Some Random Thoughts on Economic Development

By Laksiri Fernando-October 31, 2016, 8:04 pm 

There is a need to be optimistic about Sri Lanka’s future. This is also called positive thinking or PMA (positive mental attitude) in psychology. Positive thinking is necessary not only in politics but also or more so in economics. After all it is the economic progress that would enable people to be optimistic about life, their children’s future and the future of the country. Before thinking of global interdependence, the people need to have a good grasp of mutual interdependence within the country. The fate of all peoples are interwoven, whether they be Muslims, Tamils or Sinhalese or whether they believe in Buddhism, Hinduism, Islam or Christianity, or not believe anything.

The most unfortunate condition among the people undoubtedly is poverty; the lack of basic goods and amenities to meet their day to day needs. This is why the corruption, waste and misuse of resources by politicians or officials are henious crimes. Sri Lanka still is a lower middle income country. This is when the whole country is taken together. However, when we refer to the rural Sri Lanka, or areas still not recovered from the thirty years of war, the people live in lower income conditions and some even at the bottom of the pale. There are vast disparities of facilities in housing, health, education, transport or other infrastructure between the rural and urban areas. The most affected are the children and the youth. The most psychologically suffering are the women, given the constitution of our family institution.

Limitations in the State Sector

There is nothing wrong in people making money, if the means are legitimate. This right however should be available to all, and opportunities should be there for the people to undertake income generation activities. It is true that the state cannot supply employment to all. Even at present, the excess-employment in the state sector is considered a burden to the country and its coffers. Therefore, employment cannot be expanded or expanded substantially in the state sector. To some, this is a political point of view or ideology, but that is what dominant today and the facts are also clear.

There is no such burden to the country, if the private sector expands and opens up employment opportunities. In the past, there were inhibitions on the part, for example, of graduates to work in the private sector. This might be largely changed today. However, there can be a mismatch between the required qualifications in the private sector and the availables kills among the unemployed people. One among them can be English language skills. Another can be good maths knowledge, assuming our young people are fast acquiring computer skills.

However, the short term expansion in the private sector is also limited. The Prime Minister in his ‘Economic Statement’before Parliament recently has expressed that ‘since the state sector was borrowing heavily from banks in the past, there was no much room for the private sector to borrow.’ It is true that without borrowing, the private sector cannot expand. Very few have inherited money to completely start or expand businesses of their own. Private companies and banks are inter linked. However, the banks should also lend to small businesses and joint self-employment projects.

Promotion of Self-Employment

In a country like Sri Lanka, there is much room for small businesses and joint self-employment ventures. What is necessary are required skills, motivation, marketing, support from banks or other lending organizations, and insurance to cover any setbacks or calamities. For self-employment or joint self-employment, the primary requirements are the skills and also the equipment. Training of those skills could be undertaken by technical colleges or vocational training institutes. They could be like the TAFE institutes in Australia. I am not saying they are bad at present, but there can be much improvement. Training in building, construction, interior designing, plumbing, domestic or building electrification, information technology, photography or graphic designing for example could generate self-employment or joint self-employment. What I mean by joint self-employment is ventures initiated by two or more people together to supply services to customers.

What appears to be lacking in Sri Lanka of these ‘skilled workers’(apart from the required skills!) is the use of advanced equipment and required technology.That is why they waste time and energy unnecessarily. When such equipment is used, the strain on physical labour is eased. Again if I refer to Australia, there are women alongside men who are involved in these self-employment ventures. It is possible that when people get such training, some might go to the Middle East. But some may remain, or even otherwise the country is sure to get foreign remittances. To venture into self-employment, there are other skills required apart from motivation. These may entail book keeping, financial handling or know how on where and how to start. The impartation of this knowledge is up to the teachers and teaching modules.

Room for SMEs

The promotion of small and medium scale business enterprises (SMEs) in the country is different and complex. It may be true that even at present over 90 percent businesses are SMEs. The reason is that there are not much large scale businesses. Our capitalism is petty-bourgeois! The National Enterprise Development Authority is entrusted with promoting SMEs. Its role however does not appear to be impressive. Most of the SMEs are not well organized enterprises at present. They mostly survive because there are not much competition or they all are the same. There are several ingrained weaknesses identified in the SMEs. (1) There is a gender bias against women. (2) Managerial skills and knowledge of owners are low. (3) There is reluctance to observe labour standards. (4) The absenteeism levels are quite high.

High or dynamic entrepreneurship and innovation are two requirements necessary for successful SMEs. Emerging from an ancient agrarian society, it is understandable that people cannot quickly jump into modern entrepreneurship. However, this transition has dragged on now for a long period since colonial times. It is argued that the state dominance in the economy has dampened greatly the development of private entrepreneurship in the country. Therefore, releasing of market forces to develop entrepreneurship is considered necessary even if the country wants to move towards socialism in the future. It is believed that this is also the secret behind China’s miraculous growth during the last two decades. Why not utilize or experiment the opportunity?

In developing the SMEs, Sri Lanka itself is not a small market. It has nearly a 21 million people. If the SMEs are capable of going beyond, undoubtedly they have to grow beyond SME status. Whether SMEs or bigger enterprises, high entrepreneurship and innovation are important. What is the status of such attributes in the country at present? We know by the end of the 19th century,how certain local entrepreneurs entered the plantation sector as junior partners of the British planter raj. They also handled the transport services. I also remember how the textile industries sprang in my home town, Moratuwa, competitively in the 1960s. Same success could be seen in the confectionaries and soft drinks. There were several foreign franchise industries even going beyond the local market. These are random experiences. Then there was a decline in the 1970s until the open economy opened up for export garment industries and other joint ventures.

