India has responded to the US act through various measures.
Ahead of the United Nations Human Rights Council (UNHRC) session, the US had sought to send Ms. Biswal to Sri Lanka after talks with Indian leaders on the Sri Lanka issue among others.
Ms. Biswal, who was appointed to the post by US President Barak Obama, was to arrive in the country during the second week of January. However, the US authorities have indicated to Sri Lanka that she will come by the end of this month.
Meanwhile, US Ambassador at Large on war crimes Stephen J. Rapp visited Sri Lanka from January 6-11 to meet with government and political leaders, civil society, and to tour former conflict zones. He learnt about the progress made since the conflict ended, as well as the Sri Lankan people's continued desire, for reconciliation, justice and accountability.
A statement from the embassy said, “During Ambassador Rapp's discussions, he listened to eyewitness accounts about serious human rights abuses and violations of international humanitarian law, including those that occurred at the end of the war. In that context, the government of the United States encourages the government of Sri Lanka to seek the truth through independent and credible investigations, and where relevant, have prosecutions.
The United States remains committed to working with the Government of Sri Lanka to promote greater peace and prosperity for all of the people of Sri Lanka. It is vital that all sides come to an agreement on events, have appropriate redress, and move forward as a unified country that upholds the rule of law and respects the principles of democratic governance.
Reconcilition South African Style Will Not Work in Sri Lanka
The mentality of the Sinhalese politicians since the date of independence in 1948, has involved making promises and signing treaties, one after another, and breaking all of them.
Rajapaksa walking away after bidding farewell to former President Nelson Mandela lying in state at the
Union Buildings in Pretoria, South Africa on 11 December 2013 |
(MELBOURNE) - On 11 December 2013 South Africa made a gracious offer to assist Sri Lanka in whatever way possible and share its experiences on its reconciliation process, South Africa’s High Commissioner to Sri Lanka Geoff Doidge said. He said this during a meeting held to express condolence on the death of former South African President Nelson Mandela at the parliament complex. The event was organised by the Sri Lanka-South Africa parliamentary Friendship Association. The High Commissioner, Geoff Doidge suggested that if a Truth and Reconciliation Commission (TRC) was set up in Sri Lanka it would facilitate and expedite the reconciliation process between the Sinhalese and Tamils in Sri Lanka.
Geneva: Elephant in the room
Editorial-January 12, 2014,
The US is at it again. While carrying out indiscriminate drone strikes, adductions and assassinations in a bid to neutralise terrorist threats it has begun crusading for human rights in time for the Geneva summit. Ambassador-at-large Stephen Rapp was here to prepare the ground for another UNHRC resolution against this country. He wasted his time and energy by coming all the way here, pretending to be on a fact finding mission; Washington is determined to go ahead with its anti-Sri Lankan move with or without his input. Was it that he wanted to escape a polar vortex spell which brought temperature below zero back at home?
Ambassador Rapp and the US mission in Colombo have given away their battle plan with a twitter post which claims that hundreds of families were killed in army shelling in 2009 in one place alone in the North. One wouldn’t have been surprised to find such an unsubstantiated claim on a pro-LTTE website. Instead of plucking figures out of the air like a lazy schoolboy writing an argumentative essay, the US ought to provide reliable information to support its claims.
It is not being argued that everything is hunky dory on the human rights front in this country. A certain amount of international pressure may be necessary to keep the government reminded that the sky is not the limit. But, the countries which have taken upon themselves the task of having ‘accountability issues’ during the final phases of the Vanni war probed ought to mention specific instances of alleged war crimes without making sweeping statements.
The US wants the Lessons Learnt and Reconciliation Commission (LLRC) recommendations implemented forthwith. Yes, there shouldn’t be any delay on the part of the government in implementing recommendations by its own commission. But, how would the US reconcile its call for implementing LLRC recommendations and its campaign to prevent the publication of the Chilcot report on the UK’s involvement in the Iraq war and the correspondence between President George W. Bush and Prime Minister Tony Blair as regards that illegal war?
Strangely, in Geneva, nobody dares take up numerous, blatant human rights violations and war crimes committed by the US, which has beaten the rap by virtue of being a leading world power.