Some Disasters

There were some disasters as well. Most of them were related to people’s savings and investments while the Colombo Stock Exchange being dominated by a close group of companies or people. One successful entrepreneurship was related to the Central Finance and affiliated companies. But as we all know, some of the transactions were dubious. There were several other fraudsters like Sakvithi in the financial market. The situation showed that people had money to invest, but expected quick and high returns. The Central Bank or the other regulators were incapable of controlling the situation. There was something wrong with the business ethics as well.

For the enterprises to grow, there should be investments. For the investments to take place, there should be savings in the country. Otherwise, there should be investments from other countries (FDI). Sri Lanka could pursue both avenues. The general tendency in the country in the past has been consumerism. Consumerism do generate demand that could stimulate industries and enterprises. But if there are no local industries to supply for the demand, the tendency is to import. There are traders comfortable in importing. Importation of goods is not bad, if there are parallel exports. Then it is global trade. Otherwise, it is a liability for foreign exchange or country’s coffers.

For the local industries to grow, there should be sufficient savings in the country. These should be channelled through banks and other financial institutions. The stock exchange is also an important channel, although the people or even the entrepreneurs are not familiar with it. For small enterprises, banks might be the best sources of finance for investments.

Importance of Innovation

Enterprises have to grow through innovation. In other words, entrepreneurship should be for innovation. Has Sri Lanka invented anything in particular? Let us take the example of food industry. From Australia, there are two examples that I can give. During its industrialization and growth, Australia has invented Weet-Bix and Vegemite. These are standard breakfast items still popular in the country. Recently there has been a major demand from China for Weet-Bix. I could remember what was known as Thriposha in Sri Lanka in the 1970s. It was introduced as a food supplement for the poor by CARE Canada (during that food scarcity period), but it could have been developed as a popular breakfast cereal by any entrepreneur. It is nutritious, low cost and could have been improved into international standards.

Same could have been said about an alternative to Vegemite. I have been thinking and even experimenting about a Mungmite as a pastime! Mung or green gram has a great potential of converting itself into a processed food item. It can easily be condensed and has a unique taste in its cooked and condensed form. When added with yeast, it could compete with Vegemite or Marmite. I am saying this openly as I have no intention of starting any business! What is important is to think in terms of innovation in promoting economic development.

Sri Lanka has a great potential for its food industry and exports. When I go to a supermarket in Sydney, I can find Dilma tea but not any other Sri Lankan products (MD or other). Those are only available in small Sri Lankan shops. There is something missing in export promotion and marketing. Dilma however is very popular among average Australians. The way the Dilma has developed might be the way the others could develop with high ethical standards.

Finding market opportunities or creating them through marketing is also part of innovation. Sri Lanka should go for niche products and niche markets. I am still sticking to the food industry. Those may be available in the Middle East, India and China or in Australia. Why not allow the entrepreneurs to utilize the Halal market in the Middle East? I think I have seen a news item that it is happening. It should be further promoted. Sri Lanka should shed away parochial thinking. When the products are designed,they should be for the markets and not to our own taste. Why not produce something like ‘The Cola’ (Tea Cola), a cola based on tea. It could be healthier than Coca Cola. There is nothing wrong in marketing such a thing as an Asian product.

Chinese Whispering in Sri Lanka: On Gossip, Anxieties and Politics

Featured image courtesy Sri Lanka Unites

DEV PATHAK on 11/03/2016

Chinese whispering in Sri Lanka is suggestive of at least twofold meanings – literally and metaphorically. One has to do with the geo-political and international trade related issues, as many International Relations experts have put it. This meaning duly emphasises the significant role China plays in Sri Lanka’s economy and foreign policy. The other significant meaning is about the socio-political fabric intrinsic to post-war Sri Lanka, in which the presence of China gives birth to manifold gossiping, some factually substantiated and some others entirely fantastic. But then, fantasies aid in performative notions as many anthropologists have taught us. Thus the truism makes sense that Chinese whispering is not all about China’s presence in Sri Lanka. It is more about the many hushed-up tales and humid gossip looming large over the shores of the Indian Ocean. At least, this is what might attract a wandering anthropologist’s – such as this essayist’s – cruising glance. Some of this gossip and tales are of significant value and they intersect with geo-political perspectives on the relations of China and Sri Lanka, bringing in India to the picture as well — as a perennially anxious entity. They solicit the rabid acumen of analysts keen about strategic relations, international trade and politics.

However, more important than the apprehensions about geo-political calculus couched in the grammar of international analyses is something very local, concrete and enveloped in multiple layers of anxieties. It is not hard to come across this kind of gossip, which this essay dwells upon, related to the inter-ethnic discontents in post-war Sri Lanka. This is as much concrete as the ‘ethnicised communities’, 

broadly Sinhalese and Tamil in the context of this story. A wandering non-Sri Lankan anthropologist is likely to deduce from freely circulating gossip the following: things are not ‘fine’ in the midst of rhetorical performance of reconciliation in post-war Sri Lanka. And if this is the case, any initiative by any government may not really amount to building much needed inter-ethnic trust. As some Tamil youth I encountered (anonymity intended henceforth) would put it: ‘It’s just a matter of time to see the resurgence.’More than a statement of fact, this is an articulation of an anxiety, a frustration.

For, Fumes presuppose fire

 If this is the broad scene, Chinese whispering cannot be confined to the mere corporeal presence of China. It acquires a little more than what pundits of international relations could grasp even in the wildest of their collective imaginations. The slivers of fumes, indeed, presuppose fire. To cut a long story short, Chinese interests in Sri Lanka, both economic and strategic, are beyond any doubt very real. Also, there is a glamorous posterity of this relation. In ‘confidential’ reports WikiLeaks released in the public domain, Sino-Lanka friendship has facilitated to combat Soviet impact, as well as put a check on India’s regional interests. In the condolence meeting upon the death of Mao, the then Prime Minister of Sri Lanka, Sirimavo Bandaranaike was sufficiently vocal in articulating the role of China in Sri Lanka.  If this seems a very archaic indicator of mutual interests, one needs to look at the massive Port City project underway in the proximity of  Galle Face in Colombo. The Chinese initiative worth US$1.4 billion to construct a “mini-city” atop reclaimed land in Colombo inspired whispers of different kinds. The project was signed when the former president, Mahinda Rajapaksa assumed power in 2005.

Many whispered accounts suggest considerable corruption entailed in this deal, as in many others. It is hard to corroborate such allegations with factual evidence. But what matters is the ability of the Lankan public to whisper about the possibilities, no matter how unsavoury and unverifiable. This whispering could underline the idea that the ‘Lankan public’ is willing to cross the socially and politically divisive identities and discourses in order to hint at potential white-collar malpractices. It is also indicative of the public suspicion of powers that be. At the height of the power of the Rajapaksas, these whispers worked as a kind of ‘weapons of the weak’ in the sense suggested by James Scott. But some of these have now come to the surface as more concrete forms of agitation consequent to the electoral defeat of the Rajapaksa regime. Indeed, it augurs well for a discerning civil society, otherwise terribly fragmented in Sri Lanka in correspondence with the socio-political cleavages amongst various identity-groups. But then, there are other undercurrents of social whispering too which an observer can come across while interacting with folks any evening along the shore.

As part of social whispering, it is possible to hear a Tamil youth (anonymity intended) saying: ‘This is a Sinhalese conspiracy to prosper with Chinese money, get more employment opportunities for youth of Sinhala origin, and consequently push aside Tamil youth.’ Once again, there is no factual corroboration for this narrative. But what matters here is the clear existence of an inter-ethnic trust deficit and lack of any systemic initiatives thus far by the state or by non-state actors to ensure that these kinds of whispered account do not have a receptive audience. So once formed, these kinds of perceptions become ‘real’ in the minds of believers.

The seemingly concrete premise supporting the whispered apprehensions is partly derived from the long haul of political violence, which Sri Lanka underwent in the recent past. The premise also derives its strength from the nearly unconditional support of the present regime to Chinese project(s), known as well as unknown. On the other hand, however, a Sinhala youth (anonymity intended) could whisper with due reverence to the new god of contemporary South Asia, namely development: ‘This project like many others, is a necessary step towards putting Sri Lanka on a respectable pedestal in the international community of nations.’ This whispering makes an attempt to ignore the possibility of any ethnic, communal or caste discontent pertaining to development projects. It would instead suggest that this is for the prosperity of Sri Lanka, which will eventually benefit everybody from any identity-group. It may seem to be a very familiar stance in contemporary India too.

It becomes obvious that the Chinese presence in social whispering is meaningfully accidental. This is not to say that the concrete manifestations of the Chinese presence do not inspire whispered narrative accounts. Instead, the idea is that the socio-political divides are so deep that anything could engender ethnic apprehensions narrated in the informal walks of everyday life. These are among the strains of thought that emerged from the accounts in my field diary as I recently travelled from Colombo to Batticaloa, some three hundred kilometers away in Eastern Province. To my trepidation, my assumption was vindicated. As soon as the tourist van entered Tamil-dominated areas, my fellow traveller, a young Tamil academic from Eastern University and formerly a student at Jaffna University, exclaimed: ‘after this point, it’s the land of a superior race.’ Upon inquiry, I gathered that the reference was to the perceived Tamil cultural superiority and industriousness, which often seem to manifest in everyday conversations.

Traversing the tropical landscape, sublime lagoons, and arresting serenity in the surroundings, there appears little doubt about Tamil pride and prejudices in their sense of ‘homeland.’ But then, Tamil subjectivity is scarred by the military aggression in the recent past, as well as persistent grudges about the lackluster unfolding of democratic processes and institutions. The Lankan model of democracy is clearly farcical for the Tamil populace (and perhaps for many Sinhalese too), asserted a scholar from Jaffna visiting Eastern University in Batticaloa. And many ordinary folks at local cafes could be overheard reiterating a similar view, by mostly harping on the ‘underrepresentation of Tamils’ in not only political processes but also in state machineries more generally. A young scholar researching on Tamil performance art observed, ‘You may find quite a few Tamils in the lower rung of the hierarchy in the Lankan bureaucracy, but seldom any on the top positions.’ An oft-repeated message in this part of Lanka is about the perceived Sinhalese conspiracy to keep Tamils away from the realms of crucial decision-making. And in this regard, they find the new regime much the same as the old one(s). This is not only in politics and ordinary life. An art historian of reckoning opined that even historiography in Sri Lanka narrates stories of Tamil society and culture only in the footnotes. ‘How many Tamil scholars are mentioned in the debates in social sciences, arts or in public discussions in Sri Lanka,’ asks an evidently disappointed Tamil political scientist.