Flying frogs
Animals have made headlines during the past few weeks. A venomous snake found in the Opposition Leader’s parliamentary office caused quite a stir. (It has been all snakes and no ladders for the Jumbo Chief!) A UNP rebel has claimed that a croc was put into his swimming pool the other day. A white turtle has gone missing from a hatchery in the south. Last month, a crocodile had to be chased out of a GCE O/L examination centre. A female anaconda in the Dehiwala Zoo has become internationally known—for the wrong reason though. She devoured her beloved mate. Two peafowls have recently collided with an aircraft, forcing it to make an emergency landing at the newly built airport at Mattala, where one sees more jumbos than jets.
National Geographic reported, last year, that a new type of flying frog had been discovered in Vietnam. It has special aerodynamic adaptations like webbed feet and ability to parachute from tree to tree, we are told. But, our parachuting frogs are peerless. Elections are the times when they usually become quite active. A cacophony of croaks is heard from the lake isle of Kotte.
Some of the frogs have already begun leaping ahead of the provincial council polls and many others are expected to do likewise in the next few weeks. The problem with frogs is that they go places in politics!
Betraying Tamils
- Monday, 13 January 2014
Today a group calling itself Tamils for Labour will hold a meeting to undermine Lee Scott MP. Lee for those of whom you do not know is the chairman of the All Party Parliamentary Group for Tamils who has tirelessly and against the odds championed the plight of Tamils since his election in 2005. He has advocated a two state solution and without fail fought against deportations of Tamils refugees, and indeed stopped many.
See Link below.
He travels each year to Geneva to champion the cause of an Independent International Inquiry into the deaths of over a 140,000 innocent Tamil civilians and instrumental in persuading David Cameron to go to Jaffna and shine the spotlight on the travails Tamils have to endure.
Yet today some people claiming to represent Tamils will be organising a meeting with the sole objective of unseating him at the 2015 General Elections.
One must seriously ask the question whether they are working in the best interests of the Tamils or their own interests.
Sri Lankan Weltanschauung
[TamilNet, Monday, 13 January 2014, 01:38 GMT]The accumulating woes for Sri Lanka in the international scene can be attributed two distinct and inter-related phenomena. One, the continuing denial of the history of injustices inflicted by the State on the Tamils, culminating in the Mu'l'livaaykaal massacres of civilians and the refusal by the Sinhala rulers and the elites to acknowledge the killings, and second, the locally prevailing "Weltanschauung" (worldview) cultivated as an instrument for the ruling autocracy to stay in power, which accepts that, to eliminate the Tigers, any atrocity against any Tamil is acceptable. However, the Sri Lankan weltanschauung does not apply in the international arena. Colombo's refusal to respond to the accusations of war-crimes, and genocide, partly arises from the tolerance for Tamil injustice that is intrinsic to Sri Lanka's weltanshauung.
Retooling the media to dominate all means of mass-communications is one key element of this nefarious exercise. While many authoritarian regimes do not seek total domination of all means of mass communication, in Sri Lanka, total domination of media prevails, enforced by intolerance to dissent including threat to lives of journalists who dare to challenge Rajapaksas.
The result is, selective censorship of political expression, constant torrent of pro-government narratives, and the use the subservient power of editorial omission to limit criticism of official policies and actions. After the Mu'l'lvaaykaal massacres where, according to U.N. estimates between 40,000 and 80,000 Tamil civilians were killed by State's military, the narrative still is that there were no casualties.
However, this media effort assures longevity and feeds the demanding hubris arising from defeating the Tigers, at the expense of building a society with an outward looking weltanschauung, consistent with the view of the rest of the democratic world, Sri Lanka political observers note.
Besides the international political decision makers who would have access to credible independent information streams from the local embassies, and are unlikely to be influenced by the propagandist versions of State narratives, the autocrats might wish to seek influence from three different audiences: regime elites, mass audiences, and the political opposition/independent civil society, according to Robert Orttung of Elliot School in Washington D.C.
According to Orttung, the first is regime elites: Authoritarian governments must always worry about their elites because any split among this group could lead to regime collapse. State-controlled media make it a mission to reassure these regime mainstays that the incumbent ruler stands secure. Clear media dominance signals to members of the ruling coalition that defections will be punished, including through smear campaigns.