Apprehension Beneath Comprehension

 With the above-mentioned excerpts from freewheeling interactions – without data sets, tables and graphs, it is possible to surmise that post-war Lanka is grappling with a deeply ethnicised sense of subjectivity. At one level, it seems nearly impossible to devise a scheme of reasoning beyond the ethnic divide as things prevail at present. Equally tough is task to cultivate an inclusive liberal-romantic-utopia cutting across different ethno-cultural communities in Sri Lanka.

Nevertheless, could there be a shared dream of Sri Lanka in this wake? To find an optimistic answer, one expects that the state machineries ought to be doing something qualitatively different to engender an alternative subjectivity for Lankan communities. And perhaps the goals of governance should ideally rise above playing the India-China game to more realistically and inclusively redefine notions of development and a more hopeful collective vision of the future. The latter is necessary as a more socially sensitive measure to bring about inter-ethnic partnership, as it were. Of course, beyond the state, this also ideally should be a prerogative for civil society as well as individuals. Or else, the seeming lull could bring about a storm of a bizarre nature in times to come. The chill of the thought compels even an irreverent anthropologist to turn to the Buddha with a prayer: let an awakening be.

Readers who enjoyed this post may find “Contending with rejection and exclusion: Take two on the Kuliyapitiya debacle” and “(Re)conceptualising reconciliation: Transitional justice in Sri Lanka” instructive.

Looking at Economic Affairs in Sri Lanka

Taylor Dibbert -11/03/2016

W.A Wijewardena is an independent economic analyst. From 2000-2009, Mr. Wijewardena served as Deputy Governor of the Central Bank of Sri Lanka.

This interview has been edited lightly.

What are Sri Lanka’s principal economic challenges?

The current economic challenge has been to elevate the growth rate to a high and sustained level to uplift the country from the present lower-middle-income country to a higher-middle-income country in the first instance, and then to a high-income country within the next 3 to 4 decades.

This could be achieved by Sri Lanka if it can maintain an annual growth rate of 7% or above continuously in the next 3 decades. However, its past performance since independence in 1948 has been highly volatile, recording an average annual growth of about 4.7%. It has peaked the growth rate above 7% only on six occasions and even then in periods way apart from each other. The growth for the next 4-year period has also been projected at around 5%. Thus, the country has to make a jumpstart through a host of supportive policies. They encompass linking Sri Lanka to the rest of the world through trade, converting Sri Lanka’s simple technology-based economy to a complex technology-based one, attracting [Foreign Direct Investments] FDIs with high technology, creating a competitive atmosphere within the economy, improving ease of doing business by eliminating hurdles, reforming the public sector and the budget and, above all, selling thrift as a guiding principle to the electorate. These are difficult but not impossible through a proper strategy.

In terms of Colombo’s economic reform agenda, how much has been accomplished thus far?

The economic policy to be pursued by the government was announced by Prime Minister Ranil Wickremesinghe in parliament in November 2015. It was a comprehensive document outlining key reforms the government was planning to introduce during 2016-2020. This was to be followed by a supportive budget to be presented by Finance Minister Ravi Karunanayake two weeks later.

However, the main budget proposals had been counter to what the premier had announced in the economic policy statement. Hence, the work done to implement the reform agenda in the statement is far from desired. On top of this, the premier made a second policy announcement in parliament in October 2016, but it appeared that it was a fresh statement with no relation whatsoever to the one he made in November last year. There was no assessment of the progress on the previous announcement. Independent analysts therefore feel that the government has not implemented the reform agenda adequately.

Regarding tax reform, what specifically would you like to see happen?

In the policy statement of November 2015, the premier quite correctly announced that the government should change the tax structure from the current indirect taxes bringing 80% and direct taxes bringing the balance 20% to a structure where indirect taxes would be reduced to 60% and direct taxes increased to 40% — by 2020. The foundation should have been laid for this right from 2016 but in the budget [for] 2016, indirect taxes were raised to 87%, quite contrary to what the premier had expected. The current reliance on a [Value-Added Tax] VAT has reinforced this. Hence, the tax reform should expand the tax net, get more people to pay income taxes and to encourage them to pay more. Marginal tax rates should be reduced from the current 26% to about 15%.

Would you talk a little bit about the alleged “bond scandal” (from early 2015) and the role of Perpetual Treasuries Limited? What allegedly occurred and will anyone be held accountable?

There was suspicion in the market that Perpetual Treasuries had benefitted from some inside information throughout to superperform in the market, making longstanding and large primary dealers just dwarfs. This was confirmed by the financial results which they had published in terms of the Central Bank requirements. Accordingly, from February 2014 to March 2016, they had made a net after tax profit of about Rs [Sri Lankan Rupees] 6.1 billion (USD $ 41 million) — when many others had made losses or those who made profits, insignificant amounts of profits. Now the parliamentary watchdog, the Committee on Public Enterprises (COPE) has released its investigation results, agreed by 25 members out of 26, implicating Perpetual Treasuries of improprieties. The COPE report has declared the former Governor Arjuna Mahendran and the Central Bank officers who had supported him as accountable. It has recommended that legal action be taken against Mr. Mahendran, Perpetual Treasuries and the Central Bank officers involved in the scam.

What is Mr. Mahendran’s current position? What kind of message does his continued role in government send to the public?

Prime Minister Ranil Wickremesinghe made a statement in parliament that Mr. Mahendran has left the country to attend a wedding ceremony. He did not say that he would return, but the indication was that he would return. Meanwhile, the opposition has vowed to take him to court if he returns to the country. In fact, one senior minister of the government who represents the president’s side on the government has said that they would get Interpol’s assistance to bring him down to Sri Lanka. Hence, his continued association with the prime minister would be an eternal rock in the latter’s boot.

Nearly two years since the new government came to power, we still haven’t seen anyone held accountable for high-level corruption. Does this concern you? And, more broadly, will the current government will ever get around to dealing with high-level corruption in a meaningful way?

Civil society activists and organisations are concerned about the slow pace of bringing the culprits to justice. They continue to exert pressure on the government to expedite the investigations and judicial processes.

The government will be presenting its annual budget soon. What are some things to look out for?

It is a very trying era for Sri Lanka requiring some hard choices on its part. But the electorate has not been sufficiently groomed to accept such hard choices. It is better if the finance minister makes a frank announcement and comes out with a program of ‘thrift’ implemented across the board.

In recent years, why has the country’s defense spending has continued to rise. And is this a prudent course of action?

Defense expenditure in any country is like joining the mafia and once joined, no one can leave it. Hence, defense expenditure had ballooned during the time of war and the government is unable to reduce it even when there is peace. Accordingly, the government will have to live with it forever like a cancer patient who has to live with his cancer without treatment.

Chinese influence in Sri Lanka was a hot topic when Maithripala Sirisena campaigned for the presidency. Has Sri Lanka’s economic relationship with China truly changed since January 2015?

Sri Lanka was a neutral country throughout and, despite what the politicians may have pronounced in election platforms, China has been a friend and will continue to be a friend. Sri Lanka’s foreign policy has to make a proper balance between China vs. India and China vs. the West and get the maximum for the country without angering anyone.

The Economic and Technology Cooperation Agreement (ETCA), a trade deal with India, is expected to be signed soon. What’s your view on the agreement? How would ordinary people benefit from the ETCA?

ETCA is a must given the current economic situation in the country; in fact, Sri Lanka should sign many more trade agreements with other nations as well. Bilateral free trade is not something which Sri Lanka could ignore at this point in time.

Follow Taylor Dibbert on Twitter: www.twitter.com/taylordibbert

Can you shake hands with a clenched fist?

We wanted change but we had to pay a price for change.

by Victor Cherubim

( November 4, 2016, London, Sri Lanka Guardian) Change is the “C” word which is repeated over and over again. “Change is going to come,” is what world leaders broadcast. Perhaps, it is as pleasing to the ear, like a repetition of a chorus. Possibly, it is one thing people have longed for. It is the surest thing which we can expect in the months and years ahead.

To many of us life seems to be like a soap opera and neither you nor your friends know what is going to happen in the next episode. This element of surprise makes it both enchanting, exciting and in some respects challenging.

We long for a sense of experimentation, a desire for freedom, not wanting to be tied down or committed to anything, but eager for constant change, even a tendency to be bored with the same thing all the time. So in a way change is part of human nature,

What we see in Sri Lanka and in the world at large is constant change. Within the past 22 months since the era of President Sirisena or the “yahapalana” government,   there have been so many twists and turns that anyone would hardly think a ride down “kaduganawa” was incomparable. Managing change has been the miracle of existence and we give credit to our ingenuity.

“The criteria of good governance, the concept of cohabitation between the two major political parties, the UNP and the SLFP, getting together to grapple with issues no single party could resolve in the past. It is no easy task when two political parties with different views have to govern a country together.”

New Ways, new challenges 

With all this change, what is special about Sri Lanka? We had a devastating war which lasted nearly thirty years. We needed investment to rebuild our economy. We had many friends who could help us in this development, but there were hardly any immediate offers on the scale we required. Our neighbour, India had helped to manage the transition, the Asian Development Bank and World Bank and friendly Western countries and Japan had come to our aid, but there was a widened gulf which needed to be covered.

Lack of investment on infrastructure after a prolonged war does not alleviate poverty, nor stimulate economic economic activities nor reduce trade costs or improve competitiveness.

Besides, our export market of our basic three commodities also was in the doldrums.

We wanted change but we had to pay a price for change.

As the Chinese Ambassador in Colombo stated recently “Colombo took loans at 5.8 percent interest rate from Europe last year, against the 2 percent rate that Chinese loans came with to fund the port projects.” Let us be thankful for small mercies!

He also went on to comment that “Sri Lanka should have a consistent policy, regulations and laws which do not waver with political upheavals in order to attract foreign investment and spur economic growth.” Let us have a continuing foreign policy

and a  permanent civil service that does not change with every change of government, so that the wide world knows who we are?

The way we respond to change 

We have yet to condition ourselves to the risks of change. We have to get out of the disjointed approach to adjust to change. It is all well and easy to consider ourselves to be “victims” of change.

What about welcoming change instead rather than fighting it. What about acknowledging, change as change will happen no matter what.

In UK, the High Court has today ruled that the Government of Theresa May does not have the authority to trigger Article 50 and take UK out of the European Union without the prior agreement of Parliament. This decision means MP’s will be granted a vote in the Commons on leaving the EU.

The Government argued that it had the authority to use the royal prerogative to trigger Art.50 without a vote. Theresa May maintained this vote would subvert democracy.

We in Sri Lanka too need to move on and it is time to move on. As someone recently commented:

“The majority Sinhalese must refuse to live with a minority mindset. Such a mindset cannot embrace modern concepts of integration and assimilation. So it is true with the Tamils. Generations long memories of subjugation and fabricated accusations of ethnic cleansing by the majority are a great hindrance to an open minded approach.”