In Sri Lanka, this group is virtually entirely absent, and many "elites" have unashamedly forced or fallen within the State's weltanschauung. The few who are troubled by the moral deprivity of this stand, attempt to write neutrally, but even here, they advocate Government response enough to avoid international opprobrium. These intellectuals advance the inferior 'hypothetical imperative' driven by the desire to benefit, not worthy of the "elite" label, instead of taking the moral high ground advancing Kant's superior 'categorical imperative,' acts driven by duty and not desire.
A former Defence Secretary, Austin Fernando, writes in the Sunday Leader, elucidating the tactics to counter international pressure. For those pushing for accountability, Fernando's response is, "[t]he danger in this kind of attitude is that it pushes ‘war managers’ and/ or the ‘political leadership’ against the wall, causing them in turn to utilize nationalistic sentiment, in order to stave off potential atrocious punishment. This is why patience is virtue, in post-conflict reconciliation." Mr. Fernando appears to ignore "[un]disciplined, [un]wise and [ir]rational behavior" of the State the past five years and wants Tamils to be still patient.
The second crucial audience, according to Orttung, is the populace at large. State-dominated media work to make mass audiences respect and fear the regime, but breeding apathy and passivity is just as important, Orttung says. Rajapaksas' media successfully keeps in the dark, the regime-fearing masses who are inebriated with victory, but reel from meeting daily financial struggles of making their ends meet.
The third group, the political opposition and independent civil society, is controlled in Sri Lanka, almost exactly as Orttung outlines. "In democracies, open media are the lifeblood of politics. In authoritarian regimes, state-controlled media seek to isolate activists from society at large, with the idea of preventing them from organizing and mobilizing. To this end, state-run media try to discredit in the public’s mind any notion of a political alternative. State media attacks de-legitimize civil society and the opposition, paving the way for other repressive measures, while accusing oppositionists of wanting to cause chaos, a charge that may resonate widely in societies with histories of political instability," according to Orttung.
"Until Sri Lanka encouraged by its 'elites' moves away from the currently prevailing blinded weltanschauung, engaging productively with liberal democratic power houses of the West including premier Rights organizations, will face challenges, many insurmountable," Sri Lanka political observers note.
External Links:
| WP: | Why autocrats need media | |
| Wiki: | Weltanschauung |
CaFFE commences election operations
- Monday, 13 January 2014
The election coordinating centre of Campaign for Free and Fair Elections (CaFFE) to monitor the western and southern provincial councils will commence operations from January 16 said CaFFE’s Executive Director Rajith Keerthi Tennakoon.He added that CaFFE will observe pre election, Election Day and post election periods and will monitor election related violence, misuse of public property, illegal propaganda and mediate to ensure the voting rights of the people.
CaFFE’s coordinating centre will be established at 100/19 A, Welikadawatte Road, Rajagiriya and can be reached through 0114341514 (p,) 0114341524 (p,) 0112866224 (f) and caffe2008@gmail.com. Ahmed Manas is CaFFE’s national coordinator while Aravinda Rathnayake and Kathindra Kuruwita will lead CaFFE’s media and Research units respectively.
Mannar, Jaffna Bishops’ war crimes charge:Catholic Bishops’ Conference won’t support move – Cardinal
US embassy claims having access to war crimes evidence
By Shamindra Ferdinando and Norman Palihawadana
January 12, 2014,Bishop of Colombo Rt. Rev. Malcolm Cardinal Ranjith yesterday said that the Catholic Bishops’ Conference of Sri Lanka wouldn’t endorse the allegations made by Bishop of Mannar Rt. Rev. Dr. Rayappu Joseph and Jaffna Bishop Rt. Rev. Dr. Thomas Saundranayagam that Sri Lankan forces had used cluster bombs as well as chemical weapons during the last phase of eelam war IV.
The Bishop of Colombo was responding to a query by The Island in the wake of media reports that the Bishops of Mannar and Jaffna had called for an international war crimes investigation during a meeting with US Ambassador-at-large at the State Department’s Office of Global Criminal Justice Stephen J. Rapp in the North and US Ambassador in Colombo Michele J. Sison.
Rt. Rev. Dr. Malcolm Cardinal Ranjith emphasised that the controversial statements attributed to the two Bishops were based on their person opinion.
At the conclusion of Ambassador Rapp’s six-day visit on Saturday, Juliana A. Spaven, Press and Information Officer, US Embassy, Sri Lanka and Maldives said that the official during discussions here had had the opportunity to listen to eyewitness accounts about serious human rights abuses and violations of international humanitarian law, including those that had occurred at the end of the war.