Restructuring the EPF is now a must

Friday, 4 November 2016

 We have a history of Employees’ Provident Fund (EPF) money being blatantly and rampantly abused by governments to buy shares and bonds in the secondary market, including the bail out of various ailing Government-linked companies. 

The Government has said many times that steps will be taken to secure the funds in EPF and the Employees Trust Fund (ETF). Furthermore, it has said both these funds will be amalgamated to create a new national pension plan and the combined value of the new fund will be around Rs. 1.7 trillion.

The IMF has plainly stated that the EPF governance structure needs changing. The IMF has said many times that the EPF must develop a “sound, robust and independent governance structure with the clear objective of seeking the best investment returns for members, while taking into account reasonable levels of risk tolerance and the individual preferences and circumstances of workers”.

The Prime Minister has also said that he will not leave room for politicians and officials to waste the money of this new fund. Despite that assurance, Opposition politicians and trade unionists have expressed their strong opposition to a Government move to set up a common fund by merging EPF and ETF under the cover of introducing a pension scheme for private sector employees.

We cannot blame them given the track record of the EPF where the CB administration has been accused of getting involved in pump and dump deals. There are many examples of such transactions that have still not been properly investigated by the current administration. For example the JVP’s North Central Provincial Council member and Chairman of the Inter Company Employees Union, Wasantha Samarasinghe, has said many times that workers will take to the streets if the Sirisena-Wickremesinghe Government lays its hands on the EPF and ETF like the previous Rajapaksa Government.

He accused the Rajapaksa Government of having invested huge sums from the two funds in the stock market in an irresponsible manner. The General Secretary of the Ceylon Teachers’ Union, Joseph Stalin, said the Government had no right to dip into the EPF and ETF according to its whims and fancies as they belonged to the workers and the Government was only its custodian. However, given that EPF is not a social and welfare financial institution and thus should not be subjected to any political pressure, a Public Wealth Trust comprising trade union and employer representatives, Treasury and Central Bank nominees, two members nominated by the Constitutional Council, two others chosen jointly by the Prime Minister and Leader of the Opposition and a Chairman and an Executive Officer could be a good option given the way it is managed now.

Provident fund

EPF, which is under full State control, is the largest retirement fund for private sector workers. EPF has invested about 92% of its funds in government securities, 6% in stocks and 2% in corporate debt and short-term government securities.

Today, what often concerns contributors to the fund are the limited benefits EPF offers them during their working life, when compared with some of the well managed global superannuation funds that fund skills development, healthcare and provide effective housing benefits.

Take the CPF of Singapore. The whole scheme is tied to housing, health and a host of benefits for workers. It is also not out of place to point out that the NTUC (the only trade union recognised in Singapore) has the Prime Minister as ex officio President and that the type of tripartism practised is unique and not that different to a communist form although the economic policy is strictly market-driven.

The CPF has never been accused of mismanagement and investing in junk bonds and stocks. The concern for many workers is how safe their contribution would be by the time they retire and in addition, the real value of their balance that will be available to use as retirement income. That is where the real problem lies which needs to be addressed in consultation with all stakeholders. The Prime Minister is the best person to do this.

Need to restructure

What the unions must realise is that what the Prime Minister is attempting to do is a good thing. He is effectively taking control of the fund away from the Central Bank and giving it to an independent body where all stakeholder representatives can sit together and decide how the funds should be managed based on defined policy guidelines.

The members can also be given two options: either to continue with the current way of doing things under a credible body to expand the services of the EPF or to create a new mechanism to pay a lump sum at retirement and retain an amount to deliver a pension for life. Or even move beyond that to create a hybrid system consisting of both options.

According to the EPF Act, an employee is required to contribute a minimum of 8% and the employer a minimum of 12% of the total salary of the employee monthly, to the EPF. During the course of employment the worker derives little benefit and the benefit is fully for the State in the short term. Given the significant changes in the workplace as a result of new and advanced technology, a vehicle for skills training would also help employees remain employable during their working life and also help to grow our nation’s skills base.

On the other hand the ETF board, unlike the EPF, has private sector and trade union representatives on the Board and the institution was set up to assist workers during their work life, unlike the EPF which was set up to benefit an employee when they retired at the age of 55 or 60.

Furthermore, it may be also prudent for the Government to study its current and long-term funding options and the risks associated with managing the EPF in consultation with the private sector because any change that is proposed should not fundamentally alter the rights of workers over their current benefits (Gratuity and EFT) or the long-term benefit of receiving a lump sum at the age of 55 or 60.

The private sector could also benefit substantially through a type of unemployment benefit scheme, which a new system can fund if properly merged. That would help companies to restructure and become more competitive and for the economy to improve its competitiveness.

In the final analysis, the EPF should not continue to be a lender of last resort for the State. The fund must be committed to preserving and growing the savings of its members in a prudent manner in accordance with best practices in investments and corporate governance.

(The writer is a former ETF Chairman).

NARAHENPITA POLICE RECEIVED 3 CALLS FROM PRESIDENTIAL SECRETARIAT ON THE NIGHT THAJUDEEN WAS KILLED

03/11/2016

The CID had informed Colombo Additional Magistrate Nishantha Peiris former Narahenpita OIC Damian Perera had received three telephone calls from the phones belonging to the Presidential Secretariat Office on the night of May 17, 2012 at Shalika Ground where Thajudeen’s murder took place, reports Daily News.