Spaven reiterated the US commitment to ensure an independent and credible investigation to pave the way for prosecutions. She said: "The United States remains committed to working with the government of Sri Lanka to promote greater peace and prosperity for all of the people of Sri Lanka. It is vital that all sides come to an agreement on events, have appropriate redress, and move forward as a unified country that upholds the rule of law and respects the principles of democratic governance."
MaRa paying homage to Jesus augurs ill for Christians! their two places of worship attacked on same day
(Lanka-e-News-12.Jan.2014, 11.30PM) The Rajapakse regime which is notorious for diverting the attention of the people from their unsolved burning issues had employed its criminal extremist monks who are now functioning as a paramilitary force of the regime to attack two Christian places of worship today alone. One of them is a Christian religious center at Hikkaduwa and the other is at Pitipana , Homagama.
The Rajapakse extremist criminal monks have yesterday night tried to set fire to the Christian religious center run in a house at Pitipana by pouring petrol. The front room of the house had suffered slight damaged as a result As usual no suspect had been arrested so far.
The other Christian religious center is at Hikkaduwa where religious activities had been carried out for the last nearly 16 years. Criminal monks of extremist Buddhist organizations and some civilian marauders had broken into the venue and wreaked havoc while the police were idly watching and enjoying.
At the beginning the police had however obstructed the criminals from entering , but the criminal monks have gained entry through the backdoor and harassed the devotees who were praying . The women and children had got frightened because they were not getting protection from the police.
Owing to this violent commotion there was a traffic congestion on the Galle road near Hikkaduwa. Later, following an illegal assurance given by the police to these criminal monks that this religious place will be evacuated , the Rajapakse paramilitary criminal monks have dispersed.
What a disgrace ! not even before a week had elapsed since the country’s chief , Medamulana MaRa returned to the Island along with John Amaratunge , the opposition chief organizer after visiting the place of birth of Christ to pay homage , these two despicable attacks were launched by his paramilitary criminal monks on the very places of worship of Christ.
What a pity ! what a waste of piety !!
(Lanka-e-News-12.Jan.2014, 11.30PM) The Rajapakse regime which is notorious for diverting the attention of the people from their unsolved burning issues had employed its criminal extremist monks who are now functioning as a paramilitary force of the regime to attack two Christian places of worship today alone. One of them is a Christian religious center at Hikkaduwa and the other is at Pitipana , Homagama.The Rajapakse extremist criminal monks have yesterday night tried to set fire to the Christian religious center run in a house at Pitipana by pouring petrol. The front room of the house had suffered slight damaged as a result As usual no suspect had been arrested so far.
The other Christian religious center is at Hikkaduwa where religious activities had been carried out for the last nearly 16 years. Criminal monks of extremist Buddhist organizations and some civilian marauders had broken into the venue and wreaked havoc while the police were idly watching and enjoying.
At the beginning the police had however obstructed the criminals from entering , but the criminal monks have gained entry through the backdoor and harassed the devotees who were praying . The women and children had got frightened because they were not getting protection from the police.
Owing to this violent commotion there was a traffic congestion on the Galle road near Hikkaduwa. Later, following an illegal assurance given by the police to these criminal monks that this religious place will be evacuated , the Rajapakse paramilitary criminal monks have dispersed.
What a disgrace ! not even before a week had elapsed since the country’s chief , Medamulana MaRa returned to the Island along with John Amaratunge , the opposition chief organizer after visiting the place of birth of Christ to pay homage , these two despicable attacks were launched by his paramilitary criminal monks on the very places of worship of Christ.
What a pity ! what a waste of piety !!
In Sri Lanka, Muslims replacing Tamils as perceived enemy
Attacks on mosques stir anew religious tensions in Sri Lanka, where about 9 per cent of the population — 1.4 million — practise Islam.
Attacks on mosques in Sri Lanka have stirred anew religious tensions in this country, where about 9 per cent of the population — 1.4 million — practise Islam. Here a Muslim woman walks past a police barricade outside a mosque vandalized in Colombo in August, 2013.
By: Rosie Dimanno Toronto Star, Published on Mon Jan 13 2014
COLOMBO—Cellphone cameras captured the ugly scene: Muslims being chased through the streets by maddened Buddhists.
Video: Buddhist Monk Led Mob Attacked Christian Church
January 13, 2014
On the 12th of January 2014, the Assemblies of God and the Calvary church in Hikkaduwa (Galle District) came under attack by mobs while engaging in worship services, says the National Christian Evangelical Alliance of Sri-Lanka.
According to the NCEASL, both churches were engaged in Sunday morning worship when at approximately 10.00 a.m., mobs of about 300 persons led by Buddhist monks stormed the respective churches. The first to be attacked was the Assemblies of God, followed by the Calvary church. Serious damage was caused to the two buildings. Stones were thrown at the premises while some worshippers were trapped inside.
The previous night, the pastors of both churches received information of the impending attacks. They went ahead with the worship services based on the guarantee that there will be police protection for the services, says the NCEASL.
The protesting monks included Buddhist clergy from a group calling themselves ‘Hela Bodu Pawura’ as well as monks from Hikkaduwa and nearby temples. They claimed the Christian presence was illegal. The protesters obstructed the Galle – Colombo main road, creating a tense situation in Hikkaduwa. The situation prevailed past noon, with the Police unable to disperse the mob. A senior police officer who arrived at the scene gave an undertaking to the monks that the churches will be closed for 2 weeks (until 10th February), during which time a solution will be sought. The mobs then dispersed.
24 suspects including eight monks have been identified the Police spokesman SSP Ajith Rohana said today.
Sri Lanka police 'identify church attackers' in Hikkaduwa
Windows, doors, musical instruments were smashed when a mob, led by monks, vandalised the churches
Police in Sri Lanka say they have identified and intend to arrest 24 people, including eight Buddhist monks, allegedly involved in attacks on two churches on Sunday.
By Charles Haviland-13 January 2014
No injuries were reported, but one pastor said he received death threats.
Footage from southern Hikkaduwa town showed monks hurling stones and bricks.
An opposition politician has urged the government to investigate the attacks. Police were at the scene but failed to prevent the assaults.
Police spokesman Ajith Rohana, who had admitted to what he called police "inaction" because of insufficient numbers, said on Monday that legal action would be taken against all people identified as attackers.
He said they would be charged with offences such as vandalism, trespass and unlawful assembly and that an alleged death threat by one of them against a pastor would also be probed.
The pastors of the two independent churches told the BBC that the police on the scene appeared unwilling to restrain the monks but Mr Rohana said charges would be brought against people "irrespective of status".
Arson assault
Video footage aired by a private television station, Derana, showed monks at a building used by an independent church shouting insults in Sinhala, smashing up signs, setting goods alight and hurling stones and what appeared to be a brick.
In further footage released by a Christian group, Pastor Ranjan Perumal of the Calvary Free Church indicated smouldering papers lying by a railway, which he said were burned Bibles and Christian literature.
Windows, doors and musical instruments were also smashed. A senior politician of the main opposition party, Karu Jayasuriya, has urged a full investigation by the government into the "very sad" attacks.
"The government should take steps, corrective actions, to ensure this doesn't happen again," he told the BBC.
He said that he as a Buddhist believed all religious and ethnic groups should coexist peacefully.
Some of the monks allege that the Calvary Free Church and the Assemblies of God are operating illegally. The pastors say they have, indeed, had orders from the government to close. But they say they are registered under an Act of Parliament and are operating legally.
They said they had been subjected to earlier attacks, including a 2003 assault on a woman which is still in the courts. They alleged that some monks involved in earlier assaults were present on Sunday.
At least one further attack on a church was reported early on Sunday - an arson assault on a church near Colombo. The fire was doused before severe damage was done, a Christian organisation said.
The attacks come at a time of resurgent Buddhist nationalism among the majority Sinhalese community on the island.
Hardline Buddhists have also been attacking some Muslim businesses and mosques.
Now attacks on small, independent churches are becoming much more numerous - several were reported at Christmas time - but the events are often downplayed or ignored by the national media.
An Open Letter To Prof. Kapila Abhayawansa
By Sharmini Serasinghe -January 13, 2014
Sharmini Serasinghe
Dear Prof. Abhayawansa,
You may regard the following disrespectful, and highly impertinent, but I was educated within a system, where I was encouraged, to challenge my teachers. And the most adamant of them all, was my reverend Guru, the late Piyadassi Maha Thera.
Therefore, though you are not one of my esteemed teachers, I shall nevertheless, regard you as a teacher.