The report further says:

When the case of Wasim Thajudeen murder was taken up yesterdayyThe CID conducting investigations informed Court that they have initiated a comprehensive investigation into the telephone calls received by former Narahenpita OIC Damian Perera on the night Thajudeen’s murder took place. At a previous occasion, the CID informed Colombo Additional Magistrate Nishantha Peiris former Narahenpita OIC Damian Perera had received three telephone calls from the phones belonging to the Presidential Secretariat Office on the night of May 17, 2012 at Shalika Ground where Thajudeen’s murder took place.

Meanwhile, Western Province former Senior DIG Anura Senanayake and former Narahenpita Crimes OIC Sumith Champika Perera arrested over their alleged role in the cover up of evidence in the former rugby player Wasim Thajudeen murder were yesterday ordered to be further remanded till November 16 by Colombo Additional Magistrate Nishantha Peiris. The Court had refused to release the suspects on bail citing it did not have jurisdiction to grant bail for suspects who had been charged under section 296 of the Penal Code for conspiring to commit a murder.

Former rugby player Wasim Thajudeen was killed, apparently, in a road accident in Colombo in May 2012. The CID had informed court that investigations conducted so far had revealed that Thajudeen’s teeth had been broken, the bones in the pelvic region also broken and his neck pierced with a sharp instrument prior to his death.

The CID added that muscles in his legs had been cut with a piece of a broken glass. Earlier, police maintained that Thajudeen was driving to the airport and had lost control of his car and crashed into the wall of Shalika Grounds at Park Road, Narahenpita, and that his vehicle had exploded within seconds of the crash.

Exclusive: SIS Document Shows Gota Ordered Lasantha’s Phone To Be Tapped Just Weeks Before He Was Killed

November 2, 2016

A leaked State Intelligence Service document shows that former Secretary to the Ministry of Defence Gotabaya Rajapaksa had ordered surveillance of Sunday Leader Editor Lasantha Wickrematunge’s mobile phone, just weeks before he was murdered, Colombo Telegraph can reveal today.

According to the report in possession of the Colombo Telegraph, Rajapaksa had ordered for several mobile numbers to be under surveillance, including that of Wickrematunge. In the order, it was claimed that the numbers had to be under surveillance to carry out intelligence operations in relation to ‘national security’.

Lasantha was subjected to surveillance, along with his telephone among phones of several others which were tapped. This was ordered by Secretary Defence through DIG Keerthi Gajanayake a few weeks before Lasantha was killed on 10th September 2008 (See Communication Below). Wickrematunge was murdered in January 2009 in Attidiya, on his way to office.

The surveillance had been ordered on the basis that the users of the listed hand phones were a national security risk. Some of those listed are prominent politicians including Ranil Wickremesinghe elected democratically, acted democratically and continues to act democratically. It is crystal clear that the politicians were being monitored not as a national security risk but for former President Mahinda Rajapaksa’s political advantage. That too ordered by his brother using his official position. The CID, SIS or the TID separately or together did have the facilities to intercept/eavesdrop or even monitor via GPS the movements of hand phone users is proved by this document.

However, despite this evidence, President Maithripala Sirisena’s interference over the arrest of army intelligence officers is hampering the investigation process, highly placed sources pointed out, and this is apparent with the granting of bail to Military Intelligence Officer Premananda Udalagama, who was arrested and remanded for his alleged connection in the Wickrematunge murder.

Records go on to show that the police had objected to Udalagama’s bail, but the Magistrate had gone ahead on granted bail, under the influence of Sirisena’s controversial statement made last month, criticizing all those for arresting and remanding army intelligence officers.

A source noted that Udalagama, did not post the simple bail conditions either through fear of getting back to his normal habitat or did not have sufficient time to muster the bail requirements. “Even the Army did not come forward immediately to help post bail for Udalagama as expected or did he refuse to come out of remand prison, is a question that is being asked,” he said.

Another important fact is that Ilandarige Jayamanna, the Army Intelligence Officer who committed suicide claiming he killed Wickrematunge was in fact not in Attitdiya but in Pinnawala at the time Wickrematunge was murdered.

A highly placed political source pointed out that surveilling Wickrematunge’s mobile phone was surprising because all the other numbers in the document were of politicians. “Was this done to camouflage the real intent is a valid thought because the Editor was murdered a few weeks later. None of the others were killed,” the source pointed out.

What the DIG did with the information thus obtained on orders of the Secretary Defence is for the investigators of Wickrematunge’s murder to question. “Recent statement of President Sirisena notwithstanding, this is a murder investigation and country’s move from an oligarchy to a State that accepts Human Rights and Rights to Life cannot be wished away by any person, including the President of the Democratic Socialist Republic of Sri Lanka included,” the source noted.

“The Yahapalanaya government was elected to correct the course of a nation that was fast spiraling out of control. President Sirisena, has since stated that the media and some NGO’s had misquoted or not read the entirety of his controversial statement. If that is so, he should now correct the misconception that is sweeping across the public, polity and maybe even amongst the judiciary that “war heroes” be they suspects to murder should be bailed out or treated differently to other murderers,” the source said.

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Impunity and press freedom in Sri Lanka

Outspoken journalist Lasantha Wickrematunge (L) who predicted his own murdear is the highest profile victim of press violations in Sri Lanka, while justice remains to be served in the 2010 case involving the disappearence of political cartoonist Prageeth Eknaligoda

By Gouri Sharma

Wed, 02/11/2016

Earlier this month, a judge released two suspects who were being held in connection with the disappearance of a prominent political cartoonist six years ago.