To start with, your post titled “God in the Buddha” on Colombo Telegraph dated 10thJanuary, 2014, in response to Mr. Shyamon Jayasinghe and Dr. Jagath Asoka, I found quite intriguing, to say the least.
You start with by stating, that you got the idea “to write something revealing the true nature of popular Buddhist practices”. But having carefully studied your post, I find nothing cogently “revealing” of such, except to condone what you term, as “popular Buddhist activities”, introduced to the people of Sri Lanka, as Buddhism, by Buddhist monks, over 2500 years ago. Though these “activities” appear to have been borrowed from Hinduism, they are indeed harmless, but they are nevertheless, contradictory, to the Buddha’s teachings.
Therefore, what I did find “revealing”, is that your archaic views on Buddhism, are not applicable, in today’s context.
You, dear Professor, have cited the Buddha’s words, “na āyatkeneva aññārādhanam vadāmi. Apica anupubba-sikkhā anupubba-kiriyā anupubba-patipadā aññārādhanam hoti”.-(M.I. 479), which translates into “I do not say that one can win the final knowledge at the very beginning. It is had from a gradual discipline, a gradual mode of action and conduct”.
Given the context in which you have stated the above, your interpretation of it appears to be, that the Buddha condoned and encouraged his followers, to engage in, what you term as “Popular Buddhist Practices”. You might be aware, that the Buddha categorically denounced such practices, as worshipping of objects, including himself, as a prerequisite to attaining “the final knowledge”.
You also go on to state, that most Buddhists, in all Buddhist countries, irrespective of the sect, perform popular ‘religious activities’, “We cannot say that all such activities are based on wrong beliefs”. If so, please do enlighten me and others such as myself, on the ‘right belief’ according to you, of such practices? As far as I know, the Buddha denounced such practices, as he meant Buddhism to be a philosophy and not a religion (Religion, defined as per the Oxford dictionary- “the belief in and worship of a superhuman controlling power, especially a personal God or gods”).
Did the Buddha (who was not a God), advocate the offering of flowers to perceived images of him, in order for one to be reminded, of the impermanence of life (anicca)? Similarly, did he advocate lighting oil- lamps, candles etc., in order to remind oneself of “wisdom illuminating the darkness of ignorance”? Also, did he ask of his followers, to keep watering Bo trees, which gave him shade, as he attained enlightenment?
Lack of labour force the biggest challenge: NCE President
Lack of labour force the biggest challenge: NCE President
January 13, 2014
By Samantha Nayakarathna
Ceylon FT: The Central bank statistics show that earnings from exports grew by 5.6% to US$ 9,400 million during the first nine months of 2013. Industrial exports grew by 4.1% and agricultural exports grew by 10.6% during the same period of 2013.
In this back ground Ceylon FT spoke to
Dr. Jagath Peiris the President of National Chamber of Exporters to get his views about year 2014 and beyond.
“2014 is good for the industries, because signals have been given at the road map for lending rate rates to come down so that industries can borrow at a lower cost. Right now our biggest problem is; we cannot expand because of local of capital. At the last budget lot of concessions were given for import substitution; therefore 2014 will be a good year for industries and exporters as well,” Dr. Peiris said.
When questioned about the current exchange rate and electricity prices, he said, “I don’t think any exporter is expecting a rupee depreciation; we are quite comfortable with current rate. We don’t expect an increase in electricity cost. But global oil prices might increase; so that can result in the energy cost going up.”
Speaking about the challenges faced by exporters Dr. Peiris said, “The major challenge we have right now is non- availability of labour force because unemployment rate is so low, so it’s very difficult to find people to work in our industries. People have their own choices.”
According to the NCE the Production cost of the local industry sector has gone up by 15% due to the high electricity and labour cost. Therefore exporters are of the view that value addition is of utmost importance to face the competition.
“We have to do two things. One is value addition and the other is looking at new markets. We have been mainly focusing on our traditional markets. It is only now that people have identified that traditional markets are not going to expand. Therefore we have to look at new markets. But the problem is we cannot immediately get into new markets.”
“We need value addition because our cost of production is going up so we are not in position to compete on cost basis.”
Lack of labour force the biggest challenge: NCE President
January 13, 2014 By Samantha Nayakarathna
Ceylon FT: The Central bank statistics show that earnings from exports grew by 5.6% to US$ 9,400 million during the first nine months of 2013. Industrial exports grew by 4.1% and agricultural exports grew by 10.6% during the same period of 2013.
In this back ground Ceylon FT spoke to
Dr. Jagath Peiris the President of National Chamber of Exporters to get his views about year 2014 and beyond.
“2014 is good for the industries, because signals have been given at the road map for lending rate rates to come down so that industries can borrow at a lower cost. Right now our biggest problem is; we cannot expand because of local of capital. At the last budget lot of concessions were given for import substitution; therefore 2014 will be a good year for industries and exporters as well,” Dr. Peiris said.
When questioned about the current exchange rate and electricity prices, he said, “I don’t think any exporter is expecting a rupee depreciation; we are quite comfortable with current rate. We don’t expect an increase in electricity cost. But global oil prices might increase; so that can result in the energy cost going up.”
Speaking about the challenges faced by exporters Dr. Peiris said, “The major challenge we have right now is non- availability of labour force because unemployment rate is so low, so it’s very difficult to find people to work in our industries. People have their own choices.”
According to the NCE the Production cost of the local industry sector has gone up by 15% due to the high electricity and labour cost. Therefore exporters are of the view that value addition is of utmost importance to face the competition.
“We have to do two things. One is value addition and the other is looking at new markets. We have been mainly focusing on our traditional markets. It is only now that people have identified that traditional markets are not going to expand. Therefore we have to look at new markets. But the problem is we cannot immediately get into new markets.”
“We need value addition because our cost of production is going up so we are not in position to compete on cost basis.”
Warning: Vicious debt trap ahead!
Increasing foreign debt burden despite improved external finances
Sunday, January 12, 2014
In spite of the Central Bank announcing that “Gross Official Reserves increased to US$ 7.1 billion (provisional) by end 2013″, the Government intends to borrow US$ 1.5 billion this year from international financial sources.
External finances have been improving owing to increased export earnings, large amount of workers’ remittances and higher tourist earnings. Despite these favourable developments, the Government continues to borrow mainly to meet this year’s large debt servicing obligations (loan repayments and interest costs). The gross external reserves cited by the Central Bank do not indicate the extent of funds available to meet short term financial needs. They do not allow for liabilities incurred in building the gross reserves.
Foreign debt has risen to levels when the debt servicing costs are a huge burden on the external finances. The Government has to borrow to service the large foreign debt incurred over the years. Further borrowing will increase the external debt and its debt servicing costs.
Increasing foreign debt
Total external debt expanded by a massive 13.8 per cent to reach US$ 28.4 billion at the end of 2012 from US$ 25 billion in 2011. At the end of 2013, foreign debt is likely to have increased to more than US$ 30 billion. In addition, private and state banks raised loans in international financial markets in 2012 and 2013. With further borrowing during this year, foreign debt is likely to reach about US$ 31 billion.
Total external debt expanded by a massive 13.8 per cent to reach US$ 28.4 billion at the end of 2012 from US$ 25 billion in 2011. At the end of 2013, foreign debt is likely to have increased to more than US$ 30 billion. In addition, private and state banks raised loans in international financial markets in 2012 and 2013. With further borrowing during this year, foreign debt is likely to reach about US$ 31 billion.
Most of the debt stock is from commercial sources. In 2012, commercial debt accounted for 55 per cent of total debt, while 45 per cent was from concessionary sources like the IMF, World Bank, ADB and foreign governments. In 2012, for the first time, the major portion of foreign debt was from commercial sources. This switch to commercial borrowing makes the increasing debt more risky.
As foreign debt increases with increased foreign borrowing, the risk premium charged by foreign lenders goes up as the country’s credit worthiness declines. Moreover, when Government borrowing increases, private borrowers’ access to foreign capital markets becomes limited.
This trend is likely to continue as the country is not entitled to concessionary financing as it is now a low middle income country. Even more disadvantageous is that Sri Lanka has to borrow at high interest rates, much above LIBOR (London Inter-Bank Borrowing Rate) as the country’s credit ratings have gone down.
High interest rate borrowing
In addition, commercial banks raised US$ 973 million in 2012 by way of long-term foreign financing, including a US$ 500 million international bond issued by the Bank of Ceylon. In 2013, the National Savings Bank borrowed US$ 750 million at 8.72 per cent and the BoC borrowed US$ 1,000 million at a rate of 8.875 per cent, about 300 basis points higher than the last bond sale by the NSB.