The two former army intelligence officers were among a number of men arrested last year following the 2010 disappearance of Prageeth Eknaligoda, a journalist with pro-opposition website Lankaenews.

Eknaligoda’s family had hoped the new political era, led by so-called ‘common candidate’ Maithripala Sirisena, would have made a difference to the outcome of the hearing.

During last year’s election, Sirisena beat populist president Mahinda Rajapaksa on a mandate pledging to investigate allegations of war crimes committed during the country’s decades long civil war, including attacks on the media.

There’s been some progress since, and in March Sirisena appointed a secretary to examine violence against journalists during Rajapaksa’s time in office.

But following the court’s decision, some of that hope has been diminished, and press freedom advocates now say the case embodies the challenges the government will face while trying to bring those responsible for attacks on journalists during Rajapaksa’s near-decade long rule, to justice.

Speaking after the court hearing, Eknaligoda’s wife Sandhya told Doha Centre for Media Freedom: “The government is talking the right talk, especially on an international level. But in practice, the military can still block things from moving forward.

“In this case, the army refused to hand over certain information and the president made comments prior to the hearing where he called for the suspects to be released on bail.

“This raises questions about the credibility of the domestic process. I have had death threats in the past and this decision puts my life at risk.”

Impact of war

The country’s recent political history has been tumultuous. The majority Sinhalese government defeated the separatist group, the so-called Liberation Tigers of Tamil Eelam, or LTTE during a civil war that lasted more than 20 years.

Official figures suggest 80,000 people were killed, and human rights groups have accused both sides of committing abuses.

Local journalists were among those targeted - according to Amnesty International at least 10 media workers were killed in the final three years of the conflict, with no convictions ever having been made, while figures suggest that the number of local media workers killed in the final five years of Rajapaska's rule could be as high as 30.

Up until Rajapaksa’s election defeat a year ago, Sri Lanka was ranked among one of worst ten countries in the world to be a journalist - listed alongside countries including North Korea and Eritrea - in the annual Reporters Without Borders press freedom index.

The most high-profile murder was that of Colombo-based journalist Lasantha Wickrematunge. In the early 1990s, Wickrematunge and his brother Lal co-founded the Sunday Leader newspaper, an anti-establishment English-language newspaper that was highly critical of both the Rajapaksa government and the LTTE during the war.

It also reported extensively on government corruption and alleged government human rights violations.

The paper’s hard-hitting, no holds-barred coverage irked authorities. It’s offices were raided and Wickrematunge regularly received death threats. Rajapaksa was also reported to have called Wickrematunge directly, warning him that if he didn’t stop reporting he would be killed. The editor refused to be deterred, and instead was vocal about how he knew his journalism would one day cost him his life.

That day came on January 8 2009, when he was gunned down in broad daylight while on the way to work.

Chilling prediction

One of the most chilling aspects of the case was the article posthumously published in the paper three days later.

In the 2,500 word  comment piece - entitled ‘And Then They Came For Me’ - Wickrematunge defended the paper’s role as an independent, critical voice, and, at times directly addressing Rajapaksa, spoke out against the threats made against the media.

He went as far as predicting his own death. “When finally I am killed, it will be the government that kills me,” he wrote, “but like all the inquiries you have ordered in the past, nothing will come of this one, too.”

His murder - along with Eknaligoda’s disappearance - drew international condemnation and increased pressure on the Rajapaksa government to improve the dire situation for journalists.

But only since Rajapaksa’s departure has the situation for journalists improved, and investigations into each of the two cases have moved forward.

As well as the arrests in Eknaligoda’s case, Wickrematunge’s body was exhumed after the government ordered a fresh investigation into his death a month ago.  

But press freedom groups and journalists maintain that while the military still yields this much power and popularity, there’s only so far the current administration will be allowed to go.

The Free Media Movement, a press freedom organisation based in Colombo, told DCMF: “While we welcome the fact that more progress has been made on each of these cases since Sirisena has come into power than during the whole time Rajapaksa was in government, it may be limited because military personnel may be implicated and the government will be wary about receiving a backlash from the Sinhalese majority by investigating army officers considered national heroes.”

Amantha Perera, a Sri Lankan journalist based in Colombo, added: “There is still a long way to go until these investigations reach a conclusion and that will be the real challenge, given the inherent political risks.

“What Colombo needs to do is a balancing act, it cannot antagonise the majority support and expect to win elections. So far this government has shown that it is willing to go farther than any other predecessor and it is important to distinguish between the concerns expressed internationally and those that are important nationally, they are not always one and the same.”

International pressure

Internationally though, the pressure on the government to pursue the perpetrators behind these two cases, and that of other journalists, remains high.

Ujjwal Acharya, who focuses on South Asia for the International Federation of Journalists, told DCMF: “We are concerned that these developments could be halted or slowed down due to pressure from powerful people, who may have some kind of involvement into these crimes so it’s absolutely necessary for Sirisena and the Sri Lankan government to be strong and committed into solving those cases.”

While Eknaligoda’s family have vowed to continue their fight, the case involving Wickrematunge may be unraveling.

Earlier this month, a former military officer was found dead after writing a note admitting the murder, before allegedly committing suicide.

It’s been less than a decade since the war ended, and less than two years since Mahinda Rajapaksa - the man accused of committing some of the worst atrocities against the media - left office.

With scars as deep as Sri Lanka’s, more time will be required if justice for Sri Lanka’s slain journalists is to prevail.