In addition, commercial banks raised US$ 973 million in 2012 by way of long-term foreign financing, including a US$ 500 million international bond issued by the Bank of Ceylon. In 2013, the National Savings Bank borrowed US$ 750 million at 8.72 per cent and the BoC borrowed US$ 1,000 million at a rate of 8.875 per cent, about 300 basis points higher than the last bond sale by the NSB.
These are very high rates of interest for international borrowing and reflect perceived credit risk rating. The DFCC restricted its borrowing to just US$ 100 million owing to high interest rates at which loans were offered. The Government has in addition borrowed rupee denominated debt from abroad at rates ranging from 11 to 13 per cent.
Debt burden
Borrowing at high rates increases foreign debt servicing costs due to both the increase in debt and the higher interest costs. At this rate of interest, principal and interest payments will double every eight years, and if GDP does not grow as fast as the debt, then the debt burden as a proportion of GDP will increase, making it more difficult to meet the country’s total external debt obligations.
Borrowing at high rates increases foreign debt servicing costs due to both the increase in debt and the higher interest costs. At this rate of interest, principal and interest payments will double every eight years, and if GDP does not grow as fast as the debt, then the debt burden as a proportion of GDP will increase, making it more difficult to meet the country’s total external debt obligations.
The large amount of foreign borrowing, much of it at commercial interest rates, has resulted in a huge debt servicing cost that requires further borrowing to service debt and compounds the problem. It is, therefore, imperative that foreign debt is reduced so that the debt servicing costs are contained at manageable levels, so that the country does not run the risk of being caught up in a vicious debt trap.
Furthermore, when borrowed funds are invested in activities that have low returns and mostly confined to non-tradable activities, it becomes increasingly difficult to service the debt. In the final analysis, a country can pay off its debt only by generating trade surpluses.
Trade balance
It is essential to utilise the improvement in external finances to redeem debt rather than incur further foreign liabilities. The trade deficit had fallen to US$ 7.8 billion in the first 11 months of 2013 as exports exceeded US$ 1 billion in October and November. Since this uptrend is likely to continue into 2014, the pressure on the balance of payments of the last three years would be eased to some extent. With increased workers’ remittances and higher tourist earnings, the Central Bank estimates the overall balance of payments to be around US$ 700 million.
It is essential to utilise the improvement in external finances to redeem debt rather than incur further foreign liabilities. The trade deficit had fallen to US$ 7.8 billion in the first 11 months of 2013 as exports exceeded US$ 1 billion in October and November. Since this uptrend is likely to continue into 2014, the pressure on the balance of payments of the last three years would be eased to some extent. With increased workers’ remittances and higher tourist earnings, the Central Bank estimates the overall balance of payments to be around US$ 700 million.
These improvements in the balance of payments should enable the Government to reduce foreign debt rather than increase it. It has an opportunity this year of redeeming debt rather than incurring further debt. To achieve this aggregate demand must be contained through monetary and fiscal measures.
However, monetary policies are not in the direction to curb private consumption and there are inadequate fiscal initiatives to reduce government spending that should be pruned to achieve an improvement in the trade balance as it has adverse impacts on the external finances by increasing intermediate and investment goods imports.
However, monetary policies are not in the direction to curb private consumption and there are inadequate fiscal initiatives to reduce government spending that should be pruned to achieve an improvement in the trade balance as it has adverse impacts on the external finances by increasing intermediate and investment goods imports.
Bottom line
In the final analysis, loans have to generate returns higher than the interest paid and they must be generated in sectors that will help debt repayment. Long gestating and large infrastructure projects have to be financed from domestically generated long-term savings to avoid a foreign debt problem.
Todd Schneider, who headed the IMF mission in September last year, observed that “New external borrowings should be done with a close eye on sustainability and the need to ensure that investments generate the resources needed to service these obligations”.
In the final analysis, loans have to generate returns higher than the interest paid and they must be generated in sectors that will help debt repayment. Long gestating and large infrastructure projects have to be financed from domestically generated long-term savings to avoid a foreign debt problem.
Todd Schneider, who headed the IMF mission in September last year, observed that “New external borrowings should be done with a close eye on sustainability and the need to ensure that investments generate the resources needed to service these obligations”.
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